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The Board of Directors of KPJ Healthcare Berhad (KPJ)
is pleased to provide the following statement on the state
of internal controls of the Group for the financial year
ended 31st December 2011, which has been prepared
in accordance with Paragraph 15.27 (b) of the Listing
Requirements of Bursa Malaysia and the Statement on
Internal Control – Guidance for Directors of Public Listed
Companies. The system of internal controls is designed to
manage risks to an acceptable level within the context of
the business environment throughout the Group.
Board Responsibilities
The primary responsibility of the Board is to ensure the
adequacy and integrity of the Group’s internal controls
systemwhich cover financial, operational and compliance
controls management. The principal objective of
the internal controls system is to manage business
risks effectively, enhance the value of shareholder’s
investments and safeguards assets of the Group. The
role of Managing Director and Management is to assist
in the design and implementation of the Board’s policies
on internal control system.
Since internal controls are designed to manage and
reduce risks rather than eliminate them, therefore such
internal controls can provide only reasonable assurance
to Management and the Board of Directors regarding the
achievement of company objectives through:-
• effectiveness and efficiency of operations
• reliability of financial reporting
• compliance with applicable laws and regulations
TheBoardstill relieson theCOSOInternalControl Framework
to ensure an appropriate and sound system of internal
controls, which encompasses five interrelated components
i.e. the Control Environment, Risk Assessment Framework,
Control Activities, Information and Communication and
Continuous Monitoring process.
Control Environment
Integrity And Ethical Values
The Management is committed to enforce ethical
behaviour in employees and medical consultants. At
the annual staff assembly or “Pedoman” (Perhimpunan,
Dialog dan Anugerah Tahunan Anggota Pekerja) in the
hospitals, new staff take an oath and sign a “Service
Pledge” declaration form. All employees and medical
consultants are reminded during the Pedoman of
the five Core Values adopted by the Group, which
are Safety, Courtesy, Integrity, Professionalism and
Continuous Improvement.
Employees are also encouraged to report directly to
the Managing Director of any misconduct or unethical
behaviour committed by any staff of the Group through
the Borang Peradaban declaration.
The Group has implemented the policy on “Code of Ethics
and Business Conduct” to emphasize the commitment of
the Group towards ethical values.
All hospitals and companies within the Group have been
requested to sign an integrity pledge with their suppliers,
contractors and other related third parties.
Commitment To Competence
As a service provider, the Group is committed to improve
the skills and competencies of its management, medical
consultants and employees through various training
programmes, seminars, workshops and quality initiatives.
The Group has made it mandatory for each staff to undergo
at least 30 hours of training per year as part of the indicator
in the Key Performance Indicators with the objective of
encouraging knowledge management and initiatives.
Training on work related areas such as customer services,
fire safety and corporate culture are done either internally
or through external moderators.
The Group also organizes the KPJ Medical Conference,
Medical Workshop and Nursing Convention yearly for
the medical consultants, nurses and allied health staff to
deliberate and discuss medical and clinical issues related
to their practices to promote patient safety, best practices
as well as standardization of practices.
New and creative ideas are encouraged through suggestion
schemes and Innovative Circle Committee competitions,
held yearly, whereby the winner of this event will represent
KPJ at the higher level of competition at JCorp, the ultimate
holding corporation.
Organisation Structure
The organization structure of the Group, headed by the
Managing Director, is divided into three (3) main divisions:
Financial, Professional Services and Operation. For the
year 2011, the Group has created new position ie Executive
Director, to overseeing operational matters of the Group.
As for the hospitals, the day-to-day operations are
managed by the Executive Directors cum Chief
Executives Officer or the General Manager.
The Executive Directors cum Chief Executive Officers
and the General Managers are assisted by the Medical
Directors in relation to clinical issues in the hospitals.
At the Corporate level, the Group is assisted by the Medical
Advisory Committee and Clinical Governance Committee
on matters pertaining to clinical issues.
Assignment of Authority and Responsibility
The Board assigns authority and responsibility mainly to the
Executive Committee (EXCO) to manage the strategic issues
pertaining to the delivery of services and future direction of
the Group. Major purchases are discussed and deliberated
by the EXCO before they are tabled at the respective
hospital’s Board meetings. The objective is to ensure Group
synergy, standardization and bulk discounts.
Statement On Internal Control
(Pursuant to Paragraph 15.27(b) of the Bursa Malaysia Listing Requirements)
65 ANNUAL REPORT 2011