BGH : Annual Report 2011 by Bangkok Hospital Medical Center Shareinvestor

ANNUAL REPORT 2011 BANGKOK DUSIT MEDICAL SERVICES Public Company Limited

Contents

Statement of the Board of Directors Financial Highlights Juristic persons in which the company holds 10% of shares or greater Board of Directors Corporate Social Responsibility Nature of Business Research and Development Industry and Competition Risk Factors Shareholding Structure and Management Good Corporate Governance Connected Transactions Management discussion and analysis Auditorâ&#x20AC;&#x2122;s Compensation Report of the Audit Committee The Board of Directorâ&#x20AC;&#x2122;s Report on its Responsibility to the Financial Statements Report of Independent Auditor Financial Statements Notes to Consolidated Financial Statements General Information

2 4 7 10 21 31 40 44 47 51 59 71 75 80 82 83 85 86 98 144

Ethics The most important principle that we all live by and strictly ad here to is our duty in providing medical care with the highest professional ethics.

Conscience To provide the best possible care for every life that comes through our door is not stated in our duties nor are there any guidelines that bind us, but it is a service that we willingly provide with the conscience of caring for fellow humans.

Dedication and devotion For some people, every second means life. With each breath, we realize the importance of sincere dedication and devotion.

Statement of the Board of Directors In 2011, Bangkok Hospital ventured into our 40th year of business with the resolution to follow the Company’s vision and determination to fulfill the mission statement in providing healthcare services to patients of all nationalities and languages. The Bangkok Hospital Group therefore recognizes the significance of our medical staff and academic strengths. We endeavor to develop and enhance our medical staff and technology to internation¬al heights. It can be stated that “people” and “technology” are key elements in uniting Bangkok Hospital as one and they are the basis of medical services that meet international standards, which has inspired customer confidence in the last 4 decades. Our dedication in using the best technology and devotion of our medical staff and specialists in various fields has garnered many awards both domestic and international. In 2011, Bangkok Hospital, Bangkok Heart Hospital and Wattanosoth Hospital (Bangkok Cancer Hospital) received the Disease or Condition-Specific Care Certification of 6 conditions from the Joint Commission International (JCI) in the United States, namely, stroke, back pain, diabetes type 2, acute myocardial infarction, heart failure and breast cancer. 2

Furthermore, the Bangkok Hospital network received the “Best of the Best Prime Minister’s Export Awards” as the Best Service Provider on the occasion of 20th Anniversary of the Prime Minister’s Export Awards. The Company was 1 of 5 companies selected for the award out of a total of 322 companies. In addition, we received the “Trusted Brand Award, Gold” in the Hospital category for the second consecutive year. CNN also interviewed executive management and toured Bangkok Hospital as part of the “Eyes on Thailand” documentary, which was aired globally 5 – 9 December 2011. Even though the global economy slowed down in 2011 as a consequence of the economic troubles in the US and Europe, and Thailand’s manufacturing and supply chains suffered from the major flood in late 2011, the Company was able to continue its growth with the cooperation of everyone in the organization. The organic growth and realization of income from the merger of Phyathai Hospitals and Paolo Hospitals in 2011 resulted in the Company’s increased medical service revenue from Baht 23,513 million in 2010 to Baht 35,224 million in 2011. Net profit also increased from Baht 2,295 million in 2010 to Baht 4,386 million in 2011 equal to 91% increase in net profit. Moreover, the market value of the Company rose from Baht 57,940 million in 2010 to Baht 126,728 million in 2011. This financial strength led to the upgrade of the Company and issue ratings from “A” with “stable” outlook to “A+” by TRIS Rating Company Limited, which reflects the Company’s strength as a business leader as the largest private hospital operator in the country with high quality service, state-of-the-art medical technology, expert and experienced management, staff and specialist physicians, as well as a strong expanding network.

The sustainable growth together with care for Thai society is another mission that receives priority from the Bangkok Hospital network and everyone in the organization as we are a hospital for the Thai people. During the major flooding, Bangkok Hospital set up a working team to follow the news and closely assess the situation. Four measures were carried out: safeguarding the hospital and surrounding community; providing assistance to employees and their families; providing relief to people affected by the floods in various areas by dispatching mobile medical units, distributing consumption goods and medicine, SKY ICU to transport patients from affected areas; and rehabilitation assistance after the floods receded. The recent major flooding was another test of the cooperation and generosity of member of the organization and demonstrates the management’s vision in managing the Company during crises. Bangkok Hospital also organized many activities for the society namely; 146 Academic Scholarships to Children of Employees; Project “Health Check-Ups for Senior Citizens of Sai Jai Thai Foundation” in cooperation with the Sai Jai Thai Foundation and the Ministry of Health provided check-ups to 127 members aged over 55 at no cost; Project “Urbanites Unite for Good Health” provided free medical check-ups for the 15th consecutive year; and Providing Assistance to Tsunami Victims in Japan by sending doctors, nurses and medicine to care for senior citizens at the Refugee Center in Iwate Prefecture, Japan. The Company in cooperation with the Vejdusit Foundation under the Royal Patronage of Her Royal Highness Princess Galyani Vadhana Krom Luang Naradhiwas Rajanagarindra also organized the following activities: awarded 8 scholarships under “2011 Medical, Nursing and Public Health Research Scholarships”, which is in its 9th consecutive year and “Helping the Less Fortunate on Tour 2011” to help the less fortunate, disabled children and underprivileged children in various charitable centers with regards to public health such as annual medical check-ups, dental check-ups, medicines, medicine supplies and others. The challenge for the Bangkok Hospital network in the coming year is not only to grow, but also to instigate customer confidence and continue to take care of Thai society as a hospital for the Thai people. Bangkok Hospital will enter its 41st year as a strong Company that is ready to steadfastly brave the 2015 ASEAN Free Trade. On behalf of the Board of Directors, I would like to express sincere gratitude to customers, shareholders, doctors, nurses and stakeholders for your continued trust and support of the Bangkok Hospital Group. Your support will be the major factor in the organization’s sustainable growth alongside Thai society.

(Professor Emeritus Arun Pausawasdi, M.D.) Chairman of the Board of Directors

(Mr. Prasert Prasarttong-Osoth, M.D.) President

Financial Highlights Revenue from Hospital Operations and Growth Ratios

Net profit and Net Profit Margin

49.8%

11.9%

9.6% 7.9% 8.9% 1.9% 21,597

2009

23,513

2010

35,224

2011

1,725

2,295

2009

2010

4,386

2011

Note: Non-Recurring Items Revenue from Hospital Operations (million Baht) Growth on Revenue from Hospital Operations

Total Assets and Total Liabilities

Net profit (million Baht) Net Profit Margin

Net Interest-Bearing Debt to Equity and Net Interest-Bearing Debt to EBITDA (x)

2.1

58,792 32,197

30,359

25,375 15,612

2009

1.5

0.5

0.4

2010

2011

0.7

15,914

2010

Total Assets (million Baht) Total Liabilities (million Baht)

2011

2009

Net Interest-Bearing Debt to Equity Net Interest-Bearing Debt to EBITDA

2011

2010

2009

Balance Sheets (in million Baht) Total Assets Total Liabilities Total Shareholdersâ&#x20AC;&#x2122; Equity

58,792 25,375 33,417

32,197 15,914 16,283

30,359 15,612 14,747

Income Statements (in million Baht) Revenue from Hospital Operations Operating Income1/ Net profit

35,224 36,726 4,386

23,513 23,968 2,295

21,597 21,945 1,725

Information about Common Shares Share Capital Issue and Fully Paid-up Book Value Per Share (Baht) Basic Earnings Per Share (Baht) Dividend Per Share (Baht)

1,545.5 21.6 3.0 1.12/

1,246.0 13.1 1.9 0.8

1,214.5 12.1 1.4 0.7

Financial Ratios Growth Ratios (%) Growth on Revenue from Hospital Operations Net Profit Growth Profitability Ratios (%) EBITDA Margin (Excluding non-recurring items)1/ Net Profit Margin (Excluding non-recurring items)1/ Net Profit Margin Returns (%) Return on Average Assets Return on Average Equity Assets & Liabilities Management Liquidity Ratio (x) Average Collection (Days) Average Inventory Period (Days) Average Payable Period (Days) Leverage and Coverage ratios) (x) Total Interest-Bearing Debt to Equity Net Interest-Bearing Debt to Equity Net Interest-Bearing Debt to EBITDA Interest Coverage

49.8 91.1

8.9 33.0

1.9 3.8

23.2 10.6 11.9

23.0 9.5 9.6

22.9 7.9 7.9

9.6 18.4

7.3 15.4

5.9 13.0

1.2 27.3 12.2 39.8

0.8 26.7 8.7 31.5

1.5 26.2 7.0 29.8

0.5 0.4 1.5 11.1

0.7 0.5 1.5 9.5

0.8 0.7 2.1 7.8

1/ Excluding non- recurring items which are consisted of gain on fair value adjustment of investments in 2011, gain on a bargain purchase as a result of an acquisition of A.N.B. Laboratories Company Limited in 2010 and loss on redemption of convertible debentures in 2009 2/ Board-approved rate as of 14th March 2012

Continually evolving We dedicate our resources to developing service and technological capabilities in treating patients because we believe that continuous development today will create even better service in the future.

Juristic persons in which the company holds 10% of shares or greater

50-89%

More than 90%

S.R. Property

49.0

14.2

PYT1 100.0

NHS

74.0

Seam Reap

49.0

Udon Pattana

14.9

PSAMUT 88.7

PYT2 99.1

BKH

89.7

PPFP

49.0

PCHOK

80.7

PYT3 97.8

Angkor Pisith

80.0

49.0

PNW

99.8

PYTS 64.6

Royal Rattanak

70.0

B-COP 49.0

BNH

91.5

BHI

100.0

PPCL

BHH

98.8

SVH

95.8

BPB

100.0

PMED 100.0

BSH

100.0

BKY

100.0

67.5

AIH

100.0

Royal Abu Dhabi

BTH

99.8

BDMS International 100.0

Irving 95.0

Royal BKK

100.0

ANB

BCH

99.7

PPMS 100.0

First Health

NPMS 100.0

BPH

97.2

BIO

95.0

BRH

100.0

GLS

100.0

99.0

100.0

97.1

BDMS 100.0 Training Sodexho

Less than 20%

79.0

99.7

30.0

20-49%

BPD

BPK

SSH

as at December 31, 2011

74.0

RAM

38.2

KDH

20.0

COOL & JOY

30.0

Company Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

AIH ANB BCH B-Cop BDMS Inter BDMS Training BH BHH BHI BIO BKH BKY BNH BPD BPH BPK BRH

Asia International Healthcare Co., Ltd. A.N.B. Laboratory Co., Ltd. Wattanavej Co., Ltd. Bangkok Helicopter Services Co., Ltd. BDMS International Medical Services Co., Ltd. BDMS Training Co., Ltd. Bumrungrad Hospital PLC. Bangkok Hospital Had yai Co., Ltd. Bangkok Health Insurance Co., Ltd. Bio-Molecular Laboratories (Thailand) Co., Ltd. Bangkok Hospital Ratchasima Co., Ltd. Bangkok Hospital Khao Yai Co., Ltd. BNH Medical Center Co., Ltd. (BNH) Bangkok Hosital Prapradaeng Co., Ltd. Bangkok Hospital Pattaya Co., Ltd. Bangkok Hospital Phuket Co., Ltd. Bangkok Hospital Rayong Co., Ltd.

18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

BSH BTH Cool & Joy First Health GLS Irving KDH MP NHS NPMS PCHOK BPB PMED PNW PPCL PPFP PPMS

Bangkok Hospital Samui Co., Ltd. Bangkok Hospital Trad Co., Ltd. Cool & Joy Co., Ltd. First Health Food Co., Ltd. Greenline Synergy Co., Ltd. Irving Sheridan SE Co., Ltd. Krungthon Hospital Co., Ltd. Medicpharma Co., Ltd. National Healthcare Systems Co., Ltd. New Petchburi Medical Services Co., Ltd. Siam Medical Co., Ltd. Bangkok Premier Life Insurance Co., Ltd. Paolo Medic CO., Ltd. Thai Medical Center PLC. Prasit Patana Plc. (PPCL) Phnom Penh First Property Co., Ltd. Phnom Penh Medical Services Public Co., Ltd

35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

PSAMUT PYT 1 PYT 2 PYT 3 PYTS RAH RAM Royal Abu Dhabi Royal BKK RRH S.R. Property Seam Reap Sodexho SSH SVH Udon Pattana

Paolo Samut Prakran Co., Ltd. The Phyathai 1 Hospital Co., Ltd. The Phyathai 2 Hospital Co., Ltd. The Phyathai 3 Hospital Co., Ltd. Sriracha Nakorn General Hospital PLC. Angkor Pisith Co., Ltd. Ramkhamhaeng Hospital Plc. Al Ghaith Bangkok Dusit Management Service LLC. Royal Bangkok Healthcare Co., Ltd. Royal Rattanak Medical Services Co., Ltd. S.R. Property Co., Ltd. Seam Reap Invesment Co., Ltd. Sodexo Healthcare Support Service (Thailand) Co., Ltd. Samitivej Sriracha Co., Ltd. Samitivej Plc. Udorn Pattana (1994) Co., Ltd.

Juristic persons in which the company holds 10% of shares or greater Name

Location

Business

Shares issued and paid-up

% held

1 Prasit Patana Plc. (PPCL)

24 Jan 1974

943 Paholyothin Rd., Samsennai, Phyathai, Bangkok

Holding Company

2,341,274,292 Par value Baht 1/share

97.14%

2 The Phyathai 1 Hospital Co., Ltd. Held trough PPCL

11 Dec 2001

364/1 Sri Aduddaya Rd., Phyathai, Radjdhevee, Bangkok

Private Hospital

18,100,000 Par value Baht 10/share

99.99%

3 The Phyathai 2 Hospital Co., Ltd. Held trough PPCL

15 Sep 2007

943 Phaholyothin Rd., Samsennai, Phyathai, Bangkok

Private Hospital

22,511,351 Par value Baht 10/share

99.09%

4 The Phyathai 3 Hospital Co., Ltd. Held trough PPCL

24 Sep 1996

111 Phet Kasem Rd., Pak Khlong Tarat, Phasi Charoen, Bangkok

Private Hospital

Common share 5,442,995 Prefer share 3,750,000 Par value Baht 10/share

5 Sriracha Nakorn General Hospital PLC. Held trough PPCL

17 Feb 1997

90 Sriracha Nakorn Rd., 3 Sriracha, Sriracha, Chonburi Province

Private Hospital

35,954,180 Par value Baht 10/share

64.64%

670/1 Phaholyothin Rd., Samsennai, Phyathai, Bangkok

Private Hospital

30,000,000 Par value Baht 10/share

99.99% 88.73%

6 Paolo Medic CO., Ltd.

Date Registered

as at December 31, 2011

8 Oct 1986

97.76% 100.00%

7 Paolo Samut Prakran Co., Ltd.

30 Jan 1992

123 Srinakarin Rd., Tambon Banmueng, Ampor Mueng, Samut Prakran Province

Private Hospital

8,400,000 Par value Baht 5/share

8 Siam Medical Co., Ltd.

17 Jul 1970

1 Chokchai Rd, 4 Lat Phrao. Khet Lat Phrao, Bangkok

Private Hospital

Common Share 8,700,000 Prefer share 1,300,000 Par value Baht 10/share

9 Thai Medical Center PLC.

27 Jan 1936

44/505 Navamin Rd., Khet Bueng Kum Bangkok

Private Hospital

200,538,671 Par value Baht 10/share

99.76%

10 Bangkok Hospital Khao Yai Co., Ltd.

18 Jul 2007

2 Soi Soonwijai 7, New Petchaburi Rd., Bangkok

Private Hospital

7,000,000 Par value Baht 10/share

100.00%

11 Bangkok Hospital Samui Co., Ltd.

14 Aug 2003

57 Moo 3, Bor Pud, Samui Island, Suratthani Province

Private Hospital

15,000,000 Par value Baht 10/share

100.00%

12 Bangkok Hospital Rayong Co., Ltd.

13 Aug 2002

8 Moo 2, Soi Saengchanniramit Nern Pra, Muang, Rayong Province

Private Hospital

40,000,000 Par value Baht 10/share

100.00%

13 Bangkok Hospital Trad Co., Ltd.

25 Jan 1994

276 Sukhumvit Rd., Muang, Trad Province

Private Hospital

50,000,000 Par value Baht 5/share

99.76%

14 Wattanavej Co., Ltd.

28 Oct 1983

25/14 Thaluang Rd., Muang, Chantaburi Province

Private Hospital

18,000,000 Par value Baht 10/share

99.69%

15 Bangkok Hospital Phuket Co., Ltd.

15 Mar 1994

2/1 Hongyokuthit Rd., Muang, Phuket Province

Private Hospital

100,000,000 Par value Baht 5/share

99.68%

16 Bangkok Hospital Had yai Co., Ltd.

27 Jul 1995

75 Soi 15 Petchkasem Rd., Muang, Songkla Province

Private Hospital

100,000,000 Par value Baht 5/share

98.78%

17 Bangkok Hospital Pattaya Co., Ltd.

1 May 1989

301 Sukhumvit Road km. 143 Pattaya, Chonburi Province

Private Hospital

28,000,000 Par value Baht 10/share

97.22%

18 Samitivej Plc. (SVH)

28 Dec 1976

133 Sukhumvit 49, Klongtan, Wattana Bangkok

100,000,000 Par value Baht 10/share

95.76%

19 BNH Medical Center Co., Ltd. (BNH)

27 Aug 1991

9/1 Convent Rd., Silom, Bangrak, Bangkok

Private Hospital

58,611,935 Par value Baht 10/share

91.48%

20 Bangkok Hospital Ratchasima Co., Ltd.

24 Nov 1992

1308/9 Mitraparp Rd., Nai Muang, Muang, Nakornratchasima Province

Private Hospital

30,000,000 Par value Baht 10/share

89.71%

21 Bangkok Hosital Prapradaeng Co., Ltd.

7 Sep 1993

288 Suksawat, Muang, Samutprakarn Province

Private Hospital

10,500,000 Par value Baht 10/share

79.00%

National Road No.6, Kruos Village, Svay Dangkom Commune, Siem Reap District, Siem Reap Province, Cambodia.

Private Hospital in Camobia

10,000 Par value USD 1,000/share

80.00%

No.11, Street 592, Sangkat Boeung Kak 2, Khan Toul Kok, Phnom Penh, Cambodia.

Private Hospital in Cambodia

6,500 Par value USD 1,000/share

70.00%

Toeuk Thla Village, Russian Federation Blvd., Sangkat Toeuk Thla, Khan Russey Keo, Phnom Penh, Cambodia.

Private Hospital in Cambodia

10,000 Par value USD 1,000/share

100.00%

61A Street 214, Sangkat Beong Rang, Khan Don Peh, Phnom Penh, Cambodia.

Private Hospital in Cambodia

1,000 Par value KHR 9,200,000/share

100.00%

22 Angkor Pisith Co., Ltd.

20 Dec 2005

23 Royal Rattanak Medical Services Co., Ltd.

1 Jun 2007

24 Phnom Penh Medical Services Co., Ltd.

27 Nov 2006

25 B.D.M.S. International Medical Services Co., Ltd.

20 Dec 2005

Private Hospital

(Samitivej Sukhumvit, Samitivej Srinakarin)

(Not yet in operations) (Not yet in operations)

79.93% 86.02%

Name

Date Registered

Location 517 Road No.6, Phum Salakanseng, Khum Svay Damdum, Srok Khet, Siem Reap, Cambodia. 517 Road No.6, Phum Salakanseng, Khum Svay Damdum, Srok Khet, Siem Reap, Cambodia.

26 S.R. Property Investment Co., Ltd.

20 Dec 2005

27 Siem Reap Land Investment Co., Ltd.

10 Feb 2006

28 Phnom Penh First Property Co., Ltd.

27 Nov 2006

29 Bio-Molecular Laboratories (Thailand) Co., Ltd.

7 Nov 2001

2 Soi Soonwijai 7, New Petchaburi Rd., Bangkok

30 National Healthcare Systems Co., Ltd.

25 Jul 2001

31 Asia International Healthcare Co., Ltd. (AIH) 32 Al Ghaith Bangkok Dusit Management Services LLC. Held through (AIH)

Held through SVH and BNH 25.97%

Business

Shares issued and paid-up

% held

Land Holding Company

1,000 Par value KHR 20,000/share

49.00%

Land Holding Company

1,000 Par value KHR 20,000/share

49.00%

No.61 Street 214, Sangkat Beong Rang, Land Holding Khan Don Peh, Phnom Penh, Cambodia. Company

1,000 Par value KHR 20,000/share

49.00%

Bio molecular laboratories

1,000,000 Par value Baht 10/share

95.00%

2301/2 New Petchaburi Rd., Bangkok

Share service company

7,500,000 Par value Baht 10/share

74.02%

17 Jul 2003

2 Soi Soonwijai 7, New Petchaburi Rd., Bangkok

Holding Company

3,500,000 Par value Baht 10/share

100.00%

1 Jun 2007

AI Gaith Tower 14th Floor, Office Number 1401, Hamdan Street, Abu Dhabi, United Arab Emirates

Private Hospital in UAE

10,000 Par value AED 1,000/share

30.00%

33 Greenline Synergy Co., Ltd.

18 Aug 2008

2301/2 Dental center, New Petchaburi Rd., Bangkok

Information technology

20,000,000 Par value Baht 10/share

100.00%

34 Royal Bangkok Healthcare Co., Ltd.

11 Feb 2008

2 Soi Soonwijai 7, New Petchaburi Rd., Bangkok

Holding Company Holds shares of A.N.B Laboratories Co., Ltd.

73,600,000 Par value Baht 10/share

100.00%

Manufacture and distribution of medicine Health insurance

115,000 Par value Baht 1,000/share

100.00%

10,500,000 Par value Baht 10/share

99.94%

35 A.N.B. Laboratory Co., Ltd. Held through

1 Jun 2004

39/1 Ram-Indra Rd., Kannayao, Bangkok

36 Bangkok Health Insurance Co., Ltd.

2 Jan 1981

2 Soi Soonwijai 7, New Petchaburi Road Bangkok

Royal Bangkok Healthcare Co., Ltd.

37 Bangkok Premier Life Insurance Co., Ltd.

29 Aug 2010

2301/2 New Petchaburi Rd., Bangkok

Insurance Broker

400,000 Par value Baht 10/share

100.00%

38 New Petchburi Medical Services Co., Ltd.

20 Dec 2002

2 Soi Soonwijai 7, New Petchaburi Rd., Bangkok

Dormant Company

10,000 Par value Baht 100/share

99.93%

9 Apr 2001

8 Soi Laenkate, Chermjormpol Rd., Sriracha, Chonburi Province

Private Hospital

18,751,000 Par value Baht 10/share

67.52%

40 Medicpharma Co., Ltd.

26 Aug 1971

124 Thonburi-Parktor Rd., Bangkok

2,143,000 Par value Baht 10/share

49.00%

41 Bangkok Helicopter Services Co., Ltd.

29 Jun 1995

1111 Ploenchit Rd., Lumpini, Patumwan Bangkok

Manufacture and distribution of medicine Air medical transport

10,000,000 Par value Baht 10/share

49.00%

42 Cool & Joy Co., Ltd.

20 May 2003

2 Soi Soonwijai 7, New Petchaburi Rd., Bangkok

Public relations and marketing support

500,000 Par value Baht 10/share

30.00%

43 Ramkhamhaeng Hospital Plc. ***

25 Aug 1986

2138 Ramkhamhaeng Rd., Bangkapi, Bangkok

Private Hospital

12,000,000 Par value Baht 10/share

38.24%

44 Bumrungrad Hospital PLC. ***

15 Dec 1989

33 Sukumvith Rd., Soi 3 Klong Tun Nua Wattana, Bangkok

Private Hospital

Common share 728,383,622 Par value Baht 1/share

14.25%

39 Samitivej Sriracha Co., Ltd. Held through SVH

45 Krungthon Hospital Co., Ltd. ***

7 Jan 1993

337 Somdej Prachao Thaksin Rd., Thonburi, Bangkok

Private Hospital

15,000,000 Par value Baht 10/share

20.01%

46 Udorn Pattana (1994) Co., Ltd. ***

9 Jun 1994

555/5 Posri Rd., Muang, Udornthani Province

Private Hospital

30,000,000 Par value Baht 1/share

14.90%

Training Cneter for staff within the network Asset management

100,000 Par value Baht 10/share

100.00%

10,000 Par value Baht 10/share

95.00%

Held trough PPCL and RAM 13.27%

47 BDMS Training Co., Ltd.

23 Sep 2010

2 Soi Soonwijai 7, New Petchaburi Rd., Bangkok

48 Irving Sheridan SE Co., Ltd.

14 Nov 2002

488 Srinakarin Rd., Suanluang, Bangkok

49 First Health Food Co., Ltd.

23 Mar 2004

488 Srinakarin Rd., Suanluang, Bangkok

Restaurant and health food

1,400,000 Par value Baht 10/share

99.99%

23/93 Sornchai Building, Soi Sukhumvit 63, Wattana, Bangkok

Other services

150,000 Par value Baht 100/share

74.00%

Held through SVH Held through SVH

50 Sodexo Healthcare Support Service 15 May 2004 (Thailand) Co., Ltd. Held through First Health

Note *** The Company is a shareholder only and is not involved in management of the business.

Board of Directors Director

1. Mr. Prasert Prasarttong-Osoth, M.D. 2. Mr. Pongsak Viddayakorn, M.D. CEO & President 1st Vice Chairman

3. Mr. Wichai Thongtang 2nd Vice Chairman

7. Mr. Chatree Duangnet, M.D. Director

9. Mr. Thavatvong Thanasumitra Director

8. Mr. Pradit Theekakul Director

Independent Director

1. Professor Emeritus Arun Pausawasdi, M.D. Chairman of the Board of Directors/ Independent Director

2. Professor Emeritus Santasiri Sornmani, M.D. Independent Director

3. Mr. Chawalit Setthmethikul Independent Director

4. Mr. Chuladej Yossundharakul, M.D. 5. Mr. Chirotchana Suchato, M.D. Director Director

6. Mr. Wallop Adhikomprapa Director

10. Miss Kananuch Lekwijit Director

4. Mr. Somchai Sujjapongse, Phd. Independent Director

5. Mr. Sripop Sarasas Independent Director

Company Management

Professor Emeritus Arun Pausawasdi, M.D.

Chairman of the Board of Directors/ Independent Director Age 74 years Education • Directors Accreditation Program Class 45, Thai Institute of Directors Association • Dr. Med, Hamburg University, German • Facharzt fur Chirurgie, The Medical Council of Hamburg, German • Certificate of Medical Clinic, Mahidol University • Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

Experience • Assistant to Ministry of Public Health • President, Royal College of Surgeons of Thailand • Secretary General, Royal College of Surgeons of Thailand • Chairman of Scientific Session Medical, The Medical Association of Thailand • Dean, Faculty of Medicine Siriraj Hospital, Mahidol University • Director of the Medical Association

Bangkok Dusit Medical Services Public Company Limited

Mr. Prasert Prasarttong-Osoth, M.D. CEO & President Age 78 years Education • Directors Accreditation Program Class 45, Thai Institute of Directors Association • Certificate from National Defense College, Course for the Joint State Private Sector, Class 1 • Bachelor Degree from Siriraj Medical School, University of Medicine

Experience • Member of National Legislative Council (Senator) • Member of National Legislative Council • Surgeon in Department of Surgery, Faculty of Medicine Siriraj Hospital

Other Position • Director/ CEO, Bangkok Airways Co., Ltd. • Chairman, Bangkok Airways Holding Co., Ltd. • Chairman, A.N.B. Laboratories Co., Ltd.

Year of appointed to be a director • 1994

Other Position • Chairman, Centre for Continuing Medical Education of Thailand • Vice President, The Prince Mahidol Award Foundation • Member of the Thai medical registration license committee • Vice President, Siriraj Foundation • Director of Chao Phya Hospital PLC • Director of Chao Phya Medical Center Co., Ltd.

Board of Director meeting attendance • 14/14

Number of shareholding* • 162,115,584 Share (10.50%)

Relationship among other management • None

Year of appointed to be a director • 1998

Board of Director meeting attendance • 14/14

Number of shareholding* • 381,781 Shares (0.03%)

Relationship among other management • None

Noted * : Outstanding shares held as of 30th September 2011 includes spouses and dependents

Mr. Pongsak Viddayakorn, M.D.

1st Vice Chairman/ Executive Company Advisor Age 78 years

2nd Vice Chairman Age 65 years

Education

• Honorary Doctorate in Humanities, Universities of Baguio • Directors Accreditation Program Class 45, Thai Institute of Directors Association • Honorary Doctorate in Business Management, Christian University • Certificate from National Defences College • DTM & H Diploma, Faculty of Tropical Medicine and Hygiene, Mahidol University • Post Graduate Study, University of Pennsylvania, USA. • Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

Experience

• President/ Bangkok Dusit Medical Services PCL. • Director of The Medical Heath Care Centre of The Teacher Council of Thailand • Member of consultation committee of the Bangkok Metropolitan Administration Governor (Healthcare) • Chairman, Private Hospital Association • Director of Medical Association

Other Position

• Vice Chairman, Samitivej PLC. • Chairman, Bangkok Phuket Hospital Co., Ltd. • Chairman, Bangkok Ratchasima Hospital Co., Ltd. • Director/Chief Executive Officer, Prasit Patana PLC. • Director/Chief Executive Officer, Phyathai 1 Hospital Co., Ltd. • Director/Chief Executive Officer, Phyathai 2 Hospital Co., Ltd. • Director/Chief Executive Officer, Phyathai 3 Hospital Co., Ltd. • Director/Chief Executive Officer, Srirachanakorn General Hospital PLC. • Director/Chief Executive Officer, Paolo Medic Co., Ltd. • Director/Chief Executive Officer, Paolo Samut Prakarn Co., Ltd. • Director/Chief Executive Officer, Siam Medic Co., Ltd. • Director/Chief Executive Officer, Thai Medical Centre PLC. • Chairman, Bangkok Hospital Khao-Yai Co., Ltd. • Vice Chairman, Angkor Pisith Co., Ltd. • Chairman, B.D.M.S International Medical Services Co., Ltd. • Chairman, National Healthcare Systems Co., Ltd. • Chairman, Bio Molecular Laboratory (Thailand) Co., Ltd. • Chairman, Bangkok Premier Brokerage Insurance Co., Ltd. • Chairman, Bangkok Health Insurance Co., Ltd. • Chairman, Asia International Healthcare Co., Ltd. • Chairman, Royal Bangkok Healthcare Co., Ltd.

Year of appointed to be a director • 1994

Board of Director meeting attendance

Noted

Mr.Wichai Thongtang • Directors Accreditation Program (DAP) # 15 • Audit Committee Program (ACP) # 3 • Directors Certification Program (DCP) # 62 • Financial for Non-Finance Director (FND) # 21 • Role of the Chairman Program (RCP) # 11 • Capital Market Academy # 9 • Master’s Degree of Public Administration, Thammasat University, Bangkok, Thailand • Bachelor’s Degree of Law, Thammasat University, Bangkok, Thailand

Experience • President and CEO of Sikarin Hospital Plc. • Vice Chairman of KPN, Yamaha Group • Chairman of Audit Committee, KPN Automotive Plc. • Chairman of the Board, Health Network Plc. • Chairman of the Board, Yannaphan Plc. • Executive Vice President of IVGlobal Securities

Other Position • Chairman of the Board, Prasit Patana Plc. • Chairman of the Board, Phyathai 1 Hospital Co., Ltd. • Chairman of the Board, Phyathai 2 Hospital Co., Ltd. • Chairman of the Board, Phyathai 3 Hospital Co., Ltd • Chairman of the Board, Sriracha Nakorn Hospital Plc. • Chairman of the Board, Paolo Medic Co., Ltd. • Chairman of the Board, Paolo Samutprakarn Co., Ltd. • Chairman of the Board, Paolo Chokchai 4 Co., Ltd. • Chairman of the Board, Paolo Nawamin Co., Ltd. • Head of the Wichai Thongtang Law Firm • Vice Chairman of Bangkok Dusit Medical Services Plc. • Chairman of the Board of Directors and Executive Director of Grand Asset Hotels and Property Plc. • Executive Vice President of Metromachinery Co., Ltd.

Year of appointed to be a director • 2011

Board of Director meeting attendance

• 14/14

• 8/9**

Number of shareholding*

• 13,629,160 Shares (0.90%)

• 211,518,748 Shares (13.70%)

Relationship among other management

• None

* : Outstanding shares held as of 30th September 2011 includes spouses and dependents (if any). ** : Directors had been appointed by the EGM 1/2011 held on 24th February 2011, which directors were on duty and attend the Board of Directors meeting since Board of director meeting no 4/2011.

Mr. Wallop Adhikomprapa

Mr. Chuladej Yossundharakul, M.D.

Director/ Executive Company Advisor Age 68 years

Director Age 79 years

Education

• Graduate Diploma, Capital Market Academy Class 8, Stock Exchange of Thailand • Graduate Diploma in Public Law and Management Class 6 King Prajadhipok’s Institute • Graduate Diploma in Management of Public Economy Class 4 King Prajadhipok’s Institute • The Role of the Chairman, Class 9, Thai Institute of Directors Association • Directors Certification Program, Class 20, Thai Institute of Directors Association • Senior Executive Program, Sasin Graduate Institute of Business Administration • Master of Science - Accounting, Roosevelt University, USA.

• Directors Accreditation Program Class 45, Thai Institute of Directors Association • Diplomate of American Board of Surgery • Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

Experience • President, Bangkok Dusit Medical Services PCL. • Chief Finance Officer, Bangkok Dusit Medical Services PCL. • Managing Director, Thai Wah Resorts Development Co., Ltd. (Laguna Resort and Hotels PCL)

Experience • Head, Surgical Unit, National Cancer Institute • Hospital Director, Karuna Pitak Hospital • Hospital Director, Bangkok Hospital

Other Position • Chairman, Bangkok Hospital Prapadaeng Co., Ltd. • Director, Bangkok Hospital Pattaya, Co., Ltd. • Director, Bangkok Health Insurance Co., Ltd. • Director, Royal Bangkok Healthcare Co., Ltd.

Year of appointed to be a director • 1994

Board of Director meeting attendance

Other Position

• 14/14

• Vice Chairman, Samitivej PLC. • Director, Bangkok Hospital Khao-Yai Co., Ltd. • Director, Asia International Healthcare Co., Ltd. • Director, Royal Bangkok Healthcare Co., Ltd. • Director, B.D.M.S. International Medical Services Co., Ltd. • Director, Rattanak Medical Services Co., Ltd.

Number of shareholding* • 27,565,795 Shares (1.80%)

Relationship among other management • None

Year of appointed to be a director • 1999

Board of Director meeting attendance • 14/14

Number of shareholding* • 17,521,019 Shares (1.13%)

Relationship among other management • None

Noted * : Outstanding shares held as of 30th September 2011 includes spouses and dependents

Mr. Chirotchana Suchato, M.D. Director Age 76 years

Mr. Chatree Duangnet, M.D.

Education

Director/ CEO of Bangkok Hospital Medical Center Age 67 years

• Directors Accreditation Program Class 45, Thai Institute of Directors Association • Diplomate of American Board of Radiology, Downstate University of New York • Graduated Course Radiobiology at M.D. Anderson Hospital, Houston, Texas • Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

Education

• Directors Accreditation Program Class 54, Thai Institute of Directors Association • Certified of National Defense College • Fellow, American College of Medical Quality • Certified, American Board of Quality Assurance & Utilization Review Physicians • Fellow, American Academy of Pediatrics • Certified, American Board of Pediatrics • Medical Doctor, Faculty of Medicine, Chulalongkorn University

Experience

• School Director, School of X-Tray Technician • Professor of Radiology division, Faculty of Medicine, Ramathibodi Hospital • Consultant to Radiology, Clinic of The Teacher Council of Thailand

Other Position • Chairman, Bangkok Hospital Pattaya Co., Ltd. • Director, Bangkok Hospital Phuket Co., Ltd. • Director, Bangkok Hospital Khao-Yai Co., Ltd. • Director, Bangkok Health Insurance Co., Ltd. • Director, Bangkok Premier Brokerage Insurance Co., Ltd. • Director, Asia International Healthcare Co., Ltd. • Director, Royal Bangkok Healthcare Co., Ltd.

Year of appointed to be a director • 1994

Board of Director meeting attendance • 14/14

Number of shareholding* • 39,273,009 Shares (2.54%)

Relationship among other management • None

• Group Chief Medical Officer, Bumrungrad Hospital, Bangkok • Chief Executive Administrator, Bangkok Hospital • Clinical Assistant Professor of Pediatrics, College of Medicine, 15 Pennsylvania State University, Pennsylvania, USA • Chairman of the Board, Jameson Physician Hospital Organization, New Castle, Pennsylvania, USA • President, Lawrence Independent Physician Association, Lawrence County, Pennsylvania, USA • Physician Executive, Jameson Health System, New Castle, Pennsylvania, USA • Training courses in QA/UR/RM. American Board of Quality Assurance & Utilization Review Physicians, USA

Other Position

• Deputy of CEO, Bangkok Hospital Ratchasima Co., Ltd. • Director, Bangkok Hospital Samui Co., Ltd. • Director, National Healthcare Systems Co., Ltd. • Director, Bio Molecular Laboratory (Thailand) Co., Ltd. • Director, Bangkok Helicopter Services Co., Ltd. • Director, B.D.M.S International Medical Services Co., Ltd. • Director, Angkor Pisith Co., Ltd. • Director, Phnom Penh Medical Services Co., Ltd. • Director, Rattanak Medical Services Co., Ltd. • Director, Bangkok Health Insurance Co., Ltd. • Director, Asia International Healthcare Co., Ltd. • Director, Greenline Synergy Co., Ltd. • Director, Sodexho Healthcare Support Services (Th) Co., Ltd. • Director, Royal Bangkok Healthcare Co., Ltd. • Director, Supeior Bio Tech Co., Ltd.

Year of appointed to be a director • 2006

Board of Director meeting attendance • 14/14

Number of shareholding* • 150,000 Shares (0.01%)

Relationship among other management • None

Noted * : Outstanding shares held as of 30th September 2011 includes spouses and dependents

Mr. Pradit Theekakul Director/ Acting Executive Vice President Age 53 years Education

• Directors Certification Program Class 29th, Thai Institute of Directors Association • Bachelor Degree of Law Chulalongkorn University/ Bangkok • The Thai Barrister • Bachelor Degree or Arts (Political Science) Ramkamhaeng University/ Bangkok, Thailand

Other Position

• Director, Samitivej PCL. • Director, Prasit Patana Plc. • Director, Phyathai 1 Hospital Co., Ltd. • Director, Phyathai 2 Hospital Co., Ltd. • Director, Phyathai 3 Hospital Co., Ltd. • Director, Sriracha Nakorn Hospital Plc. • Director, Paolo Medic Co., Ltd. • Director, Paolo Samutprakarn Co., Ltd. • Director, Paolo Chokchai 4 Co., Ltd. • Director, Paolo Nawamin Co., Ltd. • Director, Bangkok Helicopter Services Co., Ltd. • Director, A.N.B. Laboratories Co., Ltd. • Director, BDMS Training Co., Ltd. • Director, Sodexho Healthcare Healthcare Support Service Co., Ltd. • Director, Sodexho Healthcare Support Services (Th) Co., Ltd. • Senior Executive Vice President-Administration Bangkok Airways Co., Ltd. • Managing Director, Air Lanka Catering Service Co., Ltd. • Director, Thai Petroleum Service Co., Ltd. • Chairman, Bangkok Air Catering, WFS-PG Cargo Co., Ltd. • Director, Worldwide Flight Services Bangkok Air Ground Handling Co., Ltd.

Professor Emeritus Santasiri Sornmani, M.D. Chairman of Audit Committee/ Independent Director Age 77 years Education • Directors Accreditation Program Class 43, Thai Institute of Directors Association • Ph.D. (Tropical Medicine), Liverpool University • Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

Experience • Vice President for Administration, Mahidol University • Dean, Faculty of Tropical Medicine, Mahidol University • Member, Expert Committee on Food Borne Parasitic Diseases, WHO

Other Position • Chairman, The Medic Pharma Co., Ltd. • Vice Chairman, Chureevej Co., Ltd. (Chureevej Hospital)

Year of appointed to be a director • 1994

Board of Director meeting attendance • 13/14

Number of shareholding* • 1,715,127 Sheres (0.11%)

Relationship among other management • None

Year of appointed to be a director • 2008

Board of Director meeting attendance • 14/14

Number of shareholding* • 3,400,000 Sheres (0.22%)

Relationship among other management • None

Noted * : Outstanding shares held as of 30th September 2011 includes spouses and dependents

Mr. Thavatvong Thanasumitra

Mr. Chawalit Setthmethikul

Education

Director Age 64 years

• Directors Certification Program Class 27th, Thai Institute of Directors Association • Bachelor of Law, Thammasart University

Experience • Managing Director, Air Lanka Catering Service Co., Ltd.

Other Position • Director, Senior Executive Vice President of Finance, Bangkok Airways Co., Ltd. • Vice President, Catering-Bangkok Airways • Director, Bangkok Helicopter Services Co., Ltd. • Managing Director, Thai Petroleum Service Co., Ltd. • Chairman, Bangkok Air Catering, WFS-PG Cargo Co., Ltd. • Director, Worldwide Flight Services Bangkok Air Ground Handling Co., Ltd.

Year of appointed to be a director • 1999

Board of Director meeting attendance • 14/14

Number of shareholding* • 3,501,256 Sheres (0.23%)

Relationship among other management • None

Independent Director Age 64 years

• Bachelor of Laws (LL.B.) (Second Class Honors), Thammasat University • Barrister at Law, Institute of Legal Education, Thai Bar Association • Diploma from National Defence College of Thailand, Class 40 • Master of Political Science (M.Pol.Sc), Public Administration, Thammasat University • Directors Accreditation Program Class 6/2003, Thai Institute of Directors Association • Director Certification Program (DCP) Class 74, Thai Institute of Directors Association

Experience • Director General of The Thai Customs Department, Ministry of Finance • Deputy Permanent Secretaries of Ministry of Finance • Inspector of Ministry of Finance • Deputy Director-General: The Excise Department of Ministry of Finance • Chairman: The Board of Small Business Credit Guarantee Corporation • Vice Chairman: The Board of Metropolitan Electricity Authority • Vice President: The Board of Airports of Thailand PCL. • Director: Office of The council of State • Director: The Thai BAR

Other Position • Chairman of The Board of Directors: Hemaraj Land and Development PCL. • President: Sriracha Harbour PCL.

Year of appointed to be a director • 2011

Board of Director meeting attendance • 9/9**

Number of shareholding* • None

Relationship among other management • None

Noted

Mr. Somchai Sujjapongse, Phd.

Mr. Sripop Sarasas

Education

Independent Director/ Member of Audit Committee Age 50 years

• Ph.D. (Economics) 1990 The Ohio State University/ Columbus, Ohio, U.S.A. • M.A. (Economics) 1985 The Ohio State University/ Columbus, Ohio, U.S.A. • B.A. (Economics) (Hons.) 1984/ Chulalongkorn University/ Bangkok, Thailand • Directors Certification Program Class75th, Thai Institute of Directors Association

Experience

Independent Director/ Member of Audit Committee Age 55 years • Certificate, Audit Committee Program - ACP 1/2004 Thai Institute of Directors • Certificate, Director Certification Program 22/2002 Thai Institute of Directors • Diploma Thai Institute of Directors • Master Degree in Business Administration (Finance) University of Southern California, U.S.A.

Experience

• Director-General State Enterprise Policy Office (SEPO) • Director-General The Customs Department, Ministry of Finance • Director-General Fiscal Policy Office, Ministry of Finance • Fiscal Policy Advisor Fiscal Policy Office Ministry of Finance • Deputy Director-General Fiscal Policy Office/ Ministry of Finance • Director, Bureau of Fiscal Policy Fiscal Policy Office/ Ministry of Finance • Director, Fiscal Risk Management Group Fiscal Policy Office/ Ministry of Finance • Director, Fiscal Policy and Planning Division Fiscal Policy Office/ Ministry of Finance • Director, Savings and Investment Policy Division Fiscal Policy Office/ Ministry of Finance • Director, Economic Rehabilitation Planning and Policy Division

• President & CEO Krung Thai Asset Management PCL • Managing Director/ Phatra Securities PCL. • Chief Executive Officer General Environmental Conservation PCL.

Other Position

Year of appointed to be a director

• Director, Board of Metropolitan Electricity Authority • Director, Board of Aeronautical Radio of Thailand • Director, Board of Thai Oil Public Company Limited

Other Position • Director/ Member of Audit Committee The Royal Ceramic Industry PCL. • Director/ Member of Audit Committee Advanced Information Technology PCL. • Director/ Member of Audit Committee Living Land Capital PCL. • Director/ Member of Audit Committee Kiattana Transport PCL. • 2008

Board of Director meeting attendance

Year of appointed to be a director

• 14/14

• 2011

Number of shareholding*

Board of Director meeting attendance

• None

• 9/14

Number of shareholding* • None

Relationship among other management • None

Noted * : Outstanding shares held as of 30th September 2011 includes spouses and dependents

Miss Kananuch Lekwijit Independent Director/ Member of Audit Committee Age 55 years

Mrs. Narumol Noi-am Chief Financial Officer Age 54 years Education

• 2011

• MBA Banking and Finance, from North Texas State University, USA • Bachelor of Economics (second class honors) Faculty of Economics from Chulalongkorn University, Thailand • Graduate Diploma Advanced Certificate Course in Politics and Governance in Democratic Systems for Executives, class 13 King Prajadhipok’s Institute • Successful Formulation & Execution of Strategy Class 6/2010 by Thai Institute of Directors Association • Directors Certification Program Class 107 by Thai Institute of Directors Association • Financial Executive Development Program Class 12 by The Thai Institute of Banking and Finance for Executives 19 from Financial Institutions • Applied International Management Program, Sweden by Government of Sweden

Board of Director meeting attendance

Experience

Education • Master of Art (M.A.) from Kasetsart University • Directors Certification Program Class 27th, Thai Institute of Directors Association

Experience • Director of Kornthip Company Limited • Director of Metro Granite Company Limited • Director of Health Network Public Company Limited

Other Position • Director of Paolo Medic Company Limited • Director of Saithong Business Company Limited

Year of appointed to be a director

• 3,204 Sheres (0.0002%)

• Senior Vice President, Investment Banking Department TMB Bank Public Company Limited • Senior Vice President, Finance Department Industrial Finance Corporation of Thailand

Relationship among other management

Other Position

• 9/9**

Number of shareholding* • None

• Director, Bangkok Hospital Pattaya Co., Ltd. • Director, Bangkok Phuket Hospital Co., Ltd. • Director, Prasit Patana Plc. • Director, Phyathai 1 Hospital Co., Ltd. • Director, Phyathai 2 Hospital Co., Ltd. • Director, Phyathai 3 Hospital Co., Ltd • Director, Sriracha Nakorn Hospital Plc. • Director, Paolo Medic Co., Ltd. • Director, Paolo Samutprakarn Co., Ltd. • Director, Paolo Chokchai 4 Co., Ltd. • Director, Paolo Nawamin Co., Ltd. • Director, National Healthcare System Co., Ltd. • Director, Greenline Synergy Co., Ltd. • Director, Bangkok Helicopter Services Co., Ltd. • BDMS Training Co., Ltd.

Number of shareholding* • None

Relationship among other management • None

Noted * : Outstanding shares held as of 30th September 2011 includes spouses and dependents (if any). th

** : Directors had been appointed by the EGM 1/2011 held on 24 February 2011, which directors were on duty and attend the Board of Directors meeting since Board of director meeting no 4/2011.

Caring with our hearts

There is only one thing that can convey good feelings, that is caring with our hearts. A mere touch from the giver can convey the sincerity to the receiver.

Corporate Social Responsibility Fair Business The objective of Bangkok Hospital is to provide full cycle medical services for the highest satisfaction of consumers. We are determined to devote ourselves to achieve this objective. We provide the highest quality medical services that meet international standards under medical ethics in healing and caring for patients using state-of-the-art technology. Furthermore, we provide training to our medical staff so that they have high expertise in order to provide quality care for our patients.

Responsibility to Patients The Company recognizes that our patients are an important success factor in our business. We endeavor to provide customer satisfaction with high quality services. Apart from responsibilities under medical ethics as stated in “Policy Towards Patients” in the Good Corporate Governance Report (Annual Report page 64), in 2011, Bangkok Hospital also organized many activities and projects to show our responsibility and care to our patients as follows: 1. “Big Give: Born Here, Delivered Here, Without Cost” in honor of National Mother’s Day and to celebrate our 40th anniversary. The first 40 babies or “Daughters of Bangkok Hospital” were delivered at Bangkok Hospital free of charge to show our thanks to our customers. 2. “We Want You to Ask” is a project aimed to create a standard of service with safety for our patients and their families as part of the medical care provided. The objective is for all patients to safely participate in their medical care with safety goals such as caring for the right patient whereby doctors and nurses will ask the first and last name and date of birth of the patient each time before providing medical services, efficient communication with the patients, aim to safely provide the right medication, as well as ensuring that patients and relatives are safe from infection and safe from slipping or falling. 3. Research in developing the quality of processes in providing services to reduce the time and cost of treatment for our patients, such as • Project “We Are Ready” by the Heart Operation (OR) Unit. • Project “Streamlining of Patient Flow: the Improvement of Patient Care” by the Department of Oncology Imaging and Radiation Therapy. • Project “One Stop Service” by the Department of Internal Medicine. • Project “Shortened Length of Stay (LOS) and Decreased Cost of Treatment by Effective Use of Disposable Pump” by the Cancer Clinic, the Breast Clinic, the Chemotherapy Service Unit, the Palliative Medicine Clinic, the Surgical Oncology Clinic, Ward 4W, Ward 5W and Ward 6W.

Environmental Conservation Building Energy Award of Thailand 2010 (BEAT 2010): The Company entered the Building Energy Award of Thailand 2010 organized by the Energy Policy and Planning Office (EPPO), Ministry of Energy to improve energy efficiency in the buildings and also to be a medium in “creating conscience and finding ways to save energy” for the Thai people. The Company entered BEAT 2010 for the period April 2010 to August 2011 with the goal to have a building that would be a good example of energy management and to become a knowledge base for similar buildings as well as create a conscience for energy saving.

Education • Scholarship for Medical, Nursing and Public Health Research 2010: The Vejdusit Foundation awarded 8 scholarships from a total of 49 candidates. This has been our 9th year in awarding such scholarships and to-date, we have awarded a total of 52 scholarships. • Academic Scholarships to Children of Employees: Bangkok Hospital has awarded such scholarships every year and 2011 marks the 17th year of our academic scholarships. A total of 146 scholarships have been awarded to children of our employees totaling Baht 730,000.

Community and Social Development1. Quality of Life • Project “Health Check-Ups for Senior Citizens of Sai Jai Thai Foundation”: The Sai Jai Thai Foundation in cooperation with Bangkok Hospital and the Ministry of Health initiated the project to show our concern for senior citizen members of Sai Jai Thai who may have greater opportunity to get sick. These senior citizens need special care both physically and mentally. The project was initiated in the central region at Bangkok Hospital with a total of 127 members aged over 55 at no cost.

• Project “Urbanites Unite for Good Health”: Bangkok Hospital has organized this yearly event for the past 15 years to provide basic medical check-up and ambulances to standby for people who exercise at Lumpini Park. Furthermore, Bangkok Hospital organized activities to provide knowledge on health care by panels of expert doctors and game every first Sunday of the month.

2. Society and Community Service • Providing Assistance to Tsunami Victims in Japan: Bangkok Hospital in cooperation with AMDA International Medical Information Center provided assistance to Tsunami victims in Japan by sending doctors, nurses and medicine to care for senior citizens at the Refugee Center in Iwate Prefecture, Japan. Moreover, the Bangkok Hospital Group and the Samitivej Hospital Group donated money to help the victims of the natural disaster through the Embassy of Japan and the Japanese community in Thailand. • Providing Relief to Victims of the Flooding in the South: The Bangkok Hospital Group and Vejdusit Foundation donated medical supplies, food and other necessities worth Baht 10 million. Bangkok Hospital together with Bangkok Airways provided relief to people in various provinces in the South who were affected by the flooding and sent teams of doctors and nurses to provide medical check-ups. Furthermore, we also provided 24-hour emergency helicopter service (SKY ICU) to quickly transport severe patients, pregnant women nearing their term, children and people with major injuries in the affected areas, to various hospitals.

Images of 2011 Flood

We are a Thai hospital, when Thais are in need, we do not just stand by and watch.

• Project “Bangkok Hospital Group Prepare for the Flood”: In preparation for the flooding, the Company divided operations into 2 parts. The first part was the safeguarding of areas within the Hospital (SAVE HOSPTIALS = SAVE PATIENTS). This included preparation by reserving fuel, food, water, medicine and medical supplies. In case of flooding, the hospitals will be able to continue providing services for 2 months. Apart from precautions within the hospitals, we also planned to take care of the communities surrounding the hospitals by sending engineers to provide consultation, donating sand bags, as well as build barriers for those in need. Moreover, in providing relief to victims of the flooding, the Bangkok Hospital Group provided rapid relief by sending SKY ICU, medical airboat and mobile medical unit into the affected areas during the 2 months. The Group fully cooperated with the public sector, including the Ministry of Health, the Emergency Medical Institute of Thailand, the press and rescue units, as well as local administration organizations, in providing assistance, sending food, basic medicines for the home and medical supplies. The Group also provided critical patient transport, mobile medical unit to provide preliminary check-ups to victims of the flooding, medical care to patients who transferred from the public sector and donated funds to various organizations such as the Thai Chamber of Commerce, the Thai Listed Companies Association, Matichon Newspaper and the Royal Thai Army. Furthermore, the Group joined with BTS in providing mobile check-ups and sky medical units to consult on health issues and flood-related diseases. The total amount of relief provided by the Group as of 31st December 2011 was Baht 27.3 million. • Her Royal Highness Princess Maha Chakri Sirindhorn granted an audience to Dr. Prasert Prasarttong-osoth, CEO & President to present a Toyota Commuter 15-seat van equipped with medical equipment for the Thai Red Cross Rehabilitation Center to transport patients. • Vejdusit Foundation Activities The Vejdusit Foundation was established in 1984. Throughout the 26 years, Vejdusit Foundation has helped Thai society in terms of medical care and public health in various forms such as providing medical care to people with no means, donating medical equipment and supplies to public hospitals, supporting medical research, and donating vaccines, medical equipment and supplies, medicine and daily necessities to people of need. In 2011, Vejdusit Foundation organized the following activities: 1. The directors of Vejdusit Foundation were granted an audience with Her Royal Highness Princess Maha Chakri Sirindhorn on Wednesday, 23rd March 2011 at the Dusidalai Pavillion on the grounds of Chitralada Palace to present 1,200 knitted hats from the project “BigHat BigGive” to relieve the cold for underprivileged children in remote areas in the North. The Directors once again donated another 1,200 knitted hats on Wednesday, 25th January 2012.

2. Helping the Less Fortunate on Tour 2011: activities to help the less fortunate with regards to public health such as annual medical check-ups, dental check-ups, medicines, medicine supplies and others as follows: - Helping disabled children at The Bangkok School For The Blind - Providing prostheses via contributions to The Prostheses Foundation of H.R.H. the Princess Mother - Helping underprivileged children at Rajvithi Home for Girls - Helping underprivileged children at Mahamek Home for Boys - Helping underprivileged children at Saeng Thien Group Foundation - Helping underprivileged children at Maharaj Foundation - Helping underprivileged children at Thanyaporn Home for Girls - Helping underprivileged children at Chantaram School, Chantaburi Province

3. Project to assist flood victims: the Bangkok Hospital Network donated money to government agencies such as the Royal Thai Army, the Revenue Department, and the Pharmacy For Society Foundation to support production of medicine to treat athleteâ&#x20AC;&#x2122;s foot. In addition, Bangkok Hospital deployed mobile medical units with doctors and nurses providing medical checkups as well as distributing food, medicin.

Medical teams visit communities to provide medical check-ups to senior citizens at home.

Thailandâ&#x20AC;&#x2122;s first Medical Airboat assists in transporting patients in flooded areas.

Images of 2011 Flood

Visiting victims of the flood by helicopter in order to reach the victims faster.

The medical team helps to bandage a head wound at the underpass in Om-noy Dictrict.

Bangkok Hospital network I cooperation with the Emergency Medical Institute of Thailand (EMIT) sent medical teams to help transfer patients using helicopters from the Ministry of Agriculture and Cooperatives.

Nurses visited the affected areas to distribute medicine and food despite the high water level.

The medical team prep the patient before transporting to the hospital.

Images of 2011 Flood

Many people volunteered once they knew that we would be helping those affected by the flood. No one asked about compensation. Everyone wanted to help wholeheartedly.

The Bangkok Hospital Group celebrated the great achievement of entering the 40th year of Bangkok Hospital.

“The Symphony of Life”

The leader in medical technology with the largest medical service network in Thailand. With the resolution to follow the Company’s vision and determination to fulfill the mission statement in providing healthcare services to patients of all nationalities and languages, as well as the determination to develop medical staff and technology to meet international standards. “People” and “technology” are two of the important factors that go hand-in-hand in providing the best medical services and it is why we have been entrusted with our clients’ health for the past 4 decades.

Nature of Business History

Bangkok Dusit Medical Services Public Company Limited was registered on 30th October 1969 under the name “Bangkok Dusit Medical Services Company Limited” with an initial registered capital of Baht 10 million. On 26th February 1972, Bangkok Hospital commenced operations in providing medical services. The Company was later listed on the Stock Exchange of Thailand on 2nd October 1991 and registered its conversion to public company limited in 1994. Presently, the Company has a registered capital of Baht 1,553.40 million, with paid-up capital of Baht 1,545.46 million.

Major Developments in the Past Five Years 2007 - The Company, holding 100%, established a new subsidiary under Global Medical Network Company Limited to establish a private hospital in Hua Hin, Prachuapkhirikhan Province. Presently, the company has changed its registered name to Bangkok Hospital Hua Hin Company Limited. - Royal Angkor International Hospital, a 21-bed hospital in Siem Riap, Cambodia under the management of Angkor Pisith Co., Ltd., a subsidiary in which the Company holds 80%, opened for business on 15th January 2007, with the grand opening held on 19th November 2007. - Royal Rattanak Hospital, a 30-bed hospital in Phnom Penh, Cambodia, under management of Royal Rattanak Medical Services Co., Ltd., in which the Company holds 70 percent, opened for business on 1st September 2007. - The Company bought additional shares of Ramkhamhaeng Hospital Public Company Limited or “RAM”, increasing holdings from 19% to 26.2%. Later, the Company made a bid offer for the remaining shares of RAM during 4th January 2008 through 7th February 2008 at the price of Baht 480 per share. After the bid, the Company held 38.2% of RAM shares outstanding. 2008 - The Company established Greenline Synergy Company Limited to act as the center for information technology. The aim of this new company is to standardize information technology within the Group for the best interests of the end users and to lower costs associated with information technology developments. The Company holds 100% of Greenline Synergy. - The Company bought the 256-slice multi-detector CT scan, the newest innovation in high-speed, computerized x-ray to detect and diagnose acute coronary syndrome at Bangkok Heart Hospital. 2009 - The Company established the Bangkok Hospital Khao Yai Company Limited, with Baht 70 million capital and holding 100% of the total shares outstanding, to operate a private hospital in Park Chong, Nakornratchasima Province. - The Company bought 114,391,922 shares of rights issues of of Prasit Pattana Public Company Limited at Baht 1 per share, increasing the Company’s ownership from 16.31% to 16.95%. The Company also bought additional shares from the existing shareholders, which increased the Company’s ownership to 19.47%.

- The Company installed the Tele Interpreter system to improve communications between physicians and patients from overseas. The system employs the videophone to provide interpreters in 26 languages. There are applications that provide interpretation of 3 major languages, namely, Japanese, Arabic and English. Interpreters are available 24 hours a day using Unified Communication technology. The system is installed on the physicians’ and interpreters’ computers for communication and exchanging of information. In the case that the interpreter is outside the hospital, the interpreter can use the Wireless IP Phone to communicate at any time. - The Spine Academy, Bangkok Hospital acquired surgical instruments to assist in providing the best spine and brain surgery. • Intraoperative CT scanner, or O-arm, photographs the spine and the surrounding areas using Computerized Tomography through X-Ray. The resulting photograph is precise and pinpoints the spine during surgery, enabling surgeons to operate on small areas or in pinning the spine with the highest accuracy. • Surgical Navigator (“Stealth 7”) an innovative instrument used in spine and brain surgery, which assists the surgeon in accurately determining the exact location of brain tumors or various points in the spine to within a fraction of a millimeter.

2010 - The Company invested in Krungthon Hospital Public Company Limited “KDH”, a company listed on the Stock Exchange of Thailand and operating a 150-bed private hospital, by acquiring shares from existing shareholders of KDH with initial investment equal to 16.82% of registered and paid-up capital of KDH. Later, the Company acquired additional shares through the Stock Exchange of Thailand, resulting in total number of shares held equal to 20.01% of registered and paid-up capital of KDH. - The Company increased capital in Greenline Synergy Company Limited, a subsidiary in which the Company holds 100%, from Baht 30 million to Baht 200 million in order to improve information technology services provided to the Group. - Wattanosoth Hospital, the cancer hospital, opened the Bangkok Hematology Center on 20th August 2010 to provide medical care to patients with blood disease by a team of hematology physicians and diagnosis laboratory which meets high standards, as well as a blood bank to store and reserve blood. The Bangkok Hematology Center provides efficient holistic medical care to patients with blood disease. - The Company went through some restructuring. On 28th October 2010, the Company executed an Entire Business Transfer of Bangkok Hospital Hua Hin Company Limited, a subsidiary in which the Company holds 100% and was established as a 60-bed private hospital in Hua Hin, Prachuabkirikhan Province. The purpose of the Entire Business Transfer was to transfer operations of the Bangkok Hospital Hua Hin from the subsidiary to Bangkok Dusit Medical Services Public Company Limited, as a branch of Bangkok Hospital in Hua Hin, in order to reduce management costs and increase flexibility in management of operations and resources, especially in management of medical personnel, which will increase operational efficiency to meet the Company’s policy.

The Bangkok Hospital Hua Hin is an investment project which received support from the Board of Investment. The investment capital is approximately Baht 850 million. On the day of the entire business transfer, Bangkok Hospital Hua Hin was still under construction and not yet in operation. After the transfer of the business and all assets to the parent company, the Bangkok Hospital Hua Hin Company Limited registered the closing of the business on 5th November 2010 and is currently in the liquidation process. - The Company increased capital in Royal Bangkok Healthcare Company Limited, a subsidiary in which the Company holds 100%, from initial registered capital of Baht 1.0 million to Baht 736.0 million. The increased capital was used to acquire all shares of A.N.B. Laboratories Company Limited (“ANB”) from existing shareholders on 1st December 2010 with total investment of Baht 734.0 million. ANB is the 4th largest producer of saline in the country. In addition, the company also produces and distributes medicine and medical supplies with exports equaling about 20% of total sales. - The Board of Directors’ special agenda meeting 2/2010 on 14th December 2010 approved the merger of the Company and Health Network Public Company Limited (Phyathai Hospital Group and Paolo Hospital Group) through an Entire Business Transfer of Health Network Public Company Limited, which is majority held by Mr. Wichai Tongtang and family. The Company shall pay a total of no more than Baht 9,825,357,789 for the merger, comprised of newly issued common shares of the Company in the amount of no more than 230,870,405 shares at Baht 37.75 per share, equal to no more than Baht 8,715,357,789 and cash of approximately Baht 680,000,000, as well as transfer of load debt and interest incurred from Health Network in the amount of no more than Baht 430,000,000. - The Company invested in an Open MRI 1.0 T, the only such machine in Thailand. Patients do not need to enter the tunnel when getting a scan as before, which greatly reduces patient’s anxiety of confined spaces and does not require anesthesia. - The Bangkok Spine Academy has performed minimal invasive spine surgery using a microscope to reduce pain and blood loss and for faster recuperation. - The Bangkok Heart Hospital and the Pacific Rim Electrophysiology Research Institute established the “Pacific Rim Electrophysiology Research Institute at Bangkok Hospital” and the “Cardiac Electrophysiology Clinic” headed by Dr. Koonlawee Nademanee, an American Board cardiologist specializing in cardiac electrophysiology. The Institute provides diagnosis and treatment of a variety of irregular heart rhythms (cardiac arrhythmias) using catheter ablation, electrophysiology and cardiac device implantation. - The Company invested in the Bi-plane DSA used in diagnosis and treatment of strokes and other blood vessels with visual effects using 2 megapixel digital imaging. The technology enables doctors to more efficiently diagnose by creating 3 dimension imaging, which can clearly show blood vessels that are as thin as a strand of hair. 2011 - In February 2011, the Company invested in 46,116,400 common shares of Bumrungrad Hospital Public Company Limited (“BH”), equal to 6.32% of outstanding shares sold of BH, as well as invested in 35,000,000 units of NVDR

or 4.79% of shares outstanding of BH. The Company later exercised the 1:1 conversion of NVDR to common shares, as well as invested in additional common shares of BH. Presently, the Company holds 103,827,600 shares or 14.25% of shares outstanding of Bumrungrad Hospital Public Company Limited. - The Company registered additional capital of Baht 1,481,034,024 on 1st April 2011 to pay for the entire business transfer of Health Network Public Company Limited in accordance with the Extraordinary Meeting of the Shareholders 1/2011 on 24th February 2011. This resulted in the Company holding 68.64% from 19.47% of Prasit Pattana Public Company Limited (Phyathai Hospital Group: Phyathai Hospital 1-3 and Phyathai Hospital Sriracha). In addition, the Company now holds shares of 4 companies within the Paolo Memorial Hospital Group, namely, 100% of Paolo Medic Company Limited (Paolo Memorial Hospital Phaholyotin), 88.73% of Paolo Samutrprakarn Company Limited (Paolo Memorial Hospital Samutrprakarn), 80.72% of Siam Medical Company Limited (Paolo Memorial Hospital Chokchai 4) and 99.76% of Thai Medical Center Public Company Limited (Paolo Memorial Hospital Nawamintr). Consequently, after the mergers, the Company now has 27 hospitals in the Group, from 19 (25 hospitals in Thailand and 2 hospitals in Cambodia), with a total of 4,987 beds, up from 3,193 beds. - The Company made a tender offer on Prasit Pattana Public Company Limited (“PYT”) with a period of 25 business days from 8th April to 23rd May 2011. Payment was offered in two ways, namely, Baht 3.71 cash per share or common shares of the Company (“BGH”) at 10.1706 PYT shares for 1 BGH share. The respondents must choose either option. 34

After the tender offer, the Company held 97.10% of PYT outstanding shares, up from 68.64%. The Company issued 64,366,277 rights shares to respondents who chose to receive BGH shares, resulting in Baht 1,545,400,481 of paid-up capital from Baht 1,481,034,024. - The Company increased paid-up capital by another Baht 58,200 to accommodate the conversion of the convertible bonds to common shares of the Company, resulting in a paid-up capital of Baht 1,545,458,883. The convertible bonds matured in July 2011, therefore, the Company no longer has any convertible bond obligations. - The Company invested in an additional 1,474,000 common shares of Udon Pattana (1994) Company Limited (Ake Udon Hospital) equal to 4.9%, resulting in 4,474,000 shares or 14.9% of shares outstanding, up from 3,000,000 shares or 10%. When including ownership of Udon Pattana shares through Prasit Pattana Public Company Limited and Ramkamhaeng Hospital Public Company Limited, a subsidiary and associated company respectively, the Company holds 28.17% of shares outstanding of Ake Udon Hospital. - The Company set up a subsidiary, “Bangkok Premier Life Insurance Broker Company Limited” with registered and paid-up capital of Baht 4.0 million (Baht 10 par value). Services - The Company officially commenced operations of Bangkok Hospital Hua Hin on 6th April 2011. Construction on the Hospital started on 11th November 2009 on 14 rai of land and began providing medical services under Bangkok Hua Hin Medical Clinic on 1st November 2010. The Bangkok Hospital Hua Hin is comprised of 5 floors with 60 beds. The first floor accommodates outpatients and emergency services. The second floor houses surgery theaters

and ICU. On the third floor, there are the Bio Molecular Laboratory, Administration offices, Executive offices and training facilities. The fourth and fifth floors are for in-patient rooms. Total usable area is 12,000 square meters. The helicopter pad for patient transfers to hospitals in Bangkok is on the 6th floor. - Bangkok Hospital opened the Bangkok Sports and Exercises Medicine Center and uses sports and exercise medicine in healing and developing physical ability of athletes, both professionals and amateurs, both national team athletes and the general public, so that they may play sports or exercise efficiently with less injury. The Center also provides rehabilitation after playing sports by expert physicians in sports medicine. In addition, Bangkok Hospital provided medical check-ups to Thai national team athletes for SEA Games, Asian Games and the Olympic Games, as well as sponsored the Football Association of Thailand, taking care of the Thai national football team for more than 15 years. - Wattanosoth Hospital performed advanced medicine by utilizing PET/CT in detecting brain cell deterioration to find the cause in the of Alzheimer disease in the early stages. - Wattanosoth Hospital purchased the CT Simulator to better view details of X-rays in 3D, which reduced the time in planning treatment. - The Bangkok Spine Academy, Bangkok Hospital, organized the biggest spine seminar of the year entitled “Master Classes in Advanced Spine Surgery” and was honored to have Dr. Rick Delamarter and Dr. Daniel K. Riew, renown spine surgeons from the United States, as guest speakers. The event was attended by Dr. Phudhiphorn Thienprasit, Senior Director of the Bangkok Spine Academy, along with the surgical team to exchange experiences in spine medicine. - The Embassy of Japan and Bangkok Hospital organized the cooperation agreement signing ceremony between Bangkok Hospital and 10 hospitals in Japan. The event was presided over by His Excellency Mr. Seiji Kojima, the Ambassador of Japan to Thailand and Dr. Prasert Prasarttong-osoth, CEO& President. Bangkok Hospital, as well as representatives from hospitals in Japan. This signified the good relationship between hospitals in Thailand and Japan. - Bangkok Hospital opened Bangkok Plaza, a center for medical care, food and banking to provide convenience to patrons of the Hospital and people living in Soi Soonvijai area on 11th November 2011. - The Bangkok Hospital opened Bangkok Hospital Counter Service in the departure area of Suvarnnabhumi International Airport to provide services to foreign patients who travelled to Thailand to receive medical care at the Hospital. - Bangkok Hospital Ratchasima Company Limited, a subsidiary in which the Company holds 89.7% opened the “Bangkok Hospital Pakchong”, a 30 bed hospital in Pakchong District, Nakornratchasima Province, making it the 26th hospital in Thailand for the Bangkok Hospital Group.

Awards - In 2011, TRIS Rating Company Limited upgraded the Company and issue ratings from “A” with “stable” outlook to “A+” which reflects the Company’s strength as a business leader being the largest private hospital operator in the country with service quality standards, expert and experienced management, staff and specialist physicians, as well as a strong expanding network.

- Bangkok Dusit Medical Services Public Company Limited, the largest private hospital operator in Thailand, known as “Bangkok Hospital Network”, was awarded the “Best of the Best Prime Minister’s Export Awards” as the Best Service Provider from the Department of International Trade Promotion, the Ministry of Commerce on the occasion of 20th Anniversary of the Prime Minister’s Export Awards. The Company was 1 of 5 companies selected for the award out of a total of 322 companies. - “Trusted Brand Award, Gold 2010” in 2011, for the second consecutive year, from a survey conducted by Readers’ Digest, which found that Thai’s believe that Bangkok Hospital is a quality hospital which understands the needs of patrons and gives importance to social responsibility. - Bangkok Hospital, Bangkok Heart Hospital and Wattanosoth Hospital (Bangkok Cancer Hospital) received the Disease or Condition-Specific Care Certification from the Joint Commission International (JCI) in the United States, which certifies that the disease specific care of 6 diseases meets international standards, namely, 1. Primary Stroke Program 2. Low Back Pain Program 3. Diabetics Mellitus Type 2 4. Acute Myocardial Infarction Program (AMI) 5. Heart Failure Program 6. Breast Cancer Program - The Company, a private hospital group, received accreditation both nationally (HA : Hospital Accreditation) and internationally according to US standards (JCI Accreditation) through 7 hospitals namely, Bangkok Hospital Medical Center (Bangkok Hospital, Bangkok Heart Hospital and Wattanosoth Hospital (Bangkok Cancer Hospital)), Samitivej Sukhumvit Hospital, Samitivej Srinakarin Hospital, Samitivej Sriracha Hospital, BNH Hospital, Bangkok Hospital Pattaya and Bangkok Hospital Phuket. - EURAMI Accreditation: EURAMI (The European Aero Medical Institute) International Accreditation & Standardization, the aero transport accreditation institute widely accepted in Europe and the United States, certified in October 2008 that Bangkok Hospital’s aero transport service in the Fixed and Rotary Wing category meets high international standards in terms of structure and safety, as well as procedure and results. - Thai-Canadian Chamber of Commerce Business Excellence Award for Best Professional Services - Health Services Award 2007”

“Best of the Best Prime Minister’s Export Awards”

Received JCI Accreditation for international standards

“Trusted Brand Award - Gold”

Received EURAMI Accreditation for aero transport

Business Operations 1. Private Hospital Business No. Hospital Bangkok Hospital Group

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Bangkok Hospital Bangkok Heart Hospital Wattanosoth Cancer Hospital Bangkok Hospital Hua hin Bangkok Hospital Prapradang Bangkok Hospital Pattaya Bangkok Hospital Rayong Bangkok Hospital Chantaburi Bagnkok Hospital Trat Bangkok Hospital Ratchasima Bangkok Hospital Pakchong Bangkok Hospital Samui Bangkok Hospital Phuket Bagnkok Hospital Had Yai

Operated By

Bangkok Dusit Medical Services PLC. Bangkok Dusit Medical Services PLC. Bangkok Dusit Medical Services PLC. Bangkok Dusit Medical Services PLC. Bangkok Prapradang Hospital Co., Ltd. Bangkok Pattaya Hospital Co., Ltd. Bangkok Rayong Hospital Co., Ltd. Wattanavej Co., Ltd. Bangkok Trat Hospital Co., Ltd. Bangkok Hospital Ratchasima Co., Ltd. Bangkok Hospital Ratchasima Co., Ltd. Bangkok Samui Hospital Co., Ltd. Bangkok Phuket Hospital Co., Ltd. Bangkok Had Yai Hospital Co., Ltd.

Total Number Number of Bed of Bed

343 97 48 60 60 400 220 170 114 300 30 50 317 165

1,826

% of Holding

79.00% 97.22% 100.00% 99.69% 99.76% 89.71% 89.71% 100.00% 99.68% 98.78%

Samitivej Group

15 Samitivej Hospital (Sukumvith) 16 Samitivej Hospital (Srinakarin) 17 Samitivej Hospital (Sriracha)

Samitivej Plc. (SVH) Samitivej Plc. (SVH) Samitivej Sriracha Co., Ltd.

275 400 150

825

95.76% 95.76% 67.52%

18 BNH Hospital

BNH Medical Center Co., Ltd.

144

91.48%

80.00% 70.00%

1,097

100.00% 99.09% 97.76% 64.64%

697

100.00% 80.72% 99.76% 88.73%

Royal Hospital Group

19 Royal Angkor Pisith 20 Royal Rattanak Hospital

Angkor Pisith Co., Ltd. Rattanak Medical Services Co., Ltd.

21 30

Phyathai Group

21 22 23 24

Phyathai 1 Hospital Phyathai 2 Hospital Phyathai 3 Hospital Phyathai Sriracha Hospital

Phyathai 1 Hospital Co., Ltd. Phyathai 2 Hospital Co., Ltd. Phyathai 3 Hospital Co., Ltd. Phyathai Sriracha Hospital PLC.

350 260 230 257

Paolo Memorail Hospital Group

25 26 27 28

Paolo Medic Co., Ltd. Paolo Memorial Hospital Chokchai 4 Siam Medical Co., Ltd. Thai Medical Center PLC. Paolo Memorial Hospital Nawamin Paolo Memorial Hospital Samutprakarn Paolo Samut Prakran Co., Ltd. Paolo Memorial Hospital Phaholyothin

237 120 140 200 5,188

No. Hospital Group of invested Hospital (Company has not manage)

Number of Bed

Operated By

29 Aek Udon International Hospital

Udon Pattana (1994) Co., Ltd.

30 Ramkamhaeng Hospital 31 Bangkok Chain Hospital 32 Bumrungrad Hospital

Ramkamhaeng Hospital PCL. Bangkok Chain Hospital PCL. Bumrungrad Hospital PCL.

Total Number of Bed

350

% of Holding

28.20% (Company held directly 14.9% and held trough subsidiary 13.3%)

300 150 538

1,338

38.24% 20.10% 14.22%

2. Medical Care Related Businesses Nature of Business

1. Manufacture saline and medicalequipment

2. Medical Lab and Share Services (central purchase and accounting) 3. Bio Molecular Lab 4. Information and technology for company and the Subsidiaries Share service 5. Medical Evacuation 6. Marketing and promotion support company and the subsidiaries 7. Cartering and General support for company and the subsidiaries

Operated By

A.N.B. Laboratory Co., Ltd.

% of holding

100.0

(Held trough Royal Bangkok Healthcare Co., Ltd., which is the company subsidiary own 100%)

Medicpharma Co., Ltd. National Healthcare Systems Co., Ltd.

49.0 98.9 (Company held directly 74.0% and held trough subsidiary 24.9%)

Bio-Molecular Laboratories (Thailand) Co., Ltd. Greenline Synergy Co., Ltd.

95.0 100.0

Bangkok Helicopter Services Co., Ltd. Cool & Joy Co., Ltd.

49.0 30.0

Irving Sheridan SE Co., Ltd.

95.0

(Held trough Samitivej PLC, which is the company subsidiary)

First Health Food Co., Ltd.

99.0

(Held trough Samitivej PLC, which is the company subsidiary)

Sodexo Healthcare Support Service (Thailand) Co., Ltd.

74.0

(Held trough First Health Food Co., Ltd. , which is the Samitivej PLC.'s subsidiary)

8. Land holding company in cambodia

9. Healthcare Business (Holding Company) 10. Traing and delopment for company and the Subsidiaries 11. Insurance broker

S.R. Property Investment Co., Ltd. Siem Reap Land Investment Co., Ltd. Phnom Penh First Property Co., Ltd. Asia International Healthcare Co., Ltd. Royal Bangkok Healthcare Co., Ltd. BDMS Training Co., Ltd.

49.0 49.0 49.0 100.0 100.0 100.0

Bangkok Health Insurance Co., Ltd. Bangkok Premier Life Insurance Co., Ltd.

100.0 100.0

Income Structure of the Company and its Subsidiaries Comparison of income structure of the Company and its subsidiaries during 2009-2011 Type of revenue

Operated by

Patient revenue Bangkok Dusit Medical Services PLC. Samitivej PLC. (SVH) BNH Medical Center Co., Ltd. Bangkok Hosital Prapradaeng Co., Ltd. Bangkok Hospital Pattaya Co., Ltd. Bangkok Hospital Rayong Co., Ltd. Bangkok Hospital Trad Co., Ltd. Wattanavej Co., Ltd. Bangkok Hospital Had Yai Co., Ltd. Bangkok Hospital Samui Co., Ltd. Bangkok Hospital Phuket Co., Ltd. Bangkok Hospital Ratchasima Co., Ltd. Angkor Pisith Co., Ltd. Rattanak Medical Services Co., Ltd. Prasit Patana PLC. (PPCL) Paolo Medic Co., Ltd. (1) Siam Medical Co., Ltd. (1) Thai Medical Center PLC. (1) Paolo Samut Prakran Co., Ltd. (1) Total Other revenue which related to patient revenue National Healthcare Systems Co., Ltd. Bio-Molecular Laboratories (Thailand) Co., Ltd. Total Total revenue from operation

2012 % of Holding Revenue %

100.00 95.76 91.48 79.00 97.22 100.00 99.76 99.67 98.78 100.00 99.68 89.71 80.00 70.00 97.14 99.99 80.72 99.76 88.73

74.00 95.00

Remark: (1) Subsidiaries from the Company acquisition in year 2010

8,218.7 6,687.7 1,579.7 202.9 2,793.1 1,359.9 299.4 717.0 944.8 459.4 2,065.8 925.6 95.5 155.8 5,632.8 1,339.0 480.8 420.3 720.3 35,098.4 121.1 5.0

2011 Revenue %

23.3 7,182.8 19.0 5,887.9 4.5 1,466.1 0.6 181.7 7.9 2,499.7 3.9 1,193.5 0.8 275.2 2.0 647.3 2.7 770.5 1.3 432.8 5.9 1,839.3 2.6 817.9 0.3 83.9 0.4 130.2 16.0 3.8 1.4 1.2 2.0 99.6 23,408.8 0.3 0.0

55.6 48.2

30.5 25.0 6.2 0.8 10.6 5.1 1.2 2.8 3.3 1.8 7.8 3.5 0.4 0.6

(Unit : Million Baht)

2010 Revenue %

6,851.6 31.7 5,468.6 25.3 1,464.0 6.8 168.3 0.8 2,202.7 10.2 1,030.1 4.8 249.0 1.2 541.8 2.5 761.0 3.5 391.2 1.8 1,541.5 7.1 673.2 3.1 86.2 0.4 110.7 0.5

99.6 21,539.9 99.7 0.2 0.2

23.6 33.5

0.1 0.2

126.1 0.4 103.8 0.4 57.1 0.3 35,224.5 100.0 23,512.6 100.0 21,597.0 100.0

Research and Development In 2011 Bangkok Hospital IRB & EC has approved 14 new studies, of which 9 studies are initiated by physicians, pharmacists and nurses in Bangkok Hospital group; and 5 studies are studies under collaboration between Bangkok Hospital and external organizations.

Following are studies that are initiated by medical staff in Bangkok Hospital group

1. Retrospective study of Hospitalized Patients with Influenza in Adult During January 2010 – December 2010. The study’s principle investigator is Paithoon Boonma, MD, infectious disease specialist, Internal Medicine Clinic, Bangkok Hospital. 2. Retrospective study of Hospitalized Patients with Dengue Infection During January 2010- December 2010. The study’s principle investigator is Paithoon Boonma, MD, infectious disease specialist, Internal Medicine Clinic, Bangkok Hospital. 3. Pandemic Influenza A (H1N1) Infection Among Pediatric Population in Thailand: Clinical Spectrum, Complication, Treatment and Predictive Indicators for Unfavorable Outcome. The study’s principle investigator is Montri Saengpattrachai, MD, pediatric neurology and development specialist, Pediatric Center, Bangkok Hospital. 4. Neurologic Complications and Outcome of Children with Novel Influenza A (H1N1) in Bangkok Hospital, Thailand. The study’s principle investigator is Montri Saengpattrachai, MD, pediatric neurology and development specialist, Pediatric Center, Bangkok Hospital. 5. Active Surveillance Cultures to Screen for Methicillin-Resistant Staphylococcus Aureus (MRSA) in Referral Patient in Critical Care Unit, Bangkok Hospital Medical Group. The study’s principle investigator is Paithoon Boonma, MD, infectious disease specialist, Internal Medicine Clinic, Bangkok Hospital. 6. A Comparative Efficacy Study of Chemotherapy Education by a New Computer-Assisted Instruction (CAI) and Current Face-to-Face Program, In Relation To Quality of Life (QOL) in Solid Cancer Patients Receiving Initial Chemotherapy at Wattanosoth Hospital. The study’s principle investigator is Ms. Paranee Phongnopakoon, Educator Nurse, Outpatient Department, Wattanosoth Hospital. 7. A Pilot Study of Accuracy and Concordance Between Oto-Acoustic Emission (OAE) and the Diagnostic Auditory Brainstem Response (ABR) in Neonatal Hearing Screening at the Bangkok Hospital Medical Center. The study’s

principle investigator is Montri Saengpattrachai, MD, pediatric neurology and development specialist, Pediatric Center, Bangkok Hospital. 8. Nutrition Day Worldwide Survey. The study’s principle investigator is Surat Komindr, MD, diabetes, endocrinology and clinical nutrition specialist, Diabetes and Endocrinology Center, Bangkok Hospital. 9. Relationships Between Antimicrobial Consumption and Antimicrobial Resistance Among Hospital Isolates at Bangkok Hospital Medical Center. The study’s principle investigator is Ms. Sumaiporn Groodpanta, Pharmacist, Outpatient Pharmacy, Bangkok Hospital.

Following are studies under collaboration between Bangkok Hospital and external organizations 1. Ablation of Ventricular Fibrillation Substrates in Brugada or SUDS Syndrome Patients. The study’s principle investigator is Koonlawee Nademanee, MD, cardiovascular disease and clinical cardiac electrophysiology specialist, Pacific Rim Electrophysiology Research Institute at Bangkok Hospital. 2. Congestive Heart Failure (NoAfib-CHF). The study’s principle investigator is Koonlawee Nademanee, MD, cardiovascular disease and clinical cardiac electrophysiology specialist, Pacific Rim Electrophysiology Research Institute at Bangkok Hospital. 3. Combined Treatment of Intra-articular Hyaluronic Acid and Peripheral Blood Stem Cells (PBSC) With or Without Intra-articular Granulocyte Colony-stimulating Factor (G-CSF) in Cartilage Degeneration for Early Osteoarthritic Knee Disease. The study’s principle investigator is Pornthep Mamamee, MD, orthopedic surgery specialist, Orthopedic Center, Bangkok Hospital. 4. The Impact of Medical Tourism on the Domestic Economy and Health System: A Case Study of Thailand. The study’s principle investigator is Thinakorn Noree, MD, Researcher, 5. A Multi-Center, Randomized, Double-Blind, Placebo-Controlled Study to Evaluate Cardiovascular Outcomes Following Treatment with Alogliptin in Addition to Standard of Care in Subjects with Type 2 Diabetes and Acute Coronary Syndrome (Protocol No. SYR-322-402). The study’s principle investigator is Pradub Sukhum, MD, cardiology and heart failure specialist, Heart Failure Clinic, Bangkok Heart Hospital. Routine to Research (R2R) Program and Continuous Quality Improvement (CQI) for Patient Safety and Core Process Program have been organized in Bangkok Hospital. The programs aims to increase research knowledge and skills for medical staff, and to have studies initiated by medical staff which will help to improve medical services

in terms of quality and efficiency. In 2011, there were 4 studies initiated in the R2R Program, 10 studies in the CQI for Patient Safety Program, and 10 studies in CQI for Core Process Program

Following are studies that are initiated in the Routine to Research (R2R) Program 1. A Comparative Efficacy Study of Chemotherapy Education by a New Computer-Assisted Instruction (CAI) and Current Face-to-Face Program, In Relation To Quality of Life (QOL) in Solid Cancer Patients Receiving Initial Chemotherapy at Wattanosoth Hospital. The study is initiated by Wattanosoth Hospital research team which consists of Cancer Clinic, Breast Clinic, Chemotherapy Service Unit, Palliative Medicine Clinic, Surgical Oncology Clinic, Ward 4W, Ward 5W and Ward 6W. 2. Retrospective study of Hospitalized Patients with Dengue Infection During January 2010- December 2010. The study is initiated by Infection Control Unit 3. The Role of Multi-detector Computerized Tomography (MDCT) Scan in Right Ventricular Outflow Tract (RVOT) Ablation in Brugada Syndrome. The study is initiated by Cardiac Imaging Unit 4. Analysis of Intersegment Integration Pattern of the Left Ventricular Regional Wall Motion by Magnetic Resonance Imaging. The study is initiated by Cardiac Imaging Unit Following are studies that are initiated in the Continuous Quality Improvement (CQI) for Patient Safety Program 1. Assessment Tool for Dehydration in Pediatric Patients. The study is initiated by Ward 14D team 2. Effective Education to Prepare Patient for Gastroscopy & Sigmoidoscopy The study is initiated by Ward 10D and Ward 11D team. 3. Safety With Adequacy Food and Nutrition in Dysphagia Patients in Stroke Pathway. The study is initiated by Nutrition and Rehabilitation Department. 4. Care of Patient who has Upper GI Bleeding. The study is initiated by Gastrointestinal and Liver Unit. 5. Post-Stroke Complication Awareness. The study is initiated by Rehabilitation Department. 6. Prevention of Postpartum Hemorrhage. The study is initiated by Ward 9D and Labour Unit team. 7. Radiation Safety. The study is initiated by Cardiac Imaging Unit. 8. Reduce Self-extubation in Critical Unit. The study is initiated by CCU 2 and ICCU team. 9. Prevention of Percutaneous Endoscopic Gastronomy (PEG) Infection. The study is initiated by Infection Control Unit. 10. Radiation Therapy Side Effects At-A-Glance. The study is initiated by Oncology Imaging and Radiotherapy Unit.

Following are studies that are initiated in the Continuous Quality Improvement (CQI) for Core Process Program 1. Improve OPD Record Scanning Process. The study is initiated by Medical Record Unit 2. Cycle Time Reduction of X-ray Process for Arabic Patients. The study is initiated by Imaging Unit 3. Provisioning Service for Financial Information. The study is initiated by Treasury Unit 4. We Are Ready. The study is initiated by Heart Operation Room (OR) team 5. Streamlining of Patient Flow: the Improvement of Patient Care. The study is initiated by Oncology Imaging and Radiation Therapy Unit 6. Medical Supply Management in ICU 1 and ICU 3. The study is initiated by ICU 1 and ICU 3 team 7. Re-service of Pre-Insurance Patients. The study is initiated by HPC 2 team 8. One Stop Service. The study is initiated by Department Internal Medicine 9. Japanese Check-up Process Improvement. The study is initiated by Japan Medical Service (JMS) Clinic 10. Shortened Length of Stay (LOS) and Decreased Cost of Treatment by Effective Use of Disposable Pump. The study is initiated by Wattanosoth Hospital research team which consists of Cancer Clinic, Breast Clinic, Chemotherapy Service Unit, Palliative Medicine Clinic, Surgical Oncology Clinic, Ward 4W, Ward 5W and Ward 6W.

Industry and Competition In 2011, the private hospital business has continuously grown out of increased demand for healthcare and medical services as well as the growing number of the aging population. This has a positive impact on Medical Tourism, which is likely to continue to expand. The market can be divided into 2 groups as follows: 1. Domestic Patients The Government’s policy to increase wages, whether it be the civil servants’ salaries, which increased at the beginning of 2012, or minimum wages, should enable people to have more purchasing power. It is also a good opportunity for the private hospital business to grow. Statistics show that the health services market in Thailand in 2010, when compared to the gross domestic product (GDP), is around 3.2% or Baht 163,630 million. From 2001 to 2010, the compound annual growth rate (CAGR) of the amount spent on health services and medical care was 5.6% per annum compared to the GDP growth rate of 4.6% during the same period. This shows that the demand for health services has continuously grown at a higher rate than the economy. Growth of health services expense compared to GDP. GDP

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 CAGR (44 - 53)

Value (Million Baht) 3,073,601 3,237,042 3,468,166 3,688,189 3,858,019 4,054,504 4,259,026 4,364,833 4,263,139 4,596,112

Health Services Expense of the Private Sector Growth Rate (%) 2.2 5.3 7.1 6.3 4.6 5.1 5.0 2.5 (2.3) 7.8 4.6

Value (Million Baht) 100,597 103,705 111,784 120,577 130,213 138,970 143,280 150,192 158,499 163,630

Growth Rate (%) 5.0 3.1 7.8 7.9 8.0 6.7 3.1 4.8 5.5 3.2 5.6

Source: Office of the National Economic and Social Development Board

The continued growth of demand for health services is mainly from: • Increased Income The result is increased ratio of the population who are able to afford healthcare services, including health services provided by the private sector which is not covered by the government. The World Health Organization shows that the ratio of healthcare services expense to GDP increased from 3.4% in 2000 to 4.1% in 2008.

• Changes in Demographic The population growth of Thailand has been on a downward trend in the past few decades, while the estimated average age has risen. This is due to better education and wider use of healthcare services, resulting in Thailand becoming an aging economy. The Office of the National Economic and Social Development Board (NESB) estimates that the ratio of the population that is older than 60 years of age with increase from 9.4% in 2000 to 17.5% in 2020. This significant change in the demographics will increase demand for healthcare services and change the direction of healthcare services to prevention and treatment of diseases. Thai Population Grouped by Age (%)

2000

2005

2010

2015E

2020E

Ages 0 - 14 years Ages 15 - 29 years Ages 30 - 44 years Ages 45 - 59 years Ages > 60 years

24.7 26.3 25.2 14.4 9.4

22.8 24.5 25.2 17.1 10.4

19.4 22.5 25.0 19.4 13.7

18.7 22.1 23.3 21.7 14.2

16.6 21.0 22.4 22.4 17.5

Source: National Statistics Office

• Growth of Residential Areas in Bangkok and Vicinity The National Statistics Office forecast that the ratio of the population residing in Bangkok and Vicinity will increase from 31.1% in 2000 to 38.0% in 2020. Therefore, as the majority of the coverage areas of private hospitals are in the city, the need to expand the city will be one of the major forces leading to growing demand for healthcare services. 2. Foreign Patients who come to Thailand for healthcare services (Medical Tourism) 1. Thailand’s healthcare services have made quite an impression on foreigners who have used the healthcare services here. Many factors contribute to the popularity of Thailand as a medical tourism destination, the quality of services, value for money, and the lower wages and cost of living compared to other countries, to name a few. Furthermore, the strategy of managing private hospitals as a network has enabled control of costs in providing services and suitable pricing of those services. Thai physicians are also internationally accepted for their expertise. Moreover, many private hospitals in Thailand have received international accreditation, which strengthens foreigners’ confidence in the quality of healthcare services provided by Thai hospitals. Another factor in rising demand for healthcare services is the government’s recent policy to support Thailand in becoming the Medical Hub of Asia.

Market Outlook and Competition

Medical centers can be categorized by the standards of care provided, namely, primary care, secondary care and tertiary care. Primary care centers are those that provide general medical services such as clinics or small medical centers. Secondary care centers are those that are able to provide a higher level of service to both inpatients and out-patients, as well as care for more complex illnesses. Tertiary care centers are those that can provide complete medical care and treatment for specific illnesses as well as complex diseases with state-of-the-art medical equipment.

Healthcare services in Thailand are comprised of the public and private sectors. The following table lists the number of beds of public and private hospitals, respectively.

2003 2004 2005 2006 2007 2008 2009 2010

Public Sector (Beds)

Growth Rate (%)

Public Sector (Beds)

Growth Rate (%)

134,622 133,245 132,920 134,763 139,715 125,866 117,568 133,683

0.1 (1.0) (0.2) 1.4 3.7 (9.9) (6.6) 13.7

34,863 35,267 35,506 35,806 35,792 36,004 33,405 32,872

(9.1) 1.2 0.7 0.8 (0.0) 0.6 (7.2) (1.6)

Source: Bureau of Policy and Strategy, Sanatorium and the art of healing Department Ministry of Public Health

Private hospitals in Thailand mainly compete in terms of the size of the network. Chain hospitals that can operate efficiently have a large customer base covering a wide area, economies of scale, patient referrals within the network, and a widely recognized brand. Furthermore, in order to meet the entire needs of the target market, large private hospital businesses aim to compete in terms of service, medical expertise, state-of-the-art medical equipment and the establishment of specialized medical centers. In 2011, private hospitals had to adapt in order to handle the various risk factors, such as the economic slowdown, the financial crisis in Europe and the major flooding in the last quarter. These factors negatively affected the rise in number of foreign patients. However, it is expected that foreign patients will continue to come to Thailand for medical tourism, as many are continuing treatment while others still choose to come to Thailand for the world renowned medical services as well as comparably less expensive treatment costs. The creation of the ASEAN Economic Community in 2015 is one of the forces that will drive the private hospital business in Thailand. There will be increased demand for healthcare services, especially from the aging population in the ASEAN region, increased investments within ASEAN member countries and more foreign patients from the increased number of ex pats coming to work in Thailand. The AEC will also support medical services across borders, such as via the internet, which would provide additional convenience to business expansion into other countries. Domestically, advancing towards the ASEAN Economic Community will help the domestic economy to expand, which will lead to increased purchasing power, as well as increased revenue from domestic patients. Nevertheless, medical standards remain an important factor whether it is in terms of quickness in providing services, expertise of physicians or state-of-the-art medical equipment. Therefore, maintain high standards and continuous developments are crucial to the private hospital business.

Risk Factors 1. Risks from economic volatility The Thai economy in 2011 expanded by only 1.8% mainly due to the flooding in the central region and in Bangkok. The flooding directly affected the industrial parks, which are vital to the country’s exports. There were damages to agricultural output, especially rice, which was in the harvesting season. Tourism was also affected in the 4th quarter, the high season for foreign tourists. The important factors in the economic recovery in 2012 are the revival of investor confidence by the public sector and the European debt crisis. The public sector must efficiently solve the water issue in order to gain confidence. Furthermore, government spending must be able to stimulate private spending. The uncertainty of the debt crisis in Europe could also cause volatility in the Thai economy. As Bangkok Hospital and some of the network hospitals, namely, Samitivej Hospital, Bangkok Hospital Pattaya and Bangkok Hospital Phuket, provide treatment of complex diseases by tertiary care experts, the Company may be more affected than other private hospitals in times of economic slowdown.

2. Risk of private hospital business and operations 2.1 Risk from future changes in standards or regulations governing the Company The Company operates under the supervision of the Ministry of Health and other related government agencies. Furthermore, the Company must have a license to operate a healthcare business and health clinics as stipulated by the law governing health clinics. In addition, the Company must comply with laws governing health clinics, companies and other related laws. Any changes in the interpretation of current regulations or enforcement of laws or new regulations or policies that are likely to be stricter, may impact the Company’s operations. The enforcement of laws or new regulations, as well as the deliberation of the draft Patient Protection Act, which protects persons who have been wronged or received damages from healthcare services with the goal to compensate the patients in a timely manner without having to prove wrongdoing, may affect healthcare providers including the Company. There is also consideration of setting up a patient protection fund to pay for damages to patients, whereby the healthcare clinics (including the Company) are responsible for contributing to the fund according to the rules, procedures and rate determined by the Patient Protection Committee. Therefore, the Company may not be able to guarantee that future changes to laws and regulations or new regulations or new policies related to the Company’s business will not affect the Company’s operations and business opportunities. However, the Company and hospitals within the networks are in compliance with various standards of quality such as JCI, HA (Hospital Accreditation), ISO 9001(quality standards) and ISO 14001(environmental standards). Compliance with HA requires that a Committee be established to monitor the quality of patient care and ensure that it meets the standards of safety and environmental conservation, as well as monitor the various risks, especially risk in providing medical care. Furthermore, compliance with ISO 9001 requires that healthcare services provided must be systematic and meet standards, which is a means in managing clinical risk. ISO 14001 requires compliance monitoring to ensure adherence to laws, rules and regulations regarding health and the environment. This may help to lessen the effects of changes to laws regarding health and the environment. 2.2 Risk from competition The private hospital business is highly competitive and is likely to be even more competitive in the future. Apart from competition with hospitals at the same level, the Company must also compete with mid level private hospitals, which have improved and developed medical services, as well as acquired state-of-the-art medical equipment in order to expand their customer base. State hospitals have also expanded medical services offered such as opening afterhours clinics, Excellence Centers, and private hospitals managed by medical schools or large state hospitals, which shows the public sector’s adaptation in order to increase efficiency in providing public health

services to the people. This is expected to continue in the near to medium term and may have some effects on the Company. Therefore, in order to maintain competitive edge and to differentiate services provided, the Company has made substantial investments in state-of-the-art technology and medical equipment, as well as investment in information technology to support expedition of medical services. 2.3 Risk in losing medical personnel or crucial executives The private hospital business must depend on executives as well as skilled medical personnel such as physicians, nurses, pharmacists and technicians. Therefore, losing medical personnel or crucial executives, and not being able to replace them with comparable personnel may have negative effects on the Company.

Presently, the hospital business in Thailand is faced with the problem of lack of medical personnel. Great reliance is placed upon the state to develop medical personnel and there have not been sufficient medical personnel to meet demand. The Company has had to compete with other hospital operators in retaining and attracting skilled medical personnel, which will affect the Company’s costs. However, the Bangkok Hospital network is a large one and has continued to provide financial support for education and research to medical personnel in order to improve specialized skills. We are a knowledge organization that aims to enhance medical knowledge in all areas as well as state-of-the-art medical technology. Moreover, the Company has set measures in determining compensation that is fair when compared to other operators in the private hospital business. Therefore, the Company currently has not been significantly affected by this risk. 2.4 Risk of lawsuits Presently, people are more aware of patients’ rights, especially with the issuance of the Act on Court Proceedings for Consumer Cases B.E. 2551 (2008), which more easily enables consumers and patients to file suit against healthcare service providers. This law may affect healthcare service providers and medical personnel, which puts the Company at risk of being sued for medical services provided. Nevertheless, management recognizes the importance of controlling and inspecting quality of medical services, the screening of physicians, as well as patients’ rights. The Company gives importance to providing information, managing patients’ expectations, reporting procedures and finding solutions when a complaint is received, as well as improving quality and determining indicators that ensure that the service is always of international standard quality. 2.5 Risk of reliance on foreign patients Medical services revenue from foreign patients, which includes persons living or working in Thailand, or persons travelling to Thailand for pleasure or specifically to receive medical care, as well as staff of foreign governments or agencies, or employees of foreign companies, equaled Baht 8,520.3 million and Baht 9,863.4 million in 2010 and 2011, respectively or 36.0% and 26.0% of the Company’s revenue in 2010 and 2011, respectively. This group of patrons chooses the Company’s services because of the high standard and quality of medical services, lower medical costs when compared with other countries, the tourism industry and political stability. As the revenue from foreign patients is high, there is fierce competition in providing services to this group of patients among private hospital operators.

If there is a situation that affects the decision to receive medical services in Thailand, such as the political situation in Thailand, other factors affecting the tourism industry, the significant appreciation of the Baht against other currencies, the negative image of Thailand in the eyes of foreigners, increased competition from other countries in medical tourism, foreign patients may not come to Thailand for medical services and this may affect the Company’s business opportunities. However, the Company has expanded the network to cover more areas in Bangkok and the various regions in the country in order to expand the domestic client base and lower the dependence on foreign clients. In addition, the Company has expanded the foreign client base to cover additional countries to decrease dependence on any particular group of foreign patients. 2.6 Risk from foreign investments The Company has made investments (capital, loans to subsidiaries and guarantee loans of subsidiaries with external parties) as of 31 December 2011 in the amount of USD 47.3 million or approximately Baht 1,454.7 million or 2.5% of the Company’s total assets. The Company’s foreign investments, including shares held in Angkor Pisith Co., Ltd., which manages the Royal Angkor International Hospital, and shares held in Rattanak Medical Services Co., Ltd., which manages Royal Rattanak Hospital, equal to 80.0% and 70.0%, respectively, and 100% investment in Phnom Penh Medical Services Co., Ltd. and BDMS International Medical Services Co., Ltd., which has not yet started operations. There are factors that may negatively affect the Company’s foreign investments, such as the law, regulations or policies of the governments of the foreign countries which govern the Company’s business or the political situation and economy of the country, foreign currency exchange volatility or cost of investments or operations that are higher than estimated. These factors may prevent the Company from receiving the return as expected and may affect the financial status and operations of the Company.

3. Financial Risks 3.1 Risk in receiving payment of medical fees Receiving payment is one of the financial risks that the Company faces, that is, when providing medical care before charging fees and expenses, there is a risk that we may not be able to receive payment for such services. However, the Company has the following policies in reducing such risk: 1. When providing services to patients who are personally responsible for the expense, in the case of nonemergency procedures, the Company has the policy to assess the expense before providing medical services so that the patient will be aware of the budget and make payment prior to treatment. 2. The Company also has the policy to notify the party responsible for the payment of medical expenses of the expenses incurred along the way and encourages payment long the way to lessen the burden of one-time payment at the end of treatment. 3. For payment by counter parties, the Company also has a policy to provide credit for payment of medical services with caution by analyzing the counter party’s credit history and financial status, as well as regularly reviewing the relationship.

The Company has set up the Debtor Management Committee comprised of management from finance and operations. The Committee meets regularly to review and determine measures to manage the risk, as well as find appropriate solutions for the Company and patients when there is default of payment. 3.2 Risk from interest rate volatility As of 31st December 2011, the Company has financial liabilities at the floating rate in the amount of Baht 5,665 million from a total of Baht 16,267 million or 34.8% of total financial liabilities. Therefore, the volatility of interest rates may have some impact on the cost of capital. However, as the Company has the policy to manage interest rate risk, which includes entering into interest rate swaps according to the market situation. 3.3 Effects of global economy and foreign currency exchange volatility Part of the Company’s revenue comes from services provided to foreigners who travel to Thailand. The economic status of the country of origin of the foreign patients, therefore has an impact on the number of foreigners who visit hospitals within the Company’s network in the same way that the domestic economy impacts the number of local patients. Thus, The Company’s business, financial status, profits and business opportunities may be impacted by the economy of the various countries of origin of the foreign patients. Furthermore, the volatility of foreign currency against the Thai Baht, which is a determining factor in setting competitive pricing compared to healthcare providers in other countries, is another factor that may affect the Company’s revenue. In 2011, the Thai Baht appreciated compared to the US dollar, from Baht 33.4 to Baht 30.0 to the dollar or around 11.3%. This resulted in the price of the Company’s services in Thai Baht to have increased when compared to the US dollar and other currencies of foreign patients. The Company thus faces risk from the volatility of foreign currency exchange, which is an external factor that is out of the Company’s control. In this case, the Company has hedge the currency risk with financial institutions and endeavors to maintain a suitable ratio of domestic and foreign patients in order to reduce this risk. 50

Shareholding Structure and Management 1. Shareholding Structure The top ten major shareholders of the Company on the closing of the shareholders register on 30 September 2011 are as follows:

Name

Total Shares

1. Mr. Wichai Thongtang and spouse 2. Mr. Prasert Prasarttong-Osoth, M.D. and spouse(1) 3. Mr. Satit Viddayakorn and spouse 4. Bangkok Airway Co., Ltd., Bangkok Airways holding Co., Ltd. and Bangkok Airway Catering Co., Ltd. 5. The Viriyah Insurance Co., Ltd. 6. Miss Poramaporn Prasarttong-Osoth, M.D. 7. DEUTSCHE BANK AG SINGAPORE (DCS) A/C CLIENT 8. Mr. Chirotchana Suchato, M.D. and spouse 9. STATE STREET BANK EUROPE LIMITED 10. Mr. Chuladej Yossundharakul, M.D. and spouse Total

% of total shares outstanding

211,518,748 162,115,584 143,335,498 124,927,169

13.7% 10.5% 9.3% 8.1%

100,261,163 49,462,707 44,694,900 39,273,009 32,613,005 27,565,795 935,767,578

6.5% 3.2% 2.9% 2.5% 2.1% 1.8% 60.5%

Source: The Thailand Securities Depository Company Limited (TSD) Note: (1) Shareholders 2 and 4 are the same group as defined by Clause 258

2. Management 2.1 Personnel As of 31 December 2011, the Company had 2,888 employees and 957 physicians, details as follows:

Type Nurses Employees Total employees Physicians

Staff Physicians and Employees

Consulting Physicians and Part-time Employees

Total

787 1,621 2,408 345

145 335 480 612

932 1,956 2,888 957

Note: Staff Physicians refer to physicians who work 40 hours or more a week for the Company but are not considered employees of the Company.

2.2 Management Structure As of 31st December 2011, the management structure of the Company is comprised of the Board of Directors, the Audit Committee, the Nomination and Remuneration Committee, the Executive Committee and the top four executive officers, details as follows:

Board of Directors 1. Prof. (Emeritus) Arun Pausawasdi, M.D. 2. Mr. Pongsak Viddyakorn, M.D. 3. Mr. Wichai Thongtang 4. Mr. Prasert Prasarttong-Osoth, M.D. 5. Mr. Wallop Adhikomprapa 6. Mr. Pradit Theekakul 7. Mr. Chirotchana Sucharto, M.D. 8. Mr. Chuladej Yossundharakul, M.D. 9. Prof. (Emeritus) Santasiri Sornmani, M.D. 10. Mr. Chatree Duangnet, M.D. 11. Mr. Thavatvong Thanasumitra 12. Dr. Somchai Sujjapongse 13. Mr. Sripop Sarasas 14. Mr. Chavalit Setmeteekul 15. Miss Kanoknuj Lekvichit

Chairman of the Board and Independent Director 1st Vice Chairman 2rd Vice Chairman Group Chief Executive Officer and President Director Director Director Director Independent Director Director Director Independent Director Independent Director Independent Director Director

Authorized Directors Two directors out of the following six may sign jointly and affix the company seal: Mr. Prasert Prasarttong-Osoth, M.D., Mr. Pongsak Viddyakorn, M.D., Mr. Wallop Adhikomprapa, Mr. Chuladej Yossundharakul, M.D., Mr. Chirotchana Sucharto, M.D., and Mr. Chatree Duangnet, M.D.

Company Secretary The Board of Directors has appointed Ms. Kessara Wongsakate, Assistant Vice President, as the Company Secretary to act in accordance with the law with regards to securities and securities exchange and notifications of the Capital Market Supervisory Board. Furthermore, the Company Secretary shall fulfill her duties as assigned by the Board of Directors as well as coordinate and monitor to ensure compliance with the resolutions of the Board of Directors’ and the Shareholders’ Meetings for success and corporate good governance. Duties and Responsibilities of the Board of Directors 1. Perform duties using their knowledge and expertise for the benefit of the Company in accordance with the regulations of the Company and resolutions of the shareholders’ meeting. Directors are authorized to perform actions indicated in the Articles of Association, the Public Company Act and relevant laws. 2. Comply with the provisions and the good practices of listed company directors of the Stock Exchange of Thailand. 3. Determine policies and ensure that management acts in accordance with those policies, as well as approve business plans, annual budgets, investments, and make financial decisions. 4. Monitor the operational results of management and the Company in order to ensure consistency with established goals and plans. 5. Set efficient internal control and audit systems for the purpose of auditing, operational oversight and liaise with the Audit Committee. 6. Protect the interests of the shareholders and practice standardized and transparent disclosure of information. 7. Report conflicts of interest of oneself, spouse and related persons as prescribed in the Securities and Exchange Act, as well as report securities held of oneself, spouse and children (not yet of legal age) to the Company Secretary for further reporting of any changes at the Board of Directors’ meetings. Audit Committee The Board of Directors meeting 6/2011 on 26th June 2011 resolved to appoint the Audit Committee, which is to be comprised of three independent directors with a term of three years. The members of the Audit Committee are as follows: 1. Prof. (Emeritus) Santasiri Sornmani, M.D. 2. Dr. Somchai Sujjapongse 3. Mr. Sripop Sarasas (Possess experience in accounting and finance)

Chairman of the Audit Committee Member of committee Member of committee

The Audit Committee is nominated from the independent directors, who possess the qualifications as stated in “Selection of Directors and Executive Officers” on page 56 of the Annual Report. Duties and Responsibilities of the Audit Committee In order that the Audit Committee may perform the duties as assigned by the Board of Directors, the Audit Committee shall have the following duties and responsibilities: 1) Ensure the correct, complete and reliable issuance of reports and disclosure of information in the financial reports of the Company by liaising with external auditors and executives responsible for the preparation of quarterly and annual financial reports. 2) Ensure the use of proper and efficient internal control measures and engage in the joint revision with independent external auditors and internal auditors in order to ensure consistency. 3) Review transactions with subsidiaries or individuals in order to prevent conflicts of interest. 4) Ensure that the Company is in compliance with regulations of the Stock Exchange of Thailand and other relevant laws. 5) Review internal investigation evidence in the case that there is suspicion of fraud or abnormality or significant defect of internal control measures for presentation to the Board of Directors for further consideration. 6) Instruct and review evidence in the case where there is suspicion of violation of law or any regulations of the Stock Exchange of Thailand, which may significantly affect the financial status and operational results of the listed company. 7) Nominate auditor and annual auditing fee for consideration of the Board of Directors for the approval of the shareholders’ meeting. 8) Review medical services to ensure that the services meet the standards set. 9) Complete other tasks as assigned by the Board of Directors. Nomination and Remuneration Committee The Board of Directors meeting 2/2012 on 29th February 2012 resolved to appoint the Nomination and Remuneration Committee, which is to be comprised of independent directors with a term of three years. The members of the Nomination and Remuneration Committee are as follows: 1. Prof. (Emeritus) Santasiri Sornmani, M.D. Chairman of committee 2. Mr. Chavalit Setmeteekul Member of committee 3. Dr. Somchai Sujjapongse Member of committee 4. Mr. Sripop Sarasas Member of committee Duties and Responsibilities of the Nomination and Remuneration Committee 1. Determine process and guidelines in selecting candidates for vacant positions of Directors. 2. Determine suitable qualifications for Directors with regards to skill, experience and specialization, which are beneficial to the Company, devotion of time and fulfillment of duties. 3. Select qualified candidates who should be nominated as Director to the Board of Directors and request approval from the general shareholders’ meeting. 4. Advise the Board of Directors on the structure and components of Directors’ remunerations. 5. Determine guidelines for consideration of remuneration to suit duties and responsibilities of the Directors and dependent upon operational results of the Company in order to motivate and maintain capable, qualified Directors. 6. Report to the Board of Directors on the selection of directors and consideration of remuneration. 7. Complete other tasks as assigned by the Board of Directors. Executive Committee The Board of Directors meeting 8/2011 on 24th August 2011 resolved to appoint the Executive Committee as follows: Chairman of the Executive Committee 1. Mr. Prasert Prasarttong-Osoth, M.D. Vice Chairman 2. Mr. Pongsak Viddyakorn, M.D. Committee Member 3. Mr. Chirotchana Sucharto, M.D. Committee Member 4. Mr. Chatree Duangnet, M.D. Committee Member 5. Mr. Pradit Theekakul

Duties and Responsibilities of the Executive Committee 1. Authority 1) Consider approving the appointment, transfer or dismissal of executives of the Company and its subsidiaries from the Director of the Hospital (or equivalent) up to Executive Vice President 2) Consider the pay scale or other benefits of executives from the Director of the Hospital (or equivalent) up to Executive Vice President of the Company and its subsidiaries (with the exception of the President, whose remuneration is proposed by the Nomination and Remuneration Committee). As well as to consider approving the annual salary raise of the Company and its subsidiaries and to further propose to the Board of Directors for approval. 3) Consider approving adjustments or changes to management structure, regulations and work force quota for suitability. 4) Consider approving investments and operational costs, as well as cost for public benefits or for charity which are not included in the annual budget and is more than Baht 5 million but not exceeding Baht 20 million, except investments in real estate, namely, land and/or buildings, including lease rights of land and/or buildings, whereby the lease rights must be registered with the district land office which must be approved for investment by the Board of Directors in all instances. 5) Have the authority to appoint working teams to address and solve problems to ensure compliance with Company policies.

2. Duties 1) Determine the vision, policies and strategies of the Company and its subsidiaries for further approval by the Board of Directors. 2) Prepare, consider and/or approve the organization structure and duties and responsibilities of the Company and its subsidiaries before proposing to the Board of Directors for approval. 3) Consider business plans, annual budgets, investment plans and corporate social responsibility plans (CSR) of the Company and its subsidiaries so that they are inline with the policies and strategies set and propose to the Board of Directors for approval. 4) Supervise operations of the Company and its subsidiaries and ensure compliance with plans set as well as with laws and regulations of the Company and regulations of the Stick Exchange of Thailand. 5) Ensure that the Company and its subsidiaries has strict and sufficient internal controls, and in accordance with the suggestions and objections of the Audit Committee. 6) Consider the summary report on operations of the Company and its subsidiaries and present to the Board of Directors each quarter. 7) Plan and supervise management leadership building and succession plans. 8) Other duties as assigned by the Board of Directors. The above authority and duties shall not include an item that will cause the executive officers or persons with possible conflict to have a stake or conflict of interest in any form with the Company or subsidiaries. Furthermore, it does not include related transactions and purchase/sale of important assets of the listed company in accordance with the regulations of the Stock Exchange of Thailand or other related notifications. The Company must act in accordance with regulations and guidelines of the Stock Exchange of Thailand or other related notifications on the related matter. Moreover, the abovementioned authority does not include other matters that must be approved at the shareholdersâ&#x20AC;&#x2122; meeting as prescribed by the article of the Company. Top 4 Executive Officers Name 1. Mr. Prasert Prasarttong-Osoth, M.D. 2. Mr. Chatree Duangnet, M.D. 3. Mr. Pradit Theekakul 4. Mrs. Narumol Noi-Am

Title Chairman of the Board and Independent Director Executive Vice President Acting Executive Vice President Chief Financial Officer

1. Manage the Company in accordance with the policies, plans, goals, regulations and good corporate governance as prescribed by the Company, as well as in strict compliance with related laws and regulations. 2. Manage the Company in accordance with the resolution of the shareholders’ meetings, resolutions of the Board of Directors’ meetings and resolutions of the Executive Committee meetings (as the case may be) within the duties, responsibilities and power of approval with honesty, care and with the best interests of the Company in mind for the greater good of the organization and the shareholders, as well as fair consideration of stakeholders. 3. Regularly report performance and progress of the Company at the Board of Directors’ meetings to ensure that the Company is operating in accordance with the determined goals and plans. 4. Report conflicts of interest of oneself, spouse and related persons as prescribed in the Securities and Exchange Act, as well as report securities holdings of oneself, spouse and children (not yet of legal age) to the Company Secretary for further reporting of any changes to the Board of Directors. 5. Consider matters to be proposed to the Executive Committee and/or Board of Directors (as the case may be), as well as consider ways to solve any problems that arise. 6. Other duties as assigned from time to time by the Executive Committee and/or the Board of Directors (as the case may be). The above authority and duties shall not include an item that will cause the executive officers or persons with possible conflict to have a stake or conflict of interest in any form with the Company or subsidiaries. Furthermore, it does not include related transactions and purchase/sale of important assets of the listed company in accordance with the regulations of the Stock Exchange of Thailand or other related notifications. The Company must act in accordance with regulations and guidelines of the Stock Exchange of Thailand or other related notifications on the related matter. Moreover, the abovementioned authority does not include other matters that must be approved at the shareholders’ meeting as prescribed by the article of the Company.

3. Selection of Directors and Executive Officers

The Nomination and Remuneration Committee has the responsibility of selecting directors to replace those that have completed their terms or must retire for other reasons or new positions. The Committee shall consider and select the qualified persons and present the final candidates to the Board of Directors for approval (in the case of replacing existing directors) or for approval for later appointment by the shareholders. The Nomination and Remuneration Committee shall select qualified persons with knowledge, capability, past experience that is beneficial to the company, leadership skills, vision, and persons who are moral and ethical. In addition, the candidates shall have a transparent and untainted work history, autonomy in making decisions with professionalism and integrity, as well as meet the qualifications as stated in the Company’s Articles of Association and the notifications of the Office of the SEC. The appointment of a Director must be approved by the shareholders’ meeting as per the following guidelines: (1) Each shareholder has number of votes equal to the number of shares held. (2) Each shareholder shall cast all votes available to them under (1) to elect an individual or multiple individuals as director(s). In the event where multiple directors are elected, votes may not be distributed to the various candidates in varying proportions. (3) Candidates with the most votes are to be appointed Directors up to the number open at a given meeting. If more candidates receive equal votes than the number of Directors required, the Chairman of the meeting must cast a deciding vote. The appointment and dismissal of Directors shall be as prescribed in the Articles of Association as follows: 1. The Board of Directors shall be comprised of at least 5 directors and no less than half shall have residence in Thailand. 2. Directors shall be individuals with the following qualifications: • A person of juristic age • A person who is not bankrupt, incompetent or quasi-incompetent • A person who has never been sentenced to imprisonment on a charge relating to fraudulent assets • A person who has never been removed from service in the government or government agency due to fraudulent acts.

3. At the annual general shareholders’ meeting, at least one third (1/3) of the Board of Directors shall be retired. If the Board of Directors cannot be divided by three, then the closest number of Directors to one third (1/3) shall be retired. Directors who retire as aforementioned, may be re-elected. 4. Apart from being retired at completion of term, a director may be retired under the following circumstances: (1) Death (2) Resignation (3) Disqualification or legally unqualified (4) The shareholders’ meeting passes a resolution to retire a director, with no less than three quarters of the total number of shares present at the meeting and possess voting rights provided that the total number of shares is no less than half of the total number of shares present at the meeting and possess voting rights (5) Court ordered 5. Directors wishing to resign shall submit a letter of resignation to the Company to be effective upon receipt of the letter by the Company. 6. In the event that a director position is vacant due to circumstances other than completion of term, the Board of Directors shall elect a qualified individual to fill the position at the next Board of Directors’ meeting, except when the director’s term is less than two months to completion. In this case, the individual serving as replacement shall remain in office for the remainder of the term of the director who has retired. The resolution of the Board of Directors as the above shall only be passed with votes no less than three quarters of the number of directors remaining. 7. In the event that the number of vacant director positions is insufficient for quorum, the remaining directors may act on behalf of the Board of Directors only in organization of the shareholders’ meeting in order to elect directors to the vacant positions. The meeting shall be held within one month from the day that the number of vacant director positions is insufficient for quorum. The individual elected to the vacant director positions shall remain in office for the remainder of the term of the director whom he replaces. 56

In addition to the above criteria in selecting the Board of Directors, the Company has stipulated that at least one third of the Board of Directors shall be independent directors. The selection of independent directors is the same process as the selection of directors. However, the Company has determined additional qualifications for Independent Directors in accordance with the regulations of the Office of the SEC as follows: 1. Hold no more than 0.5% of shares with voting rights of the Company or affiliates, associated companies subsidiaries, major shareholders or persons with control of the Company. This includes shares held by related persons of the independent director. 2. Not be involved in management or be a staff member, employee, salaried advisor or have control over the Company, subsidiaries, affiliates, major shareholders or persons with control of the Company, unless such capacity has ended for at least 2 years. This restriction does not apply to independent directors who were civil servants or advisor of government agencies, which is a major shareholder or persons with control of the Company. 3. Is not a person who is a blood relative or legally registered as a parent, spouse, sibling or child, including spouse of child, of management, major shareholders with control or persons who have been nominated as management or persons with control of the Company or its subsidiaries. 4. Does not have or used to have a business relationship with the Company, subsidiaries, affiliates, major shareholders or persons with control of the Company, which could impede independent judgment. In addition, the person must not be or used to be a significant shareholder or person with control of a person that has a business relationship with the Company, subsidiaries, affiliates, major shareholders or persons with control of the Company, unless such capacity has ended for at least 2 years. 5. Is not and has not been an auditor of the Company, subsidiaries, affiliates, major shareholders or persons with control of the Company and is not a significant shareholder, person with control or partner of an audit firm which employs auditors who have audited the Company, subsidiaries, affiliates, major shareholders or persons with control of the Company, unless such capacity has ended for at least 2 years. 6. Is not and has not been a professional service provider, including legal or financial advisor, which receives compensation of more than Baht 2 million per year from the Company, subsidiaries, affiliates, major shareholders or persons with control of the Company and is not a significant shareholder, person with control or partner of a professional service provider, unless such capacity has ended for at least 2 years. 7. Is not a Director appointed as a representative of a Director of the Company, major shareholders or shareholders that are related/associated with major shareholders.

8. Does not operate a business that is significantly the same and is in competition with the Company or subsidiaries, or is not a significant partner of a partnership or a Director involved in management, a worker, employee, salaried advisor or hold more than 1% of shares with voting rights of a company that operates a business that is significantly the same and is in competition with the Company or subsidiaries. 9. Does not possess any other qualities that would hinder independent opinions with regards to the Company’s business.

4. Remuneration of Executive Management 4.1 Monetary Remuneration The Company paid remuneration to the Directors and Sub-Committee Members for the accounting year ending 31st December 2011 as follows: (Unit : Baht)

Director’s Name 1. Prof. (Emeritus) Arun Pausawasdi, M.D. 2. Mr. Pongsak Viddyakorn, M.D. 3. Mr. Wichai Thongtang(1) 4. Mr. Prasert Prasarttong-Osoth, M.D. 5. Mr. Wallop Adhikomprapa 6. Mr. Chirotchana Sucharto, M.D. 7. Mr. Chuladej Yossundharakul, M.D. 8. Mr. Pradit Theekakul 9. Prof. (Emeritus) Santasiri Sornmani, M.D. 10. Mr. Thavatvong Thanasumitra 11. Mr. Chatree Duangnet, M.D. 12. Mr. Chavalit Setmeteekul(1) 13. Dr. Somchai Sujjapongse 14. Mr. Sripop Sarasas 15. Miss Kanoknuj Lekvichit(1) Total remuneration

Attendance Director’s Meeting at meetings Allowance Allowance

Title Chairman/Independent Director 1st Vice Chairman 2nd Vice Chairman President Director Director Director Director Independent Director Director Director Independent Director Independent Director Independent Director Director

14/14 14/14 8/9 14/14 1414 14/14 14/14 14/14 13/14 14/14 14/14 9/9 9/14 14/14 9/9

1,646,341 1,097,561 1,097,561 1,097,561 1,097,561 1,097,561 1,097,561 1,097,561 1,097,561 1,097,561 1,097,561 1,097,561 13,719,512

560,000 350,000 200,000 350,000 350,000 350,000 350,000 350,000 325,000 350,000 350,000 225,000 225,000 350,000 225,000 4,910,000

Note: (1) Appointed at the Extraordinary Shareholders’ Meeting 1/2011 on 24th February 2011 as Director of the Company effective 1st April 2011 and for the one year ending 31st December 2011, attended the Board of Directors’ meeting from the monthly meeting in April 2011 onwards. (2) Prof (Emeritus) Sanoe Indrasuksri M.D. Independent Director, finished his term at the Annul General Meeting on 28th April 2011 and did not renew, therefore, there were 15 Directors remaining on the Board.

Remuneration of Sub-Committees Audit Commitee 1. Prof. (Emeritus) Santasiri Sornmani, M.D. 2. Dr. Somchai Sujjapongse 3. Mr. Sripop Sarasas Total remuneration

(Unit : Baht)

Attendance at meetings

Meeting Allowance

7/7 4/7 7/7

210,000 100,000 175,000 485,000

(Unit : Baht)

Nomination and Remuneration Committee

Attendance at meetings

Meeting Allowance

1/1 1/1 1/1

30,000 25,000 25,000 80,000

1. Prof. (Emeritus) Sanoe Indrasuksri, M.D. 1. Prof. (Emeritus) Santasiri Sornmani, M.D. 3. Mr. Sripop Sarasas Total remuneration

Note: The above Nomination and Remuneration Committee completed their term in April 2011 and Prof (Emeritus) Sanoe Indrasuksri M.D., Independent Director and Chairman of the Nomination and Remuneration Committee completed his term as Director of the Company at the Annual General Meeting held on 28th April 2011 and he did not wish to renew for another term. Therefore, the Board of Directors appointed a new Nomination and Remuneration Committee as listed in “Management Structure” on pages 51-52 in the Annual Report.

Remuneration of Executive Officers ending 31st December 2011 In 2011, the first four (4) Executive Officers together received remuneration in the form of salary and bonus, as well as employer contribution to the provident fund in the amount of Baht 37.83 million.

4.2 Other Remuneration • Directors and Sub-Committee Members Apart from compensation in the form of meeting allowances and annual allowances as approved by the shareholders, as the Company provides medical services, the Directors receive medical benefits according to company policy, the same as with employees of the Company. • Executive Officers Apart from compensation in the form of company car and mobile phone, executive officers also receive medical benefits according to company policy, the same as with employees of the Company.

5. Dividend Payment Policy In 2009, the Company prescribed a material dividend payment policy as follows: “the Company shall pay dividends at no less than 50% of the company profits, depending on business expansion and capital requirements of the Company in each year, as approved by the shareholders”, except for dividends within accounting periods which may be approved by the Board of Directors if the Board deems that the Company has had good operating results and sufficient liquidity. During 2006 - 2010, the Company paid out dividends as follows:

Dividend Payment Date

Dividend Payment Rate (Baht per share)

Dividend Payment Period

12 January 2011 19 April 2010 30 April 2009 25 April 2008 4 May 2007

0.80 (1) 0.70 0.60 0.50 0.50

January 2010 - November 2010 January 2009 - December 2009 January 2008 - December 2008 January 2007 - December 2007 January 2006 - December 2006

Note: (1) The Board of Directors’ extraordinary meeting 2/2010 on 14 December 2010 approved the interim dividend payment from operations of the Company during 1 January 2010 - 30 November 2010 and at 2011 Annual General Shareholders’ Meeting the interim dividend payment was noted and it was resolved that there would be no additional dividend payment as proposed by the Board of Directors.

Good Corporate Governance The Company recognizes its role, duty and responsibility in practicing good corporate governance and believes that corporate governance determines the structure of the relationships among the shareholders, the Board of Directors, management and all stakeholders. The aim of good corporate governance is to increase competitive edge and value for shareholders in the long term, as well as the benefits of the other stakeholders, which will ensure the Company’s continuous and sustainable growth. The Board of Directors plays many significant roles; one of those roles is to ensure good corporate governance as assigned to the President and management, which will comply with approved corporate governance policies. The Company’s good corporate governance policies are in compliance with the guidelines set by the Stock Exchange of Thailand. The Company monitors the new regulations that have been put into practice and adjusts the Company’s practices to comply with such regulations, which is supported by the Board of Directors and management to encourage practice and set examples.

1. Corporate Governance Policy The Board of Directors is responsible to every shareholder and endeavors to understand the needs of shareholders, as well as assess economic, social, environmental and ethical factors which may significantly impact the interests of shareholders. Each Director must possess honesty, determination, as well as independence of thought and decision making. In addition, the Board of Directors must also be aware of the interests of the other stakeholders. The corporate governance policy recognizes the special role that the Board of Directors plays in connecting the shareholders with the President, as well as management. Furthermore, the policy clearly covers the dual role of the President and other Directors who are both members of the Board and members of executive management. The Board of Directors has reviewed and revised the current corporate governance policy and made many changes to meet international standards. The Board of Directors has emphasized good corporate governance through integration of policy and business direction, sufficient internal controls and auditing, as well as ensuring that management act efficiently under the established policies so as to ascertain that the Company is transparent, ethical and abides by the governing laws and regulations. The Board of Directors has entrusted the Audit Committee to draft the internal audit scheme to ensure that the organization complies with all policies, including the regular monitoring, review and revision of policy. This is to assure that the Company’s corporate governance policy is up-to-date and suits the present situation. The Corporate Governance Policy covers the following topics: 1. Rights and equal treatment of shareholders and the shareholders’ meeting 2. Policy on stakeholders’ interests 3. Disclosure and transparency 4. Responsibility of the Board of Directors and sub-committees 5. Business ethics

2. Rights and Equality of Shareholders 2.1 Rights and Equality The Company is responsible to shareholders in disclosure of information, preparation of financial statements, utilization of insider information and resolution of conflicts of interest. Management must possess ethics and any decisions made must be made with honesty and integrity, as well as be fair to major and minor shareholders for the good of the whole. The Company is aware of its responsibility in assigning importance to rights without bias and with equal treatment of all shareholders. It is the Company’s duty to protect the rights and interests of the shareholders, including the

right to dividend payments and the right to receive relevant information regularly and in a timely fashion. Moreover, the Company has the duty to disclose information with transparency and show responsibility of management by holding the shareholders’ meetings. The Company has the policy to support disclosure of information and business transactions so that the shareholders may better understand the Company’s operations. Major and minor shareholders, institutional investors or foreign investors equally receive information on business operations, management policy and the financial statements of the Company and have the right to be treated fairly. At each shareholder’s meeting, the Company will distribute the letter of invitation in advance to inform the shareholders of the meeting agenda as well as opinion of the Board of Directors on each agenda and other documents so that the shareholders may be well informed when making the decision to vote. In the letter, the Company also informs shareholders of their rights in attending the meetings and their right to vote. In addition, to provide greater convenience, the Company posts the letter of invitation to the shareholders meeting on the Company website. For 2011 annual general meeting, the Company posted the letter of invitation on the website 30 days in advance of the meeting date. The shareholders shall receive proxy forms to allow the shareholders to appoint an authorized representative to attend meetings and vote on their behalf. In addition, to provide another channel in exercising shareholders’ rights, the Company suggests that in the case that the shareholder cannot attend a particular meeting, the shareholder should appoint an independent director as proxy to attend the meeting and vote on the shareholder’s behalf. In appointing such proxy, shareholders may use any one of the proxy forms included in the meeting invitation package or download the proxy form from the Company’s website.

The Company has a policy to give the shareholders the opportunity to submit questions and to propose agendas for the annual shareholders’ meeting, as well as to nominate qualified and capable persons as Directors to the Board of Directors prior to the meeting. The Company gives opportunity to do so for a period of 45 days and interested shareholders can access information on guidelines and conditions in proposing agendas and nominees on the Company’s website. In the case that the Board of Directors has considered that the proposed agenda is suitable, constructive and beneficial to the Company, the Board of Directors will include such agenda in the meeting proceedings for consideration of the shareholders. However, if the Board of Directors is of the opinion that such agenda is not suitable, the Board of Directors shall report this to the shareholders’ meeting and provide reasons as to why that agenda was not included in the proceedings. In 2011, the Company provided the opportunity for shareholders to propose agendas for the annual general meeting as well as to nominate qualified and capable persons as Directors to the Board of Directors prior to the meeting between 1 December 2011 to 15 January 2012. During the shareholders’ meeting, each shareholder has equal rights to express their opinions and pose questions within the appropriate time frame. The process of voting and counting votes is carried out swiftly with full disclosure. The Company deems that one share equals one vote and the majority vote decides the outcome (for general agendas for which the law does not specify otherwise). If the vote is equal, the Chairman of the meeting shall cast an additional vote, apart from his/her vote as a shareholder, as the deciding vote. Ballots shall be used only in the case that a shareholder objects, abstains or a split vote. The ballots shall be retained for further inspection after the meeting. The results of the voting are recorded in the minutes of the meeting. For each agenda, number of “for”, “against” and “abstain” votes are recorded, as well as the questions raised, explanations and opinions of the meeting so that shareholders may later verify the information. In the case that any shareholder has a special stake in any of the agendas, the shareholder is not allowed to vote on that agenda with the exception of voting for appointment or removal of directors. 2.2 Shareholders’ Meetings The Company’s policy is to convene the shareholders’ meeting as prescribed by law and give shareholders the opportunity to be fully informed before exercising their rights. To this end, the Company has held the annual general shareholders meeting within four months from the end of the accounting year. The meetings are held in compliance with the laws and regulations of the Stock Exchange of Thailand from announcement of the meeting and organization of the meeting to after the meeting.

Shareholders with total shares no less than one fifth (1/5) of shares outstanding or shareholders no less than 25 persons whose total shares is no less than one tenth (1/10) of shares outstanding, may petition the Board of Directors to hold an extraordinary meeting of the Company’s shareholders as stated in the company rules and regulations. The petition must clearly state the reason for convening the extraordinary meeting. The Board of Directors must convene the extraordinary shareholders’ meeting within one month from the day the petition is received. Details of the proceedings of shareholders’ meetings are as follows: Prior to Meetings The Company has sent letters of notification no less than 10 days in advance for general matter, which is a higher standard than the law requires, and at least 14 days in advance in the case approval is needed for connected transactions or special matters. The notification of the meeting is published in at least one daily Thai language newspaper and in at least one daily English language newspaper for three consecutive days prior to the meeting date. From the annual general shareholders’ meeting in 2007 onwards, the Company has announced the shareholders’ meeting and accompanying documents both in Thai and English on the Company’s website (http://www.bangkok hospital.com) under the menu item “Investor Relations” as an additional mode of dispensing information to ensure shareholder equality. In 2011, the Company posted the meeting invitation on the Company’s website 30 days prior to the meeting date. The meeting invitation shall include details of the meeting, such as time and place for the meeting, meeting agenda, the Company’s annual report, proxy form and a list of accompanying documents of the meeting. Additionally, the Company has delivered details on the meeting proceedings and appointment of proxy, including suggesting that the shareholder appoint an independent director to act as proxy. This is to assist the shareholders in making informed decisions when exercising their rights and voting. For the convenience of the shareholders, the Company provides registration at the meeting using bar codes and has prepared separate ballots for each agenda, especially for the selection of Directors, whereby the Company has prepared ballots for the voting of individual directors. Shareholders and/or proxies shall receive the ballots at the registration stage. During Meetings The Company has assigned the Chairman of the meeting the duty of notifying and explaining the voting procedures in the various agendas before the meeting is officially convened. The President is assigned the task of responding to questions from the shareholders. After each agenda, the results of the vote will be announced and duly recorded. For the convenience of the shareholders and for clarity, the Company uses multimedia facilities in presenting information during the meeting. The Company has the policy to strictly adhere to the meeting agenda and to allow shareholders equal opportunity in casting votes. To honor the rights of all shareholders, the Company has put in place a policy, which requires that all directors, as well as sub-committees, the auditor and executive management such as Chief Financial Officer, Accounting Director and Financial Director (Investor relation), attend each shareholders’ meeting. If any director or executive cannot attend the shareholders’ meeting, he/she must submit a written explanation of the absence to the Chairman of the Board (in the case of directors) or the President (in the case of executive management). The Chairman of the meeting has provided sufficient opportunity for shareholders to raise questions and advise on business operations, and the annual financial reports without infringing shareholders’ rights. The Chairman of the Board and the President will clarify all information during the meeting and give all directors the opportunity to unofficially meet the shareholders after each meeting. After Meetings The Company has prepared the minutes of the meeting as well as recorded the results of the voting. For each agenda, number of “for”, “against” and “abstain” votes are recorded, as well as the questions raised, explanations and opinions of the meeting are detailed in the minutes. The minutes of the shareholders’ meeting are submitted

to the Stock Exchange of Thailand within the prescribed 14 days after the meeting. The Company has the policy to announce the minutes of the shareholders’ meeting on the company website (http://www.bangkokhospital.com) under the menu item “Investor Relations”.

3. Equality and Rights of Stakeholders Policy The Company recognizes the significance of each group of stakeholders, whether they are internal personnel or external stakeholders such as shareholders, customers, creditors, counter-parties, communities, government agencies and other related organizations. The Company also recognizes that the support of each of the stakeholders will ensure the stability and longevity of the organization in the long term. Therefore, the Company has the policy to protect the rights of the stakeholders through compliance with relevant laws and regulations, as well as respecting the interests of all related parties. The policies are as follows: 3.1 Policy on Transactions which may cause Conflict of Interest and Transactions between Companies The Board of Directors understands that transactions which may lead to conflicts of interest and/or transactions with related counter-parties must be thoroughly contemplated to ensure compliance with the relevant laws and regulations of the Securities and Stock Exchange Commission and the Capital Market Committee, as well as the Company’s internal guidelines. Moreover, such transactions must be strictly carried out as with any other transactions with external parties which have no relationship with the Company. Also, the transactions must fully provide value to the Company and the shareholders. The terms and conditions of the transactions must follow the generally accepted standard terms and conditions of business transactions.

The Company has the policy to prevent Directors, management and employees from using their status for their own personal gain. Directors, management and employees must refrain from engaging in transactions which have conflict of interest with the Company. Furthermore, any Directors, management or employees who have a stake in any transactions will not be part of the decision making process. Directors, especially, will not be allowed to consider or vote on any matters in which they have an interest, including transactions between companies and transactions between subsidiaries and stakeholders. 3.2 Policy on Insider Information The Board of Directors prohibits the Directors, management and employees from taking advantage of opportunities or information that they receive through their positions for personal gain. Nor are they permitted to use opportunity or information to establish a business that is in competition with or is related to the Company’s business. This includes strictly prohibiting the use of insider information to buy or sell shares and securities of the Company for personal gain as well as providing insider information to other persons or juristic persons to buy or sell shares and securities of the Company. Directors and management must report the trading of the Company’s securities and update their current share holding, as well as holdings of spouse and dependents, each time there is a change, to the Company Secretary every month. The Company Secretary will present the report on the changes in securities holdings at the Board of Directors’ meeting. 3.3 Policy on Shareholders The Company aims to achieve the utmost benefits in the long term for the shareholders through stable growth and sustainable capability in generating profits, including maintaining the competitive edge by recognizing the current and future business risks. The Company emphasizes business for consistent profits through continuous business development. The Company strives on professional management, efficient internal control, systematic audit and strong risk management to reciprocate and show responsibility to our shareholders. Other than fundamental rights of the shareholders such as the right to inspect number of shares, right to receive share certificate, right to attend shareholders’ meetings and to vote, right to freely express opinions and make suggestions on the Company operations at the shareholders’ meetings, right to fairly receive returns, and other lawful rights, the Company also has the policy disclose information justly, with transparency and in a timely fashion under business limitations so that every shareholder equally receives information.

3.4 Policy on Employees Employees are a valuable asset to the Company. Capable and experienced employees are consistently welltaken care of in compliance with the Company’s strategy and operational plans. The Company also ensures equal opportunity and suitable compensation. Furthermore, the Company has arranged for the necessary training by both internal and external persons in order to continuously enhance the skills of employees. The Company has provided employees the opportunity to express their opinions and make suggestions to management via the Company’s internal website. The Company supports the healthy working environment and culture, and treats employees equally and justly. Employees are provided with benefits and safety which include medical benefits, provident fund, and academic scholarships for doctors, nurses and employees so that they may use the knowledge to assist in the development of the organization. The aim is for the Company to be a place of learning for personnel, as well as to motivate knowledgeable and capable persons to remain with the organization in the long-term. The Company has put in place guidelines in human resources management from recruitment, training to maintaining quality personnel as follows: Recruitment and Career Advancement The Company recognizes the importance of personnel development from the recruitment process. The Company clearly defines the level of education, experience, expertise and other qualifications of each position in order to recruit the most suitable candidates. In recruiting for a particular position, the Company shall give priority to internal staff in order to provide an opportunity for career advancement. If there are no suitable internal candidates, the Company shall then consider external candidates. Each new employee is required to attend orientation in order to be informed about the working process of the various departments within the organization. This will enable employees to plan and act according to the objectives set. The Company also gives importance to career advancement of employees in order to retain outstanding employees. Employee Training The Company has the policy to support training and development of personnel. In order to regularly and continuously develop and improve employees’ skills, the Company organizes both internal and external training sessions. Apart from training on work skills organized within the organization, the Company also encourages employees to exchange knowledge and experience among the various departments, be it through meetings or information exchange through the intranet. For external training, the Company encourages employees to fill out questionnaires on training desired and will send them to attend those training sessions as appropriate. The Company shall monitor results or measure the knowledge gained in each training course for the greater benefit of the Company and the employees. Employee Evaluation The Company evaluates the employees’ knowledge and skill by clearly and justly specifying the guidelines in evaluating employees of all levels. The employees shall be evaluated based their capabilities and potential in terms of skill, knowledge, attributes and performance. The Company has widely communicated the evaluation guidelines in advance. In determining employee compensation, apart from business profits and the economy in each year, the employee evaluation is also an important factor. By basing employee compensation on employee evaluations, employees will be encouraged to carry out their duties and develop their potential with efficiency and effectiveness. Equal Treatment of Employees The Company recognizes the importance of treating employees equally within the organization, from recruitment to promotion, without bias or nepotism in evaluations, expressing opinions and work. Employee Satisfaction Surveys In order to become aware of each employee’s satisfaction or happiness in their work, the Company has specified that surveys be conducted of employees at all levels to gather opinions and suggestions. The information gathered can be used to correct and/or improve any shortcomings in management of the organization and personnel both in the short and long term. In addition, the Company has also set guidelines on submitting grievances in order to fairly and justly alleviate any frustration in the work place.

Provide Better Quality of Life for Employees The Company recognizes the importance of good quality of life of our personnel, which will encourage our employees to work efficiently. We, therefore, pay close attention to ensuring that the workplace is safe and hygienic for the health and benefit of our employees. The Company provides annual health check-ups to employees. Furthermore, if the number of employees in any department is insufficient for the amount of work assigned, the Company shall employ additional employees so that the amount of work matches the number of employees to better the quality of life for our employees. Build Solid Management and Intra-Working Systems The Company recognizes the importance of continuous work processes from beginning to end in order to produce quality output that meet standards, as well as eliminate and lessen conflicts. To this end, every department has contributed to the Operational Manual to be used as a guideline in communicating and coordinating among departments within the organization. The manual is accessible by all through the intranet and is reviewed and revised as appropriate. Build Good Relationship between Management and Employees The Company recognizes the significance of a good working relationship between management and employees, which affects the work efficiency. Therefore, we have organized activities between management and employees, which will improve the relationship between the two and encourage contentment in the work place; such activities include New Year’s Party, merit making and sports events. In addition, management meets regular with employees in order to exchange views. This will enable the organization to efficiently and effectively reach for the same goals.

Create First-Rate Employees for the Organization and Society In order for employees to conform and for collective discipline, when any employee evades or is in violation of work regulations, that employee will be considered to be at fault. This must be deliberated and rectified according to the regulations by taking into consideration good corporate governance as defined by the Company, which has been set as a guideline for management and employees. The Company firmly believes that developing employees into good and outstanding individuals will ensure the organization’s stable and sustainable growth. 3.5 Policy on Management The Company realizes that management is an important success factor. To this end, the Company has set up a suitable compensation program which is comparable to management in the health care business. Moreover, management is able to carry out their duties and responsibilities independently without intervention, which is for the mutual interest of the organization and all related persons. 3.6 Policy on Counter-Parties The Company does business justly and ethically with partners, competitors, creditors, counter-parties and others according to the terms and conditions in the trade agreement. The Company has the policy to avoid any actions which may be dishonest or infringe on the rights according to the law or as mutually agreed upon of the counterparty, as well as to ensure that the transactions are ethical business-wise. 3.7 Policy on Customers The Company recognizes that the customers are an important success factor of the business. The Company strives for customer satisfaction by providing quality professional service with the determination to continuously improve the quality of medical care services in order to meet the needs and expectations of the customers. This organization maintains the privacy of customers and will not disclose any customer’s information unless required by law or when the customer has given consent. 3.8 Policy on Social Responsibility and the Environment The Company aims to consistently treat society and the environment with the highest standards by upholding safety and environment-friendly standards throughout the business. The Company is involved in public interest and has participated in activities that benefit the community and the environment. It is the Company’s policy to act responsibly towards society (please see details under “Social Responsibility Activities” on page 21 of the 2011 Annual Report), related persons and personnel within the organization.

The Company recognizes the impact of the medical care process on the environment, as well as the safety of the customers and the health of all levels of personnel providing service. To this end, the Company has adopted ISO 14001 for Environmental Management and Mor Or Gor. 18001/ OHSAS18001 for Occupational Hygiene and Safety Management within the organization and received certification from Management System Certification Institute (MASCI). Furthermore, the Company has announced and conveyed the “Environmental, Occupational Health, and Safety Policy” within the hospital to all personnel and related persons since 2003. The policy has been practiced earnestly and consistently. Moreover, the Company has participated in many charitable activities and has supported the employees concerns regarding the environment and the community. In 2007, the Company established the “Community Relations Committee” to oversee, coordinate and communicate between the organization and the community.

4. Disclosure and Transparency The Company has the policy to ensure that disclosure of financial information and general information to shareholders, investors and securities analysts, as well as the general public, is done so sufficiently, completely, justly, timely, with transparency, and as prescribed by relevant laws and regulations. The Company has the policy to disclose the financial statements, important information and any other information which may affect the interests of the shareholders or the decision to invest in the Company, which in turn, may affect the price of the shares and/or securities of the Company. This information will be disclosed sufficiently, completely and at the appropriate time through fair and suitable channels. The main purpose is to ensure that the decision to invest in securities of the Company is made fairly and with equal information. The Board of Directors has prepared the report of responsibilities to the financial statements along with the report from the auditors and has included the reports in the annual report and Form 56-1 so that management may recognize the commitment and responsibility to information and financial reports, which must be accurate before being made available to the investors. In communicating externally, executive management who have been assigned the task of disclosing information about the Company are the President, the Chief Financial Officer and Financial Director (Investor relation). In 2011, the executive officers, including the Financial Director (Investor relation) met with and provided information at the following opportunities: 1. Road shows: 4 domestically, and 3 abroad (7 times in total) 2. Analyst Meetings: 4 times 3. Company Visits and Conference Calls: 120 times 4. Site Visits: 5 times Apart from the aforementioned instances, the Company provides information on the company, operating results, financial statements, and news to the Stock Exchange of Thailand (SET). Interested persons may look up this information on the SET website www.set.or.th and the Company’s website www.bangkokhospital.com. For further information, investors and interested persons may contact the Financial Director (Investor relation) by telephone at 0-2755-1793, e-mail: investor@bangkokhospital.com or the company website www.bangkokhospital.com.

5. Responsibilities of the Board of Directors and the Sub-Committees 5.1 Board of Directors The Board of Directors is comprised of 15 members, 7 of those being Executive Directors and 8 being NonExecutive Directors. Of the 8 Non-Executive Directors, 5 are Independent Directors. Executive Directors Executive Directors are Directors who are involved full-time in the management of the Company and receive a monthly salary or other equal compensation from the Company. Non-Executive Directors Non-Executive Directors are not Directors who are not involved full-time in the management of the Company nor do they receive a monthly salary from the Company. These Directors may be appointed or be representatives of major shareholders.

Independent Directors Independent Directors are Directors who are not involved in management of the Company, subsidiaries, associates or related companies with independent management, major shareholders nor have authority to take over the business. Furthermore, the Independent Directors must not have a business or be involved with the interests of the Company, subsidiaries, associates or related companies, which may negatively affect the interests of the Company and/or shareholders.

Qualifications of Independent Directors, which the Company has set according to regulations of the SEC, are as follows: 1.) Holds less than 0.05 percent of the voting shares of the Company, its subsidiaries, associates or affiliates. This includes shares held by related persons of the individual independent directors. 2.) Is not/Has not been an executive director, staff, employee, salaried advisor or person with controlling power of the Company, parent company, subsidiaries, associated companies, major shareholders or persons with controlling power, unless that status has ended for no less than 2 years prior to the appointment. This restriction shall not apply to an independent director who has been a civil servant or an advisor to a government authority that is a major shareholder or controlling person of the Company. 3.) Is not a blood relative of or has a legally registered relationship as father, mother, spouse, sibling and child, as well as spouse of child, with management, major shareholders with controlling power or individuals to be proposed as management or have controlling power over the company or subsidiaries. 4.) Does not have/Has not had business relationship with the Company, parent company, subsidiaries, associated companies, major shareholders or persons with controlling power, in a way that may hinder oneâ&#x20AC;&#x2122;s independent judgment. In addition, the individual must not be/have been a substantial shareholder or a person with controlling power of an entity that has a business relationship with the Company, parent company, subsidiaries, associated companies, major shareholders or persons with controlling power, unless that status has ended for no less than 2 years prior to the appointment. 5.) Is not/Has not been an auditor of the Company, parent company, subsidiaries, associated companies, major shareholders or persons with controlling power of the Company and is not a substantial shareholder, a person with controlling power or partner of an audit firm which employs auditors of the Company, parent company, subsidiaries, associated companies, major shareholders or persons with controlling power, unless that status has ended for no less than 2 years prior to the appointment. 6.) Is not/has not been a professional advisor, which includes legal counsel and financial advisor, who receives an annual service fee exceeding Baht 2 million from the Company, parent company, subsidiaries, associated companies, major shareholders or persons with controlling power and is not a substantial shareholder, a person with controlling power or partner of the professional advisor, unless that status has ended for no less than 2 years prior to the appointment. 7.) Is not a director who has been appointed as a representative of the Companyâ&#x20AC;&#x2122;s directors, major shareholders or a shareholder who is a related person to a major shareholder. 8.) Not conducting any business which is of the same nature as or in material competition with that of the Company or its subsidiaries, nor be a substantial partner, executive director, staff, employee, salaried advisor, or hold more than 1% of total shares with voting rights of any company whose business is of the same nature as or in material competition with that of the Company or its subsidiaries. 9.) Not posses any other characteristics whish may render that person incapable of expressing independent opinions with regards to the Companyâ&#x20AC;&#x2122;s operations. Separation of Positions 1. The Board of Directors has elected an independent director to be Chairman of the Board. The Chairman and the President must not be the same person. The Chairman shall act impartially in determining policy and strategies, as well as ensure that Board meetings are held and that all directors participate and independently raise questions at each meeting. 2. The Company has determined that the Chairman of the Board must not be a member of the Nomination and Remuneration Committee so that the Committee shall be free to make decisions independent of the Board of Directors.

Authority of Directors and Management are clearly defined and separated. The Board of Directors shall meet regularly each month to monitor and support strategic policies of the Company. At the same time, the Board of Directors shall not interfere with day-to-day operations or business activities under the responsibility of the President and management as only the President is assigned such tasks by the Board. Therefore, management efficiently responds to the power and responsibility of the President. Furthermore, the Company has clearly defined the duties and authority of all levels of management. Term of Directorship In principal, directors should not serve for a long, continuous period of time. However, there is a shortage of persons with experience and knowledge and understanding of health care, as well as limitations in finding suitable replacements. In addition, we must take into consideration management risk that may occur because of lack of knowledge and understanding of health care, which is an important factor in selecting directors, especially in the healthcare business, which requires expertise and specialization in order to clearly understand the Company’s business. Therefore, the Company has not set any official limitations on the term of the directors. Duties of Directors Each director has the duty and responsibility in determining and monitoring the operational policies of the Company, apart from the duties and responsibilities as stated in “Shareholding Structure and Management” on page 51 of the Annual Report, which include the following: 1) Directors should have sufficient access to financial information and other business information so that he/she may carryout duties efficiently. 2) Directors should attend every Board meeting as well as sub-committee meetings, and raise important questions to protect and maintain the rights and interests of the shareholders and stakeholders to ensure proper business conduct and operations. 3) Directors should attend every shareholders’ meeting, especially Directors who have been appointed as the Audit Committee, in order to answer and provide explanation to the shareholders’ queries, as well as acknowledge suggestions from the shareholders. 4) Directors should be capable and have the intention to learn about the Company’s business, as well as share opinions independently, devote time to the Company as needed and show interest in the important issues. 5) Independent directors should submit a letter to the Company to confirm that he/she is truly independent, according to the Company’s definition, on the day that he/she has accepted the appointment to the position and each year after such appointment. 6) Directors must submit and update their personal stake and report changes in securities held by him/her, his/her spouse as well as children under juristic age (if any) to show transparency and must report any changes to the Board of Directors’ meeting. 7) Any other duties of the Directors as stipulated in notifications, acts or laws governing the Company. 5.2 Sub-Committees 5.2.1 Audit Committee The Audit Committee is granted full authority by the Board of Directors to carry out its duties, which include systematic monitoring of business practices, ensuring efficient and strict internal control measures, ensuring compliance with laws on disclosure and determining risk management dealing with the business and finances of the Company. Presently, two of the Audit Committee members are knowledgeable and have direct experience in accounting and finance. In planning internal audits, the Audit Committee will have the internal audit officers plan the audit of the Company for the entire year. The Company has hired an external company, which is licensed and qualified in auditing companies listed on the stock exchange as defined by the SEC, to carry out the internal audit. We believe that internal audit by external auditors will result in just and efficient reporting of the facts as they have independence and flexibility. The Audit Committee will report the activities of the internal auditors at the Board of Directors’ meeting immediately after each meeting.

At Audit Committee meetings that deal with the financial statements and disclosure of financial reports of the Company, the Chief Financial Officer and the Accounting Director of the Company will both be in attendance. Prior to meetings on the financial statements with management, the Audit Committee shall meet with the accounting auditors separately, without management, to enquire about the important risks that may occur from the financial statements or the financial status or limitations, which the auditor has found in the process of auditing the financial statements of the Company and subsidiaries. This is to ensure that auditors are able to act independently without impediments in auditing the Company. 5.2.2 Nomination and Remuneration Committee In order to comply with good corporate governance of listed companies, the Board of Directors passed a resolution to appoint the Nomination and Remuneration Committee. The Committee must be mainly comprised of directors who do not take part in management and have the duty to seek qualified candidates for nomination as directors of the Company for both replacements of directors who have retired and new director positions. Furthermore, the Committee shall determine the guidelines in evaluating the directorsâ&#x20AC;&#x2122; performance annually in order to determine appropriate remuneration. 5.2.3 Executive Committee With the rapid growth of the Company through the merger with Phyathai and Paolo Hospital Groups in 2011 and in order to ensure that the Company follows the strategy, goals and plans set for the year, the Board of Directors made the decision to appoint the Executive Committee. The Committee is comprised of 5 executive directors and has the responsibility to supervise and ensure that the Company and its subsidiaries act in accordance with the set plans. In addition, the Executive Committee shall consider reports by management that are to be presented to the Board of Directors as well as have the authority to approve normal business transactions or transactions that support normal business activities of the Company within a given monetary limit. 68

The approval authority of the Executive Committee cannot be used with persons that may have conflict of interest, stake or any other forms of conflict with the Company or subsidiaries. Such authority also does not include connected transactions and purchase/sale of important assets of the listed Company in accordance with the rules and regulations of the Stock Exchange of Thailand or other related regulations. The Company must act in accordance with the rules and regulations of the Stock Exchange of Thailand or other related regulations on such particular matter. The approval authority of the Executive Committee does not include other matters which require approval from the shareholdersâ&#x20AC;&#x2122; meeting as stated in the Articles of the Company. 5.3 Board of Directors Meetings and Sub-Committee Meetings The Company has set the dates for the Board of Directorsâ&#x20AC;&#x2122; meetings in advance for the entire year so that the Directors are all informed of the meetings in advance and can arrange their schedules to accommodate the meetings. The meetings are to be held on the last Wednesday of each month with the Executive Committee meeting to be held on the Wednesday prior to the Board meeting. The agenda of each meeting will also be set in advance and will include continuing agendas to follow up on any assignments from prior meetings. The Company Secretary shall send meeting invitations and the agenda at least 7 business days in advance of each meeting in order to allow directors sufficient time to review the information prior to attending the meeting. The meetings of the Audit Committee and the Nomination and Remuneration Committee are set in advance. The meetings of the two sub-committees are held as deem appropriate and when opportunity allows in order to accomplish the duties assigned. After the sub-committee meetings, the Chairman of the committees or an appointed representative shall report the result of the meeting to the Board of Directors at the next Board meeting. In 2011, the meetings of the Board of Directors and the sub-committees can be summarized as follows:

Title

Attendance at meetings

Chairman/Independent Director 1st Vice Chairman 2nd Vice Chairman President Director Director Director Director Independent Director Director Director Independent Director Independent Director Independent Director Director

14/14 14/14 8/9 14/14 14/14 14/14 14/14 14/14 13/14 14/14 14/14 9/9 9/14 14/14 9/9

Note: (1) Appointed at the Extraordinary Shareholders’ Meeting 1/2011 on 24th February 2011 as Director of the Company effective 1st April 201 and for the one year ending 31st December 2011, attended the Board of Directors’ meeting from the monthly meeting in April 2011 onwards. (2) Prof (Emeritus) Sanoe Indrasuksri M.D.Independent Director, finished his term at the Annual General Meeting on 28th April 2011 and did not renew, therefore, there were 15 Directors remaining on the Board.

Director’s Name

Title

1. Mr. Prasert Prasarttong-Osoth, M.D. 2. Mr. Pongsak Viddyakorn, M.D. 3. Mr. Chirotchana Sucharto, M.D. 4. Mr. Chatree Duangnet, M.D. 5. Mr. Pradit Theekakul 6. Prof. (Emeritus) Sanoe Indrasuksri M.D.

Chairman of Executive Committee Executive Director Executive Director Executive Director Executive Director Independent Director/ Chairman of the Nomination and Remuneration Committee Independent Director/Chairman of the Audit Committee/ Nomination and Remuneration Committee Member Independent Director/ Audit Committee Member Independent Director/ Audit Committee Member/ Nomination and Remuneration Committee Member

7. Prof. (Emeritus) Santasiri Sornmani, M.D. 8. Dr. Somchai Sujjapongse 9. Mr. Sripop Sarasas

Attendance at Attendance at Executive Committee Audit Committee meetings meetings

Attendance at Nomination and Remuneration Committee meetings

4/4 4/4 4/4 4/4 4/4 1/1 7/7

1/1

4/7 7/7

1/1

Note: 1. The Executive Committee was appointed at the Board of Directors’ Meeting 8/2011 held on 24th August 2011. 2. The Nomination and Remuneration Committee as shown in the above table, were retired in April 2011. Prof (Emeritus) Sanoe Indrasuksri M.D., Independent Director and Chairman of the Nomination and Remuneration Committee retired as a Director of the Company at the 2011 Annual General Meeting held on 28th April 2011. The Board of Directors appointed a new Nomination and Remuneration Committee as listed in “Shareholding Structure and Management” on page 53 of the Annual Report. The new Committee shall meet in 2012 in order to select directors who have completed their term at the 2012 Annual general Meeting.

5.4 Determining Remuneration for Directors and Executives Presently, the Company has appointed the Nomination and Remuneration Committee the task of justly determining the remuneration of directors to correspond to the directorsâ&#x20AC;&#x2122; duties and responsibilities by comparing to those of companies of similar size in the same industry. As for remuneration of executives, the Company will award remuneration by performance evaluation as stated in the guidelines defined by the Board of Directors and the Human Resources Department for each level of management. The performance is linked to the operational results of the Company and individual accomplishments. 5.5 Directorsâ&#x20AC;&#x2122; Knowledge Enhancement The Company has the policy to encourage directors of the Company and subsidiaries to attend the Director Certificate Program (DCP) and the Director Accreditation Program (DAP) organized by the Thai Institute of Directors (IOD). The programs will provide the directors with knowledge and understanding of efficient corporate governance and will enable them to use the knowledge for continuous good corporate governance. Fifteen of the directors have attended and passed the Director Certificate Program and/or the Director Accreditation Program. The Company also encourages directors to attend training courses on amendments and updates of the regulations, policies and guidelines of the Stock Exchange and the SEC. The Company has assigned the Company Secretary the task of summarizing significant changes to the regulations or guidelines to the President for further reporting to the Board of Directors for their acknowledgement and practice. In some cases, the Company may invite experts in specific fields to present such information or guidelines to the Board of Directors for their acknowledgement and practice.

Connected Transactions Nature of Transactions Transactions between the Company or subsidiaries and a person with conflict of interest are normal practice in business dealings and the conditions are the same as those of dealings with external parties. Such transactions have been approved in principal by the Board of Directors at Meeting 8/2551. Therefore, the Audit Committee, which has reviewed the transactions for the year ended 31st December 2010 and 31st December 2011, has the opinion that the transactions with persons with conflict of interest have the same conditions as transactions with external parties, there has not been any transfer of benefits to the persons with conflict of interest and are in accordance with the resolution of the Board of Directors. The transactions can be categorized into 2 types as follows: 1. Normal Business Transactions or Transactions Supporting Normal Business The Company has measures or procedures in approving normal business transactions or transactions supporting normal business. Therefore, management shall consider approving small transactions and normal business transactions with the same conditions as transactions with external parties. The Board of Directors shall approve in the case of medium to large normal business transactions and small to medium transactions that have exceptional conditions. For large transactions that have exceptional conditions, the Board of Directors shall propose the transaction to the shareholders’ meeting for approval. The size of the transaction is evaluated as follows: • Small transactions: transactions with value of less than or equal to Baht 1 million or less than or equal to 0.03% of net assets, whichever is higher. • Medium transactions: transactions with value of more than Baht 1 million but less than Baht 20 million or more than 0.03% but no more than 3% of net assets, whichever is higher. • Large transactions: transactions with value of more than Baht 20 million or more than 3% of net assets, whichever is higher. The Securities and Stock Exchange Act (Fourth Edition) Amendment B.E. 2551 effective 31st August 2008 and the Securities and Exchange Commission circular dated 16th July 2008 state that for flexibility, the Company may bring transactions with associated companies which are normal business transactions or transactions supporting normal business between the Company or subsidiaries and a related person in front of the Board of Directors for approval in principal. Therefore, at the Board of Directors Meeting 8/2551 on 27th August 2008, the Board gave management approval in principal to consider entering into normal business or transaction supporting normal business transactions with normal conditions, which are priced or have fees charged at the market rate with the same conditions as the Company’s transactions with external parties.

2. Financial Assistance The Company has the policy to provide financial assistance to subsidiaries in which the Company holds more than 50 percent of the shares outstanding. The financial assistance is provided under the condition that the subsidiary has no related person that holds more than 10 percent of the remaining shares. The Board of Directors’ Meeting 2/2551 on 26th February 2008 and Meeting 5/2551 on 28th May 2008 resolved that the Company shall provide financial assistance to subsidiaries under the aforementioned conditions. As of 31st December 2011, the Company provided financial assistance in the following forms: 2.1 Loans to subsidiaries The Company will take out a loan in the money market or from a financial institution and then loan that money to the subsidiary at a rate of no more than 1% per annum above the actual cost of capital, which is less than the rate the subsidiary would be charged if taking out a loan directly. 72

Benefit derived The subsidiary can take out a loan at a rate lower than borrowing directly from a financial institution as the Company is capable of seeking loans at a lower rate. 2.2 Guarantee loans by foreign subsidiary Benefit derived To enable the foreign subsidiary to seek a loan directly from a financial institution in that particular country at a prime rate. 2.3 Centralize Liquidity Management (Cash Pooling) At the end of the business day, the liquidity management program will transfer money from the subsidiary’s bank account to the Company’s bank account. The money transferred into the Company’s bank account will be stated as short-term loan from a subsidiary with interest charged at the market rate. At the same time, if any subsidiary requires capital, the Company will transfer the excess liquidity to the subsidiary with interest charged at the market rate. Benefit derived For liquidity management within the Group, companies with excess liquidity will receive interest at a rate higher than the savings rate of financial institutions, while companies needing capital can borrow at a rate no higher than the market rate.

(Unit : baht)

Related Company

Relationship

Guarantee Obligation

Loan to Subsidiaries Long term loan

Short term loan

Advance

Interest receivable

Total debt

Cash Pooling

Accure Interest

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Bangkok Hospital Pattaya Co., Ltd. Bangkok Hospital Rayong Co., Ltd. Bangkok Hospital Had yai Co., Ltd. Wattanavej Co., Ltd. Bangkok Hospital Samui Co., Ltd. Bangkok Hospital trat Co., Ltd. Bangkok Hospital Ratchasima Co., Ltd. Bangkok Hospital Phuket Co., Ltd. Bangkok Hosital Prapradaeng Co., Ltd. Samitivej Plc. (SVH) BNH Medical Center Co., Ltd. Prasit Patana Plc. (PPCL) Paolo Medic Co., Ltd. Siam Medical Co., Ltd. Thai Medical Center PLC. Paolo Samut Prakran Co., Ltd.

Company holds 97.2% Company holds 100.0% Company holds 98.8% Company holds 99.7% Company holds 100.0% Company holds 99.8% Company holds 89.7% Company holds 99.7% Company holds 79.0% Company holds 95.8% Company holds 91.5% Company holds 97.1% Company holds 99.9% Company holds 80.7% Company holds 99.8% Company holds 88.7%

335,000,000 788,540,000 111,270,000

80,903,023 3,043,441 38,512,335 -

28,367 97,474 86,535 205,236 28,961

80,931,390 338,140,915 38,598,870 788,745,236 111,298,961

N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 2,876,000,000 N/A N/A N/A N/A

336,133,002 51,912,138 75,665,722 24,257,528 21,317,917 43,066,318 92,498,245 145,463,674 372,417,651 36,645,839 137,007,477 111,346,169

1,449,194 79,257 142,387 390,214 56,968 60,785 37,687 143,844 216,830 517,784 1,578,516 114,743 341,703 245,709

17 18 19 20 21

Ankor Pisith Co., Ltd. (1) Phnom Penh Medical Services Co., Ltd. (2) Royal Rattanak Medical Services Co., Ltd. (3) National Healthcare Systems Co., Ltd. Bio-Molecular Laboratories (Thailand) Co., Ltd.

Company holds 80.0% Company holds 100.0% Company holds 70.0% Company holds 74.0% Company holds 95.0%

363,438,090 67,290,094 -

39,438,125 -

1,633,677 1,015,283 602,569 -

41,071,802 364,453,373 67,892,664 -

USD 5,000,000 N/A N/A N/A N/A

70,441,442 13,047,185

264,230 34,487

22 23 24 25

Greenline Synergy Co., Ltd. BDMS Training Co., Ltd. A.N.B. Laboratory Co., Ltd. Bankok Premier Life Insurance Co., Ltd.

Company holds 100.0% Company holds 100.0% Subsidiary holds 100.0% Company holds 100.0%

144,200,362 1,000,000

1,408,489 314

145,608,851 -

1,379 283,821 -

1,665,538,184

307,097,286

5,106,906

N/A N/A 1,856,990 N/A 94,868,755 N/A BAHT 2,876,000,000 1,976,742,061 USD 5,000,000 1,627,946,051

Note: (1) Debt for loan in foreign currency US$ 1.25 million (equal to Baht 39.44 million) (2) Debt for loan in foreign currency US$ 11.52 million (equal to Baht 363.44 million) (3) Debt for loan in foreign currency US$ 2.38 million (equal to Baht 67.29 million)

5,959,534

Related persons who are directors and executive management are as follows: 1. Mr. Prasert Prasarttong-Osoth, M.D. 2. Mr. Pongsak Viddyakorn, M.D. 3. Mr. Vichai Thongtang 4. Mr. Wallop Adhikomprapa 5. Mr. Chuladej Yossundharakul, M.D. 6. Mr. Chirotchana Sucharto, M.D. 7. Mr. Pradit Theekakul 8. Mr. Chatree Duangnet, M.D. 9. Miss Kanoknuj Lekvichit 10. Mrs. Narumol Noi-Am The Director was appointed to the subsidiary as a representative of the Company as a major shareholder, not as a personal appointment. Persons with mutual interest holding shares in subsidiaries and associated companies over 5% of shares with voting rights: - None -

For other transactions or connected transactions as defined in the Securities and Exchange Act, the Company shall act in accordance with the rules and regulations of the Securities and Exchange Act as well as with other related notifications. Furthermore, for investor protection, the Company has assigned the Audit Committee the task of ensuring that connected transactions are fair. In the case that the Audit Committee does not have expertise in considering the connected transactions, the Company has the policy to appoint independent persons with professional expertise to provide opinion on such transactions to the Audit Committee and/or the Board of Directors and/or the shareholdersâ&#x20AC;&#x2122; meeting, as the case may be. The Company has disclosed the connected transactions in the Note 12 â&#x20AC;&#x153;Connected Transactionsâ&#x20AC;? in notes to the audited financial statements, which have been certified by an auditor. Policy and Future Related Transactions Transaction

Outlook and Policy

Normal business transactions such as medical care, patient transfer, and lab analysis, etc.

The Company has the policy to allow the Company and subsidiaries to charge each other fees at the market rate. The medical service fees and conditions of payment, as well as other business conditions, shall be equal or have similar conditions or are indifferent from those the Company and subsidiaries charge other customers, whether individuals or counter-parties, under the same circumstances.

Transactions supporting general business such as creditors, and debtors, etc.

In the case that the Company and subsidiaries engage in sale of goods and services, raw materials and medical supplies, procurement, hiring, construction contract between the companies, or between the Company or subsidiary and a related person and such transaction supports normal business, such transaction must have competitive price or fee or must have a reference rate available. The conditions of payment and other terms and conditions must not differ from those of transactions that the Company and subsidiaries engages in with other counter-parties, under the same circumstances.

Financial assistance

The Company has the goal and policy to provide financial assistance to subsidiaries within the Group by centralizing money management for suitable cost of capital and efficiency for the benefit of the organization as a whole. In determining the loan amount, the Company shall give greater importance to the ability to repay the loan than the percentage of shareholding. The rate must not be less than the cost of capital of the Company. Such transactions must comply with the Securities and Exchange Act and/or rules and regulations of the Stock Exchange of Thailand and/ or the notifications of the Capital Market Committee.

Management discussion and analysis

for the year ended December 31, 2011

Since April 1, 2011, the Company had completely acquired and accepted the Entire Business Transfer of Health Network Public Company Limited (“Health Network”). As a result, the Company has become a major shareholder and consolidated the performance of: • The Phyathai Hospital Group, which has Prasit Patana Public Company Limited (“PPCL”) as the major shareholder, consists of Phyathai 1 Hospital Company Limited, Phyathai 2 Hospital Company Limited, Phyathai 3 Hospital Company Limited and Sriracha Nakhon Hospital Public Company Limited (Phyathai Sriracha). • The Paolo Memorial Hospital Group consists of Paolo Medic Hospital Company Limited (Paolo Memorial Hospital, Phaholyothin), Paolo Samutprakarn Company Limited (Paolo Memorial Hospital, Samutprakarn), Siam Medical Company Limited (Paolo Memorial Hospital, Chokchai 4) and Thai Medical Centre Public Company Limited (Paolo Memorial Hospital, Nawamin). Summary of consolidated operating results (Unit : Million Baht)

Revenues from hospital operations Revenue from sales of goods and food Other income Total Operating Income Cost of hospital operations and others Administrative expenses Total Operating Expenses & Depreciation Operating Profit Interest income Dividend income Income from associated companies EBIT Finance expenses Taxes Non-controlling interests of the subsidiaries Normalized Profit Non- Recurring items Profit to equity holders of the Company

2011

2010

% yoy

35,224 1,009 492 36,726 (23,675) (7,224) (30,900) 5,826 63 104 382 6,374 (770) (1,456) (241) 3,907 479 4,386

23,513 222 234 23,968 (15,350) (5,257) (20,607) 3,361 54 3 300 3,718 (584) (779) (85) 2,269 26 2,295

50% 356% 111% 53% 54% 37% 50% 73% 16% 27% 71% 32% 87% 183% 72% 91%

Profitability Analysis

Gross Profit Gross Profit Margin EBITDA (Excluding non-recurring items) EBITDA margin (Excluding non-recurring items) Net profit margin (Excluding non-recurring items) Net profit margin Basic earnings per share (Excluding non-recurring items) Basic earnings per share

2011

2010

% yoy

12,558 34.7% 8,534 23.2% 10.6% 11.9% 2.67 3.00

8,384 35.3% 5,511 23.0% 9.5% 9.6% 1.86 1.88

50% 55%

44% 59%

2011 Consolidated Performance For the year ended December 31, 2011, the Company and its subsidiaries recorded a consolidated net profit of Baht 4,386 million; an increase of Baht 2,091 million, or 91% yoy from 2010. The summarized 2011 consolidated performance is as follows:-

1. Operating income Operating income during 2011 were Baht 36,726 million, an increase of Baht 12,758 million or 53% from 2010 primarily due to: • Revenue from hospital operations during 2011 were Baht 35,224 million, an increase of Baht 11,712 million or 50% from 2010, consisted of : - the revenue growth of organic BDMS hospital operations of Baht 26,631 million, or increased 13% yoy from 2010. The organic growth is driven mainly by an increase in number of patients and severity of diseases resulting in revenue from Thai patients to grow 13% yoy while revenue from international patients to grow 12% yoy. From type of patient perspective, outpatient revenues grew 12% yoy and inpatient revenues grew 14% yoy; and - the consolidation of revenues from Phyathai Hospital Group and Paolo Memorial Hospital Group of Baht 8,593 million Since most of the patients from Phyathai and Paolo Memorial Hospital Group are Thai patients, there was a change in revenue proportion between Thai and international patients from 64% : 36% in 2010 to 74% : 26% in 2011. • Revenue from sales of goods and food were Baht 1,009 million, an increase of Baht 788 million from 2010, as a result of consolidation of revenue from sales of goods of A.N.B. Laboratories Company Limited for Baht 819 million since Company’s subsidiary acquired 100% of A.N.B. Laboratories Company Limited, a manufacturer and distributor of medicines and pharmaceutical products in December 2010. • Other incomes were Baht 492 million, an increase of Baht 258 million from 2010, due mainly to consolidation of Phyathai Hospital Group and Paolo Memorial Hospital Group for Baht 154 million together with Bangkok Hospital Had Yai Company Limited, one of the subsidiaries, receiving an insurance claim from flooding for Baht 24 million during 2Q11. 2. Operating expenses • The Company and its subsidiaries reported cost of hospital operations and others (including depreciation and amortization) of Baht 23,675 million in 2011, an increase by 54% yoy. An increase was due mainly to an organic growth in revenue from hospital operations, the consolidation of Phyathai Hospital Group and Paolo Memorial Hospital Group together with the rise in doctor fee especially specialized doctors. There were also a rise in

clinical staff expenses and an increase in number of clinical staffs from newly graduated nurses’ recruitment together with the recruitment of experienced nurses to support the continued business growth. In addition, the cost of hospital operations and others also included cost of goods sold from A.N.B. Laboratories Company Limited. Since the revenue from hospital operations and revenue from sales of goods and foods grew at the slower pace than cost of hospital operations and others, the gross margin decreased from 35.3% in 2010 to 34.7% in 2011. • The administrative expenses (including depreciation and amortization) were Baht 7,224 million in 2011, an increase by 37% yoy, due mainly to the consolidation of Phyathai Hospital Group and Paolo Memorial Hospital Group together with the flood prevention expenses, staff allowance and donations to various charities and government agencies which are part of the Company’s Corporate Social Responsibility. EBITDA (excluding non-recurring items); however, increased from Baht 5,511 million in 2010 to Baht 8,534 million in 2011, increased by 55% yoy. While the EBITDA margin increased from 23.0% in 2010 to 23.2% in 2011. 3. Depreciation and amortization expenses The depreciation and amortization expenses were Baht 2,707 million in 2011, an increase by 26% yoy due mainly to the consolidation of property, premises and equipments from Phyathai Hospital Group and Paolo Memorial Hospital Group. 4. Others • Interest income was Baht 63 million, increased by 16% yoy, as a result of an increase in short-term investments during 2011. • Dividend income was Baht 104 million, mainly from investment in Bumrungrad Hospital Public Company Limited (“BH”). • Share of income from investments in associated companies was Baht 382 million, increased by 27% yoy, mainly from share of income from investment in RAM of Baht 350 million. • Finance expenses increased to Baht 770 million or increased by 32% yoy due mainly to consolidation of longterm loans from financial institution of Phyathai Hospital Group and Paolo Memorial Hospital Group. • Taxes in 2011 were Baht 1,456 million, an increase from Baht 779 million in 2010, due mainly to increase in pre-tax profit. 5. Non-recurring items In 2011, the Company and its subsidiaries also recorded non-recurring items for gain on fair value adjustment of investments totaling Baht 479 million as a result of “Step Acquisition” in accordance with Thai Financial Reporting Standard (“TFRS 3”) – Business Combinations (effective in 2011) which the Company are required to revalue the original stake from the carrying cost to the fair value and recognize the difference in the statements of income. There are two Step Acquisitions from the following investments:1. Acquisition of PPCL As of 1Q11, the Company held 455.8 million shares or 19.47% of registered and paid up capital in PPCL at the carrying cost of Baht 1,072.5 million. Upon the Entire Business Transfer of Health Network and the completion of the tender offer of PPCL shares during 2Q11, the Company had increased its stake in PPCL to 97.1%. Consequently, on the acquisition date (April 1, 2011), the Company revalued the original stake of 19.47% at fair value, resulting in gain on fair value adjustment of investments in PPCL of Baht 440 million. 2. Additional investment in Udon Pattana (1994) Co., Ltd. As of 1Q11, the Company held 10% of registered and paid-up capital in Udon Pattana (1994) Co., Ltd. During 2Q11 and 3Q11, the Company purchased additional investment of 1,577,000 shares, totaling Baht 38.30 million or 5.26% of shareholding in Udon Pattana (1994) Co., Ltd. together with PPCL shareholding of 10% or 9.71 indirect percentage of shareholding by the Company resulting in an increased in percentage of shareholding from 10% to 24.97% and changes its status to become an associated company. The Company, therefore, revalued the original stake of 10% at fair value using the book value as a benchmark resulting in gain on fair value adjustment of investment in Udon Pattana (1994) Co., Ltd. of Baht 39 million. The Company has also reversed allowance for impairment of such investments of Baht 12 million.

In 2010, the Company and its subsidiaries also recorded non-recurring items totaling Baht 26 million from the gain on a bargain purchase as a result of an acquisition of A.N.B. Laboratories Company Limited. As a result, if excluding non-recurring items which are gain on fair value adjustment of investments totaling Baht 479 million in 2011 and the gain on a bargain purchase as a result of an acquisition of A.N.B. Laboratories Company Limited of Baht 26 million in 2010 as previously mentioned, net profit was Baht 3,907 million; an increase of Baht 1,638 million, or 72% yoy. Net profit margin, excluding non-recurring items, increased from 9.5% in 4Q10 to 10.6% in 4Q11 and the basic earnings per share increased from Baht 1.86 in 2010 to Baht 2.67 in 2011 or grew 44% yoy. If including the non-recurring items, the Company and its subsidiaries recorded a consolidated net profit of Baht 4,386 million in 2011; an increase of Baht 2,091 million, or 91% yoy. Net profit margin significantly increased from 9.6% in 2010 to 11.9% in 2011 and the basic earnings per share increased from Baht 1.88 in 2010 to Baht 3.00 in 2011 or grew 59% yoy. Comprehensive income statements (Unit : Million Baht)

Profit for the period Gain(Loss)on change in value of available-for-sale investments Exchange differences Share of other comprehensive income from associated company Others Total comprehensive income for the period

2011

2010

% yoy

4,627 1,372 51 65 6 6,121

2,380 (125) 2,256

91% N/A (141)% N/A N/A 171%

Total comprehensive income for 2011 was Baht 6,121 million, an increase by 171% yoy from 4Q10, mainly attributable to higher profit for the period as mentioned earlier together with gain on change in value of availablefor-sale investments of Baht 1,372 million for the investment in BH. In addition, the Company has recognized share of other comprehensive income from associated company of Baht 65 million which was mainly as a result of gain on change in value of available-for-sale investments from RAM. Consolidated financial status (Unit : Million Baht)

Total Assets Total Liabilities Total equity attributable to company's shareholders Total shareholders' equity

Dec - 11

Dec - 10

% yoy

58,792 25,375 31,995 33,417

32,197 15,914 15,634 16,283

83% 59% 105% 105%

The consolidated financial position of the Company and its subsidiaries as of December 31, 2011 : The Company and its subsidiaries reported total assets of Baht 58,792 million, an increase of Baht 26,595 million or 83% from December 31, 2010, due mainly to an increase in property, premises and equipments of Baht 10,572 million and a recording of goodwill arise from the Merger of Baht 9,310 million. Such increases were due mainly to the consolidation of Phyathai and Paolo Memorial Hospital Group. In addition, there was also an increase in other longterm investments of Baht 3,409 million, mainly from an investment in BH of Baht 3,456 million and gain on change in value of investment in BH of Baht 1,372 million, offset with change in investment in PPCL of Baht 1,072 million

from other long-term investments to become the Company’s subsidiary and decrease in investment in Bill of Exchange of Baht 500 million. Total consolidated liabilities as of December 31, 2011 were Baht 25,375 million, an increase of Baht 9,461 million or 59% from December 31, 2010, due mainly to an increase in long-term loans from financial institutions of Baht 5,168 million from the consolidation of Phyathai and Paolo Memorial Hospital Group, an increase in trade and other payable of Baht 1,441 million, an increase in other current liabilities of Baht 901 million together with a record of provision for long-term employee benefits of Baht 863 million. Total debt to equity decreased from 0.7x as of December 31, 2010 to 0.5x as of December 31, 2011 while net debt to equity decreased from 0.5x as of December 31, 2010 to 0.4x as of December 31, 2011 Total consolidated shareholders’ equity were Baht 33,417 million, increased by Baht 17,134 million or 105% from the year ended 2010. This is due mainly to total comprehensive income during 2011 together with an issuance of 295.2 million ordinary shares of Baht 13,175 million in relation to the Entire Business Transfer of Health Network and the tender offer for PPCL shares In addition, the Company sold 4.1 million newly issued ordinary shares totaling Baht 156 million to major shareholders of Health Network on a private placement basis. This is offset by change in non-controlling interests of subsidiaries from purchase investment in subsidiaries as a result of additional investment in PPCL of Baht 1,716 million and the cumulative effect of change in accounting policy for employee benefits of Baht 536 million. For the first-time adoption of TAS 19 employee benefits, the Company elected to recognize the transitional liability, which exceeds the liability that would have been recognized at the same date under the previous accounting policy, through an adjustment to the beginning balance of retained earnings in 2011. Liquidity (Unit : Million Baht)

Net cash from operating activities Net cash used in investing activities Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period

2011

2010

% yoy

6,195 (3,775) (1,033) 1,386 2,489 3,876

4,449 (2,462) (1,384) 603 1,886 2,489

39% 53% (25)% 130% 32% 56%

Regarding cash flows statements for the year ended December 31, 2011, the Company and its subsidiaries’ net cash flows from operating activities were Baht 6,195 million, increased by Baht 1,745 million from 2010, due mainly to an increase in profit during year. Net cash used in investing activities were Baht 3,775 million, increased by Baht 1,313 million from 2010. The investing activities during the year was mainly from a decrease in short-term investments of Baht 1,540 million, offset with the purchase of investments in subsidiaries, associates and other companies of Baht 2,188 million and the purchase of property, premises and equipment for Baht 3,560 million. Net cash used in financing activities were Baht 1,033 million, decreased by Baht 351 million due mainly to an increase in long-term loans from financial institutions of Baht 4,616 million, the issuance of the debentures of Baht 3,495 million, netted with repayment of long-term loans from financial institutions of Baht 5,020 million and the redemption of maturing debentures of Baht 3,000 million. Consequently, cash and cash equivalents increased to Baht 3,876 million as of December 31, 2011 from Baht 2,489 million as of December 31, 2010.

Auditorâ&#x20AC;&#x2122;s Compensation Ernst & Young Office Company Limited has been the auditor of the Company and its subsidiaries since the annual audit in 2005 to the present. In 2010, the Company and its subsidiaries have compensated the auditor as follows: 1. Auditing Fee The Company and subsidiaries paid a total of Baht 16,666,500 in auditing fee, details as follows:

Bangkok Dusit Medical Services PCL Subsidiaries (36 companies in total) Total auditing fee

2. Other fees -None80

Review of quarterly financial statements (3 quarters)

Annual Auditing Fee

870,000 5,094,000

1,030,000 9,672,500

Total 1,900,000 14,766,500 16,666,500

Pride in Mission The heart is an amazing organ that can change exhaustion into happiness. It can transform a tough task into pride because we believe that the heart must be cared for from the hearts of the care givers.

Caring for each life with love and concern Love and concern is what closely bonds members of a family. Therefore, we are ready to provide love and concern in caring for each life as if they were a member of our family.

Quality of life Because life is of the highest value, it is worth providing the best service possible. Therefore, we endeavor to continuously improve our services to raise the quality of life every day.

Report of the Audit Committee Dear Shareholders of Bangkok Dusit Medical Services Public Company Limited, The Board of Directors of Bangkok Dusit Medical Services Public Company Limited appointed the Audit Committee, which is comprised of 3 independent directors, namely Professor emeritus Santasiri Sornmani, M.D. as Chairman of the Audit Committee and Mr. Sripop Sarasas and Mr. Somchai Sujjapongse as members of the Committee. The main duties and responsibilities of the Audit Committee are to ensure that the Company’s financial statements are in accordance with accounting standards and have accurate and sufficient disclosure, ensure that the Company has an internal audit system, evaluate the risks and ensure suitable and efficient risk controls, ensure compliance with related regulations and laws, as well as mitigate conflicts of interest between the Company and related persons.

In 2011, the Audit Committee held meetings a total of 7 times to carry out duties as assigned, the most important being: 1. Review the financial statements of the Company and subsidiaries, before presentation to the Board of Directors, as reviewed and explained by the auditor and executive management. The Audit Committee is of the opinion and belief that the aforementioned financial statements were prepared according to accounting standards with accurate and complete disclosure of important facts. 2. Consider and nominate the auditor from Ernst & Young Office Company Limited and the annual auditing fee to the Board of Directors for further approval by the Shareholders’ Meeting. 3. Consider approving the annual audit plan, review internal audit procedures, which are a part of the Company’s management policy, and provide written approval on the internal audit process to be used as a guideline according to international standards. 4. Consider transactions with related persons, disclosure of transactions with related persons and ensure that acquisitions or sales of assets are in compliance with regulations and laws. 5. Consider and hear the internal audit report from the internal auditors by engaging an internal audit company that is licensed by the Office of the Securities and Exchange Commission. The internal auditors carried out the audit according to the importance of the risks as evaluated. The Audit Committee provided suggestions to the Board of Directors and executive management on good corporate governance and internal controls. In addition, the Committee gave importance to suitable arrangement of the Shareholders’ meeting according to the guidelines of the Stock Exchange of Thailand, compliance with laws, regulations and practices, and efficiency in risk evaluation and risk mitigation of the various departments and the organization. The Committee is of the opinion that the internal control system is suitable and sufficient in risk mitigation in accordance with the policies and strategies of the Company. The Audit Committee has carried out the duties as assigned with care for the benefit of the Company, the Shareholders and all stakeholders.

(Professor emeritus Santasiri Sornmani, M.D.)

Chairman of the Audit Committee

The Board of Directors’ Report on its Responsibility to the Financial Statements

The Board of Directors recognizes the importance of duties and responsibilities in ensuring that the Company practices good corporate governance, that the financial statements in the 2011 Annual Report are accurate and fully disclosed, as well as in compliance with generally accepted accounting standards by selecting appropriate accounting policies and consistently adhering to those policies, with careful discretion. The Board of Directors has assigned the Audit Committee the task of reviewing the Company’s financial statements and has been informed that the financial statements are in compliance with generally accepted accounting standards by selecting appropriate accounting policies and consistently adhering to those policies. The financial statements were carefully prepared with consideration of the suitable items to be presented and provide sufficient disclosure in the notes. The Audit Committee has reported these opinions in the Audit Committee Report in the 2011 Annual Report and the Company’s 2011 Form 56-1. Furthermore, the Board of Directors has put in place an efficient internal control system to ensure that all accounting information is recorded accurately and assets are safe-kept in order to prevent fraud or significant damages. In conclusion, the Board of Directors is of the opinion that the Company internal control system is satisfactory and reasonably believes the trustworthiness of the Company’s financial statements as of 31st December 2011, which the auditor has reviewed in accordance with generally accepted accounting standards. Additionally, the financial statements accurately show the significant aspects of the Company’s financial status and performance in accordance with generally accepted accounting standards.

(Mr. Prasert Prasarttong-Osoth, M.D.) Presiedent

Report and Consolidated Financial Statements 31 December 2011 and 2010

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries

Report of Independent Auditor To The Shareholders of Bangkok Dusit Medical Services Public Company Limited I have audited the consolidated statement of financial position of Bangkok Dusit Medical Services Public Company Limited and its subsidiaries as at 31 December 2011, the related consolidated statements of income, comprehensive income, changes in shareholdersâ&#x20AC;&#x2122; equity and cash flows for the year then ended, and have also audited the separate financial statements of Bangkok Dusit Medical Services Public Company Limited for the same period. These financial statements are the responsibility of the Companyâ&#x20AC;&#x2122;s management as to their correctness and completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audit. I did not audit the financial statements as at 31 December 2011 and for the year then ended of a domestic associated company, as included in the consolidated financial statements. The consolidated statement of financial position as at 31 December 2011 included investment in associated company amounted to Baht 2,329 million or 4 percent of consolidated assets, and its related consolidated statements of income for the year ended 31 December 2011 of the associated company amount to approximately Baht 350 million, representing 8 percent of the consolidated income of the year. The financial statements of the associated company were audited by other auditor, whose report has been furnished to me. My opinion on the consolidated financial statements insofar as they relate to any amounts included for this associated company, is based solely upon the audit report of other auditor. The consolidated financial statements of Bangkok Dusit Medical Services Public Company Limited and its subsidiaries and the separate financial statements of Bangkok Dusit Medical Services Public Company Limited for the year ended 31 December 2010, as presented herein for comparative purposes, were audited in accordance with generally accepted auditing standards by another auditor of our firm who expressed an unqualified opinion on those financial statements, under his report dated 24 February 2011. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, based on my audit and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Bangkok Dusit Medical Services Public Company Limited and its subsidiaries and of Bangkok Dusit Medical Services Public Company Limited as at 31 December 2011, the results of their operations and cash flows for the year then ended in accordance with generally accepted accounting principles. Without qualifying my opinion on the above financial statements, I draw attention to Note 3 and Note 5 to the financial statements. During the current year, the Company and its subsidiaries adopted the revised and new accounting standards issued by the Federation of Accounting Professions, and applied them in its preparation and presentation of the financial statements. For the first-time adoption of TAS 19 Employee Benefits, the Company and its subsidiaries elected to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under the previous accounting policy, through an adjustment to the beginning balance of retained earnings in the current year, and for the first-time adoption of TAS 40 (Revised 2009) Investment Property, the Company and its subsidiaries elected to recognise investment property under fair value model and recognised impact of the change to the financial statements through an adjustment to the beginning balance of retained earnings in the current year.

Wichart Lokatekrawee

Certified Public Accountant (Thailand) No. 4451 Ernst & Young Office Limited Bangkok: 29 February 2012

As at 31 December 2011 and 2010

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries

Statements of financial position

(Unit : Baht)

Assets Note

Current assets Cash and cash equivalents Short-term investments Trade and other receivables Short-term loans to related parties Inventories Other current assets Total current assets Non-current assets Long-term deposit at financial institution Restricted financial institution deposits Investments in subsidiary companies Investments in associated companies Other long-term investments Long-term loans to related parties Investment properties Property, premises and equipment Land and buildings not used in operation Goodwill Intangible assets Other non-current assets Leasehold rights Others Total non-current assets Total assets

8 10, 11, 12 12 13

8, 9 14 15 16 12 17 18 19 14.1 20 12, 21 12

Consolidated financial statements 2010 2011

Separate financial statements 2010 2011

3,875,733,420 464,365,921 3,377,111,722 1,037,726,798 121,792,752 8,876,730,613

2,489,455,028 1,739,553,849 1,954,824,148 398,304,761 187,651,255 6,769,789,041

1,520,306,827 10,032 829,289,509 307,097,286 230,927,282 14,872,145 2,902,503,081

1,082,258,711 1,739,542,882 572,576,549 103,131,775 57,832,701 74,722,283 3,630,064,901

50,000,000 24,685,891 2,815,613,743 5,049,423,501 190,226,327 29,430,070,630 511,202,630 10,609,368,928 482,139,079

61,659,484 2,271,388,344 1,640,078,691 18,858,095,794 511,202,630 1,299,169,249 201,420,094

23,925,320,165 1,735,973,111 4,876,099,654 1,665,538,184 425,816,327 4,978,103,389 510,876,287 72,988,099

8,678,064,290 1,666,020,682 1,639,788,771 1,321,013,908 5,152,116,946 510,876,287 75,096,402

557,137,056 195,333,849 49,915,201,634 58,791,932,247

509,063,654 75,157,462 25,427,235,402 32,197,024,443

106,061,020 14,455,744 38,311,231,980 41,213,735,061

59,003,325 18,555,109 19,120,535,720 22,750,600,621

The accompanying notes are an integral part of the financial statements.

As at 31 December 2011 and 2010

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries

Statements of financial position (continued) (Unit : Baht)

Liabilities and shareholders' equity Note

Current liabilities Short-term loans from related parties Bank overdrafts and short-term loans from financial institutions Trade and other payables Current portion of long-term loans from financial institutions Current portion of liabilities under finance lease agreements Current portion of convertible debentures - liability component Current portion of debentures Income tax payable Dividend payable Accrued expenses Other current liabilities Total current liabilities Non-current liabilities Long - term loans from financial insitutions - net of current portion Liabilities under finance lease agreement - net of current portion Debentures - net of current portion Provision for long-term employee benefits Deferred income Other non-current liabilities Total non-current liabilities Total liabilities

Consolidated financial statements 2010 2011

Separate financial statements 2010 2011

1,627,946,051

639,601,233

22 12, 23

231,170,205 3,391,190,815

38,406,219 1,950,357,140

942,752,305

733,717,654

813,214,841

355,264,851

436,300,000

343,800,000

149,722,523

76,619,464

3,051,032

631,187

725,829,097 1,815,833,234 451,509,847 7,578,470,562

2,141,480 2,999,445,421 353,919,391 989,912,836 1,014,146,461 447,329,053 8,227,542,316

48,526,497 397,328,233 158,023,562 3,613,927,680

2,141,480 2,999,445,421 87 13,080,104 989,912,836 353,982,315 132,520,559 6,208,832,789

6,951,172,278

2,240,647,470

2,705,410,000

2,120,100,000

25 37 26

185,304,941 74,528,018 8,461,262,680 4,963,726,969 862,972,388 173,449,698 146,112,262 1,162,070,430 261,562,874 17,796,232,415 7,686,577,593 25,374,702,977 15,914,119,909

6,927,699 81,668 8,461,262,680 4,963,726,969 148,516,084 108,620,182 146,112,262 106,791,206 93,770,731 11,537,527,851 7,323,791,630 15,151,455,531 13,532,624,419

The accompanying notes are an integral part of the financial statements.

As at 31 December 2011 and 2010

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries

Statements of financial position (continued)

(Unit : Baht)

Liabilities and shareholders' equity (continued) Note

Shareholders' equity Share capital Registered 1,553,391,408 ordinary shares of Baht 1 each (2010 : 1,312,264,222 ordinary shares of Baht 1 each) Issued and fully paid-up 1,545,458,883 ordinary shares of Baht 1 each (2010: 1,246,035,935 ordinary shares of Baht 1 each) Share premium Premium on ordinary shares Difference from shareholding restructure Retained earnings Appropriated - statutory reserve Unappropriated Other components of shareholders' equity Equity attributable to owners of the Company Non - controlling interests of the subsidiaries Total shareholders' equity Total liabilities and shareholders' equity

Consolidated financial statements 2010 2011

Separate financial statements 2010 2011

1,553,391,408

1,312,264,222

1,553,391,408

1,312,264,222

1,545,458,883

1,246,035,935

1,545,458,883

1,246,035,935

20,022,497,644 305,000,325

6,988,760,633 305,000,325

19,959,573,716 -

6,925,836,705 -

155,339,141 9,003,545,079 963,350,808 31,995,191,880 1,422,037,390 33,417,229,270 58,791,932,247

131,226,422 5,161,968,125 1,801,501,360 15,634,492,800 648,411,734 16,282,904,534 32,197,024,443

155,339,141 2,516,503,383 1,885,404,407 26,062,279,530 26,062,279,530 41,213,735,061

131,226,422 186,554,761 728,322,379 9,217,976,202 9,217,976,202 22,110,999,388

The accompanying notes are an integral part of the financial statements.

For the years ended 31 December 2011 and 2010

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries

Income statements (Unit : Baht)

Revenues Consolidated financial statements 2010 2011

Note

12 Revenues from hospital operations 12 Other income Revenue from sales of goods and foods Interest income Dividend income 14.1, 15.1 Gain on fair value adjustment of investments Others Total other income Total revenues Expenses 12 Cost of hospital operations and goods sold 12 Administrative expenses Total expenses Profit before share of income from investments in associated companies, finance expenses and corporate income tax Share of income from investments in associated 15 companies Profit before finance expenses and corporate income tax 12 Finance expenses Profit before corporate income tax Corporate income tax Profit for the year

Profit attributable to: Equity holders of the Company Non-controlling interests of the subsidiaries

Basic earnings per share Profit attributable to equity holders of the Company Weighted average number of ordinary shares (shares)

35,224,466,182 23,512,628,958

Separate financial statements 2010 2011 8,258,839,349

7,219,714,616

221,574,213 1,009,460,204 42,371,398 54,166,538 63,051,703 71,717,388 3,065,072 1,979,139,621 103,527,505 479,028,410 259,779,774 491,804,455 407,838,566 538,585,597 2,501,066,973 2,146,872,277 37,371,338,459 24,051,214,555 10,759,906,322

37,349,309 162,557,925 791,679,745 309,196,142 1,300,783,121 8,520,497,737

23,675,485,850 15,350,057,774 7,224,190,229 5,256,968,992 30,899,676,079 20,607,026,766

5,479,336,126 2,302,468,571 7,781,804,697

4,760,073,780 2,106,194,991 6,866,268,771 89

6,471,662,380

3,444,187,789

2,978,101,625

1,654,228,966

381,645,368

299,746,829

6,853,307,748 (770,451,369) 6,082,856,379 (1,456,317,745) 4,626,538,634

3,743,934,618 (584,353,865) 3,159,580,753 (779,387,008) 2,380,193,745

2,978,101,625 1,654,228,966 (571,660,686) (574,526,395) 2,406,440,939 1,079,702,571 (84,191,711) (109,428,864) 995,510,860 2,297,012,075

4,385,987,305 240,551,329 4,626,538,634

2,295,063,120 85,130,625 2,380,193,745

2,297,012,075

995,510,860

3.00

1.88

1.57

0.82

1,461,915,619

1,218,818,908

1,461,915,619

1,218,818,908

The accompanying notes are an integral part of the financial statements.

For the years ended 31 December 2011 and 2010

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries

Statements of comprehensive income

(Unit : Baht)

Consolidated financial statements 2010 2011 Profit for the year

Other comprehensive income: Gain on change in value of available-for-sale investments Actuarial loss Gain on revaluation of land Exchange differences on translation of financial statements in foreign currency Share of other comprehensive income from associated company Other comprehensive income for the year Total comprehensive income for the year Total comprehensive income attributable to: Equity holders of the Company Non-controlling interests of the subsidiaries

Separate financial statements 2010 2011

4,626,538,634

2,380,193,745

2,297,012,075

995,510,860

1,372,437,827 (3,309,777) 8,985,000

42,525 -

1,372,272,360 -

42,525 -

51,099,075

(124,657,590)

65,309,329 1,494,521,454

(124,615,065)

1,372,272,360

42,525

6,121,060,088

2,255,578,680

3,669,284,435

995,553,385

5,885,182,971 235,877,117 6,121,060,088

2,170,448,055 85,130,625 2,255,578,680

3,669,284,435

995,553,385

The accompanying notes are an integral part of the financial statements.

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries

For the years ended 31 December 2011 and 2010

Statements of cash flows

(Unit : Baht)

Cash flows from operating activities Consolidated financial statements 2010 2011 Profit before corporate income tax 6,082,856,379 Adjustments to reconcile profit before corporate income tax to net cash provided by (paid from) operating activities: Depreciation and amortisation expenses 2,707,488,415 Write-off of assets 18,628,818 Bad debts and allowance for doubtful accounts 116,796,026 Loss (reversal loss) on impairment of assets (13,083,042) Loss on deteriorated inventories 913,628 Amortisation of deferred income (43,745,508) Share of income from investments in associated companies (381,645,368) Negative goodwill (25,266,375) Gain on fair value adjustment of investments (479,028,410) Amortisation of expense for convertible debentures, issued debentures and loan 4,010,911 Gain on disposal of property, premises and equipment (9,915,912) Gain on disposal of investment Gain on adjust fair value of investment property (1,045,000) Loss on liquidation of a subsidiary company Unrealised loss (gain) on foreign exchange Long-term employee benefit expenses 107,180,693 Interest income (63,051,703) Dividend income (103,527,505) Interest expense 770,451,369 Profit from operating activities before changes in operating assets and liabilities 8,688,017,416 Decrease (increase) in operating assets Trade and other receivables (714,466,815) Inventories (482,018,260) Other current assets 105,300,148 Other non-current assets (35,341,337) Increase (decrease) in operating liabilities Trade and other payables 625,615,414 Accrued expenses 151,864,550 Other current liabilities (87,604,617) Provision for long-term employee benefits (39,117,120) Other non-current liabilities 65,558,065 Net cash from operating activities 8,277,807,444 Cash received from interest incomes 62,891,993 Cash paid for interest expenses (737,131,245) Cash received from tax refund 15,041,752 Cash paid for corporate income tax (1,423,883,387) Net cash from operating activities 6,194,726,557

Separate financial statements 2010 2011 2,406,440,939

1,079,702,571

701,608,922 2,149,708,242 276,429 26,981,753 82,315,432 58,859,014 18,219,433 (12,333,020) 224,933 737,983 (37,492,080) (38,237,767) (299,746,829) (26,164,108) 11,825,283 3,277,578 (4,327,802) (2,552,500) (314,128) (18,069,000) 1,031,853 (12,870,015) 22,241,974 (54,166,538) (71,717,388) (3,065,072) (1,979,139,621) 584,353,865 571,660,686 5,607,187,450 1,631,961,754

716,589,401 22,183,140 20,000,000 224,933 (38,237,767) 11,825,283 (1,290,406) (314,128) 38,809,776 (162,557,925) (791,679,745) 574,526,395 1,469,781,528

3,159,580,753

(168,590,474) (36,048,287) (65,412,775) (18,565,509)

(331,495,962) (173,832,564) 59,850,137 (351,887)

(4,880,193) 4,354,459 (21,219,221) 767,124

282,354,828 38,172,942 (32,415,184) 77,291,808 5,683,974,799 18,518,138 (567,377,073) (685,738,314) 4,449,377,550

180,733,708 17,448,294 25,503,007 (6,353,393) 13,020,475 1,416,483,569 70,192,988 (555,288,206) (69,068,435) 862,319,916

123,484,257 28,231,547 (42,559,628) 20,337,389 1,578,297,262 137,342,328 (566,751,209) (99,471,122) 1,049,417,259

The accompanying notes are an integral part of the financial statements.

For the years ended 31 December 2011 and 2010

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries

Cash flows from investing activities

(Unit : Baht)

Statements of cash flows (continued)

Consolidated financial statements 2010 2011

Separate financial statements 2010 2011

1,539,710,529 61,067,509 166,639,607 15,111,753

(537,725,569) (9,737,481) 64,286,160 21,769,165

1,739,532,850 1,979,139,621 15,111,753

(539,534,063) 791,679,745 21,769,165

(2,188,039,086) Cash received from refunding capital of a subsidiary company 500,000,000 Cash received from disposal of dued other long-term investment Cash received from disposal of investment (135,177,289) Cash paid for investment property 18,300,692 Cash received from disposal of property, premises and equipment Cash paid for purchase of property, premises and equipment (3,559,683,668) (52,960,502) Cash paid for leasehold rights Decrease (increase) in short-term loans to related parties Increase in long-term loans to related parties Cash received from long-term loans to related parties (140,325,399) Cash paid for purchase of intangible assets (3,775,355,854) Net cash from (used in) investing activities

(766,230,407) 1,052,125 23,867,019 (1,192,129,444) (7,492,779) (60,039,569) (2,462,380,780)

(4,607,666,211) 258,968,147 500,000,000 (135,177,289) 5,725,129 (762,812,347) (52,960,502) (164,527,385) (1,010,593,176) 641,837,422 (9,472,731) (1,602,894,719)

(1,013,103,408) 1,052,125 6,441,818 (719,295,672) 56,529,105 (69,279,800) 1,543,496,656 (96,300) 79,659,371

Decrease (increase) in short-term investments Decrease (increase) in restricted financial institution deposits Dividend received Interest received from investment Cash paid for purchase of investments in subsidiaries, associates and other company

The accompanying notes are an integral part of the financial statements.

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries

For the years ended 31 December 2011 and 2010

Statements of cash flows (continued)

(Unit : Baht)

Cash flows from financing activities Consolidated financial statements 2010 2011 Increase in short-term loans from related parties

Separate financial statements 2010 2011 988,344,818

16,715,225 (343,800,000) (2,019,957) -

Increase (decrease) in bank overdraft and short-term loans

191,279,298 4,616,390,400 (5,019,926,849) (137,403,367) 3,494,818,102 (3,000,000,000)

(5,008,367) (361,587,066) (131,152,297) -

1,021,610,000 (343,800,000) (2,154,273) 3,494,818,102 (3,000,000,000)

(131,467,725) 9,717,108 (989,912,836) (66,586,442) (1,033,092,311) 1,386,278,392 2,489,455,028 3,875,733,420 -

(4,737,050) (850,139,674) (31,358,807) (1,383,983,261) 603,013,509 1,886,441,519 2,489,455,028

9,717,108 (989,912,836) 1,178,622,919 438,048,116 1,082,258,711 1,520,306,827 -

90,571,481 Increase in accounts payable - property, premises and equipment 48,301,606 Increase (decrease) in payable to construction and retention 166,135,869 Dividend receivable Acquire investments in subsidiary companies by issuing shares 13,321,247,595 Dividend payable -

98,430,208 164,739,522 12,474,718 27,531 989,912,836

11,159,376 25,939,443 (13,722,006) 13,321,247,595 -

from financial institutions Cash received from long-term loans from financial institutions Repayment of long-term loans from financial institutions Repayments of liabilities under finance lease agreements Cash received from issue of debentures Cash paid for redemption of debentures Cash paid for investment in subsidiary companies from non - controlling interests Net cash received from issuing ordinary shares Dividend paid Dividend paid by subsidiaries to non - controlling interests Net cash from (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

(850,139,674) 93 (1,179,244,406) (50,167,776) 1,132,426,487 1,082,258,711

Supplemental cash flows information: Non-cash items: Assets acquired under finance lease agreements

79,384,878 58,341,315 989,912,836

The accompanying notes are an integral part of the financial statements.

For the years ended 31 December 2011 and 2010

Statements of changes in shareholders' equity

Issued and paid-up share capital

Premium on ordinary shares

Difference from shareholding restructure

Retained earnings Surplus (deficit) on changes Appropriatedin value of statutory available-forreserve Unappropriated sale investments

1,214,498,745 31,537,190 Conversion of convertible debentures Profit for the year Other comprehensive income for the year Total comprehensive income for the year Dividend paid (Note 28) Decrease in non-controlling interests of subsidiaries 1,246,035,935 Balance as at 31 December 2010

5,855,970,240 1,132,790,393 6,988,760,633

305,000,325 305,000,325

131,226,422 131,226,422

4,706,957,515 2,295,063,120 2,295,063,120 (1,840,052,510) 5,161,968,125

(221,533)

1,246,035,935

6,988,760,633

305,000,325

131,226,422

5,161,968,125

(179,008)

(517,149,736)

295,236,682 4,127,864 58,402 -

12,879,901,154 151,699,002 2,136,855 -

24,112,719 -

(24,112,719) 4,385,987,305 (3,147,896) 4,382,839,409

1,372,433,095 1,372,433,095

1,545,458,883

20,022,497,644

305,000,325

155,339,141

9,003,545,079

1,372,254,087

Balance as at 31 December 2009

Balance as at 31 December 2010

42,525 42,525 (179,008)

Cumulative effect of change in accounting policy for employee benefits (Note 5.1) Acquire investments in subsidiary companies by issuing shares (Note 27) Issue of share capital (Note 27) Conversion of convertible debentures Statutory reserve Profit for the year Other comprehensive income for the year Total comprehensive income for the year Change in non-controlling interests of subsidiaries from purchase investment in subsidiaries Decrease in non-controlling interests of subsidiaries from dividend of subsidiaries Balance as at 31 December 2011

The accompanying notes are an integral part of the financial statements.

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries

(Unit : Baht)

Consolidated financial statements Equity attributable to owners of the Company Other components of shareholdersâ&#x20AC;&#x2122; equity

Revaluation surplus on land

Exchange differences on Share of other Convertible comprehensive translation of debentures - income from financial equity statements in associated foreign currency component company

Net change in ownership interest of subsidiary shareholding recognised in equity

Total equity attributable to owners of the Company

Equity attributable to non-controlling interest of the subsidiaries

Total shareholders' equity

Total other components of shareholders' equity

1,949,627,079 1,949,627,079

(44,143,583) (124,657,590) (124,657,590) (168,801,173)

10,920,897 (10,900,710) 20,187

20,834,275 20,834,275

1,937,017,135 (10,900,710) (124,615,065) (124,615,065) 1,801,501,360

14,150,670,382 1,153,426,873 2,295,063,120 (124,615,065) 2,170,448,055 (1,840,052,510) 15,634,492,800

596,451,933 85,130,625 85,130,625 (33,170,824) 648,411,734

14,747,122,315 1,153,426,873 2,380,193,745 (124,615,065) 2,255,578,680 (1,840,052,510) (33,170,824) 16,282,904,534

1,949,627,079

(168,801,173)

20,187

20,834,275

1,801,501,360

15,634,492,800

648,411,734

16,282,904,534

(517,149,736)

(19,303,550)

(536,453,286)

65,309,329 65,309,329

(20,187) 1,502,343,562 1,502,343,562

13,175,137,836 155,826,866 2,175,070 4,385,987,305 1,499,195,666 5,885,182,971

240,551,329 (4,674,212) 235,877,117

13,175,137,836 155,826,866 2,175,070 4,626,538,634 1,494,521,454 6,121,060,088

5,855,907 5,855,907

58,745,231 58,745,231

(20,187) -

(2,340,473,927)

623,638,531

(1,716,835,396)

1,955,482,986

(110,055,942)

86,143,604

(2,340,473,927)

963,350,808

31,995,191,880

(66,586,442) 1,422,037,390

(66,586,442) 33,417,229,270

For the years ended 31 December 2011 and 2010

Statements of changes in shareholders' equity (continued) Issued and paid-up share capital

Retained earnings Premium on ordinary shares

Appropriatedstatutory reserve

Unappropriated

Balance as at 31 December 2009 Conversion of convertible debentures Profit for the year Other comprehensive income for the year Total comprehensive income for the year Dividend paid (Note 28) Balance as at 31 December 2010

1,214,498,745 31,537,190 1,246,035,935

5,793,046,312 1,132,790,393 6,925,836,705

131,226,422 131,226,422

1,031,096,411 995,510,860 995,510,860 (1,840,052,510) 186,554,761

Balance as at 31 December 2010 Cumulative effect of change in accounting policy for employee benefits (Note 5.1) Cumulative effect of change in accounting policy for investment property (Note 5.2) Acquire investments in subsidiary companies by issuing shares (Note 27) Issue of share capital (Note 27) Conversion of convertible debentures Statutory reserve Profit for the year Other comprehensive income for the year Total comprehensive income for the year Balance as at 31 December 2011

1,246,035,935

6,925,836,705

131,226,422

186,554,761

(158,120,879)

215,170,145

12,879,901,154 151,699,002 2,136,855 19,959,573,716

24,112,719 155,339,141

(24,112,719) 2,297,012,075 2,297,012,075 2,516,503,383

295,236,682 4,127,864 58,402 1,545,458,883

The accompanying notes are an integral part of the financial statements.

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries

(Unit : Baht)

Separate financial statements Other components of shareholdersâ&#x20AC;&#x2122; equity Surplus (deficit) on changes in value of available-forsale investments

Total shareholders' equity

Revaluation surplus on land

Convertible debentures - equity component

Total other components of shareholders' equity

(221,533) 42,525 42,525 (179,008)

728,481,200 728,481,200

10,920,897 (10,900,710) 20,187

739,180,564 (10,900,710) 42,525 42,525 728,322,379

8,909,048,454 1,153,426,873 995,510,860 42,525 995,553,385 (1,840,052,510) 9,217,976,202

(179,008)

728,481,200

20,187

728,322,379

9,217,976,202

97 -

(158,120,879)

(215,170,145)

(20,187) 1,372,272,360 1,372,272,360 1,885,404,407

13,175,137,836 155,826,866 2,175,070 2,297,012,075 1,372,272,360 3,669,284,435 26,062,279,530

1,372,272,360 1,372,272,360 1,372,093,352

513,311,055

(20,187) -

For the years ended 31 December 2011 and 2010

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries

Notes to consolidated financial statements 1. General information

Bangkok Dusit Medical Services Public Company Limited ("the Company") is a public company under Thai laws and domiciled in Thailand. The Company is principally engaged in the hospital business. The registered office of the Company is at 2, Soi Soonvijai 7, New Petchburi Road, Bang Kapi, Huaykwang, Bangkok.

2. Basis of preparation

2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

2.2 Basis of consolidation a) The consolidated financial statements include the financial of Bangkok Dusit Medical Services Public Company Limited (“the Company”) and the following subsidiaries (“the subsidiaries”) as follows:

Company's name

Nature of business

Registered capital 2011

2010

Held by the Company Samitivej Public Co., Ltd. Hospital Baht 1,000 million Baht 1,000 million Bangkok Hospital Hatyai Co., Ltd. Hospital Baht 500 million Baht 500 million Bangkok Phuket Hospital Co., Ltd. Hospital Baht 500 million Baht 500 million BNH Medical Center Co., Ltd. Hospital Baht 586 million Baht 586 million Bangkok Phrapradaeng Hospital Co., Ltd. Hospital Baht 105 million Baht 105 million Bangkok Pattaya Hospital Co., Ltd. Hospital Baht 280 million Baht 280 million Bangkok Rayong Hospital Co., Ltd. Hospital Baht 400 million Baht 400 million Bangkok Samui Hospital Co., Ltd. Hospital Baht 150 million Baht 150 million Bangkok Trat Hospital Co., Ltd. Hospital Baht 250 million Baht 250 million Wattanavej Co., Ltd. Hospital Baht 180 million Baht 180 million Bangkok Ratchasima Hospital Co., Ltd. Hospital Baht 300 million Baht 300 million National Healthcare Systems Co., Ltd. Central lab Baht 75 million Baht 75 million Bio Molecular Laboratories Central lab Baht 10 million Baht 10 million (Thailand) Co., Ltd.

Percentage of shareholding by the Company (percent) 2011

2010

95.76 98.78 99.68 91.48 79.00 97.22 100.00 100.00 99.76 99.69 89.73 74.02 95.00

95.76 98.78 99.67 91.42 79.00 97.22 100.00 100.00 99.76 99.67 89.53 74.02 95.00

Company's name

Nature of business

Held by the Company (continued) Hospital Angkor Pisith Co., Ltd. Hospital Phnom Penh Medical Services Co., Ltd. Hospital Royal Rattanak Medical Services Co., Ltd. Hospital B.D.M.S. International Medical Services Co., Ltd. Asia International Healthcare Co., Ltd. Investment Liquidated Bangkok Hospital Hua Hin Co., Ltd. New Petchburi Medical Services Co., Ltd. Hospital Health Bangkok Health Insurance Limited insurance Management Royal Bangkok Healthcare Co., Ltd. service Technology Greenline Synergy Co., Ltd. and information service Bangkok Hospital Kao Yai Co., Ltd. BDMS Training Co., Ltd. Prasit Patana Public Co., Ltd. Paolo Medic Co., Ltd. Paolo Samutprakarn Co., Ltd. Siam Medical Co., Ltd. Thai Medical Center Public Co., Ltd. Bangkok Premier Life Insurance Broker Co., Ltd.

Hospital Training business Investment

Registered capital

Percentage of shareholding by the Company (percent)

2011

2010

2011

2010

USD 10 million USD 10 million Riel 26,000 million Riel 9,200 million Baht 35 million Baht 260 million Baht 1 million Baht 105 million Baht 736 million Baht 200 million

80.00 100.00 70.00

100.00

100.00 100.00 99.94

100.00 100.00 100.00 99.94

100.00

Baht 70 million Baht 70 million Baht 1 million Baht 1 million

100.00 100.00

Baht 2,341 million Baht 300 million Baht 42 million Baht 100 million Baht 201 million -

97.14

100.00 88.73 80.72 99.76 100.00

Baht 2,341 million Hospital Baht 300 million Hospital Baht 42 million Hospital Baht 100 million Hospital Baht 201 million Life insurance Baht 4 million broker

Company's name Held by the subsidiaries Samitivej Sriracha Co., Ltd. (held by a subsidiary at 68%) Irving Sheridan SE Co., Ltd. (held by a subsidiary at 95%) First Health Food Co., Ltd. (held by a subsidiary at 100%)

100

Nature of business

Hospital Asset management for healthcare business Restaurant and distribution of health food products and facility management

Sodexo Healthcare Support Services Restaurant and (Thailand) Co., Ltd. distribution of (held by a subsidiary at 74%) health food products Phuket Health And Travel Co., Ltd. Healthcare travel (held by a subsidiary at 100%) service A.N.B. Laboratories Co., Ltd. Manufacturer and distributor of medicine (held by a subsidiary at 100%) and pharmaceutical products

Registered capital

Percentage of shareholding by the Company (percent)

2011

2010

2011

2010

Baht 188 million Baht 0.1 million

Baht 14 million

Baht 15 million

Baht 5 million Baht 499 million

All subsidiaries incorporated in Thailand except B.D.M.S. International Medical Services Co., Ltd., Angkor Pisith Co., Ltd., Phnom Penh Medical Services Co., Ltd. and Royal Rattanak Medical Services Co., Ltd. which were incorporated in Cambodia. b) Subsidiaries are fully consolidated, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. c) The financial statements of the subsidiaries are prepared using the same significant accounting policies as the Company. d) The assets and liabilities in the financial statements of overseas subsidiary companies are translated to Baht using the exchange rate prevailing on the end of reporting period, and revenues and expenses translated using monthly average exchange rates. The resulting differences are shown under the caption of “Exchange differences on translation of financial statements in foreign currency” in the statements of changes in shareholders’ equity. e) Material balances and transactions between the Company and its subsidiaries have been eliminated from the consolidated financial statements. f ) Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated profit or loss and within equity in the consolidated statement of financial position. 2.3 The separate financial statements, which present investments in subsidiaries and associates under the cost method, have been prepared solely for the benefit of the public.

3. Adoption of new accounting standards

During the current year, the Company and its subsidiaries adopted a number of revised and new accounting standards, issued by the Federation of Accounting Professions, as listed below. Accounting standards: TAS 1 (revised 2009) TAS 2 (revised 2009) TAS 7 (revised 2009) TAS 8 (revised 2009) TAS 10 (revised 2009) TAS 11 (revised 2009) TAS 16 (revised 2009) TAS 17 (revised 2009) TAS 18 (revised 2009) TAS 19 TAS 23 (revised 2009) TAS 24 (revised 2009) TAS 26 TAS 27 (revised 2009) TAS 28 (revised 2009) TAS 29 TAS 31 (revised 2009) TAS 33 (revised 2009) TAS 34 (revised 2009) TAS 36 (revised 2009) TAS 37 (revised 2009) TAS 38 (revised 2009) TAS 40 (revised 2009) Financial reporting standards: TFRS 2 TFRS 3 (revised 2009) TFRS 5 (revised 2009) TFRS 6 Financial Reporting Standard Interpretations: TFRIC 15 Accounting Standard Interpretations: SIC 31

Presentation of Financial Statements Inventories Statement of Cash Flows Accounting Policies, Changes in Accounting Estimates and Errors Events after the Reporting Period Construction Contracts Property, Plant and Equipment Leases Revenue Employee Benefits Borrowing Costs Related Party Disclosures Accounting and Reporting by Retirement Benefit Plans Consolidated and Separate Financial Statements Investments in Associates Financial Reporting in Hyperinflationary Economies Interests in Joint Ventures Earnings per Share Interim Financial Reporting Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets Investment Property Share-Based Payment Business Combinations Non-current Assets Held for Sale and Discontinued Operations Exploration for and Evaluation of Mineral Resources Agreements for the Construction of Real Estate Revenue-Barter Transactions Involving Advertising Services

These accounting standards do not have any significant impact on the financial statements, except TAS 19 Employee Benefits and TAS 40 (revised 2009) Investmetn Property, as described in Note 5.

101

4. New accounting standards issued during the years not yet effective The Federation of Accounting Professions issued the following new/revised accounting standards that are effective for fiscal years beginning on or after 1 January 2013. Accounting standards: TAS 12 TAS 20 (revised 2009) TAS 21 (revised 2009) Accounting Standard Interpretations: SIC 10 SIC 21 SIC 25

Income Taxes Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rates Government Assistance - No Specific Relation to Operating Activities Income Taxes - Recovery of Revalued Non-Depreciable Assets Income Taxes - Changes in the Tax Status of an Entity or its Shareholders

The Companyâ&#x20AC;&#x2122;s management believes that these accounting standards will not have any significant impact on the financial statements for the year when they are initially applied, except for the following accounting standards.

102

TAS 12 Income Taxes This accounting standard requires an entity to identify temporary differences, which are differences between the carrying amount of an asset or liability in the accounting records and its tax base, and to recognize deferred tax assets and liabilities under the stipulated guidelines. At present, the management is evaluating the impact on the financial statements in the year when this standard is adopted.

5. Cumulative effect of changes in accounting policies from adoption of new accounting standards During the current year, the Company and its subsidiaries made the changes to its significant accounting policies described in Note 3 to the financial statements, as a result of the adoption of revised and new accounting standards. The cumulative effect of the changes in the accounting policies has been separately presented in the statements of changes in shareholdersâ&#x20AC;&#x2122; equity as summarised below. 5.1 TAS 19 Employee Benefits This accounting standard requires employee benefits to be recognised as expense in the period in which the service is performed by the employee. In particular, an entity has to evaluate and make a provision for postemployment benefits using actuarial techniques and provisions for vacation. The Company and its subsidiaries previously accounted for such employee benefits when they were incurred. The Company and its subsidiaries have changed this accounting policy in the current year and recognise the liability in the transition period through an adjustment to the beginning balance of retained earnings in the current year. The changes has the effect of decreasing the beginning balance of retained earnings of the Company and its subsidiaries by Baht 497.2 million (Separate financial statements: Baht 158.1 million) and decreasing the profit for the year ended 31 December 2011 by Baht 102.5 million (Baht 0.07 per share) (Separate financial statement: decreasing profit for the year ended 31 December 2011 by Baht 22.7 million or Baht 0.02 per share). In addition, an associated company has changed this accounting policy in the current year and recognise the liability in the transition period through an adjustment to the beginning balance of retained earnings in the current year. The change has the effect of decreasing the beginning balance of investment in such associated company under equity method in consolidated financial statements and consolidated retained earnings by Baht 20.0 million.

5.2 TAS 40 (revised 2009) Investment Property This accounting standard requires entities to choose to recognise investment property either under the cost model (with disclosure of fair value in the notes to financial statements) or the fair value model, whereby changes in fair value are to be recognised in profit or loss. Investment property was previously recognised under the caption of Property, Plant and Equipment, which is measured using the cost model. In adopting the new accounting policy, the Company and its subsidiaries separately present investment property and measure it using the fair value model, commencing in the current year. The Company and its subsidiaries have recognised the effect of the change in accounting policy as an adjustment to the opening balance of retained earnings for the year. The change has the effect of increasing the beginning balance of retained earnings of the Company by Baht 215.2 million and not effect to the retained earnings of consolidated financial statements. The change has the effect of increasing profit of the Company and its subsidiaries for the year 2011 by Baht 1 million (Separate financial statements: increasing profit by Baht 18 million or 0.01 Baht per share). 5.3 TFRS 3 (revised 2009) Business combinations Acquisition-related costs are accounted for as expenses in the periods in which the costs are incurred and the services are received. If the business combination is achieved in stages, the acquirerâ&#x20AC;&#x2122;s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

6. Significant accounting policies 6.1 Revenue recognition Hospital operations Revenues from hospital operations, mainly consisting of medical fees, hospital room sales and medicine sales, are recognised as income when services have been rendered or medicine delivered. Revenue from sales of goods and foods Sales of goods and foods are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods and food supplied after deducting discounts. Service income Service income is recognised when services have been rendered. Membership income Membership income is cash receipt from sales of membership cards which initially recorded as deferred income and gradually amortised to income over membership period. For cash received in advance from the Life Privilege membership program is amortised to income over a period of 10 years. Interest income Interest income is recognised on an accrual basis based on the effective rate. Dividends Dividends are recognised when the right to receive the dividends is established. 6.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand and cash at financial institutions and highly liquid investment with an original maturity of 3 months or less and not subject to withdrawal restrictions. 6.3 Trade accounts receivable and allowance for doubtful accounts Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences and analysis of debt aging.

103

6.4 Inventories Inventories are valued at lower of cost (weighted average basis) or net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. 6.5 Investments a) Investments in securities held for trading are stated at fair value. Changes in the fair value of these securities are recorded in profit or loss. b) Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities are recorded as a separate item in shareholders’ equity, and will be recorded in profit or loss when the securities are sold. c) Investments in debt securities, both due within one year and expected to be held to maturity, are recorded at amortised cost. The premium/discount on debt securities is amortised/accreted by the effective rate method with the amortised/ accreted amount presented as an adjustment to the interest income. d) Investments in non-marketable equity securities, which the Company classifies as other investments, are stated at cost net of allowance for loss on diminution in value (if any). e) Investments in associates are accounted for in the consolidated financial statements using the equity method. f) Investments in subsidiaries and associates are accounted for in the separate financial statements using the cost method. The fair value of marketable securities is based on the latest bid price of the last working day of the year.

104

6.6 Property, premises and equipment/Depreciation Land is stated at revalued amount. Buildings and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Land initially recorded at cost on the acquisition date, and subsequently revalued by an independent professional appraiser to its fair values. Revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from fair value at the end of reporting period. Differences arising from the revaluation are dealt with in the financial statements as follows: • When an asset’s carrying amount is increased as a result of a revaluation of the Company and its subsidiaries’ assets, the increase is credited directly to equity under the heading of “Revaluation surplus on land”. However, a revaluation increase will be recognised as income to the extent that it reverses a revaluation decrease of the same asset previously recognised as an expense. • When an asset’s carrying amount is decreased as a result of a revaluation of the Company and its subsidiaries’ assets, the decrease is recognised in profit or loss. However, the revaluation decrease is charged to the other comprehensive income to the extent that it does not exceed an amount already held in “Revaluation surplus on land” in respect of the same asset. Depreciation of premises and equipment is calculated by reference to their cost on a straight-line basis over the following estimated useful lives: Land improvements Building, structures and building improvements Medical tools and equipment and machine Structure equipment, furniture and office equipment Vehicles

Depreciation attributed to the original cost portion is included in determining income.

5 - 20 years 5 - 40 years 3 - 10 years 3 - 15 years 5 - 8 years

No depreciation is provided on land and fixed assets under construction and installation. An item of property, premises and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset is included in profit or loss when the asset is derecognised. 6.7 Intangible assets Intangible assets acquired through business combination are initially recognised at their fair value on the date of business acquisition while intangible assets acquired in other cases are recognised at cost. Following the initial recognition, the intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses (if any). Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to profit or loss. A summary of the intangible assets with finite useful lives is as follow: Computer software 5 - 10 years 6.8 Goodwill / Business combination Business combinations are accounted for using the acquisition method with the cost of the acquisition being the fair value at the acquisition date of consideration transferred, and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest, if any, in the acquiree either at fair value or at the proportionate share of the acquireeâ&#x20AC;&#x2122;s identifiable net assets. Acquisition-related costs are accounted for as expenses in the periods in which the costs are incurred and the services are received. Goodwill is initially recorded at cost, which equals to the excess of cost of business combination over the fair value of the net assets acquired. If the fair value of the net assets acquired exceeds the cost of business combination, the excess is immediately recognised as gain in profit or loss. Goodwill is carried at cost less any accumulated impairment losses. Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the Companyâ&#x20AC;&#x2122;s cash generating units (or group of cash-generating units) that are expected to benefit from the synergies of the combination. The Company estimates the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in profit or loss. Impairment losses relating to goodwill cannot be reversed in future periods. 6.9 Related party transactions Related parties comprise enterprises and individuals that control or are controlled by the Company, whether directly or indirectly, or which are under common control with the Company. They also include associated companies and individuals which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, key management personnel, directors and officers with authority in the planning and direction of the Companyâ&#x20AC;&#x2122;s operations.

105

6.10 Long-term rental agreements Leases of property, premises or equipment which transfer substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in other long-term payables, while the interest element is charged to profit or loss over the lease period. The property, premises or equipment acquired under finance leases is depreciated over the useful life of the assets. 6.11 Operating leases Leases of assets where a significant portion of the risks and rewards of ownership is retained by the lessor are classified as operating leases. Payments made under operating leases are recognised as expenses in profit or loss on a straight line basis over the period of the lease.

106

6.12 Impairment of assets At the end of each reporting period, the Company and its subsidiaries performs impairment reviews in respect of the property, premises and equipment and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. In determining 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. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by a valuation model that, based on information available, reflects the amount that the Company and its subsidiaries could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. An impairment loss is recognised in profit or loss. However in cases where property was previously revalued and the revaluation was taken to equity, a part of such impairment is recognised in equity up to the amount of the previous revaluation. In the assessment of asset impairment if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, the Company and its subsidiaries estimates the asset’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at a revalued amount, in which case the reversal, which exceeds the carrying amount that would have been determined, is treated as a revaluation increase. 6.13 Leasehold rights Leasehold rights are amortised on the straight-line basis over the lease period. 6.14 Foreign currencies Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the end of reporting period. Gains and losses on exchange are included in determining income. 6.15 Employee benefits Short-term employee benefits Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred.

Post-employment benefits Defined contribution plans The Company and its subsidiaries and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company and its subsidiaries. The fundâ&#x20AC;&#x2122;s assets are held in a separate trust fund and the Companyâ&#x20AC;&#x2122;s and its subsidiaries contributions are recognised as expenses when incurred. Defined benefit plans The Company and its subsidiaries has obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Company and its subsidiaries treats these severance payment obligations as a defined benefit plan. The obligation under the defined benefit plan and other long-term employee benefit plans is determined by a professionally qualified independent actuary based on actuarial techniques, using the projected unit credit method. Actuarial gains and losses arising from post-employment benefits are recognised immediately in other comprehensive income. For the first-time adoption of TAS 19 Employee Benefits, the Company and its subsidiaries elected to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under the previous accounting policy, through an adjustment to the beginning balance of retained earnings in the current year. Provisions for vacation The Company and its subsidiaries have set up provisions for vacation which is calculated in accordance with the Companyâ&#x20AC;&#x2122;s and its subsidiaries' policy and formula, taking into consideration the employee's salary, the number of years of service and the unused vacation day. This provision has been adjusted annually. 6.16 Investment properties Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value. Any gains or losses arising from changes in the value of investment properties are recognised in profit or loss when incurred. On disposal of investment properties, the difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period when the asset is derecognised. 6.17 Financial instruments Financial assets carried on the statement of financial position included cash and cash equivalents, short-term investments, trade and other receivables, short-term loan and long-term loan to related parties, restricted financial institution deposit, and investments. Financial liabilities carried on the statement of financial position included bank overdrafts and short-term loans from financial institution, trade and other payables, short-term loans from related parties, long-term loans, liabilities under finance leases, convertible debentures and debentures. The Company and its subsidiaries have no policy to hold any off-statement of financial position derivative financial instruments for speculative or trading purpose. 6.18 Income tax Income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation.

107

6.19 Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. 6.20 Provisions Provisions are recognised when the Company and its subsidiaries have a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. 6.21 Interest rate swap contracts The net amount of interest to be received from or paid to the counterparty under an interest rate swap contract is recognised as income or expenses on an accrual basis.

7. Significant accounting judgments and estimates The preparation of financial statements in conformity with generally accepted accounting principles at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could differ from these estimates. Significant judgments and estimates are as follows: 108

Allowance for doubtful accounts In determining allowances for doubtful accounts, the management needs to make judgment and estimates based upon, among other things, debt collection experience, the aging profile of outstanding debts and the prevailing economic conditions. Property, premises and equipment/Depreciation In determining depreciation of premises and equipment, the management is required to make estimates of the useful lives and residual values of the Companyâ&#x20AC;&#x2122;s and its subsidiariesâ&#x20AC;&#x2122; premises and equipment and to review estimate useful lives and residual values when there are any changes. The Company and its subsidiaries measure land at revalued amounts. Fair value from revaluation is determined by independent valuer using market approach. Such valuation is based on certain assumptions and estimates. In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying amount. This requires judgements regarding forecast of future revenues and expenses relating to the assets subject to the review. Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgment regarding whether significant risks and rewards of ownership of the leased asset have been transferred, taking into consideration terms and conditions of the arrangement. Fair value of financial instruments In determining the fair value of financial instruments that are not actively traded and for which quoted market prices are not readily available, the management exercise judgment, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of liquidity, correlation and longer-term volatility of financial instruments.

Impairment of equity investments The Company and its subsidiaries treats available-for-sale investments and other investments as impaired when there has been a significant or prolonged decline in the fair value below their cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires judgement of the management. Investment property The Company and its subsidiaries present investment property at the fair value estimated by an independent appraiser, and recognises changes in the fair value in profit or loss. The valuation involves certain assumptions and estimates. Goodwill and intangible assets The initial recognition and measurement of goodwill and other intangible assets, and subsequent impairment testing, require management to make estimates of cash flows to be generated by the asset or the cash generating unit and to choose a suitable discount rate in order to calculate the present value of those cash flows. Post-employment benefits under defined benefit plans The obligation under the defined benefit plan is determined based on actuarial techniques. Such determination is made based on various assumptions, including discount rate, future salary increase rate, mortality rate and staff turnover rate. Litigation The Company and its subsidiaries have contingent liabilities arising from litigation. The Company's management has used judgment to assess the outcome of the litigation. In cases of loss, the Company and its subsidiaries will record provision for contingent liabilities in their books of account. In cases where it has assessed that no damage will arise from the litigation, the Company and its subsidiaries will not record provision for contingent liabilities at the end of the reporting period.

8. Cash and cash equivalents

Cash and cash equivalents consist of the following: (Unit : Thousand Baht)

Consolidated financial statements Cash and deposits at banks Fixed deposits, notes, and mutual funds Less: Fixed deposits, notes, and mutual funds with maturities of more than 3 months (short-term investments) Restricted bank deposits Total cash and cash equivalents

Separate financial statements

2011 3,346,104 1,018,681 4,364,785

2010 2,492,491 1,798,177 4,290,668

2011 1,520,307 10 1,520,317

2010 1,082,259 1,739,543 2,821,802

(464,366) (24,686) 3,875,733

(1,739,554) (61,659) 2,489,455

(10)

(1,739,543) 1,082,259

1,520,307

109

9. Restricted financial institutions deposits These represent bank deposits that the Company and its subsidiaries have placed with banks to secure letters of guarantees issued by the banks on behalf of the Company and its subsidiaries. These also represent bank deposits that the Company and its subsidiaries have placed with government agencies, state enterprise and private entities to guarantee contractual performance, among others and as escrow account.

10. Trade and other receivables (Unit : Thousand Baht)

Consolidated financial statements Trade receivables - related parties Trade receivables - unrelated parties-net Other receivables - related parties Other receivables - unrelated parties Total trade and other receivables - net

2011 2,913 3,192,485 13,791 167,923 3,377,112

2010 2,233 1,890,624 18,927 43,040 1,954,824

Separate financial statements 2011 7,724 746,315 33,694 41,557 829,290

2010 9,283 505,789 37,538 19,967 572,577

11. Trade accounts receivable As at 31 December 2011 and 2010, the aging analysis of the outstanding trade accounts receivable is as follows: (Unit : Thousand Baht)

110

Consolidated financial statements 2011 Related parties Less than 3 months 3 - 6 months 6 - 12 months Total trade accounts receivable - related parties Unrelated parties Less than 3 months 3 - 6 months 6 - 12 months over 12 months Total trade accounts receivable - unrelated parties Less: Allowance for doubtful accounts Total trade accounts receivable - unrelated parties - net Total trade accounts receivable - net

2010

Separate financial statements 2011

2010

2,400 144 369 2,913

2,233 2,233

7,538 180 6 7,724

9,283 9,283

2,613,130 400,660 245,702 233,893 3,493,385 (300,900) 3,192,485 3,195,398

1,579,726 232,699 109,659 162,109 2,084,193 (193,569) 1,890,624 1,892,857

526,491 121,141 131,735 101,585 880,952 (134,637) 746,315 754,039

409,029 66,303 42,951 82,249 600,532 (94,743) 505,789 515,072

12. Related party transactions The Company and its subsidiaries had significant business transactions with individuals or related parties, which have been concluded on commercial terms and bases agreed upon between the Company and those related parties. Below is a summary of those transactions.

Transaction

Pricing and lending policy

Revenue from hospital operation and lab services Revenue and expenses from consulting and management Rental income and rental expenses Interest charge of inter-company loan Purchases and sales of fixed assets Purchases of investments

Based on the price charged to normal customers Rates as stipulated in agreements Rates as stipulated in agreements Interest rate close to that charged by commercial banks Prices are dependent on the condition of fixed assets The same prices as purchases from unrelated parties

The significant intercompany transactions are as follows: (Unit : Million Baht)

For the years ended 31 December Consolidated financial Separate financial statements statements 2011 Subsidiary companies Revenue from hospital operations and lab services Consulting and management fee income Interest income Dividend income (Note 14) Other income Service cost Consulting and management fee expenses Other expenses Interest expenses Sales of medical equipment and vehicle Associated companies Revenue from hospital operations and lab services Dividend income (Note 15) Other income Service cost Other expenses Dividend payment Individuals or related companies Revenue from hospital operations and lab services Dividend income Other income Service cost Other expenses Dividend payment

2010 -

2011

2010

40.2 236.8 55.2 1,818.2 37.3 367.9 206.2 153.1 36.6 1.2

36.9 210.6 111.0 728.3 23.7 328.5 167.2 60.4 8.1 2.1

3.2 26.2 99.2 1.8 -

2.4 16.5 108.7 7.3

1.1 61.8 0.2 36.7 -

0.4 60.3 68.5 7.3

4.7 10.8 10.5 14.9 5.8 -

11.0 2.5 6.9 13.5 7.7 170.9

1.9 10.8 13.6 0.1 -

10.9 2.5 10.4 2.5 170.9

111

The outstanding balances of the above transactions as at 31 December 2011 and 2010 have been separately shown in the statement of financial position as follows: (Unit : Thousand Baht)

Consolidated financial statements

112

Trade accounts receivable - related parties Subsidiary companies Associated companies Related companies Total trade accounts receivable - related parties Short-term loans to related parties Subsidiary companies Total short-term loans to related parties Other accounts receivable - related parties Consulting and management fee receivable Subsidiary companies Total Others Subsidiary companies Associated companies Related companies Total Total other accounts receivable - related parties Long-term loans to related parties Subsidiary companies Total long-term loans to related parties Leasehold rights - related parties (included in other non-current assets) Associated companies Related parties Total leasehold rights - related parties Deposits - related parties (included in other non-current assets) Subsidiary companies Associated company Total deposits - related parties Short-term loans from related parties Subsidiary companies Total short-term loans from related parties

2011

2010

894 2,019 2,913

117 2,116 2,233

Separate financial statements 2011

2010

6,617 1,107 7,724

7,804 1,479 9,283

307,097 307,097

103,132 103,132

22,491 22,491

25,118 25,118

8,484 5,307 13,791 13,791

13,394 5,533 18,927 18,927

11,203 11,203 33,694

12,420 12,420 37,538

1,665,538 1,665,538

1,321,014 1,321,014

272,672 85,708 358,380

262,103 91,632 353,735

2,700 2,700

122 2,700 2,822

1,627,946 1,627,946

639,601 639,601

(Unit : Thousand Baht)

Consolidated financial statements

Trade accounts payable - related parties Subsidiary companies Associated companies Related companies Total trade accounts payable - related parties Other accounts payable - related parties Subsidiary companies Associated companies Related companies Total other accounts payable - related parties Deposits - related parties ŕ¸Ľ (included in other non-current liabilities) Subsidiary companies Associated company Total deposits - related parties

Separate financial statements

2011

2010

2011

2010

89,466 715 90,181

76,723 290 77,013

54,499 73,782 530 128,811

45,691 65,020 285 110,996

13,126 5,769 18,895

1,967 3,131 5,098

46,676 195 46,871

24,690 113 65 24,868

113 113

2,399 2,399

2,045 113 2,158

Movement of loans to and loans from related parties during the year are summarised as follows: (Unit : Thousand Baht)

Separate financial statements

Short-term loans to related parties Subsidiary companies Total short-term loans to related parties Long-term loans to related parties Subsidiary companies Total long-term loans to related parties Short-term loans from related parties Subsidiary companies Total short-term loans from related parties

31 December 2010

Increase

Decrease 31 December 2011

103,132 103,132

307,097 307,097

(103,132) (103,132)

307,097 307,097

1,321,014 1,321,014

1,023,869 1,023,869

(679,345) (679,345)

1,665,538 1,665,538

639,601 639,601

1,627,946 1,627,946

(639,601) (639,601)

1,627,946 1,627,946

113

Short-term and long-term loans to related parties The Company has entered into short-term loan agreements and long-term loan agreements with terms of 3-8 years with its subsidiaries. The Company charged interest on loans to related parties at the Fixed Deposit Rate plus fixed rate per annum, LIBOR plus fixed rate per annum and a fixed interest rate stipulated in the agreement payable on a monthly basis while principal is repayable on the basis stipulated in the agreements. As at 31 December 2011, the Company has outstanding short term and long term loans to subsidiaries totaling Baht 1,972.6 million (2010: Baht 1,424.2 million). Management agreement The Company The Company provides hospital management services to its subsidiaries, for the remuneration rates are based on the net revenue from hospital operations. A Subsidiary A subsidiary company has entered into a Hospital Management Agreement with another subsidiary company, expiring on 28 May 2022. The subsidiary company is to receive management income at a certain percentage of total operation result as stipulated in the agreement. A subsidiary company has entered into a Hospital Management Agreement with its 4 subsidiary companies and other 4 subsidiary companies. The agreement is for 1-2.5 years and is entitled to renew. The subsidiary company shall receive managing income at the rates stipulated in the agreement. The payment must be made on a monthly basis. 114

Long term rental agreement The Company In May 2004, a subsidiary company entered into a three-year agreement to rent land from the Company for use in hospital operations whereby the subsidiary company has to pay a monthly rental fee at the rate stipulated in the agreement. Subsequently, the subsidiary extended the agreement to 30 April 2013. The subsidiaries A subsidiary company entered into an agreement to rent land from another subsidiary company for construction of a building, expiring on 31 December 2012. The subsidiary company has to pay a monthly rental fee at the rate stipulated in the agreement. In addition, such another subsidiary company entered into an agreement to rent the building from a subsidiary company for its hospital operations, expiring on 30 April 2014. That subsidiary company has to pay a monthly rental fee at the rate stipulated in the agreement. Service and management agreement A subsidiary company has entered into service and management agreements with the Company and other related parties which have to pay monthly service and management fees to the subsidiary at the rates stipulated in the agreements. The Company and other related parties have entered into information technology management agreements with a subsidiary company whereby have to pay monthly service fees to the subsidiary at the rate stipulated in the agreements. A subsidiary company has entered into food providing and maintenance service agreements with the Company and related parties whereby the Company and related parties have to pay monthly service fee to subsidiary at the rates stipulated in the agreements. Air ambulance service agreement Associated company On 1 September 2007, an associated company entered into an air ambulance service agreement with the Company. The agreement is for a period of 3 years from the date the service commenced and is renewable. The

agreement stipulates the monthly minimum service fee that the associated company is to earn from the Company. The Company has extended the agreement for 25 months ended on 30 September 2012. Guarantee obligations with related party The Company has guaranteed long-term loan on credit amount of USD 3.6 million and overdraft facility amounting to USD 1 million for an overseas subsidiary company. The Company has guaranteed long-term loan on credit amount of Baht 2,876 million for local subsidiary companies. Directors and managementâ&#x20AC;&#x2122;s benefits During the year ended 31 December 2011 and 2010, the Company and its subsidiaries had employee benefit expenses of their directors and management as below. (Unit : Million Baht)

Consolidated financial statements 2011 56.0 1.5 57.5

Short-term employee benefits Post-employment benefits Total

Separate financial statements

2010 50.4 50.4

2011 56.0 1.5 57.5

13. Inventories

2010 50.4 50.4

(Unit : Thousand Baht)

Consolidated financial statements 2011 904,876 84,825 49,584 1,039,285 (1,558) 1,037,727

Medicines and medical supplies Reagent Supplies and others Less: Provision for deteriorated inventories Total

Separate financial statements

2010 339,251 27,776 31,923 398,950 (645) 398,305

2011 231,928 231,928 (1,001) 230,927

14. Investments in subsidiary companies

2010 58,096 58,096 (263) 57,833

(Unit : Thousand Baht)

Separate financial statements Companyâ&#x20AC;&#x2122;s name Samitivej Public Co., Ltd. Bangkok Hospital Hatyai Co., Ltd. Bangkok Phuket Hospital Co., Ltd. BNH Medical Center Co., Ltd. Bangkok Phrapradaeng Hospital Co., Ltd. Bangkok Pattaya Hospital Co., Ltd. Bangkok Rayong Hospital Co., Ltd.

Nature of business

Paid-up Capital

Hospital Hospital Hospital Hospital Hospital Hospital Hospital

Baht 1,000 million Baht 500 million Baht 500 million Baht 586 million Baht 105 million Baht 280 million Baht 400 million

% Shareholding

Investments cost method

2011

2010

95.76 98.78 99.68 91.48 79.00 97.22 100.00

95.76 1,639,071 1,639,071 574,373 574,373 98.78 610,153 609,995 99.67 602,655 602,235 91.42 96,775 96,775 79.00 708,196 708,196 97.22 415,020 415,020 100.00

2011

2010

Dividend received during the year 2011

2010

384,970 34,573 79,739 147,447 244,982 180,000

191,527 59,249 66,980 217,760 40,000

115

(Unit : Thousand Baht)

Separate financial statements Companyâ&#x20AC;&#x2122;s name

116

Nature of business

Paid-up Capital

% Shareholding

Investments cost method

Dividend received during the year

2011

2010

2011

2010

2011

2010

Bangkok Samui Hospital Co., Ltd. Hospital Baht 150 million 100.00 Bangkok Trat Hospital Co., Ltd. Hospital Baht 250 million 99.76 Wattanavej Co., Ltd. Hospital Baht 180 million 99.69 Bangkok Ratchasima Hospital Co., Ltd. Hospital Baht 300 million 89.73 National Healthcare Systems Co., Ltd. Central Lab Baht 75 million 74.02 Bio Molecular Laboratories Central Lab Baht 10 million 95.00 (Thailand) Co., Ltd. Angkor Pisith Co., Ltd. Hospital USD 10 million 80.00 Phnom Penh Medical Services Co., Ltd. Hospital USD 10 million 100.00 Royal Rattanak Medical Services Co., Ltd. Hospital Riel 26,000 million 70.00 B.D.M.S. International Medical Hospital Riel 9,200 million 100.00 Services Co., Ltd. Asia International Healthcare Co., Ltd. Investment Baht 35 million 100.00 Bangkok Hospital Hua Hin Co., Ltd. Liquidated Baht 260 million New Petchburi Medical Services Co., Ltd. Hospital Baht 1 million 100.00 Bangkok Health Insurance Limited Health insurance Baht 105 million 99.94 Royal Bangkok Healthcare Co., Ltd. Management Baht 736 million 100.00 service Greenline Synergy Co., Ltd. Technology and Baht 200 million 100.00 information service Bangkok Hospital Kao Yai Co., Ltd. Hospital Baht 70 million 100.00 BDMS Training Co., Ltd. Training business Baht 1 million 100.00 Prasit Patana Public Co., Ltd. Investment Baht 2,341 million 97.14 Paolo Medic Co., Ltd. Hospital Baht 300 million 100.00 Paolo Samutprakarn Co., Ltd. Hospital Baht 42 million 88.73 Siam Medical Co., Ltd. Hospital Baht 100 million 80.72 Thai Medical Center Public Co., Ltd. Hospital Baht 201 million 99.76 Bangkok Premier Life Insurance Life insurance Broker Co., Ltd. broker Baht 4 million 100.00 Total investments in subsidiary companies Less: Allowance for impairment of investment Total investments in subsidiary companies - net

100.00 99.76 99.67 89.53 74.02 95.00

150,000 245,889 450,643 917,286 56,768 9,502

150,000 245,889 450,534 915,246 56,768 9,502

45,000 19,951 179,450 66,622 4,750

60,000 53,824 33,311 5,700

80.00 100.00 70.00 100.00

287,840 338,323 154,063 94,208

100.00 100.00 100.00 99.94 100.00

35,000 999 47,027 736,000

35,000 260,000 999 47,027 736,000

100.00

200,000

100.00 100.00 -

70,000 1,000 9,109,950 2,922,872 1,675,754 904,818 887,135

70,000 1,000 -

399,900 7,453 4,931 -

4,000

18,400

23,945,320 8,698,064 1,818,168 728,351 (20,000)

(20,000)

23,925,320 8,678,064

14.1 Merger with Health Network Public Company Limited On 24 February 2011, the Extraordinary General Meeting of the Company approved for the Company to enter into the merger with Health Network Public Company Limited and the Company has completed the entire business transfer on 1 April 2011 by paying the total consideration of Baht 11,484 million (See consideration paid summary in a). After merger, the Company has additional investment in subsidiary companies as follows: Company 1) Prasit Patana Public Company Limited and its subsidiaries 2) Paolo Medic Company Limited 3) Paolo Samutprakarn Company Limited 4) Siam Medical Company Limited 5) Thai Medical Centre Public Company Limited

% of shares held 68.64%* 100.00% 88.73% 80.72% 99.76%

* Including the Company’s existing 19.47% shareholding in Prasit Patana Public Company Limited and resulted in a change in the status of this company to a subsidiary company. The Company realised gain from the remeasurement of its previously held shareholding to fair value in the consolidated statement of income by Baht 440 million, under the caption “gain on fair value adjustment of investments”.

The Company and Health Network Public Company Limited must comply with the conditions stipulated in the entire business transfer agreement. Goodwill from merger a) Consideration paid for goodwill calculation is as follows: The Company issued 230,870,405 ordinary shares (calculation from fair value at acquisition date) Cash Novation of loan Total consideration Add : Fair value of the Company’s existing 19.47% shareholding in Prasit Patana Public Company Limited Total consideration paid for calculating goodwill

(Unit : Thousand Baht)

10,424,687 680,000 379,416 11,484,103 1,512,559 12,996,662

b) The fair value of assets and liabilities at acquisition date are as follows: (Unit : Thousand Baht)

Cash and cash equivalents Short-term investments Trade accounts receivable - net Short-term loan to a related company Inventories Other current assets Long-term deposit at financial institution

1,986,099 264,357 818,977 360,000 158,317 110,889 50,000

117

(Unit : Thousand Baht)

118

Restricted financial institution deposits Other long-term investments - net Investment property Property, premises and equipment - net Intangible assets - net Other non-current assets Trade accounts payable Income tax payable Other current liabilities Long-term loans from financial institutions Liabilities under finance lease agreement Provision for long-term employee benefits Other non-current liabilities Fair value of net assets Less : Non-controlling interest Net asset acquired Consideration paid Goodwill

24,094 244,233 34,400 9,342,016 188,269 62,315 (463,867) (311,239) (833,921) (5,565,664) (205,270) (304,132) (937,341) 5,022,532 (1,336,070) 3,686,462 12,996,662 9,310,200

The cost of merger and tender offer totaling Baht 189.5 million has been separately recorded as expense in income statements for amount of Baht 43.4 million and the cost of Baht 146.1 million which was related to share capital increase has been offset with share premium under shareholders' equity in statements of financial position. 14.2 Tender offer to purchase securities of Prasit Patana Public Company Limited On 7 April 2011, the Company submitted a tender offer proposal to purchase securities of Prasit Patana Public Company Limited, offering the two following options of payment to shareholders: 1. Cash payment of Baht 3.71 per share 2. The Companyâ&#x20AC;&#x2122;s newly issued ordinary shares at the ratio of 10.1706 shares in Prasit Patana Public Company Limited to 1 share in the Company, equaling Baht 37.75 per share. After Tender offer completion on 23 May, 2011, the Company has additional investment in ordinary shares of Prasit Patana Public Company Limited of 666.34 million shares, totaling Baht 2,939.9 million by cash payment of Baht 43.34 million and issuing 64.4 million ordinary shares of the Company, totaling Baht 2,896.56 million (calculation from fair value at acquisition date). As a result, the Company's shareholding in that company increased to 97.10 percent. In addition, in the third quarter of 2011, the Company purchased additional investment of 1.09 million shares, totaling Baht 4.04 million in Prasit Patana Public Company Limited from the former shareholders. As a result, the Company's shareholding in that company increased to 97.14 percent.

14.3 Investment in subsidiary companies which the Company previously held Bangkok Phuket Hospital Co., Ltd. In 2011, the Company purchased additional investment of 11,000 shares, totaling Baht 0.2 million in Bangkok Phuket Hospital Co., Ltd. As a result, the Company's shareholding in that company increased to 99.68 percent. BNH Medical Center Co., Ltd. In 2011, the Company purchased additional investment of 34,960 shares, totaling Baht 0.4 million in BNH Medical Center Co., Ltd. As a result, the Company's shareholding in that company increased to 91.48 percent. Wattanavej Co., Ltd. In 2011, the Company purchased additional investment of 3,750 shares, totaling Baht 0.1 million in Wattanavej Co., Ltd. As a result, the Company's shareholding in that company increased to 99.69 percent. Bangkok Ratchasima Hospital Co., Ltd. In 2011, the Company purchased additional investment of 60,000 shares, totaling Baht 2.0 million in Bangkok Ratchasima Hospital Co., Ltd. As a result, the Company's shareholding in that company increased to 89.73 percent. Bangkok Hospital Hua Hin Co., Ltd. In 2010, the Board of Directors of the Company's meeting passed a resolution of the Companyâ&#x20AC;&#x2122;s restructuring by transferring entirely business of the Company's wholly owned subsidiary, Bangkok Hospital Hua Hin Co., Ltd., to the Company. Bangkok Hospital Hua Hin Co., Ltd will transfer all of its assets, liabilities, authorities and liabilities as of transferring date to the Company. The book value of Bangkok Hospital Hua Hin Co., Ltd., was used as the basis for price the transfer. The Company has already transferred the business in the fourth quarter of 2010. The subsidiary company has already liquidated on 9 November 2011 and the Company has received capital refund amounting Baht 259.0 million and recorded loss on liquidation of a subsidiary company amounting Baht 1.0 million in profit or loss. Samitivej Public Co., Ltd. and Samitivej Sriracha Co., Ltd. In 2011, the subsidiary company purchased additional investment of 100,000 shares, totaling Baht 3.5 million in Samitivej Sriracha Co., Ltd. As a result, the subsidiary company increased the percentage of shareholding in that company to 68.06 percent. Prasit Patana Public Co., Ltd. and Sriracha Nakorn General Hospital Public Co., Ltd. From the second to fourth quarter of 2011, the subsidiary company purchased additional investment of 1,090,100 shares, totaling Baht 58.9 million in Sriracha Nakorn General Hospital Public Co., Ltd. As a result, the subsidiary company increased the percentage of shareholding in that company to 64.64 percent. Prasit Patana Public Co., Ltd. and Phyathai 2 Hospital Co., Ltd. From the second to fourth quarter of 2011, the subsidiary company purchased additional investment of 108,676 shares, totaling Baht 5.4 million in Phyathai 2 Hospital Co., Ltd. As a result, the subsidiary company increased the percentage of shareholding in that company to 99.09 percent. Prasit Patana Public Co., Ltd. and Phyathai 3 Hospital Co., Ltd. From the second to fourth quarter of 2011, the subsidiary company purchased additional investment of 135,568 shares, totaling Baht 13.6 million in Phyathai 3 Hospital Co., Ltd. As a result, the subsidiary company increased the percentage of shareholding in that company to 97.76 percent. 14.4 Investment in a new subsidiary company during the year Bangkok Premier Life Insurance Broker Co., Ltd. In the third quarter of 2011, the Company invested in Bangkok Premier Life Insurance Broker Company Limited which operates in life insurance broker business. The Company invested Baht 4 million in that company for a 100% shareholding.

119

15. Investments in associated companies (Unit : Thousand Baht)

Company’s name

Associated companies held by the Company The Medic Pharma Co., Ltd. Cool & Joy Co., Ltd.

120

S.R. Property Investment Co., Ltd. Siem Reap Land Investment Co., Ltd. Phnom Penh First Property Co., Ltd. Bangkok Helicopter Services Co., Ltd. Ramkhamhaeng Hospital Public Co., Ltd. Krungdhon Hospital Public Co., Ltd. Udon Pattana (1994) Co., Ltd. (held by the Company at 15.26% and indirectly held by subsidiary at 9.71%) Total investments in associated companies held by the Company Associated companies held by the subsidiary companies Sodexo Support Services (Thailand) Co., Ltd. Al Ghaith Bangkok Dusit Management Services LLC. Total investments in associated company held by the subsidiary companies Total investments in associated companies in the consolidated financial statements

Natures of business

Pharmaceuticals Production of television and radio program Real estate Real estate Real estate Service Hospital Hospital Hospital

Paid-up Capital

% Shareholding

Consolidated financial statements

Separate financial statements

Equity Method

Cost Method 2011

2010

52,500 1,500

2011

2010

2011

2010

Baht 21.4 million 49.00

49.00 30.00

144,140 1,069

126,578 1,069

Baht 5 million 30.00 Riel 20 million 49.00 Riel 20 million 49.00 Riel 20 million 49.00 Baht 100 million 49.00 Baht 120 million 38.24 Baht 150 million 20.01 Baht 300 million 24.97

49.00 49.00 49.00 49.00 38.24 20.01 -

1,837 1,419 101 101 1,529 1,156 101 101 2,947 2,135 88 88 38,134 40,962 50,859 50,859 2,329,480 1,989,406 1,459,800 1,459,800 107,865 102,360 101,072 101,072 180,101 69,952 -

2,807,102 2,265,085 1,735,973 1,666,021

Management services Management services

Baht 5 million 26.00

26.00

8,118

5,910

UAE DIRHAM 30.00

30.00

393

8,511

6,303

0.15 million

2,815,613 2,271,388

15.1 Udon Pattana (1994) Co., Ltd. As a result of purchasing of investment as stated in Note 14.1 and 14.2, Prasit Patana Public Company Limited, the new subsidiary company, has 10 percentage of shareholding in Udon Pattana (1994) Co., Ltd. or 9.71 indirect percentage of shareholding by the Company. Subsequently, in the second and third quarters of 2011, the Company purchased additional investment of 1,577,000 shares, totaling Baht 38.30 million or 5.26 percentage of shareholding in Udon Pattana (1994) Co., Ltd. from the former shareholders. As a result, the Company holds totally 24.97 percentage of shareholding in that company and changes its status to become an associated company. The Company realised gain from the remeasurement of its previously held shareholding to fair value in the consolidated statement of income by Baht 39 million, under the caption “gain on fair value adjustment of investments”. The Company has also reversed allowance for impairment of such investments of Baht 12.3 million.

15.2 Details of share of income and dividend received from the associated companies are set out below. (Unit : Thousand Baht)

Companyâ&#x20AC;&#x2122;s name Associated companies held by the Company The Medic Pharma Co., Ltd. Cool & Joy Co., Ltd. S.R. Property Investment Co., Ltd. Siem Reap Land Investment Co., Ltd. Phnom Penh First Property Co., Ltd. Bangkok Helicopter Services Co., Ltd. Ramkhamhaeng Hospital Public Co., Ltd. Krungdhon Hospital Public Co., Ltd. Udon Patana (1994) Co., Ltd. Associated companies held by the subsidiary companies Sodexo Support Services (Thailand) Co., Ltd. Al Ghaith Bangkok Dusit Management Services LLC. Total

Consolidated financial statements

Separate financial statements

Share of income/(loss) from investments in associated companies

Dividend received during the year

2011

2010

2011

2010

22,811 339 309 693 (2,827) 349,806 7,006 -

20,932 328 298 686 1,060 273,721 1,289 -

5,250 55,061 1,501 -

5,250 55,061 -

121 3,508 381,645

1,433 299,747

61,812

60,311

Below are fair values of investments in associated companies that are listed companies on the Stock Exchange of Thailand (Unit : Thousand Baht)

Companyâ&#x20AC;&#x2122;s name

Ramkhamhaeng Hospital Public Co., Ltd. Krungdhon Hospital Public Co., Ltd. Total

Fair values as at 31 December 2011 3,588,148 97,566 3,685,714

2010 2,844,823 112,576 2,957,399

15.3 Below is a summary of financial information of associated companies (Unit : Million Baht)

For the years ended 31 December

As at 31 December Companyâ&#x20AC;&#x2122;s name

Paid-up capital 2011

122

Associated companies held by the Company The Medic Pharma Co., Ltd. Cool & Joy Co., Ltd. S.R. Property Investment Co., Ltd. Siem Reap Land Investment Co., Ltd. Phnom Penh First Property Co., Ltd. Bangkok Helicopter Services Co., Ltd. Ramkhamhaeng Hospital Public Co., Ltd. Krungdhon Hospital Public Co., Ltd. Udon Patana (1994) Co., Ltd. Associated companies held by the subsidiary companies Sodexo Support Services (Thailand) Co., Ltd Al Ghaith Bangkok Dusit Management Services LLC.

2010

Baht 21 million Baht 21 million Baht 5 million

Baht 5 million

Riel 20 million

Baht 100 million Baht 100 million Baht 120 million Baht 120 million Baht 150 million Baht 150 million Baht 300 million

Baht 5 million

UAE DIRHAM

0.15 million

Total assets 2011

2010

Total liabilities 2011

2010

Total revenues

Net income (loss)

2011 2010 2011 2010

394.9 330.4 101.2 81.9 371.3 324.8 55.9 40.7 2.9 2.9 0.7 69.8 66.4 66.0 63.5 0.7 0.7 0.7 0.6 63.5 60.5 60.4 58.1 0.6 0.6 0.6 1.4 145.9 138.8 139.9 134.5 1.5 1.4 1.4 261.6 270.1 183.8 186.3 70.0 64.1 (5.9) 2.3 5,415.0 4,643.3 2,110.2 2,072.1 3,044.1 2,759.4 909.0 708.9 312.9 294.9 37.5 47.0 295.9 330.9 35.0 (4.8) 22.9 1,071.1 359.1 393.5 -

105.7 -

100.1 -

74.5 -

77.3 -

319.3 -

304.5 -

13.5 -

5.5 -

Share of income from investment in two associated companies which are listed company on the Stock Exchange of Thailand for the year ended 31 December 2011 of Baht 357 million (2010: Baht 275 million) representing 94 percent (2010: 92 percent) of total share of income from all associated companies were calculated based on audited financial statements of those companies.

16. Other long-term investments Company's name Investments held by the Company Available-for-sale investments Investments in listed securities Thai Military Bank Public Co., Ltd. Aikchol Hospital Public Co., Ltd. Bumrungrad Hospital Public Co., Ltd. Surplus (deficit) on changes in value of available-for-sale investments Investments in listed securities - net

(Unit : Thousand Baht)

Nature of business

Paid-up capital (Million Baht)

% share holding

Bank Hospital Hospital

415,367 125 730

0.20 14.22

Investment (cost) 2011 2010

1,770 350 3,455,835 3,457,955

1,770 350 2,120

1,372,094 4,830,049

(179) 1,941

(Unit : Thousand Baht)

Company's name Investments in related companies Bangkok Airways Co., Ltd. X-Ray Computer Urupong Co., Ltd. Investments in related companies Investments in other companies Udon Pattana (1994) Co., Ltd. Computer Center Co., Ltd.* Phyathai X-ray Co., Ltd.* Winstore Co., Ltd.* Thai Longstay Management Co., Ltd. Prasit Pattana Public Co., Ltd. Superior Biotech Holding Co., Ltd. Less: Allowance for impairment of investments Investments in unrelated companies-net Investment in debt security Bill of Exchange Investment in debt security Total other long-term investments net in the separate financial statements Investment held by the subsidiary companies Investments in unrelated companies Thai Herbal Products Co., Ltd. Prasitthirat Co., Ltd.**

Nature of business

Paid-up % share capital (Million Baht) holding

Investment (cost) 2011 2010

Airline X-ray lab

1,200 100

1.20 4.09

Hospital

300 130

10.00 -

142 100 2,341

0.36 1.06 19.47

Rental of medical instrument Retail and wholesale Travel business Investment in medical services Investment

36,000 4,520 40,520

36,000 4,520 40,520 31,650 25 3

226 531 531 1,072,480 -

123 44

9.09

5,000 5,000 5,531 1,109,915 (12,587)

5,531 1,097,328 500,000 500,000

4,876,100 1,639,789

Sales of herbal products Educational institution

* Write-off during the period **Acquired from Entire Business Transfer as stated in Note 14.

0.60

290

150

33.33

107,192

290 -

(Unit : Thousand Baht)

Company's name Phuket International Hospital Co., Ltd.** Asia Laboratories Center Limited ** Investments in unrelated companies Investments in ordinary shares (ceased operations)** Phyathai 4 Hospital (Petchaburi Road) Co., Ltd. Klass - V Co., Ltd. Phuket Paradise Co., Ltd. Phyathai Herbs Co., Ltd.

124

Unrelated company Phuket Hospital Public Co., Ltd.

Nature of business

Paid-up % share capital (Million Baht) holding

Investment (cost) 2011 2010 29,552 400 137,434 290

Hospital Central lab

195 5

6.15 8.00

Adjudged bankrupt Adjudged bankrupt Adjudged bankrupt In process of liquidation

328 250 409 196

89.79 89.66 72.26 63.64

42,889

Hospital

358

19.08

42,889

(7,000)

35,889

Less : Allowance for impairment of investment Investment in ordinary shares (ceased operations) - net Total other long-term investments - net in the consolidated financial statements

5,049,423 1,640,079

**Acquired from Entire Business Transfer as stated in Note 14.

Bumrungrad Hospital Public Company Limited In 2011, the Company purchased ordinary shares of Bumrungrad Hospital Public Company Limited for total of 103.83 million shares, amount of Baht 3,455.84 million, representing 14.22 percent of the issued and paid-up capital of that company. Prasitthirat Company Limited A subsidiary company had 33.33 percentage of shareholding in Prasitthirat Company Limited but has not classified it as investment in associated company because the subsidiary company has no power to participate in the financial and operating policy decisions of that company. Investments in ordinary shares (ceased operations)-Subsidiary companies A subsidiary company has investments in companies that have ceased their operations but has not classified them as investments in subsidiary companies because the subsidiary company has no power to control such companies.

17. Investment properties (Unit : Thousand Baht)

Consolidated financial statements 2011 Land Balance at beginning of year 34,400 Increase from acquisition Purchase Transfer from property, premises and equipment 1,045 Gain on revalue of assets 35,445 Balance at ending of year

Separate financial statements 2010

Building Total 34,400 135,177 135,177 19,604 19,604 1,045 154,781 190,226

Land Building Total 252,966 252,966 135,177 135,177 19,604 19,604 18,069 18,069 271,035 154,781 425,816

The investment properties consist of land and building for rent. The fair value of land has been determined based on valuations performed by an accredited independent valuer, using the Market approach. The fair value of building for rent has been determined based on cost due to incomplete construction.

18. Property, premises and equipment (Unit : Thousand Baht)

Consolidate financial statements Assets which are stated at cost or reappraised value

Assets which are stated at cost

Medical Structure tools, equipment, Building and machine furniture, fixture Land and land building and and office improvement improvement equipment equipment Vehicles Cost/reappraised value 31 December 2009 Increase from acquisition Purchases Transfer in / (Transfer out) Disposals/Written-off Translation adjustment 31 December 2010 Increase from acquisition Increase from revaluation Purchases Transfer in / (Transfer out) Disposals/Written-off Translation adjustment 31 December 2011

4,913,456 410,292 22,216 5,345,964 2,860,267 8,985 330,145 49 8,545,410

15,924,442 95,182 110,725 43,639 (7,079) (36,713) 16,130,196 7,079,417 629,089 370,332 (35,925) 17,571 24,190,680

7,150,031 64,457 634,090 (54,624) (144,471) (15,700) 7,633,783 2,969,286 1,354,679 66,232 (196,395) 3,493 11,831,078

3,908,024 139,814 242,675 144,547 (151,836) (892) 4,282,332 1,006,114 518,730 101,924 (106,133) 4,514 5,807,481

387,723 59,282 36,164 6,322 (26,553) (499) 462,439 121,255 67,475 1,177 (33,312) 240 619,274

Building under construction and medical tools and equipment under installation

Total

645,953 1,742 383,442 (158,396) (1,879) (47,923) 822,939 279,925 964,574 (595,984) (288) 25,264 1,496,430

32,929,629 770,769 1,429,312 (18,512) (331,818) (101,727) 34,677,653 14,316,264 8,985 3,864,692 (56,270) (372,053) 51,082 52,490,353

125

(Unit : Thousand Baht)

Consolidate financial statements (continued) Assets which are stated at cost or reappraised value

Assets which are stated at cost

Medical Structure tools, equipment, Building and machine furniture, fixture Land and land building and and office improvement improvement equipment equipment

126

Accumulated depreciation 31 December 2009 Increase from acquisition Depreciation for the year Transfer in / (Transfer out) Disposals/Written-off Translation adjustment 31 December 2010 Increase from acquisition Depreciation for the year Transfer in / (Transfer out) Disposals/Written-off Translation adjustment 31 December 2011 Impairment of fixed assets 31 December 2010 Reversal of impairment loss 31 December 2011 Net book value 31 December 2010 31 December 2011

17,016 466 17,482 7,011 330 16 24,839

6,238,159 35,980 896,230 (1,321) (2,581) (4,482) 7,161,985 2,468,573 1,089,527 4,775 (25,304) 2,696 10,702,252

2,955 2,955

750 (750)

5,325,527 8,517,616

Vehicles

Building under construction and medical tools and equipment under installation

Total

4,204,701 51,438 766,679 (43,606) (130,230) (5,480) 4,843,502 1,717,567 1,036,963 53,134 (193,226) 2,686 7,460,626

3,021,038 121,697 380,780 45,259 (139,690) (3,490) 3,425,594 711,822 422,604 (58,215) (96,028) 3,643 4,409,420

315,733 35,947 40,206 (24,319) (278) 367,289 69,275 56,119 (744) (31,952) 203 460,190

13,796,647 245,062 2,084,361 332 (296,820) (13,730) 15,815,852 4,974,248 2,605,543 (1,034) (346,510) 9,228 23,057,327

3,705 (750) 2,955

8,967,461 13,488,428

2,790,281 4,370,452

856,738 1,398,061

95,150 159,084

822,939 1,496,430

18,858,096 29,430,071

Depreciation charged included in income statement for the year 2010 (Baht 1,688 million included in cost of hospital operations, sales and services, and the balance in administrative expenses) 2011 (Baht 2,114 million included in cost of hospital operations, sales and services, and the balance in administrative expenses)

2,084,361 2,605,543

(Unit : Thousand Baht)

Separate financial statements Assets which are stated at cost or reappraised value

Assets which are stated at cost

Medical Structure tools, equipment, Building and machine furniture, fixture Land and land building and and office improvement improvement equipment equipment Vehicles Cost/reappraised value 31 December 2009 Purchases Transfer in / (Transfer out) Disposals/Written-off 31 December 2010 Cumulative effect of change in accounting policy Purchases Transfer in / (Transfer out) Disposals/Written-off 31 December 2011 Accumulated depreciation 31 December 2009 Depreciation for the year Transfer in / (Transfer out) Disposals/Written-off 31 December 2010 Depreciation for the year Transfer in / (Transfer out) Disposals/Written-off 31 December 2011 Net book value 31 December 2010 31 December 2011

Building under construction and medical tools and equipment under installation

Total

836,787 181,544 1,018,331

4,288,020 66,856 (2,134) (60) 4,352,682

2,330,483 272,086 21,955 (18,429) 2,606,095

1,206,040 31,685 14,543 (3,547) 1,248,721

140,416 16,539 264 (13,830) 143,389

40,977 249,849 (41,316) 249,510

8,842,723 818,559 (6,688) (35,866) 9,618,728

(252,966) 24,532 789,897

104,529 130,548 4,587,759

400,663 425 (4,943) 3,002,240

112,964 94,705 (7,633) 1,448,757

19,452 (14,978) 147,863

124,050 (246,520) (10) 127,030

(252,966) 786,190 (20,842) (27,564) 10,103,546

1,337,949 291,411 (1,321) (60) 1,627,979 273,402 (2,051) 1,899,330

1,329,356 298,959 (1,061) (14,317) 1,612,937 326,642 (4,623) 1,934,956

999,856 102,324 2,382 (3,469) 1,101,093 77,309 946 (5,510) 1,173,838

128,633 8,270 (12,299) 124,604 6,638 (13,923) 117,319

3,795,794 700,964 (30,145) 4,466,613 683,991 (1,105) (24,056) 5,125,443

1,018,331 789,897

2,724,703 2,688,429

993,158 1,067,284

147,628 274,919

18,785 30,544

249,510 127,030

5,152,115 4,978,103

Depreciation charged included in income statement for the year 2010 (Baht 587 million included in cost of hospital operations, sales and services, and the balance in administrative expenses) 2011 (Baht 594 million included in cost of hospital operations, sales and services, and the balance in administrative expenses)

700,964 683,991

127

In 2011, a subsidiary has recorded appraisal result of its subsidiary company which engaged an independent appraiser to appraise all of its land using the market approach. The fair values of the revalued land amounted to Baht 203 million which increased from the previous revaluation of Baht 9 million. The subsidiary therefore recorded "Gain on revaluation of land" in the consolidated statements of comprehensive income. The revaluation surplus can neither be offset against deficit nor used for dividend payment. If the Company and its subsidiaries recorded the land at cost, their net book value as at 31 December 2011 and 2010 would have been as follows: (Unit : Thousand Baht)

Consolidated financial statements

Separate financial statements

5,715,550 2,552,079

458,130 433,598

Net book value (at cost) : As of 31 December 2011 As of 31 December 2010

As at 31 December 2011, the Company and its subsidiaries have medical tools, equipment and vehicles under finance lease agreements with net book values amounting to Baht 420.3 million and Baht 11.2 million in the separate financial statements (2010: Baht 278.9 million and Baht 1.2 million in the separate financial statements). 128

As at 31 December 2011, the Company and its subsidiaries have certain building improvement, medical tools, equipment and vehicles which have been fully depreciated but are still in use. The original cost of those assets amounted to approximately Baht 9,752.8 million and Baht 2,130.1 million in the separate financial statement (2010: Baht 6,071.2 million and Baht 2,046.5 million in the separate financial statements).

19. Land and buildings not used in operations Land and buildings not used in operations as at 31 December 2011 and 2010 consisted of: (Unit : Thousand Baht)

Consolidated financial statements

Land and buildings at historical cost Revaluation surplus Allowance for impairment Total

2011 368,174 143,748 (719) 511,203

2010 368,174 143,748 (719) 511,203

Separate financial statements 2011 367,847 143,748 (719) 510,876

2010 367,847 143,748 (719) 510,876

The cumulative capitalised interest on loans recorded as a portion of cost of land not used in operations amounted to approximately Baht 29 million (2010: Baht 29 million).

20. Intangible assets Intangible assets, as at 31 December 2011 and 2010, which are computer software are as follows: (Unit : Thousand Baht)

Cost As at 1 January 2010 Purchase Transfer in Disposals/written-off Translation adjustment As at 31 December 2010 Increase from acquisition Purchase Transfer in Disposals/written-off Translation adjustment As at 31 December 2011 Accumulated amortisation As at 1 January 2010 Amortisation for the year Disposals/written-off Translation adjustment As at 31 December 2010 Increase from acquisition Amortisation for the year Transfer out Disposals/written-off Translation adjustment As at 31 December 2011 Net book value As at 31 December 2010 As at 31 December 2011

Consolidated financial statements

Separate financial statements

393,737 60,039 18,512 (350) (212) 471,726 349,676 140,325 35,122 (384) 102 996,567

141,560 96 6,688 148,344 9,473 133 157,950

222,575 47,990 (212) (47) 270,306 161,407 82,904 (83) (141) 35 514,428

61,837 11,410 73,247 11,715 84,962

201,420 482,139

75,097 72,988

129

21. Leasehold rights (Unit : Thousand Baht)

Consolidated financial statements

Cost Less: Accumulated amortisation Book value - net Amortisation for the year

Separate financial statements

2011 716,587 (159,450) 557,137

2010 648,371 (139,307) 509,064

2011 133,010 (26,949) 106,061

2010 80,050 (21,047) 59,003

19,041

17,357

5,902

4,215

22. Bank overdrafts and short-term loans from financial institutions As at 31 December 2011, the Company and its subsidiaries have bank overdraft facilities with banks of Baht 450 million and USD 1 million (2010: Baht 390 million and USD 1 million) and in separate financial statements of Baht 150 million (2010: Baht 150 million). The facilities carry interest rate at MOR for Baht currency facilities and LIBOR plus fixed rate for US currency facilities.

23. Trade and other payables (Unit : Thousand Baht)

130

Consolidated financial statements

Trade payables - related parties Trade payables - unrelated parties Other payables - related parties Other payables - unrelated parties Accounts payable - construction and retention Total trade and other payables

2011 90,181 2,266,225 18,895 731,504 284,386 3,391,191

2010 77,013 1,237,152 5,098 535,926 95,168 1,950,357

Separate financial statements 2011 128,811 454,895 46,871 257,719 54,456 942,752

2010 110,996 301,684 24,868 227,992 68,178 733,718

24. Long-term loans (Unit : Thousand Baht)

As at 31 December Consolidated financial statements Long-term loans Less: Current portion due within one year Long-term loans - net of current portion

2011 7,764,387 (813,215) 6,951,172

2010 2,595,912 (355,265) 2,240,647

Separate financial statements 2011 3,141,710 (436,300) 2,705,410

2010 2,463,900 (343,800) 2,120,100

The Company a) In 2008, the Company entered into a 10-year loan agreement with a bank granting the credit facilities of Baht 3,438 million. The loan carries interest at the Fixed Deposit Rate plus fixed rate per annum as stipulated in the agreement with interest and principal payable on a monthly basis. This loan agreement includes a condition that the Company and its subsidiaries may not mortgage any assets and also certain covenants which the Company and its subsidiaries must comply. The Company also entered into an interest rate swap contract for the above loan with a financial institution as discussed in Note 39.2 the outstanding balance of this loan as at 31 December 2011 was Baht 2,120.1 million (2010: Baht 2,463.9 million). b) In October 2011, the Company entered into a credit support agreement with a financial institution granting credit facilities of Baht 1,000 million with condition for issuing note and withdrawing loan. The interest rate and repayment term of note credit are as stipulated on the note. The interest rate for loan is six-month Fixed Deposit Rate plus fixed rates per annum as stipulated in the agreement. The interest is repayable on a monthly basis and the principal is repayable on quarterly basis according to a condition as stipulated in the agreement. The drawdown period is within 1 year from the agreement date. As at 31 December 2011, the Company had not yet withdrawn such credit. c) In November 2011, the Company entered into a loan agreement with a financial institution granting credit facilities of Baht 1,000 million carrying interest at six-month Fixed Deposit Rate plus fixed rates per annum as stipulated in the agreement. The interest is repayable on a monthly basis and the principal is repayable on every six-month according to a condition as stipulated in the agreement. The drawdown period is within 1 year from the agreement date. As at 31 December 2011, the Company had not yet withdrawn such loan. d) In November 2011, the Company entered into a loan agreement with a financial institution granting credit facilities of Baht 3,000 million carrying interest at the rate of six-month Fixed Deposit Rate plus fixed rates per annum as stipulated in the agreement. The interest is repayable on a monthly basis and the principal is repayable on a quarterly basis according to a condition as stipulated in the agreement. As at 31 December 2011, this loan has outstanding balance of Baht 1,021.6 million. The subsidiaries a) In 2007 and 2008, Angkor Pisith Co., Ltd., a subsidiary company, entered into a long-term loan agreement with a foreign financial institution granting credit facilities were of USD 4 million. The loan bears interest at the rate of LIBOR plus a fixed rate per annum. The interest and principal are repayable on a monthly basis according to a condition as stipulated in the agreement. This loan is guaranteed by the Company. As at 31 December 2011, this loan has outstanding balance of USD 3.6 million or equivalent to Baht 113.8 million. (2010: USD 3.9 million or equivalent to Baht 116.4 million). b) In 2008, Bangkok Ratchasima Hospital Co., Ltd., a subsidiary company, entered into a loan agreement with a financial institution. The credit facilities were Baht 20 million. The loan bears interest at fixed rate per annum. The interest and principal are repayable on a monthly basis according to a condition as stipulated in the agreement. As at 31 December 2011, this loan has outstanding balance of Baht 12.2 million (2010: Baht 15.6 million). c) In April 2011, Prasit Patana Public Company Limited, a subsidiary company, entered into the loan agreements with 2 financial institutions obtaining loans of Baht 3,594.8 million. These loans bear interest at a six-month Fixed Deposit Rate plus fixed rate per annum, with the specified repayments of principal and interest as stipulated in the agreement. These loan facilities are guaranteed by the Company. As at 31 December 2011, this loan has outstanding balance of Baht 3,594.8 million. d) In 2008, Sriracha Nakorn General Hospital Public Company Limited, a subsidiary company, entered into longterm loan agreement with a financial institution to obtain loan of Baht 11.9 million. This loan bears interest at the fixed rate per annum, with the specified repayments of principal and interest as stipulated in the

131

agreement. In 2009, the subsidiary entered into long-term loan agreement with another financial institution to obtain loan of Baht 410 million. This loan consequently amended to bears interest at a six-month Fixed Deposit Rate plus fixed rate per annum, with the specified repayments of principal and interest as stipulated in the agreement. As at 31 December 2011, these loans from 2 financial institutions have outstanding balance of Baht 315.8 million The Companyâ&#x20AC;&#x2122;s and its subsidiaries' loan agreements contain certain covenants which the Company and its subsidiaries must comply.

25. Liabilities under finance lease agreements

As at 31 December 2011 and 2010, liabilities under finance lease agreements are as follows: (Unit : Thousand Baht)

Consolidated financial statements Liabilities under finance lease agreements Less: Deferred interest expenses Total Less: Current portion of liabilities under finance lease agreements Liabilities under finance lease agreements - net of current portion

132

2011 364,871 (29,843) 335,028 (149,723) 185,305

2010 165,129 (13,982) 151,147 (76,619) 74,528

Separate financial statements 2011 10,816 (837) 9,979 (3,051) 6,928

2010 753 (40) 713 (631) 82

As at 31 December 2011, the Company and its subsidiaries have future minimum lease payments which required under the finance lease agreements are as follows: (Unit : Thousand Baht)

Consolidated financial statements

Future minimum finance lease payments Deferred interest expenses Present value of future minimum finance lease payments

Less than 1 year 169,207 (19,484) 149,723

1-5 years 195,664 (10,359) 185,305

Total 364,871 (29,843) 335,028 (Unit : Thousand Baht)

Separate financial statements

Future minimum finance lease payments Deferred interest expenses Present value of future minimum finance lease payments

Less than 1 year 3,525 (474) 3,051

1-5 years 7,291 (363) 6,928

Total 10,816 (837) 9,979

The Company and its subsidiaries have finance lease agreements with various leasing companies to rent medical tools, equipment, and vehicles for use in their operations. Installments are due on a monthly basis over 32-60 months and at the end of the agreements.

26. Provision for long-term employee benefits Provision for long-term employee benefits as at 31 December 2011, which is compensations on employees’ retirement, was as follows: (Unit : Thousand Baht)

Consolidated financial Separate financial statements statements Cumulative effect of change in accounting policy for employee benefits adjusted against beginning balance of retained earnings Increase from acquisition Current service cost Interest cost Benefits paid during the year Actuarial loss Balance at end of year

471,633 304,133 76,439 30,742 (23,122) 3,147 862,972

132,629 16,568 5,674 (6,355) 148,516

Long-term employee benefit expenses included in the profit or loss for the year ended 31 December 2011 amounted to Baht 107.2 million (Separate financial statement: Baht 22.2 million). 133

Principal actuarial assumptions at the valuation date were as follows: Consolidated financial Separate financial statements statements Discount rate Future salary increase rate (depending on age of employee)

(% per annum) 3.7 - 5.0 3.0 - 7.5

(% per annum) 4.7 6.0

27. Share capital On 24 February 2011, the Extraordinary General Meeting of the Company’s shareholders No.1/2011 approved the reduction of the Company’s registered capital of Baht 1,312,264,222, consisting of 1,312,264,222 ordinary shares with par value of Baht 1 each to be the new registered capital of Baht 1,246,194,338, consisting of 1,246,194,338 ordinary shares with par value of Baht 1 each and approved the increase in the Company’s registered capital of Baht 307,197,070, consisting of 307,197,070 ordinary shares with par value of Baht 1 each to be the new registered capital of Baht 1,553,391,408, consisting of 1,553,391,408 ordinary shares with par value of Baht 1 each. The Company has already registered the change in share registered in the first quarter of 2011. Consequently, in the second quarter of 2011, the Company issued 295.2 million newly issued ordinary shares for Entire Business Transfer and Tender offer as stated in Note 14.1 and 14.2 respectively. In addition, the Company private placement sold 4.1 million newly issued ordinary shares with a par value of Baht 1 each, at the price of Baht 37.75 per share, totaling Baht 156 million to major shareholders of Health Network Public Company Limited. As a result of share issuance and converted the remaining convertible bonds as mentioned in Note 36, the Company's paid up share capital as of 31 December 2011 was Baht 1,545,458,833 (1,545,458,883 ordinary shares of Baht 1 each).

28. Dividends Dividends

Final dividends for 2009 Interim dividends for 2010 *

Approved by

Annual General Meeting of the shareholders on 1 April 2010 Board of Directorsâ&#x20AC;&#x2122; meeting on 14 December 2010

Total dividend for 2010

Total dividends

Dividend per share

(Million Baht) 850

(Baht) 0.70

990

0.80

1,840

1.50

* The Thailand Securities Depository Co., Ltd notified the Company that certain shareholders were not entitled to receive dividend amounting to approximately Baht 6.9 million, and the Company therefore recorded dividend payable of Baht 990 million in the financial statement as at 31 December 2010. The Company paid such dividend in January 2011.

29. Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution. 134

30. Expenses by nature Significant expenses by nature for the years ended 31 December 2011 and 2010 are as follows: (Unit : Million Baht)

Consolidated financial statements Employee expenses Doctor fee Cost of drugs and supplies Depreciation and amortisation expenses Advertising and public relation expenses Rental expenses

2011 8,587.7 7,053.2 5,164.7 2,707.5 473.1 376.8

2010 5,499.7 4,423.8 3,083.1 2,149.7 367.3 251.8

Separate financial statements 2011 1,786.0 1,325.4 953.3 701.6 198.0 40.1

2010 1,529.6 1,199.3 814.9 716.6 154.2 28.4

31. Provident fund The Company, its subsidiaries and their employees have jointly established provident funds in accordance with the Provident Fund Act B.E. 2530. The funds are contributed to by employees and the Company and its subsidiaries at the agreed percentage rates based on the employeesâ&#x20AC;&#x2122; basic salaries and are managed by various financial institutions. The funds will be paid to the employees upon termination in accordance with the fund rules. During the year, the Company and its subsidiaries contributed Baht 122.9 million (2010: Baht 86.7 million) to the fund, with contributions per the separate financial statement contributed Baht 27.3 million (2010: Baht 24.1 million) to the fund.

32. Earnings per share Basic earnings per share is determined by dividing profit for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year. No disclosure of diluted earnings per share is required for 2010 after the issue of convertible debentures (as discussed in Note 36) since the calculated earnings per share assuming the conversion of all convertible debentures to ordinary shares is antidilutive.

33. Long-term lease agreements The Company The Company has entered into a land rental agreement for a car parking building for a period of 20 years from 26 February 2004 to 25 February 2024. The rental fee for the first 17 months is Baht 200,000 per month and will be increased by the rate as agreed in the agreement. The rental for the last 3 years will be Baht 560,000 per month. The Company has entered into a land rental agreement for construction of an OPD building for a period of 30 years from 28 September 2004 to 27 September 2034. The first payment date is 10 October 2005 at the rental fee of Baht 50,000 per month. The rate will be increased by 10% of the latest rental of every three years. The Company has entered into a land rental agreement for a car parking for a period of 7 years from 1 September 2005 to 31 August 2012 and the rental is paid on a monthly basis. The first payment date is 1 September 2005 at the rate of Baht 131,000 per month. The rental rate will be Baht 175,000 per month starting from 1 September 2006 onward. The Company has entered into a land rental agreement for a period of 30 years from 1 January 2006 to 31 December 2035 and the rental is paid on a monthly basis. The first payment date is 5 January 2006 and rental to be paid at Baht 30,000 per month and from 1 January 2027 onward at Baht 100,000 per month. The Company has entered into an agreement to construct a hospital building on land owned by a government authority. The condition of the agreement states that upon completion of the building construction, the Company has to transfer the ownership over such building to that authority. After the authority accepts such transfer, in 2006 the Company entered into another land and hospital building rental agreement with that government authority. The agreement will cover a period of 30 years after the signing date of the agreement and the Company is obliged to pay rental on a yearly basis. The rental fee for the first 5 years is Baht 492,676 per year and this fee is to be increased every 5 years. The rental for the last 5 years will thus be Baht 990,943 per year. The Company has entered into a land rental agreement for a period of 30 years from 18 March 2011 to 17 March 2041 and the rental is paid on a monthly basis with no rental for the first three months. The first payment date is 18 July 2011 and rental to be paid at Baht 100,000 per month. The rate will be increased by 10% of the latest rental of every three years. The Company has entered into a rental agreement and a medical services agreement with a company to operate medical clinic in a building for a period of 2 years from 1 September 2011 to 27 September 2013. The Company has to pay fee at the rate stipulated in the agreement, of monthly gross operating revenue before deducted any expenses or the minimum fee stipulated in agreement whichever is higher. Samitivej Public Company Limited The subsidiary company has entered into a rental agreement for a parking building dated 10 September 2003, for 30 years, effective from 8 December 2004. The total rental fee over the lease will thus be Baht 155.1 million. The subsidiary company is committed to pay Baht 38.8 million as prepaid rental as per the schedule. The remaining rental fee will be paid on a monthly basis. In addition, the subsidiary company has entered into a service agreement with the same company for providing of services in the parking building for 30 years totaling Baht 103.4 million.

135

The subsidiary company has entered into a medical services agreement with a company to operate medical clinic in a building for a period of 5 years from 28 May 2010. The subsidiary company has to pay fee at the rate stipulated in the agreement, of monthly gross operating revenue before deducted any expenses or the minimum fee stipulated in agreement whichever is higher. BNH Medical Center Co., Ltd. The subsidiary company entered into an agreement with an association which is a shareholder, to lease land for the construction of a hospital for a period of 30 years, commencing 1 September 1993, with options to renew. Paolo Medic Co., Ltd. The subsidiary company entered into a land and premises rental agreement which will be expired in January 2037, and the rental fee is paid on a monthly basis at the amount as stipulated in the agreement. Phyathai 1 Hospital Co., Ltd. The subsidiary company entered into a land rental agreement with a state enterprise for a period of 3 years expiring in the year 2013 and the rental fee is paid on a monthly basis as stipulated in the agreement.

34. Commitments and contingent liabilities As at 31 December 2011 commitments and contingent liabilities are as follows: (Unit : Million Baht)

Consolidated financial statements

136

Less than Over 1 year 1-5 years 5 years

Contractual commitments - the land and building rental contracts (including long-term agreements in Note 33) - the office equipment rental and other services - the medical equipment provision and maintenance contracts - the building construction and decoration contracts - the sale and purchase contract for land Total

Separate financial statements Less than Over 1 year 1-5 years 5 years

101 249

183 97

471 -

18 50

39 3

137 -

367

116

562 1,279

60 456

44 515

50 208

137

(Unit : Million Baht)

Contingent liabilities - For letters of guarantee issued by banks to guarantee contractual performance - For letters of guarantee issued by banks for electricity use and others Total

Consolidated financial statements

Separate financial statements

94 95 189

7 18 25

35. Segment information The Company and its subsidiaries operate mainly in the hospital business and hospital related businesses in Thailand. As a result, most of the revenues, operating profits and assets as reflected in these financial statements pertain to the aforementioned industry segment and geographic area.

36. Convertible Bonds These represent the unsecured and name-registered convertible bonds, due 2011, issued to foreign investors outside the United States of America in 2006. A total of 124,000 units of the bonds, which carry interest at a rate of 3.75%, had been issued at a price of USD 1,000 each. Holders of the bonds have the right to convert the bonds into the Company's ordinary shares at an initial conversion price of Baht 36.30 per share, which was subsequently adjusted to Baht 32.67 per share. The Company has the right to redeem the bonds at a redemption price to be calculated in accordance with the formula as stated in the Offering Circular.The Company is required to observe covenants as provided in the Offering Circular. As at 31 December 2010, the Company has remaining convertible bonds of 50 units or equivalent to Baht 2.14 million. In the second quarter of 2011, the convertible bonds holders exercised the right to convert all such convertible bonds to common shares.

37. Debentures On 6 March 2008, the Company had issued unsecured, named registered and unsubordinated debentures without a debentureholders’ representative for the total number of 5,000,000 units, at the price of Baht 1,000 per unit, totaling Baht 5,000 million. These debentures are divided into two tranches: the 3-year debentures for the amount of Baht 3,000 million at the coupon rate of 4.11% per annum and the 5-year debentures for the amount of Baht 2,000 million at the coupon rate of 4.84% per annum with interest payable every six-month. The Company had redeemed the 3-year debentures for the amount of Baht 3,000 million in the first quarter of 2011. On 4 June 2009, the Company had issued unsecured, name registered and unsubordinated debentures for the total number of 3,000,000 units, at the price of Baht 1,000 per unit, totaling Baht 3,000 million. These debentures are divided into two tranches: the 5-year debentures for the amount of Baht 2,000 million at the coupon rate of 4.80% per annum and the 7-year debentures for the amount of Baht 1,000 million at the coupon rate of 5.35% per annum with interest payable every six-month. Up to 31 December 2011, the Company had repurchased such debentures for amount of 30,000 units, totaling Baht 30 million. On 3 March 2011, the Company had issued unsecured, name registered and unsubordinated debentures without a debentureholders’ representative debenture for the total number of 2,500,000 units, at the price of Baht 1,000 per unit, totaling Baht 2,500 million. These debentures are 4-year debentures at the coupon rate of 3.99% per annum with interest payable every six-month. On 29 March 2011, the Company had issued unsecured, name registered and unsubordinated debentures without a debentureholders’ representative debenture for the total number of 1,000,000 units, at the price of Baht 1,000 per unit, totaling Baht 1,000 million. These debentures are 3-year debentures at the coupon rate of 3.78% per annum with interest payable every six-month. Debenture agreement contains certain covenants which the Company must comply with such as financial ratios, payment of dividend and assets dispositions, etc.

38. Promotional privileges The Company has been granted promotional privileges under The Investment Promotion Act B.E. 2520, according to the promotional certificate No. 2302(2)/2553, dated 26 November 2010, for hospital business Type 7.7. Significant privileges are as follows: • Exemption of import duty on machinery as approved by the board.

137

• Exemption from corporate income tax derived from the promoted operation, with the limited rate of 100 percent of the investment excluding land and working capital for a period of 8 years commencing from the date that revenues are first derived from the promoted operation. In case of losses being incurred during the corporate income tax exemption period, the Company is allowed to utilise the loss as a deduction against net profits for a period of 5 years after exemption period, whether from any one year or from several years. • Exemption from income tax on dividend paid from the profit of the promoted operations throughout the tax exemption period. Wattanavej Co., Ltd. Wattanavej Co., Ltd. has been granted promotional privileges under The Investment Promotion Act B.E. 2520, according to the promotional certificate No. 1686(2)/2547, dated 25 August 2004, for hospital business Type 7.11. Significant privileges are as follows: • Exemption of import duty on machinery as approved by the board. • Exemption from corporate income tax derived from the promoted operation, with the limited rate of 100 percent of the investment excluding land and working capital for a period of 8 years commencing from the date that revenues are first derived from the promoted operation. 138

In case of losses being incurred during the corporate income tax exemption period, the Company is allowed to utilise the loss as a deduction against net profits for a period of 5 years after exemption period, whether from any one year or from several years. • Exemption from income tax on divided paid from the profit of the promoted operation throughout the tax exemption period. Bangkok Samui Hospital Co., Ltd. Bangkok Samui Hospital Co., Ltd. has been granted promotional privileges under The Investment Promotion Act B.E. 2520, according to the promotional certificate No. 1719(2)/2547, dated 1 September 2004, for hospital business Type 7.11. Significant privileges are as follows: • Exemption of import duty on machinery as approved by the board. • Exemption from corporate income tax derived from the promoted operation, with the limited rate of 100 percent of the investment excluding land and working capital for a period of 8 years commencing from the date that revenues are first derived from the promoted operation. In case of losses being incurred during the corporate income tax exemption period, the Company is allowed to utilise the loss as a deduction against net profits for a period of 5 years after exemption period, whether from any one year or from several years. • Exemption from income tax on dividend paid from the profit of the promoted operation throughout the tax exemption period. A.N.B. Laboratories Co., Ltd. A.N.B. Laboratories Co., Ltd. has been granted promotional privileges under The Investment Promotion Act B.E. 2520, according to the promotional certificate No. 1913(2)/2554, dated 4 August 2011, for production of medicines and/or active ingredients in medicines. Type 6.5. Significant privileges are as follows: • Exemption of import duty on machinery as approved by the board.

• Exemption from corporate income tax derived from the promoted operation, with the limited rate of 100 percent of the investment excluding land and working capital for a period of 5 years commencing from the date that revenues are first derived from the promoted operation. In case of losses being incurred during the corporate income tax exemption period, the Company is allowed to utilise the loss as a deduction against net profits for a period of 5 years after exemption period, whether from any one year or from several years. • Exemption from income tax on dividend paid from the profit of the promoted operation throughout the tax exemption period. The Company and subsidiary companies must comply with the conditions stipulated in the investment promotional privileges. Revenues of the Company and subsidiary companies for the years 2011 and 2010 can be separated between the promoted and non-promoted operation as follows: (Unit : Thousand Baht)

Consolidated financial statements Promoted operation

Revenue from hospital operations Other income Total revenues

Non-promoted operation

Total

2011 951,872

2010 724,544

2011 34,272,594

2010 22,788,085

2011 35,224,466

2010 23,512,629

951,872

724,544

2,146,872 36,419,466

538,586 23,326,671

2,146,872 37,371,338

538,586 24,051,215

(Unit : Thousand Baht)

Separate financial statements Promoted operation

Revenue from hospital operations Other income Total revenues

Non-promoted operation

Total

2011 190,257

2010 5,932

2011 8,068,582

2010 7,213,783

2011 8,258,839

2010 7,219,715

190,257

5,932

2,501,067 10,569,649

1,300,783 8,514,566

2,501,067 10,759,906

1,300,783 8,520,498

39. Financial instruments

The Company and its subsidiaries’ financial instruments, which are defined under Thai Accounting Standard No. 107 “Financial Instruments: Disclosure and Presentation”, principally comprise the financial assets and liabilities mentioned in Note 6.17 to financial statements. The financial risks associated with these financial instruments and how they are managed is described below. 39.1 Financial risk management The Company and its subsidiaries are exposed to risk arising from changes in market interest rates and foreign currency exchange rates, and from nonperformance of contractual obligation by counterparties in the future. The subsidiaries do not use derivative instruments, while the Company uses derivative instruments as and when they

139

consider appropriate, to manage such risks. Neither the Company nor subsidiaries hold or issue derivative financial instruments for speculative or trading purposes. 39.2 Interest rate risk The Company and its subsidiaries are exposed to interest rate risk relates primarily to its cash at banks, bank overdrafts, short-term loans, long-term loans, convertible debentures and debentures. However, most of the Companyâ&#x20AC;&#x2122;s financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate and the Company enters into interest rate swap contract to reduce this risk as appropriate. The long-term loans, convertible debentures and debentures were presented in notes 24, 36, and 37 respectively. Interest rate swap contract Interest rate swap are used to manage exposure to fluctuations in interest rate. On 15 September 2008, the Company entered into a five-year interest rate swap contract with a financial institution which converts a floating interest rate based on the Fixed Deposit Rate plus fixed rate per annum to a fixed interest rate per annum on the long-term loan balance. The net fair value of the interest rate swap contract at the statement of financial position date was as follows: (Unit : Million Baht)

Consolidated financial statements

140

Fair value of interest rate swap contract (liabilities)

2011 (20.5)

2010 (75.4)

Separate financial statements 2011 (20.5)

2010 (75.4)

Fair value of interest rate swap contracts has been calculated using the rate quoted by a financial institution as if the contract was terminated at the statement of financial position date. Significant financial assets and liabilities as at 31 December 2011 classified by type of interest rate are as follows: (Unit : Million Baht)

Consolidated financial statements Fixed interest rates

Financial Assets - Cash and cash equivalent - Short-term investments - Trade and other accounts receivable - Long-term deposit at financial institution - Restricted financial institution deposit - Investments

Within 1 year

1-5 years

Over 5 years

510 418 12 940

50 50

Floating interest rate

Non-interest bearing

Total

3,204 13 3,217

162 46 3,377 7,865 11,450

3,876 464 3,377 50 25 7,865 15,657

(Unit : Million Baht)

Consolidated financial statements Fixed interest rates

Financial liabilities - Bank overdrafts and short-term loans from financial institution - Trade and other payables - Long-term loans - Liabilities under finance lease agreements - Debentures

Floating interest rate

Non-interest bearing

Total

Within 1 year

1-5 years

Over 5 years

231 7,751

3,391 -

231 3,391 7,764

7,982

3,391

335 8,461 20,182

150 154

185 8,461 8,655

(Unit : Million Baht)

141

Separate financial statements Fixed interest rates

Financial Assets - Cash and cash equivalent - Trade and other receivables - Short-term loans to related parties - Long-term loans to related parties - Investments Financial liabilities - Short-term loans from related parties - Trade and other payables - Long-term loans - Liabilities under finance lease agreements - Debentures

Floating interest rate

Non-interest bearing

Total

Within 1 year

1-5 years

Over 5 years

170 60 230

1,517 137 1,606 3,260

3 829 30,537 31,369

1,520 829 307 1,666 30,537 34,859

1,628 3,142

943 -

1,628 943 3,142

7 8,461 8,468

4,770

943

10 8,461 14,184

3 3

39.3 Foreign currency risk The Company and its subsidiaries are exposed to foreign currency risk mainly in respect of purchase of medical tools and equipment transactions that are denominated in foreign currencies. The Company seeks to reduce this risk by entering into forward exchange contracts when it considers appropriate. Generally, the forward contracts mature within one year. Forward exchange contract As at 31 December 2011 and 2010, the outstanding balance of forward exchange contracts was as follows:

Balance as at

Foreign currency

31 December 2011 31 December 2010

142

US Dollar Euro -

Amount bought

Contractual exchange rate for amount bought

482,588 3,465 -

(Baht per foreign currency unit) 30.75 - 31.63 41.52 -

39.4 Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable, loans, bill of exchange and other receivable. The Company and its subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore do not expect to incur material financial losses. In addition, the Company and its subsidiaries do not have high concentration of credit risk since it has a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of receivables, loans and other receivables as stated in the statement of financial position. 39.5 Fair values of financial instruments Since the majority of the Company’s and its subsidiaries’ financial instruments bear floating interest rates or fixed interest rates which are close to market rate, their fair value is not expected to be materially different from the amounts presented in the statement of financial position. A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument.

40. Capital management The primary objective of the Company’s and its subsidiaries’ capital management is to ensure that it has appropriate capital structure in order to support its business and maximise shareholders value. As at 31 December 2011, the Group's debt-to-equity ratio was 0.8:1.0 (2010: 1.0:1.0) and the Company's was 0.6:1.0 (2010: 1.5:1.0).

41. Litigation In the second quarter of 2011, 5 shareholders of the Company, who held a total of 25,067 shares, or 0.0017 percentage of total issued and paid-up share capital as of 8 April 2011, filed a petition with the Court requesting cancellation of the resolutions passed by the Annual General Meeting of 2011 on the grounds that the meeting was illegal and contrary to the Company's articles of association because of a change in the voting method. Legal counselor of the Company gathered information, including the procedures for arranging meetings, and concluded that the Company had complied with the Company's articles of association and the regulations of the Stock Exchange

of Thailand generally practiced by listed companies, and that the meeting was legally conducted in all respects and had taken into account the legal rights of every shareholder. The case is in legal process, but the management expects that this case will not result in changes to such resolutions.

42. Reclassification To comply with the Notification of the Department of Business Development relating to the financial statement presentation as described in Note 2 and as the result of the adoption of revised and new accounting standards as described in Note 3 and Note 5, certain amounts in the financial statements for the year ended 31 December 2010 have been reclassified to conform to the current year’s classification, without any effect to the previously reported profit or shareholders’ equity. In addition, the other reclassifications with had no effect to previously reported profit or shareholders’ equity are as follows: (Unit : Thousand Baht)

Income statements (only reclassification items) for the year ended 31 December 2010 Consolidated financial statements

Cost of hospital operations and goods sold Administrative expenses Depreciation and amortisation expenses Management benefit expenses

Separate financial statements

As reclassified

As previously reported

As reclassified

As previously reported

15,350,058 5,256,969 -

13,661,968 4,744,953 2,149,708 50,398

4,760,074 2,106,195 -

4,173,208 1,926,074 716,589 50,398

43. Subsequent event Tender offer to purchase securities of Prasit Patana Public Company Limited On 6 February 2012, the Company submitted a tender offer proposal to purchase securities of Prasit Patana Public Company Limited, a subsidiary company, for delisting of its securities from the Stock Exchange of Thailand according to the Meeting of Company’s Board of Directors on 30 November 2011.

44. Approval of financial statements These financial statements have been authorised for issue by the Company’s Board of Directors on 29 February 2012.

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General Information and Reference Information

144

Type of Business

Health Care Business

Location

2 Soi Soonvijai 7, New Petchaburi Road, Bangkapi, Huay Kwang, Bangkok 10320 Telephone 1719, 02-310-3000 Fax 02-310-3032, 02-310-3327

Company Registration Number

BorMorJor. 0107537000025

Web site

www.bangkokhospital.com

Registered Capital

Baht 1,553.40 million with Baht 1,545.50 million in paid-up capital, divided into 1,246.04 million common shares with par value of Baht 1 each

Reference Information Securities Registrar

Thailand Securities Depository Co., Ltd. 4th Floor, Stock Exchange of Thailand Building, 62 Ratchadaphisek Road, Klongtoey, Bangkok 10110 Telephone 02-229-2800, 02-654-5599 Fax 0-2359-1259

Bond Registrar

TMB Bank Public Company Limited. 10th Floor, 393 Silom Road, Silom, Bangrak, Bangkok 10500 Telephone 02-230-5878, 02-230-5756 Fax 02-230-6093

Bond Representative

KasikornBank Public Company Limited. Securities Service Department 400/22 Kasikorn Bank Building, 11th Fl., Paholyotin Road Samsennai, Phyathai, Bangkok 10400 Telephone 02-470-1952, 02-470-3687 Fax 02-470-3684

Auditor

Ernst & Young Office Co., Ltd. 33rd Floor, Lake Rajada Building, 193/136-137 Ratchadaphisek Road, Klongtoey, Bangkok 10110 Telephone 02-661-9190, 02-264-0777 Fax 02-661-9192, 02-264-0789-90

BANGKOK DUSIT MEDICAL SERVICES Public Company Limited 2 Soi Soonvijai 7 New Phetchburi Rd., Bangkok, Thailand 10310 Tel. 66-2310-3000 Fax. 66-2318-1546 www.bangkokhospital.com Thailand

Overseas