0
MASTER OF BUSINESS ADMINISTRATION
CORPORATE GOVERNANCE
KPC 1123
LECTURER NAME
PROFESSOR DR. MUHAMAD HUDAIB
INDIVIDUAL ASSIGNMENT
MOHD JAMIL BIN MOHD JA’AFAR
KBB19031
A COMPARATIVE ANALYSIS ON CORPORATE GOVERNANCE STRUCTURE
AND FIRM’S PERFORMANCE BETWEEN APEX HEALTHCARE BERHAD,
MALAYSIA AND ISEC HEALTHCARE LTD., SINGAPORE
1
TABLE OF CONTENT
1.0
INTRODUCTION
1
2.0
BACKGROUND OF THE COMPANIES
2
2.1
APEX Healthcare Berhad
2.2
ISEC Healthcare Limited
3.0
FINANCIAL ANALYSIS
4
3.1
APEX and ISEC Data
3.2
Analysis on APEX and ISEC for Financial Year 2016 – 2018
4.0
CORPORATE GOVERNANCE CHARACTERISTICS
15
4.1
4.1 Duality Status of CEO and Chairman
4.2
4.2 Board Size
4.3
4.3 Gender Diversify
4.4
Board Committees
5.0
THE INFLUENCES OF CORPORATE GOVERNANCE
CHARACTERISTICS TO THE PERFORMANCE OF COMPANIES
18
5.1
Total Assets per Director
5.2
Gross Profit per Director
5.3
Operating Cost per Director
5.4
Net Profit per Director
6.0
CONCLUSION
21
7.0
REFERENCES
23
8.0
APPENDIX
24
2
1.0 INTRODUCTION
Corporate governance is the corner stone of any good business. It encompasses
the processes, practices and policies that a company relies on to make formal
decisions and to manage the company. When a company practices good
corporate governance, with full disclosure, the public will feel that the company
and brand can be trusted, ultimately helping the company reputation to grow.
Corporate governance has earned its place as an essential tool in the
management and growth of companies, and will continue to grow in importance
as time goes on. This study will be focusing on the comparison of the corporate
governance mechanism and structure between two (2) companies operate in the
same industry. In order to analyze the contrast, the selected companies are IN
Healthcare Sector; APEX Healthcare Berhad a Malaysian company listed in Bursa
Malaysia and ISEC Healthcare Limited which is the non-Malaysian company listed
in Singapore Exchange Ltd.
2.0 BACKGROUND OF COMPANY
2.1 APEX HEALTHCARE BERHAD (MALAYSIA)
Apex Healthcare Berhad is a leading healthcare group with operations in Malaysia,
Singapore, Vietnam and Myanmar. Founded in 1962, our core expertise is in the
development, manufacturing, sales and marketing, distribution and wholesaling of
pharmaceuticals, consumer healthcare products and diagnostics. Apex
Healthcare Berhad is publicly listed on the Main Market of Bursa Malaysia.
Establishment in 1962, Apex Healthcare Berhad business has been focused on
making pharmaceutical and healthcare products available to customers in the
markets in which we operate, through manufacturing and distribution, and in a
manner, which fairly rewards all stakeholders. We know our business intimately
and have a growing network of loyal customers; this will remain our business for
the future. Our confidence in our business stems from a conscious decision to
focus resources on our area of expertise, which enables us to increase our
capabilities, efficiencies and understanding of underlying trends in the industry.
Apex’s mission is to bring health and quality of life to all through its businesses.
Doctors and Pharmacists use our medicines and diagnostic devices to treat and
manage infections, cardiovascular, metabolic, gastroenterological, rheumatic
conditions and more.
Consumers use our medicated powder, nutritional supplements and other
healthcare related products to enhance their state of well being. We take heart in
knowing that our products play a role in the restoration of health and enhancement
of life in those who use and trust them.
3
2.2 ISEC HEALTHCARE LTD. (SINGAPORE)
ISEC Healthcare provides a comprehensive suite of specialist medical eye care
services with ambulatory surgical centres in Singapore, Malaysia, and Myanmar
that are equipped with state–of-the-art technology and facilities. Our team of 30
doctors are specialised in the fields of cataract and refractive surgery (including
LASIK), vitreoretinal diseases, corneal and external eye diseases, glaucoma,
uveitis, oculoplastics, facial cosmetics and aesthetics surgery, adult strabismus
and paediatric ophthalmology.
International Specialist Eye Centre (ISEC) group of clinics including ISEC at Kuala
Lumpur, Penang, Sibu, Johor, Yangon Myanmar, Southern Specialist Eye Centre
Melaka, Asia Pacific Eye Centre (formerly Lee Hung Ming Eye Centre) in
Singapore are centers of excellence in ophthalmology, specifically in clinical care,
teaching and research.
ISEC’s vision is to provide high quality, compassionate, world-class eye care at
an affordable level to the local and regional community. ISEC want strive to
provide high quality, compassionate, world-class eyecare at an affordable level to
the local and regional community. ISEC provides a full range of tertiary specialty
services, ranging from sophisticated laser eye surgery (LASIK), to the most
complex vitreoretinal, orbital reconstruction and complex corneal transplantation
surgeries.
The strength of ISEC is in its ophthalmologists. Our eye surgeons hold impressive
credentials, are generally regarded as key opinion leaders in their field. They had
held consulting positions at prominent local teaching university hospitals, and are
among the leading eye surgeons in the country. Our fellowship-trained eye
surgeons possess the necessary training and clinical experiences with previous
clinical appointments from renowned eye centres in Singapore, India, Australia,
United Kingdom, Canada and the United States.
ISAC aim to operate, manage and further establish centres which we term as
Centres of Excellence specialising in ophthalmology, with the vision of providing
high quality, compassionate, world class eye care at an affordable level to the local
and regional community.
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3.0 FINANCIAL ANALYIS
3.1 Apex Healthcare Berhad (“the Company”) is incorporated in Malaysia. The
principal activities of the Company are investment holding and the provision of
management services.
The key principal activities of the subsidiaries are the manufacturing, marketing,
distribution and wholesaling of pharmaceutical and healthcare products. The
name, place of incorporation, activities of its subsidiaries and the percentage of
issued share capital held by the Company in each subsidiary.
YEAR
SALES
(RM’000)
TOTAL LIABILITIES
(RM’000)
2016
581,268
106,020
2017
620,263
456,903
113,247
2018
652,660
153,504
Table 1: Financial Report Apex Healthcare Berhad 2016 –2018
YEAR
RETURN
OF
ASSET
(ROA)
RETURN
OF
EQUITY
(ROE)
NET
PROFIT
MARGIN
CURRENT
RATIO
QUICK
RATIO
TOTAL
ASSET
TURNOVER
AVERAGE
COLLECTION
PERIOD
DEBT
RATIO
DEBT
TO
EQUITY
RATIO
2016
8.36%
11.20%
6.02%
2.82
2.18
1.39
87.17
0.25
0.34
2017
9.74%
12.95%
7.17%
2.72
2.09
1.36
81.99
0.25
0.33
2018
10.86%
15.18%
8.99%
2.63
1.97
1.21
89.72
0.28
0.40
Table 2: Comparison Apex Healthcare Berhad in term of profitability, liquidity and financial
stability for 3 years (2016, 2017 & 2018)
ISEC Healthcare Ltd. (the “Company”) is a public limited company, incorporated and
domiciled in Singapore with its registered office address and principal place of
business at 101 Thomson Road #09-04 United Square Singapore 307591. The
Company’s registration number is 201400185H. The Company is listed on the Catalist
Board of the Singapore Exchange Securities Trading Limited (“SGX”). The principal
activity of the Company is that of an investment holding company.
YEAR
SALES
($’000)
TOTAL LIABILITIES
($’000)
2016
30,780
6,393
2017
36,976
71,602
5,217
2018
40,444
5,972
Table 3: Financial Report ISEC Healthcare Ltd. 2016 –2018
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Table 4: Comparison ISEC Healthcare Ltd. in term of profitability, liquidity and financial
stability for 3 years (2016, 2017 & 2018)
3.3 Analysis on APEX and ISEC for Financial Year 2016 – 2018
3.3 (a) PERFORMANCE
Performance ratios tell investors about a company’s profit, which explains why
they are frequently referred to as profitability ratios. Performance ratios tell a clear
picture of a company’s profitability at various stages of its operations. Examples
include:
• Return on assets
• Return on equity
• Net profit margin
i. Return on Asset (ROA)
RETURN ON ASSET
2016
2017
2018
APEX
8.36%
9.74%
10.86%
ISEC
2.20%
2.90%
3.31%
Table 5: Data of Return on Asset 2016 – 2018
YEAR
RETURN
OF
ASSET
(ROA)
RETURN
OF
EQUITY
(ROE)
NET
PROFIT
MARGIN
CURRENT
RATIO
QUICK
RATIO
TOTAL
ASSET
TURNOVER
AVERAGE
COLLECTION
PERIOD
DEBT
RATIO
DEBT
TO
EQUITY
RATIO
2016
2.20%
2.43%
4.81%
4.42
4.20
0.46
25.74
0.10
0.11
2017
2.90%
3.13%
5.62%
6.69
6.42
0.52
24.73
0.07
0.08
2018
1.09%
3.31%
6.02%
6.06
5.85
0.55
26.93
0.08
0.09
Figure 1: Graph of Return on Asset 2016 – 2018
8.36%
9.74%
10.86%
2.20% 2.90% 3.31%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2016 2017 2018
RETURN ON ASET
APEX ISEC