thainakarin...basic earnings per share 1.00 0.96 0.82 financial ratios 1. liquidity ratio (x) 1.1...
TRANSCRIPT
TNH
Thainakarin...The hospital
you can trust
““
Contents
4 Message From The Chairman
5 Message From The Chief Medical Officer
6 Directors and Executives
8 Vision and Mission
10 Thainakarin Milestone
16 General Information and Financial Highlights
19 Nature of Business
23 Market and Competition
28 Risk Factors
30 Management Structure
49 Corporate Governance
56 Report of the Audit Committee
58 Related Parties Transaction
60 Management Discussion & Analysis (MD&A)
67Report of the Accountability of the Board ofDirectors to the Company’s Financial Reports
69 Financial Statements
102 Auditor’s Remuneration and Reference Information
103 Corporate Social Responsibilities
General Information and Financial Highlights
Market and Competition
103
Corporate Social Responsibilities : CSR
2316
Management Discussion & Analysis
(MD&A)
60
69Financial Statements
Corporate Governance
49
Message from the Chairman
Thai Nakarin Hospital Public Company Limited celebrates its 21st anniversary in 2014. Looking into the future, TNH recognizes the significance and implications of the upcoming 2015 ASEAN Economic Community integration. To prepare for the changes, we will focus on our aspiration to become a leading hospital in eastern Bangkok and eastern Thailand which have shown continuous and rapid population growth. Endless development is always a top priority for TNH. We have consistently placed importance on the development of personnel, health care service quality and technologies and the concurrent adherence to the principles of good corporate governance, integrity, ethics and social responsibility. The purpose is to assure our capability to deliver efficient, quality and timely medical services and satisfy client’s needs through the synchronized efforts of our dedicated teams of professionals.
On behalf of the Board of Directors, I would like to thank our clients, shareholders, doctors, nurses, all staff members, and organizations for their continued support. We promise to ceaselessly develop our medical and health care services and honor our commitment to bringing the maximum satisfaction to all stakeholders.
Jatuporn Sihanatkathakul Chairman of the Board
4
Message from the Chief Medical Officer
The society has become increasingly health-conscious. In today’s world, besides access to new treatment solutions and technologies, people also give priority to disease prevention and learning more about information which is useful for their medical treatment decisions. Highly trusted by residents of eastern Bangkok and nearby provinces, Thai Nakarin Hospital Public Company Limited is committed to continuously expanding and enhancing its services to effectively and comprehensively respond to the clients’ needs. To this end, we have implemented several initiatives related to the improvement of our technologies, health check-up and preventive medicine services, and dissemination of knowledge about major diseases and health care via print and online media. We are fully aware that the heart of good health care lies in the recognition of the importance of high quality of life and the co-creation of safe and pleasant environment for the community.
As TNH is entering its 21st year, we hereby promise that we will continue to operate our business with prudence, transparency and integrity and comply with the laws and the principles of ethics and good corporate governance to lead our organization towards sustainable stability and growth.
Dr. Charoen MeensukChief Medical Officer
5
Directors
5.Asst.Prof.Dr.Prapas Teerakul Director
1.Mr.Jatuporn Sihanatkathakul Chairman of the Board
6. Mr.Prapat Suthawate Director
2. Dr.Charoen Meensuk Director
7. Mr.Sumeth Jenjesda Director
3. Mr.Suchart Sihanatkatakul Director
4. Prof.Dr.Deja Tanphaichitra Director
8. Dr.Arkom Cheirsilpa Director
9.Mr.Thiti Sihanatkathakul Director
10. Mr.Pitipat Sihanatkathakul Director
13. Dr.Pridi Hetrakul Audit Committee
11. Mr.Kraisak Kadkum Chairman of the Audit Committee
14. Dr.Shertsak Dhiraputra Audit Committee
12. Pol.Gen.Sawat Amornvivat Audit Committee
15. Asst.Prof.Dr.Panya Issarawornrawanich Audit Committee
10
13
6
2
12
15
8
4
9
5
1
7
11
14
3
6
Executives
6
9
4
7
11
2
10
5
8
1 3
5. Mrs. Nampetch Saraggananda Deputy Medical Director (Nursing)
1. Dr.Charoen Meensuk Chief Medical Officer
6. Mrs.Chadarat Siriwat Deputy Chief Operating Office
2. Honour Clinical Professor Chaiporn Phadrakom Medical Director Chief Operating Officer
7. Miss.Malee Boonleechai Deputy Admin. Director
3. Mr.Prapat Suthawate Acting Admin. Director
8. Mr.Pitipat Sihanatkathakul Assistant Admin. Director
4. Dr.Virachai Phungrasamee Deputy Medical Director
9. Mr.Poom Jantree Assistant Admin. Director
10. Miss.Tippayawan Srichaivoranat Assistant Medical Director
11. Mrs.Wiboonluk Visitnorapat Assistant Medical Director (Nursing Service)
7
Mission • To develop personnel competency, satisfaction and pride in the hospital. • To elevate the health care quality to the world-class standard. • To progressively proceed with continuous and sustainable development of the hospital. • To achieve the best hospitality with a warm and family-like treatment that creates lasting impressions. • To manage in accordance with the principles of good governance.
VisionThainakarin… The hospital you can trust.Thainakarin Hospital has earned trust and respect from the general public since the early establishment. The success in excellent care comes from the world class quality in health care, warm hospitality that treats everyone like family, affordable price, effective and transparent management and positive attitude staff.
Growth and Going Together
Vision & Mission
Medical Executive Committee : MEC 2557-2558 Back Row Prapas Teerakul,M.D., Siroj Kanjanapanjapol,M.D., Virachai Phungrasamee,M.D., Honour Clinical Professor Chaiporn Bhadrakom,M.D., Vasin Meevatha,M.D., Arkom Cheirsilpa,M.D
Front Row Seree Tuchida,M.D., Deja Tanphaichitra, Jatuporn Sihanatkathakul, Charoen Meensook,M.D., Vinai Viriyakitjar,M.D. Prapas Teerakul,M.D., Siroj Kanjanapanjapol,M.D.,
8
9
10
• 1994• 1993 • 1995 •1996 • 1997 •1998 •1999 •2000 •2002
ThainakarinMilestone
2002 : Opened Traditional Chinese Medical Clinic
2008 : The Best CEO Award for mai-Listed Company
2010 : Listed on the “Asia’s 200 Best under a Billion” roster of Forbes Asia magazine
2011 : Opened Hepato-Biliary & Pancreas Clinic
Awards and Achievements •HA-HospitalRe-Accreditation •TaxpayerRecognitionAward •PlatinumAwardinHospitalQualityfromAIA •TokioMarineTaiyouAwardfromTokioMarine LifeInsurance(Thailand)Pcl.
• 2010 • 2011• 2008
Tha i Naka r i n Hospi ta l has officially opened since 14 June 1993 and initially offered medical services through 6 departments, namely Medicine Department, Surgery Department, Obstetrics and Gynecology Department, Pediatrics Department, Ear, Nose and Throat Department, and Dental Department.
2001 : OpenedCheckupCenter
11
•2003•2004 •2005 •2006 •2007
2003 : HA-HospitalRe-Accreditation
2004 : OpenedSkinandLaserCenter and Hemodialysis Center
2012 : ExpandedCheck-upCenterand Heart Center
2013 : Opened Gastrointestinal Center and
Diabetes & Endocrinology Center Awards and Achievements •HA-HospitalRe-Accreditation •EatSafeEatSmartAwardfromNational FoodInstitute,MinistryofIndustry •LaborDevelopmentContributorAward from Ministry of Labor
2014 :•OpenedLasikCenterand Breast Care Center• TopYieldStockAward fromMarket ofAlternativeInvestment(mai)
• 2015• 2013 • 2014• 2012
2005 : Opened Heart Center
2006 :Opened Bone and Joint Center
2007 : Opened Holistic Oncology Center
Activitiesin2014
Activities in 2014
ForThaiNakarinHospital,healthpromotionisasignificantundertaking.Therefore,TNHhasorganizedanumberofactivities to support health promotion such as monthly Health Seminar; happiness sharing campaigns for special occasions SuchasNewYear,SongkrandayandChildren’sday;andeducationalseminarsfacilitatedbyourdoctorsforvisitorswhocouldalsoenjoyshowsperformedbyfamousartists.
Baby Genius Workshop
Opened Breast Care Center
Chinese New Year
Doctor Talk : Men’s Andropause
Sugar camping
LASIK : Goodbye Glasses
12
Songkran day (Thai New Year) Lasik Center Blood donation
Doctors Talk : Breast Diseases in 2014 Children’s day
Good Health is “Contagious”
13
Activitiesin2014
Good Health is “Contagious”
Recognizing the importanceofpreventivehealthcareandaiming tocontinue theGoodHealth is “Contagious”project initiated in2013, TNHhasarrangedhealthcare knowledgesharing sessions facilitatedbyour specialists,mobilemedical check-up clinic, SafetyDay andmany other health promotion as activities to disseminate useful healthcare knowledge tonearbylocalcommunities,ourcontractcorporateandinsurancecompany.Inaddition,thehospitalhasimplementedvarious wellness initiatives for localcommunitieswhich includedon-sitemedicalcheck-upbyourdedicated teamsofdoctorsand nurses, knowledgesharingbynutritionists,exerciseandergonomicposture lessonsdeliveredbyourphysical therapists, donationoffirst-aidkitstolocalcommunitiesanddisasterreliefprograms.
Community Service Activities
Contract Corporate Activities
Contract Corporate Activities
14
Activities for Public Unit
Nutrition Knowledge Sharing
Mobile Check-up Service
Good Health is “Contagious”
15
GeneralInformation
Name of Company
• ThaiNakarinHospitalPublicCompanylimitedorThainakarinHospital
Type of Business
• Private hospital
Address• 345Bangna-TradRd.,km.3.5,Bangna,Bangkok10260
Registration Number• 0107547000974
Registered Capital• Baht180,000,000.Thecapitalisfullypaid-upandcomprisedof180millionordinarysharesoftheparvalueofBaht1pershare.
Website/E-mail address• www.thainakarin.co.thE-mail:[email protected]
Telephone/Fax• Tel:023612727,023612828/Fax:023612777
16
17
Financial Highlights
940 MB
1,035MB
1,111MB
Million Baht
Total Assets
2012 2013 20140
800
900
1,000
1,100
1,200
1,352 MB
1,467MB
1,599MB
Million Baht
Total Revenues
2012 2013 20141,000
1,200
1,300
1,400
1,500
1,600
148MB
172MB
179MB
Million Baht
Profit
2012 2013 20140
50
100
150
200
250
722MB
804MB
875MB
Million Baht
Total Shareholders’ Equity
20120
200
400
600
800
1,000
2013 2014
18
Financial Highlights
Financial Performance (Million Baht) 2014 2013 2012Total current assets 414.41 387.88 509.62
Total assets 1,110.90 1,035.47 940.43
Total current liabilities 201.50 200.71 188.56
Total liabilities 235.87 231.55 218.74
Total shareholders’ equity 875.03 803.92 721.69
Total revenues 1,598.83 1,467.30 1,352.30
Net profit for the year 179.11 172.23 147.51
Basic earnings per share 1.00 0.96 0.82
Financial Ratios
1. Liquidity Ratio (x)
1.1 Current Ratio 2.06 1.93 2.70
2. Efficiency Ratio(Days)
2.1 Average Collection Period 19 20 19
2.2 Average Inventory Period 10 10 10
2.3 Average Paymant Period 21 23 27
3. Profitability Ratio (%)
3.1 Gross Profit Margin 23.04 24.33 24.47
3.2 EBITDA Margin 19.73 21.36 22.08
3.3 Net Profit Margin 11.20 11.74 10.91
3.4 Return on Assets 20.84 22.60 23.78
3.5 Return on Equity 21.34 22.59 21.12
4. Financial Policy Ratio (x)
4.1 Total Liabilities to Equity 0.27 0.29 0.30
4.2 Interest Coverage - 3,064.03 -
5. Other Financial Ratio
5.1 Growth on Revenues from Hospital Operations (%) 8.85 8.74 8.03
5.2 Growth on Net Profit for the Year (%) 3.99 16.76 (14.53)
5.3 Book Value per Share (Baht) 4.86 4.47 4.01
19
Thai Nakarin Hospital Public Company Limited (TNH) is located at 345, Bangna-Trad Rd.,Km 3.5, Bangna, Bangkok. On 14 June 1993, Thai Nakarin Hospital commenced its business as the first private hospital in eastern Bangkok to provide patients with quality medical services through our IPD, OPD and 24-hour emergency units which are fully equipped with advanced medical equipment and teams of trusted specialist doctors. On-site and Off-site medical check-up services are also offered to patients. Currently, the hospital has approximately 260 doctors and 510 nurses. The hospital has the capacity of 190 beds for IPD service and can serve 2,000 OPD per day. After-hours clinic is also available until 22.00 hours daily. The proportion of outpatients to inpatients is as illustrated below:
Nature of Business
2014
41%
59%2013
42%
58%2012
43%
57%
Inpatient
Outpatient
Revenue structure
2014 2013 2012
Amount(MB)
Proportion(%)
Amount(MB)
Proportion(%)
Amount(MB)
Proportion(%)
Revenue from medical services
Outpatient service 922.26 57.68 836.68 57.02 763.43 56.45
Inpatient service 649.55 40.63 607.28 41.39 564.53 41.75
Subtotal 1,571.81 98.31 1,443.96 98.41 1,327.96 98.20
Other revenue 27.02 1.69 23.34 1.59 24.34 1.80
Total 1,598.83 100.00 1,467.30 100.00 1,352.30 100.00
The proportion of Patients
20
Types of Products and ServicesOutpatient service is available from the following 24 departments and centers:
1. Heart Center 13. Mental Health Clinic
2. Bone & Joint Center 14. Hepato-Biliary & Pancreas Clinic
3. Dental Center 15. Medicine Department
4. Check-up Center 16. Emergency Department
5. Hemodialysis Center 17. Eye Department
6. Skin & Laser Center 18. Ear, Nose and Throat Department
7. Holistic Oncology Center 19. Surgery Department
8. Gastrointestinal Center 20. Obstetrics and Gynecology Department
9. Diabetes & Endocrinology Center 21. Pediatrics Department
10. Lasik Center 22. Physical Therapy Department
11. Breast Care Center 23. X-ray Department
12. Traditional Chinese Medical Clinic 24. Laboratory Department
TNH has been licensed to operate inpatient services and has 190 licensed beds in operations which can be categorized according to medical unit as follows:
1. Operating Room(OR) 5. Coronary Care Unit (CCU)
2. Cardiac Surgery Room 6. Anesthesia Induction Room
3. Delivery / Labor Room 7. Cath Lab
4. Intensive Care Unit(ICU)
Besides medical services and treatments, TNH also made available at its premises access to high-speed internet connection, 24-hour convenience stores, florist shops, hair salons, coffee shops, bakery shops, maternity shops, a Buddhist prayer room and a Muslim prayer room to offer superior convenience to patients and visitors.
Capacity The capacity utilization rate is derived from the comparison of the actual capacity with the maximum capacity and is categorized into outpatient and inpatient. The capacity utilization sees an upward trend which is expected to continue in both inpatient and outpatient departments as a result of the ease and convenience of access and the consumers’ confidence in our superior medical standard and services.
21
Outpatients 2014 2013 2012
Capacity per day (person) 2,000 2,000 2,000
Total capacity per annum *(person) 730,000 730,000 730,000
Patients per annum (person) 496,708 485,248 451,971
Capacity utilization rate (percentage) 68.04 66.47 61.91
*Total capacity is based on the multiplication of capacity per day by the number of days.
Inpatients 2014 2013 2012
Bed capacity (bed) 190 190 190
Total capacity **(bed) 69,350 69,350 69,350
Bed occupancy (bed) 36,565 36,212 35,350
Bed occupancy (percentage) 52.73 52.22 50.97
**Total capacity is based on the multiplication of the bed capacity by the number of days.
Sourcing of Products or Services
Talent Acquisition and Retention The Company aims to source specialist doctors and medical staff, including nurses, to offer a wide array of medical services which match the patients’ needs and meet good standards. The Company has been successful with its talent attraction and retention strategy as it has offered competitive compensation and benefit scheme, pleasant and productive workplace environment, skill development of doctors and nurses through seminars and academic conference.
Sourcing of Medicines and Medical Supplies
Medicines and medical supplies are essential raw materials for hospitals. The Company has exercised stringent controls for every step in the sourcing process, from purchasing, which is decided by a committee consisting of doctors, pharmacists and staff of Procurement Department to inventory control.
Primarily, the Company has sourced medicines and medical supplies from domestic distributors, removing the risk of supply shortage. In addition, the Company has employed effective procurement and inventory management systems and assessed prices, efficiency and quality of purchased goods to ensure that they truly meet the Company’s requirements.
22
Business Assets
Core Assets
The Company does not own any land property. Its hospital facilities and head office, of which address is 345, Bangna-Trad Road, Km. 3.5, Bangna, Bangkok 10260, is located on the land (6-2-42 rai) leased from the Thai Red Cross Society under the 30-year leasehold agreement, covering the period from 9 November 1988 to 8 November 2018. The leasehold agreement will be expired in 4 years.
Details of the Company’s core assets as of 31 July 2014 are listed below:
(Unit: Baht Million)
Asset Book Value Estate
Building, Construction and Work in Process 435.18 Please see remark
Systems 294.34 Owned
Equipment and Furniture 140.72 Owned
Medical Equipment and Tools 464.64 Owned
Vehicles 11.33 Owned
Land Improvement 2.32 Owned
Subtotal 1,348.53
Less : Accumulated Depreciation (971.60)
Total 376.93
Remark : The hospital is comprised of a 14-story building and a 7-story building with the total usable area of 64,325 square meters. The Company has taken out an insurance policy for its buildings and equipment with the insured sum of Baht 800 million under the coverage period between 1 January 2014 and 1 January 2015.The beneficiary under the insurance policy is Thai Nakarin Hospital Public Company Limited.
Investment Policy As of 31 July 2014, the Company does not have any investment in other entities. Nonetheless, the Company has planned to invest in businesses which can support and strengthen its medical service business.
Medical Equipment and Tools
To effectively treat diseases which nowadays have become increasingly complex, we require advanced medical equipment and tools. As such hardware improvement involves a large sum of investment, the Company carefully deliberates on each purchase in terms of product quality, usage volume and our actual demand. Purchases have been made through domestic distributors at agreed prices and well-defined after-sales service terms and conditions for the best benefit and cost-effectiveness of the Company.
23
Thailand’s economy experienced dramatic shrinkage, particularly in the last quarter of 2013 and the first quarter of 2014, due to the pressure from the domestic political conflicts which had dampened the private sector’s confidence and public spending. Slow income growth coupled with unfavorable economic conditions led to cautious consumer spending. The industrial sector saw negative growth due to slow export recovery while the agricultural sector recorded continuous growth. The revenue of the hospitality industry also declined, mainly due to weaker performance of the tourism cluster.
With the brighter economic outlook in the second half of 2014, the Thai economy is expected to grow by 4-5 percent, pulling the annual GDP growth upward to 2-2.5 percent and giving a strong growth momentum for 2015. The consumer confidence and consumption, saving, including public and private investment should see signs of rebound. An upturn is expected for the tourism industry as confidence of tourists and arrival rates should be returning to the pre-crisis levels. The export sector should improve in line with the global economic recovery.
Private hospital business in the eastern Bangkok demonstrates solid growth potentials which are attributable to increasing population and longevity, urban growth, economic conditions, health and wellness trends, and a larger health care market following the 2015 AEC integration.
Most private hospitals in the eastern Bangkok have an established customer base and the same customer targets. Nonetheless, the health care business still has plenty of room to grow through the new customer acquisition model and the expansion of medical service channels which include, for example, medical clinic in densely populated districts and large shopping centers to enhance the competitive edge and achieve solid business growth. In addition, the competitiveness can be strengthened through collaboration with allied hospitals in the form of resource sharing and co-development of medical capabilities.
Thai Nakarin Hospital is one of the first private hospitals in Bangkok’s eastern region which is the gateway to other provinces such as Samutprakarn, Chachoengsao and Cholburi. Located in the area which is among Thailand’s tops for the population and economic growths, TNH has continuously recorded an increasing number of customers. Looking forward, it is vital for TNH to developing our capabilities and services to constantly achieve a higher level of trust and satisfaction for our clients and stakeholders.
Performance Highlights Key focus of Thai Nakarin Hospital for 2014 is the constant development of medical capabilities and services to effectively satisfy the needs and expectations of our growing Thai and foreign clients. Top development priorities are:
• WorkprocessimprovementTNH has implemented continuous and systematic organizational development, primarily focusing on the corporate culture because it is a key stepping-stone for the achievement of our strategic goal which is to enhance organizational efficiency and effectiveness. To this end, we have applied behavioral science and problem-based research methodology to the work process improvement.
• Goal-basedrecruitmentandpeopledevelopment To effectively respond to the prevailing and imminent changes and socio-economic developments in the age of globalization, TNH has adopted the utility theory for its resource utilization and management in order to gain competitive edge and protect our business from the unfavorable effects of external factors.
Market and Competition Outlook
24
• ITcapabilitiesdevelopmentThe development has been implemented and customized to the Company’s specific requirements and the constantly evolving business landscape. Skill development programs have been arranged for employees to equip them with knowledge and information useful for delivering quality services to customers as well as to develop TNH towards a knowledge-based organization.
• ContinuousorganizationaldevelopmentIn today’s world, the accreditation has a major influence on the customers’ hospital preference and motivates hospitals to continuously improving their capabilities and competitiveness. Despite requirement nuances, every accreditation program aims to heighten the quality and standard of medical processes and services for the benefit of clients. In this regard, TNH has made active and earnest efforts to encourage our personnel to adhere to the standards and quality improvement guidelines when doing work or delivering services to clients.
• MarketingandpublicrelationsTNH continues to focus on activity-based marketing which has been crafted around the principle of good corporate governance. We have arranged various activities to promote knowledge and awareness of our clients and the nearby communities about the importance of good life quality as well as to create a healthy society.
InternalActivities
1. Monthly talks given by our doctors, nurses and specialists for the public such as:
- Breast Care Center organized the “Breast Diseases in 2014” seminar facilitated by Dr. Prakasit Chirappapha, Head of Breast Care Center, and breast specialists to share knowledge about breast diseases, breast cancer treatment and breast reconstruction. Also available in the seminar were a self-breast exam workshop and a computerized breast cancer risk assessment service.
- LasikCenterorganized the “Goodbye to Glasses” seminar facilitated by Dr. Kanitta Tantisirisomboon, an ophthalmologist and Head of Eye Department.
- Bone&JointCenter organized the “Stiffness and Joint Pain” seminar facilitated by Dr. Thavat Prasartritha, Head of Bone & Joint Center, and offered a free bone density test.
2. Disease prevention exhibitions related to breast cancer and seasonal diseases such as influenza, dengue fever and diarrhea.
3. Regular hygiene knowledge sharing for employees, staff and clients.
4. Energy-saving projects to promote use of certified electrical appliances with low power consumption.
5. Quarterly blood donation activities for the Thai Red Cross Society.
6. Happiness sharing campaigns for special occasions like New Year, Children’s day, Chinese New Year, Songkran’s day and TNH’s anniversary, etc.
ExternalActivities
1. Health and safety promotion activities facilitated by our teams of medical practitioners for companies, organization and institutes.
2. Mobile medical check-up programs for local communities organized in collaboration with public and private organizations such as Bangna District Office, Prakanong District Office, Samutprakarn Provincial Office and Matichon Publishing.
25
3. Safety promotion projects for nearby communities which included the police booth renovation and the installation of surveillance cameras along the road connecting Lasalle Junction and Bangna Junction and the road connecting Sukhumvit 101/1 and Udomsuk Junction.
7. Dredging of canals adjacent to the hospital in collaboration with the Environment Department of Bangna District Office.
8. Support programs for the underprivileged were regularly held in collaboration with the Luang Por Bhuddh-Thainakarin Hospital Foundation, our counterparties and various organizations to extend assistance to the underprivileged rural students of the Mae Fah Luang Hill Tribe Community Learning Center in Tak Province under the School in the Fog Project.
TNH has disseminated useful medical knowledge, articles written by our doctors, and news about TNH through various communication channels which include newspapers, radio stations, magazines and social media to promote the corporate image and credibility.
26
Thailand’sAgeingIndexfor2005-2035
The ability to flexibly adapt the focus and service scope in line with the changing healthcare trends and demands is vital for the business. Therefore, we aspire to constantly develop and become a modern medical and health care center which
is regionally and internationally recognized. Our development plans for 2014 and 2015 include the following:
1. Non-communicableDiseases(NCDs)-TNHwillexpanditsserviceswhicharerelatedtoNCDsasfollows:
• Cancer The Breast Care Center offers a full-service breast cancer treatment and uses the most advanced digital mammography technology for accurate breast cancer screening. Examination and treatment are conducted by internationally-recognized and experienced doctors and breast surgeons specialized in breast-conserving surgery.
YearPopulation (Million) Ageing Index
(Old Age Persons/100 Youths)Total Youth Old Age
2005 62.2 14.3 6.4 45.0
2010 63.7 13.2 7.5 57.0
2015 64.6 12.3 9.0 73.4
2020 65.1 11.2 11.0 98.0
2021 65.2 11.0 11.3 103.2
2025 65.1 10.4 12.9 123.6
2030 64.5 9.8 14.6 149.9
2035 63.4 9.1 15.9 174.4
Source: Institute for Population and Social Research, 2006
Target and the Future Project Thai Nakarin Hospital aspires to a contributor to the quality growth of local communities. We have established organizational development plans with the aim of meeting the growing healthcare needs of our clients.
TNH has given priority to the development of medical treatment and healthcare capabilities which are necessary for its ability to proactively respond to Thailand’s long-term demographic transformation towards the ageing society and the shift in the medical costs and needs of all population groups.
27
• StrokeTNH has targeted to debut its comprehensive stroke care and treatment services in early 2015. With our experienced specialist doctors and medical practitioners, patients will receive quality physical therapy both during and after their hospitalization from our professional physical therapists. In addition, a 24-hour emergency care unit staffed with trained professionals is established to provide emergency medical service for stroke patients. TNH also has the most advanced and powerful Magnetic Resonance Imaging (MRI) technology used by Thailand’s leading medical institutes.
• CoronaryHeartDiseaseThroughout the past decade, TNH has continuously developed its Heart Center by integrating the best quality standard and the latest medical technology into the center’s operation in order to offer the best services and treatment to our patients. To accommodate the growing number of patients, we have undertaken major capability development and strengthened our heart disease specialist team to offer 24-hour medical emergency services and advanced medical technologies and facilities such as the 64-slice CT scanner and the cardiac catheterization laboratory to heart disease patients.
2. Developmentofmedicalunitsandcenterstomeetgrowingdemands
• TNH has introduced Women’s Health Center and expand the facilities of Bone & Joint Center and Pediatrics Department in line with the clients’ demands and requirements. We have also recruited doctors and specialists to offer medical treatment and services that meet complicated and specific needs of patients.
• Inpatient care and facilities are also available for surgery and neurological patients. As acute medical care and treatment is crucial for patients with injuries from traffic incidents, TNH which is located on an arterial road has continuously enhanced the capabilities of our Emergency Department to provide acute and 24-hour care and treatment for patients with emergency medical needs.
28
Risk factors associated with the Company’s business are as detailed below:
1. Risk from Shortage of Medical PersonnelA key success factor of hospital business is the ability to attract and retain medical personnel, doctors, registered
nurses, pharmacists and technicians who possess the right set of expertise, skills and competencies. Due to the strong market demand from private and public hospitals, the hospital is exposed to the risk of medical personnel shortage and difficulties in attracting talents for its medical facilities, existing centers and new centers. We focus on fostering positive relationship with specialist doctors and equipping our facilities with advanced medical equipment and tools to enhance the convenience of medical treatment. To encourage endless people development, we have constantly provided training courses for our personnel. To enhance motivation, morale and ultimately employee engagement in the long run, we have offered attractive benefit and compensation packages and pleasant work environment.
2. Risk from Intense Competition in Hospital Industry
The competition in Thailand’s medical service and health care business has intensified and affected both public and private hospitals. To protect their current customer base and penetrate new customer targets, private hospitals have implemented competitive strategies to differentiate themselves from peers in terms of prices, service quality and medical expertise. As a result, the Company is exposed to the risk of losing its customers to competitors.
TNH aims to protect the current customer base and move forward as a leading hospital in the Eastern Bangkok region. To this end, TNH has invested in advanced medical equipment and IT systems, offered extra privileges to the Healthy Society members, improved the amenities and expanded our inpatient and outpatient facilities for better convenience and comfort of our patients.
3. Risk from Change in Public PoliciesOur non-participation in the social security system and the national health security system is a factor that leads
to the difference in the number of patients between TNH and participating hospitals. Recognizing the threat, we have emphasized on the quality of service and care to gain competitive edge through better customer satisfaction and superior medical alternatives. To widen our business opportunities, the hospital has selectively participated in programs initiated by the government sector which do not affect our image such as facilitating patients’ reimbursement of their hemodialysis expenses from the Social Security Office or public organizations.
4. Risk from Land Leasing
Thai Nakarin Hospital is located on the land leased from the Thai Red Cross Society under the 30-year leasehold agreement which will expire on 8 November 2018. As the leasehold agreement expiry is approaching, the hospital and the management team, being fully aware of the associated risk, have initiated the negotiation with the Thai Red Cross Society about the renewal of the land and building leasehold agreement which is expected to be extended for 25-30 years at the lease fee and other fees as mutually agreed. The hospital should lead to an amicable and satisfactory conclusion on account of the good relationship between the hospital and the Thai Red Cross Society, the hospital’s proper compliance with contractual terms and conditions and our consistent support and participation in activities of the Thai Red Cross Society.
Risk Factors
29
The hospital has undertaken legal actions to accelerate the ownership transfer of the lands on the side and the back of the hospital (with the total size of approximately 16-3-19.5 rai) purchased at auction from Sukhumvit Asset Management Company Limited. The ownership transfer cannot be yet completed due to the pending legal dispute between Sukhumvit Asset Management Company Limited and a third-party plaintiff. The Court of First Instance and the Court of Appeal had dismissed the case; however, the plaintiff filed an appeal with the Supreme Court which has issued a temporary injunction prohibiting against the land sale and transfer. The Supreme Court should soon rule on the case and it is expected that the Supreme Court will affirm the judgment of the Court of the First Instance and the Court of Appeal, unlocking the land ownership transfer and eradicating the issue. In addition, the hospital will be able to expand its facilities on the premises.
5. Legal DisputeLegal disputes and lawsuits between patients and hospitals or doctors have reportedly grown in number.
With the new legislations which lead to a high level of consumer and patient protection such as the National Health Act B.E. 2550 and the Consumer Case Procedure Act B.E. 2551 as well as more stringent rules governing hospitals’ advertisement, hospitals including doctors and nurses must be more careful with all aspects of medical services and practices. To prevent the risk of legal disputes and enhance our service quality and standard, TNH has adhered to hospital accreditation (HA) standards and the laboratory standards established by Department of Medical Sciences, Ministry of Public Health. The hospital favors the settlement of legal disputes through negotiation and compromise. In recent years, TNH have marginally experienced legal disputes and they do not have material impact on our business or assets.
30
Shareholding Structure Company’s Securities
The Company’s total registered capital is Baht 180 million. The capital is fully paid-up and comprised of 180 million ordinary shares at the par value of Baht 1 per share.
List of top 10 major shareholders of the Company as of 31 July 2014
Shareholding and Management Structure
Names of Shareholders Number of Shares % of Shareholding
1. Siam Property Development Company Limited 50,000,000 27.77
2. Mr. Jatuporn Sihanatkathakul 24,040,000 13.35
3. Thai NVDR Company Limited 4,673,975 2.59
4. Mrs. Waewta Looareesuwan 4,420,500 2.45
5. Miss Nuchnapa Wongcharoensin 3,471,725 1.92
6. Dr. Prachuab Khunsongkiat 2,985,200 1.65
7. Dr. Charoen Meensook 2,500,000 1.38
8. Mrs. Hattaya Meensook 2,285,500 1.27
9. Miss Saowakhon Kajornkiatarcha 2,236,800 1.24
10. Mrs. Sokjeng Saengow 2,175,000 1.20
Source: Thailand Securities Depository Co., Ltd.
1. The major shareholders having material influence on the Company’s decisions on policies, management and operations The Sihanatkathakul family which includes Mr. Jatuporn Sihanatkathakul, Mr. Suchart Sihanatkatakul, Mrs. Nipapat Sihanatkathakul, Mr. Thiti Sihanatkathakul, Mr. Pitipat Sihanatkathakul, Miss Onaree Sihanatkathakul and Mr. Tosaporn Sihanatkathakul.
2. Members of the Sihanatkathakul family hold shares in Siam Property Development Company Limited and are authorized directors of Siam Property Development Company Limited.
Dividend Policy According to the Company’s dividend policy, the dividend payment shall be at least 60 percent of the net profit after corporate income tax. Nonetheless, the payout ratio may be lower than the said level if the Company finds it necessary to allocate the net profit to its business expansion.
On 26 September 2014, the Board of Directors, in its meeting no. 3/2014, resolved to propose the 2014 annual dividend
payment (from the operating results of the period between 1 August 2013 and 31 July 2014) at the rate of Baht 0.60 per share, totaling
Baht 108 million (one hundred and eight million baht) to the 2014 annual general meeting of shareholders for approval.
31
Chie
f Med
ical
Offi
cer
Dr.C
haro
en M
eens
uk
Chie
f Ope
ratin
g O
ffice
rH
onou
r Clin
ical
Pro
fess
or
Chai
porn
Bha
drak
om
Depu
ty C
hief
Ope
ratin
g O
ffice
rM
rs.C
hada
rat
Siriw
at
Assis
tant
Med
ical
Dire
ctor
Miss
.Tip
paya
wan
Sric
haiv
oran
atAs
sista
nt M
edic
al D
irect
or(N
ursin
g Se
rvic
e)M
rs.W
iboo
nluk
Visi
tnor
apat
Depu
ty M
edic
al D
irect
orDr
.Vira
chai
Phu
ngra
sam
eeDe
puty
Med
ical
Dire
ctor
(Nur
sing)
Pol.C
apt.
Nam
petc
h S
arag
gana
nda
Actin
g Ad
min
. Dire
ctor
Mr.P
rapa
t Sut
haw
ate
Depu
ty A
dmin
. Dire
ctor
Miss
.Mal
ee B
oonl
eech
ai
Assis
tant
Adm
in. D
irect
orM
r.Poo
m Ja
ntre
eAs
sista
nt A
dmin
. Di
rect
orM
r.Piti
pat S
ihan
atka
thak
ul
Com
pany
Sec
reta
ryM
r.Poo
m Ja
ntre
eTh
e Au
dit C
omm
ittee
Boar
d of
Dire
ctor
s
The
Chai
rman
Mr.J
atup
orn
Siha
natk
atha
kul
Med
ical
Dire
ctor
Hon
our C
linic
al P
rofe
ssor
Dr
.Cha
ipor
n P
hadr
akom
1. M
anag
emen
t Str
uctu
re
*Hon
our C
linic
al P
rofe
ssor
Cha
ipor
n Bh
adra
kom
, M.D
. act
s as
Chi
ef O
pera
ting
Offi
cer o
n a
tem
pora
ry b
asis
.
32
Board of Directors As of 31 July 2014, the Board is comprised of 15 members as detailed below:
1. Mr. Jatuporn Sihanatkathakul Chairman of the Board2. Dr. Charoen Meensook Director 3. Mr. Suchart Sihanatkatakul Director
4. Prof. Dr. Deja Tanphaichitra Director
5. Asst. Prof. Dr.Prapas Teerakul Director
6. Mr. Prapat Suthawate Director
7. Mr. Sumeth Jenjesda Director
8. Mr. Arkom Cheirsilpa Director
9. Mr. Thiti Sihanatkathakul Director
10. Mr. Pitipat Sihanatkathakul Director
11. Mr. Kraisak Kadkum DirectorandChairmanoftheAuditCommittee
12. Pol. Gen. Sawat Amornvivat DirectorandMemberoftheAuditCommittee
13. Dr. Pridi Hetrakul DirectorandMemberoftheAuditCommittee
14. Dr. Chertsak Dhiraputra DirectorandMemberoftheAuditCommittee
15. Asst. Prof. Dr. Panya Issarawornrawanich DirectorandMemberoftheAuditCommittee
Company Secretary Mr. Poom Jantree
Authorized Director 2 of the 6 authorized directors, namely Mr. Jatuporn Sihanatkathakul, Dr. Charoen Meensook, Mr. Prapat Suthawate,
Asst. Prof. Dr. Prapas Teerakul, Dr. Pridi Hetrakul, and Mr. Thiti Sihanatkathakul shall co-sign and affix the Company’s seal
to legally bind the Company.
Scope of Duty and Responsibility of the Board The Board shall have the authority, duties and responsibilities to perform acts with care and integrity to ensure the Company’s compliance with applicable laws, the corporate purpose, the articles of association, and the resolutions of legitimate shareholders’ meetings. Key authority and responsibilities of the Board are as summarized below:
(a) The Board shall call an annual general meeting of shareholders within 4 months from the end of the Company’s accounting period.
(b) The Board shall convene a Board meeting at least every 3 months.
(c) The Board shall propose the audited statements of financial positions and the statement of comprehensive income as of the end of the Company’s accounting period to a shareholders’ meeting for approval.
(d) The Board may delegate a director, directors or other persons to perform acts on its behalf and under its supervision; or delegate to such persons the authority within the scope as the Board deems appropriate. Such delegation may be annulled or amended or re-assigned to other persons as the Board deems appropriate.
33
The Board may delegate to managing directors the authority and responsibility to perform acts or duties as detailed in the scope of power and responsibilities of managing directors. Such delegation shall not explicitly or implicitly vest managing directors with the power to consider and approve transactions involving conflict of interest between themselves or their related parties and Company or its subsidiaries (if any), unless otherwise permitted by applicable policies and criteria previously approved by the Board.
(e) The Board shall determine the Company’s policies, directions, business plans and budget plans as well as govern managing directors’ operations to assure compliance with the policies and directions given by the Board. This clause excludes matters such as capital increase, capital decrease, sale or transfer of entire business or significant part of business, business acquisition, acceptance of business transfer, amendment of the Company’s articles of association, etc. which the Board must obtain prior approval from the shareholders’ meeting in accordance with regulatory requirements.
The Board also has the duty to oversee the Company’s compliance with the Securities and Exchange Act, rules and regulations of the Stock Exchange of Thailand governing, for example, related-party transactions and acquisition or disposal of material assets, and other relevant laws.
(f) The Board shall approve management structure and the appointment of managing directors and members of committees as appropriate.
(g) The Board shall monitor the Company’s performance and assure that it is consistently in line with business plans and budget plans.
(h) Directors shall refrain from operating businesses similar to or competing with the Company or being partners in ordinary partnerships, partners with unlimited liability in limited partnerships, or directors of private companies or companies operating businesses similar to and competing the Company, regardless of whether such tenure is for the interest of themselves or others, unless the shareholders’ meeting has been notified of the tenure before approving their directorship.
(i) Directors shall, without delay, notify the Company of their direct and indirect conflict of interest related to the Company’s contractual transactions, and change in their possession of shares or debentures of the Company or its subsidiaries.
Scope of Duty and Responsibility of the Chairman of the Board
(a) The Chairman of the Board shall review the annual budget allocation plan proposed by the management prior to submission thereof for the Board’s approval.
(b) The Chairman of the Board shall have the authority to approve procurement transactions within the limit of Baht 5,000,000 per transaction.
The Chairman of the Board shall not have the power to approve transactions of the Company and its subsidiaries which involve conflict of interest with himself or his related parties in accordance with rules and regulations of the Stock Exchange of Thailand. Such transactions shall be proposed to the Board’s meeting and/or the shareholders’ meeting for approval as required by the Company’s articles of association or applicable laws, unless they are in the ordinary course of the Company’s business and meet the specific approval criteria previously established by the Board.
34
Audit Committee
As of 31 July 2014, the Audit Committee is comprised of 5 members as follows :
1. Mr.Kraisak Kadkum Chairman of the Audit Committee
2. Pol.Gen.Sawat Amornvivat Member
3. Dr.Pridi Hetrakul Member
4. Dr.Chertsak Dhiraputra Member
5. Asst.Prof.Dr.Panya Issarawornrawanich Member
Asst. Prof. Dr. Panya Issarawornrawanich, an assistant professor of Accounting Department, Thammasat Business School, Thammasat University, and a certified public accountant is an Audit Committee member who possesses extensive accounting and finance knowledge and experience.
Secretary to the Audit Committee Mr. Poom Jantree
Scope of Duty and Responsibility of the Audit Committee
(a) Review the Company’s financial reports to ensure accuracy and adequacy of the quarterly and annual financial reports in collaboration with external auditors and executives concerned.
The Audit Committee may recommend external auditors to review and examine any items or transactions which are considered essential and material during the audit process.
(b) Review the Company’s internal control and internal audit to ensure their adequacy and effectiveness in collaboration with external auditors and internal auditors.
(c) Review the Company’s compliance with the Securities and Exchange Act, rules and regulations of the Stock Exchange of Thailand or applicable laws.
(d) Screen and nominate external auditors for the Company by taking into consideration the audit fees based on the credibility, resources, and workload of auditing firms concerned as well as the independence and experience of designated auditors.
(e) Examine the Company’ disclosure of related-party transactions or conflict of interest.
(f) Perform any other duties as assigned by the Board and concurred by the Audit Committee which include, for example, reviewing financial and the executives’ compliance with the code of ethics which must be publicly disclosed in important reports such as the management discussion and analysis in accordance with the laws.
(g) Prepare the Audit Committee’s Report which must contain the Audit Committee’s opinions regarding the accuracy and reliability of the Company’s financial reports and disclosure as well as the adequacy of the Company’s internal control. The Audit Committee’s Report must be included in the annual report and signed by the Chairman of the Audit Committee.
35
(h) Regularly report the Audit Committee’s performance to the Board at least quarterly.
(i) Provide opinions on the performance evaluation, appointment, removal and remuneration of internal auditors.
(j) Meet with external auditors and internal auditors without participation of the management at least annually to discuss and seek opinions on relevant matters.
An office term of the Audit Committee
- Chairman 2 years
- Member 2 years
The Chairman and members of the Audit Committee who retire by rotation may be re-appointed.
Qualification of Audit Committee Member and Selection Process The Board is vested with the authority to appoint 5 persons possessing qualifications in accordance with the Securities and Exchange Act, and notifications, rules and/or regulations stipulated by the Securities and Exchange Commission to serve on the Audit Committee. At least 1 member of the Audit Committee shall have finance and accounting knowledge. Each member of the Audit Committee shall hold an office term of 2 years at a maximum and must meet the following qualification criteria:
1) Holds not more than 5 percent of total voting shares of the Company, its parent company, its subsidiaries, its associate companies or entities of persons who may have conflict of interest.
2) Is not engaged in the Company’s management and is not staff, employee, salaried advisor or person with controlling power of the Company, its parent company, its subsidiaries, its associate companies or entities owned by persons who may have conflict of interest.
3) Is not related by blood, marriage or legal registration as father, mother, child or close relative of persons who may have conflict of interest.
4) Does not have business relationship with the Company, its parent company, its subsidiaries, its associate companies or entities owned by persons who may have conflict of interest in a manner that may obstruct his/her independent judgment as well as does not possess any characteristic which may obstruct his/her independent opinion on the Company’s business operations.
5) Possesses a suitable level of abilities and experience required for the effective review of financial statements and his/her performance of other duties as a member of the Audit Committee.
6) Each member of the Audit Committee shall be able to offer opinions and recommendations on internal control audit reports prepared by the Internal Audit Department or internal audit service providers.
36
Management Team As of 31 July 2014, the management team is comprised of 11 executives as follows:
1. Dr. Charoen Meensook Chief Medical Officer
2. Honour Clinical Professor Dr. Chaiporn Bhadrakom Medical Director and Chief Operating Officer
3. Mr. Prapat Suthawate Acting Managing Director
4. Dr. Virachai Phungrasamee Deputy Medical Director
5. Mrs. Nampetch Saragananda Deputy Medical Director, (Nursing)
6. Mrs. Chadarat Siriwat DeputyChiefOpreatingOfficer
7. Mrs. Malee Boonleechai DeputyAdministrativeDirector
8. Mr. Pitipat Sihanatkathakul Assistant Administrative Director
9. Mr. Poom Jantree Assistant Executive Administrative Director
10. Miss Tippayawan Srichaivoranat AssistantMedicalDirector
11. Mrs. Wiboonluk Visitnorapat AssistantMedicalDirector(NursingService)
Scope of Duty and Responsibility of Chief Medical Officer
Chief Medical Officer shall have the authority, duty and responsibility to give consultation and advice to doctors and formulate medical policies as detailed below:
(a) Undertake supervision to ensure that the Company’s medical policies comply with rules and regulations stipulated by the Ministry of Public Health.
(b) Provide consultation and advice for doctors about proper medical practices in accordance with professional standard and ethics.
Chief Medical Officer shall not have the power to approve transactions of the Company and its subsidiaries which involve conflict of interest with himself or his related parties in accordance with rules and regulations of the Stock Exchange of Thailand. Such transactions shall be proposed to the Board’s meeting and/or the shareholders’ meeting for approval as required by the Company’s articles of association or applicable laws, unless they are in the ordinary course of the Company’s business and meet the specific approval criteria previously established by the Board.
Scope of Duty and Responsibility of Medical Director
Medical Director shall have the authority, duty and responsibility to manage ordinary medical service operations as detailed below:
(a) Control medical services and day-to-day operations of doctors, nurses, pharmacists and medical staff to ensure compliance with regulatory requirements stipulated by the Ministry of Public Health, the Medical Council of Thailand, Thailand Nursing and Midwifery Council and the Pharmacy Council of Thailand.
(b) Execute work in accordance with policies, business plans and budget plans approved by the Board.
(c) Make decisions on recruitment of medical personnel with suitable knowledge and expertise as well as on employment termination.
(d) Supervise the selection of medicines and medical supplies, equipment and tools.
37
(e) Consider, in collaboration with division managing directors, rates of salary, bonus and compensation of employees, staff and persons hired by the Company within the framework approved by the Board.
(f) Control service quality to consistently meet health care accreditation standards.
Medical Director shall not have the power to approve transactions of the Company and its subsidiaries which involve conflict of interest with himself or his related parties in accordance with rules and regulations of the Stock Exchange of Thailand. Such transactions shall be proposed to the Board’s meeting and/or the shareholders’ meeting for approval as required by the Company’s articles of association or applicable laws, unless they are in the ordinary course of the Company’s business and meet the specific approval criteria previously established by the Board.
Scope of Duty and Responsibility of Chief Operating Officer Chief Operating Officer shall have the authority, duty and responsibility to manage and supervise all quality improvement activities of the hospital as detailed below:
(a) Govern all quality improvement activities of the hospital.
(b) Manage all risks associated with health care services provided by the hospital.
(c) Execute work in accordance with policies, business plans and budget plans approved by the Board.
(d) Consider, in collaboration with division managing directors, rates of salary, bonus and compensation of employees, staff and persons hired by the Company within the framework approved by the Board.
(e) Control service quality to consistently meet health care accreditation standards.
Chief Operating Officer shall not have the power to approve transactions of the Company and its subsidiaries which involve conflict of interest with himself or his related parties in accordance with rules and regulations of the Stock Exchange of Thailand. Such transactions shall be proposed to the Board’s meeting and/or the shareholders’ meeting for approval as required by the Company’s articles of association or applicable laws, unless they are in the ordinary course of the Company’s business and meet the specific approval criteria previously established by the Board.
Scope of Duty and Responsibility of Administrative Director
Administrative Director shall have the authority, duty and responsibility to manage and supervise ordinary operations and administration of the Company as detailed below:
(a) Govern and supervise the Company’s administration and/or day-to-day operations.
(b) Execute work in accordance with policies, business plans and budget plans approved by the Board.
(c) Review the annual budget allocation plan proposed by the management prior to submission of the plan to the Board for approval. Consider and decide on requests for annual budget revision or increase which are urgent and cannot wait until the upcoming Board’s meeting. Decisions on such requests shall be reported to the subsequent Board’s meeting.
(d) Approve procurement transactions within the limit of Baht 300,000 per transaction.
38
(e) Consider, in collaboration with division Administrative directors, rates of salary, bonus and compensation of employees, staff and persons hired by the Company within the framework approved by the Board.
(f) Serve as an authorized person of the Company who is empowered to manage the Company’s business in strict compliance with the corporate purpose, articles of associations, policies, regulations, rules, directives, and resolutions of shareholders’ meetings and/or resolutions of the Board’s meetings.
Administrative Director shall not have the power to approve transactions of the Company and its subsidiaries which involve conflict of interest with himself or his related parties in accordance with rules and regulations of the Stock Exchange of Thailand. Such transactions shall be proposed to the Board’s meeting and/or the shareholders’ meeting for approval as required by the Company’s articles of association or applicable laws, unless they are in the ordinary course of the Company’s business and meet the specific approval criteria previously established by the Board.
The Board’s meeting resolved to increase the authority limit of Deputy Administrative Director to Baht 300,000 per transaction which is the same as the authority limit of Administrative Director. Deputy Administrative Director shall not have the power to approve transactions of the Company and its subsidiaries which involve conflict of interest with herself or her related parties in accordance with rules and regulations of the Stock Exchange of Thailand. Such transactions shall be proposed to the Board’s meeting and/or the shareholders’ meeting for approval as required by the Company’s articles of association or applicable laws, unless they are in the ordinary course of the Company’s business and meet the specific approval criteria previously established by the Board.
2. Director and Executive Nomination The nomination of directors is proposed to the shareholders’ meeting and subject to the majority vote of shareholders. Though the Nomination Committee is not involved in the nomination process, the Company has taken steps to ensure that director candidates meet the qualification criteria as set out in Section 68 of the Public Limited Companies Act B.E. 2535 and possesses professional knowledge and expertise which are beneficial to the Company’s business, visionary leadership, integrity, morality, proven record of transparency, and independence.
The Company has established a committee consisting of senior medical, nursing and administrative executives to be responsible for screening and interviewing candidates for executive positions. The remuneration packages of senior executives is based on their scope of duties and responsibilities and benchmarked with other companies of comparable size in the same industry.
3. Director and Executive Remuneration The Company’s expenses on remuneration and fringe benefits for directors and executives for the year ended 31 July 2014 are as shown below:
(1) Total director remuneration in relation to attendance fees and benefits is as listed below:
39
Name
Attendance Fee for Board Meeting
Attendance Fee for Audit Committee
MeetingTotalNo. of
Meeting No. of
Attendance
Fee Amount(Baht)
No. of Meeting No. of
Attendance/
Fee Amount(Baht)
1. Mr. Jatuporn Sihanatkathakul 4/4 68,000 - - 68,000
2. Dr. Charoen Meensook 4/4 52,000 - - 52,000
3. Mr. Suchart Sihanatkatakul 4/4 52,000 - - 52,000
4. Prof. Dr. Deja Tanphaichitra 4/4 52,000 - - 52,000
5. Asst. Prof. Dr. Prapas Teerakul 4/4 52,000 - - 52,000
6. Mr. Prapat Suthawate 4/4 52,000 - - 52,000
7. Mr. Sumeth Jenjesda 4/4 52,000 - - 52,000
8. Mr. Arkom Cheirsilpa 4/4 52,000 - - 52,000
10. Mr. Thiti Sihanatkathakul 4/4 52,000 - - 52,000
11. Mr. Pitipat Sihanatkathakul 3/3 42,000 - - 42,000
12. Mr. Kraisak Kadkum 4/4 52,000 4/4 68,000 120,000
13. Pol. Gen. Sawat Amornvivat 4/3 38,000 4/3 38,000 76,000
14. Dr. Pridi Hetrakul 4/4 52,000 4/4 52,000 104,000
14. Dr. Chertsak Dhiraputra 4/3 38,000 4/4 52,000 90,000
15. Asst. Prof. Dr. Panya Issarawornrawanich 4/4 52,000 4/4 52,000 104,000
Total 758,000 262,000 1,020,000
Director remuneration refers to remuneration paid to the Company’s directors, exclusive of monthly salary and fringe benefits offered to executives. The director remuneration has been approved by the shareholders’ meeting.
Medical benefit for directors and their families are limited at Baht 800,000 per year and the Company’s expenses on the said benefit in 2014 amounted to Baht 2.33 million as detailed in the note 7 to the financial statements. All medical expenses which exceed the limit are charged and collected in accordance with the Company’s procedures.
40
(2)Executive Director and Executive RemunerationTotal remuneration of executive directors and executives of the Company in 2014 amounted to Baht 30.54 million,
inclusive of monthly salary, medical benefits and fringe benefits offered to executives.
4. Personnel As of 31 July 2014, the Company has 1,138 permanent employees and 173 contractual employees, totaling 1,311 employees. Expenses on salary, wages and fringe benefits of employees in 2013 are as shown below:
Category Amount(MB)
Salary,overtime,bonus,retiringallowanceandothers 390.39
Benefits 22.88
ContributiontoSocialSecurityFund 8.42
Contributiontoprovidentfund 2.45
ContributiontoFundforEmpowermentofPersonswithDisabilities 1.26
Others 0.18
Total 425.58
Employee Training and Development for 2014 Human resources are a key driver behind every organization’s success. Thai Nakarin Hospital has formulated concrete people development and health promotion plans and allocated budgets for active implementation of such projects as detailed below:
1. Alignment of work attitude Alignment of work Alignment of work attitude to corporate culture and management structure is a key success factor. Therefore, TNH has arranged an orientation program for new joiners, helping them to clearly understand their functional roles and responsibilities as well as developments which will enable them to maximize their potentials and work effectively.
2. Training and development Training and development Training and development are provided for employees through both public and in-house training courses.. Training and development plans are competency-based and customized to the needs of specific care centers as well as the results of employee training need survey.
3. Leadership development and career growth Leadership development and career growth Leadership development and career growth have been promoted through the Talent and Leadership Program which is designed for department heads or middle management and the domestic and overseas field trip programs for top-level management.
4. Employee engagement Employee engagement Employee engagement has been integrated with corporate social responsibility activities such as merit-making ceremony, offering food to monks, sick employee visit by executives, monthly “Happy Birthday To You” activity and quarterly “Happy Birthday Outing” activity.
41
5. Employee health promotion Employee health promotion has been a top priority of TNH. We recognize the importance of a healthy body and mind and provide our employees with medical benefits which include medical treatment, annual medical check-up, vaccinations and personal protection equipment. We have organized sports day activity and “From Belly Fat to Flat Belly” program to promote healthy diet and exercise.
6. Occupational safety and health promotion Occupational safety and health promotion are treated as priorities and have been carried out in the form of knowledge sharing via different internal communication channels and social network. In addition, we have organized annual fire drill and training in basic fire prevention and fire fighting, energy saving, occupational safety, health and environment, infectious disease prevention and control, basic life support etc.
อบอุ่น... มั่นใจ ที่ ไทยนครินทร์
42
Deta
ils o
f Man
agem
ent a
nd P
erso
ns w
ith C
ontr
ollin
g Po
wer
of t
he C
ompa
nyM
anag
emen
t
Nam
e/Po
sitio
nAg
e
(yea
rs)
Educ
atio
n
Shar
ehol
ding
in
the
Com
pany
(%)
Fam
ily
Rela
tions
hip
with
M
anag
emen
tW
ork
Expe
rienc
e
1. M
r. Ja
tupo
rn S
ihan
atka
thak
ul
C
hairm
an o
f the
Boa
rd
73--B.
Acc
., C
hula
long
korn
Uni
vers
ity
--H
onor
ary
Ph.D
., H
otel
and
Tou
rism
,
Dhu
raki
j Pun
dit U
nive
rsity
13.3
5--Yo
unge
r bro
ther
of M
r. Su
char
t
Siha
natk
atak
ul
--Fa
ther
of M
r. Th
iti S
ihan
atka
thak
ul
--an
d M
r. Pi
tipat
Sih
anat
kath
akul
1988
-Pre
sent
1999
-Pre
sent
1993
-Pre
sent
1982
-Pre
sent
--C
hairm
an o
f the
Boa
rd, T
hai N
akar
in H
ospi
tal P
cl.
--Pr
esid
ent,
Tha
i Tou
rism
Indu
stry
Ass
ocia
tion
--M
anag
ing
Dire
ctor
, Mah
idol
Uni
vers
ity, C
olle
ge o
f Man
agem
ent
Prog
ram
--Ch
airm
an o
f the
Boa
rd, L
andm
ark
Ove
rsea
s De
velo
pmen
t Co.
, Ltd
--D
irect
or, S
iam
Ove
rsea
s D
evel
opm
ent C
o., L
td.
--M
anag
ing
Dire
ctor
, Sia
m P
rope
rty D
evel
opm
ent C
ompa
ny L
imite
d
2. D
r. C
haro
en M
eens
uk
D
irect
or a
nd
C
hief
Med
ical
Offi
cer
72--M
.D. 1
967
--D
iplo
mat
e Am
eric
an B
oard
of
Inte
rnal
Med
icin
e &
Subs
peci
alty
Boa
rd o
f
Gas
troen
tero
logy
196
8 - 1
973
--N
ew Y
ork
Stat
e Bo
ard
1974
--D
TM &
H (L
iver
pool
) 197
4
--FA
CG
197
5
--FA
CP
1986
1.38
-20
11 -P
rese
nt
1992
-201
0
1976
- Pr
esen
t
--D
irect
or a
nd C
hief
Med
ical
Offi
cer,
Thai
Nak
arin
Hos
pita
l Pcl
.
--Di
rect
or a
nd M
edic
al M
anag
ing
Dire
ctor
, Tha
i Nak
arin
Hos
pita
l Pcl
.
--Sp
ecia
list d
octo
r and
con
sulta
nt s
peci
aliz
ed in
inte
rnal
med
icin
e
and
gast
roen
tero
logy
, Tha
i Nak
arin
Hos
pita
l Pcl
.
3. M
r. Su
char
t Si
hana
tkat
akul
D
irect
or
84-
0.30
--El
der b
roth
er o
f Mr.
Jatu
porn
Siha
natk
atha
kul
1988
-Pre
sent
1993
-Pre
sent
1982
-Pre
sent
--D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--D
irect
or, L
andm
ark
Ove
rsea
s D
evel
opm
ent C
o., L
td.
--D
irect
or, S
iam
Ove
rsea
s D
evel
opm
ent C
o., L
td.
--C
hairm
an o
f the
Boa
rd a
nd D
irect
or,
Siam
Pro
perty
Dev
elop
men
t
Com
pany
Lim
ited
4. P
rof.
Dr.
Dej
a Ta
npha
ichi
tra
D
irect
or
71--D
octo
r of M
edic
ine,
Fac
ulty
of
Med
icin
e Si
riraj
Hos
pita
l, M
ahid
ol
Uni
vers
ity
--In
tern
al M
edic
ine,
Am
eric
an B
oard
F.A.
C.P
. (in
fect
ious
dis
ease
)
0.20
-19
93 -P
rese
nt
2000
-200
4
--D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--Pr
ofes
sor a
nd H
ead
of In
fect
ious
Dis
ease
and
Epi
dem
iolo
gy
Dep
artm
ent,
Ram
athi
bodi
Hos
pita
l
43
Nam
e/Po
sitio
nAg
e
(yea
rs)
Educ
atio
n
Shar
ehol
ding
in
the
Com
pany
(%)
Fam
ily
Rela
tions
hip
with
M
anag
emen
tW
ork
Expe
rienc
e
5. A
sst.
Prof
. Dr.
Prap
as T
eera
kul
D
irect
or
59--M
BA in
Man
agem
ent,
Ram
kham
haen
g U
nive
rsity
--Fe
llow
of T
he A
mer
ican
Aca
dem
y of
Cos
met
ic S
urge
ry
--C
ertif
icat
e in
Oto
rhin
olar
ygol
o-
gy, F
acul
ty o
f Med
icin
e, M
ahid
ol
Uni
vers
ity
--B.
Sc. i
n Sc
ienc
e
--
1992
-Pre
sent
2011
-201
4
1991
-199
2
2006
-201
0
1983
-199
1
1980
-198
3
1979
-198
0
1978
-197
9
--D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--M
edic
al D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--D
eput
y M
edic
al M
anag
ing
Dire
ctor
, Tha
i Nak
arin
Hos
pita
l Pcl
.
--As
sist
ant P
rofe
ssor
, Dep
artm
ent o
f Oto
rhin
olar
ygol
ogy,
Fac
ulty
of
Med
icin
e Ra
mat
hibo
di H
ospi
tal,
Mah
idol
Uni
vers
ity
--Le
ctur
er, F
acul
ty o
f Med
icin
e Ra
mat
hibo
di H
ospi
tal, M
ahid
ol U
nive
rsity
--Re
side
ncy,
Fac
ulty
of M
edic
ine
Ram
athi
bodi
Hos
pita
l, M
ahid
ol
Uni
vers
ity
--Ph
ysic
ian
4, M
inis
try o
f Pub
lic H
ealth
--Ex
tern
, Va
jira
Hos
pita
l
6. M
r. Pr
apat
Sut
haw
ate
D
irect
or a
nd A
ctin
g Ex
ecut
ive
M
anag
ing
Dire
ctor
70--M
aste
r of P
oliti
cal S
cien
ce
(Gov
ernm
ent),
Chu
lalo
ngko
rn
Uni
vers
ity
--Ba
chel
or o
f Pol
itica
l Sci
ence
(Pub
lic A
dmin
istra
tion)
Ram
kham
haen
g U
nive
rsity
--D
iplo
ma
in T
ouris
m M
anag
emen
t
and
Dev
elop
men
t, U
nive
rsity
of
Hai
fa, I
srae
l
--
2005
-Pre
sent
2010
-Pre
sent
2007
-201
3
2005
-201
1
2005
-201
1
1999
- 20
05
1992
-200
5
--D
irect
or a
nd A
ctin
g Ex
ecut
ive
Man
agin
g D
irect
or, T
hai N
akar
in
Hos
pita
l Pcl
.
--G
uest
Lec
ture
r, Fa
culty
of B
usin
ess
Adm
inis
tratio
n,
Ram
kham
haen
g U
nive
rsity
--G
uest
lect
urer
, Fac
ulty
of B
usin
ess
Adm
inis
tratio
n, K
aset
sart
Uni
vers
ity
--Sp
ecia
l Pro
gram
Dire
ctor
, Ran
gsit
Uni
vers
ity
--C
hairm
an o
f Wor
king
Gro
up, R
.S.U
. Hor
izon
Tra
vel C
o., L
td.,
Rang
sit U
nive
rsity
--Ex
ecut
ive
Man
agin
g D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--M
anag
er a
nd A
dvis
or, H
uman
Res
ourc
es D
epar
tmen
t, Si
am
Prop
erty
Dev
elop
men
t Com
pany
Lim
ited
7. M
r. Su
met
h Je
njes
da
D
irect
or
80--B.
Acc
. and
B. C
omm
.-
-20
05 -P
rese
nt
2004
- O
ct 2
005
1995
-Pre
sent
2004
-Pre
sent
--D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--D
irect
or a
nd C
hairm
an o
f Aud
it C
omm
ittee
,
Thai
Nak
arin
Hos
pita
l Pcl
.
--D
irect
or a
nd C
hairm
an o
f Aud
it C
omm
ittee
, Sia
m S
port
Synd
icat
e Pc
l.
--C
ertif
ied
Publ
ic A
ccou
ntan
t, Le
rtnim
it Ac
coun
ting
and
Law
Co.
, Ltd
.
8. D
r. A
rkom
Che
irsilp
a
D
irect
or
67--B.
Sc. M
ahid
ol U
nive
rsity
--M
.D.(C
IM’7
6 Ph
ilippi
nes)
--Bo
ard
of In
tern
al M
edic
ine,
The
Med
ical
Cou
ncil
of
Thai
land
--Su
p - S
peci
ality
Boa
rd C
ertif
icat
ion
in
Med
ical
Onc
olog
y
--
2007
2007
-Pre
sent
--Re
ceiv
ed th
e W
orld
Sci
entis
ts F
orum
Inte
rnat
iona
l Aw
ards
in
Can
cer R
esea
rch
and
Clin
ical
Onc
olog
y “E
min
ent S
cien
tist o
f the
Year
200
7: A
sia”
Int
erna
tiona
l Res
earc
h Pr
omot
ion
Cou
ncil,
UK
--D
irect
or o
f Hol
istic
Onc
olog
y C
ente
r and
Dire
ctor
, Tha
i Nak
arin
Hos
pita
l Pcl
.
44
Nam
e/Po
sitio
nAg
e
(yea
rs)
Educ
atio
n
Shar
ehol
ding
in
the
Com
pany
(%)
Fam
ily
Rela
tions
hip
with
M
anag
emen
tW
ork
Expe
rienc
e
--Fo
llow
ship
in O
ncol
ogy
(RPM
I, U
SA
and
RMH
, UK)
--M
ini M
BA C
hula
long
korn
Uni
vers
ity
--M
BA in
Hea
lth. C
hula
long
korn
Uni
vers
ity
--C
ert.
in H
ospi
tal M
anag
emen
t,
Hav
ard
Scho
ol o
f Pub
lic H
ealth
, USA
--
2002
-200
7
1980
-Pre
sent
--Ad
viso
r, N
atio
nal O
ncol
ocy
Soci
ety
--H
onor
ary
Advi
sor,
Thai
Soc
iety
of C
linic
al O
ncol
ogy
--Ad
viso
r, M
aha
Vajir
alon
gkor
n C
ance
r Cen
ter T
hany
abur
i, N
atio
nal
Can
cer I
nstit
ute
--M
edic
al C
onsu
ltant
, Chu
labh
orn
Hos
pita
l, C
hula
rbho
rn R
esea
rch
Inst
itute
--D
eput
y D
irect
or, N
atio
nal C
ance
r Ins
titut
e
--C
ance
r Spe
cial
ist,
Food
and
Dru
g Ad
min
istra
tion
Dep
artm
ent,
Min
istry
of P
ublic
Hea
lth
9. M
r. Th
iti S
ihan
atka
thak
ul
D
irect
or
39--M
.Sc.
Ana
lysi
s, D
esig
n an
d
Man
agem
ent o
f Inf
orm
atio
n Sy
stem
s,
The
Lond
on S
choo
l of E
cono
mic
s
and
Polit
ical
Sci
ence
, UK
--M
BA, H
uron
Uni
vers
ity, U
K
--BB
A, B
anki
ng a
nd F
inan
ce,
Busi
ness
Sch
ool,
Chu
lalo
ngko
rn
Uni
vers
ity
0.27
--So
n of
Mr.
Jatu
porn
Siha
natk
atha
kul
--El
der b
roth
er o
f Mr.
Pitip
at
Siha
natk
atha
kul
2008
-Pre
sent
2010
-Pre
sent
2003
-Pre
sent
2001
-200
2
1999
-200
0
1998
1997
-- D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--D
irect
or, C
orne
r Déc
or C
o., L
td.
--D
irect
or, K
omar
s En
terp
rise
Co.
, Ltd
.
--D
irect
or, K
umpo
o Th
aila
nd C
o., L
td.
--D
eput
y M
anag
ing
Dire
ctor
and
Dire
ctor
, Lan
dmar
k Ba
ngko
k
Gro
up
--Ac
ting
Dire
ctor
of H
uman
Res
ourc
es D
epar
tmen
t, La
ndm
ark
Bang
kok
--As
soci
ate
Judg
e, C
entra
l Lab
or C
ourt
--M
arke
ting
Dep
artm
ent,
Than
a Si
am C
redi
t Pcl
.
--M
anag
emen
t Tra
inee
, Roy
al L
anca
ster
Hot
el, U
K
10. M
r. Pi
tipat
Sih
anat
kath
akul
Dire
ctor
38
--M
.M. (
Org
aniz
atio
n D
evel
opm
ent
and
Man
agem
ent),
Ass
umpt
ion
Uni
vers
ity
--B.
Acc.
, Ass
umpt
ion
Uni
vers
ity
--M
ini M
BA, C
hula
long
korn
Uni
vers
ity
--Es
sent
ials
of L
eade
rshi
p Tr
aini
ng
Cou
rse,
Lon
don
Busi
ness
Sch
ool
0.55
--So
n of
Mr.
Jatu
porn
Siha
natk
atha
kul
--Yo
unge
r bro
ther
of
Mr.
Thiti
Sih
anat
kath
akul
2013
-Pre
sent
2006
- Pr
esen
t
2005
- 2
006
2004
- 20
05
2002
- 20
04
--D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--As
sist
ant E
xecu
tive
Man
agin
g D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--Ac
ting
Assi
stan
t Exe
cutiv
e M
anag
ing
Dire
ctor
, Tha
i Nak
arin
Hos
pita
l Pcl
.
--Ad
viso
r to
Info
rmat
ion
Cen
ter a
nd P
R Ad
viso
r, Th
ai N
akar
in
Hos
pita
l Pcl
.
--As
sist
ant M
anag
er, B
oard
of D
irect
ors
Offi
ce,
--Si
am P
rope
rty D
evel
opm
ent C
ompa
ny L
imite
d
11.
Mr.
Krai
sak
Kadk
um
Dire
ctor
and
Cha
irman
of t
he
Aud
it C
omm
ittee
51--
LL.B
. Ram
kham
haen
g Un
ivers
ity
--Ba
rrist
er-a
t-law
, Tha
i Bar
Inst
itute
--Di
plom
a in
Bus
ines
s La
ws, T
ham
ma-
sat U
nive
rsity
--
2005
- P
rese
nt
2004
- 2
005
1994
-Pre
sent
--D
irect
or a
nd C
hairm
an o
f the
Aud
it C
omm
ittee
Tha
i Nak
arin
Hos
pita
l Pcl
.
--M
embe
r of t
he A
udit
Com
mitt
ee, T
hai N
akar
in H
ospi
tal P
cl.
--La
wye
r and
Exe
cutiv
e D
irect
or,
Saha
karn
Law
Offi
ce C
o., L
td.
45
Nam
e/Po
sitio
nAg
e
(yea
rs)
Educ
atio
n
Shar
ehol
ding
in
the
Com
pany
(%)
Fam
ily
Rela
tions
hip
with
M
anag
emen
tW
ork
Expe
rienc
e
--Fo
llow
ship
in O
ncol
ogy
(RPM
I, U
SA
and
RMH
, UK)
--M
ini M
BA C
hula
long
korn
Uni
vers
ity
--M
BA in
Hea
lth. C
hula
long
korn
Uni
vers
ity
--C
ert.
in H
ospi
tal M
anag
emen
t,
Hav
ard
Scho
ol o
f Pub
lic H
ealth
, USA
--
2002
-200
7
1980
-Pre
sent
--Ad
viso
r, N
atio
nal O
ncol
ocy
Soci
ety
--H
onor
ary
Advi
sor,
Thai
Soc
iety
of C
linic
al O
ncol
ogy
--Ad
viso
r, M
aha
Vajir
alon
gkor
n C
ance
r Cen
ter T
hany
abur
i, N
atio
nal
Can
cer I
nstit
ute
--M
edic
al C
onsu
ltant
, Chu
labh
orn
Hos
pita
l, C
hula
rbho
rn R
esea
rch
Inst
itute
--D
eput
y D
irect
or, N
atio
nal C
ance
r Ins
titut
e
--C
ance
r Spe
cial
ist,
Food
and
Dru
g Ad
min
istra
tion
Dep
artm
ent,
Min
istry
of P
ublic
Hea
lth
9. M
r. Th
iti S
ihan
atka
thak
ul
D
irect
or
39--M
.Sc.
Ana
lysi
s, D
esig
n an
d
Man
agem
ent o
f Inf
orm
atio
n Sy
stem
s,
The
Lond
on S
choo
l of E
cono
mic
s
and
Polit
ical
Sci
ence
, UK
--M
BA, H
uron
Uni
vers
ity, U
K
--BB
A, B
anki
ng a
nd F
inan
ce,
Busi
ness
Sch
ool,
Chu
lalo
ngko
rn
Uni
vers
ity
0.27
--So
n of
Mr.
Jatu
porn
Siha
natk
atha
kul
--El
der b
roth
er o
f Mr.
Pitip
at
Siha
natk
atha
kul
2008
-Pre
sent
2010
-Pre
sent
2003
-Pre
sent
2001
-200
2
1999
-200
0
1998
1997
-- D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--D
irect
or, C
orne
r Déc
or C
o., L
td.
--D
irect
or, K
omar
s En
terp
rise
Co.
, Ltd
.
--D
irect
or, K
umpo
o Th
aila
nd C
o., L
td.
--D
eput
y M
anag
ing
Dire
ctor
and
Dire
ctor
, Lan
dmar
k Ba
ngko
k
Gro
up
--Ac
ting
Dire
ctor
of H
uman
Res
ourc
es D
epar
tmen
t, La
ndm
ark
Bang
kok
--As
soci
ate
Judg
e, C
entra
l Lab
or C
ourt
--M
arke
ting
Dep
artm
ent,
Than
a Si
am C
redi
t Pcl
.
--M
anag
emen
t Tra
inee
, Roy
al L
anca
ster
Hot
el, U
K
10. M
r. Pi
tipat
Sih
anat
kath
akul
Dire
ctor
38
--M
.M. (
Org
aniz
atio
n D
evel
opm
ent
and
Man
agem
ent),
Ass
umpt
ion
Uni
vers
ity
--B.
Acc.
, Ass
umpt
ion
Uni
vers
ity
--M
ini M
BA, C
hula
long
korn
Uni
vers
ity
--Es
sent
ials
of L
eade
rshi
p Tr
aini
ng
Cou
rse,
Lon
don
Busi
ness
Sch
ool
0.55
--So
n of
Mr.
Jatu
porn
Siha
natk
atha
kul
--Yo
unge
r bro
ther
of
Mr.
Thiti
Sih
anat
kath
akul
2013
-Pre
sent
2006
- Pr
esen
t
2005
- 2
006
2004
- 20
05
2002
- 20
04
--D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--As
sist
ant E
xecu
tive
Man
agin
g D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--Ac
ting
Assi
stan
t Exe
cutiv
e M
anag
ing
Dire
ctor
, Tha
i Nak
arin
Hos
pita
l Pcl
.
--Ad
viso
r to
Info
rmat
ion
Cen
ter a
nd P
R Ad
viso
r, Th
ai N
akar
in
Hos
pita
l Pcl
.
--As
sist
ant M
anag
er, B
oard
of D
irect
ors
Offi
ce,
--Si
am P
rope
rty D
evel
opm
ent C
ompa
ny L
imite
d
11.
Mr.
Krai
sak
Kadk
um
Dire
ctor
and
Cha
irman
of t
he
Aud
it C
omm
ittee
51--
LL.B
. Ram
kham
haen
g Un
ivers
ity
--Ba
rrist
er-a
t-law
, Tha
i Bar
Inst
itute
--Di
plom
a in
Bus
ines
s La
ws, T
ham
ma-
sat U
nive
rsity
--
2005
- P
rese
nt
2004
- 2
005
1994
-Pre
sent
--D
irect
or a
nd C
hairm
an o
f the
Aud
it C
omm
ittee
Tha
i Nak
arin
Hos
pita
l Pcl
.
--M
embe
r of t
he A
udit
Com
mitt
ee, T
hai N
akar
in H
ospi
tal P
cl.
--La
wye
r and
Exe
cutiv
e D
irect
or,
Saha
karn
Law
Offi
ce C
o., L
td.
Nam
e/Po
sitio
nAg
e
(yea
rs)
Educ
atio
n
Shar
ehol
ding
in
the
Com
pany
(%)
Fam
ily
Rela
tions
hip
with
M
anag
emen
tW
ork
Expe
rienc
e
12.
Pol
. Gen
. Saw
at A
mor
nviv
at
Dire
ctor
and
Mem
ber o
f the
Aud
it C
omm
ittee
79-- M
aste
r of P
oliti
cal S
cien
ce
(Pub
lic A
dmin
istra
tion)
, Ind
iana
Uni
vers
ity
--M
aste
r of S
ocia
l Sci
ence
(Soc
ial
Dev
elop
men
t), K
aset
sart
Uni
vers
ity
--Ba
chel
or’s
Deg
ree
in P
ublic
Adm
inis
tratio
n, R
oyal
Pol
ice
Cad
et
Acad
emy
--C
ertif
icat
e, F
BI C
olle
ge, U
SA
--N
atio
nal D
efen
se C
olle
ge, C
lass
26
0.55
-20
07 -P
rese
nt
2000
-200
6
1997
--Di
rect
or a
nd M
embe
r of t
he A
udit C
omm
ittee,
Tha
i Nak
arin
Hos
pita
l Pcl
.
--Se
nate
of C
hian
gmai
-- M
embe
r of C
onst
itutio
n D
rafti
ng A
ssem
bly
-- M
embe
r of N
atio
nal L
egis
lativ
e As
sem
bly
(2 te
rms)
13. D
r. Pr
idi H
etra
kul
Dire
ctor
and
Mem
ber o
f the
A
udit
Com
mitt
ee
71
--D
octo
r of M
edic
ine,
Fac
ulty
of
Med
icin
e Si
riraj
Hos
pita
l
--Am
eric
an B
oard
of S
urge
ry
(Gen
eral
Sur
gery
)
0.83
-19
93 -P
rese
nt
1978
-Pre
sent
--Di
rect
or a
nd M
embe
r of t
he A
udit
Com
mitt
ee T
hai N
akar
in H
ospi
tal P
cl.
--D
irect
or a
nd S
urge
on, M
eyo
Poly
clin
ic C
o., L
td.
14. D
r. C
herts
ak D
hira
putra
Dire
ctor
and
Mem
ber o
f the
Audi
t Com
mitt
ee
71-- D
octo
r of M
edic
ine,
Fac
ulty
of
Med
icin
e Si
riraj
Hos
pita
l
--M
.S.C
. Mic
robi
olog
y U
nive
rsity
of N
ew S
outh
Wal
es, A
ustra
lia
--
2006
- Pr
esen
t
1968
- Pr
esen
t
1998
- 20
00
1997
-200
4
1988
-198
9
--Di
rect
or a
nd M
embe
r of t
he A
udit C
omm
ittee,
Tha
i Nak
arin
Hos
pita
l Pcl
.
--Le
ctur
er, A
ssoc
iate
Pro
fess
or, F
acul
ty o
f Med
icin
e Si
riraj
Hos
pita
l
--Ad
viso
r to
Hos
pita
l Dire
ctor
Fac
ulty
of M
edic
ine
Sirir
aj H
ospi
tal
--H
ead
of D
epar
tmen
t of M
icro
bioI
ogy
and
Exec
utiv
e D
irect
or, F
acul
ty
of M
edic
ine
Sirir
aj H
ospi
tal
--As
soci
ate
Dea
n fo
r Stu
dent
Affa
irs, F
acul
ty o
f Med
icin
e Si
riraj
Hos
pita
l
15. A
sst.
Prof
. Dr.
Pany
a
Issa
raw
ornr
awan
ich
Dire
ctor
and
Mem
ber o
f the
Aud
it
Com
mitt
ee
42--Ph
D in
Acc
ount
ing,
Bus
ines
s Sc
hool
,
Chu
lalo
ngko
rn U
nive
rsity
--M
.Acc
., Bu
sine
ss S
choo
l,
Tham
mas
at U
nive
rsity
--D
iplo
ma
(Acc
ount
ing)
, Bus
ines
s
Scho
ol, T
ham
mas
at U
nive
rsity
--B.
Acc.
Bus
ines
s Sc
hool
,
Chu
lalo
ngko
rn U
nive
rsity
--
2013
- Pr
esen
t
2006
-Pre
sent
2004
-Pre
sent
1997
-Pre
sent
2000
- 2
004
1995
- 20
00
--As
soci
ate
Dean
for F
inan
ce a
nd P
lann
ing,
Bus
ines
s Sc
hool
,
Tham
mas
at U
nive
rsity
--Di
rect
or a
nd M
embe
r of th
e Au
dit C
omm
ittee
Thai
Naka
rin H
ospi
tal P
cl.
--Pe
rman
ent L
ectu
rer,
Assis
tant
Pro
fess
or o
f Acc
ount
ing
Depa
rtmen
t of
Busin
ess
Scho
ol, T
ham
mas
at U
nive
rsity
--Ce
rtifie
d Pu
blic
Acc
ount
ant,
Fede
ratio
n of
Acc
ount
ing
Prof
essio
ns
--He
ad o
f Acc
ount
ing
Depa
rtmen
t, Fa
culty
of B
usin
ess
Adm
inist
ratio
n,
Mah
anak
orn
Unive
rsity
of T
echn
olog
y
--Se
nior
Aud
it As
sista
nt, E
rnst
and
You
ng
46
Dire
ctor
s
Nam
e/Po
sitio
nAg
e
(yea
rs)
Educ
atio
n
Shar
ehol
ding
in
the
Com
pany
(%)
Fam
ily
Rela
tions
hip
with
M
anag
emen
tW
ork
Expe
rienc
e
1. D
r. C
haro
en M
eens
uk
C
hief
Med
ical
Offi
cer
72--M
.D. 1
967
--D
iplo
mat
e Am
eric
an B
oard
of I
nter
nal
Med
icin
e &
Su
bspe
cial
ty B
oard
of
Gas
troen
tero
logy
196
8 -1
973
--N
ew Y
ork
Stat
e Bo
ard
197
4
--D
TM &
H (L
iver
pool
) 197
4
--FA
CG
197
5
--FA
CP
1986
1.38
-20
11 -P
rese
nt
1992
-201
0
1976
- P
rese
nt
--D
irect
or a
nd C
hief
Med
ical
Offi
cer,
Thai
Nak
arin
Hos
pita
l Pcl
.
--Di
rect
or a
nd M
edic
al M
anag
ing
Dire
ctor
, Tha
i Nak
arin
Hos
pita
l Pcl
.
--Sp
ecia
list d
octo
r and
con
sulta
nt s
peci
aliz
ed in
inte
rnal
med
icin
e
and
gast
roen
tero
logy
, Tha
i Nak
arin
Hos
pita
l Pcl
.
2. C
lin. P
rof.
Emer
. Cha
ipor
n
B
hadr
akom
M
edic
al M
anag
ing
Dire
ctor
and
M
anag
ing
Dire
ctor
of S
peci
al
O
pera
tions
Dep
artm
ent
70--D
octo
r of M
edic
ine,
Fac
ulty
of
Med
icin
e Si
riraj
Hos
pita
l, M
ahid
ol
Uni
vers
ity
--D
iplo
mat
e in
Obs
tetri
cs a
nd
Gyn
ecol
ogy
--
May
201
4- P
rese
nt
2007
- Pr
esen
t
2000
-200
4
1997
-200
4
1995
-200
0
--M
edic
al M
anag
ing
Dire
ctor
, Tha
i Nak
arin
Hos
pita
l Pcl
.
--M
anag
ing
Dire
ctor
, Spe
cial
Ope
ratio
ns D
ivis
ion,
Tha
i Nak
arin
Hos
pita
l Pcl
.
--Ad
viso
r, Fa
culty
of M
edic
ine
Sirir
aj H
ospi
tal
--H
ead
of D
epar
tmen
t of O
bste
trics
and
Gyn
ecol
ogy,
Fac
ulty
of
Med
icin
e Si
riraj
Hos
pita
l
--M
ain
Col
labo
rato
r C.D
.C U
SA
--H
ead
of S
TD,
Sirir
aj H
ospi
tal
3. M
r. Pr
apat
Sut
hawa
te
D
irect
or a
nd A
ctin
g Ex
ecut
ive
M
anag
ing
Dire
ctor
71--M
aste
r of P
oliti
cal S
cien
ce
(Gov
ernm
ent),
Chu
lalo
ngko
rn
Uni
vers
ity
--Ba
chel
or o
f Pol
itica
l Sci
ence
(Pub
lic A
dmin
istra
tion)
Ram
kham
haen
g U
nive
rsity
--D
iplo
ma
in T
ouris
m M
anag
emen
t
and
Dev
elop
men
t, U
nive
rsity
of
Hai
fa, I
srae
l
--
2005
-Pre
sent
2010
-Pre
sent
2007
-201
3
2005
-201
1
2005
-201
1
1999
- Ju
n 20
05
1992
-200
5
--Di
rect
or a
nd A
ctin
g Ex
ecut
ive M
anag
ing
Dire
ctor
, Tha
i Nak
arin
Hosp
ital P
cl.
--G
uest
lect
urer
, Fac
ulty
of B
usin
ess
Adm
inist
ratio
n, R
amkh
amha
eng
Unive
rsity
--G
uest
lect
urer
, Fac
ulty
of B
usin
ess
Adm
inist
ratio
n,
--Ka
sets
art U
nive
rsity
--Sp
ecia
l Pro
gram
Dire
ctor
, Ran
gsit U
nive
rsity
--Ch
airm
an o
f Wor
king
Gro
up, R
.S.U
. Hor
izon
Trav
el C
o., L
td.,
Rang
sit U
nive
rsity
--Ex
ecut
ive M
anag
ing
Dire
ctor
, Tha
i Nak
arin
Hos
pita
l Pcl
.
--M
anag
er a
nd A
dviso
r, Hu
man
Res
ourc
es D
epar
tmen
t, Si
am P
rope
rty
Deve
lopm
ent C
ompa
ny L
imite
d
47
Nam
e/Po
sitio
nAg
e
(yea
rs)
Educ
atio
n
Shar
ehol
ding
in
the
Com
pany
(%)
Fam
ily
Rela
tions
hip
with
M
anag
emen
tW
ork
Expe
rienc
e
4. D
r. Vi
rach
ai P
hung
rasa
mee
D
eput
y M
edic
al M
anag
ing
D
irect
or
64--D
octo
r of M
edic
ine,
Fac
ulty
of
Med
icin
e Si
riraj
Hos
pita
l, M
ahid
ol
Uni
vers
ity
--D
epar
tmen
t of O
bste
trics
and
Gyn
ecol
ogy,
Fac
ulty
of M
edic
ine
Sirir
aj H
ospi
tal,
Mah
idol
Uni
vers
ity
--
Sept
201
3- P
rese
nt
2011
-201
3
2005
-Pre
sent
1981
-200
6
--Se
pt 2
013-
Pre
sent
-Dep
uty
Med
ical
Man
agin
g Di
rect
or, T
hai
Naka
rin H
ospi
tal P
cl.
--He
ad o
f Ob-
Gyn
Dep
artm
ent,
Thai
Nak
arin
Hos
pita
l
--O
bste
trici
an, T
hai N
akar
in H
ospi
tal
--O
bste
trici
an, H
ua C
hiew
Hos
pita
l
5. M
rs. N
ampe
tch
Sara
kkha
non
D
eput
y M
edic
al M
anag
ing
D
irect
or, N
ursi
ng U
nit
53
--M
aste
r of P
ublic
Adm
inis
tratio
n
(Gen
eral
Adm
inis
tratio
n), B
urap
ha
Uni
vers
ity
--N
ursi
ng A
dmin
istra
tion,
Chu
lalo
ngko
rn U
nive
rsity
--M
ini M
BA,
Chu
lalo
ngko
rn U
nive
rsity
--Pr
ivat
e H
ospi
tal A
dmin
istra
tion,
Priv
ate
Hos
pita
l Ass
ocia
tion
--B.
Sc. i
n N
ursi
ng, P
olic
e N
ursi
ng
Col
lege
--
2011
- Pr
esen
t
2007
- 2
011
2006
- 20
07
1993
-200
6
1992
-199
3
1990
-199
2
1982
-199
0
--D
eput
y M
edic
al M
anag
ing
Dire
ctor
, Nur
sing
Uni
t, Th
ai N
akar
in
Hos
pita
l Pcl
.
--D
eput
y D
irect
or, N
ursi
ng U
nit,
Thai
Nak
arin
Hos
pita
l Pcl
.
--H
ead
of H
ead
of In
patie
nt S
ervi
ce U
nit,
Thai
Nak
arin
Hos
pita
l Pcl
.
--H
ead
of D
eliv
ery
Room
Uni
t, Th
ai N
akar
in H
ospi
tal P
cl.
--O
b-G
yn R
oom
Nur
se, P
olic
e G
ener
al H
ospi
tal
--O
b-G
yn W
ard
Nur
se, P
olic
e G
ener
al H
ospi
tal
--D
eliv
ery
Room
Nur
se, P
olic
e G
ener
al H
ospi
tal
6. M
rs. C
hada
rat S
iriw
at
D
eput
y M
anag
ing
Dire
ctor
of
S
peci
al O
pera
tions
Dep
artm
ent
53--Ba
chel
or o
f Pub
lic H
ealth
, Suk
hoth
ai
Tham
mat
hira
t Ope
n U
nive
rsity
--
2011
- P
rese
nt
Jan
2010
- Ju
l 201
1
Sept
200
9 -
Dec
201
0
1992
- Au
g 20
09
1982
-199
2
--D
eput
y M
anag
ing
Dire
ctor
of S
peci
al O
pera
tions
Dep
artm
ent,
Thai
Nak
arin
Hos
pita
l Pcl
.
--D
irect
or, N
ursi
ng U
nit,
Thai
Nak
arin
Hos
pita
l Pcl
.
--Ac
ting
Dire
ctor
, Nur
sing
Uni
t, Th
ai N
akar
in H
ospi
tal P
cl.,
Thai
Nak
arin
Hos
pita
l Pcl
.
--D
eput
y D
irect
or, N
ursi
ng U
nit,
Thai
Nak
arin
Hos
pita
l Pcl
.
--In
patie
nt D
epar
tmen
t, M
issi
on H
ospi
tal,
Bang
kok
7. M
iss
Mal
i Bun
licha
i
D
eput
y Ex
ecut
ive
Man
agin
g
D
irect
or
49--B.
Econ
., C
hian
gmai
Uni
vers
ity
--M
ini
MBA
, Tha
mm
asat
Uni
vers
ity
--
Aug
2006
-Pre
sent
2005
-Ju
l 200
6
2002
-200
5
1994
- 20
02
1992
-199
4
--D
eput
y Ex
ecut
ive
Man
agin
g D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--Ac
ting
Dep
uty
Exec
utiv
e M
anag
ing
Dire
ctor
, Tha
i Nak
arin
Hos
pita
l Pcl
.
--As
sist
ant E
xecu
tive
Man
agin
g D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--M
anag
er, O
ffice
of E
xecu
tive
Man
agin
g D
irect
ors,
Tha
i Nak
arin
Hos
pita
l Pcl
.
--M
anag
er, P
rocu
rem
ent D
epar
tmen
t, T
hai N
akar
in H
ospi
tal
48
Nam
e/Po
sitio
nAg
e
(yea
rs)
Educ
atio
n
Shar
ehol
ding
in
the
Com
pany
(%)
Fam
ily
Rela
tions
hip
with
M
anag
emen
tW
ork
Expe
rienc
e
8. M
r. Pi
tipat
Sih
anat
kath
akul
A
ssis
tant
Exe
cutiv
e M
anag
ing
D
irect
or
38--
M.M
. (O
rgan
izatio
n De
velo
pmen
t and
Man
agem
ent),
Ass
umpt
ion
Unive
rsity
--B.
Acc.
, Ass
umpt
ion
Unive
rsity
--M
ini M
BA, C
hula
long
korn
Uni
vers
ity
--Es
sent
ials
of L
eade
rshi
p Tr
aini
ng
Cour
se, L
ondo
n Bu
sines
s Sc
hool
0.55
--So
n of
Mr.
Jatu
porn
Siha
natk
atha
kul
--Yo
unge
r bro
ther
of
Mr.
Thiti
Siha
natk
atha
kul
2013
-Pre
sent
2006
- Pr
esen
t
2005
- Ju
l 200
6
2004
- 20
05
2002
- 20
04
--D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--As
sist
ant E
xecu
tive
Man
agin
g D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--Ac
ting
Assi
stan
t Exe
cutiv
e M
anag
ing
Dire
ctor
, Tha
i Nak
arin
Hos
pita
l Pcl
.
--Ad
viso
r to
Info
rmat
ion
Cen
ter a
nd P
R Ad
viso
r, Th
ai N
akar
in
Hos
pita
l
--As
sist
ant M
anag
er, B
oard
of D
irect
ors
Offi
ce, S
iam
Pro
perty
Dev
elop
men
t Com
pany
Lim
ited
9. M
r. Po
om J
antre
e
A
ssist
ant E
xecu
tive
Man
agin
g
Di
rect
or C
ompa
ny S
ecre
tary
39--
Mas
ter o
f Man
agem
ent,
Mah
idol
Unive
rsity
--Ba
chel
or o
f Bus
ines
s In
form
atio
n
Man
agem
ent,
Sain
t Joh
n’s
Unive
rsity
--
2013
-Pre
sent
2013
-Pre
sent
2008
-201
2
2007
-200
8
1997
-200
7
--As
sist
ant E
xecu
tive
Man
agin
g D
irect
or, T
hai N
akar
in H
ospi
tal P
cl.
--C
ompa
ny S
ecre
tary
, Tha
i Nak
arin
Hos
pita
l Pcl
.
--M
anag
er, I
nfor
mat
ion
Cen
ter,
Thai
Nak
arin
Hos
pita
l Pcl
.
--Pr
ojec
t Man
ager
, Sia
m T
elte
ch C
o., L
td
--Sy
stem
Ana
lyst
, Chu
lalo
ngko
rn U
nive
rsity
Boo
ksho
p
49
The Company has attached importance to the adherence to the corporate governance principle and the Board has consistently complied with the Code of Best Practice for Directors of Listed Companies established by the Stock Exchange of Thailand.
The Company has adopted the 15 Principles of Good Corporate Governance to promote our business transparency and the management’s effectiveness which will ultimately lead to the trust and confidence of shareholders, investors and stakeholders.
1. Corporate Governance Policy
The Board fully recognizes that good corporate governance practices contribute to the transparency, effectiveness, competitiveness and credibility of the Company in the eyes of shareholders, investors and stakeholders. The corporate governance policy articulates the rights and equitable treatment of shareholders and stakeholders, roles, duties, responsibilities and independence of the Board, disclosure, transparency, risk control and management and business ethics.
2. Shareholders’ Rights
The Company has consistently delivered its promise of equitable treatment of shareholders. The notice of shareholders’ meeting and supporting documents are submitted to shareholders at least 7 days in advance of each shareholders’ meeting; and shareholders are invited to propose meeting agenda items, questions and director nominations in advance of the meeting date via the investor relations section on the Company’s website or via email to [email protected]. In addition, every shareholder is equitably entitled to the right of scrutinizing the Company’s business operations and freely expressing their opinions and recommendations. Shareholders who cannot attend the meeting may appoint Audit Committee members as their proxies to attend the meeting and cast votes. Following each shareholders’ meeting, the Company will prepare the meeting minutes to keep an accurate and complete record of key points raised and discussed in the meeting.
3. Stakeholders’ Rights
The Company has attached great importance to the rights of all stakeholders as follows:
(a) Employees : The Company equitably and fairly treats all employees and offers suitable remuneration packages and training programs to them with the aim of enhancing their technical knowledge and language skills.
(b) Suppliers and creditors : The Company fairly treats its suppliers and creditors in accordance with commercial terms and/or contracts mutually agreed in order to foster positive business relationship and mutual benefits.
(c) Clients: The Company demonstrates earnest care and accountability for its clients and is committed to providing quality services that meet good standards, protecting patients’ confidentiality and strictly complying with the laws. We also have a customer complaint unit which is specifically responsible for receiving and handling customers’ complaints to ensure that all complaints are quickly resolved. In addition, a customer satisfaction survey is conducted every quarter to gain useful information about customer satisfaction and needs.
(d) Competitors : The Company adheres to the principle of fair play and shall not adopt dishonest practices to destroy competitors.
Corporate Governance
50
(e) Shareholders : The Company focuses on achieving a continuous and sustainable growth in terms of income, profit and business value to ultimately maximize the shareholders’ return.
(f) Community and society : Responsibility for the environment of the community and the society, especially the environmental impact issue, is high on our agenda. To protect the environment, we have adopted effective practices and processes for infectious waste management, wastewater treatment, hazardous waste management, etc. which meet regulatory standards. In addition, the Company has offered free check-up and medical services to local residents.
4. Shareholders’ Meeting
The Company strives to continuously improve the quality of shareholders’ meeting and allows all shareholders an equal opportunity to scrutinize its operations, ask questions, offer opinions and recommendations at the shareholders’ meeting. Following each shareholders’ meeting, the Company will prepare a meeting minutes which accurately and comprehensively detail key questions, comments and recommendations raised in the meeting.
5. Leadership and VisionDespite the current non-existence of the Nomination Committee, the Board is comprised of highly qualified members
who possess extensive professional experience in medical, accounting, legal and management fields. The Board is in charge of formulating the Company’s policies, vision, strategies, business goals, business plans and budget plans. Another key role of the Board is to direct the management’s execution to ensure that established policies, goals and plans are efficiently and effectively achieved within the framework permissible by the laws, the Company’s articles of association and the resolutions of the shareholders’ meeting for the ultimate benefits of the Company and the shareholders in general.
The Board has also established effective internal control, internal audit and risk management mechanism. Regular monitoring and follow-up are conducted through the committees and the management to ensure compliance with established policies.
6. Conflict of InterestThe Company has set up mechanisms to prevent conflict of interest associated with related-party transactions
and prohibit executives and related parties from involving in the approval of such transactions in order to comply with the Securities and Exchange Act, the Public Limited Company Act B.E. 2535, and regulations, notifications, rules and requirements stipulated by the Stock Exchange of Thailand. In addition, related-party transactions have been proposed to the Audit Committee (independent experts) and external auditors for review as well as disclosed in the notes to financial statements in accordance with the Thai Accounting Standards stipulated by the Federation of Accounting Professions. The Company has clear guidelines for future related-party transactions as detailed in the Internal Control section of this annual report and has established policies and procedures to prevent against use of inside information by executives and relevant persons and require executives to report changes in their shareholding to the Office of Securities and Exchange Commission.
7. Code of Ethics
The Company has established the Code of Ethics which is a guide for the Board, executives and employees across the organization towards the practice of integrity, honesty and fairness. The Company has actively monitored compliance with the Code of Ethics and set disciplinary punishment for offences.
51
8. Balance of Power by Non-Executive Directors
As of 31 July 2014, the Board is comprised of 15 members, of which 6 are executive directors and 9 are non-executive directors. There are 5 independent directors, representing 33 percent of total directors, and they serve on the Audit Committee.
The qualifications of every independent director meet the requirements under the SET’s notification on the qualifications and work scope of the Audit Committee. Their mission is to assure though the checks and balances system that the Company conducts business in accordance with the principles of integrity and fairness in the shareholders’ best interests.
9. Combination or Segregation of Duties
The positions of Chief Medical Officer and Administrative Director are not served by the same persons to separate the duties of policy formulation and oversight from the duties of day-to-day management. The authority of each position has been clearly defined according to the resolution of the Board meeting. Chief Medical Officer and the Administrative Director do not have the supreme power to decide on any particular matter, nor can they empower their delegates to approve or execute any transactions which might cause conflict of interest.
10. Director and Executive Remuneration
The shareholders’ meeting has clearly determined the remuneration of directors. The remuneration packages offered to director and executives shall be commensurate with their roles, duties and responsibilities as well as competitive to the market for the effect of talent motivation and retention. Executives’ remuneration is guided by the framework and policies determined by the Board and correlates with the corporate performance and their individual performance.
11. Board meetings
A regular Board meeting is held every 3 months or more frequently and the Board may convene a special Board meeting as and when necessary. Between 1 August 2013 and 31 July 2014, there were 4 Board meetings, each of which was attended by more than 70 percent of the total directors. The meeting agenda is clearly specified and a Board meeting notice is submitted at least 7 days prior to the meeting date in order that the directors have sufficient time for preparations. The Company prepares written records of the Board meetings and retains the adopted meeting minutes for examination and cross-reference by the Board and relevant parties.
For the Board’s independent deliberation, related directors will leave the meeting room prior to the deliberation on the agenda items with which they have conflict of interest.
12. Committees
The Board has established the Audit Committee to oversee the Company’s operations and compliance in accordance with its well-defined scope of authority and duties. Administrative Director and Chief Medical Officer in charge of managing the Company’s business in accordance with the established policies. The Company has also developed the quality infrastructure to support effective compliance governance and operations.
52
The following 27 committees assist in the Company’s quality infrastructure oversight and management:
1) Hospital Management Committee
2) Medical Executive Committee
3) Quality Development Committee
4) Medical Organization Committee
5) Nursing Organization Committee
6) Dentist Committee
7) Facilitator Committee
8) Risk Management Committee
9) Information Technology Committee
10) Pharmacy and Therapy Committee
11) Human Resources Management and Development Committee
12) Infectious Disease Control Committee
13) Medical Resource Integration Committee
14) Medical Record Development Committee
15) Occupational Safety, Health and Environment Committee
16) Interdisciplinary Surgery Committee
17) Interdisciplinary Pediatrics Committee
18) Interdisciplinary Medicine Committee
19) Interdisciplinary Obstetrics Gynecology Committee
20) Interdisciplinary Cardiology Committee
21) Interdisciplinary Orthopedics Committee
22) Interdisciplinary Otolaryngology Committee
23) Interdisciplinary Childbirth and Perinatology Committee
24) Health Promotion Committee
25) Knowledge Management Committee
26) Kidney Transplantation Committee
27) CPR Committee
The committees are in charge of overseeing and controlling the quality of health care and medical treatment services. Relevant data and information have been compiled and analyzed to identify suitable measures for constantly enhancing the quality to medical treatment and services to meet the hospital accreditation standards and relevant supervisory requirements.
53
The Risk Management Committee is comprised of 15 members representing the medical team, the nursing team, and the management team. Key roles of the Risk Management Committee are the development of policies and risk management system to mitigate and control risks associated with the quality of services and the safety of patients. The Risk Management Committee is also responsible for analyzing risk causes, establishing mechanisms to monitor risk causes and risk factors, identifying risk mitigation measures, and assigning relevant units to closely and continuously monitors risks concerned in accordance with the HA standard.
13. Internal Control and Internal Audit
The Company has attached great importance to the internal control both at managerial and operational levels and exercised controls to optimize resource utilization. To promote the proper checks and balances, the duties of transaction authorization, transaction recording and asset custody are segregated. In addition, the Company has conducted internal financial audits and implemented financial reporting system to periodically provide line managers with relevant financial information.
The Company has appointed Dharmniti Auditing Co., Ltd. as its internal auditor and established the Internal Control and Compliance Department to control, oversee and enhance internal systems and procedures.
14. Board’s Report The Board is responsible for the Company’s financial statements and financial information presented in the annual report. The Company has prepared its financial statements in accordance with the generally accepted accounting standards in Thailand and adopted appropriate accounting policies on a consistent basis. The financial statements are supported by reasonable and prudent judgment and best estimates. Important information has been adequately disclosed in the notes to the financial statements.
In addition, the Audit Committee which is comprised of non-executive directors with accounting expertise is responsible for reviewing the Company’s financial reports, financial statements and disclosures included in the financial statements.
15. Investor Relations The Board has placed emphasis on the transparent disclosure of accurate and complete financial information and general information. In this connection, the Company has made the information publicly available on the Company’s website at www.thainakarin.co.th and by telephone at 0 2361 2727 as well as aims to further develop in this aspect.
Prevention Against Use of Insider Information The prevention against the use of insider information for personal benefits is of the utmost importance to the Board. Therefore, the Board has established a policy to restrict access to non-public information to only relevant persons.
The Company has advised all directors and executives of their obligations to report to the Office of Securities and Exchange Commission the holding of the Company’s securities by themselves, their spouse and dependent children and changes thereto in accordance with Section 59 of the Securities and Exchange Act B.E. 2535. Each director has also been informed of relevant punishments under Section 275 of the Securities and Exchange Act B.E. 2535.
54
In addition, the Company has prohibited directors, executives, employees as well as their spouse and dependent children from using insider and non-public information, especially financial information, for their personal interests or trading, transferring and accepting of the Company’s securities. Directors, executives, employees as well as their spouse and dependent children shall submit a report on their trading, transfer and acceptance transactions which are related to the Company’s securities to the Office of Securities and Exchange Commission within 3 days from the transaction date. A copy of the report shall be submitted to the Company Secretary as evidence.
The employee handbook also articulates that all executives and employees are prohibited from using any insider information for their personal interests. Violation of the prohibition shall create grounds for punishment against the offenders in accordance with the Company’s rules and regulations.
Internal Control The Company has attached significance to internal control both at managerial and operational levels with the aim of preventing potential loss and damage of the Company. Internal control has been integrated into our financial activities, operations, risk management and governance to gear the Company towards resource optimization, asset custody, error reduction, and leak and loss prevention. To this end, we have segregated duties of transaction authorization, transaction recording and effective asset custody to promote the proper checks and balances. In addition, the Company has internally audited its financial activities and financial reporting system to assure reliability and compliance with relevant rules, regulations and laws. Line managers are also assigned to periodically conduct relevant monitoring. In 2014, the Board and the Audit Committee have collaboratively conducted the internal control assessment to evaluate the adequacy of the Company’s internal control in the following 5 dimensions which are interrelated:
1. Organization and Control Environment
The Company has appropriate organizational structure and the well-defined scope of authority, duties and responsibilities. Our corporate culture fosters the sense of integrity, encouraging employees at all levels to responsibly perform duties to the best of their ability and knowledge and comply with internal control measures. Employees across the organization are fully aware of their roles, authority, duties and responsibilities as well as strictly abide by policies, manuals, operating procedures. The review of internal control adequacy and operations is properly and consistently conducted and reported in accordance with established policies.
2. Risk Management
The Company has established the Risk Management Committee which is responsible for analyzing risk causes, establishing mechanisms to monitor risk causes and risk factors, identifying risk mitigation measures and incident reporting procedures. The Risk Management Committee also develops risk management and contingency plans, designates key persons responsible for handling emergencies, and assigns relevant units to closely and continuously monitors risks concerned in accordance with the HA standard.
55
3. Management Control
The Company has clearly defined the scope of authority and duty, the financial transaction approval limits of management, and rules and procedures governing the issue of conflict of interest associated with directors and senior executives. In addition, quarterly performance reporting by management is included as a regular agenda item of the Board meeting.
4. Information Technology and Communication
The Company has implemented effective IT systems and stringent data security control to protect the confidentiality of customer information in accordance with the Declaration of Patients’ Rights. A synthetic data quality assurance team has been established to ensure the integrity, accuracy, availability, adequacy and currency of data as well as the effectiveness of data storage and categorization. As a result, end-users can conveniently use data for effective decision-making. We have also developed the e-medical record system, the e-mail system and the intranet portal to facilitate faster internal and external communications which will lead to correct and mutual understanding of relevant parties. Employees can conveniently access and study useful information for their correct understanding and compliance with standard operating practices. With these effective IT systems and e-communication channels, the Company could reduce the use of paper and cascade knowledge across the organization more effectively. The IT systems also contributed to better reporting efficiency and timely submission of material information to the management and the Board.
5. Monitoring The Company has regularly held meetings and discussions to monitor of the Company’s operating results, risks, and key performance indicators. To proactively manage risks, the Company has analyzed the causes of performance gaps and unmet performance goals as well as solved issues as detailed in the Audit Committee’s Report for 2014.
56
Report of the Audit CommitteeThai Nakarin Hospital Public Company Limited
To Board of Directors
Thai Nakarin Public Company Limited
The Audit Committee is appointed by the Board of Directors and consists of 5 independent directors, namely Mr. Kraisak Kadkum, the Chairman of the Audit Committee, Pol. Gen. Sawat Amornvivat, Dr. Pridi Hetrakul, Dr. Chertsak Dhiraputra and Asst. Prof. Dr. Panya Issarawornrawanich. Miss Sarinrat Sintharajiratha serves as the acting secretary to the Audit Committee.
The Audit Committee has carefully and independently performed duties in accordance with the scope of roles and responsibilities approved by the Board of Directors in accordance with applicable laws, rules of the Stock Exchange of Thailand and relevant instructions. The Audit Committee members have effectively harnessed knowledge and competencies in such duty performance and received full access to relevant information and good cooperation from executives, internal auditors and auditors. During the 2014 accounting period from 1 August 2013 to 31 July 2014, the Audit Committee held 4 meetings and executives, internal auditors and external auditors were invited to the meetings to provide relevant information as summarized below:
1. Review of quarterly financial statements and 2014 financial statements The Audit Committee made inquiries and received clarification from executives and auditors regarding the accuracy and adequacy of financial statements and disclosure. The Audit Committee concurs with the auditor that the financial reports are materially accurate, reliable and in accordance with generally accepted accounting standards.
2. Review of internal audit The Audit Committee has reviewed the scope of work, roles, responsibilities and independence of internal auditors based on the internal audit guidelines stipulated by the Stock Exchange of Thailand. The Audit Committee is of the opinion that the Company’s internal controls are adequate, appropriate and effective and meet good standards.
3. Review of performance and internal controls The aim of the review is to assess the adequacy and effectiveness of internal controls which are necessary for the Company’s goal achievement. The review is based on the reports on internal audits which have been carried out in accordance to approved audit plans and covered key systems of the Company.
No material issues are found. The Company has appropriately managed the properties and assets and complied with the Securities and Exchange Act, requirements stipulated by the Stock Exchange of Thailand and applicable laws and regulations. Authority delegation and approval have conformed to applicable procedures and effective internal control principles. The Company has also adhered to and updated the principles of good corporate governance to promote transparency and adapt to prevailing changes.
4. Review and opinion on related-party transactions and conflicts of interest Transactions of the Company are reasonable, transparent and beneficial to the Company. Relevant disclosure has been accurately and adequately made.
57
5. Screening and nomination of auditors The Audit Committee has reviewed and offered opinions on the nomination of auditors to the Board of Directors which will be proposed to the shareholders’ meeting for approval. The nominated auditors for 2015 are Mr. Wichart Lokatekrawee, registration number 4451 and/or Miss Kamontip Lertwitworatep, registration number 4377 and/or Miss Siriwan Suratepin, registration number 4604 of E Y Office Company Limited. The audit expense budget for the year ended 31 July 2015 includes the audit fee of Baht 960,000 and the out-of-pocket expenses within the limit of Baht 30,000.
The Audit Committee has dutifully undertaken its responsibilities as assigned by the Board of Directors and is of the opinion that the Company’s financial reporting and operations have been correct. The Company has implemented internal controls and internal audits, complied with legal and regulatory requirements and correctly disclosed related-party transactions. In addition, the Company has adhered to the principles of good corporate governance to promote transparency and reliability as well as continuously developed its systems and operations to meet the quality standards and match the business environment.
(Mr. Kraisak Kadkum) Chairman of the Audit Committee Thai Nakarin Hospital Public Company Limited
58
The Company’s related-party transactions and the balance of conflict of interest transactions executed in 2014 and as of 31 July 2014 are as disclosed in the financial statements and the note 7 to the financial statements.
Necessity and Reasonableness To protect the Company’s best interest, all related-party transactions are executed on the basis of necessity and reasonableness in accordance with the arm’s length and fair pricing principles. The Audit Committee’s opinions on the Company’s related-party transactions are as detailed in the preceding section.
Related-Party Transaction Procedure and Process The Company has strictly complied with the Securities and Exchange Act, the Stock Exchange of Thailand’s rules, regulations and requirements, and the Public Limited Company Act B.E. 2535. Directors and persons who are considered related parties or may have conflict of interest have no right to decide on transactions concerned, unless otherwise allowed by applicable exceptions under the Securities and Exchange Act, the Stock Exchange of Thailand’s rules, regulations and requirements, or the Public Limited Company Act B.E. 2535. The Company’s articles of association contain clear provisions on the execution of related-party transactions and the acquisition and disposal of the Company’s assets.
Future Related-Party Transaction Policy and Outlook The Company has formulated the policy on future related-party transactions which mandates the Board of Directors to take into consideration the necessity and the reasonableness of such transactions and the Company’s best interests to assure the propriety of pricing and conditions on an arm’s length basis. The Audit Committee has the duty to provide opinions on the necessity and the reasonableness of related-party transactions and compliance with the arm’s length principle based on the comparison with actual prices under transactions executed between the Company and third parties. As a policy, related-party transactions such as borrowing transactions which might incur conflict of interest will be made only as and when the Company has financial needs and cannot secure the funding needed from other sources than its related parties which offer better credit conditions and/or interest rates that are lower or comparable to market rates.
The Company expects that some of the existing related-party transactions which benefit the Company will continue into the future such as the guarantees provided by Mr. Jatuporn Sihanatkathakul in favor of the Company to satisfy conditions imposed by creditor upon the Company’s overdraft facilities and promissory notes, and the payment bonds for the Company’s electricity expenses.
Investor Protection Measure The Company’s articles of association encompass clear provisions on related-party transactions and the acquisition and disposal of the Company’s assets. Directors and persons who are deemed related parties or have conflict of interest or may have conflict of interest are obligated to refrain from partaking in the consideration and approval of transactions concerned in order to comply with the Stock Exchange of Thailand’s rules, regulations and requirements, and applicable laws. In addition, the Audit Committee is responsible for providing opinions on the necessity and the reasonableness of related-party transactions and such transactions are disclosed in the Company’s financial statement and annual report.
In circumstances where the Audit Committee does not possess expertise required for effective review of certain related-party transactions, the Company will engage an independent expert or its external auditors in such review to provide the Audit Committee with opinions on such transactions necessary for the decision-making of the Board of Directors or the shareholders.
Related-Party Transaction
59
Related-party transaction report for 2013 and 2014 (as of 31 July 2014)
Related party and relationship Transaction
Transaction Value(MB) Necessity and
Reasonableness2557 2556
1. Doctors being
directors and
executives
Doctor’s fees :
Doctor’s fees are paid to directors
and executives of the Company
10.70 8.44 The transactions are necessary
and reasonable because the
directors and executives being
doctors are entitled to receive
doctor’s fees at the rates
comparable to other doctors
working for the hospital.
2. Siam Property
Development
Company Limited
Medical fee income:
The transactions are in the normal
course of the Company’s business
and charged at the rates
applicable to general customers.
0.17 0.02 The transactions are necessary
and reasonable. They are
considered normal trade
transactions and charged at the
rates applicable to general
customers.
3.Thep Pongpat
Company Limited
Rental fee income:
Rental income is from a food
court open to visitors for their
convenience and to employees as
welfare benefits. Rental
agreements are fairly priced
and based on standard
conditions.
0.30 0.30 The transactions are necessary
and reasonable. They are
considered normal trade
transactions.
4.Directors Welfare expenses
According to the Company’s
regulations, medical benefits
for directors and their spouse,
children and parents are limited
at Baht 800,000 per year and do
not cover doctor’s fees, lab tests
and examination by other
hospitals and special equipment.
2.33 2.25 The transactions are necessary
and reasonable. They are
considered normal trade
transactions.
60
Management discussion and analysis (MD&A)Results of Operations
RevenueThe Company reported the operating result of the fiscal year 2014 from 1 August 2013 to 31 July 2014, the
Company presented total revenues of Bath 1,598.83 million from revenues from hospital operations by Baht 1,571.81 million or 98.31 percent of total revenue. The increased in total revenues by Baht 131.53 million or increased by 8.96 percent when compare with the prior year as a result form increased in number of both inpatient and outpatient due to open new clinic and medical center in the fiscal year 2014 such as Diabetes & Endocrinology Center, Gastrointestinal Center, Breast Care Center and Lasik Center and increased in healthcare inflation and intensity.
The amount of revenues from hospital operations inpatient and outpatient from the year 2012, 2013 and
2014 are as below.
In 2014, the main customer of the Company is Thai people. The main group is self-pay that it is a trend for business growth because the location of the Company is close to communities and combines with reputation of the special clinic. However, the company has provided insignificant for other customer groups such as insurance group and contract group.
In addition, other income of the Company such as interest form investment, rental income presented by 1.69 percent of total revenues.
Million Baht
2555
7.4%
9.7%
7.1%
10.2%
2556 2557
IPD
OPD
565Million Baht
763Million Baht
607Million Baht
837Million Baht
650Million Baht
922Million Baht
61
Cost of hospital operationsIn 2014, the Company reported cost of hospital operations of Baht 1,209.69 million increased from the prior year
by Baht 117.04 million or increased by 10.71 percent. The growth was contributable to an increase in revenue of hospital operations. In addition, the increased in cost of hospital operations as a result from rising cost of medicines and supplies, cost of doctors’ fee from support clinical, increased in cost of employee benefits and depreciation was mainly to invest in new medical equipment and renovation expansion.
Administrative expenseThe Company reported administrative of Baht 165.48 million increased by Baht 14.12 million from the fiscal year
2013 or increased by 9.33 percent were mainly due to increase in annual salary and staff welfare from increased in number of employee.
Income taxAlthough the increasing in net profit but decreased in income tax expense as a result from the cabinet passed
a resolution to reduce the corporate income tax rate from 30 percent to 23 percent in the fiscal year 2013, and then to 20 percent in the fiscal year 2014.
Profit for the year2014 2013 2012
Total revenues (Million baht) 1,598.83 1,467.30 1,352.30
Profit for the year (Million baht) 179.11 172.23 147.51
Net profit margin (Percent) 11.20 11.74 10.91
Gross profit margin (Percent) 23.04 24.33 24.47
Return on equity (Percent) 21.34 22.59 21.12
The growth of total revenues approximately 8.96 percent and the growth of net profit approximately 3.99 percent when comply with the corresponding period as a result from above reasons. But net profit margin and gross profit margin were slightly decrease when compare with the fiscal year 2013 mainly due to increase in cost of hospital operations. Therefore, the policy of the Company has emphasized on mediation standard on price and quality.
62
Financial PositionAs at 31 July 2014, the Company reported the financial position as follow:
Assets Liabilities and Equities
Amount(Million Baht) Ratio (%)
Amount(Million Baht) Ratio (%)
Current Assets 414.42 37.3% Current Liabilities 201.50 18.1%
Non-Current Assets 696.48 62.7% Non-Current Liabilities 34.37 3.1%
Shareholders’ Equity 875.03 78.8%
Total 1,110.90 100.0% Total 1,110.90 100%
Details of assets are summarized below.
(Unit: Million Baht)
Description 2014 2013 2012
Cash and Cash Equivalents 90.81 62.07 133.16
Current investments 200.96 200.00 270.00
Trade and other receivables 88.45 91.45 75.90
Inventory 31.80 31.64 29.68
Long-term deposits at financial institutions 279.60 210.56 -
Buildings and equipment 376.93 398.06 390.04
Other Assets 42.35 41.70 41.65
Total Assets 1,110.90 1,035.48 940.43
The increment in cash and cash equivalents approximately Baht 28.74 million or increase by 46.30 percent
when compare with the year 2013 was mainly due from increased in net operations and net profit.
63
As at 31 July 2014, 2013 and 2012 the Company have trade receivable balance were Baht 78.72 million,
Baht 84.36 million and Baht 73.05 million, respectively. Although total revenues rising increased but balance of trade receivable
decreased as a result from intensive of debt collection policy. The debt collection period decreased from 20 days to 19 days.
To consider, the ratio of the trade receivable found out approximately 58.9 percent has not yet due date and trade receivable
balance more than 12 months is only 3.9 percent which decreased when compare with 31 July 2013(5.1 percent). In
addition, the Company policy has allowance for doubtful accounts, to estimate based upon, among other things, debt
collection experience, aging profile of outstanding debts. As at 31 July 2014, the provision is Baht 3.94 million.
As at 31 July 2014, 2013 and 2012 summaries are below.
Trade receivables2014 2013 2012
(Million Baht) % (Million
Baht) % (Million Baht) %
Aged on the basis of due dates (Not yet due) 48.65 58.9% 43.88 49.2% 43.75 56.7%
Past due
Up to 3 months 28.05 33.9% 33.02 37.1% 25.70 33.3%
3 - 6 months 1.14 1.4% 3.96 4.4% 1.03 1.3%
6 - 12 months 1.60 1.9% 3.78 4.2% 2.65 3.4%
Over 12 months 3.22 3.9% 4.57 5.1% 4.08 5.3%
Total trade receivables 82.66 100% 89.21 100% 77.21 100%
Less: Allowance for doubtful accounts (3.94) (4.85) (4,16)
Total trade receivables - net 78.72 84.36 73.05
Average Collection Period (Days) 19 days 20 days 19 days
As at 31 July 2014, the Company have inventories balance were Baht 31.80 million, including medicines and medical
supplies of Baht 28.01 million or 88.08 percent and other supplies of Baht 3.79 million.
Long-term deposits at financial institutions of Baht 279.60 million increased from the end of the fiscal year 2013
by Baht 69.04 million or increased by 32.79 percent from cash received from operating income. So, the Company deposit
in long-term deposits at financial institutions carried interests between 2.30 and 3.60 percent per annum
64
As at 31 July 2014, 2013 and 2012, the Company have buildings and equipment-net balance were Baht 376.93
million, Bath 398.06 million and Baht 390.04 million, respectively. The Company continuously invests in building improvements
and medical equipment for more efficiency in our service and contribution quality of patient facility for future development.
In 2014, the Company invests of Baht 62.52 million, depreciation for the year Baht 83.07 million resulting to buildings and
equipment-net balance decrease from 2013.
Ratio 2014 2013 2012
Return on Fixed Asset (%) 46.22 43.71 37.66
Return on Assets (%) 20.84 22.60 23.78
Liabilities As at 31 July 2014, 2013 and 2012, detail of liabilities were summaries below.
(Unit: Million Baht)
Description 2014 2013 2012
Trade and other payables 132.90 133.49 116.10
Doctor fee payable 51.89 48.58 43.97
Income Tax Payable 15.86 17.60 27.54
Provision for long-term employee benefits 33.92 30.42 29.76
Other liabilities 1.30 1.46 1.37
Total liabilities 235.87 231.55 218.74
Trade and other payables, mainly consisting of medicines and medical supplies, other supply, construction, medical
equipment and accrued expense.
As at 31 July 2014, the Company have doctor fee payable was Baht 51.89 million, increased from 2013 by
Baht 3.31 million or 6.81 percent as a result from increase in Revenues from hospital operations.
Although the increasing in net profit but decreased in income tax expense due to the cabinet passed a
resolution to reduce the corporate income tax rate from 30 percent to 23 percent in the fiscal year 2013, and then to 20 percent in
the fiscal year 2014.
65
As at 31 July 2014, 2013 and 2012 ,the Company have cash and cash equivalents balance were Baht 90.81 million, Baht 62.07 million and Baht 133.61 million, respectively. Details of cash flows were summaries below.
- Net cash flow from operating activities were Baht 252.65 million increases from the fiscal year 2013 by
Baht 17.04 million.
- During 2014, net cash used in investing activities was Baht 115.91 million. The investing activities during the year
were mainly from deposit in long-term investments at financial institutions for Baht 69.04 million, purchases of
medical equipment, construction and building improvement were Baht 59.46 million.
- Net cash used in financing activities were Baht 108 million mainly from dividend payment.
At 31 July 2014, 2013 and 2012, the current ratio were 2.06X, 1.93X and 2.70X, respectively. These are high rate that
show the Company have capacity to pay short term obligation.
Capital Management
The Company has strong business model and has continuously delivered solid business performances.
Total debt to equity remains unchanged and low rate at 0.27x, 0.29 x and 0.30x respectively as of 31 July 2014, 2013 and 2012.
However the Company’s executives continuously develop and improve the quality of financial management and emphases
on financial control resulting to the Company have a good financial Ratio and Liquidity Ratio.
Shareholders’ equity As at 31 July 2014, 2013 and 2012, the Company have Shareholders’ equity balance were Baht 875.03 million,
Baht 803.92 million and Baht 721.69 million, respectively. This increase result from the Company net profit netted off with
a dividend payment.
Liquidity
(Unit : Million Baht)
Description 2014 2013 2012
Cash flows from operating activities 252.65 235.61 235.40
Cash flows from investing activities (115.91) (216.70) (329.16)
Cash flows from financing activities (108.00) (90.00) (86.40)
Net increase (decrease) in cash and cash equivalents 28.74 (71.09) (180.16)
Cash and cash equivalents at beginning of year 62.07 133.16 313.32
Cash and cash equivalents at end of year 90.81 62.07 133.16
66
Contractual Obligations
As at 31 July 2014, the Company has long-term lease agreement of lease of land on which to construct a hospital
building with The Thai Red Cross Society. The agreement will be expired in 2018 and now under negotiation period. The future
minimum leases payments to be paid as follows:
(Unit: Million Baht)
DescriptionPayment Period
TotalIn up to 1 year In over 1 and up to 5 years
Commitments under lease of Land 1.5 5.4 6.9
Commitments under service agreements 9.1 1.1 10.2
The factors that related to future operation
Increasing healthcare demand
The Company strongly belives in the hospital business public are able to continue grow from need rising in country and other countries. As the result, the revenue increased from each customer and citizen knew how important in meditation and also the elder-people are increased. Moreover, AEC are opened at the resent year 2015, the hospirtal will gain more patients from Medical Hub of Asia policy.
Potential of Location
The location of the Company is closed to the Bangna-Trad road, in the communities area and industries area that continue expansion and cause to increase in group of customer due to the main of customer in hospital is middle-level of group. The hospital is relined on the company policy that provided the best the meditation, fair at price and take care of patients like own family.
Improvement the potential of Specific Clinical
Presently, healthcare system is more complicate and patient can access to the data of hospital business as a resulting the Company have to improve Service Quality by we provide a Professional Doctor support by experienced colleagues with Hi-Technology equipment for expansion of the increasing of the demand for health service. In 2014, the Company have new Specific Clinical such as Gastrointestinal Center, Diabetes & Endocrinology Center, Lasik Center and Breast Care Center and in the future the Company plan to have more Specific Clinical.
New accounting standards
In the year 2014, the Company has change new accounting policy TAS 12 Income Taxes in this current year and restated the prior year’s financial statement, presented as comparative information, as though the Company had initially recognised the tax effects as deferred tax assets or liabilities. The cumulative effect of this change in accounting policy has been presented in Note 4 to the financial statements
67
Report of the Board of Directors’ Responsibility for Financial Reports
The Board of Directors places great importance on its oversight duties and responsibilities to assure the Company’s due compliance with the good corporate governance policy. Financial reports and financial information disclosed in this annual report are correct, adequate and prepared in accordance with generally accepted accounting standards and appropriate accounting policies which are consistently practiced based on prudent judgment. The Board of Directors has appointed the Audit Committee to review the Company’s previous financial statements and has been notified that the Company’s financial statements are carefully prepared in conformity to generally accepted accounting principles and appropriate accounting policies. In addition, the presentations of items in the financial statements are evaluated and information is adequately disclosed in the notes to the financial statements. The Audit Committee’s opinions on the financial reports and financial information are detailed in the Report of the Audit Committee section of this annual report and the 2014 annual registration statement (Form 56-1) of the Company.
Furthermore, the Board of Directors has put in place the efficient and effective internal control system to ensure that accounting information is accurately and completely recorded as well as the asset control system to prevent against material frauds or damage.
The Board of Directors is of the view that the Company’s overall internal control system is satisfactory and provides reasonable confidence in the reliability of the Company’s financial statements as of 31 July 2014 which have been audited by the auditor in accordance with generally accepted auditing standards. The auditor has certified that the financial statements present fairly, in all material respects, the financial positions and financial performance in accordance with generally accepted accounting standards.
(Mr. Jatuporn Sihanatkathakul)
Chairman of the Board
68
Report and financial statementsAs at 31 July 2014Thai Nakarin Hospital Public Company Limited
69
Report and financial statements
Independent Auditor’s Report
To the Shareholders of Thai Nakarin Hospital Public Company Limited
I have audited the accompanying financial statements of Thai Nakarin Hospital Public Company Limited, which comprise the statement of financial position as at 31 July 2014, and the related statements of comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Opinion
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Thai Nakarin Hospital Public Company Limited as at 31 July 2014, and its financial performance and cash flows for the year then ended, in accordance with Thai Financial Reporting Standards.
Emphasis of matter
I draw attention to Note 4 to the financial statements regarding the change in accounting policy as a result of
70
the adoption of Thai Accounting Standard 12 Income Taxes. The Company has restated the financial statements for the year ended 31 July 2013, presented herein as comparative information, to reflect the adjustment resulting from such change. The Company has also presented the statement of financial position as at 1 August 2012 as comparative information, using the newly adopted accounting policy for income taxes. My opinion is not qualified in respect of this matter.
Other matter
The financial statements of Thai Nakarin Hospital Public Company Limited for the year ended 31 July 2013 (before restatement) and 31 July 2012 (which have been used for preparing the statement of financial position as at 1 August 2012 as described in the preceding paragraph) were audited by other auditor, who expressed unqualified opinions on those statements, under his reports dated 27 September 2013 and 25 September 2012, respectively.
Kamontip LertwitworatepCertified Public Accountant (Thailand) No. 4377
EY Office Limited(Formerly known as Ernst & Young Office Limited)Bangkok: 26 September 2014
71
Report and financial statements
Thai Nakarin Hospital Public Company LimitedStatement of financial positionAs at 31 July 2014
(Unit: Baht)
AssetsNote 31 July
201431 July 2013
(Restated)
1 August 2012
Cash and cash equivalents 8 90,811,623 62,073,750 133,163,712
Current investments - fixed deposits at
financial institutions 9 200,959,000 200,000,000 270,000,000
Trade and other receivables 7, 10 88,449,652 91,448,537 75,901,872
Inventories 11 31,798,243 31,643,149 29,676,871
Other current assets 2,394,812 2,718,517 878,083
Total current assets 414,413,330 387,883,953 509,620,538
Non-current assets
Long-term deposits at financial institutions 12 279,600,000 210,559,000 -
Buildings and equipment 13 376,931,158 398,064,481 390,035,147
Intangible assets 14 8,818,656 8,285,428 9,818,021
Deposit for land acquisition 25 20,600,000 20,600,000 20,600,000
Deferred tax assets 4, 19 10,488,172 10,008,011 10,117,947
Other non-current assets 45,335 75,335 237,695
Total non-current assets 696,483,321 647,592,255 430,808,810
Total assets 1,110,896,651 1,035,476,208 940,429,348
The accompanying notes are an integral part of the financial statements.
72
Report and financial statementsThai Nakarin Hospital Public Company LimitedStatement of financial position (continued)As at 31 July 2014
(Unit: Baht)
Liabilities and shareholders’ equity Note 31 July
201431 July 2013
(Restated)
1 August 2012
Current liabilities
Trade and other payables 15 132,901,728 133,486,540 116,100,615
Doctor fee payable 7 51,885,313 48,580,497 43,969,475
Income tax payable 15,861,813 17,599,510 27,538,225
Other current liabilities 846,254 1,038,855 954,159
Total current liabilities 201,495,108 200,705,402 188,562,474
Non-current liabilities
Provision for long-term employee benefits 16 33,917,290 30,416,447 29,764,219
Other non-current liabilities 457,000 433,000 414,000
Total non-current liabilities 34,374,290 30,849,447 30,178,219
Total liabilities 235,869,398 231,554,849 218,740,693
Shareholders’ equity
Share capital
Registered
180,000,000 ordinary shares of Baht 1 each 180,000,000 180,000,000 180,000,000
Issued and fully paid-up
180,000,000 ordinary shares of Baht 1 each 180,000,000 180,000,000 180,000,000
Share premium 20,537,768 20,537,768 20,537,768
Retained earnings
Appropriated - statutory reserve 17 18,000,000 18,000,000 18,000,000
Unappropriated 656,489,485 585,383,591 503,150,887
Total shareholders’ equity 875,027,253 803,921,359 721,688,655
Total liabilities and shareholders’ equity 1,110,896,651 1,035,476,208 940,429,348
The accompanying notes are an integral part of the financial statements.
73
(Uni
t: Ba
ht)
Not
eIss
ued
and
pai
d-up
shar
e ca
pita
l
Shar
e p
rem
ium
Reta
ined
ear
ning
sTo
tal
shar
ehol
ders
’eq
uity
Appr
opria
ted
-st
atut
ory
rese
rve
Unap
prop
riate
d
Bala
nce
as a
t 31
July
201
2 - a
s pr
evio
usly
repo
rted
180
,000
,000
2
0,53
7,76
8 1
8,00
0,00
0 4
93,0
32,9
40
711
,570
,708
Cum
ulat
ive e
ffect
of c
hang
e in
acc
ount
ing
polic
y fo
r inc
ome
taxe
s4
- -
- 1
0,11
7,94
7 1
0,11
7,94
7
Bala
nce
as a
t 31
July
201
2 - a
s re
stat
ed 1
80,0
00,0
00
20,
537,
768
18,
000,
000
503
,150
,887
7
21,6
88,6
55
Tota
l com
preh
ensi
ve in
com
e fo
r the
yea
r (re
stat
ed)
- -
- 1
72,2
32,7
04
172
,232
,704
Div
iden
d pa
id21
- -
- (9
0,00
0,00
0) (9
0,00
0,00
0)
Bala
nce
as a
t 31
July
201
3 - a
s re
stat
ed 1
80,0
00,0
00
20,
537,
768
18,
000,
000
585
,383
,591
8
03,9
21,3
59
Bala
nce
as a
t 31
July
201
3 - a
s pr
evio
usly
repo
rted
180
,000
,000
2
0,53
7,76
8 1
8,00
0,00
0 5
75,3
75,5
80
793
,913
,348
Cum
ulat
ive e
ffect
of c
hang
e in
acc
ount
ing
polic
y for
inco
me
taxe
s4
- -
- 1
0,00
8,01
1 1
0,00
8,01
1
Bala
nce
as a
t 31
July
201
3 - a
s re
stat
ed 1
80,0
00,0
00
20,
537,
768
18,
000,
000
585
,383
,591
8
03,9
21,3
59
Tota
l oth
er c
ompr
ehen
sive
inco
me
for t
he y
ear
- -
- 1
79,1
05,8
94
179
,105
,894
Div
iden
d pa
id21
- -
- (1
08,0
00,0
00)
(108
,000
,000
)
Bala
nce
as a
t 31
July
201
4 1
80,0
00,0
00
20,
537,
768
18,
000,
000
656
,489
,485
8
75,0
27,2
53
The
acco
mpa
nyin
g no
tes
are
an in
tegr
al p
art o
f the
finan
cial
sta
tem
ents
.
Repo
rt a
nd fi
nanc
ial s
tate
men
tsTh
ai N
akar
in H
ospi
tal P
ublic
Com
pany
Lim
ited
Stat
emen
t of c
hang
es in
sha
reho
lder
s’ eq
uity
For t
he y
ear e
nded
31
July
201
4
74
Report and financial statementsThai Nakarin Hospital Public Company LimitedStatement of comprehensive incomeFor the year ended 31 July 2014
(Unit: Baht)
Note 2014 2013(Restated)
Revenues
Revenues from hospital operations 1,571,810,100 1,443,963,659
Other income 27,022,864 23,338,174
Total revenues 1,598,832,964 1,467,301,833
Expenses 18
Cost of hospital operations 1,209,685,360 1,092,647,630
Administrative expenses 165,482,329 151,356,616
Total expenses 1,375,167,689 1,244,004,246
Profit before finance cost and income tax expenses 223,665,275 223,297,587
Finance cost - (72,877)
Profit before income tax expenses 223,665,275 223,224,710
Income tax expenses 19 (44,559,381) (50,992,006)
Profit for the year 179,105,894 172,232,704
Other comprehensive income:
Other comprehensive income for the year - -
Total comprehensive income for the year 179,105,894 172,232,704
Basic earnings per share 20
Profit 1.00 0.96
Weighted average number of ordinary shares (shares) 180,000,000 180,000,000
The accompanying notes are an integral part of the financial statements.
75
(Unit: Baht)
2014 2013
Cash flows from operating activities
Profit before tax 223,665,275 223,224,710
Adjustments to reconcile profit before tax to net cash
provided by (paid from) operating activities:
Depreciation and amortisation expenses 84,725,669 82,649,834
Bad debts and doubtful debts 1,750,766 2,457,623
Long-term employee benefit expenses 6,295,577 2,419,346
Loss on disposals of equipment 400,209 251,290
Interest expenses - 72,877
Interest income (15,866,867) (13,630,551)
Profit from operating activities before changes in
operating assets and liabilities 300,970,629 297,445,129
Decrease (increase) in operating assets
Trade and other receivables 1,562,802 (14,778,268)
Inventories (155,094) (1,966,278)
Other current assets 323,705 (1,840,434)
Other non-current assets - (8,000)
Increase (decrease) in operating liabilities
Trade and other payables (3,616,969) 14,708,019
Doctor fee payable 3,304,816 4,611,022
Other current liabilities (192,601) 84,696
Provision for long-term employee benefits (2,794,734) (1,767,118)
Other non-current liabilities 24,000 19,000
Cash from operating activities 299,426,554 296,507,768
Cash paid for interest - (72,877)
Cash paid for income tax (46,777,239) (60,820,785)
Net cash from operating activities 252,649,315 235,614,106
The accompanying notes are an integral part of the financial statements.
Report and financial statementsThai Nakarin Hospital Public Company LimitedStatement of cash flowsFor the year ended 31 July 2014
76
(Unit: Baht)
2014 2013
Cash flows from investing activities
Interest received 15,552,184 10,404,531
Decrease (increase) in current investments (959,000) 70,000,000
Increase in long-term deposits at financial institutions (69,041,000) (210,559,000)
Cash paid for purchases of equipment and building improvement (59,458,500) (86,873,555)
Increase in intangible assets (2,191,851) (104,090)
Cash received from disposals of equipment 186,725 428,046
Net cash used in investing activities (115,911,442) (216,704,068)
Cash flows from financing activities
Dividend paid (108,000,000) (90,000,000)
Net cash used in financing activities (108,000,000) (90,000,000)
Net increase (decrease) in cash and cash equivalents 28,737,873 (71,089,962)
Cash and cash equivalents at beginning of year 62,073,750 133,163,712
Cash and cash equivalents at end of year (Note 8) 90,811,623 62,073,750
Supplemental cash flows information
Non-cash items
Increase in accounts payable - construction and equipment purchase 3,032,157 2,677,906
Decrease in deposits for equipment and building improvement 30,000 170,360
The accompanying notes are an integral part of the financial statements.
Report and financial statementsThai Nakarin Hospital Public Company LimitedStatement of cash flows (continued)For the year ended 31 July 2014
77
Thai Nakarin Hospital Public Company LimitedNotes to financial statementsFor the year ended 31 July 2014
1. General information Thai Nakarin Hospital Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in hospital business. The registered office of the Company is at No. 345 Bangna-Trad Road, Km.3.5, Kwaeng Bangna, Khet Bangna, Bangkok.
2. Basis of preparation The financial statements have been prepared in accordance with Thai Financial Reporting Standards enunciated under the Accounting Profession Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543.
The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements.
The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.
3. New accounting standards Below is a summary of accounting standards that became effective in the current accounting year and those that will become effective in the future.
(a) Accounting standards that became effective in the current accounting year
Report and financial statements
Accounting Standards
TAS 12 Income Taxes
TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of Government
Assistance
TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates
Financial Reporting Standard
TFRS 8 Operating Segments
Accounting Standard Interpretations:
TSIC 10 Government Assistance - No Specific Relation to Operating
Activities
TSIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets
TSIC 25 Income Taxes - Changes in the Tax Status of an Entity or its
Shareholders
Accounting Treatment Guidance for Transfers of Financial Assets
78
Report and financial statements
These accounting standards, financial reporting standard, accounting standard interpretations and accounting treatment guidance do not have any significant impact on the financial statements, except for the following accounting standard.
TAS 12 Income Taxes
This accounting standard requires an entity to identify temporary differences between the carrying amount of an asset or liability in the statement of financial position and its tax base and recognise the tax effects as deferred tax assets or liabilities subjecting to certain recognition criteria. The Company has changed this accounting policy in this current period and restated the prior year’s financial statements, presented as comparative information, as though the Company had initially recognised the tax effects as deferred tax assets or liabilities. The cumulative effect of this change in accounting policy has been presented in Note 4 to the financial statements.
(b) Accounting standards that will become effective in the future
Effective date
Accounting Standards:
TAS 1 (revised 2012) Presentation of Financial Statements 1 January 2014
TAS 7 (revised 2012) Statement of Cash Flows 1 January 2014
TAS 12 (revised 2012) Income Taxes 1 January 2014
TAS 17 (revised 2012) Leases 1 January 2014
TAS 18 (revised 2012) Revenue 1 January 2014
TAS 19 (revised 2012) Employee Benefits 1 January 2014
TAS 21 (revised 2012) The Effects of Changes in Foreign Exchange Rates 1 January 2014
TAS 24 (revised 2012) Related Party Disclosures 1 January 2014
TAS 28 (revised 2012) Investments in Associates 1 January 2014
TAS 31 (revised 2012) Interests in Joint Ventures 1 January 2014
TAS 34 (revised 2012) Interim Financial Reporting 1 January 2014
TAS 36 (revised 2012) Impairment of Assets 1 January 2014
TAS 38 (revised 2012) Intangible Assets 1 January 2014
Financial Reporting Standards:
TFRS 2 (revised 2012) Share-based Payment 1 January 2014
TFRS 3 (revised 2012) Business Combinations 1 January 2014
TFRS 4 Insurance Contracts 1 January 2014
79
Effective date
Financial Reporting Standards:
TFRS 5 (revised 2012) Non-current Assets Held for Sale and Discontinued Operations 1 January 2014
TFRS 8 (revised 2012) Operating Segments 1 January 2014
Accounting Standard Interpretations:
TSIC 15 Operating Leases - Incentives 1 January 2014
TSIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease
1 January 2014
TSIC 29 Service Concession Arrangements: Disclosures 1 January 2014
TSIC 32 Intangible Assets - Web Site Costs 1 January 2014
Financial Reporting Standard Interpretations:
TFRIC 1 Changes in Existing Decommissioning, Restoration and
Similar Liabilities
1 January 2014
TFRIC 4 Determining whether an Arrangement contains a Lease 1 January 2014
TFRIC 5 Rights to Interests arising from Decommissioning,
Restoration and Environmental Rehabilitation Funds
1 January 2014
TFRIC 7 Applying the Restatement Approach under TAS 29 Financial
Reporting in Hyperinflationary Economies
1 January 2014
TFRIC 10 Interim Financial Reporting and Impairment 1 January 2014
TFRIC 12 Service Concession Arrangements 1 January 2014
TFRIC 13 Customer Loyalty Programmes 1 January 2014
TFRIC 17 Distributions of Non-cash Assets to Owners 1 January 2014
TFRIC 18 Transfers of Assets from Customers 1 January 2014
The Company’s management believes that these accounting standards, financial reporting standards, accounting
standard interpretations and financial reporting standard interpretations will not have any significant impact on the financial
statements for the year when they are initially applied.
80
4. Cumulative effect of the change in accounting policies due to the adoption of new accounting standard
During the current year, the Company made the change described in Note 3 to the financial statements to its
significant accounting policies, as a result of the adoption of TAS 12 Income Taxes. The cumulative effect of the change in
the accounting policies has been separately presented in the statements of changes in shareholders’ equity.
The amounts of adjustments affecting the statements of financial position and the statements of comprehensive
income are summarised below.
(Unit: Thousand Baht)
31 July 2014 31 July 2013 1 August 2012
Statements of financial position
Increase in deferred tax assets 10,488 10,008 10,118
Increase in unappropriated retained earnings 10,488 10,008 10,118
(Unit: Thousand Baht)
For the years ended 31 July
2014 2013
Statements of comprehensive income
Profit and loss:
Decrease (increase) in income tax expenses 480 (110)
Increase (decrease) in profit 480 (110)
Increase (decrease) in basic earnings per share (Baht) 0.0027 (0.0006)
5. Significant accounting policies
5.1 Revenue recognition
Revenue from hospital operations
Revenues from hospital operations, mainly consisting of medical fees, hospital room sales and medicine sales, are recognised as income when services have been rendered or medicines have been delivered.
Revenue from rental
Revenue from rental is recognised over the term of the rental agreements.
Interest income
Interest income is recognised on an accrual basis based on the effective rate.
Other income
Other income is recognised on an accrual basis.
81
5.2 Cash and cash equivalents
Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity
of 3 months or less and not subject to withdrawal restrictions.
5.3 Trade accounts receivable and allowance for doubtful accounts
Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for
the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection
experiences and analysis of debt aging.
5.4 Inventories
Inventories are valued at the lower of cost (first-in first out) and net realisable value. Net realisable value is
the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale.
5.5 Buildings and equipment and depreciation
Buildings and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of
assets (if any).
Depreciation of buildings and equipment is calculated by reference to their costs on the straight-line basis over the
following estimated useful lives:
Useful lives (years)
ParticularsAssets acquired before
1 August 2004Assets acquired as from
1 August 2004
Buildings 25 Over the lease term
Building improvement 10 10
Land improvement 30 30
Facility systems 15, 20 3 - 10
Medical accessory equipment 5 - 20 5 - 15
Furniture, fixtures and equipment 8 - 15 5 - 10
Vehicles 10 10
Depreciation is included in determining income. No depreciation is provided on assets under construction and installation
An item of building and equipment is derecognised upon disposal or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on disposal of an asset is included in profit or loss when the asset is derecognised.
82
5.6 Intangible assets
Intangible assets are measured at cost on the date of acquisition. Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation and any accumulated impairment losses (if any).
Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and tested
for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and
the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense
is charged to profit or loss.
A summary of the intangible assets with finite useful lives is as follows:
Useful lives
Computer software 10 years
5.7 Related party transactions
Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly
or indirectly, or which are under common control with the Company.
They also include associated companies and individuals which directly or indirectly own a voting interest in the Company
that gives them significant influence over the Company, key management personnel, directors, and officers with authority in
the planning and direction of the Company’s operations.
5.8 Long-term leases
Leases of property which do not transfer substantially all the risks and rewards of ownership are classified as operating leases.
Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the lease term.
5.9 Impairment of assets
At the end of each reporting period, the Company performs impairment reviews in respect of the buildings and
equipment and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired.
An impairment loss is recognised in profit or loss when the recoverable amount of an asset, which is the higher of the asset’s
fair value less costs to sell and its value in use, is less than the carrying amount. In determining value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate
valuation model is used. These calculations are corroborated by a valuation model that, based on information available,
reflects the amount that the Company could obtain from the disposal of the asset in an arm’s length transaction between
knowledgeable, willing parties, after deducting the costs of disposal.
In the assessment of asset impairment, if there is any indication that previously recognised impairment losses may no
longer exist or may have decreased, the Company estimates the asset’s recoverable amount. A previously recognised impairment
loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since
the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment
loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the
asset in prior years. Such reversal is recognised in profit or loss.
83
5.10 Foreign currencies
The financial statements are presented in Baht, which is also the Company’s functional currency.
Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at
the end of reporting period.
Gains and losses on exchange are included in determining income.
5.11 Employee benefits
Short-term employee benefits
Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred.
Post-employment benefits and other long-term employee benefits
Defined contribution plans
The Company and its employees have jointly established a provident fund. The fund is monthly contributed by employees
and by the Company. The fund’s assets are held in a separate trust fund and the Company’s contributions are recognised as
expenses when incurred.
Defined benefit plans and other long-term employee benefits
The Company has obligations in respect of the severance payments it must make to employees upon retirement under
labor law. The Company treats these severance payment obligations as a defined benefit plan. In addition, the Company
provides other long-term employee benefit plan, namely long service awards.
The obligation under the defined benefit plan and other long-term employee benefit plan is determined by a
professionally qualified independent actuary based on actuarial techniques, using the projected unit credit method.
Actuarial gains and losses arising from post-employment benefits are recognised immediately in profit or loss.
For the first-time adoption of TAS 19 Employee Benefits in fiscal year ended 31 July 2012, the Company elected
to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under
the previous accounting policy, through an adjustment to the beginning balance of retained earnings in the year 2012.
5.12 Provisions
Provisions are recognised when the Company has a present obligation as a result of a past event, it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be
made of the amount of the obligation.
5.13 Income tax
Income tax expense represents the sum of corporate income tax currently payable and deferred tax.
Current tax
Current income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on
taxable profits determined in accordance with tax legislation.
84
Deferred tax
Deferred income tax is provided on temporary differences between the tax bases of assets and liabilities and their
carrying amounts at the end of each reporting period, using the tax rates enacted at the end of the reporting period.
The Company recognises deferred tax liabilities for all taxable temporary differences while its recognises deferred tax
assets for all deductible temporary differences and tax losses carried forward to the extent that it is probable that future taxable
profit will be available against which such deductible temporary differences and tax losses carried forward can be utilised.
At each reporting date, the Company reviews and reduces the carrying amount of deferred tax assets to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilised.
The Company records deferred tax directly to shareholders’ equity if the tax relates to items that are recorded directly
to shareholders’ equity.
6. Significant accounting judgements and estimates
The preparation of financial statements in conformity with financial reporting standards at times requires
management to make subjective judgements and estimates regarding matters that are inherently uncertain. These
judgements and estimates affect reported amounts and disclosures and actual results could differ from these estimates. Significant
judgements and estimates are as follows:
Leases
In determining whether a lease is to be classified as an operating lease or finance lease, management is required to
use judgement regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking
into consideration terms and conditions of the arrangement.
Allowance for doubtful accounts
In determining an allowance for doubtful accounts, the management needs to make judgement and estimates based
upon, among other things, debt collection experience, aging profile of outstanding debts and the prevailing economic condition.
Buildings and equipment and depreciation
In determining depreciation of buildings and equipment, the management is required to make estimates of the useful
lives and residual values of the Company’s buildings and equipment and to review estimate useful lives and residual values
when there are any changes.
In addition, the management is required to review buildings and equipment for impairment on a periodical basis and
records impairment losses in the period when it is determined that their recoverable amount is lower than the carrying amount.
This requires judgements regarding forecast of future revenues and expenses relating to the assets subject to the review.
Deferred tax assets
Deferred tax assets are recognised for deductible temporary differences to the extent that it is probable that taxable
profit will be available against which the temporary differences can be utilised. Significant management judgement is required
to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of estimate future
taxable profits.
85
Post-employment benefits and other long-term employee benefits under defined benefit plans
The obligation under the defined benefit plan and other long-term employee benefit plan is determined based on
actuarial techniques. Such determination is made based on various assumptions, including discount rate, future salary increase
rate, mortality rate and staff turnover rate.
Litigation
The Company has contingent liabilities arising from litigation. The Company’s management has used judgement to
assess the outcome of the litigation. Provision for contingent liabilities will be recorded at the end of the reporting period if it is
probable that loss will result.
7. Related party transactions
During the years, the Company had significant business transactions with related parties. Such transactions, which
are summarised below, were concluded on commercial terms and bases agreed upon between the Company and those
related parties.
Transfer pricing policy
Revenue from hospital operations Based on the price charged to normal customers
Rental income Rates as stipulated in the agreements
Doctor fee expenses (directors and management) The same rate as other doctors in the hospital
Medical welfare Under the Company’s regulations, medical welfare benefits are granted to directors, their spouses, children and parents, up to a specified amount per annum. These benefits exclude doctor fees, examinations conducted on other premises and special equipment charges
(Unit: Thousand Baht)
For the years ended 31 July
2014 2013Transactions with related companies and persons
Revenue from hospital operations 166 20
Rental income 300 300
Doctor fee expenses (directors and management) 10,699 8,436
Medical welfare 2,334 2,247
86
The balances of accounts as at 31 July 2014 and 2013 between the Company and its related parties are as follows:
(Unit: Thousand Baht)
2014 2013
Trade receivables - related parties (Note 10)
Related companies (related by common shareholders and directors) 54 228
Total trade receivables - related parties 54 228
Other receivables - related parties (Note 10)
Related companies (related by common shareholders and directors) 101 99
Total other receivables - related parties 101 99
Doctor fee payable - related persons
Related persons (directors and management) 839 688
Total doctor fee payable - related persons 839 688
Directors and management’s benefits
During the years ended 31 July 2014 and 2013, the Company had employee benefit expenses payable to its
directors and management as below.
(Unit: Thousand Baht)
2014 2013
Short-term employee benefits 29,984 22,705
Post-employment benefits 552 468
Total 30,536 23,173
8. Cash and cash equivalents(Unit: Thousand Baht)
2014 2013
Cash 6,782 3,254
Bank deposits 84,030 58,820
Total cash and cash equivalents 90,812 62,074
As at 31 July 2014, bank deposits in savings accounts carried interests between 0.25 and 1.60 percent per annum
(2013: between 0.125 and 2.60 percent per annum).
87
9. Current investments - fixed deposits at financial institutionsAs at 31 July 2014, fixed deposits at financial institutions carried interests between 2.50 and 2.95 percent per annum
(2013: between 2.10 and 3.60 percent per annum).
10. Trade and other receivables(Unit: Thousand Baht)
2014 2013
Trade receivables - related parties
Aged on the basis of due dates
Not yet due 38 21
Past due
Up to 3 months 14 5
3 - 6 months 2 1
6 - 12 months - 66
Over 12 months - 135
Total trade receivables - related parties 54 228
Trade receivables - unrelated parties
Aged on the basis of due dates
Not yet due 48,608 43,854
Past due
Up to 3 months 28,034 33,016
3 - 6 months 1,136 3,964
6 - 12 months 1,595 3,715
Over 12 months 3,226 4,437
Total trade receivables - unrelated parties 82,599 88,986
Less: Allowance for doubtful accounts (3,938) (4,856)
Total trade receivables - unrelated parties - net 78,661 84,130
Total trade receivables - net 78,715 84,358
Other receivables
Other receivables - related parties 101 99
Other receivables - unrelated parties 5,184 2,857
Accrued interest income 4,450 4,135
Total other receivables 9,735 7,091
Total trade and other receivables - net 88,450 91,449
88
11. Inventories
(Unit: Thousand Baht)
2014 2013
Medicines and medical supplies 28,010 27,938
Supplies and others 3,788 3,705
Total 31,798 31,643
12. Long-term deposits at financial institutions
As at 31 July 2014, long-term deposits at financial institutions carried interests between 2.30 and 3.60 percent per
annum (2013: between 3.30 and 3.60 percent per annum).
89
(Uni
t: Th
ousa
nd B
aht)
Build
ings
and
bu
ildin
g/la
nd
impr
ovem
ents
Faci
lity
syst
ems
Med
ical
acc
esso
ry
equi
pmen
t Fu
rnitu
re, f
ixtu
res
and
equi
pmen
tVe
hicl
esAs
sets
und
er
cons
truc
tion
and
inst
alla
tion
Tota
l
Cos
t
1 Au
gust
201
239
2,60
928
4,08
341
2,22
016
0,63
611
,147
14,3
821,
275,
077
Addi
tions
-2,
905
43,9
9014
,144
187
28,4
9589
,721
Tran
sfer
in (t
rans
fer o
ut)
16,8
4910
,087
481,
611
-(2
8,59
5)-
Dis
posa
ls a
nd w
rite-
off
-(2
,729
)(4
,083
)(8
73)
--
(7,6
85)
31 J
uly
2013
409,
458
294,
346
452,
175
175,
518
11,3
3414
,282
1,35
7,11
3
Addi
tions
428
1,11
430
,376
11,8
10-
18,7
9362
,521
Tran
sfer
in (t
rans
fer o
ut)
11,7
912,
236
-3,
226
-(1
7,25
3)-
Dis
posa
ls a
nd w
rite-
off
-(3
,364
)(1
7,91
1)(4
9,83
3)-
-(7
1,10
8)
31 J
uly
2014
421,
677
294,
332
464,
640
140,
721
11,3
3415
,822
1,34
8,52
6
Accu
mul
ated
dep
reci
atio
n
1 Au
gust
201
227
2,33
522
3,71
325
9,63
312
4,10
65,
255
-88
5,04
2
Dep
reci
atio
n fo
r the
yea
r21
,199
11,8
5433
,751
13,2
8092
9-
81,0
13
Dep
reci
atio
n on
dis
posa
ls a
nd w
rite-
off
-(2
,225
)(3
,936
)(8
45)
--
(7,0
06)
31 J
uly
2013
293,
534
233,
342
289,
448
136,
541
6,18
4-
959,
049
Dep
reci
atio
n fo
r the
yea
r22
,366
11,5
2533
,662
14,5
7094
4-
83,0
67
Dep
reci
atio
n on
dis
posa
ls a
nd w
rite-
off
-(3
,352
)(1
7,38
4)(4
9,78
5)-
-(7
0,52
1)
31 J
uly
2014
315,
900
241,
515
305,
726
101,
326
7,12
8-
971,
595
Net
boo
k va
lue
31 J
uly
2013
115,
924
61,0
0416
2,72
738
,977
5,15
014
,282
398,
064
31 J
uly
2014
105,
777
52,8
1715
8,91
439
,395
4,20
615
,822
376,
931
Dep
reci
atio
n fo
r the
yea
r
2013
(Bah
t 76.
98 m
illion
incl
uded
in c
ost o
f hos
pita
l op
erat
ions
, and
the
bala
nce
in a
dmin
istra
tive
expe
nses
)81
,013
2014
(Bah
t 78.
67 m
illion
incl
uded
in c
ost o
f hos
pita
l op
erat
ions
, and
the
bala
nce
in a
dmin
istra
tive
expe
nses
)83
,067
As a
t 31
July
201
4, c
erta
in e
quip
men
t ite
ms
have
bee
n fu
lly d
epre
ciat
ed b
ut a
re s
till i
n us
e. T
he g
ross
car
ryin
g am
ount
bef
ore
dedu
ctin
g ac
cum
ulat
ed d
epre
ciat
ion
of th
ose
asse
ts a
mou
nted
to B
aht 4
74.
11 m
illion
(201
3: B
aht 4
34.3
1 m
illion
).
13.
Build
ings
and
equ
ipm
ent
90
14. Intangible assets
The net book value of intangible assets, which are computer software, as at 31 July 2014 and 2013 is presented below.
Unit: Thousand Baht
Cost
1 August 2012 16,335
Additions 104
31 July 2013 16,439
Additions 2,192
31 July 2014 18,631
Accumulated amortisation
1 August 2012 6,517
Amortisation for the year 1,637
31 July 2013 8,154
Amortisation for the year 1,658
31 July 2014 9,812
Net book value
31 July 2013 8 ,285
31 July 2014 8,819
15. Trade and other payables
(Unit: Thousand Baht)
2014 2013
Trade payables - unrelated parties 73,054 66,205
Other payables - unrelated parties 14,026 15,908
Accounts payable - construction and equipment purchase 21,374 18,342
Accrued expenses 24,448 33,032
Total trade and other payables 132,902 133,487
91
16. Provision for long-term employee benefits
Provision for long-term employee benefits, which are compensations on employees’ retirement and long service
awards, was as follows:
(Unit: Thousand Baht)
Retirement benefit plan
Long service award plan
Total
As at 1 August 2012 26,091 3,673 29,764
Current service cost 3,937 839 4,776
Interest cost 1,271 164 1,435
Benefits paid during the year (712) (1,055) (1,767)
Actuarial gain (2,407) (1,385) (3,792)
As at 31 July 2013 28,180 2,236 30,416
Current service cost 4,126 598 4,724
Interest cost 1,453 119 1,572
Benefits paid during the year (2,337) (458) (2,795)
As at 31 July 2014 31,422 2,495 33,917
Long-term employee benefit expenses included in the profit or loss were as follows:
(Unit: Thousand Baht)
2014 2013
Current service cost 4,724 4,776
Interest cost 1,572 1,435
Actuarial gain - (3,792)
Total expenses recognised in profit or loss 6,296 2,419
Line items under which such expenses are included
in profit or loss
Cost of hospital operations 4,742 873
Administrative expenses 1,554 1,546
92
Principal actuarial assumptions at the valuation date were as follows:
2014(% per annum)
2013(% per annum)
Discount rate 4.52 4.52
Future salary increase rate 5.00 5.00
Staff turnover rate (depending on age of employees) 0.00 - 20.43 0.00 - 20.43
Amounts of defined benefit obligation for the current and previous three years are as follows:
(Unit: Thousand Baht)
Retirement benefit plan
Long service award plan
Year 2014 31,422 2,495
Year 2013 28,180 2,236
Year 2012 26,091 3,673
Year 2011 21,829 3,095
17. Statutory reserve
Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a
statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any), until
the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution.
At present, the statutory reserve has fully been set aside.
18. Expenses by nature
Significant expenses by nature are as follows:
(Unit: Thousand Baht)
2014 2013
Salaries and wages and other employee benefits 425,577 375,654
Cost of doctors’ fee 373,101 333,023
Cost of medicines and supplies 304,635 276,449
Depreciation and amortisation 84,725 82,650
Service fees for outside treatments 25,042 23,579
General supplies expenses 19,894 18,761
Other expenses 142,194 133,888
93
19. Income tax
Income tax expenses for the years ended 31 July 2014 and 2013 are made up as follows:
(Unit: Thousand Baht)
2014 2013 (Restated)
Current income tax:
Current income tax charge 45,039 50,882
Deferred tax:
Relating to origination and reversal of temporary differences (480) 110
Income tax expenses reported in the statements of comprehensive income 44,559 50,992
Reconciliation between income tax expenses and the product of accounting profit multiplied by the applicable tax
rates for the years ended 31 July 2014 and 2013 is presented below.
(Unit: Thousand Baht)
2014 2013(Restated)
Accounting profit before tax 223,665 223,225
Applicable tax rate 20% 23%
Accounting profit before tax multiplied by applicable tax rate 44,733 51,342
Effects of changes in applicable tax rates - (17)
Effects of:
Non-deductible expenses 277 189
Additional expenses deductions allowed (451) (522)
Total (174) (333)
Income tax expenses reported in the statements of comprehensive income 44,559 50,992
94
The components of deferred tax assets are as follows:
(Unit: Thousand Baht)
31 July 2014 31 July 2013(Restated)
31 August 2014
Deferred tax assets
Allowance for doubtful accounts 788 971 832
Provision for long-term employee benefits 6,783 6,083 5,953
Accumulated depreciation - equipment 2,917 2,954 3,333
Total 10,488 10,008 10,118
In October 2011, the cabinet passed a resolution to reduce the corporate income tax rate from 30 percent to 23 percent
in 2012, and then to 20 percent from 2013. In addition, in order to comply with the resolution of the cabinet, in
December 2011, the decreases in tax rates for 2012 - 2014 were enacted through a royal decree. The Company reflected
the changes in tax rates in its deferred tax calculation, as presented above.
20. Earnings per share
Basic earnings per share is calculated 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.
21. Dividends
Dividends Approved byTotal dividends(Million Baht)
Dividend per share(Baht)
Final dividends for 2012 Annual General Meeting of the
shareholders on 20 November 2012
90 0.50
Total dividends for 2013 90 0.50
Final dividends for 2013 Annual General Meeting of the
shareholders on 20 November 2013
108 0.60
Total dividends for 2014 108 0.60
95
22. Operating segment information
Operating segment information is reported in a manner consistent with the internal reports that are regularly reviewed by the chief operating decision maker in order to make decisions about the allocation of resources to the segment and assess its performance.
The one main reportable operating segment of the Company is the hospital business and the single geographical area of its operations in Thailand. Segment performance is measured based on operating profit or loss, on a basis consistent with that used to measure operating profit or loss in the financial statements. As a result, all of the revenues, operating profits and assets as reflected in these financial statements pertain exclusively to the aforementioned reportable operating segment and geographical area.
For the years 2014 and 2013, the Company has no major customer with revenue of 10 percent or more of its revenues.
23. Provident fund
The Company and its employees have jointly established a provident fund scheme in accordance with the Provident Fund Act B.E. 2530. Both employees and the Company contribute to the fund monthly at the rate of 2 percent of basic salary. The fund is managed by TISCO Asset Management Company Limited and will be paid to the employees upon termination in accordance with the fund rules. During the year ended 31 July 2014, the Company contributed Baht 2.45 million (2013: Baht 2.27 million) to the fund as recorded as expenses in profit or loss.
24. Commitments and contingent liabilities
24.1 Operating lease commitment
The Company entered into a long-term lease agreement for lease of land on which to construct a hospital building covering a period of 30 years, from November 1988 to November 2018. In April 2006, the lessor transferred the ownership of this land to The Thai Red Cross Society. The agreement is renewable for periods of not less than 5 years each time, with the Company being required to inform The Thai Red Cross Society of its intention to renew at least one year prior to the expiry date.
The future minimum lease payments required under this non-cancellable operating lease contract were as follows:
(Unit: Million Baht)
As at 31 July
2014 2013
Payable:
In up to 1 year 1.5 1.4
In over 1 and up to 5 years 5.4 6.4
Over 5 years - 0.5
96
24.2 Commitments under service agreements
The Company had total minimum payments to be paid in the future under the service agreements as follows:
(Unit: Million Baht)
As at 31 July
2014 2013
Payable:
In up to 1 year 9.1 4.2
In over 1 and up to 5 years 1.1 0.6
24.3 Guarantees
(a) As at 31 July 2014, the Company had credit facilities for overdrafts with a commercial bank of Baht 21.5
million (2013: Baht 21.5 million) guaranteed by the Company’s directors, and for short-term loans with a
commercial bank of Baht 10.0 million (2013: Baht 10.0 million) guaranteed by the Company’s director and
secured by the land and construction thereon of a related company.
(b) As at 31 July 2014, the Company had outstanding bank guarantees of approximately Baht 4.8 million (2013:
Baht 4.8 million) issued by the bank on behalf of the Company in respect of electricity use as required in
the normal course of business.
25. Land purchasing
The meeting of the Company’s Board of Directors No. 5/2007, held on 5 July 2007, passed a resolution approving the purchase of land adjacent to and behind that of the Company from Sukhumvit Asset Management Co., Ltd. at a total price of Baht 206 million, in case the Company is unable to renew its land lease or to support future expansion of the business. The Company is to pay the cost of the land on the date ownership is transferred, and is responsible for all costs and fees incurred in respect of the transfer. It is also responsible for taking over legal proceedings from the seller, including obligations in respect of litigation to evict the current occupants from the land.
However, Sukhumvit Asset Management Co., Ltd. was unable to transfer the ownership of the land to the Company because a third party petitioned the Court to order the temporary attachment of the land. In September 2007, the Company brought lawsuits seeking to compel Sukhumvit Asset Management Co., Ltd. and the third party to comply with the agreement to purchase and to sell the land and to pay damages for breach of the agreement.
97
On 21 October 2008, the Court ordered Sukhumvit Asset Management Co., Ltd. to comply with the contract whereby it shall transfer the ownership of the land to the Company and receive the full payment for the land from the Company. Although the final verdict of the case was reached, the land ownership cannot be transferred because there was a separate case between a third party and Sukhumvit Asset Management Co., Ltd. whereby a third party had filed a petition with the Court to order a temporary attachment of such land. Sukhumvit Asset Management Co., Ltd. therefore filed a counterclaim, petitioning the Court to cancel the land attachment. In July 2010, the Court ordered to dismiss the claim filed by Sukhumvit Asset Management Co., Ltd.
However, on 18 May 2009, Sukhumvit Asset Management Co., Ltd. demanded the Company to pay deposit amounting to Baht 20.6 million for the land purchase. The deposit is part of the selling price of the land and there remained outstanding commitments of Baht 185.4 million to be paid in respect of the land on the date of ownership transfer.
On 14 December 2010, the Company filed the petition to cancel the temporary order of consideration protection for the case that the Court adjudged to seize the land. In the year 2012, the Appeal Court adjudged to leave out the
mentioned petition. The Company filed the petition to the Supreme Court under which the case is being in process.
26. Litigation
26.1 In August 2010, the Company, as a joint defendant, and a hospital together with doctors (5 defendants in total) were sued for damages amounting to approximately Baht 31.2 million with interest of 7.50 percent per annum from the date the defendants were sued till the case is closed. The plaintiff claimed that doctors who gave treatment jointly committed a tort. The hospitals, as business operators and employers of the doctors, must be also responsible for the tort. The Company and its doctors viewed that they did not commit any wrongful act as claimed by the plaintiff and no actual damage had occurred, they therefore filed a statement of defence.
On 31 January 2011, the plaintiff filed a petition with the Court to amend the lawsuit, reducing the amount of damages to Baht 15 million with interest of 7.50 percent per annum from the date the defendants were sued till the case is closed.
On 29 November 2011, the Court of First Instance rendered the judgment to dismiss the plaintiff. The plaintiff filed an appeal against the Court of First Instance.
On 25 September 2013, the Appeal Court made the same judgment as the Court of First Instance to dismiss the plaintiff.
On 20 December 2013, the plaintiff filed an appeal with the Supreme Court. It is currently waiting for the court to decide whether to accept the appeal.
26.2 In October 2012, the Company and the dentist were sued by the patient, claiming for damages amounting to Baht 155.5 million with interest of 7.50 percent per annum from the date being sued until the payments are settled. The Company and the dentist viewed that they did not commit any wrongful act as claimed by the patient and had defended to the Court.
On 13 February 2014, the Court of First Instance ordered the Company and the dentist performing the treatment procedure to pay compensation for damages amounting to approximately Baht 3.1 million, together with interest thereon at the rate of 7.50 percent per annum.
On 30 May 2014, the Company filed an appeal to the Appeal Court under which the case is being considered.
98
26.3 In October 2013, the Company and the doctor were sued by the patient, claiming for damages amounting to Baht 4.9 million with respect to medical treatment. The Company and the doctor had already filed a statement of defence, and the Court scheduled the mediation in December 2013.
In January 2014, the plaintiff was called into the case that the Company and the doctor were sued as a joint defendant and had filed a petition to withdraw an action. Thereafter, the court had allowed and stroked the case out of the court case list.
26.4 In July 2014, the Company and a doctor were sued for compensation, in relation to medical treatment provided by the Company, of Baht 153 million with interest of 7.50 percent per annum from the date being sued until the payments are settled. The Company and the doctor viewed that they did not commit any wrongful act to the plaintiff and had prepared to submit a statement of defence. The court ordered the Company to submit the statement of defence and the mediation in October 2014.
27. Financial instruments
27.1 Financial risk management
The Company’s financial instruments, as defined under Thai Accounting Standard No. 107 “Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, current investments - fixed deposits at financial institutions, trade and other receivables, long-term deposits at financial institutions, and trade and other payables. The financial risks associated with these financial instruments and how they are managed is described below.
Credit risk
The Company is exposed to credit risk primarily with respect to trade and other receivables. The Company manages the risk by adopting appropriate credit control policies and procedures, therefore does not expect to incur material financial losses. In addition, the Company does not have high concentration of credit risk since it has a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of trade and other receivables as stated in the statement of financial position.
Interest rate risk
The Company’s exposure to interest rate risk relates primarily to its cash at financial institutions. However, since most of the Company’s financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate.
99
Significant financial assets and liabilities classified by type of interest rates are summarised in the table below.
(Unit: Million Baht)
As at 31 July 2014
Fixed interest rates Floating interest
rate
Non- interest bearing
Total Interest rate (% p.a.)Within
1 year1 to 5 years
Financial assets
Cash and cash equivalents - - 84.03 6.78 90.81 0.25 - 1.60
Current investments - fixed deposits at financial institutions 200.96 - - - 200.96 2.50 - 2.95
Trade and other receivables - - - 88.45 88.45 -
Long-term deposits at financial institutions - 279.60 - - 279.60 2.30 - 3.60
200.96 279.60 84.03 95.23 659.82
Financial liabilities
Trade and other payables - - - 132.90 132.90 -
- - - 132.90 132.90
(Unit: Million Baht)
As at 31 July 2013
Fixed interest rates Floating interest
rate
Non- interest bearing
Total Interest rate (% p.a.)Within
1 year1 to 5 years
Financial assets
Cash and cash equivalents - - 58.82 3.25 62.07 0.125 -2.60
Current investments - fixed deposits at financial institutions 200.00 - - - 200.00 2.10 - 3.60
Trade and other receivables - - - 91.45 91.45 -
Long-term deposits at financial institutions - 210.56 - - 210.56 3.30 - 3.60
200.00 210.56 58.82 94.70 564.08
Financial liabilities
Trade and other payables - - - 133.49 133.49 -
- - - 133.49 133.49
100
Foreign currency risk
The Company’s exposure to foreign currency risk is minimal since the majority of business operations are denominated in Thai Baht.
27.2 Fair values of financial instruments
Since the majority of the Company’s financial instruments are short-term in nature and bear floating interest rates
or interest rates which are close to market rate, their fair value is not expected to be materially different from the amounts
presented in the statement of financial position.
A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable,
willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial
instrument or by using an appropriate valuation technique, depending on the nature of the instrument.
28. Capital management
The primary objective of the Company’s capital management is to ensure that it has appropriate capital structure in
order to support its business and maximise shareholders value. As at 31 July 2014, the Company’s debt-to-equity ratio
was 0.27:1 (2013: 0.29:1)
29. Event after the reporting period
On 26 September 2014, the Meeting of the Board of Directors of the Company passed a resolution approving the
dividend payment for the year 2014 to the Company’s shareholders at Baht 0.6 per share or a total of approximately Baht
108 million. The payment of dividend will later be proposed for approval in the Annual General Meeting of the Company’s
shareholders.
101
30. Reclassification
Certain amounts in the prior year’s financial statements have been reclassified to conform to the current period’s
classification but with no effect on previously reported profit or shareholders’ equity. The reclassifications are as follows:
(Unit: Thousand Baht)
As at 31 July 2013 As at 1 August 2012
As reclassified As previously reported
As reclassified As brought forward
Statements of financial position
Deposits for construction and equipment purchase - 30 - 201
Other non-current assets 75 45 238 37
(Unit: Thousand Baht)
For the year ended 31 July 2013
As reclassified As previously reported
Statement of comprehensive income
Profit or loss
Cost of hospital operations 1,092,648 1,077,107
Administrative expenses 151,356 143,724
Management’s remuneration - 23,173
31. Approval of financial statements
These financial statements were authorised for issue by the Company’s Board of Directors on 26 September 2014.
102
Auditor’s Remuneration In 2014, Certified Public Accountant (Thailand) of the Company is Miss Kamonthip Lertwitworatep Number 4377 from EY Office Limited (Formerly known as Ernst & Young Office Limited). The auditor’s remuneration of Baht 960,000 per year and actual expenses including travelling expense and copy print not over Baht 30,000 per year.
Reference Information
Securities Registrar Name : Thailand Securities Depository Co., Ltd.Address : Stock Exchange of Thailand Building, : 62 Ratchadaphisek Road, Klongtoey, Bangkok 10110Telephone : 0 2229 2800Fax : 0 2359 1259TSD Call Center : 0 229 2888Website : www.tsd.co.th
AuditorName : EY Office Limited. (Formerly known as Ernst & Young Office Co., Ltd.)Auditor’s name : Mr.Wichart Loketekrawee, Certified Public Accountant (Thailand) No. 4451 and/or Ms.Kanontip Lertwitworatep, Certified Public Accountant (Thailand) No.4377 and/or Ms.Siriwan Suratepin, Certified Public Accountant (Thailand) No.4604Address : 33rd Floor, Lake Rajada Building, 193/136-137 Ratchadaphisek Road, Klongtoey, Bangkok, 10110Telephone : 0 2264 0777Fax : 0 2264 0789
Internal Auditor Name : Dharmniti Auditing Co., Ltd.Address : 267/1 Pracharat Sai 1 Road, Bang Sue, Bang Sue, Bangkok, 10800Telephone : 0 2587 8080Fax : 0 2586 0301
103
Corporate Social Responsibility
Throughout the past 21 years, Thai Nakarin Hospital has earned trust from the public because of its world-class service quality standard, warm and family-like hospitality, fair prices, transparent and effective management and positive attitude employees. In line with the corporate vision, the management is fully aware that TNH focuses not only on gaining business profits but also on giving the best care for people’s heath, quality of life, the society and the environment. We believe that corporate social responsibility is the key to sustainable business growth.
TNH aims to achieve business growth by adherence to with the good corporate governance and the provision of high quality services for the improvement of the quality of life, the betterment of the Thai society, the preservation and restoration of
the environment through several projects and activities in accordance with our 5 missions stated below:
1. To develop personnel competency, satisfaction and pride in the hospital.
2. To elevate the healthcare quality to the world-class standard.
3. To progressively proceed with continuous and sustainable development of the hospital.
4. To achieve the best hospitality with a warm and family-like treatment that creates lasting impressions.
5. To manage in accordance with the principles of good governance.
Corporate social responsibility works of TNH are based on the following founding principles:
1. Fair business conducts
Treating business ethics and integrity as top priorities, TNH adheres to the principles of transparency and honestly,
avoids monopoly in all forms, is open for scrutiny and does not tolerate piracy.
- Offer equal opportunities to all vendors to discourage monopoly and encourage price competition among suppliers. We do not rely on any sole supplier.
- Compare products and pricesto promote transparency in the procurement process, reduce costs to maintain our competitiveness in the market and at the same time offer the benefits of lower prices to our clients.
- Establish ground rules and procedures for procurement to foster compliance with the code of ethics and deter all forms of corruption in order to transparently deal with suppliers and creditors.
2. Respect for Human Rights
TNH respects human rights which are the basic rights of all human beings and the basis of human resources management and development. It is a very important foundation for the business of the hospital.
2.1 Overall services for patients and clients TNH is fully aware of its role as a health care service provider and must respect the rights of clients according to 10 principles under the Declaration of Patients’ Rights as follows:
104
1. All patients have the right to receive health care services according to the Constitution.
2. All patients have the right to receive health care services without discrimination on the grounds of race, religion, social status, belief, political affiliation, gender, age and type of illness.
3. Patients who seek health care services have the rights to receive sufficient and clear information from health care practitioners to support their decision to receive or refuse treatment from health care practitioners, except in case of emergency.
4. Patients in critical conditions have the right to receive urgent and immediate assistance from practitioners regardless of whether they request assistance.
5. Patients have the right to know names, surnames and specialties of health care practitioners providing services for them.
6. Patients have the right to seek a second opinion from other health care practitioners and request the change of place and provider of service.
7. Patients have the right to strict confidentiality of their personal information and health care practitioners shall in no case disclose patients’ information unless consent is given by patients or required by the law.
8. Patients have the right to obtain complete information to support their decision to participate in or withdraw from a research experiment conducted by health care practitioners.
9. Patients have the right to obtain information about their own medical treatment as shown in their medical records upon request provided that it does not violate the rights of a third party.
10. Father, mother or legal representatives may surrogate the rights of patients who are under 18 years of age or have physical or mental disability.
The Declaration of Patients’ Rights is visibly posted in all service areas of TNH for clients’ information. We focus on the morality of our employees and willingly respond to specific needs of patients such as foreign patients who have different cultural beliefs.
2.1.1 Information Technology
In health care business, medical history which is generally known as medical record is very important. TNH has fully digitalized the medical records. Medical record data entry and access are governed by stringent controls, policies and procedures to achieve data accuracy of medical records and prevent disclosure which is not permitted by the patients or their representatives or related persons. According to our policies and procedures, information about patients’visits and treatments must be recorded and retained on the IT system. Therefore, electronic medical records contain comprehensive and accurate patient details. We have established data and server security control policies and strictly controlled access to server rooms to provide patients with assurance about the security and confidentiality of their medical records.
105
2.1.2 Services
TNH places emphasis on delivering quality services to live up to our motto “Thainakarin….The hospital you can trust”. Listed below are the guiding principles for our service-related work:
• We provide convenient, fast and correct medical services for everyone.
• Executives supervise each service unit every day.
• Customer satisfaction survey is conducted twice a year in order to improve and develop our services.
• We have foreign officers to provide correct and complete information for foreign patients.
• We have an appointment reminder system to help patients to receive continuous treatment and help physicians to follow up and evaluate the results of treatment.
• We have security unit which proactively works to facilitate best convenience for our clients by providing, for example, handicapped parking space, wheelchair assistance service, fire extinguisher drill on the 15th of every month, enhancing hospital-wide security by installing more lighting to removing dark spots during night time, 24-hour security guards inside and outside the buildings, installing CCTV camera in every area including dark and deserted areas ensure the safety of our clients and their possessions.
2.2 Personnel
The hospital has adhered to the principle of human rights which are applied to our personnel at all levels, from the Board to operational employees. The principle is integrated to hospital-wide operations in the form of welfare, annual medical check-up, uniform, bonus and annual salary raise.
2.2.1 Pregnant employees are entitled to request to be transferred to positions appropriate for their physical and mental states.
2.2.2 Supervisors and subordinates are mandated to treat one another fairly.
2.2.3 The hospital does not adopt layoff policy even in times of economic crisis.
2.2.4 Concrete development and health promotion projects such as:
• Orientation sessions are offered to new employees to help them fine-tune their attitudes to the corporate culture and management structure, helping them to clearly understand their functional roles and as well as developments which will enable them to maximize their potentials and work effectively.
• Training and development plans are competency-based and customized to the needs of specific care centers as well as the results of employee training need survey. Development includes both public and in-house training programs which cover knowledge development, skill development, attitude development and service quality development. Examples include the “Decision Making in Breast Conservative & Concept Change in Breast Cancer Surgery” course which was provided for professional practitioners, doctors, nurses, pharmacists, medical technicians, physical therapists, radiologists, and nutritionists to equip them with relevant knowledge prior to the launch of Breast Care Center. In addition, there are other interesting activities that develop the mind and reduce the stress for employees such as “Happy Brain”, “Happy Soul” and “Happy Relax” projects.
106
• Leadership development and career growth have been promoted through the Talent and Leadership Program which is designed for department heads or middle management and the domestic and overseas field trip programs for top-level management.
• Employee engagement has been integrated with corporate social responsibility activities such as the hospital anniversary celebration, merit-making ceremony, offering food to monks, sick employee visit by executives, monthly “Happy Birthday To You” activity and quarterly “Happy Birthday Outing” activity through which executives and employees can celebrate their birthday by making merit, sharing health knowledge with the communities, giving medicines to monks, providing meals, donating clothes and first-aid kits to the School for Blind Children in Lopburi, releasing crabs to the sea, planting mangrove with the Princess Sirindhorn Mangrove Forest Conservation Center in Petchaburi.
107
• TNH recognizes the importance of a healthy body and mind. Therefore, we provide our employees with medical benefits which include medical treatment, annual medical check-up, vaccinations and personal protection equipment (ear plugs for employees working in an area with noise exposure of above 87 decibels, safety shoes for employees exposed to electrical hazards, and lumbar support for those whose work involve heavy lifting). We have organized sports day activity and “From Belly Fat to Flat Belly” program to promote healthy diet and exercise.
• Occupational safety and health promotion are treated as priorities and have been carried out in the form of knowledge sharing via different internal communication channels and social network. In addition, we have organized annual fire drill and training in basic fire prevention and fire fighting, energy saving, occupational safety, health and environment, infectious disease prevention and control and basic life support etc.
108
3. Anti-Corruption
Ethics and transparency are the heart of our business. TNH has a transparent policy concerning internal control and audit process which is fair and never caused any complaints. We do not reveal confidential information of our suppliers to other corporate such as prices of products. Together with the Pharmacy Department, we have arranged medicine bidding for the best and fair benefits of both the organization and the stakeholders. In addition, the selection of medical equipment, medicine and medical supplies is based on the opinions of an independent committee. Products and goods delivered by suppliers must be jointly checked by owner units, Managerial Accounting Division and Goods Examination & Registration Department. Our operations are audited by both internal and external auditors and we have channels for receiving complaints from counterparties.
To promote anti-corruption consciousness across the organization, TNH has created a mailbox to receive suggestions and complaints from employees. Our salary structure is reviewed and revised to comply with the minimum wage law and treat our workers fairly. The salary average is at the same level as the market midpoint and the inflation rate is factored in the annual salary increase consideration. In addition, a salary satisfaction survey has been conducted annually.
4. Fair Labor Practice
TNH respects and follows the law and code of ethics in its human resources management. We treat every employee equally without discrimination or bias as detailed below:
• Our recruitment and hiring procedure is in line with the fair labor practice and free from discrimination and bias. We respect the principle of human rights and do not use child labor.
• Our compensation scheme, disciplinary punishment and protection of pregnant workers are legal, fair and equal.
• To show our respect for human rights and promote career growth and job security for the disabled, TNH employs disabled persons as phone operators and other positions which are suitable for their physical and mental conditions.
5. Environmental Protection and Preservation
In addition to providing medical services to the public, TNH has also strived for protecting and preserving the environment inside and outside the hospital through:
• Implementing the wastewater treatment and management system. Through the Occupational Safety, Health and Environment Committee, we have effectively monitored and controlled the quality of treated wastewater in accordance with the wastewater quality indicator standard, thus successfully preventing against the release of contaminated water into the environment.
• Assessing risks/vulnerabilities in operating practices through the trilateral monthly environment round-table discussions attended by representatives from the doctor team, the nurse team and the management team. Results of the discussions are presented to the Occupational Safety, Health and Environment Committee’s monthly meetings.
• Promoting environmental awareness and knowledge among personnel through training and energy-saving programs such as setting an office lights off period, encouraging use of stairs instead of elevators and posting stickers that encourage energy-saving practices.
109
• Arranging training programs to promote waste sorting knowledge and awareness and making available recycling bins in our facilities. We also have a team which is directly responsible for monitoring and assess the waste sorting process. The results showed that 97% of our employees can correctly sort waste, exceeding the target of 87%.
• Adding more green areas to our facilities and premises such as the Checkup Center on the third floor and the gardens at the back of the hospital building and outdoor parking area to provide shades for visitors and reduce the carbon dioxide released from cars.
6. Community and Society Development
During the past 21 years, TNH has operated its business in accordance with the principle of ethics and its CSR commitment. Being fully aware of our responsibility towards the society and environment, we have arranged various activities related to life quality development, health education, medical check-up and environment conservation.
• Under “Thai Nakarin Health Society” project, we have provided mobile medical check-up and disease prevention education for Phairoj Bangna Village every 2 months.
• Under “Sharing Kindness and Smile to Children 2” project, we offered medical check-up services, health care advices, and donations in cash and in kind to 150 underprivileged children at SOS Children’s Village in Bangpu which is supported by SOS Children’s Villages Thailand Foundation Under the Royal Patronage of H.M. the Queen.
• Health promotion activities for elderly people included sharing knowledge about CPR and basic medical check-up at Saranchit Elderly Club.
110
• “Bye Bye Calories Season 1” project was initiated to share knowledge about healthy calorie controlled diet and was organized at Lakeville Sport Club.
• Under “Sharing Our Hearts, Sharing Our Love by TNH” project, our employees fed mentally and intellectually challenged children and donated supplies to Bang Pakong Home for Persons with Disabilities in Chachoengsao.
• “One-Day Trip for Birthday Outing” is an activity that creates joy and fosters employee engagement. It encourages employees’ public mindedness and allows employees to celebrate their birth month together on an outing to Lopburi School for the Blind and the Blind with Multi-Handicapped. The students were granted scholarships, lunch as well as 10 medical kit bags and 2 sets of first-aid kits, altogether worth more than Baht 60,000.
