Annual Report 2016 Kpj Healthcare Berhad
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SUSTAINABLE HEALTHCARE ANNUAL REPORT 2016 KPJ HEALTHCARE BERHAD 2016ANNUAL REPORT SUSTAINABLE HEALTHCARE KPJ Healthcare Bhd (KPJ)’s success journey in Malaysia for the last 35 years underscores our philosophy that building and growing our business sustainably in a responsible manner go hand-in-hand. We serve our mission to provide the rakyat of Malaysia with quality healthcare services as we continue to create long-term value for shareholders, and support the development and expansion of the healthcare industry in the country. Table of Contents 008 Facts at a Glance 009 Our Reporting Approach Sustainability Statement Financial Statements Get To Know Us 083 About This Report 184 Directors’ Report 084 Sustainability Management 190 Statement by Directors 085 Materiality 190 Statutory Declaration 010 Corporate Profile 086 Responding to Stakeholders 191 Independent Auditors’ Report 012 What We Offer 088 Economic 196 Statements of Comprehensive Income 014 Our Reach 096 Environmental 197 Statements of Financial Position 015 Corporate Information 100 People 199 Consolidated Statement of Changes in Equity 016 Corporate Structure 201 Company Statement of Changes in Equity 018 Corporate Milestones Our Significant Events 202 Statements of Cash Flows 205 Notes to the Financial Statements and Accolades 280 Supplementary Information How We Created and Delivered Value in 2016 105 Corporate Developments and Announcements Other Information 106 Awards and Achievements 2016 020 Chairman’s Message 108 KPJ in the News 281 Shareholdings Statistics 024 Our Business Model 110 2016 Events Highlights 284 Warrantholdings Statistics 025 Strategy at a Glance 286 Classification of Shareholders 026 Management Discussion and Analysis 287 List of Top 10 Properties 032 Business Review How We Keep on Track: 288 Network of KPJ Hospitals and Companies • Hospital Operations Our Governance Compass 290 Notice of Annual General Meeting • New Hospital Development 294 Statement Accompanying Notice of Annual • Ambulatory Care 116 Our Operating Environment General Meeting • Biomedical Services 117 Board of Directors • Senior Living Care 120 Directors’ Profiles • Proxy Form • Medical Tourism 131 Executive Committee • Ancillary Services 134 Executive Committee Members’ Profiles • Education 142 Hospital Medical Directors 068 Key Initiatives 144 Hospital Management Committee 150 Statement on Corporate Governance 165 Statement on Risk Management and Internal Strategy and Performance Control 169 Audit Committee Report 172 Medical Advisory Committee (MAC) Report 071 Group Financial Review 177 Medical Advisory Committee (MAC) 072 Group Financial Highlights 178 Business Continuity Management 073 Group Operational Highlights 180 Compliance Information 074 Statements of Comprehensive Income 182 Directors’ Responsibility Statement 074 Statements of Financial Position 075 Investor Information 078 Statement of Value Added 079 Distribution of Value Added 080 Group Quarterly Performance TAILORING FOR OUR CUSTOMERS Our core focus is ensuring that our customers enjoy a positive and holistic patient experience. We connect and engage with them as we improve our service delivery and offerings. We have our finger on the pulse of their needs which allows us to design innovative healthcare and medical packages that best provide relevant solutions that are for everyone. OUR CORE VALUES As a global provider of premium healthcare services, KPJ is committed to world-class excellence in every aspect of healthcare. Our medical expertise and advanced facilities enable us to provide a one-stop continuum of care to cater to the rapidly growing demands of the markets we operate in. KPJ HAS A WELL-DEFINED STRATEGY Our fundamental purpose is the delivery of exceptional health treatment, care and diagnosis to all our patients. We are dedicated to being the preferred provider of care, with innovative use of technology, experienced doctors and well-trained staff who collaborate to offer the best diagnosis and treatment plans. ENSURING DELIVERING PERFORMING EXERCISING STRIVING FOR SAFETY SERVICE WITH DUTIES WITH PROFESSIONALISM CONTINUOUS COURTESY INTEGRITY AT ALL TIMES IMPROVEMENT Our mission is to improve the health of the people and the Our values represent the philosophy of our organisation and guide all our decision-making and actions. We strive to maintain a patient-centred environment focused communities we serve. Led by skilled and caring medical on compassionate care. Our core values of Ensuring Safety, Delivering Service with Courtesy, Performing Duties with Integrity, Exercising Professionalism at All Times, staff, we are consistently focused on clinical excellence and Striving for Continuous Improvement are an intrinsic part of our commitment to ‘Care for Life’ in every aspect of our operations. and innovative technology for superior patient outcomes. We hold ourselves accountable to high standards and our core values reaffirm our commitment to serving all those who count on us. DELIVERING TO THE NATION We constantly innovate and upgrade our hospitals with the latest state-of-the-art medical technology and equipment, on par with international benchmarks and practices. We are committed to maintaining clinical excellence as we deliver quality healthcare services to all our patients. OUR EXCELLENT SERVICES HEALTHCARE 1 ACCESSIBILITY IMPROVED SCORE 2 KPJ’S CUSTOMER SATISFACTION CLINICAL GOVERNANCE SURVEY 86.1% 3 24/7 CUSTOMER SERVICE When you are 4 responsible for IN 2016, INTEGRATED NETWORKED PLATFORM delivering EMPLOYEES RECEIVED high-quality healthcare AN AVERAGE OF to more than 2 million people, patient 5 satisfaction is as QUALITY hours critically important. 47OF TRAINING PER PERSON Accreditation Integrated Management System Certification Body ACHIEVING FOR OUR SHAREHOLDERS We are committed to long-term growth, and with that, focus on creating long-term value for our shareholders by operating sustainably in a responsible manner. STRONG PARTNERSHIPS WILL CONTINUE TO MATTER. WE MUST CONVINCE THOSE RESPONSIBLE IN THE DIFFERENT REGIONS OF OUR FROST & SULLIVAN QUALITY AND RECOGNISES RELIABILITY KPJ HEALTHCARE BERHAD AS “HOSPITAL OF THE YEAR” OUR MOTIVATION IN NUMBERS 2016 2016 2016 2016 2016 MSQH 2016: 29.73 2016: 14.08 2016: 5.16 2016: 9.25 2016: 3.96 ACCREDITATION 2015: 29.02 2015: 13.80 2015: 5.10 2015: 9.30 2015: 3.71 “KPJ RAWANG SPECIALIST HOSPITAL” 2% 2% 1% -1% 7% “KPJ BANDAR MAHARANI SPECIALIST HOSPITAL” GROSS PROFIT MARGIN EBITDA MARGIN NET PROFIT MARGIN RETURN ON EQUITY RETURN ON ASSETS (%) (%) (%) (%) (%) 2016 2016 2016 2016 2016 2016: 9.09 2016: 0.40 2016: 67 2016: 0.99 2016: 1.07 EXPANDED OUR CSR OUTREACH 2015: 9.13 2015: 0.39 2015: 66 2015: 1.05 2015: 0.94 -1% 3% 2% -6% 14% NEW RETURN ON AVERAGE DEBT RATIO DEBT TURNOVER DEBT EQUITY RATIO CURRENT RATIO 2KWAN CLINICS CAPITAL EMPLOYED DAYS RATIO (%) Facts at a Glance HOSPITALS 1,122 25 2 1 1 MEDICAL in Malaysia in Indonesia in Bangladesh in Thailand CONSULTANTS RETIREMENT & AGED CARE INPATIENTS OUTPATIENTS CENTERS 279,794 2,464,704 1in Australia 2in Malaysia 2 BRANCHES EMPLOYEES 1UNIVERSITY COLLEGE 38 PROGRAMMES 12,635 ACCREDITED HOSPITALS 2,929 18 4 By Malaysian Society for Quality By Joint Commission International OPERATING BEDS in Health (MSQH) (JCI) ANNUAL REPORT 2016 | KPJ HEALTHCARE BERHAD 8 Our Reporting Approach ABOUT THIS REPORT AND OUR REPORTING SUITE We have produced a full suite of reporting publications in line with Bursa Malaysia’s revised Listing Requirements (24 March 2016). KPJ Healthcare’s Annual Report 2016 which contains its Sustainability Statement, has been prepared and curated within our best capacity to provide our stakeholders a clear and informed review of KPJ’s 2016 performance and ongoing business delivery and creation of value, against the year’s landscape of opportunities, challenges and developments. The Report has been tailored to meet our readers’ specific information requirements. This also marks the debut of the KPJ Sustainability Statement, as part of our commitment to, and in accordance with market regulation, share how our business integrates social value into our operations, in creating sustainable business value for all our stakeholders. REPORT PUBLICATION PURPOSE FRAMEWORKS APPLIED CROSS-REFERENCE KPJ Annual Report Provide a comprehensive discussion of KPJ’s √ Companies Act, 1965 KPJ website 2016 performance √ Bursa Malaysia Securities Berhad Listing Requirements √ Malaysian Financial Reporting Standards √ International Financial Reporting Standards KPJ Sustainability Present a balanced and comprehensive √ Bursa Malaysia Securities Berhad Listing Statement 2016 analysis of KPJ’s sustainability practices and Requirements relating to Sustainability performance in relation to issues material to Statements in Annual Report our stakeholders. The statement scope covers KPJ’s operations in Malaysia only. 9 KPJ HEALTHCARE BERHAD | ANNUAL REPORT 2016 Corporate Profile Driven by its core values of Safety, Courtesy, Integrity, Professionalism and Continuous Improvement, KPJ’s integrated network consists of 25 specialist hospitals KPJ Healthcare Berhad (KPJ or the Group) located throughout the nation. With its expansion abroad, the Group currently has two hospitals in Indonesia, a sizable share in a hospital in Bangkok, a hospital in is Malaysia’s leading provider of private Bangladesh, as well as a retirement and age-care resort healthcare services. Since its introduction of in Australia. KPJ’s competitive advantage lies in its extensive reach the first private specialist hospital in Johor in and presence