bgh : annual report 2011

BANGKOK DUSIT MEDICAL SERVICES Public Company Limited

ANNUALREPORT

2011

Statement of the Board of DirectorsFinancial Highlights Juristic persons in which the company holds 10%of shares or greaterBoard of DirectorsCorporate Social ResponsibilityNature of BusinessResearch and DevelopmentIndustry and CompetitionRisk FactorsShareholding Structure and Management Good Corporate GovernanceConnected TransactionsManagement discussion and analysisAuditor’s CompensationReport of the Audit CommitteeThe Board of Director’s Report on its Responsibilityto the Financial StatementsReport of Independent AuditorFinancial StatementsNotes to Consolidated Financial StatementsGeneral Information

247

10213140444751597175808283

858698

144

Contents

EthicsThe most important principle that we all live by and strictly ad here to is our duty

in providing medical care with the highest professional ethics.

ConscienceTo provide the best possible care for every life that comes through our door is not stated in

our duties nor are there any guidelines that bind us, but it isa service that we willingly provide with the conscience of caring for fellow humans.

Dedication and devotionFor some people, every second means life. With each breath, we realize the importance

of sincere dedication and devotion.

2

Statement ofthe Board of Directors

In 2011, Bangkok Hospital ventured into our 40th year of business with the resolution to follow the Company’svision and determination to fulfill the mission statement in providing healthcare services to patients of all nationalitiesand languages. The Bangkok Hospital Group therefore recognizes the significance of our medical staff and academicstrengths. We endeavor to develop and enhance our medical staff and technology to internation¬al heights. It canbe stated that “people” and “technology” are key elements in uniting Bangkok Hospital as one and they are thebasis of medical services that meet international standards, which has inspired customer confidence in the last4 decades.

Our dedication in using the best technology and devotion of our medical staff and specialists in various fieldshas garnered many awards both domestic and international. In 2011, Bangkok Hospital, Bangkok Heart Hospital andWattanosoth Hospital (Bangkok Cancer Hospital) received the Disease or Condition-Specific Care Certification of6 conditions from the Joint Commission International (JCI) in the United States, namely, stroke, back pain,diabetes type 2, acute myocardial infarction, heart failure and breast cancer.

Furthermore, the Bangkok Hospital network received the “Best of the Best Prime Minister’s Export Awards”as the Best Service Provider on the occasion of 20th Anniversary of the Prime Minister’s Export Awards. The Companywas 1 of 5 companies selected for the award out of a total of 322 companies. In addition, we received the “TrustedBrand Award, Gold” in the Hospital category for the second consecutive year. CNN also interviewed executivemanagement and toured Bangkok Hospital as part of the “Eyes on Thailand” documentary, which was aired globally5 – 9 December 2011.

Even though the global economy slowed down in 2011 as a consequence of the economic troubles in the USand Europe, and Thailand’s manufacturing and supply chains suffered from the major flood in late 2011, theCompany was able to continue its growth with the cooperation of everyone in the organization. The organic growthand realization of income from the merger of Phyathai Hospitals and Paolo Hospitals in 2011 resulted in theCompany’s increased medical service revenue from Baht 23,513 million in 2010 to Baht 35,224 million in 2011.Net profit also increased from Baht 2,295 million in 2010 to Baht 4,386 million in 2011 equal to 91% increasein net profit. Moreover, the market value of the Company rose from Baht 57,940 million in 2010 to Baht126,728 million in 2011.

This financial strength led to the upgrade of the Company and issue ratings from “A” with “stable” outlook to“A+” by TRIS Rating Company Limited, which reflects the Company’s strength as a business leader as the largestprivate hospital operator in the country with high quality service, state-of-the-art medical technology, expert andexperienced management, staff and specialist physicians, as well as a strong expanding network.

The sustainable growth together with care for Thai society is another mission that receives priority from theBangkok Hospital network and everyone in the organization as we are a hospital for the Thai people. During themajor flooding, Bangkok Hospital set up a working team to follow the news and closely assess the situation. Fourmeasures were carried out: safeguarding the hospital and surrounding community; providing assistance to employeesand their families; providing relief to people affected by the floods in various areas by dispatching mobile medicalunits, distributing consumption goods and medicine, SKY ICU to transport patients from affected areas; andrehabilitation assistance after the floods receded. The recent major flooding was another test of the cooperationand generosity of member of the organization and demonstrates the management’s vision in managing the Companyduring crises.

Bangkok Hospital also organized many activities for the society namely; 146 Academic Scholarships to Childrenof Employees; Project “Health Check-Ups for Senior Citizens of Sai Jai Thai Foundation” in cooperation withthe Sai Jai Thai Foundation and the Ministry of Health provided check-ups to 127 members aged over 55 at no cost;Project “Urbanites Unite for Good Health” provided free medical check-ups for the 15th consecutive year; andProviding Assistance to Tsunami Victims in Japan by sending doctors, nurses and medicine to care for seniorcitizens at the Refugee Center in Iwate Prefecture, Japan. The Company in cooperation with the Vejdusit Foundationunder the Royal Patronage of Her Royal Highness Princess Galyani Vadhana Krom Luang Naradhiwas Rajanagarindraalso organized the following activities: awarded 8 scholarships under “2011 Medical, Nursing and Public HealthResearch Scholarships”, which is in its 9th consecutive year and “Helping the Less Fortunate on Tour 2011” tohelp the less fortunate, disabled children and underprivileged children in various charitable centers with regardsto public health such as annual medical check-ups, dental check-ups, medicines, medicine supplies and others.

The challenge for the Bangkok Hospital network in the coming year is not only to grow, but also to instigatecustomer confidence and continue to take care of Thai society as a hospital for the Thai people. Bangkok Hospitalwill enter its 41st year as a strong Company that is ready to steadfastly brave the 2015 ASEAN Free Trade.

On behalf of the Board of Directors, I would like to express sincere gratitude to customers, shareholders, doctors,nurses and stakeholders for your continued trust and support of the Bangkok Hospital Group. Your support will bethe major factor in the organization’s sustainable growth alongside Thai society.

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

3

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

4

Financial Highlights

Revenue from Hospital Operationsand Growth Ratios

2009 2010 201121,597

1.9%

23,513 35,224

49.8%

8.9%

Growth on Revenue from Hospital Operations

Net profit and Net Profit Margin

Net profit (million Baht)

Net Profit Margin

Note: Non-Recurring Items2009 2010 20111,725

7.9%

2,295 4,386

11.9%

9.6%

Total Assets and Total Liabilities

Total Assets (million Baht)

Total Liabilities (million Baht)

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

2009

30,359

15,612

2010

32,197

15,914

2011

58,792

25,375

2009 2010 2011

0.7

2.1

1.5

0.40.5

1.5

Net Interest-Bearing Debt to Equity

Net Interest-Bearing Debt to EBITDA

Revenue from Hospital Operations (million Baht)

5

32,197

15,914

16,283

23,513

23,968

2,295

1,246.0

13.1

1.9

0.8

8.9

33.0

23.0

9.5

9.6

7.3

15.4

0.8

26.7

8.7

31.5

0.7

0.5

1.5

9.5

30,359

15,612

14,747

21,597

21,945

1,725

1,214.5

12.1

1.4

0.7

1.9

3.8

22.9

7.9

7.9

5.9

13.0

1.5

26.2

7.0

29.8

0.8

0.7

2.1

7.8

2011 2010 2009

Balance Sheets (in million Baht)

Total Assets

Total Liabilities

Total Shareholders’ Equity

Income Statements (in million Baht)

Revenue from Hospital Operations

Operating Income1/

Net profit

Information about Common Shares

Share Capital Issue and Fully Paid-up

Book Value Per Share (Baht)

Basic Earnings Per Share (Baht)

Dividend Per Share (Baht)

Financial Ratios

Growth Ratios (%)

Growth on Revenue from Hospital Operations

Net Profit Growth

Profitability Ratios (%)

EBITDA Margin (Excluding non-recurring items)1/

Net Profit Margin (Excluding non-recurring items)1/

Net Profit Margin

Returns (%)

Return on Average Assets

Return on Average Equity

Assets & Liabilities Management

Liquidity Ratio (x)

Average Collection (Days)

Average Inventory Period (Days)

Average Payable Period (Days)

Leverage and Coverage ratios) (x)

Total Interest-Bearing Debt to Equity

Net Interest-Bearing Debt to Equity

Net Interest-Bearing Debt to EBITDA

Interest Coverage

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

58,792

25,375

33,417

35,224

36,726

4,386

1,545.5

21.6

3.0

1.12/

49.8

91.1

23.2

10.6

11.9

9.6

18.4

1.2

27.3

12.2

39.8

0.5

0.4

1.5

11.1

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

Juristic persons in which the companyholds 10% of shares or greater

20-49%

COOL &JOY 30.0

MP 49.0

S.R.Property 49.0

SeamReap 49.0

PPFP 49.0

RAM 38.2

B-COP 49.0

KDH 20.0

Less than 20%

BH 14.2

50-89%

NHS 74.0

BPD 79.0

AngkorPisith 80.0

BKH 89.7

70.0RoyalRattanak

AIHANBBCHB-CopBDMS InterBDMS TrainingBHBHHBHIBIOBKHBKYBNHBPDBPHBPKBRH

123456789

1011121314151617

BSHBTHCool & JoyFirst HealthGLSIrvingKDH MPNHSNPMSPCHOKBPB PMEDPNWPPCLPPFPPPMS

1819202122232425262728293031323334

PSAMUTPYT 1PYT 2PYT 3PYTSRAHRAMRoyal Abu DhabiRoyal BKKRRHS.R. PropertySeam Reap SodexhoSSHSVHUdon Pattana

35363738394041424344454647484950

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

More than 90%

BPK 99.7

BHH 98.8

BSH 100.0

BIO 95.0

BDMSInternational 100.0

BHI 100.0

PSAMUT 88.7

PCHOK 80.7

PNW 99.8

BTH 99.8

BCH 99.7

BPH 97.2

GLS 100.0

BNH 91.5

BRH 100.0

NPMS 100.0PPMS 100.0

BKY 100.0

BDMSTraining 100.0

100.0PYT1

99.1PYT2

PYT3 97.8

PYTS 64.6

100.0RoyalBKK 100.0ANB

74.0Sodexho

67.5SSH

95.0Irving

99.0FirstHealth

30.0Royal AbuDhabiAIH 100.0

SVH 95.8

PPCL 97.1

100.0PMED100.0BPB

Company Name

7

UdonPattana 14.9

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

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

as at December 31, 2011

8

Juristic persons in which the companyholds 10% of shares or greater as at December 31, 2011

NameDate

Registered Location Business % held

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Prasit Patana Plc. (PPCL)

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



Sriracha Nakorn General Hospital PLC.Held trough PPCL

Paolo Medic CO., Ltd.

Paolo Samut Prakran Co., Ltd.

Siam Medical Co., Ltd.

Thai Medical Center PLC.

Bangkok Hospital Khao Yai Co., Ltd.

Bangkok Hospital Samui Co., Ltd.

Bangkok Hospital Rayong Co., Ltd.

Bangkok Hospital Trad Co., Ltd.

Wattanavej Co., Ltd.

Bangkok Hospital Phuket Co., Ltd.

Bangkok Hospital Had yai Co., Ltd.

Bangkok Hospital Pattaya Co., Ltd.

Samitivej Plc. (SVH)

BNH Medical Center Co., Ltd. (BNH)

Bangkok Hospital Ratchasima Co., Ltd.

Bangkok Hosital Prapradaeng Co., Ltd.

Angkor Pisith Co., Ltd.

Royal Rattanak Medical Services Co., Ltd.

Phnom Penh Medical Services Co., Ltd.

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

24 Jan 1974

11 Dec 2001

15 Sep 2007

24 Sep 1996

17 Feb 1997

8 Oct 1986

30 Jan 1992

17 Jul 1970

27 Jan 1936

18 Jul 2007

14 Aug 2003

13 Aug 2002

25 Jan 1994

28 Oct 1983

15 Mar 1994

27 Jul 1995

1 May 1989

28 Dec 1976

27 Aug 1991

24 Nov 1992

7 Sep 1993

20 Dec 2005

1 Jun 2007

27 Nov 2006

20 Dec 2005

943 Paholyothin Rd., Samsennai,Phyathai, Bangkok

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

943 Phaholyothin Rd., Samsennai,Phyathai, Bangkok

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

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

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

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

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

44/505 Navamin Rd., Khet Bueng KumBangkok

2 Soi Soonwijai 7, New Petchaburi Rd.,Bangkok

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

8 Moo 2, Soi SaengchanniramitNern Pra, Muang, Rayong Province

276 Sukhumvit Rd.,Muang, Trad Province

25/14 Thaluang Rd.,Muang, Chantaburi Province

2/1 Hongyokuthit Rd., Muang, Phuket Province

75 Soi 15 Petchkasem Rd.,Muang, Songkla Province

301 Sukhumvit Road km. 143Pattaya, Chonburi Province

133 Sukhumvit 49, Klongtan, WattanaBangkok

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

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

288 Suksawat, Muang,Samutprakarn Province

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

Holding Company

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Private Hospital(Samitivej Sukhumvit,Samitivej Srinakarin)

Private Hospital

Private Hospital

Private Hospital

Private Hospitalin Camobia

Private Hospitalin Cambodia

Private Hospitalin Cambodia(Not yet in operations)

Private Hospitalin Cambodia(Not yet in operations)

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

18,100,000Par value Baht 10/share


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




Common Share 8,700,000Prefer share 1,300,000

Par value Baht 10/share














10,000 Par valueUSD 1,000/share



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

97.14%

99.99%

99.09%

64.64%

99.99%

88.73%

99.76%

100.00%

100.00%

100.00%

99.76%

99.69%

99.68%

98.78%

97.22%

95.76%

91.48%

89.71%

79.00%

80.00%

70.00%

100.00%

100.00%

Shares issuedand paid-up

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

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

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

100.00%97.76%

86.02%79.93%

9

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

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

S.R. Property Investment Co., Ltd.

Siem Reap Land Investment Co., Ltd.

Phnom Penh First Property Co., Ltd.

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

National Healthcare Systems Co., Ltd.Held through SVH and BNH 25.97%

Asia International Healthcare Co., Ltd.(AIH)

Al Ghaith Bangkok Dusit Management Services LLC. Held through (AIH)

Greenline Synergy Co., Ltd.

Royal Bangkok Healthcare Co., Ltd.

A.N.B. Laboratory Co., Ltd. Held throughRoyal Bangkok Healthcare Co., Ltd.

Bangkok Health Insurance Co., Ltd.

Bangkok Premier Life Insurance Co., Ltd.

New Petchburi Medical Services Co., Ltd.

Samitivej Sriracha Co., Ltd.Held through SVH

Medicpharma Co., Ltd.

Bangkok Helicopter Services Co., Ltd.

Cool & Joy Co., Ltd.

Ramkhamhaeng Hospital Plc. ***

Bumrungrad Hospital PLC. ***

Krungthon Hospital Co., Ltd. ***

Udorn Pattana (1994) Co., Ltd. ***Held trough PPCL and RAM 13.27%

BDMS Training Co., Ltd.

Irving Sheridan SE Co., Ltd.Held through SVH

First Health Food Co., Ltd.Held through SVH

Sodexo Healthcare Support Service(Thailand) Co., Ltd. Held through First Health

20 Dec 2005

10 Feb 2006

27 Nov 2006

7 Nov 2001

25 Jul 2001

17 Jul 2003

1 Jun 2007

18 Aug 2008

11 Feb 2008

1 Jun 2004

2 Jan 1981

29 Aug 2010

20 Dec 2002

9 Apr 2001

26 Aug 1971

29 Jun 1995

20 May 2003

25 Aug 1986

15 Dec 1989

7 Jan 1993

9 Jun 1994

23 Sep 2010

14 Nov 2002

23 Mar 2004

15 May 2004

Land HoldingCompany

Land HoldingCompany

Land HoldingCompany

Bio molecularlaboratories

Share servicecompany

Holding Company

Private Hospitalin UAE

Informationtechnology

Holding Company Holds shares of A.N.BLaboratories Co., Ltd.

Manufacture anddistribution ofmedicine

Health insurance

Insurance Broker

Dormant Company

Private Hospital

Manufacture anddistribution ofmedicine

Air medical transport

Public relationsand marketing support

Private Hospital

Private Hospital

Private Hospital

Private Hospital

Training Cneter forstaff within the network

Asset management

Restaurantand health food

Other services

1,000 Par valueKHR 20,000/share

1,000 Par value KHR 20,000/share

1,000 Par valueKHR 20,000/share


7,500,000 Par valueBaht 10/share

3,500,000 Par value Baht 10/share

10,000 Par valueAED 1,000/share



115,000 Par valueBaht 1,000/share


400,000 Par valueBaht 10/share







Common share728,383,622 Par value

Baht 1/share







49.00%

49.00%

49.00%

95.00%

74.02%

100.00%

30.00%

100.00%

100.00%

100.00%

99.94%

100.00%

99.93%

67.52%

49.00%

49.00%

30.00%

38.24%

14.25%

20.01%

14.90%

100.00%

95.00%

99.99%

74.00%

NameDate

Registered Location Business % heldShares issuedand paid-up

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

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

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


2301/2 New Petchaburi Rd., Bangkok


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


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

2 Soi Soonwijai 7, New Petchaburi RoadBangkok

2301/2 New Petchaburi Rd., Bangkok


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

124 Thonburi-Parktor Rd., Bangkok

1111 Ploenchit Rd., Lumpini, PatumwanBangkok


2138 Ramkhamhaeng Rd., Bangkapi,Bangkok

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

337 Somdej Prachao Thaksin Rd.,Thonburi, Bangkok

555/5 Posri Rd., Muang,Udornthani Province


488 Srinakarin Rd., Suanluang,Bangkok

488 Srinakarin Rd., Suanluang,Bangkok

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

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

10

1. Mr. Prasert Prasarttong-Osoth, M.D. CEO & President

2. Mr. Pongsak Viddayakorn, M.D.1st Vice Chairman

3. Mr. Wichai Thongtang2nd Vice Chairman

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

8. Mr. Pradit Theekakul Director

9. Mr. Thavatvong Thanasumitra Director

Director

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

3. Mr. Chawalit Setthmethikul Independent Director

Independent Director

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

Board of Directors

11

4. Mr. Chuladej Yossundharakul, M.D. Director

5. Mr. Chirotchana Suchato, M.D. Director

6. Mr. Wallop Adhikomprapa Director

10. Miss Kananuch Lekwijit Director

4. Mr. Somchai Sujjapongse, Phd. Independent Director

5. Mr. Sripop Sarasas Independent Director

Company Management Bangkok Dusit Medical Services Public Company Limited

12

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

Professor EmeritusArun Pausawasdi, M.D.Chairman of the Board of Directors/Independent DirectorAge 74 years Education• Directors Accreditation Program Class 45,Thai Institute of Directors Association

• Dr. Med, Hamburg University, German • Facharzt fur Chirurgie, The Medical Council of Hamburg, German • Certificate of Medical Clinic, Mahidol University• Medical Doctor, Faculty of Medicine Siriraj Hospital,Mahidol University

Experience• Assistant to Ministry of Public Health• President, Royal College of Surgeons of Thailand• Secretary General, Royal College of Surgeons of Thailand• Chairman of Scientific Session Medical,The Medical Association of Thailand

• Dean, Faculty of Medicine Siriraj Hospital, Mahidol University• Director of the Medical Association

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

Year of appointed to be a director • 1998

Board of Director meeting attendance• 14/14

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

Relationship among other management• None

Mr. Prasert Prasarttong-Osoth, M.D.CEO & PresidentAge 78 years Education• Directors Accreditation Program Class 45,Thai Institute of Directors Association

• Certificate from National Defense College, Course forthe Joint State Private Sector, Class 1

• Bachelor Degree from Siriraj Medical School,University of Medicine

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

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



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


13

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

Mr. Pongsak Viddayakorn, M.D.1st Vice Chairman/ Executive Company AdvisorAge 78 yearsEducation• Honorary Doctorate in Humanities, Universities of Baguio• Directors Accreditation Program Class 45,

Thai Institute of Directors Association• Honorary Doctorate in Business Management, Christian University• Certificate from National Defences College• DTM & H Diploma, Faculty of Tropical Medicine and Hygiene,

Mahidol University• Post Graduate Study, University of Pennsylvania, USA.• Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

Experience• President/ Bangkok Dusit Medical Services PCL.• Director of The Medical Heath Care Centre of The Teacher Council of Thailand• Member of consultation committee of the Bangkok Metropolitan

Administration Governor (Healthcare)• Chairman, Private Hospital Association• Director of Medical Association

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

Year of appointed to be a director • 1994Board of Director meeting attendance• 14/14Number of shareholding*• 13,629,160 Shares (0.90%)Relationship among other management• None

Mr.Wichai Thongtang2nd Vice ChairmanAge 65 yearsEducation• Directors Accreditation Program (DAP) # 15• Audit Committee Program (ACP) # 3• Directors Certification Program (DCP) # 62• Financial for Non-Finance Director (FND) # 21• Role of the Chairman Program (RCP) # 11• Capital Market Academy # 9• Master’s Degree of Public Administration,Thammasat University, Bangkok, Thailand

• Bachelor’s Degree of Law, Thammasat University,Bangkok, Thailand

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

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

• Executive Vice President of Metromachinery Co., Ltd.


Board of Director meeting attendance• 8/9**

Number of shareholding*• 211,518,748 Shares (13.70%)


14


Mr. Wallop AdhikomprapaDirector/ Executive Company AdvisorAge 68 yearsEducation• Graduate Diploma, Capital Market Academy Class 8, Stock Exchange of Thailand

• Graduate Diploma in Public Law and Management Class 6King Prajadhipok’s Institute

• Graduate Diploma in Management of Public Economy Class 4 King Prajadhipok’s Institute

• The Role of the Chairman, Class 9,Thai Institute of Directors Association

• Directors Certification Program, Class 20, Thai Institute of Directors Association

• Senior Executive Program, Sasin Graduate Institute of BusinessAdministration

• Master of Science - Accounting, Roosevelt University, USA.

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

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





Mr. Chuladej Yossundharakul, M.D.DirectorAge 79 yearsEducation• Directors Accreditation Program Class 45,Thai Institute of Directors Association

• Diplomate of American Board of Surgery • Medical Doctor, Faculty of Medicine Siriraj Hospital,Mahidol University

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

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





15


Mr. Chirotchana Suchato, M.D.DirectorAge 76 yearsEducation• Directors Accreditation Program Class 45,Thai Institute of Directors Association

• Diplomate of American Board of Radiology,Downstate University of New York

• Graduated Course Radiobiology at M.D. Anderson Hospital,Houston, Texas

• Medical Doctor, Faculty of Medicine Siriraj Hospital,Mahidol University

Experience• School Director, School of X-Tray Technician• Professor of Radiology division, Faculty of Medicine,Ramathibodi Hospital

• Consultant to Radiology, Clinic of The Teacher Council of Thailand

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





Mr. Chatree Duangnet, M.D.Director/ CEO ofBangkok Hospital Medical CenterAge 67 yearsEducation• Directors Accreditation Program Class 54,Thai Institute of Directors Association

• Certified of National Defense College • Fellow, American College of Medical Quality• Certified, American Board of Quality Assurance & UtilizationReview Physicians

• Fellow, American Academy of Pediatrics • Certified, American Board of Pediatrics • Medical Doctor, Faculty of Medicine, Chulalongkorn UniversityExperience• Group Chief Medical Officer, Bumrungrad Hospital, Bangkok• Chief Executive Administrator, Bangkok Hospital • Clinical Assistant Professor of Pediatrics, College of Medicine,Pennsylvania State University, Pennsylvania, USA

• Chairman of the Board, Jameson Physician HospitalOrganization, New Castle, Pennsylvania, USA

• President, Lawrence Independent Physician Association,Lawrence County, Pennsylvania, USA

• Physician Executive, Jameson Health System, New Castle,Pennsylvania, USA

• Training courses in QA/UR/RM. American Board of QualityAssurance & Utilization Review Physicians, USA

Other Position• Deputy of CEO, Bangkok Hospital Ratchasima Co., Ltd.• Director, Bangkok Hospital Samui Co., Ltd.• Director, National Healthcare Systems Co., Ltd. • Director, Bio Molecular Laboratory (Thailand) Co., Ltd.• Director, Bangkok Helicopter Services Co., Ltd.• Director, B.D.M.S International Medical Services Co., Ltd.• Director, Angkor Pisith Co., Ltd.• Director, Phnom Penh Medical Services Co., Ltd.• Director, Rattanak Medical Services Co., Ltd.• Director, Bangkok Health Insurance Co., Ltd.• Director, Asia International Healthcare Co., Ltd.• Director, Greenline Synergy Co., Ltd.• Director, Sodexho Healthcare Support Services (Th) Co., Ltd.• Director, Royal Bangkok Healthcare Co., Ltd.• Director, Supeior Bio Tech Co., Ltd.Year of appointed to be a director • 2006Board of Director meeting attendance• 14/14Number of shareholding*• 150,000 Shares (0.01%)Relationship among other management• None

16


Mr. Pradit TheekakulDirector/ Acting Executive Vice PresidentAge 53 years Education• Directors Certification Program Class 29th,Thai Institute of Directors Association

• Bachelor Degree of Law Chulalongkorn University/ Bangkok• The Thai Barrister • Bachelor Degree or Arts (Political Science) Ramkamhaeng University/Bangkok, Thailand

Other Position• Director, Samitivej PCL.• Director, Prasit Patana Plc.• Director, Phyathai 1 Hospital Co., Ltd.• Director, Phyathai 2 Hospital Co., Ltd.• Director, Phyathai 3 Hospital Co., Ltd.• Director, Sriracha Nakorn Hospital Plc.• Director, Paolo Medic Co., Ltd.• Director, Paolo Samutprakarn Co., Ltd.• Director, Paolo Chokchai 4 Co., Ltd.• Director, Paolo Nawamin Co., Ltd.• Director, Bangkok Helicopter Services Co., Ltd.• Director, A.N.B. Laboratories Co., Ltd.• Director, BDMS Training Co., Ltd.• Director, Sodexho Healthcare Healthcare Support Service Co., Ltd.• Director, Sodexho Healthcare Support Services (Th) Co., Ltd.• Senior Executive Vice President-Administration Bangkok AirwaysCo., Ltd.

• Managing Director, Air Lanka Catering Service Co., Ltd.• Director, Thai Petroleum Service Co., Ltd.• Chairman, Bangkok Air Catering, WFS-PG Cargo Co., Ltd. • Director, Worldwide Flight Services Bangkok Air GroundHandling Co., Ltd.



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


Professor EmeritusSantasiri Sornmani, M.D.Chairman of Audit Committee/Independent DirectorAge 77 yearsEducation• Directors Accreditation Program Class 43,Thai Institute of Directors Association

• Ph.D. (Tropical Medicine), Liverpool University• Medical Doctor, Faculty of Medicine Siriraj Hospital,Mahidol University

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

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

Year of appointed to be a director• 1994




17


Mr. Thavatvong ThanasumitraDirector Age 64 years Education• Directors Certification Program Class 27th,Thai Institute of Directors Association

• Bachelor of Law, Thammasart University

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

Other Position• Director, Senior Executive Vice President of Finance,Bangkok Airways Co., Ltd.

• Vice President, Catering-Bangkok Airways• Director, Bangkok Helicopter Services Co., Ltd.• Managing Director, Thai Petroleum Service Co., Ltd.• Chairman, Bangkok Air Catering, WFS-PG Cargo Co., Ltd. • Director, Worldwide Flight Services Bangkok Air GroundHandling Co., Ltd.





Mr. Chawalit SetthmethikulIndependent Director Age 64 years Education• Bachelor of Laws (LL.B.) (Second Class Honors),Thammasat University

• Barrister at Law, Institute of Legal Education,Thai Bar Association

• Diploma from National Defence College of Thailand, Class 40• Master of Political Science (M.Pol.Sc), Public Administration,Thammasat University

• Directors Accreditation Program Class 6/2003,Thai Institute of Directors Association

• Director Certification Program (DCP) Class 74,Thai Institute of Directors Association

Experience• Director General of The Thai Customs Department,Ministry of Finance

• Deputy Permanent Secretaries of Ministry of Finance• Inspector of Ministry of Finance • Deputy Director-General: The Excise Department of Ministryof Finance

• Chairman: The Board of Small Business Credit GuaranteeCorporation

• Vice Chairman: The Board of Metropolitan Electricity Authority• Vice President: The Board of Airports of Thailand PCL.• Director: Office of The council of State• Director: The Thai BAR

Other Position• Chairman of The Board of Directors: Hemaraj Land andDevelopment PCL.

• President: Sriracha Harbour PCL.

Year of appointed to be a director• 2011


Number of shareholding*• None


18


Mr. Somchai Sujjapongse, Phd.Independent Director/Member of Audit CommitteeAge 50 yearsEducation• Ph.D. (Economics) 1990 The Ohio State University/Columbus, Ohio, U.S.A.

• M.A. (Economics) 1985 The Ohio State University/Columbus, Ohio, U.S.A.

• B.A. (Economics) (Hons.) 1984/ Chulalongkorn University/Bangkok, Thailand

• Directors Certification Program Class75th, Thai Institute ofDirectors Association

Experience• Director-General State Enterprise Policy Office (SEPO)• Director-General The Customs Department, Ministry of Finance• Director-General Fiscal Policy Office, Ministry of Finance• Fiscal Policy Advisor Fiscal Policy Office Ministry of Finance• Deputy Director-General Fiscal Policy Office/ Ministry of Finance• Director, Bureau of Fiscal Policy Fiscal Policy Office/Ministry of Finance

• Director, Fiscal Risk Management GroupFiscal Policy Office/ Ministry of Finance

• Director, Fiscal Policy and Planning DivisionFiscal Policy Office/ Ministry of Finance

• Director, Savings and Investment Policy DivisionFiscal Policy Office/ Ministry of Finance

• Director, Economic Rehabilitation Planning and Policy DivisionOther Position• Director, Board of Metropolitan Electricity Authority• Director, Board of Aeronautical Radio of Thailand • Director, Board of Thai Oil Public Company LimitedYear of appointed to be a director • 2011Board of Director meeting attendance• 9/14Number of shareholding*• NoneRelationship among other management• None

Mr. Sripop Sarasas Independent Director/Member of Audit Committee Age 55 yearsEducation• Certificate, Audit Committee Program - ACP 1/2004Thai Institute of Directors

• Certificate, Director Certification Program 22/2002 Thai Institute of Directors

• Diploma Thai Institute of Directors• Master Degree in Business Administration (Finance) University of Southern California, U.S.A.

Experience• President & CEOKrung Thai Asset Management PCL

• Managing Director/ Phatra Securities PCL.• Chief Executive OfficerGeneral Environmental Conservation PCL.

Other Position• Director/ Member of Audit CommitteeThe Royal Ceramic Industry PCL.

• Director/ Member of Audit CommitteeAdvanced Information Technology PCL.

• Director/ Member of Audit CommitteeLiving Land Capital PCL.

• Director/ Member of Audit CommitteeKiattana Transport PCL.





19


Miss Kananuch LekwijitIndependent Director/Member of Audit Committee Age 55 yearsEducation• Master of Art (M.A.) from Kasetsart University• Directors Certification Program Class 27th, Thai Institute of Directors Association

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

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



Number of shareholding*• 3,204 Sheres (0.0002%)


Mrs. Narumol Noi-amChief Financial OfficerAge 54 yearsEducation• MBA Banking and Finance, from North Texas StateUniversity, USA

• Bachelor of Economics (second class honors) Faculty ofEconomics from Chulalongkorn University, Thailand

• Graduate Diploma Advanced Certificate Course in Politicsand Governance in Democratic Systems for Executives,class 13 King Prajadhipok’s Institute

• Successful Formulation & Execution of Strategy Class 6/2010 by Thai Institute of Directors Association

• Directors Certification Program Class 107 by Thai Institute ofDirectors Association

• Financial Executive Development Program Class 12 byThe Thai Institute of Banking and Finance for Executivesfrom Financial Institutions

• Applied International Management Program, Sweden byGovernment of Sweden

Experience• Senior Vice President, Investment Banking DepartmentTMB Bank Public Company Limited

• Senior Vice President, Finance DepartmentIndustrial Finance Corporation of Thailand

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



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

Corporate Social Responsibility

21

Fair BusinessThe objective of Bangkok Hospital is to provide full cycle medical services for the highest satisfaction of consumers.

We are determined to devote ourselves to achieve this objective. We provide the highest quality medical servicesthat meet international standards under medical ethics in healing and caring for patients using state-of-the-arttechnology. Furthermore, we provide training to our medical staff so that they have high expertise in order to providequality care for our patients.

Responsibility to PatientsThe Company recognizes that our patients are an important success factor in our business. We endeavor to

provide customer satisfaction with high quality services. Apart from responsibilities under medical ethics as statedin “Policy Towards Patients” in the Good Corporate Governance Report (Annual Report page 64), in 2011, BangkokHospital also organized many activities and projects to show our responsibilityand care to our patients as follows:

1. “Big Give: Born Here, Delivered Here, Without Cost” in honor ofNational Mother’s Day and to celebrate our 40th anniversary. The first 40 babiesor “Daughters of Bangkok Hospital” were delivered at Bangkok Hospital freeof charge to show our thanks to our customers.

2. “We Want You to Ask” is a project aimed to create a standard of servicewith safety for our patients and their families as part of the medical careprovided. The objective is for all patients to safely participate in their medicalcare with safety goals such as caring for the right patient whereby doctors andnurses will ask the first and last name and date of birth of the patient eachtime before providing medical services, efficient communication with thepatients, aim to safely provide the right medication, as well as ensuring thatpatients and relatives are safe from infection and safe from slipping or falling.

3. Research in developing the quality of processes in providing services to reduce the time and cost of treatmentfor our patients, such as

• Project “We Are Ready” by the Heart Operation (OR) Unit.• Project “Streamlining of Patient Flow: the Improvement of Patient Care” by the Department of OncologyImaging and Radiation Therapy.

• Project “One Stop Service” by the Department of Internal Medicine.• Project “Shortened Length of Stay (LOS) and Decreased Cost of Treatment by Effective Use of DisposablePump” by the Cancer Clinic, the Breast Clinic, the Chemotherapy Service Unit, the Palliative Medicine Clinic,the Surgical Oncology Clinic, Ward 4W, Ward 5W and Ward 6W.

Environmental ConservationBuilding Energy Award of Thailand 2010 (BEAT 2010): The Company entered the Building Energy Award of

Thailand 2010 organized by the Energy Policy and Planning Office (EPPO), Ministry of Energy to improve energyefficiency in the buildings and also to be a medium in “creating conscience and finding ways to save energy”for the Thai people.

The Company entered BEAT 2010 for the period April 2010 to August 2011 with the goal to have a building thatwould be a good example of energy management and to become a knowledge base for similar buildings as wellas create a conscience for energy saving.

22

Education• Scholarship for Medical, Nursing and Public Health Research2010: The Vejdusit Foundation awarded 8 scholarships from atotal of 49 candidates. This has been our 9th year in awardingsuch scholarships and to-date, we have awarded a total of 52scholarships.

• Academic Scholarships to Children of Employees: BangkokHospital has awarded such scholarships every year and 2011marks the 17th year of our academic scholarships. A total of146 scholarships have been awarded to children of our employees totaling Baht 730,000.

Community and Social Development-1. Quality of Life• Project “Health Check-Ups for Senior Citizens of Sai Jai Thai Foundation”: The Sai Jai Thai Foundation incooperation with Bangkok Hospital and the Ministry of Health initiated the project to show our concern for seniorcitizen members of Sai Jai Thai who may have greater opportunity to get sick. These senior citizens need specialcare both physically and mentally. The project was initiated in the central region at Bangkok Hospital with a totalof 127 members aged over 55 at no cost.

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

2. Society and Community Service• Providing Assistance to Tsunami Victims in Japan: Bangkok Hospital incooperation with AMDA International Medical Information Center providedassistance to Tsunami victims in Japan by sending doctors, nurses and medi-cine to care for senior citizens at the Refugee Center in Iwate Prefecture,Japan. Moreover, the Bangkok Hospital Group and the Samitivej HospitalGroup donated money to help the victims of the natural disaster throughthe Embassy of Japan and the Japanese community in Thailand.

• Providing Relief to Victims of the Flooding in the South: The BangkokHospital Group and Vejdusit Foundation donated medical supplies, food andother necessities worth Baht 10 million. Bangkok Hospital together withBangkok Airways provided relief to people in various provinces in the Southwho were affected by the flooding and sent teams of doctors and nurses toprovide medical check-ups. Furthermore, we also provided 24-hour emergencyhelicopter service (SKY ICU) to quickly transport severe patients, pregnantwomen nearing their term, children and people with major injuries in the affected areas, to various hospitals.

23

Images of 2011 Flood

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

24

• Project “Bangkok Hospital Group Prepare for the Flood”: In preparation for the flooding, the Company dividedoperations into 2 parts. The first part was the safeguarding of areas within the Hospital (SAVE HOSPTIALS = SAVEPATIENTS). This included preparation by reserving fuel, food, water, medicine and medical supplies. In case offlooding, the hospitals will be able to continue providing services for 2 months. Apart from precautions within thehospitals, we also planned to take care of the communities surrounding the hospitals by sending engineers toprovide consultation, donating sand bags, as well as build barriers for those in need. Moreover, in providing reliefto victims of the flooding, the Bangkok Hospital Group provided rapid reliefby sending SKY ICU, medical airboat and mobile medical unit into the affectedareas during the 2 months. The Group fully cooperated with the public sector,including the Ministry of Health, the Emergency Medical Institute of Thailand,the press and rescue units, as well as local administration organizations, inproviding assistance, sending food, basic medicines for the home and medicalsupplies. The Group also provided critical patient transport, mobile medicalunit to provide preliminary check-ups to victims of the flooding, medical careto patients who transferred from the public sector and donated funds tovarious organizations such as the Thai Chamber of Commerce, the Thai ListedCompanies Association, Matichon Newspaper and the Royal Thai Army.Furthermore, the Group joined with BTS in providing mobile check-ups andsky medical units to consult on health issues and flood-related diseases. Thetotal amount of relief provided by the Group as of 31st December 2011 wasBaht 27.3 million.

• Her Royal Highness Princess Maha Chakri Sirindhorngranted an audience to Dr. Prasert Prasarttong-osoth,CEO & President to present a Toyota Commuter 15-seatvan equipped with medical equipment for the ThaiRed Cross Rehabilitation Center to transport patients.

• Vejdusit Foundation Activities The Vejdusit Foundation was established in 1984.

Throughout the 26 years, Vejdusit Foundation has helpedThai society in terms of medical care and public healthin various forms such as providing medical care to peoplewith no means, donating medical equipment and suppliesto public hospitals, supporting medical research, anddonating vaccines, medical equipment and supplies,medicine and daily necessities to people of need. In 2011,Vejdusit Foundation organized the following activities:

1. The directors of Vejdusit Foundation were grantedan audience with Her Royal Highness Princess MahaChakri Sirindhorn on Wednesday, 23rd March 2011 atthe Dusidalai Pavillion on the grounds of ChitraladaPalace to present 1,200 knitted hats from the project“BigHat BigGive” to relieve the cold for underprivilegedchildren in remote areas in the North. The Directors once again donated another 1,200 knitted hats on Wednesday,25th January 2012.

25

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

3. Project to assist flood victims: the Bangkok Hospital Network donated money to government agencies such asthe Royal Thai Army, the Revenue Department, and the Pharmacy For Society Foundation to support productionof medicine to treat athlete’s foot. In addition, Bangkok Hospital deployed mobile medical units with doctorsand nurses providing medical checkups as well as distributing food, medicin.

26

Thailand’s first Medical Airboat assists in transporting patients in flooded areas.

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

27

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

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


28

Nurses visited the affected areasto distribute medicine and food

despite the high water level.

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

The medical team prepthe patient before

transporting to the hospital.

29

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


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

“The Symphony of Life”The leader in medical technology with the largest medical service network in Thailand.

With the resolution to follow the Company’s vision and determination to fulfill

the mission statement in providing healthcare services to patients of all nationalities and languages,

as well as the determination to develop medical staff and technology to meet

international standards. “People” and “technology” are two of the important factors that

go hand-in-hand in providing the best medical services and

it is why we have been entrusted with our clients’ health for the past 4 decades.

�

31

HistoryBangkok Dusit Medical Services Public Company Limited was registered on 30th October 1969 under the name

“Bangkok Dusit Medical Services Company Limited” with an initial registered capital of Baht 10 million. On 26th

February 1972, Bangkok Hospital commenced operations in providing medical services. The Company was laterlisted on the Stock Exchange of Thailand on 2nd October 1991 and registered its conversion to public companylimited in 1994. Presently, the Company has a registered capital of Baht 1,553.40 million, with paid-up capital ofBaht 1,545.46 million.

Nature of Business

Major Developments in the Past Five Years2007 - The Company, holding 100%, established a new subsidiary under GlobalMedical Network Company Limited to establish a private hospital in Hua Hin,Prachuapkhirikhan Province. Presently, the company has changed its registeredname to Bangkok Hospital Hua Hin Company Limited.

- Royal Angkor International Hospital, a 21-bed hospital in Siem Riap, Cambodiaunder the management of Angkor Pisith Co., Ltd., a subsidiary in which theCompany holds 80%, opened for business on 15th January 2007, with thegrand opening held on 19th November 2007.

- Royal Rattanak Hospital, a 30-bed hospital in Phnom Penh, Cambodia, undermanagement of Royal Rattanak Medical Services Co., Ltd., in which theCompany holds 70 percent, opened for business on 1st September 2007.

- The Company bought additional shares of Ramkhamhaeng Hospital PublicCompany Limited or “RAM”, increasing holdings from 19% to 26.2%. Later,the Company made a bid offer for the remaining shares of RAM during 4th

January 2008 through 7th February 2008 at the price of Baht 480 per share.After the bid, the Company held 38.2% of RAM shares outstanding.

2008- The Company established Greenline Synergy Company Limited to act asthe center for information technology. The aim of this new company is tostandardize information technology within the Group for the best interestsof the end users and to lower costs associated with information technologydevelopments. The Company holds 100% of Greenline Synergy.

- The Company bought the 256-slice multi-detector CT scan, the newest inno-vation in high-speed, computerized x-ray to detect and diagnose acutecoronary syndrome at Bangkok Heart Hospital.

2009- The Company established the Bangkok Hospital Khao Yai Company Limited,with Baht 70 million capital and holding 100% of the total shares outstanding,to operate a private hospital in Park Chong, Nakornratchasima Province.

- The Company bought 114,391,922 shares of rights issues of of Prasit PattanaPublic Company Limited at Baht 1 per share, increasing the Company’s owner-ship from 16.31% to 16.95%. The Company also bought additional sharesfrom the existing shareholders, which increased the Company’s ownershipto 19.47%.

32

- The Company installed the Tele Interpreter system to improve communica-tions between physicians and patients from overseas. The system employsthe videophone to provide interpreters in 26 languages. There are applicationsthat provide interpretation of 3 major languages, namely, Japanese, Arabicand English. Interpreters are available 24 hours a day using Unified Communi-cation technology. The system is installed on the physicians’ and interpreters’computers for communication and exchanging of information. In the case thatthe interpreter is outside the hospital, the interpreter can use the WirelessIP Phone to communicate at any time.

- The Spine Academy, Bangkok Hospital acquired surgical instruments to assistin providing the best spine and brain surgery. • Intraoperative CT scanner, or O-arm, photographs the spine and the surroundingareas using Computerized Tomography through X-Ray. The resulting photo-graph is precise and pinpoints the spine during surgery, enabling surgeons tooperate on small areas or in pinning the spine with the highest accuracy.

• Surgical Navigator (“Stealth 7”) an innovative instrument used in spine andbrain surgery, which assists the surgeon in accurately determining the exactlocation of brain tumors or various points in the spine to within a fraction ofa millimeter.

2010- The Company invested in Krungthon Hospital Public Company Limited “KDH”,a company listed on the Stock Exchange of Thailand and operating a 150-bedprivate hospital, by acquiring shares from existing shareholders of KDH withinitial investment equal to 16.82% of registered and paid-up capital of KDH.Later, the Company acquired additional shares through the Stock Exchangeof Thailand, resulting in total number of shares held equal to 20.01% ofregistered and paid-up capital of KDH.

- The Company increased capital in Greenline Synergy Company Limited, asubsidiary in which the Company holds 100%, from Baht 30 million to Baht200 million in order to improve information technology services provided tothe Group.

- Wattanosoth Hospital, the cancer hospital, opened the Bangkok HematologyCenter on 20th August 2010 to provide medical care to patients with blooddisease by a team of hematology physicians and diagnosis laboratory whichmeets high standards, as well as a blood bank to store and reserve blood.The Bangkok Hematology Center provides efficient holistic medical care topatients with blood disease.

- The Company went through some restructuring. On 28th October 2010, theCompany executed an Entire Business Transfer of Bangkok Hospital Hua HinCompany Limited, a subsidiary in which the Company holds 100% and wasestablished as a 60-bed private hospital in Hua Hin, Prachuabkirikhan Province.The purpose of the Entire Business Transfer was to transfer operations of theBangkok Hospital Hua Hin from the subsidiary to Bangkok Dusit Medical ServicesPublic Company Limited, as a branch of Bangkok Hospital in Hua Hin, in orderto reduce management costs and increase flexibility in management of opera-tions and resources, especially in management of medical personnel, whichwill increase operational efficiency to meet the Company’s policy.

33

The Bangkok Hospital Hua Hin is an investment project which receivedsupport from the Board of Investment. The investment capital is approximatelyBaht 850 million. On the day of the entire business transfer, Bangkok HospitalHua Hin was still under construction and not yet in operation. After thetransfer of the business and all assets to the parent company, the BangkokHospital Hua Hin Company Limited registered the closing of the businesson 5th November 2010 and is currently in the liquidation process.

- The Company increased capital in Royal Bangkok Healthcare Company Limited,a subsidiary in which the Company holds 100%, from initial registered capitalof Baht 1.0 million to Baht 736.0 million. The increased capital was used toacquire all shares of A.N.B. Laboratories Company Limited (“ANB”) fromexisting shareholders on 1st December 2010 with total investment of Baht734.0 million. ANB is the 4th largest producer of saline in the country. Inaddition, the company also produces and distributes medicine and medicalsupplies with exports equaling about 20% of total sales.

- The Board of Directors’ special agenda meeting 2/2010 on 14th December2010 approved the merger of the Company and Health Network PublicCompany Limited (Phyathai Hospital Group and Paolo Hospital Group) throughan Entire Business Transfer of Health Network Public Company Limited, whichis majority held by Mr. Wichai Tongtang and family. The Company shall paya total of no more than Baht 9,825,357,789 for the merger, comprised ofnewly issued common shares of the Company in the amount of no morethan 230,870,405 shares at Baht 37.75 per share, equal to no more than Baht8,715,357,789 and cash of approximately Baht 680,000,000, as well as transferof load debt and interest incurred from Health Network in the amount of nomore than Baht 430,000,000.

- The Company invested in an Open MRI 1.0 T, the only such machine inThailand. Patients do not need to enter the tunnel when getting a scan asbefore, which greatly reduces patient’s anxiety of confined spaces and doesnot require anesthesia.

- The Bangkok Spine Academy has performed minimal invasive spine surgeryusing a microscope to reduce pain and blood loss and for faster recuperation.

- The Bangkok Heart Hospital and the Pacific Rim Electrophysiology ResearchInstitute established the “Pacific Rim Electrophysiology Research Instituteat Bangkok Hospital” and the “Cardiac Electrophysiology Clinic” headedby Dr. Koonlawee Nademanee, an American Board cardiologist specializing incardiac electrophysiology. The Institute provides diagnosis and treatment ofa variety of irregular heart rhythms (cardiac arrhythmias) using catheter abla-tion, electrophysiology and cardiac device implantation.

- The Company invested in the Bi-plane DSA used in diagnosis and treatmentof strokes and other blood vessels with visual effects using 2 megapixeldigital imaging. The technology enables doctors to more efficiently diagnoseby creating 3 dimension imaging, which can clearly show blood vessels thatare as thin as a strand of hair.

2011- In February 2011, the Company invested in 46,116,400 common shares ofBumrungrad Hospital Public Company Limited (“BH”), equal to 6.32% ofoutstanding shares sold of BH, as well as invested in 35,000,000 units of NVDR

34

or 4.79% of shares outstanding of BH. The Company later exercised the 1:1conversion of NVDR to common shares, as well as invested in additionalcommon shares of BH. Presently, the Company holds 103,827,600 shares or14.25% of shares outstanding of Bumrungrad Hospital Public Company Limited.

- The Company registered additional capital of Baht 1,481,034,024 on 1st April2011 to pay for the entire business transfer of Health Network Public CompanyLimited in accordance with the Extraordinary Meeting of the Shareholders1/2011 on 24th February 2011. This resulted in the Company holding 68.64%from 19.47% of Prasit Pattana Public Company Limited (Phyathai HospitalGroup: Phyathai Hospital 1-3 and Phyathai Hospital Sriracha). In addition,the Company now holds shares of 4 companies within the Paolo MemorialHospital Group, namely, 100% of Paolo Medic Company Limited (PaoloMemorial Hospital Phaholyotin), 88.73% of Paolo Samutrprakarn CompanyLimited (Paolo Memorial Hospital Samutrprakarn), 80.72% of Siam MedicalCompany Limited (Paolo Memorial Hospital Chokchai 4) and 99.76% of ThaiMedical Center Public Company Limited (Paolo Memorial Hospital Nawamintr).Consequently, after the mergers, the Company now has 27 hospitals in theGroup, from 19 (25 hospitals in Thailand and 2 hospitals in Cambodia), witha total of 4,987 beds, up from 3,193 beds.

- The Company made a tender offer on Prasit Pattana Public Company Limited(“PYT”) with a period of 25 business days from 8th April to 23rd May 2011.Payment was offered in two ways, namely, Baht 3.71 cash per share or commonshares of the Company (“BGH”) at 10.1706 PYT shares for 1 BGH share. Therespondents must choose either option.

After the tender offer, the Company held 97.10% of PYT outstandingshares, up from 68.64%. The Company issued 64,366,277 rights shares torespondents who chose to receive BGH shares, resulting in Baht 1,545,400,481of paid-up capital from Baht 1,481,034,024.

- The Company increased paid-up capital by another Baht 58,200 to accom-modate the conversion of the convertible bonds to common shares of theCompany, resulting in a paid-up capital of Baht 1,545,458,883. The convertiblebonds matured in July 2011, therefore, the Company no longer has anyconvertible bond obligations.

- The Company invested in an additional 1,474,000 common shares of UdonPattana (1994) Company Limited (Ake Udon Hospital) equal to 4.9%, resultingin 4,474,000 shares or 14.9% of shares outstanding, up from 3,000,000 sharesor 10%. When including ownership of Udon Pattana shares through PrasitPattana Public Company Limited and Ramkamhaeng Hospital Public CompanyLimited, a subsidiary and associated company respectively, the Companyholds 28.17% of shares outstanding of Ake Udon Hospital.

- The Company set up a subsidiary, “Bangkok Premier Life Insurance BrokerCompany Limited” with registered and paid-up capital of Baht 4.0 million(Baht 10 par value).

Services- The Company officially commenced operations of Bangkok Hospital Hua Hinon 6th April 2011. Construction on the Hospital started on 11th November2009 on 14 rai of land and began providing medical services under BangkokHua Hin Medical Clinic on 1st November 2010. The Bangkok Hospital Hua Hinis comprised of 5 floors with 60 beds. The first floor accommodates out-patients and emergency services. The second floor houses surgery theaters

35

and ICU. On the third floor, there are the Bio Molecular Laboratory, Adminis-tration offices, Executive offices and training facilities. The fourth and fifth floorsare for in-patient rooms. Total usable area is 12,000 square meters. Thehelicopter pad for patient transfers to hospitals in Bangkok is on the 6th floor.

- Bangkok Hospital opened the Bangkok Sports and Exercises Medicine Centerand uses sports and exercise medicine in healing and developing physicalability of athletes, both professionals and amateurs, both national teamathletes and the general public, so that they may play sports or exerciseefficiently with less injury. The Center also provides rehabilitation after playingsports by expert physicians in sports medicine. In addition, Bangkok Hospitalprovided medical check-ups to Thai national team athletes for SEA Games,Asian Games and the Olympic Games, as well as sponsored the FootballAssociation of Thailand, taking care of the Thai national football team formore than 15 years.

- Wattanosoth Hospital performed advanced medicine by utilizing PET/CT indetecting brain cell deterioration to find the cause in the of Alzheimer diseasein the early stages.

- Wattanosoth Hospital purchased the CT Simulator to better view details ofX-rays in 3D, which reduced the time in planning treatment.

- The Bangkok Spine Academy, Bangkok Hospital, organized the biggest spineseminar of the year entitled “Master Classes in Advanced Spine Surgery” andwas honored to have Dr. Rick Delamarter and Dr. Daniel K. Riew, renown spinesurgeons from the United States, as guest speakers. The event was attendedby Dr. Phudhiphorn Thienprasit, Senior Director of the Bangkok Spine Academy,along with the surgical team to exchange experiences in spine medicine.

- The Embassy of Japan and Bangkok Hospital organized the cooperation agree-ment signing ceremony between Bangkok Hospital and 10 hospitals in Japan.The event was presided over by His Excellency Mr. Seiji Kojima, the Ambassadorof Japan to Thailand and Dr. Prasert Prasarttong-osoth, CEO& President.Bangkok Hospital, as well as representatives from hospitals in Japan. Thissignified the good relationship between hospitals in Thailand and Japan.

- Bangkok Hospital opened Bangkok Plaza, a center for medical care, food andbanking to provide convenience to patrons of the Hospital and people livingin Soi Soonvijai area on 11th November 2011.

- The Bangkok Hospital opened Bangkok Hospital Counter Service in thedeparture area of Suvarnnabhumi International Airport to provide services toforeign patients who travelled to Thailand to receive medical care at theHospital.

- Bangkok Hospital Ratchasima Company Limited, a subsidiary in which theCompany holds 89.7% opened the “Bangkok Hospital Pakchong”, a 30 bedhospital in Pakchong District, Nakornratchasima Province, making it the 26th

hospital in Thailand for the Bangkok Hospital Group.

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

36

“Trusted Brand Award - Gold”“Best of the Best Prime Minister’s Export Awards”

Received JCI Accreditation for international standards Received EURAMI Accreditation for aero transport

- Bangkok Dusit Medical Services Public Company Limited, the largest private hospital operator in Thailand, knownas “Bangkok Hospital Network”, was awarded the “Best of the Best Prime Minister’s Export Awards” as the BestService Provider from the Department of International Trade Promotion, the Ministry of Commerce on the occasionof 20th Anniversary of the Prime Minister’s Export Awards. The Company was 1 of 5 companies selected for theaward out of a total of 322 companies.

- “Trusted Brand Award, Gold 2010” in 2011, for the second consecutive year, from a survey conducted by Readers’Digest, which found that Thai’s believe that Bangkok Hospital is a quality hospital which understands the needsof patrons and gives importance to social responsibility.

- Bangkok Hospital, Bangkok Heart Hospital and Wattanosoth Hospital (Bangkok Cancer Hospital) received the Diseaseor Condition-Specific Care Certification from the Joint Commission International (JCI) in the United States, whichcertifies that the disease specific care of 6 diseases meets international standards, namely, 1. Primary Stroke Program2. Low Back Pain Program3. Diabetics Mellitus Type 24. Acute Myocardial Infarction Program (AMI)5. Heart Failure Program6. Breast Cancer Program

- The Company, a private hospital group, received accreditation both nationally (HA : Hospital Accreditation) andinternationally according to US standards (JCI Accreditation) through 7 hospitals namely, Bangkok Hospital MedicalCenter (Bangkok Hospital, Bangkok Heart Hospital and Wattanosoth Hospital (Bangkok Cancer Hospital)), SamitivejSukhumvit Hospital, Samitivej Srinakarin Hospital, Samitivej Sriracha Hospital, BNH Hospital, Bangkok Hospital Pattayaand Bangkok Hospital Phuket.

- EURAMI Accreditation: EURAMI (The European Aero Medical Institute) International Accreditation &Standardization, the aero transport accreditation institute widely accepted in Europe and the United States,certified in October 2008 that Bangkok Hospital’s aero transport service in the Fixed and Rotary Wing categorymeets high international standards in terms of structure and safety, as well as procedure and results.

- Thai-Canadian Chamber of Commerce Business Excellence Award for Best Professional Services - HealthServices Award 2007”

37

Bangkok Hospital

Bangkok Heart Hospital

Wattanosoth Cancer Hospital

Bangkok Hospital Hua hin

Bangkok Hospital Prapradang

Bangkok Hospital Pattaya

Bangkok Hospital Rayong

Bangkok Hospital Chantaburi

Bagnkok Hospital Trat

Bangkok Hospital Ratchasima

Bangkok Hospital Pakchong

Bangkok Hospital Samui

Bangkok Hospital Phuket

Bagnkok Hospital Had Yai

Bangkok Dusit Medical Services PLC.




Bangkok Prapradang Hospital Co., Ltd.

Bangkok Pattaya Hospital Co., Ltd.

Bangkok Rayong Hospital Co., Ltd.


Bangkok Trat Hospital Co., Ltd.



Bangkok Samui Hospital Co., Ltd.

Bangkok Phuket Hospital Co., Ltd.

Bangkok Had Yai Hospital Co., Ltd.

79.00%

97.22%

100.00%

99.69%

99.76%

89.71%

89.71%

100.00%

99.68%

98.78%

No.

TotalNumberof Bed

% ofHolding

Numberof BedHospital

1

2

3

4

5

6

7

8

9

10

11

12

13

14

Operated By

Business Operations 1. Private Hospital Business

Bangkok Hospital Group

Samitivej Hospital (Sukumvith)

Samitivej Hospital (Srinakarin)

Samitivej Hospital (Sriracha)

BNH Hospital



Samitivej Sriracha Co., Ltd.

BNH Medical Center Co., Ltd.

275

400

150

144

825

144

95.76%

95.76%

67.52%

91.48%

15

16

17

18

Samitivej Group

Phyathai 1 Hospital

Phyathai 2 Hospital

Phyathai 3 Hospital

Phyathai Sriracha Hospital

Phyathai 1 Hospital Co., Ltd.



Phyathai Sriracha Hospital PLC.

350

260

230

257

1,097

100.00%

99.09%

97.76%

64.64%

21

22

23

24

Phyathai Group

Paolo Memorial Hospital Phaholyothin

Paolo Memorial Hospital Chokchai 4

Paolo Memorial Hospital Nawamin

Paolo Memorial Hospital Samutprakarn

Paolo Medic Co., Ltd.




237

120

140

200

5,188

697

100.00%

80.72%

99.76%

88.73%

25

26

27

28

Paolo Memorail Hospital Group

Royal Angkor Pisith

Royal Rattanak Hospital


Rattanak Medical Services Co., Ltd.

21

30

51

80.00%

70.00%

Royal Hospital Group

19

20

1,826

343

97

48

60

60

400

220

170

114

300

30

50

317

165

38

Aek Udon International

Hospital

Ramkamhaeng Hospital

Bangkok Chain Hospital

Bumrungrad Hospital

Udon Pattana (1994) Co., Ltd.

Ramkamhaeng Hospital PCL.

Bangkok Chain Hospital PCL.

Bumrungrad Hospital PCL.

350

300

150

538

1,338

29

30

31

32

Group of invested Hospital (Company has not manage)

(Company helddirectly 14.9%

and held troughsubsidiary 13.3%)

(Company held directly74.0% and held trough

subsidiary 24.9%)

1. Manufacture saline and

medicalequipment

2. Medical Lab and Share Services

(central purchase and accounting)

3. Bio Molecular Lab

4. Information and technology for

company and the Subsidiaries Share

service

5. Medical Evacuation

6. Marketing and promotion support

company and the subsidiaries

7. Cartering and General support for

company and the subsidiaries

8. Land holding company in cambodia

9. Healthcare Business

(Holding Company)

10. Traing and delopment for company

and the Subsidiaries

11. Insurance broker

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

Medicpharma Co., Ltd.

National Healthcare Systems Co., Ltd.

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




Irving Sheridan SE Co., Ltd.

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

First Health Food Co., Ltd.

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

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

(Held trough First Health Food Co., Ltd. , which is

the Samitivej PLC.'s subsidiary)




Asia International Healthcare Co., Ltd.



Bangkok Health Insurance Co., Ltd.

Bangkok Premier Life Insurance Co., Ltd.

% ofholdingNature of Business Operated By

2. Medical Care Related Businesses

28.20%

38.24%

20.10%

14.22%

No.Total Number

of Bed% of

HoldingNumberof BedHospital Operated By

100.0

49.0

98.9

95.0

100.0

49.0

30.0

95.0

99.0

74.0

49.0

49.0

49.0

100.0

100.0

100.0

100.0

100.0

39

100.00

95.76

91.48

79.00

97.22

100.00

99.76

99.67

98.78

100.00

99.68

89.71

80.00

70.00

97.14

99.99

80.72

99.76

88.73

74.00

95.00

Type ofrevenue Operated by

% ofHolding

8,218.7

6,687.7

1,579.7

202.9

2,793.1

1,359.9

299.4

717.0

944.8

459.4

2,065.8

925.6

95.5

155.8

5,632.8

1,339.0

480.8

420.3

720.3

35,098.4

121.1

5.0

126.1

35,224.5

23.3

19.0

4.5

0.6

7.9

3.9

0.8

2.0

2.7

1.3

5.9

2.6

0.3

0.4

16.0

3.8

1.4

1.2

2.0

99.6

0.3

0.0

0.4

100.0

2012Revenue %

7,182.8

5,887.9

1,466.1

181.7

2,499.7

1,193.5

275.2

647.3

770.5

432.8

1,839.3

817.9

83.9

130.2

23,408.8

55.6

48.2

103.8

23,512.6

30.5

25.0

6.2

0.8

10.6

5.1

1.2

2.8

3.3

1.8

7.8

3.5

0.4

0.6

99.6

0.2

0.2

0.4

100.0

2011Revenue %

6,851.6

5,468.6

1,464.0

168.3

2,202.7

1,030.1

249.0

541.8

761.0

391.2

1,541.5

673.2

86.2

110.7

21,539.9

23.6

33.5

57.1

21,597.0

31.7

25.3

6.8

0.8

10.2

4.8

1.2

2.5

3.5

1.8

7.1

3.1

0.4

0.5

99.7

0.1

0.2

0.3

100.0

2010Revenue %

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

(Unit : Million Baht)

Patient revenue


Samitivej PLC. (SVH)





Bangkok Hospital Trad Co., Ltd.


Bangkok Hospital Had Yai Co., Ltd.





Rattanak Medical Services Co., Ltd.

Prasit Patana PLC. (PPCL)

Paolo Medic Co., Ltd. (1)

Siam Medical Co., Ltd. (1)

Thai Medical Center PLC. (1)

Paolo Samut Prakran Co., Ltd. (1)

Total

Other revenue which related to patient revenue


Bio-Molecular Laboratories

(Thailand) Co., Ltd.

Total

Total revenue from operation

Income Structure of the Company and its SubsidiariesComparison of income structure of the Company and its subsidiaries during 2009-2011

40

Research and DevelopmentIn 2011 Bangkok Hospital IRB & EC has approved 14 new studies, of which 9 studies are initiated by physicians,

pharmacists and nurses in Bangkok Hospital group; and 5 studies are studies under collaboration between Bangkok

Hospital and external organizations.

Following are studies that are initiated by medical staff in Bangkok Hospital group1. Retrospective study of Hospitalized Patients with Influenza in Adult During January 2010 – December 2010. The

study’s principle investigator is Paithoon Boonma, MD, infectious disease specialist, Internal Medicine Clinic,

Bangkok Hospital.

2. Retrospective study of Hospitalized Patients with Dengue Infection During January 2010- December 2010. The

study’s principle investigator is Paithoon Boonma, MD, infectious disease specialist, Internal Medicine Clinic,

Bangkok Hospital.

3. Pandemic Influenza A (H1N1) Infection Among Pediatric Population in Thailand: Clinical Spectrum, Complication,

Treatment and Predictive Indicators for Unfavorable Outcome. The study’s principle investigator is Montri

Saengpattrachai, MD, pediatric neurology and development specialist, Pediatric Center, Bangkok Hospital.

4. Neurologic Complications and Outcome of Children with Novel Influenza A (H1N1) in Bangkok Hospital, Thailand.

The study’s principle investigator is Montri Saengpattrachai, MD, pediatric neurology and development specialist,

Pediatric Center, Bangkok Hospital.

5. Active Surveillance Cultures to Screen for Methicillin-Resistant Staphylococcus Aureus (MRSA) in Referral Patient

in Critical Care Unit, Bangkok Hospital Medical Group. The study’s principle investigator is Paithoon Boonma, MD,

infectious disease specialist, Internal Medicine Clinic, Bangkok Hospital.

6. A Comparative Efficacy Study of Chemotherapy Education by a New Computer-Assisted Instruction (CAI) and

Current Face-to-Face Program, In Relation To Quality of Life (QOL) in Solid Cancer Patients Receiving Initial

Chemotherapy at Wattanosoth Hospital. The study’s principle investigator is Ms. Paranee Phongnopakoon,

Educator Nurse, Outpatient Department, Wattanosoth Hospital.

7. A Pilot Study of Accuracy and Concordance Between Oto-Acoustic Emission (OAE) and the Diagnostic Auditory

Brainstem Response (ABR) in Neonatal Hearing Screening at the Bangkok Hospital Medical Center. The study’s

41

principle investigator is Montri Saengpattrachai, MD, pediatric neurology and development specialist, Pediatric

Center, Bangkok Hospital.

8. Nutrition Day Worldwide Survey. The study’s principle investigator is Surat Komindr, MD, diabetes, endocrinology

and clinical nutrition specialist, Diabetes and Endocrinology Center, Bangkok Hospital.

9. Relationships Between Antimicrobial Consumption and Antimicrobial Resistance Among Hospital Isolates at

Bangkok Hospital Medical Center. The study’s principle investigator is Ms. Sumaiporn Groodpanta, Pharmacist,

Outpatient Pharmacy, Bangkok Hospital.

Following are studies under collaboration between Bangkok Hospital andexternal organizations1. Ablation of Ventricular Fibrillation Substrates in Brugada or SUDS Syndrome Patients. The study’s principle

investigator is Koonlawee Nademanee, MD, cardiovascular disease and clinical cardiac electrophysiology specialist,

Pacific Rim Electrophysiology Research Institute at Bangkok Hospital.

2. Congestive Heart Failure (NoAfib-CHF). The study’s principle investigator is Koonlawee Nademanee, MD, cardio-

vascular disease and clinical cardiac electrophysiology specialist, Pacific Rim Electrophysiology Research Institute

at Bangkok Hospital.

3. Combined Treatment of Intra-articular Hyaluronic Acid and Peripheral Blood Stem Cells (PBSC) With or Without

Intra-articular Granulocyte Colony-stimulating Factor (G-CSF) in Cartilage Degeneration for Early Osteoarthritic

Knee Disease. The study’s principle investigator is Pornthep Mamamee, MD, orthopedic surgery specialist,

Orthopedic Center, Bangkok Hospital.

4. The Impact of Medical Tourism on the Domestic Economy and Health System: A Case Study of Thailand. The

study’s principle investigator is Thinakorn Noree, MD, Researcher,

5. A Multi-Center, Randomized, Double-Blind, Placebo-Controlled Study to Evaluate Cardiovascular Outcomes

Following Treatment with Alogliptin in Addition to Standard of Care in Subjects with Type 2 Diabetes and Acute

Coronary Syndrome (Protocol No. SYR-322-402). The study’s principle investigator is Pradub Sukhum, MD, cardiology

and heart failure specialist, Heart Failure Clinic, Bangkok Heart Hospital.

Routine to Research (R2R) Program and Continuous Quality Improvement (CQI) for Patient Safety and Core

Process Program have been organized in Bangkok Hospital. The programs aims to increase research knowledge and

skills for medical staff, and to have studies initiated by medical staff which will help to improve medical services

42

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

for Patient Safety Program, and 10 studies in CQI for Core Process Program

Following are studies that are initiated in the Routine to Research (R2R) Program

1. A Comparative Efficacy Study of Chemotherapy Education by a New Computer-Assisted Instruction (CAI) and

Current Face-to-Face Program, In Relation To Quality of Life (QOL) in Solid Cancer Patients Receiving Initial

Chemotherapy at Wattanosoth Hospital. The study is initiated by Wattanosoth Hospital research team which

consists of Cancer Clinic, Breast Clinic, Chemotherapy Service Unit, Palliative Medicine Clinic, Surgical Oncology

Clinic, Ward 4W, Ward 5W and Ward 6W.

2. Retrospective study of Hospitalized Patients with Dengue Infection During January 2010- December 2010. The

study is initiated by Infection Control Unit

3. The Role of Multi-detector Computerized Tomography (MDCT) Scan in Right Ventricular Outflow Tract (RVOT)

Ablation in Brugada Syndrome. The study is initiated by Cardiac Imaging Unit

4. Analysis of Intersegment Integration Pattern of the Left Ventricular Regional Wall Motion by Magnetic Resonance

Imaging. The study is initiated by Cardiac Imaging Unit

Following are studies that are initiated in the Continuous Quality Improvement (CQI) for Patient Safety Program

1. Assessment Tool for Dehydration in Pediatric Patients. The study is initiated by Ward 14D team

2. Effective Education to Prepare Patient for Gastroscopy & Sigmoidoscopy The study is initiated by Ward 10D and

Ward 11D team.

3. Safety With Adequacy Food and Nutrition in Dysphagia Patients in Stroke Pathway. The study is initiated by

Nutrition and Rehabilitation Department.

4. Care of Patient who has Upper GI Bleeding. The study is initiated by Gastrointestinal and Liver Unit.

5. Post-Stroke Complication Awareness. The study is initiated by Rehabilitation Department.

6. Prevention of Postpartum Hemorrhage. The study is initiated by Ward 9D and Labour Unit team.

7. Radiation Safety. The study is initiated by Cardiac Imaging Unit.

8. Reduce Self-extubation in Critical Unit. The study is initiated by CCU 2 and ICCU team.

9. Prevention of Percutaneous Endoscopic Gastronomy (PEG) Infection. The study is initiated by Infection Control Unit.

10. Radiation Therapy Side Effects At-A-Glance. The study is initiated by Oncology Imaging and Radiotherapy Unit.

43

Following are studies that are initiated in the Continuous Quality Improvement (CQI) for Core Process Program

1. Improve OPD Record Scanning Process. The study is initiated by Medical Record Unit

2. Cycle Time Reduction of X-ray Process for Arabic Patients. The study is initiated by Imaging Unit

3. Provisioning Service for Financial Information. The study is initiated by Treasury Unit

4. We Are Ready. The study is initiated by Heart Operation Room (OR) team

5. Streamlining of Patient Flow: the Improvement of Patient Care. The study is initiated by Oncology Imaging and

Radiation Therapy Unit

6. Medical Supply Management in ICU 1 and ICU 3. The study is initiated by ICU 1 and ICU 3 team

7. Re-service of Pre-Insurance Patients. The study is initiated by HPC 2 team

8. One Stop Service. The study is initiated by Department Internal Medicine

9. Japanese Check-up Process Improvement. The study is initiated by Japan Medical Service (JMS) Clinic

10. Shortened Length of Stay (LOS) and Decreased Cost of Treatment by Effective Use of Disposable Pump. The

study is initiated by Wattanosoth Hospital research team which consists of Cancer Clinic, Breast Clinic, Chemo-

therapy Service Unit, Palliative Medicine Clinic, Surgical Oncology Clinic, Ward 4W, Ward 5W and Ward 6W.

44

Industry and CompetitionIn 2011, the private hospital business has continuously grown out of increased demand for healthcare and

medical services as well as the growing number of the aging population. This has a positive impact on MedicalTourism, which is likely to continue to expand. The market can be divided into 2 groups as follows:

1. Domestic Patients The Government’s policy to increase wages, whether it be the civil servants’ salaries, whichincreased at the beginning of 2012, or minimum wages, should enable people to have more purchasing power.It is also a good opportunity for the private hospital business to grow.

Statistics show that the health services market in Thailand in 2010, when compared to the gross domesticproduct (GDP), is around 3.2% or Baht 163,630 million. From 2001 to 2010, the compound annual growth rate(CAGR) of the amount spent on health services and medical care was 5.6% per annum compared to the GDPgrowth rate of 4.6% during the same period. This shows that the demand for health services has continuouslygrown at a higher rate than the economy.

Growth of health services expense compared to GDP.

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

3,073,601

3,237,042

3,468,166

3,688,189

3,858,019

4,054,504

4,259,026

4,364,833

4,263,139

4,596,112

2.2

5.3

7.1

6.3

4.6

5.1

5.0

2.5

(2.3)

7.8

4.6

100,597

103,705

111,784

120,577

130,213

138,970

143,280

150,192

158,499

163,630

5.0

3.1

7.8

7.9

8.0

6.7

3.1

4.8

5.5

3.2

5.6

Health Services Expense of the Private SectorGDP

Growth Rate (%)

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

CAGR (44 - 53)

Value(Million Baht) Growth Rate (%)

Value(Million Baht)

Source: Office of the National Economic and Social Development Board

45

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

Thai Population Grouped by Age

• Growth of Residential Areas in Bangkok and VicinityThe National Statistics Office forecast that the ratio of the population residing in Bangkok and Vicinity willincrease from 31.1% in 2000 to 38.0% in 2020. Therefore, as the majority of the coverage areas of privatehospitals are in the city, the need to expand the city will be one of the major forces leading to growingdemand for healthcare services.

2. Foreign Patients who come to Thailand for healthcare services (Medical Tourism)1. Thailand’s healthcare services have made quite an impression on foreigners who have used the healthcare

services here. Many factors contribute to the popularity of Thailand as a medical tourism destination, the qualityof services, value for money, and the lower wages and cost of living compared to other countries, to namea few. Furthermore, the strategy of managing private hospitals as a network has enabled control of costs inproviding services and suitable pricing of those services. Thai physicians are also internationally accepted fortheir expertise. Moreover, many private hospitals in Thailand have received international accreditation, whichstrengthens foreigners’ confidence in the quality of healthcare services provided by Thai hospitals. Anotherfactor in rising demand for healthcare services is the government’s recent policy to support Thailand in becomingthe Medical Hub of Asia.

Market Outlook and Competition Medical centers can be categorized by the standards of care provided, namely, primary care, secondary care

and tertiary care. Primary care centers are those that provide general medical services such as clinics or smallmedical centers. Secondary care centers are those that are able to provide a higher level of service to both in-patients and out-patients, as well as care for more complex illnesses. Tertiary care centers are those that can providecomplete medical care and treatment for specific illnesses as well as complex diseases with state-of-the-art medicalequipment.

24.7

26.3

25.2

14.4

9.4

22.8

24.5

25.2

17.1

10.4

19.4

22.5

25.0

19.4

13.7

18.7

22.1

23.3

21.7

14.2

16.6

21.0

22.4

22.4

17.5

Ages 0 - 14 years

Ages 15 - 29 years

Ages 30 - 44 years

Ages 45 - 59 years

Ages > 60 years

(%) 2000 2005 2010 2015E 2020E

Source: National Statistics Office

46

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

Private hospitals in Thailand mainly compete in terms of the size of the network. Chain hospitals that can operateefficiently have a large customer base covering a wide area, economies of scale, patient referrals within the network,and a widely recognized brand. Furthermore, in order to meet the entire needs of the target market, large privatehospital businesses aim to compete in terms of service, medical expertise, state-of-the-art medical equipment andthe establishment of specialized medical centers.

In 2011, private hospitals had to adapt in order to handle the various risk factors, such as the economic slow-down, the financial crisis in Europe and the major flooding in the last quarter. These factors negatively affectedthe rise in number of foreign patients. However, it is expected that foreign patients will continue to come to Thailandfor medical tourism, as many are continuing treatment while others still choose to come to Thailand for the worldrenowned medical services as well as comparably less expensive treatment costs. The creation of the ASEANEconomic Community in 2015 is one of the forces that will drive the private hospital business in Thailand. Therewill be increased demand for healthcare services, especially from the aging population in the ASEAN region, increasedinvestments within ASEAN member countries and more foreign patients from the increased number of ex patscoming to work in Thailand. The AEC will also support medical services across borders, such as via the internet,which would provide additional convenience to business expansion into other countries.

Domestically, advancing towards the ASEAN Economic Community will help the domestic economy to expand,which will lead to increased purchasing power, as well as increased revenue from domestic patients. Nevertheless,medical standards remain an important factor whether it is in terms of quickness in providing services, expertise ofphysicians or state-of-the-art medical equipment. Therefore, maintain high standards and continuous developmentsare crucial to the private hospital business.

134,622

133,245

132,920

134,763

139,715

125,866

117,568

133,683

0.1

(1.0)

(0.2)

1.4

3.7

(9.9)

(6.6)

13.7

34,863

35,267

35,506

35,806

35,792

36,004

33,405

32,872

(9.1)

1.2

0.7

0.8

(0.0)

0.6

(7.2)

(1.6)

Public Sector (Beds) Growth Rate (%) Public Sector (Beds) Growth Rate (%)

2003

2004

2005

2006

2007

2008

2009

2010

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

47

1. Risks from economic volatilityThe Thai economy in 2011 expanded by only 1.8% mainly due to the flooding in the central region and in

Bangkok. The flooding directly affected the industrial parks, which are vital to the country’s exports. There weredamages to agricultural output, especially rice, which was in the harvesting season. Tourism was also affected inthe 4th quarter, the high season for foreign tourists.

The important factors in the economic recovery in 2012 are the revival of investor confidence by the publicsector and the European debt crisis. The public sector must efficiently solve the water issue in order to gainconfidence. Furthermore, government spending must be able to stimulate private spending. The uncertainty of thedebt crisis in Europe could also cause volatility in the Thai economy.

As Bangkok Hospital and some of the network hospitals, namely, Samitivej Hospital, Bangkok Hospital Pattayaand Bangkok Hospital Phuket, provide treatment of complex diseases by tertiary care experts, the Company maybe more affected than other private hospitals in times of economic slowdown.

2. Risk of private hospital business and operations 2.1 Risk from future changes in standards or regulations governing the Company

The Company operates under the supervision of the Ministry of Health and other related government agencies.Furthermore, the Company must have a license to operate a healthcare business and health clinics as stipulatedby the law governing health clinics. In addition, the Company must comply with laws governing health clinics,companies and other related laws.

Any changes in the interpretation of current regulations or enforcement of laws or new regulations or policiesthat are likely to be stricter, may impact the Company’s operations. The enforcement of laws or new regulations,as well as the deliberation of the draft Patient Protection Act, which protects persons who have been wronged orreceived damages from healthcare services with the goal to compensate the patients in a timely manner withouthaving to prove wrongdoing, may affect healthcare providers including the Company. There is also considerationof setting up a patient protection fund to pay for damages to patients, whereby the healthcare clinics (includingthe Company) are responsible for contributing to the fund according to the rules, procedures and rate determinedby the Patient Protection Committee. Therefore, the Company may not be able to guarantee that future changesto laws and regulations or new regulations or new policies related to the Company’s business will not affect theCompany’s operations and business opportunities.

However, the Company and hospitals within the networks are in compliance with various standards of qualitysuch as JCI, HA (Hospital Accreditation), ISO 9001(quality standards) and ISO 14001(environmental standards). Compliance with HA requires that a Committee be established to monitor the quality of patient care and ensurethat it meets the standards of safety and environmental conservation, as well as monitor the various risks, especiallyrisk in providing medical care. Furthermore, compliance with ISO 9001 requires that healthcare services providedmust be systematic and meet standards, which is a means in managing clinical risk. ISO 14001 requires compliancemonitoring to ensure adherence to laws, rules and regulations regarding health and the environment. This may helpto lessen the effects of changes to laws regarding health and the environment.

2.2 Risk from competitionThe private hospital business is highly competitive and is likely to be even more competitive in the future.

Apart from competition with hospitals at the same level, the Company must also compete with mid level privatehospitals, which have improved and developed medical services, as well as acquired state-of-the-art medicalequipment in order to expand their customer base. State hospitals have also expanded medical services offeredsuch as opening afterhours clinics, Excellence Centers, and private hospitals managed by medical schools or largestate hospitals, which shows the public sector’s adaptation in order to increase efficiency in providing public health

Risk Factors

48

services to the people. This is expected to continue in the near to medium term and may have some effects onthe Company. Therefore, in order to maintain competitive edge and to differentiate services provided, the Companyhas made substantial investments in state-of-the-art technology and medical equipment, as well as investmentin information technology to support expedition of medical services.

2.3 Risk in losing medical personnel or crucial executivesThe private hospital business must depend on executives as well as skilled medical personnel such as physicians,

nurses, pharmacists and technicians. Therefore, losing medical personnel or crucial executives, and not being ableto replace them with comparable personnel may have negative effects on the Company.

Presently, the hospital business in Thailand is faced with the problem of lack of medical personnel. Greatreliance is placed upon the state to develop medical personnel and there have not been sufficient medical personnelto meet demand. The Company has had to compete with other hospital operators in retaining and attracting skilledmedical personnel, which will affect the Company’s costs.

However, the Bangkok Hospital network is a large one and has continued to provide financial support for educationand research to medical personnel in order to improve specialized skills. We are a knowledge organization thataims to enhance medical knowledge in all areas as well as state-of-the-art medical technology. Moreover, theCompany has set measures in determining compensation that is fair when compared to other operators in theprivate hospital business. Therefore, the Company currently has not been significantly affected by this risk.

2.4 Risk of lawsuits Presently, people are more aware of patients’ rights, especially with the issuance of the Act on Court Proceedings

for Consumer Cases B.E. 2551 (2008), which more easily enables consumers and patients to file suit against healthcareservice providers. This law may affect healthcare service providers and medical personnel, which puts the Companyat risk of being sued for medical services provided. Nevertheless, management recognizes the importance ofcontrolling and inspecting quality of medical services, the screening of physicians, as well as patients’ rights. TheCompany gives importance to providing information, managing patients’ expectations, reporting procedures andfinding solutions when a complaint is received, as well as improving quality and determining indicators that ensurethat the service is always of international standard quality.

2.5 Risk of reliance on foreign patientsMedical services revenue from foreign patients, which includes persons living or working in Thailand, or persons

travelling to Thailand for pleasure or specifically to receive medical care, as well as staff of foreign governmentsor agencies, or employees of foreign companies, equaled Baht 8,520.3 million and Baht 9,863.4 million in 2010and 2011, respectively or 36.0% and 26.0% of the Company’s revenue in 2010 and 2011, respectively. This groupof patrons chooses the Company’s services because of the high standard and quality of medical services, lowermedical costs when compared with other countries, the tourism industry and political stability. As the revenuefrom foreign patients is high, there is fierce competition in providing services to this group of patients among privatehospital operators.

49

If there is a situation that affects the decision to receive medical services in Thailand, such as the politicalsituation in Thailand, other factors affecting the tourism industry, the significant appreciation of the Baht againstother currencies, the negative image of Thailand in the eyes of foreigners, increased competition from other countriesin medical tourism, foreign patients may not come to Thailand for medical services and this may affect the Company’sbusiness opportunities.

However, the Company has expanded the network to cover more areas in Bangkok and the various regions inthe country in order to expand the domestic client base and lower the dependence on foreign clients. In addition,the Company has expanded the foreign client base to cover additional countries to decrease dependence on anyparticular group of foreign patients.

2.6 Risk from foreign investmentsThe Company has made investments (capital, loans to subsidiaries and guarantee loans of subsidiaries with

external parties) as of 31 December 2011 in the amount of USD 47.3 million or approximately Baht 1,454.7 millionor 2.5% of the Company’s total assets. The Company’s foreign investments, including shares held in Angkor PisithCo., Ltd., which manages the Royal Angkor International Hospital, and shares held in Rattanak Medical ServicesCo., Ltd., which manages Royal Rattanak Hospital, equal to 80.0% and 70.0%, respectively, and 100% investmentin Phnom Penh Medical Services Co., Ltd. and BDMS International Medical Services Co., Ltd., which has not yetstarted operations. There are factors that may negatively affect the Company’s foreign investments, such as thelaw, regulations or policies of the governments of the foreign countries which govern the Company’s business orthe political situation and economy of the country, foreign currency exchange volatility or cost of investments oroperations that are higher than estimated. These factors may prevent the Company from receiving the return asexpected and may affect the financial status and operations of the Company.

3. Financial Risks3.1 Risk in receiving payment of medical fees

Receiving payment is one of the financial risks that the Company faces, that is, when providing medical carebefore charging fees and expenses, there is a risk that we may not be able to receive payment for such services.However, the Company has the following policies in reducing such risk:

1. When providing services to patients who are personally responsible for the expense, in the case of non-emergency procedures, the Company has the policy to assess the expense before providing medical servicesso that the patient will be aware of the budget and make payment prior to treatment.

2. The Company also has the policy to notify the party responsible for the payment of medical expenses ofthe expenses incurred along the way and encourages payment long the way to lessen the burden of one-timepayment at the end of treatment.

3. For payment by counter parties, the Company also has a policy to provide credit for payment of medicalservices with caution by analyzing the counter party’s credit history and financial status, as well as regularlyreviewing the relationship.

50

The Company has set up the Debtor Management Committee comprised of management from finance andoperations. The Committee meets regularly to review and determine measures to manage the risk, as well as findappropriate solutions for the Company and patients when there is default of payment.

3.2 Risk from interest rate volatilityAs of 31st December 2011, the Company has financial liabilities at the floating rate in the amount of Baht 5,665

million from a total of Baht 16,267 million or 34.8% of total financial liabilities. Therefore, the volatility of interestrates may have some impact on the cost of capital. However, as the Company has the policy to manage interestrate risk, which includes entering into interest rate swaps according to the market situation.

3.3 Effects of global economy and foreign currency exchange volatilityPart of the Company’s revenue comes from services provided to foreigners who travel to Thailand. The economic

status of the country of origin of the foreign patients, therefore has an impact on the number of foreigners whovisit hospitals within the Company’s network in the same way that the domestic economy impacts the numberof local patients. Thus, The Company’s business, financial status, profits and business opportunities may be impactedby the economy of the various countries of origin of the foreign patients.

Furthermore, the volatility of foreign currency against the Thai Baht, which is a determining factor in settingcompetitive pricing compared to healthcare providers in other countries, is another factor that may affect theCompany’s revenue. In 2011, the Thai Baht appreciated compared to the US dollar, from Baht 33.4 to Baht 30.0to the dollar or around 11.3%. This resulted in the price of the Company’s services in Thai Baht to have increasedwhen compared to the US dollar and other currencies of foreign patients. The Company thus faces risk from thevolatility of foreign currency exchange, which is an external factor that is out of the Company’s control. In this case,the Company has hedge the currency risk with financial institutions and endeavors to maintain a suitable ratio ofdomestic and foreign patients in order to reduce this risk.

Shareholding Structureand Management1. Shareholding Structure

The top ten major shareholders of the Company on the closing of the shareholders register on 30 September2011 are as follows:

2. Management2.1 Personnel

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

2.2 Management StructureAs of 31st December 2011, the management structure of the Company is comprised of the Board of Directors,

the Audit Committee, the Nomination and Remuneration Committee, the Executive Committee and the top fourexecutive officers, details as follows:

51

13.7%

10.5%

9.3%

8.1%

6.5%

3.2%

2.9%

2.5%

2.1%

1.8%

60.5%

Name Total Shares% of total shares

outstanding

1. Mr. Wichai Thongtang and spouse

2. Mr. Prasert Prasarttong-Osoth, M.D. and spouse(1)

3. Mr. Satit Viddayakorn and spouse

4. Bangkok Airway Co., Ltd., Bangkok Airways holding Co., Ltd.

and Bangkok Airway Catering Co., Ltd.

5. The Viriyah Insurance Co., Ltd.

6. Miss Poramaporn Prasarttong-Osoth, M.D.

7. DEUTSCHE BANK AG SINGAPORE (DCS) A/C CLIENT

8. Mr. Chirotchana Suchato, M.D. and spouse

9. STATE STREET BANK EUROPE LIMITED

10. Mr. Chuladej Yossundharakul, M.D. and spouse

Total

211,518,748

162,115,584

143,335,498

124,927,169

100,261,163

49,462,707

44,694,900

39,273,009

32,613,005

27,565,795

935,767,578

932

1,956

2,888

957

TypeStaff Physicians and

EmployeesConsulting Physicians and

Part-time Employees Total

Nurses

Employees

Total employees

Physicians

787

1,621

2,408

345

145

335

480

612

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

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

52

Board of Directors1. Prof. (Emeritus) Arun Pausawasdi, M.D.2. Mr. Pongsak Viddyakorn, M.D.3. Mr. Wichai Thongtang4. Mr. Prasert Prasarttong-Osoth, M.D.5. Mr. Wallop Adhikomprapa6. Mr. Pradit Theekakul7. Mr. Chirotchana Sucharto, M.D.8. Mr. Chuladej Yossundharakul, M.D.9. Prof. (Emeritus) Santasiri Sornmani, M.D.

10. Mr. Chatree Duangnet, M.D.11. Mr. Thavatvong Thanasumitra12. Dr. Somchai Sujjapongse13. Mr. Sripop Sarasas14. Mr. Chavalit Setmeteekul15. Miss Kanoknuj Lekvichit

Authorized DirectorsTwo directors out of the following six may sign jointly and affix the company seal: Mr. Prasert Prasarttong-Osoth,

M.D., Mr. Pongsak Viddyakorn, M.D., Mr. Wallop Adhikomprapa, Mr. Chuladej Yossundharakul, M.D., Mr. ChirotchanaSucharto, M.D., and Mr. Chatree Duangnet, M.D.

Company SecretaryThe Board of Directors has appointed Ms. Kessara Wongsakate, Assistant Vice President, as the Company Secretary

to act in accordance with the law with regards to securities and securities exchange and notifications of the CapitalMarket Supervisory Board. Furthermore, the Company Secretary shall fulfill her duties as assigned by the Board ofDirectors as well as coordinate and monitor to ensure compliance with the resolutions of the Board of Directors’and the Shareholders’ Meetings for success and corporate good governance.

Duties and Responsibilities of the Board of Directors1. Perform duties using their knowledge and expertise for the benefit of the Company in accordance with the

regulations of the Company and resolutions of the shareholders’ meeting. Directors are authorized to performactions indicated in the Articles of Association, the Public Company Act and relevant laws.

2. Comply with the provisions and the good practices of listed company directors of the Stock Exchange of Thailand. 3. Determine policies and ensure that management acts in accordance with those policies, as well as approve

business plans, annual budgets, investments, and make financial decisions.4. Monitor the operational results of management and the Company in order to ensure consistency with established

goals and plans. 5. Set efficient internal control and audit systems for the purpose of auditing, operational oversight and liaise with

the Audit Committee. 6. Protect the interests of the shareholders and practice standardized and transparent disclosure of information.7. Report conflicts of interest of oneself, spouse and related persons as prescribed in the Securities and Exchange

Act, as well as report securities held of oneself, spouse and children (not yet of legal age) to the CompanySecretary for further reporting of any changes at the Board of Directors’ meetings.

Audit CommitteeThe Board of Directors meeting 6/2011 on 26th June 2011 resolved to appoint the Audit Committee, which is

to be comprised of three independent directors with a term of three years. The members of the Audit Committeeare as follows:

1. Prof. (Emeritus) Santasiri Sornmani, M.D.2. Dr. Somchai Sujjapongse3. Mr. Sripop Sarasas

(Possess experience in accounting and finance)

Chairman of the Board and Independent Director1st Vice Chairman 2rd Vice Chairman Group Chief Executive Officer and PresidentDirector DirectorDirectorDirectorIndependent Director DirectorDirectorIndependent Director Independent Director Independent DirectorDirector

Chairman of the Audit CommitteeMember of committeeMember of committee

53

The Audit Committee is nominated from the independent directors, who possess the qualifications as stated in“Selection of Directors and Executive Officers” on page 56 of the Annual Report.

Duties and Responsibilities of the Audit Committee In order that the Audit Committee may perform the duties as assigned by the Board of Directors, the Audit

Committee shall have the following duties and responsibilities: 1) Ensure the correct, complete and reliable issuance of reports and disclosure of information in the financial

reports of the Company by liaising with external auditors and executives responsible for the preparation ofquarterly and annual financial reports.

2) Ensure the use of proper and efficient internal control measures and engage in the joint revision with independentexternal auditors and internal auditors in order to ensure consistency.

3) Review transactions with subsidiaries or individuals in order to prevent conflicts of interest.4) Ensure that the Company is in compliance with regulations of the Stock Exchange of Thailand and other relevant

laws. 5) Review internal investigation evidence in the case that there is suspicion of fraud or abnormality or significant

defect of internal control measures for presentation to the Board of Directors for further consideration. 6) Instruct and review evidence in the case where there is suspicion of violation of law or any regulations of the

Stock Exchange of Thailand, which may significantly affect the financial status and operational results of thelisted company.

7) Nominate auditor and annual auditing fee for consideration of the Board of Directors for the approval of theshareholders’ meeting.

8) Review medical services to ensure that the services meet the standards set.9) Complete other tasks as assigned by the Board of Directors.

Nomination and Remuneration CommitteeThe Board of Directors meeting 2/2012 on 29th February 2012 resolved to appoint the Nomination and Remu-

neration Committee, which is to be comprised of independent directors with a term of three years. The membersof the Nomination and Remuneration Committee are as follows:

1. Prof. (Emeritus) Santasiri Sornmani, M.D.2. Mr. Chavalit Setmeteekul3. Dr. Somchai Sujjapongse4. Mr. Sripop Sarasas

Duties and Responsibilities of the Nomination and Remuneration Committee1. Determine process and guidelines in selecting candidates for vacant positions of Directors.2. Determine suitable qualifications for Directors with regards to skill, experience and specialization, which are

beneficial to the Company, devotion of time and fulfillment of duties. 3. Select qualified candidates who should be nominated as Director to the Board of Directors and request approval

from the general shareholders’ meeting. 4. Advise the Board of Directors on the structure and components of Directors’ remunerations. 5. Determine guidelines for consideration of remuneration to suit duties and responsibilities of the Directors and

dependent upon operational results of the Company in order to motivate and maintain capable, qualified Directors. 6. Report to the Board of Directors on the selection of directors and consideration of remuneration.7. Complete other tasks as assigned by the Board of Directors.

Executive CommitteeThe Board of Directors meeting 8/2011 on 24th August 2011 resolved to appoint the Executive Committee as

follows:1. Mr. Prasert Prasarttong-Osoth, M.D.2. Mr. Pongsak Viddyakorn, M.D.3. Mr. Chirotchana Sucharto, M.D.4. Mr. Chatree Duangnet, M.D.5. Mr. Pradit Theekakul

Chairman of committeeMember of committeeMember of committeeMember of committee

Chairman of the Executive CommitteeVice ChairmanCommittee MemberCommittee MemberCommittee Member

54

Duties and Responsibilities of the Executive Committee1. Authority1) Consider approving the appointment, transfer or dismissal of executives of the Company and its subsidiaries from

the Director of the Hospital (or equivalent) up to Executive Vice President2) Consider the pay scale or other benefits of executives from the Director of the Hospital (or equivalent) up to

Executive Vice President of the Company and its subsidiaries (with the exception of the President, whose remu-neration is proposed by the Nomination and Remuneration Committee). As well as to consider approving theannual salary raise of the Company and its subsidiaries and to further propose to the Board of Directors forapproval.

3) Consider approving adjustments or changes to management structure, regulations and work force quota for suitability.4) Consider approving investments and operational costs, as well as cost for public benefits or for charity which

are not included in the annual budget and is more than Baht 5 million but not exceeding Baht 20 million, exceptinvestments in real estate, namely, land and/or buildings, including lease rights of land and/or buildings, wherebythe lease rights must be registered with the district land office which must be approved for investment by theBoard of Directors in all instances.

5) Have the authority to appoint working teams to address and solve problems to ensure compliance with Companypolicies.

2. Duties1) Determine the vision, policies and strategies of the Company and its subsidiaries for further approval by the

Board of Directors.2) Prepare, consider and/or approve the organization structure and duties and responsibilities of the Company and

its subsidiaries before proposing to the Board of Directors for approval.3) Consider business plans, annual budgets, investment plans and corporate social responsibility plans (CSR) of the

Company and its subsidiaries so that they are inline with the policies and strategies set and propose to the Boardof Directors for approval.

4) Supervise operations of the Company and its subsidiaries and ensure compliance with plans set as well as withlaws and regulations of the Company and regulations of the Stick Exchange of Thailand.

5) Ensure that the Company and its subsidiaries has strict and sufficient internal controls, and in accordance withthe suggestions and objections of the Audit Committee.

6) Consider the summary report on operations of the Company and its subsidiaries and present to the Board ofDirectors each quarter.

7) Plan and supervise management leadership building and succession plans.8) Other duties as assigned by the Board of Directors.

The above authority and duties shall not include an item that will cause the executive officers or persons withpossible conflict to have a stake or conflict of interest in any form with the Company or subsidiaries. Furthermore,it does not include related transactions and purchase/sale of important assets of the listed company in accordancewith the regulations of the Stock Exchange of Thailand or other related notifications. The Company must act inaccordance with regulations and guidelines of the Stock Exchange of Thailand or other related notifications on therelated matter. Moreover, the abovementioned authority does not include other matters that must be approvedat the shareholders’ meeting as prescribed by the article of the Company.

Top 4 Executive Officers

Name Title

1. Mr. Prasert Prasarttong-Osoth, M.D.

2. Mr. Chatree Duangnet, M.D.

3. Mr. Pradit Theekakul

4. Mrs. Narumol Noi-Am

Chairman of the Board and Independent Director

Executive Vice President

Acting Executive Vice President

Chief Financial Officer

55

1. Manage the Company in accordance with the policies, plans, goals, regulations and good corporate governanceas prescribed by the Company, as well as in strict compliance with related laws and regulations.

2. Manage the Company in accordance with the resolution of the shareholders’ meetings, resolutions of the Boardof Directors’ meetings and resolutions of the Executive Committee meetings (as the case may be) within theduties, responsibilities and power of approval with honesty, care and with the best interests of the Company inmind for the greater good of the organization and the shareholders, as well as fair consideration of stakeholders.

3. Regularly report performance and progress of the Company at the Board of Directors’ meetings to ensure thatthe Company is operating in accordance with the determined goals and plans.

4. Report conflicts of interest of oneself, spouse and related persons as prescribed in the Securities and ExchangeAct, as well as report securities holdings of oneself, spouse and children (not yet of legal age) to the CompanySecretary for further reporting of any changes to the Board of Directors.

5. Consider matters to be proposed to the Executive Committee and/or Board of Directors (as the case may be),as well as consider ways to solve any problems that arise.

6. Other duties as assigned from time to time by the Executive Committee and/or the Board of Directors (as thecase may be).

The above authority and duties shall not include an item that will cause the executive officers or persons withpossible conflict to have a stake or conflict of interest in any form with the Company or subsidiaries. Furthermore,it does not include related transactions and purchase/sale of important assets of the listed company in accordancewith the regulations of the Stock Exchange of Thailand or other related notifications. The Company must act inaccordance with regulations and guidelines of the Stock Exchange of Thailand or other related notifications on therelated matter. Moreover, the abovementioned authority does not include other matters that must be approvedat the shareholders’ meeting as prescribed by the article of the Company.

3. Selection of Directors and Executive OfficersThe Nomination and Remuneration Committee has the responsibility of selecting directors to replace those that

have completed their terms or must retire for other reasons or new positions. The Committee shall consider andselect the qualified persons and present the final candidates to the Board of Directors for approval (in the case ofreplacing existing directors) or for approval for later appointment by the shareholders. The Nomination and Remu-neration Committee shall select qualified persons with knowledge, capability, past experience that is beneficial tothe company, leadership skills, vision, and persons who are moral and ethical. In addition, the candidates shallhave a transparent and untainted work history, autonomy in making decisions with professionalism and integrity,as well as meet the qualifications as stated in the Company’s Articles of Association and the notifications of theOffice of the SEC. The appointment of a Director must be approved by the shareholders’ meeting as per thefollowing guidelines:

(1) Each shareholder has number of votes equal to the number of shares held.(2) Each shareholder shall cast all votes available to them under (1) to elect an individual or multiple individuals

as director(s). In the event where multiple directors are elected, votes may not be distributed to the variouscandidates in varying proportions.

(3) Candidates with the most votes are to be appointed Directors up to the number open at a given meeting. If morecandidates receive equal votes than the number of Directors required, the Chairman of the meeting must casta deciding vote.

The appointment and dismissal of Directors shall be as prescribed in the Articles of Association as follows: 1. The Board of Directors shall be comprised of at least 5 directors and no less than half shall have residence

in Thailand. 2. Directors shall be individuals with the following qualifications:

• A person of juristic age• A person who is not bankrupt, incompetent or quasi-incompetent • A person who has never been sentenced to imprisonment on a charge relating to fraudulent assets • A person who has never been removed from service in the government or government agency due tofraudulent acts.

56

3. At the annual general shareholders’ meeting, at least one third (1/3) of the Board of Directors shall be retired.If the Board of Directors cannot be divided by three, then the closest number of Directors to one third (1/3)shall be retired. Directors who retire as aforementioned, may be re-elected.

4. Apart from being retired at completion of term, a director may be retired under the following circumstances: (1) Death(2) Resignation(3) Disqualification or legally unqualified (4) The shareholders’ meeting passes a resolution to retire a director, with no less than three quarters of the

total number of shares present at the meeting and possess voting rights provided that the total numberof shares is no less than half of the total number of shares present at the meeting and possess voting rights

(5) Court ordered 5. Directors wishing to resign shall submit a letter of resignation to the Company to be effective upon receipt

of the letter by the Company. 6. In the event that a director position is vacant due to circumstances other than completion of term, the Board

of Directors shall elect a qualified individual to fill the position at the next Board of Directors’ meeting, exceptwhen the director’s term is less than two months to completion. In this case, the individual serving as replace-ment shall remain in office for the remainder of the term of the director who has retired. The resolution ofthe Board of Directors as the above shall only be passed with votes no less than three quarters of the numberof directors remaining.

7. In the event that the number of vacant director positions is insufficient for quorum, the remaining directorsmay act on behalf of the Board of Directors only in organization of the shareholders’ meeting in order toelect directors to the vacant positions. The meeting shall be held within one month from the day that thenumber of vacant director positions is insufficient for quorum. The individual elected to the vacant directorpositions shall remain in office for the remainder of the term of the director whom he replaces.

In addition to the above criteria in selecting the Board of Directors, the Company has stipulated that at leastone third of the Board of Directors shall be independent directors. The selection of independent directors is thesame process as the selection of directors. However, the Company has determined additional qualifications forIndependent Directors in accordance with the regulations of the Office of the SEC as follows:

1. Hold no more than 0.5% of shares with voting rights of the Company or affiliates, associated companies sub-sidiaries, major shareholders or persons with control of the Company. This includes shares held by related personsof the independent director.

2. Not be involved in management or be a staff member, employee, salaried advisor or have control over theCompany, subsidiaries, affiliates, major shareholders or persons with control of the Company, unless such capacityhas ended for at least 2 years. This restriction does not apply to independent directors who were civil servantsor advisor of government agencies, which is a major shareholder or persons with control of the Company.

3. Is not a person who is a blood relative or legally registered as a parent, spouse, sibling or child, including spouseof child, of management, major shareholders with control or persons who have been nominated as managementor persons with control of the Company or its subsidiaries.

4. Does not have or used to have a business relationship with the Company, subsidiaries, affiliates, major shareholdersor persons with control of the Company, which could impede independent judgment. In addition, the personmust not be or used to be a significant shareholder or person with control of a person that has a businessrelationship with the Company, subsidiaries, affiliates, major shareholders or persons with control of the Company,unless such capacity has ended for at least 2 years.

5. Is not and has not been an auditor of the Company, subsidiaries, affiliates, major shareholders or persons withcontrol of the Company and is not a significant shareholder, person with control or partner of an audit firm whichemploys auditors who have audited the Company, subsidiaries, affiliates, major shareholders or persons withcontrol of the Company, unless such capacity has ended for at least 2 years.

6. Is not and has not been a professional service provider, including legal or financial advisor, which receives com-pensation of more than Baht 2 million per year from the Company, subsidiaries, affiliates, major shareholdersor persons with control of the Company and is not a significant shareholder, person with control or partner ofa professional service provider, unless such capacity has ended for at least 2 years.

7. Is not a Director appointed as a representative of a Director of the Company, major shareholders or shareholdersthat are related/associated with major shareholders.

57

8. Does not operate a business that is significantly the same and is in competition with the Company or subsidiaries,or is not a significant partner of a partnership or a Director involved in management, a worker, employee, salariedadvisor or hold more than 1% of shares with voting rights of a company that operates a business that is significantlythe same and is in competition with the Company or subsidiaries.

9. Does not possess any other qualities that would hinder independent opinions with regards to the Company’sbusiness.

4. Remuneration of Executive Management 4.1 Monetary Remuneration

The Company paid remuneration to the Directors and Sub-Committee Members for the accounting year ending31st December 2011 as follows:

Remuneration of Sub-Committees

1,646,341

1,097,561

1,097,561

1,097,561

1,097,561

1,097,561

1,097,561

1,097,561

1,097,561

1,097,561

1,097,561

1,097,561

13,719,512

Director’s Name TitleAttendanceat meetings

Director’sAllowance

560,000

350,000

200,000

350,000

350,000

350,000

350,000

350,000

325,000

350,000

350,000

225,000

225,000

350,000

225,000

4,910,000

MeetingAllowance

1. Prof. (Emeritus) Arun Pausawasdi, M.D.

2. Mr. Pongsak Viddyakorn, M.D.

3. Mr. Wichai Thongtang(1)


5. Mr. Wallop Adhikomprapa

6. Mr. Chirotchana Sucharto, M.D.

7. Mr. Chuladej Yossundharakul, M.D.


9. Prof. (Emeritus) Santasiri Sornmani, M.D.

10. Mr. Thavatvong Thanasumitra


12. Mr. Chavalit Setmeteekul(1)

13. Dr. Somchai Sujjapongse

14. Mr. Sripop Sarasas

15. Miss Kanoknuj Lekvichit(1)

Total remuneration

Chairman/Independent Director

1st Vice Chairman

2nd Vice Chairman

President

Director

Director

Director

Director


Director

Director




Director

14/14

14/14

8/9

14/14

1414

14/14

14/14

14/14

13/14

14/14

14/14

9/9

9/14

14/14

9/9

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

Audit Commitee Meeting Allowance




Total remuneration

210,000

100,000

175,000

485,000

Attendance at meetings

7/7

4/7

7/7

(Unit : Baht)

(Unit : Baht)

58

Remuneration of Executive Officers ending 31st December 2011

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

4.2 Other Remuneration• Directors and Sub-Committee Members Apart from compensation in the form of meeting allowances and

annual allowances as approved by the shareholders, as the Company provides medical services, the Directors receivemedical benefits according to company policy, the same as with employees of the Company.

• Executive Officers Apart from compensation in the form of company car and mobile phone, executive officersalso receive medical benefits according to company policy, the same as with employees of the Company.

5. Dividend Payment PolicyIn 2009, the Company prescribed a material dividend payment policy as follows: “the Company shall pay

dividends at no less than 50% of the company profits, depending on business expansion and capital requirementsof the Company in each year, as approved by the shareholders”, except for dividends within accounting periodswhich may be approved by the Board of Directors if the Board deems that the Company has had good operatingresults and sufficient liquidity.

During 2006 - 2010, the Company paid out dividends as follows:

Nomination and Remuneration Committee Meeting Allowance

1. Prof. (Emeritus) Sanoe Indrasuksri, M.D.



Total remuneration

30,000

25,000

25,000

80,000

Attendance at meetings

1/1

1/1

1/1

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

Dividend Payment Date Dividend Payment Period

12 January 2011

19 April 2010

30 April 2009

25 April 2008

4 May 2007

January 2010 - November 2010

January 2009 - December 2009




Dividend Payment Rate(Baht per share)

0.80 (1)

0.70

0.60

0.50

0.50

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

(Unit : Baht)

Good Corporate Governance

59

The Company recognizes its role, duty and responsibility in practicing good corporate governance and believesthat corporate governance determines the structure of the relationships among the shareholders, the Board ofDirectors, management and all stakeholders. The aim of good corporate governance is to increase competitive edgeand value for shareholders in the long term, as well as the benefits of the other stakeholders, which will ensurethe Company’s continuous and sustainable growth.

The Board of Directors plays many significant roles; one of those roles is to ensure good corporate governanceas assigned to the President and management, which will comply with approved corporate governance policies.

The Company’s good corporate governance policies are in compliance with the guidelines set by the StockExchange of Thailand. The Company monitors the new regulations that have been put into practice and adjuststhe Company’s practices to comply with such regulations, which is supported by the Board of Directors and manage-ment to encourage practice and set examples. 1. Corporate Governance Policy

The Board of Directors is responsible to every shareholder and endeavors to understand the needs of shareholders,as well as assess economic, social, environmental and ethical factors which may significantly impact the interestsof shareholders. Each Director must possess honesty, determination, as well as independence of thought anddecision making. In addition, the Board of Directors must also be aware of the interests of the other stakeholders.

The corporate governance policy recognizes the special role that the Board of Directors plays in connecting theshareholders with the President, as well as management. Furthermore, the policy clearly covers the dual role ofthe President and other Directors who are both members of the Board and members of executive management.

The Board of Directors has reviewed and revised the current corporate governance policy and made manychanges to meet international standards. The Board of Directors has emphasized good corporate governance throughintegration of policy and business direction, sufficient internal controls and auditing, as well as ensuring that manage-ment act efficiently under the established policies so as to ascertain that the Company is transparent, ethical andabides by the governing laws and regulations.

The Board of Directors has entrusted the Audit Committee to draft the internal audit scheme to ensure thatthe organization complies with all policies, including the regular monitoring, review and revision of policy. This is toassure that the Company’s corporate governance policy is up-to-date and suits the present situation.

The Corporate Governance Policy covers the following topics: 1. Rights and equal treatment of shareholders and the shareholders’ meeting 2. Policy on stakeholders’ interests 3. Disclosure and transparency 4. Responsibility of the Board of Directors and sub-committees 5. Business ethics

2. Rights and Equality of Shareholders2.1 Rights and Equality

The Company is responsible to shareholders in disclosure of information, preparation of financial statements,utilization of insider information and resolution of conflicts of interest. Management must possess ethics and anydecisions made must be made with honesty and integrity, as well as be fair to major and minor shareholders forthe good of the whole.

The Company is aware of its responsibility in assigning importance to rights without bias and with equal treatmentof all shareholders. It is the Company’s duty to protect the rights and interests of the shareholders, including the

60

right to dividend payments and the right to receive relevant information regularly and in a timely fashion. Moreover,the Company has the duty to disclose information with transparency and show responsibility of management byholding the shareholders’ meetings.

The Company has the policy to support disclosure of information and business transactions so that the share-holders may better understand the Company’s operations. Major and minor shareholders, institutional investorsor foreign investors equally receive information on business operations, management policy and the financial state-ments of the Company and have the right to be treated fairly.

At each shareholder’s meeting, the Company will distribute the letter of invitation in advance to inform theshareholders of the meeting agenda as well as opinion of the Board of Directors on each agenda and other documentsso that the shareholders may be well informed when making the decision to vote. In the letter, the Company alsoinforms shareholders of their rights in attending the meetings and their right to vote. In addition, to provide greaterconvenience, the Company posts the letter of invitation to the shareholders meeting on the Company website.For 2011 annual general meeting, the Company posted the letter of invitation on the website 30 days in advanceof the meeting date.

The shareholders shall receive proxy forms to allow the shareholders to appoint an authorized representativeto attend meetings and vote on their behalf. In addition, to provide another channel in exercising shareholders’rights, the Company suggests that in the case that the shareholder cannot attend a particular meeting, the share-holder should appoint an independent director as proxy to attend the meeting and vote on the shareholder’sbehalf. In appointing such proxy, shareholders may use any one of the proxy forms included in the meeting invitationpackage or download the proxy form from the Company’s website.

The Company has a policy to give the shareholders the opportunity to submit questions and to propose agendasfor the annual shareholders’ meeting, as well as to nominate qualified and capable persons as Directors to theBoard of Directors prior to the meeting. The Company gives opportunity to do so for a period of 45 days andinterested shareholders can access information on guidelines and conditions in proposing agendas and nomineeson the Company’s website. In the case that the Board of Directors has considered that the proposed agenda issuitable, constructive and beneficial to the Company, the Board of Directors will include such agenda in the meetingproceedings for consideration of the shareholders. However, if the Board of Directors is of the opinion that suchagenda is not suitable, the Board of Directors shall report this to the shareholders’ meeting and provide reasonsas to why that agenda was not included in the proceedings. In 2011, the Company provided the opportunity forshareholders to propose agendas for the annual general meeting as well as to nominate qualified and capablepersons as Directors to the Board of Directors prior to the meeting between 1 December 2011 to 15 January 2012.

During the shareholders’ meeting, each shareholder has equal rights to express their opinions and pose questionswithin the appropriate time frame. The process of voting and counting votes is carried out swiftly with full disclosure.The Company deems that one share equals one vote and the majority vote decides the outcome (for generalagendas for which the law does not specify otherwise). If the vote is equal, the Chairman of the meeting shallcast an additional vote, apart from his/her vote as a shareholder, as the deciding vote. Ballots shall be used onlyin the case that a shareholder objects, abstains or a split vote. The ballots shall be retained for further inspectionafter the meeting. The results of the voting are recorded in the minutes of the meeting. For each agenda, numberof “for”, “against” and “abstain” votes are recorded, as well as the questions raised, explanations and opinionsof the meeting so that shareholders may later verify the information.

In the case that any shareholder has a special stake in any of the agendas, the shareholder is not allowed tovote on that agenda with the exception of voting for appointment or removal of directors.

2.2 Shareholders’ MeetingsThe Company’s policy is to convene the shareholders’ meeting as prescribed by law and give shareholders

the opportunity to be fully informed before exercising their rights. To this end, the Company has held the annualgeneral shareholders meeting within four months from the end of the accounting year. The meetings are held incompliance with the laws and regulations of the Stock Exchange of Thailand from announcement of the meetingand organization of the meeting to after the meeting.

61

Shareholders with total shares no less than one fifth (1/5) of shares outstanding or shareholders no less than25 persons whose total shares is no less than one tenth (1/10) of shares outstanding, may petition the Board ofDirectors to hold an extraordinary meeting of the Company’s shareholders as stated in the company rules andregulations. The petition must clearly state the reason for convening the extraordinary meeting. The Board ofDirectors must convene the extraordinary shareholders’ meeting within one month from the day the petition isreceived. Details of the proceedings of shareholders’ meetings are as follows:

Prior to MeetingsThe Company has sent letters of notification no less than 10 days in advance for general matter, which is a

higher standard than the law requires, and at least 14 days in advance in the case approval is needed for connectedtransactions or special matters. The notification of the meeting is published in at least one daily Thai languagenewspaper and in at least one daily English language newspaper for three consecutive days prior to the meeting date.

From the annual general shareholders’ meeting in 2007 onwards, the Company has announced the shareholders’meeting and accompanying documents both in Thai and English on the Company’s website (http://www.bangkokhospital.com) under the menu item “Investor Relations” as an additional mode of dispensing information to ensureshareholder equality. In 2011, the Company posted the meeting invitation on the Company’s website 30 days priorto the meeting date.

The meeting invitation shall include details of the meeting, such as time and place for the meeting, meetingagenda, the Company’s annual report, proxy form and a list of accompanying documents of the meeting. Additionally,the Company has delivered details on the meeting proceedings and appointment of proxy, including suggestingthat the shareholder appoint an independent director to act as proxy. This is to assist the shareholders in makinginformed decisions when exercising their rights and voting.

For the convenience of the shareholders, the Company provides registration at the meeting using bar codesand has prepared separate ballots for each agenda, especially for the selection of Directors, whereby the Companyhas prepared ballots for the voting of individual directors. Shareholders and/or proxies shall receive the ballotsat the registration stage.

During Meetings The Company has assigned the Chairman of the meeting the duty of notifying and explaining the voting procedures

in the various agendas before the meeting is officially convened. The President is assigned the task of respondingto questions from the shareholders. After each agenda, the results of the vote will be announced and duly recorded.

For the convenience of the shareholders and for clarity, the Company uses multimedia facilities in presentinginformation during the meeting. The Company has the policy to strictly adhere to the meeting agenda and to allowshareholders equal opportunity in casting votes.

To honor the rights of all shareholders, the Company has put in place a policy, which requires that all directors,as well as sub-committees, the auditor and executive management such as Chief Financial Officer, AccountingDirector and Financial Director (Investor relation), attend each shareholders’ meeting. If any director or executivecannot attend the shareholders’ meeting, he/she must submit a written explanation of the absence to the Chairmanof the Board (in the case of directors) or the President (in the case of executive management).

The Chairman of the meeting has provided sufficient opportunity for shareholders to raise questions and adviseon business operations, and the annual financial reports without infringing shareholders’ rights. The Chairman ofthe Board and the President will clarify all information during the meeting and give all directors the opportunity tounofficially meet the shareholders after each meeting.

After MeetingsThe Company has prepared the minutes of the meeting as well as recorded the results of the voting. For each

agenda, number of “for”, “against” and “abstain” votes are recorded, as well as the questions raised, explanationsand opinions of the meeting are detailed in the minutes. The minutes of the shareholders’ meeting are submitted

62

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

3. Equality and Rights of Stakeholders PolicyThe Company recognizes the significance of each group of stakeholders, whether they are internal personnel

or external stakeholders such as shareholders, customers, creditors, counter-parties, communities, governmentagencies and other related organizations. The Company also recognizes that the support of each of the stakeholderswill ensure the stability and longevity of the organization in the long term.

Therefore, the Company has the policy to protect the rights of the stakeholders through compliance withrelevant laws and regulations, as well as respecting the interests of all related parties. The policies are as follows:

3.1 Policy on Transactions which may cause Conflict of Interest and Transactions between CompaniesThe Board of Directors understands that transactions which may lead to conflicts of interest and/or transactions

with related counter-parties must be thoroughly contemplated to ensure compliance with the relevant laws andregulations of the Securities and Stock Exchange Commission and the Capital Market Committee, as well as theCompany’s internal guidelines. Moreover, such transactions must be strictly carried out as with any other transactionswith external parties which have no relationship with the Company. Also, the transactions must fully provide valueto the Company and the shareholders. The terms and conditions of the transactions must follow the generallyaccepted standard terms and conditions of business transactions.

The Company has the policy to prevent Directors, management and employees from using their status for theirown personal gain. Directors, management and employees must refrain from engaging in transactions which haveconflict of interest with the Company. Furthermore, any Directors, management or employees who have a stakein any transactions will not be part of the decision making process. Directors, especially, will not be allowed toconsider or vote on any matters in which they have an interest, including transactions between companies andtransactions between subsidiaries and stakeholders.

3.2 Policy on Insider Information The Board of Directors prohibits the Directors, management and employees from taking advantage of opportunities

or information that they receive through their positions for personal gain. Nor are they permitted to use opportunityor information to establish a business that is in competition with or is related to the Company’s business. Thisincludes strictly prohibiting the use of insider information to buy or sell shares and securities of the Company forpersonal gain as well as providing insider information to other persons or juristic persons to buy or sell shares andsecurities of the Company.

Directors and management must report the trading of the Company’s securities and update their current shareholding, as well as holdings of spouse and dependents, each time there is a change, to the Company Secretaryevery month. The Company Secretary will present the report on the changes in securities holdings at the Boardof Directors’ meeting.

3.3 Policy on Shareholders The Company aims to achieve the utmost benefits in the long term for the shareholders through stable growth

and sustainable capability in generating profits, including maintaining the competitive edge by recognizing the currentand future business risks. The Company emphasizes business for consistent profits through continuous businessdevelopment. The Company strives on professional management, efficient internal control, systematic audit andstrong risk management to reciprocate and show responsibility to our shareholders.

Other than fundamental rights of the shareholders such as the right to inspect number of shares, right to receiveshare certificate, right to attend shareholders’ meetings and to vote, right to freely express opinions and makesuggestions on the Company operations at the shareholders’ meetings, right to fairly receive returns, and otherlawful rights, the Company also has the policy disclose information justly, with transparency and in a timely fashionunder business limitations so that every shareholder equally receives information.

63

3.4 Policy on EmployeesEmployees are a valuable asset to the Company. Capable and experienced employees are consistently well-

taken care of in compliance with the Company’s strategy and operational plans. The Company also ensures equalopportunity and suitable compensation. Furthermore, the Company has arranged for the necessary training by bothinternal and external persons in order to continuously enhance the skills of employees. The Company has providedemployees the opportunity to express their opinions and make suggestions to management via the Company’sinternal website.

The Company supports the healthy working environment and culture, and treats employees equally and justly.Employees are provided with benefits and safety which include medical benefits, provident fund, and academicscholarships for doctors, nurses and employees so that they may use the knowledge to assist in the developmentof the organization. The aim is for the Company to be a place of learning for personnel, as well as to motivateknowledgeable and capable persons to remain with the organization in the long-term. The Company has put in placeguidelines in human resources management from recruitment, training to maintaining quality personnel as follows:

Recruitment and Career AdvancementThe Company recognizes the importance of personnel development from the recruitment process. The Company

clearly defines the level of education, experience, expertise and other qualifications of each position in order torecruit the most suitable candidates. In recruiting for a particular position, the Company shall give priority to internalstaff in order to provide an opportunity for career advancement. If there are no suitable internal candidates, theCompany shall then consider external candidates. Each new employee is required to attend orientation in orderto be informed about the working process of the various departments within the organization. This will enableemployees to plan and act according to the objectives set. The Company also gives importance to career advance-ment of employees in order to retain outstanding employees.

Employee TrainingThe Company has the policy to support training and development of personnel. In order to regularly and

continuously develop and improve employees’ skills, the Company organizes both internal and external trainingsessions. Apart from training on work skills organized within the organization, the Company also encouragesemployees to exchange knowledge and experience among the various departments, be it through meetings orinformation exchange through the intranet. For external training, the Company encourages employees to fill outquestionnaires on training desired and will send them to attend those training sessions as appropriate. The Companyshall monitor results or measure the knowledge gained in each training course for the greater benefit of the Companyand the employees.

Employee EvaluationThe Company evaluates the employees’ knowledge and skill by clearly and justly specifying the guidelines in

evaluating employees of all levels. The employees shall be evaluated based their capabilities and potential interms of skill, knowledge, attributes and performance. The Company has widely communicated the evaluationguidelines in advance. In determining employee compensation, apart from business profits and the economy ineach year, the employee evaluation is also an important factor. By basing employee compensation on employeeevaluations, employees will be encouraged to carry out their duties and develop their potential with efficiencyand effectiveness.

Equal Treatment of EmployeesThe Company recognizes the importance of treating employees equally within the organization, from recruitment

to promotion, without bias or nepotism in evaluations, expressing opinions and work.

Employee Satisfaction SurveysIn order to become aware of each employee’s satisfaction or happiness in their work, the Company has specified

that surveys be conducted of employees at all levels to gather opinions and suggestions. The information gatheredcan be used to correct and/or improve any shortcomings in management of the organization and personnel bothin the short and long term. In addition, the Company has also set guidelines on submitting grievances in order tofairly and justly alleviate any frustration in the work place.

64

Provide Better Quality of Life for EmployeesThe Company recognizes the importance of good quality of life of our personnel, which will encourage our

employees to work efficiently. We, therefore, pay close attention to ensuring that the workplace is safe and hygienicfor the health and benefit of our employees. The Company provides annual health check-ups to employees.Furthermore, if the number of employees in any department is insufficient for the amount of work assigned, theCompany shall employ additional employees so that the amount of work matches the number of employees tobetter the quality of life for our employees.

Build Solid Management and Intra-Working Systems The Company recognizes the importance of continuous work processes from beginning to end in order to

produce quality output that meet standards, as well as eliminate and lessen conflicts. To this end, every departmenthas contributed to the Operational Manual to be used as a guideline in communicating and coordinating amongdepartments within the organization. The manual is accessible by all through the intranet and is reviewed andrevised as appropriate.

Build Good Relationship between Management and EmployeesThe Company recognizes the significance of a good working relationship between management and employees,

which affects the work efficiency. Therefore, we have organized activities between management and employees,which will improve the relationship between the two and encourage contentment in the work place; such activitiesinclude New Year’s Party, merit making and sports events. In addition, management meets regular with employeesin order to exchange views. This will enable the organization to efficiently and effectively reach for the same goals.

Create First-Rate Employees for the Organization and Society In order for employees to conform and for collective discipline, when any employee evades or is in violation

of work regulations, that employee will be considered to be at fault. This must be deliberated and rectified accordingto the regulations by taking into consideration good corporate governance as defined by the Company, which hasbeen set as a guideline for management and employees. The Company firmly believes that developing employeesinto good and outstanding individuals will ensure the organization’s stable and sustainable growth.

3.5 Policy on Management The Company realizes that management is an important success factor. To this end, the Company has set up

a suitable compensation program which is comparable to management in the health care business. Moreover,management is able to carry out their duties and responsibilities independently without intervention, which is forthe mutual interest of the organization and all related persons.

3.6 Policy on Counter-Parties The Company does business justly and ethically with partners, competitors, creditors, counter-parties and others

according to the terms and conditions in the trade agreement. The Company has the policy to avoid any actionswhich may be dishonest or infringe on the rights according to the law or as mutually agreed upon of the counter-party, as well as to ensure that the transactions are ethical business-wise.

3.7 Policy on CustomersThe Company recognizes that the customers are an important success factor of the business. The Company

strives for customer satisfaction by providing quality professional service with the determination to continuouslyimprove the quality of medical care services in order to meet the needs and expectations of the customers. Thisorganization maintains the privacy of customers and will not disclose any customer’s information unless requiredby law or when the customer has given consent.

3.8 Policy on Social Responsibility and the EnvironmentThe Company aims to consistently treat society and the environment with the highest standards by upholding

safety and environment-friendly standards throughout the business. The Company is involved in public interest andhas participated in activities that benefit the community and the environment. It is the Company’s policy to actresponsibly towards society (please see details under “Social Responsibility Activities” on page 21 of the 2011Annual Report), related persons and personnel within the organization.

65

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

4. Disclosure and TransparencyThe Company has the policy to ensure that disclosure of financial information and general information to share-

holders, investors and securities analysts, as well as the general public, is done so sufficiently, completely, justly,timely, with transparency, and as prescribed by relevant laws and regulations.

The Company has the policy to disclose the financial statements, important information and any other informationwhich may affect the interests of the shareholders or the decision to invest in the Company, which in turn, mayaffect the price of the shares and/or securities of the Company. This information will be disclosed sufficiently,completely and at the appropriate time through fair and suitable channels. The main purpose is to ensure that thedecision to invest in securities of the Company is made fairly and with equal information.

The Board of Directors has prepared the report of responsibilities to the financial statements along with thereport from the auditors and has included the reports in the annual report and Form 56-1 so that managementmay recognize the commitment and responsibility to information and financial reports, which must be accuratebefore being made available to the investors.

In communicating externally, executive management who have been assigned the task of disclosing informationabout the Company are the President, the Chief Financial Officer and Financial Director (Investor relation). In 2011,the executive officers, including the Financial Director (Investor relation) met with and provided information at thefollowing opportunities:

1. Road shows: 4 domestically, and 3 abroad (7 times in total) 2. Analyst Meetings: 4 times 3. Company Visits and Conference Calls: 120 times4. Site Visits: 5 times

Apart from the aforementioned instances, the Company provides information on the company, operating results,financial statements, and news to the Stock Exchange of Thailand (SET). Interested persons may look up thisinformation on the SET website www.set.or.th and the Company’s website www.bangkokhospital.com. For furtherinformation, investors and interested persons may contact the Financial Director (Investor relation) by telephoneat 0-2755-1793, e-mail: [email protected] or the company website www.bangkokhospital.com.

5. Responsibilities of the Board of Directors and the Sub-Committees 5.1 Board of Directors

The Board of Directors is comprised of 15 members, 7 of those being Executive Directors and 8 being Non-Executive Directors. Of the 8 Non-Executive Directors, 5 are Independent Directors.

Executive DirectorsExecutive Directors are Directors who are involved full-time in the management of the Company and receive

a monthly salary or other equal compensation from the Company.

Non-Executive DirectorsNon-Executive Directors are not Directors who are not involved full-time in the management of the Company

nor do they receive a monthly salary from the Company. These Directors may be appointed or be representativesof major shareholders.

66

Independent Directors Independent Directors are Directors who are not involved in management of the Company, subsidiaries, associates

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

Qualifications of Independent Directors, which the Company has set according to regulations of the SEC,are as follows:1.) Holds less than 0.05 percent of the voting shares of the Company, its subsidiaries, associates or affiliates. This

includes shares held by related persons of the individual independent directors.2.) Is not/Has not been an executive director, staff, employee, salaried advisor or person with controlling power of

the Company, parent company, subsidiaries, associated companies, major shareholders or persons with controllingpower, unless that status has ended for no less than 2 years prior to the appointment. This restriction shall notapply to an independent director who has been a civil servant or an advisor to a government authority that isa major shareholder or controlling person of the Company.

3.) Is not a blood relative of or has a legally registered relationship as father, mother, spouse, sibling and child,as well as spouse of child, with management, major shareholders with controlling power or individuals to beproposed as management or have controlling power over the company or subsidiaries.

4.) Does not have/Has not had business relationship with the Company, parent company, subsidiaries, associatedcompanies, major shareholders or persons with controlling power, in a way that may hinder one’s independentjudgment. In addition, the individual must not be/have been a substantial shareholder or a person with controllingpower of an entity that has a business relationship with the Company, parent company, subsidiaries, associatedcompanies, major shareholders or persons with controlling power, unless that status has ended for no less than2 years prior to the appointment.

5.) Is not/Has not been an auditor of the Company, parent company, subsidiaries, associated companies, majorshareholders or persons with controlling power of the Company and is not a substantial shareholder, a personwith controlling power or partner of an audit firm which employs auditors of the Company, parent company,subsidiaries, associated companies, major shareholders or persons with controlling power, unless that statushas ended for no less than 2 years prior to the appointment.

6.) Is not/has not been a professional advisor, which includes legal counsel and financial advisor, who receivesan annual service fee exceeding Baht 2 million from the Company, parent company, subsidiaries, associatedcompanies, major shareholders or persons with controlling power and is not a substantial shareholder, a personwith controlling power or partner of the professional advisor, unless that status has ended for no less than2 years prior to the appointment.

7.) Is not a director who has been appointed as a representative of the Company’s directors, major shareholdersor a shareholder who is a related person to a major shareholder.

8.) Not conducting any business which is of the same nature as or in material competition with that of the Companyor its subsidiaries, nor be a substantial partner, executive director, staff, employee, salaried advisor, or holdmore than 1% of total shares with voting rights of any company whose business is of the same nature as or inmaterial competition with that of the Company or its subsidiaries.

9.) Not posses any other characteristics whish may render that person incapable of expressing independent opinionswith regards to the Company’s operations.

Separation of Positions1. The Board of Directors has elected an independent director to be Chairman of the Board. The Chairman and the

President must not be the same person. The Chairman shall act impartially in determining policy and strategies,as well as ensure that Board meetings are held and that all directors participate and independently raise questionsat each meeting.

2. The Company has determined that the Chairman of the Board must not be a member of the Nomination andRemuneration Committee so that the Committee shall be free to make decisions independent of the Board ofDirectors.

67

Authority of Directors and Management are clearly defined and separated. The Board of Directors shall meetregularly each month to monitor and support strategic policies of the Company. At the same time, the Board ofDirectors shall not interfere with day-to-day operations or business activities under the responsibility of the Presidentand management as only the President is assigned such tasks by the Board. Therefore, management efficientlyresponds to the power and responsibility of the President. Furthermore, the Company has clearly defined theduties and authority of all levels of management.

Term of DirectorshipIn principal, directors should not serve for a long, continuous period of time. However, there is a shortage of

persons with experience and knowledge and understanding of health care, as well as limitations in finding suitablereplacements. In addition, we must take into consideration management risk that may occur because of lack ofknowledge and understanding of health care, which is an important factor in selecting directors, especially in thehealthcare business, which requires expertise and specialization in order to clearly understand the Company’sbusiness. Therefore, the Company has not set any official limitations on the term of the directors.

Duties of DirectorsEach director has the duty and responsibility in determining and monitoring the operational policies of the

Company, apart from the duties and responsibilities as stated in “Shareholding Structure and Management” onpage 51 of the Annual Report, which include the following:1) Directors should have sufficient access to financial information and other business information so that he/she

may carryout duties efficiently.2) Directors should attend every Board meeting as well as sub-committee meetings, and raise important questions

to protect and maintain the rights and interests of the shareholders and stakeholders to ensure proper businessconduct and operations.

3) Directors should attend every shareholders’ meeting, especially Directors who have been appointed as the AuditCommittee, in order to answer and provide explanation to the shareholders’ queries, as well as acknowledgesuggestions from the shareholders.

4) Directors should be capable and have the intention to learn about the Company’s business, as well as shareopinions independently, devote time to the Company as needed and show interest in the important issues.

5) Independent directors should submit a letter to the Company to confirm that he/she is truly independent,according to the Company’s definition, on the day that he/she has accepted the appointment to the positionand each year after such appointment.

6) Directors must submit and update their personal stake and report changes in securities held by him/her, his/herspouse as well as children under juristic age (if any) to show transparency and must report any changes to theBoard of Directors’ meeting.

7) Any other duties of the Directors as stipulated in notifications, acts or laws governing the Company.

5.2 Sub-Committees 5.2.1 Audit Committee

The Audit Committee is granted full authority by the Board of Directors to carry out its duties, which includesystematic monitoring of business practices, ensuring efficient and strict internal control measures, ensuring com-pliance with laws on disclosure and determining risk management dealing with the business and finances of theCompany. Presently, two of the Audit Committee members are knowledgeable and have direct experience inaccounting and finance.

In planning internal audits, the Audit Committee will have the internal audit officers plan the audit of theCompany for the entire year. The Company has hired an external company, which is licensed and qualified in auditingcompanies listed on the stock exchange as defined by the SEC, to carry out the internal audit. We believe thatinternal audit by external auditors will result in just and efficient reporting of the facts as they have independenceand flexibility. The Audit Committee will report the activities of the internal auditors at the Board of Directors’meeting immediately after each meeting.

68

At Audit Committee meetings that deal with the financial statements and disclosure of financial reports of theCompany, the Chief Financial Officer and the Accounting Director of the Company will both be in attendance.Prior to meetings on the financial statements with management, the Audit Committee shall meet with the accountingauditors separately, without management, to enquire about the important risks that may occur from the financialstatements or the financial status or limitations, which the auditor has found in the process of auditing the financialstatements of the Company and subsidiaries. This is to ensure that auditors are able to act independently withoutimpediments in auditing the Company.

5.2.2 Nomination and Remuneration CommitteeIn order to comply with good corporate governance of listed companies, the Board of Directors passed a

resolution to appoint the Nomination and Remuneration Committee. The Committee must be mainly comprisedof directors who do not take part in management and have the duty to seek qualified candidates for nominationas directors of the Company for both replacements of directors who have retired and new director positions.Furthermore, the Committee shall determine the guidelines in evaluating the directors’ performance annually inorder to determine appropriate remuneration.

5.2.3 Executive CommitteeWith the rapid growth of the Company through the merger with Phyathai and Paolo Hospital Groups in 2011

and in order to ensure that the Company follows the strategy, goals and plans set for the year, the Board ofDirectors made the decision to appoint the Executive Committee. The Committee is comprised of 5 executivedirectors and has the responsibility to supervise and ensure that the Company and its subsidiaries act in accordancewith the set plans. In addition, the Executive Committee shall consider reports by management that are to bepresented to the Board of Directors as well as have the authority to approve normal business transactions ortransactions that support normal business activities of the Company within a given monetary limit.

The approval authority of the Executive Committee cannot be used with persons that may have conflict ofinterest, stake or any other forms of conflict with the Company or subsidiaries. Such authority also does not includeconnected transactions and purchase/sale of important assets of the listed Company in accordance with the rulesand regulations of the Stock Exchange of Thailand or other related regulations. The Company must act in accordancewith the rules and regulations of the Stock Exchange of Thailand or other related regulations on such particularmatter. The approval authority of the Executive Committee does not include other matters which require approvalfrom the shareholders’ meeting as stated in the Articles of the Company.

5.3 Board of Directors Meetings and Sub-Committee MeetingsThe Company has set the dates for the Board of Directors’ meetings in advance for the entire year so that the

Directors are all informed of the meetings in advance and can arrange their schedules to accommodate the meetings.The meetings are to be held on the last Wednesday of each month with the Executive Committee meeting to beheld on the Wednesday prior to the Board meeting. The agenda of each meeting will also be set in advance andwill include continuing agendas to follow up on any assignments from prior meetings. The Company Secretaryshall send meeting invitations and the agenda at least 7 business days in advance of each meeting in order to allowdirectors sufficient time to review the information prior to attending the meeting.

The meetings of the Audit Committee and the Nomination and Remuneration Committee are set in advance.The meetings of the two sub-committees are held as deem appropriate and when opportunity allows in orderto accomplish the duties assigned. After the sub-committee meetings, the Chairman of the committees or anappointed representative shall report the result of the meeting to the Board of Directors at the next Board meeting.

In 2011, the meetings of the Board of Directors and the sub-committees can be summarized as follows:

69

Director’s NameAttendance at

meetings

1. Prof. (Emeritus) Arun Pausawasdi, M.D.


3. Mr. Wichai Thongtang(1)


5. Mr. Wallop Adhikomprapa


7. Mr. Chuladej Yossundharakul, M.D.



10. Mr. Thavatvong Thanasumitra


12. Mr. Chavalit Setmeteekul(1)



15. Miss Kanoknuj Lekvichit(1)

14/14

14/14

8/9

14/14

14/14

14/14

14/14

14/14

13/14

14/14

14/14

9/9

9/14

14/14

9/9

Title

Chairman/Independent Director

1st Vice Chairman

2nd Vice Chairman

President

Director

Director

Director

Director


Director

Director




Director

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

Director’s Name

Attendance at Executive Committee

meetings

4/4

4/4

4/4

4/4

4/4

Attendance at Audit Committee

meetings

7/7

4/7

7/7

1/1

1/1

1/1

Title

Note: 1. The Executive Committee was appointed at the Board of Directors’ Meeting 8/2011 held on 24th August 2011.2. The Nomination and Remuneration Committee as shown in the above table, were retired in April 2011. Prof (Emeritus) Sanoe Indrasuksri M.D.,Independent Director and Chairman of the Nomination and Remuneration Committee retired as a Director of the Company at the 2011 AnnualGeneral Meeting held on 28th April 2011. The Board of Directors appointed a new Nomination and Remuneration Committee as listed in“Shareholding Structure and Management” on page 53 of the Annual Report. The new Committee shall meet in 2012 in order to select directorswho have completed their term at the 2012 Annual general Meeting.






6. Prof. (Emeritus) Sanoe Indrasuksri M.D.




Attendance at Nomination andRemuneration

Committee meetings

Chairman of Executive Committee

Executive Director

Executive Director

Executive Director

Executive Director

Independent Director/ Chairmanof the Nomination andRemuneration Committee

Independent Director/Chairmanof the Audit Committee/Nomination and RemunerationCommittee Member

Independent Director/Audit Committee Member

Independent Director/Audit Committee Member/Nomination and RemunerationCommittee Member

70

5.4 Determining Remuneration for Directors and ExecutivesPresently, the Company has appointed the Nomination and Remuneration Committee the task of justly

determining the remuneration of directors to correspond to the directors’ duties and responsibilities by comparingto those of companies of similar size in the same industry.

As for remuneration of executives, the Company will award remuneration by performance evaluation as statedin the guidelines defined by the Board of Directors and the Human Resources Department for each level of manage-ment. The performance is linked to the operational results of the Company and individual accomplishments.

5.5 Directors’ Knowledge EnhancementThe Company has the policy to encourage directors of the Company and subsidiaries to attend the Director

Certificate Program (DCP) and the Director Accreditation Program (DAP) organized by the Thai Institute of Directors(IOD). The programs will provide the directors with knowledge and understanding of efficient corporate governanceand will enable them to use the knowledge for continuous good corporate governance. Fifteen of the directorshave attended and passed the Director Certificate Program and/or the Director Accreditation Program. The Companyalso encourages directors to attend training courses on amendments and updates of the regulations, policies andguidelines of the Stock Exchange and the SEC.

The Company has assigned the Company Secretary the task of summarizing significant changes to the regulationsor guidelines to the President for further reporting to the Board of Directors for their acknowledgement and practice.In some cases, the Company may invite experts in specific fields to present such information or guidelines to theBoard of Directors for their acknowledgement and practice.

71

Connected TransactionsNature of Transactions

Transactions between the Company or subsidiaries and a person with conflict of interest are normal practicein business dealings and the conditions are the same as those of dealings with external parties. Such transactionshave been approved in principal by the Board of Directors at Meeting 8/2551. Therefore, the Audit Committee,which has reviewed the transactions for the year ended 31st December 2010 and 31st December 2011, has theopinion that the transactions with persons with conflict of interest have the same conditions as transactions withexternal parties, there has not been any transfer of benefits to the persons with conflict of interest and are inaccordance with the resolution of the Board of Directors. The transactions can be categorized into 2 types as follows:

1. Normal Business Transactions or Transactions Supporting Normal BusinessThe Company has measures or procedures in approving normal business transactions or transactions supporting

normal business. Therefore, management shall consider approving small transactions and normal business transac-tions with the same conditions as transactions with external parties. The Board of Directors shall approve in thecase of medium to large normal business transactions and small to medium transactions that have exceptionalconditions. For large transactions that have exceptional conditions, the Board of Directors shall propose the transac-tion to the shareholders’ meeting for approval.

The size of the transaction is evaluated as follows:• Small transactions: transactions with value of less than or equal to Baht 1 million or less than or equal to0.03% of net assets, whichever is higher.

• Medium transactions: transactions with value of more than Baht 1 million but less than Baht 20 million ormore than 0.03% but no more than 3% of net assets, whichever is higher.

• Large transactions: transactions with value of more than Baht 20 million or more than 3% of net assets,whichever is higher.

The Securities and Stock Exchange Act (Fourth Edition) Amendment B.E. 2551 effective 31st August 2008 andthe Securities and Exchange Commission circular dated 16th July 2008 state that for flexibility, the Company maybring transactions with associated companies which are normal business transactions or transactions supportingnormal business between the Company or subsidiaries and a related person in front of the Board of Directors forapproval in principal.

Therefore, at the Board of Directors Meeting 8/2551 on 27th August 2008, the Board gave management approvalin principal to consider entering into normal business or transaction supporting normal business transactions withnormal conditions, which are priced or have fees charged at the market rate with the same conditions as theCompany’s transactions with external parties.

72

2. Financial Assistance The Company has the policy to provide financial assistance to subsidiaries in which the Company holds more

than 50 percent of the shares outstanding. The financial assistance is provided under the condition that the subsidiaryhas no related person that holds more than 10 percent of the remaining shares. The Board of Directors’ Meeting2/2551 on 26th February 2008 and Meeting 5/2551 on 28th May 2008 resolved that the Company shall providefinancial assistance to subsidiaries under the aforementioned conditions. As of 31st December 2011, the Companyprovided financial assistance in the following forms:

2.1 Loans to subsidiaries The Company will take out a loan in the money market or from a financial institutionand then loan that money to the subsidiary at a rate of no more than 1% per annum above the actual cost ofcapital, which is less than the rate the subsidiary would be charged if taking out a loan directly.

Benefit derived The subsidiary can take out a loan at a rate lower than borrowing directly from a financialinstitution as the Company is capable of seeking loans at a lower rate.

2.2 Guarantee loans by foreign subsidiaryBenefit derived To enable the foreign subsidiary to seek a loan directly from a financial institution in thatparticular country at a prime rate.

2.3 Centralize Liquidity Management (Cash Pooling) At the end of the business day, the liquidity managementprogram will transfer money from the subsidiary’s bank account to the Company’s bank account. The moneytransferred into the Company’s bank account will be stated as short-term loan from a subsidiary with interestcharged at the market rate. At the same time, if any subsidiary requires capital, the Company will transfer theexcess liquidity to the subsidiary with interest charged at the market rate.

Benefit derived For liquidity management within the Group, companies with excess liquidity will receive interestat a rate higher than the savings rate of financial institutions, while companies needing capital can borrow at arate no higher than the market rate.

73

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

RelationshipRelated Company Loan to Subsidiaries

Long termloan

Short termloan Advance

Interestreceivable Total debt

(Unit : baht)

GuaranteeObligation Cash Pooling

AccureInterest



Bangkok Hospital Had yai Co., Ltd.



Bangkok Hospital trat Co., Ltd.






Prasit Patana Plc. (PPCL)





Ankor Pisith Co., Ltd. (1)

Phnom Penh Medical Services Co., Ltd. (2)

Royal Rattanak Medical Services Co., Ltd. (3)


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



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

Bankok Premier Life Insurance Co., Ltd.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Company holds 97.2% Company holds 100.0%

Company holds 98.8%

Company holds 99.7%

Company holds 100.0%

Company holds 99.8%

Company holds 89.7%

Company holds 99.7%

Company holds 79.0%

Company holds 95.8%

Company holds 91.5%

Company holds 97.1%

Company holds 99.9%

Company holds 80.7%

Company holds 99.8%

Company holds 88.7%

Company holds 80.0%


Company holds 70.0%

Company holds 74.0%

Company holds 95.0%



Subsidiary holds 100.0%


- -

-

-

-

-

335,000,000

-

-

-

-

-

788,540,000

-

-

111,270,000

-

363,438,090

67,290,094

- -

- -

-

-

1,665,538,184

-

28,367

-

-

-

-

97,474

-

86,535

-

-

-

205,236

-

-

28,961

1,633,677

1,015,283

602,569

- -

1,408,489

-

-

314

5,106,906

80,903,023

-

-

-

-

3,043,441

-

38,512,335

-

-

-

-

-

-

-

39,438,125

-

-

-

-

144,200,362

-

-

1,000,000

307,097,286

-

-

-

-

-

-

-

-

-

-

-

- -

-

-

-

-

-

-

-

-

-

-

- -

-

-

80,931,390

-

-

-

-

338,140,915

-

38,598,870

-

-

-

788,745,236

-

-

111,298,961

41,071,802

364,453,373

67,892,664

-

-

145,608,851

-

-

-

1,976,742,061

336,133,002

-

51,912,138

75,665,722

24,257,528

21,317,917

-

43,066,318

-

92,498,245

145,463,674

-

372,417,651

36,645,839

137,007,477

111,346,169

-

-

-

70,441,442

13,047,185

-

1,856,990

94,868,755

-

1,627,946,051

1,449,194

79,257

142,387

390,214

56,968

60,785

37,687

143,844

-

216,830

517,784

-

1,578,516

114,743

341,703

245,709

-

-

-

264,230

34,487

-

1,379

283,821

-

5,959,534

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

2,876,000,000

N/A

N/A

N/A

N/A

USD 5,000,000

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

BAHT 2,876,000,000USD 5,000,000

74

Related persons who are directors and executive management are as follows:1. Mr. Prasert Prasarttong-Osoth, M.D. 2. Mr. Pongsak Viddyakorn, M.D. 3. Mr. Vichai Thongtang4. Mr. Wallop Adhikomprapa 5. Mr. Chuladej Yossundharakul, M.D.6. Mr. Chirotchana Sucharto, M.D. 7. Mr. Pradit Theekakul8. Mr. Chatree Duangnet, M.D.9. Miss Kanoknuj Lekvichit

10. Mrs. Narumol Noi-Am

The Director was appointed to the subsidiary as a representative of the Company as a major shareholder, notas a personal appointment.

Persons with mutual interest holding shares in subsidiaries and associated companies over 5% of shareswith voting rights:

- None -

For other transactions or connected transactions as defined in the Securities and Exchange Act, the Companyshall act in accordance with the rules and regulations of the Securities and Exchange Act as well as with otherrelated notifications. Furthermore, for investor protection, the Company has assigned the Audit Committee the taskof ensuring that connected transactions are fair. In the case that the Audit Committee does not have expertise inconsidering the connected transactions, the Company has the policy to appoint independent persons with pro-fessional expertise to provide opinion on such transactions to the Audit Committee and/or the Board of Directorsand/or the shareholders’ meeting, as the case may be. The Company has disclosed the connected transactionsin the Note 12 “Connected Transactions” in notes to the audited financial statements, which have been certifiedby an auditor.

Policy and Future Related Transactions

Transaction

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

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

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

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

Transactions supporting generalbusiness such as creditors,and debtors, etc.

Financial assistance

Outlook and Policy

75

Management discussionand analysis for the year ended December 31, 2011

Since April 1, 2011, the Company had completely acquired and accepted the Entire Business Transfer of HealthNetwork Public Company Limited (“Health Network”). As a result, the Company has become a major shareholderand consolidated the performance of:

• The Phyathai Hospital Group, which has Prasit Patana Public Company Limited (“PPCL”) as the major share-holder, consists of Phyathai 1 Hospital Company Limited, Phyathai 2 Hospital Company Limited, Phyathai 3 HospitalCompany Limited and Sriracha Nakhon Hospital Public Company Limited (Phyathai Sriracha).

• The Paolo Memorial Hospital Group consists of Paolo Medic Hospital Company Limited (Paolo MemorialHospital, Phaholyothin), Paolo Samutprakarn Company Limited (Paolo Memorial Hospital, Samutprakarn), SiamMedical Company Limited (Paolo Memorial Hospital, Chokchai 4) and Thai Medical Centre Public Company Limited(Paolo Memorial Hospital, Nawamin).

Summary of consolidated operating results

% yoy20102011


Revenues from hospital operations

Revenue from sales of goods and food

Other income

Total Operating Income

Cost of hospital operations and others

Administrative expenses

Total Operating Expenses & Depreciation

Operating Profit

Interest income

Dividend income

Income from associated companies

EBIT

Finance expenses

Taxes

Non-controlling interests of the subsidiaries

Normalized Profit

Non- Recurring items

Profit to equity holders of the Company

50%

356%

111%

53%

54%

37%

50%

73%

16%

-

27%

71%

32%

87%

183%

72%

-

91%

23,513

222

234

23,968

(15,350)

(5,257)

(20,607)

3,361

54

3

300

3,718

(584)

(779)

(85)

2,269

26

2,295

35,224

1,009

492

36,726

(23,675)

(7,224)

(30,900)

5,826

63

104

382

6,374

(770)

(1,456)

(241)

3,907

479

4,386

76

2011 Consolidated PerformanceFor the year ended December 31, 2011, the Company and its subsidiaries recorded a consolidated net profit

of Baht 4,386 million; an increase of Baht 2,091 million, or 91% yoy from 2010. The summarized 2011 consolidatedperformance is as follows:-

1. Operating incomeOperating income during 2011 were Baht 36,726 million, an increase of Baht 12,758 million or 53% from 2010primarily due to:• Revenue from hospital operations during 2011 were Baht 35,224 million, an increase of Baht 11,712 million or50% from 2010, consisted of :- the revenue growth of organic BDMS hospital operations of Baht 26,631 million, or increased 13% yoy from2010. The organic growth is driven mainly by an increase in number of patients and severity of diseasesresulting in revenue from Thai patients to grow 13% yoy while revenue from international patients to grow12% yoy. From type of patient perspective, outpatient revenues grew 12% yoy and inpatient revenues grew14% yoy; and

- the consolidation of revenues from Phyathai Hospital Group and Paolo Memorial Hospital Group of Baht8,593 million

Since most of the patients from Phyathai and Paolo Memorial Hospital Group are Thai patients, there was achange in revenue proportion between Thai and international patients from 64% : 36% in 2010 to 74% : 26%in 2011.

• Revenue from sales of goods and food were Baht 1,009 million, an increase of Baht 788 million from 2010, asa result of consolidation of revenue from sales of goods of A.N.B. Laboratories Company Limited for Baht 819million since Company’s subsidiary acquired 100% of A.N.B. Laboratories Company Limited, a manufacturerand distributor of medicines and pharmaceutical products in December 2010.

• Other incomes were Baht 492 million, an increase of Baht 258 million from 2010, due mainly to consolidationof Phyathai Hospital Group and Paolo Memorial Hospital Group for Baht 154 million together with BangkokHospital Had Yai Company Limited, one of the subsidiaries, receiving an insurance claim from flooding for Baht24 million during 2Q11.

2. Operating expenses• The Company and its subsidiaries reported cost of hospital operations and others (including depreciation andamortization) of Baht 23,675 million in 2011, an increase by 54% yoy. An increase was due mainly to an organicgrowth in revenue from hospital operations, the consolidation of Phyathai Hospital Group and Paolo MemorialHospital Group together with the rise in doctor fee especially specialized doctors. There were also a rise in

% yoy20102011

Gross Profit

Gross Profit Margin

EBITDA (Excluding non-recurring items)

EBITDA margin (Excluding non-recurring items)

Net profit margin (Excluding non-recurring items)

Net profit margin

Basic earnings per share (Excluding non-recurring items)

Basic earnings per share

50%

55%

44%

59%

8,384

35.3%

5,511

23.0%

9.5%

9.6%

1.86

1.88

12,558

34.7%

8,534

23.2%

10.6%

11.9%

2.67

3.00

Profitability Analysis

77

clinical staff expenses and an increase in number of clinical staffs from newly graduated nurses’ recruitmenttogether with the recruitment of experienced nurses to support the continued business growth. In addition,the cost of hospital operations and others also included cost of goods sold from A.N.B. Laboratories CompanyLimited. Since the revenue from hospital operations and revenue from sales of goods and foods grew at theslower pace than cost of hospital operations and others, the gross margin decreased from 35.3% in 2010 to34.7% in 2011.

• The administrative expenses (including depreciation and amortization) were Baht 7,224 million in 2011, anincrease by 37% yoy, due mainly to the consolidation of Phyathai Hospital Group and Paolo Memorial HospitalGroup together with the flood prevention expenses, staff allowance and donations to various charities andgovernment agencies which are part of the Company’s Corporate Social Responsibility.

EBITDA (excluding non-recurring items); however, increased from Baht 5,511 million in 2010 to Baht 8,534million in 2011, increased by 55% yoy. While the EBITDA margin increased from 23.0% in 2010 to 23.2% in 2011.

3. Depreciation and amortization expensesThe depreciation and amortization expenses were Baht 2,707 million in 2011, an increase by 26% yoy due

mainly to the consolidation of property, premises and equipments from Phyathai Hospital Group and PaoloMemorial Hospital Group.

4. Others• Interest income was Baht 63 million, increased by 16% yoy, as a result of an increase in short-term investmentsduring 2011.

• Dividend income was Baht 104 million, mainly from investment in Bumrungrad Hospital Public CompanyLimited (“BH”).

• Share of income from investments in associated companies was Baht 382 million, increased by 27% yoy, mainlyfrom share of income from investment in RAM of Baht 350 million.

• Finance expenses increased to Baht 770 million or increased by 32% yoy due mainly to consolidation of long-term loans from financial institution of Phyathai Hospital Group and Paolo Memorial Hospital Group.

• Taxes in 2011 were Baht 1,456 million, an increase from Baht 779 million in 2010, due mainly to increase inpre-tax profit.

5. Non-recurring itemsIn 2011, the Company and its subsidiaries also recorded non-recurring items for gain on fair value adjustment

of investments totaling Baht 479 million as a result of “Step Acquisition” in accordance with Thai FinancialReporting Standard (“TFRS 3”) – Business Combinations (effective in 2011) which the Company are required torevalue the original stake from the carrying cost to the fair value and recognize the difference in the statementsof income. There are two Step Acquisitions from the following investments:-

1. Acquisition of PPCL As of 1Q11, the Company held 455.8 million shares or 19.47% of registered and paid upcapital in PPCL at the carrying cost of Baht 1,072.5 million. Upon the Entire Business Transfer of Health Networkand the completion of the tender offer of PPCL shares during 2Q11, the Company had increased its stake inPPCL to 97.1%. Consequently, on the acquisition date (April 1, 2011), the Company revalued the original stakeof 19.47% at fair value, resulting in gain on fair value adjustment of investments in PPCL of Baht 440 million.

2. Additional investment in Udon Pattana (1994) Co., Ltd. As of 1Q11, the Company held 10% of registered andpaid-up capital in Udon Pattana (1994) Co., Ltd. During 2Q11 and 3Q11, the Company purchased additionalinvestment of 1,577,000 shares, totaling Baht 38.30 million or 5.26% of shareholding in Udon Pattana (1994)Co., Ltd. together with PPCL shareholding of 10% or 9.71 indirect percentage of shareholding by the Companyresulting in an increased in percentage of shareholding from 10% to 24.97% and changes its status to becomean associated company. The Company, therefore, revalued the original stake of 10% at fair value using thebook value as a benchmark resulting in gain on fair value adjustment of investment in Udon Pattana (1994)Co., Ltd. of Baht 39 million. The Company has also reversed allowance for impairment of such investmentsof Baht 12 million.

78

In 2010, the Company and its subsidiaries also recorded non-recurring items totaling Baht 26 million from thegain on a bargain purchase as a result of an acquisition of A.N.B. Laboratories Company Limited.

As a result, if excluding non-recurring items which are gain on fair value adjustment of investments totaling Baht479 million in 2011 and the gain on a bargain purchase as a result of an acquisition of A.N.B. Laboratories CompanyLimited of Baht 26 million in 2010 as previously mentioned, net profit was Baht 3,907 million; an increase of Baht1,638 million, or 72% yoy. Net profit margin, excluding non-recurring items, increased from 9.5% in 4Q10 to 10.6%in 4Q11 and the basic earnings per share increased from Baht 1.86 in 2010 to Baht 2.67 in 2011 or grew 44% yoy.

If including the non-recurring items, the Company and its subsidiaries recorded a consolidated net profit of Baht4,386 million in 2011; an increase of Baht 2,091 million, or 91% yoy. Net profit margin significantly increased from9.6% in 2010 to 11.9% in 2011 and the basic earnings per share increased from Baht 1.88 in 2010 to Baht 3.00 in2011 or grew 59% yoy.

Comprehensive income statements

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

Consolidated financial status

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

20102011

Profit for the period

Gain(Loss)on change in value of available-for-sale investments

Exchange differences

Share of other comprehensive income from associated company

Others

Total comprehensive income for the period

91%

N/A

(141)%

N/A

N/A

171%

2,380

-

(125)

-

-

2,256

4,627

1,372

51

65

6

6,121


% yoy

Dec - 11

Total Assets

Total Liabilities

Total equity attributable to company's shareholders

Total shareholders' equity

83%

59%

105%

105%

32,197

15,914

15,634

16,283

58,792

25,375

31,995

33,417


% yoyDec - 10

79

from other long-term investments to become the Company’s subsidiary and decrease in investment in Bill ofExchange of Baht 500 million.

Total consolidated liabilities as of December 31, 2011 were Baht 25,375 million, an increase of Baht 9,461 millionor 59% from December 31, 2010, due mainly to an increase in long-term loans from financial institutions of Baht5,168 million from the consolidation of Phyathai and Paolo Memorial Hospital Group, an increase in trade and otherpayable of Baht 1,441 million, an increase in other current liabilities of Baht 901 million together with a record ofprovision for long-term employee benefits of Baht 863 million. Total debt to equity decreased from 0.7x as ofDecember 31, 2010 to 0.5x as of December 31, 2011 while net debt to equity decreased from 0.5x as of December 31,2010 to 0.4x as of December 31, 2011

Total consolidated shareholders’ equity were Baht 33,417 million, increased by Baht 17,134 million or 105%from the year ended 2010. This is due mainly to total comprehensive income during 2011 together with an issuanceof 295.2 million ordinary shares of Baht 13,175 million in relation to the Entire Business Transfer of Health Networkand the tender offer for PPCL shares In addition, the Company sold 4.1 million newly issued ordinary shares totalingBaht 156 million to major shareholders of Health Network on a private placement basis. This is offset by changein non-controlling interests of subsidiaries from purchase investment in subsidiaries as a result of additional invest-ment in PPCL of Baht 1,716 million and the cumulative effect of change in accounting policy for employee benefitsof Baht 536 million. For the first-time adoption of TAS 19 employee benefits, the Company elected to recognizethe transitional liability, which exceeds the liability that would have been recognized at the same date under theprevious accounting policy, through an adjustment to the beginning balance of retained earnings in 2011.

Liquidity

Regarding cash flows statements for the year ended December 31, 2011, the Company and its subsidiaries’ netcash flows from operating activities were Baht 6,195 million, increased by Baht 1,745 million from 2010, due mainlyto an increase in profit during year. Net cash used in investing activities were Baht 3,775 million, increased by Baht1,313 million from 2010. The investing activities during the year was mainly from a decrease in short-term invest-ments of Baht 1,540 million, offset with the purchase of investments in subsidiaries, associates and other companiesof Baht 2,188 million and the purchase of property, premises and equipment for Baht 3,560 million. Net cash usedin financing activities were Baht 1,033 million, decreased by Baht 351 million due mainly to an increase in long-termloans from financial institutions of Baht 4,616 million, the issuance of the debentures of Baht 3,495 million, nettedwith repayment of long-term loans from financial institutions of Baht 5,020 million and the redemption of maturingdebentures of Baht 3,000 million.

Consequently, cash and cash equivalents increased to Baht 3,876 million as of December 31, 2011 from Baht2,489 million as of December 31, 2010.

% yoy20102011

Net cash from operating activities

Net cash used in investing activities

Net cash used in financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of the period

Cash and cash equivalents at end of the period

39%

53%

(25)%

130%

32%

56%

4,449

(2,462)

(1,384)

603

1,886

2,489

6,195

(3,775)

(1,033)

1,386

2,489

3,876


80

Ernst & Young Office Company Limited has been the auditor of the Company and its subsidiaries since the annualaudit in 2005 to the present. In 2010, the Company and its subsidiaries have compensated the auditor as follows:

1. Auditing FeeThe Company and subsidiaries paid a total of Baht 16,666,500 in auditing fee, details as follows:

2. Other fees-None-

Auditor’s Compensation

AnnualAuditing Fee Total

Review of quarterlyfinancial statements

(3 quarters)

Bangkok Dusit Medical Services PCL

Subsidiaries (36 companies in total)

870,000

5,094,000

Total auditing fee

1,030,000

9,672,500

1,900,000

14,766,500

16,666,500

Pride in MissionThe heart is an amazing organ that can change exhaustion into happiness.

It can transform a tough task into pride becausewe believe that the heart must be cared for from the hearts of the care givers.

Caring for each life with love and concernLove and concern is what closely bonds members of a family.

Therefore, we are ready to provide love and concern in caring for each life asif they were a member of our family.

Quality of lifeBecause life is of the highest value, it is worth providing

the best service possible. Therefore, we endeavor to continuously improveour services to raise the quality of life every day.

82

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

In 2011, the Audit Committee held meetings a total of 7 times to carry out duties as assigned, the mostimportant being:

1. Review the financial statements of the Company and subsidiaries, before presentation to the Board of Directors,as reviewed and explained by the auditor and executive management. The Audit Committee is of the opinionand belief that the aforementioned financial statements were prepared according to accounting standardswith accurate and complete disclosure of important facts.

2. Consider and nominate the auditor from Ernst & Young Office Company Limited and the annual auditing feeto the Board of Directors for further approval by the Shareholders’ Meeting.

3. Consider approving the annual audit plan, review internal audit procedures, which are a part of the Company’smanagement policy, and provide written approval on the internal audit process to be used as a guidelineaccording to international standards.

4. Consider transactions with related persons, disclosure of transactions with related persons and ensure thatacquisitions or sales of assets are in compliance with regulations and laws.

5. Consider and hear the internal audit report from the internal auditors by engaging an internal audit companythat is licensed by the Office of the Securities and Exchange Commission. The internal auditors carried outthe audit according to the importance of the risks as evaluated. The Audit Committee provided suggestionsto the Board of Directors and executive management on good corporate governance and internal controls.In addition, the Committee gave importance to suitable arrangement of the Shareholders’ meeting accordingto the guidelines of the Stock Exchange of Thailand, compliance with laws, regulations and practices, andefficiency in risk evaluation and risk mitigation of the various departments and the organization. The Committeeis of the opinion that the internal control system is suitable and sufficient in risk mitigation in accordancewith the policies and strategies of the Company.

The Audit Committee has carried out the duties as assigned with care for the benefit of the Company, theShareholders and all stakeholders.

(Professor emeritus Santasiri Sornmani, M.D.)Chairman of the Audit Committee

Report of the Audit Committee

Dear Shareholders of Bangkok Dusit Medical ServicesPublic Company Limited,

83

The Board of Directors’ Report on itsResponsibility to the Financial Statements

The Board of Directors recognizes the importance of duties and responsibilities in ensuring that the Companypractices good corporate governance, that the financial statements in the 2011 Annual Report are accurate andfully disclosed, as well as in compliance with generally accepted accounting standards by selecting appropriateaccounting policies and consistently adhering to those policies, with careful discretion. The Board of Directors hasassigned the Audit Committee the task of reviewing the Company’s financial statements and has been informedthat the financial statements are in compliance with generally accepted accounting standards by selecting appropriateaccounting policies and consistently adhering to those policies. The financial statements were carefully preparedwith consideration of the suitable items to be presented and provide sufficient disclosure in the notes. The AuditCommittee has reported these opinions in the Audit Committee Report in the 2011 Annual Report and the Company’s2011 Form 56-1.

Furthermore, the Board of Directors has put in place an efficient internal control system to ensure that allaccounting information is recorded accurately and assets are safe-kept in order to prevent fraud or significant damages.

In conclusion, the Board of Directors is of the opinion that the Company internal control system is satisfactoryand reasonably believes the trustworthiness of the Company’s financial statements as of 31st December 2011,which the auditor has reviewed in accordance with generally accepted accounting standards. Additionally, thefinancial statements accurately show the significant aspects of the Company’s financial status and performance inaccordance with generally accepted accounting standards.

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

31 December 2011 and 2010

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries

Report andConsolidated Financial

Statements

85

Report of Independent Auditor

To The Shareholders of Bangkok Dusit Medical Services Public Company Limited

I have audited the consolidated statement of financial position of Bangkok Dusit Medical Services Public CompanyLimited and its subsidiaries as at 31 December 2011, the related consolidated statements of income, comprehensiveincome, changes in shareholders’ equity and cash flows for the year then ended, and have also audited the separatefinancial statements of Bangkok Dusit Medical Services Public Company Limited for the same period. These financialstatements are the responsibility of the Company’s management as to their correctness and completeness of thepresentation. My responsibility is to express an opinion on these financial statements based on my audit. I did notaudit the financial statements as at 31 December 2011 and for the year then ended of a domestic associatedcompany, as included in the consolidated financial statements. The consolidated statement of financial positionas at 31 December 2011 included investment in associated company amounted to Baht 2,329 million or 4 percentof consolidated assets, and its related consolidated statements of income for the year ended 31 December 2011of the associated company amount to approximately Baht 350 million, representing 8 percent of the consolidatedincome of the year. The financial statements of the associated company were audited by other auditor, whosereport has been furnished to me. My opinion on the consolidated financial statements insofar as they relate toany amounts included for this associated company, is based solely upon the audit report of other auditor. Theconsolidated financial statements of Bangkok Dusit Medical Services Public Company Limited and its subsidiariesand the separate financial statements of Bangkok Dusit Medical Services Public Company Limited for the year ended31 December 2010, as presented herein for comparative purposes, were audited in accordance with generallyaccepted auditing standards by another auditor of our firm who expressed an unqualified opinion on those financialstatements, under his report dated 24 February 2011.

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

In my opinion, based on my audit and the reports of the other auditors, the financial statements referred toabove present fairly, in all material respects, the financial position of Bangkok Dusit Medical Services Public CompanyLimited and its subsidiaries and of Bangkok Dusit Medical Services Public Company Limited as at 31 December 2011,the results of their operations and cash flows for the year then ended in accordance with generally acceptedaccounting principles.

Without qualifying my opinion on the above financial statements, I draw attention to Note 3 and Note 5 tothe financial statements. During the current year, the Company and its subsidiaries adopted the revised and newaccounting standards issued by the Federation of Accounting Professions, and applied them in its preparation andpresentation of the financial statements. For the first-time adoption of TAS 19 Employee Benefits, the Companyand its subsidiaries elected to recognise the transitional liability, which exceeds the liability that would have beenrecognised at the same date under the previous accounting policy, through an adjustment to the beginning balanceof retained earnings in the current year, and for the first-time adoption of TAS 40 (Revised 2009) Investment Property,the Company and its subsidiaries elected to recognise investment property under fair value model and recognisedimpact of the change to the financial statements through an adjustment to the beginning balance of retainedearnings in the current year.

Wichart LokatekraweeCertified Public Accountant (Thailand) No. 4451Ernst & Young Office LimitedBangkok: 29 February 2012

86

Bangkok Dusit Medical Services Public Company Limited and its subsidiariesAs at 31 December 2011 and 2010

Statements of financial position(Unit : Baht)Assets

8

10, 11, 12

12

13

8, 9

14

15

16

12

17

18

19

14.1

20

12, 21

12

2010201120102011

Separate financialstatements

Consolidated financialstatements

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

3,875,733,420

464,365,921

3,377,111,722

-

1,037,726,798

121,792,752

8,876,730,613

50,000,000

24,685,891

-

2,815,613,743

5,049,423,501

-

190,226,327

29,430,070,630

511,202,630

10,609,368,928

482,139,079

557,137,056

195,333,849

49,915,201,634

58,791,932,247

1,082,258,711

1,739,542,882

572,576,549

103,131,775

57,832,701

74,722,283

3,630,064,901

-

-

8,678,064,290

1,666,020,682

1,639,788,771

1,321,013,908

-

5,152,116,946

510,876,287

-

75,096,402

59,003,325

18,555,109

19,120,535,720

22,750,600,621

Current assets

Cash and cash equivalents

Short-term investments

Trade and other receivables

Short-term loans to related parties

Inventories

Other current assets

Total current assets

Non-current assets

Long-term deposit at financial institution

Restricted financial institution deposits

Investments in subsidiary companies

Investments in associated companies

Other long-term investments

Long-term loans to related parties

Investment properties

Property, premises and equipment

Land and buildings not used in operation

Goodwill

Intangible assets

Other non-current assets

Leasehold rights

Others

Total non-current assets

Total assets

2,489,455,028

1,739,553,849

1,954,824,148

-

398,304,761

187,651,255

6,769,789,041

-

61,659,484

-

2,271,388,344

1,640,078,691

-

-

18,858,095,794

511,202,630

1,299,169,249

201,420,094

509,063,654

75,157,462

25,427,235,402

32,197,024,443

1,520,306,827

10,032

829,289,509

307,097,286

230,927,282

14,872,145

2,902,503,081

-

-

23,925,320,165

1,735,973,111

4,876,099,654

1,665,538,184

425,816,327

4,978,103,389

510,876,287

-

72,988,099

106,061,020

14,455,744

38,311,231,980

41,213,735,061

Note

87

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries As at 31 December 2011 and 2010

Statements of financial position (continued)


(Unit : Baht)Liabilities and shareholders' equity

2010201120102011Note

Current liabilities

Short-term loans from related parties

Bank overdrafts and short-term loans from

financial institutions

Trade and other payables

Current portion of long-term loans from

financial institutions

Current portion of liabilities under

finance lease agreements

Current portion of convertible debentures

- liability component

Current portion of debentures

Income tax payable

Dividend payable

Accrued expenses

Other current liabilities

Total current liabilities

Non-current liabilities

Long - term loans from financial insitutions

- net of current portion

Liabilities under finance lease agreement

- net of current portion

Debentures - net of current portion

Provision for long-term employee benefits

Deferred income

Other non-current liabilities

Total non-current liabilities

Total liabilities

12

22

12, 23

24

25

36

37

28

24

25

37

26

12

639,601,233

-

733,717,654

343,800,000

631,187

2,141,480

2,999,445,421

13,080,104

989,912,836

353,982,315

132,520,559

6,208,832,789

2,120,100,000

81,668

4,963,726,969

-

146,112,262

93,770,731

7,323,791,630

13,532,624,419

-

231,170,205

3,391,190,815

813,214,841

149,722,523

-

-

725,829,097

-

1,815,833,234

451,509,847

7,578,470,562

6,951,172,278

185,304,941

8,461,262,680

862,972,388

173,449,698

1,162,070,430

17,796,232,415

25,374,702,977

-

38,406,219

1,950,357,140

355,264,851

76,619,464

2,141,480

2,999,445,421

353,919,391

989,912,836

1,014,146,461

447,329,053

8,227,542,316

2,240,647,470

74,528,018

4,963,726,969

-

146,112,262

261,562,874

7,686,577,593

15,914,119,909

1,627,946,051

-

942,752,305

436,300,000

3,051,032

-

-

48,526,497

-

397,328,233

158,023,562

3,613,927,680

2,705,410,000

6,927,699

8,461,262,680

148,516,084

108,620,182

106,791,206

11,537,527,851

15,151,455,531



88

Bangkok Dusit Medical Services Public Company Limited and its subsidiariesAs at 31 December 2011 and 2010

Statements of financial position (continued)

(Unit : Baht)Liabilities and shareholders' equity (continued)

27

29

2010201120102011Note


1,553,391,408

1,545,458,883

20,022,497,644

305,000,325

155,339,141

9,003,545,079

963,350,808

31,995,191,880

1,422,037,390

33,417,229,270

58,791,932,247

1,312,264,222

1,246,035,935

6,925,836,705

-

131,226,422

186,554,761

728,322,379

9,217,976,202

-

9,217,976,202

22,110,999,388

Shareholders' equity

Share capital

Registered

1,553,391,408 ordinary shares of Baht 1 each

(2010 : 1,312,264,222 ordinary shares of

Baht 1 each)

Issued and fully paid-up

1,545,458,883 ordinary shares of Baht 1 each

(2010: 1,246,035,935 ordinary shares of

Baht 1 each)

Share premium

Premium on ordinary shares

Difference from shareholding restructure

Retained earnings

Appropriated - statutory reserve

Unappropriated

Other components of shareholders' equity

Equity attributable to owners of the Company

Non - controlling interests of the subsidiaries

Total shareholders' equity

Total liabilities and shareholders' equity

1,312,264,222

1,246,035,935

6,988,760,633

305,000,325

131,226,422

5,161,968,125

1,801,501,360

15,634,492,800

648,411,734

16,282,904,534

32,197,024,443

1,553,391,408

1,545,458,883

19,959,573,716

-

155,339,141

2,516,503,383

1,885,404,407

26,062,279,530

-

26,062,279,530

41,213,735,061



89

Bangkok Dusit Medical Services Public Company Limited and its subsidiaries For the years ended 31 December 2011 and 2010

Income statements


(Unit : Baht)Revenues

2010201120102011Note

Revenues from hospital operations

Other income

Revenue from sales of goods and foods

Interest income

Dividend income

Gain on fair value adjustment of investments

Others

Total other income

Total revenues

Expenses

Cost of hospital operations and goods sold


Total expenses

Profit before share of income from investments in

associated companies, finance expenses and

corporate income tax

Share of income from investments in associated

companies

Profit before finance expenses and corporate

income tax

Finance expenses

Profit before corporate income tax

Corporate income tax

Profit for the year

Profit attributable to:

Equity holders of the Company


Basic earnings per share

Profit attributable to equity holders of the Company

Weighted average number of ordinary shares (shares)

12 12

14.1, 15.1

12 12

15

12

32

8,258,839,349

42,371,398

71,717,388

1,979,139,621

-

407,838,566

2,501,066,973

10,759,906,322

5,479,336,126

2,302,468,571

7,781,804,697

2,978,101,625

-

2,978,101,625

(571,660,686)

2,406,440,939

(109,428,864)

2,297,012,075

2,297,012,075

1.57

1,461,915,619

7,219,714,616

37,349,309

162,557,925

791,679,745

-

309,196,142

1,300,783,121

8,520,497,737

4,760,073,780

2,106,194,991

6,866,268,771

1,654,228,966

-

1,654,228,966

(574,526,395)

1,079,702,571

(84,191,711)

995,510,860

995,510,860

0.82

1,218,818,908

35,224,466,182

1,009,460,204

63,051,703

103,527,505

479,028,410

491,804,455

2,146,872,277

37,371,338,459

23,675,485,850

7,224,190,229

30,899,676,079

6,471,662,380

381,645,368

6,853,307,748

(770,451,369)

6,082,856,379

(1,456,317,745)

4,626,538,634

4,385,987,305

240,551,329

4,626,538,634

3.00

1,461,915,619

23,512,628,958

221,574,213

54,166,538

3,065,072

-

259,779,774

538,585,597

24,051,214,555

15,350,057,774

5,256,968,992

20,607,026,766

3,444,187,789

299,746,829

3,743,934,618

(584,353,865)

3,159,580,753

(779,387,008)

2,380,193,745

2,295,063,120

85,130,625

2,380,193,745

1.88

1,218,818,908



90

Bangkok Dusit Medical Services Public Company Limited and its subsidiariesFor the years ended 31 December 2011 and 2010

Statements of comprehensive income(Unit : Baht)

2010201120102011


4,626,538,634

1,372,437,827

(3,309,777)

8,985,000

51,099,075

65,309,329

1,494,521,454

6,121,060,088

5,885,182,971

235,877,117

6,121,060,088

995,510,860

42,525

-

-

-

-

42,525

995,553,385

995,553,385

2,380,193,745

42,525

-

-

(124,657,590)

-

(124,615,065)

2,255,578,680

2,170,448,055

85,130,625

2,255,578,680

2,297,012,075

1,372,272,360

-

-

-

-

1,372,272,360

3,669,284,435

3,669,284,435



Profit for the year

Other comprehensive income:

Gain on change in value of available-for-sale investments

Actuarial loss

Gain on revaluation of land

Exchange differences on translation of financial statements

in foreign currency

Share of other comprehensive income from

associated company

Other comprehensive income for the year

Total comprehensive income for the year

Total comprehensive income attributable to:

Equity holders of the Company


91


Statements of cash flows


(Unit : Baht)Cash flows from operating activities

2010201120102011Profit before corporate income tax

Adjustments to reconcile profit before corporate income tax to

net cash provided by (paid from) operating activities:

Depreciation and amortisation expenses

Write-off of assets

Bad debts and allowance for doubtful accounts

Loss (reversal loss) on impairment of assets

Loss on deteriorated inventories

Amortisation of deferred income

Share of income from investments in associated companies

Negative goodwill

Gain on fair value adjustment of investments

Amortisation of expense for convertible debentures, issued debentures and loan

Gain on disposal of property, premises and equipment

Gain on disposal of investment

Gain on adjust fair value of investment property

Loss on liquidation of a subsidiary company

Unrealised loss (gain) on foreign exchange

Long-term employee benefit expenses

Interest income

Dividend income

Interest expense

Profit from operating activities before changes in operating assets and liabilities

Decrease (increase) in operating assets

Trade and other receivables

Inventories



Increase (decrease) in operating liabilities

Trade and other payables

Accrued expenses





Cash received from interest incomes

Cash paid for interest expenses

Cash received from tax refund

Cash paid for corporate income tax


2,406,440,939

701,608,922

276,429

58,859,014

(12,333,020)

737,983

(37,492,080)

-

-

-

3,277,578

(2,552,500)

-

(18,069,000)

1,031,853

(12,870,015)

22,241,974

(71,717,388)

(1,979,139,621)

571,660,686

1,631,961,754

(331,495,962)

(173,832,564)

59,850,137

(351,887)

180,733,708

17,448,294

25,503,007

(6,353,393)

13,020,475

1,416,483,569

70,192,988

(555,288,206)

-

(69,068,435)

862,319,916

1,079,702,571

716,589,401

-

22,183,140

20,000,000

224,933

(38,237,767)

-

-

-

11,825,283

(1,290,406)

(314,128)

-

-

38,809,776

-

(162,557,925)

(791,679,745)

574,526,395

1,469,781,528

(4,880,193)

4,354,459

(21,219,221)

767,124

123,484,257

28,231,547

(42,559,628)

-

20,337,389

1,578,297,262

137,342,328

(566,751,209)

-

(99,471,122)

1,049,417,259

6,082,856,379

2,707,488,415

18,628,818

116,796,026

(13,083,042)

913,628

(43,745,508)

(381,645,368)

(25,266,375)

(479,028,410)

4,010,911

(9,915,912)

-

(1,045,000)

-

-

107,180,693

(63,051,703)

(103,527,505)

770,451,369

8,688,017,416

(714,466,815)

(482,018,260)

105,300,148

(35,341,337)

625,615,414

151,864,550

(87,604,617)

(39,117,120)

65,558,065

8,277,807,444

62,891,993

(737,131,245)

15,041,752

(1,423,883,387)

6,194,726,557

3,159,580,753

2,149,708,242

26,981,753

82,315,432

18,219,433

224,933

(38,237,767)

(299,746,829)

(26,164,108)

-

11,825,283

(4,327,802)

(314,128)

-

-

-

-

(54,166,538)

(3,065,072)

584,353,865

5,607,187,450

(168,590,474)

(36,048,287)

(65,412,775)

(18,565,509)

282,354,828

38,172,942

(32,415,184)

-

77,291,808

5,683,974,799

18,518,138

(567,377,073)

-

(685,738,314)

4,449,377,550



92

Bangkok Dusit Medical Services Public Company Limited and its subsidiariesFor the years ended 31 December 2011 and 2010

Statements of cash flows (continued)

(Unit : Baht)Cash flows from investing activities

2010201120102011


1,539,710,529

61,067,509

166,639,607

15,111,753

(2,188,039,086)

-

500,000,000

-

(135,177,289)

18,300,692

(3,559,683,668)

(52,960,502)

-

-

-

(140,325,399)

(3,775,355,854)

(539,534,063)

-

791,679,745

21,769,165

(1,013,103,408)

-

-

1,052,125

-

6,441,818

(719,295,672)

-

56,529,105

(69,279,800)

1,543,496,656

(96,300)

79,659,371

Decrease (increase) in short-term investments

Decrease (increase) in restricted financial institution deposits

Dividend received

Interest received from investment

Cash paid for purchase of investments in subsidiaries,

associates and other company

Cash received from refunding capital of a subsidiary company

Cash received from disposal of dued other long-term investment

Cash received from disposal of investment

Cash paid for investment property

Cash received from disposal of property, premises and equipment

Cash paid for purchase of property, premises and equipment

Cash paid for leasehold rights

Decrease (increase) in short-term loans to related parties

Increase in long-term loans to related parties

Cash received from long-term loans to related parties

Cash paid for purchase of intangible assets

Net cash from (used in) investing activities

(537,725,569)

(9,737,481)

64,286,160

21,769,165

(766,230,407)

-

-

1,052,125

-

23,867,019

(1,192,129,444)

(7,492,779)

-

-

-

(60,039,569)

(2,462,380,780)

1,739,532,850

-

1,979,139,621

15,111,753

(4,607,666,211)

258,968,147

500,000,000

-

(135,177,289)

5,725,129

(762,812,347)

(52,960,502)

(164,527,385)

(1,010,593,176)

641,837,422

(9,472,731)

(1,602,894,719)



93


Statements of cash flows (continued)


(Unit : Baht)Cash flows from financing activities

2010201120102011

Increase in short-term loans from related parties

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

from financial institutions

Cash received from long-term loans from financial institutions

Repayment of long-term loans from financial institutions

Repayments of liabilities under finance lease agreements

Cash received from issue of debentures

Cash paid for redemption of debentures

Cash paid for investment in subsidiary companies

from non - controlling interests

Net cash received from issuing ordinary shares

Dividend paid

Dividend paid by subsidiaries to non - controlling interests

Net cash from (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Supplemental cash flows information:

Non-cash items:

Assets acquired under finance lease agreements

Increase in accounts payable - property, premises and equipment

Increase (decrease) in payable to construction and retention

Dividend receivable

Acquire investments in subsidiary companies by issuing shares

Dividend payable

988,344,818

-

1,021,610,000

(343,800,000)

(2,154,273)

3,494,818,102

(3,000,000,000)

-

9,717,108

(989,912,836)

-

1,178,622,919

438,048,116

1,082,258,711

1,520,306,827

-

11,159,376

25,939,443

(13,722,006)

-

13,321,247,595

-

16,715,225

-

-

(343,800,000)

(2,019,957)

-

-

-

-

(850,139,674)

-

(1,179,244,406)

(50,167,776)

1,132,426,487

1,082,258,711

-

79,384,878

58,341,315

-

-

989,912,836

-

191,279,298

4,616,390,400

(5,019,926,849)

(137,403,367)

3,494,818,102

(3,000,000,000)

(131,467,725)

9,717,108

(989,912,836)

(66,586,442)

(1,033,092,311)

1,386,278,392

2,489,455,028

3,875,733,420

-

90,571,481

48,301,606

166,135,869

-

13,321,247,595

-

-

(5,008,367)

-

(361,587,066)

(131,152,297)

-

-

(4,737,050)

-

(850,139,674)

(31,358,807)

(1,383,983,261)

603,013,509

1,886,441,519

2,489,455,028

98,430,208

164,739,522

12,474,718

27,531

-

989,912,836



94

For the years ended 31 December 2011 and 2010

Statements of changes in shareholders' equity


Balance as at 31 December 2009

Conversion of convertible debentures

Profit for the year



Dividend paid (Note 28)

Decrease in non-controlling interests of subsidiaries



Cumulative effect of change in accounting policy

for employee benefits (Note 5.1)

Acquire investments in subsidiary companies by

issuing shares (Note 27)

Issue of share capital (Note 27)


Statutory reserve

Profit for the year



Change in non-controlling interests of subsidiaries

from purchase investment in subsidiaries

Decrease in non-controlling interests of subsidiaries

from dividend of subsidiaries


Retained earningsPremiumon ordinary

shares

Difference fromshareholdingrestructure

Appropriated-statutoryreserve Unappropriated

Surplus (deficit)on changesin value of

available-for-sale investments

131,226,422

-

-

-

-

-

-

131,226,422

131,226,422

-

-

-

-

24,112,719

-

-

-

-

-

155,339,141

4,706,957,515

-

2,295,063,120

-

2,295,063,120

(1,840,052,510)

-

5,161,968,125

5,161,968,125

(517,149,736)

-

-

-

(24,112,719)

4,385,987,305

(3,147,896)

4,382,839,409

-

-

9,003,545,079

5,855,970,240

1,132,790,393

-

-

-

-

-

6,988,760,633

6,988,760,633

-

12,879,901,154

151,699,002

2,136,855

-

-

-

-

-

-

20,022,497,644

305,000,325

-

-

-

-

-

-

305,000,325

305,000,325

-

-

-

-

-

-

-

-

-

-

305,000,325

(221,533)

-

-

42,525

42,525

-

-

(179,008)

(179,008)

-

-

-

-

-

-

1,372,433,095

1,372,433,095

-

-

1,372,254,087

Issued and paid-up

share capital

1,214,498,745

31,537,190

-

-

-

-

-

1,246,035,935

1,246,035,935

-

295,236,682

4,127,864

58,402

-

-

-

-

-

-

1,545,458,883

95


Exchange differences ontranslation of

financial statements in

foreign currency

Share of othercomprehensiveincome fromassociated company

Equityattributable tonon-controlling

interestof the

subsidiaries

(Unit : Baht)

Consolidated financial statements

(44,143,583)

-

-

(124,657,590)

(124,657,590)

-

-

(168,801,173)

(168,801,173)

-

-

-

-

-

-

58,745,231

58,745,231

-

-

(110,055,942)

Equity attributable to owners of the Company

Revaluationsurplus on

land

1,949,627,079

-

-

-

-

-

-

1,949,627,079

1,949,627,079

-

-

-

-

-

-

5,855,907

5,855,907

-

-

1,955,482,986

Convertibledebentures -

equitycomponent

10,920,897

(10,900,710)

-

-

-

-

-

20,187

20,187

-

-

-

(20,187)

-

-

-

-

-

-

-

20,834,275

-

-

-

-

-

-

20,834,275

20,834,275

-

-

-

-

-

-

65,309,329

65,309,329

-

-

86,143,604

14,150,670,382

1,153,426,873

2,295,063,120

(124,615,065)

2,170,448,055

(1,840,052,510)

-

15,634,492,800

15,634,492,800

(517,149,736)

13,175,137,836

155,826,866

2,175,070

-

4,385,987,305

1,499,195,666

5,885,182,971

(2,340,473,927)

-

31,995,191,880

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(2,340,473,927)

-

(2,340,473,927)

1,937,017,135

(10,900,710)

-

(124,615,065)

(124,615,065)

-

-

1,801,501,360

1,801,501,360

-

-

-

(20,187)

-

-

1,502,343,562

1,502,343,562

(2,340,473,927)

-

963,350,808

596,451,933

-

85,130,625

-

85,130,625

-

(33,170,824)

648,411,734

648,411,734

(19,303,550)

-

-

-

-

240,551,329

(4,674,212)

235,877,117

623,638,531

(66,586,442)

1,422,037,390

14,747,122,315

1,153,426,873

2,380,193,745

(124,615,065)

2,255,578,680

(1,840,052,510)

(33,170,824)

16,282,904,534

16,282,904,534

(536,453,286)

13,175,137,836

155,826,866

2,175,070

-

4,626,538,634

1,494,521,454

6,121,060,088

(1,716,835,396)

(66,586,442)

33,417,229,270

Net change inownership interest ofsubsidiary

shareholdingrecognised in equity

Total other components of shareholders'

equity

Total equityattributable to

owners ofthe Company

Other components of shareholders’ equityTotal

shareholders'equity

96

For the years ended 31 December 2011 and 2010

Statements of changes in shareholders' equity (continued)


Retained earningsPremium on

ordinary shares Appropriated-statutoryreserve Unappropriated

Issued and paid-up

share capital



Profit for the year



Dividend paid (Note 28)




for employee benefits (Note 5.1)


for investment property (Note 5.2)

Acquire investments in subsidiary companies by

issuing shares (Note 27)

Issue of share capital (Note 27)


Statutory reserve

Profit for the year




1,214,498,745

31,537,190

-

-

-

-

1,246,035,935

1,246,035,935

-

-

295,236,682

4,127,864

58,402

-

-

-

-

1,545,458,883

5,793,046,312

1,132,790,393

-

-

-

-

6,925,836,705

6,925,836,705

-

-

12,879,901,154

151,699,002

2,136,855

-

-

-

-

19,959,573,716

131,226,422

-

-

-

-

-

131,226,422

131,226,422

-

-

-

-

-

24,112,719

-

-

-

155,339,141

1,031,096,411

-

995,510,860

-

995,510,860

(1,840,052,510)

186,554,761

186,554,761

(158,120,879)

215,170,145

-

-

-

(24,112,719)

2,297,012,075

-

2,297,012,075

2,516,503,383

97


(Unit : Baht)

Separate financial statements

Surplus (deficit) on changesin value of available-for-

sale investmentsRevaluation

surplus on land

728,481,200

-

-

-

-

-

728,481,200

728,481,200

-

(215,170,145)

-

-

-

-

-

-

-

513,311,055

Convertibledebentures - equity

component

Total other components of

shareholders' equity

Other components of shareholders’ equity Totalshareholders' equity

(221,533)

-

-

42,525

42,525

-

(179,008)

(179,008)

-

-

-

-

-

-

-

1,372,272,360

1,372,272,360

1,372,093,352

10,920,897

(10,900,710)

-

-

-

-

20,187

20,187

-

-

-

-

(20,187)

-

-

-

-

-

739,180,564

(10,900,710)

-

42,525

42,525

-

728,322,379

728,322,379

-

(215,170,145)

-

-

(20,187)

-

-

1,372,272,360

1,372,272,360

1,885,404,407

8,909,048,454

1,153,426,873

995,510,860

42,525

995,553,385

(1,840,052,510)

9,217,976,202

9,217,976,202

(158,120,879)

-

13,175,137,836

155,826,866

2,175,070

-

2,297,012,075

1,372,272,360

3,669,284,435

26,062,279,530

98

Notes to consolidated financial statementsBangkok Dusit Medical Services Public Company Limited and its subsidiariesFor the years ended 31 December 2011 and 2010

Baht 1,000 million

Baht 500 million

Baht 500 million

Baht 586 million

Baht 105 million

Baht 280 million

Baht 400 million

Baht 150 million

Baht 250 million

Baht 180 million

Baht 300 million

Baht 75 million

Baht 10 million

Baht 1,000 million

Baht 500 million

Baht 500 million

Baht 586 million

Baht 105 million

Baht 280 million

Baht 400 million

Baht 150 million

Baht 250 million

Baht 180 million

Baht 300 million

Baht 75 million

Baht 10 million

Company's name

2011 2010 2011 2010

Percentage ofshareholding by

the Company (percent)Nature ofbusiness

Held by the Company

Samitivej Public Co., Ltd.

Bangkok Hospital Hatyai Co., Ltd.



Bangkok Phrapradaeng Hospital Co., Ltd.






Bangkok Ratchasima Hospital Co., Ltd.


Bio Molecular Laboratories(Thailand) Co., Ltd.

Registered capital

95.76

98.78

99.68

91.48

79.00

97.22

100.00

100.00

99.76

99.69

89.73

74.02

95.00

95.76

98.78

99.67

91.42

79.00

97.22

100.00

100.00

99.76

99.67

89.53

74.02

95.00

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Central lab

Central lab

1. General informationBangkok Dusit Medical Services Public Company Limited ("the Company") is a public company under Thai laws

and domiciled in Thailand. The Company is principally engaged in the hospital business. The registered office ofthe Company is at 2, Soi Soonvijai 7, New Petchburi Road, Bang Kapi, Huaykwang, Bangkok.

2. Basis of preparation2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the

Accounting Profession Act B.E. 2547 and their presentation has been made in compliance with the stipulationsof the Notification of the Department of Business Development dated 28 September 2011, issued under theAccounting Act B.E. 2543.

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

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

2.2 Basis of consolidationa) The consolidated financial statements include the financial of Bangkok Dusit Medical Services Public Company

Limited (“the Company”) and the following subsidiaries (“the subsidiaries”) as follows:

99

USD 10 million

USD 10 million

Riel 26,000

million

Riel 9,200

million

Baht 35 million

Baht 260 million

Baht 1 million

Baht 105

million

Baht 736

million

Baht 200

million

Baht 70 million

Baht 1 million

Baht 2,341

million

Baht 300 million

Baht 42 million

Baht 100 million

Baht 201 million

Baht 4 million

2011 2010 2011 2010

80.00

100.00

70.00

100.00

100.00

-

100.00

99.94

100.00

100.00

100.00

100.00

97.14

100.00

88.73

80.72

99.76

100.00

80.00

100.00

70.00

100.00

100.00

100.00

100.00

99.94

100.00

100.00

100.00

100.00

-

-

-

-

-

-

Held by the Company (continued)



Royal Rattanak Medical

Services Co., Ltd.

B.D.M.S. International Medical

Services Co., Ltd.


Bangkok Hospital Hua Hin Co., Ltd.


Bangkok Health Insurance Limited



Bangkok Hospital Kao Yai Co., Ltd.


Prasit Patana Public Co., Ltd.


Paolo Samutprakarn Co., Ltd.


Thai Medical Center Public Co., Ltd.

Bangkok Premier Life Insurance

Broker Co., Ltd.

Hospital

Hospital

Hospital

Hospital

Investment

Liquidated

Hospital

Health

insurance

Management

service

Technologyand

informationservice

Hospital

Training

business

Investment

Hospital

Hospital

Hospital

Hospital

Life insurance

broker

Company's name


the Company (percent)Nature ofbusiness Registered capital

USD 10 million

USD 10 million

Riel 26,000

million

Riel 9,200

million

Baht 35 million

Baht 260 million

Baht 1 million

Baht 105

million

Baht 736

million

Baht 200

million

Baht 70 million

Baht 1 million

Baht 2,341

million

Baht 300 million

Baht 42 million

Baht 100 million

Baht 201 million

-

100

All subsidiaries incorporated in Thailand except B.D.M.S. International Medical Services Co., Ltd., Angkor PisithCo., Ltd., Phnom Penh Medical Services Co., Ltd. and Royal Rattanak Medical Services Co., Ltd. which were incor-porated in Cambodia.

b) Subsidiaries are fully consolidated, being the date on which the Company obtains control, and continue tobe consolidated until the date when such control ceases.

c) The financial statements of the subsidiaries are prepared using the same significant accounting policies asthe Company.

d) The assets and liabilities in the financial statements of overseas subsidiary companies are translated to Bahtusing the exchange rate prevailing on the end of reporting period, and revenues and expenses translatedusing monthly average exchange rates. The resulting differences are shown under the caption of “Exchangedifferences on translation of financial statements in foreign currency” in the statements of changes in share-holders’ equity.

e) Material balances and transactions between the Company and its subsidiaries have been eliminated fromthe consolidated financial statements.

f ) Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are notheld by the Company and are presented separately in the consolidated profit or loss and within equity inthe consolidated statement of financial position.

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

Hospital

Asset managementfor healthcare

business

Restaurant anddistribution ofhealth food

products and facilitymanagement

Restaurant anddistribution of

health food products

Healthcare travel

service

Manufacturer anddistributor of medicineand pharmaceutical

products

Baht 188

million

Baht 0.1

million

Baht 14

million

Baht 15

million

Baht 5

million

Baht 499

million

Baht 188

million

Baht 0.1

million

Baht 14

million

Baht 15

million

Baht 5

million

Baht 499

million

2011 2010 2011 2010Held by the subsidiaries

Samitivej Sriracha Co., Ltd.

(held by a subsidiary at 68%)

Irving Sheridan SE Co., Ltd.


First Health Food Co., Ltd.


Sodexo Healthcare Support Services(Thailand) Co., Ltd.(held by a subsidiary at 74%)

Phuket Health And Travel Co., Ltd.


A.N.B. Laboratories Co., Ltd.


-

-

-

-

-

-

-

-

-

-

-

-

Company's name


the Company (percent)Nature ofbusiness Registered capital

101

3. Adoption of new accounting standardsDuring the current year, the Company and its subsidiaries adopted a number of revised and new accounting

standards, issued by the Federation of Accounting Professions, as listed below.

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

Accounting standards:

TAS 1 (revised 2009)









TAS 19



TAS 26



TAS 29








Financial reporting standards:

TFRS 2

TFRS 3 (revised 2009)

TFRS 5 (revised 2009)

TFRS 6

Financial Reporting Standard Interpretations:

TFRIC 15

Accounting Standard Interpretations:

SIC 31

Presentation of Financial Statements

Inventories

Statement of Cash Flows

Accounting Policies, Changes in Accounting Estimates and Errors

Events after the Reporting Period

Construction Contracts

Property, Plant and Equipment

Leases

Revenue

Employee Benefits

Borrowing Costs

Related Party Disclosures

Accounting and Reporting by Retirement Benefit Plans

Consolidated and Separate Financial Statements

Investments in Associates

Financial Reporting in Hyperinflationary Economies

Interests in Joint Ventures

Earnings per Share

Interim Financial Reporting

Impairment of Assets

Provisions, Contingent Liabilities and Contingent Assets

Intangible Assets

Investment Property

Share-Based Payment

Business Combinations

Non-current Assets Held for Sale and Discontinued Operations

Exploration for and Evaluation of Mineral Resources

Agreements for the Construction of Real Estate

Revenue-Barter Transactions Involving Advertising Services

102

4. New accounting standards issued during the years not yet effectiveThe Federation of Accounting Professions issued the following new/revised accounting standards that are effective

for fiscal years beginning on or after 1 January 2013.

The Company’s management believes that these accounting standards will not have any significant impact onthe financial statements for the year when they are initially applied, except for the following accounting standards.

TAS 12 Income TaxesThis accounting standard requires an entity to identify temporary differences, which are differences between

the carrying amount of an asset or liability in the accounting records and its tax base, and to recognize deferredtax assets and liabilities under the stipulated guidelines.

At present, the management is evaluating the impact on the financial statements in the year when this standardis adopted.

5. Cumulative effect of changes in accounting policies from adoption of new accountingstandardsDuring the current year, the Company and its subsidiaries made the changes to its significant accounting policies

described in Note 3 to the financial statements, as a result of the adoption of revised and new accounting standards. The cumulative effect of the changes in the accounting policies has been separately presented in the statements of changes in shareholders’ equity as summarised below.

5.1 TAS 19 Employee BenefitsThis accounting standard requires employee benefits to be recognised as expense in the period in which the

service is performed by the employee. In particular, an entity has to evaluate and make a provision for post-employment benefits using actuarial techniques and provisions for vacation. The Company and its subsidiariespreviously accounted for such employee benefits when they were incurred.

The Company and its subsidiaries have changed this accounting policy in the current year and recognise theliability in the transition period through an adjustment to the beginning balance of retained earnings in the currentyear. The changes has the effect of decreasing the beginning balance of retained earnings of the Company and itssubsidiaries by Baht 497.2 million (Separate financial statements: Baht 158.1 million) and decreasing the profit forthe year ended 31 December 2011 by Baht 102.5 million (Baht 0.07 per share) (Separate financial statement:decreasing profit for the year ended 31 December 2011 by Baht 22.7 million or Baht 0.02 per share).

In addition, an associated company has changed this accounting policy in the current year and recognise theliability in the transition period through an adjustment to the beginning balance of retained earnings in the currentyear. The change has the effect of decreasing the beginning balance of investment in such associated companyunder equity method in consolidated financial statements and consolidated retained earnings by Baht 20.0 million.

Accounting standards:

TAS 12



Accounting Standard Interpretations:

SIC 10

SIC 21

SIC 25

Income Taxes

Accounting for Government Grants and Disclosure of Government Assistance

The Effects of Changes in Foreign Exchange Rates

Government Assistance - No Specific Relation to Operating Activities

Income Taxes - Recovery of Revalued Non-Depreciable Assets

Income Taxes - Changes in the Tax Status of an Entity or its Shareholders

103

5.2 TAS 40 (revised 2009) Investment PropertyThis accounting standard requires entities to choose to recognise investment property either under the cost

model (with disclosure of fair value in the notes to financial statements) or the fair value model, whereby changesin fair value are to be recognised in profit or loss. Investment property was previously recognised under the captionof Property, Plant and Equipment, which is measured using the cost model. In adopting the new accounting policy,the Company and its subsidiaries separately present investment property and measure it using the fair value model,commencing in the current year. The Company and its subsidiaries have recognised the effect of the change inaccounting policy as an adjustment to the opening balance of retained earnings for the year. The change has theeffect of increasing the beginning balance of retained earnings of the Company by Baht 215.2 million and not effectto the retained earnings of consolidated financial statements. The change has the effect of increasing profit of theCompany and its subsidiaries for the year 2011 by Baht 1 million (Separate financial statements: increasing profitby Baht 18 million or 0.01 Baht per share).

5.3 TFRS 3 (revised 2009) Business combinationsAcquisition-related costs are accounted for as expenses in the periods in which the costs are incurred and the

services are received.

If the business combination is achieved in stages, the acquirer’s previously held equity interest in the acquireeis remeasured to fair value at the acquisition date through profit or loss.

6. Significant accounting policies6.1 Revenue recognitionHospital operations

Revenues from hospital operations, mainly consisting of medical fees, hospital room sales and medicine sales,are recognised as income when services have been rendered or medicine delivered.

Revenue from sales of goods and foods Sales of goods and foods are recognised when the significant risks and rewards of ownership of the goods have

passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods and food supplied afterdeducting discounts.

Service income Service income is recognised when services have been rendered.

Membership income Membership income is cash receipt from sales of membership cards which initially recorded as deferred income

and gradually amortised to income over membership period. For cash received in advance from the Life Privilegemembership program is amortised to income over a period of 10 years.

Interest income Interest income is recognised on an accrual basis based on the effective rate.

DividendsDividends are recognised when the right to receive the dividends is established.

6.2 Cash and cash equivalentsCash and cash equivalents consist of cash in hand and cash at financial institutions and highly liquid investment

with an original maturity of 3 months or less and not subject to withdrawal restrictions.

6.3 Trade accounts receivable and allowance for doubtful accountsTrade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided

for the estimated losses that may be incurred in collection of receivables. The allowance is generally based oncollection experiences and analysis of debt aging.

104

6.4 InventoriesInventories are valued at lower of cost (weighted average basis) or net realisable value. Net realisable value is

the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale.

6.5 Investmentsa) Investments in securities held for trading are stated at fair value. Changes in the fair value of these securities

are recorded in profit or loss.b) Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities

are recorded as a separate item in shareholders’ equity, and will be recorded in profit or loss when thesecurities are sold.

c) Investments in debt securities, both due within one year and expected to be held to maturity, are recordedat amortised cost. The premium/discount on debt securities is amortised/accreted by the effective ratemethod with the amortised/ accreted amount presented as an adjustment to the interest income.

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

e) Investments in associates are accounted for in the consolidated financial statements using the equity method.f) Investments in subsidiaries and associates are accounted for in the separate financial statements using the

cost method.

The fair value of marketable securities is based on the latest bid price of the last working day of the year.

6.6 Property, premises and equipment/DepreciationLand is stated at revalued amount. Buildings and equipment are stated at cost less accumulated depreciation

and allowance for loss on impairment of assets (if any).

Land initially recorded at cost on the acquisition date, and subsequently revalued by an independent pro-fessional appraiser to its fair values. Revaluations are made with sufficient regularity to ensure that the carryingamount does not differ materially from fair value at the end of reporting period.

Differences arising from the revaluation are dealt with in the financial statements as follows: • When an asset’s carrying amount is increased as a result of a revaluation of the Company and its subsidiaries’

assets, the increase is credited directly to equity under the heading of “Revaluation surplus on land”. However, arevaluation increase will be recognised as income to the extent that it reverses a revaluation decrease of the sameasset previously recognised as an expense.

• When an asset’s carrying amount is decreased as a result of a revaluation of the Company and its subsidiaries’ assets, the decrease is recognised in profit or loss. However, the revaluation decrease is charged to the other comprehensive income to the extent that it does not exceed an amount already held in “Revaluation surplus onland” in respect of the same asset.

Depreciation of premises and equipment is calculated by reference to their cost on a straight-line basis overthe following estimated useful lives:

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

Land improvements

Building, structures and building improvements

Medical tools and equipment and machine

Structure equipment, furniture and office equipment

Vehicles

5 - 20 years

5 - 40 years

3 - 10 years

3 - 15 years

5 - 8 years

105

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

An item of property, premises and equipment is derecognised upon disposal or when no future economicbenefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset is included in profitor loss when the asset is derecognised.

6.7 Intangible assetsIntangible assets acquired through business combination are initially recognised at their fair value on the date

of business acquisition while intangible assets acquired in other cases are recognised at cost. Following the initialrecognition, the intangible assets are carried at cost less any accumulated amortisation and any accumulatedimpairment losses (if any).

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

A summary of the intangible assets with finite useful lives is as follow:Computer software 5 - 10 years

6.8 Goodwill / Business combinationBusiness combinations are accounted for using the acquisition method with the cost of the acquisition being the

fair value at the acquisition date of consideration transferred, and the amount of any non-controlling interest inthe acquiree. For each business combination, the acquirer measures the non-controlling interest, if any, in theacquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets.

Acquisition-related costs are accounted for as expenses in the periods in which the costs are incurred and theservices are received.

Goodwill is initially recorded at cost, which equals to the excess of cost of business combination over the fairvalue of the net assets acquired. If the fair value of the net assets acquired exceeds the cost of business combina-tion, the excess is immediately recognised as gain in profit or loss.

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

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

6.9 Related party transactionsRelated parties comprise enterprises and individuals that control or are controlled by the Company, whether

directly or indirectly, or which are under common control with the Company.

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

106

6.10 Long-term rental agreementsLeases of property, premises or equipment which transfer substantially all the risks and rewards of ownership

are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased assetsand the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges,are included in other long-term payables, while the interest element is charged to profit or loss over the leaseperiod. The property, premises or equipment acquired under finance leases is depreciated over the useful life ofthe assets.

6.11 Operating leasesLeases of assets where a significant portion of the risks and rewards of ownership is retained by the lessor are

classified as operating leases. Payments made under operating leases are recognised as expenses in profit or losson a straight line basis over the period of the lease.

6.12 Impairment of assetsAt the end of each reporting period, the Company and its subsidiaries performs impairment reviews in respect

of the property, premises and equipment and other intangible assets whenever events or changes in circumstancesindicate that an asset may be impaired. An impairment loss is recognised when the recoverable amount of anasset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carryingamount. In determining value in use, the estimated future cash flows are discounted to their present value usinga pre-tax discount rate that reflects current market assessments of the time value of money and the risks specificto the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculationsare corroborated by a valuation model that, based on information available, reflects the amount that the Companyand its subsidiaries could obtain from the disposal of the asset in an arm’s length transaction between knowledge-able, willing parties, after deducting the costs of disposal.

An impairment loss is recognised in profit or loss. However in cases where property was previously revaluedand the revaluation was taken to equity, a part of such impairment is recognised in equity up to the amount ofthe previous revaluation.

In the assessment of asset impairment if there is any indication that previously recognised impairment lossesmay no longer exist or may have decreased, the Company and its subsidiaries estimates the asset’s recoverableamount. A previously recognised impairment loss is reversed only if there has been a change in the assumptionsused to determine the asset’s recoverable amount since the last impairment loss was recognised. The increasedcarrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amountthat would have been determined had no impairment loss been recognised for the asset in prior years. Such reversalis recognised in profit or loss unless the asset is carried at a revalued amount, in which case the reversal, whichexceeds the carrying amount that would have been determined, is treated as a revaluation increase.

6.13 Leasehold rightsLeasehold rights are amortised on the straight-line basis over the lease period.

6.14 Foreign currenciesTransactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transac-

tion. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rateruling at the end of reporting period.

Gains and losses on exchange are included in determining income.

6.15 Employee benefitsShort-term employee benefits

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

107

Post-employment benefits Defined contribution plansThe Company and its subsidiaries and its employees have jointly established a provident fund. The fund is monthly

contributed by employees and by the Company and its subsidiaries. The fund’s assets are held in a separate trustfund and the Company’s and its subsidiaries contributions are recognised as expenses when incurred.

Defined benefit plansThe Company and its subsidiaries has obligations in respect of the severance payments it must make to em-

ployees upon retirement under labor law. The Company and its subsidiaries treats these severance paymentobligations as a defined benefit plan.

The obligation under the defined benefit plan and other long-term employee benefit plans is determined by aprofessionally qualified independent actuary based on actuarial techniques, using the projected unit credit method.

Actuarial gains and losses arising from post-employment benefits are recognised immediately in other com-prehensive income.

For the first-time adoption of TAS 19 Employee Benefits, the Company and its subsidiaries elected to recognisethe transitional liability, which exceeds the liability that would have been recognised at the same date under theprevious accounting policy, through an adjustment to the beginning balance of retained earnings in the current year.

Provisions for vacation The Company and its subsidiaries have set up provisions for vacation which is calculated in accordance with the

Company’s and its subsidiaries' policy and formula, taking into consideration the employee's salary, the number ofyears of service and the unused vacation day. This provision has been adjusted annually.

6.16 Investment propertiesInvestment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition,

investment properties are stated at fair value. Any gains or losses arising from changes in the value of investmentproperties are recognised in profit or loss when incurred.

On disposal of investment properties, the difference between the net disposal proceeds and the carrying amountof the asset is recognised in profit or loss in the period when the asset is derecognised.

6.17 Financial instrumentsFinancial assets carried on the statement of financial position included cash and cash equivalents, short-term

investments, trade and other receivables, short-term loan and long-term loan to related parties, restricted financialinstitution deposit, and investments. Financial liabilities carried on the statement of financial position included bankoverdrafts and short-term loans from financial institution, trade and other payables, short-term loans from relatedparties, long-term loans, liabilities under finance leases, convertible debentures and debentures.

The Company and its subsidiaries have no policy to hold any off-statement of financial position derivativefinancial instruments for speculative or trading purpose.

6.18 Income taxIncome tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based

on taxable profits determined in accordance with tax legislation.

108

6.19 Borrowing costsBorrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily

takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of therespective assets. All other borrowing costs are expensed in the period they are incurred. Borrowing costs consistof interest and other costs that an entity incurs in connection with the borrowing of funds.

6.20 ProvisionsProvisions are recognised when the Company and its subsidiaries have a present obligation as a result of a past

event, it is probable that an outflow of resources embodying economic benefits will be required to settle theobligation, and a reliable estimate can be made of the amount of the obligation.

6.21 Interest rate swap contractsThe net amount of interest to be received from or paid to the counterparty under an interest rate swap contract

is recognised as income or expenses on an accrual basis.

7. Significant accounting judgments and estimatesThe preparation of financial statements in conformity with generally accepted accounting principles at times

requires management to make subjective judgments and estimates regarding matters that are inherently uncertain.These judgments and estimates affect reported amounts and disclosures and actual results could differ from theseestimates. Significant judgments and estimates are as follows:

Allowance for doubtful accountsIn determining allowances for doubtful accounts, the management needs to make judgment and estimates

based upon, among other things, debt collection experience, the aging profile of outstanding debts and the prevailingeconomic conditions.

Property, premises and equipment/DepreciationIn determining depreciation of premises and equipment, the management is required to make estimates of the

useful lives and residual values of the Company’s and its subsidiaries’ premises and equipment and to reviewestimate useful lives and residual values when there are any changes.

The Company and its subsidiaries measure land at revalued amounts. Fair value from revaluation is determinedby independent valuer using market approach. Such valuation is based on certain assumptions and estimates.

In addition, the management is required to review property, plant and equipment for impairment on a periodicalbasis and record impairment losses in the period when it is determined that their recoverable amount is lowerthan the carrying amount. This requires judgements regarding forecast of future revenues and expenses relating tothe assets subject to the review.

Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is

required to use judgment regarding whether significant risks and rewards of ownership of the leased asset havebeen transferred, taking into consideration terms and conditions of the arrangement.

Fair value of financial instrumentsIn determining the fair value of financial instruments that are not actively traded and for which quoted market

prices are not readily available, the management exercise judgment, using a variety of valuation techniques andmodels. The input to these models is taken from observable markets, and includes consideration of liquidity,correlation and longer-term volatility of financial instruments.

109

Impairment of equity investmentsThe Company and its subsidiaries treats available-for-sale investments and other investments as impaired

when there has been a significant or prolonged decline in the fair value below their cost or where other objectiveevidence of impairment exists. The determination of what is “significant” or “prolonged” requires judgement ofthe management.

Investment propertyThe Company and its subsidiaries present investment property at the fair value estimated by an independent

appraiser, and recognises changes in the fair value in profit or loss. The valuation involves certain assumptions andestimates.

Goodwill and intangible assetsThe initial recognition and measurement of goodwill and other intangible assets, and subsequent impairment

testing, require management to make estimates of cash flows to be generated by the asset or the cash generatingunit and to choose a suitable discount rate in order to calculate the present value of those cash flows.

Post-employment benefits under defined benefit plans The obligation under the defined benefit plan is determined based on actuarial techniques. Such determination

is made based on various assumptions, including discount rate, future salary increase rate, mortality rate and staffturnover rate.

Litigation The Company and its subsidiaries have contingent liabilities arising from litigation. The Company's management

has used judgment to assess the outcome of the litigation. In cases of loss, the Company and its subsidiaries willrecord provision for contingent liabilities in their books of account. In cases where it has assessed that no damagewill arise from the litigation, the Company and its subsidiaries will not record provision for contingent liabilities atthe end of the reporting period.

8. Cash and cash equivalentsCash and cash equivalents consist of the following:


20112011 20102010


(Unit : Thousand Baht)

3,346,104

1,018,681

4,364,785

(464,366)

(24,686)

3,875,733

2,492,491

1,798,177

4,290,668

(1,739,554)

(61,659)

2,489,455

1,520,307

10

1,520,317

(10)

-

1,520,307

1,082,259

1,739,543

2,821,802

(1,739,543)

-

1,082,259

Cash and deposits at banks

Fixed deposits, notes, and mutual funds

Less: Fixed deposits, notes, and mutual funds

with maturities of more than 3 months

(short-term investments)

Restricted bank deposits

Total cash and cash equivalents

110

9. Restricted financial institutions depositsThese represent bank deposits that the Company and its subsidiaries have placed with banks to secure letters

of guarantees issued by the banks on behalf of the Company and its subsidiaries. These also represent bank depositsthat the Company and its subsidiaries have placed with government agencies, state enterprise and private entitiesto guarantee contractual performance, among others and as escrow account.

10. Trade and other receivables

11. Trade accounts receivableAs at 31 December 2011 and 2010, the aging analysis of the outstanding trade accounts receivable is as follows:

12. Related party transactionsThe Company and its subsidiaries had significant business transactions with individuals or related parties, which

have been concluded on commercial terms and bases agreed upon between the Company and those relatedparties. Below is a summary of those transactions.

20112011 20102010


Trade receivables - related parties

Trade receivables - unrelated parties-net

Other receivables - related parties

Other receivables - unrelated parties

Total trade and other receivables - net

2,913

3,192,485

13,791

167,923

3,377,112

2,233

1,890,624

18,927

43,040

1,954,824

7,724

746,315

33,694

41,557

829,290

9,283

505,789

37,538

19,967

572,577

20112011 20102010


Related parties

Less than 3 months

3 - 6 months

6 - 12 months

Total trade accounts receivable - related parties

Unrelated parties

Less than 3 months

3 - 6 months

6 - 12 months

over 12 months

Total trade accounts receivable - unrelated parties

Less: Allowance for doubtful accounts

Total trade accounts receivable - unrelated parties - net

Total trade accounts receivable - net

2,400

144

369

2,913

2,613,130

400,660

245,702

233,893

3,493,385

(300,900)

3,192,485

3,195,398

2,233

-

-

2,233

1,579,726

232,699

109,659

162,109

2,084,193

(193,569)

1,890,624

1,892,857

7,538

180

6

7,724

526,491

121,141

131,735

101,585

880,952

(134,637)

746,315

754,039

9,283

-

-

9,283

409,029

66,303

42,951

82,249

600,532

(94,743)

505,789

515,072





111

The significant intercompany transactions are as follows:

For the years ended 31 December


20112011 20102010Subsidiary companies

Revenue from hospital operations and lab services

Consulting and management fee income

Interest income

Dividend income (Note 14)

Other income

Service cost

Consulting and management fee expenses

Other expenses

Interest expenses

Sales of medical equipment and vehicle

Associated companies


Dividend income (Note 15)

Other income

Service cost

Other expenses

Dividend payment

Individuals or related companies


Dividend income

Other income

Service cost

Other expenses

Dividend payment

-

-

-

-

-

-

-

-

-

-

3.2

-

26.2

99.2

1.8

-

4.7

10.8

10.5

14.9

5.8

-

-

-

-

-

-

-

-

-

-

-

2.4

-

16.5

108.7

-

7.3

11.0

2.5

6.9

13.5

7.7

170.9

40.2

236.8

55.2

1,818.2

37.3

367.9

206.2

153.1

36.6

1.2

1.1

61.8

0.2

36.7

-

-

1.9

10.8

-

13.6

0.1

-

36.9

210.6

111.0

728.3

23.7

328.5

167.2

60.4

8.1

2.1

0.4

60.3

-

68.5

-

7.3

10.9

2.5

-

10.4

2.5

170.9

Transaction Pricing and lending policy

Revenue from hospital operation and lab services

Revenue and expenses from consulting and management

Rental income and rental expenses

Interest charge of inter-company loan

Purchases and sales of fixed assets

Purchases of investments

Based on the price charged to normal customers

Rates as stipulated in agreements

Rates as stipulated in agreements

Interest rate close to that charged by commercial banks

Prices are dependent on the condition of fixed assets

The same prices as purchases from unrelated parties



112

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

20112011 20102010


Trade accounts receivable - related parties

Subsidiary companies


Related companies

Total trade accounts receivable - related parties



Total short-term loans to related parties

Other accounts receivable - related parties

Consulting and management fee receivable


Total

Others



Related companies

Total

Total other accounts receivable - related parties



Total long-term loans to related parties

Leasehold rights - related parties

(included in other non-current assets)


Related parties

Total leasehold rights - related parties

Deposits - related parties

(included in other non-current assets)


Associated company

Total deposits - related parties



Total short-term loans from related parties

-

894

2,019

2,913

-

-

-

-

-

8,484

5,307

13,791

13,791

-

-

272,672

85,708

358,380

-

2,700

2,700

-

-

-

117

2,116

2,233

-

-

-

-

-

13,394

5,533

18,927

18,927

-

-

262,103

91,632

353,735

-

2,700

2,700

-

-

6,617

-

1,107

7,724

307,097

307,097

22,491

22,491

11,203

-

-

11,203

33,694

1,665,538

1,665,538

-

-

-

122

2,700

2,822

1,627,946

1,627,946

7,804

-

1,479

9,283

103,132

103,132

25,118

25,118

12,420

-

-

12,420

37,538

1,321,014

1,321,014

-

-

-

122

2,700

2,822

639,601

639,601



113

ล

Movement of loans to and loans from related parties during the year are summarised as follows:

20112011 20102010


-

89,466

715

90,181

-

13,126

5,769

18,895

-

-

-

-

76,723

290

77,013

-

1,967

3,131

5,098

-

113

113

54,499

73,782

530

128,811

46,676

-

195

46,871

2,399

-

2,399

45,691

65,020

285

110,996

24,690

113

65

24,868

2,045

113

2,158

Trade accounts payable - related parties



Related companies

Total trade accounts payable - related parties

Other accounts payable - related parties



Related companies

Total other accounts payable - related parties

Deposits - related parties

(included in other non-current liabilities)


Associated company

Total deposits - related parties

DecreaseIncrease



103,132

103,132

1,321,014

1,321,014

639,601

639,601

307,097

307,097

1,023,869

1,023,869

1,627,946

1,627,946

(103,132)

(103,132)

(679,345)

(679,345)

(639,601)

(639,601)

307,097

307,097

1,665,538

1,665,538

1,627,946

1,627,946



Total short-term loans to related parties



Total long-term loans to related parties



Total short-term loans from related parties

31 December2010

31 December2011



114

Short-term and long-term loans to related partiesThe Company has entered into short-term loan agreements and long-term loan agreements with terms of 3-8

years with its subsidiaries. The Company charged interest on loans to related parties at the Fixed Deposit Rate plusfixed rate per annum, LIBOR plus fixed rate per annum and a fixed interest rate stipulated in the agreement payableon a monthly basis while principal is repayable on the basis stipulated in the agreements. As at 31 December 2011,the Company has outstanding short term and long term loans to subsidiaries totaling Baht 1,972.6 million (2010:Baht 1,424.2 million).

Management agreementThe Company

The Company provides hospital management services to its subsidiaries, for the remuneration rates are basedon the net revenue from hospital operations.

A SubsidiaryA subsidiary company has entered into a Hospital Management Agreement with another subsidiary company,

expiring on 28 May 2022. The subsidiary company is to receive management income at a certain percentage of totaloperation result as stipulated in the agreement.

A subsidiary company has entered into a Hospital Management Agreement with its 4 subsidiary companies andother 4 subsidiary companies. The agreement is for 1-2.5 years and is entitled to renew. The subsidiary companyshall receive managing income at the rates stipulated in the agreement. The payment must be made on a monthlybasis.

Long term rental agreementThe Company

In May 2004, a subsidiary company entered into a three-year agreement to rent land from the Company foruse in hospital operations whereby the subsidiary company has to pay a monthly rental fee at the rate stipulatedin the agreement. Subsequently, the subsidiary extended the agreement to 30 April 2013.

The subsidiariesA subsidiary company entered into an agreement to rent land from another subsidiary company for construction

of a building, expiring on 31 December 2012. The subsidiary company has to pay a monthly rental fee at the ratestipulated in the agreement. In addition, such another subsidiary company entered into an agreement to rent thebuilding from a subsidiary company for its hospital operations, expiring on 30 April 2014. That subsidiary companyhas to pay a monthly rental fee at the rate stipulated in the agreement.

Service and management agreementA subsidiary company has entered into service and management agreements with the Company and other

related parties which have to pay monthly service and management fees to the subsidiary at the rates stipulatedin the agreements.

The Company and other related parties have entered into information technology management agreementswith a subsidiary company whereby have to pay monthly service fees to the subsidiary at the rate stipulated inthe agreements.

A subsidiary company has entered into food providing and maintenance service agreements with the Companyand related parties whereby the Company and related parties have to pay monthly service fee to subsidiary at therates stipulated in the agreements.

Air ambulance service agreementAssociated company

On 1 September 2007, an associated company entered into an air ambulance service agreement with theCompany. The agreement is for a period of 3 years from the date the service commenced and is renewable. The

115

20112011 20102010


Short-term employee benefits

Post-employment benefits

Total

56.0

1.5

57.5

50.4

-

50.4

56.0

1.5

57.5

50.4

-

50.4

20112011 20102010


Medicines and medical supplies

Reagent

Supplies and others

Less: Provision for deteriorated inventories

Total

904,876

84,825

49,584

1,039,285

(1,558)

1,037,727

339,251

27,776

31,923

398,950

(645)

398,305

231,928

-

-

231,928

(1,001)

230,927

58,096

-

-

58,096

(263)

57,833

2011 2010


% ShareholdingInvestments -cost method

Dividend receivedduring the year

Paid-upCapital

Nature ofbusinessCompany’s name


Samitivej Public Co., Ltd.

Bangkok Hospital Hatyai Co., Ltd.



Bangkok Phrapradaeng Hospital Co., Ltd.



Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Baht 1,000 million

Baht 500 million

Baht 500 million

Baht 586 million

Baht 105 million

Baht 280 million

Baht 400 million

95.76

98.78

99.68

91.48

79.00

97.22

100.00

95.76

98.78

99.67

91.42

79.00

97.22

100.00

2011 20101,639,071

574,373

610,153

602,655

96,775

708,196

415,020

1,639,071

574,373

609,995

602,235

96,775

708,196

415,020

2011 2010384,970

34,573

79,739

147,447

-

244,982

180,000

191,527

59,249

-

66,980

-

217,760

40,000

agreement stipulates the monthly minimum service fee that the associated company is to earn from the Company.The Company has extended the agreement for 25 months ended on 30 September 2012.

Guarantee obligations with related partyThe Company has guaranteed long-term loan on credit amount of USD 3.6 million and overdraft facility

amounting to USD 1 million for an overseas subsidiary company.

The Company has guaranteed long-term loan on credit amount of Baht 2,876 million for local subsidiary companies.

Directors and management’s benefitsDuring the year ended 31 December 2011 and 2010, the Company and its subsidiaries had employee benefit

expenses of their directors and management as below.

13. Inventories

14. Investments in subsidiary companies





116

2011 2010






Bangkok Ratchasima Hospital Co., Ltd.


Bio Molecular Laboratories




Royal Rattanak Medical Services Co., Ltd.

B.D.M.S. International Medical

Services Co., Ltd.


Bangkok Hospital Hua Hin Co., Ltd.


Bangkok Health Insurance Limited



Bangkok Hospital Kao Yai Co., Ltd.


Prasit Patana Public Co., Ltd.


Paolo Samutprakarn Co., Ltd.


Thai Medical Center Public Co., Ltd.

Bangkok Premier Life Insurance

Broker Co., Ltd.

Total investments in subsidiary

companies

Less: Allowance for impairment of

investment

Total investments in subsidiary

companies - net

Hospital

Hospital

Hospital

Hospital

Central Lab

Central Lab

Hospital

Hospital

Hospital

Hospital

Investment

Liquidated

Hospital

Health insurance

Management

service

Technology andinformation

service

Hospital

Training business

Investment

Hospital

Hospital

Hospital

Hospital

Life insurance

broker

Baht 150 million

Baht 250 million

Baht 180 million

Baht 300 million

Baht 75 million

Baht 10 million

USD 10 million

USD 10 million

Riel 26,000 million

Riel 9,200 million

Baht 35 million

Baht 260 million

Baht 1 million

Baht 105 million

Baht 736 million

Baht 200 million

Baht 70 million

Baht 1 million

Baht 2,341 million

Baht 300 million

Baht 42 million

Baht 100 million

Baht 201 million

Baht 4 million

100.00

99.76

99.69

89.73

74.02

95.00

80.00

100.00

70.00

100.00

100.00

-

100.00

99.94

100.00

100.00

100.00

100.00

97.14

100.00

88.73

80.72

99.76

100.00

100.00

99.76

99.67

89.53

74.02

95.00

80.00

100.00

70.00

100.00

100.00

100.00

100.00

99.94

100.00

100.00

100.00

100.00

-

-

-

-

-

-

2011 2010

150,000

245,889

450,643

917,286

56,768

9,502

287,840

338,323

154,063

94,208

35,000

-

999

47,027

736,000

200,000

70,000

1,000

9,109,950

2,922,872

1,675,754

904,818

887,135

4,000

23,945,320

(20,000)

23,925,320

150,000

245,889

450,534

915,246

56,768

9,502

287,840

338,323

154,063

94,208

35,000

260,000

999

47,027

736,000

200,000

70,000

1,000

-

-

-

-

-

-

8,698,064

(20,000)

8,678,064

2011 2010

45,000

19,951

179,450

-

66,622

4,750

-

-

-

-

-

-

-

-

18,400

-

-

-

-

399,900

7,453

4,931

-

-

1,818,168

60,000

-

53,824

-

33,311

5,700

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

728,351

% ShareholdingInvestments -cost method


Paid-upCapital

Nature ofbusinessCompany’s name

117


Company % of shares held

1) Prasit Patana Public Company Limited and its subsidiaries

2) Paolo Medic Company Limited

3) Paolo Samutprakarn Company Limited

4) Siam Medical Company Limited

5) Thai Medical Centre Public Company Limited

68.64%*

100.00%

88.73%

80.72%

99.76%

The Company issued 230,870,405 ordinary shares (calculation from fair value at acquisition date)

Cash

Novation of loan

Total consideration

Add : Fair value of the Company’s existing 19.47% shareholding in Prasit Patana

Public Company Limited

Total consideration paid for calculating goodwill

10,424,687

680,000

379,416

11,484,103

1,512,559

12,996,662

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

14.1 Merger with Health Network Public Company LimitedOn 24 February 2011, the Extraordinary General Meeting of the Company approved for the Company to enter

into the merger with Health Network Public Company Limited and the Company has completed the entire businesstransfer on 1 April 2011 by paying the total consideration of Baht 11,484 million (See consideration paid summaryin a).

After merger, the Company has additional investment in subsidiary companies as follows:

The Company and Health Network Public Company Limited must comply with the conditions stipulated in the entire business transfer agreement.

Goodwill from merger a) Consideration paid for goodwill calculation is as follows:

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

Cash and cash equivalents

Short-term investments

Trade accounts receivable - net

Short-term loan to a related company

Inventories


Long-term deposit at financial institution

1,986,099

264,357

818,977

360,000

158,317

110,889

50,000


118

The cost of merger and tender offer totaling Baht 189.5 million has been separately recorded as expense inincome statements for amount of Baht 43.4 million and the cost of Baht 146.1 million which was related to sharecapital increase has been offset with share premium under shareholders' equity in statements of financial position.

14.2 Tender offer to purchase securities of Prasit Patana Public Company LimitedOn 7 April 2011, the Company submitted a tender offer proposal to purchase securities of Prasit Patana Public

Company Limited, offering the two following options of payment to shareholders:

1. Cash payment of Baht 3.71 per share

2. The Company’s newly issued ordinary shares at the ratio of 10.1706 shares in Prasit Patana Public CompanyLimited to 1 share in the Company, equaling Baht 37.75 per share.

After Tender offer completion on 23 May, 2011, the Company has additional investment in ordinary shares ofPrasit Patana Public Company Limited of 666.34 million shares, totaling Baht 2,939.9 million by cash payment ofBaht 43.34 million and issuing 64.4 million ordinary shares of the Company, totaling Baht 2,896.56 million (calculationfrom fair value at acquisition date). As a result, the Company's shareholding in that company increased to 97.10percent.

In addition, in the third quarter of 2011, the Company purchased additional investment of 1.09 million shares,totaling Baht 4.04 million in Prasit Patana Public Company Limited from the former shareholders. As a result, theCompany's shareholding in that company increased to 97.14 percent.


Restricted financial institution deposits

Other long-term investments - net

Investment property

Property, premises and equipment - net

Intangible assets - net


Trade accounts payable

Income tax payable


Long-term loans from financial institutions

Liabilities under finance lease agreement



Fair value of net assets

Less : Non-controlling interest

Net asset acquired

Consideration paid

Goodwill

24,094

244,233

34,400

9,342,016

188,269

62,315

(463,867)

(311,239)

(833,921)

(5,565,664)

(205,270)

(304,132)

(937,341)

5,022,532

(1,336,070)

3,686,462

12,996,662

9,310,200

119

14.3 Investment in subsidiary companies which the Company previously held Bangkok Phuket Hospital Co., Ltd.

In 2011, the Company purchased additional investment of 11,000 shares, totaling Baht 0.2 million in BangkokPhuket Hospital Co., Ltd. As a result, the Company's shareholding in that company increased to 99.68 percent.

BNH Medical Center Co., Ltd.In 2011, the Company purchased additional investment of 34,960 shares, totaling Baht 0.4 million in BNH Medical

Center Co., Ltd. As a result, the Company's shareholding in that company increased to 91.48 percent.

Wattanavej Co., Ltd.In 2011, the Company purchased additional investment of 3,750 shares, totaling Baht 0.1 million in Wattanavej

Co., Ltd. As a result, the Company's shareholding in that company increased to 99.69 percent.

Bangkok Ratchasima Hospital Co., Ltd.In 2011, the Company purchased additional investment of 60,000 shares, totaling Baht 2.0 million in Bangkok

Ratchasima Hospital Co., Ltd. As a result, the Company's shareholding in that company increased to 89.73 percent.

Bangkok Hospital Hua Hin Co., Ltd.In 2010, the Board of Directors of the Company's meeting passed a resolution of the Company’s restructuring

by transferring entirely business of the Company's wholly owned subsidiary, Bangkok Hospital Hua Hin Co., Ltd., tothe Company. Bangkok Hospital Hua Hin Co., Ltd will transfer all of its assets, liabilities, authorities and liabilities asof transferring date to the Company. The book value of Bangkok Hospital Hua Hin Co., Ltd., was used as the basisfor price the transfer. The Company has already transferred the business in the fourth quarter of 2010. The subsidiarycompany has already liquidated on 9 November 2011 and the Company has received capital refund amountingBaht 259.0 million and recorded loss on liquidation of a subsidiary company amounting Baht 1.0 million in profitor loss.

Samitivej Public Co., Ltd. and Samitivej Sriracha Co., Ltd.In 2011, the subsidiary company purchased additional investment of 100,000 shares, totaling Baht 3.5 million

in Samitivej Sriracha Co., Ltd. As a result, the subsidiary company increased the percentage of shareholding in thatcompany to 68.06 percent.

Prasit Patana Public Co., Ltd. and Sriracha Nakorn General Hospital Public Co., Ltd.From the second to fourth quarter of 2011, the subsidiary company purchased additional investment of 1,090,100

shares, totaling Baht 58.9 million in Sriracha Nakorn General Hospital Public Co., Ltd. As a result, the subsidiarycompany increased the percentage of shareholding in that company to 64.64 percent.

Prasit Patana Public Co., Ltd. and Phyathai 2 Hospital Co., Ltd.From the second to fourth quarter of 2011, the subsidiary company purchased additional investment of 108,676

shares, totaling Baht 5.4 million in Phyathai 2 Hospital Co., Ltd. As a result, the subsidiary company increased thepercentage of shareholding in that company to 99.09 percent.

Prasit Patana Public Co., Ltd. and Phyathai 3 Hospital Co., Ltd.From the second to fourth quarter of 2011, the subsidiary company purchased additional investment of 135,568

shares, totaling Baht 13.6 million in Phyathai 3 Hospital Co., Ltd. As a result, the subsidiary company increased thepercentage of shareholding in that company to 97.76 percent.

14.4 Investment in a new subsidiary company during the year Bangkok Premier Life Insurance Broker Co., Ltd.

In the third quarter of 2011, the Company invested in Bangkok Premier Life Insurance Broker Company Limitedwhich operates in life insurance broker business. The Company invested Baht 4 million in that company for a 100%shareholding.

120

15. Investments in associated companies

15.1 Udon Pattana (1994) Co., Ltd.As a result of purchasing of investment as stated in Note 14.1 and 14.2, Prasit Patana Public Company Limited,

the new subsidiary company, has 10 percentage of shareholding in Udon Pattana (1994) Co., Ltd. or 9.71 indirectpercentage of shareholding by the Company. Subsequently, in the second and third quarters of 2011, the Companypurchased additional investment of 1,577,000 shares, totaling Baht 38.30 million or 5.26 percentage of shareholdingin Udon Pattana (1994) Co., Ltd. from the former shareholders. As a result, the Company holds totally 24.97percentage of shareholding in that company and changes its status to become an associated company. The Companyrealised gain from the remeasurement of its previously held shareholding to fair value in the consolidated statementof income by Baht 39 million, under the caption “gain on fair value adjustment of investments”. The Companyhas also reversed allowance for impairment of such investments of Baht 12.3 million.

2011 2010

Separatefinancial

statements

Consolidatedfinancial

statements% Shareholding

Cost MethodEquity Method

Paid-upCapital

Natures ofbusinessCompany’s name


Associated companies held by

the Company

The Medic Pharma Co., Ltd.






Ramkhamhaeng Hospital Public Co., Ltd.

Krungdhon Hospital Public Co., Ltd.


(held by the Company at 15.26% and

indirectly held by subsidiary at 9.71%)

Total investments in associated

companies held by the Company

Associated companies held by

the subsidiary companies

Sodexo Support Services


Al Ghaith Bangkok Dusit Management

Services LLC.

Total investments in associated company

held by the subsidiary companies

Total investments in associated companies

in the consolidated financial statements

Pharmaceuticals

Production oftelevision andradio program

Real estate

Real estate

Real estate

Service

Hospital

Hospital

Hospital

Management

services

Management

services

Baht 21.4 million

Baht 5 million

Riel 20 million

Riel 20 million

Riel 20 million

Baht 100 million

Baht 120 million

Baht 150 million

Baht 300 million

Baht 5 million

UAE DIRHAM

0.15 million

49.00

30.00

49.00

49.00

49.00

49.00

38.24

20.01

24.97

26.00

30.00

49.00

30.00

49.00

49.00

49.00

49.00

38.24

20.01

-

26.00

30.00

2011 2010

144,140

1,069

1,837

1,529

2,947

38,134

2,329,480

107,865

180,101

2,807,102

8,118

393

8,511

2,815,613

126,578

1,069

1,419

1,156

2,135

40,962

1,989,406

102,360

-

2,265,085

5,910

393

6,303

2,271,388

2011 2010

52,500

1,500

101

101

88

50,859

1,459,800

101,072

69,952

1,735,973

52,500

1,500

101

101

88

50,859

1,459,800

101,072

-

1,666,021

121

15.2 Details of share of income and dividend received from the associated companies are set out below.

Below are fair values of investments in associated companies that are listed companies on the Stock Exchangeof Thailand

Company’s name

Share of income/(loss)from investments in

associated companies


20112011 20102010Associated companies held by the Company









Udon Patana (1994) Co., Ltd.

Associated companies held

by the subsidiary companies

Sodexo Support Services (Thailand) Co., Ltd.

Al Ghaith Bangkok Dusit Management Services LLC.

Total

22,811

-

339

309

693

(2,827)

349,806

7,006

-

3,508

-

381,645

20,932

-

328

298

686

1,060

273,721

1,289

-

1,433

-

299,747

5,250

-

-

-

-

-

55,061

1,501

-

-

-

61,812

5,250

-

-

-

-

-

55,061

-

-

-

-

60,311

Company’s name

2011 2010

Fair values as at 31 December




Total

3,588,148

97,566

3,685,714

2,844,823

112,576

2,957,399




122

15.3 Below is a summary of financial information of associated companies

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

16. Other long-term investments

As at 31 December

Company’s name

For the years ended31 December

Paid-up capitalTotal

liabilitiesTotal

revenuesNet income

(loss)Totalassets


2011 2010


by the Company









Udon Patana (1994) Co., Ltd.


by the subsidiary companies

Sodexo Support Services (Thailand) Co., Ltd

Al Ghaith Bangkok Dusit Management

Services LLC.

55.9

-

0.7

0.6

1.4

(5.9)

909.0

35.0

22.9

13.5

-

40.7

-

0.7

0.6

1.4

2.3

708.9

(4.8)

-

5.5

-

2011 2010

371.3

-

0.7

0.6

1.5

70.0

3,044.1

295.9

393.5

319.3

-

324.8

-

0.7

0.6

1.4

64.1

2,759.4

330.9

-

304.5

-

2011 20102011 20102011 2010

Baht 21 million

Baht 5 million

Riel 20 million

Riel 20 million

Riel 20 million

Baht 100 million

Baht 120 million

Baht 150 million

Baht 300 million

Baht 5 million

UAE DIRHAM

0.15 million

Baht 21 million

Baht 5 million

Riel 20 million

Riel 20 million

Riel 20 million

Baht 100 million

Baht 120 million

Baht 150 million

-

Baht 5 million

UAE DIRHAM

0.15 million

394.9

2.9

69.8

63.5

145.9

261.6

5,415.0

312.9

1,071.1

105.7

-

330.4

2.9

66.4

60.5

138.8

270.1

4,643.3

294.9

-

100.1

-

101.2

-

66.0

60.4

139.9

183.8

2,110.2

37.5

359.1

74.5

-

81.9

-

63.5

58.1

134.5

186.3

2,072.1

47.0

-

77.3

-

Investment(cost)

% shareholding

Paid-upcapital

(Million Baht)Nature ofbusinessCompany's name


Investments held by the CompanyAvailable-for-sale investmentsInvestments in listed securities

Thai Military Bank Public Co., Ltd.

Aikchol Hospital Public Co., Ltd.

Bumrungrad Hospital Public Co., Ltd.

Surplus (deficit) on changes in value of

available-for-sale investments

Investments in listed securities - net

Bank

Hospital

Hospital

415,367

125

730

-

0.20

14.22

2011 2010

1,770

350

3,455,835

3,457,955

1,372,094

4,830,049

1,770

350

-

2,120

(179)

1,941

123


Investments in related companies

Bangkok Airways Co., Ltd.

X-Ray Computer Urupong Co., Ltd.

Investments in related companies

Investments in other companies


Computer Center Co., Ltd.*

Phyathai X-ray Co., Ltd.*

Winstore Co., Ltd.*

Thai Longstay Management Co., Ltd.

Prasit Pattana Public Co., Ltd.

Superior Biotech Holding Co., Ltd.

Less: Allowance for impairment of

investments

Investments in unrelated

companies-net

Investment in debt security

Bill of Exchange

Investment in debt security

Total other long-term investments -

net in the separate financial

statements

Investment held by the subsidiary

companies

Investments in unrelated companies

Thai Herbal Products Co., Ltd.

Prasitthirat Co., Ltd.**

2011 2010

36,000

4,520

40,520

-

-

-

-

531

-

5,000

5,531

-

5,531

-

-

4,876,100

290

107,192

36,000

4,520

40,520

31,650

25

3

226

531

1,072,480

5,000

1,109,915

(12,587)

1,097,328

500,000

500,000

1,639,789

290

-

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

Airline

X-ray lab

Hospital

Rental of medical

instrument

Retail and wholesale

Travel business

Investment in

medical services

Investment

Sales of herbal

products

Educational

institution

1,200

100

300

-

130

142

100

2,341

44

80

150

1.20

4.09

10.00

-

-

0.36

1.06

19.47

9.09

0.60

33.33

Investment(cost)

% shareholding

Paid-upcapital


124

Bumrungrad Hospital Public Company LimitedIn 2011, the Company purchased ordinary shares of Bumrungrad Hospital Public Company Limited for total of

103.83 million shares, amount of Baht 3,455.84 million, representing 14.22 percent of the issued and paid-up capitalof that company.

Prasitthirat Company LimitedA subsidiary company had 33.33 percentage of shareholding in Prasitthirat Company Limited but has not classified

it as investment in associated company because the subsidiary company has no power to participate in the financialand operating policy decisions of that company.

Investments in ordinary shares (ceased operations)-Subsidiary companiesA subsidiary company has investments in companies that have ceased their operations but has not classified

them as investments in subsidiary companies because the subsidiary company has no power to control suchcompanies.


Phuket International Hospital Co., Ltd.**

Asia Laboratories Center Limited **

Investments in unrelated companies

Investments in ordinary shares

(ceased operations)**

Phyathai 4 Hospital

(Petchaburi Road) Co., Ltd.

Klass - V Co., Ltd.

Phuket Paradise Co., Ltd.

Phyathai Herbs Co., Ltd.

Unrelated company

Phuket Hospital Public Co., Ltd.

Less : Allowance for impairment of

investment

Investment in ordinary shares

(ceased operations) - net

Total other long-term investments - net

in the consolidated financial

statements

-

-

290

-

-

-

-

-

-

-

-

1,640,079

2011 2010

6.15

8.00

89.79

89.66

72.26

63.64

19.08

29,552

400

137,434

-

-

-

42,889

-

42,889

(7,000)

35,889

5,049,423

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

Hospital

Central lab

Adjudged bankrupt

Adjudged bankrupt

Adjudged bankrupt

In process of

liquidation

Hospital

195

5

328

250

409

196

358

Investment(cost)

% shareholding

Paid-upcapital


125

17. Investment properties

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

18. Property, premises and equipment



2011 2010



Building

-

-

135,177

19,604

-

154,781

-

-

135,177

19,604

-

154,781

252,966

-

-

-

18,069

271,035

252,966

-

135,177

19,604

18,069

425,816

-

34,400

135,177

19,604

1,045

190,226

TotalLand Building TotalLand

-

34,400

-

-

1,045

35,445

Assets whichare stated at

cost orreappraised

value Assets which are stated at cost

Structureequipment,

furniture, fixtureand officeequipment Vehicles Total

Medicaltools,

machineand

equipment

Building andbuilding

improvementLand and landimprovement

32,929,629

770,769

1,429,312

(18,512)

(331,818)

(101,727)

34,677,653

14,316,264

8,985

3,864,692

(56,270)

(372,053)

51,082

52,490,353

4,913,456

410,292

22,216

-

-

-

5,345,964

2,860,267

8,985

330,145

49

-

-

8,545,410

Consolidate financial statements

Building underconstruction and medical toolsand equipment

under installation

Cost/reappraised value

31 December 2009

Increase from acquisition

Purchases

Transfer in / (Transfer out)

Disposals/Written-off

Translation adjustment

31 December 2010


Increase from revaluation

Purchases




31 December 2011

645,953

1,742

383,442

(158,396)

(1,879)

(47,923)

822,939

279,925

-

964,574

(595,984)

(288)

25,264

1,496,430

387,723

59,282

36,164

6,322

(26,553)

(499)

462,439

121,255

-

67,475

1,177

(33,312)

240

619,274

15,924,442

95,182

110,725

43,639

(7,079)

(36,713)

16,130,196

7,079,417

-

629,089

370,332

(35,925)

17,571

24,190,680

7,150,031

64,457

634,090

(54,624)

(144,471)

(15,700)

7,633,783

2,969,286

-

1,354,679

66,232

(196,395)

3,493

11,831,078

3,908,024

139,814

242,675

144,547

(151,836)

(892)

4,282,332

1,006,114

-

518,730

101,924

(106,133)

4,514

5,807,481

Balance at beginning of year


Purchase

Transfer from property, premises and equipment

Gain on revalue of assets

Balance at ending of year

Depreciation charged included in income statement for the year

2010 (Baht 1,688 million included in cost of hospital operations, sales and services,

and the balance in administrative expenses)

2011 (Baht 2,114 million included in cost of hospital operations, sales and services,


2,084,361

2,605,543

126


cost orreappraised



Accumulated depreciation

31 December 2009


Depreciation for the year




31 December 2010






31 December 2011

Impairment of fixed assets

31 December 2010

Reversal of impairment loss

31 December 2011

Net book value

31 December 2010

31 December 2011

17,016

-

466

-

-

-

17,482

7,011

330

16

-

-

24,839

2,955

-

2,955

5,325,527

8,517,616

Consolidate financial statements (continued)

13,796,647

245,062

2,084,361

332

(296,820)

(13,730)

15,815,852

4,974,248

2,605,543

(1,034)

(346,510)

9,228

23,057,327

3,705

(750)

2,955

18,858,096

29,430,071

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

822,939

1,496,430

6,238,159

35,980

896,230

(1,321)

(2,581)

(4,482)

7,161,985

2,468,573

1,089,527

4,775

(25,304)

2,696

10,702,252

750

(750)

-

8,967,461

13,488,428

4,204,701

51,438

766,679

(43,606)

(130,230)

(5,480)

4,843,502

1,717,567

1,036,963

53,134

(193,226)

2,686

7,460,626

-

-

-

2,790,281

4,370,452

3,021,038

121,697

380,780

45,259

(139,690)

(3,490)

3,425,594

711,822

422,604

(58,215)

(96,028)

3,643

4,409,420

-

-

-

856,738

1,398,061

315,733

35,947

40,206

-

(24,319)

(278)

367,289

69,275

56,119

(744)

(31,952)

203

460,190

-

-

-

95,150

159,084

Structureequipment,


Medicaltools,

machineand

equipment



Building underconstruction and medical toolsand equipment

under installation

127


Depreciation charged included in income statement for the year

2010 (Baht 587 million included in cost of hospital operations, sales and services,


2011 (Baht 594 million included in cost of hospital operations, sales and services,


700,964

683,991


cost orreappraised


Structureequipment,


Medicaltools,

machineand

equipment



836,787

181,544

-

-

1,018,331

(252,966)

24,532

-

-

789,897

-

-

-

-

-

-

-

-

-

1,018,331

789,897


Building underconstruction andmedical tools andequipment under

installation

Cost/reappraised value

31 December 2009

Purchases



31 December 2010

Cumulative effect of change

in accounting policy

Purchases



31 December 2011

Accumulated depreciation

31 December 2009




31 December 2010




31 December 2011

Net book value

31 December 2010

31 December 2011

40,977

249,849

(41,316)

-

249,510

-

124,050

(246,520)

(10)

127,030

-

-

-

-

-

-

-

-

-

249,510

127,030

8,842,723

818,559

(6,688)

(35,866)

9,618,728

(252,966)

786,190

(20,842)

(27,564)

10,103,546

3,795,794

700,964

-

(30,145)

4,466,613

683,991

(1,105)

(24,056)

5,125,443

5,152,115

4,978,103

4,288,020

66,856

(2,134)

(60)

4,352,682

-

104,529

130,548

-

4,587,759

1,337,949

291,411

(1,321)

(60)

1,627,979

273,402

(2,051)

-

1,899,330

2,724,703

2,688,429

2,330,483

272,086

21,955

(18,429)

2,606,095

-

400,663

425

(4,943)

3,002,240

1,329,356

298,959

(1,061)

(14,317)

1,612,937

326,642

-

(4,623)

1,934,956

993,158

1,067,284

1,206,040

31,685

14,543

(3,547)

1,248,721

-

112,964

94,705

(7,633)

1,448,757

999,856

102,324

2,382

(3,469)

1,101,093

77,309

946

(5,510)

1,173,838

147,628

274,919

140,416

16,539

264

(13,830)

143,389

-

19,452

-

(14,978)

147,863

128,633

8,270

-

(12,299)

124,604

6,638

-

(13,923)

117,319

18,785

30,544

128

In 2011, a subsidiary has recorded appraisal result of its subsidiary company which engaged an independentappraiser to appraise all of its land using the market approach. The fair values of the revalued land amounted toBaht 203 million which increased from the previous revaluation of Baht 9 million. The subsidiary therefore recorded"Gain on revaluation of land" in the consolidated statements of comprehensive income.

The revaluation surplus can neither be offset against deficit nor used for dividend payment.

If the Company and its subsidiaries recorded the land at cost, their net book value as at 31 December 2011 and2010 would have been as follows:

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

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

19. Land and buildings not used in operationsLand and buildings not used in operations as at 31 December 2011 and 2010 consisted of:

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




Net book value (at cost) :

As of 31 December 2011

As of 31 December 2010

5,715,550

2,552,079

458,130

433,598

20112011 20102010


Land and buildings at historical cost

Revaluation surplus

Allowance for impairment

Total

368,174

143,748

(719)

511,203

368,174

143,748

(719)

511,203

367,847

143,748

(719)

510,876

367,847

143,748

(719)

510,876



129

20. Intangible assetsIntangible assets, as at 31 December 2011 and 2010, which are computer software are as follows:




Cost

As at 1 January 2010

Purchase

Transfer in

Disposals/written-off


As at 31 December 2010


Purchase

Transfer in




Accumulated amortisation

As at 1 January 2010

Amortisation for the year






Transfer out




Net book value



393,737

60,039

18,512

(350)

(212)

471,726

349,676

140,325

35,122

(384)

102

996,567

222,575

47,990

(212)

(47)

270,306

161,407

82,904

(83)

(141)

35

514,428

201,420

482,139

141,560

96

6,688

-

-

148,344

-

9,473

133

-

-

157,950

61,837

11,410

-

-

73,247

-

11,715

-

-

-

84,962

75,097

72,988

130

21. Leasehold rights

22. Bank overdrafts and short-term loans from financial institutionsAs at 31 December 2011, the Company and its subsidiaries have bank overdraft facilities with banks of Baht 450

million and USD 1 million (2010: Baht 390 million and USD 1 million) and in separate financial statements of Baht150 million (2010: Baht 150 million). The facilities carry interest rate at MOR for Baht currency facilities and LIBORplus fixed rate for US currency facilities.

23. Trade and other payables

24. Long-term loans

20112011 20102010


Cost

Less: Accumulated amortisation

Book value - net


716,587

(159,450)

557,137

19,041

648,371

(139,307)

509,064

17,357

133,010

(26,949)

106,061

5,902

80,050

(21,047)

59,003

4,215

20112011 20102010


Trade payables - related parties

Trade payables - unrelated parties

Other payables - related parties

Other payables - unrelated parties

Accounts payable - construction and retention

Total trade and other payables

90,181

2,266,225

18,895

731,504

284,386

3,391,191

77,013

1,237,152

5,098

535,926

95,168

1,950,357

128,811

454,895

46,871

257,719

54,456

942,752

110,996

301,684

24,868

227,992

68,178

733,718

As at 31 December

20112011 20102010


Long-term loans

Less: Current portion due within one year

Long-term loans - net of current portion

7,764,387

(813,215)

6,951,172

2,595,912

(355,265)

2,240,647

3,141,710

(436,300)

2,705,410

2,463,900

(343,800)

2,120,100







131

The Companya) In 2008, the Company entered into a 10-year loan agreement with a bank granting the credit facilities of Baht

3,438 million. The loan carries interest at the Fixed Deposit Rate plus fixed rate per annum as stipulated inthe agreement with interest and principal payable on a monthly basis. This loan agreement includes a conditionthat the Company and its subsidiaries may not mortgage any assets and also certain covenants which theCompany and its subsidiaries must comply. The Company also entered into an interest rate swap contractfor the above loan with a financial institution as discussed in Note 39.2 the outstanding balance of this loanas at 31 December 2011 was Baht 2,120.1 million (2010: Baht 2,463.9 million).

b) In October 2011, the Company entered into a credit support agreement with a financial institution grantingcredit facilities of Baht 1,000 million with condition for issuing note and withdrawing loan. The interest rateand repayment term of note credit are as stipulated on the note. The interest rate for loan is six-month FixedDeposit Rate plus fixed rates per annum as stipulated in the agreement. The interest is repayable on a monthlybasis and the principal is repayable on quarterly basis according to a condition as stipulated in the agreement.The drawdown period is within 1 year from the agreement date. As at 31 December 2011, the Company hadnot yet withdrawn such credit.

c) In November 2011, the Company entered into a loan agreement with a financial institution granting creditfacilities of Baht 1,000 million carrying interest at six-month Fixed Deposit Rate plus fixed rates per annum asstipulated in the agreement. The interest is repayable on a monthly basis and the principal is repayable onevery six-month according to a condition as stipulated in the agreement. The drawdown period is within 1 yearfrom the agreement date. As at 31 December 2011, the Company had not yet withdrawn such loan.

d) In November 2011, the Company entered into a loan agreement with a financial institution granting creditfacilities of Baht 3,000 million carrying interest at the rate of six-month Fixed Deposit Rate plus fixed rates perannum as stipulated in the agreement. The interest is repayable on a monthly basis and the principal isrepayable on a quarterly basis according to a condition as stipulated in the agreement. As at 31 December2011, this loan has outstanding balance of Baht 1,021.6 million.

The subsidiariesa) In 2007 and 2008, Angkor Pisith Co., Ltd., a subsidiary company, entered into a long-term loan agreement

with a foreign financial institution granting credit facilities were of USD 4 million. The loan bears interest atthe rate of LIBOR plus a fixed rate per annum. The interest and principal are repayable on a monthly basisaccording to a condition as stipulated in the agreement. This loan is guaranteed by the Company. As at31 December 2011, this loan has outstanding balance of USD 3.6 million or equivalent to Baht 113.8 million.(2010: USD 3.9 million or equivalent to Baht 116.4 million).

b) In 2008, Bangkok Ratchasima Hospital Co., Ltd., a subsidiary company, entered into a loan agreement witha financial institution. The credit facilities were Baht 20 million. The loan bears interest at fixed rate per annum.The interest and principal are repayable on a monthly basis according to a condition as stipulated in theagreement. As at 31 December 2011, this loan has outstanding balance of Baht 12.2 million (2010: Baht 15.6million).

c) In April 2011, Prasit Patana Public Company Limited, a subsidiary company, entered into the loan agreementswith 2 financial institutions obtaining loans of Baht 3,594.8 million. These loans bear interest at a six-monthFixed Deposit Rate plus fixed rate per annum, with the specified repayments of principal and interest asstipulated in the agreement. These loan facilities are guaranteed by the Company. As at 31 December 2011,this loan has outstanding balance of Baht 3,594.8 million.

d) In 2008, Sriracha Nakorn General Hospital Public Company Limited, a subsidiary company, entered into long-term loan agreement with a financial institution to obtain loan of Baht 11.9 million. This loan bears interestat the fixed rate per annum, with the specified repayments of principal and interest as stipulated in the

132

20112011 20102010


Liabilities under finance lease agreements

Less: Deferred interest expenses

Total

Less: Current portion of liabilities under finance lease agreements

Liabilities under finance lease agreements - net of current portion

364,871

(29,843)

335,028

(149,723)

185,305

165,129

(13,982)

151,147

(76,619)

74,528

10,816

(837)

9,979

(3,051)

6,928

753

(40)

713

(631)

82

1-5 years TotalLess than1 year


Future minimum finance lease payments

Deferred interest expenses

Present value of future minimum finance lease payments

169,207

(19,484)

149,723

195,664

(10,359)

185,305

364,871

(29,843)

335,028



Future minimum finance lease payments

Deferred interest expenses

Present value of future minimum finance lease payments

3,525

(474)

3,051

7,291

(363)

6,928

10,816

(837)

9,979

agreement. In 2009, the subsidiary entered into long-term loan agreement with another financial institutionto obtain loan of Baht 410 million. This loan consequently amended to bears interest at a six-month FixedDeposit Rate plus fixed rate per annum, with the specified repayments of principal and interest as stipulatedin the agreement. As at 31 December 2011, these loans from 2 financial institutions have outstanding balanceof Baht 315.8 million

The Company’s and its subsidiaries' loan agreements contain certain covenants which the Company and itssubsidiaries must comply.

25. Liabilities under finance lease agreementsAs at 31 December 2011 and 2010, liabilities under finance lease agreements are as follows:

As at 31 December 2011, the Company and its subsidiaries have future minimum lease payments which requiredunder the finance lease agreements are as follows:

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




1-5 years TotalLess than1 year

133

26. Provision for long-term employee benefits Provision for long-term employee benefits as at 31 December 2011, which is compensations on employees’

retirement, was as follows:

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

Principal actuarial assumptions at the valuation date were as follows:

27. Share capital On 24 February 2011, the Extraordinary General Meeting of the Company’s shareholders No.1/2011 approved

the reduction of the Company’s registered capital of Baht 1,312,264,222, consisting of 1,312,264,222 ordinary shareswith par value of Baht 1 each to be the new registered capital of Baht 1,246,194,338, consisting of 1,246,194,338ordinary shares with par value of Baht 1 each and approved the increase in the Company’s registered capital ofBaht 307,197,070, consisting of 307,197,070 ordinary shares with par value of Baht 1 each to be the new registeredcapital of Baht 1,553,391,408, consisting of 1,553,391,408 ordinary shares with par value of Baht 1 each. The Companyhas already registered the change in share registered in the first quarter of 2011.

Consequently, in the second quarter of 2011, the Company issued 295.2 million newly issued ordinary sharesfor Entire Business Transfer and Tender offer as stated in Note 14.1 and 14.2 respectively. In addition, the Companyprivate placement sold 4.1 million newly issued ordinary shares with a par value of Baht 1 each, at the price ofBaht 37.75 per share, totaling Baht 156 million to major shareholders of Health Network Public Company Limited.As a result of share issuance and converted the remaining convertible bonds as mentioned in Note 36, the Company'spaid up share capital as of 31 December 2011 was Baht 1,545,458,833 (1,545,458,883 ordinary shares of Baht 1 each).


Cumulative effect of change in accounting policy for employee

benefits adjusted against beginning balance of retained earnings


Current service cost

Interest cost

Benefits paid during the year

Actuarial loss

Balance at end of year

471,633

304,133

76,439

30,742

(23,122)

3,147

862,972

132,629

-

16,568

5,674

(6,355)

-

148,516

Discount rate

Future salary increase rate (depending on age of employee)

3.7 - 5.0

3.0 - 7.5

4.7

6.0

(% per annum) (% per annum)





134

Total dividendsApproved byDividends

(Million Baht) (Baht)

Dividend per share

Final dividends for 2009

Interim dividends for 2010 *

Total dividend for 2010

Annual General Meeting of the

shareholders on 1 April 2010

Board of Directors’ meeting on

14 December 2010

850

990

1,840

0.70

0.80

1.50

28. Dividends

29. Statutory reservePursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside

to a statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any),until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividenddistribution.

30. Expenses by natureSignificant expenses by nature for the years ended 31 December 2011 and 2010 are as follows:

31. Provident fundThe Company, its subsidiaries and their employees have jointly established provident funds in accordance with

the Provident Fund Act B.E. 2530. The funds are contributed to by employees and the Company and its subsidiariesat the agreed percentage rates based on the employees’ basic salaries and are managed by various financialinstitutions. The funds will be paid to the employees upon termination in accordance with the fund rules.

During the year, the Company and its subsidiaries contributed Baht 122.9 million (2010: Baht 86.7 million) to thefund, with contributions per the separate financial statement contributed Baht 27.3 million (2010: Baht 24.1 million)to the fund.

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

20112011 20102010


Employee expenses

Doctor fee

Cost of drugs and supplies


Advertising and public relation expenses

Rental expenses

8,587.7

7,053.2

5,164.7

2,707.5

473.1

376.8

5,499.7

4,423.8

3,083.1

2,149.7

367.3

251.8

1,786.0

1,325.4

953.3

701.6

198.0

40.1

1,529.6

1,199.3

814.9

716.6

154.2

28.4



135

32. Earnings per shareBasic earnings per share is determined by dividing profit for the year attributable to equity holders of the Company

(excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year.

No disclosure of diluted earnings per share is required for 2010 after the issue of convertible debentures (asdiscussed in Note 36) since the calculated earnings per share assuming the conversion of all convertible debenturesto ordinary shares is antidilutive.

33. Long-term lease agreementsThe Company

The Company has entered into a land rental agreement for a car parking building for a period of 20 years from26 February 2004 to 25 February 2024. The rental fee for the first 17 months is Baht 200,000 per month and willbe 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 30years from 28 September 2004 to 27 September 2034. The first payment date is 10 October 2005 at the rental feeof 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 September2005 to 31 August 2012 and the rental is paid on a monthly basis. The first payment date is 1 September 2005 atthe rate of Baht 131,000 per month. The rental rate will be Baht 175,000 per month starting from 1 September 2006onward.

The Company has entered into a land rental agreement for a period of 30 years from 1 January 2006 to 31December 2035 and the rental is paid on a monthly basis. The first payment date is 5 January 2006 and rental tobe 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 governmentauthority. The condition of the agreement states that upon completion of the building construction, the Companyhas to transfer the ownership over such building to that authority. After the authority accepts such transfer, in 2006the 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 obligedto 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 beincreased every 5 years. The rental for the last 5 years will thus be Baht 990,943 per year.

The Company has entered into a land rental agreement for a period of 30 years from 18 March 2011 to 17 March2041 and the rental is paid on a monthly basis with no rental for the first three months. The first payment date is18 July 2011 and rental to be paid at Baht 100,000 per month. The rate will be increased by 10% of the latestrental of every three years.

The Company has entered into a rental agreement and a medical services agreement with a company to operatemedical clinic in a building for a period of 2 years from 1 September 2011 to 27 September 2013. The Companyhas to pay fee at the rate stipulated in the agreement, of monthly gross operating revenue before deducted anyexpenses or the minimum fee stipulated in agreement whichever is higher.

Samitivej Public Company LimitedThe subsidiary company has entered into a rental agreement for a parking building dated 10 September 2003,

for 30 years, effective from 8 December 2004. The total rental fee over the lease will thus be Baht 155.1 million.The subsidiary company is committed to pay Baht 38.8 million as prepaid rental as per the schedule. The remainingrental fee will be paid on a monthly basis. In addition, the subsidiary company has entered into a service agreementwith the same company for providing of services in the parking building for 30 years totaling Baht 103.4 million.

136

The subsidiary company has entered into a medical services agreement with a company to operate medicalclinic in a building for a period of 5 years from 28 May 2010. The subsidiary company has to pay fee at the ratestipulated in the agreement, of monthly gross operating revenue before deducted any expenses or the minimumfee stipulated in agreement whichever is higher.

BNH Medical Center Co., Ltd.The subsidiary company entered into an agreement with an association which is a shareholder, to lease land

for the construction of a hospital for a period of 30 years, commencing 1 September 1993, with options to renew.

Paolo Medic Co., Ltd.The subsidiary company entered into a land and premises rental agreement which will be expired in January

2037, and the rental fee is paid on a monthly basis at the amount as stipulated in the agreement.

Phyathai 1 Hospital Co., Ltd.The subsidiary company entered into a land rental agreement with a state enterprise for a period of 3 years

expiring in the year 2013 and the rental fee is paid on a monthly basis as stipulated in the agreement.

34. Commitments and contingent liabilitiesAs at 31 December 2011 commitments and contingent liabilities are as follows:



1-5 years

183

97

116

-

60

456

39

3

-

-

-

42

18

50

90

50

-

208

137

-

-

-

-

137

471

-

-

-

44

515

Over5 years

Less than1 year 1-5 years

Over5 years

Less than1 year

101

249

367

562

-

1,279

Contractual commitments

- the land and building rental contracts

(including long-term agreements in Note 33)

- the office equipment rental and other services

- the medical equipment provision and

maintenance contracts

- the building construction and

decoration contracts

- the sale and purchase contract for land

Total

Contingent liabilities

- For letters of guarantee issued by banks to guarantee contractual performance

- For letters of guarantee issued by banks for electricity use and others

Total

94

95

189

7

18

25

Consolidatedfinancial

statements

Separatefinancial

statements



137

35. Segment informationThe Company and its subsidiaries operate mainly in the hospital business and hospital related businesses in

Thailand. As a result, most of the revenues, operating profits and assets as reflected in these financial statementspertain to the aforementioned industry segment and geographic area.

36. Convertible BondsThese represent the unsecured and name-registered convertible bonds, due 2011, issued to foreign investors

outside the United States of America in 2006. A total of 124,000 units of the bonds, which carry interest at a rateof 3.75%, had been issued at a price of USD 1,000 each. Holders of the bonds have the right to convert the bondsinto the Company's ordinary shares at an initial conversion price of Baht 36.30 per share, which was subsequentlyadjusted to Baht 32.67 per share. The Company has the right to redeem the bonds at a redemption price to becalculated in accordance with the formula as stated in the Offering Circular.The Company is required to observecovenants as provided in the Offering Circular. As at 31 December 2010, the Company has remaining convertiblebonds of 50 units or equivalent to Baht 2.14 million. In the second quarter of 2011, the convertible bonds holdersexercised the right to convert all such convertible bonds to common shares.

37. DebenturesOn 6 March 2008, the Company had issued unsecured, named registered and unsubordinated debentures

without a debentureholders’ representative for the total number of 5,000,000 units, at the price of Baht 1,000 perunit, totaling Baht 5,000 million. These debentures are divided into two tranches: the 3-year debentures for theamount of Baht 3,000 million at the coupon rate of 4.11% per annum and the 5-year debentures for the amountof Baht 2,000 million at the coupon rate of 4.84% per annum with interest payable every six-month. The Companyhad redeemed the 3-year debentures for the amount of Baht 3,000 million in the first quarter of 2011.

On 4 June 2009, the Company had issued unsecured, name registered and unsubordinated debentures for thetotal number of 3,000,000 units, at the price of Baht 1,000 per unit, totaling Baht 3,000 million. These debenturesare divided into two tranches: the 5-year debentures for the amount of Baht 2,000 million at the coupon rate of4.80% per annum and the 7-year debentures for the amount of Baht 1,000 million at the coupon rate of 5.35%per annum with interest payable every six-month. Up to 31 December 2011, the Company had repurchased suchdebentures for amount of 30,000 units, totaling Baht 30 million.

On 3 March 2011, the Company had issued unsecured, name registered and unsubordinated debentures withouta debentureholders’ representative debenture for the total number of 2,500,000 units, at the price of Baht 1,000per unit, totaling Baht 2,500 million. These debentures are 4-year debentures at the coupon rate of 3.99% perannum with interest payable every six-month.

On 29 March 2011, the Company had issued unsecured, name registered and unsubordinated debentures withouta debentureholders’ representative debenture for the total number of 1,000,000 units, at the price of Baht 1,000per unit, totaling Baht 1,000 million. These debentures are 3-year debentures at the coupon rate of 3.78% perannum with interest payable every six-month.

Debenture agreement contains certain covenants which the Company must comply with such as financial ratios,payment of dividend and assets dispositions, etc.

38. Promotional privilegesThe Company has been granted promotional privileges under The Investment Promotion Act B.E. 2520, according

to the promotional certificate No. 2302(2)/2553, dated 26 November 2010, for hospital business Type 7.7. Significantprivileges are as follows:

• Exemption of import duty on machinery as approved by the board.

138

• Exemption from corporate income tax derived from the promoted operation, with the limited rate of 100percent of the investment excluding land and working capital for a period of 8 years commencing from thedate that revenues are first derived from the promoted operation.

In case of losses being incurred during the corporate income tax exemption period, the Company is allowed toutilise the loss as a deduction against net profits for a period of 5 years after exemption period, whether from anyone year or from several years.

• Exemption from income tax on dividend paid from the profit of the promoted operations throughout the taxexemption period.

Wattanavej Co., Ltd.Wattanavej Co., Ltd. has been granted promotional privileges under The Investment Promotion Act B.E. 2520,

according to the promotional certificate No. 1686(2)/2547, dated 25 August 2004, for hospital business Type 7.11.Significant privileges are as follows:




• Exemption from income tax on divided paid from the profit of the promoted operation throughout the taxexemption period.

Bangkok Samui Hospital Co., Ltd.Bangkok Samui Hospital Co., Ltd. has been granted promotional privileges under The Investment Promotion Act

B.E. 2520, according to the promotional certificate No. 1719(2)/2547, dated 1 September 2004, for hospital businessType 7.11. Significant privileges are as follows:




• Exemption from income tax on dividend paid from the profit of the promoted operation throughout the taxexemption period.

A.N.B. Laboratories Co., Ltd.A.N.B. Laboratories Co., Ltd. has been granted promotional privileges under The Investment Promotion Act B.E.

2520, according to the promotional certificate No. 1913(2)/2554, dated 4 August 2011, for production of medicinesand/or active ingredients in medicines. Type 6.5. Significant privileges are as follows:


139

Total

20112011 20102010



34,272,594

2,146,872

36,419,466

22,788,085

538,586

23,326,671

2011 2010

951,872

-

951,872

724,544

-

724,544

35,224,466

2,146,872

37,371,338

23,512,629

538,586

24,051,215

20112011 20102010



8,068,582

2,501,067

10,569,649

7,213,783

1,300,783

8,514,566

2011 2010

190,257

-

190,257

5,932

-

5,932

8,258,839

2,501,067

10,759,906

7,219,715

1,300,783

8,520,498

Promoted operation Non-promoted operation

TotalPromoted operation Non-promoted operation



• Exemption from income tax on dividend paid from the profit of the promoted operation throughout the taxexemption period.

The Company and subsidiary companies must comply with the conditions stipulated in the investment promo-tional privileges.

Revenues of the Company and subsidiary companies for the years 2011 and 2010 can be separated betweenthe promoted and non-promoted operation as follows:

39. Financial instrumentsThe Company and its subsidiaries’ financial instruments, which are defined under Thai Accounting Standard

No. 107 “Financial Instruments: Disclosure and Presentation”, principally comprise the financial assets andliabilities mentioned in Note 6.17 to financial statements. The financial risks associated with these financial instrumentsand how they are managed is described below.

39.1 Financial risk managementThe Company and its subsidiaries are exposed to risk arising from changes in market interest rates and foreign

currency exchange rates, and from nonperformance of contractual obligation by counterparties in the future. Thesubsidiaries do not use derivative instruments, while the Company uses derivative instruments as and when they

Revenue from hospitaloperations

Other income

Total revenues

Revenue from hospitaloperations

Other income

Total revenues

140

consider appropriate, to manage such risks. Neither the Company nor subsidiaries hold or issue derivative financialinstruments for speculative or trading purposes.

39.2 Interest rate riskThe Company and its subsidiaries are exposed to interest rate risk relates primarily to its cash at banks, bank

overdrafts, short-term loans, long-term loans, convertible debentures and debentures. However, most of theCompany’s financial assets and liabilities bear floating interest rates or fixed interest rates which are close to themarket rate and the Company enters into interest rate swap contract to reduce this risk as appropriate.

The long-term loans, convertible debentures and debentures were presented in notes 24, 36, and 37 respectively.

Interest rate swap contractInterest rate swap are used to manage exposure to fluctuations in interest rate.

On 15 September 2008, the Company entered into a five-year interest rate swap contract with a financialinstitution which converts a floating interest rate based on the Fixed Deposit Rate plus fixed rate per annum to afixed interest rate per annum on the long-term loan balance.

The net fair value of the interest rate swap contract at the statement of financial position date was as follows:

Fair value of interest rate swap contracts has been calculated using the rate quoted by a financial institution asif the contract was terminated at the statement of financial position date.

Significant financial assets and liabilities as at 31 December 2011 classified by type of interest rate are as follows:

20112011 20102010


Fair value of interest rate swap contract (liabilities) (20.5) (75.4) (20.5) (75.4)


Fixed interest ratesFloating

interest rateNon-interest

bearing Total


3,204

-

-

-

13

-

3,217

-

-

-

50

-

-

50

162

46

3,377

-

-

7,865

11,450

3,876

464

3,377

50

25

7,865

15,657

1-5years

Over5 years

-

-

-

-

-

-

-

Financial Assets

- Cash and cash equivalent

- Short-term investments

- Trade and other accounts receivable

- Long-term deposit at financial institution

- Restricted financial institution deposit

- Investments

510

418

-

-

12

-

940

Within1 year



141


Financial liabilities

- Bank overdrafts and short-term

loans from financial institution

- Trade and other payables

- Long-term loans

- Liabilities under finance lease

agreements

- Debentures

231

-

7,751

-

-

7,982

-

-

9

185

8,461

8,655

-

3,391

-

-

-

3,391

231

3,391

7,764

335

8,461

20,182

-

-

-

-

-

-

-

-

4

150

-

154



Financial Assets

- Cash and cash equivalent

- Trade and other receivables

- Short-term loans to related parties

- Long-term loans to related parties

- Investments

Financial liabilities

- Short-term loans from related parties

- Trade and other payables

- Long-term loans

- Liabilities under finance lease

agreements

- Debentures

1,517

-

137

1,606

-

3,260

1,628

-

3,142

-

-

4,770

-

-

-

-

-

-

-

-

-

7

8,461

8,468

3

829

-

-

30,537

31,369

-

943

-

-

-

943

1,520

829

307

1,666

30,537

34,859

1,628

943

3,142

10

8,461

14,184

-

-

-

-

-

-

-

-

-

-

-

-

-

-

170

60

-

230

-

-

-

3

-

3



bearing Total



bearing Total


1-5years

Over5 years

Within1 year

1-5years

Over5 years

Within1 year

142

39.3 Foreign currency riskThe Company and its subsidiaries are exposed to foreign currency risk mainly in respect of purchase of medical

tools and equipment transactions that are denominated in foreign currencies. The Company seeks to reduce thisrisk by entering into forward exchange contracts when it considers appropriate. Generally, the forward contractsmature within one year.

Forward exchange contract As at 31 December 2011 and 2010, the outstanding balance of forward exchange contracts was as follows:

39.4 Credit riskThe Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable,

loans, bill of exchange and other receivable. The Company and its subsidiaries manage the risk by adopting appro-priate credit control policies and procedures and therefore do not expect to incur material financial losses.

In addition, the Company and its subsidiaries do not have high concentration of credit risk since it has a largecustomer base. The maximum exposure to credit risk is limited to the carrying amounts of receivables, loans andother receivables as stated in the statement of financial position.

39.5 Fair values of financial instruments Since the majority of the Company’s and its subsidiaries’ financial instruments bear floating interest rates or

fixed interest rates which are close to market rate, their fair value is not expected to be materially different fromthe amounts presented in the statement of financial position.

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

40. Capital managementThe primary objective of the Company’s and its subsidiaries’ capital management is to ensure that it has appro-

priate capital structure in order to support its business and maximise shareholders value. As at 31 December 2011,the Group's debt-to-equity ratio was 0.8:1.0 (2010: 1.0:1.0) and the Company's was 0.6:1.0 (2010: 1.5:1.0).

41. LitigationIn the second quarter of 2011, 5 shareholders of the Company, who held a total of 25,067 shares, or 0.0017

percentage of total issued and paid-up share capital as of 8 April 2011, filed a petition with the Court requestingcancellation of the resolutions passed by the Annual General Meeting of 2011 on the grounds that the meetingwas illegal and contrary to the Company's articles of association because of a change in the voting method. Legalcounselor of the Company gathered information, including the procedures for arranging meetings, and concludedthat the Company had complied with the Company's articles of association and the regulations of the Stock Exchange

Amount boughtContractual exchange rate

for amount boughtBalance as at Foreign currency

31 December 2011

31 December 2010

US Dollar

Euro

-

482,588

3,465

-

30.75 - 31.63

41.52

-

(Baht per foreign currency unit)

143

Income statements (only reclassification items)for the year ended 31 December 2010


As reclassified

4,760,074

2,106,195

-

-

4,173,208

1,926,074

716,589

50,398

As previouslyreported

As previouslyreportedAs reclassified

15,350,058

5,256,969

-

-

13,661,968

4,744,953

2,149,708

50,398

of Thailand generally practiced by listed companies, and that the meeting was legally conducted in all respectsand had taken into account the legal rights of every shareholder. The case is in legal process, but the managementexpects that this case will not result in changes to such resolutions.

42. ReclassificationTo comply with the Notification of the Department of Business Development relating to the financial statement

presentation as described in Note 2 and as the result of the adoption of revised and new accounting standards asdescribed in Note 3 and Note 5, certain amounts in the financial statements for the year ended 31 December 2010have been reclassified to conform to the current year’s classification, without any effect to the previously reportedprofit or shareholders’ equity.

In addition, the other reclassifications with had no effect to previously reported profit or shareholders’ equityare as follows:

43. Subsequent eventTender offer to purchase securities of Prasit Patana Public Company Limited

On 6 February 2012, the Company submitted a tender offer proposal to purchase securities of Prasit PatanaPublic Company Limited, a subsidiary company, for delisting of its securities from the Stock Exchange of Thailandaccording to the Meeting of Company’s Board of Directors on 30 November 2011.

44. Approval of financial statementsThese financial statements have been authorised for issue by the Company’s Board of Directors on 29 February

2012.

Cost of hospital operations and goods sold



Management benefit expenses



144

Type of Business

Location

Company Registration Number

Web site

Registered Capital

Reference InformationSecurities Registrar

Bond Registrar

Bond Representative

Auditor

Health Care Business

2 Soi Soonvijai 7, New Petchaburi Road, Bangkapi,Huay Kwang, Bangkok 10320 Telephone 1719, 02-310-3000Fax 02-310-3032, 02-310-3327

BorMorJor. 0107537000025

www.bangkokhospital.com

Baht 1,553.40 million with Baht 1,545.50 millionin paid-up capital, divided into 1,246.04 million common shareswith par value of Baht 1 each

Thailand Securities Depository Co., Ltd. 4th Floor, Stock Exchange of Thailand Building,62 Ratchadaphisek Road, Klongtoey, Bangkok 10110 Telephone 02-229-2800, 02-654-5599 Fax 0-2359-1259

TMB Bank Public Company Limited.10th Floor, 393 Silom Road, Silom,Bangrak, Bangkok 10500 Telephone 02-230-5878, 02-230-5756 Fax 02-230-6093

KasikornBank Public Company Limited.Securities Service Department 400/22 Kasikorn Bank Building, 11th Fl., Paholyotin Road Samsennai, Phyathai, Bangkok 10400 Telephone 02-470-1952, 02-470-3687 Fax 02-470-3684

Ernst & Young Office Co., Ltd.33rd Floor, Lake Rajada Building, 193/136-137 Ratchadaphisek Road, Klongtoey, Bangkok 10110 Telephone 02-661-9190, 02-264-0777Fax 02-661-9192, 02-264-0789-90

General Information and Reference Information

BANGKOK DUSIT MEDICAL SERVICES Public Company Limited2 Soi Soonvijai 7 New Phetchburi Rd.,Bangkok, Thailand 10310 Tel. 66-2310-3000 Fax. 66-2318-1546

www.bangkokhospital.com

T h a i l a n d O v e r s e a s

bgh : annual report 2011

Documents

uniting bangkok hospital

toured bangkok hospital

bangkok hospital network

bangkok hospital group

hospital category

medical care

medical staff

best technology