STOCK CODE : 5878
COMPANY NAME : KPJ Healthcare Berhad
FINANCIAL YEAR : December 31, 2023

KPJ Healthcare Berhad (KPJHB) and KPJ Group of Companies are to uphold good business value ethics by preventing and eliminating all forms of bribery/corruption in order to achieve the Organization's vision and mission to safeguard the interests of its stakeholders.

The Board Charter ("Charter") of the Company is to set out key values, principles and ethics of the Company in ensuring the Board's efficiency in discharging its duties. The Board of Directors ("the Board") is accountable and responsible for the performance and affairs of KPJ Healthcare Berhad ("the Company" or "KPJ"), including practising a high level of corporate governance and practices, that accord with applicable laws.

The Audit Committee is established as a committee of KPJ Healthcare Berhad (KPJ) Board of Directors (the Board). The Audit Committee is appointed by the Board for the purpose of overseeing the financial reporting process, the audit process, the system of internal controls and compliance with laws and regulations.

The Tender Committee ("TC"), previously known as the Development and Procurement Committee (DPC), is established as a committee of KPJ Healthcare Berhad (KPJ) Board of Directors (the Board)
The Committee is appointed by the Board of Directors of the Group for the purpose of overseeing the tendering process and monitoring the hospital development and expansion projects of the Group.

1. INTRODUCTION
The Group Medical Advisory Committee (MAC) was formed in 2002 to initiate as well as to oversee clinical governance activities undertaken by the Group.

1. Introduction
The Risk, Sustainability and Governance Committee (the RSGC Committee) is established as a committee of KPJ Healthcare Berhad (KPJ) Board of Directors (the Board). The RSGC Committee is appointed by the Board for the purpose of overseeing the risk management, sustainability and governance process within the Group.

I. PURPOSE

The NRC has been established primarily for the following purposes:

a) Nomination

• To identify and recommend candidates for Board directorship;
• To recommend Directors to fill the seats on Board Committees, taking into consideration the diversity of these Committees;
• To evaluate the effectiveness of the Board and Board Committees (including the size and composition) and contributions of each individual Director;
• To ensure an appropriate framework and plan for Board succession;
and
• To assess the performance quality of individual directors and ensure training needs are addressed.

b) Remuneration

• To provide assistance to the Board in determining the remuneration of the President & Managing Director as well as Senior Management. In fulfilling these responsibilities,the NRC is to ensure that the President & Managing Director and applicable Senior Management of the Company are:

- Fairly rewarded for their individual contribution to overall performance;

- Compensated reasonably in light of the Company's achievements; and

- Compensated similar to other companies.

c) Performance Setting & Assessment

• To establish the President & Managing Director's goals and objectives; and

• To review the President & Managing Director's performance against the goals and objectives set.

ii. MEMBERSHIP

The appointment of an NRC member terminates when the member ceases to be a Director of the Company. The NRC does not have executive powers. In the event of

equality of votes, the Chairman of the NRC shall have a casting vote. In the absence of the Chairman of the NRC, the members present shall elect one of their members to

chair the meeting.

The Board believes that the current composition of NRC is capable of acting collectively in the best overall interests of shareholders with reference to nomination and remuneration of Board members.

iii. MEETINGS

The NRC meets at least once a year, with additional meetings scheduled as and when necessary. The NRC has established procedures to govern its meetings, keeping of minutes and its administration.

The NRC has access to such information and advice, both from within the Group and externally, as it deems necessary or appropriate in accordance with the procedures determined by the Board. The NRC may request other Directors, members of management, counsels and consultants to participate in NRC meetings as necessary, to carry out the NRC's responsibilities.

Non-NRC Directors and members of management in attendance may be required by the Chairperson to leave the meeting of the NRC when so requested.

The secretary of the NRC is the Company Secretary. Setting the agenda for NRC meeting is the responsibility of the NRC Chairman, with inputs from the NRC members. The NRC Chairman may also request for management to participate in this process. The agenda of each meeting, including supporting information, are circulated to the NRC members in advance to enable them to have sufficient time to assess and evaluate prior to each meeting. The NRC, through its Chairman, reports to the Board at the next Board of Directors' meeting after the NRC meeting.

The Chairman of the NRC shall be available to answer questions about the NRC matters at the Annual General Meeting ("AGM") of the Company.

IV. SCOPE OF ACTIVITIES

The duties of the NRC shall include the following:

a) Nomination

• To determine the criteria for Board membership, including qualities, experience, skills, education and other factors that will best qualify a nominee to serve on the Board;
• To review annually and recommend to the Board the structure, size, balance and composition of the Board and Committees, including the required mix of skills and experience, core competencies which Non-Executive Directors should bring to the Board and other qualities to function effectively and efficiently;
• To consider, evaluate and propose to the Board any new Board appointments, whether Executive or Non-Executive position. In making a recommendation to the Board on the candidate for directorship, the NRC shall have regard to:

- Size, composition, mix of skills, experience, competencies and other qualities of the existing Board, level of commitment, resources and time that the recommended candidate can contribute to the existing Board;

- Non-Executive Directors should be persons of calibre, credibility and have the necessary skills and experience to bring an independent judgement to bear on issues considered by the Board and that Independent Non-Executive Directors should make up at least one-third of the membership of the Board; and

- Boardroom diversity by ensuring that women candidates are sought as part of its recruitment exercises.

• To propose to the Board the responsibilities of Non-Executive Directors, including membership and Chairmanship of Board Committees;
• To evaluate and recommend the appointment of senior executive positions, including that of the Managing Director, their duties and the continuation (or not) of their service;
• To establish and implement processes for assessing the effectiveness of the Board as a whole, the Committees of the Board and for assessing the contribution of each Director;
• To evaluate on an annual basis:

- The effectiveness of each Director's ability to contribute to the effectiveness of the Board and the relevant Board Committees, in addition to providing the necessary feedback to the Directors in respect of their performance;

- The effectiveness of the Committees of the Board; and

- The effectiveness of the Board as a whole.

• To recommend to the Board:

- Whether Directors who are retiring by rotation should be put forward for re-election; and

- Termination of membership of individual Directors in accordance with policy

• To establish appropriate succession plans at Board level, and if appropriate, at senior management level;
• To provide for adequate training and orientation of new Directors with respect to the business, structure and management of the Group as well as the expectations of the Board with regard to their contributions to the Board and Company;
• To consider other matters as referred to the NRC by the Board.

b) Remuneration

• To establish and recommend the remuneration structure and policy for Directors and key executives, if applicable, and to review changes to the policy as necessary.
• To ensure that a strong link is maintained between the level of remuneration and individual performance against agreed targets, the performance-related elements of remuneration setting forming a significant proportion of the total remuneration package of Executive Directors.
• To review and recommend the entire individual remuneration package for each of the Executive Director and, as appropriate, other senior Executives, including the terms of employment or contract of employment/service; any benefit, pension or incentive scheme entitlement; any other bonuses, fees and expenses; and any compensation payable on the termination of the service contract.
• To review with the President & Managing Director, his/her goals and objectives and to assess his/her performance against these objectives as well as contribution to the corporate strategy.
• To review the performance standards for key Executives to be used in implementing the Group’s compensation programmes where appropriate.
• To consider and approve compensation commitments/severance payments for Executive Directors and key Executives, where appropriate, in the event of early termination of the employment/service contract.
• To consider other matters as referred to the NRC by the Board.

Remuneration policies and procedures

The Board believes that the levels of remuneration offered by the Group are sufficient to attract Directors of calibre as well as sufficient experience and talent to contribute to the performance of the Group. The remuneration framework for the President & Managing Director has the underlying objective of attracting and retaining an Executive Director needed to manage the Company successfully. The remuneration package of the President & Managing Director is structured to commensurate with the achievement of corporate targets set by the Board and his individual performance. The Non- Executive Directors are remunerated based on fixed annual fees approved by the shareholders of the Company.

Recruitment Process and Annual Assessment

The Board is responsible to the shareholders. All Directors appointed during the financial year retire at the AGM of the Company in the period of appointment and are eligible for re-election. In compliance with Paragraph 7.26(2) of the Listing Requirements, all Directors shall retire at least once every three (3) years.

The Company has in place a formal and transparent procedure on the appointment of new Directors. All nominees to the Board are first considered by the NRC, taking into account the mix of skills, competencies, experience and other qualities required to oversee a highly-regulated healthcare business, before they are recommended to the Board.

While the Board is responsible for the appointment of new Directors, the NRC is delegated to the role of screening and conducting an initial selection, which includes an external search, before making a recommendation to the Board. The NRC evaluates the nominees' ability to discharge their duties and responsibilities before recommending their appointment as Directors to the Board for approval.

Board Performance Evaluation

The effectiveness of the Board is vital to the success of the Group. For that reason, a large portion of the Board Policy Manual is devoted to explaining and outlining the format and procedure for evaluating Board Members performance. The availability of the structured format for Board Members evaluation assists the members in discharging their duties effectively and efficiently.

The Board, through the NRC, undertakes a rigorous evaluation each year in order to assess how well the Board, its Committees, the Directors and the Chairman are performing, including assessing the independence of Independent Directors, taking into account the individual Director's capability to exercise independent judgement at all times. The evaluation covers the Board's composition, skills mix, experience, communication, roles and responsibilities, effectiveness as well as conduct. All Directors complete a questionnaire regarding the Board and Committees' processes, their effectiveness and where improvements may be considered. The process also includes a peer review in which Directors assess their fellow Directors' performance against a set criteria, including the skills they bring to the Group and the contribution they make. The Company Secretary reports the outcome of the evaluation exercise to the NRC and then to the Board for notation.

Following the performance evaluation process for 2016 which was conducted in February 2017, the Board has concluded that the Board and its Committees operate effectively. Additionally, the Chairman is satisfied that each Director continues to make an effective contribution to the work of the Board, is well prepared and informed concerning matters to be considered by the Board, has a good understanding of the Group's business and their commitment to the role remains strong.

The Investment Committee (IC) is established as a committee of KPJ Healthcare Berhad (KPJ) Board of Directors (the Board).

The IC is appointed by the Board of Directors for the purpose of making decisions and/or advising the Board of Directors on matters pertaining to the business, investments, disposals and other forms of key corporate exercises.

The IC also possesses important responsibilities in governing investment policy of the group.

1. Objectives
The objective of this Fit and Proper Policy is to outline a set of formal and transparent criteria for the Nomination and Remuneration Committee ("NRC") and the Board of Directors (the "Board") in the selection of candidates for appointment as Directors and in the evaluation of Directors annually as well as for recommendation to the shareholders for re-election at the annual general meeting.

1.0 INTRODUCTION

The purpose of the Code of Ethics of KPJ Healthcare Berhad is to serve as a standard of conduct for all staff. It contains standards of ethical behavior for healthcare employees in their professional relationships. These relationships include colleagues, patients or others served; members of the healthcare employees’ organization and other organizations, the community, and society as a whole.

All KPJ Healthcare Berhad employees shall act in a manner consistent with ethical principles established in this policy. Employees shall perform their duties with integrity, honesty, fairness and diligence; and adhere to the highest principles of dignity, respect, and confidentiality for a wide variety of people they encounter to include patients, families, staff members, community representatives, and a network of external providers.

2.0 OBJECTIVE

The fundamental objectives of the healthcare management profession are to maintain or enhance the overall quality of life, dignity and well-being of every individual needing healthcare service and to create a more equitable, accessible, effective and efficient healthcare system.

3.0 SCOPE

This policy is applicable to all employees of KPJ Healthcare Berhad and its Group of Companies. ("KPJ Group") ("Employees") ("KPJ")

4.0 RESPONSIBILITY

Each employee will be responsible to adhere to ethical guidelines as established in this policy and other supporting policies. They are to perform their duties in align with KPJ core values of Safety, Courtesy, Integrity, Professionalism and Continuous Improvement.

We further recognize and understand this this responsibility extends to all patients, their families, staff, the community, and a wide network of external systems and providers.

5.0 POLICY STATEMENT

5.1 This Code of Ethics incorporates standards of ethical behavior governing individual behavior, particularly when that conduct directly relates to the role and identity of the employee.

5.2 DUTY OF EMPLOYEES

5.2.1 Duty to the profession

All Employees shall:

1. Conduct professional activities with honesty, integrity, respect, fairness and good faith in a manner that will reflect well upon the profession
2. Be fit for duty during work time, including on-call responsibilities;
3. Comply with all and regulations pertaining to the Private Healthcare and Facilities Act 1998 and other related bylaws and legislations;
4. Maintain competent and proficient in their profession through yearly training programmes and continuing professional education;
5. Avoid improper exploitation of professional relationships for personal gain;
6. Disclose financial and other conflicts of interest;
7. Respect personal confidence;
8. Do no harm to other colleagues;
9. Refrain from participating in any activity that demeans the credibility and dignity of the healthcare management profession;
10. As professionals, perform and fulfil duties consistent with the principles, values and obligations established in our applicable professional code of ethics and are subject to sanctions from the same;
11. Promptly report to supervisor, any individual who may be impaired in his or her ability to perform assigned responsibilities due to any cause (e.g. emotional issues, substance abuse)

5.2.2 Duty to patient and family rights (Kindly refer to Policy on Patient Safety and Family Rights and Patient Grievance Mechanism Plan, where applicable)

All Employees shall:

1. Encourage, support and respect the right and responsibility of all individuals to assert themselves and ensure patient safety and the quality of care;
2. Protect all patients from any form of abuse, neglect, or exploitation;
3. Be sensitive, responsive, and respectful in the care of individuals who are dying, address treatment of primary and secondary treatment, effectively manage pain, and respond to individual’s and their family’s specific needs;
4. Maintain the highest level of patient confidentiality at all times;

5.2.3 Duty to organization

All Employees shall within the scope of his or her authority:

1. Safeguard the property of the Company;
2. Protect and defend the image and credibility of the Company;
3. Provide healthcare services consistent with available resources, and when there are limited resources, work to ensure the existence of a resource allocation process that considers ethical ramifications;
4. Recognize our position of public trust and will represent our services and capabilities fairly and accurately to the public;
5. Be truthful in all forms of professional and organizational communication and avoid disseminating information that is false, misleading or deceptive;
6. To advise patients about their financial responsibility to the hospital, if any and perform all billing and reimbursement practices with honesty and accuracy utilizing detailed accounting procedures;
7. Report negative financial and other information promptly and accurately;
8. Prevent fraud and abuse and aggressive accounting practices that may result in disputable financial reports
9. Create an organizational environment in which both clinical and management mistakes are minimized and, when they do occur, are disclosed and addressed effectively;
10. Uphold and monitor compliance to the organizational code of ethics;
11. Shall not accept any gifts from patients, their families or friends, vendors or from any other source associated with the performance of their duties that has any potential to influence or able to create a perception of influence.

DUTY OF EMPLOYERS

Duty to Employees

The organization has ethical and professional obligations to the employees they manage that encompass but are not limited to:

1. Creating a work environment that promotes ethical conduct by employees;
2. Providing a work environment that encourages free expression of ethical concerns and provides mechanisms for discussing and addressing such concerns;
3. Providing a work environmental that discourages harassment, sexual and other; coercion of any kind, especially to perform illegal or unethical acts; and discrimination on the basis of race, ethnicity, creed, gender, sexual orientation, age, or disability;
4. Providing a work environment that promotes the proper use of employees’ knowledge and skills;
5. Provide ethics resources to staff to address organizational and clinical issues;
6. Providing a safe working environment through the implementation of safety policies, procedures, personal protective equipment (PPE), etc. in adherence to Occupational Safety & Health Act 1994 and all its relevant regulations, bylaws and guidelines;
7. Establish appropriate grievance and appeal mechanism

6.0 BREACH OF POLICY

Breach of this policy will result in the respective disciplinary action as laid out in the KPJ e-Handbook and KPJ/TM/10-Policy on Handling Employee Misconduct

7.0 SUPPORTING DOCUMENTS

This Code of Ethics policy will be used (but not limited to) the following supportive documents, where applicable:

1. KPJ e-Handbook
2. Kod Tatakelakuan dan Etika Bisnes Johor Corporation
3. KPJ Corporate Integrity Pledge
4. Private Healthcare and Facilities Act 1998
5. Code of Medical Ethics, Malaysian Medical Association (MMA)
6. Code of Professional Conduct, Malaysian Medical Council (MMC)
7. BY-LAWS (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (MIA)
8. Patients and Family Rights Policy
9. KPJ/TM/02 – Policy on Dress Code
10. KPJ/TM/09 – Policy on Handling Employee Grievance
11. KPJ/TM/10 – Policy on Handling Employee Misconduct
12. KPJ/TM/11 – Policy on Sexual Harassment
13. KPJ/TM/15 – Policy on No Gifts and Entertainment
14. KPJ/TM/19 – Policy on Whistle Blowing
15. KPJ/TM/27 – Policy on Password Safety & Security
16. KPJ/TM/28 – Policy on PDPA

The objective of this policy is to govern the whistleblowing process, establish a mechanism and encourage everyone who has a relationship with the KPJHB Group to voice and raise their concerns, including any act or conduct that violates the code of conduct, actual or suspected misconduct, illegal or unethical behaviour, without fear of retaliation or unfair treatment.

THE MALAYSIAN CODE ON CORPORATE GOVERNANCE

• Corporate governance provides a framework of control mechanisms that support the company in achieving its goals, as well encourage high level professionalism. The pillars of corporate governance such as ethical behavior, accountability, transparency and sustainability are crucial to the governance of companies and stewardship of investors' capital.

• The Malaysian Code of Corporate Governance (MCCG) reflects global principles and internationally recognised practices of corporate governance which are above and beyond the minimum required by statute, regulations or those prescribed by Bursa Malaysia.

• The MCCG permits a more constructive and flexible response to raise standards of corporate governance. It recognises that there are aspects of corporate governance where statutory regulation is necessary and others where self-regulation complemented by market regulation is more appropriate.

• The MCCG was reviewed and updated in 2007, 2012, 2017 and 2021 to ensure that it remains relevant and is aligned with globally recognised best practices and standards.

• KPJ's adherence to these principles generate long-term value to all our stakeholders.

SUSTAINABILITY POLICY STATEMENT

KPJ is committed to enhancing its sustainability performance by integrating sustainable practices into its operations, focusing on the 5Ps – Patients, Physicians, People, Partners and Planet. This policy complements and supports all related KPJ policies and is guided by the following principles under the ESG pillars: