everywherew i t h y o u ,

Annual Report 2007 Bangkok Dusit Medical Services Plc. Bangkok Prapradaeng Hospital

BNH Hospital

The Highest Honor Majesty King Bhumipol Adulyadej graciously bestowed the Royal Garuda Emblem upon Bangkok Dusit Medical Services Public Company Limited established and managed by Bangkok Hospital for over 35 years This has been of great pride to the management, physicians, nurses and employees of the hospital to have received His Royal kindness. We promise to persevere in our business with honesty, diligence and commitment, for the health of the people and the development of Thai medical service standards to be a global leader in the industry.

Prasert Prasarttong-Osoth, MD, Chairman of the CEO Committes Bangkok Dusit Medical Services Public Company Limited led the executives to receive the royal mandate from Mr. Kaewkwan Watcharothai, Lord Chamberlain of the Royal Household at the Royal Place on 9th April 2007 w i t h y o u , everywhere Contents ë Message from the Board of Directors ...... 2 ë Audit Committee Report ...... 4 ë General Information ...... 5 ë Board of Directorûs Profile ...... 6 ë Juristic Persons in which the Company holds 10% or more of the shares outstanding ...... 16 ë Financial Overview ...... 19 ë Nature of Business ...... 22 ë Research & Development ...... 31 ë Future Projects ...... 34 ë Industry and Competition ...... 35 ë Risks Factors ...... 38 ë Shareholding Structure and Management ...... 44 ë Report of Compliance with Good Corporate Governance ...... 50 ë Transactions with Associated Companies ...... 53 ë Explanation and Analysis of Operational Results and Financial Status ...... 55 ë The Remuneration of the Auditor ...... 58 ë Responsibility of the Board of Directors to the Financial Statements ...... 59 ë Auditor Report and Financial Statements ...... 62 Message from the Board of Directors

The Board of Directors is pleased to present our dear shareholders with the operational results of Bangkok Dusit Medical Services Public Company Limited for 2007.

In 2007, the Thai economy as a whole was faced with a slowdown due to the continually increasing oil prices in the world market, the political uncertainty, as well as the global economic slowdown and sub prime issue in the United States. This has caused many local businesses to stabilize or even deteriorate due to decreasing consumer demand, including private hospitals where there is high competition and patients have the opportunity to choose from various public and private hospitals. The Company, as one of the largest private hospitals in Thailand, is conscious of the high competition and has improved the quality of service to our clients, continually developed medical technology, including improving the quality of medical services to our patientsû satisfaction with concern for society and the environment. Consequently, His Majesty the King graciously bestowed the Royal Garuda Emblem upon the Company, which is the highest honor that the Company has received.

From the continuous determination under Bangkok Hospital Medical Center, which includes Bangkok Hospital, Bangkok Heart Hospital, Wattanosoth Hospital, and Bangkok International Hospital, as well as the Samitivej Hospital group, which includes Samitivej Sukhumvit Hospital and Samitivej Srinakarin Hospital, the Company has raised the quality of medical services in the areas of state of the art medical technology, quality of service, and diagnoses that are at internationally recognized levels. To this end, the Company received accreditation from the Joint Commission International Accreditation (JCI) in 2007 and was first place in The Asian Hospital Management Awards 2 years in a row in 2006-2007. This illustrates the Companyûs capability and potential in providing services to our Thai and foreign clients that are equal to international standards.

In terms of investments, the Company recognizes that the domestic economy is unpredictable and has therefore expanded the business into neighboring countries by opening two private hospitals in Cambodia. The hospitals are Royal Angkor International Hospital, a 50-bed hospital in Seam Reap, and Royal Rattanak Hospital, a 28-bed hospital in Phnom Penh. The Company also has plans to expand into tourism areas in Thailand by establishing the Global Medical Network Company Limited to oversee the opening of a private hospital in Hua Hin, Prachuabkireekan Province.

In terms of academics, the Company has held annual academic conferences. For the seventh year, the Company organized the conference entitled çExcellence in Oncology and Advancement in Stem Cellé in August 2007, which garnered wide interest and attracted even more participants than previous years. In addition, the Bangkok Diabetes and Endocrine Glands Center, Bangkok Hospital, with the support of the Ministry of Science, Technology and Environment and Thai Stem Life Company Limited, has continuously studied stem cell as a treatment of diabetes wounds. This innovation provides an alternative for diabetes patients.

2 Through the years, the Board of Directors has endeavored to raise the standard of service and push for continuous business growth both in terms of quality of medical services and financial status of the Company. In 2007, the Company was named as one of the top 200 çBest Under a Billioné in Asia for three consecutive years and the çFastest Growing Companyé from Forbes Magazine, a leading global magazine. Furthermore, the Company was one of 300 companies that listed on the S&P Global Challengers Index-Class of 2006, whereby Standard & Poors selected mid-cap companies with high growth and the potential to become blue chip companies in the near future. The Board of Directors would like to express our gratitude towards the shareholders, clients, executives, doctors, nurses and employees, who have contributed to the growth and rapid success of the Company. On behalf of the Board of Directors, we would like to wish you great happiness, good health and good luck in all your endeavors.

(Professor Arun Pausawasdi, M.D.) (Wallop Adhikomprapa) Chairman of the Board President

3 Audit Committee Report

The Board of Directors of Bangkok Dusit Medical Services Public Company Limited has appointed the Audit Committee, comprised of three independent directors with Professor Snoe Indrasukhsri, M.D. as Chairman of the Committee and Professor Santasiri Sornmani, M.D. and Mr. Anuchat Chaiprapa as members.

The Audit Committee is entrusted by the Board of Directors with the duties of monitoring good corporate governance to assess the financial statements and the internal control measures, to ensure compliance with relevant laws and regulations, to prevent conflicts of interest and nominate the auditors.

In 2007, the Audit Committee has had eleven meetings with the auditors and/or management involved in order to assess the quarterly financial statements, evaluate the internal control measures, ensure compliance with relevant laws and regulations and assess the 2007 financial statements accompanying the auditorûs report. It is the opinion of the Audit Committee that the financial statements of the Company is correct as per the generally accepted accounting standards and that there is adequate disclosure of information.

The Audit Committee has nominated the auditors to the Board of Directors for selection of auditors at the 2008 annual shareholders meeting.

(Professor Snoe Indrasukhsri, M.D.) Chairman of the Audit Committee

4 General Information

Type of Business Health Care Business

Location 2 Soi Soonvijai 7, New Phetchburi Road, Bangkapi, Huay Kwang, Bangkok 10320 Telephone: 02-318-0066, 02-310-3000 Fax: 02-318-1546, 02-310-3327

Company Registration Number Bor.Mor.Jor. 0107537000025

Website http://www.bangkokhospital.com

Registered Capital Baht 1,312.26 million, with Baht 1,214.13 million in paid-up capital, divided into 1,214.13 million common shares with par value of Baht 1 each Reference Information Security Registrar Thailand Securities Depository Co., Ltd. 4th Floor, Stock Exchange of Thailand Building 62 Ratchadaphisek Road, Klongtoey, Bangkok 10110 Telephone: 02-229-2800, 02-654-5599 Fax: 02-359-1259

Auditor Ernst & Young Office Co., Ltd. Mrs. Nonglak Pumnoi Mrs. Saifon Intrakaew Ms. Rattana Jala

33rd Floor, Lake Rajada Building 193/136-137 Ratchadaphisek Road Klongtoey, Bangkok 10110 Telephone: 02-661-9190, 02-264-0777 Fax: 02-661-9192, 02-264-0789-90

5 Board of Directorûs Profile

Professor Arun Pausawasdi, M.D. Chairman of the Board of Directors Age 70 years Education ë Directors Accreditation Program Class 45, Thai Institute of Directors Association ë Facharzt fur Chirurgie, The Medical Council of Hamburg, German ë Certificate of Medical Clinic, Mahidol University ë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University Experience ë Secretary General, Royal College of Surgeons of Thailand ë Chairman of Scientific Session Medical, The Medical Association of Thailand ë Dean, Faculty of Medicine Siriraj Hospital, Mahidol University ë Director of the Medical Association Other Position ë Assistant to Ministry of Public Health ë Chairman, Centre for Continuing Medical Education of Thailand ë President, Royal College of Surgeons of Thailand ë Vice President, The Prince Mahidol Award Foundation ë Member of the Thai medical registration license committee ë Vice President, Siriraj Foundation Percentage of shareholding* ë 0.02 Relationship among other management ë None Prasert Prasarttong-Osoth, M.D. Vice Chairman/Chairman of CEO Committee Age 74 years Education ë Directors Accreditation Program Class 45, Thai Institute of Directors Association ë Certificated from National Defense College ë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University Experience ë Resident/Professor in Department of Surgery, Faculty of Medicine Siriraj Hospital ë Member of National Legislative Council (Senator) Other Position ë President, Bangkok Airways Co., Ltd. Percentage of shareholding* ë 13.6 Relationship among other management ë None Professor Snoe Indrasukhsri, M.D. Independent Director/Chairman of Audit Committee Age 87 years Education ë Directors Accreditation Program Class 45, Thai Institute of Directors Association ë Certificate in Pediatric Surgery ë Medical Doctor (Honour), Faculty of Medicine Siriraj Hospital, Mahidol University Experience ë Head, Department of Surgery, Faculty of Medicine Siriraj Hospital, Mahidol University ë Secretary General, Department of Medicine, Siriraj Hospital ë School Director, School of Therapist Rehabilitation ë President, Medical Society of Private Practioner ë Chairman, Pediatric Association Other Position ë None Percentage of shareholding* ë 0.41 22 Relationship among other management ë None Pongsak Viddayakorn, M.D. Executive Company Advisor/Member of CEO Committee Age 74 years Education ë Directors Accreditation Program Class 45, Thai Institute of Directors Association ë Honorary Doctorate in Business Management, Christian University ë Certificate from National Defences College ë DTM&H Diploma, Faculty of Tropical Medicine and Hygiene, Mahidol University ë Post Graduate Study, University of Pennsylvania, USA. ë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University Experience ë Director of The Medical Heath Care Centre of The Teacher Council of Thailand ë Member of consultation committee of the Bangkok Metropolitan Administration Governor (Healthcare) ë Chairman, Private Hospital Association ë Director of Medical Association Other Position ë Vice President, Samitivej PLC. ë Chairman, Bangkok Phuket Hospital Co., Ltd. ë Chairman, Bangkok Ratchasima Hospital Co., Ltd. ë Vice President, Angkor Pisith Co., Ltd. ë Chairman, B.D.M.S International Medical Services Co., Ltd. ë Chairman, S.R. Property Investment Co., Ltd. ë Chairman, Seam Reap Land Investment Co., Ltd. ë Chairman, Phnom Penh Medical Services Co., Ltd. ë Chairman, Phnom Penh First Property Co., Ltd. ë Chairman, Bangkok Helicopter Services Co., Ltd. ë Chairman, Bangkok Health Insurance Co., Ltd. ë Chairman, Asia International Healthcare Co., Ltd. ë Chairman, Global Medical Network Co., Ltd. ë Director, Royal Rattanak Medical International Co., Ltd. ë Director, National Healthcare System Co., Ltd. ë Director, Bio Molecular Laboratory (Thailand) Co., Ltd. Percentage of shareholding* ë 5.0 Relationship among other management ë None Chuladej Yossundharakul, M.D. Director/Member of CEO Committee Age 76 years Education ë Directors Accreditation Program Class 45, Thai Institute of Directors Association ë Diplomate of American Board of Surgery ë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University Experience ë Head, Surgical Unit, National Cancer Institute ë Hospital Director, Karuna Pitak Hospital ë Hospital Director, Bangkok Hospital Other Position ë Chairman, Bangkok Prapadaeng Hospital Co., Ltd. ë Director, Bangkok Pattaya Hospital, Co., Ltd. ë Director, Bangkok Health Insurance Co., Ltd. ë Director, Global Medical Network Co., Ltd. Percentage of shareholding* ë 2.33 Relationship among other management ë None 23 §≥–°√√¡°“√·≈–ºBoard of Directorûs ProfileŸâ∫√‘À“√

Wallop Adhikomprapa Pesident/Member of CEO Committee/Chief Financial Officer Age 65 years Education ë Graduate Diploma in Public Law and Management Class 6 King Prajadhipokûs Institute ë Graduate Diploma in Management of Public Economy Class 4 King Prajadhipokûs Institute ë The Role of the Chairman, Class 9, Thai Institute of Directors Association ë Directors Certification Program Class 20, Thai Institute of Directors Association ë Senior Executive Program, Sasin Graduate Institute of Business Administration ë MS-Accounting, Roosevelt University, USA. Experience ë Managing Director, Thai Wah Resorts Development Co., Ltd. ë Managing Director, Thai Wah Plaza Co., Ltd. ë Financial Controller, Holiday Inn Crown Plaza ë Assistant Director-Accounting and Finance, Hostmark Hospitality Group USA Other Position ë Director, Samitivej PLC. ë Director, Bangkok Helicopter Services Co., Ltd. ë Director, First Health Food Co., Ltd. ë Director, Sodexho Support Services (Th) Co., Ltd. ë Director, Bangkok Health Insurance Co., Ltd. ë Director, B.D.M.S. International Medical Services Co., Ltd. ë Director, S.R. Property Investment., Ltd. ë Director, Angkor Pisith Co., Ltd. ë Director, Seam Reap Land Investment Co., Ltd. ë Director, Phnom Penh Medical Services Co., Ltd. ë Director, Phnom Penh First Property Co., Ltd. ë Director, Asia International Healthcare Co., Ltd. ë Director, Global Medical Network Co., Ltd. ë Director, Royal Rattanak Medical International Co., Ltd. Percentage of shareholding* ë 1.40 Relationship among other management ë None Chirotchana Suchato, M.D. Director/Member of CEO Committee Age 72 Years Education ë Directors Accreditation Program Class 45, Thai Institute of Directors Association ë Diplomate of American Board of Radiology, Downstate University of New York ë Graduated Course Radiobiology at M.D. Anderson Hospital, Houston, Texas ë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University Experience ë School Director, School of X-Tray Technician ë Professor of Radiology division, Faculty of Medicine, Ramathibodi Hospital ë Consultant to Radiology, Clinic of The Teacher Council of Thailand Other Position ë Chairman, Bangkok Pattaya Hospital Co., Ltd. ë Director, Bangkok Phuket Hospital Co., Ltd. ë Director, Bangkok Health Insurance Co., Ltd. ë Director, Asia International Healthcare Co., Ltd. ë Director, Global Medical Network Co., Ltd. Percentage of shareholding* ë 3.20 22 Relationship among other management ë None Yingdao Krairiksh, M.D. Director/Member of CEO committee Age 57 years Education ë Directors Accreditation Program Class 44, Thai Institute of Directors Association ë Stanford Executive Program Graduate School of Business, Stanford University ë Resident Training Program (Internal Medicine) Siriraj Hospital ë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University Experience ë Hospital Director, Bangkok Hospital Other Position ë Chairman of Executive committee, BNH Medical Centre Co., Ltd. ë Chairman of Executive committee, Bangkok Prapradaeng Hospital Co., Ltd. ë Chairman of Executive committee, Bangkok Hadyai Hospital Co., Ltd. ë Chairman of Executive committee, Bangkok Phuket Hospital Co., Ltd. ë Director, Bangkok Health Insurance Co., Ltd. Percentage of shareholding* ë 0.22 Relationship among other management ë None Professor Santasiri Sornmani, M.D. Independent Director/Audit Committee Age 75 Years Education ë Directors Accreditation Program Class 43, Thai Institute of Directors Association ë Ph.D. (Tropical Medicine), Liverpool University ë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University Experience ë Vice President for Administration, Mahidol University ë Dean, Faculty of Tropical Medicine, Mahidol University ë Member, Expert Committee on Food Borne Parasitic Diseases, WHO Other Position ë Chairman, The Medic Pharma Co., Ltd. Percentage of shareholding* ë 0.14 Relationship among other management ë None Mr. Anuchat Chaiprapa Independent Director/Audit Committee Age 75 years Education ë Directors Accreditation Program Class 14, Thai Institute of Directors Association ë Certified Public Accountant ë Certificate, National Defense College ë Bachelor of Accounting, Chulalongkorn University Experience ë Senior Executive General Manager, Thai Military Bank PLC. ë Director, Nava Finance & Securities PLC ë Director, Paiboon Insurance Co., Ltd. ë Director, Small Business Credit Guarantee Corporation Other Position ë Director, Syn Mun Kong Insurance PLC. ë Director, Bangkok Prapadaeng Hospital Co., Ltd. Percentage of shareholding* ë 0.01 Relationship among other management ë None 23 Board of Directorûs Profile

Kitipan Visudharom, M.D. Director/Member of CEO Committee Hospital Director of Bangkok Heart Hospital Age 70 years Education ë Directors Accreditation Program Class 54, Thai Institute of Directors Association ë Diplomate American Board of Surgery ë Diplomate American Board of Thoracic Surgery ë Ph.D. (Surgery) University of Minnesota, Graduate School, Minneapolis, Minnesota, USA ë Residency Training, University of Minnesota, School of Medicine, USA ë Internship, University of Kentucky Medical Center, USA ë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University Experience ë Cardiac Surgeon, Minessotta Hospital, USA ë Associate Professor, Department of Surgery, Uthsesa, USA ë Cardiac Surgeon, Minneapolis Heart Institute - Abbott Northwestern Hospital, Minnesota, USA ë Chief Heart Surgeon, John Nasseff Heart Hospital, USA ë President, Heart Association of Thailand Other Position ë Head, Heart Institute Samitivej - Sukhumvit ë Director of Thailand Cardiac Surgeon Association ë Director of Queen Sirikit Heart Center of the Northeast Percentage of shareholding* ë 0.35 Relationship among other management ë None Krittavith Lertutsahakul M.D. Member of CEO Committee Age 51 years Education ë Director Certification Program Class 22, Thai Institute of Directors Association ë Dermatologist, Medical School, Chulalongkorn University ë Medical Doctor, Faculty of Medicine, Chulalongkorn University Experience ë Hospital Director, Samitivej Hospital ë Hospital Director, BNH Hospital Other Position ë Chairman of Executive committee, Bangkok Samui Hospital Co., Ltd. ë Chairman of Executive committee, Bangkok Pattaya Hospital Co., Ltd. ë Chairman of Executive committee, Bangkok Rayong Hospital Co., Ltd. ë Chairman of Executive committee, Wattanavej Co., Ltd. ë Chairman of Executive committee, Bangkok Trat Hospital Co.,Ltd. Percentage of shareholding* ë 0.01 Relationship among other management ë None

22 Thavatvong Thanasumitra Director Age 61 years Education ë Directors Certification Program Class 27th, Thai Institute of Directors Association ë Bachelor of Law, Thammasart University Experience ë Managing Director, Air Lanka Catering Service Co., Ltd. Other Position ë Director, Bangkok Helicopter Services Co., Ltd. ë Managing Director, Thai Petroleum Service Co., Ltd. ë Director, Executive Vice President of Finance, Bangkok Airways Co., Ltd. Percentage of shareholding* ë 0.23 Relationship among other management ë None Chatree Duangnet, M.D. Director/Member of CEO Committee/CEO of Bangkok Hospital Group Medical Center Age 64 years Education ë Directors Accreditation Program Class 54, Thai Institute of Directors Association ë Certified of National Defense College ë Fellow, American College of Medical Quality ë Certified, American Board of Quality Assurance & Utilization Review Physicians ë Fellow, American Academy of Pediatrics ë Certified, American Board of Pediatrics ë Medical Doctor, Chulalongkorn University Experience ë Group Chief Medical Officer, Bumrungrad Hospital, Bangkok ë Chief Executive Administrator, Bangkok Hospital, ë Clinical Assistant Professor of Pediatrics, College of Medicine, Pennsylvania State University, Pennsylvania, USA ë Chairman of the Board, Jameson Physician Hospital Organization, New Castle, Pennsylvania, USA ë President, Lawrence Independent Physician Association, Lawrence County, Pennsylvania, USA ë Physician Executive, Jameson Health System, New Castle, Pennsylvania, USA ë Training courses in QA/UR/RM. American Board of Quality Assurance & Utilization Review Physicians, USA Other Position ë Director, Bangkok Prapradaeng Hospital Co., Ltd. ë Director, Bangkok Ratchasima Hospital Co., Ltd. ë Director, B.D.M.S International Medical Services Co., Ltd. ë Director, Angkor Pisith Co., Ltd. ë Director, National Healthcare Systems Co., Ltd. ë Director, Bio Molecular Laboratory (Thailand) Co., Ltd. ë Director, Bangkok Health Insurance Co., Ltd. ë Director, Bangkok Helicopter Services Co., Ltd. ë Director, Asia International Healthcare Co., Ltd. ë Director, Phnom Penh Medical Services Co., Ltd. ë Director, Global Medical Network Co., Ltd. Percentage of shareholding* ë 0 Relationship among other management ë None 23 Board of Directorûs Profile

Associate Professor Ajjima Srethaputr Member of CEO Committee/Assistant to Chairman of CEO Committee Age 58 years Education ë Stanford Executive Program, Stanford Graduate School of Business (U.S.A.) ë MBA, Lehigh University of Virginia, USA ë Bachelor of Economics, University of West Virginia, USA ë Bachelor of Business Administration Major Marketing (Honour), Thammasat University Experience ë Assistant President and Vice President of Business Development of Bangkok Dusit Medical Services PLC. ë Instructor, The Journal of Business Administration, Faculty of Commerce & Accountancy - Thammasat University Other Position ë Managing director, Cool & Joy Co., Ltd. ë Director, The Medic Pharma Co., Ltd ë Director, Asia International Healthcare Co., Ltd. ë Member of the Academy of Standard Committee, Dept. of Marketing & General Management, Faculty of Business Administration, Thammasat University. ë Committee & Secretary, Vej Dusit Foundation under the Royal Patronage of H.R.H Princess Galyani Vadhana Krom Luang Naradhiwas Rajanagarindra ë Director, Institute for small and medium enterprise Development Percentage of shareholding* ë 0 Relationship among other management ë None Mr. Chong Chin Wah Member of CEO Committee/Chif Operating Officer Age 44 years Education ë Bachelor of Business, Curtin University of Technology, Australia ë Tertiary Entrance Examination (A levels), Canning College, Australia Experience ë Chief Operation Officer and Chairman of CEO Committee/Samitivej Public Company Limited ë Chairman of Executive Committee of Hospital Pantai Indah, Malaysia Other Position ë President/Chairman of CEO Committee/Samitivej Public Company Limited ë Director and Member of Executive committee/Samitivej Siracha Co., Ltd. ë Director, First Health Food Co., Ltd. ë Director, Sodexho Support Services (Th) Co., Ltd. ë Director, Sodexho Healthcare Services (Th) Co., Ltd. ë Director, National Healthcare System Co., Ltd. ë Director, Bio Molecular Laboratory (Thailand) Co., Ltd ë Director, Irving Seridian Se Co., Ltd. Percentage of shareholding* ë 0 Relationship among other management ë None

22 Somsiri Sakolsatayatorn, M.D. Member of CEO Committee Age 60 years Education ë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University ë Diplomate Board of Pediatric, Medicine Siriraj Hospital, Mahidol University Experience ë Head of Pediatric, Samitivej Hospital ë Deputy of Hospital Director, Samitivej Hospital Other Position ë Director/ Hospital Director, Samitivej Hospital Percentage of shareholding* ë 0 Relationship among other management ë None Somchai Chansawang, M.D. Member of CEO Committee Age 54 years Education ë Doctor of Medicine (First Class Honor), Prince of Songkla University ë Diplomate Board of Surgery, (Siriraj Hospital, Medical Council of Thailand) ë Advanced Management Program (AMP167), Harvard Business School ë Minimally Invasive Surgery (Phoenix, Arizona) Experience ë Deputy of Hospital Director, Bangkok Heart ë Managing Dirctor, Bangkok Hatyai Hospital ë Hospital Director, Bangkok Hatyai Hospital Other Position ë Director, Bangkok Ratchasima Hospital Co., Ltd. ë Director, Bangkok Hatyai Hospital Co., Ltd. Percentage of shareholding* ë 0.00 Relationship among other management ë None Pichit Kangwolkij M.D. Member of CEO Committee, Age 48 years Education ë Certificate in Advanced Management, Harvard Business School ë Diplomate Board of Clinical Preventive Medicine (Thailand Medical Council) ë Doctor of Medicine, Mahidol University - Ramathibodi Faculty of Medicine ë Managing Director, Wattanavej, Co., Ltd. Experience ë Managing Director, Bangkok Rayong Hospital Co., Ltd. ë Managing Director, Bangkok Trat Hospital Co., Ltd. ë Hospital Director, Bangkok Pattaya Hospital Co., Ltd. ë Hospital Director, Bangkok Hospital ë Hospital Director, BNH Hospital Percentage of shareholding* ë 0.06 Relationship among other management ë None

23 We choose Bangkok Hospital because it has the largest network

My father has heart disease and we live quite far, but he is always safe in the Mobile CCU sent by Bangkok Heart Hospital

Traffic on Sukhumvit Road is jam-packed, so I visit the network hospital closest to home

Connecting Network Care for your health and safety anywhere, anytime, whether it is at your home in the suburbs or your workplace in downtown Bangkok because we have the largest network with consistent medical services throughout the network, as well as efficient patient transport for the safety of all our clients. The emergency helicopter can pick us up instantly, I am resting in bed at the Bangkok International Hospital in minutes

I am so pleased that I can use the card at any of the hospitals in the network. I work in Chonburi so I choose to go to Bangkok Pattaya Hospital

strategic NETWORk Juristic Persons in which the Company holds 10% or more of the shares outstanding

Date of Number of Number of % Name Location Type of Business issued and shares held by Share Registration paid-up shares the Company holding

Global Medical Network Co., Ltd. 17 July 2003 100/25 Moo 6 Sukhapiban 1 Rd. Private hospital in 10,000,000 9,999,994 100.0 Buengkum, Bangkok Hua Hin (not yet (par Baht 10 opened for business) per share) Asia International Healthcare 17 July 2003 2 Soi Soonvijai 7 New Phetchburi Rd. Holding Company 3,500,000 3,499,994 100.0 Co., Ltd. (AIH) Huay Kwang, Bangkok (par Baht 10 per share) Phnom Penh Medical 27 November 61A Street 214, Sangkat Beong Private hospital in 10,000 (par KHR 10,000 100.0 Services Co., Ltd. 2006 Rang, Phnom Penh, Cambodia Cambodia (not yet 4,039,550 opened for business) per share) B.D.M.S. International 20 December 61A Street 214, Sangkat Beong Private hospital in 1,000 (par KHR 1,000 100.0 Medical Services Co., Ltd. 2005 Rang, Phnom Penh, Cambodia Cambodia 9,200,000 per share) Bangkok Samui Hospital Co., Ltd. 14 August 57 Moo 3, Koh Samui, Private hospital 15,000,000 14,999,993 100.0 2003 Suratthani (par Baht 10 per share) New Petchaburi Medical 20 December 2 Soi Soonvijai 7 New Phetchburi Rd. Dormant Company 10,000 9,993 100.0 Services Co., Ltd. 2002 Huay Kwang, Bangkok (par Baht 100 per share) Bangkok Rayong Hospital Co., Ltd. 13 August 8 Moo 2 . Soi saengchanneramit Private hospital 40,000,000 39,999,993 100.0 2002 Amphur Muang, Rayong (par Baht 10 per share) Bangkok Insurance Co., Ltd. 2 January 2 Soi Soonvijai 7 New Phetchburi Rd. Health Insurance 10,500,000 10,494,000 99.9 1971 Huay Kwang, Bangkok (par Baht 10 per share) Bangkok Trad Hospital Co., Ltd. 25 January 276 Sukhumvit Rd. Private hospital 50,000,000 49,854,748 99.7 1994 Amphur Muang,Trad (par Baht 5 per share) Wattanavej Co., Ltd. 28 October 25/14 Thaluang Rd. Amphur Muang, Private hospital 18,000,000 17,904,000 99.5 1983 Chantaburi (par Baht 10 per share) Bangkok Phuket Hospital Co., Ltd. 15 March 2/1 Hongyok-uthit Rd., Private hospital 100,000,000 99,467,500 99.5 1994 Amphur Muang, Phuket (par Baht 5 per share) Bangkok Hadyai Hospital Co., Ltd. 27 July 1995 75 Soi 15 Petchakasem Rd., Private hospital 100,000,000 98,533,300 98.5 Amphur Hadyai, Songkla (par Baht 5 per share) Bangkok Pattaya Hospital Co., Ltd. 1 May 1989 301 Sukhumvit KM 143, Private hospital 28,000,000 27,176,144 97.1 Pattaya, Chonburi (par Baht 10 per share) Bio Molecular Laboratories 7 November 2 Soi Soonvijai 7 New Phetchburi Rd. Bio molecular 1,000,000 949,993 95.0 (Thailand) Co., Ltd. 2001 Huay Kwang, Bangkok laboratory (par Baht 10 per share) Samitivej Public Company Limited 28 December 133 Sukhumvit 49 Klongtan, Private hospitals 100,000,000 92,919,772 92.9 1976 Wattana, Bangkok (Samitivej Sukhumvit (par Baht 10 (Held by and Samitivej Srinakarin) per share) Samitivej Plc.) Irving Sheridan SE Co., Ltd. 14 November 488 Srinakarin Rd. Manage and operate 100,000 9,500 95.0 2002 Suan Luang, Bangkok assets related to (par Baht 10 (Held by medical services per share) Samitivej Plc.) First Health Food Co., Ltd. 26 March 488 Srinakarin Rd. Restaurant and 14,000,000 1,399,988 100.0 2004 Suan Luang, Bangkok health food (par Baht 10 (Held by per share) Samitivej Plc.)

(as of 31st December 2007) 16 Date of Number of Number of % Name Location Type of Business issued and shares held by Share Registration paid-up shares the Company holding

Sodexo Healthcare Support Service 12 November 23/93 Sorachai Building, Provide services or attain 150,000 110,994 74.0 (Thailand) Co., Ltd. 2005 22nd Floor, Sukhumvit 63, services to support or add (Par Baht 100 (Held by Sukhumvit Rd., Bangkok value to clientsû businesses per share) Samitivej Plc.) BNH Medical Center Co., Ltd. 27 August 9/1 Convent Rd., Silom, Bangrak, Private hospital 58,611,935 51,762,673 88.3 (Par Baht 10 1991 Bangkok per share) Bangkok Ratchsima Hospital Co., Ltd. 24 November 1308/9 Mitrapap Rd., Private hospital 30,000,000 25,401,518 84.7 1992 Amphur Muang, Nakornratchasima (Par Baht 10 per share) Angkor Pisith Co., Ltd. 20 December 61A Street 214, Sangkat Beong Private hospital 10,000 (Par 8,000 80.0 2005 Rang, Phnom Penh, Cambodia In Cambodia USD 1,000 per share) Bangkok Prapradaeng Hospital 7 September 288 Suksawat Rd., Amphur Muang, Private hospital 10,500,000 8,295,000 79.0 Co., Ltd. 1992 Samutrprakarn (Par Baht 10 per share) National Healthcare Systems 25 July 2001 2 Soi Soonvijai 7 New Phetchburi Rd., Medical laboratory 7,500,000 5,551,793 99.96 Co., Ltd. Huay Kwang, Bangkok (Par Baht 10 per share) Royal Rattanak Medical Services June 2007 Phnom Penh Cambodia Private hospital 6,500 (Par 4,550 70.0 Company Limited In Cambodia USD 1,000 per share) Samitivej Sriracha Co., Ltd. 9 April 2001 8 Soi Laemket, Jermjormpol Rd., Private hospital 18,751,000 12,366,050 65.9 Sriracha, Chonburi (Par Baht 10 (Held by per share) Samitivej Plc.) Medical Pharma Co., Ltd. 26 August 124 Thonburi-Paktor Rd., Pharmaceutical 2,143,000 1,050,000 49.0 1971 Bangkok manufacturing and sales (Par Baht 10 per share) Bangkok Helicopter Services 29 June 1995 1111 Ploenchit Rd., Lumpini, Provide patients with air 10,000,000 4,899,996 49.0 Co., Ltd. Patumwan, Bangkok transportation (Par Baht 10 per share) S.R.Property Investment 20 December 571 Road No.6, Phum Salakanseng, Land Holding Company 1,000 (Par 490 49.0 Co., Ltd. 2005 Siem Reap, Cambodia KHR 20,000 per share) Siem Reap Land Investment 10 February 571 Road No.6, Phum Salakanseng, Land Holding Company 1,000 (Par 490 49.0 Co., Ltd. 2006 Siem Reap, Cambodia KHR 20,000 per share) Phnom Penh First Property 27 November 571 Road No.6, Phum Salakanseng, Land Holding Company 1,000 (Par 490 49.0 Co., Ltd. 2006 Siem Reap, Cambodia KHR 20,000 per share) Cool & Joy Co., Ltd. 20 May 2003 2 Soi Soonvijai 7 New Phetchburi Rd., Public relations and 5,000,000 1,500,000 30.0 Huay Kwang, Bangkok marketing support (Par Baht 10 per share) Royal Bangkok Hospital L.L.C, June 2007 Abu Dhabi, Private hospital 10,000 (Par 3,000 30.0 Abu Dhabi (formerly AL Ghaith United Arab Emirates in UAE AED 1,000 (Held by AIH) Bangkok Medical Center L.L.C.) per share) Ramkhamhaeng Hospital Public 25 August 2138 Ramkhamhaeng Rd., Private hospital 12,000,000 3,141,700 26.2 Company Limited *** 1986 Bangkapi, Bangkok (Par Baht 10 per share) Prasit Pattana Public Company 24 January 943 Paholyothin Rd., Samsen nai, Invest in shares of Phyathai 1,732,047,520 282,548,048 16.3 Limited *** 1974 Phayathai, Bangkok Hospital 1, 2 and 3 (Par Baht 1 per share) Udon Pattana Co., Ltd. *** 9 June 1994 555/5 Phosri Rd., Amphur Muang, Private hospital 30,000,000 3,000,000 10.0 Udonthani (Par Baht 10 per share)

Note ***The Company holds shares only and is not involved in day-to-day operation. (as of 31st December 2007) 17 Juristic Persons in which the Company holds 10%

Summary of Shareholding Proportion by the Company (as of the 31st of December 2007) 90% up 50%-89% 20%-49% less than 20% BPK BTH BNH COOL & PPFP Udon 99.5% 99.6% 88.3% JOY 49.0% Pattana BHH BCH NHS 30.0% RAM 10.0% 98.5% 99.5% 99.9% MP 26.1% PYT BSH BPH BPD 49.0% Bangkok 16.3% 100% 97.1% 79.0% S.R. Helicopter BIO BRH Angkor Property 49.0% 95.0% 100% Pisith 49.0% BDMS NPMS 80.0% Seam Reap International 99.9% BKH Investment 100% PPMS 84.7% 49.0% BHI 100% Royal 100% SVH Rattanak Global 92.9% 70.0% Medical 100% SSH Irving First Health AIH 65.9% 65.9% 95.0% 100% Royal BKK Hospital Sodexho 30.0% 74.0%

™◊ËÕ∫√‘…—∑™◊ËÕ∫√‘…—∑ AIH Asia International Healthcare Co., Ltd. First Health First Health Food Co., Ltd. Angkor Pisith Angkor Pisith Co., Ltd. Global Medical Global Medical Network Co., Ltd. Bangkok Helicopters Bangkok Helicopter Services Co., Ltd. MP Medical Pharma Co., Ltd. BCH Wattanavej Co., Ltd. NHS National Healthcare Systems Co., Ltd. BDMS Inter BDMS International Medical Services Co., Ltd. NPMS New Petchaburi Medical Services Co., Ltd. BHH Bangkok Hadyai Hospital Co., Ltd. PPFP Phnom Penh First Property Co., Ltd. BHI Bangkok Insurance Co., Ltd. PPMS Phnom Penh Medical Services Public Co., Ltd BIO Bio Molecular Laboratories (Thailand) Co., Ltd. PYT Prasit Pattana Public Company Limited BKH Bangkok Ratchsima Hospital Co., Ltd. RAM Ramkhamhaeng Hospital Public Company Limited BNH BNH Medical Center Co., Ltd. Royal BKK Royal Bangkok Hospital L.L.C, Abu Dhabi BPD Bangkok Prapradaeng Hospital Co., Ltd. Royal Rattanak Royal Rattanak Medical Services Company Limited BPH Bangkok Pattaya Hospital Co., Ltd. S.R. Property S.R. Property Co., Ltd. BPK Bangkok Phuket Hospital Co., Ltd. Seam Reap Investment Seam Reap Investment Co., Ltd. BRH Bangkok Rayong Hospital Co., Ltd. Sodexho Sodexo Healthcare Support Service BSH Bangkok Samui Hospital Co., Ltd. (Thailand) Co., Ltd. BTH Bangkok Trad Hospital Co., Ltd. SSH Samitivej Sriracha Co., Ltd. Cool & Joy Cool & Joy Co., Ltd. SVH Samitivej Public Company Limited Irving Irving Sheridan SE Co., Ltd. Udon Pattana Udon Pattana Co., Ltd. 18 Financial Overview

(Unit : Million Baht) Consolidated financial Statements Company Only 20072006 2005 2007 2006 2005 Revenue from Operations Total Revenue 18,885 15,981 10,724 6,967 6,304 4,696 Revenue from Medical Services 18,423 15,607 10,254 6,321 5,484 4,243 Cost of Medical Services 10,237 8,673 5,935 3,427 2,975 2,365 Gross Profit 8,187 6,934 4,319 2,894 2,509 1,878 Profit before interest and depreciation 3,991 3,361 1,865 1,239 1,187 955 Net Profit 1,244 1,323 832 627 1,124 832 Profit per share (Baht) 1.04 1.12 0.72 0.52 0.95 0.72 Weighted Average Number of Shares 1,195,856,184 1,176,883,665 1,163,410,108 1,195,856,184 1,176,883,665 1,163,410,108 Financial Status Total Assets 26,232 24,934 17,677 16,433 15,955 11,664 Total Liabilities 14,522 14,949 9,260 7,471 7,864 3,775 Minority shareholders 596 507 528 0 Major shareholders 11,114 9,477 7,890 8,961 8,091 7,890 Total Shareholders Equity 11,710 9,984 8,418 8,961 8,091 7,890 Financial Ratios Liquidity Ratio (times) 0.60 0.73 0.51 0.46 0.93 0.38 Quick Ratio (times) 0.56 0.68 0.45 0.44 0.89 0.33 Average Collection (Period) 26.42 24.85 17.62 33.18 31.71 17.36 Inventory Turnover (days) 7.57 8.47 8.38 6.35 6.92 8.55 Payment Period (days) 30.48 33.38 34.02 34.53 31.91 38.07

Debt to Equity (times) 1.24 1.50 1.1 0.83 0.97 0.48 Interest Coverage Ratio (times) 5.80 6.16 8.18 3.09 4.11 10.34 Revenue from Medical Services Growth 18.05% 52.20% 94.40% 15.26% 29.26% 15.33% Net Profit Growth -5.94% 58.98% 33.53% -44.21% 35.07% 33.53% Gross Profit Margin 44.44% 44.43% 42.12% 45.78% 45.75% 44.26% Net Profit Margin 6.75% 8.48% 8.10% 9.92% 20.49% 19.61% Return on Equity 11.19% 13.96% 10.54% 7.00% 13.89% 10.54%

Asset Growth 5.21% 41.05% 21.10% 3.00% 36.78% 15.02% Return on Assets 4.74% 5.30% 4.71% 3.82% 7.04% 7.13% Asset Turnover (times) 0.70 0.63 0.58 0.38 0.34 0.36

19 quality guaranteed

ë 2007 ë 2007 "Forbes Asia" Best Under a Billion JCI (Joint Commission International)

ë 2007 ë 2006 The Asian Hospital Management Awards The Asian Hospital Mana Connecting Quality Develop service standards to a consistent level throughout the network, witness from the numerous quality awards, certified by various public and private institutions, that we have received throughout the 36 years. We are committed to continuously developing our services to provide assurance to our clients.

ë 2007 ë 2007 JCI (Joint Commission International) Telemedicine for the Mobile Society

ë 2006 agement Awards Prime Minister's Export Award Nature of Business

1. Background 36.8 percent, 67.8 percent and 51.2 percent to 92.9 Bangkok Dusit Medical Services Public Company percent, 98.5 percent and 99.5 percent, respectively. Limited was established on 30th October 1969 under the name çBangkok Dusit Medical Services Company 2005 Limitedé with initial registered capital of Baht 10 million. The Company invested in additional shares of BNH On 26th February 1972, Bangkok Hospital commenced Medical Center Co., Ltd. from the existing shareholders, operations in providing medical services. Through business increasing holdings from 48.5 percent to 61.5 percent expansion, the Company was listed on the Stock Exchange in April 2005. Currently, the Company holds 88.3 of Thailand on 2nd October 1991 and registered its percent of the subsidiary. conversion to public company limited in 1994. Presently, the Company has a registered capital of Baht 1,312.26 On Friday, 26th August 2005, Her Majesty Queen million, with paid-up capital of Baht 1,214.13 million. Sirikit graciously presided over the official opening ceremony of the Bangkok Heart Hospital. Significant events in the past five years 2003 The Company unofficially opened the Wattanosoth The Company invested in a new subsidiary, initially Hospital for patients suffering from cancer at the end holding 81 percent of the total shares of Bangkok of 2005. Rayong Hospital Co., Ltd., enabling the Company with hospitals in all provinces in the Eastern region, namely, Chonburi, Rayong, Chantaburi and Trad. Currently, the Company holds 100 percent of the shares of the subsidiary.

2004 The Company invested in a new subsidiary, holding 100 percent of the total shares of Bangkok Samui Hospital Co., Ltd., which is a 50-bed private hospital on Koh Samui, Suratthani Province.

The Company purchased 19 percent of issued and paid-up capital of Ramkhamhaeng Hospital Public Company Limited.

The Company purchased additional shares of Samitivej Public Company Limited, Bangkok Hadyai Hospital Co., Ltd. and Bangkok Phuket Hospital Co., Ltd., increasing holdings of issued and paid-up capital from

22 Presently, the Company has increased its holdings to 84.7 percent.

In September 2006, the Company invested in a new subsidiary çAsia International Healthcare Co., Ltd.é for the purpose of investing in an overseas hospital with 100 percent shareholding. The subsidiary, holding 30 percent, has partnered with a local investor in the United Arab Emirates to set up Royal Bangkok Hospital LLC in Abu Dhabi to establish a 30-bed private hospital in Abu Dhabi, United Arab Emirates

2007 The Company invested in a new subsidiary with 100 percent shareholding, Global Medical Network Co., Ltd., to operate a private hospital in Amphur Hua Hin, Prachuabkirikhan Province, which is expected to open for business in 2009. 2006 The Company made a bid to purchase shares of In January 2007, the Royal Angkor International Hospital, Bangkok Pattaya Hospital Co., Ltd., Bangkok Rayong a 50-bed hospital in Siem Riap, Cambodia under Hospital Co., Ltd., Wattanavej Co., Ltd. (Bangkok management of Angkor Pisith Co., Ltd., in which the Chantaburi Hospital) and Bangkok Trad Hospital Co., Company holds 80 percent, opened for business. The Ltd. This increased the Companyûs holdings in the four official opening ceremony was held on 19th November companies from 49.0 percent, 81.1 percent, 62.0 2007. percent and 63.4 percent to 97.1 percent, 100.0 percent, 99.5 percent and 99.6 percent of paid-up On 1st September 2007, Royal Rattanak Hospital, a capital, respectively. 28-bed hospital in Phnom Penh, Cambodia, under management of Royal Rattanak Medical Services Co., In February 2006, the Company opened the Bangkok Ltd., in which the Company holds 70 percent, opened International Hospital to provide multi-lingual (26 for business. languages) One Stop Service for international patients both out-patients and in-patients. The Company invested in additional shares of Ramkamhaeng Hospital Plc., increasing shareholding The Company invested in 79.7 percent of Bangkok from 19 percent to 26.18 percent. The Extraordinary Ratchasima Hospital Co., Ltd., a 300-bed private Shareholders Meeting 1/2550 held on 26th December hospital in Amphur Muang, Nakornratchasima Province. 2007, passed a resolution for the Company to make

23 an offer for the remaining shares of Ramkamhaeng Hospital Plc. at Baht 480 per share from 4th January- 7th February 2008.

Significant Events in 2007 ë Bangkok Hospital Medical Center in conjunction with the Bangkok Health Department organized a CSR project entitled çAssembling Healthy City Dwellersé at the Bhirombhakdi Pavilion, Lumpini Park on the first Sunday of every month from 6.00- 9.00 am. There are 3 zones within the event. In the first zone, nurses provide physical check-up, take blood pressure and blood samples, and provide basic medical advice. In the second zone, specialist physicians provide knowledge about various illnesses. The third zone, offers games to test efficiency of various bodily functions. This project was instigated ë On 9th October 2007 at 3.00 pm, His Excellency in June 2007 and has been well received by people Palakorn Suwanrath, Privy Councilor, presided over who exercise in Lumpini Park. the grand opening of the Vascular Center, Bangkok Heart Hospital, and was welcomed by Chatree Duangnet, M.D., Chairman of the Executive Group and Kitipan Visudharom, M.D., Hospital Director of the Bangkok Heart Hospital.

ë With oil prices continuing to rise, which will increasingly affect energy consumption within the organization, the Company has recognized the importance of energy consumption preservation. To this end, the Company wishes to encourage staff to preserve energy both at work and at home, in order to set a good example for society and the country. On 30th November 2007, the Energy Preservation Working Team organized the çEnergy Preservationé campaign and exhibition to educate and create awareness in using energy

24 medicine and medical equipment. On board the helicopters, service is provided 24 hours a day by certified and experienced physicians and nurses in every weather condition.

The helicopters are able to land and take off from the ground, tall buildings and difficult to access areas such as tourist destinations on the sea and oil & gas rigs. There are also helicopters available for hire (flying limousine). Clients may hire the helicopters to fly all over Thailand and neighboring countries with amenities provided throughout the flight.

efficiently among the staff and executives, with organic cotton bags as souvenirs.

ë Bangkok Helicopter Services Company Limited in conjunction with Bangkok Dusit Medical Services Public Company Limited through Bangkok Medical Center in the Bangkok Hospital Group, Samitivej Hospital Group and BNH Hospital, has initiated a new service, Helicopter Emergency Medical Services (HEMS) or Sky ICU, covering all provinces in Thailand as well as neighboring countries. The service is an aviation medicine service provided to save lives and transport patients via helicopters, which carry

25 (JCI), which validates the readiness and capability in providing medical service to both Thais and foreigners equal to internationally accepted hospitals.

ë The Asian Hospital Management Award in 2002, 2006 and 2007.

ë On Forbes çBest Under a Billioné, a list of two hundred best companies in Asia Pacific with revenue of no more than US$ 1 billion, for three consecutive years from 2005 through 2007.

çBest Under a Billioné by Forbes Asia is based on growth rate and continuing revenue, as well as the management team and efficient business operations, which generate increasing revenue both domestically and internationally.

Awards ë His Majesty King Bhumipol Adulyadej graciously bestowed the Royal Garuda Emblem upon the Company. The Royal Garuda Emblem is equivalent to a certificate of assurance that the Company operates its business with honesty and integrity, is financially stable, and it trustworthy in its dealings with the general public. It also provides moral support to entrepreneurs and further enhances the prosperity and stability of business throughout the country.

ë In 2007, Bangkok Hospital Medical Center (Bangkok Hospital, Bangkok Heart Hospital, Wattanosoth Hospital and Bangkok International Hospital) and Samitivej, a network hospital (Samitivej Sukhumvit Hospital, and Samitivej Srinakarin Hospital) received accreditation from the Joint Commission International Accreditation

26 ë çFastest Growing Companyé from Forbes Asia in Singapore on 28th November 2007.

ë On S&P Global Challengers Index-Class of 2006, one of three hundred mid cap companies that S&P selected for high growth rate and potential to become a blue chip company in the near future.

ë çBest Thailand Deal of the Year 2006é from Finance Asia and çCountry Deals of 2006é from Asia Money for the Companyûs convertible bond.

ë Prime Ministerûs Export Award from Department of Export Promotion, Ministry of Commerce in 2001 and 2006.

ë ISO 14001 Certification for environmental management, Mor Or Gor. 18001/ OHSAS18001 certification for occupational hygiene and safety management from Japan Audit and Certification Organization (JACO) in 2004.

ë ISO 14001 Certification for environmental manage- ment, Mor Or Gor. 18001/ OHSAS18001 certification for occupational hygiene and safety management from 3. Business Operations the Industrial Standard Organization (ISO) in 2003. 1. Private hospital operations under çBangkok Hospital Medical Center : BMCé comprised of çBangkok Hospitalé, ë Superbrands Thailand Award in 2003, the Company çBangkok Heart Hospitalé, çWattanosoth Hospitalé and is one of the two hospitals in Thailand that is recognized çBangkok International Hospitalé. by consumers for good reputation and impressive medical services. 2. Investments in private hospitals and related businesses through various subsidiaries as follows:

27 Investments in Medical Services Number of Shareholding Area of Service Entity Beds Percentage 1. Inner Bangkok, covering 1. Samitivej Plc. : Samitivej Sukhumvit Hospital 275 92.90 Sukhumvit, Asoke, Silom 2. BNH Medical Center Co., Ltd. : BNH Hospital 225 88.30 and Sathorn 2. Outer Bangkok and 3. Samitivej Plc. : Samitivej Srinakarin Hospital 400 92.90 Samutprakarn 4. Bangkok Prapradaeng Hospital Co., Ltd. 150 79.00 5. Ramkhamhaeng Hospital Plc. (We are not 300 26.18 involved in management of the hospital.) 6. Prasit Pattana Plc. : Phyathai 1 Hospital, 790 16.31 Phyathai 2 Hospital and Phyathai 3 Hospital (We are not involved in management of the hospital.) 3. Eastern region, covering 7. Bangkok Pattaya Hospital Co., Ltd. 200 97.10 Chonburi, Rayong, 8. Bangkok Rayong Hospital Co., Ltd. 200 100.00 Chantaburi and Trad 9. Wattanavej Co., Ltd. : Bangkok Chantaburi Hospital 200 99.50 10. Bangkok Trad Hosptial Co., Ltd. 150 99.60 11. Samitivej Sriracha Co., Ltd. : 180 65.90 (Held by Samitivej Plc., Samitivej Sriracha Hosptial a subsidiary) 4. Northeastern Region, 12. Bangkok Ratchasima Co., Ltd. (Formerly 300 84.67 covering Nakornratchasima Ratchasima Hopsital Thonburi Co., Ltd.) 350 10.00 and Udornthani 13. Udorn Pattana Co., Ltd. : Eak Udorn Hospital (We are not involved in management of the hospital.)

28 Number of Shareholding Area of Service Entity Beds Percentage 5. Southern Region, covering 14. Bangkok Phuket Hospital Co., Ltd. 170 99.50 Prachuabkirikan, Suratthani, 15. Bangkok Hadyai Hosptial Co., Ltd. 200 98.50 Phuket and Songkla 16. Bangkok Samui Hosptial Co., Ltd. 50 100.00 17. Global Medical Network Co., Ltd. (To operate 100 100.00 private hospital in Hua Hin, not yet opened) 6. Overseas (United Arab 18. Angkor Pisith Co., Ltd. : 50 80.00 Emirates and Cambodia) Royal Angkor International Hospital 19. Phnom Penh Medical Services Co., Ltd. 100 100.00 (Not yet opened) 20. Royal Rattanak Medical Services Co., Ltd. : 28 70.00 Royal Rattanak Hospital 21. Royal Bangkok Hospital L.L.C, Abu Dhabi 30 30.00 (Held by AIH, (Formerly AL Ghaith Bangkok Medical Center L.L.C.) a subsidiary)

Investment in Related Businesses Shareholding Type of Businesss Entity Percentage 1. Manufacture and distribution of medicine Medical Pharma Co., Ltd. 49.00 2. Medical Laboratories National Healthcare Systems Co., Ltd. 74.00 3. Bio Molecular Laboratories Bio Molecular Laboratories 95.00 (Thailand) Co., Ltd. 4. Public Relations and Marketing Support Cool & Joy Co., Ltd. 30.00 for associated hospitals 5. Air Medical Evacuation Bangkok Helicopter Services Co., Ltd. 49.00

6. Real Estate (land) lease for S.R. property Investment Co., Ltd. 49.00 hospital operations in Cambodia Seam Reap Land Investment Co., Ltd. 49.00 Phnom Penh First Property Co., Ltd. 49.00 7. Overseas investments (Holding Company) Asia International Healthcare Co., Ltd. (AIH) 100.00

29 Revenue Structure of the Company and Subsidiaries Comparison of revenue structure of the Company and subsidiaries in 2005-2007 as follows: (Unit : Miillion Baht) 2007 2006 2005 Type of Entity % Revenue Shareholding Revenue% Revenue% Revenue % Medical service fees Bangkok Dusit Medical Services Plc. 100.00 6,304.1 34.2 5,379.4 34.5 4,238.2 41.3 Samitivej Plc. 92.92 4,632.3 25.1 3,664.0 23.3 2,776.6 27.1 Bangkok Pattaya Hospital Co., Ltd. 97.06 1,957.2 10.6 1,697.2 10.9 Bangkok Phuket Hospital Co., Ltd. 99.47 1,336.8 7.3 1,047.0 6.7 787.5 7.7 BNH Medical Center Co., Ltd. 88.31 1,307.2 7.1 1,126.5 7.2 720.6 7.0 Bangkok Rayong Hospital Co., Ltd. 100.00 729.8 4.0 625.5 4.0 474.9 4.6 Bangkok Hadyai Hospital Co., Ltd. 98.53 592.1 3.2 555.1 3.6 540.6 5.3 Wattanavej Co., Ltd. 99.47 481.4 2.6 466.7 3.0 209.8 2.0 Bangkok Ratchasima Hospital Co., Ltd. 84.67 417.6 2.3 292.8 1.9 Bangkok Samui Hospital Co., Ltd. 100.00 258.2 1.4 214.0 1.4 159.8 1.6 Bangkok Trad Hospital Co., Ltd. 99.71 198.0 1.1 167.7 1.1 144.2 1.4 Bangkok Prapradaeng Hospital Co., Ltd. 79.00 126.9 0.7 131.7 0.8 134.8 1.3 Angkor Pisith Co., Ltd 80.00 53.6 0.3 Royal Rattanak Medical Services Co., Ltd 70.00 3.0 0.0

Revenue from laboratory fees Total 18,398.2 99.9 15,367.6 98.5 10,187.0 99.4 Bio Molecular Laboratories 95.00 19.3 0.1 35.5 0.2 24.1 0.2 (Thailand) Co., Ltd. National Healthcare Systems Co., Ltd. 74.02 6.0 0.0 203.8 1.3 42.7 0.4 Total 25.3 0.1 239.3 1.5 66.8 0.6 Total Revenue from Operations 18,423.5 100.0 15,606.9 100.0 10,253.8 100.0

30 Research & Development

1. Research The Company has continuously organized academic seminars for physicians in Bangkok Hospital and outside physicians from various institutions to expand physiciansû capabilities in all medical fields. Bangkok Hospital has been certified by the Medical Practitioners Council as the primary institution in Continuous Medical Education, where physicians, nurses and medical professionals who attend Bangkok Hospital academic seminars will receive credit for renewal Each accreditation is awarded for three years. of medical professional practice license. Organizations requesting accreditation must exhibit In 2007, Wattanosoth Hospital signed a Memoran- perseverance, determination, actual practice, as dum of Understanding with the Barbara Ann well as results of quality patient care, safety and Karmanos Cancer Institute, an American institution continuous quality improvements. The JCI standard specializing in cancer, with the objective of exchanging is comprised of 340 main clauses and 1031 sub- medical knowledge and experience. clauses for performance evaluation. This year, the two standards aforementioned 2. Development are the main goals of the organization. The Company The Company adopted the Performance Manage- has analyzed the main factors that must be evaluated ment System in order to drive the organization in in improving quality with the goal of meeting the all four aspects of the balance scorecard to achieve highest standards in medical services, with emphasis tangible results and to assign accountability to all on patient safety. Furthermore, improvements in employees in achieving the goals set by the Company. quality must be continuous. The main factors are In addition to the Institute of Hospital Quality as follows: Improvement and Accreditation, a widely recognized 1. Emphasis on patient safety, especially in organization in accreditation of hospital standards, providing medical services. the Company aims to receive certification from the 2. Emphasis on environmental safety, which Joint Commission International Accreditation (JCI), affect the safety of patients and employees. a unit of the Joint Commission on Accreditation of 3. Improvement of quality of service to patients, Healthcare Organization (JCAHO), which is an including patient care, work procedures, improving accreditation organization of hospitals in the United quality of service, as well as innovations in provid- States. JCI, established in 1998 with the goal to ing services and work procedures that significantly improve patient care around the world, awards affect patient care. accreditation to hospitals outside the United States. 4. Using indicators as information in continuous improvement of quality.

31 5. In order to ensure that the above are practiced using standardized principles and tools. throughout the organization in all related units, as 2. The organization sets goals in designing or well as to ensure control and efficient evaluation of adapting new processes and clearly defines indicators the quality of patient care using the indicators to which can evaluate the processes. the utmost benefit, the organization established the Risk management strategies within the organization structure in improving quality and patient safety and can be achieved by doing the right thing and reducing appointed the following committees to supervise: risks of dangers which may occur in the caring of 1. Board of Directors (BOD) patients for the greater benefit of the patients. 2. Joint Executive Committee (JEXCO) The hospital defines the main factors in patient 3. Center Executive Committee (CEC) safety as follows: 4. Medical Executive Committee (MEC) ë Available 5. Hospital Executive Committees (HECs) ë Timely 6. Quality Management Committee (QMC) ë Effective 7. Patient Safety Committee (PSC) ë Continuity 8. Environmental Care Committee (ECC) ë Safety ë Efficiency Quality and Safety Design ë Respect & Caring 1. The organization designs and adapts new systems or processes in order to improve quality by

32 Critical Success Factors of Patient Safety Measures 2. Good Practice for Patient Safety and Safety 1. Leadership Support : support from executive Culture : HA National Forum 2008: 5 Projects chosen management, a definite goal in supporting quality to present of service and patient care ë Clean care is safer care 2. Strategic Plan : encompass improvement of ë Patient Identification quality and patient safety in the organizationûs ë Isolation/Precaution strategies and an important driver force ë Medication Management System 3. Budget : adequate allocation of budget, clearly ë Fall Prevention Project define boundaries and goals 4. Empowerment : support and assign a fully In the past three years, the Company has contri- authorized team as the driving force with approval buted the following amounts to research & development: and support from executive management 2005 Baht 36.0 million 2006 Baht 48.3 million Results: 2007 Baht 32.61 million ë Bangkok Hospital Medical Center accredited by 9-month period the Joint Commission International in July 2007 ë Awards from quality development activities: 1. Hospital Management of Asia 2007: second place in Patient Safety category from Prevention of Catheter Related Blood Stream Infection Project

33 Future Projects

The Company has five current or future investment Expected Benefits projects as follows: 1. To expand specialized medical services and 1. 50-bed private hospital in Phnom Penh, Cambodia, accommodate the increasing number of patients. to be operated by Royal Rattanak Company, which 2. To expand customer base and become the is a subsidiary registered in Cambodia. Construction center for patients from Southeast Asia and the is nearly completed and the hospital is scheduled Middle East. to open in March 2008.

2. 50-bed private hospital in Abu Dhabi, United Arab Emirates, to be operated by Al Ghaith Bangkok Medical Center LLC, Abu Dhabi, a joint venture between Asia International Healthcare Co., Ltd., a wholly owned subsidiary and Al Ghaith Holding PJSC, a local investor in United Arab Emirates, with ownership of 30:70. The project is currently under construction and is scheduled to open within 2008. Projects which the Company has invested in since 2005-2006 may be summarized as follows: 3. 100-bed private hospital in Phnom Penh, 1. Bangkok Dental and Maxilofacial Center: Baht Cambodia, to be operated by Phnom Penh Medical 250 million project located at the entrance of Soi Services Co., Ltd., which is a subsidiary registered Soonvijai on New Phetchburi Road. Construction in Cambodia. Construction is underway and expected began late 2005 and opened for business in late to be completed in 2009 2006.

4. 50-bed private hospital in Hua Hin, Prachuab- 2. Private hospital in Seam Riap, Cambodia: operated keereekhan Province, to be operated by Global by Angkor Pisith Co., Ltd., a subsidiary registered Medical Network Co., Ltd. The Company has already in Cambodia. Construction was completed in late purchased the land and construction is scheduled 2006 and began operations in January 2007 under to begin in 2008 and is expected to be completed the name Royal Angkor International Hospital: in 2010. RAIH.

5. Bangkok Brain Hospital to begin construction in 2009.

34 Industry and Competition

Industry Consequently, public hospitals could not invest The need for medical services has increased in and improve medical services and technology, Thailand as can be seen from the increasing expenses which led to the migration of medical professionals for medical care. This is because the Government to private hospitals, which offered better benefits. has instated the çBaht 30 Care for Every Disease The middle class who were not satisfied with the Programé and the rise in medical tourism, which length of time of medical services and the quality of has become popular among tourist groups. Thai service at public hospitals, switched to private hospitals offer various medical services to cater to hospitals more and more. Private hospitals were both Thai and foreign patients. able to retain greater liquidity as they could collect medical fees as incurred. The increased revenue of Trend in Increasing Number of Thai Patients private hospitals is the main reason that they have In 2001, the Thai Government began the çBaht been able to improve the quality of service, the 30 Care for Every Disease Programé, which medical facilities and medical equipment. Visits to greatly increased the number of Thai patients private hospitals increased from 26.1 percent in 2005 visiting public hospitals. This caused the shortage to 28.6 percent in 2006. of personnel and financial trouble in public hospitals as they could not charge actual medical fees.

100% 7.2% 5.1% 5.6% 3.9% 4.9% 90% 24.0% 80% 29.8% 32.0% 32.0% 34.5% 70% 60% 29.4% 24.9% 26.1% 50% 27.0% 28.6% 40% 30% 20% 39.4% 40.2% 38.0% 35.4% 32.0% 10% 0% 2002 2003 2004 2005 2006

Over-the- Source : National Statistical Office Public hospital counter drug Private hospital etc.

35 Furthermore, the amount Thais spend on medical population had a life expectancy of 69.9 years and services is expected to increase due to changes in the Thai female population had a life expectancy demographics. It is expected that people will live of 77.6 years. It is forecasted that the Thai male longer. In 2006, the number of people over 60 population will have a life expectancy of 71.3 years years old was equal to 11 percent and it is expected in 2015 and 74.8 years in 2025, and the Thai female that the number will increase to 14 percent in 2015 population will have a life expectancy of 77.5 years and 17 percent in 2020. In 2006, the Thai male in 2015 and 80.3 years in 2025.

9% 11% 14% 17% 14% 18% 21% 21% 25% 25% 23% 22%

26% 24% 22% 21%

25% 23% 20% 19%

2000 2006 2015 2520

Source : National Economic and less than 15-29 years 30-45 years 46-59 years 60 years up Social Development Board 15 years

Life expectancy (year) 90 80.3 78.9 77.6 77.5 80 74.9 76.2

68.9 70 73.1 74.8 63.8 71.3 62.0 69.3 69.9 69.6 60 63.8 59.5 58.0 50 1965 1976 1986 1996 2006 2007 2015 2020 2025

Source : Ministry of Public Health Thai male population Thai female population

36 Outlook for Increase in Foreign Patients in Thailand Foreign patients in Thailand are expected to increase foreign patients. Promotion and marketing overseas as in 2004, the Government announced the policy has increased the number of foreign patients in to develop Thailand as the medical service hub of private hospitals. Furthermore, other important Asia by 2010. The Government developed a strategy factors that have attracted foreign patients to Thailand to promote Thai medical services abroad and to are the reputation for high quality of service, state improve management, services and medical care of the art medical technology meeting international by specifying Bangkok, Chiangmai, Phuket and standards and cheaper medical fees. Samui as the provinces that would accommodate

(thousand) 1,600 1,400 1,200 303 1,000 127 198 800 315 216 137 1,400 71 159 600 166 99 220 99 400 35 72 572 200 49 482 209 360 0 2002 2003 2004 2005 2006

Source : Department of Export Promotions, Asia Pacific Middle East North America Europe etc. Ministry of Public Health

37 Risks Factors

1. Economic Risks Private hospital business is one which may be affected by economic fluctuations. At times of economic recession when people earn less, they tend to cut down on health expenses and opt for cheaper medical services of public hospitals and other cheaper private hospitals. However, a portion of the Companyûs revenue, approximately 36 percent, is from foreign patients and is not as affected by economic recession. fact that our experienced executives have shown their capability in leading the Company through On the contrary, when the economy is doing well, several economic crises is clear evidence that the people earn more and will shift from public hospitals impact of economic fluctuations can be mitigated. to private hospitals as the quality of service is better. As the Company is a large organization with stable 2. Operational Risks financial status, a strong team of medical professionals Operational risks such as clientsû confidence, main- and continuous investment in state of the art medical taining quality of service and management of risks equipment, our clients have confidence and trust in from medical care. the service of hospitals in the Bangkok Hospital group. Furthermore, the majority of our clients are Reputation and confidence are key decision factors of the premium class and are not as affected by for patients. The Company has over 30 years ex- economic recession. Therefore, even in times of perience as well as çBangkok Hospitalé, çBangkok economic slowdown, we still have many clients that Heart Hospitalé, çWattanosoth Hospitalé, çBangkok use our services regularly. More importantly, the International Hospitalé, çSamitivej Sukhumvit Hospitalé and çSamitivej Srinakarin Hospitalé having received accreditation from the Joint Commission International, which is an international accreditation awarded for medical care services and organization management. Furthermore, with 18 hospitals in the Group covering various regions including Bangkok, provincial and overseas, under the names Bangkok Hospital, Samitivej Hospital, BNH Hospital and Royal Angkor International Hospital, such risks are greatly diversified.

38 3. Legal Risks with good reputation and experience will likely be As the public are becoming better informed about interested in setting up hospitals in Thailand. They patientsû rights, we are at a greater risk of being are at a advantage because of their technological sued as a result of our provision of medical services. advancements, network size and image as global This is especially true since we have a growing players. number of foreign clients. To this end, we have focused on relevant matters such as patient education, managing Nevertheless, the hospital business is a complex clientsû expectations, handling and resolving complaints, one and varies from one country to another so quality improvement and achieving international entrepreneurs need to understand consumersû service. requirement well. This is where foreign entrepreneurs are at a disadvantage. Further, medical personnel 4. Risk from Dependence on Foreign Clients practicing in Thailand need to be issued a proper Domestic political changes, possible alterations of license by the Thai authorities, therefore foreign economic policies from political changes, unrest in entrepreneurs may not relocate their personnel from the 3 southern provinces as well as SARS and avian foreign countries and have their practice in Thailand. flu epidemic can potentially affect the number of Given the reasons above, foreign entrepreneurs will tourists and investors, and consequently, the number face numerous obstacles even if Thai medical service of our foreign clients. industry is liberalized. As strong local entrepreneurs, we have an extensive network of hospitals covering key locations across the country, a great state of readiness, necessary equipments and standardized services. We believe that these factors help mitigate risks from the competition. We will nevertheless continue to improve our services and remain at the top of the industry.

5. Competitive Risks The medical business has become increasing competitive. In addition to public and private hospitals, it is possible that foreign entrepreneurs will soon enter the scene with the Governmentûs plan to liberate the medical service industry. These foreign entrepreneurs

39 6. Personnel Risks percent of total number of units. There are 94,520 Despite the efforts of the Government to encourage units or 76.2 percent remaining. Conditions of the educational institutions to produce knowledgeable convertible debentures stipulate that the holders medical personnel, the actual process requires time may redeem the debentures before they mature in and expertise. Consequently, with the rapid growth three years on 12th July 2009. The Company faces of the economy and the medical service industry, the risk that holders may redeem the debentures it is possible that the supply of personnel may not before maturity at the same time and will have to be sufficient in the future. We are not yet significantly find an alternative source for Baht 3,885.90 million affected because medical personnel are attracted in capital (equal to remaining capital and excess of by our size and reputation. In spite of this, we are value from early redemption of debentures) in prepared to accommodate the growth through preparation for early redemption of debentures, which compensations, training, welfare benefits and recreational will affect the fiscal plans and financial status of the activities that will help us become the çEmployer Company. However, the Company has contingency of Choiceé to attract personnel and retain them at the same time.

7. Financial Risks 7.1 Risks from Early Redemption of Debentures In 2006, we issued 5-year convertible debentures at the interest rate of 3.75 percent per year in the amount of US$124 million or equal to Baht 4,731.84 million with a fixed exchange rate of Baht 38.16 to US$1. As of 31st December 2007, holders of the debenture redeemed a total of 29,480 units or 23.8 plans by gradually reserving a portion of profits from operations in anticipation of redemptions of debentures. Furthermore, the Company has plans to secure long-term loans at least 6 months in advance from financial institutions in case there is simultaneous early redemption of debentures.

Further these convertible debentures are hybrid capital-debt instruments which entitle the holders to convert the debentures into ordinary shares at any

40 time at the value of Baht 36.30 or 1,051.24 ordinary shares to 1 debenture, the holders may choose to gradually exercise this right once the value of our ordinary shares in the Stock Exchange is greater than the returns from debentures. This mitigates our risk of having to secure capital to facilitate early redemption of debentures.

fees for the patients in advance and informs them of the treatment fees incurred at intervals in order to minimize the burden of a single payment upon discharge from the hospital. As for clients who are party to agreements, the Company has a policy of carefully granting credit based upon the credit and financial status of the party company and reviewing transactions made with the company on an annual 7.2 Interest Rate Risk basis. The said policy is effective in reducing possible Future increases in interest rates may affect the risks from fee collection. Companyûs capital costs. However, the Company has plans to issue debentures in 2008, which will increase the portion of liabilities with fixed interest rates, and decrease risks from fluctuating interest rates to a certain degree.

7.3 Collection Risk Approximately 65 percent of the Companyûs patients pay by cash or credit card, the remaining 35 percent pose a risk in collection of fees.

The Company has a strict policy in place to mitigate risk in collection of fees. No credit is given to clients. The hospital prepares an estimate of treatment

41 Foreigners believe in the service that Bangkok International Hospital has to offer. Interpreters are provided for precise communication

The Bangkok Hospital Network is state-of-the-art, linking us to anywhere that is convenient for us

service first in mind My son likes the doctors because they are gentle and understanding

Nurses are polite and caring, always giving encouragement, I am very impressed

I am single with no children, they take care of me from the moment I step out of the car giving me a feeling of being with family

Connecting Relationships Our physicians, nurses and staff are always ready to warmly welcome you with smiles and provide service with care and thoughtfulness as if you are a member of our family. Shareholding Structure and Management

1. Shareholding Structure The top ten major shareholders as of 6th December 2007 are as follows:

No. Name Number of Shares Percentage 1 Prasert Prasarttong-Osoth, MD and spouse * 164,476,371 13.6% 2 Bangkok Aviation Co., Ltd. * 120,349,064 9.9% 3 Wiriya Insurance Co., Ltd. 90,269,263 7.4% 4 Mr. Satit Viddayakorn and spouse 69,266,790 5.7% 5 Pongsak Viddayakorn, MD and spouse 60,738,827 5.0% 6 HSBC (Singapore) Nominees (PTE) Limited 41,153,700 3.4% 7 Ms. Poramaporn Prasarttong-Osath 40,940,700 3.4% 8 Chirotchana Suchato, MD and spouse 39,273,009 3.2% 9 Thai NVDR co., Ltd. 28,806,559 2.4% 10 Chuladej Yossundharakul, MD and spouse 27,565,795 2.3% Total 682,840,078 56.2%

Source : Thailand Securities Depository Co., Ltd. * These shareholders are considered to be in the same group. 2. Management 2.1 Personnel As of 31st December 2007, the Company had a total of 2,321 employees and 662 physicians, details as follows:

(Unit : Persons) Type of Personnel Number Nurses 663 General staff 1,658 Total number of employees 2,321 Staff Physicians 232 Advisory Physicians 336 Dentists 94 Total 2,983

Note: Staff Physicians means doctors who work with the Company 40 hours or more a week but are not considered employees of the Company. 44 2.2 Management Structure ë Duties and Responsibilities of the Board As of 31st December 2007, the management structure of Directors of the Company is comprised of the Board of 1. Perform duties using their knowledge and expertise Directors, the Audit Committee and the executive for the benefit of the Company in accordance with management, details as follows: the regulations of the Company and resolutions of ë Board of Directors the shareholders meeting. Directors are authorized 1. Prof. Arun Pausawasdi, M.D. to perform actions indicated in the Articles of Association, Chairman the Public Company Act and relevant laws. 2. Prasert Prasarttong-Osoth, M.D. 2. Comply with the provisions and the good practices Vice Chairman of listed company directors of the Stock exchange 3. Pongsak Viddayakorn, M.D. of Thailand. Director 3. Determine policies and ensure that management 4. Mr. Wallop Adhikomprapa acts in accordance with those policies, as well Director as approve business plans, annual budgets and 5. Chuladej Yossundharakul, M.D. investments, and make financial decisions. Director 4. Monitor the operational results of management 6. Prof. Sanoe Indrasukhsri, M.D. and the Company in order to ensure consistency Chairman of Audit Committee with established goals and plans. 7. Chirotchana Sucharto, M.D. 5. Set efficient internal control and audit systems Director for the purpose of auditing, operational oversight 8. Prof. Santasiri Sornmani, M.D. and liaison with the Audit Committee. Director 6. Protect the interests of the shareholders and 9. Mr. Thavatvong Thanasumitra practice standardized and transparent disclosure of Director information. 10. Kitipan Visudharom, M.D. ë Audit Committee Director 1. Prof. Sanoe Indrasukhsri, M.D 11. Chatree Duangnet, M.D. Chairman of Audit Committee Director 2. Prof. Santasiri Sornmani, M.D. 12. Mr. Anuchat Chaiprapa Member Director 3. Mr. Anuchat Chaiprapa 13. Yingdao Krairiksh, M.D. Member Director ë Authorized Directors Duties and Responsibilities of the Audit Committee Two directors out of the following sign jointly and In order that the Audit Committee may perform the affix the company seal: Pongsak Viddayakorn, M.D., duties as assigned by the Board of Directors, the Chuladej Yossundharakul, M.D., Chirotchana Sucharto, Audit Committee shall have the following duties M.D., Chatree Duangnet, M.D. and Mr. Wallop and responsibilities: Adhikomprapa. 45 1. Ensure the correct, complete and reliable issuance 4. Chirotchana Sucharto, M.D. of reports and disclosure of information in the Member financial reports of the Company by liaising with 5. Mr. Wallop Adhikomprapa external auditors and executives responsible for Member the preparation of quarterly and annual financial 6. Yingdao Krairiksh, M.D. reports. Member 2. Ensure the use of proper and efficient internal 7. Chatree Duangnet, M.D. control measures and engage in the joint revision Member with independent external auditors and internal 8. Kitipan Visudharom, M.D. auditors in order to ensure consistency. Member 3. Review transactions with subsidiaries or individuals 9. Mr. Chong Chin Wah in order to prevent conflicts of interest. Member 4. Ensure that the Company is in compliance with 10. Krittavith Lertutsahakul M.D. regulations of the Stock Exchange of Thailand and Member other relevant laws. 11. Pichit Kangwolkij, M.D. 5. Review internal investigation evidence in the case Member that there is suspicion of fraud or abnormality or 12. Somsiri Sakolsatayatorn, M.D. significant defect of internal control measures for Member submission to the Board of Directors for further 13. Somchai Chansawang, M.D. consideration. Member 6. Instruct and review evidence in the case where 14. Assoc, Prof. Ajjima Srethaputr there is suspicion of violation of law or any regulations Member and Secretary of the Stock Exchange of Thailand, which may significantly affect the financial status and operational Duties and Responsibilities of the Executive results of the listed company. Board 7. Nominate auditor and annual auditing fee for 1. Determine business strategies, policies, business consideration of the Board of Directors for the plans and budgets for the approval of the Board approval of the shareholders meeting. of Directors. 8. Complete other tasks as assigned by the Board 2. Control, audit and monitor operations of the of Directors. Company as authorized by the Board of Directors in accordance with authorized responsibilities as ë Executive Board approved by the Board of Directors for the utmost 1. Prasert Prasarttong-Osoth, M.D. benefit of the Company and its shareholders to Chairman of Executive Board ensure efficiency and favorable business environment. 2. Pongsak Viddayakorn, M.D. 3. Assign and monitor operations of management Vice Chairman under the supervision of the Chairman of the 3. Chuladej Yossundharakul, M.D. Executive Board as assigned by the Board of Member Directors. 46 4. Consider and review matters that are to be presented Duties and responsbilities for approval by the Board of Directors, including The management is responsible for internal adminis- identifying solutions to problems of the Company tration in accordance with established policies and and proposing administrative and personnel policies business goals. for consideration by the Board of Directors. 5. Propose the appointment and removal of high 2.3 Selection of Directors level executives as well as determine duties and The appointment and removal of Directors shall responsibilities of high level executives in each area. be as prescribed in the Articles of Association as 6. Engage in other duties occasionally assigned by follows: the Board of Directors. ë The board of Directors shall comprise of at 7. Legitimately and honestly act in accordance with least 5 directors and no less than half shall have the resolutions of the shareholders meetings and the residence in Thailand. Board of Directors meetings for the benefit of the ë Directors shall be individuals with the following Company within the objectives and regulations of qualifications: the Company. Name Position 1. Mr. Wallop Adhikomprapa Executive Director, Chief Executive Officer Accounting and Finance Division, and acting Chairman Of Executive Group 5 * 2. Mr. Chong Chin Wah Chief Operating Officer and Chairman of Executive Group 2 * 3. Chatree Duangnet, M.D. Chairman of Executive Group 1 * 4. Krittavith Lertutsahakul, M.D. Chairman of Executive Group 3 * 5. Yingdao Krairiksh, M.D. Chairman of Executive Group 4 *

* Note Group 1 refers to Bangkok Hospital Medical Center comprised of Bangkok Hospital, Bangkok Heart Hospital, Wattanosoth Hospital and Bangkok International Hospital Group 2 refers to Samitivej Sukhumvit Hospital, Samitivej Srinakarindra Hospital and Samitivej Sriracha Hospital Group 3 refers to Bangkok Pattaya Hospital, Bangkok Rayong Hospital, Bangkok Chantaburi Hospital, Bangkok Trad Hospital, Koh Chang International Clinic and Bangkok Samui Hospital Group 4 refers to Bangkok Prapradaeng Hospital, Bangkok Hadyai Hospital, Bangkok Phuket Hospital and BNH Hospital Group 5 refers to all non-hospital businesses and Bangkok Ratchasima Hospital The above duties and responsibilities shall not (1) A person of juristic age allow the executives and Chairman of the Executive (2) A person who is not bankrupt, incompetent Board to approve transactions relating to themselves or qausi-incompetent or individuals which may cause conflicts of interest (3) A person who has never been sentenced to (as prescribed in the notifications of the Securities imprisonment on a charge relating to fraudulent assets and Exchange Commission) with the Company or (4) A person who has never been removed from subsidiaries. Such transactions shall be presented service in the government or government agency to the Audit Committee and/or the Board of Directors, due to fraudulent acts. whichever the case may be, for approval. 47 ë The shareholders meeting shall elect the directors ë In the event that a director position is vacant using the following criteria: due to circumstances other than completion of term, (1) Each shareholder may cast number of votes the Board of Directors shall elect a qualified individual equal to the number of shares held multiplied by to fill the position at the next Board of Directors the number of directors to be elected. meeting, except when the directorûs term is less (2) Each shareholder shall cast all votes available than two months to completion. In this case, the to them under (1) to elect an individual or multiple individual serving as replacement shall remain in individuals as director(s). In the event where multiple office for the remainder of the term of the director directors are elected, votes may be distributed to who has retired. the various candidates in varying proportions. The resolution of the Board of Directors as the above (3) The individuals with the highest number of shall be passed with number of votes no less than votes will respectively be appointed directors. In three quarters of the number of directors remaining. the event of a tie, a drawing will be exercised in ë In the event that the number of vacant director order to have the required number of directors. positions is insufficient for quorum, the remaining ë At the annual ordinary shareholders meeting, directors may act on behalf of the Board of Directors the Board of Directors shall be retired and a new only in organization of the shareholders meeting in Board of Directors shall be elected. The existing order to elect directors to the vacant positions. The Board of Directors shall serve in the office as necessary meeting shall be held within one month from the until the new Board of Directors assumes duty. day that the number of vacant director positions is Directors who retire as aforementioned, may be insufficient for quorum. The individual elected to re-elected. the vacant director positions shall remain in office ë Apart from being retired at completion of for the remainder of the term of the director whom term, a director may be retired under the following he replaces. circumstances: In addition to the above criteria in selecting the (1) Death Board of Directors, the Company has stipulated (2) Resignation that the Board of Directors shall be comprised of (3) Disqualification or legally unqualified at least three independent directors who possess (4) The shareholders meeting passes a resolution all qualifications as prescribed by the Office of the to retire a director, with no less than three quarters Securities and Exchange Commission. of the total number of shares present at the meeting and possess voting rights provided that the total 3. Executive Compensation number of shares is no less than half of the total 3.1 Monetary compensation in 2007 number of shares present at the meeting and ë The thirteen members of the Board of Directors possess voting rights collectively received compensation in the form of (5) Court ordered to retire meeting allowance and Director's remuneration in ë Directors wishing to resign shall submit a letter the amount of Baht 15.70 million in 2007, details of resignation to the Company to be effective upon as below: receipt of the letter by the Company.

48 Directors Compensation (Million Baht) 1. Prof. Arun Pausawasdi, M.D. 1.56 2. Prasert Prasarttong-Osoth, M.D. 1.21 3. Prof. Snoe Indrasukhsri, M.D. 1.30 4. Pongsak Viddayakorn, M.D. 1.17 5. Chirotchana Sucharto, M.D. 1.15 6. Chuladej Yossundharakul, M.D. 1.16 7. Prof. Santasiri Sornmani, M.D. 1.30 8. Yingdao Krairiksh, M.D. 1.17 9. Mr. Anuchat Chaiprapa 1.28 10. Mr. Wallop Adhikomprapa 1.15 11. Mr. Thavatvong Thanasumitra 0.95 12. Kitipan Visudharom, M.D. 1.15 13. Chatree Duangnet, M.D. 1.15

ë The Executive Board collectively received like permanent staff, are entitled to medical benefits compensation in the form of meeting allowance in according to Company regulations. the amount of Baht 0.50 million in 2007. ë Management collectively received compensation 4. Dividend Payment Policy in the form of monthly salary and bonus in the The Company and its subsidiaries pay out dividends amount of Baht 22.67 million in 2007. as approved by the Board of Directors, dependent 3.2 Other compensation upon the operational results, the ability of the The Company has the policy to provide compensation Company to pay dividends in each year, business to the Board of Directors and management other expansion and need for capital in each year. An than meeting allowances, Directors remuneration, approval by the shareholders meeting is required monthly salary and bonus, namely office cars, mobile with the exception of interim dividend payment, phones, etc. In addition, the Directors and management, which is approved by the Board of Directors. In 2004-2007, the Company announced the following dividend payments: Dividend Payment Rate Dividend Payment Date (Baht per Share) Dividend Payment Period 4 May 2007 0.50 January 2006 - December 2006 28 April 2006 0.50 January 2005 - December 2005 6 May 2005 0.50 January 2004 - December 2004

49 Report of Compliance with Good Corporate Governance

The Board of Directors recognizes its roles, duties one month from the day on which the letter from and responsibilities of good corporate governance the shareholders is received. in order to ensure continuous and stable growth of the business through efficient and transparent The Board of Directors recognizes the importance management for the confidence of all parties involved of shareholders meetings and all thirteen directors and the utmost benefit of the Company and its shall participate in the meetings in order that the shareholders. shareholders may equally exercise their rights in expressing opinions and directing questions to the 1. Shareholdersû Rights Board of Directors. Accurate and complete minutes The Company recognizes and respects the equality are taken for later revision by the shareholders and of rights of all shareholders and gives importance relevant parties. to accessibility of accurate and complete information on the Company. Shareholders may exercise their 2. Shareholdersû Equality rights and safeguard their interests by giving opinions The Company recognizes the importance of and voting at shareholders meetings, as well as equality and fairness to minority shareholders by taking part in important decisions, including appointment disclosing information to all shareholders as stipulated of the Board of Directors. For the past shareholders by the Stock Exchange of Thailand. Firstly, the meetings, the Company has sent letters of notification Company gives importance to the right of each and accompanying documents to the shareholders shareholder to attend the Shareholdersû Meeting at least seven days in advance and arranged for and sends meeting documents, the Board of Directorsû publication of shareholders meeting announcements opinions and proxy forms to the Shareholders. Three in newspapers for a period of three consecutive of the Independent Directors are proposed as days at least three business days prior to the date proxies in the case that the Shareholder is not of the meetings. In addition, the Company also posted able to attend in person. The Shareholders may notification of shareholders meetings on the company contact the Company prior to the meeting if they website. The opinion of the Board of Directors and have any queries regarding the agendas. The Company detailed documents associated with the meeting in also gives the Shareholders the opportunity to Thai and English shall be provided to the shareholders elect individuals to the Board and provide ballots prior to the meetings. The Company has provided for transparency in voting on significant agendas. an option to the shareholders to assign authority to three independent directors in the event they are The Company focuses on transparency of the unable to attend the meetings in person. Shareholders Board of Directors and management. Each Director may petition to request that the Board of Directors and member of management must disclose asset call an extraordinary shareholders meeting at any holdings to the Board each month. Furthermore, each reasonable time as specified in regulations of the Director that is accountable for any of the agendas Company by stating a clear reason. The Board of at the Board meetings must abstain from voting or Directors shall call a shareholders meeting within excuse themselves when the agenda that they are accountable for is considered during the meeting. 50 Information is disclosed to the Shareholders each business as well as sustainable social and environ- ime a related transaction occurs or receipt or sale mental development. of assets of a size as determined by the Stock Exchange. The Board of Directors and management The Company also announced the çEnvironment, act strictly in accordance to the regulations of the Hygienic Profession and Safety Policyé for use within Stock Exchange of Thailand and the Office of the the hospital and informed the employees and relevant Securities and Exchange Commission and give parties as well as ensuring continuous and earnest importance to eliminating conflicts of interest with practice of the policies. Furthermore, the Company honesty and reason for the greater benefit of the established the Wejchadusit Foundation to support Company. the research efforts of doctors nationwide. Other notable projects include çRak Jai Khun Hospitalé 3. Rights of Related Parties under which youths are encouraged to creatively The Company has recognized the right so all develop measures to prevent health problems and related parties. çThai Chuay Thaié, a preventive healthcare preven- 3.1 The Company intends to be the shareholdersû tive program. representative in ensuring transparent business 3.6 The Company strictly abides by the related operations, as well as trustworthy accounting and regulations, including responsibility to the environ- financial systems for the satisfaction of the share- ment and safety. holders, while sustaining long-term growth and continuous suitable returns. 4. Disclosure and Transparency 3.2 The Company strives to provide customer The Board of Directors recognizes the importance satisfaction through quality of service and strict of disclosure and transparency and has disclosed practice of fair business conditions. information through the Stock Exchange of Thailand 3.3 The Company recognizes the capability and channels. The annual report emphasizes accuracy trustworthiness of business and benefits with partners of information and is continuously updated and posted by strictly complying with the laws and regulations on the Company website. and business ethics. In competing with peers, the The Company has established the Investor Relations Company believes in fair competition. unit to act as the center for information disclosure 3.4 The Company has the policy to develop and to investors as well as oversee financial reports support culture and good working environment for such as operations report, financial statements, moral support and stable careers of employees. company announcements to the Stock Exchange 3.5 The Company recognizes the importance of of Thailand as well as quarterly MD & A, which social responsibility, as well as responsibility to related provides the status, operations and future outlook parties and employees. The Company has adopted of the Company to both local and foreign investors. the ISO 14001 environment management system Investors can contact Investor Relations directly or and established the çCorporate Social Respon- through the company website www.bangkokhospital. sibility (CSR) Projecté to support the Companyûs com which provides information in both Thai and English, and is regularly updated. 51 The Board of Directors evaluates the control as the Company Secretary to provide advice on system each year to examine the efficiency of legal issues as well as on regulations that the internal control measures, reduce operational risks Board should be aware of and to oversee activities and ensure transparency of information. Furthermore, of the Board, including ensuring practice according the Company deliberates the duties and responsibilities to the Boardûs resolutions. The Company also has of the Audit Committee annually after appointment the policy to encourage the Directors of the Company of the Committee at the Shareholdersû Meeting and associated companies to attend the Director and discloses meeting attendance and remuneration Certificate Program (DCP) and the Director Accreditation of all Directors in the annual report. Program (DAP) at the Thai Institute of Directors The Board of Directors also appoints the Senior (IOD). The programs provide the Directors with Managing Director to manage the Company and understanding about good corporate governance. clearly defines the duties and responsibilities of Directors who have passed the Director Certificate the Board of Directors and management. The Program are Mr. Wallop Adhikomprapa (Class 20) responsibilities of the Board of Directors is stated and Mr. Thavatvong Thanasumitra (Class 27). The in the financial statements, which are a part of the other 11 Directors have all passed the Director auditorsû report in the annual report. Accreditation Program. As the Company does not have a Remuneration The schedule for Board meetings for the entire Sub-Committee, there is a process in deliberating year are determined in advance so that the Directors suitable remuneration. Remuneration of Directors is are aware of the schedule and can allot time to considered at the Shareholdersû Meeting and attend each meeting. The meetings are held every remuneration of executive management will be last Wednesday of the month. The agendas for determined according to the principles and policies each meeting are determined in advance and include set by the Board of Directors and linked to perfor- matters related to previous agendas in order to mance of the Company and of each executive. monitor assignments. The Company Secretary shall send out invitations and agendas of the Board 5. Responsibility of the Board of Directors meetings at least 7 days prior to the scheduled There are a total of 13 Directors on the Board meeting so that the Directors will have adequate comprising 8 Directors from management and 5 time to review information before the meeting. In non-management, with 3 of the non-management 2007, the Company held 13 Board meetings being independent Directors. The Chairman of the comprised of 12 general meetings and one extra- Board is non-management and is not the same ordinary meeting. person as the Senior Managing Director so as the Chairman will have independence from the management, thus separating the duty in determining corporate governance policy from day-today management to create balance. The Company also has a unit acting

52 Transactions with Associated Companies

Nature of Transactions etc. Such transactions are necessary and reasonable Transactions between Bangkok Dusit Medical in supporting business operations and for the utmost Services Public Company Limited and associated benefit of the Company. The conditions of the companies or persons are disclosed in Note 9 to transactions are no different from those used in the financial statements and may be classified as transactions with customers or third parties. follows: 1.2 Financial Assistance 1.1 Normal Business Transactions As of 30th September 2007, the Company provided The Company has the policy of engaging in financial assistance to associated companies as transactions with associated companies in the follows: normal course of business, such as revenue from transfer of patients between hospitals, revenue from lab analysis, (Unit : Million Baht) Short-term Long-term Interest Long-term Associated Company Nature of Relationship Principal Loan loan Payable Guarantee 1. Bangkok Prapradaeng Hospital Co., Ltd. Company holds 79% - 1.20 - - and has joint directors 2. Angkor Pisith Co., Ltd. Company holds 80% - - 2.79 US$ 4 million and has joint directors 3. Bangkok Hadyai Hospital Co., Ltd. Company holds98.8% - - 83.19 - and has joint directors Total Principal - 1.20 85.98 US$ 4 million

Individuals involved as joint directors and Interested individuals holding more than 5 percent executives include: of shares with voting rights in the subsidiaries or 1. Pongsak Viddayakorn, M.D. joint ventures. 2. Mr. Wallop Adhikomprapa -None- 3. Chuladej Yossundharakul, M.D. 4. Mr. Anuchat Chaiprapa 5. Chatree Duangnet, M.D. 6. Yingdao Krairiksh, M.D.

53 Method of Transaction As a concern for investors, the Company has The Company has the policy to engage in transactions arranged Board of Directors meetings, whereby the with associated companies in the normal course of Audit Committee is present in order to ensure business. Such transactions are deemed necessary fairness and appropriate pricing of transactions and reasonable for liquidity purposes and for the with associated companies in accordance with greater benefit of the Company. normal business conventions. In the case that the Audit Committee lacks expertise in the transactions The Company has set standards and procedures that may occur, the Company shall arrange for an in approving such transactions. Management shall expert in the area to provide an opinion on the consider and approve small and normal business said transactions for further consideration by the transactions. The Board of Directors shall consider Audit Committee and/or the Board of Directors and approve medium to large, normal business and/or the Shareholders Meeting, whichever the case transactions, as well as small and medium transactions may be. The Company has disclosed transactions that are not considered normal business transactions. with associated companies in the notes to the For large transactions that are not considered audited financial statements. normal business transactions, the Shareholders Meeting shall decide whether or not to engage in With regards to provisions of financial assistance said transactions. The criteria in assessing the size to subsidiaries, other than short-term loans to of the transactions are as follows: subsidiaries in which the Company holds 100 ë Small Transactions : transactions with value percent, the Annual Ordinary Shareholders Meeting equal to or less than Baht 1 million, or equal to or in 2001 approved financial assistance to subsidiaries, less than 0.03 percent of net tangible assets, whichever joint ventures and associated companies within a is greater credit line of Baht 1,500 million. The current outstanding ë Medium Transactions : transactions with value debt is Baht 1.20 million. At that time, United Advisory greater than Baht 1 million but less than Baht 20 Services Co., Ltd., the independent financial consultant, million, or greater than 0.03 percent but less than had an opinion that such lendings to subsidiaries, 3 percent of net tangible assets, whichever is greater joint ventures and associated companies are ë Large Transactions : transactions with value reasonable and fair. equal to or greater than Baht 20 million, or greater Outlook for Future Transactions with Asso- than 3 percent of net tangible assets, whichever is ciated Companies greater The Audit Committee and the Company will jointly If the transaction is considered a related transaction oversee necessary transactions with associated according to the Stock Exchange of Thailand definition, companies and ensure fairness in price. the Company shall strictly abide by the rules and regulations of the Stock Exchange of Thailand.

54 Explanation and Analysis of Operational Results and Financial Status

1. Operations ë Increase in number of patients in 2007. Number of 1.1 Revenue from Operations outpatients per day increased from 8,016 patients In 2007, the Company and its subsidiaries derived per day in 2006 to 8,349 patients per day in 2007, a total of Baht 18,423.4 million from medical service equal to a 4.2 percent increase. fees compared to Baht 15,606.9 million in 2006 and Baht 10,253.8 million in 2005. This translates to 18.1 ë Expansion on investments in subsidiaries in 2006. percent growth in 2007 and 52.2 percent growth The Company increased investments in hospitals in in 2006. The significant events contributing to the the Eastern region. Shareholding in Bangkok Pattaya increase in revenue in 2005-2007 are as follows: Hospital Co., Ltd. Increased from 49.0 percent in 2005 to 97.1 percent. The Company also bought ë Increase in medical service fees per visit in 2007. 73.97 percent in Bangkok Ratchasima Hospital Co., Outpatient medical service fees per visit increased Ltd. The aforementioned investments significantly 10.2 percent in 2007, from Baht 2,358.80 in 2006 increased medical service revenue derived from to Baht 2,599.60 in 2007. In-patient medical service subsidiaries from Baht 6,015.6 million in 2005 to Baht fees per visit increased by 13.2 percent, from Baht 10,227.5 million in 2006, equal to 70.0 percent growth. 20,829.20 in 2006 to Baht 23,577.10 in 2007.

(Unit : Million Baht) Structure of Medical Services Revenue (Net of related transactions) 2007 2006 2005 Company 6,304.1 5,379.4 4,238.2 Subsidiaries 12,119.4 10,227.5 6,015.6 Total 18,423.5 15,606.9 10,253.8

55 1.2 Cost of Medical Services and Sales & 2006, the Groupûs total assets was comprised of Administrative Expenses 11.6 percent in current assets, 71.6 percent in land, The increase in medical service revenue from the buildings and equipment (net) and approximately Company and its subsidiaries has enabled efficiency 16.8 percent in non-current assets. In 2005, the in controlling medical service costs and sales & Groupûs total assets was comprised of 8.1 percent administrative expenses.This can be seen from the in current assets, 7.0 percent in investments in decrease in cost of medical services to service fee subsidiaries, 78.6 percent in land, buildings and revenue from 57.9 percent in 2005 to 55.7 percent equipment (net) and approximately 6.3 percent in in 2006 and 55.6 percent in 2007. non-current assets.

At the same time, sales and administrative expenses During 2005-2007, the Groupûs total assets increased. of the Company and its subsidiaries decreased. In In 2007, total assets equaled Baht 26,231.8 million, 2006, the sales and administrative expenses to service an increase of 5.2 percent compared to total assets fee revenue was 23.9 and decreased to 22.9 and in 2006 of Baht 24,933.6 million. In 2006, total assets 22.8 in 2006 and 2007, respectively. increased 41.1 percent when compared with total assets of Baht 17,677.0 million in 2005. The increase 1.3 Net Profits in total assets in the past few years is due to high In 2006, the net profit to service fees revenue of the expansion of investments in subsidiaries as well as Company and its subsidiaries was 8.5 times, an significant increase in investments in buildings and increase from 8.1 times in 2005. The net profit to medical equipment of each company in the Group. service fees revenue decreased in 2007 to 6.8 times due to increased investments in tangible assets, 2.2 Capital Structure namely buildings and medical equipment, inline As of 31st December 2007, the Company and its with general business expansion, which resulted in subsidiaries had total liabilities of Baht 14,521.8 higher depreciation and interest payables. million or 55.4 percent of liabilities and equity. This is a 2.9 percent decrease when compared to 2006 2. Financial Status when total liabilities were Baht 14,949.5 million or 2.1 Total Assets 60.0 percent of liabilities and equity. While in 2006, As of 31st December 2007, the Groupûs total assets total liabilities increased 61.4 percent when compared was comprised of 11.2 percent in current assets, with 2005 when total liabilities were Baht 9,259.7 3.6 percent in investments in subsidiaries, 73.6 million or 52.4 percent of liabilities and equity. The percent in land, buildings and equipment (net) and decrease in liabilities of the Company and its sub- approximately 11.7 percent in non-current assets. In sidiaries on 30th September 2007 resulted from the conversion of some of the convertible bonds. The

56 increase in total liabilities over the past three years respectively. This translates to shareholdersû equity is a result of business expansion in private hospitals growth in 2007 and 2006 of 17.3 percent, 18.6 through large investments in buildings and medical percent respectively. The significant increase in equipment, which necessitated increased capital from shareholdersû equity in 2007 is a result of the external sources. conversion of a portion of the convertible bonds. The significant increase in shareholdersû equity in Shareholdersû equity as of 31st December 2007 was 2006 is a result of increased investments in hospitals Baht 11,077.0 million or 44.6 percent of liabilities and in the Eastern region. Furthermore, the increase of equity. In 2006 and 2005, shareholdersû equity was realized gains from operations of the Group resulted Baht 9,984.2 million and Baht 8,417.5 million or 40.0 in increased shareholdersû equity as shown in the percent and 47.6 percent of liabilities and equity, consolidated balance sheet. (Unit : Million Baht) Capital Structure 2007 % 2006 % 2005 %

Current liabilities 4,873.1 18.6% 3,957.3 15.9% 2,837.6 16.1% Long-term liabilities 9,648.7 36.8% 10,992.2 44.1% 6,422.1 36.3% Total Liabilities 14,521.7 55.4% 14,949.5 60.0% 9,259.7 52.4% Shareholdersû equity in the Company 11,113.8 42.4% 9,477.2 38.0% 7,889.6 44.6% Total Shareholdersû equity 11,710.0 44.6% 9,984.1 40.0% 8,417.5 47.6% Total Liabilities and Shareholdersû equity 26,231.7 100.0% 24,933.6 100.0% 17,677.2 100.0%

2.3 Liquidity and Debt Payment Capabilities As of 31st December 2007, the Company and its Due to the expansion of the private hospital business, subsidiaries had a liquidity ratio of 0.60 times, a the Company and its subsidiaries increased capital decrease when compared to 0.73 times in 2006 from external sources in order to expand investments respectively. However, even though the Groupûs resulting in an increase in the Groupûs debt-to- liquidity in 2006 increased when compared to 2005, equity ratio from 1.10 times in 2005 to 1.50 times the increase in overdrafts and short-term debts from in 2006. Even thought the said ratio is higher than financial institutions, and long-term debts due in before, it is still at an acceptable level. However, one year in 2007, caused the liquidity ratio as of as some of the convertible bonds were converted, 31st December 2007 to decrease when compared the debt-to-equity ratio decreased to 1.24 times as to 2006. of 31st December 2007.

57 The Remuneration of the Auditor

Ernst & Young Office Company Limited had been auditor for company and subsidiaries since 2006. The Company has affixed the Auditor remuneration for the company and subsidiary, which can be divided into; ª√–‡¿∑√“¬°“√ 1. Auditor Remuneration For year 2007 the company and subsidiaries had affix the auditor remuneration in amount of 7,585,000 Baht.

2. Other Fee -None-

58 Responsibility of the Board of Directors to the Financial Statements

The Board of Directors is responsible for the financial statements and has assigned the Audit Committee to review the financial statements for the past year. It was consequently informed that the financial statements are carefully prepared in accordance with the generally accepted accounting principles, consistency with appropriately selected accounting policies. The appropriateness of items shown in the consolidated financial statement was evaluated and the disclosures of information in the notes to the financial statements were found to be sufficient.

In addition, the Board of Directors has established efficient internal control measures in order to ensure that all accounting data are recorded completely and precisely. The assets are also kept safe from fraudulently acts or significantly damages.

It is the opinion of the Board of Directors that our internal control measures are satisfactory and capable of instilling the credibility in the company's separate financial statements and the consolidated financial statements of the company and its subsidiaries for the year 2007.

(Wallop Adhikomprapa) (Chatree Duangnet, M.D.) President Director and Chief Financial Officer-BDMS Group

59 The MRI machines are able to detect the tumor in the first stage, so we are able to combat the cancer in time

I chose to have heart surgery performed by the Da Vinci robot, the procedure was safe, the scar small and I was able to go back to work faster than usual

Connecting Patient Care With state-of-the-art technology and innovation, through development of medical equipment to combat diseases, which are becoming more and more severe, our physicians are able to care for our patients instantly in the shortest time possible. The most modern innovation, patient transport service and patient care on our emergency helicopters

With the insulin pump, I am able to measure my blood sugar on my own without assistance from the hospital

The doctors at Bangkok Phuket Hospital sent me to get examined by the PET/CT at Wattanosoth Hospital, within 1 hour, they were able to determine my illness

state-of-the-art technology BANGKOK DUSIT MEDICAL SERVICES PUBLIC COMPANY LIMITED AND SUBSIDIARIES

AUDITOR REPORT AND FINANCIAL STATEMENTS 31 DECEMBER 2007 AND 2006

62 Report of Independent Auditor To The Shareholders of Bangkok Dusit Medical Services Public Company Limited I have audited the accompanying consolidated balance sheets of Bangkok Dusit Medical Services Public Company Limited and its subsidiaries as at 31 December 2007 and 2006, the related consolidated statements of income, changes in shareholders' equity and cash flows for the years then ended, and the separate financial statements of Bangkok Dusit Medical Services Public Company Limited for the same periods. These financial statements are the responsibility of the Companyûs management as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audits 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 statements presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the aforementioned financial statements referred to above present fairly, in all material respects, the financial position of Bangkok Dusit Medical Services Public Company Limited and its subsidiaries and of Bangkok Dusit Medical Services Public Company Limited as at 31 December 2007 and 2006 and the results of their operations and cash flows for the years then ended in accordance with generally accepted accounting principles. Without qualifying my opinion on the above financial statements, I draw attention to the matter as discussed in Note 6 to the financial statements, whereby in the first quarter of the current year the Company has changed its accounting policy for recording building in the consolidated financial statements from revalued amount to historical cost and in Note 5 to the financial statements, in the first quarter of the current year, the Company changed its accounting policy for recording investments in subsidiary and associated companies in the separate financial statements from the equity method to the cost method. In this regard, the Company has restated the consolidated and separate financial statements as at 31 December 2006 and for the year then ended to reflect the changes in accounting policies.

Saifon Inkaew Certified Public Accountant (Thailand) No. 4434 Ernst & Young Office Limited Bangkok : 20 February 2008

63 AS AT 31 DECEMBER 2007 AND 2006 BALANCE SHEETS BANGKOK DUSIT MEDICAL SERVICES PUBLIC COMPANY LIMITED AND SUBSIDIARIES

ASSETS (Unit : Baht) Consolidated financial statements Separate financial statements Note 2007 2006 2007 2006 (Restated) (Restated) CURRENT ASSETS Cash and cash equivalents 8 963,602,382 1,101,048,856 169,248,384 60,449,522 Short - term investments 56,673,919 94,508,683 8,318 8,078 Trade accounts receivable 10 Related parties 11 4,883,598 2,533,471 8,248,969 4,531,658 Other companies - net 1,328,744,804 1,057,927,794 566,404,942 471,897,684 Total accounts receivable - net 1,333,628,402 1,060,461,265 574,653,911 476,429,342 Other receivable - related parties 11 177,784,653 166,028,720 64,018,217 58,348,415 Short-term loans to related party 11 - - - 35,000,000 Dividend receivable - related party 11 - - 40,000,000 543,522,880 Inventories 12 212,241,173 201,142,786 59,617,858 56,374,082 Other current assets-net 185,797,530 259,642,125 80,519,962 93,189,311 TOTAL CURRENT ASSETS 2,929,728,059 2,882,832,435 988,066,650 1,323,321,630

NON-CURRENT ASSETS Restricted bank deposit 9 17,269,652 13,801,426 - - Investments in subsidiary companies 13 - - 7,104,083,655 6,657,567,136 Investments in associated companies 14 943,465,669 74,983,716 862,785,818 54,290,154 Investments in other companies - net 16 55,316,980 55,316,980 55,316,980 55,316,980 Other long - term investments - net 15 915,680,161 1,937,810,524 915,456,481 1,937,586,844 Long - term loans to related party 11 - - 1,200,951 1,200,951 Interest receivable - related parties - net 11 - - 73,609,727 77,859,311 Property, plant and equipment - net 17 19,296,305,446 17,864,497,412 5,838,856,992 5,319,841,836 Land not used in operation 18 472,414,200 438,927,180 472,414,200 438,927,180 Goodwill - net 1,015,637,085 1,132,349,379 - - Other intangible assets - net 19 330,805,308 318,566,969 109,949,653 74,990,876 Other non-current assets - net 11 255,116,240 214,498,474 10,783,517 13,602,345 TOTAL NON-CURRENT ASSETS 23,302,010,741 22,050,752,060 15,444,457,974 14,631,183,613 TOTAL ASSETS 26,231,738,800 24,933,584,495 16,432,524,624 15,954,505,243

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

64 AS AT 31 DECEMBER 2007 AND 2006 BANGKOK DUSIT MEDICAL SERVICES PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS(Continued)

LIABILITIES AND SHAREHOLDERSû EQUITY (Unit : Baht) Consolidated financial statements Separate financial statements Note 2007 2006 2007 2006 (Restated) (Restated) CURRENT LIABILITIES Bank overdrafts and short-term loans from 20 817,694,449 437,636,812 680,200,000 230,000,000 financial institutions Short-term loans from related parties 11 13,627,481 21,163,264 - - Trade accounts payable Related parties 11 11,126,206 14,622,435 45,443,068 19,087,078 Other companies 843,670,888 778,517,373 278,805,549 241,004,478 Total trade accounts payable 854,797,094 793,139,808 324,248,617 260,091,556 Current portion of long-term loans 21 1,070,391,045 718,088,334 387,072,000 177,792,000 Current portion of liabilities under hire purchase and financial lease agreements 22 118,000,920 123,398,365 15,356,250 35,451,223 Accounts payable - construction and retention 210,788,465 311,095,606 51,571,275 96,826,577 Other payable - related parties 11 42,516,663 6,160,159 41,896,995 33,088,288 Corporate income tax payable 227,725,809 228,413,023 102,779,683 27,003,642 Accrued expenses 877,951,221 721,298,804 362,678,483 326,489,865 Other current liabilities 639,593,745 596,878,696 161,819,259 232,301,188 TOTAL CURRENT LIABILITIES 4,873,086,892 3,957,272,871 2,127,622,562 1,419,044,339

NON-CURRENT LIABILITIES Long - term loans - net of current portion 21 5,680,206,748 5,923,645,853 1,548,021,600 1,545,093,600 Convertible debentures - liability component 32 3,528,016,610 4,625,962,991 3,528,016,610 4,625,962,991 Long - term liabilities under hire purchase and financial lease agreements - net of current portion 22 170,332,613 159,190,046 10,000,000 25,356,250 Deferred income 252,603,836 233,639,452 252,603,836 233,639,452 Other non-current liabilities 17,500,458 49,741,853 4,924,040 14,413,668 TOTAL NON-CURRENT LIABILITIES 9,648,660,265 10,992,180,195 5,343,566,086 6,444,465,961 TOTAL LIABILITIES 14,521,747,157 14,949,453,066 7,471,188,648 7,863,510,300

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

65 AS AT 31 DECEMBER 2007 AND 2006 BANGKOK DUSIT MEDICAL SERVICES PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS(Continued)

SHAREHOLDERSû EQUITY (Unit : Baht) Consolidated financial statements Separate financial statements Note 2007 2006 2007 2006 (Restated) (Restated) SHAREHOLDERSû EQUITY Share capital Registered 32 1,312,264,222 ordinary shares of Baht 1 each 1,312,264,222 1,312,264,222 1,312,264,222 1,312,264,222 Issued and fully paid-up 1,214,130,813 ordinary shares of Baht 1 each (31 December 2006 : 1,181,037,800 ordinary 33 shares of Baht 1 each) 1,214,130,813 1,181,037,800 1,214,130,813 1,181,037,800 Premium Premium on ordinary shares 33 5,816,433,793 4,625,091,357 5,753,509,865 4,562,167,429 Revaluation surplus on investments 15 (6,491,571) 679,137,344 (78,168) 679,137,344 Revaluation surplus on land 1,156,654,872 739,493,467 728,481,200 427,122,962 Difference from shareholding restructure 33 305,000,325 305,000,325 - - Translation adjustment (34,701,915) (19,963,214) - - Convertible debentures - equity component 32 37,353,100 50,062,520 37,353,100 50,062,520 Retained earnings Appropriated - statutory reserve 24 131,226,422 131,226,422 131,226,422 131,226,422 Unappropriated 2,494,223,429 1,786,066,031 1,096,712,744 1,060,240,466 TOTAL EQUITY ATTRIBUTABLE TO COMPANYûS SHAREHOLDERS 11,113,829,268 9,477,152,052 8,961,335,976 8,090,994,943 MINORITY INTEREST - Equity attributable to minority shareholders of subsidiaries 596,162,375 506,979,377 - - TOTAL SHAREHOLDERS' EQUITY 11,709,991,643 9,984,131,429 8,961,335,976 8,090,994,943 TOTAL LIABILITIES AND SHAREHOLDERSû EQUITY 26,231,738,800 24,933,584,495 16,432,524,624 15,954,505,243 0 0 0 0

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

66 INCOME AS AT 31 DECEMBER 2007 AND 2006 STATEMENTS BANGKOK DUSIT MEDICAL SERVICES PUBLIC COMPANY LIMITED AND SUBSIDIARIES

(Unit : Baht) Consolidated financial statements Separate financial statements Note 2007 2006 2007 2006 (Restated) REVENUES Revenues from hospital operations 11 18,423,444,513 15,606,874,043 6,321,009,321 5,484,306,297 Other income Revenue from sales of food and beverages 11 97,375,499 169,134,597 18,107,859 20,873,591 Interest income 11 13,222,410 27,452,052 12,271,156 3,855,919 Dividend income 31,846,810 - 267,287,897 582,380,553 Others 312,642,771 142,752,952 348,392,176 212,171,597 Total other income 455,087,490 339,339,601 646,059,088 819,281,660 Share of income from investments in associated companies 6,858,074 34,771,250 - - TOTAL REVENUES 18,885,390,077 15,980,984,894 6,967,068,409 6,303,587,957 EXPENSES Cost of hospital operations and others 11 10,236,738,970 8,672,666,780 3,427,479,403 2,975,027,332 Administrative expenses 11 4,195,701,133 3,573,496,909 1,654,234,451 1,322,514,814 Depreciation and amortisation 1,945,571,467 1,418,798,317 632,898,444 458,014,121 TOTAL EXPENSES 16,378,011,570 13,664,962,006 5,714,612,298 4,755,556,267 INCOME BEFORE INTEREST EXPENSE AND INCOME TAX 2,507,378,507 2,316,022,888 1,252,456,111 1,548,031,690 INTEREST EXPENSE (688,086,828) (545,748,426) (400,795,267) (288,966,188) CORPORATE INCOME TAX (527,303,560) (385,952,362) (224,669,666) (135,248,901) INCOME AFTER CORPORATE TAX 1,291,988,119 1,384,322,100 626,991,178 1,123,816,601 NET INCOME ATTRIBUTABLE TO MINORITY INTEREST (47,850,294) (61,635,015) - - NET INCOME FOR THE YEAR 1,244,137,825 1,322,687,085 626,991,178 1,123,816,601

BASIC EARNINGS PER SHARE 27 Net income 1.04 1.12 0.52 0.95 Weighted average number of ordinary shares (shares) 1,195,856,184 1,176,883,665 1,195,856,184 1,176,883,665

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

67 STATEMENTS OF CHANGES IN SHAREHOLDERSû EQUITY

Premium Issued and paid-up Revaluation Revaluation Premium on surplus on surplus on Note share capital ordinary shares investment land and building Balance as at 31 December 2005 - as previously reported 1,163,410,108 4,322,607,094 254,659,742 963,796,488 Cumulative effect of the change in accounting policy for recording building 6 - - - (241,391,009) Balance as at 31 December 2005 - as restated 1,163,410,108 4,322,607,094 254,659,742 722,405,479 Revaluation surplus of land 17,087,988 Adjustment of fair value of investment - - 424,477,602 - Increase in share capital 33 17,627,692 - - - Increase in share premium 33 - 302,484,263 - - Difference from shareholding restructure 33 - - - - Translation adjustment - - - - Convertible debentures - equity component 32 - - - - Transfer to statutory reserve 24 - - - - Net income for the year - - - - Dividend paid 23 - - - - Minority interest - - - - Balance as at 31 December 2006 - as restated 1,181,037,800 4,625,091,357 679,137,344 739,493,467

Balance as at 31 December 2006 - as previously reported 1,181,037,800 4,625,091,357 679,137,344 982,615,188 Cumulative effect of the change in accounting policy for recording building 6 - - - (243,121,721) Balance - as at 31 December 2006 - as restated 1,181,037,800 4,625,091,357 679,137,344 739,493,467 Increase in share capital 33 33,093,013 - - - Increase in share premium 33 - 1,191,342,436 - - Adjustment of fair value of investment - - 245,549,638 - Reverse revaluation surplus from change of status from other company to associated company - - (924,765,150) - Share of income from investment in an associate due to change in status from other company to associated company - - - - Realised loss on change in valuation of investment in an associate - - (6,413,403) - Translation adjustment - - - - Convertible debentures - equity component 32 - - - - Revaluation surplus on land 17 - - - 417,161,405 Net income for the year - - - - Dividend paid 23 23 - - - - Minority interest - - - - Balance as at 31 December 2007 1,214,130,813 5,816,433,793 (6,491,571) 1,156,654,872

68 The accompanying notes are an integral part of the financial statements. AS AT 31 DECEMBER 2007 AND 2006 BANGKOK DUSIT MEDICAL SERVICES PUBLIC COMPANY LIMITED AND SUBSIDIARIES

(Unit : Baht) Consolidated financial statements Convertible Retained earnings Translation debentures - Minority Difference from adjustment interest Total shareholding equity Appropriated- Unappropriated restructure component statutory reserve - - - 118,341,011 1,066,783,257 527,940,540 8,417,538,240

------(241,391,009) - - - 118,341,011 1,066,783,257 527,940,540 8,176,147,231 17,087,988 ------424,477,602 ------17,627,692 ------302,484,263 305,000,325 - - - - - 305,000,325 - (19,963,214) - - - - (19,963,214) - - 50,062,520 - - - 50,062,520 - - - 12,885,411 (12,885,411) ------1,322,687,085 - 1,322,687,085 - - - - (590,518,900) - (590,518,900) - - - - - (20,961,163) (20,961,163) 305,000,325 (19,963,214) 50,062,520 131,226,422 1,786,066,031 506,979,377 9,984,131,429

305,000,325 (19,963,214) 50,062,520 131,226,422 1,786,066,031 506,979,377 10,227,253,150

------(243,121,721) 305,000,325 (19,963,214) 50,062,520 131,226,422 1,786,066,031 506,979,377 9,984,131,429 ------33,093,013 ------1,191,342,436 ------245,549,638

------(924,765,150)

- - - - 54,538,473 - 54,538,473 ------(6,413,403) - (14,738,701) - - - - (14,738,701) - - (12,709,420) - - - (12,709,420) ------417,161,405 - - - - 1,244,137,825 - 1,244,137,825 - - - - (590,518,900) - (590,518,900) - - - - - 89,182,998 89,182,998 305,000,325 (34,701,915) 37,353,100 131,226,422 2,494,223,429 596,162,375 11,709,991,643

69 STATEMENTS OF CHANGES IN SHAREHOLDERSû EQUITY (Continued)

Premium Issued and paid-up Premium on Revaluation share capital surplus on Note ordinary shares investment Balance as at 31 December 2005 - as previously reported 1,163,410,108 4,322,607,094 254,659,742 Cumulative effect of the change in accounting policy for investments in subsidiary and associated companies 5 - - - Balance as at 31 December 2005 - as restated 1,163,410,108 4,322,607,094 254,659,742 Adjustment of fair value of investment - - 424,477,602 Increase in share capital 33 17,627,692 - - Increase in share premium 33 - 239,560,335 - Convertible debentures - equity component 32 - - - Transfer to statutory reserve 24 - - - Net income for the year (restated) - - - Dividend paid 23 - - - Balance as at 31 December 2006 - as restated 1,181,037,800 4,562,167,429 679,137,344

Balance as at 31 December 2005 - as previously reported 1,181,037,800 4,625,091,357 679,137,344 Cumulative effect of the change in accounting policy for investments in subsidiary and associated companies 5 - (62,923,928) - Balance as at 31 December 2006 - as restated 1,181,037,800 4,562,167,429 679,137,344 Adjustment of fair value of investment - - 245,549,638 Reversal revaluation surplus from change of status from - - (924,765,150) other company to associated company Convertible debentures - equity component 32 33,093,013 1,191,342,436 - Revaluation surplus on land 17 - - - Net income for the year - - - Dividend paid 23 - - - Balance as at 31 December 2007 1,214,130,813 5,753,509,865 (78,168)

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

70 AS AT 31 DECEMBER 2007 AND 2006 BANGKOK DUSIT MEDICAL SERVICES PUBLIC COMPANY LIMITED AND SUBSIDIARIES

(Unit : Baht) Consolidated financial statements Convertible Retained earnings Translation debentures - Revaluation Difference from adjustment Appropriated- Total surplus on shareholding equity Unappropriated land and building restructure component statutory reserve 963,796,488 - - - 118,341,011 1,066,783,257 7,889,597,700

(536,673,526) - - - - (526,955,081) (1,063,628,607) 427,122,962 - - - 118,341,011 539,828,176 6,825,969,093 ------424,477,602 ------17,627,692 ------239,560,335 - - - 50,062,520 - - 50,062,520 - - - - 12,885,411 (12,885,411) ------1,123,816,601 1,123,816,601 - - - - - (590,518,900) (590,518,900) 427,122,962 - - 50,062,520 131,226,422 1,060,240,466 8,090,994,943

982,615,188 305,000,325 (19,963,214) 50,062,520 131,226,422 1,786,066,031 9,720,273,773

(555,492,226) (305,000,325) 19,963,214 - - (725,825,565) (1,629,278,830) 427,122,962 - - 50,062,520 131,226,422 1,060,240,466 8,090,994,943 ------245,549,638 ------(924,765,150)

- - - (12,709,420) - - 1,211,726,029 301,358,238 - - - - - 301,358,238 - - - - - 626,991,178 626,991,178 - - - - - (590,518,900) (590,518,900) 728,481,200 - - 37,353,100 131,226,422 1,096,712,744 8,961,335,976

71 STATEMENTS OF AS AT 31 DECEMBER 2007 AND 2006 CASH FLOWS BANGKOK DUSIT MEDICAL SERVICES PUBLIC COMPANY LIMITED AND SUBSIDIARIES

(Unit : Baht) Consolidated financial statements Separate financial statements 2007 2006 2007 2006 (Restated) Cash flows from operating activities Net income 1,244,137,825 1,322,687,085 626,991,178 1,123,816,601 Adjustments to reconcile net income to net cash provided by (paid from) operating activities: - Depreciation and amortisation 1,945,571,467 1,418,798,317 632,898,444 458,014,121 Bad debts and allowance for doubtful accounts 41,382,953 31,139,049 15,513,084 5,946,462 Amortisation of deferred income (35,035,616) (27,791,781) (35,035,616) (27,791,781) Share of income from investments in associated companies (6,858,074) (34,771,250) - - Gain from early repayment of loan (122,558,281) - - - Dividend income (31,846,810) - (267,287,897) (582,380,553) Net income attributable to minority interest 47,850,294 61,635,015 - - Loss on impairment of fixed assets 5,665,463 - 719,600 - Amortisation of goodwill 147,767,112 118,735,961 - - Amortisation of deferred interest on financial lease agreement 4,872,294 20,493,839 3,683,707 4,460,773 Amortisation of convertible debenture 88,498,398 59,045,373 88,498,398 59,045,373 Amortisation of expense for convertible debenture issue 25,281,250 11,919,138 25,281,250 11,919,138 Loss (gain) on disposal of fixed assets (3,543,152) 1,639,135 (2,533,495) (1,383,894) Unrealised loss on foreign exchange rate - 3,745,417 - - Earnings from operating activities before changes in operating assets and liabilities 3,351,185,123 2,987,275,298 1,088,728,653 1,051,646,240 Decrease (increase) in operating assets Trade accounts receivable (314,550,090) (376,269,514) (113,737,653) (256,276,085) Other receivable and short - term loans to related parites (10,769,700) (163,231,916) (5,669,802) (39,459,142) Inventories (11,098,387) (3,966,972) (3,243,776) 13,630,882 Other current assets 16,938,478 (126,936,872) 12,669,349 3,700,386 Other non-current asset (57,884,544) 31,426,848 2,818,828 (3,570,164) Increase (decrease) in operating liabilities Trade accounts payable 62,906,127 3,590,720 64,157,061 19,650,469 Other payable - related parties 36,356,504 (8,764,835) 8,808,707 16,392,703 Corporate income tax payable (687,214) (104,637,326) 75,776,041 (87,228,236) Accrued expenses 156,769,237 132,131,338 36,188,618 192,382,591 Other current liabilities 20,237,921 225,395,449 (29,052,306) (14,686,602) Deferred income 54,000,000 78,000,000 54,000,000 78,000,000 Other non-current liabilities (32,241,395) 6,579,597 (9,489,628) 7,214,083 Net cash from operating activities 3,271,162,060 2,680,591,815 1,181,954,092 981,397,125

The accompanying notes are an integral part of the financial statements. 72 STATEMENTS OF AS AT 31 DECEMBER 2007 AND 2006 CASH FLOWS BANGKOK DUSIT MEDICAL SERVICES PUBLIC COMPANY LIMITED AND SUBSIDIARIES (Continued)

(Unit : Baht) Consolidated financial statements Separate financial statements 2007 2006 2007 2006 (Restated) Cash flows from investing activities Decrease (increase) in short - term investments and restricted bank deposit 34,366,538 (52,990,809) (240) 7,439,940 Dividend received 31,846,810 8,437,500 770,810,777 38,857,673 Net cash paid for acquisition of subsidiary companies - (213,646,723) - - Cash payment for acquisition of shares for shareholding restructure - (571,680,349) - (571,680,349) Cash paid for additional investments in other companies - (908,155,850) - (908,155,850) Cash paid for purchase of investments in subsidiary and associated companies (575,061,523) (63,915,448) (929,386,288) (1,239,923,388) Cash received from sales of investments 12,914,071 - 17,288,955 - Cash received from disposal of fixed assets 23,850,336 62,472,846 19,475,120 19,526,212 Cash paid for purchase of fixed assets (2,998,389,886) (3,649,828,230) (986,198,417) (1,465,619,902) Decrease in loans to and interest receivable from related parties 35,000,000 15,392,644 39,249,584 (19,860,027) Increase in intangible assets (47,645,276) (53,767,416) (37,148,891) (35,879,001) Cash received from minority interest for investment 99,975,643 - - - Decrease in minority interests from change of investment portion Net cash used in investing activities 47,047,190 37,860,592 - - Cash flows from financing activities (3,336,096,097) (5,389,821,243) (1,105,909,400) (4,175,294,692) Increase (decrease) in bank overdraft and short-term loans from financial institutions 380,057,637 (26,459,951) 450,200,000 50,000,000 Increase in loans from related parties (7,535,783) 11,163,264 - - Increase in long-term loans 1,261,544,530 1,846,360,000 390,000,000 1,043,800,000 Decrease in liabilities under hire purchase and financial lease agreement (61,246,808) (151,117,502) (39,134,930) (41,741,042) Repayment of long-term loans (1,027,383,865) (2,503,929,507) (177,792,000) (1,913,014,337) Dividend paid (590,518,900) (590,518,900) (590,518,900) (590,518,900) Dividend paid by subsidiaries to minority interests (27,429,248) (1,079,827) - - Cash received from increase of share capital - 91,849,797 - - Cash received from convertible debenture issue - 4,605,061,000 - 4,605,061,000 Net cash from (used in) financing activities (72,512,437) 3,281,328,374 32,754,170 3,153,586,721 Net increase (decrease) in cash and cash equivalents (137,446,474) 572,098,946 108,798,862 (40,310,846) Cash and cash equivalents at beginning of year 1,101,048,856 528,949,910 60,449,522 100,760,368 Cash and cash equivalents at end of year 963,602,382 1,101,048,856 169,248,384 60,449,522

Supplemental cash flows information :- Cash paid during the year for Interest expense 795,591,887 439,336,367 424,517,546 155,456,652 Corporate income tax 529,557,849 513,842,714 149,378,787 222,074,147 Non-cash items :- Fixed assets under financial lease and hire-purchase agreements 62,119,636 95,186,749 - - Accounts payable for purchase of fixed assets 188,722,072 134,108,232 16,907,793 41,429,120 Dividend receivable - - 40,000,000 543,522,880

The accompanying notes are an integral part of the financial statements. 73 NOTES TO FINANCIAL STATEMENTS BANGKOK DUSIT MEDICAL SERVICES PUBLIC COMPANY LIMITED AND SUBSIDIARIES FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006

1. GENERAL INFORMATION Bangkok Dusit Medical Services Public Company Limited was incorporated as a limited company under Thai laws and registered the change of the status of the Company to a public limited company on 3 January 1994. The Company operates in Thailand and its principal activity is hospital with the registered address at 2, Soi Soonvijai 7, New Petchburi Road, Bang Kapi, Huaykwang, Bangkok. 2. BASIS OF PREPARATION The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession Act B.E. 2547. The presentation of the financial statements has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 14 September 2001, issued under the Accounting Act B.E. 2543. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies. 3. BASIS OF CONSOLIDATION 3.1 The consolidated financial statements include the financial statements for the years ended 31 December 2007 and 2006 of Bangkok Dusit Medical Services Public Company Limited (herein after called çthe Companyû) and its subsidiaries (herein after called the çsubsidiariesé) which were incorporated in Thailand except B.D.M.S International Medical Services Co., Ltd., Angkor Pisith Co., Ltd., Phnom Penh Medical Services Co., Ltd. and Royal Rattanak Medical Services Co., Ltd. which was incorporated in Cambodia as follows :-

Registered capital Percentage of shareholding by the Company (percent) Subsidiary companies Type of business 2007 2006 2007 2006 Held by the Company Samitivej Public Co., Ltd. Hospital Baht 1,000 million Baht 1,000 million 92.92 92.92 Bangkok Hatyai Hospital Co., Ltd. Hospital Baht 500 million Baht 500 million 98.53 98.53 Bangkok Phuket Hospital Co., Ltd. Hospital Baht 500 million Baht 500 million 99.47 99.47 BNH Medical Center Co., Ltd. Hospital Baht 586 million Baht 586 million 88.31 88.31 Bangkok Prapradang Hospital Co., Ltd. Hospital Baht 105 million Baht 105 million 79.00 79.00 Bangkok Pattaya Hospital Co., Ltd. Hospital Baht 280 million Baht 280 million 97.06 97.06 Bangkok Rayong Hospital Co., Ltd. Hospital Baht 400 million Baht 400 million 100.00 100.00 Bangkok Samui Hospital Co., Ltd. Hospital Baht 150 million Baht 150 million 100.00 100.00 Bangkok Trat Hospital Co., Ltd. Hospital Baht 250 million Baht 250 million 99.71 99.71 Wattanavej Co., Ltd. Hospital Baht 180 million Baht 180 million 99.47 99.47

74 Registered capital Percentage of shareholding by the Company (percent) Subsidiary companies Type of business 2007 2006 2007 2006 Held by the Company Bangkok Ratchasima Hospital Co., Ltd. Hospital Baht 300 million Baht 300 million 84.67 79.72 National Healthcare Systems Co., Ltd. Central lab Baht 75 million Baht 75 million 74.02 74.02 Bio Molecular Laboratories Central lab Baht 10 million Baht 10 million 95.00 95.00 (Thailand) Co., Ltd. Angkor Pisith Co., Ltd. Hospital USD 10 million USD 5 million 80.00 80.00 Phnom Penh Medical Services Co., Ltd. Hospital Riel 20,000 million Riel 20,000 million 100.00 100.00 Royal Rattanak Medical Services Co., Ltd. Hospital Riel 26,000 million - 70.00 - B.D.M.S. International Hospital Riel 9,200 million Riel 9,200 million 100.00 100.00 Medical Services Co., Ltd. Asia International Healthcare Co., Ltd. Investment Baht 35 million Baht 5 million 100.00 100.00 Global Medical Network Co., Ltd. Hospital Baht 100 million - 100.00 - New Petchburi Medical Services Co., Ltd. Hospital Baht 1 million Baht 1 million 100.00 100.00 Bangkok Health Insurance Limited Insurance Baht 100 million Baht 95 million 99.94 99.94 Bangkok Helicopter Services Co., Ltd. Service - Baht 30 million - 100.00

Held by the subsidiary Samitivej Sriracha Hospital Baht 188 million Baht 188 million - - (held by a subsidiary at 66%) Irving Sheridan SE Co., Ltd. Management assets Baht 0.1 million Baht 0.1 million - - for healthcare (held by a subsidiary at 95%) business Restaurant and First Health Food Co., Ltd. distributing health Baht 14 million Baht 14 million - - food products and (held by a subsidiary at 100%) facility management Sodexho Healthcare Support Restaurant and Baht 15 million Baht 15 million - - Services Thailand Ltd. distributing health (held by a subsidiary at 74%) food products Phuket Health And Travel Co., Ltd. Healthcare Baht 5 million Baht 5 million - - travel service (held by a subsidiary at 100%)

75 3.2 Percentage of total assets and revenues of the subsidiary company as included in the consolidated financial statements The percentage of total assets and revenues of the subsidiary companies for the years ended 31 December 2007 and 2006 as included in the consolidated financial statements are as follow :- Subsidiary's total revenues Subsidiaryûs total assets from patient service as a percentage to as a percentage to the the consolidated total consolidated total Subsidiaries 2007 2006 2007 2006 1. Samitivej Public Co., Ltd. 21.77 22.15 25.14 23.33 2. Bangkok Hatyai Hospital Co., Ltd. 4.56 4.85 3.21 3.56 3. Bangkok Phuket Hospital Co., Ltd. 4.85 4.22 7.26 6.72 4. BNH Medical Center Co., Ltd. 4.74 4.84 7.10 7.23 5. Bangkok Prapradang Hospital Co., Ltd. 0.62 0.66 0.69 0.85 6. Bangkok Pattaya Hospital Co., Ltd. 9.94 11.35 10.62 10.90 7. Bangkok Rayong Hospital Co., Ltd. 3.84 3.78 3.96 4.02 8. Bangkok Samui Hospital Co., Ltd. 1.37 1.33 1.40 1.37 9. Bangkok Trat Hospital Co., Ltd. 1.48 1.51 1.07 1.08 10. Wattanavej Co., Ltd. 2.54 2.84 2.61 3.00 11. Bangkok Ratchasima Hospital Co., Ltd. 3.05 2.02 2.27 1.88 12. National Healthcare Systems Co., Ltd. 0.70 0.69 0.03 1.31 13. Bio Molecular Laboratories (Thailand) Co., Ltd. 0.15 0.12 0.10 0.23 14. Angkor Pisith Co., Ltd. 1.60 0.84 0.29 - 15. Phnom Penh Medical Services Co., Ltd. 0.66 0.73 - - 16. Royal Rattanak Medical Services Co., Ltd. 0.85 - 0.02 - 17. B.D.M.S. International Medical Services Co., Ltd. 0.30 0.33 - - 18. Asia International Healthcare Co., Ltd. 0.14 0.02 - - 19. Global Medical Network Co., Ltd. 0.39 - - - 20. New Petchburi Medical Services Co., Ltd. - 0.01 - - 21. Bangkok Health Insurance Limited 0.19 0.15 - - 22. Bangkok Helicopter Services Co., Ltd. - 0.25 - -

3.3 Material inter-company balances and transactions between the Company and its subsidiaries an the Company's investments in subsidiary companies and the share capital of the subsidiary companies are eliminated from the consolidated financial statements. 3.4 The differences between cost of investments over/under the fair value of identifiable assets and liabilities of the subsidiary companies to the extent of the Company's portion on acquisition date are shown under the caption of "Goodwill/negative goodwill" in the consolidated balance sheets and subject to amortisation over the period of 10 - 20 years. 3.5 Results of operations of the subsidiary companies have been included in the consolidated financial statements from their effective dates of acquisition of the investment. 3.6 The financial statements of overseas subsidiary companies are translated into Baht at the closing exchange rate as to assets and liabilities, and at monthly average exchange rates as to revenues and expenses. The translation differences have been shown under the caption of çTranslation adjustmenté in shareholders' equity. 3.7 The separate financial statements, which present investments in subsidiaries and associates under the cost method, have been prepared solely for the benefit of the public. 4. NOTIFICATION OF NEW ACCOUNTING STANDARDS The Federation of Accounting Professions (FAP) has issued Notifications No. 9/2550, 38/2550 and 62/2550 regarding accounting standards. The notifications mandate the use of the following new accounting standards. a) Thai Accounting Standards which are effective for the current year TAS 44 (revised 2007) Consolidated Financial Statements and Separate Financial Statements 76 TAS 45 (revised 2007) Investments in Associates TAS 46 (revised 2007) Interests in Joint Ventures These accounting standards become effective for the financial statements for fiscal years beginning on or after 1 January 2007. During the first quarter of the current year, the Company changed its accounting policy for recording investments in subsidiaries and associates in the separate financial statements in order to comply with the revised Thai Accounting Standards No. 44 as discussed in Note 5. b) Thai Accounting Standards which are not effective for the current year 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 will become effective for the financial statements for fiscal years beginning on or after 1 January 2008. The management has assessed the effect of these accounting standards and believes that they will not have any significant impact on the financial statements for the year in which they are initially applied except for the following accounting standard. TAS 43 (revised 2007) does not require the Company and its subsidiaries to amortise goodwill, including negative goodwill, acquired in a business combination. Such goodwill is instead to be tested for impairment, and measured at cost less accumulated impairment losses. In case of negative goodwill, identification and measurement of the acquiree's assets, liabilities and contingencies should be reassessed and the measurement of the cost of the combination and the remaining balance is to be recognised as income immediately in the income statement. 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, according to the treatment as outlined in the accounting standard. Hence, in 2008, the Company and its subsidiaries will adjust the goodwill and negative goodwill as of 31 December 2007 according to the treatment as outlined in the accounting standard. 5. CHANGE IN ACCOUNTING POLICY FOR RECORDING INVESTMENTS IN SUBSIDIARY AND ASSOCIATED COMPANIES IN THE SEPARATE FINANCIAL STATEMENTS During the first quarter of the current year, the Company changed its accounting policy for recording investments in subsidiary and associated companies in the separate financial statements from the equity method to the cost method, in compliance with Accounting Standard 44 (Revised 2007) "Consolidated Financial Statements and Separate Financial Statement", under which investments in subsidiaries and associates are to be presented in the separate financial statements under the cost method. In this regard, the Company has restated the previous period's separate financial statements as though the investments in the subsidiary and associated companies had originally been recorded using the cost method. The change has the effect of decreasing net income in the separate income statements for the year ended 31 December 2007 and 2006 by Baht 617 million (Baht 0.52 per share) and Baht 199 million (Baht 0.17 per share), respectively. The effect of the change in accounting policy to shareholders' equity as at 1 January 2007 and 2006 has been presented under the heading of "Cumulative effect of the change in accounting policy for investments in subsidiary and associated companies" in the separate statements of changes in shareholdersû equity. Such change in accounting policy affects only the accounts related to investments in subsidiary and associated companies in the Company's separate financial statements, with no effect to the consolidated financial statements. 6. CHANGE IN ACCOUNTING POLICY FOR RECORDING BUILDING Prior to 2007 the Company and its subsidiaries initially recorded land and building at cost on acquisition dates. Land of the Company and land and building of its subsidiaries are subsequently revalued by independent professional appraiser to their fair values. During the first quarter of the current year, the group changed its accounting policy for recording of building from revalued amount to historical cost. In this regard, the group has restated the previous period's consolidated financial statements as though building had originally been recorded using the historical cost method. The cumulative effect of the change in accounting policy has been presented under the heading of çCumulative effect of the change in accounting policy for recording buildingé in the consolidated statements of changes in shareholdersû equity. 77 7. SIGNIFICANT ACCOUNTING POLICIES 7.1 Revenue recognition Hospital revenue 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. Service income Service income is recognised when services have been rendered. Interest income Interest income is recognised on an accrual basis based on the effective rate. Dividends Dividends are recognised when the right to receive the dividends is established. 7.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at financial institutions with an original maturity of three months or less and are free from restrictions. 7.3 Trade accounts receivable and allowance for doubtful accounts Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided to cover the estimated losses that may incur in collection. The adequacy of the allowance is reviewed and evaluated in relation to the collection experience, age of debt and payment ability. Debt will be written off when considered uncollectible. 7.4 Inventories Inventories are valued at lower of cost (weighted average basis) and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. 7.5 Investments Investments in associated companies are accounted for in the consolidated financial statements using the equity method. Investments in subsidiary and associated companies are accounted for in the separate financial statements using the cost method. Other investments in non-marketable securities which the Company regards as other investment are stated at cost. Allowance for impairment loss will be made when the net realisable value is lower than the cost of investments. Investment in available for sales securities is determined at fair value, which is based on the latest bid price quoted on the Stock Exchange of Thailand on the last working day of the year. Change in the value of the available for sales securities is shown as a separate item in shareholder's equity as revaluation surplus on investments until securities are sold, the change will be included in income statements. 7.6 Property, plant and equipment and depreciation Land is stated at cost or revalued amount. Plant and equipment are stated at cost less accumulated depreciation and provision for impairment (Before the year 2007 : plant are stated at cost or revalued amount). Depreciation of plant and equipment is calculated by reference to their cost on a straight-line basis over the estimated useful lives of each item of property plant equipment, except assets of the Company which were acquired before 1988 are depreciated on a declining balance method. The estimated useful lives of assets are as follows :- Building, structures and building improvements 5 - 50 years Medical tools and equipment, furniture and office equipment 3 - 10 years Vehicles 5 - 8 years No depreciation is provided on land and fixed assets under construction and installation. Revalued assets The Company and its subsidiaries initially recorded land at cost on acquisition dates. Land is subsequently revalued by independent professional appraiser, to its fair values. Revaluations are made with sufficient regularity to ensure that its carrying amounts do not differ materially from its fair value at the balance sheet date. 78 The Company and its subsidiaries records the differences incurred from revaluation as follows :- - When an asset's carrying amount is increased as a result of a revaluation, the increase should be credited directly to equity under the caption of "Surplus on revaluation of land". However, a revaluation increase should be recognised as income to the extent that it reverses a revaluation decrease of the same asset previously recognised as an expense. - When an asset's carrying amount is decreased as a result of a revaluation, the decrease should be recognised as an expense in the income statement. However, a revaluation decrease should be charged directly against any related "Surplus on revaluation of land" to the extent that the decrease does not exceed the amount held in the revaluation surplus in respect of that same asset and the excess is recognised an expense in the income statement. 7.7 Hire-purchase and financial lease agreements The Company and the subsidiaries record liabilities under hire purchase agreement at hire purchase payables less related interest. The liabilities are repayable according to the installment schedules in the hire-purchase agreements. Fixed assets acquired under hire purchase agreements are recorded at their cash price and are registered in the Company's and the subsidiaries' names upon completion of repayment. In addition, the Company and the subsidiaries record fixed assets under finance leases as assets and related liabilities in the balance sheets at amounts equal to the lower of fair value of the leased property or at the present value of the minimum lease payments at the inception of the lease. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease. The interest charge is recorded to periods during the lease term on the remaining balance of the liability for each period. 7.8 Operating lease Lease of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are recognised as expenses in the income statements over the period of the lease. 7.9 Other intangible assets and amortisation Other intangible assets, mainly leasehold right and computer software, are stated at cost less accumulated amortisation and provision for impairment. The Company and its subsidiaries amortise intangible assets on a straight-line method over the period of 5 - 10 years or based on the period in the agreement and the amortisation is included in the income statement. 7.10 Impairment of assets The Company and its subsidiaries assess at each reporting date whether there is an indication that an asset may be impaired. If any such indication exist, the Company and its subsidiaries make an estimate of the asset's recoverable amount (An asset's recoverable amount is the higher of fair value less costs to sell and value in use). Where the carrying amount of the asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses are recognised in the income statement. 7.11 Deferred income Deferred income represents cash received in advance from Life Privilege members and is amortised over the periods of 10 years. 7.12 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. In addition, related parties include associated companies and individuals or enterprises which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, and key management personnel, and directors and officers with authority in the planning and direction of the Company's operations. 7.13 Foreign currencies Transactions in foreign currencies incurred during the year are translated into Baht at the rates ruling on the transaction dates. Monetary assets and liabilities denominated in foreign currencies outstanding at the balance sheet date are translated into Baht at the rates ruling on the balance sheet date. Exchange gains and losses are included in the income statements. 7.14 Employee benefits Salary, wages, bonuses and contributions to the social security fund and provident fund are recognised as expenses when incurred. 79 7.15 Income tax Income tax is provided for in the accounts based on the taxable profits determined in accordance with tax legislation. 7.16 Financial instruments Financial instruments presented in the balance sheets consist of cash and cash equivalents, short-term investments, accounts receivable, investments, short-term loans, accounts payable, debentures and borrowings. The accounting policy for each item is separately disclosed in the related notes. The Company and its subsidiaries have no policy to hold any derivative financial instruments for speculative or trading purpose. 7.17 Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions in certain circumstances, affecting amounts reported in these financial statements and related notes. Actual results could differ from these estimates. 8. CASH AND CASH EQUIVALENTS Cash and cash equivalents for the years ended 31 December 2007 and 2006, consist of the following : (Unit : Baht) Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Cash and deposit at banks 986,129,226 767,832,780 169,248,384 60,449,522 Fixed deposits 51,416,727 441,526,185 8,318 8,078 1,037,545,953 1,209,358,965 169,256,702 60,457,600 Less : Fixed deposits with maturity more than 3 months and restricted bank deposit (73,943,571) (108,310,109) (8,318) (8,078) Total cash and cash equivalents 963,602,382 1,101,048,856 169,248,384 60,449,522

9. RESTRICTED BANK DEPOSIT As at 31 December 2007, the subsidiaries had placed their fixed deposits at bank with maturity over 3 months and savings account of Baht 17.3 million (2006 : Baht 13.8 million) as a collateral against bank guarantees as discussed in Note 29.1. 10. TRADE ACCOUNTS RECEIVABLE As at 31 December 2007 and 2006, the aging analysis of the outstanding trade accounts receivable is as follows :- (Unit : Thousand Baht) Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Related parties ë Less than 3 months 4,273 2,106 7,735 4,119 ë 3 - 6 months 364 418 403 403 ë 6 - 12 months 225 9 85 9 ë over 12 months 21 - 26 - Total accounts receivable - related parties 4,883 2,533 8,249 4,531 Others ë Less than 3 months 1,116,222 939,923 416,163 385,205 ë 3 - 6 months 148,405 55,483 94,900 28,297 ë 6 - 12 months 84,253 79,316 55,834 57,566 ë over 12 months 37,907 28,237 24,152 21,754 Total accounts receivable - others 1,386,787 1,102,959 591,049 492,822 Less : Allowance for doubtful accounts (58,042) (45,031) (24,644) (20,924) Total trade accounts receivable 1,328,745 1,057,928 566,405 471,898 Total trade accounts receivable - net 1,333,628 1,060,461 574,654 476,429

80 11. RELATED PARTY TRANSACTIONS During the years, the Company and its subsidiaries had significant business transactions with related parties, which have been concluded on commercial terms and based agreed upon in the ordinary course of businesses between the Company and those companies. Below is a summary of those transactions.

Transaction Pricing and lending policy Revenue from hospital operation Prices are based on the price charged to normal customers Revenue from lab analysis service Prices are based on the price charged to normal customers Revenue from consulting and management Agreed prices and in accordance with normal course of business Interest rate charge of inter-company loan Interest rate is close to rate charged by bank to normal customer Sales and purchase of fixed assets Agreed prices and in accordance with normal course of business

The significant inter-company transactions are as follows :- (Unit : Million Baht) Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Transactions with subsidiaries (eliminated from the consolidated financial statements) Patient services income and lab services - - 18.6 15.0 Consulting and management fees income - - 239.8 135.0 Interest income - - 8.4 0.8 Dividend income (Note 13) - - 235.4 578.4 Other income - - 49.4 40.9 Service cost - - 211.9 135.5 Other expenses - - 203.0 75.9 Dividend payment - - - 1.5 Purchase of investments in ordinary shares - - - 2,068.6 Purchase of medical instruments - - - 14.0 Sales of medical instruments - - 16.6 - Transactions with associated companies Patient services income and lab services 0.2 - - - Consulting and management fees income - 1.5 - 1.5 Interest income 1.5 - 1.5 - Dividend income (Note 14) 1.1 3.9 1.1 3.9 Other income 0.2 8.4 - - Service cost 27.7 23.0 11.0 10.3 Interest expense 0.4 0.4 - - Other expenses 8.1 23.7 - 19.8 Purchase of investments in ordinary shares - 0.2 - 0.2 Transactions with related parties Patient services income and lab services 13.7 7.1 11.0 6.9 Dividend income 3.2 - 3.2 - Service cost - 1.7 - 1.5 Other expenses 22.2 12.2 16.7 6.2 Dividend payment 57.8 36.3 57.8 36.3 Sales of investments in ordinary shares 17.3 - 17.3 -

81 The outstanding balances of the above transactions as at 31 December 2007 and 2006 have been separately shown in the balance sheets, as follows :- (Unit : Thousand Baht) Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Trade accounts receivable - related parties Subsidiary companies - - 4,155 2,351 Associated companies 48 46 - - Related companies 4,836 2,487 4,094 2,180 Total trade accounts receivable - related parties 4,884 2,533 8,249 4,531

Other receivable - related parties Consulting and management fee receivable Subsidiary companies - - 36,137 27,460 Total - - 36,137 27,460

Other Subsidiary companies - - 27,537 30,888 Associated companies 165,693 166,029 187 - Related companies 12,092 - 157 - Total 177,785 166,029 27,881 30,888 Total other receivable - related parties 177,785 166,029 64,018 58,348

Short-term loans to related party Subsidiary company - - - 35,000 Total short-term loans to related party - - - 35,000

Dividend receivable - related party Subsidiary company - - 40,000 543,523 Total dividend receivable - related party - - 40,000 543,523

Long-term loans to related party Subsidiary company - - 1,201 1,201 Total long-term loans to related party - - 1,201 1,201

Interest receivable - related parties Subsidiary companies - - 73,610 77,859 Total interest receivable - related parties - - 73,610 77,859

Long-term other accounts receivable - related parties (included in other non-current assets) Associated companies 156,531 117,042 - - Total long-term other accounts receivable - related parties 156,531 117,042 - -

82 (Unit : Thousand Baht) Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Short-term loans from related parties Associated company 10,000 10,000 - - Related companies 3,627 11,163 - - Total short-term loans from related parties 13,627 21,163 - -

Trade accounts payable - related parties Subsidiary companies - - 43,068 10,458 Associated companies 10,888 6,927 2,375 2,425 Related companies 238 7,695 - 6,204 Total trade accounts payable - related parties 11,126 14,622 45,443 19,087

Other payable - related parties Subsidiary companies - - 34,594 29,356 Associated companies 5,342 - 5,246 - Related companies 37,175 6,160 2,057 3,732 Total other payable - related parties 42,517 6,160 41,897 33,088

Movement of loans to and loans from related parties during the year are summarised as follow:- (Unit : Thousand Baht) Consolidated financial statements 31 December 2006 Increase Decrease 31 December 2007 Short-term loans from related parties Associated company 10,000 - - 10,000 Related company 11,163 2,939 (10,475) 3,627 Total short-term loans from related parties 21,163 2,939 (10,475) 13,627

(Unit : Thousand Baht) Separate financial statements 31 December 2006 Increase Decrease 31 December 2007 Short-term loan to related party Subsidiary companies 35,000 - (35,000) - Total short-term loan to related party 35,000 - (35,000) - Long-term loan to related party Subsidiary company 1,201 - - 1,201 Total long-term loan to related party 1,201 - - 1,201 Short-term loan from related party Subsidiary company - 50,000 (50,000) - Total short-term loan from related parties - 50,000 (50,000) -

The Company and related parties charge interest on loans at MLR to MLR+0.5% per annum, and fixed rate per annum. 83 Bangkok Phuket Hospital Co., Ltd. had an interest payable to the Company total of Baht 4 million repayable into two equal installments, in December 2009 and December 2010. Bangkok Phuket Hospital Co., Ltd. had mortgaged its land, building and construction to be created in the future as collateral security against the above loan. However, in the first quarter of 2007 Bangkok Phuket Hospital Co., Ltd. already made the settlement in full amount. As at 31 December 2007, the Company had long overdue loan interest receivable from Bangkok Hatyai Hospital Co., Ltd. of Baht 83.19 million (31 December 2006 : Baht 83.19 million). The Company has provided allowance for doubtful accounts of Baht 9.58 million (31 December 2006 : Baht 9.58 million). The management believes that the allowance for doubtful accounts will be sufficient in respect of these loans and the subsidiary has pledged its land as collateral for the loan. Management Agreement The Company The Company services hospital management to subsidiary companies which the remunueration rates are based on the net revenue from hospital operations. The Company has entered into the Hospital Managing Employment Agreement with BNH Medical Center Co., Ltd. a subsidiary company, for a period of five years. The agreement is renewable. Remuneration rates for the 1st - 5th years are 2.5% - 5% gross margin before interest expense, income tax, depreciation, and amortisation of deferred expense per annum, and these rates rise to 8% per annum from the 6th year onwards. The employer requests to suspend the management remuneration of the 1st -5th years until the 6th year. However, this agreement was terminated in 2006. The Subsidiary The subsidiary company has entered into a Hospital Managing Employment Agreement with an associated company which transformed to be a subsidiary company in 2006. The agreement is for a period of ten years and is entitled to renew. The subsidiary company shall receive managing income at the certain percentage of total operation result as stated in the agreement. The payment shall be made on a monthly basis, starting in June 2002. Long Term Agreement Subsidiaries As at 5 June 2003, a subsidiary company entered into the 3 years land lease agreement with the Company for building construction. The subsidiary company has to pay a monthly rental fee at the rate stipulated in the agreement, commencing from 1 January 2004. On 1 November 2006, the subsidiary has extended into the 3 years land lease agreement. The subsidiary company has to pay a monthly rental fee at the rate stipulated in the agreement, commencing from 1 January 2007. In 2005, a subsidiary company entered into the 3-year building rental agreement with another subsidiary company for the hospital operation. That subsidiary company has to pay a monthly rental fee for the rate as agreed in the agreement commencing from May 2005. Air Ambulance Service Agreement Associated company On 1 September 2007, an associated company entered into the air ambulance service agreement with the Company. The agreement is for a period of 3 years starting from the date the service is commenced and is entitled to renew. The Company has to pay a service fee at the rate stipulated in the agreement. Directors and management's remuneration In 2007 the Company and its subsidiaries paid meeting allowances and gratuities to their directors and management total of Baht 33.75 million and the Company only total of Baht 16.97 million (2006 : Baht 33.48 million and the Company only : Baht 17.61 million). Guarantee obligations with related party The Company had outstanding guarantee obligations with a related party as described in Note 21 to the financial statements. 84 12. INVENTORIES As at 31 December 2007 and 2006, inventories consisted of :-

(Unit : Baht) Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Medicines and medical supplies 188,556,018 172,462,380 59,617,858 43,820,389 Reagent 20,904,822 13,401,181 - - Supplies and others 2,780,333 15,279,225 - 12,553,693 Total 212,241,173 201,142,786 59,617,858 56,374,082

13. INVEESTMENTS IN SUBSIDIARY COMPANIES (Unit : Thousand Baht) Separate financial statements % Investments - Type of Paid-up Shareholding cost method Dividends business Capital Company name 2007 2006 2007 2006 2007 2006 Samitivej Public Co., Ltd. Hospital Baht 1,000 million 92.92 92.92 1,453,948 1,453,948 - - Bangkok Hatyai Hospital Co., Ltd. Hospital Baht 500 million 98.53 98.53 572,465 572,465 14,780 - Bangkok Phuket Hospital Co., Ltd. Hospital Baht 500 million 99.47 99.47 607,014 607,014 - - BNH Medical Center Co., Ltd. Hospital Baht 586 million 88.31 88.31 580,341 580,341 - - Bangkok Prapadang Hospital Co., Ltd. Hospital Baht 105 million 79.00 79.00 96,775 96,775 - - Bangkok Pattaya Hospital Co., Ltd. Hospital Baht 280 million 97.06 97.06 705,759 705,759 135,884 577,493 Bangkok Rayong Hospital Co., Ltd. Hospital Baht 400 million 100.00 100.00 415,020 415,020 40,000 - Bangkok Samui Hospital Co., Ltd. Hospital Baht 150 million 100.00 100.00 150,000 150,000 22,500 - Bangkok Trad Hospital Co., Ltd. Hospital Baht 250 million 99.71 99.71 245,760 245,760 - - Wattanavej Co., Ltd. Hospital Baht 180 million 99.47 99.47 449,440 449,440 - - Bangkok Ratchasima Hospital Co., Ltd. Hospital Baht 300 million 84.67 79.72 865,155 814,650 - - National Healthcare Systems Co., Ltd. Central Lab Baht 75 million 74.02 74.02 56,768 56,768 22,208 - Bio Molecular Laboratories Central Lab Baht 10 million 95.00 95.00 9,502 9,502 - 950 (Thailand) Co., Ltd. Angkor Pisith Co., Ltd. Hospital USD 10 million 80.00 80.00 287,840 152,044 - -

Phnom Penh Medical Services Co., Ltd. Hospital Riel 20,000 million 100.00 100.00 177,000 177,000 - - Royal Rattanak Medical Services Co., Ltd Hospital Riel 26,000 million 70.00 - 154,063 - - - B.D.M.S. International Medical Hospital Riel 9,200 million 100.00 100.00 94,208 94,208 - - Services Co., Ltd. Asia International Healthcare Co., Ltd. Investment Baht 35 million 100.00 100.00 35,000 5,000 - -

Global Medical Network Co., Ltd. Hospital Baht 100 million 100.00 - 100,000 - - - New Petchburi Medical Services Co., Ltd. Hospital Baht 1 million 100.00 100.00 999 999 - - Bangkok Health Insurance Limited Insurance Baht 100 million 99.94 99.94 47,027 37,027 - - Bangkok Helicopter Services Co., Ltd. Service Baht 100 million - 100.00 - 33,847 - - Total investments in subsidiary companies 7,104,084 6,657,567 235,372 578,443

85 Domestic hospital business group Bangkok Pattaya Hospital Co., Ltd. In the first quarter of 2006, the Company restructured the shareholding structure according to the resolution of the Extraordinary General Meeting of the Company's shareholders No. 1/2005 (as described in Note 33 to the financial statements). As a result of the shareholding restructure, Bangkok Pattaya Hospital Co., Ltd. changed its status from an associated company to be a subsidiary company. BNH Medical Center Co., Ltd. In the year 2006, the Company purchased additional investment of 0.43 million shares in BNH Medical Center Co., Ltd. from the former shareholders totally Baht 4.0 million. As a result, the Company increase the percentage of shareholding in that company to 88.31 percent. Wattanavej Co., Ltd. In the first quarter of 2006, the Company restructured the shareholding as approved by the Extraordinary General Meeting of the Company's shareholders No. 1/2006 (as described in Note 33 to the financial statements). Bangkok Ratchasima Hospital Co., Ltd. In the second quarter of 2006, the Company purchased 22.19 million shares at Baht 34 per share totally Baht 754.5 million of Bangkok Ratchasima Hospital Co., Ltd. from former shareholders. As a result, the Company had a percentage of shareholding of 73.97 percent in the subsidiary. In the fourth quarter of 2006, the Company purchased additional investment in 1.7 million shares in Bangkok Ratchasima Hospital Co., Ltd. at Baht 34 per share totally Baht 58.7 million. As a result the Company had a percentage of shareholding of 79.72 percent in the subsidiary. In the first quarter of 2007, the Company had additional investment in 1.02 million shares of Bangkok Ratchasima Hospital Co., Ltd. at Baht 34 per share totally Baht 34.7 million. As a result the Company had a percentage of shareholding of 83.12 percent in the subsidiary. In the second quarter of 2007, the Company had additional investment in 0.47 million shares of Bangkok Ratchasima Hospital Co., Ltd. at Baht 34 per share totally Baht 15.9 million. As a result the Company had a percentage of shareholding of 84.67 percent in the subsidiary. Samitivej Public Co., Ltd. and Samitivej Sriracha Co., Ltd. In the second quarter of 2006, a subsidiary company, Samitivej Public Co., Ltd. purchased additional investment of 5.58 million shares at Baht 15 per share totally Baht 83.75 million in Samitivej Sriracha Co., Ltd. from the former shareholders. As a result, the subsidiary increased the percentage of shareholding in that company from 30 percent to 59.78 percent and that company changes the status from an associated company to be a subsidiary company. In year 2007, the subsidiary company purchased additional investment of 1,135,500 shares at Baht 25 per share total of Baht 28.39 million in Samitivej Sriracha Co., Ltd. from the former shareholders. As a result, the subsidiary company increases the percentage of share holding in that company from 59.78 percent to 65.83 percent.

Bangkok Trad Hospital Co., Ltd. In the first quarter of 2006, the Company restructured the shareholding structure according to the resolution of the Extraordinary General Meeting of the Company's Shareholders No. 1/2006 (As described in Note 33 to the financial statements). In the second quarter of 2006, Bangkok Trad Hospital Co., Ltd., a subsidiary of the Company increased its registered capital by issuing additional ordinary shares total of 10,000,000 shares with par value of Baht 5 and offered to the existing shareholders in proportion of 4 former shares to a new share, called for the payment of Baht 5 per share total of Baht 50,000,000. As a result, the registered capital increased from 40,000,000 shares to 50,000,000 shares with par value of Baht 5 total of Baht 250,000,000.

86 The Company held 39,855,148 ordinary shares of Bangkok Trad Hospital Co., Ltd. before it increased its capital which represented 99.64 percent of the registered capital. The Company subscribed the capital increase according to the entitlement of shares of 9,963,787 shares with par value of Baht 5 total of Baht 49,818,935 so the Company had 49,818,935 ordinary shares. In the third quarter of 2006, the Company purchased additional investment of 35,813 unsubscribed shares portion in Bangkok Trad Hospital Co., Ltd. totally Baht 0.18 million. As a result, the Company increases the percentage of shareholding in that company to 99.71 percent. Global Medical Network Co., Ltd. In February 2007, the Board of Director's Meeting passed a resolution to set up Global Medical Network Co., Ltd. with an investment of Baht 100 million. The objective is to operate the hospital. The Company has a percentage of shareholding of 100 percent in that company. Hospital business group in Cambodia Angkor Pisith Co., Ltd. The Board of Directors' Meeting No. 1/2006 held on 21 January 2006 passed a resolution to set up Angkor Pisith Co., Ltd. in Cambodia with the objectives to operate the hospital in that country with an investment in the second quarter of 2006 amounting to Baht 48.2 million and a percentage of shareholding of 49 percent. In the third quarter of 2006, Angkor Pisith Co., Ltd. has increased its registered share capital of 4,000 shares at U.S. dollar 1,000 per share. As a result, the registered capital increased from 1,000 shares to 5,000 shares at a par value of U.S. dollar 1,000 per share. The Company purchased additional 3,510 shares totally Baht 103.8 million. Therefore, the percentage of shareholding after additional share capital increase of 4,000 shares amounting to Baht 152 million, represented 80 percent of shareholding in that company. In the fourth quarter of 2007, Angkor Pisith Co., Ltd., a subsidiary company increased its registered share capital of 5,000 shares at U.S. dollar 1,000 per share. The Company purchased additional 4,000 shares totally Baht 135.8 million and still remained 80 percent of shareholding in that company. Phnom Penh Medical Services Co., Ltd. The Board of Directors' Meeting No. 10/2006 held on 21 October 2006 passed a resolution to set up Phnom Penh Medical Services Co., Ltd. in Cambodia to operate hospital in that country with an investment amounting to Baht 177 million which represents a percentage of shareholding of 100 percent in that company. Royal Rattanak Medical Services Co., Ltd. The Board of Directors' Meeting No. 2/2007 held on 30 May 2007 passed a resolution to set up Royal Rattanak Medical Services Co., Ltd. in Cambodia to operate hospital in that country with an investment amounting to Baht 154.06 million which represents a percentage of shareholding of 70 percent in that company.

Other hospital related business group Asia International Healthcare Co., Ltd. In September 2006, the Board of Director has approved to invest in Asia International Healthcare Co., Ltd. for 10,000 shares at Baht 2.5 per share totally Baht 25,000 for purpose of investing in overseas. The Company has fully paid up the share capital and later purchased additional investment from the increased share capital of 490,000 shares at Baht 10 per share totally Baht 4.98 million. As a result, the Company had a percentage of shareholding of 100 percent in that company. In the third quarter of 2007, Asia International Healthcare Co., Ltd. increased its registered share capital of 3,000,000 shares at Baht 10 per share. As a result, the registered capital increase from 500,000 shares to 3,500,000 shares at a par value of Baht 10 per share. The Company has purchased additional 3,000,000 shares totally Baht 30 million, representing 100 percent of shareholding in that company.

87 Bangkok Health Insurance Co., Ltd. In the first quarter of 2006, the Company purchased an investment in 9.49 million shares at Baht 3.9 per share totally Baht 37.03 million in Bangkok Health Insurance Ltd. from the former shareholders. As a result, the Company had a percentage of shareholding of 99.94 percent in that company. By the special resolution passed by the shareholders extraordinary meeting on 26 November 2007, the subsidiary was authorised to increase its share capital from Baht 100 million (10,000,000 ordinary shares of Baht 10 each) to Baht 105 million (10,500,000 ordinary shares of Baht 10 each). The subsidiary registered the increasing share with the Ministry of Commerce on 3 January 2008 and the Company still remains a percentage of shareholding of 99.94 percent in that company.

Bangkok Helicopter Services Co., Ltd. In the first quarter of 2007, the Company sold the investment in Bangkok Helicopter Services Co., Ltd. to a related company of 1.5 million shares at Baht 11.3 per share totalling amount of Baht 17.3 million. As a result, the Company decreases a percentage of shareholding in that company from 100% to 49% and that company changes its status from a subsidiary company to an associated company. 14. INVESTMENTS IN ASSOCIATED COMPANIES 14.1 Detail of associated companies (Unit : Thousand Baht) Consolidated Separate financial financial statements statements % Equity Method Cost Method Type of Paid-up Shareholding Company name business Capital 2007 2006 2007 2006 2007 2006 Associated companies held by the Company The Medic Pharma Co., Ltd. Pharmaceutical Baht 21.4 million 49.00 49.00 87,235 73,243 52,500 52,500 Cool & Joy Co., Ltd. Production of Televisionand Radio program Baht 5 million 30.00 30.00 1,451 1,451 1,500 1,500 S.R. Property Investment Co., Ltd. Real estate Riel 20 million 49.00 49.00 3,110 101 101 101 Siem Reap Land Investment Co., Ltd. Real estate Riel 20 million 49.00 49.00 1,458 101 101 101 Phnom Penh First Property Co., Ltd. Real estate Riel 20 million 49.00 49.00 5,802 88 88 88 Bangkok Helicopter Services Co., Ltd. Service Baht 100 million 49.00 - 37,787 - 50,859 - Ramkhamhaeng Hospital Public Co., Ltd. Hospital Baht 120 million 26.18 - 805,594 - 757,637 - Total investments in associated companies held by the Company 942,437 74,984 862,786 54,290 Accociated companies held by the subsidiary company Sodexho Support Services Management (Thailand) Co., Ltd service Baht 5 million 26.00 26.00 1,029 - Total investment in associated company held by the subsidiary company 1,029 - Total investment in associated companies in the consolidated financial statements 943,446 74,984

88 (Unit : Thousand Baht) Consolidated Separate financial financial statements statements Share of income/loss from investments in Dividend received associated companies Company's name 2007 2006 2007 2006 Associated companies held by the Company The Medic Pharma Co., Ltd. 13,992 7,768 1,050 3,938 Cool & Joy Co., Ltd. - 884 - - S.R. Property Investment Co., Ltd. 471 - - - Siem Reap Land Investment Co., Ltd. 214 - - - Phnom Penh First Property Co., Ltd. - - - - Bangkok Helicopter Services Co., Ltd. (8,848) - - - Ramkhamhaeng Hospital Public Co., Ltd. - - - - Associated companies held by the subsidiary company Samitivej Sriracha Co., Ltd. - 6,130 - 4,500 Sodexho Support Services (Thailand) Co., Ltd. 1,029 (999) - - Total 6,858 13,783 1,050 8,438

14.2 Fair values of investments in associated company which are listed companies in the Stock Exchange of Thailand (Unit : Thousand Baht) Company's name Fair values as at 31 December 2007 2006 Ramkhamhaeng Hospital Public Co., Ltd. 1,746,785 1,021,440 Total 1,746,785 1,021,440

14.3 Summarised financial information of associated companies (Unit: Million Baht) Paid-up Total Total Total revenues Net income (loss) capital as assets as at liabilities as at for the year ended for the year ended 31 December31 December 31 December 31 December 31 December Company's name 2007 2006 2007 2006 2007 2006 2007 20062007 2006 Associated companies held by the Company Baht Baht The Medic Pharma Co., Ltd. 21 million 21 million 234.6 203.8 12.1 48.3 272.0 213.7 26.7 18.1 Baht Baht 1) 2) 1) 1) Cool & Joy Co., Ltd. 5 million 5 million 3.4 3.0 0.3 1.6 9.6 19.6 1.7 2.1 Baht Baht S.R. Property Investment Co., Ltd. 20 million 20 million 79.6 79.6 75.7 79.4 0.5 0.1 0.5 - Baht Baht Siem Reap Land Investment Co., Ltd. 20 million 20 million 36.2 36.3 34.4 36.1 0.2 - 0.2 - Baht Baht Phnom Penh First Property Co., Ltd. 20 million 20 million 166.9 166.2 165.0 166.0 - - - - Baht Bangkok Helicopter Services Co., Ltd. 100 million - 258.0 - 180.9 - 5.4 - (20.8) - Baht Ramkhamhaeng Hospital Public Co., Ltd. 120 million - 3,9892) - 2,2602) - 1,9252) - 2572) - 1) Information from the financial statements prepared by the management of the associate 2) Information as at 30 September 2007 Accociated companies held by the subsidiary company Sodexho Support Services Baht Baht (Thailand) Co., Ltd 5 million 5 million 29.9 20.2 26.0 21.1 118.5 43.2 4.9 (5.1) 89 Domestic hospital business group Ramkhamhaeng Hospital Public Co., Ltd . In the fourth quarter of 2007, the Company purchased additional investment of 0.86 million shares at Baht 480 per share totalling Baht 413.62 million in Ramkhamhaeng Hospital Public Co., Ltd. from the former shareholders. As a result, the Company increased the percentage of shareholding in that company from 19.00 percent to 26.18 percent and that company changes the status to become an associated company. Hospital Business in Cambodia Group Siem Reap Land Investment Co., Ltd. The Board of Directors' Meeting No. 1/2006 held on 21 January 2006 passed a resolution to set up Siem Reap Land Investment Co., Ltd. in Cambodia with an investment amounting to Baht 0.1 million to hold land in that country. The Company has a percentage of shareholding of 49 percent in that company. Phnom Penh First Property Co., Ltd. The Board of Directors' Meeting No. 10/2006 held on 21 October 2006 passed a resolution to set up Phnom Penh First Property Co., Ltd. in Cambodia to hold land in that country with an investment amounting to Baht 0.1 million which represents a percentage of shareholding of 49 percent in that company. Other Hospital Related Business Bangkok Helicopter Services Co., Ltd. In the second quarter of 2007, the Company had additional investment in 3.43 million shares of Bangkok Helicopter Services Co., Ltd. at Baht 10 per share, which was partially paid, totally Baht 19.6 million. In July 2007 the remaining unpaid share of Baht 14.7 million had been called and fully paid. The total investment is Baht 34.3 million. The Company has maintained a percentage of shareholding of 49% in that associate. The calculation of investment under the equity method as at 31 December 2007 and share of profit from investment in some associated companies for the year ended 31 December 2007 of approximately Baht 14 million or equivalent to 1.1 percent of net income for the year were calculated based on financial statements which were prepared by the associated companies and had not yet been audited by their auditors. 15. OTHER LONG-TERM INVESTMENTS (Unit : Thousand Baht) Investment (cost) Paid-up capital % share Company name Type of business (Million Baht) holding 2007 2006 Other companies held by the Company Investments in marketable securities Ramkhamhaeng Hospital Public Co., Ltd. Hospital 120 19.00 - 342,915 Thai Military Bank Public Co., Ltd. Bank 133,143 - 1,770 1,770 Krungdhon Hospital Public Co., Ltd. Hospital 150 0.13 208 208 Eakchon Hospital Public Co., Ltd. Hospital 125 0.20 350 350 2,328 345,243 Add : Revaluation surplus (loss) on investments (79) 679,137 Investments in marketable securities 2,249 1,024,380

Investments in other companies X-Ray Computer Urupong Co., Ltd. X-ray lab 80 5.11 4,520 4,520 Computer Center Co., Ltd. - - 25 25 Phyathai X-ray Co., Ltd. Rental of medical instrument 130 - 3 3 90 (Unit : Thousand Baht) Investment (cost) Paid-up capital % share Company name Type of business (Million Baht) holding 2007 2006 Winstore Co., Ltd. Retail and wholesale 142 0.36 226 226 Thai Longstay Management Co., Ltd. Travel business 25 2.12 531 531 Prasit Pattana Public Company Limited Investment in medical services 1,732.05 16.31 903,156 903,156 Superior Biotech Holding Co., Ltd. Investment 44 9.09 5,000 5,000 913,461 913,461 Less : Allowance for impairment of investments (254) (254) Investments in other companies-net 913,207 913,207 Other long-term investments - net 915,456 1,937,587 in the separate financial statements Other company held by the subsidiary company Thai Herbal Products Co., Ltd. Sales of herbal products 80 0.60 290 290 Less : Allowance for impairment of investments (66) (66) Investment in other companies - net 224 224 Other long-term investments - net in the consolidated financial statements 915,680 1,937,811

During the third quarter of 2006, the Company purchased an investment in 273 million shares at Baht 3.1875 per share totalling Baht 870.3 million in Prasit Pattana Public Company Limited from the former shareholders. As a result, the Company had a percentage of shareholding of 15.76 percent in that company. In the fourth quarter of 2006 the Company purchased additional investment of 9.5 million shares in that company totalling Baht 33 million. As a result, the Company has increased the percentage of shareholding to 16.31 percent. 16. OTHER INVESTMENTS (Unit : Thousand Baht) Investment under cost method Dividend received Type of Paid up Percent of Company name business share capital shareholding 2007 2006 2007 2006 Related companies Udon Pattana (1994) Co., Ltd. Hospital 300,000 10.00 31,650 31,650 - - Bangkok Airways Co., Ltd. Airline 440,000 3.27 36,000 36,000 3,249 2,310 Total 67,650 67,650 3,249 2,310 Less : Allowance for impairment of investments (12,333) (12,333) - - Total other investments 55,317 55,317 3,249 2,310

91 17. PROPERTY, PLANT AND EQUIPMENT (Unit : Baht) Consolidated financial statement Assets which are stated at cost or Assets which are stated at cost reappraised value Building under Building and contructionand Total Land and land building Medical tools Vehicles medical toolsand improvement improvement and equipment equipment under installation Cost/reappraised value 31 December 2006 - 3,423,293,567 13,175,998,624 8,253,902,851 362,164,648 992,858,579 26,208,218,269 as previously reported Cumulative effect of the change - (300,059,459) - - - (300,059,459) in accounting policy for recording building (Note 6) 31 December 2006 - as restated 3,423,293,567 12,875,939,165 8,253,902,851 362,164,648 992,858,579 25,908,158,810 Increase from asset revaluation 382,954,785 - - - - 382,954,785 Purchase 113,763,690 62,786,591 1,031,391,682 32,065,662 1,758,360,924 2,998,368,549 Transfer in / (Transfer out) - 1,446,325,257 368,730,193 3,562,401 (1,821,341,540) (2,723,689) Translation adjustment - (7,420,900) (3,409,793) (172,331) - (11,003,024) Reclassification (1,183,900) (143,526,837) 138,841,315 - 10,235,977 4,366,555 Disposals (289,200) (10,151,685) (126,563,998) (13,448,062) (10,660,401) (161,113,346) 31 December 2007 3,918,538,942 14,223,951,591 9,662,892,250 384,172,318 929,453,539 29,119,008,640 Accumulated depreciation 31 December 2006 - 15,221,439 3,346,110,871 4,543,476,423 195,790,403 - 8,100,599,136 as previously reported Cumulative effect of the change - (56,937,738) - - - (56,937,738) in accounting policy for recording building (Note 6) 31 December 2006 - as restated 15,221,439 3,289,173,133 4,543,476,423 195,790,403 - 8,043,661,398 Depreciation for the year - 876,990,322 968,437,594 59,839,164 - 1,905,267,080 Transfer in / (Transfer out) - - 2,143,234 - - 2,143,234 Translation adjustment - (275,212) (1,104,623) (40,917) - (1,420,752) Reclassification - (5,426,653) 9,932,712 - - 4,506,059 Disposals - (4,245,474) (119,317,736) (12,836,480) - (136,399,690) 31 December 2007 15,221,439 4,156,216,116 5,403,567,604 242,752,170 - 9,817,757,329 Impairment of fixed assets 31 December 2006 ------Increasing during the year 2,387,500 2,558,365 - - - 4,945,865 31 December 2007 2,387,500 2,558,365 - - - 4,945,865 Net book value 31 December 2006 - as restated 3,408,072,128 9,586,766,032 3,710,426,428 166,374,245 992,858,579 17,864,497,412 31 December 2007 3,900,930,003 10,065,177,110 4,259,324,646 141,420,148 929,453,539 19,296,305,446 Depreciation charged (included in income statement) for the year 2006 1,377,957,604 2007 1,905,267,080

92 (Unit : Baht) Seperate financial statement Assets which are stated at cost or Assets which are stated at cost reappraised value Building under Total Building and contructionand Land and land building Medical tools Vehicles medical toolsand improvement improvement and equipment equipment under installation Cost/reappraised value 31 December 2006 569,635,882 3,255,452,563 2,833,258,681 148,884,247 387,349,424 7,194,580,797 Increase from asset revaluation 267,151,618 - - - - 267,151,618 Purchase - 8,675,763 178,617,422 7,218,100 705,002,208 899,513,493 Transfer in / (Transfer out) - 340,573,430 221,090,707 - (567,161,706) (5,497,569) Reclassification - (144,710,737) 144,710,737 - - - Disposals - - (25,156,021) (7,927,278) (455,518) (33,538,817) 31 December 2007 836,787,500 3,459,991,019 3,352,521,526 148,175,069 524,734,408 8,322,209,522 Accumulated depreciation 31 December 2006 - 484,586,344 1,299,384,014 90,768,603 - 1,874,738,961 Depreciation for the year - 236,757,851 366,522,421 21,940,251 - 625,250,523 Reclassification - (5,426,653) 5,426,653 - - - Disposals - - (8,712,375) (7,924,579) - (16,636,954) 31 December 2007 - 715,917,542 1,662,620,713 104,784,275 - 2,483,352,530 Net book value 31 December 2006 569,635,882 2,770,866,219 1,533,874,667 58,115,644 387,349,424 5,319,841,836 31 December 2007 836,787,500 2,744,073,477 1,689,900,813 43,390,794 524,734,408 5,838,856,992 Depreciation charged (included in income statement) for the year 2006 451,627,539 2007 625,250,523

There is no any interest on loans for the year 2007 which was capitalised as part of the cost of the building. (2006 : Baht 26 million for the Company and Baht 23 million for the subsidiary companies). In 1999, the Company and some subsidiary companies engaged an independent professional appraiser to appraise all of the Company's and the subsidiary companies' land (including the land not used in operations) with carrying cost value of approximately Baht 210 million and Baht 80 million, respectively. Based on the appraisal reports dated July 14, 1999 and July 15, 1999, respectively, the Market Approach Method was applied to the revaluation, reflecting the fair market value of the revalued land of approximately Baht 637 million and Baht 93 million, respectively, which was higher than the cost by approximately Baht 427 million and Baht 13 million, respectively. At present, the Company and the subsidiary companies recorded the difference between the historical cost and appraisal value as "Revaluation surplus of land" under shareholders' equity in the balance sheets. In 2004, three subsidiaries engaged an independent professional appraiser to appraise all of their land and buildings. Based on the appraisal reports dated December 15, 2004 and December 16, 2004, the Market Approach was applied to the revaluation of land and the Replacement Cost Approach was applied to the revaluation of buildings, reflecting the fair values of the revalued land and buildings of approximately totaling Baht 1,972.02 million and Baht 2,699.04 million, respectively, which were higher than the former revalued cost by approximately Baht 1,085.32 million and Baht 498.68 million, respectively.

93 The Subsidiaries recorded the total revaluation surplus of Baht 1,584 million as "Revaluation surplus on land and buildings" in shareholders' equity in the balance sheets of Baht 1,544.49 million and reversed the loss on valuation of land of a subsidiary of Baht 228.05 million for the land which had new revalued amount higher than the former revalued cost and recorded loss on revaluation of land in another subsidiary of Baht 188.54 million. As discussed in Note 6 to the financial statements, based on the appraisal of land and buildings of such subsidiaries, the Company has restated the previous period's consolidated financial statements and recognised only the surplus on revaluation of land of the subsidiaries in the consolidated financial statements by using equity method in the amount of Baht 257.05 million as "Revaluation surplus on land" in shareholders' equity in the balance sheets. In 2007, the Company and its subsidiaries engaged an independent professional appraiser to appraise all of their land. Based on the appraisal reports, the Market Approach was applied to the revaluation of land, reflecting the fair values of the revalued land approximately total of Baht 2,559.7 million which were higher than the former revalued cost by approximately Baht 414.1 million. The Company and its subsidiaries recorded the revaluation surplus from the former revalued cost of Baht 417.2 (the Company only : Baht 301.4 million) as "Revaluation surplus on land" in shareholders' equity in the balance sheets and discount from the original cost of Baht 3.1 million as loss on impairment in the income statements. A subsidiary company has recorded loss on impairment for building improvement total amount of Baht 2.6 million in the income statements. This building improvement was used for clinic operation which the subsidiary denied to renew the building rental agreement that was to be expired in February 2008. If the Company and its subsidiaries recorded the land at cost, their net book value as at 31 December 2007 and 2006 would have been as follows :-

(Unit : Baht) Consolidated financial statements Separate financial statements Net book value (at cost) : As of 31 December 2007 1,960,385,967 252,054,285 As of 31 December 2006 1,847,095,176 252,054,285

The Company and its subsidiaries have mortgaged their land and buildings and constructions to be constructed in the future as collateral for long-term loans as discussed in Note 21.

Samitivej Sriracha Co., Ltd. Samitivej Sriracha Co., Ltd., a subsidiary of Samitivej Public Co., Ltd. had its land and existing building and building improvement as at 27 December 1995 revalued by an independent appraiser who reported under the appraisal reports dated 5 January 1996. The resultant increase in value as compared to the carrying amounts of land, buildings and improvements of approximately Baht 28.39 million. During the year 2001, the subsidiary company engaged an independent appraiser to appraise all of its land, building, building improvements and utilities. The new valuation was higher than the carrying amounts of these assets. However, the subsidiary company had not compared each asset with former report, therefore, the subsidiary company did not record the assets with such revaluation.

94 On 25 May 2006, the subsidiary company which was an associated company at that time engaged an independent appraiser to appraise all of its land, building and building improvement. The subsidiary company recorded assets with revaluation. The increase in revaluation of land, building and building improvement was approximately Baht 61.1 million and Baht 109.7 million, respectively. As discussed in Note 6 to the financial statements, the Company has restated the previous periods consolidated financial statements and recognised the equity only from revaluation surplus on land by percentage of shareholding approximately Baht 17 million. 18. LAND NOT USED IN OPERATIONS Land not used in operations as at 31 December 2007 and 2006 consisted of: (Unit : Baht) Consolidated and Separate financial 2007 2006 Land at historical cost 329,385,815 329,385,815 Revaluation surplus 143,747,985 109,541,365 Allowance for impairment (719,600) - Total 472,414,200 438,927,180

In the year 1999 and 2007, the Company revalued such land not used in operations based on the independent professional appraiser's value as described in Note 17 to the financial statements. The cumulative capitalised interest on loans recorded as a portion of cost of land not used in operations amounted to approximately Baht 29 million (2006 : Baht 29 million). 19. INTANGIBLE ASSETS (Unit : Baht) Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Computer software 252,334,341 223,613,494 81,100,785 55,699,324 Leasehold right 327,265,072 311,514,147 80,049,598 62,849,598 579,599,413 535,127,641 161,150,383 118,548,922 Less : Accumulated amortisation (248,794,105) (216,560,672) (51,200,730) (43,558,046) Intangible assets - net 330,805,308 318,566,969 109,949,653 74,990,876

Amortisation for the year 40,304,387 40,840,713 7,647,921 6,386,581

20. BANK OVERDRAFTS AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTION As at 31 December 2007, the Company and its subsidiaries have bank overdraft facilities with local banks of Baht 348 million and the Company only of Baht 50 million with interest rate at MOR (Minimum Overdraft Rate).

95 21. LONG-TERM LOANS As at 31 December 2007, long-term loans consist of : -

Outstanding long - term loan amount

Agreement date Lender Credit facility Current Portion Non- current Portion Total

The Company only 1. 19 November 2004 Local bank 85 21 7 28 2. 13 January 2005 Local bank 139 35 40 75 3. 13 January 2005 Local bank 102 25 15 40 4. 29 September 2005 Local bank 45 9 18 27 5. 5 October 2005 Local bank 350 53 192 245 6. 1 December 2005 Local bank 600 84 495 579 7. 29 March 2006 Local bank 54 14 27 41 8. 6 December 2006 Local bank 600 100 500 600 9. 1 February 2007 Local bank 300 46 254 300 Total loans of the Company 387 1,548 1,935 Subsidiaries Bangkok Ratchasima Hospital Co., Ltd 1. 23 March 2007 Local bank 370 7 196 203 Angkor Pisith Co., Ltd. 1. 22 May 2007 Local bank USD 4 - 135 135 Bangkok Phuket Hospital Co., Ltd. Million 1. 18 December 2002 2. 1 September 2005 Local bank 500 60 157 217 3. 27 January 2006 Local bank 220 44 157 201 Subsidiaries (Continue) Local bank 7 1 4 5 Bangkok Trad Co., Ltd 1. 1 December 2003 Bangkok Hatyai Hospital Co., Ltd Local bank 150 8 100 108 1. 9 May 2003 2. 8 September 2004 Local bank 400 43 214 257 3. 22 June 2006 Local bank 37 8 5 13 Bangkok Rayong Hospital Co., Ltd. Local bank 12 3 6 9 1. 29 March 2004 2. 20 July 2006 Local bank 330 30 278 308 Bangkok Samui Hospital Co., Ltd. Local bank 44 10 25 35 1. 11 June 2004 BNH Medical Centre Co., Ltd. Local bank 150 18 132 150 1. 20 October 1996 2. 20 October 1996 Local bank 679 26 158 184 3. 12 February 2007 Local bank 679 26 158 184 Bangkok Pattaya Hospital Co., Ltd. Local bank 38 12 16 28 1. 28 May 2004 2. 16 October 2006 Local bank 700 70 589 659 Wattanavej Co., Ltd. Local bank 500 - 351 351 1. 27 November 2003 Samitivej Public Company Limited Local bank 135 28 36 64 1. 11 October 2001 2. 26 December 2003 Local bank 1,700 171 1,013 1,184 3. 2 June 2005 Local bank 185 19 123 142 4. 29 May 2006 Local bank 165 25 59 84 5. 8 November 2006 Local bank 56 10 30 40 Irving Sheridan SE Company Limited Local bank 42 10 27 37 1. 26 December 2003 Samitivej Sriracha Company Limited Local bank 115 15 73 88 1. 18 December 2002 2. 13 August 2004 Local bank 160 15 - 15 3. 29 May 2006 Local bank 60 15 25 40 4. 15 September 2006 Local bank 50 5 45 50 Total loans of subsidiary companies Local bank 28 4 20 24 Total loans of the Company and its subsidiaries 683 4,132 4,815 1,070 5,680 6,750

96 (Unit : Million Baht) Significant conditions of the loan agreements

Loan Period Principal repayment Interest payment Interest rate

5 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 5 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 5 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 5 years 3 months Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 7 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 9 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 4 years 10 months Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 7 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 7 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement.

8 years Quarterly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement.

10 years Quarterly Monthly LIBOR plus fixed rate as stipulated in the agreement.

10 years Quarterly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 7 years Quarterly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 7 years Quarterly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement

6 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement.

10 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 5 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 5 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement.

10 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 5 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement.

10 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement.

13 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 13 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 3 years 6 months Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement.

13 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 13 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement.

7 years Quarterly Quarterly At fixed rate or MLR less fixed rate as stipulated in the agreement.

10 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 10 years Quarterly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 6 years Quarterly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 4 years Quarterly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 4 years Monthly Monthly At fixed rate as stipulated in the agreement.

10 years Quarterly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement.

7 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 6 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 7 years Monthly Monthly At fixed rate or MLR less fixed rate as stipulated in the agreement. 7 years Monthly Monthly At fixed rate as stipulated in the agreement.

97 In April 2007 Bangkok Ratchasima Hospital Co., Ltd., a subsidiary company, entered into a loan agreement with a financial institution. The credit facilities was Baht 570 million. The loan bears interest at the rate ranging form MLR - 1.5 percent per annum to MLR per annum. The interest is repayable on a monthly basis. The principal is repayable on a quarterly basis according to a condition as stipulated in the agreement. As at 31 December 2007 the subsidiary company has withdrawn the loan totalling Baht 203 million. In December 2007 Bangkok Pattaya Hospital Co., Ltd., a subsidiary company, entered into a loan agreement with a financial institution. The credit facilities was Baht 200 million. The loan bears interest at the MLR less fixed rate as stipulated in the agreement. The interest and principle is repayable on a monthly basis according to a condition as stipulated in the agreement. As at 31 December 2007 the subsidiary company has not withdrawn this credit facility. The Company and its subsidiaries have mortgaged certain plots of land, buildings and medical equipment, including future construction and certain equipment and pledge share certificates for the investment of a subsidiary company, with banks to secure long-term loan obtained from those banks. The Company has guaranteed long-term loan of a subsidiary company amount of U.S. dollar 4 million. The Company's and its subsidiaries' loan agreements contain certain covenants which the Company and its subsidiaries must comply with. During 1998 - 2004, BNH Medical Center Co., Ltd., a subsidiary company, entered into 4 debt restructuring agreements with 2 local financial institutions whereby the subsidiary company has to comply with the conditions as stipulated in the agreements. The loans are secured by lease agreements for land, buildings and equipment. In addition, the financial institutions are named as beneficiaries of the insurance policies for such building and equipment. 22. LIABILITIES UNDER HIRE-PURCHASE AND FINANCIAL LEASE AGREEMENTS (Unit : Thousand Baht) Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Hire-purchase and financial lease payable 318,088 316,307 27,617 66,752 Less : Deferred interest (29,754) (33,719) (2,261) (5,945) Total 288,334 282,588 25,356 60,807 Less: Current portion due within one year (118,001) (123,398) (15,356) (35,451) Liabilities under hire-purchase and financial lease agreements - net of current portion 170,333 159,190 10,000 25,356

Liabilities under hire-purchase agreements Hire-purchase payable consists of amounts payable under various vehicle hire-purchase agreements, with payments to be made in 32-60 monthly installments. Liabilities under financial lease agreements The Company and its subsidiaries have entered into various financial lease agreements with various leasing companies to rent medical equipment and vehicle for use in their operations. Installments are paid on a monthly basis over 36-60 periods and at the end of the agreements, the Company and its subsidiaries have the option to purchase the equipment at prices specified in the agreements. 23. DIVIDENDS The 2006 Annual General Meeting of the Company's shareholders held on 30 March 2006 passed a resolution approving a dividend payment of Baht 0.50 per share, to the holders of the Company's 1,181,037,800 shares (par value of Baht 1 each), or a total of Baht 590.5 million. The meeting also approved the appropriation of earnings of Baht 0.29 million to the statutory reserve. The dividend payment was made on 28 April 2006. The 2007 Annual General Meeting of the Company's shareholders held on 5 April 2007 passed a resolution approving a dividend payment of Baht 0.50 per share, to the holders of the Company's 1,181,037,800 shares (par value of Baht 1 each), or a total of Baht 590.5 million. The dividend payment was made on 4 May 2007. 98 24. STATUTORY RESERVE Under the Public Companies Limited Act B.E. 2535, the Company is required to set aside as a statutory reserve at least 5 percent of its net profit, after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of its registered share capital. The statutory reserve is not available for dividend payment. 25. PROVIDENT FUND The Company, its subsidiaries and their employees jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. The fund is contributed by both employees and the Company and its subsidiaries at the agreed percentage rates based on their basic salaries and is managed by many financial institutions. The fund will be paid to the employees upon termination in accordance with the rules of the fund. During the year 2007, the Company and its subsidiaries contributed Baht 52.26 million (2006 : Baht 43.94 million) and the Company only contributed Baht 14.52 million (2006 : Baht 12.82 million) to the fund. 26. NUMBER OF EMPLOYEES AND RELATED COSTS Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Number of employees at end of year (persons) 11,628 10,505 2,553 2,544 Employee costs for the year (Thousand Baht) 4,072,338 3,431,790 1,237,509 1,091,508

27. EARNINGS PER SHARE Basic earnings per share is determined by dividing the net income for the year by the weighted average number of ordinary shares in issue during the year. As a result of the shareholding restructure as stated in Note 33 to the financial statements, during 2006 two subsidiaries held 3,082,995 shares of the Company. Basic earnings per share during the year 2006 is therefore calculated by dividing net income for the year by the weighted average number of ordinary shares in issue during the year and held by third parties (net of the Company's shares held by the subsidiaries). However, those two subsidiary companies have already disposed such Company's shares in December 2006. Therefore as at 31 December 2006, total ordinary shares of the Company was held by third parties. No disclosure of diluted earnings per share is required for 2007 and 2006 after the issue of convertible debenture (as discussed in Note 32) since the calculated earnings per share assuming the conversion of all convertible debentures to ordinary shares is not diluted. 28. LONG-TERM LEASE AGREEMENTS The Company The Company has entered into a land lease agreement for a garden. The lease agreement covers a period of 30 years from 1 January 2005 to 31 December 2033 and the rental is payable on a monthly basis. The rental fee for the first 5 years is Baht 10,000 per month and it will be increased every 5 years. The rental for the last 5 years will be Baht 25,000 per month. The Company has entered into a land rental agreement for a car parking building for a period of 20 years from 26 February 2004 to 25 February 2024. The rental fee for the first 17 months is Baht 200,000 per month and will be increased by the rate as agreed in the agreement. The rental for the last 3 years will be Baht 560,000 per month. The Company has entered into a land rental agreement for construction of an OPD building for a period of 30 years from 28 September 2004 to 27 September 2034. The first payment date is 10 October 2005 at the rental fee of Baht 50,000 per month. The rate will be increased by 10% of the latest rental of every three years. The Company has entered into a land rental agreement for a car parking for a period of 7 years from 1 September 2005 to 31 August 2012 and the rental is paid on a monthly basis. The first payment date is 1 September 2005 at the rate of Baht 131,000 per month. The rental rate will be Baht 175,000 per month starting from 1 September 2006 onward. 99 The Company has entered into a land rental agreement for a period of 30 years from 1 January 2006 to 31 December 2036 and the rental is paid on a monthly basis. The first payment date is 5 January 2006 and rental to be paid at Baht 30,000 per month and from 1 January 2027 onward at Baht 100,000 per month. The Company has entered into an agreement to construct a hospital building on land owned by a government authority. The condition of the agreement states that upon completion of the building construction, the Company has to transfer the ownership over such building to that authority. After the authority accepts such transfer, in 2006 the Company entered into another land and hospital building rental agreement with that government authority. The agreement will cover a period of 30 years after the signing date of the agreement and the Company is obliged to pay rental on a yearly basis. The rental fee for the first 5 years is Baht 492,676 per year and this fee is to be increased every 5 years. The rental for the last 5 years will thus be Baht 990,943 per year. Samitivej Public Company Limited The subsidiary company has entered into a rental agreement for a parking building dated 10 September 2003, for 30 years, effective from 8 December 2004. The total rental fee over the lease will thus be Baht 155.11 million. The subsidiary company is committed to pay Baht 38.78 million as prepaid rental as per the schedule. The remaining rental fee will be paid on a monthly basis. In addition, the subsidiary company has entered into a service agreement with the same company for providing of services in the parking building for 30 years total of Baht 103.41 million. BNH Medical Center Co., Ltd. The subsidiary company entered into an agreement with an association which is a shareholder, to lease land for the construction of a hospital for a period of 30 years, commencing 1 September 1993, with options to renew. 29. COMMITMENTS AND CONTINGENT LIABILITIES As at 31 December 2007 commitments and contingent liabilities are as follows:- 29.1 Commitments (Unit : Million Baht) Consolidated financial statements Seperate financial statements Contractual commitments - the land and building rental contracts (including long-term agreements in Note 28) 707 184 - the office equipment rental and maintenance contracts 184 51 - the medical equipment providing and maintenance contracts 59 12 - the construction and building decoration contracts 302 73 Contingent liabilities - For letters of guarantee issued by banks to guarantee contractual performance 8 - - For letters of guarantee issued by banks electricity use and others 64 15 Total 1,324 335

29.2 Litigations The Subsidiaries A subsidiary has a contingent liabilities as a defendant in a legal case related to the building construction retention of Baht 14.37 million. The case is being considered by the Central Bankruptcy court. However, the subsidiary had set up provision of Baht 10 million for contingent liabilities.

30. PURCHASE OF SUBSIDIARY COMPANIES During the year ended 31 December 2006, the Company has invested in ordinary shares of new subsidiary companies namely Angkor Pisith Co., Ltd., Bangkok Ratchasima Hospital Co., Ltd., Bangkok Health Insurance Limited, Asia International Healthcare Co., Ltd. and Phnom Penh Medical Services Co., Ltd. The Company also had additionally invested in Bangkok Pattaya Hospital Co., Ltd., resulting in that company changing its status from an associated company to a subsidiary company. In addition, Samitivej Public Co., Ltd. had additionally invested in ordinary shares of Samitivej Sriracha Co., Ltd., previously an associated company of Samitivej Public Co., Ltd. and changed its status to be a subsidiary company. Fair values of assets purchased and liabilities as at purchase dates as follows :-

100 (Unit : Million Baht)

Cash and cash equivalents 663,103,007 Short-term investments 33,540,821 Trade accounts receivable - net 150,915,886 Inventories - net 36,314,335 Other current assets 80,369,641 Restricted bank deposit 422,772 Investments 44,931,884 Property, plant and equipment - net 2,285,640,678 Intangible assets - net 4,099,808 Other non-current assets 2,368,414 Bank overdraft and short-term loans from financial institutions (108,510,927) Trade accounts payable (147,387,269) Accounts payable - construction and retention (23,429,279) Other payable - related parties (2,897,501) Other payable (60,799,778) Corporate income tax payable (214,182,501) Accrued expenses (123,880,471) Other current liabilities (28,072,433) Long-term loans (498,552,866) Hire purchase and financial lease agreement (1,273,525) Other non-current liabilities (292,384) Net assets 2,092,428,312 Less : Gain from shareholding restructure (Note 33) (305,000,325) Net acquired assets 1,787,427,987 Changes in investment from change of the status from associated to subsidiary companies (591,133,789) Changes in minority interest from change of the status from associated to subsidiary companies (295,117,441) Net assets from acquisition of subsidiary companies 901,176,757 Add : Goodwill 457,843,235 Cash paid for additional investment during the period 1,359,019,992 Less : Assets transfer for purchase of investment (482,270,262) Cash payment for purchase of investment in the period 876,749,730 Less : Cash and cash equivalents of subsidiary companies (663,103,007) Net cash paid for acquisition of subsidiary companies 213,646,723

31. SEGMENT INFORMATION The Company and its subsidiaries operate mainly in the hospital business in Thailand. As a result all of the revenues, operating profits and assets as reflected in these financial statements pertain to the aforementioned industry segment and geographic area. 32. CONVERTIBLE DEBENTURE On 19 June 2006, the Extraordinary General Meeting of Shareholders' No. 1/2006 of the Company approved for the issue and offer of the name-registered and unsecured convertible debentures with or without debenture holders' representatives/ trustee to the foreign investors (except the investors in United States of America) and/or local institutional investors in foreign currency or equivalent of not exceeding Baht 5,000 million. The maturity date will be not more than 5 years from the issuance date. It has also resolved to authorise the Board of Directors and/or the persons authorised by the Board of Directors to determine or amend the details, procedures, and conditions relating to the issue of the convertible bonds. The proceeds of the convertible debenture will be used to repay the existing loans to the Company's lenders, being the Company's working capital as well as strengthening the business operation of the Company. In addition, the Meeting has approved for reduction of the Company's registered capital by cancelling 2,372,308 authorised but unissued shares, at par value of Baht 1 per share, being Baht 2,372,308 from the existing registered capital of Baht 1,183,410,108 to be the new registered capital of Baht 1,181,037,800.

101 In addition, it has approved for the increase of the Company's registered capital of another Baht 131,226,422 divided into 131,226,422 ordinary shares at the par value of Baht 1 each from the existing registered capital of Baht 1,181,037,800 to be the new registered capital of Baht 1,312,264,222. The new issued ordinary shares will be reserved for conversion of convertible debentures. If there are any remaining shares from the convertible debentures not being exercised or there are any unsubscribed convertible debentures (as the case may be), the Board of Directors shall be authorised to allot and offer those remaining shares in one or several branches from time to time by way of private placement in accordance with the Office of the Securities and Exchange Commission (SEC) Notification No. GorJor.12/2543 regarding the application and permission for offer of new shares. Details of the allotment such as conditions of the offer, subscription period or any other relevant details shall be determined at the discretion of the Board of Directors including the determination of "market price" in accordance with the relevant the Office of the Securities and Exchange Commission (SEC) notification. The Company has registered the decrease and increase of registered capital with the Ministry of Commerce on 20 and 21 June 2006 respectively. On 6 July 2006, the Office of the Securities and Exchange Commission has granted the approval for the issue and offer of the convertible debenture. On 12 July 2006, the Company has issued the 5 years convertible debenture, type name-registered and unsecured convertible debenture with trustee, at the coupon rate of 3.75% p.a., for the total number of 124,000 units, at the price of USD 1,000 each, being the amount of USD 124 million or equivalent of Baht 4,731,840,000 (at the fixed exchange rate of Baht 38.16 per USD 1) to the foreign investors outside United States of America for the entire amount. The aforesaid convertible debenture has been approved for listing on the Singapore Exchange Securities Trading Limited. Unless, early redeemed or converted, the Company will redeem each bond on 12 July 2011 (the maturity date) at an amount equal to the Baht equivalent principal amount multiplied by 114.41 percent. Prior to the close of business on 12 July 2011, a debentureholder has the conversion right to convert any debenture into the Company's ordinary shares. The conversion price will initially be Baht 36.30 per share (which will be subject to revision and/or adjustment in the manner provided in the condition of the Bonds). The convertible debentures are redeemable prior to the maturity date. Early redemption will be subject to the condition of the debentures. Convertible debenture agreement contain certain covenants which the Company must comply with. According to the Thai Accounting Standard No. 48 "Financial Instruments: Disclosure and Presentation", the issuer of convertible debentures is required to classify the debentures' liability and equity components and present them separately in the balance sheets. On the issue of debenture, the Company has therefore separated such components, determining the liability component by discounting the stream of future payments of principal and interest at the prevailing market rate. The carrying amount of the equity component, as presented in the balance sheet under the caption of "Convertible Debenture - Equity Component" is determined by deducting the liability component from the total carrying value of the convertible bond. The liability component continues to be presented on the amortised cost basis, until conversion or maturity of the bonds. The equity component determined on the issue of the bonds is not changed in subsequent periods if there is no conversion prior to maturity date. For the year ended 31 December 2007, the 31,480 units of convertible debentures were converted into 33,093,012 of the Company's ordinary shares, at the conversion price of Baht 36.30 per share. As a result, as of 31 December 2007, the Company's issued share capital increased to 1,214,130,812 shares at Baht 1 each and premium on ordinary shares as a result of such transactions increased by a total of Baht 1,191.3 million. 33. SHAREHOLDING RESTRUCTURE On 17 October 2005, the Extraordinary General Meeting of the Company's shareholders No. 1/2005 passed a resolution approving a capital reduction on unissued 17,089,892 shares and approved the increase in registered share capital of 20,000,000 ordinary shares. The increase and decrease in share capital was registered on 28 October 2005 and the Company's registered share capital is Baht 1,183,410,108. In addition, such meeting approved the Company's restructuring planning by acquisition of shares from all other shareholders of the eastern hospital group, which comprised Bangkok Pattaya Hospital Co., Ltd., Bangkok Trad Hospital Co., Ltd., Wattanavej Co., Ltd., and Bangkok Rayong Co., Ltd.. Such purchase was subject to the condition that those shareholders must purchase the Company's shares by using all proceeds received from the Company for such purchase as payment for the Company's shares. The Company's shares to be offered to the shareholders of the eastern hospital group would comprise of the above new 20 million ordinary shares and/or the shares of the Company held by Bangkok Pattaya Hospital Co., Ltd..

102 All of them would be offered to those shareholders in the same time at the price of Baht 14.59 each. For the purpose of eliminating cross shareholding between the Company and Bangkok Pattaya Hospital Co., Ltd., the entire shares of Company which are held by Bangkok Pattaya Hospital Co., Ltd. would be offered to those shareholders before the new ordinary shares of the Company. In 2006, the Company already restructured the said shareholding by way of actual payments and also issuance of 17,627,692 new ordinary shares, in addition to the shares repurchased from Bangkok Pattaya Hospital Co., Ltd. to the shareholders of the eastern hospital group companies. This transaction increases the issued share capital of the Company to 1,181,037,800 shares at Baht 1 each and premium on ordinary shares of such transaction amounted to approximately Baht 239.6 million. In addition, as a result of such shareholding restructure, a subsidiary company had a net gain from such transaction of approximately Baht 305 million, which is presented as "Difference from shareholding restructure" in premium and 3,082,995 shares of the Company with a total value of approximately Baht 45 million were held by two subsidiaries. In December 2006, the Extraordinary Board of Director's meeting No. 2/2006 has passed a resolution approving subsidiaries, Bangkok Pattaya Hospital Co., Ltd. and Wattanavej Co., Ltd. to sell the said Company's shares held by subsidiaries to Bangkok Airway Co., Ltd. at Baht 35 per share. Gain of selling of these shares totalling of Baht 63 million was included in caption of "Share Premium". 34. FINANCIAL INSTRUMENTS The Company and its subsidiaries' financial instruments, as defined under Thai Accounting Standard No. 48 "Financial Instruments: Disclosure and Presentations", principally comprise cash and cash equivalents, short-term investment, trade accounts receivable, loans, investments, short-term loan, trade accounts payable, convertible debentures and long-term loans. The financial risks associated with these financial instruments and how they are managed is described below. 34.1 Financial risk management The Company and its subsidiaries are exposed to risk arising from changes in market interest rates and from nonperformance of contractual obligation by counterparties in the future. The Company and its subsidiaries use derivative instruments, as and when they consider appropriate, to manage such risks. They do not hold or issue derivative financial instruments for speculative or trading purposes. 34.2 Interest rate risk The Company's and subsidiaries' exposure to interest rate risk relates primarily to its cash at banks, bank overdrafts, short-term loans, convertible debentures and long-term borrowings. However, since most of the Company's financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate, the Company and its subsidiaries, therefore, have not entered into any forward exchange contract to reduce this risk. The convertible debenture and long-term loans were presented in note 32 and 21 respectively. Significant financial assets and liabilities as at 31 December 2007 classified by type of interest rates are summarised in the table below. (Unit : Million Baht) Consolidated financial statements Fixed Floating Non- interest rates interest rate interest bearing Total Financial Assets - Cash equivalent (exclude cash) 10 - - 10 - Short-term investments 56 - - 56 - Trade accounts receivable - - 1,334 1,334 - Restricted bank deposit 17 - - 17 - Investments - - 1,914 1,914 83 - 3,248 3,331 Financial liabilities - Trade accounts payable - - 855 855 - Bank overdrafts and short-term loans from financial institution 710 108 - 818 - Short-term loans from related parties 14 - - 14 - Convertible debentures 3,528 - - 3,528 - Liabilities under hire purchase and financial lease agreements 288 - - 288 - Long-term loans 62 6,688 - 6,750 4,602 6,796 855 12,253

103 (Unit : Million Baht) Seperate financial statements Fixed Floating Non- interest rates interest rate interest bearing Total Financial Assets - Trade accounts receivable - - 575 575 - Short-term loans to related party - - 1 1 - Investments - - 1,834 1,834 - - 2,410 2,410 Financial liabilities - Trade accounts payable - - 324 324 - Bank overdrafts and short-term loans from financial institution 680 - - 680 - Convertible debentures 3,528 - - 3,528 - Liabilities under hire purchase and financial lease agreements 25 - - 25 - Long-term loans - 1,935 - 1,935 4,233 1,935 324 6,492

34.3 Foreign currency risk The Company's and subsidiaries' exposure to foreign currency risk arises mainly from trading transactions that are denominated in foreign currencies. However, the amount was not significant, the Company and its subsidiaries do not expected any significant loss from this foreign currency risk. 34.4 Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable, loans, notes and other receivable. The Company and its subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore does not expect to incur material financial losses. In addition, the Company and its subsidiaries do not have high concentration of credit risk since it has a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of receivables, loans, other receivables and notes receivable as stated in the balance sheet. 34.5 Fair values of financial instruments 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. Since the majority of the financial instruments assets and liabilities of the Company and its subsidiaries are short-term in nature and the long term loans and debentures bear interest at the market rate or close to the market rate, their fair value is not expected to be materially different from the amounts presented in the balance sheets. 35. ACQUISITION OF INVESTMENTS IN RAMKHAMHAENG HOSPITAL PUBLIC CO., LTD. AND ISSUANCE OF DEBENTURES IN BAHT CURRENCY On 26 December 2007, the Extraordinary General Meeting of Shareholders' No. 1/2007 of the Company has approved for acquisition of all shares in Ramkhamhaeng Hospital Public Company by making a mendatory tender offer for all remaining 8.9 million shares at Baht 480 per share total of Baht 4,252.0 million which represented 73.82 percent of the registered capital. The Company submitted declaration of intent for tender offer for securities on 2 January 2008. In addition, the Meeting has approved the issuance and offering of name-registered, unsubordinated and unsecured debentures denominated in Baht in the total amount not exceeding Baht 7,000 million. The maturity date will be not more than 10 years from the issue date. 36. APPROVAL OF FINANCIAL STATEMENTS These financial statements have been authorised for issue by the Company's authorised directors on 20 February 2008. 104 Bangkok Dusit Medical Servic

BANGKOK HOSPITAL MEDICAL CENTER 2 Soi Soonvijai 7 New Phetchburi Rd. Huay Kwang, Bangkok 10310 Tel. (02) 310-3000, 1719 website : www.bangkokhospital.com BANGKOK HOSPITAL PRAPRADAENG 288 Suksawat Rd. Amphur Muang, Samutrprakarn 10290 Tel. (02) 818-9000 Fax : (02) 425-9859 website : www.bpdhospital.com BANGKOK HOSPITAL PATTAYA 301 Sukhumvit KM 143, Pattaya, Chonburi 20150 Tel. (038) 259-999 Fax : (038) 727-307 e-mail : [email protected] website : www.bangkokpattayahospital.com BANGKOK HOSPITAL RAYONG 8 Moo 2 Soi saengchanneramit Amphur Muang, Rayong 21000 Tel. (038) 921-999 Fax : (038) 921-925, (038) 921-990 e-mail : [email protected] website : www.rayonghospital.com BANGKOK HOSPITAL CHANTHABURI 25/14 Taluang Rd., Watmai Sub District, Muang, Chanthaburi 22000 Tel. (039) 319-8888 Fax : (039) 321-202 website : www.bangkokchanthaburi.com BANGKOK HOSPITAL TRAT 276 Sukhumvit Rd. Amphur Muang, Trat 23000 Tel. (039) 532-735 Fax : (039) 522-567, (039) 530-375 # 213 e-mail : [email protected] website : www.bangkoktrathospital.com CLINIC INTERNATIONAL KHAO CHANG 14/16 Moo 4 Had Sai Khao Khing Amphur Khao Chang, Trat 23170 Tel. (039) 551-555, (039) 551-151-2 Fax : (039) 551-150 BANGKOK HOSPITAL PHUKET 2/1 Hongyok-uthit Rd., Amphur Muang, Phuket 83000 Tel. (076) 254-421-9 Fax : (076) 254-430 e-mail : [email protected] website : www.phukethospital.com BANGKOK HOSPITAL HATYAI 75 Soi 15 Petchakasem Rd., Amphur Hatyai, Songkla 90110 Tel. (074) 272-800 Fax : (074) 365-790 e-mail : [email protected] website : www.bangkokhatyai.com BANGKOK HOSPITAL SAMUI 57 Moo 3, Koh Samui, Suratthani 84320 Tel. (077) 429-500 Fax: (077) 429-540 website : www.samuihospital.com es Plc. Network

BANGKOK HOSPITAL NAKORNRATCHASIMA 1308/9 Mitrapap Rd. Amphur Muang, Nakornratchasima 30000 Tel. (044) 262-000 Fax : (044) 256-421 e-mail : [email protected] website : www.bangkokratchasima.com BNH MEDICAL CENTER 9/1 Convent Rd, Silom, Bangrak, Bangkok 10500 Tel. (02) 686-2700 Fax. (02) 632-0577-9, (02) 632-0578 e-mail : [email protected] website : www.bnhhospital.com SAMITIVEJ HOSPITAL SUKHUMVIT 133 Sukhumvit 49 Klongtan, Wattana, Bangkok 10110 Tel. (02) 392-0011, (02) 382-2000, (02) 711-8000 Fax : (02) 381-3490 e-mail : [email protected] website : www.samitivej.co.th SAMITIVEJ HOSPITAL SRINAKARIN 488 Srinakarin Rd, Suanluang, Bangkok 10250 Tel. (02) 731-7000 Fax : (02) 731-7358 e-mail : [email protected] website : www.samitivej.co.th SAMITIVEJ HOSPITAL SRIRACHA 8 Soi Laemket, Jermjormpol Rd., Sriracha, Chonburi 20110 Tel. (038) 324-100 Fax : (038) 312-963 e-mail : [email protected] website : www.samitivej.co.th CAMBODIA ROYAL ANGKOR INTERNATIONAL HOSPITAL National Route#6, Phum Kasekam, Khum Sra Ngea, Seam Reap (Angkor), Cambodia Tel. (855) 63 761 888 Fax : (855) 63 963 274 e-mail : [email protected] website : www.RoyalAngkorHospital.com ROYAL RATTANAK HOSPITAL No. 10, Street 592, Toul Kok District, Phnom Penh, Cambodia 12152 Tel. (855) 23 365 555 (24hrs), (855) 12 182 9993, (855) 16 366 995 Fax : (855) 23 366 669 e-mail : [email protected] website : www.RoyalRattanakHospital.com Samitivej Srinakarin Hospital

Samitivej Sukumvit Hospital Bangkok International Hospital Wattanosoth Hospital

Bangkok Heart Hospital Bangkok Hospital

Bangkok Dusit Medical Services Plc. 2 Soi Soonvijai 7 New Phetchburi Rd., Bangkok, Thailand 10310 Tel. 66-2310-3000 Fax. 66-2318-1546 www.bangkokhospital.com