BH : Annual Report 2004 by Bumrungrad Hospital Public Company Limited

Annual Report 2004

Table of Contents Executive Summary

Financial Highlights

Significant Changes in 2004

Company Profile

Market and Competition

Business Goals

Risk Factors

Major Shareholders

Management Structure and Details of Directors and Management

Corporate Governance

Internal Control of Information

Dividend Policy

Related Parties’ Transactions

Management Discussion and Analysis

Report of the Audit Committee

Report of the Accountability of the Board of Directors

to the Company’s Financial Reports Financial Statements and Notes to Financial Statements

Auditors’ Remuneration

Future Plans

General Information

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Executive summary Bumrungrad Hospital Public Company Limited (“BH”, “the Company “ or the “Hospital”) is an owner and operator of hospitals, outpatient centers and wellness centers in Thailand and abroad. The Company’s flagship hospital, Bumrungrad Hospital, was opened in Bangkok in 1980 and has grown to be the largest private medical center in Southeast Asia. Bumrungrad is increasing its Bangkok campus capacity to meet demand and is actively expanding overseas through its newly formed subsidiary, Bumrungrad International Ltd. (“BI”). The Company’s revenue grew over 25% from 2003 resulting from strong growth in both domestic and foreign patient demand. Bumrungrad Hospital treated over one million patients in 2004 setting new records for private hospitals in Thailand and making Bumrungrad one of the busiest clinics in the world. Efficient management of the growth has contributed to improve operating margins that produced an increase of 40% in earnings after tax to over 934 million baht for 2004. To increase financial efficiencies, the Bangkok-based hospital business was transferred from the Company’s wholly-owned subsidiary, Bumrungrad Medical Center, Ltd. (“BMC”) to the Company. The Company also changed the par value of the shares from five baht to one baht in April 2004. The Company reinstituted its dividend policy in 2004 paying an interim and year-end dividend. A major expansion of the Company’s Bangkok campus is underway which will add a 1.2 billion baht, 22 story building comprising 25,000 square meters of outpatient clinics as well as parking and administrative facilities. Phase one of the new addition opens in 2006 and will allow unfettered growth of the hospital for five to seven years and a doubling of revenue generating capacity. The Company launched its overseas investment strategy in 2003 with the management contracts for two new hospitals in Myanmar and Bangladesh and will consolidate its international activities in BI, 100% owned subsidiary. Leveraging the Company’s success in developing major medical centers, BI acquired a major stake in Asian Hospital of the Philippines and announced plans to construct a new hospital in Dubai, United Arab Emirates opening in 2007. The BI investments are part of the Company’s strategy to maintain Bumrungrad’s dominant role in the international patient market while building new healthcare hubs in promising new markets. For twenty-five years, Bumrungrad has focused upon ensuring quality healthcare attracting the best physicians and was the first hospital in Asia to be internationally accredited by the US-based JCIA. The Company is managed by a multinational team of professional healthcare managers using proven management and investment methods coupled with some of the most advanced information technology available in the industry.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Financial Highlights 2004

2003

2002

Financial Performance (‘000 Bt) Total Current Assets

1,503,740

1,635,878

860,352

Total Assets

5,021,086

4,456,285

3,561,426

Total Current Liabilities

1,181,395

824,743

507,200

Total Liabilities

2,960,888

3,196,780

2,969,346

Total Shareholders’ Equity

2,060,198

1,259,505

592,080

Total Revenues

5,809,299

4,620,311

3,670,149

Net Earnings for the Year

934,547

666,488

226,299

Basic Earning Per Share

1.36

1.34

0.51

Basic Earning Per Share – Fully Diluted

1.08

0.78

0.26

1.27

1.98

1.70

Financial Ratios Current Ratio (x) Average Collection Period (days)

16.36

16.34

16.77

Average Inventory Period (days)

9.73

10.04

10.64

Average Payable Period (days)

39.88

41.49

41.12

Gross Profit Margin (%)

35.60

34.60

36.50

EBITDA Margin (%)

23.60

22.60

19.50

Net Profit Margin (%)

16.10

14.40

6.20

Growth on Sales from Hospital Operations (%)

26.60

25.40

19.00

Growth on Net Profit (%)

40.20

194.50

12.80

Return on Assets (%)

19.70

16.60

6.30

1.44

2.58

5.050

Debt to Equity Ratio (x) Interest Coverage Ratio (x)

9.54

6.66

5.17

Debt Service Coverage Ratio (Cash Basis) (x)

3.03

5.47

6.96

Basic earnings per share and diluted earnings per share for the year ended 31 December 2003 and 2002 have been adjusted as though the share split had been effective since the beginning of the reported period.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Significant Changes in 2004

•

28 April 2004: The shareholders approved changing of the par value from Bt. 5.00 per share to Bt. 1.00 per share, and changing of the Company’s registered capital from 184,540,537 shares at Bt. 5.00 per share to 922,702,685 shares at Bt. 1.00 per share.

•

15 June 2004: The Company approved the purchase of the hospital business from a subsidiary, Bumrungrad Medical Center Ltd. The Company acquired the movable assets, relevant licenses and permits, rights under various contracts and all employees involved in the hospital business. The purchase of the business was completed on 31 December 2004. As the result that the Company operates the hospital business by renting the building from Bumrungrad Medical Center Ltd. as of 1 August 2004.

•

16 June 2004:The Company issued 9,500,000 ordinary shares with par value of Baht 1 to International Finance Corporation at the price of Baht 11.643334 per share (the price was based on the average market price of the Company traded on the Stock Exchange of Thailand), totaling Baht 110,611,673. As a result, the Company increased paid-up share capital from Baht 663,409,365 to Baht 672,909,365.

•

16 June 2004: The Company purchased 3,060,623 ordinary shares of Bumrungrad Medical Center Ltd. from International Finance Corporation at the price of Baht 72.28050 per share (market price, based on opinion of the Company’s financial advisor), totaling Baht 221,223,346. As a result, the Company’s shareholding in this subsidiary increased from 97.45% to 100%.

•

24 August 2004: Bangkok Insurance Public Company Limited, a bondholder of unsecured convertible bonds without trustee amounting to Bt. 200,000,000 million requested to exercise its right to convert of all the bonds at a conversion price of Bt. 3.50 per 1 ordinary share. The conversion was effective on 25 August 2004, and resulted in an increase in the Company’s paid-up capital, from Bt. 672,909,365 to Bt. 730,052,222.

•

4 October 2004: The board of directors resolved to approve the investment in Asian Hospital Inc., operating a 258-bed private hospital in Manila, the Philippines.The investment was done through Bumrungrad International Limited (originally called BH Avenue Ltd.), the Company’s subsidiary.

•

21 October 2004: The shareholders of BH Avenue Ltd. resolved to approve the change of the name from “BH Avenue Ltd.” to “Bumrungrad International Ltd.”, and to increase the registered capital from Bt. 1 million to Bt. 600 million.

•

2 November 2004: The Company increased its investment in Bumrungrad International Limited by purchasing 5,990,000 paid-up ordinary shares at a par value of Bt.100, amounting to Bt. 599,000,000

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Company Profile Corporate structure:

Bumrungrad Hospital Public Company Limited (BHPCL) - Holding Company - Healthcare Business 100%

100%

Bumrungrad Medical Center Ltd. - Own main hospital building and leases the building to BHPCL

Bumrungrad International Ltd.

- International investment

Vitallife Corporation Ltd.

- Comprehensive wellness

and business development

LS Cleaning Co., Ltd

- Dormant

center specializing in preventive care

Bumrungrad Hospital Public Company Limited (“BHPCL”) is a holding company, holding 100 percent in Bumrungrad Medical Center Limited, Vitallife Corporation Limited, and Bumrungrad International Limited and holding 25 percent in LS Cleaning Co.,Ltd. and also the operator of the Company’s 554 bed-private hospital in Bangkok. Outpatient Facilities The Bumrungrad Hospital, Bangkok is equipped with the advanced Hospital 2000 Medical Information System, as well as 135 examination rooms in 33 outpatient clinics. Inpatient Facilities The hospital inpatient facilities have a total capacity of 554 beds consisting of: - 500 beds for medical, surgical, obstetric, and pediatric patients - 14 Cardiac Critical Care beds - 35 Intensive Care beds - 5 Neonatal Intensive Care beds As of 31 December 2004 The Hospital has 442 beds in operation. Emergency Facilities and Operation Facilities BH has 24-hour emergency capabilities, with emergency physicians and specialists, including obstetricians, surgeons, internists, intensivists, pediatricians, cardiologists, and anesthesiologists on station. The hospital has 19 operating rooms equipped for cardiothoracic surgery, transplant surgery, orthopedic surgery, urology surgery, ophthalmology surgery, ear, nose and throat surgeries, minimally invasive surgery, laser surgery, and general surgeries.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Customer characteristics The Hospital’s customer base can be segmented in two ways as follows: 1. Inpatients and Outpatients: Details of Inpatients and Outpatients are as follows:

Data as of 31 December 2004

Type of Patient Outpatients Inpatients Total

% of total revenues 45.90% 54.10% 100.00%

2. Domestic and International Patients, by revenue

Bumrungrad Medical Center Ltd. (“BMC”) Hold the building assets of the Company’s Bumrungrad Hospital Bangkok and leases the building to Bumrungrad Hospital Public Company Limited. Bumrungrad International Ltd. (“BI”) (Formarly B.H. Avenue Company Limited) operated in early 2005, BI will hold the Company’s overseas operations including management contracts in Myanmar and Bangladesh and equity investment in Philippines and Dubai. Vitallife Corporation Limited (“VTL”) is the pioneer wellness center in Thailand and South-East Asia. The company provides preventive care services targeted at health-conscious individuals. The Vitallife program brings together experienced medical professionals and world-class technologies to provide customers with a customized exercise programs and nutrition plans, and food and vitamin supplements for healthy living. LS Cleaning Co., Ltd. (“LS”) is currently a dormant company.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Revenue Structure Unit: Bt Million Company

% of the

2004

2003

2002

Company

Total

Shareholding

Revenue

2,560

44.07

1.47

Bumrungrad Medical Center Ltd.

100

3,212

55.29

4,534

98.14

3,607

98.28

Vitallife Corporation Ltd.

100

0.64

0.39

0.25

Bumrungrad International Ltd.

100

LS Cleaning Co., Ltd.

5,809

100.00

4,620

100.00

3,670

100.00

Bumrungrad Hospital Pcl.

Total

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Market and Competition Supply of private healthcare facilities in Thailand remains in excess of demand though a robust economy is fueling increased healthcare demand. Competition for Thai patients remains intense. There is also increasing competition for international patients both from several players in Thailand and also from Singapore, Malaysia, and India. There are 471 private hospitals in Thailand with 129 in Bangkok.The Company operates hospitals in the top tier of the industry. Only a small fraction of the facilities have the technology and sophistication to address the needs of the international patients. The Companyâ&#x20AC;&#x2122;s strategy is to maintain quality superiority through a differentiated product that includes Bumrungrad as Thailandâ&#x20AC;&#x2122;s only internationally accredited hospital. Also, pricing is targeted below the top tier of Thai hospitals while remaining price competitive in the region. The Company also seeks to maintain as the dominant player by operating hospitals in key markets such as Myanmar, Bangladesh and the Middle East.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Risk Factors 1. Affect from Slow Down in Tourism Industry Since, early half of BHâ&#x20AC;&#x2122;s hospital revenue is from international patients, BH is vulnerable to factors that affect the tourism industry. Possible risk factors are communicable diseases such as SARS, Middle East unrest, bird flu epidemics, global terrorism, and natural disasters including the tsunami disaster in southern Thailand. This could affect the willingness of people to travel. However, the Company mitigates this risk by maintaining a balanced portfolio of patient sources between domestic and foreign patients. 2. Intensified Competition in the Premium Healthcare Sector As the economy picks up, the purchasing power of domestic customers increases. As a result, the competition in the private healthcare sector intensifies. BH, as one of the leading hospitals in the country and in the region, continues to improve on the quality of healthcare services and to invest in up-to-date technology to remain competitive. BH is the first hospital in Asia to receive the international accreditation from JCIA (Joint Commission International Accreditation) and the first hospital in Thailand to receive the Thai Hospital Accreditation. In addition, the strong product name and reputation of Bumrungrad Hospital, evidenced by the Superbrand Award in 2003. 3. Shortage of Professional Staff The hospital business requires personnel with specific technical expertise and knowledge, including nurses, pharmacists and various technicians. A shortage of these professionals is possible due to the increase in demand as a result of economic recovery. Moreover, because of the nature of BHâ&#x20AC;&#x2122;s business, where a significant part of the business is from international customers, the need for multi-lingual professionals is heavy. BH has competitive compensation and benefits for recruitment and retention. BH also provides new and updated continuing education, recreation and staff welfare activities to all staff members. 4. Investment Risk To enhance its status as a leader in management of health-related businesses, the Company assigned Bumrungrad International Limited (BI), to pursue investment in hospitals abroad. BI reached an agreement to invest in a hospital in the Philippines and plans to invest in United Arab Emirates. This investment may impose investment risk. To mitigate risk, the Company has formed an experienced team responsible for planning and thorough consideration of the investment. The team consists of investment experts in the organization and outside, both domestic and abroad. 5. Legal Disputes By its nature, the hospital business is subject to legal disputes such as medical malpractice lawsuits.To mitigate the legal exposure, BH maintains a risk management system certified by JCIA. Moreover, the Hospital has various types of insurance against possible risks.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Major Shareholders Bumrungrad Hospital Pcl.â&#x20AC;&#x2DC;s Top 10 shareholders are as follows: As at 3 September 2004 Shareholder

No. of shares*

Percentage of Holding (%)**

222,899,765.00

30.53

2. Bangkok Insurance Pcl.

96,286,402.00

13.19

3. Morgan Stanley & Co., Intâ&#x20AC;&#x2122;l Ltd.

41,885,900.00

5.74

4. Wattanasophonpanich Co., Ltd.

25,121,875.00

3.44

5. HSBC (Singapore) Nominees PTL Ltd.

17,213,500.00

2.36

6. State Street Bank AND Trust Company

12,900,000.00

1.77

7. Thai NVDR Co., Ltd.

12,306,945.00

1.69

1. Bangkok Bank Pcl.

8. Mr. Chai Sophonpanich

7,633,060.00

1.05

9. UOB Kay Hian Private Limited

7,482,705.00

1.02

10.Mrs. Boonsri Sophonpanich Total

5,972,125.00

0.82

449,702,277.00

61.60

* Numbers of shares include both preferred shares and ordinary shares. ** The calculation of holding percentage includes both preferred shares and ordinary shares.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Management Structure and Details of Directors and Management Management Structure The Company has 3 sets of committees; i.e. the Company’s board of directors, the Hospital joint executive committee, and Audit Committee. Details of each committee are as follows:

Board of Directors The Company’s board of directors as at 31 December 2004 consists of the following: 1. Mr. Chai Sophonpanich

Chairperson

2. Dr. Chanvit Tanphiphat

Vice Chairperson

3. Mrs. Linda Lisahapanya

Managing Director

4. Mr. Kiat Nitthiranondh

Director

5. Mrs. Kultida Sivayathorn

Director

6. Dr. John Yangpichitt

Director

7. Dr. Dhanit Dheandhanoo

Director

8. Dr. Sawanye Dej-Udom

Director

9. Dr. Anant Tejavej

Director

10. Mr. Chong Toh

Director

11. Ms. Sophavadee Uttamobol

Director

12. Mr. Soradis Vinyaratn

Director

13. Mr. Boonpakorn Chokwatana

Director

14. Mr. Chatri Sophonpanich

Director

15. Mr. Curtis John Schroeder

Director

Ms. Suthinee Tevidhaya is the secretary of the board of directors.

Legal Binding of the Company Any two authorized directors, except Mr. Chatri Sophonpanich, Mrs. Kultida Sivayathorn and Mr. Chong Toh, sign and affix the Company’s seal.

Duties and Responsibilities of Board of Directors 1. To perform duties in accordance with the laws, the Company’s objectives and regulations, and resolutions of the shareholders’ meetings 2. To have the authority to enter into any transaction on behalf of the Company, which requires two signatures of any authorized directors and affixing of the Company’s seal 3. To consider the stipulation and amendments of the list of authorized directors, including specifying any conditions to legally bind the Company by such authorized directors’ signatures 4. To ensure that the Company has an effective internal control and internal audit system

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Joint Executive Committee The Hospital’s joint executive committee consists of: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Mr. Chai Sophonpanich Dr. Chanvit Tanphiphat Dr. Dhanit Dheandhanoo Mrs. Linda Lisahapanya Mr. Chong Toh Mr. Curtis John Schroeder Dr. Sinn Anuras Dr. Chatree Duangnet Mr. Carl Stanifer Mr. Dennis Brown Mrs. Khor Yow Lee Chan

Chairperson Vice Chairperson Director and Chairperson of the Medical Director Managing Director Director Director and Group Chief Executive Officer Group Medical Director Group Chief Medical Officer Group Chief Financial Officer and Director of International Development Program Group Chief Operating Officer Chief Financial Officer

Duties and Responsibilities of the Joint Executive Committee 1. To approve expenses included budgeted and non-budgeted as follows: An amount of not exceeding Bt 20,000,000 per project (for the non-budgeted) An amount of not exceeding Bt 40,000,000 per project (for the budgeted) 2. To consider approval of the physician’s status change, and determine the treatment right of the physicians practicing in Bumrungrad Hospital 3. To consider and make judgments on issues involving the physicians’ discipline behaviors 4. To consider and approve annual financial statements and operation statements

Audit Committee The Company’s audit committee as at 31 December 2004 comprises the following: 1. Miss Sophavadee Uttamobol Chairperson of the Audit Committee 2. Mr. Soradis Vinyaratn Member of the Audit Committee 3. Mr. Boonpakorn Chokwatana Member of the Audit Committee Mrs. Tawichar Tansathit is the secretary of the Audit Committee.

Duties and Responsibilities of the Audit Committee The Company’s audit committee has the scope of duties and responsibilities to report to the board of the directors as follows: 1. To review the financial report of the Company to be in accordance with the accounting standards, and ensure that the financial reporting is sufficient and reliable, before being presented to the board of directors 2. To consider and recommend the appointment of external auditors and audit fees 3. To ensure the suitability and effectiveness of the Company’s internal control system 4. To ensure the Company’s compliance with regulations and other relevant laws 5. To ensure that there is no conflict of interest arising from connected parties 6. To prepare a report of the audit committee work to be disclosed in the Company’s annual report; the report must be signed by the Chairperson of the Audit Committee. 7. To be responsible for any other matters assigned by the board of directors

Other responsibilities 1. To consider budgeting and human resources of the internal audit office 2. To coordinate with the Company’s internal auditors regarding the internal control system, audit plans, and audit programs, and evaluation of the results of the internal auditing of various operations of the Company, according to the generally accepted method and standards 3. To appoint, dismiss, transfer or terminate the employment of directors (chief ) of internal audit Management

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Management The Company’s management as at 31 December 2004 consists of the following: 1. Mrs. Linda Lisahapanya

Managing Director

2. Dr. Dhanit Dheandhanoo

Chairperson of the Medical Director

3. Mr. Curtis J. Schroeder

Group Chief Executive Officer

4. Dr. Sinn Anuras

Group Medical Director

5. Dr. Chatree Duangnet

Group Chief Medical Officer

6. Dr. Karoon Mekanontchai

Senior Associate Medical Director

7. Dr. Chamaree Chuapetcharasopon

Associate Medical Director

8. Mr. Carl Stanifer*

Group Chief Financial Officer and Director of International

9. Mr. Dennis Brown**

Group Chief Operating Officer

Development Program 10. Mrs. Khor Yow Lee Chan

Chief Financial Officer

11. Ms. Janice Chan Mun Yee***

Acting Chief Operating Officer

*Mr. Carl Stanifer joined BH as Group Chief Financial Officer on 12 January 2004. ** Mr. Dennis Brown joined BH as Group Chief Operating Officer on 1 March 2004. *** Ms. Janice Chan Mun Yee promoted to be Acting Chief Operating Officer on 1 February 2005.

Election of Directors and Management The Company does not have a nominating committee for the selection of directors and management. The election of any members of the board of directors must be approved by the shareholders’ meeting, in accordance with the following rules and principles: 1. Each shareholder has one vote for one share. 2. The election of directors may be either by voting for each individual director, or by voting for a group of directors, whichever way the shareholders’ meeting deems appropriate. For each resolution, each shareholder must exercise all of his/her votes for one individual director or for one group of directors. Votes by each shareholder may not be split between any directors or any groups of directors. 3. The election passes with the majority of the votes. If the number of votes is equal, the chairperson of the meeting has the final vote. Bangkok Bank Pcl, the major shareholder of the Company with 30.53* percent shareholding, has 2 representatives in the board of directors, which are Mr. Chatri Sophonpanich and Mrs. Kultida Sivayathorn. * The data as of at 3 September 2004 The selection of independent directors uses the same process as the selection of directors and management.The qualification of independent directors are as follows: 1. Being outsourcing directors who do not be the management nor full time employees of the company, affiliated company, associate company or related company. 2. Not being the management director nor authorized director of the company, affiliated company, associate company or related company. 3. Being a director who has no direct or indirect benefit or interest in finance and management of the company, affiliated company, associated company or majority shareholder of the company. 4. Independent from the management, significant shareholders and related parties. 5. Being a director who is able to safeguard interests of the company’s shareholders equally. 6. Being a director who is able to prevent the conflict of interests between the company and related parties. 7. Holding shares not more than 5 percent of paid-up capital of the company, affiliated company, associated company or related company, which shall be inclusive of the shares held by related parties.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Remuneration of Directors, Audit Committee and Management Directors’ Remunerations and Audit Committee’s Remuneration Directors’ remunerations and Audit Committee’s remunerations for the year ended 31 December 2004 are as follows: Directors’ Remuneration and Audit Committee’s Remuneration Payment Detail: Audit Committee ‘s Directors’ Remunerations Name

Number

Annual

Meeting

of Meetings RemuneAttending/

ration

Remunerations Number of

Meeting

Total

Remune-

Total

Meetings

Remune-

ration

Attending/

ration

Invitation 1. Mr. Chai Sophonpanich

8/8

Invitation 190,000

240,000

430,000

2. Dr. Chanvit Tanphiphat

7/8

170,000

175,000

345,000

3. Dr. Dhanit Dheandhanoo

8/8

150,000

160,000

310,000

4. Mr. Boonpakorn Chokwatana

8/8

150,000

160,000

310,000

4/4

80,000

390,000

5. Mr. Soradis Vinyaratn

5/8

150,000

100,000

250,000

4/4

80,000

330,000

6. Dr. Sawanya Dejudom

8/8

150,000

160,000

310,000

7. Dr. Anant Tejavej

8/8

150,000

160,000

310,000

8. Dr. John Yangpichitt

8/8

150,000

160,000

310,000

9. Mrs. Kultida Sivayathorn

5/8

150,000

100,000

250,000

10. Ms. Sophavadee Uttamobol

8/8

150,000

160,000

310,000

11. Mr. Chong Toh

8/8

150,000

160,000

310,000

12. Mrs. Linda Lisahapanya

6/8

150,000

120,000

270,000

13. Mr. Kiat Nitthiranondh

4/8

150,000

80,000

230,000

14. Mr. Boonnetr Tantakit**

0/2

150,000

15. Mr. Curtis John Schroeder***

4/6

80,000

16. Mr. Chatri Sophonpanich****

3/6

60,000

2,160,000

2,075,000

4,235,000

4/4

120,000

430,000

60,000 280,000

4,515,000

* The annual director remunerations above are for the year 2003 but paid in 2004. The 2004 annual remunerations have not yet been paid to the directors. ** Mr. Boonnetr Tantakit resigned from the board of directors on 28 Apirl 2004 *** Mr. Curtis John Schroeder became a member of the board of directors on 28 Apirl 2004 **** Mr. Chatri Sophonpanich became a member of the board of directors on 28 Apirl 2004 Director remunerations represent the benefits paid to the Company’s directors, exclusive of salaries and related benefits payable to the management. The above remunerations have been approved by the shareholders.

Remunerations of Directors and Management In 2004, the total remuneration of the 10 executives of the Company and its subsidiaries is amounted to Bt 86,003,436. The remuneration represent the salaries and benefits paid to the group management, which includes both the Bumrungrad Hospital Pcl. and subsidiaries. In 2005, the total remuneration of the 10 executives is expected to be amounted to Bt 102,500,000.

Bumrungrad Hospital Public Company Limited

- Bachelor’s degree

of Illinois, USA

- Master’s Degree University

F.R.C.S. England

- MB. CHB., LEEDS University

Institution Association

Thai Corporate Directors

- Director Certification Program,

University of Colorado, USA

- Bachelor’s degree

Education

*Shareholding as at 3 September 2004, including that of spouses and minors

Director

4. Mr. Kiat Nitheranont

Managing Director

3. Mrs. Linda Lisahapanya

Vice Chairperson

2. Dr. Chanvit Tanphiphat

1. Mr. Chai Sophonpanich

Chairperson

Age

Name / Position

Directors

0.01

0.18

0.07

Sophonpanich’s wife

- Sister of Mr. Chai

Sophonpanich

- Brother of Mr. Chatri

Mrs. Linda Lisahapanya

- Husband of sister of

between Management

(%) 1.09

Family Relationship

Shareholding*

- President, Royal Concord Inter Trade Co., Ltd.

- Consultant, Bangkok Bank Public Co., Ltd.

- Managing Director, Bumrungrad Hospital Pcl.

Surgery Department, Chulalongkorn University

- Professor, Faculty of Medical Science,

- Director of Bangkok Life Insurance Co., Ltd.

- Director of Union Plastic Public Co., Ltd.

- Vice Chairman of Amata Corporation Public Co., Ltd.

- Chairman of Furukawa Metal (Thailand) Public Co., Ltd.

- Chairman of Charoong Thai Wire & Cable Public Co., Ltd.

Bangkok Insurance Public Co., Ltd.

- President and Managing Director,

Work Experience

DETAILS OF MANAGEMENT AND CONTROLLING PARTIES

Annual Report 2004

(Edinburgh)

- DCH (England) FRCP

University)

- MBChB (Edinburgh

- Cardiology, USA

- Internal Medicine

- Board Certifications:

- MD, Mahidol University

Neurosurgery, UK

- Board Certification:

- MD, Mahidol University

Queens University

- MRCOG, FRCOG,

Stetson University

- B.Sc (Chemistry)

Education

*Shareholding as at 3 September 2004, including that of spouses and minors

Director

9. Dr. Anant Tejavej

Director

8. Dr. Swanya Dej-Udom

Director

7. Dr. Dhanit Dheandhanoo

Director

6. Dr. John Yangpichitt

5. Mrs. Kultida Sivayathon

Director

Age

Name / Position

0.14

0.05

0.04

0.02

between Management

(%) 0.01

Family Relation

Shareholding*

Ramathibodi, Mahidol University

Emeritus Professor, Medical Science Faculty,

Heart disease physician, Bumrungrad Hospital

Heart disease physician, Bangkok General Hospital

Ramathibodi University

Neurology Surgery Department of

Associate Professor, Director,

Independent physician, Ruam Rudee Clinic

Bangkok Bank Pcl.

1976-Present, Executive Vice President,

Work Experience

Annual Report 2004

Bumrungrad Hospital Public Company Limited

Age

- Managing Director, Sorachai Wiwat Co., Ltd.

- Vice Chairperson, Landmark Hotel Group

- Executive Director,The Post Publishing PCL

Pornprapa Finance Corporation

- 1984-1987 Head of Legal Department,

Bank of Asia Public Co., Ltd.

- 1987-1991 Supervisor officer,

Dhamrongtham Law Office

- 1991-present Legal Consultant,

Banking, London

Singapore Investment Corporation

- 199-1993 Economist, Government of

Morgan Stanley

- 1993-1996 Analyst, Investment Banking –

Bangkok Bank Pcl.

- 1998-2000 Vice President, Investment Banking –

- 2000-present President, Bualuang Securities

Work Experience

- Executive Vice President ,Bangkok Bank PCL

0.02

between Management

(%) -

Family Relation

Shareholding*

London College of

- Attended City of

Institution Association

Thai Corporate Directors

- Director Certification Program,

University

- MBA Chulalongkorn

Oxford University

Politics and Economics-

- BA Hons (Oxon) in Philosophy,

Institute of Technology

Management–Massachusetts

- Master of Science in

Education

*Shareholding as at 3 September 2004, including that of spouses and minors

Director

12 Mr. Soradis Vinyaratn

Director

11. Ms. Sophawadee Uttamobol

Director

10. Mr. Chong Toh

Name / Position

Annual Report 2004

Age

California

University of Southern

Services Administration,

- Masterâ&#x20AC;&#x2122;s degree in Health

United Kingdom

Regent Street Polytechnic,

- Higher Education, London

0.01

Sophonpanich

Accountancy College, Hong Kong

Mr. Chai

- Brother of

Kwang Tai High

0.30

between Management

(%) 0.04

Family Relation

Shareholding*

- High Level Vocational Education,

- Bachelorâ&#x20AC;&#x2122;s degree

Education

*Shareholding as at 3 September 2004, including that of spouses and minors

Director

15. Mr. Curtis John Schroeder

Director

14. Mr. Chatri Sophonpanich

Director

13. Mr. Boonpakhon Chokewatana 69

Name / Position

University Hospital, Los Angeles, California

- 1987-1993 Director of USC

Bangkok Bank Pcl.

- January 1999-present Chairman,

Committee of Bangkok Bank Pcl.

- July 1999-present Advisor of the Executive

Advisory Committee, Bangkok Bank Pcl.

- 1999-present Vice Chairman of

- Chairperson, New City (Bangkok) Pcl.

Work Experience

Annual Report 2004

Bumrungrad Hospital Public Company Limited

General Hospital Co., Ltd. Bangkok

- 1994-1998 Director, Bangkok

Pennsylvania State University

- Assistant Professor, Pediatrics at

- American Board of Medical Quality

Lubbook, Texas

Affair University Medical Center

- 1987-1994 Vice Chairman for Medical

Hospital, Los Angeles, California

- 1987-1993 Director of USC University

Ramathibodi University

Neurology Surgery Department of

- Association Professor, Director,

Hershey Medical Center,

- 1982 Vice Director

Work Experience

- American Board of Pediatrics

- MD, Chulalongkorn University

- American Board of Gastroenterology

0.05

0.01

0.04

Sophonpanich’s wife

- Sister of Mr. Chai

between Management

(%) 0.18

Family Relation

Shareholding*

- American Board of Internal Medicine

- Board Certifications:

- MD, Chulalongkorn University

Southern California

Administration, University of

- Master’s degree in Health Services

* Shareholding as at 3 September 2004, including that of spouses and minors

Group Chief Medical Officer

5. Dr. Chatree Duangnet

Group Medical Director

4. Dr. Sinn Anuras

Group Chief Executive Officer

Neurosurgery, UK

Director

3. Mr. Curtis John Schroeder

- Board Certifications:

- MD, Mahidol University

of Illinois, USA

- Master’s Degree University

Education

Chairman of the Medical

2. Dr. Dhanit Dheandhanoo

1. Mrs. Linda Lisahapanya

Managing Director

Age

Name / Position

Management

Annual Report 2004

Bumrungrad Hospital Public Company Limited

University of Cincinnati

Development Program

Cumberland College

Accounting and Finance,

- Bachelorâ&#x20AC;&#x2122;s Degree in

Administration at the

and Director of International

- Graduate studies in

Health Planning and

Body Imaging, USA

Radiology, USA

Vascular and Interventional

- Fellowships:

General Radiology, Thailand

- Board Certification:

Ramathibodi Hospital

- Mahidol University,

Group Chief Financial Officer

Mr. Carl Stanifer

Associate Medical Director

Chuapetcharasopon

Orthopedic Surgery

Medical Director

Dr. Chamaree

- Board Certification:

Senior Associate

- MD, Mahidol University

Education

* Shareholding as at 3 September 2004, including that of spouses and minors

Dr. Karoon Mekanontchai

Age

Name / Position

0.02

between Management

(%) 0.03

Family Relation

Shareholding*

Australia and Malaysia

- Experience in Saudi Arabia,

Tenet Healthcare Corporation

of International Healthcare Division,

- Senior Vice President, Operations

Healthcare, Singapore

- Chairperson and President of VISTA

Ramathibodi Hospital, Mahidol University

- 1990-1995 Instructor, Department of Radiology,

National Cancer Institute

- 1994-present Consultant Radiologist,

Royal College of Radiologists of Thailand

- 1998-present Executive committee,

Saraburi Province Hospital

- 1978-1993 Full time physician,

Medical School Mahidol University

- 1983-1998 Orthopedics and Rehabilitation

Bumrungrad Hospital Pcl.

- 1989 Orthopedics Consultant,

Work Experience

Annual Report 2004

Group Chief Operating Officer

Mr. Dennis Brown

Bumrungrad Hospital Public Company Limited

Age

Washington University

- Master‘s Degree, George

New Zealand

University of Wellington,

- Bachelor’s degree, Victoria

University of Florida

0.01

in Health and Hospital Administration,

- Master of Business Administration

Australia

- 2003-2005 Divition Director/Hospital Administrative

- 2003-2005 Director of Operation

Bumrungrad Medical Center Ltd.

Diethelm Singapore Pte. Ltd.

- 1982-1983 Internal Manager

Scotts Holding (S) Pte. Ltd.

- 1984-1986 Chief Accountant,

Mount Elizabeth Hospital Ltd.

- 1987-1994 Chief Financial Officer,

- Chief Executive Officer, Mount Elizabeth Hospital, Ltd.

Enterprises, Australia

- Chief Executive Officer, Australian Medical

Tenet Healthcare Corporation

University of New England,

- 1980-1984, 1985-2003 Senior Vice President,

BFT Investments, LLC.

- 2003-2004 Chief Executive Officer,

Work Experience

Operations Northern Region,

between Management

(%) -

Family Relation

Shareholding*

- Company Director’s Diploma,

Stanford University

School of Business,

- Executive Program, Graduate

Education

* Shareholding as at 3 September 2004, including that of spouses and minors

Officer

Action Chief Operating

11. Ms. Janice Chan Mun Yee

Chief Financial Officer

10. Mrs. Khor Lee Chan

Name / Position

Annual Report 2004

Corporate Governance The Company realizes the significance of good corporate governance, and is committed to follow the Principles of Good Governance Guidelines provided by the Stock Exchange of Thailand as follows:

1. Corporate governance policy The board of directors sees the importance of good corporate governance, and has the intention to follow such policies.The board of directors emphasizes the internal control and internal audit system, and will oversee that the management runs the Company in accordance with the Company’s policies efficiently, for the long-term benefits of shareholders, under the regulations and laws, and business ethics.

2. Shareholders’ rights The Company acknowledges the importance of all shareholders’ rights, including both major shareholders and minority shareholders, as well as emphasizes providing equal and transparent information for all shareholders. For every shareholder meeting, the Company sends invitation letters to shareholders to inform of the meeting agenda and board of directors’ opinion on each agenda, with supporting documents and information sufficient to facilitate shareholders in making their decisions. The Company also has minutes of the shareholders meeting available for shareholders to check.

3. Stakeholders’ rights The Company recognizes the importance of the rights of each stakeholder group, and intends to interact with each party fairly. The important stakeholders are as follows: Customers / Patients

The Company provides patient care in an ethical manner, and at the best quality possible. The Hospital’s Ethics Committee protects patients’ rights. In addition, the Hospital has a department to monitor and improve the quality of the care provided to all patients taking into consideration patients’ needs and views.

Suppliers / Contractors The Company abides by the contracts with all suppliers and contractors. Employees The Company is well aware that its employees are valuable resources. It, then, has provided employees with appropriate compensation. In addition, the Company supports the development of employees’ skills and knowledge through continuous education and regular training programs. Competitors

The Company competes with competitors fairly and in accordance with the legislation.

Community

The Company has emphasized the importance its responsibilities towards the environment and has set up an environmental policy to communicate to employees its views on environment preservation and encourages employees to help protect global environment. BH is committed to controlling environmental impact to neighboring communities and efficiently utilizing natural resources. In addition, the Hospital has various activities to support the community through its Bumrungrad Hospital Foundation.

4. Shareholders’ meetings In the annual general shareholders’ meeting of 2004, 9 directors attended the meeting to provide information and details that the shareholders might need. The Chairperson of the meeting equally gave the opportunity to the shareholders to ask questions, express their views, and make suggestions. The Company recorded the important issues raised in the minutes of the meeting.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

5. Leadership and vision The board or directors approves the establishing of the Company’s vision, mission, strategies, goals, business plans and budgets. The board of directors also ensures that the plans are carried out efficiently and effectively, to ensure the maximization of the Company’s value and stability to shareholders. The board of directors meets quarterly to review the Company’s performance against the plan. Moreover, the board of directors has set roles and responsibilities for various committees, including internal control and internal audit, as well as has communicated such roles and responsibilities to all levels of management and employees.

6. Conflict of interest To prevent any conflicts of interest, the board of directors pays special attention to transactions of which conflicts of interest may arise, and to related parties transaction, as well as strictly follows the Stock Exchange of Thailand rules and regulations, with pricing and other conditions on an arms-length basis. Details of the transactions, including amount, contracting party, and reasons for entering into the transactions are disclosed in financial statements, annual reports, and this 56-1 filing.

7. Business ethics The Company’s mission statement is “We provide effective world-class healthcare with caring and compassion. ”The Company has guiding principles, which are communicated to all employees as follows: 1. 2. 3. 4. 5. 6. 7. 8. 9.

We treat our patients as we would our family members. We embrace cultural diversity We are prudent, honest, and ethical in all our dealings. We work as a team. We continually improve the quality of everything we do. We maintain a happy working environment with respect and mutual trust. We encourage professional development and innovation through a constant process of learning. We provide effective healthcare that bring values to our external and internal customers. We are good coporate citizens.

All employees are expected to observe these guiding principles.

8. Balance of power in the board of directors The Company has 3 directors who are also management: 1. Mrs. Linda Lisahapanya 2. Dr. Dhanit Dheandhanoo 3. Mr. Curtis John Schroeder There are 9 directors who are not management: 1. Mr. Chai Sophonpanich 2. Dr. Chanvit Tanphiphat 3. Mr. Kiat Nitthiranondh 4. Mrs. Kultida Sivayathorn 5. Dr. John Yangpichitt 6. Dr. Swanya Dej-Udom 7. Dr. Anant Tejavej 8. Mr. Chong Toh 9. Mr. Chatri Sophonpanich The Company has 3 directors who are independent directors and members of the audit committee: 1. Miss Sophavadee Uttamobol 2. Mr. Soradis Vinyaratn 3. Mr. Boonpakorn Chokwatana These 3 independent directors account for 20% of all corporate directors. The Company plans to increase the number of independent directors to not less than 1/3 of directors in the future. 24

Bumrungrad Hospital Public Company Limited

Annual Report 2004

9. Aggregation and segregation of positions Chairperson of the board of directors is not the same person as the Managing Director, in order to segregate the duties of policy setting and control from the day-to-day management.

10. Directors and management remuneration The Company does not have a compensation committee. The directors’ remunerations are in the form of annual remunerations and meeting fees, approved by shareholders. Management’s remunerations are in the form of salaries and bonus, and are based upon both the Company’s performance and individual performance. The amounts of remunerations for directors and management are detailed in the section Remuneration of Directors, Audit Committee and Management.

11. Board of directors’ meetings The board of directors has a meeting every quarter, and has extraordinary meetings as necessary. The agendas of the meeting are set in advance and are sent together with invitation letters and other necessary documents to directors 7 days prior to the meeting so that the directors will have sufficient time to study the information. Normally, each meeting takes approximately 2 hours. In 2004, there were 8 meetings. Please see the attendance details in table of Director’s Remunerations and Audit Committee’s Remuneration. The Company documents minutes for every board meeting, which are approved at the next board meeting. The Directors and those involved can check the minutes as needed.

12. Committees The Company has an audit committee and a joint executive committee, as detailed in the section Management Structure. The Company does not have a compensation committee.

13. Internal control and internal audit systems The Company has given importance to internal control and internal audit systems, by establishing an internal audit unit, with the objectives to support and develop effective internal control of the organization, in order to minimize operational risks, and to ensure quality of the work process and operations. Emphasis is on effectiveness and efficiency, and appropriateness of expenses and costs, including operations in accordance to the policy and/or requirements of the management. To ensure the independence of the internal audit unit and the balance of power, the internal audit unit is required to report its work directly to the audit committee.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

14. Directors’ report The board of directors is responsible for the consolidated financial statements of the Company and its subsidiaries and information as appears in the annual report. The financial statements have been prepared in accordance with the generally accepted accounting principles, using appropriate and consistent accounting policies. The financial statements have been prepared with caution and have been evaluated for appropriateness of the overall presentation of the financial statement. There was sufficient information disclosure in the notes to the financial statements. The board of directors has set up an efficient and effective internal control system to ensure that all accounting transactions have been recorded correctly and comprehensively, and that there has been a record-keeping system of assets to protect the Company from any material fraud or damage. The board of directors agreed that the overall internal control system of the Company was at a satisfactory level, which resulted in confidence in the reliability of the financial statements of the Company and its subsidiaries as at 31 December 2004.

15. Relations with investors The board of directors understands that the disclosure of Company’s information, including general information and financial information which are important to investors’ decision making process, must be correct, complete, transparent, and released on a timely manner. The Investor Relations Department was set up in 2003 to facilitate interested investors and shareholders in this regard. Interested investors or shareholders can inquire regarding the Company’s information at the following: Investor Relations Department Telephone: 0-2667-2036 or 0-2667-1254 Email address: ir@bumrungrad.com Website: www.bumrungrad.com ,

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Internal Control of Information The Company has the following policy regarding directors using internal information for personal benefits: 1. According to Companyâ&#x20AC;&#x2122;s rules and regulations, directors are required to inform the Company immediately in the event that they may have any interests in any transactions being entered into by the Company, or that there is an increase or decrease in the holding of shares or bonds of the Company or subsidiaries. 2. Directors and management must prepare and disclose securities holding report to the Securities Exchange Commission within the required time. Penalties for violation includes the following: 1. Verbal warning for corrective action 2. Report in shareholdersâ&#x20AC;&#x2122; meeting for consideration 3. Compensation for any damages 4. Disclosure to Securities and Exchange Commission and The Stock Exchange of Thailand

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Dividend Policy 1. Company‘s dividend policy is as follows: 1.1 When the Company has net profit which can be distributed as dividends, the preferred shareholders will receive dividends before the ordinary shareholders. In any year that dividends distributed to the preferred shareholders reaches 15% of the capital represented by the preferred shares, the balance of the profit shall be distributed to the ordinary shareholders at any amount as determined by the shareholders meeting. In any year that the Company is able to distribute dividends for more than 15% of its capital, the shareholders of both types shall receive the dividends equally. 1.2 The payment of dividends to the board of directors is required to be in accordance with the resolution of shareholders’ meeting. 1.3 Every time that the Company pays dividends, the Company shall reserve at least 5% of the profit as appropriated statutory reserve, until the reserve accounts for 10% of the Company’s capital. 1.4 Accrued dividends will not receive any interest payment. On 18 August 2004, the board of directors meeting passed the resolution to approve the interim dividend payment on the performance for the year commencing 1 January 2004 to 30 June 2004, at a rate of Bt 0.30 per share, amounting Bt. 219 million. 2. Subsidiaries’ dividend policy is as follows: 2.1 When the company has profit which can be distributed as dividends, the company can pay dividends to its shareholders at any amount in accordance with the resolution of shareholders’ meeting. 2.2 Accrued dividends will not receive any interest payment. On 18 August 2004, the Bumrungrad Medical Center Co., Ltd. board of directors meeting passed the resolution to approve the interim dividend payment on the performance for the year commencing 1 January 2004 to 30 June 2004, at a rate of Bt 2 per share, amounting Bt. 240 million.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Related Parties’ Transactions Characteristics of Related Parties Transactions The Company has had transactions with its subsidiaries, affiliates and related companies as detailed in note to financial statement no. 6. The Company has also had other related parties transactions, which are normal courses of business, including revenues from corporate contracts, charged at market rate.

Transaction

Related Parties

Relationship

Amount in 2004 (Bt million)

Transactions with the Company’s

Details in notes to

subsidiaries and affiliates

financial statement no. 6

Revenues from

Bangkok Insurance Pcl.

Common director

15.3

Bangkok Bank Pcl.

Major shareholder

17.6

corporate contract Revenues from corporate contract

The Necessity and Rationale of the Related Parties Transactions The Company has entered into related parties transactions to support the normal business of the Company.The rental of building from Bangkok Bank Pcl (as detailed in notes to financial statements no. 6) has helped the Company to maintain and expand its international patient base. The corporate contracts and insurance contracts have helped expand the Company’s client base.

Approval Process for Entering into Related Parties Transactions For contracts, which are entered into as part of normal courses of business, the transactions are approved through the normal process in accordance with the Company’s policy. For other transactions, which are significant in size as per the definition of the Stock Exchange of Thailand, board approvals and/or shareholders’ approval are obtained depending on the requirements, where management and/or board of directors with vested interests are not allowed to vote.

Policy on Related Parties Transactions in the Future The Company will continue to have related parties’ transactions, as these transactions are beneficial to the Company as explained earlier. The Company will strictly abide by the Company’s policy always, as well as the rules and regulations of the Stock Exchange of Thailand. In addition, the Company will emphasize the transparency of the related parties transactions, and consider retaining Company’s benefits as the greatest concern.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Management Discussion and Analysis 1. Revenues and Expenses For the year ended 2004, the Company has total revenues (excluding gain from extraordinary item) THB 5,809 million, an increase of THB 1,189 million (26%) from the same period a year ago.The increase is mainly as a result of the continuous growth in hospital operations, where inpatient and outpatient revenues increased in the same rate at 27%. The Company has total expenses of THB 4,939 million, an increase of THB 985 million (25%) from the same period in 2003.This is a result of the growth of hospital operations. Cost of service and other operating expenses were in-line with the increase in revenues. In addition, in 2004, one of the Company’s subsidiaries had a corporate income tax expense (included in the consolidated financial statements) of THB 129 million.

2. Net Profits and Extraordinary Item The Company’s net profit for the year ended 2004 from normal operations was THB 870 million, representing a 31% growth compared to THB 666 million in 2003. This result is mainly due to the continuous increase in hospital revenue. EPS stood at THB 1.36 per share, which was similar to THB 1.34 per share in 2003 due to the increases in both profit and the weighted average number of ordinary shares after the conversion of convertible bonds and the increase in paid-up capital. However, the fully diluted earnings per share rose to THB 1.08 in 2004, compared to THB 0.78 in 2003, as a result of better earings from hospital operations while the number of diluted ordinary shares were hardly changed. In year 2004, the Company has gain from the conversion of convertible bonds of Bangkok Insurance Pcl. to ordinary shares amounting to THB 64 million. This is the result of the restructure agreement in 2000; the Company issued 12-year THB 200 million of convertible bonds at interest rate 4%. According to Thai Accounting Standards about restructuring, the Company had to record THB 96 million bond’s accrued interest. On 25 August 2004, BKI exercised its right to convert all of its bonds, resulting in a write back of interest expense amounting to 64 million that was recognized in year 2000. (During 2000-2004 the Company paid total interest amounting to THB 32 million) The Company recorded such transaction as “Gain from bond conversion” which is presented as an extraordinary item in the statement of earnings. (Unit: Million Baht) 2004

2003

Total Revenues

5,809

4,620

Gross Profit

2,023

1,552

870

666

934

666

Net Profit (Before extra. Item) Extraordinary Item Net Profit

Bumrungrad Hospital Public Company Limited

Annual Report 2004

3. Balance Sheet Total assets increased to THB 5,021 million as at 31 December 2004 compared to THB 4,456 million as at 31 December 2003, primarily because of increased investments in construction in progress and computer software. Net Debt to equity as at 31 December 2004 stood at 0.3x, a significant improvement from 31 December 2003 of 0.9x, mainly due to increase in shareholder’s equity and decrease in liability. The increase in shareholder’s equity resulted from the increase in paid-up capital, conversion of convertible bonds to ordinary shares, and net profit for the year. The decrease in liability resulted from long-term loan repayment and conversion of bonds to ordinary shares. Total equity increased to THB 2,060 million as at 31 December 2004 compared to THB 1,260 million as at 31 December 2003. Total liability was Bt. 2,960 million as at 31 December 2004 compared to Bt. 3,196 million as at 31 December 2003.

4. Liquidity The Company’s cash flow from operating activities was at Bt 1238 milion in 2004 compared to Bt 987 million in 2003. The increase was primarily attributable to improved profits from hospital operations. Net cash used in investing activities increased from Bt 496 million in 2003 to Bt 1268 million in 2004, as a result of increase in investment in properties, buildings and equipment and purchase of investment in subsidiary. Net cash used in financing activities increased from Bt 26 million in 2003 to Bt 273 million in 2004, due to dividend payment and loan repayment. As a result, cash and cash equivalents at the end of the year decreased to Bt 722 million from Bt 1026 million. Liquidity ratio stood at 1.27x in 2004, a lower than 1.98x in 2003. Quick ratio decreased from 1.71x in 2003 to 1.15x in 2004, as a result of lower and cash and cash equivalent.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Report of the Audit Committee To the Shareholders of Bumrungrad Hospital Public Company Limited The Audit Committee was established by a board resolution. The Committee comprises of three independent directors of the Company i.e. Miss Sophavadee Uttamobol, Chairperson and Dr. Boonpakorn Chokewatana and Mr. Soradis Vinyaratn as Members of the Audit Committee. The duties and responsibilities of the committee are mainly to review the sufficiency of compliance with accounting standards and credibility of the financial reports; the adequacy and effectiveness of the Company’s internal control system; the compliance with the regulations and any other relevant laws, and to review any possible conflict of interest between the Company and related parties. The Audit Committee had 4 meetings in year 2004. The following major areas were discussed: 1. Reviewed the Company and subsidiaries’ financial statements prior to submission to the Board of Directors. After due considerations with the external auditors and management, it is the opinion of the committee that the above-mentioned financial statements are presented fairly and sufficiently. 2. Reviewed and acknowledge the report on the adequacy and the effectiveness of risk assessment and internal control system to prevent risks on a regular activities of each division with the Company’s internal auditors. The committee is of the opinion that the internal control systems are adequate and appropriate to prevent risks for the Company’s operation. The Audit Committee has audited the self-assessment reports that were used as tool for evaluating its risks and found no significant deficiency.

Miss Sophavadee Uttamobol Chairperson of Audit Committee 28 February 2005

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Report of the Accountability of the Board of Directors to the Companyâ&#x20AC;&#x2122;s Financial Reports The board of directors is responsible for the consolidated financial statements of the Company and its subsidiaries and information as appears in the annual report. The financial statements have been prepared in accordance with the generally accepted accounting principles using appropriate and consistent accounting policies. The financial statements were prepared with caution and have been evaluated for appropriateness of the overall presentation of the financial statement.There is sufficient information disclosure in the notes to the financial statements. The board of directors has set up an efficient and effective internal control system to ensure that all accounting transactions are recorded correctly and comprehensively, and that there is a record-keeping system of assets to protect the Company from any material fraud or damage. The board of directors has the opinion that the overall internal control system of the Company is at the satisfactory level, which results in confidence in the reliability of the financial statements of the Company and its subsidiaries as at 31 December 2004.

Mr. Chai Sophonpanich Chairman

Mrs. Linda Lisahapanya Managing Director

Bumrungrad Hospital Public Company Limited

Annual Report 2004

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES REPORT AND FINANCIAL STATEMENTS 31 DECEMBER 2004 AND 2003

Report of Independent Auditor To The Board of Directors and Shareholders of Bumrungrad Hospital Public Company Limited

I have audited the consolidated balance sheets of Bumrungrad Hospital Public Company Limited and subsidiaries as at 31 December 2004 and 2003, and the related consolidated statements of earnings, changes in shareholdersâ&#x20AC;&#x2122; equity, and cash flows for the years then ended, and the separate financial statements of Bumrungrad Hospital Public Company Limited for the same periods. These financial statements are the responsibility of the management of the Company and subsidiaries as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audits 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 audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bumrungrad Hospital Public Company Limited and subsidiaries and of Bumrungrad Hospital Public Company Limited as at 31 December 2004 and 2003, and the results of their operations and cash flows for the years then ended, in accordance with generally accepted accounting principles.

Sumalee Reewarabandith Certified Public Accountant (Thailand) No. 3970 Ernst & Young Office Limited Bangkok: 2 February 2005

Bumrungrad Hospital Public Company Limited

Annual Report 2004

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS AS AT 31 DECEMBER 2004 AND 2003 (Unit: Baht) CONSOLIDATED Note

2004

2003

THE COMPANY ONLY 2004

2003

ASSETS CURRENT ASSETS Cash and cash equivalents

652,881,941

985,581,980

516,300,167

61,263,555

470,000,000

200,012,341

234,958,035

232,992,380

233,885,989

21,039,861

5,533,291

9,804,417

5,436,879

79,180

430,028

101,329,142

25,172,581

11,149,858

104,451,057

93,513,296

102,027,734

30,277,597

11,708,011

29,378,850

1,219,399

5,208,217

936,143

765,330

1,855,020

1,503,740,166 1,635,877,710

912,967,530

106,619,214

79,798,486

221,250,880

1,305,889

Current investments - fixed deposits at financial institutions Trade accounts receivable - net

Advances to employees and directors

10,012,341

Short-term loans and interest receivable related parties Inventories Prepaid expenses Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Pledged fixed deposits at financial institutions

229,827,772

Investments accounted for under equity method

209,354

885,171,148

767,984,493

Other long-term investments - net

2,047,213

1,700,000

2,047,213

1,700,000

160,341,068

25,022,369

183,856,970

2,801,618,198 2,484,015,981 1,618,024,805

511,058,265

Long-term loans and interest receivable related parties

Property, plant and equipment - net

Intangible assets - net

Goodwill on consolidation - net

2.3

Other non-current assets

476,127,798 7,515,561

89,005,238 (1,366,162) 6,703,318

661,016,711

7,515,561

2,785,494

TOTAL NON-CURRENT ASSETS

3,517,345,896 2,820,407,283 3,420,048,687 1,468,691,111

TOTAL ASSETS

5,021,086,062 4,456,284,993 4,333,016,217 1,575,310,325

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

Bumrungrad Hospital Public Company Limited

Annual Report 2004

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS (Continued) AS AT 31 DECEMBER 2004 AND 2003 (Unit: Baht) CONSOLIDATED Note

2004

THE COMPANY ONLY

2003

2004

2003

LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Trade accounts payable Current portion of long-term loan

413,412,878

398,122,521

412,139,998

554,735

328,521,802

82,130,450

8,000,000

Current portion of liabilities under debt restructuring agreement

Short-term loans and interest payable a related party

Accrued physician's fee

1,470,826,509

167,001,668

143,892,444

166,377,045

6,232,877

3,561,644

6,232,877

Interest payable - convertible bonds treated as equity securities Corporate income tax payable

60,893,372

Accrued expenses Accounts payable - others

Other current liabilities TOTAL CURRENT LIABILITIES

136,153,589

137,554,066

47,862,449 21,316,501 1,181,395,136

3,561,644 -

134,068,672

6,094,161

45,502,825

40,064,828

39,279,546

5,979,015

19,994,446

1,325,614

824,742,965 2,249,704,375

58,815,700

NON-CURRENT LIABILITIES Long-term loan

Liabilities under debt restructuring agreement

1,779,493,095 2,108,014,897 -

64,021,918

Convertible bonds

200,000,000

Provision for loss in excess of cost of investments in subsidiaries

23,114,011

13,085,206

TOTAL NON-CURRENT LIABILITIES

1,779,493,095 2,372,036,815

TOTAL LIABILITIES

2,960,888,231 3,196,779,780 2,272,818,386 335,922,824

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

Bumrungrad Hospital Public Company Limited

23,114,011 277,107,124

Annual Report 2004

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS (Continued) AS AT 31 DECEMBER 2004 AND 2003 (Unit: Baht) CONSOLIDATED Note

2004

2003

THE COMPANY ONLY 2004

2003

SHAREHOLDERS' EQUITY Share capital

Registered 920,009,835 ordinary shares of Baht 1 each (2003: 183,970,467 ordinary shares of Baht 10 each)

920,009,835 1,839,704,670

2,692,850 preference shares of Baht 1 each (2003: 570,070 preference shares of Baht 10 each)

2,692,850

5,700,700

2,692,850

5,700,700

Issued and paid-up 727,359,372 ordinary shares of Baht 1 each (2003: 132,122,803 ordinary shares of Baht 10 each)

727,359,372 1,321,228,030

2,692,850 preference shares of Baht 1 each (2003: 559,070 preference shares of Baht 10 each) Premium on ordinary shares

2,692,850 14

285,568,300 -

5,590,700 41,599,484

2,692,850

5,590,700

285,568,300 -

Conversion option

Convertible bonds treated as equity securities

550,000,000

41,599,484

Excess of investment over book value of a subsidiary

(192,661,558)

46,500,000

550,000,000

Retained earnings Appropriated - statutory reserve Unappropriated (deficit)

640,738,867 (679,030,713)

TOTAL EQUITY ATTRIBUTABLE TO COMPANY'S SHAREHOLDERS

2,060,197,831 1,239,387,501 2,060,197,831 1,239,387,501

MINORITY INTEREST - Equity attributable to minority shareholders of subsidiaries

20,117,712

TOTAL SHAREHOLDERS' EQUITY

2,060,197,831 1,259,505,213 2,060,197,831 1,239,387,501

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

5,021,086,062 4,456,284,993 4,333,016,217 1,575,310,325

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

Bumrungrad Hospital Public Company Limited

Annual Report 2004

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF EARNINGS FOR THE YEARS ENDED 31 DECEMBER 2004 AND 2003 (Unit: Baht) CONSOLIDATED Note

2004

2003

THE COMPANY ONLY 2004

2003

REVENUES Revenues from hospital operations

5,686,055,350 6

Non-competition fee income

Interest income

25,434,212 16,099,062

10,781,423

6,718,329

28,636,062

47,611,812

58,031,099

Gain on exchange rate Other income

53,074,334

4,490,984,530 2,482,535,921

Rental income

49,861,630 21,071,320

84,776,323

74,204,592

25,500,000

15,524,216

12,032,824 28,879,006

Share of profit from investments accounted for under equity method

TOTAL REVENUES

328,668,699 634,506,669

5,809,299,020

4,620,310,715 3,001,754,587 775,123,091

3,662,988,146

2,939,265,282 1,588,964,208

EXPENSES Cost of hospital operations Depreciation and amortisation

10, 11

242,004,565

242,887,549

80,313,675

12,108,605

Administrative expenses

765,772,208

629,554,455

412,152,308

82,916,158

Directors' remuneration

4,365,000

5,580,000

4,365,000

5,580,000

Amortisation of goodwill

2.3

(1,366,162)

(599,644)

Loss on impairment of fixed assets

9,000,000

Loss on exchange rate

9,000,000 -

448,107

Share of loss from investments accounted for under equity method

TOTAL EXPENSES

4,682,763,757

10,334,336

7,581,959

3,816,687,642 2,105,129,527 108,634,829

EARNINGS BEFORE INTEREST EXPENSE 1,126,535,263

803,623,073

INTEREST EXPENSE

AND INCOME TAX 6

(118,886,083)

(120,547,197)

(26,056,027)

CORPORATE INCOME TAX

(128,636,071)

EARNINGS BEFORE MINORITY INTEREST MINORITY INTEREST EARNINGS FROM ORDINARY OPERATIONS

879,013,109

683,075,876

(8,444,076)

(16,587,614)

870,569,033

666,488,262

896,625,060 666,488,262

870,569,033 666,488,262 -

870,569,033 666,488,262

EXTRAORDINARY ITEM - Gain from conversion of convertible bonds to ordinary shares

NET EARNINGS FOR THE YEAR

63,978,082 934,547,115

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

Bumrungrad Hospital Public Company Limited

666,488,262

63,978,082

934,547,115 666,488,262

Annual Report 2004

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF EARNINGS (Continued) FOR THE YEARS ENDED 31 DECEMBER 2004 AND 2003 (Unit: Baht) CONSOLIDATED Note

BASIC EARNINGS PER SHARE

2004

THE COMPANY ONLY

2003

2004

2003

Earnings from ordinary operations

1.27

1.34

1.27

1.34

Extraordinary item

0.09

Net earnings

1.36

1.34

1.36

1.34

686,003,287 499,162,713

686,003,287

499,162,713

0.78

Weighted average number of ordinary shares, par value of Baht 1 each (shares) DILUTED EARNINGS PER SHARE

Earnings from ordinary operations

1.01

0.78

1.01

Extraordinary item

0.07

Net earnings

1.08

0.78

1.08

0.78

863,080,160 857,914,863

863,080,160

857,914,863

Weighted average number of ordinary shares, par value of Baht 1 each (shares)

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

Bumrungrad Hospital Public Company Limited

Interest paid for convertible bonds treated as equity securities -

Bumrungrad Hospital Public Company Limited

Net earnings for the year 2004

Dividend paid

727,359,372

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

Balance - end of year 2004

Transferred to statutory reserve

Purchase of investment in a subsidiary from minority

Interest paid for convertible bonds treated as equity securities

57,142,857

Convertible bonds converted to ordinary shares

9,500,000

Minority interest for the year 2004

Ordinary shares issued during the year

205,000 (660,716,515)

1,321,228,030

Reduction the par value of the shares to deduct deficit 14

Preference shares converted to ordinary shares

Balance - end of year 2003

Transfer of premium on ordinary shares to deduct deficit

Minority interest for the year 2003

Transfer of statutory reserve to deduct deficit

30,000 428,571,420

Convertible bonds convertedto ordinary shares

2,692,850

(2,692,850)

(205,000)

5,590,700

(30,000)

5,620,700

892,626,610

Preference

Ordinary

Net earnings for the year 2003

Preference shares converted to ordinary shares

Balance - beginning of year 2003

Note

Issued and paid-up share capital

285,568,300

184,456,627

101,111,673

(1,209,465,422)

321,428,580

888,036,842

ordinary

Premium on

(41,599,484)

41,599,484

option

Conversion

CONSOLIDATED

550,000,000

(750,000,000)

1,300,000,000

equity securities

bonds treated as

Convertible

(192,661,558)

a subsidiary

book value of

investment over

Excess of

46,500,000

(36,639,475)

36,639,475

statutory reserve

640,738,867

(219,015,667)

934,547,115

(46,500,000)

(12,671,233)

663,409,365

(679,030,713)

666,488,262

(15,650,685)

1,209,465,422

36,639,475

(2,575,973,187)

(deficit)

Unappropriated

Retained earnings Appropriated-

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED 31 DECEMBER 2004 AND 2003

(28,561,788)

8,444,076

20,117,712

16,587,614

3,530,098

interest

Minority

2,060,197,831

(221,223,346)

8,444,076

(219,015,667)

934,547,115

(12,671,233)

200,000,000

110,611,673

1,259,505,213

16,587,614

666,488,262

(15,650,685)

592,080,022

Total

(Unit: Baht)

Annual Report 2004

57,142,857

727,359,372

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

Balance - end of year 2004

Purchase of investment in a subsidiary from minority

Transferred to statutory reserve

Interest paid for convertiblebonds treated as equity securities

Dividend paid

Convertible bonds converted to ordinary shares

9,500,000

Ordinary shares issued during the year

(660,716,515)

Net earnings for the year 2004

Reduction the par value of the shares to deduct deficit

205,000

1,321,228,030 14

Preference shares converted to ordinary shares

Balance - end of year 2003

Interest paid for convertible bondstreated as equity securities

428,571,420

30,000

892,626,610

Net earnings for the year 2003

14 14

Transfer of premium on ordinary shares to deduct deficit

Convertible bonds converted to ordinary shares

Transfer of statutory reserve to deduct deficit

Preference shares converted to ordinary shares

Balance - beginning of year 2003

Note

2,692,850

(2,692,850)

(205,000)

5,590,700

(30,000)

5,620,700

Issued and paidup share capital Ordinary Preference shares shares

285,568,300

184,456,627

101,111,673

(1,209,465,422)

321,428,580

888,036,842

Premium on ordinary shares

(41,599,484)

41,599,484

550,000,000

(750,000,000)

1,300,000,000

(192,661,558)

46,500,000

(36,639,475)

640,738,867

(219,015,667)

934,547,115

(46,500,000)

(12,671,233)

663,409,365

(679,030,713)

666,488,262

(15,650,685)

1,209,465,422

36,639,475

36,639,475 (2,575,973,187)

Excess of Convertible investment over Retained earnings Conversion bonds treated as book value of Appropriated- Unappropriated option equity securities a subsidiary statutory reserve (deficit)

THE COMPANY ONLY

FOR THE YEARS ENDED 31 DECEMBER 2004 AND 2003

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Continued)

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES

2,060,197,831

(192,661,558)

(219,015,667)

934,547,115

(12,671,233)

200,000,000

110,611,673

1,239,387,501

666,488,26

(15,650,685)

588,549,924

Total

(Unit: Baht)

Annual Report 2004

Bumrungrad Hospital Public Company Limited

Annual Report 2004

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2004 AND 2003 (Unit: Baht) CONSOLIDATED 2004

THE COMPANY ONLY

2003

2004

2003

Cash flows from (used in) operating activities Net earnings

934,547,115 666,488,262

934,547,115

666,488,262

242,004,565 242,887,549

80,313,675

12,108,605

Adjustments to reconcile net earnings to net cash provided by (paid from) operating activities: Depreciation and amortisation Loss on impairment of fixed assets

9,000,000

Bad debts and allowance for doubtful accounts

25,401,693

18,805,480

Amortisation of goodwill

(1,366,162)

(599,644)

9,000,000 20,629,906 -

257,916 -

Share of profit from investments accounted for under equity method Earnings attributed to minority interest for the year Loss (gain) on disposal of fixed assets

(318,334,363) (626,924,710)

8,444,076

16,587,614

12,634,832

(8,675,760)

75,989

1,230,666,119 935,493,501

726,232,322

51,930,073 (16,246,274)

Decrease (increase) in operating assets Trade accounts receivable

(27,367,348) (87,539,067)

(233,476,034)

Inventories

(10,937,761) (23,079,948)

(102,027,734)

Other current assets

(24,880,633)

1,735,116

29,108,734)

(2,185,292)

Trade accounts payable

(29,705,824)

54,499,786

366,589,082

(36,807)

Accrued physicians' fee

23,109,224

35,749,429

166,377,045

(1,320,088)

Increase (decrease) in operating liabilities

Interest payable Corporate income tax payable

60,893,372

Accrued expenses

(1,400,477)

Accounts payable - others Other current liabilities Net cash from operating activities

Bumrungrad Hospital Public Company Limited

52,004,008

127,974,511

3,298,191

2,359,624

21,893,930

785,282

20,889,829

15,337,486

(2,191,790)

18,668,832

940,387

1,238,073,782 987,244,877 1,042,014,572

58,590,107

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

Annual Report 2004

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS (Continued) FOR THE YEARS ENDED 31 DECEMBER 2004 AND 2003 (Unit: Baht) CONSOLIDATED 2004

2003

THE COMPANY ONLY 2004

2003

Cash flows from (used in) investing activities Increase in deposits at financial institutions with maturity of more than 3 months and those pledged Decrease (increase) in advances to employees and directors

(390,029,286)

(110,636,236)

(219,944,991)

(55,339)

4,271,126

(8,829,903)

(5,357,699)

(3,369,070)

(135,412,365)

(101,211,046)

(250,334,202)

(7,032,411)

7,791,506

(8,829,750)

6,285,039

(9,134,576)

Increase in short-term loans and interest receivable related parties Decrease (increase) in long-term loans and interest receivable - related parties Decrease in non-competition fee receivable Purchase of investment in a subsidiary Purchase of other investment

Decrease (increase) in other non-current assets Net cash used in investing activities

88,674,705

(221,223,346)

(347,213)

239,738,300

Dividend received Increase in plant and equipment

(221,223,346)

(508,207,993) (25,072,229) (1,268,229,800)

(264,745,016) (1,140,670,600) (86,613,355) (1,334,116)

(28,990,053)

32,971

(495,586,067) (1,620,844,765) (17,497,075)

Cash flows from (used in) financing activities Increase in short-term loans and interest payable a related party Decrease in long-term loan Cash received from issued ordinary shares Dividend paid

1,214,280,376

(82,130,450)

110,611,673

(219,015,667)

Decrease in liabilities under debt restructuring agreement from interest payment

(8,043,836)

(7,978,082)

(8,043,836)

(7,978,082)

(10,000,000)

(18,273,971)

(10,000,000) (18,273,971)

(208,578,280)

(26,252,053)

1,087,832,546 (26,252,053)

Interest paid for convertible bonds treated as equity securities Net cash from (used in) financing activities before extraordinary item Extraordinary item - gain from conversion of convertible bonds to ordinary shares Net cash from (used in) financing activities

(63,978,082) (272,556,362)

(26,252,053)

(63,978,082)

1,023,854,464 (26,252,053)

The accompanying notes are an integral part of the financial statements

Bumrungrad Hospital Public Company Limited

Annual Report 2004

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS (Continued) FOR THE YEARS ENDED 31 DECEMBER 2004 AND 2003 (Unit: Baht) CONSOLIDATED Note

2004

2003

THE COMPANY ONLY 2004

2003

Net increase (decrease) in cash and cash equivalents

(302,712,380)

465,406,757

445,024,271

14,840,979

Cash and cash equivalents at beginning of year

1,025,594,321

560,187,564

71,275,896

56,434,917

722,881,941

1,025,594,321

516,300,167

71,275,896

126,959,087

129,845,367

28,719,220

7,978,082

78,214,628

16,149,440

10,471,929

5,602,616

Cash and cash equivalents at end of year

Supplemental cash flows information Cash paid during the year for: Interest expense Corporate income tax Non-cash transaction: Convertible bonds converted to ordinary shares

200,000,000

Asset acquisition from off-set debts

390,900,014

772,236,429

Net assets from transfer of business not yet paid

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

Bumrungrad Hospital Public Company Limited

Annual Report 2004

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2004 AND 2003 1. GENERAL INFORMATION Bumrungrad Hospital Public Company Limited is registered as a public limited company under Thai laws and operates its business in Thailand. Its principal activities are hospital business, investment in other companies and rental of properties service. On 8 June 2004, the meeting of the Company’s Board of Directors passed a resolution approving the relocation of the Company’s office from 210 Soi 1 (Soi Ruen Rudee) Sukhumvit Road, Klongtoey Nua Sub District, Wattana District, Bangkok to 33 Sukhumvit Soi 3 (Nana Nua) Sukhumvit Road, Klongtoey Nua Sub District, Wattana District, Bangkok. The Company registered this relocation with the Ministry of Commerce and the Revenue Department on 1 July 2004 and 11 June 2004, respectively. On 17 October 2003, the SET had approved to transfer the Company’s securities from the “REHABCO”sector to the “Health Care Services” sector and allow trading of the Company’s securities in the SET trading system effective from 29 October 2003 onwards. On 15 June 2004, the extraordinary general meeting of the Company’s shareholders passed a resolution approving the purchase of the hospital business from a subsidiary, Bumrungrad Medical Center Ltd., and approving the Board of Directors to consider the remuneration. The Company acquired the movable assets, relevant licenses and permits, rights under various contracts and all employees involved in the hospital business. The purchase of the business was completed and relevant transactions were recorded. Total remuneration on purchase was Baht 772.2 million In addition, the Company leases the hospital building from Bumrungrad Medical Center Ltd., for use in carrying on the hospital operations. On 4 October 2004, a meeting of the Company’s Board of Directors passed a resolution approving the acquisition of 41.90% of the registered capital of Asian Hospital, Inc., which is a private hospital operating in Manila, Philippines. The Company will invest through Vista Medical Management, Inc. and a new subsidiary, located in the Philippines, which are 100% and 40%, respectively, owned by the Company. The total value of this investment is 500 million pesos, or Baht 370 million.

2. BASIS OF CONSOLIDATION 2.1 The consolidated financial statements included the financial statements for the years ended 31 December 2004 and 2003 of Bumrungrad Hospital Public Company Limited (“the Company”) and the following subsidiaries: Percentage of total Subsidiaries

Percentage owned

Type of

assets included

revenues included

by the Company

business

in the consolidated

2004

2003

100.00

97.45

(formerly known as “B.H. Avenue Co., Ltd.”) 100.00

99.94

Bumrungrad Medical Center Ltd.

Percentage of total

2004

2003

2004

2003

Hospital

Land lease

Bumrungrad International Ltd.

Vitallife Corporation Ltd.

100.00

100.00 Health care center

Bumrungrad Hospital Public Company Limited

Annual Report 2004

2.2 Significant intercompany balances and transactions, investments in subsidiaries in the Company’s accounts and shareholders’ equity of the subsidiaries are eliminated from the consolidated financial statements. 2.3 The differences between cost of investments and the value ascribed to the equity in subsidiaries at the time of acquisition are shown under the caption of “Goodwill on consolidation” in the consolidated balance sheets and subject to amortisation over the period of 5 years. 2.4 In June 2004, the Company purchased additional investment in Bumrungrad Medical Center Ltd. from former shareholder. As a result, the Company’s shareholding in this subsidiary increased from 97.45% to 100%. 2.5 In November 2004, Bumrungrad International Ltd. (formerly known as “B.H. Avenue Co., Ltd.”) increased its share capital and the Company purchased all increased shares. As a result, the Company’s shareholding in this subsidiary increased from 99.94% to 100%.

3. SIGNIFICANT ACCOUNTING POLICIES The financial statements have been prepared in accordance with accounting standards pronounced by the Institute of Certified Accountants and Auditors of Thailand and with the Accounting Act B.E. 2543. The Company’s and its subsidiaries’ financial statements have been prepared on the basis of historical cost. Significant accounting policies adopted by the Company and subsidiaries are summarised below: 3.1 Revenue and expense recognition 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. Rental income, consulting and management fee income, interest income and expenses are recognised on an accrual basis. 3.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at financial institutions with an original maturity of three months or less and not subject to restriction. 3.3 Trade accounts receivable and allowance for doubtful accounts Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided to cover the estimated losses that may incur in collection. The adequacy of the allowance is reviewed and evaluated in relation to the current status of the receivables. Bad debt will be written off for the accounts considered uncollectible. 3.4 Inventories Inventories are valued at the lower of cost (weighted average basis) and net realisable value. 3.5 Property, plant and equipment/Depreciation Land is stated at cost, plant and equipment are stated at cost less accumulated depreciation. Depreciation of plant and equipment is calculated, by reference to their costs, on a straight-line basis over the following estimated useful lives: Leasehold right Land improvement Buildings and construction Facility systems Medical accessory equipment Hospital equipment Equipment and furniture Vehicles

lease period (30 years) 3 years and 30 years 8 - 30 years 5 - 20 years 5 - 15 years 3 - 15 years 5 - 15 years 5 - 10 years

No depreciation is provided for land and construction in progress and under installation.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

3.6 Impairment of assets The Company and the subsidiaries review the impairment of assets whenever events indicate that the carrying value of an asset exceeds its recoverable amount. The recoverable value of the assets are arrived at based on the management’s valuation. The Company and the subsidiaries recognise an impairment loss in the earnings statements whenever the carrying value of an asset exceeds its recoverable amount. The Company and the subsidiaries will reverse the impairment loss to other income whenever there is any indication that the impairment loss recognised may no longer exist or may have decreased. 3.7 Amortisation Intangible assets are amortised on a straight-line method over the period of 5 years and 10 years. 3.8 Investments Investments in subsidiaries (in the Company’s financial statements) and an associated company are valued at the equity method, whereby the investments are recorded at cost at the acquisition date and, for each subsequent period, adjusted to incorporate the Company’s proportionate shares of the operating results in the subsidiaries and associated company. Loss in excess of cost of investments in subsidiaries have been shown as non-current liabilities under the caption of “Provision for loss in excess of cost of investments in subsidiaries”. Long-term investments in non-marketable equity securities, which are held as other investments, are valued at cost. The Company recognises loss on impairment of investment (if any) in the earnings statement. 3.9 Foreign currencies Foreign currency transactions during the year are translated into Baht at the rates ruling on the transaction dates. Monetary assets and liabilities in foreign currency outstanding on the balance sheet date are translated into Baht at the rates ruling on the balance sheet date. Exchange gains and losses are included in determining earnings. 3.10 Financial instruments The Company and its subsidiaries have no policy to speculate in or engage in the trading of any derivative financial instruments. Financial instruments carried in the balance sheets include cash and deposits at financial institutions, investments, trade accounts receivable, trade accounts payable, loans and borrowings. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. 3.11 Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates for certain accounting transactions, affecting amounts reported in the financial statements and notes related thereto. Subsequent actual results may differ from these estimates. 3.12 Employees’ benefits The Company and subsidiaries and their employees have jointly established a provident fund scheme under the Provident Fund Act B.E. 2530. The fund is contributed to by both employees and the Company or subsidiaries at the rate of 5% and 5 - 7% of the employees’ basic salaries, respectively. The fund is managed by Bangkok First Investment and Trust Public Company Limited and will be paid to employees upon termination in accordance with the rules of the provident fund. During the year 2004, the contributions of the Company and subsidiaries to the fund totaled Baht 17.1 million (2003: Baht 12.8 million) which was recorded as expense. 3.13 Corporate income tax Corporate income tax has been calculated on the net earnings, after adding back certain provisions for expenses which are disallowable for tax computation purposes, deducting accumulated tax loss brought forward from previous year (if any) and excluding share of profit and loss from investments accounted for under equity method and dividend received from subsidiaries.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

3.14 Earnings per share Basic earnings per share is calculated by dividing net earnings for the year by the weighted average number of ordinary shares in issue during the year. Diluted earnings per share is calculated by dividing net earnings for the year, after adjusting the effect of transactions relating to dilutive potential ordinary shares, by the total sum of the weighted average number of ordinary shares in issue during the year and the weighted average number of ordinary shares to be issued for conversion of all dilutive potential ordinary shares into ordinary shares. Calculation of basic earnings per share and diluted earning per share has proportionately adjusted the numbers of ordinary shares in issue during the year and ordinary shares to be issued for conversion of all dilutive potential ordinary shares into ordinary shares, as a result of the change in the par value as described in Note 14 and Note 13. Basic earnings per share and diluted earnings per share for the year ended 31 December 2003 have been adjusted as though the share split had been effective since the beginning of the reported period.

4. PLEDGED FIXED DEPOSITS AT FINANCIAL INSTITUTIONS As at 31 December 2004, deposits at financial institutions of Baht 9.8 million (2003: Baht 9.8 million) have been pledged with banks to secure bank guarantees issued by banks on behalf of the Company and a subsidiary (Bumrungrad Medical Center Ltd.), and Baht 220 million (2003: Baht 70 million) has been pledged to secure long-term loan of that subsidiary as described in Note 12.

5. TRADE ACCOUNTS RECEIVABLE The aging of trade accounts receivable balances as at 31 December 2004 and 2003 are as follows: -

(Unit: Baht) CONSOLIDATED Outstanding period

THE COMPANY ONLY

2004

2003

2004

2003

136,767,440

138,837,651

136,417,029

15,482,540

1 - 30 days

64,123,228

46,733,230

63,970,698

1,664,003

31 - 60 days

20,727,678

12,905,824

20,454,501

667,840

61 - 90 days

6,726,545

8,380,876

6,623,260

1,514,554

91 - 180 days

8,740,767

21,982,659

8,618,016

1,370,433

181 - 365 days

11,208,297

7,470,537

11,138,405

73,666

Current Overdue

More than 365 days

17,035,150

15,112,928

17,035,150

524,741

Total

265,329,105

251,423,705

264,257,059

21,297,777

Less: Allowance for doubtful accounts

(30,371,070)

(18,431,325)

(30,371,070)

(257,916)

Net

234,958,035

232,992,380

233,885,989

21,039,861

6. RELATED PARTY TRANSACTIONS During the years, the Company had significant business transactions with subsidiaries and related companies, which are related through shareholding or through having certain common shareholders or directors. Such transactions, which have been presented on the terms and basis agreed between the Company and those companies, are summarised below: -

Bumrungrad Hospital Public Company Limited

Annual Report 2004

(Unit: Million Baht) THE COMPANY ONLY

Pricing policy

2004

2003

Rental income

40.6

45.0

As per contract a)

Non-competition fee income

As per contract b)

Transactions with subsidiaries (eliminated from consolidated financial statements) 25.5

25.5

Interest income

2.0

1.9

Service income

3.3

11% p.a. and MLR - 0.5% p.a. (2003: 1.12% - 1.38%, 5%, 11% p.a.)

Management fee income

Cost plus margin

24.8

0.6

As per contract c)

239.7

Baht 2 per share

Rental expense

35.0

As per contract d)

Interest expense

26.0

MLR â&#x20AC;&#x201C; 0.45% p.a.

772.2

Book value plus margin

Dividend received

Net remuneration on purchase of hospital business Transactions with related companies Service income

1.0

Cost plus margin

Rental income

1.9

2.4

As per contract e)

Interest income

12.9

9.4

Rental expense

19.6

16.6

Donation expense Purchase of computer software

MLR p.a. As per contract f )

0.6

415.2

As per contract g) (Unit: Million Baht)

CONSOLIDATED

Pricing policy

2004

2003

13.8

11.8

Cost plus margin As per contract e)

Transactions with related companies Service income Rental income

1.9

2.4

Interest income

17.5

11.9

MLR p.a.

Rental expense

19.6

16.6

As per contract f )

8.2

5.2

Donation expense Maintenance fee expense Purchase of computer software

7.7

As g)

415.2

As per contract g)

A subsidiary (Bumrungrad Medical Center Ltd.) has leased a plot of land, building and nursing dormitory from the Company for its hospital operations. The lease agreements cover a period of 30 years, commencing from the year 1996. The rental fees are Baht 40.1 million per annum, not including the rental fee for B.H. Residence. On 1 August 2004, the subsidiary terminated the lease agreements of building, nursing dormitory and B.H. Residence with the Company, the subsidiary has no obligation to pay such rental fees. Another subsidiary (Vitallife Corporation Ltd.) has leased building spaces from the Company for use in its operations. The lease agreement covers a period of 11 years, commencing from the year 2001, and rental fees are Baht 3 million per annum. On 1 July 2004, the Company and subsidiary made an addendum to the lease agreement. The subsidiary has to pay rental fee equal to 5% of gross revenue inclusive of value added tax, but not less than Baht 238,200 per month.

A subsidiary (Bumrungrad Medical Center Ltd.) entered into a non-competition agreement with the Company, for a period of 30 years commencing from the year 1997. Under this agreement, the subsidiary was obliged to pay a non-competition fee totaling Baht 255 million over nine years. The obligation for 1997 was Baht 51 million, and for each of the next eight

Bumrungrad Hospital Public Company Limited

Annual Report 2004

years the fee obligation was Baht 25.5 million. In addition, the Company charged interest on the unpaid portion of the fee at a rate of 11% per annum. As a result of the sale of the subsidiary’s hospital business, the subsidiary has no obligation to pay such non-competition fee. c)

The Company and Vitallife Corporation Ltd. entered into a management service agreement under which Vitallife Corporation Ltd. had to pay the Company an amount equal to 3.5% of its turnover. In September 2004, both companies agreed to cancel such agreement. The Company and Bumrungrad Medical Center Ltd. entered into a consulting service agreement which Bumrungrad Medical Center Ltd. is obliged to pay Baht 24 million for consulting service rendered from August to December 2004.

The Company has leased hospital building from Bumrungrad Medical Center Ltd. for use in its hospital business. The lease agreement covers a period of 3 years, commencing from August 2004, and the rental fees are Baht 84 million per annum.

Global Care Solutions (Thailand) Co., Ltd. has leased building spaces from the Company for use in its operations. The lease agreement covers a period of 3 years, commencing from the year 2001, and shall be extended for a further period of 3 years. The rental fees are Baht 1 million per annum, not including rental fees for room at B.H. Residence.

The Company has entered into an agreement to lease land and a building (B.H.Tower) from Bangkok Bank Plc. for a period of 3 years, commencing from August 2000. The rental fee is calculated at the rate of 75% of net income (total revenues minus total expenses) from the sub-lease, with a minimum rental of Baht 8 million per annum. On 19 January 2004, the bank approved one-year renewal of agreement, commencing on 29 August 2003 to 28 August 2004 and on 8 December 2004, the bank approved one-year renewal of agreement, commencing on 29 August 2004 to 28 August 2005. The rate of rental and other conditions shall be in accordance with the initial agreement. Rental payable as at 31 December 2004, amounting to Baht 4.3 million (2003: Baht 8.6 million), was shown in the balance sheet under the caption of “Accounts payable - others”.

In December 2004, the Company has entered into a license agreement with Global Care Solutions (Thailand) Co., Ltd. to purchase computer software, totaling USD 10.3 million (exclusive of value added tax) of which USD 9.7 million had been paid by the Company. Bumrungrad Medical Center Ltd. is obliged to pay a software maintenance fee to Global Care Solutions (Thailand) Co., Ltd. The outstanding balance of Baht 7.7 million of the fee was recorded in “Accounts payable - others”in consolidated financial statements. The outstanding balances of the above transactions (except f ) and g)) were separately presented in the balance sheets as follows: (Unit: Baht) CONSOLIDATED

THE COMPANY ONLY

2004

2003

2004

2003

The Bumrungrad Hospital Rayong Co., Ltd.

39,431,842

Less: Allowance for doubtful accounts

(39,431,842)

24,742,553

8,564,537

150

217,648 101,183,655

217,648

2,584,971

Short-term loans and interest receivable - related parties Former subsidiary

Subsidiary Vitallife Corporation Ltd. Associated company L.S. Cleaning Co., Ltd.

150

Related companies Global Care Solutions (Thailand) Co., Ltd.

The Bumrungrad Hospital Foundation

212,230

145,437

212,230

300

Total

430,028 101,329,142

25,172,581

11,149,858

Bumrungrad Hospital Public Company Limited

Annual Report 2004

(Unit: Baht) CONSOLIDATED 2004

2003

Bumrungrad International Ltd.

Vitallife Corporation Ltd.

THE COMPANY ONLY 2004

2003

733,104

407,572

24,289,265

23,108,330

Global Care Solutions (Thailand) Co., Ltd.

160,341,068

Total

160,341,068

25,022,369

183,856,970

Long-term loans and interest receivable - related parties Subsidiaries

Related party

Short-term loans and interest payable - a related party Subsidiary Bumrungrad Medical Center Ltd.

1,470,826,509

Global Care Solutions (Thailand) Co., Ltd. is a developer of software for the hospital business. A subsidiary (Bumrungrad Medical Center Ltd.) is the beta site for all software developed by that company.The Company and the subsidiary therefore provide financial support to this company for it to use in its operations, in the form of short-term and long-term loans, on which interest is charged at the rate MLR per annum. In December 2004, Global Care Solutions (Thailand) Co., Ltd. had paid for such loans and interest totaling Baht 391 million. The short-term and long-term loans to Vitallife Corporation Ltd. carry interest at the rate of MLR less 0.5% per annum (2003: the short-term loan carried interest at the rate of 5% per annum and long-term loan carried interest at a rate equal to LIBOR quoted on the last business day of the preceding quarter). No interest has been charged on short-term loans to other related parties. The short-term loans from Bumrungrad Medical Center Ltd. carry interest at the rate of MLR less 0.45% per annum.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Movement in the related party balances during the year are summarised below: (Unit: Baht) 31 December 2003

31 December Increase

Decrease

2004

Short-term loans and interest receivable - related parties Subsidiary Vitallife Corporation Ltd. Principal

8,200,565

16,607,226

363,972

806,261

400

300

150

98,556,845

130,234,546

228,573,743

217,648

2,626,810

9,240,871

11,867,681

145,437

321,145

254,352

Interest receivable

1,235,471

23,572,320

1,170,233

Associated company L.S. Cleaning Co., Ltd. Related parties Global Care Solutions (Thailand) Co., Ltd. Principal Interest receivable The Bumrungrad Hospital Foundation

212,230

Long-term loans and interest receivable - related parties Subsidiaries Bumrungrad International Ltd. Principal

246,145

292,155

538,300

Interest receivable

161,427

33,377

194,804

22,494,000

1,795,265

Vitallife Corporation Ltd. Principal

22,494,000

Interest receivable

614,330

1,180,935

Related party Global Care Solutions (Thailand) Co., Ltd. Principal Interest receivable

143,870,479 16,470,589

143,870,479

8,227,347

24,697,936

Short-term loans and interest payable - a related party Subsidiary Bumrungrad Medical Center Ltd.

Principal

1,512,578,090

47,132,223

1,465,445,867

Interest receivable

26,026,859

20,646,217

5,380,642

Bumrungrad Hospital Public Company Limited

Annual Report 2004

7. INVENTORIES (Unit: Baht) CONSOLIDATED 2004

THE COMPANY ONLY 2003

2004

2003

Medicine

72,896,227

66,997,649

70,472,904

Medical supplies

19,874,000

16,835,380

19,874,000

Other supplies Total

11,680,830

9,680,267

11,680,830

104,451,057

93,513,296

102,027,734

8. INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD/PROVISION FOR LOSS IN EXCESS OF COST OF INVESTMENTS IN SUBSIDIARIES Investments accounted for under equity method comprise of investments in ordinary shares of the following companies: -

(Unit: Baht) Investment Percentage of Paid-up capital Companies

2004

2003

shareholding 2004

2003

Cost method 2004

Equity method

2003

2004

2003

Dividend 2004

2003

239,738,300

Subsidiaries Bumrungrad MedicalCenter Ltd. Bumrungrad International Ltd. Vitallife Corporation Ltd.

958,953,608

1,198,692,010

100.00

97.45

1,691,902,972

1,470,679,626

1,077,599,756

767,446,011

1,000,000

100.00

99.94

999,400

23,596

329,128

31,500,000

100.00

25,610,000

(23,114,011)

(13,085,206)

1,718,512,372

1,497,289,026

1,054,509,341

754,689,933

312,500

209,354

312,500

209,354

1,718,824,872

1,497,601,526

1,054,718,695

754,899,287

Total investments in subsidiaries

Associated company L.S. Cleaning Co., Ltd.

1,250,000

25.00

Total investment in associated company Total investments

(Unit: Baht) THE COMPANY ONLY 2004

2003

Net investments Investments accounted for under equity method

885,171,148

767,984,493

Excess of investment over book value of a subsidiary

192,661,558

Provision for loss in excess of cost of investments in subsidiaries

(23,114,011)

(13,085,206)

1,054,718,695

754,899,287

Total

Bumrungrad Hospital Public Company Limited

Annual Report 2004

The meeting of the Board of Directors of Bumrungrad Medical Center Ltd. held on 12 November 2003 passed a resolution approving the settlement of all premium on ordinary shares against the deficit. On 15 December 2003, the extraordinary general meeting of the subsidiary’s shareholders passed an extraordinary resolution approving the reduction of registered share capital of Baht 239.7 million by reducing the par value of the shares from Baht 10 to Baht 8, in order to reduce the deficit. The subsidiary registered this change with the Ministry of Commerce on 30 March 2004. On 16 June 2004, the Company purchased 3,060,623 ordinary shares of Bumrungrad Medical Center Ltd. from International Finance Corporation at the price of Baht 72.28050 per share (market price, based on opinion of the Company’s financial advisor), totaling Baht 221,223,346. As a result, the Company’s shareholding in this subsidiary increased from 97.45% to 100%. The difference between cost of investment and the value ascribed to the equity in the subsidiary at the time of acquisition amounting to Baht 192.7 million is presented in shareholders’ equity in the consolidated and the separate financial statements. On 18 August 2004, the Board of Directors of Bumrungrad Medical Center Ltd. approved the payment of an interim dividend of Baht 2 per share to the shareholders from that company’s earnings from 1 January 2004 to 30 June 2004. The Company received dividend totaling Baht 239.7 million. In November 2004, Bumrungrad International Ltd. (formerly known as “B.H. Avenue Co., Ltd.”) increased its share capital by issuing 5,990,000 new ordinary shares at a par value of Baht 100 each which caused the increase in subsidiary’s registered capital from Baht 1 million to Baht 600 million. The Company purchased all increased shares therefore the Company’s shareholding in this subsidiary increased from 99.94% to 100%. However, as at 31 December 2004, the Company has not yet paid for such share subscription. The share of the profit/loss of the associated company has been calculated from the management accounts of that associated company.

9. OTHER LONG-TERM INVESTMENTS (Unit: Baht) PERCENTAGE OF COMPANIES

SHAREHOLDING 2004

2003

Chantaburi Country Club Co., Ltd.

0.5

Global Care Solutions S.A.

14.0

Total Less: Provision for impairment loss Net

CONSOLIDATED

THE COMPANY ONLY

2004

2003

2004

4,500,000

347,213

2003 4,500,000 -

4,847,213

4,500,000

4,847,213

4,500,000

(2,800,000)

2,047,213

1,700,000

2,047,213

1,700,000

The Company estimated provision for loss on impairment of investments by considering the latest financial statements of invested companies.

Bumrungrad Hospital Public Company Limited

Depreciation â&#x20AC;&#x201C; disposals

31 December 2004

Increase during the year

31 December 2004

290,861,482

31 December 2004

24,414,097

25,525,835

10,466,812

1,111,738

9,355,074

34,880,909

1,318,719,249

1,350,199,722

Bumrungrad Hospital Public Company Limited

2004

2003

487,521,905

64,571,175

422,950,730

1,806,241,154

33,090,702

1,773,150,452

Building and construction

Depreciation included in the earnings statement for the year

290,861,482

31 December 2003

Net book value

31 December 2003

Provision for impairment of assets

Depreciation for the year

31 December 2003

Accumulated depreciation

290,861,482

Disposals

31 December 2004

290,861,482

Purchase

31 December 2003

Cost

Land

Leasehold right and land improvement

10. PROPERTY, PLANT AND EQUIPMENT

81,350,963

86,708,338

41,800,823

6,590,150

35,210,673

123,151,786

1,232,775

121,919,011

Facility systems

Hospital equipment

(1,786,090)

67,796,484

(238,132)

3,554,247

439,428,697 185,030,677

346,390,493 122,336,398

9,000,000

520,304,049 287,839,523

(17,642,045)

115,081,420

422,864,674 284,523,408

968,732,746 472,870,200

(33,349,916)

232,827,495

769,255,167 406,859,806

Medical accessory equipment

CONSOLIDATED

130,725,141

133,006,106

152,456,048

(152,470)

15,792,647

136,815,871

283,181,189

(514,620)

13,873,832

269,821,977

Equipment and furniture

26,221,167

28,792,903

26,283,456

(2,601,992)

7,265,747

21,619,701

52,504,623

(2,601,999)

4,694,018

50,412,604

Vehicles

304,866,725

100,194,704

304,866,725

204,672,021

100,194,704

Construction in progress under installation

213,967,12

199,367,549

2,801,618,198

2,484,015,981

9,000,000

1,526,672,616

(20,634,639)

213,967,124

1,333,340,131

4,337,290,814

(38,252,625)

558,187,327

3,817,356,112

Total

(Unit:Baht)

Annual Report 2004

Bumrungrad Hospital Public Company Limited

Depreciation for the year

Depreciation â&#x20AC;&#x201C; disposals

31 December 2004

Increase during the year

31 December 2004

290,861,482

31 December 2004

9,169,201

9,637,019

6,394,139

467,818

5,926,321

15,563,340

153,176,108

73,321,408

44,554,668

7,854,262

36,700,406

197,730,776

87,708,962

110,021,814

Building and construction

105,506,187

20,186,669

57,837,517

(133,476)

7,551,670

50,419,323

163,343,704

(507,390)

93,245,102

70,605,992

26,221,158

1,404,436

3,847,708

2,545,493

1,302,215

30,068,866

(2)

27,362,217

2,706,651

304,866,725

100,194,703

304,866,725

204,672,022

100,194,703

1,618,024,805

511,058,265

9,000,000

234,547,099

(153,054)

69,624,253

165,075,900

1,861,571,904

(889,551)

1,186,327,290

676,134,165

Total

69,624,253

178,882,314

1,512,153

65,185,390

(7,051)

1,128,348

64,064,093

244,067,704

(85,239)

178,576,697

65,576,246

Vehicles

Construction in progress under installation

2004

461,157,151

9,000,000

46,486,603

(12,527)

46,499,130

516,643,754

(296,920)

516,940,674

Hospital equipment

Equipment and furniture

12,108,605

88,184,479

13,940,395

10,241,074

3,577,532

6,663,542

98,425,553

77,821,616

20,603,937

Facility systems

Medical accessory equipment

2003

Depreciation included in the earnings statement for the year

290,861,482

31 December 2003

Net book value

31 December 2003

Provision for impairment of assets

31 December 2003

Accumulated depreciation

290,861,482

Disposals

31 December 2004

290,861,482

Purchase

31 December 2003

Cost

Land

Leasehold right and land improvement

THE COMPANY ONLY

(Unit:Baht)

Annual Report 2004

The Company has mortgaged all of the land with a book value of Baht 290.9 million (Baht 581 million appraisal fair value as of 12 November 2004) with a commercial bank, acting as bondholders’ trustee, as collateral for the convertible bonds of the Company as described in Notes 13 b) and 13 c). The Company and Bumrungrad Medical Center Ltd. have mortgaged their buildings and pledged medical instruments and hospital equipment, with net book value as at 31 December 2004 of Baht 1,327 million (2003: Baht 1,380 million), to secure long-term loan obtained from a local commercial bank as described in Note 12. In December 2004, the Company recorded provision for impairment of some medical instruments, amounting to Baht 9 million because there were indications that the carrying value of these assets exceeded their recoverable value. As at 31 December 2004, the gross carrying amounts of fully depreciated equipment of the Company and subsidiaries still in use are Baht 6 million and Baht 4.5 million (2003: Baht 3 million and Baht 278 million), respectively.

11. INTANGIBLE ASSETS (Unit: Baht) CONSOLIDATED

Computer software Less: Accumulated amortisation Computer software – net

THE COMPANY ONLY

2004

2003

2004

478,778,572

217,600,000

(2,650,774) 476,127,798

2003

478,778,572

(128,594,762)

(2,650,774)

89,005,238

476,127,798

Goodwill on purchase of business

192,927,561

Less: Accumulated amortisation

(8,038,648)

Goodwill on purchase of business – net Total

184,888,913

476,127,798

89,005,238

661,016,711

28,037,441

43,520,000

10,689,422

Amortisation included in the earnings statement for the year

12. LONG-TERM LOAN (Unit: Baht) CONSOLIDATED 2004

2003

Bumrungrad Medical Center Ltd. Loan from a local commercial bank

2,108,014,897

2,190,145,347

Less: Current portion of long-term loan

(328,521,802)

(82,130,450)

Long-term portion

1,779,493,095

2,108,014,897

On 16 September 2002, the subsidiary entered into a loan agreement in the Baht currency with a local commercial bank to obtain a Baht 2,400,000,000 credit facility. Such loan carries interest at 5.5% per annum for the first two years and then at MLR less a certain percentage per annum. Interest is payable on a monthly basis and principal is repayable in 24 quarterly installments, commencing 30 December 2004. To guarantee this loan, the subsidiary has mortgaged its building and pledged medical instruments, hospital equipment and fixed deposits as described in Notes 10 and 4. In July 2004, the Company has entered into the Amendment Agreement and the Amended and Restated Facility Agreement with that bank in order to assume joint responsibility for these liabilities. The loan agreement contains normal covenants pertaining to matters such as the maintenance of certain financial ratios, and restriction on financial indebtedness and the payment of dividends, among others.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

13. CONVERTIBLE BONDS/LIABILITIES UNDER DEBT RESTRUCTURING AGREEMENT On 24 August 2000, the Company issued the following convertible bonds for the purpose of debt settlement with a local commercial bank, which is a related party, in compliance with the Company’s debt restructuring agreement: a) Unsecured convertible bonds without trustee in an amount of Baht 200 million, with a maturity of 12 years, and a coupon rate of 4% per annum, payable semi-annually. The current conversion price is Baht 3.50 per one ordinary share (2003: Baht 17.50 per one ordinary share) and bondholders may make conversion throughout the life of the bonds. On 25 August 2004, all of the bonds had been converted by Bangkok Insurance Public Company Limited. b) Partly secured convertible bonds in an amount of Baht 300 million, with a maturity of 12 years, and a coupon rate of 2.5% for years 1 - 4, 5% for years 5 - 8, and 10% for years 9-12, payable semi-annually. The current conversion price is Baht 4.55 per one ordinary share (2003: Baht 22.75 per one ordinary share). The bondholders have the option to convert the bonds into ordinary shares throughout the life of the bonds. The bonds are secured by the mortgage of the Company’s land. c) Partly secured convertible bonds in an amount of Baht 1,000 million, with a maturity of 12 years, and a coupon rate of 1% per annum, payable semi-annually. The current conversion price is Baht 3.50 per one ordinary share (2003: Baht 17.50 per one ordinary share). The bondholders have the option to convert the bonds into ordinary shares throughout the life of the bonds. The bonds are secured by the mortgage of the Company’s land. On 3 October 2003, Baht 750 million of convertible bonds c) had been converted by the bondholder, Bangkok Bank Public Company Limited. As a result, the outstanding amount of such convertible bonds as at 31 December 2004 and 2003 was Baht 250 million. The terms and conditions governing rights and obligations of the issuer and the bondholders for each series, stated that, “If and whenever the issuer makes an alteration to the par value of the shares by reason of any consolidation of subdivision or splitting shares, the conversion price of the bonds will be adjusted. Such adjustments will be effective immediately from the date on which the alteration of the shares is completely registered with the Ministry of Commerce.” On 17 May 2004, the Company registered the change of par value of its shares from Baht 5 per share to Baht 1 per share with the Ministry of Commerce. Therefore, the conversion price of convertible bonds has been adjusted as follows: a) Unsecured convertible bonds without trustee in an amount of Baht 200 million Issued conversion price: Baht 17.50 per one ordinary share Adjusted conversion price: Baht 3.50 per one ordinary share b) Partly secured convertible bonds in an amount of Baht 300 million Issued conversion price: Baht 22.75 per one ordinary share Adjusted conversion price: Baht 4.55 per one ordinary share c) Partly secured convertible bonds in an amount of Baht 1,000 million Issued conversion price: Baht 17.50 per one ordinary share Adjusted conversion price: Baht 3.50 per one ordinary share Convertible bonds a) According to the Thai Accounting Standard No. 48 “Financial Instruments: Disclosure and Presentation” which became operative for the financial statements covering the period beginning on or after 1 January 2000, the issuer of convertible bonds is required to classify the liability and equity components and separately present them in the financial statements. The Company has therefore separated such components of the convertible bonds a), determining the liability component by discounting the stream of future payments of principal and interest at MLR of a local commercial bank, the bondholder. The carrying amount of the equity component is determined by deducting the liability component from total face value of the convertible bonds, and is shown in the shareholders’ equity under the caption of “Conversion option”. The difference between the above liability component and face value of the convertible bonds is amortised over the life of the bonds. As at 31 December 2003, the amount to be paid in the future for the bonds is shown in the balance sheet under the caption of “Liabilities under debt restructuring agreement”.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

On 24 August 2004, the bondholder of the convertible bonds a), Bangkok Insurance Public Company Limited, requested to exercise its right to convert all of the bonds, effective on 25 August 2004.The results of such conversion can be summarised as follows: Total convertible bonds sold Previously converted bonds Bonds requested for conversion Outstanding bonds Ordinary shares reserved for bond conversion Previously converted - ordinary shares Requested for conversion - ordinary shares Outstanding ordinary shares reserved for conversion

20 20 75,000,000 57,142,857 17,857,143

units units units units shares shares shares, par value of Baht 1 each shares

As a result of the conversion, the Company has no future interest. The Company therefore reversed the balance of such liabilities under the debt restructuring agreement, amounting to Baht 63,978,082, and presented such amount as an extraordinary item in the statement of earnings, under the caption of “Gain from conversion of convertible bonds to ordinary shares”. The Company also transferred Baht 41,599,484 from “Conversion option” to “Premium on ordinary shares”. Convertible bonds b) and c) On 24 November 2000, an extraordinary meeting of the Company’s shareholders passed approval of the amendment to the terms and conditions governing the rights and obligations of the issuer and the bondholders, which gives the Company the option to either redeem the convertible bonds or to convert the bonds into ordinary shares on the maturity date. According to the Thai Accounting Standard No. 48 “Financial Instruments: Disclosure and Presentation”, because the Company has the option to either redeem the convertible bonds or to convert them into ordinary shares on the maturity date, and delivery of equity securities will not be changed by fair value of such equity securities (since the Company determined a certain conversion price), so the convertible bonds are not covered by the definition of financial liabilities and are to be treated as equity securities. In addition, the Company’s management express their intention to convert these bonds into ordinary shares on the maturity date. Therefore, the whole amount of the convertible bonds are presented as part of shareholders’ equity, and future interest on the bonds will be recorded as a deduction from shareholders’ equity. On 3 October 2003, convertible bonds c) had been converted to ordinary shares by the bondholder, Bangkok Bank Public Company Limited. The result of such conversion could be notified as follows: Total convertible bonds sold Previously converted bonds Bonds requested for conversion Outstanding bonds Ordinary shares reserved for bond conversion Previously converted - ordinary shares Requested conversion - ordinary shares Outstanding ordinary shares reserved for conversion

100 75 25 60,000,000 42,857,142 17,142,858

units units units units shares shares shares, par value of Baht 10 each shares

During 2000, the Company had increased registered capital to reserve 90 million ordinary shares to accommodate the above convertible bonds. After the conversion of bonds by Bangkok Bank Public Company Limited on 3 October 2003 and Bangkok Insurance Public Company Limited on 25 August 2004 and the change in par value of the Company’s shares from Baht 5 per share to Baht 1 per share, as described in Note 14, the remaining ordinary shares reserve for conversion option is 178,571,433 shares. Interest expense for the year 2004 of the convertible bonds amounted to Baht 20.7 million (2003: Baht 23.6 million), consisting of Baht 12.7 million (2003: Baht 15.6 million) being recorded as a reduction to “retained earnings”, and Baht 8 million (2003: Baht 8 million) being recorded as a reduction to “liabilities under debt restructuring agreement”.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

14. SHARE CAPITAL Preference shareholders have the same right as the ordinary shareholders except that they are entitled to receive an annual dividend at 15% of preference shares capital prior to the dividend paid to the ordinary shareholders. Preference shares can be converted into ordinary shares. In the first quarter of 2004, 20,500 preference shares (2003: 3,000 shares) were converted into ordinary shares at the ratio of one preference share to one ordinary share. The Company registered this conversion with the Ministry of Commerce on 8 March 2004. As a result of the conversion of convertible bonds c), as described in Note 13, the Company’s paid-up capital has increased from Baht 898,247,310 to Baht 1,326,818,730 and its premium on ordinary shares has increased from Baht 888,036,842 to Baht 1,209,465,422. The Company registered this conversion with the Ministry of Commerce on 3 October 2003 and the Stock Exchange of Thailand (SET) allowed the common shares increased to be listed on the SET starting from 8 October 2003. On 18 December 2003, the extraordinary general meeting of the Company’s shareholders passed a resolution approving the settlement of the Baht 36,639,475 of statutory reserve and the Baht 1,209,465,422 of premium on ordinary shares against the deficit. In addition, the meeting also approved the reduction of registered share capital of Baht 922,702,685 by reducing the par value of the shares from Baht 10 to Baht 5, which affect to the decrease in paid-up share capital of Baht 663,409,365. All reduced paid-up share capital will be used to settle against the deficit. The Company registered this changed with the Ministry of Commerce on 8 March 2004. On 28 April 2004, the annual general meeting of the Company’s shareholders passed a resolution approving the change of the par value of the shares from Baht 5 to Baht 1 and the amendment of number of registered shares from 184,540,537 shares of Baht 5 each to 922,702,685 shares of Baht 1 each. The Company registered this change with the Ministry of Commerce on 17 May 2004. On 16 June 2004, the Company issued 9,500,000 ordinary shares with par value of Baht 1 to International Finance Corporation at the price of Baht 11.643334 per share (the price was based on the average market price of the Company traded on the Stock Exchange of Thailand), totaling Baht 110,611,673. As a result, the Company had increment in paid-up share capital from Baht 663,409,365 to Baht 672,909,365 and premium on ordinary shares in amount of Baht 101,111,673. The Company registered this change with the Ministry of Commerce on 18 June 2004. As a result of the conversion of convertible bonds a) on 25 August 2004, the Company’s paid up capital has increased from Baht 672,909,365 to Baht 730,052,222 and its premium on ordinary shares has increased from Baht 101,111,673 to Baht 285,568,300. The Company registered this conversion with the Ministry of Commerce on 26 August 2004 and the Stock Exchange of Thailand (SET) allowed the common shares increased to be listed on the SET.

15. STATUTORY RESERVE Under the Public Company Limited Act B.E. 2535, the Company is required to set aside as 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 its registered share capital. The statutory reserve could not use for dividend payment. During the year 2003, the Company settled the statutory reserve against the deficit, as described in Note 14. During the year 2004, the Company allocated Baht 46.5 million from its net earnings for the year to statutory reserve.

16. DIRECTORS’ REMUNERATION Directors’ remuneration represents the benefits paid to the Company’s executive directors in accordance with Section 90 of the Public Limited Companies Act, exclusive of salaries and related benefits payable to executive directors.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

17. CORPORATE INCOME TAX Corporate income tax of a subsidiary (Bumrungrad Medical Center Ltd.) for the year 2004 has been calculated at the rate of 30% of net earnings for the year, after adding back certain provisions and expenses which are disallowable for tax computation purposes and less tax losses brought forward. No Corporate income tax was payable by the Company for the years 2004 and 2003 and no corporate income tax was payable by subsidiaries for the year 2003 since tax losses brought forward from previous years exceed net earnings for the years.

18. RECONCILIATION OF DILUTED EARNINGS PER SHARE (Unit: Baht) For the years ended 31 December Weighted average Net earnings 2004

number of ordinary shares

2003

2004

2003

686,003,287

499,162,713

Earnings per share 2004

2003

1.36

1.34

1.08

0.78

Basic earnings per share Net earnings

934,547,115 666,488,262

Effect of dilutive potential ordinary shares Preference shares 2,692,850 shares (2003: 2,795,350 shares)

2,711,894

2,798,514

Convertible bonds 55 units (2003: 75 units)

174,364,979

355,953,636

863,080,160

857,914,863

Diluted earnings per share Net earnings of ordinary shareholders assuming the conversion of dilutive potential ordinary shares

934,547,115 666,488,262

19.DIVIDEND PAID On 18 August 2004, the Company’s Board of Directors approved the payment of an interim dividend of Baht 0.30 per share to the Company’s shareholders from the Company’s earnings from 1 January 2004 to 30 June 2004. This constitutes a total dividend of Baht 219 million.

20.STATEMENTS OF CASH FLOWS Cash and cash equivalents as reflected in the statements of cash flows consist of the following: (Unit: Baht) CONSOLIDATED 31 December 2004

2003

THE COMPANY ONLY 31 December 2004

2003

Cash on hand and at financial institutions

652,881,941

985,581,980

516,300,167

61,263,555

Fixed deposits at financial institutions

699,827,772

279,810,827

221,250,880

11,318,230

1,352,709,713

1,265,392,807

737,551,047

72,581,785

(239,798,486) (221,250,880)

(1,305,889)

1,025,594,321

71,275,896

Less: Amounts with maturities of more than 3 months or those pledged Cash and cash equivalents

(629,827,772) 722,881,941

516,300,167

Bumrungrad Hospital Public Company Limited

Annual Report 2004

21. EMPLOYEES AND RELATED COSTS CONSOLIDATED 2004 Number of employees at end of year Employee costs for the year (Thousand Baht)

2003

THE COMPANY ONLY 2004

2003

2,762

2,487

2,729

777,783

663,708

333,575

18,459

22. FINANCIAL INSTRUMENTS 22.1 Interest rate risk The interest rate risk is the risk whereby future movement in market interest rates will have an effect to the result of operations and cash flows of the Company and subsidiaries. The exposure to the interest rate risk relates primarily to their deposits at financial institutions, loans to related parties, loans from a related party, long-term loan and convertible bonds. The Company and subsidiaries do not use derivative financial instruments to hedge this risk. The details of longterm loan and convertible bonds were included in Note 12 and 13, respectively. 22.2 Foreign currency risk The exposure of the Company to the foreign currency risk relates primarily to its receivables of USD 150,872 which are denominated in foreign currencies. The Company does not hedge against exchange rate risk. 22.3 Credit risk The Company and subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable. However, due to the large number of entities comprising the customer base of the Company and subsidiaries, they do not anticipate material losses from their debt collection. 22.4 Fair value Since the majority of the financial assets are short-term and loans carry interest at rates close to current market rates, the management believes that the fair value of the Companyâ&#x20AC;&#x2122;s financial assets and liabilities does not materially differ from their carrying value.

23. COMMITMENTS As at 31 December 2004, the Company has outstanding commitments as follows: a) The Company has a commitment of Baht 1.9 million (2003: Baht 2.2 million) to pay fee to a bank which is bondholdersâ&#x20AC;&#x2122; representative. The agreement will be terminated in year 2012. b) The Company has future commitments to pay a total of Baht 263.6 million (2003: Baht 195 million) in relation to the construction of a new building and Baht 71.5 million in respect of purchase of medical instrument and hospital equipment. c) The Company has a commitment of Baht 91.7 million in respect of land rental for construction of nursing dormitory. The agreement covered a period of 30 years, expiring in the year 2035, and shall be extended for a further period of 20 years. d) The Company has a commitment of Baht 36.6 million (2003: Bumrungrad Medical Center Ltd., Baht 57 million) in respect of the lease of medical instrument under a 5-year agreement expiring in the year 2006. e) The Company has a commitment of Baht 17.4 million in respect of the lease of building for nursing dormitory and related services. The agreement covered a period of 3 years, expiring in the year 2007, and shall be renewed automatically.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

f ) The Company has a commitment to pay maintenance service fee for medical instrument. Service fee of Baht 2.8 million is payable on a monthly basis. The agreement covered a period of 5 years, expiring in the year 2008, and shall be renewed automatically. g) The Company has a commitment to pay security service fee. Service fee of Baht 0.8 million is payable on a monthly basis. The agreement covered a period of 3 years, expiring in the year 2005, and shall be renewed automatically. h) The Company has a commitment to pay cleaning service fee. Service fee of Baht 1.8 million is payable on a monthly basis. The agreement covered a period of 3 years, expiring in the year 2005.

24. BANK GUARANTEES As at 31 December 2004, there were outstanding bank guarantees of Baht 1.9 million (2003: Baht 1.3 million) issued by a bank on behalf of the Company, and of Baht 8.4 million (2003: Baht 8.4 million) issued on behalf of a subsidiary. All were required in the normal course of business.

25. FINANCIAL INFORMATION BY SEGMENT The operations of the Company and subsidiaries mainly involve the single industry segment of the hospital business and health care center, and most of them are carried on in the single geographic area in Thailand. As a result, all of the revenues, operating profits and assets as reflected in these financial statements pertain to the aforementioned industry segment and geographic area. In 2004, the Company had consulting and management fee income of Baht 17.1 million (2003: Baht 22.4 million) from hospitals in foreign countries.

26. SUBSEQUENT EVENTS In January 2005, the Company has entered into a license agreement with Global Care Solution (Thailand) Co., Ltd. to purchase computer software, totaling USD 1.5 million (exclusive of value added tax). A subsidiary (Bumrungrad International Ltd.) has entered into a license agreement with Global Care Solutions (Thailand) Co., Ltd. in January 2005 for use in its international hospital management service business. The subsidiary is obliged to pay the license fee of at least USD 2.5 million.

27. PRESENTATION The presentation of the financial statements has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 14 September 2001 as empowered under the Accounting Act B.E. 2543. Certain amounts in the financial statements for the year ended 31 December 2003 have been reclassified to conform to the current year’s classification, with no effect on previously reported net earnings or shareholders’ equity.

28. APPROVAL OF FINANCIAL STATEMENTS These financial statements have been approved by the Company’s directors.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Auditor’s Remuneration 1. Audit Fee The Company and subsidiaries’ audit fee is Bt. 1,458,050. Audit fee for the year 2004 has already approved from shareholders’ meeting.

2. Non-Audit Fee The Company and subsidiaries paid and had to pay for accounting and tax consultation fee, including special audit to Ernst & Young Office Limited and Oversee Ernst & Young Office Limited approximately Bt. 2.9 million.The amount that already paid in year 2004 is Bt. 620,816.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Future Plans Expanding business in the current area As the number of BH patients has continued to grow rapidly over the past five years, BH is now running at full capacity for car park spaces. Therefore, in late 2002, BH started constructing a 10-storey building to provide 800 spaces of car park, beginning its service in 2005. With the rapid growth of patient volume, BH also expects its outpatient spaces to reach their full capacity in the near future, and therefore has decided to continue to construct an additional 12 floors on top of the car park to prepare for the rising demand.Therefore, the building will have a total of 22 stories. The construction is expected to be completed in 2006.The total construction cost of the building is expected to be approximately Bt 1.2 billion. The Company assigns professional to manage the construction in order to operate the project on budget and on schedule.

International Business Expansion The company assigned Bumrungrad International Company Limited (BI) to invest in international business. In 2005, BI investment plan is as follows:

Investment in Philippines In February 2005, BI reached an agreement of investment in Asian Hospital, Inc. (AHI), which operates a 258-bed hospital in Manila, Philippines. The expected benefits to be derived are dividends, management fees and software license fees.

Investment in United Arab Emirates BI plans to invest in a 125-150-bed hospital in the Jumeirah Beach area of Dubai, United Arab Emirates. The expected benefits to be derived are return on investment in the form of dividends, management fees, and software license fees. The success of international investment depends on many factors such as economics and politics in these countries, as well as market situations and competition in the industry. Therefore, relieve the risk factors above, the company has formed a team responsible for planning and thorough consideration of benefits and effects from the investment. The team consists of investment experts in the organization and outside , both domestic and abroad.

Bumrungrad Hospital Public Company Limited

Annual Report 2004

General Information 1. Company Information Name :

Bumrungrad Hospital Public Company Limited

Address :

33 Sukhumvit Soi 3 (Nana Nua) Sukhumvit Road

Type of Business :

Holding Company and private hospital

Klong Toey Nua, Wattana, Bangkok 10110 Registration No. :

Public Company Limited 173

Telephone :

0 2667 1000

Fax :

0 2667 2525

Homepage :

www.bumrungrad.com

Registered Capital :

Bt 922,702,685

Total paid-up shares :

922,702,685 shares

Divided into Ordinary shares :

920,009,835 shares

Preferred shares :

2,692,850 shares

Issued and Paid up Capital :

Bt 730,052,222

Total paid-up shares :

730,052,222 shares

Divided into Ordinary shares :

727,359,372 shares

Preferred shares :

2,692,850shares

Par Value :

Bt 1.00 (Data as at 31 December 2004)

2. Subsidiaries and Affiliatesâ&#x20AC;&#x2122; Information Name :

Bumrungrad Medical Center Limited

Address :

33/3 Sukhumvit 3 (Nana Nua) Sukhumvit Road Klong Toey Nua, Wattana, Bangkok 10110

Type of Business :

Property Lease

Shareholding :

100%

Telephone :

0 2667 1000

Fax :

0 2667 2525

Issued and paid up ordinary shares :

119,869,201 shares

Par value :

Bt 8.00 (Data as at 31 December 2004)

Bumrungrad Hospital Public Company Limited

Annual Report 2004

Name :

Vitallife Corporation Limited

Address :

210 Sukhumvit Soi 1 Sukhumvit Road

Type of Business :

Wellness Center

Klong Toey Nua, Wattana, Bangkok 10110 Shareholding :

100%

Telephone :

0 2667 1000

Fax :

0 2667 2525

Issued and paid up ordinary shares :

315,000 shares

Par value :

Bt 100 (Data as at 31 December 2004)

Name :

Bumrungrad Internatiional Ltd. (Original named B.H. Avenue Company Limited)

Address :

33 Sukhumvit Soi 3 (Nana Nua) Sukhumvit Road

Type of Business :

International Investment

Klong Toey Nua, Wattana, Bangkok 10110 Shareholding :

100%

Telephone :

0 2667 1000

Fax :

0 2667 2525

Issued and paid up ordinary shares :

6,000,000 shares

Par value :

Bt 100 (Data as at 31 December 2004)

Name : Address :

L.S. Clenaing Company Limited 68 Sukhumvit Soi 1 Sukhumvit Road Klong Toey Nua, Wattana, Bangkok 10110

Type of Business :

Laundry Services

Shareholding :

25%

Telephone :

0 2667 1000

Fax :

0 2667 2525

Issued and paid up ordinary shares :

12,500 shares

Par value :

Bt 100 (Data as at 31 December 2004)

Bumrungrad Hospital Public Company Limited

Annual Report 2004

3. Other References Auditor Name :

Ernst & Young Office Limited

Address :

33rd Floor, Lake Rajada Office Complex, 193/136-137 New Rajadapisek Road Bangkok 10110

Telephone :

0 2264 0777

Legal Consultant Name :

Thai Consultant Limited

Address :

63 Soi 8 (Soi Preeda), Sukhumvit Road Bangkok 10110

Telephone :

0 2255 2552

Share Registrar Name :

Thailand Securities Depository Co., Ltd.

Address :

62 The Stock Exchange of Thailand Building 4th and 6th-7th Floor, Rachadapisek Road, Bangkok 10110

Telephone :

0 2229 2800

Convertible Bonds Registrar Name :

Bumrungrad Hospital Public Company Limited

Address :

33 Sukhumvit Soi 3 (Nana Nua) Sukhumvit Road Klong Toey Nua, Wattana, Bangkok 10110

Telephone :

0 2667 2025

Bond Holder Representative Name :

Thai Military Bank Public Company Limited

Address :

3000 Paholyothin Road, Jatujuck, Bangkok 10900

Telephone :

0 2299 1111, 0 2617 9111

Bumrungrad Hospital Public Company Limited