BH : Annual Report 2008

A n n u a l R e p o r t 2 0 0 8 Bumrungrad Hospital Public Company Limited

TABLE OF CONTENTS Message from the Chairman 2 Message from the Group CEO 3 Keys to Success 4

Financial Information 14 Financial Highlights 15 Management Discussion & Analysis 16 Report of the Audit Committee 20 Report of the Accountability of the Board of Directors to the Company’s Financial Reports 21 Financial Statements 22

Other Information 56 Corporate Governance Report 80

MESSAGE FROM THE CHAIRMAN

When times are tough, a company shows its true pedigree.

In 1997 and the tumultuous years that followed, Thailand and Asia faced widespread economic challenges. During this period, Bumrungrad experienced some of its most dramatic growth, gained market share, and built the basis for the exceptional shareholder returns that followed. We became pioneers in medical destination travel, developed an innovative information system, and invested in quality that resulted in international accreditation and recognition. Our standards of patient care and value drew the world’s attention to Bumrungrad and Thailand.

The recent financial crisis brings new challenges. Bumrungrad’s core strengths, values, leadership and innovation will see us through these times as they did in 1997. We continue to explore new markets, improve our products and expand overseas.

And though our management carefully manages expenses, Bumrungrad will never compromise when it comes to medical quality and service. This commitment served us and our shareholders well ten years ago, and it will serve us well going forward.

Mr. Chai Sophonpanich Chairman

MESSAGE FROM THE GROUP CEO

In the face of a challenging 2008, Bumrungrad continued to produce record earnings from operations. Diversification of earnings sources has been a key feature of Bumrungrad’s regular and organic growth for over a decade. Bumrungrad’s patient revenues are equally divided between inpatient and outpatient sources and the geography of patients is spread across 190 nations. By the 4th Quarter of 2008, Bumrungrad’s overseas operations accounted for 7% of earnings, creating new avenues for profitability. This diversity has allowed us to weather many storms, even take advantage of them.

We benefit from being in an industry based on a timeless human need. Health will remain important even as consumers pare their demands for non-essentials. Customers will search for value, and since both our domestic and international markets are crowded with competitors, we must continue to innovate. Our strong balance sheet and robust cash flow allow us to do this while many providers are more constrained. So we believe this is an excellent time to pursue new opportunities and re-tool the organization. We have accelerated our refurbishment plans for our Bangkok facility. We are proceeding with full technology replacement capital. Bumrungrad International Limited continues to expand overseas. When the economic crisis subsides, Bumrungrad will be well positioned with a virtually new flagship hospital and additional overseas income sources.

The year 2008 saw the opening of the world’s largest private outpatient clinic, our Bumrungrad International Clinic in Bangkok, capable of treating 6,000 patients per day. Bumrungrad was recognized in 2008 as the best managed small cap company in Thailand, one of Thailand’s most respected and innovative companies, and the best hospital to work for. These are promising signs for the road ahead.

Mr. Curtis J. Schroeder Group Chief Executive Officer

Strength

The long-term trends of aging populations and rising living standards continue to drive demand for high quality healthcare. Bumrungrad International was the first hospital in Asia to invite international accreditation to assure patients of its quality. It continues to measure itself against the best hospitals in the world, and advocates transparency in both business and medical practices.

Asian Wall Street Journal Most Admired Companies

2008 Asia 200

In 2002, Bumrungrad became the first Asian hospital accredited by the Joint Commission International, the international arm of the organization that reviews and accredits American hospitals. Bumrungrad was re-accredited in 2005 and again in 2008.

In 2008, Asian Wall Street Journal readers rated Bumrungrad International one of their most admired Thai companies and #1 in quality of products and services.

Value

During times of economic uncertainty, value plays a more important role in consumer decisions, including healthcare. Bumrungrad has taken important additional steps to meet these needs. In 2008, Bumrungrad introduced the Healthy Living Club, a membership program for residents of Thailand. Over 10,000 members are already enjoying valuable benefits, without compromising on quality.

Value has always been a key driver of medical travel. Bumrungrad succeeds by offering international-standard healthcare at prices less than half those in Europe and the US. The hospital’s website helps people all over the world learn about Bumrungrad’s quality and value. Thousands of prospective patients visit it each week to search for a doctor, find out about a medical service, or make an appointment. Starting in 2008, they could also see what Bumrungrad patients paid for over 40 common procedures, at www.bumrungrad.com/realcost.

@

Best Website International Medical Travel 2008

At the 2008 Consumer Health World Awards in the U.S., Bumrungrad International’s www.bumrungrad.com won the Best Website for International Medical Travel award.

Bumrungrad International received the Award of Excellence in Health Tourism at the Tourism Authority of Thailand’s 7th Thailand Tourism Awards in 2008.

Award of Excellence

Health Tourism

Leadership

Smart, experienced management has kept Bumrungrad well-positioned to weather difficult economic times and maintain the company’s strategic direction. The company’s solid financial position allows it to capitalize on opportunities presented in recessionary markets.

Best

Small-Cap Company Thailand 2008

Bumrungrad International was one of only four companies to win the prestigious Thailand Quality Class (TQC) award in 2008. Now in its seventh year, the Office of Thailand Quality Award recognizes companies that meet a rigorous set of standards for delivering high quality products and services.

Bumrungrad International hospital was chosen Thailand’s Best Small-Cap Company in 2008 by Asiamoney.

The award is determined by the magazine’s annual poll of fund managers and analysts.

Innovation

Developing innovative ways to better serve patients has always been a cornerstone of Bumrungrad’s success. Medical and information technologies continue to provide advanced care and productivity growth, while delivering a more satisfying patient experience. In 2008, major innovations were introduced in the hospital’s new outpatient facilities, inpatient rooms (pictured at right), automated pharmacy and lab systems.

Excellence in Information Technology 2008

The Association of Medical Directors of Information Systems recognized Bumrungrad International for Excellence in Information Technology in 2008 – the only hospital outside the US to be awarded.

Bumrungrad International hospital won Thailand’s Most Innovative Company award in 2008, the first year of the event organized by Chulalongkorn University’s School of Business.

Thailand’s Most Innovative Company 2008

Responsibility Year after year, Bumrungrad management and staff have enthusiastically supported important charitable programs, donating their time and medical resources to serve the neediest members of the community. Corporate social responsibility programs include the Thomson Mobile Fund, which since 2001 has helped provide free healthcare to underprivileged communities in Bangkok using mobile units. In 2008, the program served more than 22,000 needy patients.

For the past five years, Bumrungrad has performed hundreds of cardiac surgeries at no cost to underprivileged Thai children with heart defects. The current Ruk Jai Thai (‘Love Thai hearts’) program began in mid-2008 and will provide about 100 such operations each year.

หนู ช อบเ ล่ น แต่ ง ตั ว ตุ ๊ ก ตา โตขึ ้ น หนู อ ยากเ ป็ น ดี ไ ซเน อร์ ช ื ่ อ ด ั ง Dhammika Khaipo received heart transplant surgery on February 11, 2005.

Nuttawut, Yossakorn and Nuttanicha are among the hundreds of needy children and adults who are realizing their dreams of better health and brighter futures with the help of Bumrungrad’s charitable programs. Following her successful heart transplant surgery provided at no cost, 10-year old Dhammika Khaipo writes, “I love playing with dolls. I want to be a famous fashion designer.”

Financial Information

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Bumrungrad Hospital Public Company Limited

Financial Performance (Baht ‘000) Total Current Assets Total Assets Total Current Liabilities Total Liabilities Total Shareholders’ Equity Total Revenues Net Earnings before Extraordinary Items Net Earnings for the Year Basic Earnings per Share Earnings per Share – Fully Diluted Book Value per Share Book Value per Share – Fully Diluted Dividend per Share

Financial Ratios Gross Profit Margin (%) EBITDA Margin (%) Net Profit Margin Excluding Extraordinary Items (%) Net Profit Margin (%) Growth on Sales from Hospital Operations (%) Net Profit Growth before Extraordinary Items (%) Net Profit Growth (%) Return on Equity (%) Return on Assets (%) Liabilities to Equity (x) Debt to Equity (x) Net Debt to Equity (x) Interest Coverage Ratio (x) Liquidity Ratio (x) Average Collection Period (days) Average Inventory Period (days) Average Payable Period (days)

2008 2007 2006

2005

2004

1,141,576 8,104,244 2,122,861 3,238,883 4,865,361 8,925,077 1,191,047 1,191,047 1.64 1.37 6.68 5.61 0.80

38.3% 24.3% 13.3% 13.3% 3.7% 4.0% -25.7% 25.9% 15.3% 0.67 0.39 0.31 18.83 0.54 25.65 13.23 34.00

1,410,552 7,459,163 1,774,840 3,110,141 4,349,023 9,413,123 1,144,715 1,603,258 2.20 1.85 5.97 5.01 0.80

38.5% 24.2% 13.3% 17.0% 8.8% 4.5% 46.3% 40.2% 22.8% 0.72 0.41 0.28 18.73 0.79 26.05 13.00 37.02

1,629,054 6,622,894 1,571,898 2,994,347 3,628,547 7,895,518 1,095,702 1,095,702 1.51 1.26 4.51 3.79 0.75

37.6% 24.7% 13.9% 13.9% 15.1% 4.1% 4.1% 34.7% 17.7% 0.91 0.54 0.27 17.70 1.04 22.01 11.92 39.06

1,103,842 5,727,518 1,580,758 3,031,729 2,695,789 6,806,775 1,052,739 1,052,739 1.45 1.21 3.59 3.01 0.75

37.6% 24.5% 15.5% 15.5% 16.9% 20.9% 12.6% 44.3% 19.6% 1.16 0.68 0.39 15.57 0.70 17.55 11.04 38.98

1,503,740 5,021,086 1,181,395 2,960,888 2,060,198 5,809,298 870,569 934,547 1.36 1.08 3.00 2.39 0.70

35.6% 23.4% 15.0% 16.1% 26.6% 30.6% 40.2% 56.3% 19.7% 1.44 1.03 0.37 11.36 1.27 16.36 9.73 39.88

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Annual Report 2008

Financial Highlights

Bumrungrad Hospital Public Company Limited

Management Discussion & Analysis

The Company reported total revenues in 2008 of Baht 8,882 million, a 4% increase from 2007. The 2008 net profit was Baht 1,191 million, also a 4% increase from 2007 net profit, excluding a one-time non-operating item in 2007 related to the sale of hospital software by CDE Trading Company Limited, an associated company. When the one-time net gain in 2007 from the sale of the software is included in the 2007 returns, 2008 net profit was down by 26% from 2007. Details of the management discussion and analysis are as follows:

1. BASIS OF CONSOLIDATION On 27 April 2007, the Company’s shareholding in Bumrungrad International Limited decreased from 51.0% to 31.5% as the Company waived its rights to subscribe to Bumrungrad International Limited’s new shares to allow Asia Financial Holdings to own 19.5% of Bumrungrad International Limited. As a result, the status of Bumrungrad International Limited has changed from a subsidiary to an associated company. Therefore, from 2Q07 onwards, Bumrungrad International Limited’s accounts are no longer consolidated but are equity accounted instead. Consequently, please note that the 2007 income statements reflect the consolidation of Bumrungrad International Limited’s 1Q07 accounts and the equity-accounting of Bumrungrad International Limited’s 2Q07, 3Q07 and 4Q07 performance, while the 2008 income statement does not consolidate Bumrungrad International Limited’s accounts.

2. PROFIT AND LOSS STATEMENT For the year 2008, the Company reported revenues from hospital operations of Baht 8,629 million, an increase by 4% from Baht 8,323 million in 2007. The increase is mainly the result of the continuous growth in hospital operations, where inpatient revenues increased by 2% while outpatient revenues increased by 9%. Other income increased to Baht 87 million in 2008 from Baht 43 million in 2007, primarily from the sale of membership of the “Healthy Living Club” loyalty program, which was launched in June 2008, together with revenues from “the Mezz” food center in the new Bumrungrad International Clinic Building, which was also opened in June 2008. Total revenues in 2008 were Baht 8,882 million, compared to Baht 8,559 million in 2007, an increase of 4%, in line with the increase in revenues from hospital operations.

In 2008, the Company reported cost of hospital operation of Baht 5,324 million, an increase of 4% from Baht 5,120 million in 2007, at the same growth rate as that of revenues from hospital operations. Gross profit, therefore, increased by 3% to Baht 3,305 million in 2008 from Baht 3,203 million in 2007, with stable gross profit margin at 38.3% in 2008 compared to 38.5% in 2007.

The Company’s administrative expenses increased to Baht 1,396 million in 2008 compared to Baht 1,356 million in 2007, or an increase of 3%, in line with total revenues as a result of rigid cost control. As a result, EBITDA was Baht 2,155 million in 2008, a 4% increase from Baht 2,070 million in 2007. Consequently, EBITDA margin remained stable at 24.3% in 2008 compared to 24.2% in 2007.

The Company reported depreciation and amortization of Baht 459 million in 2008, higher than Baht 408 million in 2007. The increase was a result of the opening of the new Bumrungrad International Clinic Building in May 2008, when the Company started to recognize the related depreciation. The corporate income tax was Baht 440 million in 2008, compared to Baht 445 million in 2007, or at the effective tax rate of 27.7% in 2008 and 28.5% in 2007. The low effective tax rates for both periods was because the Company was able to take advantage of the tax savings scheme issued by the Revenue Department allowing 25% of the Company’s qualified CAPEX to be tax deductible expense.

The Company reported share of income from investments in joint venture and associated companies of Baht 43 million in 2008, comprising of (1) share of profit from Bumrungrad International Limited of Baht 65 million, a significant improvement from Baht 18 million in 2007, mainly from the better performance of each the project, with the exception of Bumrungrad Hospital Dubai, which Bumrungrad International Limited has made a full provision of approximately Baht 76 million (at Bumrungrad International Limited level) in 4Q08, as the project has been put on hold and under review, and (2) share of loss from CDE Trading Company Limited (previously Global Care Solutions (Thailand) Company Limited) of Baht 22 million, primarily resulting from the foreign exchange loss on the amount of the proceeds from the sale of its assets that have not been received in 1Q08, as the Thai Baht strengthened against the US dollar. In 2007, the share of income from investments was Baht 854 million, significantly higher than in 2008 because of a one-time non-operating item, which was the share of profits from CDE Trading of Baht 829 million, which was the one-time gain from sale of assets, mainly hospital software, in CDE Trading to Microsoft, netted off with CDE Trading’s 4Q07 operations. The remaining 2007 share of investment are (1) share of profit from Asian Hospital Inc. in the Philippines in 1Q07, when Bumrungrad International Limited’s financial statement was still consolidated with the Company’s, of Baht 8 million, and (2) share of profit from investment in Bumrungrad International Limited of Baht 18 million in 2Q07, 3Q07 and 4Q07.

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Annual Report 2008

The Company reported net profit of Baht 1,191 million in 2008, an increase of 4% from normal net profit of Baht 1,145 million in 2007 (excluding one-time non-operating items which are the allowance for loss on impairment of assets of Baht 370 million and share of profit from investments in CDE Trading Company Limited of Baht 829 million), but a decrease of 26% from reported net profit of Baht 1,603 million in 2007. Net profit margin remained stable at 13.3% in 2008 compared to the normal net profit margin (excluding one-time non-operating items) of 13.3% in 2007, but lower than the reported net profit margin of 17.0% in 2007.

For the year 2008, basic EPS was Baht 1.64, a 6% increase from normal basic EPS (excluding one-time non-operating items) of Baht 1.54 in 2007, but a 26% decrease from reported basic EPS of Baht 2.20 in 2007. Similarly, for the year 2008, fully diluted EPS was Baht 1.37, a 6% increase from normal fully diluted EPS (excluding one-time non-operating items) of Baht 1.29 in 2007, but a 26% decrease from reported fully diluted EPS of Baht 1.85 in 2007.

(Unit: Baht Million)

2008 2007 Growth

8,629 8,323 4% Revenues from Hospital Operations 8,882 8,559 4% Total Revenues Gross Profit 3,305 3,203 3%

38.3% 38.5%

Gross Profit Margin 2,155 2,070 4% EBITDA (Excluding one-time non-operating item) EBITDA Margin (Excluding one-time non-operating item) 24.3% 24.2%

43 854 -95% Share of Income from Investments in Joint Venture and Associated Companies 1,191 1,145 4% Net Profit (Excluding one-time non-operating item) Net Profit Margin (Excluding one-time non-operating item) 13.3% 13.3%

Net Profit 1,191 1,603 -26%

13.3% 17.0%

Net Profit Margin EPS – Basic (Excluding one-time non-operating item) 1.64 1.54 6% EPS – Basic 1.64 2.20 -26%

1.37 1.29 6% EPS – Fully Diluted (Excluding one-time non-operating item) 1.37 1.85 -26% EPS – Fully Diluted

3. BALANCE SHEET As at 31 December 2008, the Company reported total current assets of Baht 1,142 million, a decrease from Baht 1,410 million as at 31 December 2007. This is primarily due to a decrease in cash to Baht 385 million as at 31 December 2008 from Baht 550 million as at 31 December 2007, as cash has been used primarily for the acquisition of BH Tower, the construction of Bumrungrad International Clinic Building, and the purchase of medical equipment; together with the decrease in trade accounts receivable to Baht 494 million as at 31 December 2008 from Baht 590 million as at 31 December 2007, as the collection of receivables, especially from the Middle East continues to improve. Total non-current assets increased to Baht 6,963 million as at 31 December 2008 from Baht 6,049 million as at 31 December 2007 as a result of the increase in property, plant and equipment, netted off with a decrease in investments in associated companies. Property, plant and equipment increased to Baht 5,374 million as at 31 December 2008 from Baht 4,145 million as at 31 December 2007, because of the acquisition of BH Tower in February 2008, the completion and opening of the seven floors of Bumrungrad International Clinic Building on 30 May 2008, and the purchase of medical equipment. Investments in associated companies decreased to Baht 1,235 million as at 31 December 2008 from Baht 1,523 million as at 31 December 2007 as the investment amount in CDE Trading was adjusted by the dividend received of Baht 438 million in second quarter of 2008, resulting in investment in CDE Trading of Baht -28 million as at 31 December 2008 from Baht 432 million as at 31 December 2007. In addition, the Company recorded an investment in joint venture of Baht 6 million as at 31 December 2008, as in 4Q08, the Company acquired a 51% stake in Asia Renal Care (Thailand) Company Limited (ARC Thailand), with the purpose to invest in dialysis business in Thailand. In February 2009, ARC Thailand has entered into an agreement to make a 20% investment in Nephromed Company Limited, a chain of 14 dialysis centers in Thailand. As a result, the Company’s total assets increased to Baht 8,104 million as at 31 December 2008 from Baht 7,459 million as at 31 December 2007.

Bumrungrad Hospital Public Company Limited

Total liabilities were Baht 3,239 million as at 31 December 2008, a slight increase from Baht 3,110 million as at 31 December 2007. This was primarily due to a increase in interest-bearing debt (short-term loan + long-term loans inclusive of the current portion) to Baht 1,885 million as at 31 December 2008 from Baht 1,772 million as at 31 December 2007, as the Company made a drawdown of Baht 400 million in February 2008 to finance the acquisition of BH Tower, netted off with scheduled repayment of Baht 487 million in 2008, together with additional drawdown of short term loan of Baht 200 million for working capital. With the increase in its debt position together with lower cash balance, net debt to equity increased to 0.31x as at 31 December 2008 from 0.28x as at 31 December 2007. The Company’s interest coverage ratio remained stable at 18.8x in 2008 compared to 18.7x in 2007.

Total shareholder’s equity increased to Baht 4,865 million as at 31 December 2008 from Baht 4,349 million as at 31 December 2007, as a result of the Company’s 2008 net profit of Baht 1,191 million, netted off with dividend payments of Baht 584 million and translation adjustments of an associated company (Bumrungrad International Limited) during 2008 of Baht 63 million. Average return on assets for 2008 was 15.3% compared to 22.8% in 2007, while average return on equity remained high at 25.9% in 2008 compared to 40.2% in 2007. The return on assets and return on equity in 2007 were exceptionally high as the reported net income used to calculate the ratios included one-time non-operating items as explained earlier.

In terms of working capital, the Company’s average collection period slightly decreased to 25.6 days as at 31 December 2008 from 26.1 days as at 31 December 2007, as the collection of corporate contracts especially from Middle East accounts continued to improve. The Company’s average inventory period remained stable at 13.2 days as at 31 December 2008 compared to 13.0 days as at 31 December 2007. The average payable period decreased to 34.0 days as at 31 December 2008 compared to 37.0 days as at 31 December 2007 as the Company has reinforced the repayment policy to pay suppliers quicker in 2008.

(Unit: Baht Million) 2008 2007 Growth

Total Assets 8,104 7,459 9%

3,239 3,110 4% Total Liabilities Total Shareholders’ Equity 4,865 4,349 12%

25.6 26.1

Average Collection Period (days) 13.2 13.0

Average Inventory Period (days) Average Payables Period (days) 34.0 37.0

0.31x 0.28x

Net Debt to Equity Interest Coverage Ratio 18.8x 18.7x

15.3% 22.8%

Average Return on Assets Average Return on Equity 25.9% 40.2%

4. LIQUIDITY The Company’s cash flow from operating activities in 2008 was Baht 1,762 million, an increase from Baht 1,341 million in 2007, primarily attributable to a decrease in trade accounts receivable. Net cash used in investment activities increased to Baht 1,440 million in 2008, compared to Baht 585 million in 2007 because of acquisition of property, plant and equipment and repayment of construction and medical equipment payable related to the acquisition of BH Tower, the construction of the Bumrungrad International Clinic Building and the purchase of medical equipment. The Company reported net cash flow used in financing activities of Baht 488 million in 2008, compared to Baht 617 million in 2007, as a result of drawdown of short-term loan of Baht 200 million in 2008. As a result, cash and cash equivalents at the end of the period was Baht 385 million as at 31 December 2008 compared to Baht 550 million (after deduction of cash of subsidiary, Bumrungrad International Limited, as at the date that the subsidiary changed to an associated company) as at 31 December 2007.

The Liquidity ratio as at 31 December 2008 decreased to 0.54x from 0.79x as at 31 December 2007, while the quick ratio was 0.41x as at 31 December 2008, a decrease from 0.64x as at 31 December 2007. The decrease in both liquidity and quick ratios is due to the decrease in total current assets, primarily from the decrease in cash and cash equivalents and trade accounts receivable, coupled with the increase in total current liabilities, primarily from the increase in short term loan from financial institution.

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(Unit: Baht Million)

Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at end of year Liquidity Ratio Quick Ratio

2008

2007

1,762

1,341

-1,440

-585

-488

-617

-165

139

385

550

0.54x

0.79x

0.41x

0.64x

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Annual Report 2008

Bumrungrad Hospital Public Company Limited

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, namely, Miss Sophavadee Uttamobol, Chairperson, Mr. Boonpakorn Chokwathana, and Mr. Soradis Vinyaratn, Audit Committee Members. The duties and responsibilities of the Committee are mainly to ensure that financial reports of the Company comply with accounting standards with sufficient and accurate information disclosure; to ensure that the Company’s internal control system including risk assessment and control are appropriate and effective; to ensure that the Company complies with the regulations and other relevant laws, and to review any possible conflict of interest in the transaction between the company related parties.

The Audit Committee had 4 meetings in year 2008 to perform the duties assigned. The major topics are: 1. Reviewed the Company and subsidiaries’ financial statements prior to submission to the Board of Directors.

After due considerations with the external auditors and the management, it is the opinion of the Committee that the financial statements were prepared in accordance with accounting standards with sufficient and accurate disclosure of material information.

2. Considered and recommended an appointment of Ms. Vissuta Jariyathanakorn, from Ernst and Young Office Limited, as external auditor and recommended the yearly audit fee to the Board of Directors for proposing to the Shareholders Meeting.

3. Approved yearly budget of the Internal Audit Department, reviewed annual internal audit plan and its processes, which are part of the Company’s administrative policy, and agreed to revise a written charter, policy, and procedure for internal audit works to comply with working criteria of international standard.

4. Considered transactions with connected parties and the disclosure of information concerning the transactions with connected parties and transactions for acquisition or disposition of assets.

5. Engaged one of the big 4 of international audit firm to review and revise documents concerning internal audit functions; i.e. audit committee charter and internal audit charter and to assess, identify and prioritize organization risks as well as the formulation of the 18-months internal audit plan. In addition, the Audit Committee has approved one additional full time equivalent internal audit manager, and their relevant budget. Those activities were to increase internal audit efficiency.

6. Reviewed and acknowledge the reports from the Company’s internal auditors and provided suggestions to the Board of Directors and management in relation to good corporate governance and internal control. The Committee also focused on the holding of the annual general meeting appropriately in accordance with the guidelines given by the Stock Exchange of Thailand, the compliance with regulations, procedures, and rules as prescribed by the laws as well as the adequacy and effectiveness of risk assessment and risk prevention activities of each division and of the organization.

The Committee is of the opinion that the internal control systems are adequate and appropriate to prevent risks from operation of the business pursuant to the Company’s policies and strategies.

The Audit Committee has performed its assigned duties with care and at its fullest ability for the benefit of the Company, the shareholders and all the stakeholders.

Miss Sophavadee Uttamobol

Chairperson of Audit Committee

25 February 2009

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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 has the opinion 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 2008.

Mr. Chai Sophonpanich Mrs. Linda Lisahapanya Chairperson Managing Director

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Annual Report 2008

Report of the Accountability of the Board of Directors to the Company’s Financial Reports

Bumrungrad Hospital Public Company Limited

Bumrungrad Hospital Public Company Limited and its subsidiaries Report and consolidated financial statements 31 December 2008 and 2007

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To the Shareholders of Bumrungrad Hospital Public Company Limited

I have audited the accompanying consolidated balance sheet of Bumrungrad Hospital Public Company Limited and its subsidiaries as at 31 December 2008, the related consolidated statements of income, changes in shareholders’ equity and cash flows for the year then ended, and the separate financial statements of Bumrungrad Hospital Public Company Limited for the same period. These financial statements are the responsibility of the management of the Company and its 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 audit. The consolidated financial statements of Bumrungrad Hospital Public Company Limited and its subsidiaries for the year ended 31 December 2007, and the separate financial statements of Bumrungrad Hospital Public Company Limited for the same period, as presented herein for comparative purposes, were audited by another auditor of our firm who expressed an unqualified opinion on those statements under her report dated 27 February 2008.

I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bumrungrad Hospital Public Company Limited and its subsidiaries and of Bumrungrad Hospital Public Company Limited as at 31 December 2008, and the results of their operations and cash flows for the year then ended, in accordance with generally accepted accounting principles.

Vissuta Jariyathanakorn Certified Public Accountant (Thailand) No. 3853

Ernst & Young Office Limited Bangkok: 25 February 2009

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Annual Report 2008

Report of Independent Auditor

Bumrungrad Hospital Public Company Limited

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES BALANCE SHEETS AS AT 31 DECEMBER 2008 AND 2007 (Unit: Baht)

Consolidated Separate financial statements financial statements

Note 2008 2007 2008 2007

Assets Current assets

Cash and cash equivalents

384,641,789 549,863,854 350,881,453 508,939,898 Trade accounts receivable - net 6 494,121,990 590,306,691 492,376,167 588,086,215 Amounts due from related parties 7 8,797,038 7,140,769 8,797,038 7,225,215 Advances to employees and directors

8,785,621 10,337,972 8,785,621 10,329,872 Short-term loan and interest receivable -

a related party 7 - - - 10,058,348 Inventories 8 187,974,998 203,483,802 184,131,025 199,829,831 Prepaid expenses

52,243,447 48,036,054 51,715,907 46,088,460 Other current assets

5,010,939 1,382,929 4,702,592 919,161 Total current assets

1,141,575,822 1,410,552,071 1,101,389,803 1,371,477,000 Non-current assets

Restricted bank deposits 9 17,146,800 12,146,800 8,792,400 3,792,400 Investments in subsidiaries - net 10 - - 1,172,512,972 1,172,512,972 Investment in joint venture 11 6,085,265 - 6,119,970 - Investments in associated companies - net 12 1,234,931,024 1,522,607,253 1,013,453,313 887,703,313 Other long-term investments - net 13 2,247,213 2,247,213 2,047,213 2,047,213 Property, plant and equipment - net 14 5,373,730,959 4,144,586,821 4,412,801,934 3,128,389,655 Intangible assets - net 15 310,364,085 349,177,979 343,423,294 476,188,623 Other non-current assets

18,162,783 17,845,161 21,162,784 20,845,159 Total non-current assets

6,962,668,129 6,048,611,227 6,980,313,880 5,691,479,335 Total assets

8,104,243,951 7,459,163,298 8,081,703,683 7,062,956,335 The accompanying notes are an integral part of the financial statements.

24

AS AT 31 DECEMBER 2008 AND 2007 (Unit: Baht)

Consolidated Separate financial statements financial statements Note 2008 2007 2008 2007

Liabilities and shareholders’ equity

Current liabilities 16 200,000,000 - 200,000,000 - Short-term loan from financial institution

504,341,232 501,349,205 502,592,696 499,321,764 Trade accounts payable 7 2,015,049 - 3,683,026 - Amounts due to a related party 77,127,082 120,299,463 77,127,082 120,299,463 Construction and medical equipment payable 17 569,279,069 437,148,619 131,250,000 81,250,000 Current portion of long-term loans

Current portion of long-term loan and 7 - - 438,029,068 355,898,619 interest payable - a related party

262,460,716 292,550,253 261,310,716 291,726,160 Accrued physicians’ fees

564,859 1,091,635 312,842 400,328 Interest payable

Interest payable - convertible bonds treated

11,575,343 6,232,877 11,575,343 6,232,877 as equity securities

195,479,980 197,048,251 193,045,798 196,325,517 Corporate income tax payable

260,094,311 148,689,856 258,020,607 147,909,167 Accrued expenses

16,098,005 29,372,607 15,773,332 29,298,631 Accounts payable - others

23,825,155 41,057,085 23,420,748 40,259,870 Other current liabilities

2,122,860,801 1,774,839,851 2,116,141,258 1,768,922,396 Total current liabilities

Non-current liabilities

Long-term loan and interest payable 7 - - 501,207,360 856,337,809 - a related party 17 1,116,021,802 1,335,300,872 787,500,000 568,750,000 Long-term loans

1,116,021,802 1,335,300,872 1,288,707,360 1,425,087,809 Total non-current liabilities 3,238,882,603 3,110,140,723 3,404,848,618 3,194,010,205 Total liabilities The accompanying notes are an integral part of the financial statements.

25

Annual Report 2008

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES BALANCE SHEETS (CONTINUED)

Bumrungrad Hospital Public Company Limited

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES BALANCE SHEETS (CONTINUED) AS AT 31 DECEMBER 2008 AND 2007 (Unit: Baht)

Consolidated Separate financial statements financial statements

Shareholders’ equity Share capital Registered 920,919,935 ordinary shares of Baht 1 each (2007: 920,853,235 ordinary shares of Baht 1 each) 1,782,750 preference shares of Baht 1 each (2007: 1,849,450 preference shares of Baht 1 each) Issued and paid-up 728,269,472 ordinary shares of Baht 1 each (2007: 728,202,772 ordinary shares of Baht 1 each) 1,782,750 preference shares of Baht 1 each (2007: 1,849,450 preference shares of Baht 1 each) Premium on ordinary shares Other paid-in capital of an associated company Translation adjustment Convertible bonds treated as equity securities Excess of investment over book value of a subsidiary Retained earnings Appropriated - statutory reserve Unappropriated Total shareholders’ equity Total liabilities and shareholders’ equity

Note

2007

2008

2007

19

920,919,935 920,853,235

920,919,935

920,853,235

1,782,750

1,849,450

1,782,750

1,849,450

728,269,472 728,202,772

728,269,472

728,202,772

1,782,750

1,849,450

1,782,750

1,849,450

285,568,300 285,568,300

285,568,300

285,568,300

252,172,534 256,548,996

-

-

(53,479,292)

9,985,279

-

-

550,000,000 550,000,000

550,000,000

550,000,000

(192,661,558) (192,661,558)

-

-

18

20

92,275,000

92,275,000

92,275,000

92,275,000

3,201,434,142 2,617,254,336 3,018,959,543 2,211,050,608

4,865,361,348 4,349,022,575 4,676,855,065 3,868,946,130

8,104,243,951 7,459,163,298 8,081,703,683 7,062,956,335

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

26

2008

FOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007 (Unit: Baht)

Consolidated Separate financial statements financial statements Note 2008 2007 2008 2007

Revenues

Revenues from hospital operations 7 8,629,431,002 8,323,137,073 8,560,815,107 8,247,922,455 Revenues from hospital management 7 - 17,456,184 - - Rental income 7 127,882,990 132,305,227 154,407,401 159,555,897 Interest income 7 6,273,193 12,493,388 5,856,178 8,668,544 Exchange gains

31,544,727 29,876,972 31,544,307 32,293,650 Dividend income from an

associated company 7, 12.2 - - 437,927,000 418,430,250 Other income 7 86,696,905 43,466,165 86,496,906 57,692,932 Total revenues

8,881,828,817 8,558,735,009 9,277,046,899 8,924,563,728 Expenses

Cost of hospital operations 7 5,324,432,431 5,119,724,624 5,303,081,983 5,089,520,686 Depreciation and amortisation 14, 15 459,363,374 407,634,558 403,559,695 369,775,988 Administrative expenses 7 1,395,955,771 1,356,383,467 1,460,724,816 1,409,801,151 Allowance for loss on impairment

of assets

- 370,232,632 143,010,644 370,232,632 Total expenses

7,179,751,576 7,253,975,281 7,310,377,138 7,239,330,457 Income before finance cost and corporate income tax

1,702,077,241 1,304,759,728 1,966,669,761 1,685,233,271 Finance cost 7 (114,427,819) (110,513,805) (123,830,878) (116,445,159) Share of income from investments in

joint venture and associated companies 11.2, 12.2 43,247,889 854,387,550 - - Income before corporate income tax

1,630,897,311 2,048,633,473 1,842,838,883 1,568,788,112 Corporate income tax 22 (439,850,701) (445,375,457) (428,063,144) (439,891,445) Net income for the year

1,191,046,610 1,603,258,016 1,414,775,739 1,128,896,667

Net income attributable to:

Equity holders of the parent

1,191,046,610 1,605,462,201 1,414,775,739 1,128,896,667 Minority interests of the subsidiaries

- (2,204,185)

Net income for the year

1,191,046,610 1,603,258,016

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

27

Annual Report 2008

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES INCOME STATEMENTS

Bumrungrad Hospital Public Company Limited

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES INCOME STATEMENTS (CONTINUED) FOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007 (Unit: Baht)

Consolidated Separate financial statements financial statements

Earnings per share Basic earnings per share Net income attributable to equity holders of the parent Weighted average number of ordinary shares (shares)

Diluted earnings per share Net income attributable to equity holders of the parent Weighted average number of ordinary shares (shares)

Note 2008 2007 2008 2007

23

1.64 2.20 1.94 1.55

728,256,168 728,119,020 728,256,168 728,119,020

23

1.37 1.85 1.63 1.30

867,414,859 867,414,859 867,414,859 867,414,859

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

28

29

377,400

-

-

19

18

26

Capital increase of shareholders of an associated company

Minority interest of associate’s subsidiary

Translation adjustment

Interest paid for convertible bonds treated as equity securities

Net income (loss) for the year

Dividend paid

18

Minority interest of associate’s subsidiary

Translation adjustment

Interest paid for convertible bonds treated as equity securities

728,269,472

-

-

-

-

-

1,782,750

-

-

-

-

-

(66,700)

1,849,450

1,849,450

-

-

-

-

-

-

-

(377,400)

2,226,850

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

19

Preference shares converted to ordinary shares

Balance as at 31 December 2008

66,700

Balance as at 31 December 2007

26

Dividend paid

728,202,772

Balance as at 31 December 2007

Net income for the year

-

728,202,772

Decrease in minority interest from changing in status of a subsidiary to an associated company

-

-

-

-

Preference shares converted to ordinary shares

727,825,372

Balance as at 31 December 2006

Consolidated financial statements

285,568,300

-

-

-

-

-

-

285,568,300

285,568,300

-

-

-

-

-

-

-

-

285,568,300

252,172,534

-

-

-

-

(4,376,462)

-

256,548,996

256,548,996

-

-

-

-

-

4,376,462

96,037,589

-

156,134,945

(53,479,292)

-

-

-

(63,464,571)

-

-

9,985,279

9,985,279

-

-

-

-

(3,060,394)

-

-

-

13,045,673

550,000,000

-

-

-

-

-

-

550,000,000

550,000,000

-

-

-

-

-

-

-

-

550,000,000

(192,661,558)

-

-

-

-

-

-

(192,661,558)

(192,661,558)

-

-

-

-

-

-

-

-

(192,661,558)

92,275,000

-

-

-

-

-

-

92,275,000

92,275,000

-

-

-

-

-

-

-

-

92,275,000

3,201,434,142

(584,024,338)

1,191,046,610

(22,842,466)

-

-

-

2,617,254,336

2,617,254,336

-

(620,544,389)

1,605,462,201

(17,500,000)

-

-

-

-

1,649,836,524

4,865,361,348

(584,024,338)

1,191,046,610

(22,842,466)

(63,464,571)

(4,376,462)

-

4,349,022,575

4,349,022,575

-

(620,544,389)

1,605,462,201

(17,500,000)

(3,060,394)

4,376,462

96,037,589

-

3,284,251,106

Total

(Unit: Baht)

(17,500,000)

(6,279,222)

4,376,462

96,037,589

-

(338,872,550)

(620,544,389)

(22,842,466)

(63,464,571)

(4,376,462)

-

(584,024,338)

Annual Report 2008

- 4,865,361,348

-

- 1,191,046,610

-

-

-

-

- 4,349,022,575

- 4,349,022,575

(338,872,550)

-

(2,204,185) 1,603,258,016

-

(3,218,828)

-

-

-

344,295,563 3,628,546,669

Equity attributable to parent’s shareholders Minority interest Other paid-in Translation Excess of - equity attributable capital of a adjustment of Total equity to minority subsidiary/an a subsidiary/an Convertible investment over Retained earnings Issued and paid-up share capital Premium on associated attributable to the shareholders of associated bonds treated as book value of Appropriated - Note Ordinary shares Preference shares ordinary shares company company equity securities a subsidiary statutory reserve Unappropriated parent’s shareholders subsidiary

FOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

30 (Unit: Baht)

- -

26 728,269,472

-

18

66,700

728,202,772

19

-

26

-

728,202,772

-

18

377,400

19

1,782,750

-

-

-

(66,700)

1,849,450

1,849,450

-

-

-

(377,400)

285,568,300

-

-

-

-

285,568,300

285,568,300

-

-

-

-

550,000,000

-

-

-

-

550,000,000

550,000,000

-

-

-

-

92,275,000

-

-

-

-

92,275,000

92,275,000

-

-

-

-

3,018,959,543

(584,024,338)

1,414,775,739

(22,842,466)

-

2,211,050,608

2,211,050,608

(620,544,389)

1,128,896,667

(17,500,000)

-

4,676,855,065

(584,024,338)

1,414,775,739

(22,842,466)

-

3,868,946,130

3,868,946,130

(620,544,389)

1,128,896,667

(17,500,000)

-

Separate financial statements

Retained earnings

Convertible

Issued and paid-up share capital Premium on bonds treated as Appropriated -

Note Ordinary shares Preference shares ordinary shares equity securities statutory reserve Unappropriated Total 727,825,372 2,226,850 285,568,300 550,000,000 92,275,000 1,720,198,330 3,378,093,852

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

Balance as at 31 December 2006 Preference shares converted to ordinary shares Interest paid for convertible bonds treated as equity securities Net income for the year Dividend paid Balance as at 31 December 2007

Balance as at 31 December 2007 Preference shares converted to ordinary shares Interest paid for convertible bonds treated as equity securities Net income for the year Dividend paid Balance as at 31 December 2008

FOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Bumrungrad Hospital Public Company Limited

FOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007 (Unit: Baht)

Consolidated Separate financial statements financial statements

2008

2007

2008

2007

Cash flows from operating activities Net income before corporate income tax Adjustments to reconcile net income before tax to net cash provided by (paid from) operating activities: Depreciation and amortisation Bad debts and allowance for doubtful accounts Allowance for loss on impairment of assets Loss on disposal of equipment Income from receipt of securities Dividend income from an associated company Share of income from investments in associated companies Share of loss from investment in joint venture Interest expense Income from operating activities before changes in operating assets and liabilities Operating assets (increase) decrease Trade accounts receivable Amounts due from related parties Inventories Other current assets Operating liabilities increase (decrease) Trade accounts payable Amounts due to a related party Accrued physicians’ fees Accrued expenses Accounts payable - others Other current liabilities Cash flows from operating activities Cash paid for interest expense Cash paid for corporate income tax

1,630,897,311 2,048,633,473

1,842,838,883 1,568,788,112

459,363,374 48,062,153 - 2,029,764 - -

(43,282,595) 34,706 114,427,819

2,211,532,532

48,122,548 (1,657,451) 15,508,804 (8,967,296)

2,992,027 - (30,089,537) 111,404,455 (13,968,185) (17,231,930) 2,317,645,967 (114,954,595) (440,287,079)

407,634,558 31,082,828 370,232,632 6,631,038 (200,000) -

(854,387,550) - 110,513,805

2,120,140,784

(165,307,995) 76,297 (37,070,502) (5,449,692)

(94,955,762) (1,800,000) 36,988,359 34,545,393 1,985,353 7,339,405 1,896,491,640 (110,190,191) (445,646,733)

403,559,695 369,775,988 46,844,991 30,342,286 143,010,644 370,232,632 2,029,764 6,631,038 - - (437,927,000) (418,430,250)

- - - - 123,830,878 116,445,159

2,124,187,855 2,043,784,965

48,865,057 (156,093,890) (1,573,005) 10,017,215 15,698,806 (38,718,787) (9,410,878) (7,680,934)

3,270,932 (48,003,846) 1,667,977 (1,800,000) (30,415,444) 38,214,266 110,111,440 28,091,819 (14,218,883) 1,721,741 (16,839,122) 2,129,192 2,231,344,735 1,871,661,741 (123,918,364) (126,071,817) (431,342,863) (439,726,779)

Net cash flows from operating activities

1,762,404,293 1,340,654,716

1,676,083,508 1,305,863,145

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

31

Annual Report 2008

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CASH FLOWS

Bumrungrad Hospital Public Company Limited

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007 (Unit: Baht)

Consolidated Separate financial statements financial statements

Cash flows from investing activities Decrease (increase) in restricted bank deposits Decrease (increase) in advances to employees and directors Decrease in short-term loan and interest receivable - a related party Acquisition of investment in joint venture Acquisition of investments in associated companies Dividend received from an associated company Acquisition of property, plant and equipment and repayment of construction and medical equipment payable Proceeds from sales of equipment Acquisition of computer software Increase in other non-current assets Net cash flows used in investing activities Cash flows from financing activities Increase in short-term loan from financial institution Repayment of long-term loan and interest payable - a related party Cash receipt from long-term loans Repayment of long-term loans Dividend paid Interest paid for convertible bonds treated as equity securities Net cash flows used in financing activities Decrease in translation adjustments Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Less: Cash and cash equivalents of a subsidiary (BIL) as at the date of it changed to an associated company Cash and cash equivalents at end of year

2008

2008

2007

(5,000,000)

7,458,695

(5,000,000)

7,458,695

1,552,351

- (6,119,970) (141,750,000) 437,927,000

(1,722,414,602) 2,765,910 (6,290,048) (317,625) (1,439,646,984)

200,000,000

- 400,000,000 (487,148,620) (583,330,754)

(17,500,000) (487,979,374) - (165,222,065) 549,863,854 384,641,789

938,452

- - (287,704,013) 418,430,250

(569,699,256) 4,276,313 (155,784,138) (3,361,512) (585,445,209)

-

- 350,000,000 (328,521,802) (620,544,389)

(17,500,000) (616,566,191) (553,904) 138,089,412 853,860,177 991,949,589

1,544,251

10,058,348 (6,119,970) (141,750,000) 437,927,000

(1,721,879,065) 2,765,910 (6,290,048) (317,625) (1,429,061,199)

200,000,000

(273,000,000) 400,000,000 (131,250,000) (583,330,754)

(17,500,000) (405,080,754) - (158,058,445) 508,939,898 350,881,453

(766,214)

8,063,036 - (287,704,013) 418,430,250

(612,467,920) 4,276,313 (155,784,138) (1,021,513) (619,515,504)

-

(243,000,000) 350,000,000 - (620,544,389)

(17,500,000) (531,044,389) - 155,303,252 353,636,646 508,939,898

- (442,085,735) 384,641,789 549,863,854

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

32

2007

- - 350,881,453 508,939,898

FOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007

1. GENERAL INFORMATION 1.1 Corporate information Bumrungrad Hospital Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in hospital business, investment in other companies and rental of properties service and its registered address is 33 Soi 3 (Nana Nua) Sukhumvit Road, Klongtoey Nua Sub District, Wattana District, Bangkok.

1.2 Economic crisis The financial crisis experienced by the United States of America over the past year has had a far reaching adverse effect on the global economy as evidenced by sharp falls in share prices worldwide, a tight squeeze on credit including interbank lending, failures of large financial institutions and reduced consumer confidence. The crisis has substantially affected the business and financial plans of Thailand enterprises and asset value. Despite efforts made by governments of many countries to contain the crisis, it remains uncertain as to when the global economy will return to normalcy.

These financial statements have been prepared on the bases of facts currently known to the Company, and on estimates and assumptions currently considered appropriate. However, they could be adversely affected by an array of future events.

2. BASIS OF FINANCIAL STATEMENTS PREPARATION 2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 14 September 2001, issued under the Accounting Act B.E. 2543.

The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from such financial statements in Thai language.

The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

2.2 Basis of consolidation a) The consolidated financial statements include the financial statements of Bumrungrad Hospital Public Company Limited (“the Company”) and the following subsidiary companies (“the subsidiaries”):

Revenues as a percentage

Assets as a percentage to the consolidated

to the consolidated total revenues for the

Nature of Country of Percentage of total assets as at year ended

Company’s name business incorporation shareholding 31 December 31 December

2008 2007 2008 2007 2008 2007

Percent Percent Percent Percent Percent Percent Bumrungrad Medical Center Ltd. (BMC) Building lease Thailand 100 100 12 14 - - Vitallife Corporation Ltd. (VTL)

Health care center

Thailand

100

100

1

1

1

1

b) Subsidiaries are fully consolidated as from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. c) The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent significant accounting policies. d) Material balances and transactions between the Company and its subsidiary companies have been eliminated from the consolidated financial statements. e) Minority interests represent the portion of net income or loss and net assets of the subsidiary that are not held by the Company and are presented separately in the consolidated income statement and within equity in the consolidated balance sheet.

2.3 The separate financial statements, which present investments in subsidiaries, joint venture and associates presented under the cost method, have been prepared solely for the benefit of the public.

33

Annual Report 2008

BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Bumrungrad Hospital Public Company Limited

3. ADOPTION OF NEW ACCOUNTING STANDARDS 3.1 Accounting standards which are effective for the current year The Federation of Accounting Professions has issued Notification No. 9/2550, 38/2550 and 62/2550 mandating the use of new accounting standards as follows: TAS 25 (revised 2007) Cash Flow Statements TAS 29 (revised 2007) Leases TAS 31 (revised 2007) Inventories TAS 33 (revised 2007) Borrowing Costs TAS 35 (revised 2007) Presentation of Financial Statements TAS 39 (revised 2007) Accounting Policies, Changes in Accounting Estimates and Errors TAS 41 (revised 2007) Interim Financial Reporting TAS 43 (revised 2007) Business Combinations TAS 49 (revised 2007) Construction Contracts TAS 51 Intangible Assets These accounting standards become effective for the financial statements for fiscal years beginning on or after 1 January 2008. The management has assessed the effect of these standards and believes that TAS 49 (revised 2007) is not relevant to the business of the Company, while the remaining do not have any significant impact on the financial statements for the current year, except for the TAS 43 (revised 2007) “Business Combinations� as following.

TAS 43 (revised 2007) does not require the Company to amortise goodwill acquired in a business combination.

Such goodwill is instead to be tested for impairment, and measured at cost less accumulated impairment losses. This accounting standard applies to goodwill arising from business combinations for which the agreement date is on or after 1 January 2008. Previously recognised goodwill can be accounted for prospectively, with the Company discontinuing the amotisation of the goodwill and instead testing for impairment, as from the beginning of the first fiscal year starting on or after 1 January 2008.

3.2 Accounting standards which are not effective for the current year The Federation of Accounting Professions has also issued Notification No. 86/2551 mandating the use of the following new accounting standards: TAS 36 (revised 2007) Impairment of Assets TAS 54 (revised 2007) Non-current Assets Held for Sale and Discontinued Operations These accounting standards will become effective for the financial statements for fiscal years beginning on or after 1 January 2009. The management has assessed the effect of these standards and believes that they will not have any significant impact on the financial statements for the year in which they are initially applied.

4. SIGNIFICANT ACCOUNTING POLICIES 4.1 Revenue recognition a) 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. b) Consulting and management fee income are recognised when service has been rendered taking into account the stated of completion. c) Rental income and related service income are recognised on an accrual basis in accordance with a period as stipulated in an agreement. d) Interest income is recognised on an accrual basis. e) Dividends are recognised when the right to receive the dividends is established.

4.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand, cash at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions.

4.3 Trade accounts receivable Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences and analysis of debt aging.

4.4 Inventories Inventories are valued at the lower of cost (weighted average basis) and net realisable value.

4.5 Investments a) Investments in non-marketable equity securities, which the Company classifies as other investments, are stated at cost net of allowance for loss on diminution in value (if any).

34

Annual Report 2008

b) Investment in joint venture and associated companies are accounted for in the consolidated financial statements using the equity method. c) Investments in subsidiaries, joint venture and associated companies are accounted for in the separate financial statements using the cost method.

4.6 Property, plant and equipment/Depreciation Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Depreciation of buildings and equipment is calculated by reference to their costs on the straight-line basis over the following estimated useful lives: Leasehold right - 30 years as lease period Land improvement - 3 years and 30 years Buildings and construction - 8 - 30 and 40 years Facility systems - 5 - 20 years Medical accessory equipment - 5 - 15 years Hospital equipment - 3 - 15 years Equipment and furniture - 5 - 15 years Motor vehicles - 5 - 10 years Depreciation is included in determining income.

No depreciation is provided on land and assets under construction and installation.

4.7 Borrowing costs Borrowing costs are expensed in the period they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

4.8 Intangible assets Intangible assets acquired in a business combination are recognised at fair value on the date of acquisition. Other acquired intangible assets are measured at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to the income statement.

A summary of the intangible assets with finite useful lives is as follows.

Useful lives Computer software 10 years Compensation for business combination 10 years 4.9 Goodwill Goodwill is initially measured at cost, which is the excess of the cost of the business combination over the Company’s share in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.

Goodwill is carried at cost less any accumulated impairment losses. Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the Company’s cash generating units (or group of cash-generating units) that are expected to benefit from the synergies of the combination. The Company estimates the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.

4.10 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly or indirectly, or which are under common control with the Company.

They also include associated companies and individuals which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, key management personnel, directors, and officers with authority in the planning and direction of the Company’s operations.

4.11 Foreign currencies Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the balance sheet date.

Gains and losses on exchange are included in determining income.

35

Bumrungrad Hospital Public Company Limited

4.12 Impairment of assets At each reporting date, the Company performs impairment reviews in respect of the property, plant and equipment and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired.

The Company also carries out annual impairment reviews in respect of goodwill. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. In determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by a valuation model that, based on information available, reflects the amount that the Company could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal.

An impairment loss is recognised in the income statement.

4.13 Employee benefits Salaries, wages, bonuses and contributions to the social security fund and provident fund are recognised as expenses when incurred.

4.14 Provisions Provisions are recognised when the Company and its subsidiaries have a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

4.15 Income tax Income tax is provided for in the accounts based on the taxable profits determined in accordance with tax legislation.

5. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain.

These judgments and estimates affect reported amounts and disclosures and actual results could differ. Significant judgments and estimates are as follows: Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgment regarding whether significant risk and rewards of ownership of the leased asset have been transferred, taking into consideration terms and conditions of the arrangement.

Allowance for doubtful accounts In determining an allowance for doubtful accounts, the management needs to make judgment and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic conditions.

Property plant and equipment/Depreciation In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives and salvage values of the Company’s plant and equipment and to review estimated useful lives and salvage values when there are any changes.

In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying amount. This requires judgments regarding forecasts of future revenues and expenses relating to the assets subject to the review.

Goodwill and intangible assets The initial recognition and measurement of goodwill and other intangible assets, and subsequent impairment testing, require management to make estimates of cash flows to be generated by the asset or the cash generating units and to choose a suitable discount rate in order to calculate the present value of those cash flows.

36

(Unit: Baht) Consolidated financial statements

Age of receivables

2008

Not yet due Past due 1 - 30 days 31 - 60 days 61 - 90 days 91 - 180 days 181 - 365 days More than 365 days Total Less: Allowance for doubtful debts Trade accounts receivable - net

Separate financial statements

2007

232,951,319

107,490,260 36,698,495 23,018,434 46,065,696 39,191,180 98,745,420 584,160,804 (90,038,814) 494,121,990

2008

231,925,240

110,174,464 52,175,107 48,448,335 72,415,810 73,276,794 56,895,538 645,311,288 (55,004,597) 590,306,691

2007

232,345,911

107,132,572 36,571,907 22,992,972 45,491,876 38,579,960 96,715,648 579,830,846 (87,454,679) 492,376,167

231,372,792

109,797,275 52,015,929 48,083,562 71,799,674 72,534,450 56,120,157 641,723,839 (53,637,624) 588,086,215

7. RELATED PARTY TRANSACTIONS During the years, the Company and its subsidiaries had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Company and those related parties.

(Unit: Baht Million)

Consolidated financial statements 2008 2007

Transactions with subsidiary companies (eliminated from the consolidated financial statements)

Separate financial statements 2008 2007

Transfer pricing policy

Rental income

-

-

26.7

27.3

Interest income

-

1.2

-

1.0

Medical service income

-

-

12.6

14.7

Cost plus margin

Consulting fee income

-

0.4

-

15.5

As per contract 7.9, Actual charge

Lab service expense

-

-

7.8

4.5

Rental expense

-

-

88.8

86.0

As per contract 7.2

Interest expense

-

-

67.4

84.6

MLR less 1.00% p.a.

0.7

0.8

0.7

0.8

Computer software license fee income

-

1.9

-

-

As per contract 7.6

Management fee income

-

12.7

-

-

As per contract 7.7

16.2

13.0

16.2

13.0

437.9

-

437.9

418.4

Computer software maintenance expense -

18.7

-

56.2

As per contract 7.8

139.1

-

139.1

As per contracts 7.5

As per contracts 7.1 MLR p.a.

Cost plus margin

Transactions with associated companies Rental income

Consulting fee income Dividend income Purchase of computer software

-

As per contract 7.3, Actual paid

As per contract 7.9, Actual paid As declared

37

Annual Report 2008

6. TRADE ACCOUNTS RECEIVABLE The balances of trade accounts receivable as at 31 December 2008 and 2007, aged on the basis of due dates, are summarised below.

Bumrungrad Hospital Public Company Limited

(Unit: Baht Million)

Consolidated Separate financial statements financial statements

policy Transfer pricing

2008

2007

2008

2007

Transactions with jointly controlled entity (eliminated from the consolidated financial statements) - Consulting fee income

0.3

-

16.7

31.7

16.7

Rental income

-

1.0

-

Other income

1.4

2.3

1.4

Computer software

maintenance expense

-

56.2

-

56.2 As per contract 7.8

4.4

35.7

4.4

35.7 As per contract 7.4

15.5

7.8

15.5

7.8 -

0.7

5.3

0.7

5.3 As per contract

-

1.8

-

24.9

20.2

24.9

Purchase of land and building

470.0

-

470.0

System implementation income

-

2.2

-

- Cost

Transactions with related companies Medical service income

Rental expense Donation expense Consulting fee expense System implementation expense Insurance expense

31.7 Cost plus margin 1.0 As per contract 7.3 2.3 Cost

- As per contract 7.10 20.1 As per insurance policies - As per contract 7.4 - As per contract 7.10

7.1 A subsidiary (Bumrungrad Medical Center Ltd.) has leased a plot of land from the Company. The lease agreement covers a period of 30 years, commencing from the year 1996. The rental fee is Baht 22 million per annum.

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. The subsidiary has to pay rental fees equal to 5% of gross revenue inclusive of value added tax, but not less than Baht 238,200 per month.

7.2 The Company has leased hospital building from a subsidiary (Bumrungrad Medical Center Ltd.) for use in its hospital business. The rental fee is Baht 89 million per annum. The agreement will be expired on July 2010.

7.3 CDE Trading Limited had leased building spaces from the Company for use in its operations. The rental fee was Baht 1 million per annum, not including rental fees for room at BH Residence Tower. The agreement expired on 13 December 2007.

7.4 The Company had entered into an agreement to lease land and a building (BH Residence Tower) from Bangkok Bank Plc. for a period of 3 years, commencing from August 2000. The rental fee was 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. Subsequently, the bank approved renewal of agreement, commencing on 29 August 2005 to 28 February 2008. The rate of rental and other conditions were in accordance with the initial agreement.

Rental fees payable as at 31 December 2007, amounting to Baht 6.7 million, were shown in the consolidated and separate balance sheets under the caption of accounts payable - others.

On 18 February 2008, the Company entered into a purchase agreement to acquire the land and building (BH Residence Tower) from Bangkok Bank Plc. at a price of Baht 470.0 million. The purchase price does not exceed the appraisal value of an independent valuer.

7.5 In December 2007, the Company entered into a license agreement with CDE Trading Limited to purchase additional computer software, totaling Baht 130 million (exclusive of value added tax). The Company already paid for such software.

7.6 In February 2005, a former subsidiary (Bumrungrad International Ltd.) and Asian Hospital, Inc. (AHI) entered into a software site license agreement. AHI paid a license fee of Peso 52,676,342 in 2005. The license fee was recognised as income in accordance with the period as stipulated in the agreement.

7.7 In February 2005, a former subsidiary (Bumrungrad International Philippines Inc.) (BIPI) and Asian Hospital, Inc. (AHI) entered into a management service agreement under which AHI has to pay the former subsidiary a percentage of its total revenue and profit before interest expense, income tax, and depreciation and amortisation expenses.

38

(Unit: Baht)

Consolidated financial statements

2008

Amounts due from related parties Subsidiary Company

Vitallife Corporation Ltd. Joint venture Asia Renal Care (Thailand) Limited Associated companies Bumrungrad International Ltd. CDE Trading Limited Related party The Bumrungrad Hospital Foundation Total Amounts due from related parties Subsidiary Company Vitallife Corporation Ltd. Associated company CDE Trading Limited Total Short-term loan and interest receivable - a related party Subsidiary Company

Vitallife Corporation Ltd. Long-term loan and interest payable - a related party Subsidiary Company

Bumrungrad Medical Center Ltd.

Long-term loan Less: Current portion Non-current portion

Separate financial statements

2007

2008

2007

-

70,000

3,256,622 -

5,470,416 8,797,038

-

2,015,049 2,015,049

-

-

2,754,583 20,258

4,365,928 7,140,769

-

- -

-

70,000

3,256,622 -

5,470,416 8,797,038

1,667,977

2,015,049 3,683,026

84,446

-

2,754,583 20,258

4,365,928 7,225,215

-

- -

-

-

-

10,058,348

- - -

- - -

939,236,428 438,029,068 501,207,360

1,212,236,428 355,898,619 856,337,809

The short-term loan to Vitallife Corporation Ltd. carries interest at the rate of MLR per annum.

The long-term loan from Bumrungrad Medical Center Ltd. carries interest at the rate of MLR less 1% per annum.

39

Annual Report 2008

The management fee shall be paid in form of cash up to a certain amount, the excess of which will be paid in the form of AHI’s shares, up to a maximum of 10% of total issued and outstanding capital stock of AHI (fully diluted basis). The agreement covers a period of 5 years, expiring in the year 2010, and shall be renewed.

7.8 On 4 January 2007, the Company entered into an Agreement for Maintenance Services for Software Hospital 2005/DOT NET and Its Version 2 with CDE Trading Limited. The Company was obliged to pay such fee totaling Baht 70 million (exclusive of value added tax). The agreement expired on 31 December 2007.

7.9 On 2 June 2006, the Company entered into a Consulting Support Agreement with a former subsidiary (Bumrungrad International Ltd.). The former subsidiary is obliged to pay such fee totaling Baht 4.9 million per month starting from August 2006 to March 2007, and Baht 1.2 million per month starting from April 2007 onwards. The agreement will expire as per the agreement’s conditions.

7.10 In March 2007, a former subsidiary (Bumrungrad International Ltd.) entered into the provision of services under system

implementation agreement with CDE Trading Limited to provide computer system implementation service to the joint venture

(Bumrungrad Hospital Dubai, LLC (BHD)) for the use in its overseas hospital business. The former subsidiary was obliged to pay

such fee totaling USD 200,000. During the first quarter of 2007, the subsidiary recorded for such fee amounting to USD 50,000.

The former subsidiary had also entered into computer system implementation agreement with BHD, totaling USD 400,000.

The former subsidiary called for such fee during the first quarter of 2007 amounting to USD 125,000.

The balances of the accounts as at 31 December 2008 and 2007 between the Company and those related companies are as follows:

Bumrungrad Hospital Public Company Limited

During 2008, movements of loan to and loan from related parties were as follows: (Unit: Baht)

Balance as at 31 December

2007 Short-term loan and interest receivable - a related party Subsidiary Company

Vitallife Corporation Ltd. 10,000,000 Principal Interest receivable 58,348

10,058,348 Long-term loan and interest payable - a related party Subsidiary Company

Bumrungrad Medical Center Ltd.

Principal 1,212,236,428 Interest payable -

1,212,236,428

Balance as at During the year 31 December Increase Decrease 2008

- 28,233 28,233

(10,000,000) (86,581) (10,086,581)

- - -

- 67,381,727 67,381,727

(273,000,000) (67,381,727) (340,381,727)

939,236,428 - 939,236,428

Directors and management’s remuneration

In 2008 the Company and its subsidiaries paid salaries, bonuses, meeting allowances and gratuities to its directors and management totaling Baht 85.2 million (Separate financial statements: Baht 82.0 million) (2007: Baht 110.2 million, Separate financial statements: Baht 104.9 million).

8. INVENTORIES (Unit: Baht)

Consolidated financial statements 2008 2007 Medicine Medical supplies Other supplies Total

Separate financial statements 2008 2007

106,579,268 35,067,530 46,328,200

130,853,499 34,866,537 37,763,766

102,735,295 35,067,530 46,328,200

127,199,528 34,866,537 37,763,766

187,974,998

203,483,802

184,131,025

199,829,831

9. RESTRICTED BANK DEPOSITS These deposits at financial institutions have been pledged with banks to secure bank guarantees issued by banks on behalf of the Company and a subsidiary (Bumrungrad Medical Center Ltd.).

40

(Unit: Baht)

Company’s name

Shareholding percentage

Paid-up capital 2008

2007

2008 (%)

Bumrungrad Medical 958,953,608 958,953,608 Center Ltd. Vitallife Corporation Ltd. 31,500,000 31,500,000 Total

Allowance for impairment of investments

Cost

2007 (%)

2008

2007

2008

Carry amounts based on cost method - net

2007

2008

2007

100.00

100.00 1,691,902,972 1,691,902,972 545,000,000 545,000,000 1,146,902,972 1,146,902,972

100.00

100.00

25,610,000

25,610,000

-

-

25,610,000

25,610,000

1,717,512,972 1,717,512,972 545,000,000 545,000,000 1,172,512,972 1,172,512,972

11. INVESTMENT IN JOINT VENTURE 11.1 Details of investment in joint venture:

Investment in joint venture represents investment in an entity which is jointly controlled by the Company and another company.

Details of this investment is as follows:

(Unit: Baht)

Consolidated financial statements

Jointly controlled Nature of Carrying amount based on

entity business Cost equity method Shareholding percentage

2008 2007 2008 2007 2008 2007

(%) (%)

Asia Renal Care Investment in (Thailand) Limited other companies 51.00 - 6,119,970 - 6,119,970 -

(Unit: Baht)

Separate financial statements Jointly controlled Nature of Shareholding Allowance for impairment Carrying amount based on

entity business percentage Cost of investment cost method - net

2008 2007 2008 2007 2008 2007 2008 2007

(%) (%)

Asia Renal Care Investment in - 6,119,970 - - - 6,119,970 - (Thailand) Limited other companies 51.00

The Company’s management has deemed the investment in Asia Renal Care (Thailand) Limited (ARCT) to be an investment in a jointly controlled entity, held between the Company and Asia Renal Care (SEA) Pte Ltd. Although the Company has a 51% shareholding in ARCT, both joint venturers have entered into the Joint Venture Agreement dated 23 February 2009. The agreement stipulates joint control between the two parties through the board of directors of that jointly controlled entity, with each joint venturer having the same representation. In addition, neither joint venturer has control over the operations of the jointly controlled entity.

11.2 Share of loss and dividend received During the year, the Company recognised its share of net loss from investment in the joint venture in the consolidated financial statements and dividend income in the separate financial statements as follows: (Unit: Baht)

Jointly controlled entity Asia Renal Care (Thailand) Limited

Consolidated financial statements Share of loss from investment in joint venture during the years 2008 2007 34,706 -

Separate financial statements Dividend received during the years 2008 2007 - -

41

Annual Report 2008

10. INVESTMENTS IN SUBSIDIARIES Details of investments in subsidiaries as presented in separate financial statements are as follows:

Bumrungrad Hospital Public Company Limited

11.3 Summarised financial information of jointly controlled entity Financial information of the jointly controlled entity is summarised below.

(Unit: Baht Million)

Total revenues Net loss Jointly controlled Paid-up capital as Total assets as Total liabilities as at for the years ended for the years ended

entity at 31 December at 31 December 31 December at 31 December 31 December

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

12.0 - 12.0 - 0.1 - - - 0.1 - Asia Renal Care (Thailand) Limited

12. INVESTMENTS IN ASSOCIATED COMPANIES 12.1 Details of investments in associated companies: (Unit: Baht)

Consolidated financial statements

Country of Shareholding Carrying amounts based on Nature of Company’s name business incorporation percentage Cost equity method

2008 2007 2008 2007 2008 2007

(%) (%)

31.50 31.50 1,007,790,600 866,040,600 1,229,417,093 1,090,598,513 Holding Thailand Bumrungrad

company International Ltd. 30.00 30.00 21,662,713 21,662,713 (27,545,278) 432,008,740 CDE Trading Limited Development Thailand

of software

for hospital

business

1,029,453,313 887,703,313 1,201,871,815 1,522,607,253 Total

Add: Deferred gain on sales of computer software - net

33,059,209 -

1,234,931,024 1,522,607,253

Total

Deferred gain on sales of software is a gain from an associated company’s sale of computer software to the Company in year 2007, which had been eliminated against investment in the associated company. During the current year, the Company transferred the deferred gain to deduct against the relevant intangible asset (Note 15 to financial statements). The deferred gain is amortised over 10 years, which is the period for which the software is expected to generate economic benefit.

(Unit: Baht)

Company’s name

Bumrungrad International Ltd. CDE Trading Limited

Total

42

Shareholding percentage

Separate financial statements Allowance for impaiment Cost of inventments

2008 (%) 31.50

2007 (%) 31.50

2008

1,007,790,600

2007

866,040,600

30.00

30.00

21,662,713

2008

Carrying amounts based on cost method - net

2007

-

-

2008

1,007,790,600

2007

866,040,600

21,662,713

16,000,000

-

5,662,713

21,662,713

1,029,453,313

887,703,313

16,000,000

-

1,013,453,313

887,703,313

(Unit: Baht) Separate financial statements

Consolidated financial statements Share of income/(loss) from investments in associates during the years

Company’s name

2008

Asian Hospital Inc. Bumrungrad International Ltd. CDE Trading Limited Total

2007 -

Dividend received during the years 2008

8,042,866

2007 -

-

64,909,613

17,568,407

-

-

(21,627,018)

828,776,277

437,927,000

418,430,250

43,282,595

854,387,550

437,927,000

418,430,250

12.3 Summarised financial information of associated companies Financial information of the associated companies is summarised below.

Company’s name

Bumrungrad International Ltd. CDE Trading Limited

Paid-up capital as at 31 December 2008

(Unit: Baht Million) Net income (loss) Total revenues for the years Total assets as at Total liabilities as at for the years ended ended 31 December 31 December 31 December 31 December

2007 2008

3,199.30

2007 2008 2007 2008

2,749.30 7,066.30

10.0

10.0

19.0

2007 2008 2007

4,300.80

2,459.50

737.8

4,146.0

1,442.5

188.5

47.7

1,579.20

0.6

16.5

12.0

3,044.0

(79.4)

2,765.3

13. OTHER LONG-TERM INVESTMENTS (Unit: Baht)

Company’s name

Chantaburi Country Club Co., Ltd. Global Care Solutions S.A. Bumrungrad Dialysis Center Co., Ltd. Total Less: Allowance for impairment of investments Other long-term investments - net

Shareholding percentage 2008 (%) 0.5

Consolidated financial statements

2007 (%) 0.5

2008

4,500,000

2007

4,500,000

Separate financial statements 2008 2007

4,500,000 4,500,000

14.0

14.0

347,213

347,213

347,213

347,213

20.0

20.0

200,000

200,000

-

-

5,047,213

5,047,213

4,847,213

4,847,213

(2,800,000) 2,247,213

(2,800,000) 2,247,213

(2,800,000) 2,047,213

(2,800,000) 2,047,213

43

Annual Report 2008

12.2 Share of income/loss and dividend received During the year, the Company recognised its share of net income/loss from investments in associate companies in the consolidated financial statements and dividend income in the separate financial statements as follows:

44 (Unit: Baht)

588,389,482

Depreciation included in the income statements for the years 2007

2008

31 December 2008

2,390,826,330

20,002,017

364,112,033

1,209,730,650

374,796,375

197,857,425

7,064,068

220,952,579

420,077,536

329,446,751

5,373,730,959

Consolidated financial statements

Medical Equipment Assets under

Leasahold right Buildings and Facility accessory Hospital and Motor construction and

and land construction systems equipment equipment furniture vehicles Total

Land improvement installation Cost

31 December 2007 290,861,482 34,880,909 2,035,155,685 139,161,217 1,923,830,551 667,940,003 323,347,726 46,881,353 1,033,947,888 6,496,006,814 Purchase 297,528,000 - 222,229,114 23,169,698 235,255,524 153,634,318 32,570,595 740,000 714,114,973 1,679,242,222 Disposals - - (154,818) (111,597) (8,474,344) (5,877,297) (1,549,922) (3,826,969) - (19,994,947) Classified to computer

software - - - - - - - - (25,224,874) (25,224,874) Transfer - - 930,180,895 278,707,127 165,410,494 63,209,137 64,377,755 - (1,501,885,408) - 31 December 2008 588,389,482 34,880,909 3,187,410,876 440,926,445 2,316,022,225 878,906,161 418,746,154 43,794,384 220,952,579 8,130,029,215 Accumulated depreciation

31 December 2007 - 13,775,872 703,682,609 63,690,154 878,625,119 442,128,181 200,693,200 35,182,876 - 2,337,778,011 Depreciation for the year - 1,103,020 92,938,407 13,129,787 221,041,305 66,227,014 20,960,085 4,677,918 - 420,077,536 Depreciation on disposals - - (36,470) (5,529) (7,016,831) (4,245,409) (764,556) (3,130,478) - (15,199,273) 31 December 2008 - 14,878,892 796,584,546 76,814,412 1,092,649,593 504,109,786 220,888,729 36,730,316 - 2,742,656,274 Allowance for impairment loss

31 December 2007 - - - - 13,641,982 - - - - 13,641,982 31 December 2008 - - - - 13,641,982 - - - - 13,641,982 Net book value

31 December 2007 290,861,482 21,105,037 1,331,473,076 75,471,063 1,031,563,450 225,811,822 122,654,526 11,698,477 1,033,947,888 4,144,586,821

14. PROPERTY, PLANT AND EQUIPMENT

Bumrungrad Hospital Public Company Limited

45

Land

430,295,038 222,229,114 (154,818)

- 930,180,895 1,582,550,229

96,702,369 38,206,317 (36,470) 134,872,216

- -

333,592,669 1,447,678,013

114,434,984 23,169,698 (111,597)

- 278,707,127 416,200,212

31,737,662 12,998,872 (5,529) 44,731,005

- -

82,697,322 371,469,207

Leasehold right Facility and land Buildings and improvement construction systems

Cost 290,861,482 15,563,340 31 December 2007 Purchase 297,528,000 - Disposals - - Classified to computer

software - - Transfer - - 31 December 2008 588,389,482 15,563,340 Accumulated depreciation

31 December 2007 - 7,771,442 Depreciation for the year - 459,101 Depreciation on disposals - - 31 December 2008 - 8,230,543 Allowance for impairment loss

31 December 2007 - - 31 December 2008 - - Net book value

31 December 2007 290,861,482 7,791,898 31 December 2008 588,389,482 7,332,797 Depreciation included in the income statements for the years 2007

2008

1,482,850,092 235,255,524 (8,474,344)

- 165,410,493 1,875,041,765

415,587,520 223,175,724 (7,016,831) 631,746,413

13,641,982 13,641,982

1,053,620,590 1,229,653,370

Medical accessory equipment

430,756,915 153,248,178 (5,877,297)

- 63,209,138 641,336,934

215,762,319 64,354,777 (4,245,409) 275,871,687

- -

214,994,596 365,465,247

Hospital equipment

Separate financial statements

203,766,655 32,421,197 (1,549,922)

- 64,377,755 299,015,685

104,536,972 20,401,147 (764,556) 124,173,563

- -

99,229,683 174,842,122

Equipment and furniture

Total

Annual Report 2008

24,445,596 1,033,902,946 4,026,877,048 740,000 714,114,972 1,678,706,683 (3,826,969) - (19,994,947)

- (25,224,874) (25,224,874) - (1,501,885,408) - 21,358,627 220,907,636 5,660,363,910

12,747,127 - 884,845,411 4,677,918 - 364,273,856 (3,130,478) - (15,199,273) 14,294,567 - 1,233,919,994

- - 13,641,982 - - 13,641,982

11,698,469 1,033,902,946 3,128,389,655 7,064,060 220,907,636 4,412,801,934

273,984,520

364,273,856

Motor vehicles

Assets under construction and installation

(Unit: Baht)

Bumrungrad Hospital Public Company Limited

The Company has mortgaged all of the land with a book value of Baht 290.9 million (Baht 567.7 million appraisal fair value as of 25 November 2008) with a commercial bank, acting as bondholders’ trustee, as collateral for the convertible bonds treated as equity securities as described in Note 18 to the financial statements.

The Company and the subsidiary (Bumrungrad Medical Center Ltd.) have mortgaged their buildings and pledged medical instruments and hospital equipment, with a total net book value as at 31 December 2008 of Baht 1,751 million (Separate financial statements: Baht 792 million) (2007: Baht 1,193 million (Separate financial statements: Baht 179 million)), as collaterals for long- term loan credit facilities granted by a local commercial bank as described in Note 17 to the financial statements.

As at 31 December 2008, certain equipment items have been fully depreciated but are still in use. The original cost of those assets amounted to approximately Baht 200 million (Separate financial statements: Baht 198 million) (2007: Baht 204 million (Separate financial statements: Baht 202 million)).

15. INTANGIBLE ASSETS Details of intangible assets are as follows:

(Unit: Baht)

Consolidated financial statements Separate financial statements

Compensation Other

intangible Computer for business Computer combination Total asset Total software

software

Cost

911,969,429 - 911,969,429 911,969,429 192,927,561 1,104,896,990 31 December 2007 8,594,279 - 8,594,279 8,594,279 - 8,594,279 Additions Classified from property, plant

25,224,874 - 25,224,874 25,224,874 - 25,224,874 and equipment Classified to other current assets (288,000) - (288,000) (288,000) - (288,000)

- (36,732,454) - - - Deferred gain on sales of software (36,732,454) 908,768,128 - 908,768,128 945,500,582 192,927,561 1,138,428,143 31 December 2008 Accumulated amortisation

192,558,818 - 192,558,818 192,558,818 65,916,917 258,475,735 31 December 2007 Amortisation during the year 39,285,838 - 39,285,838 39,285,838 - 39,285,838

Realised gain on sales of software during the year (3,673,245) - (3,673,245) - - - 31 December 2008 228,171,411 - 228,171,411 231,844,656 65,916,917 297,761,573

46

Annual Report 2008

Consolidated financial statements

Other

Computer intangible

software asset Total

Allowance for loss on impairment 370,232,632 - 370,232,632 31 December 2007 Increase during the year - - - 31 December 2008 370,232,632 - 370,232,632

Net book value 349,177,979 - 349,177,979 31 December 2007 31 December 2008 310,364,085 - 310,364,085 Amortisation included in the income

statements for the years 77,530,241 657,566 78,187,807 2007 2008 39,285,838 - 39,285,838

(Unit: Baht) Separate financial statements Compensation Computer for business software combination Total

370,232,632

-

370,232,632

-

127,010,644

127,010,644

370,232,632

127,010,644

497,243,276

349,177,979

127,010,644

476,188,623

343,423,294

-

343,423,294

76,498,711

19,292,757

95,791,468

39,285,838

-

39,285,838

16. SHORT-TERM LOAN FROM FINANCIAL INSTITUTION As at 31 December 2008, the Company has short-term loan from bank amounting to Baht 200 million which is promissory note and due within 1 month bearing interest at the rate of 4% per annum.

17. LONG-TERM LOANS

(Unit: Baht)

Consolidated Separate

financial statements financial statements Repayment Interest rate

Tranche (%) schedule 2008 2007 2008 2007

766,550,871 1,122,449,491 - -

A Average MLR-1.25 24 quarterly installments,

commencing

30 December 2004

568,750,000 650,000,000 568,750,000 650,000,000 B2 Average MLR-1.25 32 quarterly installments,

commencing

31 March 2008

C Average MLR-1.25 32 quarterly 350,000,000 - 350,000,000 -

installments, commencing

31 March 2008

1,685,300,871 1,772,449,491 918,750,000 650,000,000 Total Less: Current portion

(569,279,069) (437,148,619) (131,250,000) (81,250,000) Non-current portion 1,116,021,802 1,335,300,872 787,500,000 568,750,000

47

Bumrungrad Hospital Public Company Limited

Movements in long-term loan account during the year 2008 are summarised below.

(Unit: Baht)

Consolidated Separate financial statements financial statements

1,772,449,491 650,000,000

Balance as at 1 January 2008 Add : Additional loan 400,000,000 400,000,000

Less: Repayment (487,148,620) (131,250,000)

Balance as at 31 December 2008 1,685,300,871 918,750,000

On 18 February 2008, the Company has drawn down Baht 400 million from tranche C of the long-term loan, to use in the purchase of the land and BH Residence Tower.

The loans are secured by mortgaged land and buildings and pledged medical instruments and hospital equipment (as described in Note 14 to the financial statements).

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.

As at 31 December 2008, outstanding long-term credit facilities of the Company and its subsidiaries which have yet to be drawn down total Baht 320 million as follows:

Interest rate Outstanding

Tranche Facility objective credit facilities (%)

(Baht Million)

300 D MMR For working capital and drawdown within

31 December 2015

20 E MOR For working capital and drawdown within

31 December 2015

Total

320

On 12 February 2008, the Company and the subsidiary entered into Third Amendment Dated 12 February 2008 to Baht 2,400,000,000 Facility Agreement Dated 12 September 2002 as amended and restated on 28 July 2004 and 25 May 2006 with the bank creditor to change the interest rate of long-term loan (Tranche D) of Baht 300 million credit facility from average MLR less 1.25% per annum to MMR per annum.

18. CONVERTIBLE BONDS Convertible bonds as at 31 December 2008 and 2007 are as follows: a) 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. 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. b) Partly secured convertible bonds in an amount of Baht 250 million (after conversion by the bondholder of Baht 750 million in the year 2003); 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. 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 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 expresses their intention to convert these bonds into ordinary shares on the maturity date. Therefore, the whole amounts 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.

48

49

Annual Report 2008

The Company has reserved 178,571,433 ordinary shares to accommodate the above convertible bonds.

Interest expense for the year 2008 of the convertible bonds amounted to Baht 22.8 million (2007: Baht 17.5 million), being recorded as a reduction to retained earnings.

19. 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 2008, 66,700 preference shares (2007: 377,400 shares) were converted into ordinary shares at ratio of one preference share to one ordinary share. The Company registered this conversion with the Ministry of Commerce on 14 March 2008.

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

As at 31 December 2008 and 2007, the statutory reserve reaches 10% of the Company’s registered capital.

21. EXPENSES BY NATURE Significant expenses by nature are as follows:

(Unit: Baht)

Consolidated Separate

financial statements financial statements

2008 2007 2008 2007

Salary and wages and other employee benefits 1,361,170,035 1,227,440,524 1,344,066,133 1,215,116,113 Physicians fee 2,178,574,817 2,108,618,830 2,167,439,355 2,096,816,088

Loss on impairment of

- 370,232,632 - 370,232,632 - computer software - - 127,010,644 - - compensation for business combination - investment in an associate - - 16,000,000 -

41,216,112 41,240,782 41,216,112 41,240,782 Equipment rental expenses Land and building rental expenses 44,431,162 74,818,122 133,231,163 160,818,122 Building and equipment maintenance

137,129,748 179,106,892 136,865,609 178,893,348 expenses 133,267,307 109,411,419 131,728,809 109,212,604 Advertising and public relations expenses

Medical supplies and other supplies consumptions 1,971,297,317 1,950,344,834 1,956,953,822 1,931,522,290

22. CORPORATE INCOME TAX The Company’s and subsidiaries’ corporate income tax for the years 2008 and 2007 has been calculated at the rate of 30% of net taxable income.

23. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the net income for the year by the weighted average number of ordinary shares in issue during the year.

Diluted earnings per share is calculated by dividing the net income for the year by the sum of the weighted average number of ordinary shares in issue during the year and the weighted average number of ordinary shares which would need to be issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes that the conversion took place either at the beginning of the year or on the date the potential ordinary shares were issued.

Bumrungrad Hospital Public Company Limited

The following table sets forth the computation of basic and diluted earnings per share:

Consolidated financial statements

Weighted average Earnings

Net income number of ordinary shares per share

2008 2007 2008 2007 2008 2007

(shares) (Baht) (Baht) (Baht) (Baht) (shares)

Basic earnings per share

Net income attributable to equity 1,191,046,610 1,605,462,201 728,256,168 728,119,020 1.64 2.20 holders of the parent

Effect of dilutive potential ordinary shares - - 1,796,054 1,933,202

Preference shares Convertible bonds - - 137,362,637 137,362,637

Diluted earnings per share

Net income of ordinary shareholders

assuming the conversion of dilutive 1,191,046,610 1,605,462,201 867,414,859 867,414,859 1.37 1.85 potential ordinary shares

Separate financial statements

Weighted average

Net income

number of ordinary shares

2008 2007 2008 2007

(Baht) (Baht) (shares) (Shares) Basic earnings per share

1,414,775,739 1,128,896,667 728,256,168 728,119,020 Net income attributable to equity holders of the parent

Effect of dilutive potential ordinary shares Preference shares - - 1,796,054 1,933,202 Convertible bonds - - 137,362,637 137,362,637

Diluted earnings per share

Net income of ordinary shareholders

assuming the conversion of dilutive potential ordinary shares 1,414,775,739 1,128,896,667 867,414,859 867,414,859

Earnings per share 2008 2007 (Baht) (Baht)

1.94

1.55

1.63

1.30

24. SEGMENT INFORMATION The Company’s and its subsidiaries’ business operations involve a single industry segment, the hospital and health care center, and are carried on in the single geographic area in Thailand. As a result, all of the revenues, operating income and assets reflected in these financial statements pertain to the aforementioned industry segment and geographic area.

25. PROVIDENT FUND The Company, its subsidiaries and its employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. Employees contributed to the fund monthly at the rate of 5% of their basic salaries and the Company or subsidiaries contributed 5% - 7% of basic salary. The fund, which is managed by Finansa Asset Management Limited, will be paid to employees upon termination in accordance with the fund rules. During the year 2008, the Company and subsidiaries contributed Baht 34.4 million (2007: Baht 28.1 million) to the fund.

50

Total for 2007

(Unit: Baht)

Total Dividend Approved by dividends per share 292,011,489 0.40 Annual General Meeting of the shareholders on 23 April 2008

Board of Directors’ meeting on 6 August 2008

Annual General Meeting of the shareholders on 25 April 2007 Board of Directors’ meeting on 8 August 2007

292,012,849

0.40

584,024,338

0.80

328,523,500

0.45

292,020,889

0.40

620,544,389

0.85

27. COMMITMENTS AND CONTINGENT LIABILITIES 27.1 Capital commitments As at 31 December 2008, the Company has capital commitments to pay a total of Baht 70.3 million (2007: Baht 237.1 million) in relation to the construction agreement of building and Baht 66.6 million (2007: Baht 171.3 million) in respect of purchase of medical instrument and hospital equipment.

27.2 Operating lease and long-term service commitments The Company has entered into several lease agreements in respect of the lease of lands, buildings, vehicles and equipment and long-term service agreements. The terms of the agreements are generally between 2 and 5 years and are non-cancellable.

As at 31 December 2008, future minimum payments required under these non-cancellable operating lease agreements and long-term service agreemnts were as follows.

(Unit: Baht Million)

Payable within Less than More than Details of commitments 1 year 1 to 5 years 5 years Total

0.3 0.7 - 1.0 1) Fee to a bank which is bondholders’ representative 2) Land rental expense for construction of nursing dormitory (shall be extended for a further period of 20 years) 33.3 7.6 50.8 91.7

3) Lease of medical instrument 20.0 - - 20.0 4) Lease of land and building for operating service apartment 25.6 6.4 - 32.0

(shall be extended for a further period of 2 years) 5) Lease of building for nursing dormitory and related services 15.0 14.9 - 29.9

(shall be renewed automatically)

46.0 154.9 - 200.9 6) Maintenance service fee for medical instrument 7) Rental and maintenance service fee for cars 11.2 12.7 - 23.9

51

Annual Report 2008

26. DIVIDENDS

Dividends Final dividends of 2007 income

Interim dividends on operating results for the six-month period ended 30 June 2008 Total for 2008

Final dividends of 2006 income

Interim dividends on operating results for the six-month period ended 30 June 2007

Bumrungrad Hospital Public Company Limited

27.3 Commitments from other contracts During the current year, the Company entered into three equipment utilisation contracts with three local companies.

The contracts cover periods of 5 - 7 years and under the conditions of the contracts, the Company is required to purchase medical supplies to use with the medical equipment at the prices specified in the contracts in total throughout the period of those contracts. As at 31 December 2008, there was a minimum amount of Baht 437.2 million which the Company required to purchase according to the contracts.

27.4 Bank guarantees As at 31 December 2008, there were outstanding bank guarantees of Baht 10.9 million (2007: Baht 5.9 million) issued by a bank on behalf of the Company, and of Baht 8.4 million (2007: Baht 8.4 million) issued on behalf of a subsidiary. All were required in the normal course of business e.g. payment of utility expenses and space rental.

28. FINANCIAL INSTRUMENTS 28.1 Financial risk management The Company’s and subsidiaries’ financial instruments, as defined under Thai Accounting Standard No. 48 “Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, trade accounts receivable and payable, investments, short-term and long-term loans. The financial risks associated with these financial instruments and how they are managed is described below.

Credit risk The Company and subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable, loans and other receivables. The Company and subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore do not expect to incur material financial losses. In addition, the Company and subsidiaries have a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of receivables, loans and other receivables as stated in the balance sheet.

Interest rate risk The Company’s and its subsidiaries’ exposures to interest rate risk relate primarily to their cash at banks and long-term borrowings. However, since most of the Company’s and its subsidiaries’ financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the current market rate, the interest rate risk is expected to be minimal.

Significant financial assets and liabilities as at 31 December 2008 classified by type of interest rates are summarised in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date, or the repricing date if this occurs before the maturity date.

Consolidated financial statements

Fixed interest Floating Non- Interest interest interest rates

bearing Total rate rate (Within 1 year)

(Million Baht) (% p.a.)

Financial assets

Cash and cash equivalents - 255 130 385 0.13 - 0.75

- - 494 494 - Trade accounts receivable - net - - 9 9 - Amounts due from related parties Restricted bank deposits 17 - - 17 1.50 - 2.25

17 255 633 905

Financial liabilities

Short-term loan from financial 200 - - 200 4.00 institution Trade accounts payable - - 504 504 - Long-term loans - 1,685 - 1,685 MLR-1.25

200 1,685 504 2,389

52

200

1,858

507

2,565

Foreign currency risk The Company’s and its subsidiaries’ exposures to foreign currency risk arise mainly from purchase of medical accessory and medical equipment and payments for service fee that are denominated in foreign currencies.

There was no balance of financial assets and liabilities denominated in foreign currencies as at 31 December 2008.

28.2 Fair values of financial instruments Since the majority of the Company’s and its subsidiaries’ financial instruments are short-term in nature and loans and borrowings bear floating interest rates, their fair value is not expected to be materially different from the amounts presented in the balance sheets.

A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument.

29. CAPITAL MANAGEMENT The primary objective of the Company and its subsidiaries’ capital management is to ensure that it has an appropriate financial structure and preserves the ability to continue its business as a going concern.

According to the balance sheet as at 31 December 2008, the Group’s debt-to-equity ratio was 0.67:1 (2007: 0.72:1) and the Company’s was 0.73:1 (2007: 0.83:1)

30. SUBSEQUENT EVENTS On 25 February 2009, a meeting of the Company’s Board of Directors passed a resolution to propose to the Annual General Meeting of shareholders to be held in April 2009 to adopt a resolution to pay a dividend of Baht 0.40 per share, or a total of Baht 292.0 Million, to the shareholders in respect of the 2008 income. Such dividend will be paid and recorded after it is approved by the Annual General Meeting of the Company’s shareholders.

53

Annual Report 2008

Separate financial statements

Floating Non- Fixed interest interest interest Interest rates

rate bearing Total rate (Within 1 year)

(Million Baht) (% p.a.)

Financial assets

Cash and cash equivalents - 221 130 351 0.13 - 0.75

- - 492 492 - Trade accounts receivable - net - - 9 9 - Amounts due from related parties Restricted bank deposits 9 - - 9 1.50 2.25

9 221 631 861

Financial liabilities

loan from financial

Short-term institution 200 - - 200 4.00

Trade accounts payable - - 503 503 - Amounts due to a related party - - 4 4 - Long-term loan and interest

payable - a related party - 939 - 939 MLR-1.00

- 919 - 919 MLR-1.25 Long-term loans

Bumrungrad Hospital Public Company Limited

31. RECLASSIFICATION Certain amounts in the financial statements for the year ended 31 December 2007 have been reclassified to conform to the current year’s classification but with no effect to previously reported net income or shareholders’ equity. The reclassifications are as follows:

(Unit: Baht)

Consolidated financial statements Separate financial statements

As previously As previously As reclassified reported As reclassified reported

Trade accounts receivable – net 590,306,691 596,667,691 588,086,215 594,447,215 Trade accounts payable 501,349,205 621,648,668 499,321,764 619,621,227

and medical

Construction equipment payable 120,299,463 - 120,299,463 -

148,689,856 155,050,856 147,909,167 154,270,167 Accrued expenses Unearned income - 524,531 - - Other current liabilities 41,057,085 40,532,554 40,259,870 40,259,870

portion of long-term loan

Current and interest payable - a related party - - 355,898,619 1,212,236,428

Long-term loan and interest

payable a related party - - 856,337,809 -

Cost of hospital operations 5,119,724,624 5,120,231,716 5,089,520,686 5,090,027,778

Administrative expenses

1,356,383,467

1,355,876,375

1,409,801,151

1,409,294,059

32. APPROVAL OF FINANCIAL STATEMENTS These financial statements were authorised for issue by the Company’s Board of Directors on 25 February 2009.

54

55 Annual Report 2008

Other Information

56

Bumrungrad Hospital Public Company Limited

Annual Report 2008

1. GENERAL INFORMATION 1.1 Company Information

Name : Bumrungrad Hospital Public Company Limited (“the Company”) Type of Business : Private hospital Head Office Address : 33 Sukhumvit Soi 3 (Nana Nua) Sukhumvit Road

Klong Toey Nua, Wattana, Bangkok 10110 Registration No. : Public Company Limited 173 Home page : http://www.bumrungrad.com E-mail address : ir@bumrungrad.com Telephone : 0 2667 1000 Fax : 0 2667 2525 Registered Capital : Baht 922,702,685

Divided into Ordinary shares of 920,919,935 shares, par value at Baht 1 per share Preferred shares of 1,782,750 shares, par value at Baht 1 per share Issued and Paid up Capital Baht 730,052,222

Divided into Ordinary shares of 728,269,472 shares, par value at Baht 1 per share Preferred shares of 1,782,750 shares, par value at Baht 1 per share

1.2 Entities in which the Company has more than 10% shareholding Company

Type of Business

Issued and paid up ordinary shares 119,869,201 shares

Shareholding (%)

Bumrungrad Medical Center Limited 33/3 Sukhumvit Soi 3 (Nana Nua) Sukhumvit Road, Klong Toey Nua, Wattana, Bangkok 10110 Phone 0 2667 1000, Fax 0 2667 2525 Vitallife Corporation Limited 210 Sukhumvit Soi 1, Sukhumvit Road, Klong Toey Nua, Wattana, Bangkok 10110 Phone 0 2667 2340, Fax 0 2667 2341 Asia Renal Care (Thailand) Company Limited 33 Sukhumvit Soi 3 (Nana Nua) Sukhumvit Road, Klong Toey Nua, Wattana, Bangkok 10110 Phone 0 2667 1000, Fax 0 2667 2525 Bumrungrad International Limited 33 Sukhumvit Soi 3 (Nana Nua) Sukhumvit Road, Klong Toey Nua, Wattana, Bangkok 10110 Phone 0 2667 1000, Fax 0 2667 2525 CDE Trading Company Limited 33/3 Sukhumvit Soi 3 (Nana Nua) Sukhumvit Road, Klong Toey Nua, Wattana, Bangkok 10110 Phone 0 2667 1000, Fax 0 2667 2525 Global Care Solutions S.A. 9 Rue Schiller, L-2519 Luxembourg Phone 41 (76) 565 1533, Fax 41 (44) 496 6319

Property Lease

Wellness Center

315,000 shares

100.0%

Investment in Dialysis Business

1,200,000 shares

51.0%

International Investment

31,993,367 shares

31.5%

In the process of studying new business opportunities

100,000 shares

30.0%

Dormant Company

31,426 shares

14.0%

100.0%

57

Bumrungrad Hospital Public Company Limited

1.3 Reference Persons 1. Auditor

2. Legal Consultant 3. Share Registrar

4. Convertible Bonds Registrar

5. Bondholders’ Representative

Ernst & Young Office Limited 33rd Floor, Lake Rajada Office Complex, 193/136-137 New Rajadapisek Road, Bangkok 10110 Phone 0 2264 0777, Fax 0 2264 0789-90 Thai Consultant Limited 63 Soi 8 (Soi Preeda), Sukhumvit Road, Bangkok 10110 Phone 0 2255 2552, Fax 0 2653 1133 Thailand Securities Depository Co., Ltd. 62 The Stock Exchange of Thailand Building, 4th and 6th-7th Floor, Rachadapisek Road, Bangkok 10110 Phone 0 2229 2888, Fax 0 2359 1259 Bumrungrad Hospital Public Company Limited 33 Sukhumvit Soi 3 (Nana Nua), Sukhumvit Road, Klong Toey Nua, Wattana, Bangkok 10110 Phone 0 2667 2025, Fax 0 2667 2031 Thai Military Bank Public Company Limited 3000 Paholyothin Road, Jatujak, Bangkok 10900 Phone 0 2299 1111, 0 2617 9111, Fax 02 299 1784

2. FINANCIAL HIGHLIGHTS 2.1 Financial Summary (Page 15) 2.2 Financial Ratios (Page 15)

3. COMPANY PROFILE 3.1 Executive Summary Bumrungrad Hospital Public Company Limited (“the Company”) operates a private hospital business in Bangkok with a licensed capacity of 554 beds and 4,500 outpatients per day. The Company is one of the leading healthcare providers in Thailand and in the Southeast Asian region, providing complete healthcare services for both outpatients and inpatients.

The Company has always emphasized the importance of quality healthcare and experienced physicians and staff.

Bumrungrad International Hospital, Bangkok is the first hospital in Asia to receive the US standard accreditation from the Joint Commission on International Accreditation (JCIA).

The Company is expanding and upgrading its flagship Bangkok facilities over the next five years to accommodate the increasing demand for private healthcare. The expansion will ultimately increase the Company’s ability to service patients to 650 beds and 6,000 outpatients per day, almost doubling its current earning capacity. In addition, the Company is looking to expand its operations overseas through its 31.5% associated company, Bumrungrad International Limited.

Bumrungrad International Limited is aggressively looking for additional healthcare opportunities in the region.

The Company has two 100%-owned subsidiaries, including Bumrungrad Medical Center Limited and Vitallife Corporation Limited, one 51%-owned subsidiary, Asia Renal Care (Thailand) Company Limited, two associated companies, including a 31.5% stake in Bumrungrad International Limited and a 30% stake in CDE Trading Company Limited (previously Global Care Solutions (Thailand) Company Limited), and one related company, which is a 14% investment in Global Care Solutions S.A. in Luxemburg. The corporate structure of the Company is as follows:

58

59

Annual Report 2008

Bumrungrad Hospital

Public Company Limited

(“BH”)

100.0% 31.5% 100.0% 30.0%

Bumrungrad Medical Bumrungrad Vitallife Corporation Ltd. “CDE Trading” Co., Ltd.** Center Ltd.

International Ltd.* (“Vitallife”) (“CDE Trading”) (“BMC”)

International business Comprehensive wellness center In the process of studying Owns main hospital building specializing in preventive care new business opportunities

Management ** Name change from Global Care Solutions Contract (Thailand) Co., Ltd.

49.0% 54.4% 100.0%

Hospital Inc. Asian Bumrungrad Asia Renal Care Ltd. Bumrungrad (“AHI”) Hospital Dubai (“ARC”) AI Mafraq Hospital

49.0% 51.0%

* The strategic partners of Bumrungrad International Limited are:

Asia Renal Care - Istithmar 19.5%

(Thailand) Co., Ltd. - Temasek 19.5%

(“ARC Thailand”) - Asia Financial Holdings 19.5% Note: As of Dec 2008 - Bangkok Bank 10.0%

Details of subsidiaries. affiliated companies and related companies are as follows: 1. Bumrungrad Medical Center Limited (“BMC”) is the owner of the existing Bumrungrad International Hospital Building, which is leased to the Company.

2. Vitallife Corporation Limited (“Vitallife”) is a pioneer in wellness and anti-aging which 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 customized exercise programs, nutrition plans, and food and vitamin supplements for healthy living.

3. Bumrungrad International Limited is the Company’s international investment arm. Bumrungrad International Limited currently has 85 hospital and clinic locations in 7 countries outside of Thailand. Bumrungrad International Limited’s strategic partners are Istithmar, an investment arm of the United Arab Emirates government, Temasek of Singapore, Asia Financial Holdings in Hong Kong and Bangkok Bank Public Company Limited. These strategic partners are internationally well known with a strong presence in their respective regions, thereby providing important sources of new investment opportunities and referral networks especially in the Middle East and Asia.

4. Asia Renal Care (Thailand) Company Limited (“ARC Thailand”) is a joint-venture between the Company and Asia Renal Care (SEA) Limited. ARC Thailand has entered into an agreement to acquire a 20% stake in Nephromed Company Limited, a dialysis service provider with 14 dialysis clinics in Thailand.

5. CDE Trading Company Limited (previously Global Care Solutions (Thailand) Company Limited) was a software development company for healthcare business. In December 2007, Global Care Solutions (Thailand) Company Limited completed the sale of its core asset, which was the hospital software, and other assets to Microsoft Corporation and Microsoft (Thailand) Co., Ltd. It also changed its name from Global Care Solutions (Thailand) Company Limited to CDE Trading Company Limited and is in the process of studying new investment opportunities.

6. Global Care Solutions S.A. (“GCS Luxemburg”) is currently a dormant company.

Bumrungrad Hospital Public Company Limited

3.2 Revenue Structure Unit: Baht Million 2008 2007 2006 Product line /

% Business

Shareholding Group Operated by

by Company Revenue % Revenue % Revenue %

8,540 95.7 8,227 87.4 7,572 95.9 Healthcare Bumrungrad Hospital Pcl. 100.0 89 1.0 97 1.0 78 1.0 Healthcare Vitallife Corporation Ltd.

8,629 96.7 8,324 88.4 7,650 96.9 Total Healthcare 31.5* - - 17 0.2 57 0.7 Hospital Bumrungrad International Ltd. Management

- - 17 0.2 57 0.7 Total Hospital Management

128 1.4 132 1.4 118 1.5 Rental Bumrungrad Hospital Pcl.

128 1.4 132 1.4 118 1.5 Total Rental 167 1.9 925 9.9 57 0.7 Others Bumrungrad Hospital Pcl.** 100.0 1 - 2 - 1 - Others Bumrungrad Medical Center Ltd. 31.5 - - 13 0.1 12 0.2 Others Bumrungrad International Ltd.

168 1.9 940 10.0 70 0.9 Total Others

8,925 100.0 9,413 100.0 7,895 100.0

Total

*

**

Bumrungrad International Limited changed its status from a subsidiary to an associated company in April 2007. Therefore, the revenue from hospital management of Baht 17 million in 2007 was only the 1Q07 revenue as Bumrungrad International Limited’s accounts were no longer consolidated into the Company’s from 2Q07 onwards.

In 2007, Bumrungrad Hospital Pcl. reported other revenues of Baht 925 million, of which Baht 829 million was the share of profit from investments in CDE Trading Co., Ltd. (Previously Global Care Solutions (Thailand) Co., Ltd.), a one-time non-operating gain from the sale of assets in CDE Trading, netted off with CDE Trading’s operations.

3.3 Business Characteristics and Competition Bumrungrad Hospital Public Company Limited (“the Company”) The Company is the operator of Bumrungrad International Hospital, Bangkok, which is the main revenue contributor. As at 31 December 2008, the Company’s revenue from hospital operations is 95.7% of total revenues.

The Hospital’s Services: The services of Bumrungrad International Hospital, Bangkok can be detailed as follows: 1. Outpatient service has 33 outpatient clinics with over 200 examination rooms, and capacity to service 4,500 patients per day.

2. Inpatient service has 554 beds, of which 26 are adult intensive care beds, 14 are cardiac care beds, 9 are pediatric intensive care beds and 5 are level III neonatal intensive care beds. As at 31 December 2008, the hospital has 432 beds in operation.

3. Emergency care and special facilities: The Company has 24-hour emergency care including emergency cardiac catheterization. In addition, the Company has 19 operating theaters fully equipped with modern medical equipment, 2 cardiac catheterization laboratories and 2 cardiac operating theaters. The facility is fully equipped with PET/CT, MRI, CT, lithotripsy and 64-slice CT scanners. For patient safety and operations efficiency, the hospital has invested in lab automation and pharmacy robot. It also offers surgical navigation systems.

60

% of Revenue

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Annual Report 2008

In 2008, the Company treated a total of over one million patients. The revenue contribution by inpatient and outpatient in 2008 is as follows:

Inpatient and outpatient (% of total revenue) Inpatient

49%

Outpatient

51%

Data as at 31 December 2008

International Patient Services: The Company has a strong and successful track record in increasing its presence in the international market. It has an International Patient Services Center to facilitate and accommodate international patients. The services offered include interpreters, international insurance coordination and international medical coordinators, referral center, email correspondence, visa extension counter, embassy assistance, airport reception and travel assistance. In addition, the Company operates two serviced apartments: Bumrungrad Hospital Residence (BH Tower) with 74 fully serviced apartments connected to the hospital and Bumrungrad Hospitality Suites with 51 fully serviced apartments for patients and families. The Company also has 22 overseas representative offices in 20 countries.

In 2008, Bumrungrad International Hospital, Bangkok treated approximately 420,000 international patients from over 190 countries. The top three highest revenue contributors by country continue to be United Arab Emirates, the United States and Oman. The following graph shows the historical revenue contribution of international patients over the past five years.

Thais vs. International Patients (% of total revenue)

100%

80%

47% 46% 45% 46% 51%

60%

40%

53% 54% 55% 54% 49%

20%

0%

2004 2005 2006 2007 2008

International Thais

* Note: International patients are by nationality and include both expatriates and medical tourists.

The Bangkok Facility: At present, the hospital’s services are offered in two buildings: 1. The new Bumrungrad International Clinic Building is a new 22-storey outpatient facility, with the first 10 floors being used as parking spaces and the top 12 floors as outpatient clinics and ancillary services. The building offers outpatient services only. Currently, five clinic floors are opened for service, including health screening (check-up), heart, medical/surgical clinics, infectious disease, kidney, neurology, pulmonology, rheumatology, urology, and men’s center.

2. The existing Bumrungrad International Hospital Building offers a combination of inpatient and outpatient services. All 554 inpatient beds are in the existing Bumrungrad International Hospital Building, while outpatient services offered in this building include services such as the cancer center, dental, digestive disease, children’s and women’s centers.

Bumrungrad Hospital Public Company Limited

To accommodate patient volume growth, the Company is continuing to expand and upgrade its Bangkok facility over the next five years. In the next two years, both the outpatient clinics and inpatient rooms in the existing Bumrungrad International Hospital Building will be going through major renovations and upgrades to better accommodate patient safety and the needs of patients, doctors and nurses. Capacity expansions, on the other hand, will be through the new Bumrungrad International Clinic Building and BH Tower.

BH Tower, which is currently used as serviced apartments, will be converted into inpatient beds as the beds in the existing Bumrungrad International Hospital Building begin to fill. The Bumrungrad International Clinic Building has five floors of outpatient clinics remaining unopened. The Company plans to gradually occupy both the five remaining outpatient clinic floors of the Bumrungrad International Clinic Building and inpatient beds of BH Tower floor-by-floor as the additional capacity is needed. It is expected to take over five years before the buildings are fully occupied, which will ultimately increase capacity to 650 beds and 6,000 outpatients per day, and make Bumrungrad International Hospital, Bangkok one of the largest private outpatient clinics in the world.

Bumrungrad International Limited Bumrungrad International Limited, the Company’s 31.5% associated company, makes investments in overseas healthcare- related businesses through joint ventures with local partners and provides consulting and management services for those businesses. As at 31 December 2008, Bumrungrad International Limited has investments in two hospitals, a network of 82 dialysis clinics, and a prestigious management contract in the United Arab Emirates.

Bumrungrad International Limited has a 54.4% effective investment in Asian Hospital Inc. (“AHI”) in the Philippines as at 31 December 2008. AHI commenced its operations on 15 March 2002 as the first major private hospital with tertiary care facilities in the southern Luzon corridor of metropolitan Manila. It is a 253-bed hospital, well known for its modern medical equipment and experienced physicians, particularly in cardiology. Similar to Bumrungrad International Hospital, Bangkok, AHI targets the middle class population. AHI is in the process of expanding its capacity to 358 beds over the next five years.

The capacity will gradually be increased as needed.

Bumrungrad International Limited has a 49% joint venture with Istithmar PJSC, an investment arm of the United Arab Emirates government, to operate a 250-bed private hospital under the name Bumrungrad Hospital Dubai. The project is currently on hold and under review. As at the end of 2008, Bumrungrad International Limited has made full provision for the investment.

Bumrungrad International Limited has a 100% investment in Asia Renal Care Limited (“ARC”), the leading private provider of dialysis and related services in Asia for patients suffering from chronic kidney failure. ARC was founded in 1997 and is headquartered in Singapore. ARC currently operates 82 clinics (as of 31 December 2008) and treats over 4,400 patients in six countries, including Taiwan, Korea, Singapore, Malaysia, the Philippines and Japan. In February 2009, ARC, together with the Company, expanded into Thailand by entering into an agreement to invest in Nephromed Company Limited, a chain of 14 dialysis clinics throughout Thailand, resulting in an increase in the number of clinics to 96 clinics in seven countries in Asia.

In addition, Bumrungrad International Limited has a four-year management agreement with the Health Authority of Abu Dhabi to operate Bumrungrad Al Mafraq Hospital in Abu Dhabi, United Arab Emirates. Bumrungrad International Limited is among the three hospitals including Johns Hopkins and the Cleveland Clinic of the United States to have been awarded such management contracts. Bumrungrad Al Mafraq Hospital is a public hospital with 460 acute care beds, 14 intensive care and 14 special care baby unit beds. It treats 310,000 patients, including more than 25,000 inpatients annually.

In addition to the three existing investments, Bumrungrad International Limited is aggressively pursuing other investment opportunities in the region. Its strategic partners, including Istithmar, Temasek, Asia Financial Holdings and Bangkok Bank Public Company Limited, are sources of new investment opportunities and networks in their respective regions, which are the Middle East and Asia.

Industry and Competition In general, the demand for healthcare correlates with the growth of GDP, the increasing trend of aging population, and the rise of life expectancy. However, with the domestic political instability since September 2006, followed by the global economic meltdown and airport closure in 2008, the domestic economy saw a slow-down, resulting in slower growth in consumption of private healthcare. With the supply of private healthcare facilities in Thailand (344 private hospitals in Thailand as at 2006, of which 102 are in Bangkok) in excess of domestic demand, the competition for Thai patients remains intense. In any case, the private healthcare industry in Thailand is a fragmented market and only a few hospitals are operating close to their full capacity.

The bigger market that has been growing faster than domestic demand is medical tourism. The global medical tourism industry is expected to see continued strong growth as more and more people are traveling abroad for healthcare services.

In Thailand alone, the number of foreign patients treated in private hospitals has increased from 630,000 in 2002 to 1.4 million in 2006. Thailand’s regional competitors are hospitals in countries such as Singapore, Malaysia and India. Private

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hospitals in Thailand have a competitive advantage compared to many of these countries, as Thailand has a unique combination of high quality healthcare, accessibility and affordability, coupled with Thailand being a popular tourist destination with a good supporting infrastructure. Within Thailand itself, there are only a few private hospitals that have the technology and sophistication to address the needs of international patients.

The Company’s strategy is to maintain quality superiority through a differentiated product that includes Bumrungrad International Hospital, Bangkok as Asia’s first internationally accredited hospital. Also, pricing is targeted within the top tier of Thai hospitals while remaining price competitive in the region.

For regional competition, in addition to maintaining the quality and the pricing strategy, the Company also seeks to continue as the dominant player by operating hospitals and healthcare facilities in key markets through investments abroad, which at present includes the Philippines, Singapore, Malaysia, Taiwan, Korea, Japan and the Middle East. In addition, the Company operates 22 overseas representative offices in its major markets and has the International Patient Center to accommodate the needs of international patients. The Company is also a tertiary referral center for both domestic and international hospitals.

4. RISK FACTORS 1. Slowdown of the tourism industry In the past year, Thailand’s tourism industry has been affected primarily by two issues, the political unrest which led to the closure of the Suvarnabhumi International Airport and Donmuang Airport, and the slowdown of the global economy.

Although medical tourism is not as easily affected as the typical tourism industry as there is an established relationship between patients and the hospital and physicians, these events could cause a postponement or a reduction in the number of patients traveling to Thailand and could in turn affect revenues from international patients.

In order to minimize the risk, the Company maintains a balanced portfolio of international and Thai patients so that the Company does not rely excessively on revenue from international patients.

2. Intensified competition in the premium healthcare sector With the current environment where purchasing power has been slowing down because of political and global economic uncertainties, while the supply of private hospitals remains high, competition in the private healthcare sector continues to intensify. The risk of the Company losing its clients to other competitors therefore increases.

In order to maintain its leading position in Thailand and Asia and to mitigate the risk, the Company has invested in up-to-date equipment and information technology, upgraded both inpatient and outpatient facilities as well as continuously improving its quality of care. The Company was the first hospital in Asia to receive US standard accreditation from the Joint Commission on International Accreditation (JCIA), and was the first private hospital in Thailand to receive Thai Hospital Accreditation (HA). In addition, the Company has a strong client base of referral patients both from within Thailand and internationally. This signifies the reputation of the Company as the leader both within Thailand and in the region.

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 increasing demand. In addition, because the Company sees the importance of its international client base, multi-lingual professionals are also required.

In order to minimize the risk, the Company offers competitive compensation and benefits for its staff. The Company also provides education and training, recreation and staff welfare activities to all staff members, on par with other competitors.

Through a decentralized management structure, the Company also offers excellent career paths to various categories of staff members.

4. International investments Bumrungrad International Limited has investments in seven countries in Asia and the Middle East. Such investments carry the inherent risk of investment and expose the Company to country and currency risk outside Thailand.

To mitigate this risk, Bumrungrad International Limited’s experienced international management team conducts extensive feasibility studies and carries out detailed due diligence using firms with local knowledge before recommending the Company’s investment. Risk is also reduced by engaging local equity partners in most overseas investments. In addition, credit risk is reduced by only leveraging in its subject countries without corporate guarantees by Bumrungrad International Limited or the Company.

5. Legal disputes The hospital business is subject to litigation risk attended to the provision of healthcare services by hospital staff and physicians.

Therefore, in order to minimize the risk, the Company has implemented a healthcare risk management system to ensure that the risk of mistakes by the Company’s personnel is minimized and corrected. In addition, the Company has various insurance policies in place against possible legal lawsuits.

Bumrungrad Hospital Public Company Limited

5. SHAREHOLDING STRUCTURE AND MANAGEMENT 5.1 Major Shareholders List of the Company’s 10 major shareholders as at 30 December 2008 is as follows:

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Shareholder

Number of shares*

Bangkok Insurance Pcl. 96,099,702 Sinsuptawee Asset Management Co., Ltd. 63,258,514 UOB Kay Hian (Hong Kong) Limited - Client Account 58,673,690 Thai NVDR Co., Ltd. 50,027,585 Littledown Nominees Limited 9 43,774,600 Istithmar PJSC 43,370,743 State Street Bank and Trust Company for London 27,420,000 Wattanasophonpanich Co., Ltd. 25,121,875 Citibank Nominees Singapore Pte. Ltd. - Aranda Investments Pte. Ltd. 21,685,372 TLS Alpha Pte. Ltd. 21,685,371 Total 426,197,517 * Number of shares includes both preferred shares and common shares ** The calculation of holding percentage includes both preferred shares and ordinary shares

Shareholding** (%) 13.16 8.66 8.04 6.85 6.00 5.94 3.76 3.44 2.97 2.97 61.79

The Company has shareholders in the top ten major shareholders list who are foreign financial institutions or custodians acting as trust companies or nominee accounts. Except for Citibank Nominees Singapore Pte. Ltd. - Aranda Investments Pte. Ltd. and TLS Alpha Pte. Ltd., which are representatives of Temasek, the Company has no knowledge of the ultimate shareholders of these companies as these shareholders have never nominated their representatives to serve on the Board of Directors or take part in the management of the Company.

Shareholders with significant influence on the policies or management of the Company Bangkok Bank Public Company Limited, the major shareholder of the Company with 9.75%* shareholding, has two representatives on the Board of Directors, which are Mr. Chatri Sophonpanich and Mrs. Kulathida Sivayathorn.

The other group of major shareholders, Istithmar and Temasek, with a total shareholding of 11.88%**, has one rotating board seat between the two. Currently, Mr. Felix Herlihy from Istithmar is the representative on the Company’s Board of Directors. * Data as of 30 December 2008; the shareholding includes that of Sinsuptawee Asset Management Co., Ltd. and Bangkok Bank Pcl.

** Data as of 30 December 2008; the shareholding includes that of Istithmar PJSC, Aranda Investments Pte. Ltd. and TLS Alpha Pte. Ltd.

5.2 Management (1) Management Structure The Company has five sets of committees, which are the Company’s Board of Directors, the Audit Committee, the Nomination and Remuneration Committee, the Governing Board of Bumrungrad International Hospital, Bangkok, and the Investment Committee. Details of each committee are as follows: Board of Directors The Company’s Board of Directors as at 31 December 2008 consists of the following: 01. Mr. Chai Sophonpanich Chairperson 02. Dr. Chanvit Tanphiphat, MD Vice Chairperson, Member of the Nomination and

Remuneration Committee 03. Mrs. Linda Lisahapanya Director, Managing Director 04. Mr. Curtis John Schroeder Director, Group Chief Executive Officer 05. Dr. Dhanit Dheandhanoo, MD Director, Chairperson of the Medical Director 06. Mr. Chatri Sophonpanich Director 07. Dr. Anant Tejavej, MD Director 08. Dr. John Yangpichitt, MD Director 09. Dr. Khun Swanya Dej-Udom, MD Director 10. Mrs. Kulathida Sivayathorn Director, Member of the Nomination and Remuneration Committee 11. Mr. Chong Toh Director 12. Mr. Felix Herlihy Director

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Annual Report 2008

13. Dr. Sinn Anuras, MD Director, Group Medical Director 14. Ms. Sophavadee Uttamobol Director, Chairperson of the Audit Committee 15. Mr. Soradis Vinyaratn Director, Member of the Audit Committee 16. Mr. Boonpakorn Chokwathana Director, Member of the Audit Committee,

Chairperson of the Nomination and Remuneration Committee

Mrs. Jutatip Adulbhan, Company Secretary, is the secretary of the Board of Directors.

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

Duties and Responsibilities of the Board of Directors The duties and responsibilities of the Board of Directors, which are described in the Board of Directors’ Charter, approved by the Board of Directors’ meeting no. 1/2008 held on 27 February 2008, are as follows: 1. To perform duties in accordance with the laws, the Company’s objectives and regulations, and resolutions of the shareholders’ meeting, in good faith and with care for the best interest of the Company.

2. To establish the Company’s vision, directions and strategies, with the aim to maximize long-term shareholders’ value.

3. To endorse major strategies and policies, including objectives, business plans, financial targets, operating plans and capital expenditure budgets, as proposed by management, and to monitor and ensure the implementation and follow up on the outcome.

4. To establish the Corporate Governance Manual and the Company’s Code of Ethics and to monitor and ensure communication and implementation of such policies and guidelines, to approve amendments as appropriate, and to report in the annual report.

5. To ensure proper systems for corporate accounting, financial reporting and financial auditing; to ensure that the Company has an effective internal control, internal audit and risk management system, which should be reviewed annually, and to assign the internal audit department to independently audit and report on the system.

6. To approve quarterly and annual financial reports; to ensure that they are correct, accurate, credible, in compliance with Generally Accepted Accounting Standards and report to shareholders in the annual report.

7. To monitor, supervise and approve, as the case may be, and to ensure transparency in the transactions which are connected transactions and may cause conflict of interest, and to set clear guidelines on the approval and disclosure process of transactions with conflict of interest.

8. To set and appoint committees as appropriate to help pursue, study in detail, monitor and oversee matters of importance as assigned, and to approve their charters which include their duties and responsibilities and determine their remuneration.

Audit Committee The Company’s Audit Committee as at 31 December 2008 comprises the following: 1. Ms. Sophavadee Uttamobol Chairperson of the Audit Committee 2. Mr. Soradis Vinyaratn Member of the Audit Committee 3. Mr. Boonpakorn Chokwathana Member of the Audit Committee Mrs. Tawichar Tansathit is the secretary of the Audit Committee.

Duties and Responsibilities of the Audit Committee The duties and responsibilities of the Audit Committee, as described in the Audit Committee’s Charter, which was approved by the Board of Directors’ meeting no. 3/2008 held on 6 August 2008, are as follows: 1. To review the financial reports of the Company to ensure accuracy and sufficiency.

2. To review the Company’s internal control and internal audit systems to ensure appropriateness and efficiency, and to consider the independence of the internal audit function, including giving consent to the appointment, rotation or termination of the chief internal audit unit or another function responsible for internal auditing.

3. To review the Company’s compliance with the laws governing securities and exchange, including rules and regulations prescribed by the Stock Exchange of Thailand and other laws related to the conduct of the Company’s business.

4. To consider, select and propose the appointment of an independent party as the Company’s external auditor, to propose the audit fees, and to meet with the external auditor without the presence of management at least once a year.

5. To consider related parties transactions or transactions which may have conflict of interest, to be in accordance with the Stock Exchange of Thailand’s rules and regulations, to ensure that such transactions are reasonable and are for the best benefits of the Company.

Bumrungrad Hospital Public Company Limited

06. To prepare the report of the Audit Committee to be disclosed in the Company’s annual report. The report must be signed by the Chairperson of the Audit Committee and must contain at least the following details: 6.1 Opinion on the accuracy, sufficiency and credibility of the Company’s financial statements.

6.2 Opinion on the sufficiency of the Company’s internal control system.

6.3 Opinion on the Company’s compliance with the laws governing securities and exchange and rules and regulations prescribed by the Stock Exchange of Thailand and other laws related to the conduct of the Company’s business.

6.4 Opinion on the appropriateness of the external auditor.

6.5 Opinion on transactions which may have conflict of interest.

6.6 Number of Audit Committee meetings and the attendance of each Committee member.

6.7 Opinion and observations that the Audit Committee received from performing its duties according to this charter.

6.8 Other transactions deemed appropriate to be disclosed to shareholders and investors and are within the Audit Committee’s authority and responsibilities as assigned by the Board of Directors.

07. To investigate immediately any Company fraud cases upon receiving notification from the external auditor, and to report the findings of the preliminary investigation to the Securities and Exchange Commission and the external auditor within 30 days after receiving the written notice from the external auditor.

08. To have at least one Audit Committee member attend the Board of Directors’ meeting every time that there is an agenda on approval of financial reports.

09. To meet with the Company’s legal department regularly, and to consult with external lawyers as necessary.

10. To perform other duties as assigned by the Board of Directors and with consent from the Audit Committee.

Nomination and Remuneration Committee The Nomination and Remuneration Committee as at 31 December 2008 comprises the following: 1. Mr. Boonpakorn Chokwathana Chairperson 2. Mrs. Kulathida Sivayathorn Member 3. Dr. Chanvit Tanphiphat, MD Member Mrs. Jutatip Adulbhan, Company Secretary, is the secretary of the Nomination and Remuneration Committee.

Duties and Responsibilities of the Nomination and Remuneration Committee The duties and responsibilities of the Nomination and Remuneration Committee, in accordance with the Nomination and Remuneration Committee’s Charter, as approved by the Board of Directors’ meeting no. 4/2008 on 12 November 2008, are as follows: a) Nomination 1. To consider the appropriate size, composition and term of the Board of Directors.

2. To consider and recommend whether there should be a retirement age for directors, and to recommend to the Board of Directors the directors’ retirement age.

3. To formulate and review qualifications of directors and members of the Committees.

4. To propose and review candidates for the director position in case of vacancies or for any other reasons, including collecting a list of candidates nominated by shareholders, to be approved by the Board of Directors’ and/or Shareholders’ Meeting as the case may be.

5. To consider and propose qualified directors to be a member of a Committee when there is a vacancy. b) Remuneration 1. To determine the procedures and criteria for fair and reasonable compensation for directors and Committee members.

2. To recommend remuneration for directors and Committee members, including remuneration of Nomination and Remuneration Committee members, to the Board of Directors and/or Shareholders’ Meeting, as the case may be.

3. To implement a process for assessing the performance of the Board of Directors and Committees, including proposing their Performance Evaluation Form c) To perform other duties relevant to the Nomination and Remuneration Committee as may be assigned by the Board of Directors

Governing Board of Bumrungrad International Hospital, Bangkok The Governing Board of Bumrungrad International Hospital, Bangkok as at 31 December 2008 comprises the following:

1. Dr. Chanvit Tanphiphat, MD Chairman

2. Mr. James Matthew Banner Secretary

3. Mr. Chong Toh Member

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4. Dr. Chamaree Chuapetcharasopon, MD Member

5. Dr. Oradee Chandavasu, MD Member

6. Dr. Rujapong Sukhabote, MD Member

7. Dr. Sira Sooparb, MD Member

8. Ms. Sophavadee Uttamobol Member

9. Dr. Vatana Supromajakr, MD Member 10. Dr. Visuit Vivekaphirat, MD Member 11. Dr. Watcharaphong Saechere, MD Member 12. Ms. Arunee Kettratad Member 13. Dr. Sinn Anuras, MD Ex officio 14. Dr. Apichati Sivayathorn, MD Ex officio 15. Mrs. Lee Chan Yow Ex officio 16. Ms. Karen Carter Ex officio

Duties and Responsibilities of the Governing Board The Governing Board has the objective to recommend and implement the Hospital Policy, promote patient safety and performance improvement, provide quality patient care and provide for organizational management and planning of the Hospital.

The Governing Board has the scope of duties and responsibilities in accordance with Governing Board Bylaws, Rules and Regulations of Bumrungrad International Hospital, Bangkok as follows: 1. To organize physicians and other practitioners granted clinical privileges at the Hospital into a medical staff under Professional Staff Bylaws, Rules and Regulations approved by the Governing Board.

2. To appoint and reappoint Medical Staff members and assign clinical privileges in accordance with Professional Staff Bylaws, Rules and Regulations.

3. To establish and amend, together with the Medical Staff, and approve Professional Staff Bylaws, Rules and Regulations which set forth its organization and governance.

4. To assign to the Medical Staff reasonable authority to ensure appropriate professional care to Hospital patients, including to direct that all reasonable and necessary steps be taken by the Medical Staff and Hospital administration for meeting JCIA and HA accreditation standards and complying with applicable laws and regulations.

Investment Committee The Company’s Investment Committee as at 31 December 2008 comprises the following: 1. Mr. Chai Sophonpanich Chairperson 2. Mrs. Linda Lisahapanya Member 3. Mr. Chong Toh Member 4. Ms. Sophavadee Uttamobol Member 5. Mr. Curtis John Schroeder Member 6. Mr. Dennis Brown Observer

Duties and Responsibilities of the Investment Committee To consider investment opportunities, appropriateness and feasibility studies, including the structure of the Company’s investment projects both within the country and in the region.

Management The Company’s Management as at 31 December 2008 consists of the following: 1. Mrs. Linda Lisahapanya Managing Director 2. Dr. Dhanit Dheandhanoo, MD Chairperson of the Medical Director 3. Mr. Curtis John Schroeder Group Chief Executive Officer 4. Dr. Sinn Anuras, MD Group Medical Director 5. Dr. Karoon Mekanontchai, MD Group Associate Medical Director 6. Dr. Chamaree Chuapetcharasopon, MD Medical Director, Bumrungrad International Hospital, Bangkok 7. Dr. Apichati Sivayathorn, MD Chief Quality Officer, Bumrungrad International Hospital, Bangkok 8. Mr. James Matthew Banner Chief Executive Officer, Bumrungrad International Hospital,

Bangkok 9. Mrs. Lee Chan Yow Chief Financial Officer, Bumrungrad International Hospital,

Bangkok 10. Ms. Karen Carter Chief Operating Officer, Bumrungrad International Hospital,

Bangkok

Bumrungrad Hospital Public Company Limited

Details of Management and Controlling Parties Directors

Mr. Chai Sophonpanich

Mr. Curtis John Schroeder

Age: 65 years Education:

Age: 52 years

. Chairperson of the Board of Directors

. Director . Group Chief Executive Officer

. Bachelor of Science, University of Colorado, USA Education: . Advanced Management Program, The Wharton School, . Master’s Degree in Health Services Administration, University of Southern University of Pennsylvania, USA California, USA . The Joint State - Private Sectors Course, Class 6, The National Defense . Director Certification Program Class 78/2006, Thai Institute of Directors College of Thailand Shareholding*: 0.01% . Director Certification Program Class 16/2002, Thai Institute of Directors Family Relationship between Management: None . Chairman 2000, Class 10/2004, Thai Institute of Directors Work Experience: . 1993 – Present Group Chief Executive Officer, Shareholding*: 1.09% Family Relationship between Management:

Bumrungrad Hospital Pcl. . Spouse of Mrs. Linda Lisahapanya’s sister . 1987 – 1993 Director, USC University Hospital, Los Angeles, . Brother of Mr. Chatri Sophonpanich

California, USA Work Experience:

. 1978 – Present Chairman and President, Bangkok Insurance Pcl. Clinical Professor Emeritus Dhanit Dheandhanoo, MD . 1986 – Present Chairman, Charoong Thai Wire & Cable Pcl. . Director . 1988 – Present Chairman, Furukawa Metal (Thailand) Pcl. . Chairperson of the Medical Director . 1978 – Present Vice Chairman, Thai Reinsurance Pcl. Age: 72 years . 1968 – Present Director, Bangkok Life Assurance Pcl. Education: . Doctor of Medicine, Mahidol University

. Board Certification: Neurosurgery, United Kingdom Professor Emeritus Chanvit Tanphiphat, MD . Vice Chairperson of the Board of Directors Shareholding*: 0.02% . Member of Nomination and Remuneration Committee Family Relationship between Management: None Age: 65 years Work Experience: . Clinical Professor Emeritus, Director, Neurosurgery Unit, Department of Education: . MB ChB (Bachelor of Medicine and Bachelor of Surgery), Surgery, Faculty of Medicine, Ramathibodi Hospital, Mahidol University Leeds University, United Kingdom

. FRCS (Fellowship of the Royal College of Surgeons), United Kingdom Mr. Chatri Sophonpanich . Director Shareholding*: 0.07% Family Relationship between Management: None Work Experience:

.

Professor Emeritus, Surgery Department, Faculty of Medicine, Chulalongkorn University

Mrs. Linda Lisahapanya

. Director . Managing Director Age: 56 years Education:

Age: 75 years Education:

. Honorary Doctorate in Business Administration, Thammasat University . Honorary Degree (Honoris Causa) of Doctor of Law, Pepperdine University, California, USA . Honorary Degree (Honoris Causa) of Doctor of Business Management, De La Salle University, Philippines . Certificate of Banking, Institute of Bankers, London, United Kingdom . Director Accreditation Program Class CP/2005, Thai Institute of Directors Shareholding*: 0.50%

. Master of Finance, University of Illinois, USA Family Relationship between Management: . Director Certification Program Class 78/2006, Thai Institute of Directors . Brother of Mr. Chai Sophonpanich Shareholding*: 0.01% Work Experience: . 1999 – Present Chairman, Bangkok Bank Pcl. Family Relationship between Management: . Sister of Mr. Chai Sophonpanich’s wife . 1999 – Present Chairman, Bangkok Entertainment Co., Ltd. . 2005 – Present Chairman, Dusit Thani Pcl. Work Experience: . Managing Director, Bumrungrad Hospital Pcl. . 1963 – Present Director, Bangkok Bank Pcl.

* Shareholding as at 30 December 2008, including both preference and ordinary shares, and shares held by spouse and minors

68

. Director

Mrs. Kulathida Sivayathorn

. MB ChB (Bachelor of Medicine and Bachelor of Surgery), Edinburgh University, Scotland, United Kingdom . DCH, England . FRCP (Fellow of the Royal College of Physicians of Edinburgh), Scotland, United Kingdom . Director Accreditation Program Class 47/2005, Thai Institute of Directors

Age: 55 years Education:

Age: 74 years Education:

Shareholding*: 0.11% Family Relationship between Management: None Work Experience:

. Emeritus Professor, Department of Pediatrics, Faculty of Medicine,

Ramathibodi Hospital, Mahidol University

Dr. John Yangpichitt, MD

. Director

Age: 72 years Education:

. Director . Member of Nomination and Remuneration Committee . Bachelor of Science in Chemistry, Stetson University, USA . Chief Financial Officer Certification Program, Federation of Accounting Professions, Class 6/2006 . Advanced Management Program, Harvard Business School, 1997 . Director Certification Program Class 3/2000, Thai Institute of Directors . Audit Committee Program Class 4/2004, Thai Institute of Directors . Quality Financial Reporting Class 1/2006, Thai Institute of Directors . Chartered Director Program Class 4/2008, Thai Institute of Directors Shareholding*: - Family Relationship between Management: None Work Experience:

. 1976 – Present . Current Position:

Bangkok Bank Pcl. Executive Vice President, Bangkok Bank Pcl.

. MB (Bachelor of Medicine), BCh (Bachelor of Surgery), BAO (Bachelor of Arts of Obstetrics), Queens University, Belfast, Northern Ireland, United Kingdom MRCOG (Member of Royal College of Obstetricians and Gynecologists), London, United Kingdom FRCOG (Fellow of Royal College of Obstetricians and Gynecologists), London, United Kingdom

. .

Mr. Chong Toh

. Director

Age: 40 years Education:

. . .

Shareholding*: - Family Relationship between Management: None Work Experience:

Master of Science in Management, Massachusetts Institute of Technology, USA Bachelor of Arts in Philosophy, Politics and Economics, Oxford University, United Kingdom Director Accreditation Program Class 54/2006, Thai Institute of Director Shareholding*: 0.05%

Family Relationship between Management: Spouse of Mr. Chai Sophonpanich’s daughter Work Experience:

. 2008 – Present Director, Tongkah Harbour Pcl. . Independent Physician, Ruamrudee Clinic Dr. Khun Swanya Dej-Udom, MD

. Director

Age: 62 years Education:

. Doctor of Medicine, Mahidol University . Board Certifications: - Internal Medicine

- Cardiology . Director Accreditation Program Class 47/2005, Thai Institute of Directors Shareholding*: 0.04% Family Relationship between Management: None Work Experience:

. 1980 – Present . 1992 – Present . Present

. Present

Annual Report 2008

Emeritus Professor Anant Tejavej, MD

. . 2005 – Present

. 2005 – Present . 2001 – Present . 2000 – Present . 2001 – 2005 . 1999 – 2005 . 2000 – 2001

Executive Vice President, International Banking Group, Bangkok Bank Pcl. Executive Chairman, Bualuang Securities Pcl. Director, Bualuang Securities Pcl. Director, Asia Cement Pcl. President, Bualuang Securities Pcl. Director, Bualuang Finance Co., Ltd. President, Bualuang Finance Co., Ltd.

Cardiologist, Bumrungrad Hospital Pcl. Cardiologist, Paat Pattana Medical Center Scientific Director, The Heart Foundation of Thailand Under Royal Patronage Secretariat, The Health Promotion Foundation

* Shareholding as at 30 December 2008, including both preference and ordinary shares, and shares held by spouse and minors

69

Bumrungrad Hospital Public Company Limited

Mr. Felix Patrick Herlihy

. Director

Mr. Soradis Vinyaratn

. Master of Business Administration, Columbia University, USA . AM (Artium Baccalaures), Magna cum laude in Economics,

Age: 68 years Education:

Age: 49 years Education:

Harvard University, USA Shareholding*: - Family Relationship between Management: None Work Experience:

. Chief Investment Officer, Istithmar World Capital, Istithmar PJSC (member of Dubai World Company) . Managing Director, IFL Investment S.p.A., Agneli Group of Italy . Managing Director and Principal, Lehman Brothers Merchant Banking (LBMB)

Professor Sinn Anuras, MD

. Director . Group Medical Director Age: 67 years Education:

. Doctor of Medicine, Chulalongkorn University . Board Certifications: . American Board of Internal Medicine . American Board of Gastroenterology

Shareholding*: 0.01% Family Relationship between Management: None Work Experience:

. 1987 – 1994

Professor and Vice President of Medical Affairs, University Medical Center, Lubbock, Texas, USA

Ms. Sophavadee Uttamobol

. Director . Chairperson of Audit Committee

. Director . Member of Audit Committee

. Bank Management, City of London College of Banking, London, United Kingdom . Director Accreditation Program Class CP/2005, Thai Institute of Directors Shareholding*: 0.03% Family Relationship between Management: None Work Experience:

. 1982 – Present . 1957 – 1990

Vice Chairperson, Landmark Hotel Group Executive Vice President, Bangkok Bank Pcl.

Mr. Boonpakorn Chokwathana

. Director . Member of Audit Committee . Chairperson of Nomination and Remuneration Committee Age: 73 years Education:

. Bachelor’s Degree of Economics, University of Nottingham, United Kingdom . Director Certification Program Class 68/2005, Thai Institute of Directors . Director Accreditation Program Class 3/2003, Thai Institute of Directors . Role of Compensation Committee Class 7/2008, Thai Institute of Directors Shareholding*: 0.04 Family Relationship between Management: None Work Experience:

. Chairperson, New City (Bangkok) Pcl. . Chairperson, Dr. Thiam Chokwatana Foundation . Vice Chairperson, Saha Pathanapibul Pcl. . Vice Chairperson, Saha Pathana Inter-Holding Pcl. . Director, IT City Pcl.

Age: 48 years Education:

. Master of Business Administration, Chulalongkorn University . Director Accreditation Program Class 5/2003, Thai Institute of Directors . Audit Committee Program Class 2/2004, Thai Institute of Directors . Role of Chairman Program Class 14/2006, Thai Institute of Directors Shareholding*: - Family Relationship between Management: None Work Experience:

. 1991 – Present . 2001 – Present

Legal Consultant, Dhamrongtham Law Office Director, S&P Syndicate Pcl.

* Shareholding as at 30 December 2008, including both preference and ordinary shares, and shares held by spouse and minors

70

Professor Sinn Anuras, MD

Age: 56 years Education:

Age: 67 years Education:

. Director . Managing Director

. Director . Group Medical Director

. Doctor of Medicine, Chulalongkorn University . Master of Finance, University of Illinois, USA . Director Certification Program Class 78/2006, Thai Institute of Directors . Board Certifications: . American Board of Internal Medicine Shareholding*: 0.01% . American Board of Gastroenterology Family Relationship between Management: . Sister of Mr. Chai Sophonpanich’s wife Shareholding*: 0.01% Family Relationship between Management: None Work Experience: . Managing Director, Bumrungrad Hospital Pcl. Work Experience: .1987 – 1994 Professor and Vice President of Medical Affairs,

University Medical Center, Lubbock, Texas, USA Clinical Professor Emeritus Dhanit Dheandhanoo, MD . Director

. Chairperson of the Medical Director Dr. Karoon Mekanontchai, MD . Associate Group Medical Director Age: 72 years Age: 59 years Education: . Doctor of Medicine, Mahidol University Education: . Doctor of Medicine, Faculty of Medicine, Ramathibodi Hospital, . Board Certification: Neurosurgery, United Kingdom Mahidol University Shareholding*: 0.02% . Board Certifications: Orthopedic Surgery Family Relationship between Management: None Shareholding*: - Work Experience: . Clinical Professor Emeritus, Director, Neurosurgery Unit, Department of Family Relationship between Management: None Work Experience: Surgery, Faculty of Medicine, Ramathibodi Hospital, Mahidol University . 1989 – Present Orthopedics Consultant, Bumrungrad Hospital Pcl.

. 1983 – 1989 Lecturer, Orthopedics and Rehabilitation Department, Mr. Curtis John Schroeder . Director

Faculty of Medicine, Ramathibodi Hospital, . Group Chief Executive Officer

Mahidol University . 1978 – 1983 Full time physician, Saraburi Province Hospital Age: 52 years

Education: . Master’s Degree in Health Services Administration, Dr. Chamaree Chuapetcharasopon, MD . Medical Director University of Southern California, USA . Director Certification Program Class 78/2006, Thai Institute of Directors Age: 54 years Education: Shareholding*: 0.01% . Doctor of Medicine, Faculty of Medicine, Ramathibodi Hospital, Family Relationship between Management: None Mahidol University Work Experience: . Board Certification: General Radiology, Thailand .1993 – Present Group Chief Executive Officer, . Fellowships:

Bumrungrad Hospital Pcl. . Vascular and Interventional Radiology, USA .1987 – 1993 Director, USC University Hospital, . Body Imaging, USA

Los Angeles, California, USA

Shareholding*: - Family Relationship between Management: None Work Experience:

. 1998 – Present

. 1998 – 2008 . 1983 – 1988

Executive Committee, Royal College of Radiologists of Thailand Consultant Radiologist, National Cancer Institute Instructor, Department of Radiology, Faculty of Medicine, Ramathibodi Hospital, Mahidol University

* Shareholding as at 30 December 2008, including both preference and ordinary shares, and shares held by spouse and minors

71

Annual Report 2008

Management

Mrs. Linda Lisahapanya

Bumrungrad Hospital Public Company Limited

Clinical Professor Emeritus Apichati Sivayathorn, MD

. Chief Quality Officer

Mrs. Lee Chan Yow

Age: 60 years Education:

. Doctor of Medicine, Faculty of Medicine, Siriraj Hospital, Mahidol University . Board Certification: Dermatology

Age: 54 years Education:

. Bachelor’s Degree, Victoria University of Wellington, New Zealand . Director Certification Program Class 78/2006, Thai Institute of Directors

Shareholding*: - Family Relationship between Management: None Work Experience:

. 2006 – Present . 2002 – 2005

. 1998 – 2005

. 1996 – 1998

Chief Quality Officer, Bumrungrad Hospital Pcl. Chairperson of Quality Development Committee, Mahidol University Associate Dean, Quality Development, Faculty of Medicine, Siriraj Hospital, Mahidol University Associate Dean, Quality Development and Special Affairs, Faculty of Graduate Studies, Mahidol University

Mr. James Matthew Banner

. Chief Executive Officer Age: 61 years Education:

. Master’s Degree in Health Services Administration, Medical College of Virginia, USA

Shareholding*: - Family Relationship between Management: None Work Experience:

. BUPA Health Care Asia (previously VISTA) . Director and Chief Executive Officer,

. Chief Financial Officer

Shareholding*: - Family Relationship between Management: None Work Experience:

. 1987 – 1994

. 1984 – 1986 . 1982 – 1983

Chief Financial Officer, Mount Elizabeth Hospital Ltd., Singapore Chief Accountant, Scotts Holding (S) Pte. Ltd. Internal Audit Manager, Diethelm Singapore Pte. Ltd.

Ms. Karen Carter

. Chief Operating Officer Age: 52 years Education:

. Master of Political Science, Johns Hopkins University, Maryland, USA Shareholding*: - Family Relationship between Management: None Work Experience:

. Managing Director, BUPA Insurance (Thailand)

Subang Jaya Medical Center, Kuala Lumpur, Malaysia

* Shareholding as at 30 December 2008, including both preference and ordinary shares, and shares held by spouse and minors

72

1. Mr. Chai 2. Dr. Chanvit 3. Mrs. Linda 4. Mrs. Kulathida 5. Dr. Dhanit 6. Mr. Chong 7. Mr. Boonpakorn 8. Mr. Curtis John 9. Dr. Sinn 10. Mr. James Matthew 11. Mrs. Lee Chan

Sophonpanich Tanphiphat, MD Lisahapanya Sivayathorn Dheandhanoo, MD Toh Chokwathana Schroeder Anuras, MD Banner Yow

X / // / // / / // //

Vitallife Corporation Limited X

Bumrungrad International Limited

Asia Renal Care (Thailand) Company Limited

/

/ / / / /

X

X

/

Notes: 1. / = Director X = Chairman // = Management 2. CDE Trading Company Limited (previously Global Care Solutions (Thailand) Company Limited) and Global Care Solutions S.A. are not shown in the above

table as no director/management of the Company holds the position of director, chairman or management in CDE Trading Company Limited

and Global Care Solutions S.A.

(2) Election of Directors and Management The Nomination and Remuneration Committee has the responsibility to select and nominate candidates to replace directors and members of committees whose terms have expired or for any other reasons, including to consider candidates proposed by shareholders, and to propose to the Board of Directors to approve or to recommend to shareholders’ meetings of such appointment. The Nomination and Remuneration Committee is responsible for considering respectable candidates, taking into account their knowledge, abilities, experience which will be beneficial to the Company, leadership skills, visions, ethical values, and their independence in making professional decisions and for ensuring that the candidates possess the qualifications as stipulated in the Board of Directors’ Charter.

In shareholders’ meetings, the process for electing directors is 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.

The process for selection of independent directors is the same as that of directors and management.

Qualifications of independent directors are as follows: 1. Holds shares not more than one percent of total shares with the right to vote of the Company, affiliated company, associated company or related company, inclusive of the shares held by related persons.

2. Is not a director who takes part in the management, nor is an employee, staff, consultant with monthly salary, nor controlling person of the Company, affiliated company, subsidiary of the same level, or any juristic person which may have conflict of interest (at present and two years prior to the appointment).

3. Is not related, whether by blood or legally in the form of father, mother, siblings nor children, including the registered spouses or children, with the management, major shareholder, controlling person or those who will be proposed to be management, major shareholder, controlling person of the Company or subsidiary.

4. Has business relationship with the Company in the form of professional service or a business / trading relationship in accordance with the rules and regulations of the Securities Exchange Commission, Thailand.

5. Is not a director who is appointed as a representative of the Company’s director, major shareholder, or shareholder who is a related person of the major shareholder.

6. Does not possess other qualifications that deter the ability to give opinions independently.

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Annual Report 2008

Details of Directorships in Subsidiaries and Related Companies Bumrungrad Subsidiaries Directors Medical Center Subsidiaries Limited

Bumrungrad Hospital Public Company Limited

(3) Remuneration of Directors, Committees and Management Directors’ Remuneration and Committees’ Remuneration Remuneration of Directors, Audit Committee and Nomination and Remuneration Committee for the year ended 31 December 2008 for 17 directors are as follows:

Nomination and

Remuneration

Total Board of Directors Audit Committee Committee

Name Remuneration Number

Meeting Annual Meeting Number of Meeting Number of Total of

Meetings Remuneration Remuneration Remuneration Meetings Remuneration Meetings

1. Mr. Chai Sophonpanich 4/4 400,000 160,000 560,000 560,000

4/4 350,000 120,000 470,000 2/2 50,000 520,000 2. Dr. Chanvit Tanphiphat, MD 3. Mrs. Linda Lisahapanya 3/4 300,000 75,000 375,000 375,000 4. Mr. Curtis John Schroeder 3/4 300,000 75,000 375,000 375,000 5. Dr. Dhanit Dheandhanoo, MD 4/4 300,000 100,000 400,000 400,000 6. Mr. Chatri Sophonpanich 3/4 300,000 75,000 375,000 375,000

4/4 300,000 100,000 400,000 400,000 7. Dr. Anant Tejavej, MD 4/4 300,000 100,000 400,000 400,000 8. Dr. John Yangpichitt, MD

9. Dr. Khun Swanya Dej-Udom, MD 4/4 300,000 100,000 400,000 400,000

3/4 300,000 75,000 375,000 1/2 25,000 400,000 10. Mrs. Kulathida Sivayathorn 3/4 300,000 75,000 375,000 375,000 11. Mr. Chong Toh

12. Dr. Sinn Anuras, MD 4/4 300,000 100,000 400,000 400,000 13. Dr. Jennifer Lee, MD* 2/3 175,000 50,000 225,000 225,000 14. Mr. Felix Herlihy* 1/1 125,000 25,000 150,000 150,000 15. Ms. Sophavadee Uttamobol 4/4 300,000 100,000 400,000 4/4 160,000 560,000

4/4 300,000 100,000 400,000 4/4 100,000 500,000 16. Mr. Soradis Vinyaratn 4/4 300,000 100,000 400,000 4/4 100,000 2/2 80,000 580,000 17. Mr. Boonpakorn Chokwathana

4,950,000 1,530,000 6,480,000 360,000 155,000 6,995,000

* Mr. Felix Herlihy was appointed the Company’s director to replace Dr. Jennifer Lee, MD by the Board of Directors’ Meeting No. 3/2008 on 6 August 2008.

Directors’ remuneration represents the benefits paid to the Company’s directors, excluding salaries and related benefits payable to the management. The above remuneration has been approved by the shareholders.

Remuneration of Management In 2008, the total remuneration of the 10 executives of the Company and its subsidiaries amounted to Baht 74.48 million. The remuneration represents the salaries and benefits paid to the management.

(4) Corporate Governance (Page 80)

(5) Internal Control of Information The Company has the policy regarding management using internal information for personal benefit as follows: 1. According to the Company’s rules and regulations, directors are required to inform the Company immediately in the event that they may have any interests in any agreements being entered into by the Company, or that there is an increase or decrease in their holding of shares or bonds of the Company or subsidiaries.

2. Directors and management must prepare and disclose a securities holdings report to the Securities Exchange Commission within the required time.

74

75

Annual Report 2008

Penalties for violation include the following: 1. Verbal warning for corrective action 2. Report to shareholders’ meeting for consideration 3. Compensation for any damages 4. Disclosure to Securities Exchange Commission and the Stock Exchange of Thailand

(6) Internal Control See Report of the Audit Committee (Page 20)

(7) Dividend Policy 1. The Company’s dividend policy is as follows: 1.1 When the Company has net profit which can be distributed to shareholders, the preferred shareholders will receive dividends before the ordinary shareholders. In any year that dividends distributed to the preferred shareholders reach 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 of more than 15% of its capital, the shareholders of both types shall receive the dividends equally.

1.2 For the payment of dividends, the Board of Directors is to follow the resolution of the shareholders’ meeting.

1.3 For every dividend payment, 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 are not entitled to any interest payment.

2. Subsidiaries’ dividend policy is as follows: 2.1 When the company has profit which can be distributed to shareholders, the company is eligible to pay dividends to its shareholders at any amount in accordance with the resolution of shareholders’ meeting.

2.2 Accrued dividends are not entitled to any interest payment.

On 25 February 2009, the Board of Directors approved, subject to shareholders’ approval in shareholders’ meeting to be held in April 2009, a dividend payment for the year 2008 to preferred and ordinary shareholders at the rate of Baht 0.80 per share, totaling Baht 584 million, which is a 49% pay-out ratio. The Company already paid an interim dividend of Baht 0.40 per share, totaling Baht 292 million, on 4 September 2008. The remaining dividend payment of Baht 0.40 per share, amounting to Baht 292 million will be paid after the shareholders’ approval.

For the year 2007, the Company paid a dividend of Baht 0.80 per share, totaling Baht 584 million, or a 49.0% pay-out ratio. The net profit used to calculate the dividend pay-out ratio is the consolidated net profit for 2007, netted off with the non-cash share gain from CDE Trading Company Limited, which is a one-time non-operating item.

6. RELATED PARTIES TRANSACTIONS 1. Characteristics of Related Parties Transactions The Company has transactions with its subsidiaries, affiliates and related companies as detailed in the note to financial statement no. 7.

For the periods ending 31 December 2007 and 31 December 2008, the Company and subsidiaries entered into a number of transactions with related parties that may have conflict of interest with the Company and its subsidiaries.

These connected transactions include normal course of business transactions and other transactions, and can be summarized as follows:

76

Relationship

Common director, and BKI is the major shareholder of the Company, with a 13.16% shareholding as at 30 December 2008

Common director

Subsidiary which the Company holds 51% (as at 1 Jan 07) with change of status to associated company with 31.5% shareholding (as at 27 Apr 07) with common director

Related Company

Bangkok Insurance Pcl. (BKI)

Bangkok Bank Pcl. (BBL)

Bumrungrad International Limited

4.4

22.8

16.0

35.7

17.5

28.4

- Rental of land and building paid to BBL

- Interest on convertible bonds paid to BBL Revenues - Consulting fees on hospital management received from Bumrungrad International Limited

58.0

53.4

Expenses - Bank credit cards commission fees paid to BBL

24.9

20.2

29.1

25.3

25.4

29.5

Revenues - Revenues from hospital services received from BBL

Expenses - Insurance fees which the Company and subsidiaries paid to BKI

Revenues - Revenues from hospital services received from BKI

Description

Amount (Baht Million) For the year For the year ended ended 31 Dec 07 31 Dec 08

Approved by the shareholders.

Approved by the shareholders.

The Audit Committee has the opinion that the transaction is reasonable.

The Audit Committee has the opinion that the transaction is reasonable.

The Audit Committee has the opinion that the transaction is reasonable.

The Audit Committee has the opinion that the transaction is reasonable.

Reason for the transaction

The Company charges the fees in relation to the actual The Audit Committee has the cost of the resources used. opinion that the transaction is reasonable.

The Company paid interest on Baht 550 million principal of convertible bonds. Interest rates are in accordance with debt restructuring agreement.

It is the Company’s normal course of business, charging at normal price and benefits as customers in general.

BKI is the insurance provider which the Company and subsidiaries have always used. In addition, the insurance premium that the Company and subsidiaries paid to BKI was at the rate which BKI offers to its customers in general.

It is the Company’s normal course of business, charging at normal price and benefits as customers in general.

BBL is the credit card service provider which the Company has always used. The Company invested in various infrastructures to maximize the benefits from efficient use of the credit card payment system.

The fees paid to BBL are at the market rate.

The Company rented a building from BBL to support its hospital business and to use for parking and serviced apartments for patients’ families. The rental fees are reasonable.

Pricing Policy

Bumrungrad Hospital Public Company Limited

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Annual Report 2008

Other transactions 1. The Company waived its right to subscribe to Bumrungrad International Limited’s new shares in order to allow Asia Financial Holdings to subscribe to such shares.

On 12 March 2007, the Company’s shareholders approved a waiver of the Company’s right to subscribe to Bumrungrad International Limited’s new shares in order to allow Asia Financial Holdings to subscribe to such shares. Such waiver is a related transaction, with the details as follows:

Related Company: AFH International Company Limited (“AFH”), a 100% subsidiary of Asia Financial Holdings Limited

Relationship: Mr. Robin Yua Hing Chan is authorized director and controlling person of AFH. He is the brother of (As of 12 March 2007) Mr. Chatri Sophonpanich and Mr. Chai Sophonpanich who are directors of the Company.

Therefore, AFH is a connected person of the Company and the Transaction is regarded as

a Connected Transaction.

Description: - Waiver of rights by the Company to subscribe to 3,714,283 shares in Bumrungrad International Limited in order to allow AFH to subscribe to the shares.

- Bumrungrad International Limited offers 3,714,283 new shares to AFH.

Amount: The value of the Transaction is approximately Baht 570,216,726.16.

Pricing Policy: The subscription price of Baht 153.52 per share is a substantial premium to Bumrungrad International

Limited’s book value per share of Baht 94.88 (including minority interest attributable to minority

shareholders of subsidiaries) as of 30 September 2006. This subscription price is also equal to the

subscription price approved by shareholders’ meeting dated 15 May 2006 to allow three strategic

shareholders, namely Istithmar PJSC, V-Sciences Investment Pte Ltd and Bangkok Bank Public

Company Limited, to subscribe to new shares of Bumrungrad International Limited. In addition, the

subscription price is in line with IFA report.

Reasons for the transaction: The Transaction was approved by the shareholders’ meeting on 12 March 2007.

2. The Company purchased land and building of BH Tower from Bangkok Bank Public Company Limited.

On 22 January 2008, the Company’s shareholders approved the purchase of land and building of BH Tower 1 and 2 from Bangkok Bank Public Company Limited (“BBL”). Such transaction is a related transaction, with the details as follows:

Related Company: Bangkok Bank Public Company Limited

Relationship: Mr. Chatri Sophonpanich, a director of BBL, and Mrs. Kulathida Sivayathorn, a management of BBL,

are also directors of the Company. Therefore, BBL is a connected person of the Company and the

Transaction is regarded as a Connected Transaction.

Description: Purchase of land and BH Tower Building 1 & Building 2 (collectively called “BH Tower”) from BBL.

Amount: The value of the Transaction is Baht 470 million.

Pricing Policy: The value is a negotiated price between BBL and the Company, taking into consideration the

appraised value.

Reasons for the transaction: The Transaction was approved by the shareholders’ meeting on 22 January 2008.

Bumrungrad Hospital Public Company Limited

2. 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.

For example, having Bangkok Bank Public Company Limited as one of the Company’s corporate contracts helps the Company to expand its client base.

3. Approval Process for Entering into Related Parties Transactions For contracts which were entered into as part of normal courses of business, the transactions are approved through the normal process in accordance with the Company’s policy. In addition, the Audit Committee has considered the appropriateness and reasonableness of these transactions. For other transactions which are significant in size as per the definition of the Stock Exchange of Thailand, Board of Directors’ and/or shareholders’ approvals are obtained in accordance with rules and regulations, where management and/or directors with vested interests are not allowed to vote.

4. 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, 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 will protect the highest benefit of the Company.

7. MANAGEMENT DISCUSSION AND ANALYSIS (PAGE 16 – 19)

8. FINANCIAL STATEMENTS 8.1 Financial Statements (Page 22 – 54) 8.2 Audit Fees (a) Audit Fees For the year 2008, the Company and subsidiaries have paid audit fees in the amount of Baht 2.24 million.

The Company’s 2008 audit fees have been approved by the shareholders’ meeting. (b) Non-Audit Fees None.

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79 Annual Report 2008

Corporate Governance Report

80

Bumrungrad Hospital Public Company Limited

81

Annual Report 2008

The Company realizes the importance of good corporate governance, and is committed to follow the Principles of Good Governance Guidelines in order to manage its business with transparency, to build confidence for all stakeholders and to compete efficiently at the international level. The Company therefore would like to report the following:

1. THE RIGHTS OF SHAREHOLDERS The Company acknowledges the importance of all shareholders’ rights, including major and minority shareholders.

Shareholders’ rights include basic rights of shareholders as investors and as owners of the Company, such as rights to buy, sell, transfer their shares; rights to receive dividends from the Company; rights in shareholders’ meetings; rights to express their opinions; rights to participate in making decisions on important issues, such as election of directors, approval of important transactions that affect direction of the business and operation of the Company, amendment of memorandum of association and articles of association of the Company.

In 2008, the Company has implemented the following to encourage and facilitate the exercise of shareholders’ rights in shareholders’ meeting: 1. The Company gives shareholders the right to propose important and appropriate issues for incorporation as an agenda in the Company’s annual general meeting and to nominate candidates with appropriate knowledge, abilities and qualifications to be considered for the position of the Company’s director before the annual general meeting of shareholders.

Shareholders can find details of the criteria and guidelines on the Company’s website.

2. The Company sends invitation letters to shareholders in advance to inform them of the meeting agenda which includes opinion of the Board of Directors on each agenda item, together with supporting documents and information sufficient to facilitate shareholders in making their decisions. In addition, the invitation letter package includes details of required documents in order to protect shareholders’ rights to attend the shareholders’ meeting, together with their rights to vote.

Moreover, the invitation letter to shareholders’ meeting is disclosed on the Company’s website. For the annual general meeting of shareholders, the invitation letter is posted on the website 30 days prior to the meeting date.

3. For those shareholders unable to attend the meeting, the shareholders have the right to authorize a person or an independent director as their proxy to attend the meeting and vote on their behalf, using one of the proxy forms sent with the invitation letter. Moreover, shareholders can download the proxy form from the Company’s website.

4. The Company implements the barcode system for registration and the voting process, including the production of voting cards. This helps accelerate and ensures the accuracy of the registration and vote counting process. Upon completion of the meeting, shareholders are able to verify the details.

5. Before going into each agenda, the Chairman of the Board of Directors, who acts as chairman of the meeting, informs the meeting of the voting process for each agenda. During the meeting, the chairman of the meeting gives all shareholders the opportunity to comment, ask questions or give opinions and suggestions on any agenda items. The Chairman and management see the importance of every question and give precise and clear answers.

6. The Company Secretary records minutes of the shareholders’ meetings which are correct and complete. In addition, the minutes are sent to the Stock Exchange of Thailand and posted on the Company’s website within 14 days after the meeting date, so that shareholders are promptly informed and are able to verify.

In addition, the Company also emphasizes on providing correct, timely, equal and transparent information sufficient for all shareholders and investors to make their investment decision.

2. THE EQUITABLE TREATMENT OF SHAREHOLDERS The Company is strongly committed to equitable treatment of every shareholder, whether they are major or minority shareholders, institutional investors, or foreign shareholders. To ensure equal treatment of all shareholders, the Company created various mechanisms, such as: 1. The Company provides a channel for minority shareholders to propose issues deemed important and appropriate to include in the agenda of the Company’s annual general meeting of shareholders and to nominate candidates with appropriate knowledge, abilities and qualifications to be considered for the position of the Company’s director. The announcement has been made through the Stock Exchange of Thailand and the Company’s website. Independent directors will consider and propose the matter to the Board of Directors to be included in the meeting agenda as appropriate.

2. The Company provides proxy forms for shareholders’ meetings. The proxy forms allow shareholders to specify their voting decision on each agenda, and are in accordance with the format provided by the Ministry of Commerce. The proxy forms are sent with the invitation letter. As an alternative for shareholders, the Company also proposes one independent director as the proxy.

Bumrungrad Hospital Public Company Limited

3. The shareholders’ meetings proceed according to the order of the agenda, without adding new and uninformed agenda, in order to give the opportunity to shareholders to study the information on the given agenda before making decisions, and to ensure that there are no sudden changes to the important information in the shareholders’ meetings.

4. The Company sees the importance of the consideration of transactions which may have conflict of interest or may be connected or related transactions, and abides by good corporate governance principles, including rules and regulations of the authorities. In cases of these transactions, directors, management and those who are related persons do not participate in the consideration to approve such transactions.

5. The Company provides oversight and control to prevent improper use of inside information. Details can be found in section 5.2(5) Internal Control of Information. In addition, directors and management of the Company must report the purchase or sale of the Company’s securities to the Securities and Exchange Commission and the Company within three business days.

3. THE ROLE OF STAKEHOLDERS The Company recognizes its responsibilities towards each stakeholder, for sustainable mutual benefits, which will lead to stability of the business operations. The Company intends to interact with each party fairly. The important stakeholders of the Company are as follows: Shareholders: In addition to the basic rights, rights in accordance with the laws and the Company’s articles of association, such as rights to check number of shares, rights to receive share certificates, rights to attend and vote in shareholders’ meetings, rights to express opinions independently at shareholders’ meetings, including rights to receive fair returns, the Company also provides information to all shareholders equally and timely, and gives all shareholders the right to suggest and express their opinions independently on the Company’s business and operations in shareholders’ meetings, as the Company’s owners.

Customers / Patients: The Company provides patient care in an ethical manner, and at the best quality possible, taking into consideration patient safety, patient satisfaction and efficiency in providing its services. The hospital’s Medical Ethics Committee protects patients’ rights. In addition, the Company has a department to monitor and continuously improve the quality of the care provided to all patients, taking into consideration patients’ needs and suggestions.

Employees: The Company believes that its employees are valuable resources and therefore gives all employees equal opportunity in their employment. The Company has the policy to provide employees with appropriate compensation and appoints a welfare committee to oversee the well being and safety of its employees. The Company also provides continuous education and regular training programs to develop and reinforce employees’ knowledge, abilities and skills in all areas including operations, management and technical expertise, in order for employees to fulfill their jobs more effectively.

Furthermore, the Company provides opportunities for employees to voice their opinions or complain to management directly, and has an employee recognition program to increase employees’ morale as the Company believes that work efficiency is a result of employees’ loyalty to the Company. Therefore, the Company focuses on building such loyalty continuously and has consistently performed employee surveys to improve its human resources management.

Suppliers / Contractors: The Company abides by the conditions of agreements and contracts with all suppliers and contractors and ensures timely payment to all suppliers and contractors.

Creditors: The Company strictly abides by loan agreements and loan covenants and ensures timely payments. The Company believes that good relationships with creditors, including building credibility and trust, is a responsibility of the Company towards its creditors.

Competitors: The Company competes with competitors fairly and in accordance with rules and regulations. The Company focuses on competition in the area of quality and efficiency of service for the best benefit of customers and patients.

Community: The Company is committed to improving the quality of the society and the quality of life of the population, especially the responsibility towards the public, including the environment and neighboring community. The important corporate social responsibilities activities of the Company in the past year are as follows: 1. 500 Hearts Program: The program provides underprivileged cardiology patients with surgeries. The program is a 5-year program from 2008-2012 and is a collaboration between the Company, the Bumrungrad Hospital Foundation, the Children’s Heart Diseases Foundation, under the Royal Patronage of Her Highness Princess Kalayaniwattana, and the National Health Security Office.

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2. Scholarship programs: The Company sees the importance of human resources development and therefore initiated scholarship programs for the public and its employees. In the nine years of the programs, 437 scholarships have been granted. The programs are detailed as follows: 2.1 Youth Career Development Program (YCDP): In cooperation with UNICEF, the Company sponsors nurse aid certificate programs and practical nurse certificate programs for underprivileged girls graduated from high school from all over the country. Students have opportunities to become employees of the Company after graduation.

2.2 Nursing Degree Scholarship Program: The Company provides nurse aids with opportunities to continue their study for a Bachelor Degree in Nursing through its scholarship program. The Company also provides internship training programs during school holidays and will accept these nurses as employees once they receive their degree.

2.3 Practical Nurse Certificate Scholarship Program: The Company grants scholarships for practical nurse certificates, certified by the Thailand Nursing Council, to nurse aids.

3. Thomson Mobile Clinic: Since 2001, the Company, together with the Thomson Foundation, provides free healthcare to underprivileged communities in Bangkok through its mobile units. In 2008, the Mobile Clinic Program has treated 22,730 patients and donated over 20 tons of rice. In the 8 years of this program, the Company, the Bumrungrad Hospital Foundation and the Thomson Foundation have treated over 150,000 patients and donated over 127 tons of rice.

4. Medical Research Program: The Company and the Bumrungrad Hospital Foundation work with medical institutions, both local and abroad, to develop medical research, such as research on drugs related to AIDS, cancer and pneumonia.

5. Environmental Policy: The Company has an environmental policy which the Company communicates to employees its views on preservation of the environment and natural resources. The Company also promotes activities relating to safety of the organization and neighboring communities and uses its natural resources efficiently.

4. DISCLOSURE AND TRANSPARENCY The Company realizes the importance of disclosing information which is significant for shareholders and investors in making their decisions. The Company has a policy to disclose information which is transparent, complete, reliable, and timely through various channels which are easily accessible, in order for shareholders and investors to conveniently obtain the disclosures.

Information disclosed to the public includes both financial and non-financial information, such as financial statements, management discussions and analysis, reports of the accountability of the Board of Directors to the Company’s financial reports, connected transactions, structure, duties and responsibilities of the Board of Directors and committees, including statistics on meeting attendance and the corporate governance report.

The Company has many channels to communicate with shareholders and investors. These include those stipulated by rules and regulations, such as the 56-1 filing form, annual reports, the website of the Stock Exchange of Thailand and other communication channels, such as the Company’s website in both Thai and English, quarterly analyst meetings (4 times in 2008), roadshows and investor conferences, both in Thailand and overseas, including the United States of America, Singapore and Hong Kong (7 times in 2008) and investor meetings and conference calls (91 times in 2008).

Furthermore, the Company has set up a Company Secretary and Investor Relations Department to facilitate interested investors and shareholders. Interested investors and shareholders can request information by phone at 02-667-2010, by e-mail at ir@bumrungrad.com, or through the Company’s website, www.bumrungrad.com.

5. RESPONSIBILITIES OF THE BOARD OF DIRECTORS Structure of the Board of Directors The Board of Directors is comprised of qualified directors with extensive experience in various fields. Every director participates in setting 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 by the management, to ensure the maximization of the Company’s value and stability to shareholders. The Board of Directors meets quarterly to review the management’s report on the Company’s operations. Details of duties and responsibilities of the Board of Directors can be found in Section 5.2 (1) Management Structure.

At present, there are 16 directors, as follows: 1. Non-executive directors: 9 non-executive directors, which are Mr. Chai Sophonpanich, Dr. Chanvit Tanphiphat, MD, Mrs. Kulathida Sivayathorn, Dr. John Yangpichitt, MD, Dr. Khun Swanya Dej-Udom, MD, Dr. Anant Tejavej, MD, Mr. Chong Toh, Mr. Chatri Sophonpanich and Mr. Felix Herlihy.

2. Executive directors: 4 executive directors, including Mrs. Linda Lisahapanya, Dr. Dhanit Dheandhanoo, MD, Mr. Curtis John Schroeder and Dr. Sinn Anuras, MD.

Bumrungrad Hospital Public Company Limited

3. Independent directors: 3 independent directors, comprising of Ms. Sophavadee Uttamobol, Mr. Soradis Vinyaratn and Mr. Boonpakorn Chokwathana.

The three independent directors account for 19% of total Board of Directors. The Company plans to increase the number of its independent directors to be more than one-third of the Board of Directors, to be in accordance with the Securities and Exchange Act (No. 4) B.E. 2551.

Segregration of duties: The Company clearly separates duties and responsibilities of the Board of Directors and management. The Board of Directors is responsible for endorsing strategies and supervising management’s operations at the policy level, whereas management is responsible for managing the business to be in accordance with such strategies. Therefore, the Chairman of the Board of Directors is not the same person as the Managing Director.

Directorship Positions in other Listed Companies: The Company realizes the values of experience that directors receive from being directors in other companies.

The Company therefore has the policy that directors can hold board positions in not more than 8 companies listed on the Stock Exchange of Thailand, in order for the directors to be able to allocate sufficient time for each company. With regards to the management, other than board positions at the Company’s subsidiaries and affiliated companies, the Managing Director, the Group Chief Executive Officer and the Company’s management are allowed to hold director and/or independent director positions in not more than 3 other companies. In addition, such positions must be approved by the Board of Directors.

Company Secretary: The Board of Directors appointed Mrs. Jutatip Adulbhan as the Company Secretary to be responsible for administering the Board of Directors’ meetings and shareholders’ meetings, for advising the Board of Directors and management regarding rules and regulations related to listed companies and corporate governance policies, and for safekeeping related documentation.

Committees The Board of Directors has set up committees to assist with specific tasks and to propose assigned issues for consideration or acknowledgement. Details of committee members and their duties and responsibilities are listed in Section 5.2(1) Management Structure. Committees are as follows: 1. Audit Committee consists of 3 independent directors. In 2008, the Audit Committee held 4 meetings and reported their meeting results to the Board of Directors. Details of attendance of the Audit Committee members are in Section 5.2(3) Remuneration of Directors, Committees and Management.

2. Nomination and Remuneration Committee consists of 1 independent director, who is the chairman of the Nomination and Remuneration Committee, and 2 non-executive directors. In 2008, the Nomination and Remuneration Committee held 2 meetings and reported their meeting results to the Board of Directors. Details of attendance of the Nomination and Remuneration Committee members are in Section 5.2(3) Remuneration of Directors, Committees and Management.

3. Governing Board of Bumrungrad International Hospital, Bangkok consists of 3 directors, 2 management, 6 physicians and 1 member by invitation. In 2008, the Governing Board held 6 meetings.

4. Investment Committee consists of 1 independent director, 2 non-executive directors and 2 executive directors. In 2008, the Investment Committee held 2 meetings.

Roles, Duties and Responsibilities of the Board of Directors The Board of Directors has responsibilities towards all shareholders, both major and minority shareholders, in ensuring that the Company conducts its business and implements corporate governance practices in accordance with its objectives and policies for the highest benefit of shareholders, under ethical business values, taking into account the interests of all stakeholders. Duties and responsibilities of the Board of Directors are in Section 5.2(1) Management Structure.

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 primary objective to support and develop effective internal control of the organization, in order to minimize operational risks, and to ensure quality of work processes and operations. Emphasis is on effectiveness and efficiency, appropriateness of expenses and costs, and the operations which are in accordance with 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 reports directly to the Audit Committee.

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Conflict of interest: To prevent any problems related to conflicts of interest, the Board of Directors considers transactions which may have conflicts of interest or which may be related parties transactions with caution, as well as strictly follows the rules and regulations of the Stock Exchange of Thailand and the Securities Exchange Commission, 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 56-1 filings.

Board of Directors’ Meetings It is the duty of every director to attend Board of Directors’ meetings regularly, in order to acknowledge and make decisions relating to the operations of the Company. The Board of Directors holds 4 regular meetings every year (held quarterly), of which the schedule is set in advance for the entire year, and has extraordinary meetings as necessary. In 2008, there were 4 Board of Directors’ meetings. Details of the meeting attendance of each director are in the table in Section 5.2(3) Remuneration of Directors, Committees and Management.

For each meeting, agenda are clearly set in advance by the Chairman of the Board together with the Managing Director.

Moreover, each director is given opportunities to propose issues as agendas. The Company Secretary prepares and sends invitation letters, agendas, and other supporting documents to the Board of Directors at least seven days in advance in order to allow directors sufficient time to research and study the information prior to each meeting.

Normally, each meeting takes two hours. For the consideration of various agenda, the Chairman of the meeting gives directors the opportunity to express their opinions in the meeting independently. In addition, senior management are invited to attend Board of Directors’ meetings to provide useful and important information, and to directly obtain business strategies from the Board of Directors to be implemented in the Company’s operations. In case a director has a personal conflict of interest, such director will leave the meeting and/or does not vote on that particular matter.

Upon completion of each meeting, the Company Secretary is responsible for documenting and distributing minutes for adoption at the next Board of Directors’ meeting. Directors are able to comment, amend and make additions so that the minutes are as accurate as possible. The Company Secretary keeps the adopted minutes along with supporting documents available for directors and relevant persons’ verification.

Remuneration of the Board of Directors and Management The Company provides appropriate remuneration for the Board of Directors and management. The remuneration of the Board of Directors in the form of annual remuneration and meeting remuneration has been approved by shareholders’ meetings. The consideration of directors’ remuneration takes into account that of other comparable listed companies in the same industry.

Committee members only receive remuneration in the form of meeting remuneration.

Management’s remuneration is in the form of salaries and bonuses, taking into consideration the responsibilities and performance of each person and the performance of the Company.

Details of 2008 remuneration of each individual director, which has been approved by the shareholders’ meeting, and the sum of management’s remuneration, are disclosed in Section 5.2(3) Remuneration of Directors, Committees and Management.

Development Programs for Directors and Management The Company informs newly appointed directors of information which is important for fulfilling their duties as the Company’s directors. The information includes the Company’s background information, business strategy and rules and regulations related to the directorship position of the Company.

Moreover, the Company supports development programs for directors and management in various forms, such as training and seminars organized by the Thai Institute of Directors (IOD), the Stock Exchange of Thailand, and the Securities Exchange Commission.

A majority of the Board of Directors, 11 directors, have passed IOD training courses, as follows: 1. Chairman Program: Mr. Chai Sophonpanich and Ms. Sophavadee Uttamobol 2. Director Certification Program (DCP): Mr. Chai Sophonpanich, Mrs. Linda Lisahapanya, Mrs. Kulathida Sivayathorn, Mr. Boonpakorn Chokwathana, and Mr. Curtis John Schroeder 3. Director Accreditation Program (DAP): Mr. Chatri Sophonpanich, Dr. Anant Tejavej, MD, Dr. Khun Swanya Dej-Udom, MD, Mr. Chong Toh, Ms. Sophavadee Uttamobol, Mr. Soradis Vinyaratn, and Mr. Boonpakorn Chokwathana 4. Audit Committee Program (ACP): Mrs. Kulathida Sivayathorn and Ms. Sophavadee Uttamobol 5. Role of Compensation Committee (RCC): Mr. Boonpakorn Chokwathana 6. Chartered Director: Mrs. Kulathida Sivayathorn 7. Quality Financial Reporting: Mrs. Kulathida Sivayathorn

Bumrungrad Hospital Public Company Limited

33 Sukhumvit 3, Bangkok 10110 Thailand Tel:+66(0) 2667 1000 Fax:+66(0) 2667 2525 E-mail:ir@bumrungrad.com www.bumrungrad.com Printed on recycled paper.