Unlocking Potential: Annual Report 2017
Unlocking Potential: Annual Report 2017
Unlocking Potential: Annual Report 2017
UNLOCKING
POTENTIAL
ANNUAL REPORT 2017
UNLOCKING
POTENTIAL
IHH Healthcare Berhad is a leading international provider of
premium healthcare services in markets where the demand
for quality healthcare is growing rapidly – specifically in
Asia, Central and Eastern Europe and the Middle East.
Dual-listed on the main boards of Bursa Malaysia and the
Singapore Stock Exchange, we are one of the world’s
largest listed healthcare operator by market capitalisation.
Today, the Group is a leader in private healthcare.
We are represented by various subsidiaries in our main
markets of Malaysia, Singapore, Turkey and India, as well
as Greater China. We also have a presence in Brunei, the
United Arab Emirates, Macedonia and Bulgaria.
CONTENTS
Group Overview
2 Unlocking Potential in Malaysia
4 Unlocking Potential in India
6 Unlocking Potential in Greater China
8 Unlocking Potential in Turkey
Sustainability
10 IHH at a Glance
87 Our Environment
12 Strong Global Presence
101 Our Community
14 Financial Highlights
108 Accreditations and Awards
16 Operational and Sustainability Highlights
Governance
18 Corporate Milestones
114 Board of Directors
20 Corporate Structure
127 Group Management
21 Corporate Information
132 Corporate Governance
Strategic Report Overview Statement
24 Joint Chairman’s Statement 150 Nomination and Remuneration
Committee Report
28 CEO’s Message
156 Audit and Risk Committee Report
32 Business Model
161 Statement on Risk Management and
34 Market Outlook
Internal Control
36 Business Strategy
168 Investor Relations Report
38 Risk Management
39 Principal Risk Other Information
170 Additional Compliance Information
Performance Review
172 Directors’ Responsibility Statement
42 Financial Review
45 Home Market – Malaysia Financial Statements
46 Home Market – Singapore 174 Directors’ Report
47 Home Market – Turkey 181 Statement by Directors
48 Home Market – India 181 Statutory Declaration
49 Growth Market – Greater China 182 Independent Auditors’ Report
50 IMU Health 186 Statements of Financial Position
51 ParkwayLife REIT 188 Statements of Profit or Loss and
Other Comprehensive Income
Sustainability
190 Statements of Changes in Equity
54 Our Sustainability Statement
196 Statements of Cash Flows
57 Sustainability Strategy and Roadmap
199 Notes to the Financial Statements
59 Sustainability Governance
60 Ethics and Integrity Additional Corporate Information
62 Stakeholder Engagement 317 Analysis of Shareholdings
63 Identifying Material Matters 321 List of Top 30 Largest Shareholders
65 Our Patients 323 List of Top 10 Properties
74 Our People 325 Notice of Eighth Annual General Meeting
81 Our Organisation Form of Proxy
MALAYSIA
Parkway Pantai is the second largest private healthcare
provider in Malaysia in terms of licensed beds.
It owns and operates 10 “Pantai” hospitals and
four “Gleneagles” hospitals across Peninsular Malaysia.
Three of its hospitals are Joint Commission International
(“JCI”) accredited and all 14 hospitals are accredited by
Malaysian Society for Quality in Health (“MSQH”).
Parkway Pantai houses Centres of Excellence and
advanced clinical programmes within its Malaysia
hospitals that provide specialised equipment and
services to the doctors who practice there.
WHY?
• With a population of almost 32 million, Malaysia is a large market with considerable
growth potential. The median monthly household income grew at a rate of 6.6 percent
annually between 2014 and 2016. In addition, the number of people above the age of
60 is expected to almost double to 14.7 percent between 2010 and 2030.
KEY FACTS • Malaysia has an efficient and well-developed system of healthcare. This is complemented
by a growing private healthcare sector, which provides quality care in the tertiary and
quaternary segments to Malaysians and foreigners.
• Given the size of the market, rising incomes and an ageing population, Malaysia will
experience a growing demand for quality private healthcare services.
197,563
Inpatient
Admissions HOW?
• Parkway Pantai’s hospital network in Malaysia operates on a hub and spoke model.
Our hubs are located primarily in urban areas and have between 180 and 350
hospital beds. These hubs have specialists from a wider array of disciplines and
have advanced medical equipment. Our spokes are located in suburban areas,
have between 80 to 150 beds and typically handle less complex cases. More complex
medical treatments are usually referred to our hubs.
2.7 days
ongoing rejuvenation and expansion of existing facilities to improve service quality.
In 2015, we completed the new annexe at Gleneagles Kuala Lumpur Hospital,
which has a one stop Health Screening Centre that is equipped with state of the art
Average diagnostics facilities in Endoscopy, Neurology, Spirometry, Audiology and Women’s Health.
Length of Stay
INDIA
IHH Healthcare has six hospitals and three medical
centres in India. In 2015, IHH re-calibrated its strategy to
inorganic growth and acquired Global Hospitals and
Continental Hospitals. IHH remains focused on niche
specialties and complex procedures such as liver and
multi-organ transplants and upper gastrointestinal surgery.
In 2017, we consolidated our newly acquired
assets under the “Gleneagles” brand to drive greater
synergies as we build up a leading tertiary and
quaternary care chain in India.
WHY?
• India is one of the fastest-growing hospital markets in the world. It is expected to be
worth US$280 billion by 2020, a compound annual growth rate of 17 percent from 2011.
72,005
Inpatient
Admissions
HOW?
• Gleneagles Global Hospitals (“GGH”) has hospitals in Mumbai, Bengaluru, Hyderabad
and Chennai, four of the top seven cities in India. These cities are characterised
by large populations, high insurance penetration and a significant strata of
wealthy residents.
3.9 days
Average
Length of Stay
GREATER
CHINA
Located on Hong Kong Island South, Gleneagles Hong
Kong Hospital was opened in March 2017. This hospital, a
game changer for the Group, represents IHH’s
single largest hospital investment since the opening of
Mount Elizabeth Novena in Singapore.
WHY?
• China represents an enormous opportunity for IHH. The liberalisation of regulations
around foreign ownership has paved the way for our entry into China.
• In 2017, Hong Kong’s Hospital Authority announced that nine out of the 16 public
hospitals were overcrowded while the rest were operating at close to full occupancy.
KEY FACTS
• An ageing population coupled with a growing trend of chronic and complex diseases
will contribute to pent-up demand for private healthcare. With increasing private
insurance coverage, private hospitals offer an attractive alternative by providing
shorter waiting times and excellent outcomes.
51%
of inpatient beds
HOW?
at packaged rates • In Greater China, our plan is to operate on a hub and spoke model. Our hubs will be
in Beijing, Chengdu, Guangzhou, Shanghai, Shenyang and Hong Kong.
• Gleneagles Hong Kong Hospital, a game changer for the Group, offers high quality
and accessible healthcare services to tap on the demand from the city and from
neighbouring cities in China, acting as our premium medical hub in Greater China.
70%
of beds set aside
for Hong Kong
residents
TURKEY
Acibadem Holdings, 60% owned by IHH,
is one of Turkey’s leading private healthcare
providers with 21 hospitals and 16 medical centres in
Turkey, Macedonia and Bulgaria.
Acibadem has further strengthened its presence
in Istanbul by opening the largest private hospital,
Acibadem Altunizade, in March 2017.
WHY?
• Turkey has experienced a rise in the demand for private healthcare over the last
decade, a trend that has been catalysed by its enviable economic growth.
• As Turkish citizens have seen their incomes rise, their desire to access higher quality
healthcare services has followed suit, with many opting for private healthcare.
KEY FACTS
• Located at the crossroads of three continents and where 1.6 billion people reside
within a four-hour flight radius, private healthcare facilities have grown partly due to
medical tourism from neighbours in the Middle East, and from Asia, Russia and Europe.
213,590*
Inpatient
HOW?
Admissions • Acibadem continues to enhance its comprehensive range of services in the fields of
Oncology, Cardiology, Neuroscience, Orthopaedics, IVF, Organ Transplantation and
Sports Medicine.
• To cope with the increasing demand, Acibadem continues its organic expansion of
existing hospitals, such as the expansion of Acibadem Maslak Hospital.
3.4 days*
Average
Length of Stay
IHH AT A GLANCE
Gleneagles is the Group’s With two established hospitals in Pantai has a strong reputation
international brand, with footprint Singapore specialising in tertiary and in Malaysia for delivering quality
in Malaysia, Singapore, India, quaternary care, Mount Elizabeth is healthcare through a wide
China, Hong Kong and Brunei. among the world’s top destinations spectrum of services ranging
Across Asia, the brand is synonymous for medical treatment. from hospitals to laboratory
with personalised care and superior and rehabilitation services.
clinical outcomes.
Acibadem is renowned for its Parkway Shenton is a well-known ParkwayHealth is the brand for
clinical excellence as a leading primary healthcare brand in Parkway Pantai’s ancillary services
private healthcare provider in Singapore with an extensive in Singapore, including radiology
Turkey. It offers the full suite of network of over 1,000 general and laboratory services. It is also
integrated healthcare services practitioner clinics, 24-hour clinics the preferred primary healthcare
and has a presence in Bulgaria, and executive health screening network for expatriates in China.
Macedonia and the Netherlands. centres across the island-state.
4 1 16 1 7* 1
hospitals hospital hospitals hospital hospitals hospital
management
agreement
5 1 10 3
medical medical medical medical
centres centre centres centres
8
7 3
OUR
9
4
1
6
GLOBAL
2
REACH
Home Markets Key Growth Markets Other International Markets
1 Malaysia 6 Brunei
2 Singapore 7 Bulgaria
3 Turkey 8 Macedonia
4 India 9 UAE
5 Greater China
14 4 1
the world been growing steadily since the
US$10
Initial Public Offering. We now
hospitals hospitals hospital have a presence in nine countries
around the world.
billion+
1 50+ 10
medical clinics medical
More than Our group consists of
40
centre centres
premium-brand healthcare
assets, and our “Mount Elizabeth”,
“Gleneagles”, “Pantai”,
years “ParkwayHealth” and “Acibadem”
brands have grown to become
of experience among the most prestigious
in healthcare in Asia and Central and
management Eastern Europe.
RM11.1
over the year, thanks to sustained
organic growth from existing
operations and the ramp up of
billion
new hospitals.
RM2.3
start-up costs related to the
opening of two new hospitals –
Gleneagles Hong Kong
billion
Hospital and Acibadem
Altunizade Hospital.
10,000
more than 10,000 licensed beds
throughout Asia and in parts of
Central and Eastern Europe.
licensed beds
35,000
nurses, allied health workers
and support staff around the
world ensure high quality
employees personalised care.
FINANCIAL HIGHLIGHTS
Revenue by Strategic Business Units EBITDA by Strategic Business Units Profit After Tax and Minority
(RM million) (RM million) Interest (“PATMI”)
Excluding Exceptional Items (RM million)
Parkway Pantai
6,902.6
Parkway Pantai
1,349.1 595.3
FY17 6,902.6 FY17 1,349.1 FY17 595.3
FY16 6,165.0 FY16 1,404.1 FY16 866.0
FY15 5,159.8 FY15 1,271.1 FY15 899.2
FY14 4,374.8 FY14 1,115.4 FY14 782.2
FY13 3,887.8 FY13 966.4 FY13 610.6
Others Others
2.1 (50.8)
FY17 2.1 FY17 (50.8)
FY16 8.0 FY16 (31.4)
FY15 7.9 FY15 (37.4)
FY14 4.7 FY14 (30.7)
FY13 4.2 FY13 (30.0)
C FINANCIAL RATIOS
Basic Earnings per Share (sen)
Including Exceptional Items 7.78 9.24 11.38 7.44 11.31
Excluding Exceptional Items 7.53 9.58 10.95 10.52 6.76
Net Assets2 per Share (RM) 2.22 2.38 2.69 2.67 2.66
Net Tangible Assets3 per Share (RM) 0.81 0.95 1.04 1.02 1.08
Net Debt Equity Ratio (times) 0.12 0.08 0.19 0.21 0.03
Notes
The above historical financial summary statements for the respective financial year 2. Being net assets attributable to owners
may not be comparable across the under review, only the comparative figures for of the Company.
periods presented due to the changes the previous year were restated to conform
3. Being net assets attributable to owners
in the Group structure, as well as the with the requirements arising from the said
of the Company less goodwill and
effects of the initial public offering changes or adoption.
intangible assets.
in 2012.
1. Being earnings before interest, tax,
4. Being PATMI for the year over equity
For changes in the accounting policies, depreciation, amortisation, exchange
attributable to owners of the Company
adoption of new and/or revised differences, share of results of associates
as at year-end.
accounting standards, as well as and joint ventures and other non-
changes in presentation of financial operational items.
OPERATIONAL AND
SUSTAINABILITY HIGHLIGHTS
Notes
Parkway Pantai Limited and Acibadem Holdings 3. Represents the average number of days an In addition to licensed beds, “operational beds”
do not compile certain operational data, including overnight inpatient stays at our hospitals. includes beds used for treatments of less
the number of operational beds, the average 4. Represents the percentage of hospital than 24 hours, such as for chemotherapy,
length of stay and occupancy rates, on the same operational/overnight beds occupied radiotherapy and sedation or other beds
basis and therefore, these numbers may not by inpatients. such as incubators, labour beds and beds for
be comparable. The occupancy rate may be lower due to new examination, small treatments and relaxation,
hospitals that are in the ramp up stage. from which Acibadem derives revenue and
For changes in classification/definitions for the
does not require licensing.
respective financial year under review, only the 5. The Group acquired Continental and Global
comparative figures for the previous year were “Overnight beds” comprise beds used for
Hospitals during FY2015. Information disclosed observation and treatment of at least 24 hours.
restated to conform with the current classification/ is for full year FY2015.
definitions. 8. Aile Hospital Goztepe’s operations were
6. Includes 2 medical centres in 2015 and 2016, and suspended in late April 2012 for building works.
1. Licensed beds are the approved number of 3 medical centres in 2017.
beds by the Ministry of Health that the hospital As such, the number of beds as at the end
regularly maintains and staffs. 7. Under Turkish Law, “licensed beds” refers of 31 December 2012-2015 excludes Aile
Operational beds is an internal measure for which to the approved number of beds used for Hospital Goztepe.
we include licensed beds utilised for our patients. observation and treatment of at least 24 hours, Inpatient admissions includes were Aile
including intensive care, premature and infant Hospital Goztepe for January to April 2012,
2. Represents the total number of overnight unit beds, beds in the burn care units and as before the hospital operations were suspended.
inpatients admitted to our hospitals. indicated in the hospital operation licenses.
9. Number of hospitals includes Aile Hospital
Goztepe.
2,182
NO. OF Malaysia
OPERATIONAL
BEDS
1,192
4 India
Singapore
3,818
14 Turkey*
NO. OF Malaysia
HOSPITALS
9
India 29,127
21
Singapore
Turkey*
AVERAGE 6,237
REVENUE Malaysia
PER INPATIENT
ADMISSION
(RM) 7,780
76,459 India
Singapore
8,264
197,563 Turkey*
NO. OF Malaysia
INPATIENT
ADMISSIONS
72,005
India
213,590
Turkey*
* Represents the total operating figures of Acibadem Holdings including Turkey and other overseas operations.
CORPORATE
MILESTONES
MAR MAY
14 01
Acibadem Altunizade Hospital, Acibadem International
Turkey’s largest private healthcare Medical Centre opened in
institution, opened Amsterdam, Netherlands
MAR MAY
19 02
Mount Elizabeth Hospital partnered PPL increases stake in
with People’s Association to provide Continental Hospitals to 52.3%
sponsored cancer treatments through
Life Renewed CSR programme
JAN MAY
26
in Singapore
MAR 22
21
Pantai Medical Centre signed IHH’s 7th Annual
agreement to acquire freehold land General Meeting
and purpose-built hospital in for FY2016
Seri Manjung Gleneagles Hong Kong Hospital
opened in Wong Chuk Hang,
Hong Kong Island South
23 07 09
IHH FY2016 Gleneagles Gleneagles
Results Global Hospital, Shanghai Hospital
announced Richmond Town, groundbreaking
Bengaluru launched in Shanghai
New Hongqiao
International
APR Medical Center
10
IMU’s Special
Conferment of
seven
Honorary Degrees
16
IMU’s
JUL Chariofare 2017
18
IHH pays out
first & final
single tier cash
dividend of
3 sen per
ordinary share
JUL
31
PPL acquires 55% NOV
30
stake in Angsana
Molecular
& Diagnostics SEP
22
PPL launches
inaugural Innovation
Challenge
PPL Quality Summit
28 30-31 14
IMU first university in PPL inaugurates IMU Hospital’s
the region to integrate FutureHealth Now: groundbreaking
the United States CEO Breakfast Series
Medical Licensing
Examination in its
medical programmes
CORPORATE STRUCTURE
FOR CORE OPERATIONS
As at 30 March 2018
100%
100%
35.69%
CORPORATE INFORMATION
Board of Directors
Dato’ Mohammed Azlan bin Hashim Chang See Hiang Quek Pei Lynn
Chairman, Non-Independent, Non-Executive Senior Independent, Non-Executive Non-Independent, Non-Executive
(Alternate Director to Chintamani
Dr Tan See Leng Rossana Annizah binti Ahmad Rashid
Aniruddha Bhagat)
Managing Director and Chief Executive Independent, Non-Executive
Officer, Non-Independent, Executive Takeshi Saito
Kuok Khoon Ean
Non-Independent, Non-Executive
Mehmet Ali Aydinlar Independent, Non-Executive
(Alternate Director to Koji Nagatomi)
Non-Independent, Executive
Shirish Moreshwar Apte
Chintamani Aniruddha Bhagat Independent, Non-Executive
Non-Independent, Non-Executive Tan Sri Dato’ Dr Abu Bakar bin Suleiman
Jill Margaret Watts (Retired on 31 December 2017)
Koji Nagatomi (Appointed w.e.f. 4 April 2018) Chairman, Non-Independent, Executive
Non-Independent, Non-Executive Independent, Non-Executive
JOINT CHAIRMAN’S
STATEMENT
6.76
A SUSTAINABLE Bringing exceptional care and delivering
ORGANISATION superior clinical outcomes to our
patients remains an absolute priority
At IHH, we believe sustainability and
Basic Earnings being a responsible corporate citizen are
for us and underpins everything we
do. Our focus has always been to
per Share (sen) key to corporate success. We have built
provide world class healthcare services
(Excluding Exceptional Items) an enduring business by embracing that
to patients who choose our hospitals
ethos, creating and delivering long-term
to meet their medical needs.
value for our stakeholders.
In support of this goal, we have
In parallel with maintaining a robust
3.0 sen
established an International Clinical
balance sheet and a strategy to grow
Governance Advisory Council
in value, we are dedicated to providing
(“ICGAC”) which advises the Board as
our loyal shareholders with no less
Dividend than 20 per cent of the Group’s profit
part of the Group’s clinical governance
framework. Made up of independent
per Ordinary Share after tax and minority interests (excluding
exceptional items) through dividends.
thought leaders, former academics,
practicing professionals and management
In 2017, the Board recommended a
representatives, it provides access for
first and final single tier cash dividend
the Board and management to a wide
of 3.0 sen per ordinary share for the
range of complementary expertise and
financial year ended 31 December 2017
experience. The guidance of the ICGAC
as part of our annual dividend policy.
is fundamental to ensuring that we are
This is subject to shareholders’
constantly improving clinical care,
approval at the forthcoming Annual
patient safety and quality assurance
General Meeting.
throughout our hospitals across the
IHH Group.
JOINT CHAIRMAN’S
STATEMENT
It should be no surprise that our set various platforms to allow us to our operating companies. Succession
employees are our most valuable engage with our stakeholders regularly. planning is in place to ensure business
asset and vital to our success. This is continuity, and we have developed a
To learn more about our value creation
why we have in place a robust strong bench of high-performing talent
framework, turn to page 32 in this report.
framework and channels to manage to support our growth. Our Talent
talent retention and attraction, training SUSTAINABILITY REPORTING Council consists of members of the
and development opportunities, as well senior leadership team who meet
as employee welfare initiatives, fuelling Sustainability is a key pillar of the Group. regularly to discuss succession planning
our staff’s motivation to be and remain We have a robust corporate governance issues, recruitment and related topics.
part of the Group. framework that underpins our strategic Please refer to page 57 to learn more
sustainability vision. This framework about our Sustainability Strategy.
Doctors are also crucial stakeholders encompasses our Board of Directors, our
for us. By providing our specialists and Sustainability Management Committee ACKNOWLEDGEMENTS
consultants with a supportive and and the Sustainability Working Group.
nurturing environment, we can facilitate On behalf of the Board, we would like
The Board ensures accountability and
maximising their potential, which in turn to take this opportunity to thank all who
oversees the process of identification,
delivers the greatest care and value for have been instrumental in the resilience
monitoring and management of
our patients. At the same time, we and success of IHH over the past year.
sustainability matters.
are constantly investing in the Firstly, we would like to extend our
latest proven medical technologies to This year, our Sustainability Report thanks to our loyal shareholders for
provide cutting-edge facilities for our includes our India operations for the first trusting in our long-term vision to be a
specialists and consultants, resulting time, and we aim to expand the report to global private healthcare leader providing
in the best possible clinical outcomes cover all the geographies where we the best quality patient experience.
for our patients. operate in the report for 2018.
Our specialists, consultants and allied
We believe that open, on-going two-way Sustainable growth must be driven from healthcare professionals have continued
communication between IHH and our the top down through sound leadership. to perform their roles with dedication
stakeholders is key to understanding Our world-class management team has and passion to elevate the overall
and meeting expectations. We have also deep experience in managing hospital patient experience, enabling us to
operations at the Group level and within
CEO’S MESSAGE
STRATEGIC MILESTONES Hospital represents IHH’s single With our RMB8.0 billion project pipeline
IN 2017 largest hospital investment since the across Greater China, we are on our way
opening of Mount Elizabeth Novena in to making it our fifth home market after
2017 marked a year of continued
Singapore in 2012. Already, it is ramping Malaysia, Singapore, Turkey and India.
growth for the Group across most of
up and taking on increasingly complex In June, together with our strategic
our markets. In line with our vision of
medical treatments. partner in Mainland China, Taikang
becoming a leading global healthcare
Insurance Group (“Taikang”), and our
player, we seized opportunities Hong Kong’s population continues to
project joint venture partner, Shanghai
throughout the year to grow both age quickly with one in every three
Hongxin Medical Investment Holding,
organically and inorganically. people expected to be older than 65
we broke ground for Gleneagles Shanghai
in 2066, as reported by the Hong Kong
We are proud to announce the opening Hospital. In addition, we plan to roll out
government’s recent statistics on its
of Gleneagles Hong Kong Hospital greenfield hospitals projects in Chengdu
population. Consequently, this has led
in March, a major milestone in our and Nanjing over the next three years.
to a rising demand for private healthcare
journey to making Greater China To further accelerate our growth in China,
services, which presents tremendous
our fifth home market. A 500-bed the Group entered into a strategic
potential for Gleneagles Hong Kong
multi-speciality private tertiary hospital, partnership with Taikang to leverage
Hospital. In fact, it is on the request from
Gleneagles Hong Kong Hospital boasts their complementary strengths in
the authorities that we opened all 500
cutting-edge medical technologies, healthcare and insurance. IHH and
beds at once instead of our usual phased
providing a comprehensive range Taikang will jointly fund projects to
approach of opening new beds in new
of clinical services. Located at manage our primary care portfolio and
hospitals. By doing so, we hope to
Wong Chuk Hang on Hong Kong new hospital projects in Mainland China.
alleviate the strain in the public hospitals.
Island South, Gleneagles Hong Kong
CEO’S MESSAGE
RM11.1
market leaders, we are also taking of the curve. To this end, we are
advantage of future opportunities to increasingly leveraging innovation
ensure our growth continues to be to help us incrementally improve our
billion
sustainable. existing business model. IHH has a
Our strong pipeline of expansion dedicated team to explore different
projects in Malaysia, Turkey and China innovations, including potentially
is backed by our robust balance sheet, revolutionary solutions that would
allowing us to consolidate our strengths enhance our healthcare service delivery.
and leadership positions in these At the same time, we have rolled out
Profit After Tax and markets. Apart from driving growth various initiatives across the Group to
embrace this innovation culture, as
Minority Interest through organic investments, we are
also looking at value-accretive very often, some of the best ideas on
(“PATMI”) acquisitions in new and existing markets. how we can transform ourselves come
While acquisitions come with their own from within.
(Excluding Exceptional Items)
RM595.3
risks, we manage them carefully by Our strategies, however, can only be
performing detailed due diligence executed with the right talent. This is
on every project. For example, our why we are strong advocates of providing
million
acquisitions in India completed in 2015 training and development opportunities
have already turned EBITDA positive. for our people and will continue to invest
As we seek to solidify our market leading in them. We also ensure we have a
positions, we are continually looking competitive remuneration framework in
to improve our hospitals’ operational parallel with proactively creating career
performance by strengthening and pathways for our employees. With an
institutionalised human capital approach
Basic Earnings enhancing the quality of our healthcare
within the Group, we aim to build a
services, especially for high acuity cases.
Per Share (sen) This will allow us to provide more platform that will allow us to develop
(Excluding Exceptional Items) comprehensive care for our patients. a pipeline of talent to support the
6.76
Over time, we can add further value organisation’s growth and succession
for our patients by tailoring the best demands in the long run.
Return on
Shareholders’ Funds
(Excluding Exceptional Items)
2.72%
BUSINESS MODEL
PATIENTS
Patients turn to us for good clinical
outcomes and access to the latest
medical technology. We ensure speed,
89.9%
Average patient satisfaction
comfort and high-quality medical
care thanks to highly skilled doctors and index in Malaysia, Singapore
specialists who have access to excellent and Turkey
laboratories for diagnostics and
other services.
EMPLOYEES
In addition to competitive remuneration
and a nurturing work environment,
IHH provides continuous training and
32
hours of training per employee
development opportunities for all our
employees. This creates a motivated
and engaged workforce, both in clinical
and business services.
Our
Integrated
BUSINESS
PARTNERS
We strive to form and develop
97%
Healthcare long-term relationships with our doctors,
other healthcare professionals and
of payments were made to local
suppliers in the first quarter of
Network vendors. The doctors benefit from the
use of our best-in-class medical
2017 in Turkey
equipment and support from our
professional staff, who carry huge
passion and empathy in the workplace.
IHH mandates that all suppliers and
vendors are approved by and registered
with the local regulatory body for the
sale of health products. We work closely
with suppliers who are ethical and
committed to the sustainable
development of the business.
SHAREHOLDERS
We reward our shareholders by creating
wealth through active stewardship of
the company while ensuring strong
3.0 sen
Dividend paid in 2017
fundamentals. We believe in the
importance of sustainable growth and
our earnings have been growing
strongly year-on-year.
1 2 3 4
MARKET
OUTLOOK
When conducting business and strategising for the future, the management of
IHH looks carefully at relevant trends to spot opportunities and challenges early
so as to be prepared for the future.
challenges
BUSINESS STRATEGY
2
new hospitals opened
this year
We will strengthen our offerings, We aim to improve existing People are our greatest asset.
especially in high acuity services business models through We ensure that we offer competitive
that will drive revenue intensity. incremental innovation while compensation and put in place
We will focus on Centres of preparing for transformation career pathways for our employees.
Excellence that will carry out through disruptive innovation. We also do succession planning
to ensure business continuity.
complex procedures, such as
The Group has a dedicated team
stem cell transplants, robotic We support the development
exploring different innovations of future healthcare talent in
surgery and advanced cardiac
to enhance the delivery of educational institutions. We also
and neuro-vascular intervention.
healthcare services. explore international exchanges
within the Group for employees
to learn and share best pratices.
In our markets, we continually We continue to lay the foundation for At the International Medical
enhance our Centres of Excellence IHH’s transformation towards becoming University in Malaysia, academic
and integrated healthcare model. an efficient digital organisation. staff get 34 hours of training
One of the initiatives we are per year. At Acibadem in Turkey,
exploring is proton beam In Singapore, we implemented
nurses attend 15 hours of training
therapy to improve our cancer projects to increase productivity, one
per month to ensure their skills are
treatment solutions. of which is an inventory management
up to date.
The Group has become one of system that allows staff to do major
the largest multi-organ transplant stock take of hospital inventory, In addition, the Group continues
centres in India. Leveraging the saving 4,650 man-hours each year. to hire under the Management
medical expertise from its India Associate Programme. This
Furthermore, we launched several
hospitals, the Group launched its programme offers on-the-job
first Pantai-Gleneagles Global Liver mobile applications via the “Parkway
training and multi-disciplinary
programme to provide Malaysians Digital Health Patient Platform”
exposure in both management
with the option of seeking liver with the aim of enhancing our
and hospital administration to
transplant treatments in India. patient’s experience. One example
young graduates.
is the introduction of MyHealth Wallet.
15 hours
This mobile application provides a
1st private
hospital in Malaysia to provide liver
seamless process for our corporate
patients to search for our clinic
network across Parkway Shenton
of training per month for nurses
in Turkey
treatment and transplant services, in facilities. The platform also allows our
partnership with one of our hospitals corporate patients to track clinics and
in India hospital visits, as well as their bills.
4,650
man-hours saved
Cybersecurity risk
RISK
MANAGEMENT
We have integrated material sustainability risks. To view our material sustainability Annually, we do a risk review that is
matters into our ERM framework. Using matters, turn to page 63. augmented by an independent audit
our materiality assessment process, function to ensure that our risk
We have also appointed risk managers
we identify and assess these matters management framework and our
to manage the sustainability risks faced
and then rate them using our risk rating processes are sound and effective.
by the different IHH entities and the
criteria based on their likelihood and
responses needed to counter threats For more on our risk management
impact. This allows us to compare
and to take advantage of opportunities. strategy, turn to page 161.
sustainability issues with other business
The Group has put in place structured and effective risk management system to identify,
track and mitigate key risks associated with the Group’s operations, thereby enhancing
the Group’s decision making capabilities and reducing uncertainties associated
with executing our strategies. Key risk factors and mitigation measures are as follows:
Key Area Principal Description Mitigation Material Trend
Risk Factor Measures Matters
Strategic Geopolitical The Group is subject to political, Our key mitigating strategy includes • Compliance
risk economic and social developments, the diversification of businesses and regulatory
conditions and changes in the and geographies in the Group. risks
countries that we operate, which The Group’s presence in various
include our home markets of countries helps to mitigate the
Malaysia, Singapore, Turkey, India impact of political instability and
and key growth markets of China market volatility in specific country.
and Hong Kong. For countries facing political
uncertainties, we continue to
actively monitor the situation
to ensure the potential adverse
impacts are understood and
where possible mitigated.
Operational Talent The Group’s ability to meet our Talent management and retention • Employee welfare
& Workforce strategic objectives in delivering strategies are constantly reviewed in • Employee health
Management comprehensive innovative healthcare accordance with the Group’s agile and safety
solutions is highly dependent on a approach in retaining our workforce • Talent retention
diverse set of expertise, skill-sets and and attracting new talent to our
• Availability
experience offered by our healthcare team. Our learning and development
of skilled
professionals from various countries. programmes are in place to ensure
manpower
Inability or failure to recruit and retain key our employees continuously strive
staff could affect the Group’s operations. to achieve their full potential. • Training and
development
Cybersecurity The Group employs information Cybersecurity measures are • Security and
Risk technology (IT) systems to support continuously reviewed and upgraded, asset protection
its business, including the provision including monitoring of networks
of healthcare and telemedicine and systems, vulnerability
services. Security breaches and other assessments and penetration testing
IT disruptions could interfere with the and employee training. Although the
Group’s operations, compromise Group maintains insurance coverage
information belonging to the Group to mitigate against the various
and its patients, employees and cybersecurity risks where feasible,
partners, exposing the Group to there can be no guarantee that all
liability which could adversely costs or losses incurred will be
impact our business and reputation. fully insured.
Financial Foreign Exchange rate instability could The Group actively monitors its • Sustainable
Exchange Risk adversely affect our business, financial foreign currency risk and minimises international
condition, results of operations and such risk by borrowing in the healthcare
prospects. The Group is exposed functional currency as its foreign services
to foreign exchange risk on sales, investments. It also enters into • High maintenance
purchases, cash and cash equivalents, foreign exchange forward contracts cost
receivables and payables, and and cross currency interest rate
loans and borrowings that are swaps to manage its exposure.
denominated in a currency other
than the respective functional
currencies of Group entities.
Pre mitigation risk increased Pre mitigation risk remained unchanged Pre mitigation risk decreased
42 Financial Review
45 Home Market - Malaysia
46 Home Market - Singapore
47 Home Market - Turkey
48 Home Market - India
49 Growth Market - Greater China
50 IMU Health
51 ParkwayLife REIT
FINANCIAL REVIEW
YTD 2017 VS YTD 2016 compared to RM59.9 million the year mechanism with three key pillars as
The Group achieved revenue growth of before. In addition, the Group recognised the foundation:
11% to RM11.1 billion year-on-year, while a RM13.1 million gain from the divestment
1. Achieving synergies from economies
EBITDA was flat. Organic growth from of PLife REIT’s investment properties in
of scale and better operational
existing operations and the opening of 2016, while there was no such gain in 2017.
efficiencies;
hospitals in 2017 led to the increase in The Group’s PATMI excluding exceptional 2. Increasing productivity of our people;
revenue. The ramp up of the Bulgaria items decreased 31% to RM595.3 million and
operations of Tokuda Hospital and City as a result of incremental depreciation, 3. Improving our patient turnaround time
Clinic Group, acquired in 2016 also amortisation and finance costs associated
contributed to the increase in the with the opening of two new hospitals in Capital management
Group’s revenue. 2017. Net financing costs also increased Our philosophy is to maintain a strong
as more borrowings and loans were capital base and ensure IHH’s long term
Despite the double-digit revenue growth,
undertaken. The cash was used for working financial sustainability. Towards that aim,
EBITDA was flat at RM2.3 billion due to the
capital, capital expenditure, acquisitions we will monitor and maintain an optimal
start-up costs from Gleneagles Hong Kong
and purchase of investment properties. debt-to-equity ratio that complies with
Hospital and higher operating and staff
debt covenants and regulatory requirements.
costs. However, this was mitigated by Cost management continues to be a We will continue to build and maintain
lower bad and doubtful debt expenses priority at IHH. The Group will continue to investor, creditor and market confidence
recognised in 2017 of RM38.8 million leverage on an effective cost management to sustain the future development of
our business.
Liquidity
974.7
Our current cash, short-term and long-term 222.5
13.3 11.008.6
515.1 (601.4) (5.9)
borrowings and anticipated cash flows 9,890.3
OPERATING REVIEW
Healthcare
across the globe
What we do
COMPLEMENTARY MEDICAL
SECONDARY & QUATERNARY EDUCATION
PRIMARY CARE ANCILLARY
TERTIARY CARE CARE
SERVICES
KEY FACTS
Parkway Pantai operates 14 hospitals in Malaysia – 10 Pantai hospitals and four
Gleneagles hospitals. Three of these hospitals – Gleneagles Kuala Lumpur, Gleneagles
Revenue Penang and Pantai Kuala Lumpur – are JCI-accredited. All of our hospitals in Malaysia are
RM1.8
accredited by the MSQH.
IHH also operates Pantai Premier Pathology, a diagnostics and analytical laboratory
testing service, and Pantai Integrated Rehab, which provides comprehensive
Performance highlights
In Malaysia, our revenue increased by 13% to RM1.8 billion from RM1.6 billion while
EBITDA increased 19% to RM513.8 million from RM430.8 million. This is due to the continual
ramp up of operations at Pantai Hospital Manjung, Gleneagles Kota Kinabalu Hospital and
EBITDA Gleneagles Medini Hospital. The newest hospitals, Gleneagles Kota Kinabalu Hospital
RM513.8
and Gleneagles Medini Hospital, together contributed RM126.2 million to the Group’s
revenue, a 102% increase over the year before. The two hospitals have turned EBITDA
positive, with an EBITDA contribution of RM11.0 million in 2017.
million Inpatient admissions increased 2.7% to 197,563 in 2017. Our Malaysian operations
have continued to make significant strides in improving revenue intensity. The average
revenue per inpatient admission increased to RM6,237, a 10.9% jump as more complex
cases were undertaken.
Outlook
Hospital Expansion Pipeline The future continues to bode well for Parkway Pantai due to a number of favourable
trends, namely an ageing population, increasing life expectancies, rising affluence and
Type Hospital
an improved case mix. All this suggests that the home markets of Malaysia, Singapore
Expansion Pantai Hospital and India will continue to see sustainable growth and demand for private healthcare
Kuala Lumpur consumption in the future.
Block B We see Malaysia as one of the Group’s high-growth markets, with plans to further grow
Phase 2: our presence with expansion plans in the pipeline. Our expansion of Pantai Hospital
120 bed capacity Kuala Lumpur is scheduled to be completed by 2018, while Pantai Hospital Ayer Keroh’s
(by 2018) expansion is targeted to be done by 2020. At the same time, we will continue to explore
greenfield and brownfield projects to consolidate our position in Malaysia.
Expansion Pantai Hospital
Ayer Keroh
160 bed capacity
(by 2020)
OPERATING REVIEW
What we do
COMPLEMENTARY
SECONDARY & QUATERNARY MEDICAL
PRIMARY CARE ANCILLARY
TERTIARY CARE CARE EDUCATION
SERVICES
KEY FACTS In Singapore, Parkway Pantai operates a network of four JCI-accredited hospitals, namely
Mount Elizabeth Hospital, Mount Elizabeth Novena Hospital, Gleneagles Hospital and
Parkway East Hospital. With over 900 licensed beds, Parkway Pantai is also one of the
Revenue largest providers of private inpatient care in the Republic. More than 1,400 specialists are
RM3.8
credentialed to admit patients into these four hospitals.
The Group has over 50 clinics under the Parkway Shenton banner in Singapore. We are
billion
one of only two private healthcare providers to offer a broad range of integrated services
across the primary, secondary, tertiary and quaternary continuum. We also provide
ancillary healthcare services through ParkwayHealth Radiology and
ParkwayHealth Laboratory.
In addition, Parkway Pantai has an education arm known as Parkway College. Parkway
College focuses in the niche fields of nursing, allied health and healthcare management.
EBITDA Performance highlights
RM1.1 Revenue in Singapore increased 8% to RM3.8 billion from RM3.6 billion as we ramped up
operations at Mount Elizabeth Novena Hospital. EBITDA increased 13% to RM1.1 billion
billion
from RM0.9 billion.
Inpatient admissions increased 3.2% to 76,459, driven by an increase in local patients.
Revenue per inpatient admission increased 7.5% to RM29,127.
Outlook
While Singapore is a relatively developed market, there is potential for growth due to its
rapidly ageing population, increasing health awareness (as well as awareness of
treatments available), the prevalence of chronic illness and greater affluence. To meet
growing demand for high acuity service offerings, we will explore introducing more
precise and advanced treatment methods to achieve excellence in clinical outcomes and
improve our hospital bed turnover rate.
What we do
COMPLEMENTARY
SECONDARY & QUATERNARY
PRIMARY CARE ANCILLARY
TERTIARY CARE CARE
SERVICES
KEY FACTS Acibadem is Turkey’s leading private healthcare provider, offering integrated healthcare
services across 21 hospitals and 16 medical centres in Turkey, Macedonia and Bulgaria. It
offers more than 3,800 licensed and operational beds.
Revenue The Acibadem brand is synonymous with clinical excellence in Central and Eastern
RM3.9 Europe, the Middle East and North Africa. Six hospitals under Acibadem Holdings are
JCI-accredited. Acibadem also boasts some of the most advanced biomedical
billion
technology and equipment in the region.
Performance highlights
Acibadem Holdings registered RM3.9 billion in revenue, compared to RM3.5 billion in 2016.
The strong revenue growth was the result of the continuous ramp up of Acibadem Atakent
University Hospital and Acibadem Altunizade Hospital. Tokuda Hospital and City Clinic
Group in Bulgaria, acquired in 2016, contributed 12 months of revenue in 2017, compared
EBITDA to seven months of revenue in 2016.
RM617.9
Acibadem’s existing hospitals and healthcare businesses grew, except for Acibadem
Kadikoy Hospital and Acibadem Kozyatagi Hospital, which decanted some patients to
the newly opened Acibadem Altunizade Hospital. On a blended basis, revenue from
million
Acibadem Kadikoy Hospital, Acibadem Kozyatagi Hospital and Acibadem Altunizade
Hospital increased by RM92.2 million in 2017 as compared to 2016.
Acibadem Holdings’ EBITDA grew 15% to RM0.6 billion from RM0.5 billion on the back of
higher revenues. Acibadem’s EBITDA was partially eroded by higher operating costs
arising from medical inflation in Turkey.
Inpatient admissions grew 24.5% to 213,590 in 2017 with contributions from Acibadem
Hospital Expansion Pipeline Altunizade Hospital, as well as Tokuda Hospital and City Clinic Group in Bulgaria.
Type Hospital Meanwhile, revenue per inpatient admission grew 12.0% to RM8,264 in 2017 as more
complex cases were undertaken and there was an increase in foreign patients.
Expansion Acibadem Maslak Outlook
195 bed capacity
Acibadem expects patient volumes and revenues to grow with the continued demand
(by 2018)
and increased affordability of private healthcare. Acibadem Altunizade Hospital will also
Greenfield Acibadem contribute to Acibadem’s revenue as patient volume grows and more complex cases are
Kartal, Istanbul undertaken. Acibadem Maslak Hospital is currently undergoing an expansion to double its
120 bed capacity bed capacity. Once completed in the second half of 2018, it is expected to contribute
(by 2021) to revenue.
OPERATING REVIEW
What we do
COMPLEMENTARY
SECONDARY & QUATERNARY
PRIMARY CARE ANCILLARY
TERTIARY CARE CARE
SERVICES
KEY FACTS Our strategy has been recalibrated to inorganic growth. This is with a clear focus
on targeting specific specialties of multi-organ transplants, gastrointestinal diseases and
hepatobillary procedures of the India market. In March 2015, IHH acquired a 51% stake
Revenue in Continental Hospitals, which operates a multi-specialty tertiary and quaternary hospital.
RM708.6
This was followed by the acquisition of 72% equity on a fully diluted basis in
Global Hospitals.
million
Performance highlights
In India, revenue grew 27% to RM708.6 million. EBITDA decreased to RM13.7 million from
a high base in 2016 when the Group recognised a RM12.3 million reversal of provision for
doubtful debts on amounts due from an Indian joint venture.
In India, Parkway Pantai’s inpatient admissions increased 15.9% to 72,005, while its
revenue per inpatient admission increased 2.4% to RM7,780.
EBITDA
RM13.7
Outlook
India is a market of tremendous potential due to its expanding population, an increase
in the incidence of lifestyle related diseases and its rising affluence. To set itself apart
million
from other private hospital chains in India, we continue to focus on performing complex
treatments, such as multi-organ transplants and the treatment of treating upper
gastrointestinal diseases. The Group will continue to introduce new niche specialities
to enhance its service offerings. We expect that, over time, volume will ramp up and
the case mix will improve.
Parkway Pantai will also look for earnings-accretive opportunities in 2018 to further
solidify its footprint in the subcontinent as part of India expansion.
What we do
COMPLEMENTARY
SECONDARY & QUATERNARY
PRIMARY CARE ANCILLARY
TERTIARY CARE CARE
SERVICES
million
Parkway Pantai operates a 500-bed multi-specialty private tertiary hospital, Gleneagles
Hong Kong Hospital, located at Wong Chuk Hang on Hong Kong Island South and a
flagship medical centre.
Performance highlights
Revenue from our activities in North Asia increased from RM259.2 million to RM332.7 million.
Our EBITDA loss widened to RM252.0 million from RM27.9 million due to start-up costs
EBITDA from the opening of Gleneagles Hong Kong Hospital. We expect EBITDA to improve
RM252.0
as Gleneagles Hong Kong Hospital ramps up its operations. Gleneagles Hong Kong
Hospital was opened in March 2017, and it has begun to contribute to Parkway
Pantai’s revenue.
million Outlook
In Greater China, we have laid firm foundations to make it our fifth home market. Through
loss
our greenfield hospital project pipelines, we are looking to capture the tremendous
opportunities in this growing region. Gleneagles Chengdu Hospital is slated for opening
in early 2019, and Gleneagles Shanghai Hospital is expected to begin operations in
2020. We expect to invest RM1.2 billion in China over the next three years. These
investments will be funded by bank facilities and business partners.
OPERATING REVIEW
What we do
MEDICAL
EDUCATION
KEY FACTS IMU was set up as a college in 1992, providing five semesters of medical education to
students who would then complete their medical degrees at partner universities abroad.
In 1999, it was conferred full university status and could then offer its own medical
Revenue programme. This gives students the option to complete the course in Malaysia or
RM250.4
choose a transfer programme.
Today, IMU has 33 partner universities in the fields of medicine, dentistry, pharmacy,
million
health sciences and complementary medicine (chiropractic and Chinese medicine).
The partner universities are in Australasia, the United Kingdom, Ireland, North America
and China.
Performance highlights
In 2017, IMU Health’s revenue increased 6% to RM250.4million. EBITDA, however,
decreased 6% to RM80.6million on the back of higher staff costs and operating and
EBITDA marketing expenses.
RM80.6 Outlook
The proliferation of institutions offering programmes in medicine, dentistry and pharmacy
million
have led to increased competition for IMU.
Nevertheless, there are still opportunities for attracting international students to medicine
and selected health sciences programmes. IMU is constantly working to benchmark its
programmes to international standards.
IMU and IMC are in the process of setting up programmes that will be delivered via
e-learning. IMU has also broke ground on its teaching hospital. The hospital will provide
medical and nursing students access for attachments and observations to a hospital,
as well as a good patient case mix.
KEY FACTS The Group holds a 35.69% equity interest in PLife REIT, one of Asia’s largest listed
healthcare REITs by asset size. PLife REIT invests in income-producing real estate
and real estate-related assets used primarily for healthcare and healthcare-related
Revenue purposes. It is managed by Parkway Trust Management Limited.
RM134.0 PLife REIT owns a well-diversified portfolio of 50 properties with a total portfolio size
of approximately S$1.75 billion as at 14 February 2018.
million
In Singapore, PLife REIT owns the largest portfolio of strategically located private
hospitals, comprising Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East
Hospital. In addition, it has 46 assets located in Japan, including one pharmaceutical
product distributing and manufacturing facility in Chiba Prefecture, as well as 45 high
quality nursing home and care facility properties in various prefectures of Japan. It also
owns strata-titled units/lots at Gleneagles Intan Medical Centre Kuala Lumpur in Malaysia.
EBITDA Performance highlights
RM282.7 Over the course of 2017, PLife REIT undertook three Asset Enhancement Initiatives
for its Japan portfolio, proactively addressing the evolving needs of its tenant’s
million
operations. Separately, the REIT completed its second asset recycling exercise in
Q1 2017 with the acquisition of five properties in Japan, further supporting tenant and
geographical diversification.
For the year under review, external revenue increased by 2% to RM134.0 million,
mainly attributable to a full year’s contribution from the nursing home acquired in 2016
and higher yielding properties acquired from the asset recycling exercise completed
in Q1 2017. EBITDA decreased 1% to RM282.7 million from a high base in 2016 when
it recognised a RM13.1 million gain on the divestment of PLife REIT’s investment
properties in 2016.
Outlook
Having developed a robust portfolio of assets despite challenging market conditions
over the last decade while continuing to build on its strategies and network, PLife REIT
remains in good stead to drive growth and continued success as it charts its course for
the next 10 years.
The long-term outlook of the healthcare industry continues to be driven by favourable
patient demographics and demand for better quality healthcare and aged care
services. Looking ahead, PLife REIT is well-positioned to capitalise on these trends,
actively pursuing potential growth opportunities by continuing to build on its strong
relationships with leading healthcare operators and looking to optimise its portfolio
through asset enhancement and strategic asset recycling initiatives.
OUR SUSTAINABILITY
STATEMENT
OUR SUSTAINABILITY
STATEMENT
SUSTAINABILITY VISION
Our vision towards providing sustainable healthcare, education and development has garnered support from IHH’s stakeholders. We
have built a culture of awareness amongst our employees of what is required by an organisation to thrive in its ecological, social and
economic environment within the context of sustainability.
Our vision for sustainable healthcare services focuses on five intrinsic elements as shown below:
OUR We aim to constantly improve the quality of medical care we provide to our patients
and to introduce, monitor and check processes that ensure patient safety.
PATIENTS
OUR We aim to provide all our employees with a safe working environment, to inculcate
a culture of excellence and high standards of conduct and to provide
PEOPLE fair compensation.
OUR We prioritise the health and safety of our employees and patients and have taken
measures to ensure this. We also aim to secure a sustainable supply chain in a
ORGANISATION manner that contributes to the local economy and reduces our carbon footprint.
OUR We aim to create a positive impact by improving the health and well-being of the
local communities where we operate.
COMMUNITY
Furthermore, in building towards our vision for sustainability, IHH considers the following measures important:
• To promote the effective management of the healthcare environment;
• To encourage social interaction between patient and healthcare provider;
• To expand healthcare services to emerging markets; and
• To utilise advanced and innovative technology.
Our hospitals, outpatient centres and brands and network of hospitals, private healthcare players can play in
other facilities related to healthcare are we have navigated the challenging the markets that we operate. For
the entities upon which our core operating environment of 2017. example, the ageing demographic in
business is built. Backed by a dedicated Malaysia is influencing the government
In each of our home markets, healthcare
Board of Directors, a professional to rely more heavily on private capital to
is integral to the nation’s long-term
management team and a diligent take Malaysia’s healthcare system forward.
sustainability vision. There is growing
workforce who continue to step up and
recognition of the increasing role that
deliver and leveraging on our strong
SUSTAINABILITY
STRATEGY AND ROADMAP
A robust governance framework responsibilities, which are supported by ensure compliance with the Group’s
underpins our strategic sustainability the SWG. Its main points are as follows: policies and legal and regulatory
vision. This framework encompasses obligations relating to sustainability.
• Chaired by the Chief Sustainability
our Board of Directors (“Board”), along • Ensure proper and satisfactory internal
with our Sustainability Management Officer, who is the Group Head,
systems and controls are in place
Committee (“SMC”) and Sustainability Corporate Secretarial and General
to identify and manage material
Working Group (“SWG”), who together Counsel and is supported by the:
sustainability matters in terms of
keep us focused and accountable for • Group Chief Financial Officer economic, social and environmental
sustainable practices on a daily basis. • Group Head, Risk Governance risks, and that the Group and its
The SMC serves as an advisor and • Group Chief, Human Resource Officer operating companies’ businesses are
sounding board to the Board in • Group Head, Corporate conducted in a responsible manner.
fulfilling the Board’s duty in relation Communications • Monitor key performance indicators
to ensuring accountability, oversight and targets that underpin the Group’s
• Chief Procurement Officer
and review of the process of
sustainability strategy, which are
identifying, monitoring and managing • Develop and increase stakeholder
supported by its operating companies.
sustainability matters. awareness (both internal and external)
of the need for and benefits of Sustainability champions are appointed
Our Managing Director and Chief
sustainable behaviour. in each hospital, and they represent
Executive Officer (“MD and CEO”) is
• Oversee the development and their hospitals in their respective
mandated by the Board to oversee
implementation of policies and country’s SWG. They are responsible
the delegation of duties of the SMC
practices to ensure the Group for the implementation and monitoring
in relation to sustainability reporting.
complies with sustainability of measures built into the sustainable
The SMC establishes, monitors,
obligations and commitments. strategy as supervised by the SMC
manages, coordinates and implements
• Oversee the development and under the direction of the Board. A
IHH’s sustainability strategy in keeping
implementation of operating Group-wide Sustainability Taskforce
with the Group’s annual objectives.
company-wide processes and supports the SWG in addressing
The Board-approved Terms of Reference procedures (including reporting specific sustainability matters with real
for the SMC defines its roles and systems and investigations) to or potential impact for the Group.
MD and CEO Audit and Risk Management Committee Group Internal Audit
Annual Sustainability Sustainability Risk Reporting Internal Sustainability
Statement Reporting integrated into the ERM Assurance
Sustainability Taskforce
PPL Acibadem Gleneagles/Continental IMU • Energy & Water
Sustainability Sustainability Working Sustainability Working Sustainability Working • Waste Disposal
Working Group Group Group Group
• Green Design & Construction
• Parkway (Singapore) • Acibadem Hospitals • Gleneagles/Continental • International Medical • Sustainable Procurement
(2 to be designated) (2 to be designated) (India) University • Sustainable Food
• Gleneagles/Pantai (2 to be designated)
(Malaysia)
(2 to be designated)
Numerous operational committees have feedback and decision-making in, amongst • Infection Control
been set up at Group Level, at IHH others, the following areas: • Pandemic Planning
hospitals in Malaysia, Singapore, Turkey • Facilities Management
• Sustainability Management
and India and at IMU. With the objective of • Security, Safety and Health
addressing issues facing the organisation • Therapeutics and Infection Control
• Patient Safety
and encouraging active discussions, • Medication Management
• Ethics and Internal Complaints
these committees provide staff and • Pharmaceuticals • Transplants
management a two-way platform for • Infectious Disease Outbreak • Quality
ETHICS AND
INTEGRITY
ANTI-CORRUPTION IHH and its subsidiaries are committed based on the best practices that will
Our Code of Conduct Policy mirrors the to a high standard of compliance with add value to the Group.
Group’s stance against corruption and accounting, financial reporting, internal
External auditors are selected and hired
explicitly states that “The IHH Healthcare controls, corporate governance and
by the Group, and they are invited to
Berhad Group does not permit or condone auditing requirements.
attend meetings of the ARMC and the
bribes, kickbacks or any other illegal, In 2013, IHH put in place a whistleblowing Group’s AGM to provide feedback to
secret or improper payments, transfers policy to provide an avenue for its our shareholders, if needed, regarding
or receipts.” employees to raise concerns in the conduct of the statutory audit1 and
A requirement of the Code of Conduct good faith without fear of reprisal. the contents of the audited consolidated
Policy that condemns corruption is financial statements of the company.
Another measure that protects the
that no outside agent of any kind shall Group from corruption is its internal In this section, the anti-corruption
be used to circumvent the prohibition auditing processes. The Group has measures that are implemented and
against bribes, kickbacks and other an independent internal audit function, practiced across all IHH entities in
illegal, secret and improper payments. reporting directly to the Audit and Malaysia, Singapore, Turkey and India
Fees, commissions and expenses Risk Management Committee (“ARMC”). are described.
paid to outside agents must be It provides an independent and objective
based upon proper billing, accurate assurance on areas of operations
recordkeeping and reasonable reviewed and makes recommendations
standards for services rendered.
Code of Conduct All payments and transfers of premium and other items of value to employees of other business entities or to
Policy the entities themselves should be made openly and must be disclosed and authorised in advance by the
principal, the customer and the company.
The policy is available online and it applies to all Executive Directors and employees of the Group.
Whistleblowing IHH’s whistleblowing policy enables individuals to raise concerns internally and at a high level if the individual
Policy believes there is a case of malpractice or impropriety, which are matters of public interest.
IMU Internal Internal auditing, which is a review of IMU’s control system, is carried out at Group level and operations that
Audit are exposed to corruption risks, like procurement and HR, are subject to an internal audit once every three
to four years.
A review of the revenue cycle (covering processes such as admission and collection) is carried out on a
yearly basis.
IMU Gift Policy The IMU gift policy is available on the IMU Portal (IMU’s online platform), and new employees are informed
of the IMU Portal during the new staff orientation session.
1. A statutory audit is a legally required review of the accuracy of a company’s financial records.
2. Lag measures are measures that assess the ultimate goal you are trying to accomplish, such as an increase in sales or profits; however, they are
always in the past.
3. Lead Measures are predictive, meaning they lead to the accomplishment of the Lag Measure, and influencing, meaning you can do something
about them. Lead Measures are about narrowing your focus down to the two or three things that “trigger” success or your end goal.
STAKEHOLDER
ENGAGEMENT
IHH believes that proactive engagement with our stakeholders is essential for the growth of the business. By understanding their
expectations and responding to their concerns, we aim to strengthen our stakeholders’ confidence in us. Stakeholder engagement
is also integral to how we assess most material issues towards our sustainability performance.
We regularly engage with our stakeholders through surveys, meetings, town hall meetings, formal partnership and focus groups
(see Table 2).
Senior
Management
8
Stakeholder
Local Engagement
4 Academia
Communities
7
5
6
Regulators Patients
Accreditation
Bodies
Methods of Engagement
The risks and opportunities involved in In 2016, we analysed survey responses In 2017, as part of our endeavour to
shifting towards greater sustainability from our stakeholders who participated identify materiality and to build capacity
present the organisation with complex in the engagement, resulting in a on sustainability, we carried out
multi-dimensional and sometimes materiality matrix that depicted the an internal assessment with IHH’s
interconnected issues. Therefore, by matters of significance to our business management in Malaysia, Singapore,
developing a robust understanding of and stakeholders. Turkey and India.
what issues are material to our operations,
We believe that it is important to The outcome of these discussions was
to the environment and to our communities,
assess IHH’s material sustainability a list of our material sustainability matters
we can better prevent or mitigate these
matters every year in order to study as presented in Table 3. The material
risks and gain access to the opportunities.
any changes in prioritisation and to matters were then deliberated and
Identifying material matters is the process address those matters that recur as a prioritised using the weighted ranking
of identifying EES risks and opportunities. high priority. method by our SMC and SWG, to configure
our Materiality Matrix (see Figure 1).
IDENTIFYING
MATERIAL MATTERS
9 7 1
8 5 4
8 17 3 2
6
14 9
24 13
7 22 15
Importance to Stakeholder
18 12
6 25 23 19 11
5 20
16
29 10
26 21
4
28 27
2 30
0
1 2 3 4 5 6 7 8 9
Importance to Business Operation
1 Patient and family safety 10 Talent retention 18 Higher hospital infrastructure 25 Management of human rights
2 Compliance and regulatory risks 11 Availability of skilled manpower and employee insurance cost across the value chain
3 Patient satisfaction/expectation 12 Availability of beds 19 Vendor and supplier 26 Transparency
4 Emergency preparedness 13 Privacy of medical records development 27 Carbon emissions
5 Security and asset protection 14 Ethics and integrity 20 Food quality 28 Plastic waste management
6 Hazardous waste management 15 Training and development 21 Innovation 29 Affordable treatment and
7 Employee health and safety 16 Waste disposal 22 Water availability accessibility to medical
23 Employee welfare treatment for our local
8 International healthcare services 17 High maintenance cost community
9 Energy conservation 24 Green design and construction
30 Community development
Based on the Materiality Matrix, we Table 4: Top 10 Material Sustainability Matters and corresponding SDGs
have selected our top 10 material
sustainability matters (Table 4). Top 10 Material Sustainability Matters Relevant SDGs
Throughout our sustainability
statement, we have described our 1 Patient and family safety
approach in addressing these material
matters and thereby strengthening the 2 Compliance and regulatory risks
corresponding six SDG Focus Areas
that IHH has selected to embed in the
3 Patient satisfaction/expectation
organisation’s processes and activities.
4 Emergency preparedness
9 Energy conservation
10 Talent retention
Building quality,
safe and sustainable
healthcare services
for our patients
OUR PATIENTS
As a healthcare provider, IHH has developed plans and procedures across all
four home markets towards ensuring, amongst others, the rational use of
medicine, food quality, laboratory readiness, epidemic response and disaster
preparedness. IHH recognises the importance of these G4 specific sector
indicators as it improves public healthcare effectiveness.
Malaysia and Multidisciplinary committees have been set up to coordinate policies and monitor the use of medicines
Singapore
• Medical Advisory Board
• Medical Quality Assurance Committee
• Therapeutics and Infection Control Committee (“TICC”)
• Pharmacy and Therapeutic Committee
The Pharmacy Division tracks the usage of antibiotics such as Carbapenems4 and Vancomycin5 and reports
this to the TICC.
• Upon admission, the Pharmacist will perform medication reconciliation where prescribed medications are
reconciled with the patient’s own medications taken prior to admission to look out for duplication,
omission or an unintentional change in the dosage or dosage regimen.
• A Pharmacist will check the prescription for the appropriateness of the drug, dosage regimen, route of
administration, drug interactions, therapeutic duplication and potential cross allergy.
• A Pharmacist will provide counselling on the proper use of medications to the patient.
Turkey The Group-wide Medication Committee and Clinical Pharmacists (permanent members of the Infection and
Patient Safety Committee) monitor the rational use of medicines. Additionally, all medication orders have to
be approved by a Clinical Pharmacist.
As part of the discharge process, Acibadem nurses provide detailed education to the patients and provide
them with a Patient Information Form along with the Discharge Form to guarantee correct usage of these
drugs. Additionally, the e-prescription system mandates certain information pertaining to medications for
the order to be valid.
Acibadem developed AStore, an electronic order system that works in conjunction with the automatic drug
supply and dispensing system, enabling operational efficiency and patient safety and ensuring the rational
use of medicines.
The ‘Rational Antibiotic Use Campaign’ led by Acibadem Healthcare Group’s Medical Director and the
Chairman of the Infection Control Committee was launched in 2017, targeting healthcare professionals and
the general public.
The Campaign focuses on respiratory tract infections, specifically those related to the paediatric age group,
and a compact guideline for the treatment of respiratory tract infections has been developed.
Most of Acibadem’s Physicians are permanent staff with only 5 per cent of all admissions being treated by
external Physicians/visiting staff. As a result, it is relatively easy to enforce and ensure the aforementioned
rational drug use measures are practiced across operations.
India The responsibility to prescribe the right medication rests with the admitting Doctor (resident or otherwise)
for inpatients. This is supervised by the Head of Department during daily rounds.
The Chief Nursing Officer and Medical Director randomly inspect case papers to check if the prescribed
medications are administered in the right quantity and frequency.
The Medication Use Manual defines the procedures for ordering, dispensing, prescribing and storing as
well as for the reporting process in the case of medication error. The Medication Management team
monitors compliance to Medication Management policies and ensures safe practice in medication use,
which includes blood components, radioactive substances and implants.
4. Carbapenems are antibiotics used for the treatment of infections known or suspected to be caused by multidrug-resistant bacteria.
5. Vancomycin is an antibiotic used to treat a number of bacterial infections. The World Health Organisation’s List of Essential Medicines features
the most effective and safe medicines needed in a health system and Vancomycin is on the list.
OUR PATIENTS
India Gleneagles Global Hospitals have the following policies in place to ensure the rational use of medicine in
all their hospitals:
• Policy on the use of psychotropic and narcotic substances
• Policy on the use of chemotherapeutic agents
• Policy on the use of radioactive drugs; and
• Antimicrobial policy.
The Antimicrobial6 Policy ensures the following:
• Uniform standards and treatment protocols
• Antibiotics relevant to the type and sensitivity of organisms that are prevalent locally are chosen
• Restriction of indiscriminate use in order to prevent the emergence of drug resistance
• Monitoring of the utilisation of restricted antibiotics.
The Infection Control Team (Hospital Infection Control Committee Chairperson, Hospital Infection Control
(“HIC”) Nurse, HIC link Nurses, HIC Officer and Infectious Disease Specialist), along with the Clinical
Pharmacist, closely monitors the rational use of antibiotics as a part of the Antibiotic Stewardship
Programme. This policy is reviewed yearly and is applicable across all units of the hospital.
Continental Hospitals follows the Antimicrobial Stewardship Programme, which aims to promote and
measure the use of the appropriate agent, dose, duration and route of administration of antimicrobial
agents. Monitoring is done by Clinical Audit teams from the Infection Control and Pharmacy Department
through the restricted antimicrobial forms for 14 restricted antimicrobials.
The importance of the rational use of medication is reinforced to all the Consultants during Continual
Medical Education (“CME”)7 and during internal clinical meetings. There is a module on Medication
Management in CME for nurses as well, and it is one of the initiatives towards rational medication use
in nursing.
FORMULATING PATIENT MENUS
The quality, nutritional value and sustainability of food has become one of the factors by which patients exercise choice when selecting
their healthcare providers. Healthier, more sustainable food in our hospitals helps improve patient recovery time and also encourages
positive lifestyle changes outside the hospital for our patients, leading to a positive impact on their health and well-being, as well as on
our environment. With this in mind, IHH hospitals provide patient menus that list healthy and nutritious food options and comply with
the food quality standards prevalent in Malaysia, Singapore, Turkey and India.
Malaysia and Patient menus are planned based on the principles of a healthy, well-balanced diet, and meal portions are
Singapore based on what is recommended for the general Asian population.
Special consideration is given to reduce saturated fat, trans fat and sodium content by limiting the use
of processed food. When needed, a patient’s menu is also individually tailored to complement his or her
medical treatment.
All our food products are procured from vendors certified by Singapore’s Agri-Food and Veterinary
Authority in Singapore or Malaysia’s Ministry of Agriculture who are appointed through a tender process.
This ensures the safety of our food supply, including in terms of the use of additives and preservatives in
food products and also in terms of food products made from genetically modified food crops.
6. Antimicrobials are those agents that destroy or inhibit the growth of microorganisms, especially pathogenic microorganisms.
7. Continuing Medical Education (CME) refers to a specific form of continuing education that helps those in the medical field maintain competence
and learn about new and developing areas of their field.
Malaysia and Annually, each vendor will be assessed for product quality and suitability based on a list of
Singapore evaluation criteria.
Turkey APlus, Acibadem’s food and beverage subsidiary, only works with suppliers that are certified by Turkey’s
Ministry of Agriculture, Food and Livestock.
Production permits and licenses are required from the companies prior to entering any contracts, and, in
order to maintain their certificates, producers need to undergo periodic controls and tests by the Ministry.
APlus has developed specifications for critical and high risk food groups, such as meat and flour, and
these documents spell out the colour, smell, taste, look, composition, hygiene, packaging, labelling,
transportation, storage, sampling and laboratory analysis requirements that suppliers need to meet for
their products.
APlus, during the course of using a product, conducts random sampling and analysis at accredited food
laboratories, and the analysis parameters include chemicals, such as lead, mercury, cadmium, arsenic and
melamine; pathogens, such as salmonella, e-coli, and genetically engineered organisms. Failure to meet
the standards in these tests is grounds for the rightful termination of contracts with such suppliers.
India The standard menu offered to patients meets the principles of a balanced diet.
Freshly prepared, nutritious and culturally customised food options are provided.
The Physician and the Nutritionist collaborate and consider the clinical condition of the patient in order to
make suitable dietary recommendations. Drug-food interaction and additional food supplement needs are
reviewed collaboratively by the Clinical Pharmacist, Nutritionist and Nurse Managers.
A Clinical Pharmacist is also involved in cross-checking the dietary pattern of the patient specific to his or
her medication management and the type of drug administered (antibiotics, anticoagulant, enteric coated
etc.). If any interaction is noticed, they inform the treating Consultant and educate the patient.
Surveillance of water and food quality is conducted regularly, and the reports of the same are presented in
the committee meetings. Deviations are reported immediately to the administrative team, and appropriate
measures are taken.
Inspection of kitchen and storage areas (dry and wet) is conducted regularly, and food handlers are
vaccinated for typhoid and other related communicable diseases.
Malaysia and Parkway Laboratory Services (“PLS”) in Singapore and Pantai Premier Pathology (“PPP”) in Malaysia follow
Singapore the Parkway Corporate Pandemic Response Plan for the management of highly infectious specimens.
Highly infectious specimens are not examined in-house in PLS and PPP. They are sent to designated
testing laboratories in accordance with the directives provided by the Ministry of Health for individual
novel pathogens.
OUR PATIENTS
Malaysia and An Early Detection System, Containment and Notification are the components of Malaysia and Singapore’s
Singapore Epidemic Response Plan to prevent the spread of infectious diseases.
Early Detection System: Patients are screened and health declaration forms completed as part of triage8
assessment at entry points (A&E department9, Admission Office, Day Surgery Ward and Endoscopy Centre).
Containment: Suspected or confirmed patients are promptly directed to isolation rooms for further
evaluation.
• Healthcare staff shall don appropriate personal protective equipment during contact with the patient
until a more definite diagnosis is made.
• A Rapid Response Team is activated to assist the healthcare staff to ”ring-fence” the patient and to
ensure proper infection control and housekeeping measures.
• Designated Nurses care for the patients, and there is a no visitor policy.
• Patients are transferred to a designated hospital as specified by the Ministry of Health (“MoH”) directive.
• The affected ward is locked down pending risk assessment.
• No visitors, no transferring of patients and no deployment of staff are allowed. The condition of patients
and staff is monitored closely.
• Notification: Notify the MoH Surveillance Officer, Senior Management and Infection Control Officers of
suspected or confirmed patients with emerging and dangerous pathogens.
• Singapore has a communication, command and control structure, an additional component to its
Response Plan. The roles of designated committees and other bodies in response to the Disaster
Outbreak Response System Condition (DORSCON), a colour-coded framework that guides organisations
during a pandemic, are defined.
• As part of the Disaster Management Plan, disaster drills were conducted for all IHH hospitals in Malaysia.
• In Singapore, the disaster drills for all four hospitals were conducted in November 2017.
Turkey The Epidemic Response Plan describes the actions to control an epidemic, to prevent it spreading to
uninfected individuals and to prevent an epidemic from recurring. The plan covers infectious pathogens,
as well as chemical, biological, radiation and nuclear dangers that may occur as a result of accidents,
natural disasters or deliberate acts.
Every Acibadem hospital also has its own Disaster Preparedness Plan. The plan covers internal,
external and mixed events (that impact both the community and the hospital) and details communication
procedures, coordination with stakeholders, triage, physical measures to be taken, roles and
responsibilities, evacuation instructions, gathering sites, security controls and access to medical and
other supplies.
Disaster drills are performed on a regular basis in all Acibadem hospitals under the supervision of the
Group’s Quality Directorate at each location. From January to September 2017, across all 16 hospitals,
a total of 74 disaster drills were carried out.
Acibadem’s central laboratory, Labmed Clinical Laboratories (“Labmed”), has its own Disaster Preparedness
Plan. This Plan details the expectations, roles and responsibilities of the Disaster Commander and his/her
supporting personnel, all of whom work together during a disaster situation.
8. Triage is the process of determining the priority of patients’ treatments based on the severity of their condition.
9. A&E Department is the emergency department for patients requiring emergency care for serious and life-threatening illnesses.
India The Outbreak Policy defines the processes involved in managing and investigating an outbreak, the roles
of the committees involved (Infection Control Committee/Major Outbreak Control Group/Disaster
Management Committee) and the differentiation between an acute and non-acute outbreak.
The Disaster Management Plan at Gleneagles Global Hospitals defines the emergency codes and its
corresponding responses, the key personnel and committees involved (Disaster Management Committee/
Emergency Response Teams/Command Centre) and the details of the Disaster Management Plan in a flow
chart covering a range of actions from notification to solution management. Preparedness for area
specific disasters is also part of the Disaster Management Plan.
Continental Hospitals conducted disaster drills on 27 August and 30 October 2017, and Gleneagles Global
Hospitals conducted 18 out of the 20 disaster drills planned for 2017.
Asia Pacific Society of Infection Control (APSIC10): Continental Hospitals’ Central Sterile Supplies
Department (CSSD) was awarded “APSIC CSSD Center of Excellence Award 2015–2016” in February
2017 for demonstrating outstanding leadership in delivering quality disinfection and sterilisation services.
Dedicated departments International Marketing Acibadem Health Point, Patient Care Services Team
to manage international Department for IHH hospitals International Patient Centre,
patients in Singapore and Malaysia. International Call Centre
10. The Asia Pacific Society of Infection Control (APSIC) is a multi-national, voluntary organisation dedicated to the advancement of infection
control practices to reduce hospital associated infections, monitor and control emerging and re-emerging infectious diseases and improve
patient outcomes.
OUR PATIENTS
Partnership with The Malaysia Healthcare Travel Turkey’s Ministry of Health, GHDx11, Ministry of Health
organisational bodies Council, State Tourism Board, Ministry of Finance, Ministry of of the United Arab Emirates,
Insurance and Third Party Culture and Tourism, Foreign the Kingdom of Bahrain,
Agency partners, Ministry of Economic Relations Board, the Sultanate of Oman and
Health of Bahrain, the Sultanate Health Business Council, Sri Lanka.
of Oman, Libya, the United Arab Istanbul Development Agency,
Emirates and overseas medical National Health Funds, NGOs,
concierge facilitator. Embassies, Consulates,
International Insurance and
Assistance Companies.
11. Global Health Data Exchange (GHDx), by the Institute for Health Metric and Evaluation, is the world’s most comprehensive catalog of surveys,
censuses, vital statistics and other health-related data.
12. Telemedicine is the use of telecommunication and information technology to provide clinical health care from a distance.
OUR PEOPLE
Building
a sustainable
workforce
Singapore The minimum standard entry level wage is based on market competitiveness. Information is gathered from
Collective Agreements of hospitals in Singapore and through salary surveys.
Turkey Minimum wage levels set by Turkey’s Ministry of Labour. The standard entry level wage of a registered Nurse
compared to the current minimum wage depends on the location and the department. Compensation schemes
for Istanbul hospitals are slightly higher for Anatolia hospitals, given the higher cost of living.
OUR PEOPLE
IMU (%)
38
62
Male Female
41 50.5
48 46
11 3.5
Turkey India
IMU (%)
12
68
20
OUR PEOPLE
BUILDING TALENT exposure in both management and employees by providing them with the
Learning and development are hospital administration to young necessary support to chart their career
fundamental in building our commitment graduates. In providing on-the-job path with clear objectives and a timeline.
to quality care. Our programmes are training, MAP improves graduate Employees participating in IDP find the
designed for all levels of the workforce performance, and this reflects positively programme useful and rewarding.
within the industry. The Management on our patient satisfaction levels. The The Group provides annual feedback on
Associate Programme (“MAP”) and performance of the 10-15 Management employee performance. Performance and
Individual Development Plan (“IDP”) Associates that are hired annually by appraisals are used to identify individuals
at IHH provide on-the-job training the Group is evaluated through a of high potential and to identify the
and career development opportunities 360 Degree Feedback process by specific training required for respective
for young graduates and senior their supervisors and colleagues, and the employees through Learning Needs
professionals, as well as for the outcome and progress of this programme Analysis. This analysis is an assessment
leadership team. MAP is a structured are periodically reported to Management. to identify the gaps between employees’
development programme that offers IDP, on the other hand, is built to aid the actual performance levels and expected
on-the-job training and multidisciplinary individual professional development of performance levels.
• Basic Life Support Certification Malaysia and These skill-based training programmes are essential towards
Training Singapore Nurses* teaching competency skills and preparing the Nurses to
• Nurse Manager’s Leadership provide a range of quality healthcare services to patients.
Programme
• Basic Critical Care Training
Programme
• Structural Perioperative Training
Programme
• Management and Supervisory Skills
Training
• Productivity and Quality-Related Skills
Training
• Technical Service Skills and IT Skills
Training
• Professional Academic Certifications
Training
• Overseas Seminars and Conferences
• Sponsorship Aid for education Malaysia and Nurses who choose to pursue a part-time degree or Masters
Singapore Nurses in Nursing can apply for sponsorship aid from the organisation.
This sponsorship extends to Post Basic and Advanced
Diplomas, with additional allowances for Nurses who complete
their Post Basic and Degree courses successfully.
* Nurses in Malaysia and Singapore are required to complete at least 32 hours of training each year.
Turkey
Types of Training Attendees Description
• Fire Safety All Staff To create a culture of safety and compliance throughout
• Healthcare Law the organisation.
• Disaster Preparedness
• Patient Rights and Responsibilities
• Quality Management Training
• Competency Based Interview Directors and These training programmes cater to the roles, challenges and
Techniques Assistant Directors responsibilities associated with senior management.
• New Vision in Changing
Financial Geography
• Managerial Competencies in
VUCA14 Era
• Managing Egos
• Corporate Change and Innovation
• Presentation Techniques in English
and Conflict Management
• Hand Hygiene All Relevant Staff To ensure the highest standards of professional competence.
• Information Safety and Confidentiality
• Environment and Waste Management
13. FTE or full-time equivalent is a unit that indicates the workload of an employed person in a way that makes workloads comparable.
14. VUCA stands for volatility, uncertainty, complexity and ambiguity.
OUR PEOPLE
INDIA
In India, the training opportunities
provided to the staff include Nursing
Management of Clients with Intra-Aortic
Balloon Pump (IABP), International
Patient Safety Goals, Ward Management:
Leadership Training, Regular Induction
Programmes and Communication
Etiquette. While International Patient
Safety Goals, Communication Etiquette
and Regular Induction Programmes
are provided for all employees, training
like Ward Management: Leadership
Training is specifically for Nurses,
Ward Secretaries and Floor Managers.
Figure 5 displays the number of
employees from all the IHH hospitals
in India that have attended the
aforementioned training from January
to August 2017.
Mrs. Bindu George (Director of Nursing) giving away awards at the Nurses Day celebration
2500
2000
1500
1000
500
0
Nursing International Ward Regular Communication
Management Patient Safety Management: Induction Etiquette
of Clients Goals Leadership Programmes
with Intra-Aortic Training
Balloon Pump (IABP)
Building a culture
of sustainability
throughout our
organisation
OUR ORGANISATION
BUILDING WORKPLACE SAFETY Occupational Safety and Health in providing a safe and secure workplace
We recognise that health, safety and Committees and other effective measures for our employees, patients, visitors,
security-related concerns affect the ability unique to each of our locations have contractors and other stakeholders.
of our employees to effectively perform been introduced. This section covers the See Table 7 for a summary of these
their duties. Safety and Health Policies, initiatives in Malaysia, Singapore, India safety measures.
Incident Reporting mechanisms, and Turkey that reflect our commitment
Table 7: Health and Safety Committees in Malaysia, Singapore, Turkey and India
Country Committees and other safety measures Role of the Committees and other safety measures
Malaysia Security Steering Committee • Assists in the development and enhancement of security
measures and safety systems at work
• Reviews the effectiveness of the security measurement and
programmes
• Studies the trend of incidents related to security and safety
in the workplace and reports them to the employer
• Conducts ad-hoc investigations into major security-related
incidents.
Each of the 14 hospitals has an Responsible for overseeing and coordinating all matters
Environment, Health and Safety Committee relating to occupational health and safety.
As per Malaysia’s Occupational Safety and Health Act
(“OSHA”) 1994 requirements, the Environment, Health and
Safety Committees meet once in three months.
IMU Safety and Health Committee (“SHC”) Responsible for supporting and ensuring that safety and
health related strategies are effectively implemented.
This committee meets on a quarterly basis to report on the
safety incidents that occur within IMU facilities and to discuss
possible preventive measures.
Internal reviews are conducted to ensure compliance with
OSHA 1994.
As per OSHA’s requirements, SHC shall not meet less than
once in three months.
Singapore Facility Management and Safety • Reduction and controlling of hazards and risks
(“FMS”) Committee • Prevention of accidents and injuries
• Maintaining safe conditions
Two FTEs monitoring workplace safety and FTEs report the workplace safety and health activities and
the health of the organisation measures to the FMS Committee.
Seven Environment of Care Plans: The FMS committee reviews systems, work processes
and procedures to support the objectives of these seven
• Workplace Health and Safety
Environment of Care Plans and identifies system risk issues,
• Security Management recommends strategies and mitigates the risks by conducting
• Hazardous Materials and Waste proactive risk assessment for each hospital at least once
Management every year.
• Emergency Management
The FMS Committee meets once every two months.
• Fire Management
• Medical Technology Management
• Utility System Management
India Hospital Infection Control Committee Prevention measures for Needle Stick Injury (“NSI”) and Blood
and Body Fluid (“BBF”) exposure include vaccination and
screening. As a precaution to contain infection, isolation is
observed for affected staff.
Hospital Safety Committee Manages and governs radiation exposure, cytotoxic and
radioactive exposure, chemical spill exposure and work
place injury.
Internal Complaints Committee Manages and governs harassment and gender issues. Human
Resources, Heads of Departments and the Appellate authority
are the process owners of this.
Governs Annual Health Checks specific to occupational health
issue prevention and protection and insurance cover for
treatment and emergencies, if needed.
Ad hoc Sentinel15 Events Team The team usually consists of at least six or seven senior
employees of Gleneagles Global Hospitals, who are subject
matter experts relevant to the sentinel event.
Risk Management Policy Covers all occurrences16 and near misses17 involving staff,
service users, patients, visitors, contractors or any others to
whom the healthcare organisation owes a duty of care.
Occurrence Reporting There are two systems of reporting within the hospitals. One
involves the Patient Safety Officer and an ad hoc Sentinel
Events Team to address the issue at hand. The other involves
the Safety Manager.*
Health and Safety Committee The Occupational Health and Safety Committees of the
Gleneagles Global Hospitals in India meet once in
three months.
The Risk and Safety Management Committee of Continental
Hospitals meets on a bimonthly basis.
15. A sentinel event is defined as any unanticipated event in a healthcare setting resulting in death or serious physical or psychological injury to a
patient that is not related to the natural course of the patient’s illness.
16. Occurrence is any event or circumstance which could have or did lead to unintended or unexpected harm, loss or damage to a patient, member
of staff or visitor, a Trust, its property assets, its reputation or the environment.
17. Near miss is where an occurrence or combination of circumstances did not result in actual harm, loss or damage but had the potential to cause
loss or harm.
OUR ORGANISATION
Chairman
Employee Employer
Representatives Representatives
IMU
The IMU Safety and Health Committee (SHC), which was established in 2003, is responsible for supporting and ensuring that safety and
health related strategies are effectively implemented. Figure 7 describes the structure of IMU’s SHC and the line of reporting therein.
Chairman
Secretary
Report immediately to Head of Department (HOD) and Safety Manager informs committee members
Safety Manager within 24 hours using the Occurrence Report Form of sentinel event
Occurrence investigated and report completed. It is then shared Produce recommendations so that
with the committee members such incidents are not repeated
The recommendations are officially conveyed to all the Audit at 1 month for implementation and
Departments for speedy implementation within the set time frame after 6 months to assess impact
18. A lost time injury (LTI) is an injury sustained by an employee that will ultimately lead to the loss of productive work time.
OUR ORGANISATION
OUR SUPPLY CHAIN organisation policies. For healthcare to meet the Service Level Agreement
products, such as medical consumables (“SLA”) and Key Performance Indicator
IHH mandates that all suppliers and
and devices, vendors must be registered (“KPI”) in maintenance-support-turnaround
vendors to the organisation are approved
with the local health regulatory body and time as part of the overall Tender
by and registered with the relevant local
licensed to supply the approved products Evaluation Criteria, which include
regulatory body for the sale of health
or services to the organisation. As such, vendor credibility, technical capability
products. It is IHH’s practice to procure
these vendors supplying healthcare and cost competitiveness.
from duly approved and registered local
suppliers as preferred vendors, which will products or services to the organisation This trend is also reflected in our
support the local community while meeting are likely to be those with local presence procurement operations in Turkey,
the Group’s business needs, including or registered with the local health where 97 per cent of supplier payments
lowering operating costs and reducing regulatory body and hence qualified to be in the first quarter of 2017 were made to
our carbon footprint. Our preferred included in the organisation’s Approved local suppliers.
suppliers are those who are ethical and Vendor Listing.
committed to sustainable development In India, we also select local suppliers,
In the case of IMU, for certain projects, and this is true even for high-end
and have a track record of Health, Safety
the selection of a local supplier is crucial medical equipment as these transactions
and Environmental (“HSE”) competence.
in delivering local on-site maintenance are routed through a local distributor.
At the Group Level, all suppliers are support within a reasonable and shortest
selected via proper vendor assessment lead time, and because it is economically
and evaluation processes as per advantageous. By doing so, they are able
Safety and security protocols are overseen by each hospital’s Occupation Health and Safety Committee.
Building environmental
sustainability
OUR ENVIRONMENT
Identifying environmental risks and the concept of a “healthy building” in GBI NRNC: HOSPITAL was developed
opportunities within the healthcare terms of a building’s performance in collaboration with the Ministry of
sector has become a salient part of (i.e. indoor air quality, thermal comfort, Health and Healthcare Technical
achieving sustainability. This year we lighting quality and acoustics). Research Services Sdn. Bhd. It is a bespoke rating
have included, within the scope of shows that the hospital environment tool developed specifically for hospitals
sustainability reporting, the initiatives can provide healing benefits for and covers six key criteria: energy
that have been introduced in IHH patients when it is well-connected to efficiency, indoor environmental quality,
towards improving our environmental the outside environment and has good sustainable site planning and
performance. natural lighting. management, materials and resources,
water efficiency and innovation.
This section covers three main Malaysia
categories: Green Building, Waste Below is a summary of the sustainable
Gleneagles Kuala Lumpur has been
Management and Resource Consumption. features within Gleneagles Kuala Lumpur
built and outfitted in accordance to
that led to it being awarded the Gold
GREEN BUILDING Green Building Index19 standards.
GBI Certification.
The new annexe is built with the idea of
To achieve sustainability, IHH has promoting sustainability and environmental
addressed challenges with regard to its consciousness from the ground up. In
hospital buildings, including growing fact, Gleneagles Kuala Lumpur’s new
complexity, inefficient management and Block B obtained a Gold GBI rating.
low building performance. WHO defines
• Use of low Volatile Organic Compound (VOC) products and non-urea formaldehyde products.
• The use of LED lights, energy efficient lighting control measures and the use of presence sensor controlled lighting to optimise
energy saving.
• Set up the Green Maintenance Team to maintain green features.
• The use of energy efficient LED lights reduces strain on the eyes, ensuring greater patient comfort, while reducing the carbon
footprint.
• 100 per cent use of water from rainwater harvesting and condensate collection for irrigation.
• Use of water efficient fixtures with a Water Efficiency Labelling Scheme (“WELS”) rating. We target to reduce annual potable
water consumption by > 50 per cent.
Singapore Every aspect of the hospital’s design The 73,797 sq. m (Gross Floor Area21)
Mount Elizabeth Novena Hospital has was carefully considered for the eco-friendly facility is expected to
incorporated a range of environmentally prospect of a green building. The achieve energy savings of more than
friendly features that led to it being hospital was constructed with lush 4 million kWh per year.
awarded the Green Mark20 Platinum green aerial gardens, extensive
Besides numerous sustainable features
Award in 2012, which is the highest landscaping and natural light flowing
(listed below), Mount Elizabeth Novena
award in the Green Mark rating system, through single-handed canted rooms,
Hospital is also the first private hospital
requiring a Green Mark Score of 90 as well as clean air quality through the
in Singapore to implement a paperless
and above. innovative air-handling system.
documentation system.
• Water efficiency and management systems that achieve water savings of about 30 per cent as compared to a conventional
building.
• The building features a green roof, which helps to maintain a constant temperature of 34-36°C.
19. Green Building Index (GBI) is Malaysia’s first comprehensive green rating system for buildings and towns, created to promote sustainability in the
built-environment and raise awareness of environmental issues.
20. The Green Mark Scheme was launched by the Building and Construction Authority in January 2005 to promote environmental awareness in the
construction and real estate sectors.
21. Gross Floor Area (GFA) is the total floor area inside the building envelope, including external wall and excluding the roof.
Turkey
Acibadem Altunizade Hospital is a LEED22 Gold Certified Green Hospital. By abiding with the requirements in the LEED checklist (listed
below), Acibadem Altunizade stands out as a facility that consumes power and water efficiently, ensuring that natural resources are
used effectively and the environment is not harmed.
India
With more than 700 beds, Continental Hospitals is one of the largest multi-specialty hospitals in India, and it is the first multi-specialty
hospital in India to be LEED certified. To be LEED certified, the hospital is required to meet specific standards in the following areas:
sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality, innovation in
design and regional priority credits.
22. LEED (The Leadership in Energy and Environmental Design) green building rating system, developed by the U.S. Green Building Council (USGBC)
in 1998, provides a suite of standards for environmentally sustainable construction.
23. Green OT (Operation Theatre) is a certification from Bureau Veritas, a global certification agency that ensures the quality and safety parameters
for patients and healthcare workers in the operation theatres.
OUR ENVIRONMENT
WASTE MANAGEMENT dependent on the hospital’s occupancy collector swaps the used waste bin for a
Our healthcare facilities have waste rate and the types of procedures carried new bin.
management policies and waste out at the hospital, is closely monitored.
Clinical waste management in IHH strictly
management plans but they differ to suit Malaysia complies with Malaysia’s Environmental
each country’s waste management Quality (Scheduled Wastes) Regulations
regulations and requirements. Proper The two types of waste generated by
2005. Figure 9 is a graphical representation
waste segregation is carried out at the hospitals in Malaysia are clinical and
of the total weight of clinical waste
hospitals with specific training provided domestic waste. The domestic waste is
generated by IHH hospitals in Malaysia
to the staff and Standard Operation collected daily by the municipal collector
from January to May 2017, and Figure 10
Procedures (“SOP”) to be followed. Waste while the daily collection of clinical waste
represents the total weight of domestic
management is largely outsourced to is done by a certified outsourced
waste generated by IHH hospitals in
licensed and certified waste collectors. scheduled waste collector by using a
Malaysia from January to May 2017.
The quantity and type of waste, which is bin exchange system, where the waste
Figure 9: Total Weight of Clinical Waste generated by IHH Malaysia Hospitals from Jan–May 2017
Total Weight of Clinical Waste (kg) Total Weight of Clinical Waste (kg)
18,000
15,000
12,000
9,000
6,000
3,000
0
PHSP PHP GPg PHI PHM PHK PHKL PHC PHA GKL PHBP PHAK GMH GKK
Figure 10: Total Weight of Domestic Waste generated by IHH Malaysia Hospitals from Jan–May 2017
300,000
250,000
200,000
150,000
100,000
50,000
0
PHSP PHP GPg PHI PHM PHK PHKL PHC PHA GKL PHBP PHAK GMH GKK
June 2017.
Singapore 500
The waste generated at IHH Singapore
hospitals is categorised into three
types: general waste, cytotoxic waste 0
and biohazard waste. All these types of Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17
24. A National Environment Agency (“NEA”) licensed waste collector is a waste collector that has obtained the a Waste Disposal Facility License from
NEA and the Singapore government and complies with the pollution control standards under the Environmental Protection and Management Act.
IHH Healthcare Berhad | Annual Report 2017 91
Sustainability
OUR ENVIRONMENT
Figure 12: Monthly General Waste generated by IHH Singapore Hospitals (Jan–Aug 2017)
250
200
150
100
50
0
Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 Jul 17 Aug 17
Figure 13: Monthly Cytotoxic Waste generated by IHH Singapore Hospitals (Jan–Aug 2017)
Cytotoxic Waste Generated (‘000 kg) Total Weight of Clinical Waste (kg)
0
Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 Jul 17 Aug 17
Note: PEH does not have Cytotoxic Waste, Radioactive Waste or Chemical Waste.
75
60
45
30
15
0
Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 Jul 17 Aug 17
Figure 15: Monthly Waste recycled by IHH Singapore Hospitals (Jan –Aug 2017)
3.5
2.8
2.1
1.4
0.7
0.0
Jan 17 Feb 17 Mar 17 Apr 17 May 17 June 17 Jul 17 Aug 17
OUR ENVIRONMENT
Turkey
Acibadem’s primary goal in terms of environmental consciousness is to produce the least amount of waste possible. The wastes are
separated by type at the source and are stored and disposed of following the requirements of Turkey’s Environmental Law (No. 2872
and No. 18132) and Acibadem’s internal policies and procedures. Table 9 outlines the types of waste generated and the disposal
methods, including waste recycling efforts.
Infectious waste • Medical waste • Medical waste is picked up by the city’s licensed company
for sterilisation or incineration
Dangerous waste • Battery and power supply waste • Batteries are delivered to the Portable Battery Producers
• Electronic waste (keyboards and and Exporters Institution for appropriate disposal
monitors) • Waste power supplies are delivered to companies
• Cytotoxic waste licensed by Turkey’s Ministry of Environment and
• Pharmaceutical waste Urbanisation.
• Laboratory liquid waste • Electronic waste is delivered to licensed companies which
• Contaminated package waste remove the recyclable parts and offer them for reuse.
• Pressured container waste • Medical waste is picked up by the city’s licensed company
• Fluorescent lamp waste (mercury for sterilisation or incineration.
containing waste) • Cytotoxic and pharmaceutical waste, laboratory liquid
• Absorbent materials contaminated with chemicals, contaminated packages, pressured containers,
dangerous substances fluorescent wastes, materials contaminated with
• Paint waste dangerous substances, paint, anti-freeze and oil filters are
• Anti-freeze waste delivered to licensed companies to be incinerated.
• Oil filter waste • Mineral oil wastes are delivered to licensed companies for
• Mineral oil waste oil refining and other uses.
• Herbal oil waste • Vegetable oil wastes are delivered to licensed companies
for oil refining and other uses.
Expired medicines, a common issue users to plan consumption accordingly pharmacies, where they are given
in hospitals, have to be disposed as and undertake actions to prevent to the public, free-of-charge. As per
dangerous waste and collected by wastage. One such action is sharing Acibadem’s by-laws, none of these
licensed companies in special close-to-due-date medications across safe/usable medications can be used for
containers to avoid soil contamination. locations based on demand and or charged to other patients. Expired
Acibadem utilises a Pharmaceutical utilisation frequency. narcotics are delivered to Provincial
Tracking System that includes the due Health Directorates following a stringent
Another process in place to minimise
dates of each medication. At the tracking system in order to prevent
wastage of this kind is the collection
beginning of each month, a report is abuse of a controlled substance
and donation of unusable
generated showing the items with due amongst staff and community.
pharmaceuticals to municipality
dates closer than 180 days. This enables
RESOURCE CONSUMPTION still needed to keep life support consumption is challenging. However,
Hospitals are typically large buildings machines and other necessary IHH has introduced measures to mitigate
that conduct several energy-intensive healthcare equipment running in order the unnecessary use of electricity and
activities, including sophisticated to sustain human life. If hospitals cannot improve energy efficiency in our
heating, cooling and ventilation supply power in such situations, patients’ operations in Malaysia, Singapore, India
system, computing, medical and lives, especially those who are seriously and Turkey, which has in turn reduced
laboratory equipment use, sterilisation, ill or injured, are at risk. As a result, our carbon footprint and operating costs.
refrigeration activities and laundry, as backup generators, powered either by Additionally, our hospitals in different
well as food service activities. diesel or natural gas, are a necessity for countries have researched and
our hospitals. experimented with different initiatives
Hospitals are the communities’ life that can lower electricity consumption
support system in both times of crisis Creating a balance between the high-
without jeopardising the safety of
and times of general healthcare needs. demand of energy required to run our
our patients.
If a power outage occurs, vital power is operations and reducing our
OUR ENVIRONMENT
Malaysia
With the commissioning of new buildings, increased licensed beds and inefficient heating, ventilation and air conditioning (“HVAC”)
in some IHH hospitals, our energy consumption increased by 10.84 per cent from 2015 to 2016. We recognise that reducing energy
consumption is a challenge, given the nature of our activities and business, and, to overcome this challenge, we have taken
definitive steps and initiatives towards reducing energy consumption in IHH hospitals in Malaysia.
• The Sustainability Achieved Via Energy Efficiency (SAVE) Rebate Programme for Chiller by SEDA25 has been approved in a few
hospitals (PSP 2016, GKL 2015, PHAK 2014). With this programme, we changed our existing hospital chillers with new energy-
efficient chillers to save refrigerants. For every tonne of refrigerant saved, RM 200 will be rewarded by SEDA.
• We have conducted energy audit26 for all 14 hospitals to reduce energy consumption.
• We have set up energy committees in all 14 hospitals to monitor their electricity consumption and to decide on new plans and
policies to reduce energy consumption.
• We have upgraded our backup generators to high-efficiency generators to reduce diesel consumption.
• For the six energy-intensive hospitals (GKL, GPg, GHM, PHP, PHKL, PHAK), an Energy Audit Conditional Grant (embarked under
the “RMK-11 Energy Efficiency Projects 2016-2020”) has been approved by SEDA. The condition of this Grant is to achieve a
total energy savings of 15 per cent in three years with 2016 as the baseline.
The electricity consumption for HVAC systems. Furthermore, energy Achieved Via Energy Efficiency (SAVE)
Gleneagles Penang and Pantai Hospital intensive activities, such as laundry, Rebate Programme for Chiller by
Ayer Keroh are compared by using medical and lab equipment use, SEDA as an example of how an energy
Specific Electricity Consumption (“SEC”). sterilisation, computer and server use intensive IHH hospital has reduced its
SEC is obtained by dividing electricity and food service and refrigeration electricity consumption with the Energy
consumption (kWh) by total patient activities increase with an increase in Audit Conditional Grant. The average
census27 to obtain the electricity the number of patients. Hence, we are SEC for the baseline and current
consumption per in-patient per day. taking the number of patients/patient period is 184.2 kWh/In-Patient Day and
Electricity consumption increases with census into account when looking at the 178.17 kWh/In-Patient Day respectively.
the increasing number of patients and electricity consumption of our hospitals. There has been a 3.3 per cent reduction
visitors that occupy the buildings daily. of electricity consumption in the SEC of
Figure 16 compares the SEC between
In hospitals, the staff and patients’ use Gleneagles Penang.
the baseline reporting period
of equipment and lighting drives our
(July to December 2016) and current Figure 17 shows the average SEC of
demand on the electric grid, through
reporting period (January to June 2017) Pantai Hospital Ayer Keroh from Jan–Jun
direct energy demand and the need to
in Gleneagles Penang, Sustainability 2017 is 116.7 kWh/In-Patient Day.
dissipate waste heat generated by
25. The Sustainable Energy Development Authority of Malaysia (“SEDA”) is a statutory body formed under the Sustainable Energy Development
Authority Act 2011 (Act 726). The key role of SEDA is to administer and manage the implementation of the feed-in tariff mechanism, which is
mandated under the Renewable Energy Act 2011.
26. An energy audit is a systematic process to understand how and where energy is being used, to explore how to manage it and to identify the
energy savings potential.
27. Total patient census reflects the total number of patients treated during the 24-hour period.
Comparison of SEC between Baseline and Comparison of SEC between Baseline and
Current Period Current Period
250
150
200 120
150 90
100 60
50 30
0 0
1st Month 2nd Month 3rd Month 4th Month 5th Month 6th Month 1st Month 2nd Month 3rd Month 4th Month 5th Month 6th Month
SEC Baseline (kWh/In-Patient Day) SEC Current (kWh/In-Patient Day) SEC (kWh/In-Patient Day)
OUR ENVIRONMENT
350000
300000
250000
200000
150000
100000
50000
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Singapore
The energy performance of a commercial building is measured by its Energy Use Intensity (“EUI”), which is the energy a building uses in
one year divided by its total gross floor area. The EUI of healthcare facilities in Singapore generally increased by 10 per cent from 2008 to
2017 due to Singapore’s ageing population needing the use of more medical equipment. However, IHH Singapore emphasises reducing
its hospitals energy consumption and, to this end, has implemented energy-saving initiatives. Figure 19 displays the energy consumption
(kWh) of IHH Singapore hospitals from November 2016 to April 2017.
2500
2000
1500
1000
500
0
Nov 16 Dec16 Jan 17 Feb 17 Mar 17 Apr 17
Gleneagles Hospital Singapore’s LED lighting plan extends to its operating theatres.
Turkey
Under the auspices of the Technical Services Directorate, there is a dedicated Energy Management Department headed by a Manager
and staffed by two energy specialists. The department’s areas of responsibility include energy consumption, energy production and
energy market intelligence/market research (to support purchase and technology decisions).
Energy conservation is a top concern, and the Energy Management Department continuously monitors and periodically releases reports
on electricity, natural gas and water consumption by location.
• All hospitals, except Ankara, Bodrum, Kocaeli and Taksim, use co-generation systems where electricity is generated using
natural gas. The systems produce hot water as a side product, which is then utilised in the boilers for heating and taps/showers.
This removes the need for additional energy consumption for water-heating. Co-generation diversifies Acibadem’s energy
sources, reducing its dependency on electricity, and is less costly compared to retail electricity.
• Increased use of renewable energy sources when it is possible to do so. For example, Acibadem Bodrum Hospital, which is
located on the sunny Aegean coast, is equipped with solar panels that are used for hot water supply.
• Robust infrastructure built by employing automation systems for energy, heating/cooling and lighting. These systems enable
coding-in parameters (related to time, work load, location, temperature, etc.) that automatically regulate the operation of lights,
heaters, coolers and other devices.
• Widespread use of isolation materials to minimise leakage of heat and cool air. Thermo-protective coating in the external
façade, hot water pipes, collectors, flanges and valves help maximise the effective and efficient operation of air handling
units and climatisation systems.
• Sealant technologies and pressure control mechanisms in faucets, toilet flushes and reservoirs minimise leakage and optimise
water consumption.
• LED lights and sensor-activated illumination to increase energy efficiency for lighting purposes.
OUR ENVIRONMENT
India
Healthcare is one of the fastest growing sectors in India. As per India’s Ministry of Power, there is a huge potential for energy savings in
hospitals and healthcare institutions. After manpower and cost of consumables, energy expenditure is a significant issue that healthcare
providers focus on. IHH India has been studying and working on initiatives to cut costs and also contribute to reducing its carbon footprint
as shown below.
Building resilient
communities
OUR COMMUNITY
We recognise that the SDGs embrace communities that are vulnerable and per SDG 3 (Good Health and Well-Being)
all aspects of health, and, through our in need of support. IHH carries out its and SDG 16 (Peace, Justice and
community engagement programmes corporate social responsibility (“CSR”) Strong Institutions).
and activities, we aspire towards not to create a positive impact on society
In terms of funding, the Khazanah-
only realigning IHH’s present efforts while maximising the creation of shared
IHH Healthcare Fund (“the Fund”)
in relation to the 2030 Agenda but value for IHH and our stakeholders.
is a collective commitment towards
also towards investigating new ways
By improving accessibility to improving accessibility to healthcare
of accelerating gains already made in
healthcare services, increasing public services to the underprivileged and
improving health and well-being.
awareness about healthcare, improving vulnerable communities in IHH’s home
Through our outreach programmes in nutrition, funding community projects markets of Malaysia, Singapore and
Malaysia, Singapore, Turkey and India, and partnering with NGOs and local Turkey through a unified platform.
we deliver quality healthcare services councils, IHH aims to align its contribution
of enduring and sustainable value to towards community welfare in 2017 as The Fund was disbursed from 2013
and was closed at the end of 2017.
The Fund’s disbursement is managed by
a framework which allocates 70 per cent
for the Malaysia operations, 15 per cent
Improving
Accessibility
for the Singapore operations and 15 per cent
for Acibadem.
The Life Renewed Programme, IMU
Cares Programme and Acibadem’s
Dreams Coming True Programme are
Partnerships with Increasing three key programmes supported by
NGOs Awareness the Fund. These programmes are
Community
independently managed by the
Outreach
respective operating units within the
home markets of IHH. Table 11 shows
the healthcare distribution of the Fund
from January to May 2017 across the
two home markets of Malaysia and
Singapore. However, in the case of
Funding Nutrition
Turkey (also displayed in Table 11),
the Fund amount of RM7.5 million was
allocated for a period of five years.
Singapore Free cancer screening and medical treatment for needy 126 RM1,110,809
beneficiaries affected by the top cancers afflicting Singaporeans.
Turkey Fertility treatments and procedures to help couples conceive 2,500 RM7,500,000
through the Dreams Coming True programme.
Autism Awareness On 6 May 2017, Gleneagles Kuala Lumpur held a parenting talk “Raising Young
Khalifah with Autism” in collaboration with Young Khalifah29.
• A total of 100 participants took part.
• It was a full-day talk that addressed the challenges faced by parents of autistic
children.
• Speech therapy and occupational therapy trial vouchers were given to parents
who wished to sign up for the session.
Environmental Awareness Gleneagles Kota Kinabalu launched the “Clean City, Healthy Community” awareness
campaign with Kota Kinabalu City Hall30.
On 20 June 2017, a team of 58 hospital employees participated in cleaning up areas
surrounding the hospital, as well as areas surrounding KK Times Square, Imago
Shopping Mall and along the coastal highway.
Moving forward, the hospital, along with its partners, plans to organise clean-up
activities on a regular basis.
Flood Relief In November 2017, 100 staff were deployed from Gleneagles Penang, Pantai Hospital
Penang and Pantai Hospital Sungai Petani to provide relief and medical assistance
towards the well-being of displaced survivors.
The team of volunteers provided medical assistance to flood survivors, assessed
stroke patients and patients with minor injuries, covered several evacuation centres
and were involved in cleaning up more than 100 houses of flood victims.
Additionally, RM500,000 worth of medical supplies was deployed towards the flood
relief efforts.
The organisations that IHH worked alongside with in coordinating these relief efforts
were Mercy Malaysia, Sungai Petani Development and Security Committee and
Health District Office, Penang.
29. Young Khalifah is a company that markets Islamic products specifically for children. They design and produce creative and inspired products for
kids, mainly centered around Arabic and Islamic themes.
30. Kota Kinabalu City Hall, otherwise known as Dewan Bandaraya Kota Kinabalu (DBKK), is the city council of Kota Kinabalu in Sabah, Malaysia.
OUR COMMUNITY
IMU
Focus Area Description Community Partner
Health Screening and Promoted proper oral hygiene practices. Conducted dental screening 1. My Father’s Home
Health Education and treated people with poor oral health. 2. Dignity for Children
Foundation
3. Bloomers Training
House
Promoted awareness about head lice infestation. Screened for and 1. Ti-Ratana
eradicated head lice infestation among children in an orphanage home. 2. Rumah Titian Kaseh
Cataract and/or glucose level screening for the elderly. 1. Rumah Victory Elderly
Home
2. Rumah Sejahtera Seri
Setia
3. PPR Salak Selatan
4. Persatuan Jagaan
Orang-Orang Kurang
Upaya dan Terbiar
Lovely
Promoted the awareness and prevention of dengue infection. 1. Rumah Victory Children
and Youth Home
Academic Education Improved the level of English among children. 1. Rumah Titian Kaseh
2. United Learning Centre
3. Kampung Sebir
Environment Promoted recycling and awareness about the proper and safe disposal 1. IMU (Self-run)
of used electrical waste.
Tree planting activities.
Living and Social Skills Provided caregiver training on taking care of the elderly. 1. Ti-Ratana
2. Rumah Charis
3. Rumah Victory
4. Rumah Sejahtera
Jimah, Lukut
5. Lovely Nursing Centre
Flood Relief In November 2017, IMU donated five water jets costing approximately 1. Universiti Sains
RM2,000 to speed up the cleaning process undertaken by Asia-Pacific Malaysia
University-Community Engagement Network (“APUCEN”) volunteers
towards Penang’s flood relief efforts.
Nutrition On 27 May 2017, Mount Elizabeth Hospitals helped raise money for “Ride for Rations” (organised
by Bike-Aid), a donation programme set up to provide monthly food rations to needy families
and children.
The programme raised RM322,484 in donations to help 380 needy households and 200 school
going children at Sunlove Abode, a charity home for the intellectually disabled in Singapore.
Scholarships Mount Elizabeth Gleneagles Graduate Scholarship with Duke-National University of Singapore
(“NUS”) endowed a gift of RM6,260,000 to SingHealth Fund in support of scholarship awards for
financially needy Duke-NUS medical students and SingHealth Medical Student Talent Development
Award (“SMSTDA”) travel awards for deserving recipients from all three local medical schools.
Scholarships are valued at RM31,300 each and are bond-free while travel awards are valued at up
to RM9,390 each.
The Professorship in Medicine and Healthy Ageing (2015) and Professorship in Geriatrics (2000)
are two scholarships for which IHH Singapore has set up an endowment fund of RM9,390,000 and
a donation of RM4,695,000 respectively. The former enables NUS to appoint an expert in functional
ageing, which encompasses degenerative disorders of the bone, muscle and joints and nervous
system while the latter enables the University to engage eminent academics and clinicians who
help advance geriatric medicine in Singapore by facilitating teaching and research, as well as the
development of clinical and community care in geriatrics.
Turkey
Community Awareness • Dedicated resources to campaigns, publications, events, workshops and seminars and engaged in
Building Activities various mediums to increase awareness amongst the public on health-related issues.
• Table 12 provides a summary of the community outreach activities organised by Acibadem
hospitals and its corporate departments.
Sponsorships • Sports sponsorships have always been a key CSR area for the Group. As of Q1 2017, Acibadem
was the healthcare sponsor of eight Federations, 12 Turkish sports teams and 14 foreign
sports clubs.
• Recently, Acibadem became the official healthcare sponsor of the EuroLeague Final Four, a
Europe-wide top-tier level professional basketball competition.
• On 19 and 20 May 2017 and during the EuroLeague Final games, Acibadem organised a Basketball
Sciences Symposium in Istanbul with over 600 participants, including sports medicine specialists,
NBA team CEOs and players and leading sports experts.
Donations • Organised one blood drive from January to June 2017 and received 55 donors.
• In collaboration with a local NGO, the Acibadem Social Committee began a book donation
campaign among its employees to be donated to 15 underprivileged elementary schools in
15 cities of Turkey on 15 February 2017.
• As of May 2017, over 3,000 books were collected and delivered to needy children across
the country.
OUR COMMUNITY
Programme Description
Health Awareness Activities • Organ donation awareness activities
• 23 April 2017 – Turkey’s Children’s Day activities targeting paediatric
patients and the community
• Dental and vision screenings at local schools
• Cancer Week activities
• Heart Week activities
• Mother’s Day activities
• Children’s safety in traffic activities
• New Year’s activities for inpatients
• International hospital IVF day
Documentary/TV Show • In collaboration with NTV, a national network, Acibadem has been producing
a weekly documentary-drama chronicling real life medical cases since
December 2015.
• Titled “Life Renewed”, 25 episodes have been aired so far with huge
success with ratings around 1.65, compared to 0.4-0.5 for documentaries on
the channel, and reaching over 500,000 viewers weekly with a total of
12.5 million viewers nationwide.
• The mini documentary series featured many interesting cases, raising
awareness on diagnosis and treatment of congenital disorders, cancer, rare
diseases and organ transplantation.
Gleneagles Global Hospitals, Lakdi-Ka-Pul in Hyderabad organised free health camps at 150
Sikh Gurudwaras in Gowliguda and Ashok Nagar on 14 May 2017.
Health Awareness Aware Gleneagles Hospitals, LB Nagar in Hyderabad launched “Community Connect” on 50
8 March 2017, which included talks by Cardiologists for patients and their family members
on Primary Pulmonary Hypertension.
Aware Gleneagles Global Hospitals, LB Nagar commemorated World Asthma Day 2017 100
with a 4km walk on 2 May 2017. Titled “Live Breathfully”, the walk underscored the
importance of breathing with full lung capacity and was supported by residents of LB
Nagar and Saroor Nagar in Hyderabad.
In conjunction with “Live Breathfully”, the hospital also launched a two-day awareness
drive, where five ambulance teams travelled through Hyderabad conducting free lung
capacity testing for members of the public.
Medical Support Gleneagles Global Hospitals, Parel in Mumbai provided medical support, including 400
ambulance services to the Goghari community (Goghari Sports Group) for their sports
activities on 28 and 29 January 2017.
ACCREDITATIONS
AND AWARDS
Celebrating
an award-winning
organisation
ACCREDITATIONS The standard of IHH’s healthcare (“NABH”) in India and Turkey’s Ministry
The Group’s key hospitals are services continues to be acknowledged of Health National Accreditation.
well recognised for consistently by reputable international and regional
JCI is one of the most prestigious
performing complex high-intensity quality accreditation agencies, including
and respected independent bodies
clinical procedures involving highly the Joint Commission International
providing international healthcare
experienced surgeons and (“JCI”), the International Organisation for
accreditation services to hospitals
advanced facilities, embracing Standardisation (“ISO”), the Malaysian
around the world. JCI audits take place
global best practices and delivering Society for Quality in Health (“MSQH”),
once every three years. Our hospitals
outstanding patient outcomes. the National Accreditation Board for
that are accredited by JCI are:
Hospitals and Healthcare Providers
Pantai Hospital Kuala Lumpur Gleneagles Hospital Acibadem Adana Hospital Continental Hospitals
Gleneagles Kuala Lumpur Mount Elizabeth Acibadem Maslak Hospital
Gleneagles Penang Novena Hospital Acibadem Sistina Hospital
Mount Elizabeth Hospital Acibadem Atakent Hospital
Parkway East Hospital (awaiting Certification)
Acibadem City Clinic
Tokuda Hospital
Acibadem City Clinic
Cardiovascular Center
Hospital
Acibadem City Clinic
Cancer Centre Hospital
ISO 15489 is the first global standard for the accuracy and quality demanded of accreditation is valid till September 2018.
records management that establishes clinical staff in the care and treatment of To meet ISO 9001:2008 standards,
the core concepts and principles for the patients. The IHH laboratories that are an organisation needs to demonstrate
creation, capture and management of awarded ISO 15189 are listed in the its ability to consistently provide
records. The IHH laboratory that has table below. products that meet customer and
been awarded ISO 15489 is listed in the applicable statutory and regulatory
In 2016, the Quality Management System
table below. requirements and aim to enhance
of Gleneagles Global Hospitals Parel’s
customer satisfaction through the
ISO 15189 sets the requirements in Super Speciality and Transplant Centre
effective application of the system.
laboratory safety measures, as well as was ISO 9001:2008 certified, and the
ISO 15489
Malaysia Pantai Premier Pathology
ISO 15189
Malaysia Pantai Premier Pathology
Singapore Parkway Laboratory Services (“PLS”), Ayer Rajah Crescent (Clinical and Genetics)
PLS, Mount Elizabeth Novena Hospital (Cytology)
ACCREDITATIONS
AND AWARDS
Malaysia
MSQH is recognised by the Ministry of Health Malaysia as the national accreditation body for healthcare facilities and services and is
internationally accepted as being on par with those in other countries such as Australia, the United Kingdom and Canada. MSQH audits
take place every four years with a mid-cycle (second year) inspection. Our hospitals and clinics that are awarded MSQH status are:
Malaysia
Turkey
Since 2005, the national quality standards scheme has been implemented by Turkey’s Ministry of Health and the following 16
Acibadem hospitals have successfully completed their quality audits:
Turkey
India
NABH in India is a constituent board of the Quality Council of India. It is an accreditation body that functions on par with global
benchmarks. NABH accreditation audits are conducted every three years. Our hospitals in India that are accredited by NABH
for their laboratories and other healthcare services are:
NABH (Testing and Calibration of Laboratories) Gleneagles Global Health City, Perumbakkam
BGS Gleneagles Global Hospitals, Kengeri
Gleneagles Global Hospitals, Lakdi-Ka-Pul
Aware Gleneagles Global Hospitals, LB Nagar
Gleneagles Global Hospitals, Parel
NABH (Blood Bank and Transfusion Services) Gleneagles Global Health City, Perumbakkam
Aware Gleneagles Global Hospitals, LB Nagar
AWARDS
Below is a list of awards that IHH hospitals and IMU have received in Malaysia, Singapore, Turkey and India.
Malaysia
2017 Education Excellence Awards
International Medical University
• Tier5: Excellent Setara Rating
Singapore
2017 Asia Pacific Healthcare and Medical Tourism Awards
Mount Elizabeth Hospital Singapore Gleneagles Hospital Singapore
• Hospital of the Year Asia Pacific (second consecutive win) • Transplant Service Provider of the Year
• Hospital of the Year Singapore • Paediatric Service Provider of the Year
• Cardiology Service Provider of the Year • Orthopaedics Service Provider of the Year
(second consecutive win) (second consecutive win)
• Neurology Service Provider of the Year Parkway Cancer Centre
• Oncology Service Provider of the Year
Turkey
2017 Forbes Best 50 Companies for Women 2017 Social Media Awards Turkey
Acibadem Healthcare Group (3rd place) Acibadem Healthcare Group (Gold)
2017 Platin Global 100 Award Turkey
2017 Best Quality Private Hospital in Turkey
Acibadem Healthcare Group (72nd rank)
Acibadem Healthcare Group (No.1)
2017 Brand Turkey “One Breath of Health Award”
2017 Fortune 500 “Largest Companies of Turkey”
Acibadem Healthcare Group (Gold)
Acibadem Healthcare Group
• 1st in Healthcare Sector 2017 Webit Awards “Best Innovation for Health for Bulgaria”
• 70th for Net Revenue Acibadem City Clinic
• 8th in Number of Employees
• 45th among Istanbul Companies 2017 Economist Magazine “50 Strongest Purchasing Managers
in Turkey”
• 32nd in Return on Equity
Acibadem Healthcare Group Purchasing Director (30th rank)
2017 Capital 500 “Turkey’s Largest Companies”
Acibadem Healthcare Group 2017 Economist Magazine “50 Most Influential HR Leaders
• 1st in Healthcare Sector in Turkey”
• 81st in Net Revenue Acibadem Healthcare Group Human Resources Director
• 12th in Number of Employees (18th rank)
• 58th among Istanbul Companies 2017 Fortune Magazine “50 Most Powerful CFOs of Turkey”
Acibadem Healthcare Group Chief Finance Officer
India
2014 India LEED (Leadership in Energy & Environment Design) 2017 Asia Pacific Society of Infection Control (APSIC) Awards
Continental Hospitals Continental Hospitals
• Green Hospital of the Year • APSIC CSSD Centre of Excellence Award 2015-2016
OTHER INFORMATION
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
• Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on pages 132 to 149 of this
Annual Report
Present Directorship(s)
• Khazanah Nasional Berhad
• Scomi Group Berhad
Dato’ Mohammed Azlan bin Hashim • D&O Green Technologies Berhad
Chairman, Non-Independent, Non-Executive • Marine & General Berhad (formerly known as
Chairman of the Steering Committee Silk Holdings Berhad)
Nationality: Malaysian
Gender: Male
Age: 61
Date of Appointment: 30 March 2011
Length of Service: 7 years (As at 4 April 2018)
Last Date of Re-election: 27 May 2016
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
• Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on pages 132 to 149 of this
Annual Report
Present Directorship(s)
• Nil
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
• Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on pages 132 to 149 of this
Annual Report
Present Directorship(s)
• Nil
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
• Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on pages 132 to 149 of this
Annual Report
Nationality: Singaporean
Gender: Male
Age: 48
Date of Appointment: 23 September 2016
Length of Service: 1 year 6 months (As at 4 April 2018)
Last Date of Re-election: 22 May 2017
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
• Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on pages 132 to 149 of this
Annual Report
Nationality: Japanese
Gender: Male
Age: 57
Date of Appointment: 1 April 2017
Length of Service: 1 year (As at 4 April 2018)
Last Date of Re-election: 22 May 2017
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
• Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on pages 132 to 149 of this
Annual Report
Present Directorship(s)
• Nil
Nationality: Singaporean
Gender: Male
Age: 64
Date of Appointment: 5 April 2012
Length of Service: 6 years (As at 4 April 2018)
Last Date of Re-election: 22 May 2017
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
• Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on pages 132 to 149 of this
Annual Report
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
• Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on pages 132 to 149 of this
Annual Report
Present Directorship(s)
• Nil
Nationality: Singaporean
Gender: Male
Age: 62
Date of Appointment: 17 April 2012
Length of Service: 5 years 11 months (As at 4 April 2018)
Last Date of Re-election: 15 June 2015
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
• Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on pages 132 to 149 of this
Annual Report
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
• Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on pages 132 to 149 of this
Annual Report
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
• Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on pages 132 to 149 of this
Annual Report
Present Directorship(s)
• Nil
Nationality: Malaysian
Gender: Female
Age: 45
Date of Appointment: 25 October 2012
Length of Service: 5 years 5 months (As at 4 April 2018)
Last Date of Re-election: –
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
• Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on pages 132 to 149 of this
Annual Report
Nationality: Japanese
Gender: Male
Age: 46
Date of Appointment: 1 April 2017
Length of Service: 1 year (As at 4 April 2018)
Last Date of Re-election: –
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
• Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Overview Statement on pages 132 to 149 of this
Annual Report
Notes
• Does not have any family relationships with any directors and/or any major shareholders of the Company
• Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
PROFILES OF
GROUP MANAGEMENT
Work Experience Whilst Mr Low was based in Hong Kong from
1994 to 2005, he held various positions within
Mr Low Soon Teck assumed the position
the Kerry Group including that of Director of
of Group Chief Financial Officer of
China Operations at SCMP Group, publisher
IHH Healthcare Berhad (“IHH”) on
of the South China Morning Post. In this role,
10 January 2016. He brings with him over
he was responsible for business development,
20 years of experience in finance, legal and
newspaper publishing and circulation operations
general management in leadership roles.
as well as managing a chain of retail
Prior to joining IHH, Mr Low served with the convenience stores.
RCMA Group, a commodities supply chain
Mr Low began his career as a solicitor
management company, as its Chief Financial
in Singapore at a boutique law firm from
Officer between 2013 and 2015. From 1994
1991 to 1993, focusing on corporate and
to 2013, he was employed in the Kuok/Kerry
banking laws.
Group, holding various senior positions in
diverse businesses within the group in
Hong Kong and Singapore. His last position Academic / Professional
in the group was as Chief Financial Officer of Qualification(s)
PACC Offshore Services Holdings Group, the • Bachelor of Laws (Hons) (2nd Upper), National
Low Soon Teck offshore marine arm of the Kuok/Kerry Group. University of Singapore
Prior to this, Mr Low served as Group Treasurer • Master of Business Administration, University
Group Chief Financial Officer at Wilmar International Limited, after its merger of Chicago, Booth School of Business
in 2006 with Kuok Oils and Grains where
he had served as Group Financial Controller • Advocate and Solicitor, Supreme Court
following his relocation from Hong Kong to of Singapore
Singapore in 2005. • Member of Law Society of England and Wales
PROFILES OF
GROUP MANAGEMENT
Work Experience Organization Development & Staffing, Asia
Pacific. Prior to that, she served at Bausch
Ms Sharon Teo Fay Lin joined IHH Healthcare
& Lomb Sdn Bhd, as the Regional Human
Bhd (“IHH”) on 10 March 2017. She has been a
Resources Administrator, South Asia before
Human Resources practitioner with more than
rising to the position of Human Resources &
twenty years’ HR experience across a broad
Administration Manager, Malaysia & Singapore.
spectrum of pharmaceutical, manufacturing
Ms Teo began her career at Yeo Hiap Seng (M)
and FMCG MNCs and local enterprises.
Berhad as a Human Resources Executive
Prior to joining IHH, Ms Teo served with in 1993.
Avery Dennison Singapore Pte Ltd in various
positions, beginning as the HR Director for Academic / Professional
its’ ASEAN business before leading Integration Qualification(s)
and Transformation at the East Asia & Pacific • Bachelor of Arts in Psychology, Anthropology
level. She was subsequently promoted as & Sociology, National University of Malaysia
the HR Director for the Materials Group at
the ASEAN level. • Certificate in Personnel Management,
Malaysian Institute of Personnel Management
Preceding this, Ms Teo held senior positions
• Leadership Versatility Index Certification and
in pharmaceutical and healthcare MNCs such
Sharon Teo Fay Lin as Novartis Asia Pacific Pharmaceutical Pte Ltd,
Realise2 Accreditation Programme
Group Chief Human Resources where she served as the Human Resources • DDI Facilitator Certifications (Leadership
Manager and Regional Human Resources Assessment and Targeted Selection)
Officer
Manager, Asia Pacific before being promoted • 360° Coaching Accreditation & Occupational
as the Head of Talent Management, Climate Survey
Nationality: Singaporean
Notes
Age: 55 (As at 4 April 2018) • Does not have any family relationships with any directors and/or any major shareholders of the Company
Date of Joining: 28 June 2015 • Does not have any conflict of interest with the Company
• Does not have any convictions for offences within the past five years other than for traffic offences, if any
CORPORATE GOVERNANCE
OVERVIEW STATEMENT
OUR COMMITMENT TO GOOD existing corporate governance measures Board and Management had established
CORPORATE GOVERNANCE align with the three Principles of good a shared understanding of the Group’s
governance in accordance with the MCCG strategic goals, objectives and actions.
IHH Healthcare Berhad (“IHH” or “the
which comprises (A) Board Leadership and
Company”) together with its subsidiaries The Board is responsible for ensuring
Effectiveness, (B) Effective Audit and Risk
(“the Group”), are committed to achieving that the Group’s internal controls, risk
Management and (C) Integrity in Corporate
and maintaining the highest standards management processes and reporting
Reporting and Meaningful Relationship
of corporate governance. The Board of procedures are firmly in place. The Board
with Stakeholders. It highlights the areas
Directors (“Board”) strongly believes that is also committed to acting in the best
where the Group has made good progress
sound corporate governance practices interests of the Group and its shareholders
in adhering to MCCG’s principles, as well
are essential for delivering sustainable by exercising due diligence and care in
as the areas where more work needs to
value, enhancing business integrity, discharging its duties and responsibilities
be undertaken to achieve the
maintaining investors’ confidence and to ensure that high ethical standards are
intended outcomes.
achieving the Group’s corporate applied at all times. We undertake this
objectives and vision. To this end, the This CG Overview Statement shall be through compliance with the relevant
Board, Management and staff of the Group read together with the Corporate rules, regulations, directives and
affirm their commitment to enhancing Governance Report 2017 which is guidelines, in addition to adopting the
shareholder value by way of upholding available on the Company’s website at best practices in the MCCG and CG Guide.
high standards of corporate governance. www.ihhhealthcare.com/corporate-
The Board is guided by the Board
governance.php.
To date, the Group’s corporate Charter, documented Terms of Reference
governance model adopts the following PRINCIPLE A: BOARD (“TOR”) and Limits of Authority (“LOA”),
requirements and guidelines on which clearly define the matters that are
LEADERSHIP AND
corporate governance best practices: specifically reserved for the Board, Board
EFFECTIVENESS Committees and outline the manner in
• Malaysian Code on Corporate
(I) BOARD RESPONSIBILITIES which the day-to-day management of
Governance (“MCCG”);
the Company is to be delegated to the
• Main Market Listing Requirements Board Leadership Managing Director and Chief Executive
(“MMLR”) of Bursa Malaysia Securities The Board is primarily responsible for Officer (“MD & CEO”) and relevant
Berhad (“Bursa Securities”); and oversight and the overall governance authority limit. This formal structure of
• Corporate Governance Guide: Moving of the Group. It carries out its mandate delegation is further cascaded by the
from Aspiration to Actualisation by by providing strategic guidance, MD & CEO to the Senior Management
Bursa Securities (“CG Guide”). implementing succession planning, team within the Group. However, the MD
effectively monitoring management goals & CEO and the Senior Management team
The Board also subscribes to internal
and ensuring overall accountability for remain accountable to the Board for the
guidelines on corporate disclosure
the Group’s growth. The Board held its authority that is delegated, as well as for
policies and procedures based on the
Board Strategy Retreat (“BSR”) in August the performance of the Company and the
best practices recommended by Bursa
2017 to review the performance of the Group even as the Board continues to
Securities. These provide the Group with
Group and discuss the strategic intent monitor the same.
the appropriate guidance to discharge
of the Group over the next five years.
its disclosure obligations and ensure
The BSR was attended by all members Board Chairman
the Group moves beyond the minimum
of the Board, Senior Management and The Chairman champions good
mandatory disclosure requirements. As
the relevant Heads of Department of governance and sets the tone of
the Group maintains a significant presence
the Group. Management presented an governance for the Board, maintains
in the countries it operates in, it also
overview and report card of the Group’s Board focus towards its goals during
abides by the guidelines of the respective
performance over the past two years or outside of Board meetings and is
regulators and authorities in these countries.
since the last BSR held in 2015. At the insightful of current issues within and
Pursuant to Paragraph 15.25 of the MMLR, BSR, the Board discussed the strategic outside the healthcare industry.
the Board is pleased to present this plans to deliver growth outcomes for the
statement which provides an overview Group. The BSR included presentations Tan Sri Dato’ Dr Abu Bakar bin Suleiman
of the application of the Principles set from external consultants on, among (“Tan Sri Dato’ Dr Abu Bakar”), our former
out in the MCCG throughout the Group others, the developments within the Non-Independent Executive Chairman,
in respect of the financial year ended health industry and its change drivers to was positioned as an Executive Chairman
31 December 2017 (“CG Overview facilitate the Board’s discussions on the of IHH given that he was the Executive
Statement”). This CG Overview Statement Group’s strategy for the next five years. Chairman of IMU Health Sdn Bhd (“IMU”),
also endeavours to portray how IHH’s The outcome of the BSR is that both the a wholly-owned subsidiary of IHH, which
is a medical education arm of IHH Group
CORPORATE GOVERNANCE
OVERVIEW STATEMENT
invited to present proposals and answer Board meeting and updates the Board on During the financial year under review,
queries raised by the Board as and when the status of these matters at the next the Board met eight times. The details of
required. Management takes immediate Board meeting or if deemed urgent via the attendance of the Board members
action on all matters arising from the circulation of memorandum. are as follows:
Total Meetings
Director Designation Attended
Tan Sri Dato' Dr Abu Bakar bin Suleiman Chairman, 7/8
(Retired on 31 December 2017) Non-Independent Executive Director
Dato' Mohammed Azlan bin Hashim Deputy Chairman, 8/8
(Re-designated as Chairman on Non-Independent Non-Executive Director
1 January 2018)
Dr Tan See Leng Managing Director and Chief Executive Officer, 8/8
Non-Independent Executive Director
Mehmet Ali Aydinlar Non-Independent Executive Director 5/8
Chintamani Aniruddha Bhagat Non-Independent Non-Executive Director 8/8
Koji Nagatomi Non-Independent Non-Executive Director 5/6*
(Appointed on 1 April 2017)
Chang See Hiang Senior Independent Non-Executive Director 7/8
Rossana Annizah binti Ahmad Rashid Independent Non-Executive Director 7/8
Kuok Khoon Ean Independent Non-Executive Director 8/8
Shirish Moreshwar Apte Independent Non-Executive Director 8/8
Quek Pei Lynn Non-Independent Non-Executive Director 8/8
(Alternate Director to
Chintamani Aniruddha Bhagat)
Takeshi Saito Non-Independent Non-Executive Director 5/6*
(Alternate Director to Koji Nagatomi)
(Appointed on 1 April 2017)
Satoshi Tanaka Non-Independent Non-Executive Director 1/2
(Resigned on 1 April 2017)
Koichiro Sato Non-Independent Non-Executive Director 2/2
(Alternate Director to Satoshi Tanaka)
(Ceased on 1 April 2017)
* Directors did not participate in one meeting held during the financial year due to conflict of interest.
The directorships of the IHH Directors Board Charter responsibilities and functions of the
in other public listed companies do The Board Charter plays a vital role in Board in accordance with the principles
not exceed the prescribed limits under guiding the Board’s focus on matters that of good corporate governance set out
the MMLR. This ensures that their are pertinent to the Group, assists the in the policy documents and guidelines
commitment, resources and time are Board in delivering good governance and issued by the relevant regulatory
more focused and enables them to develops a shared understanding of the authorities. The Board Charter is available
discharge their duties effectively. The Board’s role throughout the Company. for reference on the Company’s website
Directors should notify the Board within at www.ihhhealthcare.com.
fourteen market days upon accepting The Board had in 2013 formalised a
any new directorship. Board Charter setting out the duties,
CORPORATE GOVERNANCE
OVERVIEW STATEMENT
regions and management • Establishing and implementing Annual Report on the Group’s
representatives with clinical quality a good Investor Relations (“IR”) continuous effort in identification,
and ethics background from the programme and shareholders’ assessment and management of the
respective OpCos, to form a high-level communication policy weaknesses identified in order to
advisory council. The ICGAC seeks The Board recognises that a sound improve the quality of internal control.
to drive exemplary and consistent IR programme and shareholders’
clinical quality and implement communication policy is vital Limits of Authority
continuous quality improvement in managing investors’ and The LOAs which set out the authority limits
projects and initiatives across IHH shareholders’ interests and to be adhered to as adopted by the Group,
Group. During the financial year under perception of the Company. are in compliance with the principles of
review, ICGAC has focused on the good corporate governance. The LOAs of
The Company carries out its IR
following four key workstreams: the major OpCos were developed based
activities in accordance with its annual
on the broad framework of the IHH LOA.
(i) Clinical Risk Management IR calendar and the Board is apprised
Advisory; of these activities including the Although the operations of the Company
(ii) Quality Assurance and Quality number of investor conferences and and its subsidiaries are governed by
Improvement; non-deal roadshows attended as well the LOAs, the overall management and
(iii) Professional Development and as the number of analysts’ meetings, control of the business and affairs of
Management; and on a quarterly basis. Key take-aways IHH Group still vests with the Board.
(iv) Culture of Improvement and gathered from the IR activities, which
The day-to-day operations of IHH Group
Patient Safety. would also be shared with the Board
are managed and administered by the
and Management, always take into
Please refer to the Statement on Risk Senior Management personnel of IHH
account the opinion of the investors
Management and Internal Control as Group, subject always to the policies and
and shareholders with the aim
laid out on pages 161 to 167 of this decisions of the Board.
of further improving the Group’s
Annual Report on the identification, operational and financial performance The LOAs will be updated to meet the
assessment and mitigation of actual as well as to become a better corporate changing needs of IHH Group and to ensure
enterprise and clinical risks faced citizen in the community it operates. compliance with the applicable laws
by the Group and the Sustainability including the MMLR. Any updates that are
Statement 2017 as laid out on Further details on IR activities
reviewed, verified and endorsed by the
pages 54 to 56 of this Annual Report undertaken during the financial year
Board will supersede the previous LOA.
for further details on the efforts under review are laid out on pages
undertaken to ensure the Group’s 168 to 169 of this Annual Report. Board Committees
business sustainability. • Reviewing the adequacy and the The Board delegates specific
• Establishing succession plans integrity of the Group’s internal responsibilities to the respective
The Group has, under the purview control and management Committees of the Board, which operate
of the Human Capital Management information systems within clearly defined TOR. From time to
function, embarked on succession The Board acknowledges the time, the Board reviews the functions and
planning for key management who play importance of maintaining sound TOR of Board Committees to ensure that
a pivotal role within the Group. The and effective internal control and they are relevant and updated in line with
said succession planning programme management information systems the MCCG and other related policies or
is created with the aim of driving the in order to manage and reduce risks regulatory requirements.
supply of sufficient talent pool internally that will hinder the Group from
While the Board Committees have the
to cater for the Group’s expansion achieving its goals and objectives.
authority to examine particular issues,
plan in various regions. Individual The internal control and management
they will report to the Board with their
development plans have been information systems are embedded
decisions and/or recommendations and
established and a slew of other talent within the Group’s operating activities.
the ultimate responsibility on all matters
management practices are also in place Assisted by the Group Internal Audit lies with the Board. The Committee
for development of a pool of talent. which functions independently of the members are expected to attend each
The Board, through the NRC, monitors operations, the Board and the ARMC Board Committee meeting, unless there
the performance of the Board and Key are able to effectively discharge these are exceptional circumstances that
Senior Management annually as well control responsibilities. prevent them from doing so. The minutes
as reviews and evaluates the suitability of the Board Committee meetings held
Please refer to the Statement on Risk
of potential candidates and their are presented to the Board for perusal at
Management and Internal Control as
expertise, to fill any gaps identified. each scheduled quarterly Board meeting.
laid out on pages 161 to 167 of this
CORPORATE GOVERNANCE
OVERVIEW STATEMENT
in the conduct of their business and that confidential so long as it does not hinder Notwithstanding that the Board does not
of the Group. Failure to comply with the or frustrate any investigation. Any comprise majority Independent Directors
Code may result in the commencement concern about unethical behaviour as recommended in the MCCG, the
of disciplinary proceedings that may or serious misconduct should first be Independent Directors are able to
lead to termination of employment and/ raised with the immediate superior or exercise strong independent judgement
or appointment. respective Human Resource department and provide independent views and
where possible, or via email to advice in all Board deliberations. During
The Code covers areas such as
governance@ihhhealthcare.com. the financial year, the Independent
compliance with the law, professional
Alternatively, employees may choose Directors have also challenged certain
integrity, accurate and complete to write in confidence directly to the proposals and assumptions tabled during
accounting, bribes, gifts and MD & CEO of IHH. Where reporting meetings and provided their independent
entertainment, conflicts of interest, to Management is a concern, then the viewpoints for the benefit of the
the act of diverting, confidentiality report should be made in confidence Company. Their presence provides
and protection of company assets, to the Chairman of IHH. a check and balance in the discharge
political and charitable contributions, of the Board function. Independent
as well as occupational health, safety (II) BOARD COMPOSITION Directors’ views carry significant
and environmental activities. Employees The Board members with their diverse weight in all Board deliberations and
are to direct any questions they have academic qualifications, backgrounds decision-making. This represents a
about the Code and its application and experiences enable the Board to satisfactory alternative to the requirement
to their managers or the respective provide clear and effective leadership of the recommended best practices of
Human Resource departments. to the Group and bring information and having the majority Board members to be
independent judgement to many aspects Independent Directors. All Independent
Whistleblowing Policy
of the Group’s strategy and performance, Directors act independently of Management
IHH and its major operating subsidiaries so as to ensure diversity and completeness and are not personally involved in any
have implemented a Whistleblowing in its deliberations. business dealings of the Company.
Policy that seeks to engender an Neither are they involved in any other
environment where integrity and Independent Directors relationship with the Group that may
ethical behaviour are fostered and any The Board, as at the date of this impair their independent judgement
malpractice or impropriety within the CG Overview Statement, consists and decision-making.
Group is exposed. This Whistleblowing of eleven members, comprising two
Policy enables employees to raise Nevertheless, in an effort to further
Non-Independent Executive Directors,
concerns internally and at a high level enhance the independence of the Board,
three Non-Independent Non-Executive
and to disclose information on activities the Board aims to increase the number
Directors (“NEDs”) including the
which they believe reflect instances of Independent Directors to a balanced
Chairman, four Independent NEDs and
of malpractice or impropriety. It also proportion of at least 50% by the end
two Alternate Directors. The present
offers reassurance that the whistle of 2019. Apart from the suitability and
composition of the Board and the profile
blower will be protected from reprisals availability of potential Board candidates,
of each Director are set out in the
or victimization for whistleblowing in the Board would also need to take into
Corporate Information and Profiles of
good faith. The concerns could include consideration the size of the Board in
Directors on page 21 and pages 114 to
financial malpractice, impropriety its efforts to increase the number of
126 respectively of this Annual Report.
Independent Directors. This is to ensure
or fraud, failure to comply with legal
The number of Independent Directors that the Board would still be able to
obligation or statutes, bribery, abuse
complies with the MMLR, which states function efficiently with the increased
of power, conflicts of interest, theft or
that at least two members or one-third of number of Directors. The Board is in the
embezzlement, misuse of company
the Board shall be Independent Directors. midst of identifying and will continuously
property, non-compliance with procedure,
The Board acknowledges and takes identify suitable candidates to be
danger to health, safety and environment,
cognisance of the recommendations appointed as Independent Directors of
criminal activity, improper conduct or
contained in the MCCG for the board the Company as and when required. The
unethical behaviour and the attempts
of Large Companies (as defined in Streamlining Exercise undertaken during
to conceal any of these, among other
the MCCG) to comprise a majority the financial year would also minimise
things. The Whistleblowing Policy is
independent directors. The Board or limit the common directorships of the
available on the Company’s website at
believes the current board composition Independent Directors of the Company
www.ihhhealthcare.com.
provides the appropriate balance in in Group entities and this would further
IHH is committed to treating all such terms of skills, knowledge, experience enhance the Directors’ independence
disclosures in a confidential and sensitive and independent elements to promote and avoid situations of conflict.
manner. The identity of the individual the interests of all shareholders and to
making the allegation will be kept govern the Group effectively.
CORPORATE GOVERNANCE
OVERVIEW STATEMENT
CORPORATE GOVERNANCE
OVERVIEW STATEMENT
Chairman Member
(RM per annum) (RM per annum)
Structure Existing Proposed Existing Proposed
Board of Directors – 600,000 285,000 285,000
Audit & Risk Management Committee1 150,000 – 100,000 –
Audit Committee – 175,000 – 100,000
Risk Management Committee – 175,000 – 100,000
Nomination & Remuneration Committee 2
90,000 – 60,000 –
Nomination Committee – 150,000 – 90,000
Remuneration Committee – 150,000 – 90,000
Steering Committee 90,000 350,000 60,000 100,000
1. The ARMC will be split into an Audit Committee and a Risk Management Committee, respectively with effect from 1 July 2018.
2. The NRC will be split into a Nomination Committee and a Remuneration Committee, respectively with effect from 1 July 2018.
The NEDs who are shareholders of connected to them will abstain from the Ordinary Resolution 6 to effect the
the Company will abstain and have voting in respect of their respective direct proposed revision in the NEDs fees at the
undertaken to ensure that persons and/or indirect shareholding in IHH on forthcoming AGM of IHH.
CORPORATE GOVERNANCE
OVERVIEW STATEMENT
The details of aggregate remuneration of Directors for the financial year ended 31 December 2017 are as follows:
Company Subsidiaries
Bonus, Bonus,
Incentives Benefits- Incentives Benefits- Group
Salaries Fees & Others in-kind Salaries Fees & Others in-kind Total
RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000
Executive Directors
Tan Sri Dato’
Dr Abu Bakar
bin Suleiman
(Retired on
31 December 2017) 300 – – – 900 – 720 76 1,996
Dr Tan See Leng 2,349 – 17,689 243 2,455 – 11,157 – 33,893
Mehmet Ali
Aydinlar – – – – – 1,556 5,074 – 6,630
Total 2,649 – 17,689 243 3,355 1,556 16,951 76 42,519
Non-Executive
Directors
Dato’ Mohammed
Azlan bin Hashim – 387 – – – 694 – – 1,081
Chintamani
Aniruddha Bhagat1 – 310 – – – 507 – – 817
Koji Nagatomi1
(Appointed on
1 April 2017) – 246 – – – 44 – – 290
Chang See Hiang – 409 – – – 257 – – 666
Rossana Annizah
binti Ahmad Rashid – 447 – – – 472 – – 919
Kuok Khoon Ean – 295 – – – – – – 295
Shirish Moreshwar
Apte – 420 – 8 – 296 – – 724
Quek Pei Lynn1
(Alternate Director
to Chintamani
Aniruddha Bhagat) – – – – – 218 – – 218
Takeshi Saito1
(Alternate Director
to Koji Nagatomi)
(Appointed on
1 April 2017) – – – – – 190 – – 190
Satoshi Tanaka1
(Resigned on
1 April 2017) – 64 – – – – – – 64
Koichiro Sato1
(Alternate Director
to Satoshi Tanaka)
(Ceased on
1 April 2017) – – – – – 11 – – 11
Total – 2,578 – 8 – 2,689 – – 5,275
1. Fees for representatives of Pulau Memutik Ventures Sdn Bhd and MBK Healthcare Partners Limited / Mitsui & Co., Ltd on the Board are directly
paid to Khazanah Nasional Berhad and Mitsui & Co., Ltd, respectively.
CORPORATE GOVERNANCE
OVERVIEW STATEMENT
The Company has in place a policy and approved by the Board before risks and uncertainties associated
contained in the ARMC’s TOR that being released to Bursa Securities and with the achievement of the Group’s
requires a former key audit partner to Singapore Exchange Securities Trading business objectives. It outlines the
observe a cooling-off period of at least Limited (“SGX”). governance principles, structure and
two years before being appointed as accountabilities, as well as policies and
The Directors’ Responsibility Statement
a member of the ARMC to ensure the limits in managing the Group’s key risks.
for the audited financial statements
independence of such appointment, Each major business operating entity
of the Company and the Group is set
if any. or group adopts the ERM framework
out on page 172 of this Annual Report.
to systematically identify, evaluate and
The Board and the ARMC maintain a The details of the Company and the
address key risks affecting its business
formal and professional relationship Group financial statements for financial
and regulatory environment.
with the external auditors. For the year ended 31 December 2017 are
financial year under review, the ARMC presented from pages 174 to 316 of Risk appetites, including financial,
had two meetings with the external this Annual Report. strategic, operational and governance
auditors without the presence of risk appetites, are defined in the
Management, which encouraged (II) RISK MANAGEMENT AND Group’s ERM Governance Policy.
a greater exchange of independent INTERNAL CONTROL FRAMEWORK Key risk indicators and risk tolerance
and frank views and opinions as well levels are also in place for the Management
Risk Management and Internal Control
as dialogue between both parties. and the Board to regularly monitor key
The external auditors were also invited IHH recognises that risk is an integral
business risks.
to attend the meetings of the ARMC and unavoidable consideration of doing
as well as the AGM of the Company to its business. As business and operational This robust framework allows for periodic
answer the queries that the shareholders risks cannot be wholly eliminated, IHH review of key risks and emerging risks,
may have on the conduct of the statutory will continuously foster a high level of including financial, operational, regulatory,
audit and the contents of the audited risk awareness and compliance culture reputational, cyber security and IT, clinical
consolidated financial statements of across the Group. quality and talent retention/manpower
the Company. related risks so that pre-emptive actions
The Board is fully committed to
and risk mitigation plans can be put
maintaining a sound system and
Oversight of Financial Reporting in place to address and treat these risks.
framework of risk management and
The Directors continually strive On a quarterly basis, these key risks,
internal controls. The Board, through
to present a clear, balanced and internal controls and risk mitigation plans
the ARMC, is responsible for governing
understandable assessment of the are reported to the ARMC, who in turn
risks and providing guidance to
Group’s financial position, performance will report to the Board on critical risk
Management in formulating the risk
and prospects primarily through the issues, material matters
management frameworks, policies and
audited financial statements, annual and recommendations.
guidelines. It maintains oversight of all
report and quarterly announcement identifiable risks within the Group to Our ERM framework has been developed
of results to shareholders. ensure that the policies and procedures and validated by external professional
The Directors are responsible for on risks and internal controls are firms. References are made to the
ensuring that the financial statements implemented in accordance with the Singapore Code of Corporate Governance,
prepared are drawn up in accordance Group’s business objectives. The ARMC MCCG and ISO 31000.
with the provisions of the Companies evaluates the risk management policies
Apart from the self-assessment
Act 2016 and the applicable approved formulated by Management as well as
performed by Management on the
accounting standards in Malaysia. the effectiveness of the mechanisms
adequacy and effectiveness of internal
In presenting the financial statements, set in place to identify and mitigate risk.
controls in mitigating the key risks,
the Company has used appropriate It then makes the necessary risk-related
independence audits have been
accounting policies, consistently applied recommendations to the Board for
performed by the internal auditors
and supported by reasonable and consideration and approval. The ARMC
on material internal controls such as
prudent judgements and estimates. is also responsible for ensuring that the
financial and IT controls. External audits
appropriate systems are in place to
The Board assisted by the ARMC, take the form of random checks and site
identify and highlight areas of potential
oversees the financial reporting visits by the Ministry of Health to assess
business or operational risk to the Group.
processes and the quality of the financial compliance to local laws and regulations.
reporting by the Group. The quarterly The Group has put in place an Enterprise In addition to these audits, the hospitals
financial results and audited financial Risk Management (“ERM”) framework have also embarked on a voluntary
statements were reviewed by the ARMC to identify, assess, mitigate and monitor third party assessment of its structure,
CORPORATE GOVERNANCE
OVERVIEW STATEMENT
Consistent
Transparent Accurate and Timely
information will be information should be all stakeholders will receive
released in a balanced complete and accurate the same information
and fair manner when released through broad public
dissemination,
which is made as and
when possible
Group Corporate Website Shareholders and investors can make the development of the Group.
IHH’s corporate website at inquiries about IR matters via a dedicated The provision of timely and relevant
www.ihhhealthcare.com provides a email address at ir@ihhhealthcare.com. information is principally important
dedicated platform for stakeholders to The email address is made available on to the shareholders and investors for
access essential information of the IHH’s corporate website. informed decision making particularly
Group. The information on the website, in periods of financial turbulence and
which is updated in a timely manner, Integrated Reporting extreme volatility in the market place.
includes IHH’s corporate profile, The Annual Report 2017 has been
Annual General Meeting
individual profiles of Directors and Senior prepared in accordance with the
Management, share information both in International <IR> Framework by the The Company regards the AGM
Bursa Securities and SGX, media International Integrated Reporting as the principal platform for direct
releases, quarterly and annual financial Council and the Global Reporting two-way dialogue between private
statements, investor presentations, Initiatives (GRI) Sustainability Reporting and institutional shareholders with the
dividend policy, annual reports, Guidelines to enhance reporting Board and Management of the Group.
Constitution, Board Charter, TOR of the connectivity while providing stakeholders The Group aims to ensure that the AGM
Board Committees, corporate provides an important opportunity for
with a more holistic view of how the
governance related policies, corporate effective communication with and obtain
Company creates and sustains value.
news and IHH’s global operations and constructive feedback from the Company’s
major subsidiaries. The corporate website (II) CONDUCT OF GENERAL shareholders. Before proceeding with
also has an event calendar which sets MEETINGS the agenda of the AGM, the MD & CEO
out the important dates for stakeholders would present to the shareholders the
Transparency and accountability to
such as general meetings, release date operational and financial performance
all stakeholders are the key elements
of financial results and information in of the Group during the year under
of good corporate governance.
relation to dividend entitlement. review and overview of the growth
The fundamental objectives of strategies of the Group moving forward
Visitors could also receive the latest transparency and accountability to accord shareholders with a better
IHH updates via email or RSS feed are clear communication, as well as understanding on their investment.
through the corporate website. In relevant and comprehensive information
addition, stakeholders could obtain that is timely and accessible by all Shareholders are encouraged to
regulatory announcements made by stakeholders. In this respect, the participate in the proceedings and ask
IHH to Bursa Securities and SGX by Company is committed to providing questions on the operations of the Group
clicking on the relevant link available a high standard of dissemination of and on any resolutions being proposed.
in the corporate website. relevant and material information on
ROLES OF THE NRC • Seek input from the concerned The NRC is composed of members
The NRC is primarily to assist the Board individuals on remuneration policies, with the appropriate balance and
in fulfilling its fiduciary responsibilities but no individual should be directly diversity of skills, experience, gender
relating to the review and assessment involved in deciding their own and knowledge. During the year under
of the nomination and selection remuneration; and review, NRC membership was increased
process of Board members and Senior • Have access to the advice and to five following the appointment of
Management, review of the remuneration services of the Company Secretaries. Kuok Khoon Ean, Independent Non-
framework of Board members and Executive Director as additional NRC
Senior Management, review of Board COMPOSITION AND MEETINGS member in May 2017.
and Senior Management succession The NRC is comprised exclusively of In March 2018, Chintamani Aniruddha
plans, assessment of Board, its Non-Executive Directors, a majority Bhagat was appointed as a member of
Committees and each individual Director of whom are independent. NRC following the resignation of Dato’
performance as well as evaluation of the In May 2017, Chang See Hiang, the Mohammed Azlan bin Hashim as member
training and development needs of the Senior Independent Non-Executive of NRC.
Board members. Director, had stepped down as NRC Based on the analysis/findings of the
The NRC is governed by a clearly Chairman but he however continues to performance evaluation of the NRC,
defined and documented Terms of remain as a member of NRC. Following the Board is satisfied that the NRC
Reference (“TOR”). The NRC’s TOR is thereto, Shirish Moreshwar Apte, an has consistently performed well and
reviewed and updated from time to Independent Non-Executive Director and discharged its duties and responsibilities
time, as the need arises, to ensure a member of the NRC since September satisfactorily in accordance with its
that it remains relevant and up-to-date 2014 was redesignated as the new NRC TOR under the chairmanship of the
to be in line with various changes in Chairman of the Company. NRC Chairmen.
regulations. The TOR was last reviewed
and approved for adoption by the Board The NRC has met five times during the year under review. The composition of the NRC
in February 2018 and the necessary and the attendance record of its members for the year under review are as follows:
amendments had been incorporated
therein. The TOR of the NRC is accessible Total Meetings
for reference on the Company’s website Director Designation Attended
at www.ihhhealthcare.com. Shirish Moreshwar Apte Independent 5/5
In carrying out its duties and (Chairman) Non-Executive Director
responsibilities, the NRC has Chang See Hiang Senior Independent 5/5
the following authorities: (Member) Non-Executive Director
Dato’ Mohammed Azlan Chairman, 5/5
• Perform the activities required to
bin Hashim Non-Independent
discharge its responsibilities and
(Member) Non-Executive Director
make recommendations to the Board;
(Resigned on 1 March 2018)
• Select, engage and seek approval
from the Board (within the Group’s Rossana Annizah binti Independent 5/5
Limits of Authority) for fees for Ahmad Rashid Non-Executive Director
professional advisers that the NRC (Member)
may require to carry out its duties; Kuok Khoon Ean Independent 3/3
• Have full and unrestricted access to (Member) Non-Executive Director
information, records, properties and (Appointed on 19 May 2017)
employees of the Group; Chintamani Non-Independent Not Applicable
Aniruddha Bhagat Non-Executive Director
(Member)
(Appointed on 1 March 2018)
(l) Reviewed and recommended to (s) Conducted an assessment of the (f) Assessed the performance
the Board for approval, the current Board composition against measurement and achievement of
nomination of directorship on the the relevant recommended practices the key performance indicators of the
board of key subsidiaries, having of the new MCCG. Group for 2017 against the balanced
considered the candidate’s skills, scorecard which had been approved
Subsequent to the financial year ended
character, knowledge, expertise by the Board in early 2017;
31 December 2017, the NRC carried out
and experience, professionalism, (g) Discussed and recommended
the following activities:
integrity and commitment; to the Board for approval, bonus
(m) Reviewed and recommended to the (a) Reviewed the results/findings of and salary increment for Executive
Board for approval, the appointment the performance evaluation of the Directors, Management and
of Senior Management and their Board as a whole, Board Committees, employees of the Company and
corresponding compensation individual Directors and Independent key subsidiaries upon assessing
package, having considered the Directors in accordance with the the performance of the Company,
candidates’ skillset and experience; performance evaluation criteria set subsidiaries and employees in 2017;
(n) Discussed and reviewed the out in the Corporate Governance (h) Discussed and recommended to
Executive compensation Guide – 3rd Edition: Moving from the Board for approval, the 2018
benchmarking report and findings Aspiration to Actualism by Bursa LTIP grant for Executive Directors,
prepared by an external consultant Securities, for the year 2017; Management and employees upon
engaged; (b) Assessed the NRC’s composition, assessing the performance of the
(o) Reviewed, deliberated and performance, quality, skills, Company, the respective operating
recommended to the Board for competencies and effectiveness companies and employees;
approval, the roles and functions of as well as their accountability and (i) Reviewed the NRC Report for
the Board and Board Committees responsibilities for the year 2017; inclusion in the Annual Report 2017;
of the Group aiming to simplify and (c) Undertaken an assessment to (j) Reviewed and recommended to the
streamline the overall governance review the term of office and evaluate Board for approval, the appointment
as well as to improve the efficiency the ARMC’s overall performance and of Group Chief Operating Officer and
of the Group (“Streamlining Exercise”); each of its members in discharging his corresponding compensation
(p) Deliberated and recommended to its duties and responsibilities in package, having considered the
the Board for approval, the renewal accordance with its TOR; candidate’s skillset and experience;
of contract of Senior Management of (d) Assessed and evaluated the training (k) Reviewed the proposed revision of
the Group and their corresponding needs of its Directors to ensure the the Non-Executive Chairman and
compensation package upon taking Directors kept abreast of regulatory Directors fees as recommended by
into consideration their length of changes, other developments and Management post the Streamlining
service, professionalism, performance broad business trends; Exercise in view of the increased
and competence; (e) Recommended the re-election of roles and responsibilities of the
(q) Reviewed and deliberated the revised Directors at the Eighth AGM to the Non-Executive Chairman and
succession planning framework and Board for consideration after taking Directors; and
development plan for the key into account the composition of (l) Reviewed and deliberated on the
subsidiaries; the board, the required mix of skills Group’s succession planning and
(r) Deliberated and recommended to as well as the experience and talent development.
the Board for approval, the Board contributions of the individual
Chairman transition; and Directors based on the assessment
conducted for the year 2017;
Candidate identified
STEP It can be identified on the recommendation of the existing Directors,
1 Senior Management staff, shareholders or third party referrals.
During the year under review, the Board prior assessment by the NRC and are Any new Directors appointed prior to
approved the following appointments required to give their consent on their the convening of the Eighth AGM of
upon the recommendation of the NRC: re-election prior to NRC and Board the Company will also be subject to
meetings. In assessing the candidates, re-election at the forthcoming Eighth
• Koji Nagatomi as Non-Independent
NRC takes into consideration their AGM pursuant to Article 120 of the
Non-Executive Director on 1 April 2017
character, experience, integrity, Constitution of the Company.
in place of Satoshi Tanaka who
competence and time to effectively
resigned on 1 April 2017; BOARDROOM DIVERSITY
discharge their role as Directors as well
• Takeshi Saito as alternate director to as their contribution and performance The Company recognises and
Koji Nagatomi on 1 April 2017; and based on the performance evaluation embraces the benefits of having a
• Dato’ Mohammed Azlan bin Hashim, undertaken during the year under diverse Board and sees increasing
the Deputy Chairman of the review. NRC’s recommendations are diversity at Board level as an essential
Company, as the new Chairman to thereafter submitted to the Board element in maintaining competitive
replace and succeed Tan Sri Dato’ for deliberation prior to recommending advantage. Thus, the Board will take
Dr. Abu Bakar bin Suleiman with to the shareholders for approval. the necessary measures to ensure
effect from 1 January 2018 upon the that in every possible event, boardroom
retirement of Tan Sri Dato’ Dr. Abu Pursuant to Article 113(1) of the
Constitution of the Company, diversity will be taken into consideration
Bakar bin Suleiman from the Board in the board appointment as well as
on 31 December 2017. Kuok Khoon Ean, Rossana Annizah
binti Ahmad Rashid and Shirish annual assessment.
RE-ELECTION OF DIRECTORS Moreshwar Apte shall retire at the Gender Diversity
The NRC ensures that the Directors forthcoming Eighth AGM. Save for
Kuok Khoon Ean, the rest of the The Company appreciates the benefits of
retire and are re-elected in accordance having gender diversity in the boardroom
with the relevant laws and regulations Directors have expressed their intention
to seek re-election at the Eighth AGM. as a mix-gendered board would offer
and the Constitution of the Company. different viewpoints, ideas and market
Hence, Kuok Khoon Ean shall retire
Pursuant to Article 113(1) of the upon the conclusion of the Eighth insights which enables better problem
Constitution of the Company, at least AGM of the Company. solving to gain competitive advantage in
one-third of the Directors (excluding serving an increasingly diverse customer
Directors seeking re-election pursuant Upon reviewing the results/findings of the base compared to a boardroom that is
to Article 120 of the Constitution of the performance evaluation undertaken dominated by one gender.
Company) are required to retire by during the year under review for the
Board as a whole, Board Committees, The Board also takes cognisance of
rotation at each AGM provided always the Malaysian Government’s target
that all Directors including the Managing individual Directors and Independent
Directors, the Board is of the view that of 30% women participation on public
Director and Executive Directors shall listed companies’ boards by 2020.
retire from office at least once every the following Directors, who are subject
to re-election at the Eighth AGM, have The Company does not set any specific
three years. A retiring Director is eligible target for female Directors on the Board
for re-election. the character, experience, integrity,
competence and time to effectively but will work towards having more female
Pursuant to Article 120 of the discharge their role as Directors. Directors on the Board. Presently,
Constitution of the Company, any They have also continuously brought there are two female Directors on the
Director so appointed to fill a casual independent and objective judgement Board comprising of Rossana Annizah
vacancy or as an addition to the existing in Board deliberations and decisions. binti Ahmad Rashid, an Independent
Directors, shall hold office only until the In this respect, the Board recommended Non-Executive Director, who is also the
next following AGM, and shall then be the shareholders to vote in favour of Chairman of the ARMC and a member
eligible for re-election but shall not be their re-election at the Eighth AGM of the NRC and Quek Pei Lynn, Alternate
taken into account in determining the pursuant to Article 113(1) of the Director to Chintamani Aniruddha Bhagat.
Directors who are to retire by rotation Constitution of the Company: The Company shall provide a suitable
at that meeting. working environment that is free from
(i) Rossana Annizah binti Ahmad Rashid
The Directors recommended to be harassment and discrimination in order
(ii) Shirish Moreshwar Apte
re-elected at the AGM are subject to to attract and retain women participation
on the Board.
The Audit and Risk Management Committee (“ARMC”) was established on 18 April
2012 in line with the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia
Securities Berhad (“Bursa Securities”).
ROLES OF THE ARMC In carrying out its duties and • Authorise the ARMC Chairman
responsibilities, the ARMC has for the time being to carry out the
The ARMC is primarily to assist the
the following authority: ARMC’s responsibilities as required
Board in fulfilling its statutory and
under the Whistleblowing Policy of
fiduciary responsibilities relating to • Approve any appointment or
the Group; and
monitoring and management of financial termination of senior staff members
risk processes along with its accounting of the internal audit function; • Have access to the advice and
and financial reporting practices, services of the Company Secretary.
• Convene meetings with the external
reviewing the business processes, auditors, the internal auditors or
ensuring the efficacy of the system of COMPOSITION AND MEETINGS
both excluding the attendance of
internal controls and risk management other directors and employees of the The ARMC is comprised exclusively of
processes, and in maintaining oversight Group, whenever deemed necessary Independent Non-Executive Directors
of both external and internal audit and such meetings with the external and no Alternate Director is appointed
functions for the Group on behalf of auditors shall be held at least twice as a member of the ARMC. The ARMC
the Board. a year; members come from diverse backgrounds
with extensive experience in banking,
The ARMC is a Board-delegated • Obtain external professional advice
finance, legal practice and corporate
committee and empowered by the or other advice and invite persons
governance issues. The composition
Board to carry out its duties and with relevant experience to attend
of the ARMC is in compliance with
responsibilities as set out in the Terms its meetings, if necessary;
Paragraph 15.09(1) of the MMLR.
of Reference (“TOR”). The TOR is • Investigate any matter within its TOR,
assessed, reviewed and updated from have the resources which it needs to The composition of the ARMC during the
time to time, as the need arises, to do so and have full and unrestricted year under review remains the same as
ensure that it remains relevant and access to information pertaining to in the previous year. The Board believes
up-to-date to be in line with the the Group and the Management that the existing ARMC composition
requirements in the Malaysian Code whereby all employees of the Group provides the appropriate balance in
on Corporate Governance, the MMLR are required to comply with the terms of skills, experience, gender
or any other applicable regulatory requests made by the ARMC; and knowledge to ensure the effective
requirements. The TOR would also be • Have direct communication channels functioning of the ARMC. Based on the
reviewed and updated in the event of with the external auditors and internal analysis/findings of the performance
changes to the direction or strategies auditors, and also to engage with the evaluation of the ARMC and its individual
of the Group that may affect the role of Senior Management on a continuous ARMC members by the Nomination
the ARMC. The TOR was last reviewed basis, such as the Chairman, the and Remuneration Committee, the
and approved for adoption by the Managing Director and the Chief Board is satisfied that the ARMC has
Board in May 2017 and the necessary Financial Officer (“CFO”) of the Group consistently performed well during
amendments had been incorporated and its operating subsidiaries in order the financial year and discharged their
therein. The TOR of the ARMC is to be kept informed of matters duties and responsibilities satisfactorily
accessible for reference on the affecting the Group; in upholding the integrity of financial
Company’s website at • Appoint an independent party to reporting and managing risks in
www.ihhhealthcare.com. conduct or to assist in conducting accordance with its TOR. The ARMC
any investigation, upon the terms of members have sound judgement,
appointment to be approved by the objectivity, independent attitude,
ARMC; professionalism, integrity, knowledge of
the industry and are financially literate.
Total Meetings
Director Designation Attended
Rossana Annizah binti Ahmad Rashid Independent Non-Executive Director 5/5
(Chairman)
Chang See Hiang (Member) Senior Independent Non-Executive Director 5/5
Shirish Moreshwar Apte (Member) Independent Non-Executive Director 4/5
The ARMC meetings were attended by SUMMARY OF ACTIVITIES (d) Reviewed with the external auditors,
the Managing Director & Chief Executive During the financial year, the ARMC had their audit plan and strategy for the
Officer (“MD & CEO”), Group Chief carried out the following key activities: financial year ended 31 December
Financial Officer (“GCFO”), Group Head, 2017, outlining among others, the
Internal Audit and Group Head, Risk Financial Reporting audit scope, methodology and timing
Governance together with other of audit, audit materiality, audit focus
(a) Reviewed the unaudited quarterly
members of the Senior Management areas, other audit findings and fraud
financial results of the Group
of the Group and the external auditors, risk assessment;
including the draft announcements
upon invitation, to brief the ARMC on (e) Noted the revaluation of investment
pertaining thereto, significant
pertinent issues. Senior Management properties of the Group which
judgements made by Management,
of the Group are also invited to brief and was undertaken by Management to
significant matters highlighted and
provide clarification to the ARMC on their ensure that the current market value
how these matters are addressed for
areas of responsibility for specific agenda of the investment properties was in
recommendation to be made to the
items to support detailed discussions compliance with MFRS140: Investment
Board for approval. These reviews
during the ARMC meetings. Property, prior to the same being
serve to ensure that IHH’s financial
The external auditors also attended and reporting and disclosures present a tabled to the Board for approval;
briefed the ARMC on matters relating to true and fair view of the Company’s (f) Advised Management on the
external audit at all five ARMC meetings financial position and performance improvements to be made to the
held during the financial year and and is in compliance with the MMLR evaluation and reporting processes
provided a high level review of the and applicable accounting standards with regard to merger and acquisition
financial position of the Group at in Malaysia; transactions and any accounting
the meetings. (b) Reviewed the results, reported issues treatments;
arising from the annual statutory audit (g) Discussed the implications of the
Minutes of the ARMC meetings would be Companies Act 2016 resulting in
by the external auditors, Management’s
circulated to all members for comments changes to the financial reporting
responses to the audit findings and
and extracts of the decisions made by the of the Company and the Group;
any changes in or implementation
ARMC would be escalated to the relevant
of major accounting policy changes
process owners for action. At the Board External Auditors
for the financial year ended
meetings, the Chairman of the ARMC (h) Evaluated the performance of the
31 December 2016;
would provide a report, highlighting external auditors for the financial
pertinent issues, significant points of the (c) Reviewed and made
recommendations to the Board for year ended 31 December 2016
decisions and recommendations made covering areas such as calibre of
by the ARMC to the Board and matters approval, the Annual Consolidated
Audited Financial Statements of the external audit firm, independence
reserved for the Board’s approval. and objectivity, quality of the
Company and the Group for the
financial year ended 31 December processes/performance, audit team,
2016 to ensure that it presented a audit scope and planning, audit fees,
true and fair view of the Company’s audit communications and resources
financial position and performance which was supported by the
for the year and is in compliance with assessment conducted by relevant
regulatory requirements; Management members on the
experience and opinions of the firm,
independence and objectivity, (n) Reviewed the Key Performance Regulatory and Clinical Compliance
and quality of the processes/ Indicators, competency and resources (r) Reviewed the Regulatory and
performance of the external auditors. of the internal audit function to ensure Clinical Compliance reports which
The ARMC having been satisfied that, collectively, the internal audit encompassed the following:
with the independence, suitability function is suitable and has the
(i) establishment of the Regulatory
and performance of KPMG PLT, required expertise, resources and
Compliance Framework
had recommended to the Board professionalism to discharge its
(“Framework”) of a Major OpCo
for approval, the re-appointment duties, etc;
for tracking of statutory obligations
of KPMG PLT as external auditors
Enterprise Risk Management and monitoring of compliance
for the financial year ended
with a view to standardise the
31 December 2017; (o) Reviewed the Group’s consolidated various country regulations into
Enterprise Risk Management (“ERM”) the common Framework to
(i) Met with the external auditors twice
reports including the Major OpCos be rolled out across all other
without the presence of the Executive
ERM reports which covered the geographies within the Group;
Directors and Management during the
Group’s ERM governance reporting
year under review with the exception (ii) International Clinical Governance
status, risk profile, key highlights and
of the Company Secretaries, to Advisory Council’s (“Council”)
key actions tracker to ensure that the
discuss any issues or reservations interim reports on matters related
Group’s business activities and risk
arising from the audits and any other to clinical governance practices
management methodologies are
matters the external auditors may across the Group which accords the
aligned and enhanced on an ongoing
wish to discuss including but not ARMC with a better understanding
basis. This is to proactively manage
limited to the system of internal of the performance of the member
the key risk areas that arise with the
controls and assistance given by the hospitals with regard to patient
developments in the external
Group’s employees to facilitate their safety and clinical quality as well
operating environment;
audit work; as the progress reports on the
(p) Reviewed the Risk Governance activities undertaken within the
Internal Audit Work Plan 2017 which comprises four workstreams under the TOR
(j) Reviewed and approved the 2017 risk monitoring and reporting of the Council;
internal audit plan to ensure that across the Group in the ordinary
there is adequate scope and course, cyber security governance Medical/Quality and Clinical
comprehensive coverage over the framework, Group insurance Quality Updates
activities of IHH Group and all high- renewal and management, medical
(s) Reviewed the reports on Medical/
risk areas are audited annually as data privacy framework and risk
Quality and Clinical Quality
well as the availability of adequate awareness and culture building;
Updates which encompassed
resources within the internal audit (q) Reviewed the reports pertaining to the following activities:
team to carry out the audit work; cyber risk prepared by the Group
(i) reporting on clinical incidents
(k) Reviewed the internal audit reports Risk Management team in joint
of Malaysia Operations Division
issued by the internal audit function collaboration with the information
(“MOD”) and Singapore
of the major operating companies technology (“IT”) team which covered,
Operations Division (“SOD”) to
(“Major OpCos”) during the year and among others, cyber risk heat map,
facilitate the assessment of the
presented at quarterly ARMC meetings; cyber security tender coverage and
reputational and financial risks
updates, implementation of cyber
(l) Monitored the implementation of as well as the overall impact to
security threat countermeasure
management action plan on the Group, pandemic or infectious
components and technical risk
outstanding issues on a quarterly diseases and monitoring the
assessment resolution aiming to
basis to ensure that all key risks outcomes of unusual clinical
identify and mitigate any potential
and control weaknesses are being incidents;
cyber threat which may impact the
properly addressed until the issues (ii) report on the five-year trend
Group’s IT system;
are fully resolved and rectified; of serious reportable events,
(m) Met with the Group Head, Internal adverse events and near misses
Audit twice without the presence in MOD and SOD;
of the Executive Directors and
Management with the exception of
the Company Secretaries during the
year under review to obtain feedback
on the audit activities, audit findings
and any other related matters;
(h) Reviewed the report of the internal OpCos report to the ARMC with a dotted
auditors in respect of their audit of reporting line to Group IA. The Group
the related party transactions and IA has direct control and supervision
recurrent related party transactions of internal audit activities in those
(except transactions exempted by subsidiaries that do not have an
law and/or the MMLR) entered into internal audit function.
by IHH and its subsidiaries to ensure
Group IA provides independent, objective
compliance with the MMLR;
assurance on areas of operations
(i) Reviewed the revaluation of reviewed, and makes recommendations
investment properties of the based on the best practices that will
Group which was undertaken improve and add value to the Group.
by independent valuers to ensure Group IA identifies, coordinates, monitors
that the current market value of and oversees the internal audits that are
the investment properties was in to be carried out throughout the Group
compliance with MFRS 140: Investment and also provides standards, policies and
Property, prior to the same being guidelines and advice to the subsidiaries’
tabled to the Board for approval; internal audit functions to standardise the
(j) Reviewed the ARMC Report as well internal audit activities within the Group.
as Statement on Risk Management
and Internal Control for inclusion in Group IA adopts a systematic and
the Annual Report 2017; disciplined approach to evaluate the
(k) Had its first independent session adequacy and effectiveness of the
of the year with the external financial, operational and compliance
auditors without the presence of the processes. Structured risk-based and
Executive Directors and Management strategic-based approaches are
with the exception of the Company adopted in identifying the internal
Secretaries to discuss any issues or audit activities that are aligned with the
reservations arising from the audit Group’s strategic plans to ensure those
for financial year ended 31 December risks faced by the Group are adequately
2017 including but not limited to reviewed. In addition, international
the system of internal controls and standards and best practices are
assistance given by the Group’s adopted to enhance the relevancy
employees to facilitate their audit and effectiveness of the internal
work; and audit activities.
(l) Had its first independent session of The internal audit reports are issued
the year with the Group Head, Internal to Management for their comments and
Audit without the presence of the for them to agree on action plans with
Executive Directors and Management deadlines to complete the necessary
with the exception of the Company preventive and corrective actions. The
Secretaries to obtain feedback on any reports and summary of key findings are
concerns noted in the course of tabled to the ARMC for deliberation to
auditing and feedback on the overall ensure that Management undertakes to
internal audit function of the Group. carry out the agreed remedial actions.
The Board of Directors of IHH Healthcare Berhad (“IHH or the Company”), together
with that of its subsidiary companies (“the Group”), is committed to maintaining
a sound system of risk management and internal control. In accordance with
Paragraph 15.26(b) of the Listing Requirements of Bursa Malaysia Securities Berhad,
the Board is pleased to provide the following Statement on Risk Management and
Internal Control prepared in accordance with the “Statement on Risk Management
and Internal Control: Guidelines for Directors of Listed Issuers”.
BOARD RESPONSIBILITY assurance that the following objectives Consequently, Management ensures
The Board in discharging its have been achieved: that the recommendations made by
responsibilities, is fully committed to the Internal Auditors to strengthen
(i) Reliability and integrity of financial
maintaining a sound system of risk and improve the internal controls
reports;
management and internal control as have been implemented.
(ii) Compliance with relevant regulations,
well as for reviewing its adequacy, policies, procedures and laws; Budgets and Performance Monitoring
integrity and effectiveness to safeguard (iii) Safeguarding of the Company’s
shareholders’ investment and the Annual Budgets are prepared by the
assets; and major operating subsidiaries and
Group’s assets. The system of risk
(iv) Effective and efficient utilisation of approved by their respective Boards
management and internal control by its
the Company’s resources. and these budgets are then consolidated
nature is designed to manage key risks
that may hinder the achievement of the For the year ended 2017, the Board is into the IHH Group Budget and approved
Group’s business objectives within an of the view that the present system of by the IHH Board.
acceptable risk profile. In view of the internal control is adequate and has The major operating subsidiaries’
limitations inherent in any system of been adhered to, to the best of its ability. performance is presented and discussed
risk management and internal control, The opinion is based on the following at their respective Board meetings on a
the systems put in place can only key internal controls practiced: quarterly basis and are also discussed
manage risks within tolerable and together with the consolidated IHH
knowledgeable levels, rather than Limits of Authority
Group Performance at the quarterly
eliminate the risk of failure to achieve The Limits of Authority established IHH Board meetings.
business objectives completely. by the Group serves to govern the
operations of all companies within Procurement and
CONTROL STRUCTURE the Group. It encompasses authorised Project Management
The Board is assisted by the Audit and signatories for Procurement and There is a Centralised Procurement
Risk Management Committee (“ARMC”), Payment, Financial Treasury, Human function in each major operating
which consists of three Independent Capital Management, Corporate subsidiary for major purchases
Non-Executive members of the Board. Transactions, Legal Documentation such as hospital equipment, drugs,
The Board, through the ARMC, maintains and Donations. It defines the authority maintenance expenditures and
risk oversight within the Group to ensure limit for each level of management in expansion projects. This ensures
that the implementation of the approved the major operating subsidiaries and adherence to the Group Procurement
policies and procedures on risks and the Group as a whole. Major capital Guidelines as well as provides leverage
controls are as intended. The approved investment, acquisition and disposal on economies of scale during
policies and appropriate key internal are approved by the Board of the major negotiations. Major expenditure is
controls have been put in place to operating subsidiaries and the Group. subject to Tender procedures and
mitigate the key risk areas which have evaluated by the Tender Committee.
been identified and assessed by the
Recommendations by
respective departments in charge for the
Internal Auditors There is also a Centralised Project
The Group has an Internal Audit function Management office in each major
year under review and up to the date of
to review the effectiveness of the material operating subsidiary to handle and
approval of this statement for inclusion in
internal controls of the major operating manage major renovation and expansion
the annual report.
subsidiaries based on the approved projects undertaken by the respective
The internal control system covers annual audit plan. Unannounced major operating subsidiaries.
areas of finance, operations and visits are conducted randomly to
compliance and provides reasonable ensure compliance at all times.
ca
acceptance criteria
n
• Identify critical
Risk business processes
asu s m e nt
Management
re m ent
M o n it o
Framework
M e ses
& k As
ri n
g
s
Ri
R is k
Response
& A c ti o n
The adequacy and effectiveness of the Group’s risk management, internal control and governance
processes are assessed and reported according to the following five interrelated COSO components:
on Monitoring
Inf
orm
ati
nic
ati
Control Activities
mu
on
om
an
dC
dC
an
om
on
mu
Risk Assessment
ati
nic
orm
ati
on
Inf
Control Environment
For the year ended 31 December 2017, • Reviewed the level of compliance The review of the adequacy and
the major internal audit activities with established policies and effectiveness of the internal control
undertaken were as follows: procedures and statutory process has been undertaken by the
requirements to ensure major internal audit function and necessary
• Developed a risk-based annual audit
units comply with the requirements actions have been/are being taken to
plan;
and any non-compliances were remedy any significant failing or
• Performed financial and operational highlighted to Management for weakness for the financial year under
audits on revenue cycle management remediation; review and up to the date of approval
(covering billing, cash and credit of this statement for inclusion in the
• Witnessed the tendering process for
collections, credit control, accounts annual report.
procurement of services or assets of
receivable), procurement and
the Group to ensure the activities in In the course of performing its duties,
inventory, capital and operating
the tendering process are conducted Group IA has unrestricted access to all
expenditure of hospitals, clinics
in a fair, transparent and consistent functions, records, documents, personnel,
and ancillary departments within
manner; or any other resources or information,
the Group;
• Carried out ad-hoc assignments and at all levels throughout the Group.
• Conducted Information Technology
investigations requested by the
(‘IT”) audits, risk assessment, security
ARMC and Senior Management; and
and control reviews across the
entities of the Group; • Followed-up on the implementation
of the Management Action Plan to
ensure that necessary actions have
been taken/are being taken to
remedy any significant gaps identified
in governance, risk management
and control.
OTHER RISK AND 3. The Medical Affairs department/ 7. Insurance policies relating to
CONTROL PROCESSES Medical Execution Committee workforce compensation, property
oversees the accreditation as well as damage and equipment breakdown,
The overall governance structure and
the qualifications and experience of cyber liability and network business
formally defined policy and procedures
our medical practitioners, and will not interruption, third party liability,
play a major part in establishing the
hesitate to remove their privileges if professional indemnity and medical
control and risk environment of the
they are found to be unethical or malpractice liability, are procured
Group. Although the Group is a
negligent. They also ensure patient to meet the local regulatory
networked organisation, a documented
safety and quality of services requirements and business
and auditable trail of accountability has
delivered within the hospitals, and requirements of the operational
been established through various board
compliance with government divisions and the wider Group;
committees established at operating
regulations; 8. Financial risk management systems
subsidiaries i.e. ARMC, Nomination &
Remuneration Committee and other 4. The respective quality committees are in place to address credit risk,
committees, each with clear Terms of or councils of the major operating liquidity risk, market risk, interest rate
Reference and appropriate limits subsidiaries ensures the quality of risk and foreign currency risk;
of authority. services and the safety of patients; 9. The internal auditors independently
5. On a quarterly/monthly basis, the audit and report findings on financial,
Each major operating subsidiary of the operations divisions are to submit to operational and compliance controls
Group is tasked with undertaking these the Group CEO updates pertaining to the ARMC or the Board. In addition,
corporate governance and risk to clinical/medico-legal cases, on an annual basis, the external
management practices as well as information technology (“IT”) and auditors perform statutory audit and
implementing the same: hospital development projects and report findings on financial controls
1. A governance and management business matters, HR matters, relevant to the statutory audit to the
structure is established within each financial performance and analysis, ARMC; and
hospital for functional accountability group target savings as well as the 10. Employees must abide by the
with operational/functional heads outlook for the business and strategic Code of Conduct and avoid any
reporting financial, operational projects. This information will form the dealings or conduct that could be
(clinical and non-clinical) risks, body of the Executive Report by the or could appear to be in conflict
compliance with statutory and Group CEO to the Board of each with the Group’s interests unless
regulatory requirements and major operating subsidiary, ultimately such business relationships are
reputational risks to the Hospital Chief surfacing at the Board of the Group; consented to by the Board.
Executive Officer (“CEO”)/ Director; 6. The development of any potential
2. Hospital CEOs/Directors, Business medico-legal cases are tracked and
Heads, Country Heads and Corporate reported to Senior Management and
Heads report on business operations the Board on a monthly basis and to
issues to the Senior Management on the ARMC on a quarterly basis. Any
a monthly basis. Matters such as significant risk exposures or trends
nursing issues, clinical/medical in terms of incident type or case
incidents with lapses, adverse categorisation are highlighted to
outcomes, potential legal issues and the Board/ARMC quarterly;
media exposure, are reported and
addressed at the hospital quality
meetings chaired by the Hospital CEOs;
INVESTOR RELATIONS
REPORT
CONFERENCES AND brokerage firms. IHH’s Senior quarterly operational and financial
ROADSHOWS Management, fronted by Managing performance, material operations
Director and CEO, Dr Tan See Leng, affecting the Group and the business
For 2017, stakeholder engagements were
and the Investor Relations team reached outlook. Senior Management also used
conducted through investor conferences
out directly to our shareholders and these interactions with the investment
and non-deal roadshows organised
investors to provide updates on the community to solicit their feedback and
locally or internationally by major
Group’s strategic developments, latest perceptions of the Group.
ANALYST COVERAGE
The Company is closely tracked by the investment community. As at 30 March 2018, 26 analysts provided coverage on IHH,
reflecting strong interest from sell side equity research houses, both domestic and abroad.
ADDITIONAL COMPLIANCE
INFORMATION
The following information is provided in and in existence during the financial (iv) LTIP of IMU Health Sdn Bhd
accordance with Paragraph 9.25 of the year ended 31 December 2017: (“IMU LTIP”) for a duration of ten
Main Market Listing Requirements years from 25 August 2011 and
(i) Long Term Incentive Plan (“LTIP”)
(“MMLR”) of Bursa Malaysia Securities expiring on 24 March 2021; and
of our Company (“IHH LTIP”)
Berhad (“Bursa Securities”) as set out (v) Enterprise Option Scheme (“EOS”)
for a duration of ten years from
in Part A of Appendix 9C thereto. of our Company for a duration of
25 March 2011 and expiring on
24 March 2021; ten years from 22 June 2015 and
1. UTILISATION OF PROCEEDS expiring on 21 June 2025.
(ii) LTIP of Parkway Holdings Limited
There were no proceeds raised by
(“Parkway LTIP”) for a duration (IHH LTIP, Parkway LTIP, Pantai
the Company from corporate
of ten years from 21 April 2011 LTIP, and IMU LTIP are collectively
proposals during the financial year
and expiring on 24 March 2021; referred to as “LTIPs”)
ended 31 December 2017.
(iii) LTIP of Pantai Holdings Berhad Brief details on the numbers of
2. EMPLOYEE SHARE SCHEMES (now known as Pantai Holdings LTIP units / EOS options granted,
Sdn Bhd) (“Pantai LTIP”) for vested and outstanding since the
The following are employee share
a duration of ten years from commencement of the LTIPs and
schemes established by our Group
24 May 2011 and expiring on EOS until financial year 2017
24 March 2021; (“FY 2017”) are as follows:
LTIPs EOS
Total number of LTIP units / EOS options granted 60,768,732 23,683,000
Total number of LTIP units / EOS options surrendered / exercised 47,381,045 807,000
Total number of LTIP units / EOS options lapsed / cancelled / opted out 7,329,687 3,337,000
Total number of LTIP units / EOS options outstanding 6,058,000 19,539,000
In accordance with the Bye Laws for aggregate 10% of the total number of Since the commencement of the LTIP
the LTIPs and EOS respectively, the shares to be issued under the LTIPs and EOS, the actual percentage of
total number of shares which may be and EOS respectively. None of our LTIP units and EOS options granted in
issued under the LTIPs and EOS to Directors and Senior Management, aggregate to Executive Directors and
the eligible participants, including either singly or collectively with Senior Management of the Company
Executive Directors and Senior persons connected with them, owns are 23.7% and 61.1% of the total
Management of the Company, shall 20% or more of the total number of number of LTIP units and EOS options
not exceed the aggregate of 2% of issued shares of our Company. granted respectively.
our Company’s total number of issued
For FY 2017, the actual percentage of There were no LTIP units and EOS
shares. Additionally, the total number
LTIP units granted to Executive options granted to the Non-Executive
of shares which may be issued under
Directors and Senior Management of Directors since the commencement
LTIP units and EOS options granted to
the Company was 30% of the total dates of the LTIPs and EOS.
a participant, who either singly or
number of LTIP units granted in 2017.
collectively with persons connected Details of the LTIP units and EOS
There were no EOS options granted
with him owns 20% or more of the options exercised during the financial
during the FY 2017.
total number of issued shares of year are disclosed in Note 22 of the
our Company, shall not exceed in financial statements.
* Approximately RM1.0 million of the non-audit fees is related to a limited review of the Group’s financial statements.
Services rendered by KPMG PLT permitted transferees holding the Acibadem Holding shares
are not prohibited by regulatory and shares in Acibadem Holding or in will convert into will be 20.0%
other professional requirements, its group companies (“Aydinlar”) more than the Original Number.
and are based on globally practiced have an option to convert Likewise if the conversion
guidelines on auditors’ independence. Acibadem Holding shares that would result in 20.0% or less
they hold representing up to than the Original Number, then
4. MATERIAL CONTRACTS 15.0% of the issued share capital the number of IHH Shares
INVOLVING DIRECTORS’, in Acibadem Holding into ordinary converted into will be 20.0%
CHIEF EXECUTIVE’S AND shares in IHH (“IHH Shares”) less than the Original Number.
MAJOR SHAREHOLDERS’ during a period of ten years from
Subject to Aydinlar exercising
INTERESTS 24 January 2012, provided that
the Aydinlar Option, Bagan Lalang
such option is exercisable only
Save as disclosed below and in the will have a similar right to convert
after the initial public offering of
financial statements, there were no a certain class of Acibadem
IHH (“Aydinlar Option”).
material contracts entered into by Holding shares held by Bagan
the Company and/or its subsidiaries The relative prices of the Lalang, representing up to 15.0%
involving Directors’, Chief Executive’s Acibadem Holding shares to be of the issued share capital in
and Major Shareholders’ interests transferred and the IHH Shares to Acibadem Holding, into new
subsisting as at 31 December 2017 be issued upon any exercise of IHH Shares (“Bagan Lalang
or entered into since the end of the the Aydinlar Option, will be based Option”). The Bagan Lalang
previous financial year: on the fair market valuation of Option shall mirror exactly the
these shares at the time the Aydinlar Option and shall be
(i) A shareholders’ agreement dated Aydinlar Option is exercised. If subject to identical terms and
23 December 2011 (“Shareholders’ the fair market valuation of these procedures.
Agreement”) was entered into shares will result in a conversion
among the Company, Integrated of Aydinlar’s Acibadem Holding 5. RECURRENT RELATED
Healthcare Hastaneler Turkey shares into 20.0% or more than PARTY TRANSACTIONS
Sdn Bhd, Bagan Lalang Ventures the number of IHH Shares, The recurrent related party
Sdn Bhd (“Bagan Lalang”), Hatice compared to if the Aydinlar’s transactions of revenue nature
Seher Aydinlar and Mehmet Ali Acibadem Holding shares were incurred by the Group for the
Aydinlar, whereby the parties converted by using the share financial year ended 31 December
have agreed on, among others, consideration price (per share) 2017 did not exceed the threshold
the rights and obligations of the paid under the Share Purchase prescribed under Paragraph 10.09(1)
parties regarding the governance Agreement (referred to in Section of the MMLR.
of Acibadem Saglik Yatirimlari 15.6(ii)(a) of the Company’s
Holding A.S. and its group Prospectus dated 2 July 2012)
(“Acibadem Holding”). Under (adjusted for any impact of
the Shareholders’ Agreement, subsequent capital increases
Mehmet Ali Aydinlar, Hatice Seher or other changes to the capital)
Aydinlar and any relatives or (“Original Number”), then the
heirs of these individuals or their number of IHH Shares which
DIRECTORS’ RESPONSIBILITY
STATEMENT
The Directors are required by the Companies Act 2016 to prepare financial
statements for each financial year. These are to be made out in accordance
with the applicable approved accounting standards and to give a true and
fair view of the state of affairs of the Group and the Company at the end of
the financial year as well as of the results and cash flows of the Group and
Company for the financial year.
In preparing the financial statements, the Directors have adopted suitable accounting policies and applied them consistently. The
Directors have also made judgment and estimates that are on a going concern basis as the Directors have a reasonable expectation,
having made enquiries that the Group and Company have resources to continue in operational existence for the foreseeable future.
The Directors have overall responsibility for taking such steps necessary to safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
The Statement by Directors pursuant to Section 251(2) of the Companies Act 2016 is set out in the financial statements.
DIRECTORS’ REPORT
for the year ended 31 December 2017
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the
financial year ended 31 December 2017.
PRINCIPAL ACTIVITIES
The Company is principally engaged in investment holding, whilst the principal activities of the subsidiaries are as stated in Note 46 to
the financial statements. There has been no significant change in the nature of these activities during the financial year.
SUBSIDIARIES
The details of the Company’s subsidiaries are disclosed in Note 46 to the financial statements.
RESULTS
Group Company
RM’000 RM’000
Profit for the year attributable to:
Owners of the Company 969,953 711,026
Non-controlling interests (140,125) –
829,828 711,026
DIVIDENDS
Since the end of the previous financial year, the Company paid a first and final single tier cash dividend of 3 sen per ordinary share
amounting to RM247,171,000 for the financial year ended 31 December 2016 on 18 July 2017.
The Directors have proposed a first and final single tier cash dividend of 3 sen per ordinary share for the financial year ended
31 December 2017 totalling RM247,714,000, which is subject to shareholders’ approval at the forthcoming Annual General Meeting.
DIRECTORS’ REPORT
for the year ended 31 December 2017
Number of units
At At
1 January Options 31 December
2017 exercised Bought Sold 2017
Interests in a subsidiary
Parkway Life Real Estate Investment Trust (“PLife REIT”)
Chang See Hiang
–– Direct 300,000 – – – 300,000
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other
than a benefit included in the aggregate amount of remuneration received or due and receivable by Directors as shown in the financial
statements or the fixed salary of a full-time employee of the Company or of related corporations) by reason of a contract made by the
Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the
Director has a substantial financial interest, other than certain Directors who have significant financial interests in companies which
traded with certain companies in the Group in the ordinary course of business as disclosed in Note 41 to the financial statements.
There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to
acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate apart from the
issue of the LTIP and EOS as disclosed in Note 22.
EOS
At an extraordinary general meeting held on 15 June 2016, the Company’s shareholders approved the establishment of the EOS for
granting of non-transferrable options to eligible employees of the Group any time during the existence of the scheme.
The salient features and the other terms of the EOS are, inter alia, as follows:
(i) Eligible employees are executive directors and selected senior management employed by the Group who has been selected by
the Board at its direction, if as at the offer date, the employee:
– has attained the age of 18 years;
– is in the full time employment and payroll of the Group including contract employees or in the case of a director, is on the
board of directors of the Group; and
– falls within such other categories and criteria that the Board may from time to time at its absolute discretion determine.
(ii) The aggregate number of shares to be issued under the EOS shall not exceed 2% of the issued and paid-up ordinary share
capital (excluding treasury shares) of the Company.
DIRECTORS’ REPORT
for the year ended 31 December 2017
LTIP
At an extraordinary general meeting held on 25 March 2011, the Company’s shareholders approved the establishment of the LTIP
scheme for the granting of non-transferrable convertible units to eligible employees of the Group at any time during the existence of
the scheme.
The salient features and the other terms of the LTIP are, inter alia, as follows:
(i) Eligible employees are employees that are in the full time employment and in the payroll of the Group including contract
employees for at least 6 months or persons that fall within other categories or criteria that the Board may determine from time to
time, at its absolute discretion.
(ii) The aggregate number of shares to be issued under the LTIP shall not exceed 2% of the issued and paid-up ordinary share
capital of the Company.
(iii) The LTIP shall be in force for a period of 10 years from 25 March 2011.
(iv) The LTIP units granted in each year will vest in the participants over a three year period, in equal proportions each year.
DIRECTORS’ REPORT
for the year ended 31 December 2017
SIGNIFICANT EVENTS
The significant events during the financial year are as disclosed in Notes 42, 43 and 44 to the financial statements.
SUBSEQUENT EVENTS
The events subsequent to the end of the reporting period are as disclosed in Note 49 to the financial statements.
AUDITORS
The auditors, KPMG PLT, have indicated their willingness to accept re-appointment.
The auditors’ remuneration is disclosed in Note 30 to the financial statements.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
……………………………………………………………….
Dato’ Mohammed Azlan Bin Hashim
Director
……………………………………………………………….
Dr. Tan See Leng
Director
26 March 2018
In the opinion of the Directors, the financial statements set out on pages 186 to 316 are drawn up in accordance with Malaysian
Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in
Malaysia so as to give a true and fair view of the financial positions of the Group and of the Company as of 31 December 2017 and of
their financial performances and cash flows for the financial year then ended.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
……………………………………………………………….
Dato’ Mohammed Azlan Bin Hashim
Director
……………………………………………………………….
Dr. Tan See Leng
Director
26 March 2018
STATUTORY DECLARATION
pursuant to Section 251(1)(b) of the Companies Act 2016
I, Low Soon Teck, the officer primarily responsible for the financial management of IHH Healthcare Berhad, do solemnly and sincerely
declare that the financial statements set out on pages 186 to 316 are, to the best of my knowledge and belief, correct and I make this
solemn declaration conscientiously believing the declaration to be true, and by virtue of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed Low Soon Teck, Passport No.: E4721422H at Kuala Lumpur in the Federal
Territory on 26 March 2018.
……………………………………………………………….
Low Soon Teck
Before me:
Commissioner for Oaths
Kuala Lumpur, Malaysia
Information Other than the Financial Statements and Auditors’ Report Thereon
The Directors of the Company are responsible for the other information. The other information comprises the information included in
the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.
Our opinion on the financial statements of the Group and of the Company does not cover the annual report and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the annual report
and, in doing so, consider whether the annual report is materially inconsistent with the financial statements of the Group and of the
Company or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of the annual report, we are required to report that fact. We have nothing
to report in this regard.
Other Matter
This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in
Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
Group Company
2017 2016 2017 2016
Note RM’000 RM’000 RM’000 RM’000
Assets
Property, plant and equipment 3 13,141,621 13,140,531 1,722 2,144
Prepaid lease payments 4 1,036,631 1,143,479 – –
Investment properties 5 3,109,985 3,033,107 – –
Goodwill on consolidation 6 10,692,198 11,076,000 – –
Intangible assets 6 2,278,442 2,489,642 – –
Investment in subsidiaries 7 – – 15,650,650 16,401,113
Interests in associates 8 7,632 7,657 – –
Interests in joint ventures 9 153,970 153,154 – –
Other financial assets 10 15,052 1,198,230 – –
Trade and other receivables 14 65,462 74,014 12,229 24,852
Tax recoverable 37,552 30,378 – –
Derivative assets 26 12,422 2,303 – –
Deferred tax assets 11 229,855 240,596 – –
Total non-current assets 30,780,822 32,589,091 15,664,601 16,428,109
The notes on pages 199 to 316 are an integral part of these financial statements.
Equity
Share capital 18 16,462,994 8,231,700 16,462,994 8,231,700
Share premium 19 – 8,185,160 – 8,185,160
Other reserves 19 1,478,287 2,292,652 54,779 46,520
Retained earnings 3,948,881 3,276,228 730,716 266,200
Total equity attributable to owners of the Company 21,890,162 21,985,740 17,248,489 16,729,580
Perpetual securities 20 2,158,664 – – –
Non-controlling interests 1,851,904 1,907,417 – –
Total equity 25,900,730 23,893,157 17,248,489 16,729,580
Liabilities
Loans and borrowings 21 6,103,785 6,852,782 – –
Employee benefits 22 45,590 41,398 49 41
Trade and other payables 25 1,814,177 1,666,595 – –
Derivative liabilities 26 3,742 24,860 – –
Deferred tax liabilities 11 1,011,220 1,067,265 – –
Total non-current liabilities 8,978,514 9,652,900 49 41
The notes on pages 199 to 316 are an integral part of these financial statements.
Group Company
2017 2016 2017 2016
Note RM’000 RM’000 RM’000 RM’000
The notes on pages 199 to 316 are an integral part of these financial statements.
The notes on pages 199 to 316 are an integral part of these financial statements.
Non-distributable
Share Fair
Share Share option value Revaluation
capital premium reserve reserve reserve
Group Note RM’000 RM’000 RM’000 RM’000 RM’000
The notes on pages 199 to 316 are an integral part of these financial statements.
– – – – – 50,019 – – 50,019
(2,353) – – 95,108 (7,118) (178,447) – (107,124) (285,571)
– – – – 612,353 612,353 – (4,361) 607,992
– – – – – 1,947 – – 1,947
– – – – – 54,168 – – 54,168
– – – – (246,944) (246,944) – – (246,944)
– – – – (246,944) (190,829) – – (190,829)
– – – – – – – – –
– – – – – – – (1,077) (1,077)
6 (51,132) – (5) – (51,131) – 114,941 63,810
Non-distributable
Share Fair
Share Share option value Revaluation
capital premium reserve reserve reserve
Group Note RM’000 RM’000 RM’000 RM’000 RM’000
1. Share premium arose from the exercise of employee option scheme before 31 January 2017, being the effective date of the Companies Act 2016.
2. In accordance with Section 618 of Companies Act 2016, any amount standing to the credit of the share premium account has become part of the
Company’s share capital. The Company has twenty-four months upon the commencement of Companies Act 2016 on 31 January 2017 to utilise
the credit.
The notes on pages 199 to 316 are an integral part of these financial statements.
– – – – – 3,362 – – 3,362
– – – – – 52,186 – – 52,186
– – – – (247,171) (247,171) – – (247,171)
– – – – (247,171) (191,623) – – (191,623)
– – – – – – – – –
– – – – 661 – – – –
– – – – – – – 11,392 11,392
– – – – – – – 766 766
2 293,354 – (1,119) – 292,237 – 372,389 664,626
– – – – – – – 75,056 75,056
– – – – – – – – –
15,200 (1,015,092) 47,755 2,289,575 3,948,881 21,890,162 2,158,664 1,851,904 25,900,730
Total comprehensive
income for the year – – – 6 (70) 10,772 10,708
Contributions by and
distributions to owners
of the Company
– Share options
exercised 18 464 1,483 – – – – 1,947
– Share-based payment – – 54,168 – – – 54,168
– Dividends to owners of
the Company 35 – – – – – (246,944) (246,944)
464 1,483 54,168 – – (246,944) (190,829)
Transfer to share capital
and share premium on
share options
exercised 18 7,890 32,667 (40,557) – – – –
Total transactions with
owners of the
Company 8,354 34,150 13,611 – – (246,944) (190,829)
At 31 December 2016 8,231,700 8,185,160 46,206 (153) 467 266,200 16,729,580
The notes on pages 199 to 316 are an integral part of these financial statements.
Total comprehensive
income for the year – – – (27) (467) 711,026 710,532
Contributions by and
distributions to owners
of the Company
–– Share options
exercised 18 3,208 154 – – – – 3,362
–– Share-based payment – – 52,186 – – – 52,186
–– Dividends to owners of
the Company 35 – – – – – (247,171) (247,171)
3,208 154 52,186 – – (247,171) (191,623)
Transfer to share capital
and share premium on
share options
exercised 18 42,705 67 (42,772) – – – –
Cancellation of vested
share options – – (661) – – 661 –
Total transactions with
owners of the
Company 45,913 2211 8,753 – – (246,510) (191,623)
Transfer in accordance
with Section 618(2) of
the Companies Act
20162 8,185,381 (8,185,381) – – – – –
At 31 December 2017 16,462,994 – 54,959 (180) – 730,716 17,248,489
1. Share premium arose from the exercise of employee option scheme before 31 January 2017, being the effective date of the Companies Act 2016.
2. In accordance with Section 618 of Companies Act 2016, any amount standing to the credit of the share premium account has become part of the
Company’s share capital. The Company has twenty-four months upon the commencement of Companies Act 2016 on 31 January 2017 to utilise
the credit.
The notes on pages 199 to 316 are an integral part of these financial statements.
Group Company
2017 2016 2017 2016
Note RM’000 RM’000 RM’000 RM’000
The notes on pages 199 to 316 are an integral part of these financial statements.
The notes on pages 199 to 316 are an integral part of these financial statements.
Group Company
2017 2016 2017 2016
Note RM’000 RM’000 RM’000 RM’000
Net increase in cash and cash equivalents 3,736,883 416,140 1,377,285 199,483
Effect of exchange rate fluctuations on cash held (82,412) 41,134 (38,231) 4,097
Cash and cash equivalents at 1 January 2,423,275 1,966,001 225,839 22,259
Cash and cash equivalents at 31 December 6,077,746 2,423,275 1,564,893 225,839
The notes on pages 199 to 316 are an integral part of these financial statements.
IHH Healthcare Berhad is a company incorporated and domiciled in Malaysia. It is listed on Bursa Malaysia Securities Berhad and
Singapore Exchange Securities Trading Limited. The address of the Company’s principal place of business and registered office is
as follows:
Level 11 Block A
Pantai Hospital Kuala Lumpur
8 Jalan Bukit Pantai
59100 Kuala Lumpur
The consolidated financial statements of the Company as at and for the financial year ended 31 December 2017 comprise the Company
and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”) and the Group’s interest in
associates and joint ventures. The financial statements of the Company as at and for the financial year ended 31 December 2017 do
not include other entities.
The Company is principally engaged in investment holding activities, whilst the principal activities of the subsidiaries are as stated in
Note 46 to the financial statements. There has been no significant change in the nature of these activities during the financial year.
These financial statements were authorised for issue by the Board of Directors on 26 March 2018.
1. Basis of preparation
(a) Statement of compliance
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting
Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.
The following are accounting standards, amendments and interpretations of the MFRSs framework that have been issued by the
Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company:
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018
• MFRS 9, Financial Instruments (2014)
• MFRS 15, Revenue from Contracts with Customers
• Clarifications to MFRS 15, Revenue from Contracts with Customers
• IC Interpretation 22, Foreign Currency Transactions and Advance Consideration
• Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements to MFRS
Standards 2014-2016 Cycle)
• Amendments to MFRS 2, Share-based Payment – Classification and Measurement of Share-based Payment Transactions
• Amendments to MFRS 4, Insurance Contracts – Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts
• Amendments to MFRS 128, Investments in Associates and Joint Ventures (Annual Improvements to MFRS Standards 2014-
2016 Cycle)
• Amendments to MFRS 140, Investment Property – Transfers of Investment Property
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2019
• MFRS 16, Leases
• IC Interpretation 23, Uncertainty over Income Tax Treatments
• Amendments to MFRS 3, Business Combinations (Annual Improvements to MFRS Standards 2015-2017 Cycle)
• Amendments to MFRS 9, Financial Instruments – Prepayment Features with Negative Compensation
• Amendments to MFRS 11, Joint Arrangements (Annual Improvements to MFRS Standards 2015-2017 Cycle)
• Amendments to MFRS 112, Income Taxes (Annual Improvements to MFRS Standards 2015-2017 Cycle)
• Amendments to MFRS 123, Borrowing Costs (Annual Improvements to MFRS Standards 2015-2017 Cycle)
• Amendments to MFRS 128, Investments in Associates and Joint Ventures – Long-term Interests in Associates and Joint Ventures
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2021
• MFRS 17, Insurance Contracts
MFRSs, Interpretations and amendments effective for annual periods beginning on or after a date yet to be confirmed
• Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint Ventures
– Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
• from the annual period beginning on 1 January 2018 for those accounting standards, amendments and interpretation that
are effective for annual periods beginning on or after 1 January 2018, except for amendments to MFRS 1 and MFRS 4 which
are not applicable to the Group.
• from the annual period beginning on 1 January 2019 for those accounting standard, amendments and interpretation that
are effective for annual periods beginning on or after 1 January 2019.
The Group does not plan to apply MFRS 17, Insurance Contracts that is effective for annual periods beginning on 1 January 2021
as it is not applicable to the Group.
The initial application of the accounting standards, amendments or interpretations are not expected to have any material financial
impacts to the current period and prior period financial statements of the Group except as mentioned below:
The Group has assessed that the initial application of MFRS 15 on its financial statements for the year ended 31 December
2017 will have no material impact on the net profit of the Group.
In respect of impairment of financial assets, MFRS 9 replaces the “incurred loss” model in MFRS 139 with an “expected
credit loss” (“ECL”) model. The new impairment model applies to financial assets measured at amortised cost, contract
assets and debt investments measured at fair value through other comprehensive income, but not to investments in equity
instruments.
The Group has assessed the estimated impact that the initial application of MFRS 9 will have on its consolidated financial
statements as at 1 January 2018 and the assessment resulted that no significant financial impact to the retained earnings
of the Group.
MFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognises a right-of-use
asset representing its right to use the underlying asset and a lease liability representing its obligations to make lease
payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting
remains similar to the current standard which continues to be classified as finance or operating lease.
The Group will assess the financial impact that may arise from the adoption of MFRS 16.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised and in any future periods affected.
There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have
significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes:
For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:
For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either
at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection
with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is
classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in
the fair value of the contingent consideration are recognised in profit or loss.
The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the entity. Potential voting rights are considered when
assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee
when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that
significantly affect the investee’s return.
The accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Group.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment
losses and includes transaction costs.
(iii) Associates
Associates are entities, in which the Group has significant influence, but not control, over the financial and operating policies.
Investments in associates are accounted for in the consolidated financial statements using the equity method less any
impairment losses. The cost of the investment includes transaction costs. The consolidated financial statements include
the Group’s share of the profit or loss and other comprehensive income of the associates, after adjustments if any, to align
the accounting policies with those of the Group, from the date that significant influence commences until the date that
significant influence ceases.
When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest including any
long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the
Group has an obligation to fund the associate’s operations or has made payments on behalf of the associate.
When the Group ceases to have significant influence over an associate, any retained interest in the former associate at the
date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying amount
of a financial asset. The difference between the fair value of any retained interest plus proceeds from the interest disposed
of and the carrying amount of the investment at the date when equity method is discontinued is recognised in profit or loss.
When the Group’s interest in an associate decreases but does not result in a loss of significant influence, any retained
interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains
or losses previously recognised in other comprehensive income are also reclassified proportionately to profit or loss.
Investments in associates are measured in the Company’s statement of financial position at cost less any impairment
losses. The cost of investment includes transaction costs.
• A joint arrangement is classified as “joint operation” when the Group or the Company has rights to the assets and
obligations for the liabilities relating to an arrangement. The Group and the Company account for each of its share of
the assets, liabilities and transactions, including its share of those held or incurred jointly with other investors, in
relation to the joint operation.
• A joint arrangement is classified as “joint venture” when the Group or the Company has rights only to the net assets
of the arrangements. The Group accounts for its interest in the joint venture using the equity method. Investments in
joint venture are measured in the Company’s statements of financial position at cost less any impairment losses and
includes transaction costs.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing
so causes the non-controlling interests to have a deficit balance.
The assets and liabilities acquired under business combinations arising from transfers of interests in entities that are under
the control of the shareholder that controls the Group, are recognised at the carrying amounts recognised previously in the
Group controlling shareholders’ consolidated financial statements. The components of equity of the acquired entities are
added to the same components within Group equity and any resulting gain or loss is recognised directly in equity.
If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that
control is lost. Subsequently, it is accounted for as an equity accounted investee or as an available-for-sale financial
instruments depending on the level of influence retained.
Unrealised gains arising from transactions with equity-accounted associates and joint ventures are eliminated against the
investment to the extent of the Group’s interest in the investees. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no evidence of impairment.
Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the
functional currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date,
except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date
that the fair value was determined.
The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency
and the amortised cost in foreign currency translated at the exchange rate at the end of the reporting period.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for the following differences
which are recognised in other comprehensive income arising on the retranslation of:
• available-for-sale equity instruments (except for impairment in which case foreign currency differences that have
been recognised in other comprehensive income are reclassified to profit or loss);
• a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is
effective; or
• qualifying cash flow hedges to the extent the hedge is effective.
Foreign currency differences are recognised in other comprehensive income and accumulated in the foreign currency
translation reserve (“FCTR”) in equity. However, if the operation is a non-wholly owned subsidiary, then the relevant
proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is
disposed of, such that control, significant influence or joint control is lost, the cumulative amount in the FCTR related to that
foreign operation is reclassified to profit or loss as part of the gain or loss on disposal.
When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the relevant proportion
of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment
in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the
relevant proportion of the cumulative amount is reclassified to profit or loss.
In the consolidated financial statements, when settlement of a monetary item receivable from or payable to a foreign
operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a
monetary item are considered to form part of a net investment in a foreign operation and are recognised in other
comprehensive income, and are presented in the FCTR in equity.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value
through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only
when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset
and settle the liabilities simultaneously.
An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it
is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised
as fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is
accounted for in accordance with policy applicable to the nature of the host contract.
Financial assets
(a) Financial assets at fair value through profit or loss
Fair value through profit or loss category comprises financial assets that are held for trading, including derivatives
(except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument),
contingent consideration receivable in a business combination or financial assets that are specifically designated into
this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values
cannot be reliably measured are measured at cost.
Other financial assets categorised as fair value through profit or loss are subsequently measured at their fair values
with the gain or loss recognised in profit or loss.
Financial assets categorised as held-to-maturity investments are subsequently measured at amortised cost using the
effective interest method.
Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the
effective interest method.
Investments in equity instruments that do not have a quoted market price in an active market and whose fair value
cannot be reliably measured are measured at cost. Other financial assets categorised as available-for-sale are
subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except
for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of
hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition,
the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss.
Interest calculated for a debt instrument using the effective interest method is recognised in profit or loss.
All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment (see
Note 2(m)(i)).
Financial liabilities
All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through
profit or loss, put options granted to non-controlling interests and compulsory convertible preference shares (refer below).
Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative that is a
financial guarantee contract or a designated and effective hedging instrument), contingent consideration payable in a
business combination or financial liabilities that are specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of equity instruments that do not have a quoted price in an
active market for identical instruments whose fair values otherwise cannot be reliably measured are measured at cost.
Financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the
gain or loss recognised in profit or loss.
Fair value arising from financial guarantee contracts are classified as deferred income and are amortised to profit or loss
using a straight-line method over the contractual period or, when there is no specified contractual period, recognised in
profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable, an
estimate of the obligation is made. If the carrying value of the financial guarantee contract is lower than the obligation, the
carrying value is adjusted to the obligation amount and accounted for as a provision.
A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date
accounting. Trade date accounting refers to:
(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and
(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable
from the buyer for payment on the trade date.
Subsequently, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit
or loss in the same period or periods during which the hedged forecast cash flows affect profit or loss. If the hedged item
is a non-financial asset or liability, the associated gain or loss recognised in other comprehensive income is removed from
equity and included in the initial amount of the asset or liability. However, loss recognised in other comprehensive income
that will not be recovered in one or more future periods is reclassified from equity into profit or loss.
Cash flow hedge accounting is discontinued prospectively when the hedging instrument expires or is sold, terminated or
exercised, the hedge is no longer highly effective, the forecast transaction is no longer expected to occur or the hedge
designation is revoked. If the hedge is for a forecast transaction, the cumulative gain or loss on the hedging instrument
remains in equity until the forecast transaction occurs. When the forecast transaction is no longer expected to occur, any
related cumulative gain or loss recognised in other comprehensive income on the hedging instrument is reclassified from
equity into profit or loss.
(vi) Derecognition
A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial
asset expire or control of the asset is not retained or substantially all of the risks and rewards of ownership of the financial
asset are transferred to another party. On derecognition of a financial asset, the difference between the carrying amount
and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any
cumulative gain or loss that had been recognised in equity is recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged
or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial
liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred
or liabilities assumed, is recognised in profit or loss.
Cost includes expenditure that is directly attributable to the acquisition of the asset and any other cost directly attributable
to bringing the asset to working condition for its intended use, and the cost of dismantling and removing the items and
restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and
direct labour. For qualifying assets, borrowing cost is capitalised in accordance with the accounting policy on borrowing
costs. Cost also may include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency
purchases of property, plant and equipment.
Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
The cost of property, plant and equipment recognised as a result of a business combination is based on fair value at
acquisition date. The fair value of property is the estimated amount for which a property could be exchanged between
knowledgeable, willing parties in an arm’s length transaction after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion. The fair value of other items of plant and equipment is based on the
quoted market prices for similar items when available and replacement costs when appropriate.
When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.
Property that is being constructed for future use as investment property is accounted for as property, plant and equipment until
construction or development is complete, at which time it is reclassified as investment property and measured at fair value.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from
disposal with the carrying amount of property, plant and equipment and is recognised net within “other operating income”
or “other operating expenses” respectively in profit or loss.
(iii) Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are
assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is
depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an
item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful
lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not
depreciated. Property, plant and equipment under construction (construction-in-progress) are not depreciated until the
assets are ready for their intended use.
Depreciation methods, useful lives and residual values are reviewed at the end of the reporting period, and adjusted as
appropriate.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of
the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising
the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.
Leasehold land which in substance is a finance lease is classified as property, plant and equipment, or as investment
property if held to earn rental income or for capital appreciation or for both.
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease.
Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of
the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.
Prepayment for leasehold land which in substance is an operating lease is classified as prepaid lease payments, and are
amortised over the term of the lease.
• the fulfilment of the arrangement is dependent on the use of a specific asset or assets; and
• the arrangement contains a right to use the asset(s).
At inception or upon reassessment of the arrangement, the Group separates payments and other considerations required
by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the
Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are
recognised at an amount equal to the fair value of the underlying asset. Subsequently, the liability is reduced as payments
are made and an imputed finance charge on the liability is recognised using the Group’s incremental borrowing rate.
Development activities involve a plan or design for the production of new or substantially improved products and processes.
Development expenditure is capitalised only if development costs can be measured reliably, the product or process is
technically and commercially feasible, future economic benefits are probable and the Group intends to and has sufficient
resources to complete development and to use or sell the asset.
The expenditure capitalised includes the cost of materials, direct labour and overheads costs that are directly attributable
to prepare the asset for its intended use. For qualifying assets, borrowing costs are capitalised in accordance with the
accounting policy on borrowing costs. Other development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment
losses.
Brand names and hospital licenses that have indefinite lives and other intangible assets that are not yet available for use
are stated at cost less impairment losses.
(iv) Amortisation
Amortisation is calculated based on the cost of an asset less its residual value.
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from
the date that they are available for use.
The estimated useful lives for the current and comparative periods are as follows:
Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted, if
appropriate.
Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are not amortised but
are tested for impairment annually and whenever there is an indication that they may be impaired.
Investment properties are measured initially at cost and subsequently at fair value with any change therein recognised in
profit or loss for the period in which they arise.
The fair value is determined based on internal valuation or independent professional valuation. Independent professional
valuation is obtained annually for material investment properties.
Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-
constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to
bringing the investment property to a working condition for their intended use and capitalised borrowing costs.
An investment property is derecognised on its disposal, or when it is permanently withdrawn from use and no future
economic benefits are expected from its disposal. The difference between the net disposal proceeds and the carrying
amount of the investment property is recognised in profit or loss in the period in which the item is derecognised.
When the use of a property changes such that it is reclassified as property, plant and equipment or inventories, its fair value
at the date of reclassification becomes its cost for subsequent accounting.
Development property is stated at the lower of cost and net realisable value. Net realisable value represents the estimated
selling price less cost to be incurred in selling the property.
(j) Inventories
Inventories are measured at the lower of cost and net realisable value.
Cost is calculated using the weighted average cost formula and comprises all costs of purchase and other costs incurred in
bringing the inventories to their present location and condition. Due allowance is made for all damaged, expired and slow
moving items.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make
the sale.
When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the
related revenue is recognised. The amount of any allowance for write-down of inventories to net realisable value and all losses
of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any
allowance for write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the
amount of inventories recognised as an expense in the period in which the reversal occurs.
Immediately before classification as held for sale or distribution, the assets, or components of a disposal group, are remeasured
in accordance with the Group’s accounting policies. Thereafter generally the assets, or disposal group, are measured at the
lower of their carrying amount and fair value less cost of disposal.
Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on pro rata
basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, and investment property, which
continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held
for sale or distribution and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not
recognised in excess of any cumulative impairment loss.
Intangible assets and property, plant and equipment once classified as held for sale or distribution are not amortised or
depreciated. In addition, equity accounting of associates and joint ventures ceases once classified as held for sale or distribution.
(m) Impairment
(i) Financial assets
All financial assets (except for financial assets categorised as fair value through profit or loss and investments in subsidiaries,
associates and joint ventures) are assessed at each reporting date whether there is any objective evidence of impairment
as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a
result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or
prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence
exists, then the impairment loss of the financial asset’s recoverable amount is estimated.
An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profit or loss and
is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows
discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an
allowance account.
An impairment loss in respect of available-for-sale financial instruments is recognised in profit or loss and is measured as
the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s
current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale
financial asset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive
income is reclassified from equity to profit or loss.
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is
measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash
flows discounted at the current market rate of return for a similar financial asset.
Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale is
not reversed through profit or loss.
If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an
event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that
the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been
recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units.
Subject to an operating segment ceiling test, for the purpose of goodwill impairment testing, cash-generating units to
which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the
lowest level at which goodwill is monitored for internal reporting purposes. The goodwill acquired in a business combination,
for the purpose of impairment testing, is allocated to group of cash-generating units that are expected to benefit from the
synergies of the combination.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or
cash-generating unit.
An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimated
recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are
allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (a group of cash-
generating units) and then to reduce the carrying amounts of the other assets in the cash-generating unit (groups of cash-
generating units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior
periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation,
if no impairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the financial year
in which the reversals are recognised.
A liability is recognised for the amount expected to be paid under short-term cash bonus if the Group has a present legal
or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can
be estimated reliably.
The Group’s contributions to defined contribution plans are charged to the profit or loss in the year to which they relate.
Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payment is
available.
The Group’s net obligation in respect of defined benefits retirement plan and termination plan are calculated by estimating
the amount of future benefit that employees have earned in return for their services in the current and prior periods,
discounting that amount and deducting the fair value of any plan assets.
The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation
results in a potential asset for the Group, the recognised asset is limited to the present value of economic benefits available
in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present
value of economic benefits, consideration is given to any applicable minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets
(excluding interest), if any, and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other
comprehensive income. The Group determines the net interest expense or income on the net defined liability or asset for
the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual
period to the then net defined benefit liability or asset, taking into account any changes in the net defined benefit liability
or asset during the period as a result of contributions and benefit payments.
Net interest expense and other expenses relating to defined benefits plans are recognised in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past
service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gains and losses
on the settlement of a defined benefit plan when the settlement occurs.
The gain or loss on settlement is the difference between the present value of the defined benefit obligation being settled
as determined on the date of settlement and the settlement price, including any plan assets transferred and any payments
made directly by the Group in connection with the settlement.
(q) Provision
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are
determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
Revenue is recognised when significant risks and rewards of ownership have been transferred to the customer, recovery
of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no
continuing management involvement with the goods, and the amount of revenue can be measured reliably.
Revenue excludes goods and services or other sale taxes and is after deduction of any trade discounts. No revenue is
recognised if there are significant uncertainties regarding recovery of the consideration due, associated costs or the
possible return of unit sold.
Interest income is recognised as it accrues using the effective interest method in profit or loss except for interest income
arising from temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying asset which is
capitalised.
IHH Healthcare Berhad | Annual Report 2017 215
Financial Statements
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised
in profit or loss using the effective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those
assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being
incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale
are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to
prepare the qualifying asset for its intended use or sale are interrupted or completed.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or
substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of
assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the following
temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that
are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or
substantively enacted by the end of the reporting period.
Where investment properties are carried at their fair value in accordance with the accounting policy set out in Note 2(h), the
amount of deferred tax recognised is measured using the tax rates that would apply on sale of those assets at their carrying value
at the reporting date unless the property is depreciable and is held with the objective to consume substantially all of the economic
benefits embodied in the property over time rather than through sale. In other cases, the amount of deferred tax recognised is
measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using
tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are not discounted.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend
to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the
temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to
the extent that it is no longer probable that the related tax benefit will be realised.
A tax incentive that is not a tax base of an asset is recognised as a reduction of tax expense in profit or loss as and when it is
granted and claimed. Any unutilised portion of the tax incentive is recognised as a deferred tax asset to the extent that it is
probable that future taxable profits will be available against which the unutilised tax incentive can be utilised.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number
of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which
comprise share options granted to employees.
Both basic and diluted EPS of the Group are adjusted to take into consideration the effect of perpetual securities distribution on
earnings.
(w) Contingencies
(i) Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably,
the obligation is not recognised in the statements of financial position and is disclosed as a contingent liability, unless the
probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the
occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability
of outflow of economic benefits is remote.
For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its
highest and best use.
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair value are
categorised into different levels in a fair value hierarchy based on the input used in the valuation technique as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the
measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly.
The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or change in circumstances
that caused the transfers.
IHH Healthcare Berhad | Annual Report 2017 217
Financial Statements
Cost
At 1 January 2016 584,264 3,847,997 3,942,044 6,127,495 55,310 39,881 1,027,371 15,624,362
Acquisitions through
business combinations 43 – – 264,613 244,545 – 401 4,249 513,808
Disposal of a subsidiary 44 – – – (1,480) – – – (1,480)
Additions – 30,216 32,468 348,304 5,868 4,836 1,823,678 2,245,370
Disposals – – – (63,833) – (2,142) – (65,975)
Write off – – – (8,697) (979) – – (9,676)
Reclassification – – 35,936 138,348 – – (174,284) –
Transfer to intangible assets 6 – – – (11,553) – – – (11,553)
Transfer to development
properties
–– Offset of accumulated
depreciation against cost – (258) – – – – – (258)
–– Transfer of carrying
amount 12 – (4,719) – – – – – (4,719)
Transfer to investment
properties
–– Offset of accumulated
depreciation against cost – (36) (9) (27) – – – (72)
–– Revaluation – 50,019 – – – – – 50,019
–– Transfer of carrying
amount 5 – (83,590) (785) (489) – – – (84,864)
Finalisation of purchase
price allocation 43 (318) – 11,016 (9,937) – (126) – 635
Translation differences (15,979) 50,812 7,648 (284,272) – (1,746) 3,557 (239,980)
At 31 December 2016/
1 January 2017 567,967 3,890,441 4,292,931 6,478,404 60,199 41,104 2,684,571 18,015,617
Acquisitions through
business combinations 43 – – – 12,839 – – 861 13,700
Disposal of a subsidiary 44 – – – (548) – (161) – (709)
Disposal of a business unit 42 – – – (662) – – – (662)
Additions 21,532 – 83,313 919,439 10,014 5,181 578,329 1,617,808
Disposals – – – (158,766) – (6,457) – (165,223)
Write off – – – (70,832) (2,212) – (915) (73,959)
Reclassification 225 – 1,361,155 1,112,726 – 145 (2,474,251) –
Transfer to intangible assets 6 – – – (3,901) – – – (3,901)
Transfer from investment
properties 12 – 22,086 5,164 3,346 – – – 30,596
Translation differences (27,365) (53,349) (168,621) (645,348) – (2,123) (160,606) (1,057,412)
At 31 December 2017 562,359 3,859,178 5,573,942 7,646,697 68,001 37,689 627,989 18,375,855
Accumulated depreciation
and impairment losses
At 1 January 2016 – 282,941 618,917 3,233,133 30,502 22,971 – 4,188,464
Acquisitions through
business combinations 43 – – 42,558 122,662 – (47) – 165,173
Disposal of a subsidiary 44 – – – (1,332) – – – (1,332)
Depreciation charge for
the year – 43,940 83,014 605,277 6,102 5,674 – 744,007
Impairment loss – – – – – – 746 746
Disposals – – – (46,742) – (1,399) – (48,141)
Write off – – – (7,605) (909) – – (8,514)
Transfer to development
properties
–– Offset of accumulated
depreciation against cost – (258) – – – – – (258)
Transfer to investment
properties
–– Offset of accumulated
depreciation against cost – (36) (9) (27) – – – (72)
Translation differences – 4,849 (1,268) (167,971) – (649) 52 (164,987)
At 31 December 2016/
1 January 2017 – 331,436 743,212 3,737,395 35,695 26,550 798 4,875,086
Acquisitions through
business combinations 43 – – – 7,328 – – – 7,328
Disposal of a subsidiary 44 – – – (465) – (176) – (641)
Depreciation charge for
the year – 45,388 118,855 738,382 6,855 4,825 – 914,305
Impairment loss made/
(reversed) – – – 2,267 – – (803) 1,464
Disposals – – – (139,619) – (5,168) – (144,787)
Write off – – – (69,035) (2,050) – – (71,085)
Translation differences – (5,047) (23,981) (317,581) – (832) 5 (347,436)
At 31 December 2017 – 371,777 838,086 3,958,672 40,500 25,199 – 5,234,234
At 31 December 2016/
1 January 2017 567,967 3,559,005 3,549,719 2,741,009 24,504 14,554 2,683,773 13,140,531
At 31 December 2017 562,359 3,487,401 4,735,856 3,688,025 27,501 12,490 627,989 13,141,621
Cost
At 1 January 2016 1,291 2,383 3,674
Additions 149 353 502
Translation differences – 27 27
At 31 December 2016/1 January 2017 1,440 2,763 4,203
Additions 85 365 450
Write off (31) – (31)
Translation differences (1) (28) (29)
At 31 December 2017 1,493 3,100 4,593
Accumulated depreciation
At 1 January 2016 313 956 1,269
Depreciation charge for the year 269 501 770
Translation differences – 20 20
At 31 December 2016/1 January 2017 582 1,477 2,059
Depreciation charge for the year 280 585 865
Write off (31) – (31)
Translation differences – (22) (22)
At 31 December 2017 831 2,040 2,871
Leasehold lands
Included in the net carrying amount of leasehold lands of the Group is RM3,487,401,000 (2016: RM3,559,005,000) pertaining to
leasehold lands with unexpired lease period of more than 50 years.
Securities
As at 31 December 2017, property, plant and equipment of the Group with carrying amounts of RM648,664,000 (2016:
RM866,912,000) are charged to licensed financial institutions for credit facilities and term loans granted to the Group.
Borrowing costs
Included in additions of the Group during the year are capitalised borrowing costs amounting to RM68,771,000 (2016: RM102,809,000).
Cost
At 1 January 1,221,328 956,325
Additions – 225,319
Finalisation of purchase price allocation 43 – 3,899
Translation differences (91,323) 35,785
At 31 December 1,130,005 1,221,328
Accumulated amortisation
At 1 January 77,849 54,192
Amortisation charge for the year 22,879 20,120
Finalisation of purchase price allocation 43 – 321
Translation differences (7,354) 3,216
At 31 December 93,374 77,849
Prepaid lease payments relate to leasehold lands which are in substance operating leases. The prepaid lease payments are
amortised on a straight-line basis over lease term of 50 to 99 years. The amortisation charge for the year ended 31 December
2017 of RM6,906,000 (2016: RM20,075,000) is capitalised in property, plant and equipment which relates to the construction of
a hospital.
5. Investment properties
Group
2017 2016
Note RM’000 RM’000
Investment properties includes retail units and medical suites within hospitals, nursing homes with care services and a
pharmaceutical product distributing and manufacturing facility leased or intended to be leased to external parties.
In determining the fair value, the valuers have used valuation techniques which involve certain estimates. The key assumptions
used to determine the fair value of investment properties include market corroborated capitalised yield, terminal yield, discount
rate and average growth rate.
The valuers have considered valuation techniques including the direct comparison method, the direct capitalisation approach,
and the discounted cash flow approach in arriving at the open market value as at the balance sheet date. The direct comparison
method involves the analysis of comparable sales of similar properties and adjusting the sale prices to that reflective of the
investment properties. The direct capitalisation approach capitalises an income stream into a present value using revenue
multipliers or single-year capitalisation rates. The discounted cash flow approach involves the estimation and the projection of
an income stream over a period and discounting the income stream with an appropriate rate of return.
2017
Land – – 833,672 833,672
Buildings – – 2,276,313 2,276,313
– – 3,109,985 3,109,985
2016
Land – – 796,365 796,365
Buildings – – 2,236,742 2,236,742
– – 3,033,107 3,033,107
Discounted cash flow approach Risk-adjusted discount rates range from The estimated fair value would increase/
5.0% to 7.5% (2016: 5.0% to 7.5%) (decrease) if the risk-adjusted discount
rates were lower/(higher).
Direct comparison approach Premium made for differences in type of The estimated fair value would increase/
development (including design, use and (decrease) if premium made for differences
proximity to complementary businesses) in type of development was higher/(lower).
range from 5% to 25% (2016: 0% to 10%)
Direct capitalisation approach Capitalisation rates range from The estimated fair value would increase/
5.0% to 7.0% (2016: 4.0% to 7.1%) (decrease) if the capitalisation rates were
lower/(higher).
• Capitalisation rate, based on the rate of return on investment properties on the expected income that the properties will
generate.
• Discount rates, based on the risk-free rate for bonds issued by government in the relevant market, adjusted for a risk
premium to reflect the increased risk of investing in the asset class.
• Terminal yield rate is the estimated capitalisation rate at maturity of the holding period.
Cost
At 1 January 2016 1,964,561 274,662 433,057 246,541 2,918,821 11,009,274 13,928,095
Acquisitions through business
combinations 42,43 19,241 74,181 – 9,250 102,672 122,838 225,510
Disposal of a subsidiary 44 – – – (2,077) (2,077) – (2,077)
Additions – – – 4,649 4,649 – 4,649
Write off – – – (5,670) (5,670) – (5,670)
Disposals – – – (2,594) (2,594) – (2,594)
Transfer from property, plant
and equipment 3 – – – 11,553 11,553 – 11,553
Finalisation of purchase price
allocation 43 – – (2,546) (4,393) (6,939) 5,718 (1,221)
Translation differences (96,565) (43,230) (31,139) (3,098) (174,032) (61,830) (235,862)
At 31 December 2016/
1 January 2017 1,887,237 305,613 399,372 254,161 2,846,383 11,076,000 13,922,383
Acquisitions through business
combinations 43 – 7,923 – – 7,923 15,313 23,236
Disposal of a subsidiary 44 – – – (234) (234) – (234)
Additions – – – 7,505 7,505 – 7,505
Write off – – – (264) (264) – (264)
Transfer from property, plant
and equipment 3 – – – 3,901 3,901 – 3,901
Finalisation of purchase price
allocation 43 – – – – – 33,563 33,563
Translation differences (113,098) (47,368) (36,900) (19,294) (216,660) (432,678) (649,338)
At 31 December 2017 1,774,139 266,168 362,472 245,775 2,648,554 10,692,198 13,340,752
* Other intangibles include capitalised development costs, brand use rights and favourable lease arrangements.
Accumulated amortisation
and impairment losses
At 1 January 2016 – – 236,698 81,697 318,395 – 318,395
Acquisitions through business
combinations 43 – – – 6,330 6,330 – 6,330
Disposal of a subsidiary 44 – – – (2,077) (2,077) – (2,077)
Amortisation charge for the
year – – 27,234 27,895 55,129 – 55,129
Disposals – – – (682) (682) – (682)
Translation differences – – (13,682) (6,672) (20,354) – (20,354)
At 31 December 2016/
1 January 2017 – – 250,250 106,491 356,741 – 356,741
Disposal of a subsidiary 44 – – – (17) (17) – (17)
Amortisation charge for the
year – – 24,745 21,593 46,338 – 46,338
Write off – – – (16) (16) – (16)
Translation differences – – (20,588) (12,346) (32,934) – (32,934)
At 31 December 2017 – – 254,407 115,705 370,112 – 370,112
At 31 December 2016/
1 January 2017 1,887,237 305,613 149,122 147,670 2,489,642 11,076,000 13,565,642
* Other intangibles include capitalised development costs, brand use rights and favourable lease arrangements.
Goodwill, brand names and hospital licences are allocated to the Group’s operating divisions which represent the lowest level
within the Group at which the goodwill, brand names and hospital licences are monitored for internal management purposes.
The aggregate carrying amounts of goodwill, brand names and hospital licences allocated to each operating unit are as follows:
The key assumptions for the computation of value in use of goodwill, brand names and hospital licences include the
following:
• Healthcare services CGUs: 4% to 25% (2016: 4% to 58%) per annum in the first 3 years with 2% to 39% (2016: 2%
to 25%) revenue growth for the subsequent years; and
• Education CGU: -4% to 1% (2016: -7% to 0%) per annum for the first 3 years with 0% to 1% (2016: -9% to 0%)
revenue growth for subsequent years.
(ii) EBITDA margins assumptions:
(iii) Terminal value was estimated using the perpetuity growth model:
(iv) Discount rates of approximately 7.5% to 15.5% (2016: 7.0% to 16.0%) which were based on the cost of capital plus an
appropriate risk premium at the date of assessment of the respective CGUs.
(v) There will be no other significant changes in the government policies and regulations which will directly affect the
investees’ businesses. The inflation for the operating expenses is in line with the estimated gross domestic product
growth rate for the country based on the past trends.
The values assigned to the key assumptions represent the Group’s assessment of future trends in the healthcare and
education market and are based on both external sources and internal sources (historical data).
The Group believes that no reasonably foreseeable changes in the above key assumptions that would cause the carrying
values of these CGUs to materially exceed their recoverable amounts other than changes in the prevailing operating
environment of which the impact is not ascertainable.
At cost:
Unquoted shares in Malaysia 15,650,619 15,912,137
Unquoted shares outside Malaysia 31 489,976
15,650,650 16,402,113
Allowance for impairment loss – (1,000)
15,650,650 16,401,113
Company
2017 2016
RM’000 RM’000
In January 2017, PMC redeemed the 260,000,000 redeemable preference shares held by the Company for a total cash
consideration of RM260,000,000.
(ii) During the year, pursuant to its capital reduction process, a wholly owned subsidiary, Integrated Healthcare Holdings
(Bharat) Limited, returned its capital of USD160,080,000 to the Company by buying back and cancelled 160,079,950 of its
own shares for a total consideration of USD160,080,000 (RM692,302,000). This transaction resulted in a reduction of
RM489,937,000 in the Company’s cost of investment in subsidiaries and a realised foreign exchange gain on return of
capital of RM202,365,000 which is recognised in the Company’s profit or loss.
(iii) During the year, pursuant to its liquidation process, a wholly owned subsidiary, Integrated Healthcare Capital Sdn. Bhd,
(“IHCSB”) returned its capital of RM598,000 to the Company, resulted in a reduction of RM598,000 in the Company’s cost
of investment in subsidiaries. In December 2017, IHCSB was liquidated. The Company wrote off the remaining RM928,000
cost of investment in IHCSB against the provision made in prior years.
Although the Group owns less than half of the ownership interest in, and less than half of the voting power of PLife REIT, the
Group has determined that it controls PLife REIT. The Group has de facto control over PLife REIT, on the basis that the remaining
voting rights in PLife REIT are widely dispersed and that there is no indication that all other shareholders exercise their votes
collectively.
The Group via PLife REIT, does not hold any ownership interest in the special purpose entities (“SPEs”) listed in Note 46. The
SPEs were established under terms that impose strict limitations on the decision-making powers of the SPEs’ management,
resulting in the Group receiving the majority of the benefits related to the SPEs’ operations and net assets, being exposed to the
majority of risks incident to the SPEs’ activities, and retaining the majority of the residual or ownership risks related to the SPEs
or their assets. Consequently, the SPEs are regarded as subsidiaries of the Group.
Significant restrictions
PLife REIT
The Group does not have significant restrictions on its ability to access or use the assets and settle the liabilities of PLife REIT
other than those resulting from the regulatory framework within which the subsidiary operates. PLife REIT is regulated by the
Monetary Authority of Singapore (“MAS”) and is supervised by the Singapore Exchange Securities Trading Limited (“SGX-ST”) for
compliance with the Singapore Listing Rules. Under the regulatory framework, transactions with PLife REIT are either subject to
review by PLife REIT’s Trustee or must be approved by a majority of votes by the remaining holders of Units in PLife REIT
(“Unitholders”) at a meeting of Unitholders.
The assets of PLife REIT are held in trust by a Trustee for the Unitholders. As at 31 December 2017, the carrying amounts of PLife
REIT’s assets and liabilities are RM4,454,116,000 (2016: RM4,522,481,000) and RM2,288,328,000 (2016: RM2,311,102,000)
respectively.
8. Interests in associates
Group
2017 2016
RM’000 RM’000
At cost:
Unquoted shares in Malaysia 3 3
Unquoted shares outside Malaysia 2,244 2,280
2,247 2,283
Share of post-acquisition reserves 6,198 5,324
8,445 7,607
7,632 7,657
The amounts due to associates are unsecured, interest-free and settlement is neither planned nor likely to occur in the foreseeable
future. As these amounts are, in substance, a part of the Group’s net investments in these associates, they are stated at cost.
The Group does not have any material associates. The following table summarises the information of the Group’s associates,
adjusted for any differences in accounting policies.
Individually immaterial
associates
2017 2016
RM’000 RM’000
The Group’s share of profit or loss, representing share of total comprehensive income for the year 1,543 1,747
At cost:
Unquoted shares outside Malaysia 276,887 281,262
Share of post-acquisition reserves (56,715) (53,534)
Allowance for impairment loss (100,764) (103,337)
119,408 124,391
153,970 153,154
The amounts due to joint ventures are unsecured and interest-free, and settlement is neither planned nor likely to occur in the
foreseeable future. As these amounts are, in substance, a part of the Group’s net investments in these joint ventures, they are
stated at cost.
The Group does not have any material joint ventures. The following table summarises the information of the Group’s joint
ventures, adjusted for any differences in accounting policies.
Individually immaterial
joint ventures
2017 2016
RM’000 RM’000
The Group’s share of profit or loss, representing share of total comprehensive income for the year 577 14,922
The Group estimated the recoverable amount of its investment in KHPL based on fair value of KHPL’s net assets less costs of
disposal. The amount has been categorised as a Level 3 fair value based on the inputs to the valuation technique used in the
table below.
Inter-relationship between
Type Valuation technique Significant unobservable inputs significant unobservable inputs
Property under Market Sales Comparable –– In 2016 and 2017, discount The estimated fair value would
development and method: This valuation model applied on the developmental increase/(decrease) if:
intangible asset considers the value of land per rights on KHPL’s land parcel: • The discount applied to the
square metre of nearby 10%; and leasehold land was lower/
comparable properties reserved –– In 2016 and 2017, discount (higher); and
for hospital usage, taking into applied to take into account
account the tenor and saleability • The discount applied, taking
the saleability: 50% into account the saleability
of the property under
development and intangible was lower/(higher)
asset
Other receivables Fair value approximate the book Not applicable Not applicable
and other payables value on the basis that such
assets/liabilities are to be settled
within 12 months from the
valuation date
Non-current
Available-for-sale financial instruments
At market value:
Quoted shares outside Malaysia – 1,176,638 – –
At cost:
Unquoted shares in Malaysia 11,385 11,566 – –
11,385 1,188,204 – –
Others
Fixed deposits with tenor of more than 3 months 3,323 9,612 – –
Club membership and other investments 344 414 – –
3,667 10,026 – –
15,052 1,198,230 – –
Current
Available-for-sale financial instruments
At market value:
–– Money market funds, unquoted in Malaysia – 70,574 – 70,574
–– Eurobonds, unquoted outside Malaysia – 81,468 – –
– 152,042 – 70,574
Others
Fixed deposits with tenor of more than 3 months 160,235 199,632 – –
160,235 351,674 – 70,574
Non-current investments in available-for-sale unquoted equity securities are stated at cost as their fair values cannot be reliably
measured in view that they do not have a quoted market price in an active market, the range of reasonable fair value estimates
is significant and the probabilities of the various estimates cannot be reliably assessed.
In 2016, non-current fixed deposits with tenor of more than 3 months included RM7,110,000 representing monies placed in an
escrow account pursuant to the acquisition of Tokuda Group.
At 1 January 2016 17,253 74,634 24,538 (425,670) (60,150) (500,062) 1,177 (868,280)
Acquired through business
combinations 43 3,867 – 26 (8,612) – (1,825) 2,589 (3,955)
Disposal of a subsidiary 44 – – (115) 26 – – – (89)
Recognised in profit or loss 33 2,008 (26,094) 37,543 393 405 11,234 (3,142) 22,347
Recognised in other
comprehensive income 31 – – 2,781 – – – – 2,781
Finalisation of purchase
price allocation 43 – – – 1,020 – 2,419 – 3,439
Translation differences (2,079) – (4,084) (2,333) (4,418) 29,561 441 17,088
At 31 December 2016/
1 January 2017 21,049 48,540 60,689 (435,176) (64,163) (458,673) 1,065 (826,669)
Acquired through business
combinations 43 – – – 2 – – – 2
Disposal of a subsidiary 44 – – (69) 117 – 3 – 51
Recognised in profit or loss 33 2,205 (42,348) 8,552 41,409 (12,498) 11,171 2,610 11,101
Recognised in other
comprehensive income 31 – – 3,321 – – – – 3,321
Translation differences (3,465) 2 (8,373) 4,311 4,316 33,786 252 30,829
At 31 December 2017 19,789 6,194 64,120 (389,337) (72,345) (413,713) 3,927 (781,365)
The amounts determined after appropriate offsetting is included in the statements of financial position are as follows:
Deferred tax assets and liabilities are offset above where there is legally enforceable right to set off current tax assets against
current tax liabilities and where the deferred taxes relate to the same taxation authority.
The unutilised tax losses carried forward do not expire under current tax legislations, except for amount of RM12,384,000 (2016:
RM11,824,000) which can be carried forward to offset against future taxable income for five years only. Deferred tax assets have
not been recognised in respect of these items because it is not probable that future taxable profit will be available against which
the respective subsidiaries can utilise the benefits there from.
13. Inventories
Group
2017 2016
RM’000 RM’000
As at 31 December 2017, inventories with carrying amount of RM12,892,000 (2016: RM10,245,000) are pledged to licensed
financial institutions as securities for credit facilities granted to subsidiaries.
Non-current
Trade receivables 1,009 – – –
Other receivables 1,811 1,910 – –
2,820 1,910 – –
Prepayments 40,334 46,762 12,229 24,852
Deposits 22,308 25,342 – –
65,462 74,014 12,229 24,852
Current
Trade receivables 1,260,097 1,116,595 – –
Other receivables 78,705 96,834 259 183
Interest receivables 13,812 2,227 2,002 268
1,352,614 1,215,656 2,261 451
Prepayments 100,484 173,290 12,775 6,943
Deposits 36,492 52,737 5 4
1,489,590 1,441,683 15,041 7,398
2017
Trade receivables 1,351,687 (90,581) 1,261,106
Trade payables 25 (1,096,308) 90,581 (1,005,727)
2016
Trade receivables 1,191,995 (75,400) 1,116,595
Trade payables 25 (1,083,536) 75,400 (1,008,136)
Certain trade receivables and trade payables were set off for presentation purpose as the Group has enforceable rights to set
off the amounts and intends either to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
Included in fixed deposits with licenced banks in the previous year was an amount of RM2,617,000 pledged to banks and finance
companies for credit facilities granted to certain subsidiaries (See Note 21).
Secured bank overdrafts are interest-bearing at bank’s base rate + 1.25% (2016: bank’s base rate + 1.25%).
To further support the Rental Income Guarantee, a cash deposit of JPY21,736,000 (2016: JPY154,400,000), approximately
RM789,000 (2016: RM5,941,000), was placed with PLife REIT, for withdrawal in respect of valid claims under the Rental Income
Guarantee. Any balance left in the account upon termination of the Rental Income Guarantee will be returned to the vendor.
The new ordinary shares issued during the financial year rank pari passu in all respects with the existing ordinary shares of the
Company.
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per
share at general meetings of the Company.
The new Companies Act 2016 which came into operation on 31 January 2017, abolished the concept of authorised share capital
and par value of share capital. Pursuant to Section 74 of the Act, all shares issued before or upon the commencement of the Act
shall have no par or nominal value.
There is no impact to the number of ordinary shares in issue or entitlement of the members as a result of this transition.
(i) In accordance with Section 618 (2) of the Companies Act 2016, any amount standing to the credit of the share premium account has become
part of the Company’s share capital. The Company has twenty-four months after the commencement of Section 74 of the Companies Act 2016
on 31 January 2017 to utilise the credit.
Upon the commencement of Companies Act 2016 on 31 January 2017, Company shares will no longer have any par value.
Any amount standing to the credit of the share premium account will become part of the Company’s share capital. The
Company has twenty-four months upon the commencement of Companies Act 2016 to utilise the credit.
When the share options expire, the amount from the share option reserve is transferred to retained earnings. Details of the
share options are disclosed in Note 22.
(i) non-cash contribution from, or distribution to, holding companies within the Group for the common control transfer of
subsidiaries;
(ii) difference between the consideration paid and net assets acquired in acquisition of non-controlling interests;
(iii) difference between consideration received and net assets disposed when the Group disposed its interest in
subsidiaries without losing control of the subsidiaries;
(iv) capital gain or loss arising from the payment of a non-controlling interest’s subscription to the share capital of a
subsidiary;
(v) capital gain or loss arising from the Group’s subscription to additional shares of non-wholly owned subsidiaries; and
(vi) financial liabilities arising from initial issue of put options to non-controlling interests in relation to the Group’s business
combinations, and its subsequent remeasurement changes.
(i) first and second legal reserves. The first legal reserves are generated by annual appropriations amounting to 5
percent of income disclosed in the Group’s Turkish-based subsidiaries’ statutory accounts until it reaches 20 percent
of the issued and paid-up share capital of these subsidiaries. If the dividend distribution is made in accordance with
statutory records, a further 1/11 of dividend distribution, in excess of 5 percent of paid-up share capitals are to be
appropriated to increase second legal reserve.
(ii) statutory reserve fund (“SRF”) for the Group’s subsidiaries in the People’s Republic of China (“PRC”) who are required
by the Foreign Enterprise Law to allocate 10% of the statutory profits after tax as determined in accordance with the
applicable PRC accounting standards and regulations to the SRF annually. Subject to approval from the relevant PRC
authorities, the SRF may be used to offset any accumulated losses or increase the registered capital of the subsidiaries.
The SRF is not available for dividend distribution to shareholders.
(i) foreign exchange differences arising from the translation of the financial statements of foreign operations whose
functional currencies are different from the functional currency of the Company;
(ii) the exchange differences on monetary items which form part of the Group’s net investment in the foreign operations,
provided certain conditions are met; and
(iii) the effective portion of any foreign currency differences arising from hedges of the Group’s net investment in a
foreign operation.
IHH Healthcare Berhad | Annual Report 2017 239
Financial Statements
In the same month, senior perpetual securities (“perpetual securities”) with an aggregate principal amount of US$500.0 million
(approximately RM2,130.8 million) were issued by PPL under the MTN programme. The perpetual securities bear an initial semi-
annual distribution of 4.25% per annum which will be reset in July 2022 and at every 5 years thereafter.
(iii) no fixed redemption date but PPL has the option to redeem at the end of 5 years from date of issuance at their principal
amounts and on each subsequent semi-annual periodic distribution payment date;
(iv) may also be redeemed at the option of PPL upon the occurrence of certain events as per detailed in the terms and
conditions of offering circular and pricing supplement of the perpetual securities;
(v) expected periodic distribution amount may be deferred by PPL and are cumulative, subject to the terms and conditions in
the offering circular of the perpetual securities; and
(vi) shall at all times rank pari passu and without any preference among the perpetual securities issued and (save for certain
obligations required to be preferred by law) equally with all other unsecured obligations (other than subordinated
obligations, if any) of PPL, from time to time outstanding.
The issued perpetual securities are classified as equity because the payment of any distribution or redemption of the securities
is at the option of PPL.
During the financial year, distributions amounting to RM38,639,000 were accrued to perpetual security holders. As at
31 December 2017, an amount of US$3,000,000 (approximately RM12,351,000) perpetual securities was held by a related party.
Non-current
Secured
Bank borrowings 437,702 430,224
Finance lease liabilities 107,492 90,356
Unsecured
Bank borrowings 5,257,584 6,205,323
Fixed rate medium term notes 301,007 126,879
6,103,785 6,852,782
Current
Secured
Bank borrowings 36,412 65,909
Finance lease liabilities 31,299 59,556
Unsecured
Bank borrowings 622,276 497,503
689,987 622,968
2017
Secured bank loans BGN SOFIBOR + 1.00%(2) 2018 6,362
Secured bank loans EUR 4.50% to 5.25% 2018 – 2020 9,441
Secured bank loans EUR Euribor(1) + 1.50% 2018 – 2020 112,756
Secured bank loans INR Base rate + 1.25% to 1.70% 2018 – 2028 341,439
Secured bank loans USD LIBOR(5) + 1.75% 2019 4,117
Unsecured bank loans EUR Euribor + 0.38% to 3.10% 2018 – 2026 1,877,875
Unsecured bank loans EUR 2.10% to 3.90% 2018 – 2021 71,051
Unsecured bank loans HKD HIBOR(4) + 0.80% 2021 1,050,721
Unsecured bank loans JPY LIBOR + 0.30% to 1.05% 2019 – 2021 1,079,924
Unsecured bank loans MKD 5.25% 2018 4,848
Unsecured bank loans SGD SOR(6) + 0.73% to 1.05% 2019 – 2021 1,201,112
Unsecured bank loans SGD COF(3) 2018 48,609
Unsecured bank loans TL 0% – 15.50% 2018 58,812
Unsecured bank loans USD LIBOR + 2.95% to 3.10% 2018 – 2020 486,905
Unsecured fixed rate medium term notes
–– Issued in 2017 JPY 0.57% 2023 181,367
–– Issued in 2016 JPY 0.58% 2022 119,642
6,654,981
2016
Secured bank loans EUR 4.50% to 5.25% 2017 – 2020 15,436
Secured bank loans EUR Euribor + 3.60% 2017 – 2020 88,391
Secured bank loans INR Base rate + 1.25% to 1.70% 2017 – 2028 344,895
Secured bank loans RM 5.04% 2017 40,088
Secured bank loans USD LIBOR + 1.75% to 3.60% 2017 – 2019 7,323
Unsecured bank loans EUR Euribor + 0.38% to 2.95% 2017 – 2026 1,899,011
Unsecured bank loans EUR 2.10% to 5.00% 2017 – 2021 57,260
Unsecured bank loans HKD HIBOR + 0.80% 2021 394,048
Unsecured bank loans JPY LIBOR + 0.30% to 1.10% 2018 – 2020 1,233,970
Unsecured bank loans JPY COF 2017 143
Unsecured bank loans MKD 5.25% 2017 6
Unsecured bank loans SGD SOR + 0.73% to 1.05% 2019 – 2021 1,219,326
Unsecured bank loans SGD COF 2017 50,326
Unsecured bank loans TL 10.50% to 11.10% 2017 – 2018 3,634
Unsecured bank loans USD LIBOR + 2.95% 2017 – 2020 556,860
Multi-currency loan facility
Unsecured bank loans HKD HIBOR + 1.10% 2017 – 2021 1,299,037
Unsecured bank loans SGD SWAP rate + 0.92% 2017 15,533
Unamortised transaction costs SGD (26,328)
Unsecured fixed rate medium term notes 1,288,242
–– Issued in 2016 JPY 0.58% 2022 126,879
7,325,838
The Group has finance lease and hire purchase contracts for various items of property, plant and equipment. There are no restrictions
placed upon the Group by entering into these leases and no arrangements have been entered into for contingent rental payments.
Non-current
Cash-settled LTIP 49 41 49 41
Retirement benefits 23 27,887 24,639 – –
Employment termination benefits 24 15,353 14,548 – –
Provision for unconsumed leave 2,301 2,170 – –
45,590 41,398 49 41
Current
Cash-settled LTIP 184 225 184 225
Retirement benefits 23 1,540 1,807 – –
Employment termination benefits 24 846 – – –
PTM long term incentive plan (cash-settled) 1,287 1,143 – –
Defined contribution plan 35,810 32,864 49 40
Provision for unconsumed leave 44,287 35,871 564 129
83,954 71,910 797 394
Cash-settled LTIP
The LTIP of the Company was approved and adopted by its Board on 25 March 2011 with the aim to make total employee
remuneration sufficiently competitive to recruit, reward, retain and motivate outstanding employees.
Cash-settled LTIP balances refers to the amount that the Group has to pay out in the next few years to eligible personnel who
are offered LTIP units but have elected to opt out of the scheme and receive cash instead of share options.
During the year, 58,000 (2016: 49,000) cash-settled LTIP units were granted to eligible staff.
The LTIP units granted will vest in the participants within three years from the date of grant. All LTIP units that have been
granted and vested must be surrendered to the Company for allotment of shares of the Company on the basis of one share
for each LTIP unit. The LTIP units have no exercise price and shall be in force for a period of 10 years from 25 March 2011.
The EPP options granted will vest in the participants over a 4-year period, with two-thirds of the options to be vested in
equal proportion on a yearly basis on each anniversary of the date of grant over such 4-year period and the remaining one-
third to be vested in equal proportions on the same basis upon the Group meeting the performance target for each vesting,
as determined by the Board at its own discretion on a yearly basis. The exercise price as at the initial grant of the EPP
option shall be RM2.00 only, which shall be increased by 10% over each subsequent 12 months period based on compound
annual growth rate. The EPP shall be in force for a period of 5 years from 25 March 2011. As at 31 December 2016, the EPP
scheme has expired.
(c) EOS
On 15 June 2015, at an extraordinary general meeting, the Company’s shareholders approved the establishment of the
EOS scheme to grant share options to eligible personnel.
The EOS options granted in each year will vest in the participants over a 3-year period. Each EOS option gives the participant
a right to receive one share, upon exercise of the option and subject to the payment of the exercise price.
The exercise price for the EOS option granted shall be determined by the Board which shall be based on the 5 day
weighted average market price of the underlying shares a day immediately preceding the date of offer with a discount of
not more than 10% or such other percentage of discount as may be permitted by Bursa Securities or any other relevant
regulatory from time to time (subject to the Board’s discretion to grant the discount).
The EOS shall be in force for a period of 10 years from 22 June 2015.
During the year, a total of 6,685,000 equity-settled LTIP units (2016: 6,064,000) and nil (2016: 14,861,000) EOS units were
granted to eligible staff. The movement in the number of options outstanding under the respective schemes as at 31 December
2017 and the details of the schemes are as follows:
EPP
Number Number Number
of options Number of of options Number of of options Number
outstanding options lapsed/ options outstanding of holders
Date of grant at 1.1.2016 Reclassification granted cancelled exercised at 31.12.2016 at 31.12.2016
Conversion
from
Number cash-settled Number Number
of units LTIP to Number of units Number of units Number
outstanding equity-settled of units lapsed/ of units outstanding of holders
Date of grant at 1.1.2017 LTIP* granted cancelled exercised at 31.12.2017 at 31.12.2017
As at 31 December 2017, no (2016: Nil) outstanding LTIP units are vested and exercisable.
* Per the bye-laws of the LTIP scheme, all unvested cash-settled LTIPs of employees who are promoted to vice president will be converted into
unvested equity-settled LTIPs.
As at 31 December 2017, 6,519,000 (2016: 2,381,000) outstanding EOS options are vested and exercisable.
Fair value at grant date RM5.84 – RM6.35 – RM5.83 – RM3.89 – RM3.69 – RM2.02 – RM2.06
RM6.19 RM6.55 RM6.00 RM4.39 RM3.98 RM2.06
Share price at grant date RM5.90 – RM6.41 – RM5.89 – RM3.95 – RM3.75 – RM6.41 – RM5.85
RM6.19 RM6.55 RM6.00 RM4.39 RM4.00 RM6.61
Option life (expected 3.75 – 3.92 4.75 – 4.92 5.5 – 5.92 6.5 – 6.92 7.5 – 7.92 9 years 10 years
average life) years years years years years
Expected dividends yield 0.49% 0.46% 0.50% – 0.51% 0.50% – 0.45% – 0.51%
0.51% 0.53% 0.47%
Risk free rate 3.56% – 3.55% – 3.57% – 3.39% – 3.19% – 3.68% – 3.96%
3.58% 3.81% 4.45% 3.74% 3.58% 3.88%
Share-based payment expenses included in staff costs 28 52,186 54,168 12,069 10,790
Group
2017 2016
Note RM’000 RM’000
Actuarial assumptions
Principal actuarial assumptions at the end of the financial year (expressed as weighted averages):
Group
2017 2016
% %
2017
Discount rate (1% movement) (3,204) 3,880
Future salary growth (1% movement) 3,779 (3,170)
Future mortality (1% movement) (3) 3
2016
Discount rate (1% movement) (2,687) 3,237
Future salary growth (1% movement) 3,243 (2,728)
Future mortality (1% movement) (3) 6
Whilst the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an
approximation to the sensitivity of the assumptions shown.
The termination benefits is calculated as one month gross salary for every employment year and as at 31 December 2017, the
ceiling amount has been limited to TL4,732 (2016: TL4,297), approximately RM4,916 (2016: RM5,481). The reserve has been
calculated by estimating the present value of future probable obligations of these subsidiaries arising from retirement. The
calculation was based upon the retirement pay ceiling announced by the local government.
Group
2017 2016
Note RM’000 RM’000
Sensitivity analysis
No sensitivity analysis is presented as any reasonably possible changes in the above key assumptions are not expected to
materially affect the employment termination benefits obligation.
Non-current
Trade payables 16,799 7,747 – –
Other payables 48,205 31,133 – –
CCPS liabilities 7,895 10,504 – –
Put options granted to non-controlling interests 837,526 864,608 – –
Loans from a non-controlling interest 844,268 690,401 – –
1,754,693 1,604,393 – –
Deposits 59,484 62,202 – –
1,814,177 1,666,595 – –
Current
Trade payables 988,928 1,000,389 – –
Accruals 794,266 646,339 7,329 11,836
Other payables 554,569 476,485 276 567
Interest payables 36,082 11,379 – –
CCPS liabilities 85,290 72,141 – –
Financial guarantee provision 35,273 36,657 – –
Loans from a non-controlling interest – 230,134 – –
Put options granted to non-controlling interests 160,783 – – –
2,655,191 2,473,524 7,605 12,403
Deposits and advance billings 156,314 138,922 – –
2,811,505 2,612,446 7,605 12,403
During the year, change in fair value amounting to RM13,753,000 loss (2016: RM21,947,000 loss) was recognised in profit or loss.
(1) Pursuant to the acquisition of RGE, the Group granted the following put options to a non-controlling interest of RGE:
(a) An option for the non-controlling interest to sell its 7.13% interest in RGE, on a fully diluted basis, to the Group at a
fixed consideration of INR1,463.0 million (equivalent to RM93.3 million) (2016: RM96.3 million) less price adjustment
of not more than INR110.0 million, upon achievement of a certain financial target pursuant to an option agreement
entered with the non-controlling interest; and
(b) Another option for the non-controlling interest to sell its remaining interest in RGE to the Group at the prevailing
market price on the date the option is exercised. This put option can only be exercised from December 2020 onwards
and does not have an expiry date.
(2) Pursuant to the acquisition of Continental Hospitals Private Limited (“CHL”), the Group granted a put option to a non-
controlling interest to sell its existing interest in CHL to the Group at the prevailing market price on the date the option is
exercised. The put option can only be exercised from March 2018 onwards and does not have an expiry date.
(3) Pursuant to the acquisition of City Hospitals and Clinics AD (“City Clinic”), the Group granted put options to non-controlling
interest of ACC, who were formerly shareholders of City Clinic, to sell their shares in ACC, to the Group at the higher of the
prevailing market price or an amount determined by the formula stated in the agreement. The put options can only be
exercised from June 2019 to May 2022.
(4) Pursuant to the disposal of 15% equity interest in ACC by the Group to International Finance Corporation (“IFC”), the Group
granted put options to IFC to sell their shares in ACC, to the Group at the higher of the cost of investment of IFC or an
amount determined by the formula stated in the agreement. The put options can only be exercised from June 2019 to May
2026.
(5) Pursuant to the acquisition of Angsana Holdings Pte. Ltd. (“Angsana”), the Group granted put option to the non-controlling
interest to sell their existing interest in Angsana to the Group at the prevailing market price on the date the option are
exercised. The put option can only be exercised from August 2020 onwards and does not have an expiry date.
At the transaction date, the Group recognised RM139,014,000 and RM22,426,000 being the fair value of put options granted to
non-controlling interests relating to the disposal of 15% equity interest in ACC and acquisition of Angsana respectively (2016:
RM176,882,000, being fair value of put options granted to non-controlling interests relating to the acquisition of City Clinic).
During the year, change in fair values of put options granted to non-controlling interests amounting to RM45,229,000 loss (2016:
RM287,733,000 loss) was recognised in equity.
Non-current assets
Foreign exchange forward contracts 5,761 651
Cross currency interest rate swaps 5,036 –
Put option 1,625 1,652
12,422 2,303
Current assets
Foreign exchange forward contracts 13,406 1,040
Non-current liabilities
Foreign exchange forward contracts – (2,677)
Interest rate swaps (3,742) (8,400)
Cross currency interest rate swaps – (13,783)
(3,742) (24,860)
Current liabilities
Interest rate swaps (498) (1,045)
Call option granted to non-controlling interests (22,493) (18,128)
(22,991) (19,173)
The Group enters into interest rate swaps, cross currency interest rate swaps and foreign exchange forward contracts to manage
interest rate fluctuations and exchange rate fluctuations on certain loans, as set out in Note 37(v) and (vi).
During the year, change in fair value of RM4,753,000 (2016: RM15,580,000) loss was charged to profit or loss.
The put option is stated at cost as the underlying equity instrument that will be delivered when the put option is being exercised
does not have a quoted market price in an active market.
The above agreements do not meet the criteria for offsetting in the statement of financial position as the right to set-off recognised
amounts is enforceable only following an event of default, insolvency or bankruptcy of the Group or the counterparties. In
addition, the Group and its counterparties do not intend to settle on a net basis or to realise the assets and settle the liabilities
simultaneously in its normal course of business.
27. Revenue
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Finance income
Interest income
–– Banks and financial institutions 76,774 65,504 18,689 10,847
–– Others 2,005 1,821 – –
Exchange gain on loans 51,614 61,869 – –
Fair value gain on financial derivatives 21,446 – – –
151,839 129,194 18,689 10,847
Finance costs
Interest expense on loans and borrowings (277,196) (194,606) – –
Exchange loss on loans (463,804) (393,212) – –
Fair value loss on financial derivatives (4,753) (21,308) – –
Fair value loss on CCPS liabilities (13,753) (21,947) – –
Other finance costs (34,798) (26,211) (8) (5)
(794,304) (657,284) (8) (5)
Audit fees
Current year
–– KPMG Malaysia (1,021) (1,024) (373) (373)
–– Affiliates of KPMG Malaysia (5,123) (4,762) (452) (432)
–– Other auditors (765) (793) – –
(Under)/Over provision for prior years
–– KPMG Malaysia – 9 – –
–– Affiliates of KPMG Malaysia – (456) – –
Non-audit fees paid to
–– KPMG Malaysia (680) (353) (680) (353)
–– Affiliates of KPMG Malaysia (775) (5,059) – –
2017 2016
Before tax Tax benefit Net of tax Before tax Tax benefit Net of tax
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Company (Note 11) (Note 11)
Non-executive Directors:
–– Fees 5,267 4,677 2,578 2,140
–– Remuneration and other benefits 8 7 8 7
5,275 4,684 2,586 2,147
Executive Directors:
–– Fees 1,556 1,487 – –
–– Remuneration and other benefits 17,672 9,360 11,026 3,837
–– Share-based payment 23,291 22,851 9,555 9,030
42,519 33,698 20,581 12,867
47,794 38,382 23,167 15,014
Income tax calculated using Malaysia tax rate of 24% (2016: 24%) 278,960 206,628 171,687 3,390
Effect of tax rates in foreign jurisdictions (62,718) (21,299) (102) –
Tax exempt income (137,657) (89,736) (196,067) (11,431)
Tax incentive (2,672) (25,571) – –
Non-deductible expenses 163,543 175,976 29,152 11,187
Recognition of previously unrecognised deferred tax assets (11,198) (1,430) – –
Deferred tax assets not recognised 96,303 2,471 – –
Under/(Over) provided in prior years 10,064 22,586 (335) 205
334,625 269,625 4,335 3,351
Group
2017 2016
Weighted average number of ordinary shares used in calculation of basic earnings per share (’000) 8,236,349 8,228,688
Weighted average number of unissued ordinary shares from units under LTIP (’000) 4,080 5,803
Weighted average number of unissued ordinary shares from share options under EPP (’000) – 2
Weighted average number of unissued ordinary shares from share options under EOS (’000) 196 –
Weighted average number of ordinary shares used in calculation of diluted earnings per share (’000) 8,240,625 8,234,493
The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on
quoted market prices for the period during which the options were outstanding.
35. Dividends
Dividends recognised by the Company:
Per
ordinary Total Date of
share amount payment
Sen RM’000
2017
First and final single tier cash dividend for financial year ended 31 December 2016 3.0 247,171 18 July 2017
2016
First and final single tier cash dividend for financial year ended 31 December 2015 3.0 246,944 18 July 2016
The Directors have proposed the following dividend which is subject to shareholders’ approval at the forthcoming Annual
General Meeting:
Per Total
ordinary share amount
Sen RM’000
First and final single tier cash dividend for financial year ended 31 December 2017 3 247,174*
• Singapore
• Malaysia
• India
• North Asia
• PPL Others
• Acibadem Holdings
• IMU Health
• PLife REIT
• Others
Management monitors the operating results of each of its business units for the purpose of making decisions on resource
allocation and performance assessment. Performance is measured based on segment EBITDA.
Parkway Pantai1
Singapore Malaysia India North Asia PPL Others2
2017 RM’000 RM’000 RM’000 RM’000 RM’000
1 Parkway Pantai Group, per the corporate structure, comprises the “Parkway Pantai” and “PLife REIT” segments
2 “PPL Others” comprises mainly Parkway Pantai’s hospital in Brunei, corporate office as well as other investment holding entities within
Parkway Pantai
3 “CEEMENA” refers to Central and Eastern Europe, Middle East and North Africa
Parkway Pantai1
Singapore Malaysia India North Asia PPL Others2
2016 RM’000 RM’000 RM’000 RM’000 RM’000
1 Parkway Pantai Group, per the corporate structure, comprises the “Parkway Pantai” and “PLife REIT” segments
2 “PPL Others” comprises mainly Parkway Pantai’s hospital in Brunei, corporate office as well as other investment holding entities within
Parkway Pantai
3 “CEEMENA” refers to Central and Eastern Europe, Middle East and North Africa
Revenue from
external
customers 3,848,308 2,086,801 332,658 708,596 134,006 3,853,527 164,881 13,862 – 11,142,639
Inter-segment
revenue – – – – – – – 60,000 (60,000) –
Total segment
revenue 3,848,308 2,086,801 332,658 708,596 134,006 3,853,527 164,881 73,862 (60,000) 11,142,639
Non-current
assets2 14,269,735 4,518,716 3,077,337 1,468,853 1,943,002 4,923,480 54,668 3,086 – 30,258,877
2016
Revenue from
external
customers 3,562,358 1,857,802 259,229 560,082 131,432 3,480,192 167,299 3,491 – 10,021,885
Inter-segment
revenue – – – – – – – 42,040 (42,040) –
Total segment
revenue 3,562,358 1,857,802 259,229 560,082 131,432 3,480,192 167,299 45,531 (42,040) 10,021,885
Non-current
assets2 14,576,988 4,430,373 3,057,011 1,546,932 1,845,375 5,363,639 60,063 2,378 – 30,882,759
2017
Financial assets
Other financial assets 175,287 163,902 11,385 – –
Trade and other receivables1 1,355,434 1,355,434 – – –
Derivative assets 25,828 1,625 – 19,167 5,036
Cash and cash equivalents 6,078,603 6,078,603 – – –
7,635,152 7,599,564 11,385 19,167 5,036
Financial liabilities
Trade and other payables2 (4,409,884) (4,316,699) – (93,185) –
Loans and borrowings (6,793,772) (6,793,772) – – –
Bank overdrafts (68) (68) – – –
Derivative liabilities (26,733) – – (22,493) (4,240)
(11,230,457) (11,110,539) – (115,678) (4,240)
2016
Financial assets
Other financial assets 1,549,904 209,658 1,340,246 – –
Trade and other receivables1 1,217,566 1,217,566 – – –
Derivative assets 3,343 1,652 – 1,691 –
Cash and cash equivalents 2,443,181 2,443,181 – – –
5,213,994 3,872,057 1,340,246 1,691 –
Financial liabilities
Trade and other payables2 (4,077,917) (3,995,272) – (82,645) –
Loans and borrowings (7,475,750) (7,475,750) – – –
Bank overdrafts (11,348) (11,348) – – –
Derivative liabilities (44,033) – – (20,805) (23,228)
(11,609,048) (11,482,370) – (103,450) (23,228)
2017
Financial assets
Trade and other receivables1 2,261 2,261 –
Amounts due from subsidiaries 14,848 14,848 –
Cash and cash equivalents 1,564,893 1,564,893 –
1,582,002 1,582,002 –
Financial liabilities
Trade and other payables2 (7,605) (7,605) –
Amounts due to subsidiaries (814) (814) –
(8,419) (8,419) –
2016
Financial assets
Other financial assets 70,574 – 70,574
Trade and other receivables1 451 451 –
Amounts due from subsidiaries 13,089 13,089 –
Cash and cash equivalents 225,839 225,839 –
309,953 239,379 70,574
Financial liabilities
Trade and other payables2 (12,403) (12,403) –
Amounts due to subsidiaries (2,320) (2,320) –
(14,723) (14,723) –
Company
2017 2016
RM’000 RM’000
• Credit risk
• Liquidity risk
• Market risk
The Group’s primary exposure to credit risk, arises through its trade receivables. Concentration of the credit risk relating to
these receivables are limited and the Group’s historical experience of collection of these receivables falls within the
allowances recognised. Due to these factors, the Group believes that no additional credit risks beyond amounts provided
for collection losses is inherent in the Group’s trade receivables.
The Company does not have any significant exposure to credit risk.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade
receivables. The main components of this allowance are a specific loss component that relates to individually significant
exposures, and a collective loss component established for groups of similar assets in respect of losses that have been
incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics
for similar financial assets. Specific impairment allowance is provided on a case-by-case basis depending on the
circumstances while collective loss allowance is determined based on historical data of payment statistics for similar
financial assets.
The allowance account in respect of trade receivables is used to record impairment losses unless the Group is satisfied
that no recovery of the amount owing is possible. At that point, the financial asset is considered irrecoverable and the
amount charged to the allowance account is written off against the carrying amount of the impaired financial asset.
At the end of the financial year, the Group has outstanding trade receivables from 2 significant customers amounting to
RM201,467,000 (2016: one significant customer with a trade receivable balance of RM77,461,000), which is individually 5%
or more of the Group’s gross trade receivables. Allowance for impairment of RM32,687,000 (2016: RM11,429,000) has
been recognised.
The exposure to credit risk for trade receivables at the date of reporting (by geographical distribution) are as follows:
Group
2017 2016
Note RM’000 RM’000
Similarly, the Group only enters into investments and transactions involving financial instruments with counterparties who
have sound credit ratings. As such, except for the impairment loss recognised as disclosed below, the Group does not
expect any counterparty to fail to meet their obligations.
The movements in impairment losses in respect of trade receivables during the year are as follows:
Group
2017 2016
RM’000 RM’000
The Group provides for impairment allowance in respect of trade receivables based on historical default rates. Specific
impairment allowance is provided on a case-by-case basis depending on the circumstances.
2017
Trade receivables 250,872 (141,650) 109,222
2016
Trade receivables 270,822 (178,581) 92,241
The individually impaired receivables relate to debtors that were in financial difficulties and/or debts that are in dispute. The
Group assessed that portion of the debt may be unrecoverable.
Impairment losses
As at the end of the financial year, there was no indication that the amounts due from subsidiaries are not recoverable. The
Company does not specifically monitor the ageing of the amount due from subsidiaries, but would assess for impairment
periodically.
The financial guarantees are granted by the Company and PHL for Integrated Healthcare Turkey Yatirimlari Limited
(“IHTYL”), a wholly-owned subsidiary, and KHPL, a 50% owned joint venture, respectively based on the Company’s and
Group’s shareholding interests in these borrowing entities. The Group monitors on an ongoing basis the results of and
repayments made by the borrowing entities.
On 5 January 2017, the bank served a notice to KHPL that an Event of Default has occurred. In view that KHPL is unlikely
to be able to repay the loan, PHL had made a provision for its 50% share of the amounts that KHPL owes the bank
(Note 25).
Company
The maximum exposure of the Company in respect of financial guarantee at the reporting date amounts to RM669,360,000
(2016: RM680,173,000) representing the outstanding bank loans of IHTYL.
As at the end of the reporting period, there was no indication that IHTYL would default on repayment.
The financial guarantee is not recognised since the fair value on initial recognition was not material.
The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate to finance the
Group’s operations and to mitigate the effects of fluctuations in cash flows. The Group ensures that it has sufficient cash
and available undrawn credit facilities to meet expected operational expenses, including the servicing of financial
obligations. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as
natural disasters.
2017
Non-derivative financial liabilities
Loans and borrowings 6,793,772 7,239,552 822,142 5,970,545 446,865
Bank overdrafts 68 68 68 – –
Trade and other payables* 4,316,699 4,401,500 2,596,021 1,684,393 121,086
11,110,539 11,641,120 3,418,231 7,654,938 567,951
2016
Non-derivative financial liabilities
Loans and borrowings 7,475,750 8,208,120 794,951 6,200,298 1,212,871
Bank overdrafts 11,348 11,348 11,348 – –
Trade and other payables* 3,995,272 4,099,694 2,446,286 1,653,408 –
11,482,370 12,319,162 3,252,585 7,853,706 1,212,871
2017
Non-derivative financial liabilities
Amounts due to subsidiaries 814 814 814 – –
Trade and other payables # 7,605 7,605 7,605 – –
8,419 8,419 8,419 – –
2016
Non-derivative financial liabilities
Amounts due to subsidiaries 2,320 2,320 2,320 – –
Trade and other payables # 12,403 12,403 12,403 – –
14,723 14,723 14,723 – –
The Group is exposed to foreign exchange risk on sales, purchases, cash and cash equivalents, receivables and
payables, and loans and borrowings that are denominated in a currency other than the respective functional
currencies of Group entities. The currencies giving rise to this risk are primarily the Singapore Dollar, United States
Dollar, Euro, Japanese Yen, Chinese Renminbi, Hong Kong Dollar and India Rupee.
Risk management objectives, policies and processes for managing the risk
The Group uses foreign exchange forward contracts to manage its exposure to foreign currency movements on its
net income denominated in Japanese Yen from its investment in Japan. Where necessary, the foreign exchange
forward contracts are rolled over at maturity.
The Group actively monitors its foreign currency risk and minimises such risk by borrowing in the functional currency
of the borrowing entity or by borrowing in the same currency as the foreign investment (i.e. natural hedge of net
investments).
The Group also enters in cross currency interest rate swaps to realign borrowings to the same currency of the
Group’s foreign investments to achieve a natural hedge (See Note 37(vi)).
In respect of other monetary assets and liabilities held in currencies other than the functional currencies, the Group
ensures that the net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rate where
necessary to address short term imbalances.
See Note 26 for the nominal value and fair value of the foreign exchange forward contracts and cross currency
interest rate swaps.
2017
Trade and other
receivables – 8,133 3,247 – 1,134 – – 155
Intra-group receivables 22,148 1,648 – – 23,699 – – 330
Cash and cash
equivalents 2,055 2,908,230 28,840 14,702 – 9 222,929 2,918
Loans and borrowings – (495,400) (1,739,258) – – – – –
Trade and other
payables (13,922) (87,816) (15,561) (1,776) – – (28,319) (507)
Intra-group payables (49,612) (957) – – – – (1,281) (15,768)
Put options granted to
non-controlling
interests – – – – (664,943) – – –
Foreign exchange
forward contracts – – – 1,897 – – – –
Call option granted to
non-controlling
interests – – – – (22,493) – – –
(39,331) 2,333,838 (1,722,732) 14,823 (662,603) 9 193,329 (12,872)
2016
Other financial assets – 84,579 – – – – – –
Trade and other
receivables – 10,647 20,338 – – – – 266
Intra-group receivables 28,980 5,782 – – – 1,304,894 – 12,629
Cash and cash
equivalents 2,798 47,334 2,204 37 – 2 – 104,377
Loans and borrowings – (572,390) (2,160,786) – – (1,299,038) – (23,651)
Trade and other
payables (370) (79,849) (16,058) (2,484) – (1,444) (63) (1,833)
Intra-group payables (436,134) (2,336) – – – – – (22,713)
Put options granted to
non-controlling
interests – – – – (627,411) – – –
Foreign exchange
forward contracts – – – (986) – – – –
Call option granted to
non-controlling
interests – – – – (18,128) – – –
(404,726) (506,233) (2,154,302) (3,433) (645,539) 4,414 (63) 69,075
* Others include mainly British Pound, Malaysian Ringgit, Swiss Franc, Australian Dollar, and Bangladeshi Taka.
2017
Cash and cash equivalents 189 – 1,182,977 –
Amounts due from/(to) subsidiaries 14,706 (12,567) – –
Trade and other payables (354) – – –
14,541 (12,567) 1,182,977 –
2016
Trade and other receivables – 179 – –
Cash and cash equivalents 285 – 17,969 –
Amounts due from/(to) subsidiaries 28,424 (6,543) – –
Trade and other payables (335) – (5,129) (10)
28,374 (6,364) 12,840 (10)
Sensitivity analysis
A 10% strengthening of the following currencies against the respective functional currencies of the Group entities at
the end of the financial year would have increased/(decreased) profit or loss before tax by the amounts shown below.
This analysis assumes that all other variables, in particular interest rates, remained constant and ignores any impact
of forecasted sales and purchases.
2017 2016
Equity Profit or loss Equity Profit or loss
Group RM’000 RM’000 RM’000 RM’000
* Others include mainly British Pound, Malaysian Ringgit, Swiss Franc, Australian Dollar, and Bangladeshi Taka.
The foreign currency risk associated with the Japanese denominated outstanding forward foreign exchange contracts
as at 31 December 2017 would have no significant impact to the Group as the Group would have a corresponding
gain in its net future income from Japan as a result of the weakening of Malaysian Ringgit.
A 10% weakening of the above currencies against the respective functional currencies of the Group entities at the
end of the financial year would have an equal but opposite effect on the above currencies to the amounts shown
above, on the basis that all other variables remained constant.
The Group has no significant concentration of interest rate risk that may arise from exposure to Group’s fixed deposits
and its obligations with banks and financial institutions.
Risk management objectives, policies and processes for managing the risk
The Group’s policy is to manage its interest cost using a mix of fixed and variable rate debts as well as by rolling over
its fixed deposits and variable rate borrowings on a short-term basis. In respect of long-term borrowings, the Group
may enter into interest rate derivatives to manage its exposure to adverse movements in interest rates.
Interest rate swaps have been entered into to achieve an appropriate mix of fixed and floating rate exposures within
the Group’s policy (See Note 36(vi)).
See Note 26 for the nominal value and fair value of the interest rate swaps.
Sensitivity analysis
Fair value sensitivity analysis for fixed rate instruments
Except for the Eurobonds, the Group does not account for any fixed rate financial assets and liabilities at fair value
through profit or loss. Therefore, a change in interest rates at the end of the financial year would not affect profit or
loss.
As at 31 December 2016, a change of 100 basis points in interest rate would have increase or decrease equity by nil
(2016: RM1,821,000) arising from the AFS Eurobonds.
Group
2017
Interest rate swaps – – 12,501 (15,567) 10,238 (10,238)
Cross currency
interest rate swaps – – 11,119 (11,363) 3,828 (3,828)
Other variable rate
instruments – – – – (37,709) 37,709
– – 23,620 (26,930) (23,643) 23,643
2016
Interest rate swaps – – 23,510 (30,357) 15,735 (15,735)
Cross currency
interest rate swaps – – 9,037 (9,469) 2,336 (2,336)
Other variable rate
instruments 23,013 (23,013) – – (51,227) 51,227
23,013 (23,013) 32,547 (39,826) (33,156) 33,156
Company
2017
Other variable rate
instruments – – – – 11,829 (11,829)
2016
Nil
The equity investments are held for long term strategic purposes. Their performance is assessed periodically together
with assessment if their relevance to the Group’s long term strategic plans.
As at 31 December 2016, it is estimated that an increase/(decrease) of 10% in the market price of the quoted equity
securities, with all other variables held constant, would have increased/(decreased) the Group’s equity by
RM117,664,000.
During the year, the Group disposed of all its investments in quoted equity securities.
As at 31 December 2017, where the interest rate swaps and cross currency interest rate swaps were designated as hedging
instruments in qualifying cash flow hedges, the effective portion of the changes in fair value of the swaps amounting to
RM731,000 gain (2016: RM7,850,000 loss) was recognised in other comprehensive income (see Note 31).
During the year, where hedge accounting was discontinued, not practised or ineffective, the changes in fair value of
interest rate swaps amounting to RM815,000 loss (2016: RM1,900,000 gain) was charged to profit or loss. Accordingly, the
changes in fair value of these interest rate swaps, previously recognised in the hedge reserve amounting to RM2,429,000
loss (2016: RM1,253,000 loss) were reclassified to profit or loss.
Foreign exchange gain of RM21,344,000 (2016: RM81,492,000 loss) was recognised in other comprehensive income with
respect to the effective portion of the hedge.
It is not practicable to reliably estimate the fair value of put option, unquoted equity shares, club membership and other
investments due to the lack of quoted market prices in an active market, significant range of reasonable fair value estimates,
and the inability to reasonably assess the probabilities of the various estimates.
2017
Financial assets
Non-current trade and other receivables1 14 – – – –
Other financial assets2
–– Fixed deposits with tenor of more than 3 months 10 – – – –
Financial derivatives4
–– Foreign exchange forward contracts 26 – 19,167 – 19,167
–– Cross currency interest rate swaps 26 – 5,036 – 5,036
– 24,203 – 24,203
Financial liabilities
Non-current trade and other payables3 25 – – – –
CCPS liabilities 25 – – (93,185) (93,185)
Put options granted to non-controlling interests 25 – – (998,309) (998,309)
Loans from a non-controlling interest 25 – – – –
Loans and borrowings 21 – – – –
Bank overdrafts 16 – – – –
Financial derivatives
–– Interest rate swaps 26 – (4,240) – (4,240)
–– Call option granted to non-controlling interests 26 – – (22,493) (22,493)
– (4,240) (1,113,987) (1,118,227)
– – – – 19,167 19,167
– – – – 5,036 5,036
– – 166,378 166,378 190,581 190,581
– – – – (4,240) (4,240)
– – – – (22,493) (22,493)
(301,260) – (7,402,127) (7,703,387) (8,821,614) (8,821,339)
2016
Financial assets
Non-current trade and other receivables1 14 – – – –
Other financial assets2
–– AFS quoted equity shares 10 1,176,638 – – 1,176,638
–– AFS Eurobonds and money market fund 10 – 152,042 – 152,042
–– Fixed deposits with tenor of more than 3 months 10 – – – –
Financial derivatives4
–– Foreign exchange forward contracts 26 – 1,691 – 1,691
1,176,638 153,733 – 1,330,371
Financial liabilities
Non-current trade and other payables3 25 – – – –
CCPS liabilities 25 – – (82,645) (82,645)
Put options granted to non-controlling interests 25 – – (864,608) (864,608)
Loans from a non-controlling interest 25 – – – –
Loans and borrowings 21 – – – –
Bank overdrafts 16 – – – –
Financial derivatives
–– Interest rate swaps 26 – (9,445) – (9,445)
–– Foreign exchange forward contracts 26 – (2,677) – (2,677)
–– Cross currency interest rate swaps 26 – (13,783) – (13,783)
–– Call option granted to non-controlling interests 26 – – (18,128) (18,128)
– (25,905) (965,381) (991,286)
2017
Financial assets
Other financial assets
–– AFS money market fund 10 – – – –
2016
Financial assets
Other financial assets
–– AFS money market fund 10 – 70,574 – 70,574
– – – – 1,176,638 1,176,638
– – – – 152,042 152,042
– – 209,244 209,244 209,244 209,244
– – – – 1,691 1,691
– – 211,154 211,154 1,541,525 1,541,525
– – – – (9,445) (9,445)
– – – – (2,677) (2,677)
– – – – (13,783) (13,783)
– – – – (18,128) (18,128)
(127,355) – (8,319,634) (8,446,989) (9,438,275) (9,437,799)
– – – – – –
– – – – 70,574 70,574
Quoted investments
The fair value of financial assets at fair value through profit or loss and available-for-sale financial instruments is determined
by reference to their quoted closing bid prices at the end of the financial year.
Derivatives
Call option granted to non-controlling interests are stated at fair value and valued using the Black Scholes model. The key
assumptions used include risk-adjusted discount rate, dividend yield and volatility.
Put options granted to non-controlling interest are stated at fair value based on the subsidiary’s equity value described
above and the discounted cash flow method based on present value of expected payment discounted using a risk-adjusted
discount rate.
Fair value of other non-derivative financial assets and liabilities, which is determined for disclosure purposes, is calculated
based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end
of the financial year. For finance leases, the market rate of interest is determined by reference to similar lease agreements.
2017
At 1 January 18,128 82,645 864,608
Arising from business combination – – 161,440
Change in fair value 4,753 13,753 45,229
Translation differences (388) (3,213) (72,968)
At 31 December 22,493 93,185 998,309
2016
At 1 January 1,948 58,433 405,249
Arising from business combination – – 176,882
Change in fair value 15,580 21,947 287,733
Translation differences 600 2,265 (5,256)
At 31 December 18,128 82,645 864,608
The following table shows the valuation techniques used in the determination of fair values within Level 3, as well as the
significant unobservable inputs used in the valuation models.
Inter-relationship between
significant unobservable inputs and
Valuation technique Type Significant unobservable inputs fair value measurement
Black Scholes Call option granted to • Risk-adjusted discount The estimated fair value would
model non-controlling rate at 6.4% increase/(decrease) if the risk-adjusted
interests (2016: 6.5%) discount rates were lower/(higher).
Discounted cash • CCPS liabilities Risk-adjusted discount The estimated fair value would
flow approach rates at 11.9% to 15% increase/(decrease) if the risk-adjusted
• Put options granted
(2016: 11.9% to 15%) discount rates were lower/(higher).
to non-controlling
interests
• Discount rates, based on the risk-free rate for bonds issued by government in the relevant market, adjusted for a risk
premium to reflect the increased risk of investing in the asset class;
• Dividend yield, based on historical return from investment in the equity markets; and
• Volatility, based on historical volatility of comparable companies of a similar term.
There were no changes in the Group’s approach to capital management during the financial year.
The Group is in compliance with all externally imposed capital requirements for the financial years ended 2017 and 2016.
In July 2012, the Group was informed by Pesuruhjaya Tanah Persekutuan (Federal Land Commission) that the lease
premium from 1 January 1999 to 31 December 2013 amounted to RM2,800,000 and the Group had accordingly made
payments.
The Group has accrued annual lease premium of RM116,000 for 2014 and RM420,000 for 2015 to 2017.
The Group is unable to ascertain the amount of the lease premium from 2018 to 2028 as the lease amount payable is yet
to be determined as at date of these financial statements.
With associates
Sales and provision of services 9,454 8,732
Rental income 1,708 414
Purchases and consumption of services (1,798) (2,212)
Company
2017 2016
RM’000 RM’000
With subsidiaries
Share-based payment transactions 40,118 43,378
These transactions have been entered into in the normal course of business and have been established under negotiated terms.
From time to time, directors and key management personnel of the Group, or their related parties, may receive services and
purchase goods from the Group. These services and purchases are on negotiated basis.
Cash consideration –
Fair value of net identified assets disposed (213)
(213)
Staff termination expenses paid (563)
Loss on disposal of business (776)
Inventories 94
Trade and other receivables 69
Trade and other payables (163)
Fair value of net identifiable assets acquired –
Goodwill
Note RM’000
(b) On 31 July 2017, PPL subscribed for 5,104,849 ordinary shares in Angsana for a total consideration of SGD9,300,000
(equivalent to RM29,305,000) resulting in PPL holding 55% equity interest in Angsana and its subsidiaries.
The fair value of Angsana group’s identifiable assets acquired, liabilities assumed, non-controlling interests in the acquisition and
the resulting goodwill is provisional, pending the completion of the purchase price allocation exercise. As permitted by MFRS 3
Business Combinations, provisional fair values can used for a period of 12 months from the acquisition date to reflect the initial
accounting for business combinations.
Purchase consideration settled in cash and cash equivalents 7,923 29,237 37,160
Less: Cash and cash equivalents acquired – (30,426) (30,426)
7,923 (1,189) 6,734
Goodwill
Angsana
ME-Di (provisional) Total
Note RM’000 RM’000 RM’000
If the above acquisitions had occurred on 1 January 2017, management estimates that consolidated Group revenue would have
been RM11,148,027,000 and consolidated Group profit after tax for the financial year would have been RM822,810,000.
Acquisition-related costs
The Group incurred acquisition-related costs of approximately RM1,782,000 relating to external legal fees and due diligence
costs. The legal fees and due diligence costs have been included in other operating expenses in the Group’s consolidated
statement of profit or loss and other comprehensive income.
Pursuant to the acquisition of City Clinic, the Group granted put options to non-controlling interest of ACC, who were
formerly shareholders of City Clinic, to sell their shares in ACC to the Group at the higher of the prevailing market price or
an amount determined by the formula stated in the agreement. The put options can only be exercised from June 2019 to
May 2022.
The put options granted to non-controlling interests are classified as a financial liability under trade and other payables
(Note 25).
(i) final purchase price adjustments made during the 12 months period from acquisition date (the “Window Period”) have not
been applied retrospectively as these adjustments, which relate mainly to balance sheet effects, are immaterial to the
Group.
(ii) adjustments were made to the provisional fair values of the City Clinic acquisition consideration originally recorded in 2016.
The effect of the adjustments made during the Window Period are as per set out below.
If the above acquisitions had occurred on 1 January 2016, management estimates that consolidated Group revenue would have
been RM10,183,551,000 and consolidated Group profit after tax for the financial year would have been RM592,828,000.
Acquisition-related costs
The Group incurred acquisition-related costs of approximately RM3,494,000 relating to external legal fees and due diligence
costs. The legal fees and due diligence costs have been included in other operating expenses in the Group’s consolidated
statement of profit or loss and other comprehensive income.
(i) The remeasurement to fair value of the Group’s remaining 10% interest in SIPL resulted in a gain of RM6,407,000 which is included in gain on
disposal of a subsidiary (see Note 30) recognised in the Group’s consolidated statement of profit or loss and other comprehensive income.
On disposal of the Group’s controlling stake in SIPL, the Group entered into an agreement with the purchaser and is granted a
put option to sell all of its remaining shares in SIPL only after 14 April 2019 and at the higher of the prevailing market price or
consideration determined pursuant to the agreement. This put option is classified as a financial derivative asset (Note 26).
The transaction resulted in an increase in capital reserve, non-controlling interests and hedge reserve of RM898,000,
RM257,000 and RM2,000 respectively, and a decrease in foreign currency translation reserve of RM3,000.
(b) On 10 April 2017, Parkway Group Healthcare Pte. Ltd. (“PGH”) divested 29.9% equity interest in PCH to TK Healthcare
Investment Limited (“Taikang”) through a combination of secondary sale and allotment of new shares by PCH to Taikang
as detailed below. Consequential thereto, the Group’s effective interest in PCH decreased from 100% to 70.1%.
The transaction resulted in an increase in capital reserve and non-controlling interests of RM299,609,000 and
RM310,734,000 respectively, and a decrease in foreign currency translation reserve of RM1,116,000.
Pursuant to the divestment, PGH received a deposit of RMB10,000,000 (approximately RM6,231,000) from the non-
controlling interest for granting PGH a put option to require the non-controlling interest to purchase another 10.1% shares
in PCH from PGH when the regulations allow the non-controlling interest to increase its stake in PCH. The put option is valid
till July 2018 and the deposit is non-refundable if the put option is not exercised.
The transactions resulted in a decrease in capital reserve of RM4,484,000 and an increase in non-controlling interests of
RM4,484,000.
(d) On 8 May 2017, Gleneagles (Malaysia) Sdn. Bhd. (“GMSB”) acquired 269,444 ordinary shares representing approximately
1.107% of the total issued shares of Pulau Pinang Clinic Sdn. Bhd. (“PPCSB”) from 3 minority shareholders for a total cash
consideration of RM5,928,000. Consequential thereto, the Group’s effective interest in PPCSB increased from 70.76% to
71.87%.
The transaction resulted in a decrease in capital reserve and non-controlling interests of RM3,008,000 and RM2,919,000
respectively.
(e) On 15 May 2017, ASH disposed of 15% equity interest in ACC to International Finance Corporation for a total consideration
of EUR15,000,000 (equivalent to RM67,322,000). Consequential thereto, the Group’s effective interest in ACC decreased
from 41.2% to 32.2%.
The transaction resulted in an increase in capital reserve and non-controlling interests of RM93,000 and RM67,229,000
respectively.
(f) On 16 May 2017, ASH acquired 1.83% equity interest in ACC from Ilian Georgiev Grigorov for a total consideration of
EUR1,468,000 (equivalent to RM6,957,000). Consequential thereto, the Group’s effective interest in ACC increased from
32.2% to 33.3%.
The transaction resulted in a increase in capital reserve and a decrease in non-controlling interests of RM645,000 and
RM7,795,000 respectively.
(g) On 1 November 2017, POL acquired the remaining 40% equity interest in Medlife and Ozel Turgutreis Poliklinik Hizmetleri
Ticaret A.S. (“T.Reis”). Consequential thereto, the Group’s effective interest in the 2 companies increased from 35.7% to
59.6%. The 2 companies were subsequently merged with POL and dissolved in December 2017.
The transaction resulted in a decrease in capital reserve and an increase in non-controlling interests of RM399,000 and
RM399,000 respectively.
The transaction resulted in a decrease in capital reserve and non-controlling interests of RM17,826,000 and RM8,032,000
respectively.
(b) On 24 March 2016, Parkway HK Holdings Limited acquired the remaining 15% equity interest in Parkway Healthcare Hong
Kong Limited (“PHHK”) from MediOne (Hong Kong) Limited for a total consideration of HKD11,250,000 (equivalent to
RM5,859,000). Consequential thereto, the Group’s effective interest in PHHK has increased from 85.0% to 100%.
The transaction resulted in a decrease in capital reserve of RM7,663,000 and an increase in non-controlling interests of
RM1,804,000.
The transaction resulted in an increase in capital reserve, non-controlling interests and hedge reserve of RM33,000,
RM860,000 and RM6,000 respectively, and a decrease in foreign currency translation reserve of RM5,000.
(d) On 8 June 2016, following the partial settlement of the purchase consideration of City Clinic through the issue of new
shares in ACC and an internal restructuring, the shareholdings of ACC was reconstituted as follows:
(ii) 15% held by Clinical Hospital Acibadem Sistina Skopje (a 50.3% owned subsidiary of ASH); and
Consequential thereto, the Group’s effective interest in ACC was diluted from 59.6% to 41.2%.
The transaction resulted in an increase in non-controlling interests of RM125,358,000 and a decrease in capital reserve of
RM20,021,000.
(e) On 8 September 2016, Gleneagles (Malaysia) Sdn. Bhd. (“GMSB”) acquired 174,391 ordinary shares of RM1.00 each,
representing approximately 0.72% in the share capital of Pulau Pinang Clinic Sdn. Bhd. (“PPCSB”) for total consideration of
RM3,139,000. Consequential thereto, the Group’s effective interest in PPCSB increased from 70.1% to 70.8%.
The transaction resulted in a decrease in capital reserve and non-controlling interests of RM1,414,000 and RM1,725,000
respectively.
(f) On 15 September 2016, Pantai Group Resources Sdn. Bhd. acquired the remaining 15% equity interest in Pantai Integrated
Rehab Services Sdn. Bhd. (“PIRSSB”) for total consideration of RM7,565,000. Consequential thereto, the Group’s effective
interest in PIRSSB increased from 85.0% to 100.0%.
The transaction resulted in a decrease in capital reserve and non-controlling interest of RM4,353,000 and RM3,212,000
respectively.
(g) Upon the finalisation of the purchase price allocation for the acquisition of RGE in 2016, an increase in capital reserves of
RM112,000, and a decrease in non-controlling interest of RM112,000 were recognised in 2016.
Direct subsidiaries
IMU Health Sdn. Bhd. Malaysia Investment holding and provision 100 100
of management services to
its subsidiaries
Indirect subsidiaries
IMU Healthcare Sdn. Bhd. Malaysia Investment holding and provision 100 100
of healthcare services
Parkway Group Healthcare Pte Ltd (7) # Singapore Investment holding and 100 100
provision of management
and consultancy services
Acıbadem Sağlık Hizmetleri ve Turkey Provision of medical, surgical and 59.6 59.6
Ticaret A.Ş. # hospital services
International Hospital İstanbul A.Ş. # Turkey Provision of medical, surgical and 53.6 53.6
hospital services
Acıbadem Mobil Sağlık Hizmetleri A.Ş. # Turkey Provision of emergency, home and 59.6 59.6
ambulatory care services
Clinical Hospital Acıbadem Macedonia Provision of medical, surgical and 30.0 30.0
Sistina Skopje # hospital services
Acıbadem Sistina Medikal Kompani Macedonia Provision of medical equipment and 29.8 29.8
Doo Skopje # import and wholesale of drug
and medical materials
Acıbadem Teknoloji A.Ş. # Turkey Conduct research, develop and 59.6 59.6
commercially market healthcare
related software, operating and
information systems, web-based
applications and other technology
solutions nationally and
internationally
APlus Saglik Hizmetleri A.S. # Turkey Provision of medical, surgical and 59.6 59.6
hospital services
Bodrum Medikal Özel Sağlık Hizmetleri Turkey Provision of outpatient services 35.7 35.7
Turizm Gıda İnşaat Pazarlama İthalat
İhracat Sanayi ve Ticaret A.Ş. #
Özel Turgutreis Poliklinik Hizmetleri Turkey Dissolved during the year – 35.7
Ticaret A.Ş. (16)
Sesu Özel Sağlık Hizmetleri Tıbbi Turkey Provision of outpatient services – 35.7
Malzemeler Sanayi ve Ticaret A.Ş. (17)
Poliklinika Acibadem Sistina Bitola 27 # Bulgaria Outpatient medical center 30.0 –
Acibadem City Clinic Hospice EOOD Bulgaria Hospice care centre – (14) 41.2
(formerly known as Tokuda Hospice
EOOD) #
Acibadem City Clinic Diagnostic Bulgaria Outpatient diagnostic and – (14) 41.2
and Consultation Center EAD consultative centre
(formerly known as Tokuda Medical
Center EAD) #
Acibadem City Clinic Tokuda Hospital EAD Bulgaria Multi-profile hospital for acute care – (14) 41.2
(formerly known as Multi-Profile Hospital
for Acute Care Tokuda Hospital Sofia EAD) #
Held through Acibadem City Clinic EAD (formerly known as City Hospitals and Clinics EAD):
Acibadem City Clinic University Bulgaria University multi-profile hospital 33.3 41.2
Hospital EOOD for acute care
(formerly known as City Clinic University
Multi-Profile Hospital for Acute Care EOOD) #
Acibadem City Clinic Cardiac Surgery Bulgaria Specialised hospital for acute care 23.3 28.8
Hospital Burgas OOD of cardiac surgery
(formerly known as Specialized Hospital
for Acute Care of Cardiac Surgery City
Clinic Burgas OOD) #
Acibadem City Clinic Diagnostic Bulgaria Outpatient diagnostic and 33.3 41.2
and Consultative Centre EOOD consultative centre
(formerly known as City Clinic Diagnostic
and Consultative Centre EOOD) #
Acibadem City Clinic Medical Center Bulgaria Outpatient medical centre 33.3 41.2
Varna EOOD
(formerly known as City Clinic Medical
Center Bregalnitsa EOOD) #
Acibadem City Clinic Medical Center Bulgaria Outpatient medical centre 33.3 41.2
Burgas EOOD
(formerly known as City Clinic Medical
Center Burgas EOOD) #
City Clinic Services EOOD # Bulgaria Dissolved during the year – 41.2
United Medical Center Varna EOOD # Bulgaria Liquidated during the year – 41.2
Tokuda Clinical Research Center AD # Bulgaria Site management organisation 28.3 (14) –
Acibadem City Clinic Hospice EOOD Bulgaria Hospice care centre 33.3 (14) –
(formerly known as Tokuda Hospice EOOD) #
Acibadem City Clinic Tokuda Hospital EAD Bulgaria Multi-profile hospital for acute care 33.3 (14) –
(formerly known as Multi-Profile Hospital
for Acute Care Tokuda Hospital Sofia EAD) #
Held through Pantai Holdings Sdn. Bhd. (formerly known as Pantai Holdings Berhad):
Pantai Group Resources Sdn. Bhd. Malaysia Investment holding 100 100
Pantai Hospitals Sdn. Bhd. Malaysia Investment holding and provision 100 100
of management and consultation
services to hospitals and
medical centres
Pantai Premier Pathology Sdn. Bhd. Malaysia Provision of medical laboratory services 100 100
Pantai Integrated Rehab Services Malaysia Provision of rehabilitation services 100 100
Sdn.Bhd.
Twin Towers Healthcare Sdn. Bhd. Malaysia In the process of Members’ Voluntary 100 100
Winding-up
Pantai Wellness Sdn. Bhd. Malaysia Provision of health and wellness services 100 100
Twin Towers Medical Centre KLCC Malaysia Operation of an outpatient and 100 (13) –
Sdn.Bhd. daycare medical centre
Syarikat Tunas Pantai Sdn. Bhd. Malaysia Provision of medical, surgical and 100 100
hospital services
Paloh Medical Centre Sdn. Bhd. Malaysia Provision of medical, surgical and 95.6 95.6
hospital services
Hospital Pantai Indah Sdn. Bhd. Malaysia Provision of medical, surgical and 100 100
hospital services
Pantai Hospital Johor Sdn. Bhd. Malaysia Development, construction and 100 100
leasing of medical facility buildings
HPAK Cancer Centre Sdn. Bhd. Malaysia Under Members’ Voluntary Liquidation 100 100
Parkway Trust Management Limited # Singapore Provision of management services 100 100
to PLife REIT
Parkway Shenton Pte Ltd # Singapore Investment holding and operation of 100 100
a network of clinics and provision
of comprehensive medical and
surgical advisory services
Parkway College of Nursing and Singapore Provision of courses in nursing and 100 100
Allied Health Pte. Ltd. # allied health
Parkway (Shanghai) Hospital People’s Republic Provision of management and 70.1 100
Management Ltd. # of China consultancy services to
healthcare facilities
Gleneagles Chengdu Hospital Co., Ltd People’s Republic Provision of specialised care 49.07 70
(formerly known as ParkwayHealth of China and services
Chengdu Hospital Company Limited) #
ParkwayHealth Zifeng Nanjing OBGYN People’s Republic Provision of medical and health 42.06 –
Hospital Company Limited # of China related facilities and services
Ravindranath GE Medical Associates India Private hospital ownership and 76.25 76.25
Private Limited (12) # management, specialty tertiary
care including multi organ
transplant healthcare facility
Global Clinical Research Services India Provision of clinical research services 76.02 76.02
Private Limited #
Shenton Family Medical Clinics Pte Ltd # Singapore To provide, establish and carry 100 100
on the business of clinics
Shanghai Rui Hong Clinic Co., Ltd. (10) # People’s Republic Provision of medical and healthcare 70.1 100
of China outpatient services
Shanghai Xin Rui Healthcare Co., Ltd. (9) # People’s Republic Provision of medical and healthcare 70.1 100
of China outpatient services
Suzhou Industrial Park Yuan Hui Clinic People’s Republic Provision of medical and healthcare 70.1 100
Co., Ltd. # of China outpatient services
Held through Shanghai Shu Kang Hospital Investment Management Co., Ltd.:
Shanghai Mai Kang Hospital Investment People’s Republic Investment holding 70.1 100
Management Co., Ltd. # of China
Held through Shanghai Mai Kang Hospital Investment Management Co., Ltd.:
Chengdu Rui Rong Clinic Co., Ltd. # People’s Republic Provision of medical and 70.1 100
of China healthcare outpatient services
Shanghai Rui Pu Clinic Co., Ltd. # People’s Republic Provision of medical and 70.1 100
of China healthcare outpatient services
Shanghai Rui Xiang Clinic Co., Ltd. # People’s Republic Provision of medical and 70.1 100
of China healthcare outpatient services
Shanghai Rui Ying Clinic Co., Ltd. # People’s Republic Provision of medical and 70.1 100
of China healthcare outpatient services
Mount Elizabeth Medical Holdings Ltd. # Singapore Investment holding 100 100
Parkway Life Real Estate Investment Singapore Real estate investment trust 35.69 35.71
Trust (2) #
Parkway Life MTN Pte. Ltd. # Singapore Provision of financial and 35.69 35.71
treasury services
Godo Kaisha Del Monte (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Tenshi 1 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Tenshi 2 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Healthcare 2 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Healthcare 3 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Healthcare 4 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Healthcare 5 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Samurai 2 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Samurai 3 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Samurai 4 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Samurai 5 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Samurai 7 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Samurai 8 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Samurai 9 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Samurai 10 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
Godo Kaisha Samurai 11 (15) Japan Special purpose entity 35.69 35.71
– Investment in real estate
47. Associates
Details of associates are as follows:
Effective equity
Place of interest held
incorporation 2017 2016
Name of associate and business Principal activities % %
Indirect associates
Asia Renal Care Mount Elizabeth Singapore Provision of dialysis services and 20 20
Pte Ltd ## medical consultancy services
Asia Renal Care (Katong) Pte Ltd ## Singapore Provision of dialysis services and 20 20
medical consultancy services
Held through Shanghai Mai Kang Hospital Investment Management Co., Ltd.:
Shanghai Hui Xing Hospital People’s Republic Investment holding 42.06 60
Investment Management Co., Ltd. (1) # of China
Held through Shanghai Hui Xing Hospital Investment Management Co., Ltd.:
Shanghai Hui Xing Jinpu Clinic People’s Republic Provision of medical and 42.06 60
Co., Ltd. (1) # of China healthcare outpatient services
1 Notwithstanding that the equity interest in 2016 is more than 50%, the Group had accounted for the Shanghai Hui Xing Hospital Management
Co., Ltd., and its subsidiary, Shanghai Hui Xing Jinpu Clinic Co., Ltd. as a joint venture in accordance to MFRS 10 on the basis that the Group
does not have control over the entity’s operating activities.
# Audited by other member firms of KPMG International.
## Audited by firms other than member firms of KPMG International.
+ Audit is not required.
Consequential thereto, the Group’s effective interest in RGE increased from 76.25% to 76.38% based on shareholdings
interests that give rise to present access to the rights and rewards of ownership in RGE.
(ii) On 7 February 2018, Parkway Life Japan2 Pte Ltd (“TK Investor”) entered into a Tokumei Kumiai agreement (“TK Agreement”)
with G. K. Nest (“TK Operator”). Pursuant to the TK Agreement, the purchase price of the property amounting to JPY1,500
million (approximately RM53.6 million) will be injected into the TK Operator by the TK Investor to facilitate the acquisition
of one nursing rehabilitation facility by the TK Operator.
(iii) On 8 February 2018, PHL divested 26% equity interest in Gleneagles JPMC Sdn Bhd (“GJPMC”) for a total consideration of
BND4,203,000 (equivalent to RM12,457,000). Consequential thereto, the Group’s equity interest in GJPMC decreased
from 75.0% to 49.0%. However, GJPMC is still being consolidated as subsidiary of the Group pursuant to MFRS 10:
Consolidated Financial Statements.
(iv) On 16 March 2018, MRI acquired 60% equity interest in Chengdu Shenton Health Clinic., Ltd. (formerly known as Sincere
Chengdu Clinic Co., Ltd.) (“Chengdu Shenton Clinic”) for a total consideration of RMB12,000,000 (equivalent to
RM7,440,000). The principal activity of Chengdu Shenton Clinic is the management and operation of medical and health
related facilities and services.
DISTRIBUTION OF SHAREHOLDINGS
No. of No. of
Size of Shareholdings Holders % Holdings %
Less than 100 147 1.95 1,538 0.00
100 - 1,000 2,071 27.44 1,680,307 0.02
1,001 - 10,000 3,593 47.60 15,939,988 0.19
10,001 - 100,000 998 13.22 31,423,046 0.38
100,001 - 411,979,830 * 735 9.74 2,363,300,878 28.68
411,979,831 and above ** 4 0.05 5,827,250,882 70.73
Total 7,548 100.00 8,239,596,639 100.00
Notes:
* Less than 5% of issued share capital
** 5% and above of issued share capital
CATEGORY OF SHAREHOLDERS
No. of % of No. of % of Issued
Category of Shareholders Shareholders Shareholders Shares held Shares
Individual 5,723 75.82 31,442,704 0.38
Banks/Finance Companies 89 1.18 742,579,500 9.01
Investments Trusts/Foundations/Charities 1 0.01 100,000 0.00
Other Types of Companies 90 1.19 4,857,270,928 58.95
Government Agencies/Institutions 0 0.00 0 0.00
Nominees 1,645 21.80 2,608,203,507 31.66
Others 0 0.00 0 0.00
Total 7,548 100.00 8,239,596,639 100.00
ANALYSIS OF SHAREHOLDINGS
As at 30 March 2018
SUBSTANTIAL SHAREHOLDERS
(As per Register of Substantial Shareholders)
Direct Interest Indirect Interest
No. of % of Issued No. of % of Issued
No. Name Shares Held Shares Shares Held Shares
1. Pulau Memutik Ventures Sdn Bhd 3,362,201,056 40.81 – –
2. Khazanah Nasional Berhad – – 3,362,201,056 i 40.81
3. Mitsui & Co., Ltd 1,485,400,000 18.03 – –
4. Employees Provident Fund Board 713,409,300 ii 8.66 – –
Notes:
i Deemed interest by virtue of its shareholding in Pulau Memutik Ventures Sdn Bhd pursuant to Section 8 of the Companies Act 2016.
ii The shares are held through various nominees companies.
DIRECTORS’ DIRECT AND INDIRECT INTERESTS IN THE COMPANY AND ITS RELATED CORPORATIONS
(As per Register of Directors’ Shareholdings)
Number of ordinary shares
Direct Interest Indirect Interest
No. of % of Issued No. of % of Issued
Interest in the Company Shares Held Shares Shares Held Shares
1. Dr Tan See Leng 10,453,800 0.13 – –
2. Mehmet Ali Aydinlar 176,202,000 2.14 88,910,861 i 1.08
3. Kuok Khoon Ean 250,000 0.00 – –
4. Chang See Hiang 100,000 0.00 – –
Note:
i Deemed interest by virtue of his wife, Hatice Seher Aydinlar’s shareholding in the Company and SZA Gayrimenkul Yatırım İnşaat ve Ticaret A.Ş.’s
shareholding in the Company, a company wholly-owned by Mehmet Ali Aydinlar and his wife, pursuant to Section 8 of the Companies Act 2016.
Mehmet Ali Aydinlar’s direct and/or indirect interest in the subsidiaries are as follows:
Number of ordinary shares of TL1.00 each
Direct Interest Indirect Interest
No. of % of Issued No. of % of Issued
Interest in subsidiaries Shares Held Shares Shares Held Shares
Acibadem Saglik Yatirimlari Holding A.S. 354,533,087 23.20 27,466,913 1.80
Acibadem Saglik Hizmetleri ve Ticaret A.S. 1 0.00 1 0.00
Acibadem Poliklinikleri A.S. 1 0.00 3 0.00
Acibadem Proje Yonetimi A.S. 1 0.00 – –
Aplus Hastane Otelcilik Hizmetleri A.S. 1 0.00 2 0.00
ANALYSIS OF SHAREHOLDINGS
As at 30 March 2018
DIRECTORS’ DIRECT AND INDIRECT INTERESTS IN THE COMPANY AND ITS RELATED CORPORATIONS
(As per Register of Directors’ Shareholdings) (continued)
Save as disclosed above, none of the Directors of the Company has any interest direct or indirect in the Company and its
related corporations.
No. of % of Issued
No. Name Shares Held Shares
LIST OF
TOP 30 LARGEST SHAREHOLDERS
As at 30 March 2018
No. of % of Issued
No. Name Shares Held Shares
Freehold/
Leasehold Year of Built-up/ Approximate
Land and/or Expiry of Land Strata Existing Age of Net Book
No. Address Buildings Lease Area Area Use Buildings Value
Sq m Sq m RM’000
SINGAPORE
1. Mount Elizabeth Novena Hospital Leasehold 2108 N/A Strata Hospital 4 years 3,999,544 a
and Medical Centre Units land and area: building and
38 Irrawaddy Road building 56,361 medical
Singapore 329563 centre
2. Mount Elizabeth Hospital and Leasehold 2075 N/A Strata Hospital 38 years 1,447,039 a,b
Medical Centre Units land and area: building and
3 Mount Elizabeth building 58,290 medical
Singapore 228510 centre
MALAYSIA
4. Gleneagles Medini Hospital Leasehold 2107 72,313 Built-up Hospital 2 years 394,148
Plot A25 under HSD478967, land and area: building and
PT 170682, Medini Iskandar building 55,313 medical
Malaysia, Johor centre
5. Pantai Hospital Kuala Lumpur Leasehold 2111 22,533 Built-up Hospital 13 years for 312,159 b
8 Jalan Bukit Pantai land and area: building original
59100 Kuala Lumpur building 132,711 block;
3 years and
2 year for
extension
blocks
6. Gleneagles Medical Centre Penang Freehold – 12,411 Built-up Hospital 19 years 182,176 b
1 Jalan Pangkor land and area: building and
10050 Penang building 717,43 5 years for
extension
block
LIST OF
TOP 10 PROPERTIES
for the Financial Year Ended 31 December 2017
Freehold/
Leasehold Year of Built-up/ Approximate
Land and/or Expiry of Land Strata Existing Age of Net Book
No. Address Buildings Lease Area Area Use Buildings Value
Sq m Sq m RM’000
HONG KONG
8. Gleneagles Hong Kong Hospital Leasehold 2063 27,500 Built-up Hospital Less than 1,277,472
1 Nam Fung Path building area: building 1 Year
Wong Chuk Hang 46,750
Hong Kong
INDIA
BULGARIA
10. Bulgaria Tokuda Hosital Freehold – 27,000 Built-up Hospital 11 years 213,670
bul. “Nikola Y. Vaptsarov” 51Б, land and area: building and for original
1407 Sofia, Bulgaria building 51,138 medical block and
centre 8 years for
extension
blocks
Notes:
a Carrying value includes fair value of investment properties, which were revalued in 2017 in accordance with the Group’s accounting policies
b Properties were revalued in 2010 pursuant to a purchase price allocation performed upon acquisition of Parkway Group
c Properties were revalued in 2015 pursuant to a purchase price allocation performed upon acquisition of Continental Hospitals
NOTICE IS HEREBY GIVEN that the Eighth Annual General Meeting of IHH HEALTHCARE BERHAD
(“IHH” or “the Company”) will be held at Ballroom A & B, Level 6, Hilton Hotel KL Sentral, 3 Jalan
Stesen Sentral, 50470 Kuala Lumpur, Wilayah Persekutuan, Malaysia on Monday, 28 May 2018
at 10.00 a.m. for the following purposes:
AGENDA
1. To receive the Audited Financial Statements for the financial year ended 31 December 2017 together
with the Reports of the Directors and Auditors thereon.
2. To approve the payment of a first and final single tier cash dividend of 3 sen per ordinary share for the Ordinary Resolution 1
financial year ended 31 December 2017.
3. To re-elect the following Directors who retire pursuant to Article 113(1) of the Constitution of
the Company:
4. To re-elect Jill Margaret Watts who retires pursuant to Article 120 of the Constitution of the Company. Ordinary Resolution 4
5. To approve the payment of additional fees of RM157,500 payable to the Chairman of the Board in Ordinary Resolution 5
respect of his role as Chairman retrospectively with effect from 1 January 2018 until 30 June 2018.
6. To approve the payment of the following fees and other benefits payable to the Directors of the Ordinary Resolution 6
Company by the Company:
(i) Directors’ fees to the Non-Executive Directors in respect of their directorship and committee
membership in the Company with effect from 1 July 2018 until 30 June 2019 as per the
table below:
(ii) Any other benefits provided to the Directors of the Company by the Company with effect from
1 July 2018 until 30 June 2019, subject to a maximum amount equivalent to RM1,000,000.
7. To approve the payment of the following fees and other benefits payable to the Directors of the Ordinary Resolution 7
Company by the Company’s subsidiaries:
(i) Directors’ fees (or its equivalent amount in Ringgit Malaysia as converted using the middle rate
of Bank Negara Malaysia foreign exchange on the payment dates, where applicable) to the
Directors of the Company who are holding directorship and committee membership in the
subsidiaries of IHH for the period with effect from 1 July 2018 to 30 June 2019 as per below:
(ii) Any other benefits provided to the Directors of the Company by the subsidiaries with effect from
1 July 2018 until 30 June 2019, subject to a maximum amount equivalent to RM300,000.
8. To re-appoint KPMG PLT as Auditors of the Company and to authorise the Directors to fix Ordinary Resolution 8
their remuneration.
AS SPECIAL BUSINESS
To consider and if thought fit, pass the following resolutions:
9. AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 75 OF THE COMPANIES ACT 2016 Ordinary Resolution 9
“THAT subject to the Companies Act 2016 (the “Act”), the Constitution of the Company and the
approvals from Bursa Malaysia Securities Berhad and other relevant governmental and/or regulatory
authorities, the Directors be and are hereby empowered, pursuant to Section 75 of the Act, to issue
shares in the Company from time to time and upon such terms and conditions and for such purposes
as the Directors may deem fit provided that the aggregate number of shares to be issued pursuant
to this Resolution in any one financial year does not exceed ten percent (10%) of the total number of
issued shares of the Company for the time being and that such authority shall continue in force until
the conclusion of the next Annual General Meeting of the Company.”
“THAT approval be and is hereby given for the Directors of the Company at any time and from time to
time, commencing from the date of the shareholders’ approval (“Approval Date”) and expiring at the
conclusion of the annual general meeting of the Company commencing next after the Approval Date
or the expiration of the period within which the next annual general meeting of the Company is
required to be held, to allocate, grant and subsequently vest such number of units as the same may
be allocated, granted and vested to Dr Tan See Leng, the Managing Director and Chief Executive
Officer of the Company, under any of the LTIPs of the IHH Group, and to allot and issue a corresponding
number of new IHH Shares to him upon the surrender of such units to the Company, as part of the
compensation package for his services to the Company and/or its group of companies, PROVIDED
THAT the total allocation will be based on the aggregate value of Singapore Dollar 2,692,018 or its
equivalent amount in Ringgit Malaysia as converted using the middle rate of Bank Negara Malaysia
foreign exchange on the issue date (“Base Allocation”), equivalent to the total number of units that
may be granted and vested or the corresponding number of IHH Shares that may be allotted and
issued within that Base Allocation (“Base Number”) at the issue price per unit/IHH Share to be
determined based on the five (5)-day weighted average market price of IHH Shares as traded on
Bursa Malaysia Securities Berhad prior to the issue date (“Issue Price”), PROVIDED FURTHER THAT if
the Base Number contains a fractional part of a thousand, the actual number of units that may be
granted and vested or the corresponding number of IHH Shares that may be allotted and issued
(“Actual Number”) will be rounded-up to the nearest thousand notwithstanding that the total value of
the Actual Number may exceed the Base Allocation based on the Issue Price, AND PROVIDED
ALWAYS THAT the Proposed Allocation shall be subject to the terms and conditions and/or
adjustments which may be made in accordance with the provisions of the respective Bye Laws for the
LTIP.”
11. PROPOSED ALLOCATION OF UNITS UNDER THE LONG TERM INCENTIVE PLAN (“LTIP”) OF Ordinary Resolution 11
THE IHH GROUP AND ISSUANCE OF NEW ORDINARY SHARES IN IHH (“IHH SHARES”) TO
MEHMET ALI AYDINLAR
“THAT approval be and is hereby given for the Directors of the Company at any time and from time to
time, commencing from the date of the shareholders’ approval (“Approval Date”) and expiring at the
conclusion of the annual general meeting of the Company commencing next after the Approval Date
or the expiration of the period within which the next annual general meeting of the Company is
required to be held, to allocate, grant and subsequently vest such number of units as the same may
be allocated, granted and vested to Mehmet Ali Aydinlar, an Executive Director of the Company,
under any of the LTIPs of the IHH Group, and to allot and issue a corresponding number of new IHH
Shares to him upon the surrender of such units to the Company, as part of the compensation package
for his services to the Company and/or its group of companies, PROVIDED THAT the total allocation
will be based on the aggregate value of United States Dollar 1,000,000 or its equivalent amount in
Ringgit Malaysia as converted using the middle rate of Bank Negara Malaysia foreign exchange on
the issue date (“Base Allocation”), equivalent to the total number of units that may be granted and
vested or the corresponding number of IHH Shares that may be allotted and issued within that Base
Allocation (“Base Number”) at the issue price per unit/IHH Share to be determined based on the five
(5)-day weighted average market price of IHH Shares as traded on Bursa Malaysia Securities Berhad
prior to the issue date (“Issue Price”), PROVIDED FURTHER THAT if the Base Number contains a
fractional part of a thousand, the actual number of units that may be granted and vested or the
corresponding number of IHH Shares that may be allotted and issued (“Actual Number”) will be
rounded-up to the nearest thousand notwithstanding that the total value of the Actual Number may
exceed the Base Allocation based on the Issue Price, AND PROVIDED ALWAYS THAT the Proposed
Allocation shall be subject to the terms and conditions and/or adjustments which may be made in
accordance with the provisions of the respective Bye Laws for the LTIP.”
12. PROPOSED RENEWAL OF AUTHORITY FOR IHH TO PURCHASE ITS OWN SHARES OF UP Ordinary Resolution 12
TO TEN PERCENT (10%) OF THE PREVAILING TOTAL NUMBER OF ISSUED SHARES OF THE
COMPANY (“PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY”)
“THAT subject to the Companies Act 2016 (the “Act”), rules, regulations and orders made pursuant to
the Act, the provisions of the Company’s Constitution and the Main Market Listing Requirements of
Bursa Malaysia Securities Berhad (“Bursa Securities”) (“Listing Requirements”) and the approvals of all
relevant governmental and/or relevant authorities, the Company be and is hereby authorised, to the
extent permitted by law, to purchase and/or hold such amount of ordinary shares in the Company as
may be determined by the Directors of the Company from time to time through Bursa Securities upon
such terms and conditions as the Directors may deem fit and expedient in the best interest of the
Company provided that:
(i) the aggregate number of shares which may be purchased (“Purchased Shares”) and/or held as
treasury shares pursuant to this ordinary resolution does not exceed ten percent (10%) of the
prevailing total number of issued shares of the Company at the point of purchase;
(ii) the maximum funds to be allocated for the Company to purchase its own shares pursuant to the
Proposed Renewal of Share Buy-Back Authority shall not exceed the retained profits of the
Company;
(iii) upon completion of the purchase by the Company of its own shares, the Directors of the
Company be and are hereby authorised, at their discretion, to deal with the Purchased Shares
in the following manner as may be permitted by the Act, rules, regulations, guidelines,
requirements and/or orders of Bursa Securities and any other relevant authorities for the time
being in force:
(a) cancel all or part of the Purchased Shares; and/or
(b) retain all or part of the Purchased Shares as treasury shares (as defined in Section 127 of
the Act); and/or
(c) resell the treasury shares on Bursa Securities in accordance with the relevant rules of
Bursa Securities; and/or
(d) distribute the treasury shares as share dividends to the shareholders of the Company;
and/or
(e) transfer the treasury shares for the purposes of or under the employees’ share scheme
established by the Group; and/or
(f) transfer the treasury shares as purchase consideration; and/or
(g) sell, transfer or otherwise use the treasury shares for such other purposes as the Minister
may by order prescribe,
or in any other manner as may be prescribed by the Act, the applicable laws, regulations and
guidelines applied from time to time by Bursa Securities and/or any other relevant authority for
the time being in force and that the authority to deal with the Purchased Shares shall continue
to be valid until all the Purchased Shares have been dealt with by the Directors.
THAT the authority conferred by this ordinary resolution shall be effective immediately upon passing
of this ordinary resolution and shall continue to be in force until:
(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company at which time the
authority shall lapse unless by ordinary resolution passed at that AGM, the authority is renewed,
either unconditionally or subject to conditions;
(ii) the expiration of the period within which the next AGM of the Company is required by law to be
held; or
(iii) revoked or varied by ordinary resolution passed by the shareholders of the Company at a
general meeting,
whichever occurs first, but shall not prejudice the completion of purchase(s) by the Company before
the aforesaid expiry date and, in any event, in accordance with the provisions of the Listing
Requirements and any other relevant authorities.
13. To transact any other business of which due notice shall have been given.
Kuala Lumpur
27 April 2018
*I/*We
(Full name and NRIC/Passport/Company no. in capital letters)
of
(Full address in capital letters and telephone no.)
*and/*or
Full Name Full Address NRIC/ Proportion of Shareholding
Passport No. No. of Shares %
or failing *him/*her/*them, the CHAIRMAN OF THE MEETING as *my/*our *proxy/*proxies to vote for *me/*us on *my/*our behalf at the
Eighth Annual General Meeting of the Company to be held at Ballroom A & B, Level 6, Hilton Hotel KL Sentral, 3 Jalan Stesen Sentral,
50470 Kuala Lumpur, Wilayah Persekutuan, Malaysia on Monday, 28 May 2018 at 10.00 a.m. and at any adjournment thereof. *I/*We
indicate with an “✓” or “x” in the spaces below how *I/*we wish *my/*our vote to be cast:
No. Resolutions For Against
Ordinary Resolutions
1 Payment of a first and final single tier cash dividend of 3 sen per ordinary share
2 Re-election of Rossana Annizah binti Ahmad Rashid
3 Re-election of Shirish Moreshwar Apte
4 Re-election of Jill Margaret Watts
5 Approval of payment of additional fees to the Chairman of the Board
6 Approval of payment of Directors’ fees and other benefits to the Directors of the Company by the
Company
7 Approval of payment of Directors’ fees and other benefits to the Directors of the Company by the
Company’s subsidiaries
8 Re-appointment of KPMG PLT as Auditors of the Company and authority to the Directors to fix their
remuneration
9 Authority to allot shares pursuant to Section 75 of the Companies Act 2016
10 Allocation of units under the Long Term Incentive Plan of the IHH Group and issuance of new
ordinary shares in IHH to Dr Tan See Leng
11 Allocation of units under the Long Term Incentive Plan of the IHH Group and issuance of new
ordinary shares in IHH to Mehmet Ali Aydinlar
12 Proposed renewal of authority for IHH to purchase its own shares of up to ten percent (10%) of the
prevailing total number of issued shares of IHH
Subject to the abovestated voting instructions, *my/*our *proxy/*proxies may vote or abstain from voting on any resolutions as
*he/*she/*they may think fit.
Dated this day of 2018. Total no. of Shares held
Securities Account No.
IMPORTANT: PLEASE READ THE NOTES BELOW 5. A corporation which is a member, may by resolution of its Directors or other governing body
Notes: authorise such person as it thinks fit to act as its representative at the Meeting, in accordance
with the Company’s Constitution.
* Delete whichever is not applicable.
6. The instrument appointing the proxy together with the Authorisation Document or the duly
1. A member entitled to attend and vote at the above Meeting is entitled to appoint a proxy or registered Power of Attorney referred to in Note 4 above, if any, must be deposited at the
proxies to exercise all or any of his rights to attend, participate, speak and vote in his/her stead. office of the Share Registrar, Symphony Share Registrars Sdn Bhd at Level 6, Symphony
House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan,
2. Where a member of the Company is an exempt authorised nominee which holds shares in the
Malaysia not less than forty-eight (48) hours before the time appointed for taking of the poll or
Company for multiple beneficial owners in one securities account (“omnibus account”) as
at any adjournment thereof.
defined under the Securities Industry (Central Depositories) Act, 1991, there is no limit to the
number of proxies which the exempt authorised nominee may appoint in respect of each 7. By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak
omnibus account it holds. and vote at the above Meeting and/or any adjournment thereof, a member of the Company (i)
consents to the collection, use and disclosure of the member’s personal data by the Company
3. A member other than an exempt authorised nominee shall be entitled to appoint not more
(or its agents) for the purpose of the processing and administration by the Company (or its
than two (2) proxies to attend and vote at the same meeting. Notwithstanding the foregoing,
agents) of proxies and representatives appointed for the above Meeting (including any
any member other than an exempt authorised nominee who is also a substantial shareholder
adjournment thereof) and the preparation and compilation of the attendance lists, minutes
(within the meaning of the Companies Act 2016) shall be entitled to appoint up to (but not
and other documents relating to the above Meeting (including any adjournment thereof), and
more than) five (5) proxies. Where such member appoints more than one (1) proxy, the
in order for the Company (or its agents) to comply with any applicable laws, listing rules,
appointment shall be invalid unless the percentage of the shareholding to be represented by
regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the
each proxy is specified.
member discloses the personal data of the member’s proxy(ies) and/or representative(s) to
4. The instrument appointing a proxy shall: the Company (or its agents), the member has obtained the prior consent of such proxy(ies)
(i) in the case of an individual, be signed by the appointer or by his/her attorney. and/or representative(s) for the collection, use and disclosure by the Company (or its agents)
(ii) in the case of corporation, be either under its common seal or signed by its attorney or an of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii)
officer on behalf of the corporation. agrees that the member will indemnify the Company in respect of any penalties, liabilities,
claims, demands, losses and damages as a result of the member’s breach of warranty.
A copy of the Authorisation Document or the duly registered Power of Attorney, which should
be valid in accordance with the laws of the jurisdiction in which it was created and exercised, 8. Only Members whose names appear in the General Meeting Record of Depositors on
should be enclosed with the proxy form. 21 May 2018 shall be entitled to attend, speak and vote at this Eighth Annual General Meeting
of the Company or appoint a proxy(ies) on his/her behalf.
Affix Stamp
here
www.ihhhealthcare.com