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Bangkok Dusit Medical Services Plc.Annual Report 2007

Bangkok Prapradaeng Hospital

BNH Hospital

Prasert Prasarttong-Osoth, MD, Chairman of the CEO CommittesBangkok Dusit Medical Services Public Company Limited

led the executives to receive the royal mandate fromMr. Kaewkwan Watcharothai, Lord Chamberlain

of the Royal Household at the Royal Place on 9th April 2007

The Highest HonorMajesty King Bhumipol Adulyadej graciously bestowed the Royal Garuda Emblem

upon Bangkok Dusit Medical Services Public Company Limitedestablished and managed by Bangkok Hospital for over 35 years

This has been of great pride to the management, physicians, nurses and employees of the hospital to have received His Royal kindness.

We promise to persevere in our business with honesty, diligence and commitment, for the health of the people and the development

of Thai medical service standards to be a global leader in the industry.

Contentsë Message from the Board of Directors ...............................ë Audit Committee Report ...........................................................ë General Information ......................................................................ë Board of Directorûs Profile ........................................................ë Juristic Persons in which the Company holds 10% or more of the shares outstanding .......................................ë Financial Overview ........................................................................ë Nature of Business .......................................................................ë Research & Development .........................................................ë Future Projects ...............................................................................ë Industry and Competition .........................................................ë Risks Factors ...................................................................................ë Shareholding Structure and Management .......................ë Report of Compliance with Good Corporate Governance ...............................................................ë Transactions with Associated Companies ....................... ë Explanation and Analysis of Operational Results and Financial Status ............................................................ë The Remuneration of the Auditor ........................................ë Responsibility of the Board of Directors to the Financial Statements ...................................................ë Auditor Report and Financial Statements ...............................

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5053

5558

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everywherew i t h y o u ,

Message from the Board of Directors

2

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

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

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

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

In terms of academics, the Company has held annual academic conferences. For the seventh year, theCompany organized the conference entitled çExcellence in Oncology and Advancement in Stem Cellé in August2007, which garnered wide interest and attracted even more participants than previous years. In addition, theBangkok Diabetes and Endocrine Glands Center, Bangkok Hospital, with the support of the Ministry of Science,Technology and Environment and Thai Stem Life Company Limited, has continuously studied stem cell as atreatment of diabetes wounds. This innovation provides an alternative for diabetes patients.

3

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

(Wallop Adhikomprapa)President

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

4

Audit Committee Report

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

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

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

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

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

5

General Information

Type of Business

Location

Company Registration Number

Website

Registered Capital

Reference InformationSecurity Registrar

Auditor

Health Care Business

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

Bor.Mor.Jor. 0107537000025

http://www.bangkokhospital.com

Baht 1,312.26 million, with Baht 1,214.13 millionin paid-up capital, divided into 1,214.13 millioncommon shares with par value of Baht 1 each

Thailand Securities Depository Co., Ltd.4th Floor, Stock Exchange of Thailand Building62 Ratchadaphisek Road, Klongtoey, Bangkok 10110 Telephone: 02-229-2800, 02-654-5599 Fax: 02-359-1259

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

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

22

Professor Arun Pausawasdi, M.D.Chairman of the Board of Directors Age 70 years

Education

Experience

Other Position

Percentage of shareholding*

Relationship among other management

Prasert Prasarttong-Osoth, M.D.Vice Chairman/Chairman of CEO Committee Age 74 years

Education

Experience

Other Position



Professor Snoe Indrasukhsri, M.D.Independent Director/Chairman of Audit Committee Age 87 years

Education

Experience

Other Position



ë Directors Accreditation Program Class 45, Thai Institute of Directors Associationë Facharzt fur Chirurgie, The Medical Council of Hamburg, Germanë Certificate of Medical Clinic, Mahidol Universityë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

ë Secretary General, Royal College of Surgeons of Thailandë Chairman of Scientific Session Medical, The Medical Association of Thailandë Dean, Faculty of Medicine Siriraj Hospital, Mahidol Universityë Director of the Medical Association

ë Assistant to Ministry of Public Healthë Chairman, Centre for Continuing Medical Education of Thailandë President, Royal College of Surgeons of Thailandë Vice President, The Prince Mahidol Award Foundationë Member of the Thai medical registration license committeeë Vice President, Siriraj Foundation

ë 0.02

ë None

ë Directors Accreditation Program Class 45, Thai Institute of Directors Associationë Certificated from National Defense Collegeë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

ë Resident/Professor in Department of Surgery, Faculty of Medicine Siriraj Hospital ë Member of National Legislative Council (Senator)

ë President, Bangkok Airways Co., Ltd.

ë 13.6

ë None

ë Directors Accreditation Program Class 45, Thai Institute of Directors Associationë Certificate in Pediatric Surgeryë Medical Doctor (Honour), Faculty of Medicine Siriraj Hospital, Mahidol University

ë Head, Department of Surgery, Faculty of Medicine Siriraj Hospital, Mahidol Universityë Secretary General, Department of Medicine, Siriraj Hospitalë School Director, School of Therapist Rehabilitationë President, Medical Society of Private Practionerë Chairman, Pediatric Association

ë None

ë 0.41

ë None

Board of Directorûs Profile

23

Pongsak Viddayakorn, M.D.Executive Company Advisor/Member of CEO Committee Age 74 years

Education

Experience

Other Position



Chuladej Yossundharakul, M.D.Director/Member of CEO Committee Age 76 years

Education

Experience

Other Position



ë Directors Accreditation Program Class 45, Thai Institute of Directors Associationë Honorary Doctorate in Business Management, Christian Universityë Certificate from National Defences Collegeë DTM&H Diploma, Faculty of Tropical Medicine and Hygiene, Mahidol Universityë Post Graduate Study, University of Pennsylvania, USA.ë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

ë Director of The Medical Heath Care Centre of The Teacher Council of Thailandë Member of consultation committee of the Bangkok Metropolitan Administration

Governor (Healthcare)ë Chairman, Private Hospital Associationë Director of Medical Association

ë Vice President, Samitivej PLC.ë Chairman, Bangkok Phuket Hospital Co., Ltd.ë Chairman, Bangkok Ratchasima Hospital Co., Ltd.ë Vice President, Angkor Pisith Co., Ltd.ë Chairman, B.D.M.S International Medical Services Co., Ltd.ë Chairman, S.R. Property Investment Co., Ltd.ë Chairman, Seam Reap Land Investment Co., Ltd. ë Chairman, Phnom Penh Medical Services Co., Ltd.ë Chairman, Phnom Penh First Property Co., Ltd.ë Chairman, Bangkok Helicopter Services Co., Ltd.ë Chairman, Bangkok Health Insurance Co., Ltd.ë Chairman, Asia International Healthcare Co., Ltd.ë Chairman, Global Medical Network Co., Ltd.ë Director, Royal Rattanak Medical International Co., Ltd.ë Director, National Healthcare System Co., Ltd.ë Director, Bio Molecular Laboratory (Thailand) Co., Ltd.

ë 5.0

ë None

ë Directors Accreditation Program Class 45, Thai Institute of Directors Association ë Diplomate of American Board of Surgery ë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

ë Head, Surgical Unit, National Cancer Instituteë Hospital Director, Karuna Pitak Hospitalë Hospital Director, Bangkok Hospital

ë Chairman, Bangkok Prapadaeng Hospital Co., Ltd.ë Director, Bangkok Pattaya Hospital, Co., Ltd.ë Director, Bangkok Health Insurance Co., Ltd.ë Director, Global Medical Network Co., Ltd.

ë 2.33

ë None

22

§≥–°√√¡°“√·≈–ºŸâ∫√‘À“√Board of Directorûs Profile

Wallop AdhikomprapaPesident/Member of CEO Committee/Chief Financial Officer Age 65 years

Education

Experience

Other Position



Chirotchana Suchato, M.D.Director/Member of CEO Committee Age 72 Years

Education

Experience

Other Position



ë Directors Accreditation Program Class 45, Thai Institute of Directors Association ë Diplomate of American Board of Radiology, Downstate University of New Yorkë Graduated Course Radiobiology at M.D. Anderson Hospital, Houston, Texasë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

ë School Director, School of X-Tray Technicianë Professor of Radiology division, Faculty of Medicine, Ramathibodi Hospitalë Consultant to Radiology, Clinic of The Teacher Council of Thailand

ë Chairman, Bangkok Pattaya Hospital Co., Ltd.ë Director, Bangkok Phuket Hospital Co., Ltd.ë Director, Bangkok Health Insurance Co., Ltd.ë Director, Asia International Healthcare Co., Ltd.ë Director, Global Medical Network Co., Ltd.

ë 3.20

ë None

ë Graduate Diploma in Public Law and Management Class 6 King Prajadhipokûs Institute ë Graduate Diploma in Management of Public Economy Class 4

King Prajadhipokûs Instituteë The Role of the Chairman, Class 9, Thai Institute of Directors Association ë Directors Certification Program Class 20, Thai Institute of Directors Association ë Senior Executive Program, Sasin Graduate Institute of Business Administration ë MS-Accounting, Roosevelt University, USA.

ë Managing Director, Thai Wah Resorts Development Co., Ltd.ë Managing Director, Thai Wah Plaza Co., Ltd.ë Financial Controller, Holiday Inn Crown Plazaë Assistant Director-Accounting and Finance, Hostmark Hospitality Group USA

ë Director, Samitivej PLC.ë Director, Bangkok Helicopter Services Co., Ltd.ë Director, First Health Food Co., Ltd.ë Director, Sodexho Support Services (Th) Co., Ltd.ë Director, Bangkok Health Insurance Co., Ltd.ë Director, B.D.M.S. International Medical Services Co., Ltd.ë Director, S.R. Property Investment., Ltd.ë Director, Angkor Pisith Co., Ltd.ë Director, Seam Reap Land Investment Co., Ltd.ë Director, Phnom Penh Medical Services Co., Ltd.ë Director, Phnom Penh First Property Co., Ltd.ë Director, Asia International Healthcare Co., Ltd. ë Director, Global Medical Network Co., Ltd.ë Director, Royal Rattanak Medical International Co., Ltd.

ë 1.40

ë None

23

Yingdao Krairiksh, M.D.Director/Member of CEO committee Age 57 years

Education

Experience Other Position



Professor Santasiri Sornmani, M.D.Independent Director/Audit Committee Age 75 Years

Education

Experience

Other Position



Mr. Anuchat ChaiprapaIndependent Director/Audit Committee Age 75 years

Education

Experience

Other Position



ë Directors Accreditation Program Class 44, Thai Institute of Directors Association ë Stanford Executive Program Graduate School of Business, Stanford University ë Resident Training Program (Internal Medicine) Siriraj Hospitalë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

ë Hospital Director, Bangkok Hospital

ë Chairman of Executive committee, BNH Medical Centre Co., Ltd.ë Chairman of Executive committee, Bangkok Prapradaeng Hospital Co., Ltd.ë Chairman of Executive committee, Bangkok Hadyai Hospital Co., Ltd.ë Chairman of Executive committee, Bangkok Phuket Hospital Co., Ltd.ë Director, Bangkok Health Insurance Co., Ltd.

ë 0.22

ë None

ë Directors Accreditation Program Class 43, Thai Institute of Directors Association ë Ph.D. (Tropical Medicine), Liverpool Universityë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

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

ë Chairman, The Medic Pharma Co., Ltd.

ë 0.14

ë None

ë Directors Accreditation Program Class 14, Thai Institute of Directors Association ë Certified Public Accountant ë Certificate, National Defense Collegeë Bachelor of Accounting, Chulalongkorn University

ë Senior Executive General Manager, Thai Military Bank PLC.ë Director, Nava Finance & Securities PLCë Director, Paiboon Insurance Co., Ltd.ë Director, Small Business Credit Guarantee Corporation

ë Director, Syn Mun Kong Insurance PLC.ë Director, Bangkok Prapadaeng Hospital Co., Ltd.

ë 0.01

ë None

22

Kitipan Visudharom, M.D.Director/Member of CEO CommitteeHospital Director of Bangkok Heart Hospital Age 70 years

Education

Experience

Other Position



Krittavith Lertutsahakul M.D. Member of CEO Committee Age 51 years

Education

Experience

Other Position




ë Directors Accreditation Program Class 54, Thai Institute of Directors Association ë Diplomate American Board of Surgeryë Diplomate American Board of Thoracic Surgeryë Ph.D. (Surgery) University of Minnesota, Graduate School, Minneapolis,

Minnesota, USAë Residency Training, University of Minnesota, School of Medicine, USAë Internship, University of Kentucky Medical Center, USAë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University

ë Cardiac Surgeon, Minessotta Hospital, USAë Associate Professor, Department of Surgery, Uthsesa, USAë Cardiac Surgeon, Minneapolis Heart Institute - Abbott Northwestern Hospital,

Minnesota, USAë Chief Heart Surgeon, John Nasseff Heart Hospital, USAë President, Heart Association of Thailand

ë Head, Heart Institute Samitivej - Sukhumvitë Director of Thailand Cardiac Surgeon Associationë Director of Queen Sirikit Heart Center of the Northeast

ë 0.35

ë None

ë Director Certification Program Class 22, Thai Institute of Directors Associationë Dermatologist, Medical School, Chulalongkorn Universityë Medical Doctor, Faculty of Medicine, Chulalongkorn University

ë Hospital Director, Samitivej Hospitalë Hospital Director, BNH Hospital

ë Chairman of Executive committee, Bangkok Samui Hospital Co., Ltd. ë Chairman of Executive committee, Bangkok Pattaya Hospital Co., Ltd.ë Chairman of Executive committee, Bangkok Rayong Hospital Co., Ltd.ë Chairman of Executive committee, Wattanavej Co., Ltd.ë Chairman of Executive committee, Bangkok Trat Hospital Co.,Ltd.

ë 0.01

ë None

23

Thavatvong ThanasumitraDirector Age 61 years

Education

Experience Other Position



Chatree Duangnet, M.D.Director/Member of CEO Committee/CEO of Bangkok HospitalGroup Medical Center Age 64 years

Education

Experience

Other Position



ë Directors Certification Program Class 27th, Thai Institute of Directors Associationë Bachelor of Law, Thammasart University

ë Managing Director, Air Lanka Catering Service Co., Ltd.

ë Director, Bangkok Helicopter Services Co., Ltd.ë Managing Director, Thai Petroleum Service Co., Ltd.ë Director, Executive Vice President of Finance, Bangkok Airways Co., Ltd.

ë 0.23

ë None

ë Directors Accreditation Program Class 54, Thai Institute of Directors Association ë Certified of National Defense College ë Fellow, American College of Medical Qualityë Certified, American Board of Quality Assurance & Utilization Review Physiciansë Fellow, American Academy of Pediatricsë Certified, American Board of Pediatrics ë Medical Doctor, Chulalongkorn University

ë Group Chief Medical Officer, Bumrungrad Hospital, Bangkokë Chief Executive Administrator, Bangkok Hospital, ë Clinical Assistant Professor of Pediatrics, College of Medicine, Pennsylvania

State University, Pennsylvania, USAë Chairman of the Board, Jameson Physician Hospital Organization, New Castle,

Pennsylvania, USAë President, Lawrence Independent Physician Association, Lawrence County,

Pennsylvania, USAë Physician Executive, Jameson Health System, New Castle, Pennsylvania, USAë Training courses in QA/UR/RM. American Board of Quality Assurance & Utilization

Review Physicians, USA

ë Director, Bangkok Prapradaeng Hospital Co., Ltd. ë Director, Bangkok Ratchasima Hospital Co., Ltd.ë Director, B.D.M.S International Medical Services Co., Ltd.ë Director, Angkor Pisith Co., Ltd.ë Director, National Healthcare Systems Co., Ltd. ë Director, Bio Molecular Laboratory (Thailand) Co., Ltd.ë Director, Bangkok Health Insurance Co., Ltd.ë Director, Bangkok Helicopter Services Co., Ltd.ë Director, Asia International Healthcare Co., Ltd.ë Director, Phnom Penh Medical Services Co., Ltd.ë Director, Global Medical Network Co., Ltd.

ë 0

ë None

22

Associate Professor Ajjima Srethaputr Member of CEO Committee/Assistant to Chairman of CEO Committee Age 58 years

Education

Experience

Other Position



Mr. Chong Chin WahMember of CEO Committee/Chif Operating Officer Age 44 years

Education

Experience

Other Position




ë Bachelor of Business, Curtin University of Technology, Australiaë Tertiary Entrance Examination (A levels), Canning College, Australia

ë Chief Operation Officer and Chairman of CEO Committee/Samitivej PublicCompany Limited

ë Chairman of Executive Committee of Hospital Pantai Indah, Malaysia

ë President/Chairman of CEO Committee/Samitivej Public Company Limited ë Director and Member of Executive committee/Samitivej Siracha Co., Ltd.ë Director, First Health Food Co., Ltd.ë Director, Sodexho Support Services (Th) Co., Ltd.ë Director, Sodexho Healthcare Services (Th) Co., Ltd.ë Director, National Healthcare System Co., Ltd.ë Director, Bio Molecular Laboratory (Thailand) Co., Ltdë Director, Irving Seridian Se Co., Ltd.

ë 0

ë None

ë Stanford Executive Program, Stanford Graduate School of Business (U.S.A.)ë MBA, Lehigh University of Virginia, USAë Bachelor of Economics, University of West Virginia, USAë Bachelor of Business Administration Major Marketing (Honour),

Thammasat University

ë Assistant President and Vice President of Business Development of BangkokDusit Medical Services PLC.

ë Instructor, The Journal of Business Administration, Faculty of Commerce &Accountancy - Thammasat University

ë Managing director, Cool & Joy Co., Ltd. ë Director, The Medic Pharma Co., Ltdë Director, Asia International Healthcare Co., Ltd.ë Member of the Academy of Standard Committee, Dept. of Marketing &

General Management, Faculty of Business Administration, Thammasat University.ë Committee & Secretary, Vej Dusit Foundation under the Royal Patronage

of H.R.H Princess Galyani Vadhana Krom Luang Naradhiwas Rajanagarindraë Director, Institute for small and medium enterprise Development

ë 0

ë None

23

Somsiri Sakolsatayatorn, M.D.Member of CEO Committee Age 60 years

Education

Experience

Other Position



Somchai Chansawang, M.D.Member of CEO Committee Age 54 years

Education

Experience

Other Position



Pichit Kangwolkij M.D. Member of CEO Committee, Age 48 years

Education

Experience



ë Medical Doctor, Faculty of Medicine Siriraj Hospital, Mahidol University ë Diplomate Board of Pediatric, Medicine Siriraj Hospital, Mahidol University

ë Head of Pediatric, Samitivej Hospitalë Deputy of Hospital Director, Samitivej Hospital

ë Director/ Hospital Director, Samitivej Hospital

ë 0

ë None

ë Doctor of Medicine (First Class Honor), Prince of Songkla Universityë Diplomate Board of Surgery, (Siriraj Hospital, Medical Council of Thailand)ë Advanced Management Program (AMP167), Harvard Business Schoolë Minimally Invasive Surgery (Phoenix, Arizona)

ë Deputy of Hospital Director, Bangkok Heartë Managing Dirctor, Bangkok Hatyai Hospitalë Hospital Director, Bangkok Hatyai Hospital

ë Director, Bangkok Ratchasima Hospital Co., Ltd.ë Director, Bangkok Hatyai Hospital Co., Ltd.

ë 0.00

ë None

ë Certificate in Advanced Management, Harvard Business Schoolë Diplomate Board of Clinical Preventive Medicine (Thailand Medical Council)ë Doctor of Medicine, Mahidol University - Ramathibodi Faculty of Medicineë Managing Director, Wattanavej, Co., Ltd.

ë Managing Director, Bangkok Rayong Hospital Co., Ltd.ë Managing Director, Bangkok Trat Hospital Co., Ltd. ë Hospital Director, Bangkok Pattaya Hospital Co., Ltd.ë Hospital Director, Bangkok Hospitalë Hospital Director, BNH Hospital

ë 0.06

ë None

We choose Bangkok Hospital because it has the largest network

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

Connecting Network Care for your health and safety anywhere, anytime, whether it is at your home in the suburbs or your workplace in downtown Bangkok because we have the largest network with consistent medical services throughout the network, as well as efficient patient transport for the safety of all our clients.

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

I am so pleased that I can use the card at any of the hospitals in the network.

I work in Chonburi so I choose to go to Bangkok Pattaya Hospital

NETWORkstrategic

The emergency helicopter can pick us up instantly, I am resting in bed at the Bangkok International Hospital in minutes

16(as of 31st December 2007)

Global Medical Network Co., Ltd.

Asia International HealthcareCo., Ltd. (AIH)

Phnom Penh MedicalServices Co., Ltd.

B.D.M.S. InternationalMedical Services Co., Ltd.

Bangkok Samui Hospital Co., Ltd.

New Petchaburi MedicalServices Co., Ltd.

Bangkok Rayong Hospital Co., Ltd.

Bangkok Insurance Co., Ltd.

Bangkok Trad Hospital Co., Ltd.

Wattanavej Co., Ltd.

Bangkok Phuket Hospital Co., Ltd.

Bangkok Hadyai Hospital Co., Ltd.

Bangkok Pattaya Hospital Co., Ltd.

Bio Molecular Laboratories(Thailand) Co., Ltd.

Samitivej Public Company Limited

Irving Sheridan SE Co., Ltd.

First Health Food Co., Ltd.

17 July 2003

17 July 2003

27 November2006

20 December2005

14 August2003

20 December2002

13 August2002

2 January1971

25 January1994

28 October1983

15 March1994

27 July 1995

1 May 1989

7 November2001

28 December1976

14 November2002

26 March2004

100/25 Moo 6 Sukhapiban 1 Rd.Buengkum, Bangkok

2 Soi Soonvijai 7 New Phetchburi Rd.Huay Kwang, Bangkok

61A Street 214, Sangkat BeongRang, Phnom Penh, Cambodia


57 Moo 3, Koh Samui,Suratthani


8 Moo 2 . Soi saengchanneramitAmphur Muang, Rayong


276 Sukhumvit Rd.Amphur Muang,Trad

25/14 Thaluang Rd. Amphur Muang, Chantaburi

2/1 Hongyok-uthit Rd.,Amphur Muang, Phuket

75 Soi 15 Petchakasem Rd.,Amphur Hadyai, Songkla

301 Sukhumvit KM 143,Pattaya, Chonburi


133 Sukhumvit 49 Klongtan, Wattana, Bangkok

488 Srinakarin Rd.Suan Luang, Bangkok

488 Srinakarin Rd.Suan Luang, Bangkok

100.0

100.0

100.0

100.0

100.0

100.0

100.0

99.9

99.7

99.5

99.5

98.5

97.1

95.0

92.9

95.0

100.0

9,999,994

3,499,994

10,000

1,000

14,999,993

9,993

39,999,993

10,494,000

49,854,748

17,904,000

99,467,500

98,533,300

27,176,144

949,993

92,919,772

9,500

1,399,988

NameDate of

Registration Location Type of BusinessNumber ofissued and

paid-up shares

Number ofshares held by the Company

%Shareholding

10,000,000(par Baht 10per share)


10,000 (par KHR4,039,550per share)

1,000 (par KHR9,200,000per share)


10,000(par Baht 100

per share)





100,000,000 (par Baht 5per share)



100,000(par Baht 10per share)




Holding Company

Private hospital

Dormant Company

Private hospital

Health Insurance

Private hospital

Private hospital

Private hospital

Private hospital

Private hospital

Bio molecularlaboratory

(Held bySamitivej Plc.)



Juristic Persons in which the Companyholds 10% or more of the shares outstanding

Private hospital inHua Hin (not yetopened for business)

Private hospital inCambodia (not yetopened for business)

Private hospital inCambodia

Restaurant andhealth food

Private hospitals(Samitivej Sukhumvitand Samitivej Srinakarin)

Manage and operateassets related tomedical services

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

150,000(Par Baht 100

per share)

30,000,000(Par Baht 10per share)

NameDate of

Registration Location Type of BusinessNumber ofissued and

paid-up shares

Number ofshares held by the Company

%Shareholding

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

BNH Medical Center Co., Ltd.

Bangkok Ratchsima Hospital Co., Ltd.

Angkor Pisith Co., Ltd.

Bangkok Prapradaeng HospitalCo., Ltd. National Healthcare SystemsCo., Ltd. Royal Rattanak Medical ServicesCompany Limited

Samitivej Sriracha Co., Ltd.

Medical Pharma Co., Ltd.

Bangkok Helicopter ServicesCo., Ltd.

S.R.Property InvestmentCo., Ltd.

Siem Reap Land InvestmentCo., Ltd.

Phnom Penh First PropertyCo., Ltd.

Cool & Joy Co., Ltd.

Ramkhamhaeng Hospital PublicCompany Limited ***

Prasit Pattana Public CompanyLimited ***

Udon Pattana Co., Ltd. ***

12 November2005

27 August1991

24 November1992

20 December2005

7 September1992

25 July 2001

June 2007

9 April 2001

26 August1971

29 June 1995

20 December2005

10 February2006

27 November

2006

20 May 2003

June 2007

25 August1986

24 January1974

9 June 1994

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

1308/9 Mitrapap Rd.,Amphur Muang, Nakornratchasima


288 Suksawat Rd., Amphur Muang, Samutrprakarn

2 Soi Soonvijai 7 New Phetchburi Rd.,Huay Kwang, Bangkok

Phnom Penh Cambodia

124 Thonburi-Paktor Rd.,Bangkok

1111 Ploenchit Rd., Lumpini,Patumwan, Bangkok

571 Road No.6, Phum Salakanseng, Siem Reap, Cambodia



2 Soi Soonvijai 7 New Phetchburi Rd.,Huay Kwang, Bangkok

Abu Dhabi, United Arab Emirates

2138 Ramkhamhaeng Rd.,Bangkapi, Bangkok

943 Paholyothin Rd., Samsen nai,Phayathai, Bangkok

555/5 Phosri Rd., Amphur Muang,Udonthani

74.0

88.3

84.7

80.0

79.0

99.96

70.0

65.9

49.0

49.0

49.0

49.0

49.0

30.0

30.0

26.2

16.3

10.0

Provide services or attainservices to support or addvalue to clientsû businesses

Private hospital

Private hospital

Private hospitalIn Cambodia

Private hospital

Medical laboratory

Private hospitalIn Cambodia

Private hospital

Pharmaceuticalmanufacturing and sales

Provide patients with airtransportation

Land Holding Company



Public relations andmarketing support

Private hospitalin UAE

Private hospital

Invest in shares of PhyathaiHospital 1, 2 and 3

Private hospital

110,994

51,762,673

25,401,518

8,000

8,295,000

5,551,793

4,550

12,366,050

1,050,000

4,899,996

490

490

490

1,500,000

3,000

3,141,700

282,548,048

3,000,000


10,000 (ParUSD 1,000per share)


18,751,000(Par Baht 10per share)2,143,000

(Par Baht 10per share)

6,500 (ParUSD 1,000per share)

10,500,000(Par Baht 10per share)7,500,000


1,000 (ParKHR 20,000per share)


10,000 (ParAED 1,000per share)

1,000 (ParKHR 20,000per share)1,000 (Par

KHR 20,000per share)5,000,000



1,732,047,520(Par Baht 1per share)



(Held by AIH)Royal Bangkok Hospital L.L.C,Abu Dhabi (formerly AL GhaithBangkok Medical Center L.L.C.)

23/93 Sorachai Building,22nd Floor, Sukhumvit 63,Sukhumvit Rd., Bangkok

8 Soi Laemket, Jermjormpol Rd.,Sriracha, Chonburi

Juristic Persons inwhich the Company holds 10%

18

AIHAngkor PisithBangkok HelicoptersBCHBDMS InterBHHBHIBIOBKHBNHBPDBPHBPKBRHBSHBTHCool & JoyIrving

Asia International Healthcare Co., Ltd.Angkor Pisith Co., Ltd.Bangkok Helicopter Services Co., Ltd. Wattanavej Co., Ltd.BDMS International Medical Services Co., Ltd.Bangkok Hadyai Hospital Co., Ltd.Bangkok Insurance Co., Ltd.Bio Molecular Laboratories (Thailand) Co., Ltd.Bangkok Ratchsima Hospital Co., Ltd. BNH Medical Center Co., Ltd. Bangkok Prapradaeng Hospital Co., Ltd. Bangkok Pattaya Hospital Co., Ltd.Bangkok Phuket Hospital Co., Ltd.Bangkok Rayong Hospital Co., Ltd.Bangkok Samui Hospital Co., Ltd.Bangkok Trad Hospital Co., Ltd. Cool & Joy Co., Ltd. Irving Sheridan SE Co., Ltd.

First HealthGlobal MedicalMPNHSNPMSPPFPPPMSPYTRAMRoyal BKKRoyal RattanakS.R. Property Seam Reap InvestmentSodexho

SSHSVHUdon Pattana

First Health Food Co., Ltd. Global Medical Network Co., Ltd. Medical Pharma Co., Ltd. National Healthcare Systems Co., Ltd. New Petchaburi Medical Services Co., Ltd. Phnom Penh First Property Co., Ltd.Phnom Penh Medical Services Public Co., LtdPrasit Pattana Public Company LimitedRamkhamhaeng Hospital Public Company LimitedRoyal Bangkok Hospital L.L.C, Abu Dhabi Royal Rattanak Medical Services Company Limited S.R. Property Co., Ltd.Seam Reap Investment Co., Ltd.Sodexo Healthcare Support Service(Thailand) Co., Ltd.Samitivej Sriracha Co., Ltd.Samitivej Public Company LimitedUdon Pattana Co., Ltd.

™◊ËÕ∫√‘…—∑ ™◊ËÕ∫√‘…—∑

Summary of Shareholding Proportion by the Company (as of the 31st of December 2007)

20%-49% less than 20%50%-89%90% up

SVH92.9%

SSH65.9%

Irving65.9%

BPK99.5%

BHH98.5%

BSH100%

BIO95.0%

BHI100%

AIH100%

BDMSInternational

100%

GlobalMedical

100%

99.6%BTH

99.5%BCH

97.1%BPH

100%BRH

99.9%NPMS

100%PPMS

30.0%Royal BKK Hospital

BNH88.3%

NHS99.9%

BPD79.0%

BKH84.7%

AngkorPisith80.0%

RoyalRattanak

70.0%

COOL &JOY30.0%

MP49.0%

49.0%

PPFP49.0%

UdonPattana10.0%

PYT16.3%

RAM26.1%

BangkokHelicopter

49.0%

Seam ReapInvestment

49.0%

S.R.Property

First Health95.0%

Sodexho74.0%

Financial Overview

19

(Unit : Million Baht)

18,885

18,423

10,237

8,187

3,991

1,244

1.04

1,195,856,184

26,232

14,522

596

11,114

11,710

0.60

0.56

26.42

7.57

30.48

1.24

5.80

18.05%

-5.94%

44.44%

6.75%

11.19%

5.21%

4.74%

0.70

6,304

5,484

2,975

2,509

1,187

1,124

0.95

1,176,883,665

15,955

7,864

8,091

8,091

0.93

0.89

31.71

6.92

31.91

0.97

4.11

29.26%

35.07%

45.75%

20.49%

13.89%

36.78%

7.04%

0.34

6,967

6,321

3,427

2,894

1,239

627

0.52

1,195,856,184

16,433

7,471

8,961

8,961

0.46

0.44

33.18

6.35

34.53

0.83

3.09

15.26%

-44.21%

45.78%

9.92%

7.00%

3.00%

3.82%

0.38

4,696

4,243

2,365

1,878

955

832

0.72

1,163,410,108

11,664

3,775

0

7,890

7,890

0.38

0.33

17.36

8.55

38.07

0.48

10.34

15.33%

33.53%

44.26%

19.61%

10.54%

15.02%

7.13%

0.36

10,724

10,254

5,935

4,319

1,865

832

0.72

1,163,410,108

17,677

9,260

528

7,890

8,418

0.51

0.45

17.62

8.38

34.02

1.1

8.18

94.40%

33.53%

42.12%

8.10%

10.54%

21.10%

4.71%

0.58

15,981

15,607

8,673

6,934

3,361

1,323

1.12

1,176,883,665

24,934

14,949

507

9,477

9,984

0.73

0.68

24.85

8.47

33.38

1.50

6.16

52.20%

58.98%

44.43%

8.48%

13.96%

41.05%

5.30%

0.63

Revenue from Operations

Total Revenue

Revenue from Medical Services

Cost of Medical Services

Gross Profit

Profit before interest and depreciation

Net Profit

Profit per share (Baht)

Weighted Average Number of Shares

Financial Status

Total Assets

Total Liabilities

Minority shareholders

Major shareholders

Total Shareholders Equity

Financial Ratios

Liquidity Ratio (times)

Quick Ratio (times)

Average Collection (Period)

Inventory Turnover (days)

Payment Period (days)

Debt to Equity (times)

Interest Coverage Ratio (times)

Revenue from Medical Services Growth

Net Profit Growth

Gross Profit Margin

Net Profit Margin

Return on Equity

Asset Growth

Return on Assets

Asset Turnover (times)

20062007 2005

Consolidated financial Statements

20062007

Company Only

2005

qualityguaranteed

ë 2007 JCI (Joint Commission International)

ë 2007"Forbes Asia" Best Under a Billion

ë 2007The Asian Hospital Management Awards

ë 2006The Asian Hospital Mana

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

ë 2007 JCI (Joint Commission International)

agement Awardsë 2006 Prime Minister's Export Award

ë 2007 Telemedicine for the Mobile Society

Nature of Business

22

1. BackgroundBangkok Dusit Medical Services Public Company Limited was established on 30th October 1969 under the name çBangkok Dusit Medical Services Company Limitedé with initial registered capital of Baht 10 million. On 26th February 1972, Bangkok Hospital commenced operations in providing medical services. Through business expansion, the Company was listed on the Stock Exchange of Thailand on 2nd October 1991 and registered its conversion to public company limited in 1994. Presently, the Company has a registered capital of Baht 1,312.26 million, with paid-up capital of Baht 1,214.13 million.

Significant events in the past five years 2003

The Company invested in a new subsidiary, initially holding 81 percent of the total shares of Bangkok Rayong Hospital Co., Ltd., enabling the Company with hospitals in all provinces in the Eastern region, namely, Chonburi, Rayong, Chantaburi and Trad. Currently, the Company holds 100 percent of the shares of the subsidiary.

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

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

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

36.8 percent, 67.8 percent and 51.2 percent to 92.9 percent, 98.5 percent and 99.5 percent, respectively.

2005The Company invested in additional shares of BNH Medical Center Co., Ltd. from the existing shareholders, increasing holdings from 48.5 percent to 61.5 percent in April 2005. Currently, the Company holds 88.3 percent of the subsidiary.

On Friday, 26th August 2005, Her Majesty Queen Sirikit graciously presided over the official opening ceremony of the Bangkok Heart Hospital.

The Company unofficially opened the Wattanosoth Hospital for patients suffering from cancer at the end

of 2005.

23

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

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

in Abu Dhabi, United Arab Emirates

2007 The Company invested in a new subsidiary with 100 percent shareholding, Global Medical Network Co., Ltd., to operate a private hospital in Amphur Hua Hin, Prachuabkirikhan Province, which is expected to open for business in 2009.

In January 2007, the Royal Angkor International Hospital, a 50-bed hospital in Siem Riap, Cambodia under management of Angkor Pisith Co., Ltd., in which the Company holds 80 percent, opened for business. The official opening ceremony was held on 19th November 2007.

On 1st September 2007, Royal Rattanak Hospital, a 28-bed hospital in Phnom Penh, Cambodia, under management of Royal Rattanak Medical Services Co., Ltd., in which the Company holds 70 percent, opened for business.

The Company invested in additional shares of Ramkamhaeng Hospital Plc., increasing shareholding from 19 percent to 26.18 percent. The Extraordinary Shareholders Meeting 1/2550 held on 26th December

2007, passed a resolution for the Company to make

2006The Company made a bid to purchase shares of Bangkok Pattaya Hospital Co., Ltd., Bangkok Rayong Hospital Co., Ltd., Wattanavej Co., Ltd. (Bangkok Chantaburi Hospital) and Bangkok Trad Hospital Co., Ltd. This increased the Companyûs holdings in the four companies from 49.0 percent, 81.1 percent, 62.0 percent and 63.4 percent to 97.1 percent, 100.0 percent, 99.5 percent and 99.6 percent of paid-up capital, respectively.

In February 2006, the Company opened the Bangkok International Hospital to provide multi-lingual (26 languages) One Stop Service for international patients both out-patients and in-patients.

The Company invested in 79.7 percent of Bangkok Ratchasima Hospital Co., Ltd., a 300-bed private

hospital in Amphur Muang, Nakornratchasima Province.

24

an offer for the remaining shares of Ramkamhaeng Hospital

Plc. at Baht 480 per share from 4th January- 7th February

2008.

Significant Events in 2007ë Bangkok Hospital Medical Center in conjunction

with the Bangkok Health Department organized a CSR project entitled çAssembling Healthy City Dwellersé at the Bhirombhakdi Pavilion, Lumpini Park on the first Sunday of every month from 6.00- 9.00 am. There are 3 zones within the event. In the first zone, nurses provide physical check-up, take blood pressure and blood samples, and provide basic medical advice. In the second zone, specialist physicians provide knowledge about various illnesses. The third zone, offers games to test efficiency of various bodily functions. This project was instigated in June 2007 and has been well received by people who exercise in Lumpini Park.

ë On 9th October 2007 at 3.00 pm, His ExcellencyPalakorn Suwanrath, Privy Councilor, presided over the grand opening of the Vascular Center, Bangkok Heart Hospital, and was welcomed by Chatree Duangnet, M.D., Chairman of the Executive Group and Kitipan Visudharom, M.D., Hospital Director of the Bangkok Heart Hospital.

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

25

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

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

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

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

26

Awardsë His Majesty King Bhumipol Adulyadej graciously

bestowed the Royal Garuda Emblem upon the Company.

The Royal Garuda Emblem is equivalent to a certificate

of assurance that the Company operates its business

with honesty and integrity, is financially stable, and it

trustworthy in its dealings with the general public. It

also provides moral support to entrepreneurs and further

enhances the prosperity and stability of business

throughout the country.

ë In 2007, Bangkok Hospital Medical Center (Bangkok

Hospital, Bangkok Heart Hospital, Wattanosoth Hospital

and Bangkok International Hospital) and Samitivej, a

network hospital (Samitivej Sukhumvit Hospital, and

Samitivej Srinakarin Hospital) received accreditation

from the Joint Commission International Accreditation

(JCI), which validates the readiness and capability in

providing medical service to both Thais and foreigners

equal to internationally accepted hospitals.

ë The Asian Hospital Management Award in 2002,

2006 and 2007.

ë On Forbes çBest Under a Billioné, a list of two

hundred best companies in Asia Pacific with revenue

of no more than US$ 1 billion, for three consecutive

years from 2005 through 2007.

çBest Under a Billioné by Forbes Asia is based on

growth rate and continuing revenue, as well as the

management team and efficient business operations,

which generate increasing revenue both domestically

and internationally.

27

ë çFastest Growing Companyé from Forbes Asia in

Singapore on 28th November 2007.

ë On S&P Global Challengers Index-Class of 2006,

one of three hundred mid cap companies that S&P

selected for high growth rate and potential to become

a blue chip company in the near future.

ë çBest Thailand Deal of the Year 2006é from Finance

Asia and çCountry Deals of 2006é from Asia Money for

the Companyûs convertible bond.

ë Prime Ministerûs Export Award from Department of

Export Promotion, Ministry of Commerce in 2001 and

2006.

ë ISO 14001 Certification for environmental management,

Mor Or Gor. 18001/ OHSAS18001 certification for

occupational hygiene and safety management from

Japan Audit and Certification Organization (JACO) in

2004.

ë ISO 14001 Certification for environmental manage-

ment, Mor Or Gor. 18001/ OHSAS18001 certification

for occupational hygiene and safety management from

the Industrial Standard Organization (ISO) in 2003.

ë Superbrands Thailand Award in 2003, the Company

is one of the two hospitals in Thailand that is recognized

by consumers for good reputation and impressive

medical services.

3. Business Operations1. Private hospital operations under çBangkok Hospital

Medical Center : BMCé comprised of çBangkok Hospitalé,

çBangkok Heart Hospitalé, çWattanosoth Hospitalé and

çBangkok International Hospitalé.

2. Investments in private hospitals and related businesses

through various subsidiaries as follows:

28

Investments in Medical Services

(Held by Samitivej Plc.,a subsidiary)

Area of Service EntityShareholdingPercentage

Number ofBeds

1. Inner Bangkok, covering

Sukhumvit, Asoke, Silom

and Sathorn

2. Outer Bangkok and

Samutprakarn

3. Eastern region, covering

Chonburi, Rayong,

Chantaburi and Trad

4. Northeastern Region,

covering Nakornratchasima

and Udornthani

Samitivej Plc. : Samitivej Sukhumvit Hospital

BNH Medical Center Co., Ltd. : BNH Hospital

Samitivej Plc. : Samitivej Srinakarin Hospital

Bangkok Prapradaeng Hospital Co., Ltd.

Ramkhamhaeng Hospital Plc. (We are not

involved in management of the hospital.)

Prasit Pattana Plc. : Phyathai 1 Hospital,

Phyathai 2 Hospital and Phyathai 3 Hospital

(We are not involved in management of the hospital.)



Wattanavej Co., Ltd. : Bangkok Chantaburi Hospital

Bangkok Trad Hosptial Co., Ltd.

Samitivej Sriracha Co., Ltd. :

Samitivej Sriracha Hosptial

Bangkok Ratchasima Co., Ltd. (Formerly

Ratchasima Hopsital Thonburi Co., Ltd.)

Udorn Pattana Co., Ltd. : Eak Udorn Hospital

(We are not involved in management of the hospital.)

275

225

400

150

300

790

200

200

200

150

180

300

350

92.90

88.30

92.90

79.00

26.18

16.31

97.10

100.00

99.50

99.60

65.90

84.67

10.00

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

29

Investment in Related Businesses

Area of Service Entity ShareholdingPercentage

Number ofBeds

5. Southern Region, covering

Prachuabkirikan, Suratthani,

Phuket and Songkla

6. Overseas (United Arab

Emirates and Cambodia)

170

200

50

100

50

100

28

30

99.50

98.50

100.00

100.00

80.00

100.00

70.00

30.00(Held by AIH,a subsidiary)

14.

15.

16.

17.

18.

19.

20.

21.


Bangkok Hadyai Hosptial Co., Ltd.

Bangkok Samui Hosptial Co., Ltd.

Global Medical Network Co., Ltd. (To operate

private hospital in Hua Hin, not yet opened)

Angkor Pisith Co., Ltd. :

Royal Angkor International Hospital

Phnom Penh Medical Services Co., Ltd.

(Not yet opened)

Royal Rattanak Medical Services Co., Ltd. :

Royal Rattanak Hospital

Royal Bangkok Hospital L.L.C, Abu Dhabi

(Formerly AL Ghaith Bangkok Medical Center L.L.C.)

Medical Pharma Co., Ltd.

National Healthcare Systems Co., Ltd.

Bio Molecular Laboratories

(Thailand) Co., Ltd.


Bangkok Helicopter Services Co., Ltd.

S.R. property Investment Co., Ltd.

Seam Reap Land Investment Co., Ltd.

Phnom Penh First Property Co., Ltd.

Asia International Healthcare Co., Ltd. (AIH)

1. Manufacture and distribution of medicine

2. Medical Laboratories

3. Bio Molecular Laboratories

4. Public Relations and Marketing Support

for associated hospitals

5. Air Medical Evacuation

6. Real Estate (land) lease for

hospital operations in Cambodia

7. Overseas investments (Holding Company)

49.00

74.00

95.00

30.00

49.00

49.00

49.00

49.00

100.00

Type of Businesss Entity ShareholdingPercentage

30

Revenue Structure of the Company and Subsidiaries

Comparison of revenue structure of the Company and subsidiaries in 2005-2007 as follows:

Type ofRevenue Entity %

Shareholding2007

Revenue Revenue Revenue%2006

%2005

%

(Unit : Miillion Baht)

Bangkok Dusit Medical Services Plc.

Samitivej Plc.





Bangkok Hadyai Hospital Co., Ltd.


Bangkok Ratchasima Hospital Co., Ltd.



Bangkok Prapradaeng Hospital Co., Ltd.

Angkor Pisith Co., Ltd

Royal Rattanak Medical Services Co., Ltd

Total




Total

100.00

92.92

97.06

99.47

88.31

100.00

98.53

99.47

84.67

100.00

99.71

79.00

80.00

70.00

95.00

74.02

6,304.1

4,632.3

1,957.2

1,336.8

1,307.2

729.8

592.1

481.4

417.6

258.2

198.0

126.9

53.6

3.0

18,398.2

19.3

6.0

25.3

18,423.5

34.2

25.1

10.6

7.3

7.1

4.0

3.2

2.6

2.3

1.4

1.1

0.7

0.3

0.0

99.9

0.1

0.0

0.1

100.0

5,379.4

3,664.0

1,697.2

1,047.0

1,126.5

625.5

555.1

466.7

292.8

214.0

167.7

131.7

15,367.6

35.5

203.8

239.3

15,606.9

34.5

23.3

10.9

6.7

7.2

4.0

3.6

3.0

1.9

1.4

1.1

0.8

98.5

0.2

1.3

1.5

100.0

4,238.2

2,776.6

787.5

720.6

474.9

540.6

209.8

159.8

144.2

134.8

10,187.0

24.1

42.7

66.8

10,253.8

41.3

27.1

7.7

7.0

4.6

5.3

2.0

1.6

1.4

1.3

99.4

0.2

0.4

0.6

100.0

Revenue fromlaboratory fees

Medical servicefees

Total Revenue from Operations

31

Each accreditation is awarded for three years. Organizations requesting accreditation must exhibit perseverance, determination, actual practice, as well as results of quality patient care, safety and continuous quality improvements. The JCI standardis comprised of 340 main clauses and 1031 sub-clauses for performance evaluation.

This year, the two standards aforementioned are the main goals of the organization. The Company has analyzed the main factors that must be evaluated in improving quality with the goal of meeting the highest standards in medical services, with emphasis on patient safety. Furthermore, improvements in quality must be continuous. The main factors are as follows:

1. Emphasis on patient safety, especially in providing medical services.

2. Emphasis on environmental safety, which affect the safety of patients and employees.

3. Improvement of quality of service to patients,including patient care, work procedures, improving quality of service, as well as innovations in provid-ing services and work procedures that significantly affect patient care.

4. Using indicators as information in continuousimprovement of quality.

1. ResearchThe Company has continuously organized academic

seminars for physicians in Bangkok Hospital andoutside physicians from various institutions to expandphysiciansû capabilities in all medical fields. Bangkok Hospital has been certified by the Medical Practitioners Council as the primary institution in Continuous Medical Education, where physicians, nurses and medical professionals who attend Bangkok Hospital academic seminars will receive credit for renewal of medical professional practice license.

In 2007, Wattanosoth Hospital signed a Memoran-dum of Understanding with the Barbara Ann Karmanos Cancer Institute, an American institution specializing in cancer, with the objective of exchangingmedical knowledge and experience.

2. DevelopmentThe Company adopted the Performance Manage-

ment System in order to drive the organization in all four aspects of the balance scorecard to achieve tangible results and to assign accountability to all employees in achieving the goals set by the Company.

In addition to the Institute of Hospital QualityImprovement and Accreditation, a widely recognized organization in accreditation of hospital standards, the Company aims to receive certification from the Joint Commission International Accreditation (JCI), a unit of the Joint Commission on Accreditation of Healthcare Organization (JCAHO), which is an accreditation organization of hospitals in the United States. JCI, established in 1998 with the goal to improve patient care around the world, awards accreditation to hospitals outside the United States.

Research & Development

32

5. In order to ensure that the above are practicedthroughout the organization in all related units, as well as to ensure control and efficient evaluation of the quality of patient care using the indicators to the utmost benefit, the organization established the structure in improving quality and patient safety and appointed the following committees to supervise:

1. Board of Directors (BOD)2. Joint Executive Committee (JEXCO)3. Center Executive Committee (CEC)4. Medical Executive Committee (MEC)5. Hospital Executive Committees (HECs)6. Quality Management Committee (QMC)7. Patient Safety Committee (PSC)8. Environmental Care Committee (ECC)

Quality and Safety Design 1. The organization designs and adapts new

systems or processes in order to improve quality by

using standardized principles and tools. 2. The organization sets goals in designing or

adapting new processes and clearly defines indicators which can evaluate the processes.

Risk management strategies within the organizationcan be achieved by doing the right thing and reducing risks of dangers which may occur in the caring of patients for the greater benefit of the patients.

The hospital defines the main factors in patientsafety as follows:

ë Available ë Timely ë Effective ë Continuity ë Safetyë Efficiency ë Respect & Caring

33

2. Good Practice for Patient Safety and SafetyCulture : HA National Forum 2008: 5 Projects chosen to present

ë Clean care is safer careë Patient Identification ë Isolation/Precautionë Medication Management Systemë Fall Prevention Project

In the past three years, the Company has contri-buted the following amounts to research & development:

2005 Baht 36.0 million2006 Baht 48.3 million2007 Baht 32.61 million9-month period

Critical Success Factors of Patient Safety Measures1. Leadership Support : support from executive

management, a definite goal in supporting quality of service and patient care

2. Strategic Plan : encompass improvement ofquality and patient safety in the organizationûs strategies and an important driver force

3. Budget : adequate allocation of budget, clearlydefine boundaries and goals

4. Empowerment : support and assign a fullyauthorized team as the driving force with approval and support from executive management

Results:ë Bangkok Hospital Medical Center accredited by

the Joint Commission International in July 2007ë Awards from quality development activities:1. Hospital Management of Asia 2007: second

place in Patient Safety category from Prevention of Catheter Related Blood Stream Infection Project

Future Projects

34

The Company has five current or future investment projects as follows:

1. 50-bed private hospital in Phnom Penh, Cambodia,to be operated by Royal Rattanak Company, which is a subsidiary registered in Cambodia. Construction is nearly completed and the hospital is scheduled to open in March 2008.

2. 50-bed private hospital in Abu Dhabi, UnitedArab Emirates, to be operated by Al Ghaith Bangkok Medical Center LLC, Abu Dhabi, a joint venture between Asia International Healthcare Co., Ltd., a wholly owned subsidiary and Al Ghaith Holding PJSC, a local investor in United Arab Emirates, with ownership of 30:70. The project is currently under construction and is scheduled to open within 2008.

3. 100-bed private hospital in Phnom Penh, Cambodia, to be operated by Phnom Penh Medical Services Co., Ltd., which is a subsidiary registered in Cambodia. Construction is underway and expectedto be completed in 2009

4. 50-bed private hospital in Hua Hin, Prachuab-keereekhan Province, to be operated by Global Medical Network Co., Ltd. The Company has already purchased the land and construction is scheduled to begin in 2008 and is expected to be completed in 2010.

5. Bangkok Brain Hospital to begin constructionin 2009.

Expected Benefits1. To expand specialized medical services and

accommodate the increasing number of patients. 2. To expand customer base and become the

center for patients from Southeast Asia and the Middle East.

Projects which the Company has invested in since 2005-2006 may be summarized as follows:

1. Bangkok Dental and Maxilofacial Center: Baht250 million project located at the entrance of Soi Soonvijai on New Phetchburi Road. Construction began late 2005 and opened for business in late 2006.

2. Private hospital in Seam Riap, Cambodia: operatedby Angkor Pisith Co., Ltd., a subsidiary registeredin Cambodia. Construction was completed in late 2006 and began operations in January 2007 under the name Royal Angkor International Hospital: RAIH.

35

Industry and Competition

IndustryThe need for medical services has increased in Thailand as can be seen from the increasing expensesfor medical care. This is because the Government has instated the çBaht 30 Care for Every Disease Programé and the rise in medical tourism, which has become popular among tourist groups. Thai hospitals offer various medical services to cater to both Thai and foreign patients.

Trend in Increasing Number of Thai PatientsIn 2001, the Thai Government began the çBaht 30 Care for Every Disease Programé, which greatly increased the number of Thai patients visiting public hospitals. This caused the shortage of personnel and financial trouble in public hospitals as they could not charge actual medical fees.

Consequently, public hospitals could not invest and improve medical services and technology, which led to the migration of medical professionals to private hospitals, which offered better benefits. The middle class who were not satisfied with the length of time of medical services and the quality of service at public hospitals, switched to private hospitals more and more. Private hospitals were able to retain greater liquidity as they could collectmedical fees as incurred. The increased revenue of private hospitals is the main reason that they have been able to improve the quality of service, the medical facilities and medical equipment. Visits to private hospitals increased from 26.1 percent in 2005 to 28.6 percent in 2006.

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002

7.2%

24.0%

29.4%

39.4%

2003

40.2%

24.9%

29.8%

5.1%

2004

35.4%

27.0%

32.0%

5.6%

2005

38.0%

26.1%

32.0%

3.9%

2006

32.0%

28.6%

34.5%

4.9%

0%

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

36

Furthermore, the amount Thais spend on medical services is expected to increase due to changes in demographics. It is expected that people will live longer. In 2006, the number of people over 60 years old was equal to 11 percent and it is expected that the number will increase to 14 percent in 2015 and 17 percent in 2020. In 2006, the Thai male

population had a life expectancy of 69.9 years and the Thai female population had a life expectancy of 77.6 years. It is forecasted that the Thai male population will have a life expectancy of 71.3 years in 2015 and 74.8 years in 2025, and the Thai female population will have a life expectancy of 77.5 years in 2015 and 80.3 years in 2025.

60

70

80

90

1965 1976 1986 1996 2006 2007 2015 2020 202550

Source : Ministry of Public Health

9% 11%

less than 15 years 15-29 years 30-45 years 46-59 years 60 years upSource : National Economic and

Social Development Board

2000

14%

25%

25%

26%

2006

18%

25%

24%

23%

2015

14%

21%

23%

22%

20%

2520

17%

21%

22%

21%

19%

58.0

63.8

69.3 69.9 69.671.3

73.1 74.8

62.063.8

68.9

74.977.6 76.2 77.5

78.980.3

59.5

Thai male population Thai female population

Life expectancy (year)

37

Outlook for Increase in Foreign Patients in Thailand Foreign patients in Thailand are expected to increase as in 2004, the Government announced the policy to develop Thailand as the medical service hub of Asia by 2010. The Government developed a strategy to promote Thai medical services abroad and to improve management, services and medical care by specifying Bangkok, Chiangmai, Phuket and Samui as the provinces that would accommodate

foreign patients. Promotion and marketing overseas has increased the number of foreign patients in private hospitals. Furthermore, other important factors that have attracted foreign patients to Thailandare the reputation for high quality of service, state of the art medical technology meeting international standards and cheaper medical fees.

200

400

600

800

1,000

1,200

1,400

1,600

2002

209 360572 482

99159

1,400

216

303

71137

198

127

3599166

315

4972

220

2003 2004 2005 20060

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

(thousand)

38

1. Economic Risks

Private hospital business is one which may be

affected by economic fluctuations. At times of

economic recession when people earn less, they

tend to cut down on health expenses and opt for

cheaper medical services of public hospitals and

other cheaper private hospitals. However, a portion

of the Companyûs revenue, approximately 36

percent, is from foreign patients and is not as

affected by economic recession.

On the contrary, when the economy is doing well,

people earn more and will shift from public hospitals

to private hospitals as the quality of service is better.

As the Company is a large organization with stable

financial status, a strong team of medical professionals

and continuous investment in state of the art medical

equipment, our clients have confidence and trust in

the service of hospitals in the Bangkok Hospital

group. Furthermore, the majority of our clients are

of the premium class and are not as affected by

economic recession. Therefore, even in times of

economic slowdown, we still have many clients that

use our services regularly. More importantly, the

fact that our experienced executives have shown

their capability in leading the Company through

several economic crises is clear evidence that the

impact of economic fluctuations can be mitigated.

2. Operational Risks

Operational risks such as clientsû confidence, main-

taining quality of service and management of risks

from medical care.

Reputation and confidence are key decision factors

for patients. The Company has over 30 years ex-

perience as well as çBangkok Hospitalé, çBangkok

Heart Hospitalé, çWattanosoth Hospitalé, çBangkok

International Hospitalé, çSamitivej Sukhumvit Hospitalé

and çSamitivej Srinakarin Hospitalé having received

accreditation from the Joint Commission International,

which is an international accreditation awarded for

medical care services and organization management.

Furthermore, with 18 hospitals in the Group covering

various regions including Bangkok, provincial and

overseas, under the names Bangkok Hospital,

Samitivej Hospital, BNH Hospital and Royal Angkor

International Hospital, such risks are greatly diversified.

Risks Factors

39

3. Legal Risks

As the public are becoming better informed about

patientsû rights, we are at a greater risk of being

sued as a result of our provision of medical services.

This is especially true since we have a growing

number of foreign clients. To this end, we have focused

on relevant matters such as patient education, managing

clientsû expectations, handling and resolving complaints,

quality improvement and achieving international

service.

4. Risk from Dependence on Foreign Clients

Domestic political changes, possible alterations of

economic policies from political changes, unrest in

the 3 southern provinces as well as SARS and avian

flu epidemic can potentially affect the number of

tourists and investors, and consequently, the number

of our foreign clients.

5. Competitive Risks

The medical business has become increasing

competitive. In addition to public and private hospitals,

it is possible that foreign entrepreneurs will soon

enter the scene with the Governmentûs plan to liberate

the medical service industry. These foreign entrepreneurs

with good reputation and experience will likely be

interested in setting up hospitals in Thailand. They

are at a advantage because of their technological

advancements, network size and image as global

players.

Nevertheless, the hospital business is a complex

one and varies from one country to another so

entrepreneurs need to understand consumersû

requirement well. This is where foreign entrepreneurs

are at a disadvantage. Further, medical personnel

practicing in Thailand need to be issued a proper

license by the Thai authorities, therefore foreign

entrepreneurs may not relocate their personnel from

foreign countries and have their practice in Thailand.

Given the reasons above, foreign entrepreneurs will

face numerous obstacles even if Thai medical service

industry is liberalized. As strong local entrepreneurs,

we have an extensive network of hospitals covering

key locations across the country, a great state of

readiness, necessary equipments and standardized

services. We believe that these factors help mitigate

risks from the competition. We will nevertheless

continue to improve our services and remain at the

top of the industry.

40

6. Personnel Risks

Despite the efforts of the Government to encourage

educational institutions to produce knowledgeable

medical personnel, the actual process requires time

and expertise. Consequently, with the rapid growth

of the economy and the medical service industry,

it is possible that the supply of personnel may not

be sufficient in the future. We are not yet significantly

affected because medical personnel are attracted

by our size and reputation. In spite of this, we are

prepared to accommodate the growth through

compensations, training, welfare benefits and recreational

activities that will help us become the çEmployer

of Choiceé to attract personnel and retain them at

the same time.

7. Financial Risks

7.1 Risks from Early Redemption of Debentures

In 2006, we issued 5-year convertible debentures

at the interest rate of 3.75 percent per year in the

amount of US$124 million or equal to Baht 4,731.84

million with a fixed exchange rate of Baht 38.16 to

US$1. As of 31st December 2007, holders of the

debenture redeemed a total of 29,480 units or 23.8

percent of total number of units. There are 94,520

units or 76.2 percent remaining. Conditions of the

convertible debentures stipulate that the holders

may redeem the debentures before they mature in

three years on 12th July 2009. The Company faces

the risk that holders may redeem the debentures

before maturity at the same time and will have to

find an alternative source for Baht 3,885.90 million

in capital (equal to remaining capital and excess of

value from early redemption of debentures) in

preparation for early redemption of debentures, which

will affect the fiscal plans and financial status of the

Company. However, the Company has contingency

plans by gradually reserving a portion of profits

from operations in anticipation of redemptions of

debentures. Furthermore, the Company has plans

to secure long-term loans at least 6 months in

advance from financial institutions in case there is

simultaneous early redemption of debentures.

Further these convertible debentures are hybrid

capital-debt instruments which entitle the holders to

convert the debentures into ordinary shares at any

41

time at the value of Baht 36.30 or 1,051.24 ordinary

shares to 1 debenture, the holders may choose to

gradually exercise this right once the value of our

ordinary shares in the Stock Exchange is greater

than the returns from debentures. This mitigates

our risk of having to secure capital to facilitate

early redemption of debentures.

7.2 Interest Rate Risk

Future increases in interest rates may affect the

Companyûs capital costs. However, the Company

has plans to issue debentures in 2008, which will

increase the portion of liabilities with fixed interest

rates, and decrease risks from fluctuating interest

rates to a certain degree.

7.3 Collection Risk

Approximately 65 percent of the Companyûs patients

pay by cash or credit card, the remaining 35 percent

pose a risk in collection of fees.

The Company has a strict policy in place to mitigate

risk in collection of fees. No credit is given to

clients. The hospital prepares an estimate of treatment

fees for the patients in advance and informs them

of the treatment fees incurred at intervals in order

to minimize the burden of a single payment upon

discharge from the hospital. As for clients who are

party to agreements, the Company has a policy of

carefully granting credit based upon the credit and

financial status of the party company and reviewing

transactions made with the company on an annual

basis. The said policy is effective in reducing possible

risks from fee collection.

servicefirst in mind

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

Foreigners believe in the service that Bangkok International Hospital has to offer. Interpreters

are provided for precise communication

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

My son likes the doctors because they are gentle and understanding

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

I am single with no children, they take care of me from the moment I step out of the car

giving me a feeling of being with family

Shareholding Structure and Management

44

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

Source : Thailand Securities Depository Co., Ltd. * These shareholders are considered to be in the same group.

2. Management2.1 PersonnelAs of 31st December 2007, the Company had a total of 2,321 employees and 662 physicians, details as follows:

(Unit : Persons)

Prasert Prasarttong-Osoth, MD and spouse *

Bangkok Aviation Co., Ltd. *

Wiriya Insurance Co., Ltd.

Mr. Satit Viddayakorn and spouse

Pongsak Viddayakorn, MD and spouse

HSBC (Singapore) Nominees (PTE) Limited

Ms. Poramaporn Prasarttong-Osath

Chirotchana Suchato, MD and spouse

Thai NVDR co., Ltd.

Chuladej Yossundharakul, MD and spouse

Total

1

2

3

4

5

6

7

8

9

10

164,476,371

120,349,064

90,269,263

69,266,790

60,738,827

41,153,700

40,940,700

39,273,009

28,806,559

27,565,795

682,840,078

13.6%

9.9%

7.4%

5.7%

5.0%

3.4%

3.4%

3.2%

2.4%

2.3%

56.2%

Nurses

General staff

Total number of employees

Staff Physicians

Advisory Physicians

Dentists

Total

663

1,658

2,321

232

336

94

2,983

Note: Staff Physicians means doctors who work with the Company 40 hours or more a week but are not considered employees ofthe Company.

No. Name Number of Shares Percentage

Type of Personnel Number

45

2.2 Management StructureAs of 31st December 2007, the management structure of the Company is comprised of the Board of Directors, the Audit Committee and the executive management, details as follows:

ë Board of Directors1. Prof. Arun Pausawasdi, M.D.

Chairman2. Prasert Prasarttong-Osoth, M.D.

Vice Chairman3. Pongsak Viddayakorn, M.D.

Director4. Mr. Wallop Adhikomprapa

Director5. Chuladej Yossundharakul, M.D.

Director6. Prof. Sanoe Indrasukhsri, M.D.

Chairman of Audit Committee7. Chirotchana Sucharto, M.D.

Director8. Prof. Santasiri Sornmani, M.D.

Director9. Mr. Thavatvong Thanasumitra

Director10. Kitipan Visudharom, M.D.

Director11. Chatree Duangnet, M.D.

Director12. Mr. Anuchat Chaiprapa

Director13. Yingdao Krairiksh, M.D.

Director

ë Authorized DirectorsTwo directors out of the following sign jointly andaffix the company seal: Pongsak Viddayakorn, M.D., Chuladej Yossundharakul, M.D., Chirotchana Sucharto, M.D., Chatree Duangnet, M.D. and Mr. Wallop Adhikomprapa.

ë Duties and Responsibilities of the Board of Directors1. Perform duties using their knowledge and expertise for the benefit of the Company in accordance with the regulations of the Company and resolutions of the shareholders meeting. Directors are authorized to perform actions indicated in the Articles of Association, the Public Company Act and relevant laws.2. Comply with the provisions and the good practices of listed company directors of the Stock exchange of Thailand.3. Determine policies and ensure that management acts in accordance with those policies, as well as approve business plans, annual budgets and investments, and make financial decisions.4. Monitor the operational results of management and the Company in order to ensure consistency with established goals and plans.5. Set efficient internal control and audit systems for the purpose of auditing, operational oversight and liaison with the Audit Committee.6. Protect the interests of the shareholders and practice standardized and transparent disclosure of information.

ë Audit Committee1. Prof. Sanoe Indrasukhsri, M.D

Chairman of Audit Committee2. Prof. Santasiri Sornmani, M.D.

Member3. Mr. Anuchat Chaiprapa

Member

Duties and Responsibilities of the Audit CommitteeIn order that the Audit Committee may perform the duties as assigned by the Board of Directors, the Audit Committee shall have the following duties and responsibilities:

46

1. Ensure the correct, complete and reliable issuanceof reports and disclosure of information in the financial reports of the Company by liaising with external auditors and executives responsible for the preparation of quarterly and annual financial reports. 2. Ensure the use of proper and efficient internalcontrol measures and engage in the joint revision with independent external auditors and internal auditors in order to ensure consistency. 3. Review transactions with subsidiaries or individuals in order to prevent conflicts of interest.4. Ensure that the Company is in compliance with regulations of the Stock Exchange of Thailand and other relevant laws. 5. Review internal investigation evidence in the casethat there is suspicion of fraud or abnormality or significant defect of internal control measures for submission to the Board of Directors for furtherconsideration. 6. Instruct and review evidence in the case where there is suspicion of violation of law or any regulationsof the Stock Exchange of Thailand, which may significantly affect the financial status and operationalresults of the listed company. 7. Nominate auditor and annual auditing fee forconsideration of the Board of Directors for the approval of the shareholders meeting. 8. Complete other tasks as assigned by the Board of Directors.

ë Executive Board1. Prasert Prasarttong-Osoth, M.D.

Chairman of Executive Board2. Pongsak Viddayakorn, M.D.

Vice Chairman3. Chuladej Yossundharakul, M.D.

Member

4. Chirotchana Sucharto, M.D.Member

5. Mr. Wallop AdhikomprapaMember

6. Yingdao Krairiksh, M.D.Member

7. Chatree Duangnet, M.D.Member

8. Kitipan Visudharom, M.D.Member

9. Mr. Chong Chin WahMember

10. Krittavith Lertutsahakul M.D.Member

11. Pichit Kangwolkij, M.D.Member

12. Somsiri Sakolsatayatorn, M.D.Member

13. Somchai Chansawang, M.D.Member

14. Assoc, Prof. Ajjima SrethaputrMember and Secretary

Duties and Responsibilities of the ExecutiveBoard1. Determine business strategies, policies, businessplans and budgets for the approval of the Boardof Directors. 2. Control, audit and monitor operations of the Company as authorized by the Board of Directors in accordance with authorized responsibilities as approved by the Board of Directors for the utmost benefit of the Company and its shareholders to ensure efficiency and favorable business environment. 3. Assign and monitor operations of managementunder the supervision of the Chairman of the Executive Board as assigned by the Board of Directors.

47

4. Consider and review matters that are to be presentedfor approval by the Board of Directors, including identifying solutions to problems of the Company and proposing administrative and personnel policiesfor consideration by the Board of Directors. 5. Propose the appointment and removal of high level executives as well as determine duties and responsibilities of high level executives in each area. 6. Engage in other duties occasionally assigned by the Board of Directors. 7. Legitimately and honestly act in accordance with the resolutions of the shareholders meetings and the Board of Directors meetings for the benefit of the Company within the objectives and regulations of the Company.

The above duties and responsibilities shall not allow the executives and Chairman of the Executive Board to approve transactions relating to themselves or individuals which may cause conflicts of interest (as prescribed in the notifications of the Securities and Exchange Commission) with the Company or subsidiaries. Such transactions shall be presented to the Audit Committee and/or the Board of Directors, whichever the case may be, for approval.

Duties and responsbilitiesThe management is responsible for internal adminis-tration in accordance with established policies and business goals.

2.3 Selection of DirectorsThe appointment and removal of Directors shall

be as prescribed in the Articles of Association as follows:

ë The board of Directors shall comprise of atleast 5 directors and no less than half shall have residence in Thailand.

ë Directors shall be individuals with the followingqualifications:

(1) A person of juristic age(2) A person who is not bankrupt, incompetent

or qausi-incompetent (3) A person who has never been sentenced to

imprisonment on a charge relating to fraudulent assets (4) A person who has never been removed from

service in the government or government agencydue to fraudulent acts.

Group 1 refers to Bangkok Hospital Medical Center comprised of Bangkok Hospital, Bangkok Heart Hospital,Wattanosoth Hospital and Bangkok International Hospital

Group 2 refers to Samitivej Sukhumvit Hospital, Samitivej Srinakarindra Hospital and Samitivej Sriracha Hospital Group 3 refers to Bangkok Pattaya Hospital, Bangkok Rayong Hospital, Bangkok Chantaburi Hospital, Bangkok Trad

Hospital, Koh Chang International Clinic and Bangkok Samui Hospital Group 4 refers to Bangkok Prapradaeng Hospital, Bangkok Hadyai Hospital, Bangkok Phuket Hospital and BNH Hospital Group 5 refers to all non-hospital businesses and Bangkok Ratchasima Hospital

1. Mr. Wallop Adhikomprapa

2. Mr. Chong Chin Wah

3. Chatree Duangnet, M.D.

4. Krittavith Lertutsahakul, M.D.

5. Yingdao Krairiksh, M.D.

Name

Executive Director, Chief Executive Officer Accounting andFinance Division, and acting Chairman Of Executive Group 5 *

Chief Operating Officer and Chairman of Executive Group 2 *

Chairman of Executive Group 1 *



Position

* Note

48

ë The shareholders meeting shall elect the directorsusing the following criteria:

(1) Each shareholder may cast number of votesequal to the number of shares held multiplied by the number of directors to be elected.

(2) Each shareholder shall cast all votes availableto them under (1) to elect an individual or multiple individuals as director(s). In the event where multiple directors are elected, votes may be distributed to the various candidates in varying proportions.

(3) The individuals with the highest number ofvotes will respectively be appointed directors. In the event of a tie, a drawing will be exercised in order to have the required number of directors.

ë At the annual ordinary shareholders meeting,the Board of Directors shall be retired and a new Board of Directors shall be elected. The existing Board of Directors shall serve in the office as necessaryuntil the new Board of Directors assumes duty. Directors who retire as aforementioned, may be re-elected.

ë Apart from being retired at completion of term, a director may be retired under the following circumstances:

(1) Death(2) Resignation(3) Disqualification or legally unqualified (4) The shareholders meeting passes a resolution

to retire a director, with no less than three quarters of the total number of shares present at the meetingand possess voting rights provided that the totalnumber of shares is no less than half of the total number of shares present at the meeting and possess voting rights

(5) Court ordered to retireë Directors wishing to resign shall submit a letter

of resignation to the Company to be effective upon receipt of the letter by the Company.

ë In the event that a director position is vacantdue to circumstances other than completion of term, the Board of Directors shall elect a qualified individualto fill the position at the next Board of Directors meeting, except when the directorûs term is less than two months to completion. In this case, the individual serving as replacement shall remain in office for the remainder of the term of the director who has retired.The resolution of the Board of Directors as the above shall be passed with number of votes no less than three quarters of the number of directors remaining.

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

In addition to the above criteria in selecting theBoard of Directors, the Company has stipulated that the Board of Directors shall be comprised of at least three independent directors who possess all qualifications as prescribed by the Office of the Securities and Exchange Commission.

3. Executive Compensation3.1 Monetary compensation in 2007

ë The thirteen members of the Board of Directorscollectively received compensation in the form of meeting allowance and Director's remuneration inthe amount of Baht 15.70 million in 2007, details as below:

49

ë The Executive Board collectively received compensation in the form of meeting allowance in the amount of Baht 0.50 million in 2007.

ë Management collectively received compensationin the form of monthly salary and bonus in the amount of Baht 22.67 million in 2007.

3.2 Other compensationThe Company has the policy to provide compensationto the Board of Directors and management other than meeting allowances, Directors remuneration, monthly salary and bonus, namely office cars, mobile phones, etc. In addition, the Directors and management,

like permanent staff, are entitled to medical benefitsaccording to Company regulations. 4. Dividend Payment PolicyThe Company and its subsidiaries pay out dividendsas approved by the Board of Directors, dependent upon the operational results, the ability of the Company to pay dividends in each year, business expansion and need for capital in each year. An approval by the shareholders meeting is required with the exception of interim dividend payment, which is approved by the Board of Directors.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

1.56

1.21

1.30

1.17

1.15

1.16

1.30

1.17

1.28

1.15

0.95

1.15

1.15

Directors Compensation (Million Baht)

In 2004-2007, the Company announced the following dividend payments:

Dividend Payment Date Dividend Payment Period

4 May 2007

28 April 2006

6 May 2005

Dividend Payment Rate(Baht per Share)

0.50

0.50

0.50

January 2006 - December 2006



Prof. Arun Pausawasdi, M.D.

Prasert Prasarttong-Osoth, M.D.

Prof. Snoe Indrasukhsri, M.D.

Pongsak Viddayakorn, M.D.

Chirotchana Sucharto, M.D.

Chuladej Yossundharakul, M.D.

Prof. Santasiri Sornmani, M.D.

Yingdao Krairiksh, M.D.

Mr. Anuchat Chaiprapa

Mr. Wallop Adhikomprapa

Mr. Thavatvong Thanasumitra

Kitipan Visudharom, M.D.

Chatree Duangnet, M.D.

Report of Compliance with GoodCorporate Governance

50

The Board of Directors recognizes its roles, dutiesand responsibilities of good corporate governance in order to ensure continuous and stable growth of the business through efficient and transparent management for the confidence of all parties involved and the utmost benefit of the Company and its shareholders.

1. Shareholdersû RightsThe Company recognizes and respects the equality

of rights of all shareholders and gives importance to accessibility of accurate and complete information on the Company. Shareholders may exercise their rights and safeguard their interests by giving opinions and voting at shareholders meetings, as well as taking part in important decisions, including appointment of the Board of Directors. For the past shareholders meetings, the Company has sent letters of notification and accompanying documents to the shareholders at least seven days in advance and arranged for publication of shareholders meeting announcements in newspapers for a period of three consecutive days at least three business days prior to the date of the meetings. In addition, the Company also posted notification of shareholders meetings on the company website. The opinion of the Board of Directors and detailed documents associated with the meeting in Thai and English shall be provided to the shareholders prior to the meetings. The Company has provided an option to the shareholders to assign authority to three independent directors in the event they are unable to attend the meetings in person. Shareholders may petition to request that the Board of Directors call an extraordinary shareholders meeting at any reasonable time as specified in regulations of the Company by stating a clear reason. The Board of Directors shall call a shareholders meeting within

one month from the day on which the letter from the shareholders is received.

The Board of Directors recognizes the importance of shareholders meetings and all thirteen directors shall participate in the meetings in order that the shareholders may equally exercise their rights in expressing opinions and directing questions to the Board of Directors. Accurate and complete minutes are taken for later revision by the shareholders and relevant parties.

2. Shareholdersû EqualityThe Company recognizes the importance of

equality and fairness to minority shareholders by disclosing information to all shareholders as stipulatedby the Stock Exchange of Thailand. Firstly, the Company gives importance to the right of each shareholder to attend the Shareholdersû Meetingand sends meeting documents, the Board of Directorsûopinions and proxy forms to the Shareholders. Threeof the Independent Directors are proposed as proxies in the case that the Shareholder is not able to attend in person. The Shareholders may contact the Company prior to the meeting if they have any queries regarding the agendas. The Company also gives the Shareholders the opportunity to elect individuals to the Board and provide ballots for transparency in voting on significant agendas.

The Company focuses on transparency of the Board of Directors and management. Each Director and member of management must disclose asset holdings to the Board each month. Furthermore, each Director that is accountable for any of the agendas at the Board meetings must abstain from voting or excuse themselves when the agenda that they are accountable for is considered during the meeting.

51

Information is disclosed to the Shareholders each ime a related transaction occurs or receipt or sale of assets of a size as determined by the Stock Exchange. The Board of Directors and management act strictly in accordance to the regulations of the Stock Exchange of Thailand and the Office of the Securities and Exchange Commission and give importance to eliminating conflicts of interest with honesty and reason for the greater benefit of the Company.

3. Rights of Related Parties The Company has recognized the right so all

related parties. 3.1 The Company intends to be the shareholdersû

representative in ensuring transparent business operations, as well as trustworthy accounting and financial systems for the satisfaction of the share-holders, while sustaining long-term growth and continuous suitable returns.

3.2 The Company strives to provide customersatisfaction through quality of service and strict practice of fair business conditions.

3.3 The Company recognizes the capability andtrustworthiness of business and benefits with partners by strictly complying with the laws and regulations and business ethics. In competing with peers, the Company believes in fair competition.

3.4 The Company has the policy to develop andsupport culture and good working environment for moral support and stable careers of employees.

3.5 The Company recognizes the importance ofsocial responsibility, as well as responsibility to related parties and employees. The Company has adopted the ISO 14001 environment management system and established the çCorporate Social Respon-sibility (CSR) Projecté to support the Companyûs

business as well as sustainable social and environ-mental development.

The Company also announced the çEnvironment,Hygienic Profession and Safety Policyé for use within the hospital and informed the employees and relevant parties as well as ensuring continuous and earnest practice of the policies. Furthermore, the Company established the Wejchadusit Foundation to support the research efforts of doctors nationwide. Other notable projects include çRak Jai Khun Hospitaléunder which youths are encouraged to creatively develop measures to prevent health problems and çThai Chuay Thaié, a preventive healthcare preven-tive program.

3.6 The Company strictly abides by the relatedregulations, including responsibility to the environ-ment and safety.

4. Disclosure and TransparencyThe Board of Directors recognizes the importance

of disclosure and transparency and has disclosed information through the Stock Exchange of Thailandchannels. The annual report emphasizes accuracy of information and is continuously updated and postedon the Company website.

The Company has established the Investor Relationsunit to act as the center for information disclosure to investors as well as oversee financial reports such as operations report, financial statements, company announcements to the Stock Exchange of Thailand as well as quarterly MD & A, whichprovides the status, operations and future outlook of the Company to both local and foreign investors. Investors can contact Investor Relations directly or through the company website www.bangkokhospital.com which provides information in both Thai and English, and is regularly updated.

52

The Board of Directors evaluates the controlsystem each year to examine the efficiency of internal control measures, reduce operational risks and ensure transparency of information. Furthermore, the Company deliberates the duties and responsibilitiesof the Audit Committee annually after appointment of the Committee at the Shareholdersû Meeting and discloses meeting attendance and remuneration of all Directors in the annual report.

The Board of Directors also appoints the SeniorManaging Director to manage the Company and clearly defines the duties and responsibilities of the Board of Directors and management. The responsibilities of the Board of Directors is stated in the financial statements, which are a part of the auditorsû report in the annual report.

As the Company does not have a RemunerationSub-Committee, there is a process in deliberating suitable remuneration. Remuneration of Directors is considered at the Shareholdersû Meeting and remuneration of executive management will be determined according to the principles and policies set by the Board of Directors and linked to perfor-mance of the Company and of each executive.

5. Responsibility of the Board of DirectorsThere are a total of 13 Directors on the Board

comprising 8 Directors from management and 5 non-management, with 3 of the non-management being independent Directors. The Chairman of the Board is non-management and is not the same person as the Senior Managing Director so as the Chairman will have independence from the management, thus separating the duty in determining corporate governance policy from day-today management to create balance. The Company also has a unit acting

as the Company Secretary to provide advice on legal issues as well as on regulations that the Board should be aware of and to oversee activities of the Board, including ensuring practice according to the Boardûs resolutions. The Company also has the policy to encourage the Directors of the Company and associated companies to attend the Director Certificate Program (DCP) and the Director Accreditation Program (DAP) at the Thai Institute of Directors (IOD). The programs provide the Directors with understanding about good corporate governance. Directors who have passed the Director Certificate Program are Mr. Wallop Adhikomprapa (Class 20) and Mr. Thavatvong Thanasumitra (Class 27). The other 11 Directors have all passed the Director Accreditation Program.

The schedule for Board meetings for the entire year are determined in advance so that the Directors are aware of the schedule and can allot time to attend each meeting. The meetings are held every last Wednesday of the month. The agendas for each meeting are determined in advance and include matters related to previous agendas in order to monitor assignments. The Company Secretary shall send out invitations and agendas of the Board meetings at least 7 days prior to the scheduled meeting so that the Directors will have adequate time to review information before the meeting. In 2007, the Company held 13 Board meetings comprised of 12 general meetings and one extra-ordinary meeting.

Transactions with Associated Companies

53

Nature of TransactionsTransactions between Bangkok Dusit Medical

Services Public Company Limited and associated companies or persons are disclosed in Note 9 to the financial statements and may be classified as follows:

1.1 Normal Business Transactions The Company has the policy of engaging in

transactions with associated companies in the normal course of business, such as revenue from transfer of patients between hospitals, revenue from lab analysis,

etc. Such transactions are necessary and reasonable in supporting business operations and for the utmost benefit of the Company. The conditions of the transactions are no different from those used in transactions with customers or third parties. 1.2 Financial Assistance

As of 30th September 2007, the Company providedfinancial assistance to associated companies as follows:

Individuals involved as joint directors andexecutives include:

1. Pongsak Viddayakorn, M.D.2. Mr. Wallop Adhikomprapa 3. Chuladej Yossundharakul, M.D.4. Mr. Anuchat Chaiprapa5. Chatree Duangnet, M.D. 6. Yingdao Krairiksh, M.D.

Interested individuals holding more than 5 percentof shares with voting rights in the subsidiaries orjoint ventures. -None-


1. Bangkok Prapradaeng Hospital Co., Ltd.

2. Angkor Pisith Co., Ltd.

3. Bangkok Hadyai Hospital Co., Ltd.

Company holds 79% and has joint directors

-

-

-

-

1.20

-

-

1.20

-

2.79

83.19

85.98

Associated Company Nature of RelationshipLong-term

loanInterestPayable

-

US$ 4 million

-

US$ 4 million

Long-termPrincipal

Guarantee

Short-termLoan

Total Principal

Company holds98.8% and has joint directors

Company holds 80% and has joint directors

54

Method of TransactionThe Company has the policy to engage in transactions with associated companies in the normal course of business. Such transactions are deemed necessary and reasonable for liquidity purposes and for the greater benefit of the Company.

The Company has set standards and procedures in approving such transactions. Management shall consider and approve small and normal business transactions. The Board of Directors shall consider and approve medium to large, normal business transactions, as well as small and medium transactions that are not considered normal business transactions. For large transactions that are not considered normal business transactions, the Shareholders Meeting shall decide whether or not to engage in said transactions. The criteria in assessing the size of the transactions are as follows:

ë Small Transactions : transactions with value equal to or less than Baht 1 million, or equal to or less than 0.03 percent of net tangible assets, whichever is greater

ë Medium Transactions : transactions with valuegreater than Baht 1 million but less than Baht 20 million, or greater than 0.03 percent but less than 3 percent of net tangible assets, whichever is greater

ë Large Transactions : transactions with value equal to or greater than Baht 20 million, or greater than 3 percent of net tangible assets, whichever is greater

If the transaction is considered a related transaction according to the Stock Exchange of Thailand definition,the Company shall strictly abide by the rules and regulations of the Stock Exchange of Thailand.

As a concern for investors, the Company has arranged Board of Directors meetings, whereby the Audit Committee is present in order to ensure fairness and appropriate pricing of transactions with associated companies in accordance with normal business conventions. In the case that the Audit Committee lacks expertise in the transactions that may occur, the Company shall arrange for an expert in the area to provide an opinion on the said transactions for further consideration by the Audit Committee and/or the Board of Directors and/or the Shareholders Meeting, whichever the case may be. The Company has disclosed transactions with associated companies in the notes to the audited financial statements.

With regards to provisions of financial assistance to subsidiaries, other than short-term loans to subsidiaries in which the Company holds 100 percent, the Annual Ordinary Shareholders Meeting in 2001 approved financial assistance to subsidiaries, joint ventures and associated companies within a credit line of Baht 1,500 million. The current outstanding debt is Baht 1.20 million. At that time, United Advisory Services Co., Ltd., the independent financial consultant, had an opinion that such lendings to subsidiaries, joint ventures and associated companies are reasonable and fair.

Outlook for Future Transactions with Asso-ciated Companies The Audit Committee and the Company will jointly oversee necessary transactions with associated companies and ensure fairness in price.

Explanation and Analysis of OperationalResults and Financial Status

55

1. Operations1.1 Revenue from OperationsIn 2007, the Company and its subsidiaries derived a total of Baht 18,423.4 million from medical service fees compared to Baht 15,606.9 million in 2006 and Baht 10,253.8 million in 2005. This translates to 18.1 percent growth in 2007 and 52.2 percent growth in 2006. The significant events contributing to the increase in revenue in 2005-2007 are as follows:

ë Increase in medical service fees per visit in 2007. Outpatient medical service fees per visit increased 10.2 percent in 2007, from Baht 2,358.80 in 2006 to Baht 2,599.60 in 2007. In-patient medical service fees per visit increased by 13.2 percent, from Baht 20,829.20 in 2006 to Baht 23,577.10 in 2007.

ë Increase in number of patients in 2007. Number of outpatients per day increased from 8,016 patients per day in 2006 to 8,349 patients per day in 2007, equal to a 4.2 percent increase.

ë Expansion on investments in subsidiaries in 2006. The Company increased investments in hospitals in the Eastern region. Shareholding in Bangkok Pattaya Hospital Co., Ltd. Increased from 49.0 percent in 2005 to 97.1 percent. The Company also bought 73.97 percent in Bangkok Ratchasima Hospital Co., Ltd. The aforementioned investments significantly increased medical service revenue derived from subsidiaries from Baht 6,015.6 million in 2005 to Baht 10,227.5 million in 2006, equal to 70.0 percent growth.


Company

Subsidiaries

5,379.4

10,227.5

15,606.9

6,304.1

12,119.4

18,423.5

4,238.2

6,015.6

10,253.8

Structure of Medical Services Revenue(Net of related transactions)

2007 2006 2005

Total

56

1.2 Cost of Medical Services and Sales & Administrative Expenses The increase in medical service revenue from the Company and its subsidiaries has enabled efficiency in controlling medical service costs and sales & administrative expenses.This can be seen from the decrease in cost of medical services to service fee revenue from 57.9 percent in 2005 to 55.7 percent in 2006 and 55.6 percent in 2007.

At the same time, sales and administrative expenses of the Company and its subsidiaries decreased. In 2006, the sales and administrative expenses to service fee revenue was 23.9 and decreased to 22.9 and 22.8 in 2006 and 2007, respectively.

1.3 Net ProfitsIn 2006, the net profit to service fees revenue of the Company and its subsidiaries was 8.5 times, an increase from 8.1 times in 2005. The net profit to service fees revenue decreased in 2007 to 6.8 times due to increased investments in tangible assets, namely buildings and medical equipment, inline with general business expansion, which resulted in higher depreciation and interest payables.

2. Financial Status2.1 Total AssetsAs of 31st December 2007, the Groupûs total assets was comprised of 11.2 percent in current assets, 3.6 percent in investments in subsidiaries, 73.6 percent in land, buildings and equipment (net) and approximately 11.7 percent in non-current assets. In

2006, the Groupûs total assets was comprised of 11.6 percent in current assets, 71.6 percent in land, buildings and equipment (net) and approximately 16.8 percent in non-current assets. In 2005, the Groupûs total assets was comprised of 8.1 percent in current assets, 7.0 percent in investments in subsidiaries, 78.6 percent in land, buildings and equipment (net) and approximately 6.3 percent in non-current assets.

During 2005-2007, the Groupûs total assets increased. In 2007, total assets equaled Baht 26,231.8 million, an increase of 5.2 percent compared to total assets in 2006 of Baht 24,933.6 million. In 2006, total assets increased 41.1 percent when compared with total assets of Baht 17,677.0 million in 2005. The increase in total assets in the past few years is due to high expansion of investments in subsidiaries as well as significant increase in investments in buildings and medical equipment of each company in the Group.

2.2 Capital Structure As of 31st December 2007, the Company and its subsidiaries had total liabilities of Baht 14,521.8 million or 55.4 percent of liabilities and equity. This is a 2.9 percent decrease when compared to 2006 when total liabilities were Baht 14,949.5 million or 60.0 percent of liabilities and equity. While in 2006, total liabilities increased 61.4 percent when compared with 2005 when total liabilities were Baht 9,259.7 million or 52.4 percent of liabilities and equity. The decrease in liabilities of the Company and its sub-sidiaries on 30th September 2007 resulted from theconversion of some of the convertible bonds. The

57

increase in total liabilities over the past three years is a result of business expansion in private hospitals through large investments in buildings and medical equipment, which necessitated increased capital from external sources.

Shareholdersû equity as of 31st December 2007 was Baht 11,077.0 million or 44.6 percent of liabilities and equity. In 2006 and 2005, shareholdersû equity was Baht 9,984.2 million and Baht 8,417.5 million or 40.0 percent and 47.6 percent of liabilities and equity,

2.3 Liquidity and Debt Payment CapabilitiesAs of 31st December 2007, the Company and its subsidiaries had a liquidity ratio of 0.60 times, a decrease when compared to 0.73 times in 2006 respectively. However, even though the Groupûs liquidity in 2006 increased when compared to 2005, the increase in overdrafts and short-term debts from financial institutions, and long-term debts due in one year in 2007, caused the liquidity ratio as of 31st December 2007 to decrease when compared to 2006.

respectively. This translates to shareholdersû equity growth in 2007 and 2006 of 17.3 percent, 18.6 percent respectively. The significant increase in shareholdersû equity in 2007 is a result of the conversion of a portion of the convertible bonds. The significant increase in shareholdersû equity in 2006 is a result of increased investments in hospitals in the Eastern region. Furthermore, the increase of realized gains from operations of the Group resulted in increased shareholdersû equity as shown in the consolidated balance sheet.

Due to the expansion of the private hospital business, the Company and its subsidiaries increased capital from external sources in order to expand investments resulting in an increase in the Groupûs debt-to-equity ratio from 1.10 times in 2005 to 1.50 times in 2006. Even thought the said ratio is higher than before, it is still at an acceptable level. However, as some of the convertible bonds were converted, the debt-to-equity ratio decreased to 1.24 times as of 31st December 2007.


4,873.1

9,648.7

14,521.7

11,113.8

11,710.0

26,231.7

Capital Structure 2007

18.6%

36.8%

55.4%

42.4%

44.6%

100.0%

%

3,957.3

10,992.2

14,949.5

9,477.2

9,984.1

24,933.6

2006

15.9%

44.1%

60.0%

38.0%

40.0%

100.0%

%

2,837.6

6,422.1

9,259.7

7,889.6

8,417.5

17,677.2

2005

16.1%

36.3%

52.4%

44.6%

47.6%

100.0%

%

Current liabilities

Long-term liabilities

Total Liabilities

Shareholdersû equity in the Company

Total Shareholdersû equity

Total Liabilities and Shareholdersû equity

The Remuneration of the Auditor

58

ª√–‡¿∑√“¬°“√

Ernst & Young Office Company Limited had been auditor for company and subsidiaries since 2006. TheCompany has affixed the Auditor remuneration for the company and subsidiary, which can be divided into;

1. Auditor RemunerationFor year 2007 the company and subsidiaries had affix the auditor remuneration in amount of 7,585,000 Baht.

2. Other Fee-None-

Responsibility of the Board of Directorsto the Financial Statements

59

(Chatree Duangnet, M.D.)Director

(Wallop Adhikomprapa)President

and Chief Financial Officer-BDMS Group

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

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

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

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

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

I chose to have heart surgery performed by the Da Vinci robot, the procedure was safe, the scar small

and I was able to go back to work faster than usual

technologystate-of-the-art

The most modern innovation, patient transport service and patient care on our emergency helicopters

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

The doctors at Bangkok Phuket Hospital sent me to get examined by the PET/CT at Wattanosoth Hospital,

within 1 hour, they were able to determine my illness

62

BANGKOK DUSIT MEDICAL SERVICES PUBLIC COMPANY LIMITED AND SUBSIDIARIES

AUDITOR REPORT AND FINANCIAL STATEMENTS31 DECEMBER 2007 AND 2006

63

Report of Independent AuditorTo The Shareholders of Bangkok Dusit Medical Services Public Company Limited

I have audited the accompanying consolidated balance sheets of Bangkok Dusit Medical Services Public Company Limited and its subsidiaries as at 31 December 2007 and 2006, the related consolidated statementsof income, changes in shareholders' equity and cash flows for the years then ended, and the separate financial statements of Bangkok Dusit Medical Services Public Company Limited for the same periods. Thesefinancial statements are the responsibility of the Companyûs management as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits.

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

In my opinion, the aforementioned financial statements referred to above present fairly, in all materialrespects, the financial position of Bangkok Dusit Medical Services Public Company Limited and its subsidiaries and of Bangkok Dusit Medical Services Public Company Limited as at 31 December 2007 and 2006 and the results of their operations and cash flows for the years then ended in accordance with generally accepted accounting principles.

Without qualifying my opinion on the above financial statements, I draw attention to the matter as discussedin Note 6 to the financial statements, whereby in the first quarter of the current year the Company haschanged its accounting policy for recording building in the consolidated financial statements from revaluedamount to historical cost and in Note 5 to the financial statements, in the first quarter of the current year,the Company changed its accounting policy for recording investments in subsidiary and associated companiesin the separate financial statements from the equity method to the cost method. In this regard, the Companyhas restated the consolidated and separate financial statements as at 31 December 2006 and for the yearthen ended to reflect the changes in accounting policies.

Saifon InkaewCertified Public Accountant (Thailand) No. 4434Ernst & Young Office LimitedBangkok : 20 February 2008

BALANCE SHEETS

64

ASSETS

CURRENT ASSETS

Cash and cash equivalents

Short - term investments

Trade accounts receivable

Related parties

Other companies - net

Total accounts receivable - net

Other receivable - related parties

Short-term loans to related party

Dividend receivable - related party

Inventories

Other current assets-net

TOTAL CURRENT ASSETS

NON-CURRENT ASSETS

Restricted bank deposit

Investments in subsidiary companies

Investments in associated companies

Investments in other companies - net

Other long - term investments - net

Long - term loans to related party

Interest receivable - related parties - net

Property, plant and equipment - net

Land not used in operation

Goodwill - net

Other intangible assets - net

Other non-current assets - net

TOTAL NON-CURRENT ASSETS

TOTAL ASSETS

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

8

10

11

11

11

11

12

9

13

14

16

15

11

11

17

18

19

11

963,602,382

56,673,919

4,883,598

1,328,744,804

1,333,628,402

177,784,653

-

-

212,241,173

185,797,530

2,929,728,059

17,269,652

-

943,465,669

55,316,980

915,680,161

-

-

19,296,305,446

472,414,200

1,015,637,085

330,805,308

255,116,240

23,302,010,741

26,231,738,800

1,101,048,856

94,508,683

2,533,471

1,057,927,794

1,060,461,265

166,028,720

-

-

201,142,786

259,642,125

2,882,832,435

13,801,426

-

74,983,716

55,316,980

1,937,810,524

-

-

17,864,497,412

438,927,180

1,132,349,379

318,566,969

214,498,474

22,050,752,060

24,933,584,495

169,248,384

8,318

8,248,969

566,404,942

574,653,911

64,018,217

-

40,000,000

59,617,858

80,519,962

988,066,650

-

7,104,083,655

862,785,818

55,316,980

915,456,481

1,200,951

73,609,727

5,838,856,992

472,414,200

-

109,949,653

10,783,517

15,444,457,974

16,432,524,624

60,449,522

8,078

4,531,658

471,897,684

476,429,342

58,348,415

35,000,000

543,522,880

56,374,082

93,189,311

1,323,321,630

-

6,657,567,136

54,290,154

55,316,980

1,937,586,844

1,200,951

77,859,311

5,319,841,836

438,927,180

-

74,990,876

13,602,345

14,631,183,613

15,954,505,243

AS AT 31 DECEMBER 2007 AND 2006


(Unit : Baht)

Separate financial statements Consolidated financial statements

2007 2006(Restated)

2007 2006(Restated)

Note

65

BALANCE SHEETS AS AT 31 DECEMBER 2007 AND 2006


LIABILITIES AND SHAREHOLDERSû EQUITY

CURRENT LIABILITIES

Bank overdrafts and short-term loans from

financial institutions

Short-term loans from related parties

Trade accounts payable

Related parties

Other companies

Total trade accounts payable

Current portion of long-term loans

Current portion of liabilities under hire purchase and

financial lease agreements

Accounts payable - construction and retention

Other payable - related parties

Corporate income tax payable

Accrued expenses

Other current liabilities

TOTAL CURRENT LIABILITIES

NON-CURRENT LIABILITIES

Long - term loans - net of current portion

Convertible debentures - liability component

Long - term liabilities under hire purchase and financial

lease agreements - net of current portion

Deferred income

Other non-current liabilities

TOTAL NON-CURRENT LIABILITIES

TOTAL LIABILITIES


20

11

11

21

22

11

21

32

22

817,694,449

13,627,481

11,126,206

843,670,888

854,797,094

1,070,391,045

118,000,920

210,788,465

42,516,663

227,725,809

877,951,221

639,593,745

4,873,086,892

5,680,206,748

3,528,016,610

170,332,613

252,603,836

17,500,458

9,648,660,265

14,521,747,157

437,636,812

21,163,264

14,622,435

778,517,373

793,139,808

718,088,334

123,398,365

311,095,606

6,160,159

228,413,023

721,298,804

596,878,696

3,957,272,871

5,923,645,853

4,625,962,991

159,190,046

233,639,452

49,741,853

10,992,180,195

14,949,453,066

680,200,000

-

45,443,068

278,805,549

324,248,617

387,072,000

15,356,250

51,571,275

41,896,995

102,779,683

362,678,483

161,819,259

2,127,622,562

1,548,021,600

3,528,016,610

10,000,000

252,603,836

4,924,040

5,343,566,086

7,471,188,648

230,000,000

-

19,087,078

241,004,478

260,091,556

177,792,000

35,451,223

96,826,577

33,088,288

27,003,642

326,489,865

232,301,188

1,419,044,339

1,545,093,600

4,625,962,991

25,356,250

233,639,452

14,413,668

6,444,465,961

7,863,510,300

(Continued)

(Unit : Baht)


2007 2006(Restated)

2007 2006(Restated)

Note

BALANCE SHEETS

66

SHAREHOLDERSû EQUITY

SHAREHOLDERSû EQUITY

Share capital

Registered

1,312,264,222 ordinary shares of Baht 1 each

Issued and fully paid-up

1,214,130,813 ordinary shares of Baht 1 each

(31 December 2006 : 1,181,037,800 ordinary

shares of Baht 1 each)

Premium

Premium on ordinary shares

Revaluation surplus on investments

Revaluation surplus on land

Difference from shareholding restructure

Translation adjustment

Convertible debentures - equity component

Retained earnings

Appropriated - statutory reserve

Unappropriated

TOTAL EQUITY ATTRIBUTABLE TO

COMPANYûS SHAREHOLDERS

MINORITY INTEREST - Equity attributable to minority

shareholders of subsidiaries

TOTAL SHAREHOLDERS' EQUITY

TOTAL LIABILITIES AND SHAREHOLDERSû EQUITY


32

33

33

15

33

32

24

1,312,264,222

1,214,130,813

5,816,433,793

(6,491,571)

1,156,654,872

305,000,325

(34,701,915)

37,353,100

131,226,422

2,494,223,429

11,113,829,268

596,162,375

11,709,991,643

26,231,738,800

0

1,312,264,222

1,181,037,800

4,625,091,357

679,137,344

739,493,467

305,000,325

(19,963,214)

50,062,520

131,226,422

1,786,066,031

9,477,152,052

506,979,377

9,984,131,429

24,933,584,495

0

1,312,264,222

1,214,130,813

5,753,509,865

(78,168)

728,481,200

-

-

37,353,100

131,226,422

1,096,712,744

8,961,335,976

-

8,961,335,976

16,432,524,624

0

1,312,264,222

1,181,037,800

4,562,167,429

679,137,344

427,122,962

-

-

50,062,520

131,226,422

1,060,240,466

8,090,994,943

-

8,090,994,943

15,954,505,243

0


BANGKOK DUSIT MEDICAL SERVICES PUBLIC COMPANY LIMITED AND SUBSIDIARIES(Continued)

(Unit : Baht)


2007 2006(Restated)

2007 2006(Restated)

Note

67

INCOMESTATEMENTS AS AT 31 DECEMBER 2007 AND 2006


REVENUES

Revenues from hospital operations

Other income

Revenue from sales of food and beverages

Interest income

Dividend income

Others

Total other income

Share of income from investments in

associated companies

TOTAL REVENUES

EXPENSES

Cost of hospital operations and others

Administrative expenses

Depreciation and amortisation

TOTAL EXPENSES

INCOME BEFORE INTEREST EXPENSE

AND INCOME TAX

INTEREST EXPENSE

CORPORATE INCOME TAX

INCOME AFTER CORPORATE TAX

NET INCOME ATTRIBUTABLE TO MINORITY INTEREST

NET INCOME FOR THE YEAR

BASIC EARNINGS PER SHARE

Net income

Weighted average number of ordinary

shares (shares)


11

11

11

11

11

27

18,423,444,513

97,375,499

13,222,410

31,846,810

312,642,771

455,087,490

6,858,074

18,885,390,077

10,236,738,970

4,195,701,133

1,945,571,467

16,378,011,570

2,507,378,507

(688,086,828)

(527,303,560)

1,291,988,119

(47,850,294)

1,244,137,825

1.04

1,195,856,184

15,606,874,043

169,134,597

27,452,052

-

142,752,952

339,339,601

34,771,250

15,980,984,894

8,672,666,780

3,573,496,909

1,418,798,317

13,664,962,006

2,316,022,888

(545,748,426)

(385,952,362)

1,384,322,100

(61,635,015)

1,322,687,085

1.12

1,176,883,665

6,321,009,321

18,107,859

12,271,156

267,287,897

348,392,176

646,059,088

-

6,967,068,409

3,427,479,403

1,654,234,451

632,898,444

5,714,612,298

1,252,456,111

(400,795,267)

(224,669,666)

626,991,178

-

626,991,178

0.52

1,195,856,184

5,484,306,297

20,873,591

3,855,919

582,380,553

212,171,597

819,281,660

-

6,303,587,957

2,975,027,332

1,322,514,814

458,014,121

4,755,556,267

1,548,031,690

(288,966,188)

(135,248,901)

1,123,816,601

-

1,123,816,601

0.95

1,176,883,665

(Unit : Baht)


2007 2006 2007 2006(Restated)

Note

STATEMENTS OF CHANGES IN SHAREHOLDERSû EQUITY

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

Balance as at 31 December 2005 - as previously reported

Cumulative effect of the change in accounting policy

for recording building

Balance as at 31 December 2005 - as restated

Revaluation surplus of land

Adjustment of fair value of investment

Increase in share capital

Increase in share premium




Transfer to statutory reserve

Net income for the year

Dividend paid

Minority interest

Balance as at 31 December 2006 - as restated

Balance as at 31 December 2006 - as previously reported

Cumulative effect of the change in accounting policy

for recording building

Balance - as at 31 December 2006 - as restated

Increase in share capital

Increase in share premium

Adjustment of fair value of investment

Reverse revaluation surplus from change of status from

other company to associated company

Share of income from investment in an associate due to

change in status from other company to associated company

Realised loss on change in valuation of investment in an associate



Revaluation surplus on land

Net income for the year

Dividend paid 23

Minority interest

Balance as at 31 December 2007

963,796,488

(241,391,009)722,405,47917,087,988

----------

739,493,467

982,615,188

(243,121,721)739,493,467

---

-

----

417,161,405---

1,156,654,872

6

33

33

33

32

24

23

6

33

33

32

17

23

1,163,410,108

-1,163,410,108

-17,627,692

--------

1,181,037,800

1,181,037,800

-1,181,037,800

33,093,013--

-

--------

1,214,130,813

4,322,607,094

-4,322,607,094

--

302,484,263-------

4,625,091,357

4,625,091,357

-4,625,091,357

-1,191,342,436

-

-

--------

5,816,433,793

254,659,742

-254,659,742

424,477,602---------

679,137,344

679,137,344

-679,137,344

--

245,549,638

(924,765,150)

-(6,413,403)

------

(6,491,571)

Premium on ordinary shares

Revaluationsurplus oninvestment

Revaluationsurplus on

land and building

Premium

Note

Issued and paid-up

share capital

69



-

--

----

(19,963,214)-----

(19,963,214)

(19,963,214)

-(19,963,214)

---

-

--

(14,738,701)-----

(34,701,915)

-

--

-----

50,062,520----

50,062,520

50,062,520

-50,062,520

---

-

---

(12,709,420)----

37,353,100

-

--

---

305,000,325------

305,000,325

305,000,325

-305,000,325

---

-

--------

305,000,325

118,341,011

-118,341,011

------

12,885,411---

131,226,422

131,226,422

-131,226,422

---

-

--------

131,226,422

1,066,783,257

-1,066,783,257

------

(12,885,411)1,322,687,085(590,518,900)

-1,786,066,031

1,786,066,031

-1,786,066,031

---

-

54,538,473----

1,244,137,825(590,518,900)

-2,494,223,429

527,940,540

-527,940,540

---------

(20,961,163)506,979,377

506,979,377

-506,979,377

---

-

-------

89,182,998596,162,375

8,417,538,240

(241,391,009)8,176,147,231

17,087,988424,477,60217,627,692

302,484,263305,000,325(19,963,214)50,062,520

-1,322,687,085(590,518,900)(20,961,163)

9,984,131,429

10,227,253,150

(243,121,721)9,984,131,429

33,093,0131,191,342,436245,549,638

(924,765,150)

54,538,473(6,413,403)

(14,738,701)(12,709,420)417,161,405

1,244,137,825(590,518,900)

89,182,99811,709,991,643

(Unit : Baht)

Consolidated financial statements


Appropriated-statutory reserve

Unappropriated

Retained earningsTranslationadjustment

Convertibledebentures -

equitycomponent

Minority interest Total

STATEMENTS OF CHANGES IN SHAREHOLDERSû EQUITY

70

5

33

33

32

24

23

5

32

17

23

Premium onordinary shares

Revaluationsurplus oninvestment

Premium

Note

Issued and paid-up

share capital


(Continued)

Balance as at 31 December 2005 - as previously reported Cumulative effect of the change in accounting policy for

investments in subsidiary and associated companies Balance as at 31 December 2005 - as restated Adjustment of fair value of investment Increase in share capital Increase in share premium Convertible debentures - equity component Transfer to statutory reserve Net income for the year (restated) Dividend paid Balance as at 31 December 2006 - as restated Balance as at 31 December 2005 - as previously reportedCumulative effect of the change in accounting policy for

investments in subsidiary and associated companies Balance as at 31 December 2006 - as restated Adjustment of fair value of investment Reversal revaluation surplus from change of status from

other company to associated company Convertible debentures - equity component Revaluation surplus on land Net income for the year Dividend paid Balance as at 31 December 2007

1,163,410,108

-1,163,410,108

-17,627,692

-----

1,181,037,800

1,181,037,800

-1,181,037,800

--

33,093,013---

1,214,130,813

4,322,607,094

-4,322,607,094

--

239,560,335----

4,562,167,429

4,625,091,357

(62,923,928)4,562,167,429

--

1,191,342,436---

5,753,509,865

254,659,742

-254,659,742424,477,602

------

679,137,344

679,137,344

-679,137,344245,549,638

(924,765,150)

----(78,168)

71



(Unit : Baht)


Revaluationsurplus on

land and building


Appropriated-statutory reserve

Unappropriated

Retained earningsTranslationadjustment

Convertibledebentures -

equitycomponent

Total

963,796,488

(536,673,526)427,122,962

-------

427,122,962

982,615,188

(555,492,226)427,122,962

--

-301,358,238

--

728,481,200

-

----------

(19,963,214)

19,963,214 ---

-----

-

-----

50,062,520---

50,062,520

50,062,520

-50,062,520

--

(12,709,420)---

37,353,100

-

----------

305,000,325

(305,000,325)---

-----

118,341,011

-118,341,011

----

12,885,411--

131,226,422

131,226,422

-131,226,422

--

----

131,226,422

1,066,783,257

(526,955,081)539,828,176

----

(12,885,411)1,123,816,601(590,518,900)1,060,240,466

1,786,066,031

(725,825,565)1,060,240,466

--

--

626,991,178(590,518,900)1,096,712,744

7,889,597,700

(1,063,628,607)6,825,969,093424,477,60217,627,692

239,560,33550,062,520

-1,123,816,601(590,518,900)8,090,994,943

9,720,273,773

(1,629,278,830)8,090,994,943245,549,638

(924,765,150)

1,211,726,029301,358,238626,991,178

(590,518,900)8,961,335,976

STATEMENTS OFCASH FLOWS

72

Cash flows from operating activities

Net income

Adjustments to reconcile net income to net cash

provided by (paid from) operating activities: -

Depreciation and amortisation

Bad debts and allowance for doubtful accounts

Amortisation of deferred income

Share of income from investments in associated companies

Gain from early repayment of loan

Dividend income

Net income attributable to minority interest

Loss on impairment of fixed assets

Amortisation of goodwill

Amortisation of deferred interest on financial lease agreement

Amortisation of convertible debenture

Amortisation of expense for convertible debenture issue

Loss (gain) on disposal of fixed assets

Unrealised loss on foreign exchange rate

Earnings from operating activities before changes

in operating assets and liabilities

Decrease (increase) in operating assets

Trade accounts receivable

Other receivable and short - term loans to related parites

Inventories

Other current assets

Other non-current asset

Increase (decrease) in operating liabilities




Accrued expenses


Deferred income


Net cash from operating activities


1,244,137,825

1,945,571,467

41,382,953

(35,035,616)

(6,858,074)

(122,558,281)

(31,846,810)

47,850,294

5,665,463

147,767,112

4,872,294

88,498,398

25,281,250

(3,543,152)

-

3,351,185,123

(314,550,090)

(10,769,700)

(11,098,387)

16,938,478

(57,884,544)

62,906,127

36,356,504

(687,214)

156,769,237

20,237,921

54,000,000

(32,241,395)

3,271,162,060

1,322,687,085

1,418,798,317

31,139,049

(27,791,781)

(34,771,250)

-

-

61,635,015

-

118,735,961

20,493,839

59,045,373

11,919,138

1,639,135

3,745,417

2,987,275,298

(376,269,514)

(163,231,916)

(3,966,972)

(126,936,872)

31,426,848

3,590,720

(8,764,835)

(104,637,326)

132,131,338

225,395,449

78,000,000

6,579,597

2,680,591,815

626,991,178

632,898,444

15,513,084

(35,035,616)

-

-

(267,287,897)

-

719,600

-

3,683,707

88,498,398

25,281,250

(2,533,495)

-

1,088,728,653

(113,737,653)

(5,669,802)

(3,243,776)

12,669,349

2,818,828

64,157,061

8,808,707

75,776,041

36,188,618

(29,052,306)

54,000,000

(9,489,628)

1,181,954,092

1,123,816,601

458,014,121

5,946,462

(27,791,781)

-

-

(582,380,553)

-

-

-

4,460,773

59,045,373

11,919,138

(1,383,894)

-

1,051,646,240

(256,276,085)

(39,459,142)

13,630,882

3,700,386

(3,570,164)

19,650,469

16,392,703

(87,228,236)

192,382,591

(14,686,602)

78,000,000

7,214,083

981,397,125



(Unit : Baht)


2007 2006 2007 2006(Restated)

73

STATEMENTS OFCASH FLOWS AS AT 31 DECEMBER 2007 AND 2006


Cash flows from investing activities

Decrease (increase) in short - term investments and restricted bank deposit

Dividend received

Net cash paid for acquisition of subsidiary companies

Cash payment for acquisition of shares for shareholding restructure

Cash paid for additional investments in other companies

Cash paid for purchase of investments in subsidiary and associated companies

Cash received from sales of investments

Cash received from disposal of fixed assets

Cash paid for purchase of fixed assets

Decrease in loans to and interest receivable from related parties

Increase in intangible assets

Cash received from minority interest for investment

Decrease in minority interests from change of investment portion

Net cash used in investing activities

Cash flows from financing activities

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

financial institutions

Increase in loans from related parties

Increase in long-term loans

Decrease in liabilities under hire purchase and financial lease agreement

Repayment of long-term loans

Dividend paid

Dividend paid by subsidiaries to minority interests

Cash received from increase of share capital

Cash received from convertible debenture issue

Net cash from (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Supplemental cash flows information :-

Cash paid during the year for

Interest expense

Corporate income tax

Non-cash items :-

Fixed assets under financial lease and hire-purchase agreements

Accounts payable for purchase of fixed assets

Dividend receivable


34,366,53831,846,810

---

(575,061,523)12,914,07123,850,336

(2,998,389,886)35,000,000

(47,645,276)99,975,643

47,047,190(3,336,096,097)

380,057,637(7,535,783)

1,261,544,530(61,246,808)

(1,027,383,865)(590,518,900)(27,429,248)

--

(72,512,437)(137,446,474)1,101,048,856963,602,382

795,591,887529,557,849

62,119,636188,722,072

-

(52,990,809)8,437,500

(213,646,723)(571,680,349)(908,155,850)(63,915,448)

-62,472,846

(3,649,828,230)15,392,644

(53,767,416)-

37,860,592(5,389,821,243)

(26,459,951)11,163,264

1,846,360,000(151,117,502)

(2,503,929,507)(590,518,900)

(1,079,827)91,849,797

4,605,061,0003,281,328,374572,098,946528,949,910

1,101,048,856

439,336,367513,842,714

95,186,749134,108,232

-

(240)770,810,777

---

(929,386,288)17,288,95519,475,120

(986,198,417)39,249,584

(37,148,891)-

-(1,105,909,400)

450,200,000-

390,000,000(39,134,930)

(177,792,000)(590,518,900)

---

32,754,170108,798,86260,449,522

169,248,384

424,517,546149,378,787

-16,907,79340,000,000

7,439,94038,857,673

-(571,680,349)(908,155,850)

(1,239,923,388)-

19,526,212(1,465,619,902)

(19,860,027)(35,879,001)

-

-(4,175,294,692)

50,000,000-

1,043,800,000(41,741,042)

(1,913,014,337)(590,518,900)

--

4,605,061,0003,153,586,721(40,310,846)100,760,36860,449,522

155,456,652222,074,147

-41,429,120

543,522,880

(Unit : Baht)


2007 2006 2007 2006(Restated)

(Continued)

NOTES TO FINANCIAL STATEMENTS

74

1. GENERAL INFORMATIONBangkok Dusit Medical Services Public Company Limited was incorporated as a limited company under

Thai laws and registered the change of the status of the Company to a public limited company on 3 January1994. The Company operates in Thailand and its principal activity is hospital with the registered addressat 2, Soi Soonvijai 7, New Petchburi Road, Bang Kapi, Huaykwang, Bangkok.

2. BASIS OF PREPARATIONThe financial statements have been prepared in accordance with accounting standards enunciated under

the Accounting Profession Act B.E. 2547. The presentation of the financial statements has been made incompliance with the stipulations of the Notification of the Department of Business Development dated 14September 2001, issued under the Accounting Act B.E. 2543.

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

3. BASIS OF CONSOLIDATION3.1 The consolidated financial statements include the financial statements for the years ended 31

December 2007 and 2006 of Bangkok Dusit Medical Services Public Company Limited (herein after calledçthe Companyû) and its subsidiaries (herein after called the çsubsidiariesé) which were incorporated in Thailandexcept B.D.M.S International Medical Services Co., Ltd., Angkor Pisith Co., Ltd., Phnom Penh Medical Services Co., Ltd. and Royal Rattanak Medical Services Co., Ltd. which was incorporated in Cambodia as follows :-

FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006


Held by the Company

Samitivej Public Co., Ltd.

Bangkok Hatyai Hospital Co., Ltd.



Bangkok Prapradang Hospital Co., Ltd.




Bangkok Trat Hospital Co., Ltd.


Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Baht 1,000 million

Baht 500 million

Baht 500 million

Baht 586 million

Baht 105 million

Baht 280 million

Baht 400 million

Baht 150 million

Baht 250 million

Baht 180 million

Subsidiary companies Type of business 2007

Baht 1,000 million

Baht 500 million

Baht 500 million

Baht 586 million

Baht 105 million

Baht 280 million

Baht 400 million

Baht 150 million

Baht 250 million

Baht 180 million

2006

Registered capital

92.92

98.53

99.47

88.31

79.00

97.06

100.00

100.00

99.71

99.47

2007

92.92

98.53

99.47

88.31

79.00

97.06

100.00

100.00

99.71

99.47

2006

Percentage of shareholdingby the Company (percent)

75

Held by the Company







Royal Rattanak Medical Services Co., Ltd.

B.D.M.S. International

Medical Services Co., Ltd.

Asia International Healthcare Co., Ltd.


New Petchburi Medical Services Co., Ltd.

Bangkok Health Insurance Limited


Held by the subsidiary

Samitivej Sriracha

(held by a subsidiary at 66%)

Irving Sheridan SE Co., Ltd.


First Health Food Co., Ltd.


Sodexho Healthcare Support

Services Thailand Ltd.


Phuket Health And Travel Co., Ltd.


Hospital

Central lab

Central lab

Hospital

Hospital

Hospital

Hospital

Investment

Hospital

Hospital

Insurance

Service

Hospital

Restaurant and

distributing health

food products

Healthcaretravel service

Baht 300 million

Baht 75 million

Baht 10 million

USD 10 million

Riel 20,000 million

Riel 26,000 million

Riel 9,200 million

Baht 35 million

Baht 100 million

Baht 1 million

Baht 100 million

-

Baht 188 million

Baht 0.1 million

Baht 14 million

Baht 15 million

Baht 5 million

Subsidiary companies Type of business 2007

Baht 300 million

Baht 75 million

Baht 10 million

USD 5 million

Riel 20,000 million

-

Riel 9,200 million

Baht 5 million

-

Baht 1 million

Baht 95 million

Baht 30 million

Baht 188 million

Baht 0.1 million

Baht 14 million

Baht 15 million

Baht 5 million

2006

Registered capital

84.67

74.02

95.00

80.00

100.00

70.00

100.00

100.00

100.00

100.00

99.94

-

-

-

-

-

-

2007

79.72

74.02

95.00

80.00

100.00

-

100.00

100.00

-

100.00

99.94

100.00

-

-

-

-

-

2006

Percentage of shareholdingby the Company (percent)

Management assetsfor healthcarebusiness

Restaurant anddistributing healthfood products andfacility management

76

3.3 Material inter-company balances and transactions between the Company and its subsidiaries an the Company's investments in subsidiary companies and the share capital of the subsidiary companies are eliminated from the consolidated financial statements.

3.4 The differences between cost of investments over/under the fair value of identifiable assets andliabilities of the subsidiary companies to the extent of the Company's portion on acquisition date are shownunder the caption of "Goodwill/negative goodwill" in the consolidated balance sheets and subject toamortisation over the period of 10 - 20 years.

3.5 Results of operations of the subsidiary companies have been included in the consolidated financialstatements from their effective dates of acquisition of the investment.

3.6 The financial statements of overseas subsidiary companies are translated into Baht at the closingexchange rate as to assets and liabilities, and at monthly average exchange rates as to revenues andexpenses. The translation differences have been shown under the caption of çTranslation adjustmenté inshareholders' equity. 3.7 The separate financial statements, which present investments in subsidiaries and associates under the cost method, have been prepared solely for the benefit of the public.

4. NOTIFICATION OF NEW ACCOUNTING STANDARDS The Federation of Accounting Professions (FAP) has issued Notifications No. 9/2550, 38/2550 and 62/2550regarding accounting standards. The notifications mandate the use of the following new accounting standards. a) Thai Accounting Standards which are effective for the current year TAS 44 (revised 2007) Consolidated Financial Statements and Separate Financial Statements





Bangkok Prapradang Hospital Co., Ltd.




Bangkok Trat Hospital Co., Ltd.




Bio Molecular Laboratories (Thailand) Co., Ltd.



Royal Rattanak Medical Services Co., Ltd.

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






21.77

4.56

4.85

4.74

0.62

9.94

3.84

1.37

1.48

2.54

3.05

0.70

0.15

1.60

0.66

0.85

0.30

0.14

0.39

-

0.19

-

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

Subsidiaries 2007

22.15

4.85

4.22

4.84

0.66

11.35

3.78

1.33

1.51

2.84

2.02

0.69

0.12

0.84

0.73

-

0.33

0.02

-

0.01

0.15

0.25

2006

Subsidiaryûs total assetsas a percentage to

the consolidated total

Subsidiary's total revenuesfrom patient service

as a percentage to theconsolidated total

25.14

3.21

7.26

7.10

0.69

10.62

3.96

1.40

1.07

2.61

2.27

0.03

0.10

0.29

-

0.02

-

-

-

-

-

-

2007

23.33

3.56

6.72

7.23

0.85

10.90

4.02

1.37

1.08

3.00

1.88

1.31

0.23

-

-

-

-

-

-

-

-

-

2006

3.2 Percentage of total assets and revenues of the subsidiary company as included in the consolidatedfinancial statements The percentage of total assets and revenues of the subsidiary companies for the years ended 31

December 2007 and 2006 as included in the consolidated financial statements are as follow :-

77

TAS 45 (revised 2007) Investments in Associates TAS 46 (revised 2007) Interests in Joint Ventures These accounting standards become effective for the financial statements for fiscal years beginning on or after 1 January 2007. During the first quarter of the current year, the Company changed its accounting policy for recording investments in subsidiaries and associates in the separate financial statements in orderto comply with the revised Thai Accounting Standards No. 44 as discussed in Note 5. b) Thai Accounting Standards which are not effective for the current year TAS 25 (revised 2007) Cash Flow Statements TAS 29 (revised 2007) Leases TAS 31 (revised 2007) Inventories TAS 33 (revised 2007) Borrowing Costs TAS 35 (revised 2007) Presentation of Financial Statements TAS 39 (revised 2007) Accounting Policies, Changes in Accounting Estimates and Errors TAS 41 (revised 2007) Interim Financial Reporting TAS 43 (revised 2007) Business Combinations TAS 49 (revised 2007) Construction Contracts TAS 51 Intangible Assets These accounting standards will become effective for the financial statements for fiscal years beginningon or after 1 January 2008. The management has assessed the effect of these accounting standards and believes that they will not have any significant impact on the financial statements for the year in which theyare initially applied except for the following accounting standard. TAS 43 (revised 2007) does not require the Company and its subsidiaries to amortise goodwill, includingnegative goodwill, acquired in a business combination. Such goodwill is instead to be tested for impairment,and measured at cost less accumulated impairment losses. In case of negative goodwill, identificationand measurement of the acquiree's assets, liabilities and contingencies should be reassessed and the measurement of the cost of the combination and the remaining balance is to be recognised as income immediately in the income statement. This accounting standard applies to goodwill arising from business combinations for which the agreement date is on or after 1 January 2008. Previously recognised goodwill can be accounted for prospectively, according to the treatment as outlined in the accounting standard. Hence, in 2008, the Company and its subsidiaries will adjust the goodwill and negative goodwill as of 31 December 2007 according to the treatment as outlined in the accounting standard.

5. CHANGE IN ACCOUNTING POLICY FOR RECORDING INVESTMENTS IN SUBSIDIARY AND ASSOCIATED COMPANIES IN THE SEPARATE FINANCIAL STATEMENTS During the first quarter of the current year, the Company changed its accounting policy for recording investments in subsidiary and associated companies in the separate financial statements from the equity method to the cost method, in compliance with Accounting Standard 44 (Revised 2007) "Consolidated Financial Statements and Separate Financial Statement", under which investments in subsidiaries and associates are to be presented in the separate financial statements under the cost method. In this regard, the Company has restated the previous period's separate financial statements as thoughthe investments in the subsidiary and associated companies had originally been recorded using the cost method. The change has the effect of decreasing net income in the separate income statements for the year ended 31 December 2007 and 2006 by Baht 617 million (Baht 0.52 per share) and Baht 199 million (Baht 0.17 per share), respectively. The effect of the change in accounting policy to shareholders' equity as at 1 January 2007 and 2006 has been presented under the heading of "Cumulative effect of the changein accounting policy for investments in subsidiary and associated companies" in the separate statements of changes in shareholdersû equity. Such change in accounting policy affects only the accounts related to investments in subsidiary and associated companies in the Company's separate financial statements, with no effect to the consolidated financial statements.

6. CHANGE IN ACCOUNTING POLICY FOR RECORDING BUILDING Prior to 2007 the Company and its subsidiaries initially recorded land and building at cost on acquisitiondates. Land of the Company and land and building of its subsidiaries are subsequently revalued by independent professional appraiser to their fair values. During the first quarter of the current year, the group changed its accounting policy for recording of building from revalued amount to historical cost. In this regard, the group has restated the previous period'sconsolidated financial statements as though building had originally been recorded using the historical cost method. The cumulative effect of the change in accounting policy has been presented under the heading of çCumulative effect of the change in accounting policy for recording buildingé in the consolidated statements of changes in shareholdersû equity.

78

7. SIGNIFICANT ACCOUNTING POLICIES 7.1 Revenue recognition Hospital revenue Revenues from hospital operations, mainly consisting of medical fees, hospital room sales, and medicine sales, are recognised as income when services have been rendered or medicine delivered. Service income Service income is recognised when services have been rendered. Interest income Interest income is recognised on an accrual basis based on the effective rate. Dividends Dividends are recognised when the right to receive the dividends is established. 7.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at financial institutions with an original maturityof three months or less and are free from restrictions. 7.3 Trade accounts receivable and allowance for doubtful accounts Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided to cover the estimated losses that may incur in collection. The adequacy of the allowance is reviewed and evaluated in relation to the collection experience, age of debt and payment ability. Debt will be written off when considered uncollectible. 7.4 Inventories Inventories are valued at lower of cost (weighted average basis) and net realisable value. Net realisablevalue is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. 7.5 Investments Investments in associated companies are accounted for in the consolidated financial statements using the equity method. Investments in subsidiary and associated companies are accounted for in the separate financial statementsusing the cost method. Other investments in non-marketable securities which the Company regards as other investment are stated at cost. Allowance for impairment loss will be made when the net realisable value is lower than the cost of investments. Investment in available for sales securities is determined at fair value, which is based on the latest bid price quoted on the Stock Exchange of Thailand on the last working day of the year. Change in the value of the available for sales securities is shown as a separate item in shareholder's equity as revaluation surplus on investments until securities are sold, the change will be included in income statements. 7.6 Property, plant and equipment and depreciation Land is stated at cost or revalued amount. Plant and equipment are stated at cost less accumulated depreciation and provision for impairment (Before the year 2007 : plant are stated at cost or revalued amount). Depreciation of plant and equipment is calculated by reference to their cost on a straight-line basis over the estimated useful lives of each item of property plant equipment, except assets of the Companywhich were acquired before 1988 are depreciated on a declining balance method. The estimated useful lives of assets are as follows :-

Building, structures and building improvements 5 - 50 yearsMedical tools and equipment, furniture and office equipment 3 - 10 yearsVehicles 5 - 8 years

No depreciation is provided on land and fixed assets under construction and installation.Revalued assets The Company and its subsidiaries initially recorded land at cost on acquisition dates. Land is subsequentlyrevalued by independent professional appraiser, to its fair values. Revaluations are made with sufficient regularity to ensure that its carrying amounts do not differ materially from its fair value at the balance sheet date.

79

The Company and its subsidiaries records the differences incurred from revaluation as follows :- - When an asset's carrying amount is increased as a result of a revaluation, the increase should be credited directly to equity under the caption of "Surplus on revaluation of land". However, a revaluation increase should be recognised as income to the extent that it reverses a revaluation decrease of the same asset previously recognised as an expense. - When an asset's carrying amount is decreased as a result of a revaluation, the decrease should be recognised as an expense in the income statement. However, a revaluation decrease should be charged directly against any related "Surplus on revaluation of land" to the extent that the decrease does not exceedthe amount held in the revaluation surplus in respect of that same asset and the excess is recognised an expense in the income statement. 7.7 Hire-purchase and financial lease agreements The Company and the subsidiaries record liabilities under hire purchase agreement at hire purchase payables less related interest. The liabilities are repayable according to the installment schedules in the hire-purchase agreements. Fixed assets acquired under hire purchase agreements are recorded at their cash price and are registered in the Company's and the subsidiaries' names upon completion of repayment. In addition, the Company and the subsidiaries record fixed assets under finance leases as assets and related liabilities in the balance sheets at amounts equal to the lower of fair value of the leased property or at the present value of the minimum lease payments at the inception of the lease. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease. The interest charge is recorded to periods during the lease term on the remaining balance of the liability for each period. 7.8 Operating lease Lease of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are recognised as expensesin the income statements over the period of the lease. 7.9 Other intangible assets and amortisation Other intangible assets, mainly leasehold right and computer software, are stated at cost less accumulatedamortisation and provision for impairment. The Company and its subsidiaries amortise intangible assets on a straight-line method over the period of 5 - 10 years or based on the period in the agreement and the amortisation is included in the income statement. 7.10 Impairment of assets The Company and its subsidiaries assess at each reporting date whether there is an indication that an asset may be impaired. If any such indication exist, the Company and its subsidiaries make an estimate of the asset's recoverable amount (An asset's recoverable amount is the higher of fair value less costs to selland value in use). Where the carrying amount of the asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses are recognised in the income statement. 7.11 Deferred income Deferred income represents cash received in advance from Life Privilege members and is amortised over the periods of 10 years. 7.12 Related party transactions Related parties comprise enterprises and individuals that control or are controlled by the Company, whether directly or indirectly, or which are under common control with the Company. In addition, related parties include associated companies and individuals or enterprises which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, and key management personnel, and directors and officers with authority in the planning and direction of the Company's operations. 7.13 Foreign currencies Transactions in foreign currencies incurred during the year are translated into Baht at the rates ruling on the transaction dates. Monetary assets and liabilities denominated in foreign currencies outstanding at the balance sheet date are translated into Baht at the rates ruling on the balance sheet date. Exchange gains and losses are included in the income statements. 7.14 Employee benefits Salary, wages, bonuses and contributions to the social security fund and provident fund are recognised as expenses when incurred.

80

986,129,22651,416,727

1,037,545,953

(73,943,571)963,602,382

2007

767,832,780441,526,185

1,209,358,965

(108,310,109)1,101,048,856

2006

Consolidated financial statements Separate financial statements

169,248,3848,318

169,256,702

(8,318)169,248,384

2007

60,449,5228,078

60,457,600

(8,078)60,449,522

2006

Cash and deposit at banksFixed deposits

Less : Fixed deposits with maturity more than 3 months and restricted bank depositTotal cash and cash equivalents

(Unit : Baht)

Related parties ë Less than 3 months ë 3 - 6 months ë 6 - 12 months ë over 12 monthsTotal accounts receivable - related partiesOthers ë Less than 3 months ë 3 - 6 months ë 6 - 12 months ë over 12 monthsTotal accounts receivable - othersLess : Allowance for doubtful accountsTotal trade accounts receivable Total trade accounts receivable - net

4,27336422521

4,883

1,116,222148,40584,25337,907

1,386,787(58,042)

1,328,7451,333,628

2007

2,106418

9-

2,533

939,92355,48379,31628,237

1,102,959(45,031)

1,057,9281,060,461

2006


7,7354038526

8,249

416,16394,90055,83424,152

591,049(24,644)566,405574,654

2007

4,119403

9-

4,531

385,20528,29757,56621,754

492,822(20,924)471,898476,429

2006

(Unit : Thousand Baht)

7.15 Income tax Income tax is provided for in the accounts based on the taxable profits determined in accordance with tax legislation. 7.16 Financial instruments Financial instruments presented in the balance sheets consist of cash and cash equivalents, short-term investments, accounts receivable, investments, short-term loans, accounts payable, debentures and borrowings. The accounting policy for each item is separately disclosed in the related notes. The Company and its subsidiaries have no policy to hold any derivative financial instruments for speculative or trading purpose. 7.17 Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions in certain circumstances, affecting amounts reported in these financial statements and related notes. Actual results could differ from these estimates.

8. CASH AND CASH EQUIVALENTS Cash and cash equivalents for the years ended 31 December 2007 and 2006, consist of the following :

9. RESTRICTED BANK DEPOSIT As at 31 December 2007, the subsidiaries had placed their fixed deposits at bank with maturity over 3 months and savings account of Baht 17.3 million (2006 : Baht 13.8 million) as a collateral against bank guarantees as discussed in Note 29.1.

10. TRADE ACCOUNTS RECEIVABLE As at 31 December 2007 and 2006, the aging analysis of the outstanding trade accounts receivable is as follows :-

81

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

Transaction Pricing and lending policy

Revenue from hospital operation

Revenue from lab analysis service

Revenue from consulting and management

Interest rate charge of inter-company loan

Sales and purchase of fixed assets

Prices are based on the price charged to normal customers

Prices are based on the price charged to normal customers

Agreed prices and in accordance with normal course of business

Interest rate is close to rate charged by bank to normal customer

Agreed prices and in accordance with normal course of business

Transactions with subsidiaries

(eliminated from the consolidated financial statements)

Patient services income and lab services

Consulting and management fees income

Interest income

Dividend income (Note 13)

Other income

Service cost

Other expenses

Dividend payment

Purchase of investments in ordinary shares

Purchase of medical instruments

Sales of medical instruments

Transactions with associated companies


Consulting and management fees income

Interest income

Dividend income (Note 14)

Other income

Service cost

Interest expense

Other expenses

Purchase of investments in ordinary shares

Transactions with related parties


Dividend income

Service cost

Other expenses

Dividend payment

Sales of investments in ordinary shares

2007 2006


2007 2006

(Unit : Million Baht) The significant inter-company transactions are as follows :-

-

-

-

-

-

-

-

-

-

-

-

0.2

-

1.5

1.1

0.2

27.7

0.4

8.1

-

13.7

3.2

-

22.2

57.8

17.3

-

-

-

-

-

-

-

-

-

-

-

-

1.5

-

3.9

8.4

23.0

0.4

23.7

0.2

7.1

-

1.7

12.2

36.3

-

18.6

239.8

8.4

235.4

49.4

211.9

203.0

-

-

-

16.6

-

-

1.5

1.1

-

11.0

-

-

-

11.0

3.2

-

16.7

57.8

17.3

15.0

135.0

0.8

578.4

40.9

135.5

75.9

1.5

2,068.6

14.0

-

-

1.5

-

3.9

-

10.3

-

19.8

0.2

6.9

-

1.5

6.2

36.3

-

82

The outstanding balances of the above transactions as at 31 December 2007 and 2006 have been separately shown in the balance sheets, as follows :-

-

48

4,836

4,884

-

-

-

165,693

12,092

177,785

177,785

-

-

-

-

-

-

-

-

156,531

156,531

2007

-

46

2,487

2,533

-

-

-

166,029

-

166,029

166,029

-

-

-

-

-

-

-

-

117,042

117,042

2006


4,155

-

4,094

8,249

36,137

36,137

27,537

187

157

27,881

64,018

-

-

40,000

40,000

1,201

1,201

73,610

73,610

-

-

2007

2,351

-

2,180

4,531

27,460

27,460

30,888

-

-

30,888

58,348

35,000

35,000

543,523

543,523

1,201

1,201

77,859

77,859

-

-

2006


Trade accounts receivable - related parties

Subsidiary companies

Associated companies

Related companies

Total trade accounts receivable - related parties

Other receivable - related parties

Consulting and management fee receivable


Total

Other



Related companies

Total

Total other receivable - related parties

Short-term loans to related party

Subsidiary company

Total short-term loans to related party

Dividend receivable - related party

Subsidiary company

Total dividend receivable - related party

Long-term loans to related party

Subsidiary company

Total long-term loans to related party

Interest receivable - related parties


Total interest receivable - related parties

Long-term other accounts receivable - related

parties (included in other non-current assets)


Total long-term other accounts receivable - related parties

83


Associated company

Related companies

Total short-term loans from related parties

Trade accounts payable - related parties



Related companies

Total trade accounts payable - related parties




Related companies

Total other payable - related parties

10,000

3,627

13,627

-

10,888

238

11,126

-

5,342

37,175

42,517

2007

10,000

11,163

21,163

-

6,927

7,695

14,622

-

-

6,160

6,160

2006


-

-

-

43,068

2,375

-

45,443

34,594

5,246

2,057

41,897

2007

-

-

-

10,458

2,425

6,204

19,087

29,356

-

3,732

33,088

2006



Associated company

Related company

Total short-term loans from related parties

10,000

11,163

21,163

31 December 2006

-

2,939

2,939

Increase


-

(10,475)

(10,475)

Decrease

10,000

3,627

13,627

31 December 2007


Short-term loan to related party


Total short-term loan to related party

Long-term loan to related party

Subsidiary company

Total long-term loan to related party

Short-term loan from related party

Subsidiary company

Total short-term loan from related parties

35,000

35,000

1,201

1,201

-

-

31 December 2006

-

-

-

-

50,000

50,000

Increase

Separate financial statements

(35,000)

(35,000)

-

-

(50,000)

(50,000)

Decrease

-

-

1,201

1,201

-

-

31 December 2007


Movement of loans to and loans from related parties during the year are summarised as follow:-

The Company and related parties charge interest on loans at MLR to MLR+0.5% per annum, and fixedrate per annum.

84

Bangkok Phuket Hospital Co., Ltd. had an interest payable to the Company total of Baht 4 million repayable into two equal installments, in December 2009 and December 2010. Bangkok Phuket Hospital Co., Ltd. had mortgaged its land, building and construction to be created in the future as collateral securityagainst the above loan. However, in the first quarter of 2007 Bangkok Phuket Hospital Co., Ltd. already made the settlement in full amount. As at 31 December 2007, the Company had long overdue loan interest receivable from Bangkok Hatyai Hospital Co., Ltd. of Baht 83.19 million (31 December 2006 : Baht 83.19 million). The Company has providedallowance for doubtful accounts of Baht 9.58 million (31 December 2006 : Baht 9.58 million). The managementbelieves that the allowance for doubtful accounts will be sufficient in respect of these loans and the subsidiaryhas pledged its land as collateral for the loan.

Management AgreementThe Company The Company services hospital management to subsidiary companies which the remunueration rates are based on the net revenue from hospital operations. The Company has entered into the Hospital Managing Employment Agreement with BNH Medical Center Co., Ltd. a subsidiary company, for a period of five years. The agreement is renewable. Remunerationrates for the 1st - 5th years are 2.5% - 5% gross margin before interest expense, income tax, depreciation,and amortisation of deferred expense per annum, and these rates rise to 8% per annum from the 6th year onwards. The employer requests to suspend the management remuneration of the 1st -5th years until the 6th year. However, this agreement was terminated in 2006.The Subsidiary The subsidiary company has entered into a Hospital Managing Employment Agreement with an associatedcompany which transformed to be a subsidiary company in 2006. The agreement is for a period of ten yearsand is entitled to renew. The subsidiary company shall receive managing income at the certain percentage of total operation result as stated in the agreement. The payment shall be made on a monthly basis, startingin June 2002.

Long Term AgreementSubsidiaries As at 5 June 2003, a subsidiary company entered into the 3 years land lease agreement with the Company for building construction. The subsidiary company has to pay a monthly rental fee at the rate stipulated in the agreement, commencing from 1 January 2004. On 1 November 2006, the subsidiary has extended into the 3 years land lease agreement. The subsidiary company has to pay a monthly rental fee at the rate stipulated in the agreement, commencing from 1 January 2007. In 2005, a subsidiary company entered into the 3-year building rental agreement with another subsidiarycompany for the hospital operation. That subsidiary company has to pay a monthly rental fee for the rate as agreed in the agreement commencing from May 2005.

Air Ambulance Service AgreementAssociated company On 1 September 2007, an associated company entered into the air ambulance service agreement with the Company. The agreement is for a period of 3 years starting from the date the service is commenced and is entitled to renew. The Company has to pay a service fee at the rate stipulated in the agreement. Directors and management's remuneration In 2007 the Company and its subsidiaries paid meeting allowances and gratuities to their directors and management total of Baht 33.75 million and the Company only total of Baht 16.97 million (2006 : Baht 33.48 million and the Company only : Baht 17.61 million).Guarantee obligations with related party The Company had outstanding guarantee obligations with a related party as described in Note 21 to the financial statements.

85

12. INVENTORIES As at 31 December 2007 and 2006, inventories consisted of :-

13. INVEESTMENTS IN SUBSIDIARY COMPANIES

Medicines and medical supplies

Reagent

Supplies and others

Total

188,556,018

20,904,822

2,780,333

212,241,173

2007

172,462,380

13,401,181

15,279,225

201,142,786

2006


59,617,858

-

-

59,617,858

2007

43,820,389

-

12,553,693

56,374,082

2006

(Unit : Baht)





Bangkok Prapadang Hospital Co., Ltd.












Royal Rattanak Medical Services Co., Ltd

B.D.M.S. International Medical

Services Co., Ltd.






Total investments in subsidiary companies

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Hospital

Central Lab

Central Lab

Hospital

Hospital

Hospital

Hospital

Investment

Hospital

Hospital

Insurance

Service

Baht 1,000 million

Baht 500 million

Baht 500 million

Baht 586 million

Baht 105 million

Baht 280 million

Baht 400 million

Baht 150 million

Baht 250 million

Baht 180 million

Baht 300 million

Baht 75 million

Baht 10 million

USD 10 million

Riel 20,000 million

Riel 26,000 million

Riel 9,200 million

Baht 35 million

Baht 100 million

Baht 1 million

Baht 100 million

Baht 100 million

92.92

98.53

99.47

88.31

79.00

97.06

100.00

100.00

99.71

99.47

84.67

74.02

95.00

80.00

100.00

70.00

100.00

100.00

100.00

100.00

99.94

-

92.92

98.53

99.47

88.31

79.00

97.06

100.00

100.00

99.71

99.47

79.72

74.02

95.00

80.00

100.00

-

100.00

100.00

-

100.00

99.94

100.00

Separate financialstatements

%Shareholding

Company name

Dividends

2007 2006


-

14,780

-

-

-

135,884

40,000

22,500

-

-

-

22,208

-

-

-

-

-

-

-

-

-

-

235,372

-

-

-

-

-

577,493

-

-

-

-

-

-

950

-

-

-

-

-

-

-

-

-

578,443

2007 2006

1,453,948

572,465

607,014

580,341

96,775

705,759

415,020

150,000

245,760

449,440

865,155

56,768

9,502

287,840

177,000

154,063

94,208

35,000

100,000

999

47,027

-

7,104,084

1,453,948

572,465

607,014

580,341

96,775

705,759

415,020

150,000

245,760

449,440

814,650

56,768

9,502

152,044

177,000

-

94,208

5,000

-

999

37,027

33,847

6,657,567

Investments -cost method

2007 2006

Type ofbusiness

Paid-upCapital

86

Domestic hospital business groupBangkok Pattaya Hospital Co., Ltd. In the first quarter of 2006, the Company restructured the shareholding structure according to the resolution of the Extraordinary General Meeting of the Company's shareholders No. 1/2005 (as described in Note 33 to the financial statements). As a result of the shareholding restructure, Bangkok Pattaya HospitalCo., Ltd. changed its status from an associated company to be a subsidiary company.

BNH Medical Center Co., Ltd. In the year 2006, the Company purchased additional investment of 0.43 million shares in BNH Medical Center Co., Ltd. from the former shareholders totally Baht 4.0 million. As a result, the Company increase the percentage of shareholding in that company to 88.31 percent.

Wattanavej Co., Ltd. In the first quarter of 2006, the Company restructured the shareholding as approved by the ExtraordinaryGeneral Meeting of the Company's shareholders No. 1/2006 (as described in Note 33 to the financial statements).

Bangkok Ratchasima Hospital Co., Ltd. In the second quarter of 2006, the Company purchased 22.19 million shares at Baht 34 per share totallyBaht 754.5 million of Bangkok Ratchasima Hospital Co., Ltd. from former shareholders. As a result, the Company had a percentage of shareholding of 73.97 percent in the subsidiary. In the fourth quarter of 2006, the Company purchased additional investment in 1.7 million shares in Bangkok Ratchasima Hospital Co., Ltd. at Baht 34 per share totally Baht 58.7 million. As a result the Company had a percentage of shareholding of 79.72 percent in the subsidiary. In the first quarter of 2007, the Company had additional investment in 1.02 million shares of Bangkok Ratchasima Hospital Co., Ltd. at Baht 34 per share totally Baht 34.7 million. As a result the Company had a percentage of shareholding of 83.12 percent in the subsidiary. In the second quarter of 2007, the Company had additional investment in 0.47 million shares of BangkokRatchasima Hospital Co., Ltd. at Baht 34 per share totally Baht 15.9 million. As a result the Company had a percentage of shareholding of 84.67 percent in the subsidiary.

Samitivej Public Co., Ltd. and Samitivej Sriracha Co., Ltd. In the second quarter of 2006, a subsidiary company, Samitivej Public Co., Ltd. purchased additional investment of 5.58 million shares at Baht 15 per share totally Baht 83.75 million in Samitivej Sriracha Co., Ltd.from the former shareholders. As a result, the subsidiary increased the percentage of shareholding in that company from 30 percent to 59.78 percent and that company changes the status from an associated company to be a subsidiary company. In year 2007, the subsidiary company purchased additional investment of 1,135,500 shares at Baht 25 per share total of Baht 28.39 million in Samitivej Sriracha Co., Ltd. from the former shareholders. As a result,the subsidiary company increases the percentage of share holding in that company from 59.78 percent to 65.83 percent.

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

87

The Company held 39,855,148 ordinary shares of Bangkok Trad Hospital Co., Ltd. before it increased its capital which represented 99.64 percent of the registered capital. The Company subscribed the capital increase according to the entitlement of shares of 9,963,787 shares with par value of Baht 5 total of Baht 49,818,935 so the Company had 49,818,935 ordinary shares. In the third quarter of 2006, the Company purchased additional investment of 35,813 unsubscribed shares portion in Bangkok Trad Hospital Co., Ltd. totally Baht 0.18 million. As a result, the Company increases the percentage of shareholding in that company to 99.71 percent.

Global Medical Network Co., Ltd. In February 2007, the Board of Director's Meeting passed a resolution to set up Global Medical NetworkCo., Ltd. with an investment of Baht 100 million. The objective is to operate the hospital. The Company has a percentage of shareholding of 100 percent in that company.

Hospital business group in Cambodia Angkor Pisith Co., Ltd. The Board of Directors' Meeting No. 1/2006 held on 21 January 2006 passed a resolution to set up Angkor Pisith Co., Ltd. in Cambodia with the objectives to operate the hospital in that country with an investment in the second quarter of 2006 amounting to Baht 48.2 million and a percentage of shareholdingof 49 percent. In the third quarter of 2006, Angkor Pisith Co., Ltd. has increased its registered share capital of 4,000 shares at U.S. dollar 1,000 per share. As a result, the registered capital increased from 1,000 shares to 5,000 shares at a par value of U.S. dollar 1,000 per share. The Company purchased additional3,510 shares totally Baht 103.8 million. Therefore, the percentage of shareholding after additional share capital increase of 4,000 shares amounting to Baht 152 million, represented 80 percent of shareholding in that company. In the fourth quarter of 2007, Angkor Pisith Co., Ltd., a subsidiary company increased its registered share capital of 5,000 shares at U.S. dollar 1,000 per share. The Company purchased additional 4,000 sharestotally Baht 135.8 million and still remained 80 percent of shareholding in that company.

Phnom Penh Medical Services Co., Ltd. The Board of Directors' Meeting No. 10/2006 held on 21 October 2006 passed a resolution to set up Phnom Penh Medical Services Co., Ltd. in Cambodia to operate hospital in that country with an investmentamounting to Baht 177 million which represents a percentage of shareholding of 100 percent in that company.

Royal Rattanak Medical Services Co., Ltd. The Board of Directors' Meeting No. 2/2007 held on 30 May 2007 passed a resolution to set up Royal Rattanak Medical Services Co., Ltd. in Cambodia to operate hospital in that country with an investment amounting to Baht 154.06 million which represents a percentage of shareholding of 70 percent in that company.

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

88

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

Bangkok Helicopter Services Co., Ltd. In the first quarter of 2007, the Company sold the investment in Bangkok Helicopter Services Co., Ltd. to a related company of 1.5 million shares at Baht 11.3 per share totalling amount of Baht 17.3 million. As a result, the Company decreases a percentage of shareholding in that company from 100% to 49% and that company changes its status from a subsidiary company to an associated company.

14. INVESTMENTS IN ASSOCIATED COMPANIES 14.1 Detail of associated companies

Pharmaceutical

Real estate

Real estate

Real estate

Service

Hospital

Management

service

Baht 21.4 million

Baht 5 million

Riel 20 million

Riel 20 million

Riel 20 million

Baht 100 million

Baht 120 million

Baht 5 million

49.00

30.0049.0049.0049.0049.0026.18

26.00

49.00

30.0049.0049.0049.00--

26.00


Consolidatedfinancial statements

%Shareholding

Company name

Cost Method

2007 2006


52,500

1,50010110188

50,859757,637

862,786

52,500

1,50010110188

--

54,290

2007 2006

87,235

1,4513,1101,4585,802

37,787805,594

942,437

1,029

1,029

943,446

73,243

1,45110110188

--

74,984

-

-

74,984

Equity Method

2007 2006Type ofbusiness

Paid-upCapital

Production ofTelevisionandRadio program

Associated companies held

by the Company

The Medic Pharma Co., Ltd.


S.R. Property Investment Co., Ltd.

Siem Reap Land Investment Co., Ltd.



Ramkhamhaeng Hospital Public Co., Ltd.

Total investments in associated

companies held by the Company

Accociated companies held

by the subsidiary company

Sodexho Support Services

(Thailand) Co., Ltd

Total investment in associated company

held by the subsidiary company

Total investment in associated companies

in the consolidated financial statements

89

Associated companies held by the Company








Associated companies held by the subsidiary company

Samitivej Sriracha Co., Ltd.

Sodexho Support Services (Thailand) Co., Ltd.

Total

Consolidatedfinancial statements


Company's name

Dividend received


1,050

-

-

-

-

-

-

-

-

1,050

3,938

-

-

-

-

-

-

4,500

-

8,438

2007 2006

13,992

-

471

214

-

(8,848)

-

-

1,029

6,858

7,768

884

-

-

-

-

-

6,130

(999)

13,783

2007 2006


Total

Fair values as at 31 DecemberCompany's name

1,746,785

1,746,785

2007

1,021,440

1,021,440

2006


Share of income/loss frominvestments in

associated companies

14.2 Fair values of investments in associated company which are listed companies in the StockExchange of Thailand

14.3 Summarised financial information of associated companies

12.10.32)

75.734.4

165.0180.9

2,2602)

26.0

48.31.6

79.436.1

166.0--

21.1

Net income (loss)for the year ended

Total revenuesfor the year ended

Totalliabilities as at

Totalassets as at

Paid-upcapital as

Company's name

31 December

2007 2006

(Unit: Million Baht)

26.71.71)

0.50.2-

(20.8)2572)

4.9

18.12.1-----

(5.1)

2007

272.09.61)

0.50.2-5.4

1,9252)

118.5

213.719.60.1----

43.2

31 December

234.63.41)

79.636.2

166.9258.0

3,9892)

29.9

203.83.0

79.636.3

166.2--

20.2

2007 2006

31 December

Baht21 million

Baht5 million

Baht5 million

Baht20 million

Baht20 million

Baht20 million

-

-

2007 2006

Baht21 million

Baht5 million

Baht5 million

Baht20 million

Baht20 million

Baht20 million

Baht100 million

Baht120 million

31 December 31 December

2007 2006 2006

Associated companies held by the Company








1) Information from the financial statements prepared by the management of the associate

2) Information as at 30 September 2007

Accociated companies held by the subsidiary company

Sodexho Support Services (Thailand) Co., Ltd

90

Domestic hospital business groupRamkhamhaeng Hospital Public Co., Ltd . In the fourth quarter of 2007, the Company purchased additional investment of 0.86 million shares at Baht 480 per share totalling Baht 413.62 million in Ramkhamhaeng Hospital Public Co., Ltd. from the formershareholders. As a result, the Company increased the percentage of shareholding in that company from 19.00 percent to 26.18 percent and that company changes the status to become an associated company.

Hospital Business in Cambodia GroupSiem Reap Land Investment Co., Ltd. The Board of Directors' Meeting No. 1/2006 held on 21 January 2006 passed a resolution to set up Siem Reap Land Investment Co., Ltd. in Cambodia with an investment amounting to Baht 0.1 million to holdland in that country. The Company has a percentage of shareholding of 49 percent in that company.

Phnom Penh First Property Co., Ltd. The Board of Directors' Meeting No. 10/2006 held on 21 October 2006 passed a resolution to set up Phnom Penh First Property Co., Ltd. in Cambodia to hold land in that country with an investment amountingto Baht 0.1 million which represents a percentage of shareholding of 49 percent in that company.

Other Hospital Related BusinessBangkok Helicopter Services Co., Ltd. In the second quarter of 2007, the Company had additional investment in 3.43 million shares of BangkokHelicopter Services Co., Ltd. at Baht 10 per share, which was partially paid, totally Baht 19.6 million. In July2007 the remaining unpaid share of Baht 14.7 million had been called and fully paid. The total investment is Baht 34.3 million. The Company has maintained a percentage of shareholding of 49% in that associate. The calculation of investment under the equity method as at 31 December 2007 and share of profit from investment in some associated companies for the year ended 31 December 2007 of approximately Baht 14 million or equivalent to 1.1 percent of net income for the year were calculated based on financial statements which were prepared by the associated companies and had not yet been audited by their auditors.

Other companies held by the Company

Investments in marketable securities


Thai Military Bank Public Co., Ltd.

Krungdhon Hospital Public Co., Ltd.

Eakchon Hospital Public Co., Ltd.

Add : Revaluation surplus (loss) on investments

Investments in marketable securities

Investments in other companies

X-Ray Computer Urupong Co., Ltd.

Computer Center Co., Ltd.

Phyathai X-ray Co., Ltd.

Hospital

Bank

Hospital

Hospital

X-ray lab

Rental of medical instrument

120

133,143

150

125

80

-

130

19.00

-

0.13

0.20

5.11

-

-

Investment (cost)

Company name Type of business


-

1,770

208

350

2,328

(79)

2,249

4,520

25

3

342,915

1,770

208

350

345,243

679,137

1,024,380

4,520

25

3

2007 2006Paid-upcapital

(Million Baht)% shareholding

15. OTHER LONG-TERM INVESTMENTS

91

During the third quarter of 2006, the Company purchased an investment in 273 million shares at Baht 3.1875 per share totalling Baht 870.3 million in Prasit Pattana Public Company Limited from the former shareholders. As a result, the Company had a percentage of shareholding of 15.76 percent in that company.In the fourth quarter of 2006 the Company purchased additional investment of 9.5 million shares in that company totalling Baht 33 million. As a result, the Company has increased the percentage of shareholding to 16.31 percent.

16. OTHER INVESTMENTS

Winstore Co., Ltd.

Thai Longstay Management Co., Ltd.

Prasit Pattana Public Company Limited

Superior Biotech Holding Co., Ltd.

Less : Allowance for impairment of investments

Investments in other companies-net

Other long-term investments - net

in the separate financial statements

Other company held by the subsidiary company

Thai Herbal Products Co., Ltd.

Less : Allowance for impairment of investments

Investment in other companies - net

Other long-term investments - net in the consolidated financial statements

Retail and wholesale

Travel business

Investment in medical services

Investment

Sales of herbal products

142

25

1,732.05

44

80

0.36

2.12

16.31

9.09

0.60

226

531

903,156

5,000

913,461

(254)

913,207

915,456

290

(66)

224

915,680

226

531

903,156

5,000

913,461

(254)

913,207

1,937,587

290

(66)

224

1,937,811

Related companies

Udon Pattana (1994) Co., Ltd.

Bangkok Airways Co., Ltd.

Total

Less : Allowance for impairment

of investments

Total other investments

Hospital

Airline

300,000

440,000

10.00

3.27

Company name

Dividend received


-

3,249

3,249

-

3,249

-

2,310

2,310

-

2,310

2007 2006

31,650

36,000

67,650

(12,333)

55,317

31,650

36,000

67,650

(12,333)

55,317

Investment under costmethod

2007 2006Percent of

shareholdingPaid up

share capital

Investment (cost)

Company name Type of business

Type ofbusiness


2007 2006Paid-upcapital

(Million Baht)% shareholding

92

17. PROPERTY, PLANT AND EQUIPMENT

3,423,293,567

-

3,423,293,567

382,954,785

113,763,690

-

-

(1,183,900)

(289,200)

3,918,538,942

15,221,439

-

15,221,439

-

-

-

-

-

15,221,439

-

2,387,500

2,387,500

3,408,072,128

3,900,930,003

Assets which are stated at cost

Consolidated financial statement

(Unit : Baht)

Assets which arestated at cost orreappraised value

Land and landimprovement

13,175,998,624

(300,059,459)

12,875,939,165

-

62,786,591

1,446,325,257

(7,420,900)

(143,526,837)

(10,151,685)

14,223,951,591

3,346,110,871

(56,937,738)

3,289,173,133

876,990,322

-

(275,212)

(5,426,653)

(4,245,474)

4,156,216,116

-

2,558,365

2,558,365

9,586,766,032

10,065,177,110

Building andbuilding

improvement

8,253,902,851

-

8,253,902,851

-

1,031,391,682

368,730,193

(3,409,793)

138,841,315

(126,563,998)

9,662,892,250

4,543,476,423

-

4,543,476,423

968,437,594

2,143,234

(1,104,623)

9,932,712

(119,317,736)

5,403,567,604

-

-

-

3,710,426,428

4,259,324,646

Medical toolsand equipment

362,164,648

-

362,164,648

-

32,065,662

3,562,401

(172,331)

-

(13,448,062)

384,172,318

195,790,403

-

195,790,403

59,839,164

-

(40,917)

-

(12,836,480)

242,752,170

-

-

-

166,374,245

141,420,148

992,858,579

-

992,858,579

-

1,758,360,924

(1,821,341,540)

-

10,235,977

(10,660,401)

929,453,539

-

-

-

-

-

-

-

-

-

-

-

-

992,858,579

929,453,539

26,208,218,269

(300,059,459)

25,908,158,810

382,954,785

2,998,368,549

(2,723,689)

(11,003,024)

4,366,555

(161,113,346)

29,119,008,640

8,100,599,136

(56,937,738)

8,043,661,398

1,905,267,080

2,143,234

(1,420,752)

4,506,059

(136,399,690)

9,817,757,329

-

4,945,865

4,945,865

17,864,497,412

19,296,305,446

1,377,957,604

1,905,267,080

Vehicles

Building undercontructionand

medical toolsandequipment under

installation

Total

Cost/reappraised value

31 December 2006 -

as previously reported

31 December 2006 - as restated

Increase from asset revaluation

Purchase

Transfer in / (Transfer out)


Reclassification

Disposals

31 December 2007

Accumulated depreciation

31 December 2006 -

as previously reported


Depreciation for the year



Reclassification

Disposals

31 December 2007

Impairment of fixed assets

31 December 2006

Increasing during the year

31 December 2007

Net book value


31 December 2007

Depreciation charged (included in

income statement) for the year

2006

2007

Cumulative effect of the changein accounting policy forrecording building (Note 6)

Cumulative effect of the changein accounting policy forrecording building (Note 6)

93

(Unit : Baht)

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

Cost/reappraised value

31 December 2006

Increase from asset revaluation

Purchase


Reclassification

Disposals

31 December 2007

Accumulated depreciation

31 December 2006

Depreciation for the year

Reclassification

Disposals

31 December 2007

Net book value

31 December 2006

31 December 2007

Depreciation charged (included in

income statement) for the year

2006

2007

569,635,882

267,151,618

-

-

-

-

836,787,500

-

-

-

-

-

569,635,882

836,787,500

3,255,452,563

-

8,675,763

340,573,430

(144,710,737)

-

3,459,991,019

484,586,344

236,757,851

(5,426,653)

-

715,917,542

2,770,866,219

2,744,073,477

2,833,258,681

-

178,617,422

221,090,707

144,710,737

(25,156,021)

3,352,521,526

1,299,384,014

366,522,421

5,426,653

(8,712,375)

1,662,620,713

1,533,874,667

1,689,900,813

148,884,247

-

7,218,100

-

-

(7,927,278)

148,175,069

90,768,603

21,940,251

-

(7,924,579)

104,784,275

58,115,644

43,390,794

387,349,424

-

705,002,208

(567,161,706)

-

(455,518)

524,734,408

-

-

-

-

-

387,349,424

524,734,408

7,194,580,797

267,151,618

899,513,493

(5,497,569)

-

(33,538,817)

8,322,209,522

1,874,738,961

625,250,523

-

(16,636,954)

2,483,352,530

5,319,841,836

5,838,856,992

451,627,539

625,250,523

Assets which are stated at cost

Seperate financial statement

Land and landimprovement

Building andbuilding

improvement

Medical toolsand equipment Vehicles

Building undercontructionand

medical toolsandequipment under

installation

Total

Assets which arestated at cost orreappraised value

94

The Subsidiaries recorded the total revaluation surplus of Baht 1,584 million as "Revaluation surplus on land and buildings" in shareholders' equity in the balance sheets of Baht 1,544.49 million and reversed the loss on valuation of land of a subsidiary of Baht 228.05 million for the land which had new revalued amounthigher than the former revalued cost and recorded loss on revaluation of land in another subsidiary of Baht188.54 million. As discussed in Note 6 to the financial statements, based on the appraisal of land and buildings of such subsidiaries, the Company has restated the previous period's consolidated financial statements and recognised only the surplus on revaluation of land of the subsidiaries in the consolidated financial statementsby using equity method in the amount of Baht 257.05 million as "Revaluation surplus on land" in shareholders'equity in the balance sheets. In 2007, the Company and its subsidiaries engaged an independent professional appraiser to appraise all of their land. Based on the appraisal reports, the Market Approach was applied to the revaluation of land, reflecting the fair values of the revalued land approximately total of Baht 2,559.7 million which were higher than the former revalued cost by approximately Baht 414.1 million. The Company and its subsidiariesrecorded the revaluation surplus from the former revalued cost of Baht 417.2 (the Company only : Baht 301.4 million) as "Revaluation surplus on land" in shareholders' equity in the balance sheets and discount from the original cost of Baht 3.1 million as loss on impairment in the income statements. A subsidiary company has recorded loss on impairment for building improvement total amount of Baht 2.6 million in the income statements. This building improvement was used for clinic operation which the subsidiary denied to renew the building rental agreement that was to be expired in February 2008. If the Company and its subsidiaries recorded the land at cost, their net book value as at 31 December 2007 and 2006 would have been as follows :-

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

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

Net book value (at cost) :

As of 31 December 2007

As of 31 December 2006

1,960,385,967

1,847,095,176


252,054,285

252,054,285

(Unit : Baht)

95

On 25 May 2006, the subsidiary company which was an associated company at that time engaged an independent appraiser to appraise all of its land, building and building improvement. The subsidiary company recorded assets with revaluation. The increase in revaluation of land, building and building improvement was approximately Baht 61.1 million and Baht 109.7 million, respectively. As discussed in Note 6 to the financial statements, the Company has restated the previous periods consolidated financial statements and recognised the equity only from revaluation surplus on land by percentage of shareholding approximately Baht 17 million.

18. LAND NOT USED IN OPERATIONS Land not used in operations as at 31 December 2007 and 2006 consisted of:

In the year 1999 and 2007, the Company revalued such land not used in operations based on the independent professional appraiser's value as described in Note 17 to the financial statements. The cumulative capitalised interest on loans recorded as a portion of cost of land not used in operationsamounted to approximately Baht 29 million (2006 : Baht 29 million).

19. INTANGIBLE ASSETS

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

Land at historical cost

Revaluation surplus

Allowance for impairment

Total

329,385,815

143,747,985

(719,600)

472,414,200

Consolidated and Separate financial

329,385,815

109,541,365

-

438,927,180

(Unit : Baht)

2007 2006

Computer software

Leasehold right

Less : Accumulated amortisation

Intangible assets - net

Amortisation for the year

252,334,341

327,265,072

579,599,413

(248,794,105)

330,805,308

40,304,387

2007

223,613,494

311,514,147

535,127,641

(216,560,672)

318,566,969

40,840,713

2006


81,100,785

80,049,598

161,150,383

(51,200,730)

109,949,653

7,647,921

2007

55,699,324

62,849,598

118,548,922

(43,558,046)

74,990,876

6,386,581

2006

(Unit : Baht)

96

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

Agreement date Lender Credit facility TotalCurrent Portion Non- current Portion

Outstanding long - term loan amount

Million

2135259

538414

10046

387

7

-

60441

8

4383

3010

18

262612

70-

28

17119251010

15

151554

683

1,070

7401518

19249527

500254

1,548

196

135

157157

4

100

21456

27825

132

15815816

589351

36

1,013123593027

73

-254520

4,132

5,680

28754027

24557941

600300

1,935

203

135

217201

5

108

257139

30835

150

18418428

659351

64

1,184142844037

88

15405024

4,815

6,750

8513910245

35060054

600300

370

USD 4

500220

7

150

4003712

33044

150

67967938

700500

135

1,7001851655642

115

160605028

The Company only 1. 19 November 2004 2. 13 January 2005 3. 13 January 2005 4. 29 September 2005 5. 5 October 2005 6. 1 December 2005 7. 29 March 2006 8. 6 December 2006 9. 1 February 2007Total loans of the CompanySubsidiariesBangkok Ratchasima Hospital Co., Ltd 1. 23 March 2007Angkor Pisith Co., Ltd. 1. 22 May 2007Bangkok Phuket Hospital Co., Ltd. 1. 18 December 2002 2. 1 September 2005 3. 27 January 2006Subsidiaries (Continue)Bangkok Trad Co., Ltd 1. 1 December 2003 Bangkok Hatyai Hospital Co., Ltd

1. 9 May 2003 2. 8 September 2004 3. 22 June 2006Bangkok Rayong Hospital Co., Ltd. 1. 29 March 2004 2. 20 July 2006Bangkok Samui Hospital Co., Ltd. 1. 11 June 2004BNH Medical Centre Co., Ltd. 1. 20 October 1996 2. 20 October 1996 3. 12 February 2007Bangkok Pattaya Hospital Co., Ltd. 1. 28 May 2004 2. 16 October 2006Wattanavej Co., Ltd. 1. 27 November 2003Samitivej Public Company Limited 1. 11 October 2001 2. 26 December 2003 3. 2 June 2005 4. 29 May 2006 5. 8 November 2006Irving Sheridan SE Company Limited 1. 26 December 2003Samitivej Sriracha Company Limited 1. 18 December 2002 2. 13 August 2004 3. 29 May 2006 4. 15 September 2006Total loans of subsidiary companies Total loans of the Company and its subsidiaries

Local bankLocal bankLocal bankLocal bankLocal bankLocal bankLocal bankLocal bankLocal bank

Local bank

Local bank

Local bankLocal bankLocal bank

Local bank


Local bankLocal bank

Local bank


Local bankLocal bank

Local bank

Local bankLocal bankLocal bankLocal bankLocal bank

Local bank

Local bankLocal bankLocal bankLocal bank

97

Loan Period Principal repayment Interest payment Interest rate

Significant conditions of the loan agreements


5 years5 years5 years

5 years 3 months7 years9 years

4 years 10 months7 years7 years

8 years

10 years


6 years


10 years5 years

10 years

13 years13 years

3 years 6 months

13 years13 years

7 years

10 years10 years6 years4 years4 years

10 years

7 years6 years7 years7 years

MonthlyMonthlyMonthlyMonthlyMonthlyMonthlyMonthlyMonthlyMonthly

Quarterly

Quarterly

QuarterlyQuarterlyQuarterly

Monthly

MonthlyMonthlyMonthly

MonthlyMonthly

Monthly


MonthlyMonthly

Quarterly

MonthlyQuarterlyQuarterlyQuarterlyMonthly

Quarterly

MonthlyMonthlyMonthlyMonthly

MonthlyMonthlyMonthlyMonthlyMonthlyMonthlyMonthlyMonthlyMonthly

Monthly

Monthly


Monthly


MonthlyMonthly

Monthly


MonthlyMonthly

Quarterly

MonthlyMonthlyMonthlyMonthlyMonthly

Monthly

MonthlyMonthlyMonthlyMonthly

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

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

LIBOR plus fixed rate as stipulated in the agreement.

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


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

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


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

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


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


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

98

In April 2007 Bangkok Ratchasima Hospital Co., Ltd., a subsidiary company, entered into a loan agreementwith a financial institution. The credit facilities was Baht 570 million. The loan bears interest at the rate ranging form MLR - 1.5 percent per annum to MLR per annum. The interest is repayable on a monthly basis.The principal is repayable on a quarterly basis according to a condition as stipulated in the agreement. As at 31 December 2007 the subsidiary company has withdrawn the loan totalling Baht 203 million. In December 2007 Bangkok Pattaya Hospital Co., Ltd., a subsidiary company, entered into a loan agreementwith a financial institution. The credit facilities was Baht 200 million. The loan bears interest at the MLR less fixed rate as stipulated in the agreement. The interest and principle is repayable on a monthly basis according to a condition as stipulated in the agreement. As at 31 December 2007 the subsidiary company has not withdrawn this credit facility. The Company and its subsidiaries have mortgaged certain plots of land, buildings and medical equipment,including future construction and certain equipment and pledge share certificates for the investment of a subsidiary company, with banks to secure long-term loan obtained from those banks. The Company has guaranteed long-term loan of a subsidiary company amount of U.S. dollar 4 million. The Company's and its subsidiaries' loan agreements contain certain covenants which the Company and its subsidiaries must comply with. During 1998 - 2004, BNH Medical Center Co., Ltd., a subsidiary company, entered into 4 debt restructuringagreements with 2 local financial institutions whereby the subsidiary company has to comply with the conditions as stipulated in the agreements. The loans are secured by lease agreements for land, buildings and equipment. In addition, the financial institutions are named as beneficiaries of the insurance policies for such building and equipment.

22. LIABILITIES UNDER HIRE-PURCHASE AND FINANCIAL LEASE AGREEMENTS

Liabilities under hire-purchase agreements Hire-purchase payable consists of amounts payable under various vehicle hire-purchase agreements, with payments to be made in 32-60 monthly installments.

Liabilities under financial lease agreements The Company and its subsidiaries have entered into various financial lease agreements with various leasing companies to rent medical equipment and vehicle for use in their operations. Installments are paid on a monthly basis over 36-60 periods and at the end of the agreements, the Company and its subsidiarieshave the option to purchase the equipment at prices specified in the agreements.

23. DIVIDENDS The 2006 Annual General Meeting of the Company's shareholders held on 30 March 2006 passed a resolution approving a dividend payment of Baht 0.50 per share, to the holders of the Company's 1,181,037,800 shares (par value of Baht 1 each), or a total of Baht 590.5 million. The meeting also approvedthe appropriation of earnings of Baht 0.29 million to the statutory reserve. The dividend payment was madeon 28 April 2006. The 2007 Annual General Meeting of the Company's shareholders held on 5 April 2007 passed a resolutionapproving a dividend payment of Baht 0.50 per share, to the holders of the Company's 1,181,037,800 shares (par value of Baht 1 each), or a total of Baht 590.5 million. The dividend payment was made on 4 May 2007.

Hire-purchase and financial lease payable

Less : Deferred interest

Total

Less: Current portion due within one year

Liabilities under hire-purchase and financial lease agreements -

net of current portion

318,088

(29,754)

288,334

(118,001)

170,333

2007

316,307

(33,719)

282,588

(123,398)

159,190

2006


27,617

(2,261)

25,356

(15,356)

10,000

2007

66,752

(5,945)

60,807

(35,451)

25,356

2006


99

24. STATUTORY RESERVE Under the Public Companies Limited Act B.E. 2535, the Company is required to set aside as a statutoryreserve at least 5 percent of its net profit, after deducting accumulated deficit brought forward (if any), untilthe reserve reaches 10 percent of its registered share capital. The statutory reserve is not available for dividend payment.

25. PROVIDENT FUND The Company, its subsidiaries and their employees jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. The fund is contributed by both employees and the Company and its subsidiaries at the agreed percentage rates based on their basic salaries and is managed by many financial institutions. The fund will be paid to the employees upon termination in accordance with the rules of the fund. During the year 2007, the Company and its subsidiaries contributed Baht 52.26 million (2006 : Baht 43.94 million) and the Company only contributed Baht 14.52 million (2006 : Baht 12.82 million) to the fund.

26. NUMBER OF EMPLOYEES AND RELATED COSTS

27. EARNINGS PER SHARE Basic earnings per share is determined by dividing the net income for the year by the weighted averagenumber of ordinary shares in issue during the year. As a result of the shareholding restructure as stated in Note 33 to the financial statements, during 2006two subsidiaries held 3,082,995 shares of the Company. Basic earnings per share during the year 2006 is therefore calculated by dividing net income for the year by the weighted average number of ordinary sharesin issue during the year and held by third parties (net of the Company's shares held by the subsidiaries). However, those two subsidiary companies have already disposed such Company's shares in December 2006. Therefore as at 31 December 2006, total ordinary shares of the Company was held by third parties. No disclosure of diluted earnings per share is required for 2007 and 2006 after the issue of convertible debenture (as discussed in Note 32) since the calculated earnings per share assuming the conversion of all convertible debentures to ordinary shares is not diluted.

28. LONG-TERM LEASE AGREEMENTSThe Company The Company has entered into a land lease agreement for a garden. The lease agreement covers a period of 30 years from 1 January 2005 to 31 December 2033 and the rental is payable on a monthly basis.The rental fee for the first 5 years is Baht 10,000 per month and it will be increased every 5 years. The rentalfor the last 5 years will be Baht 25,000 per month. The Company has entered into a land rental agreement for a car parking building for a period of 20 yearsfrom 26 February 2004 to 25 February 2024. The rental fee for the first 17 months is Baht 200,000 per monthand will be increased by the rate as agreed in the agreement. The rental for the last 3 years will be Baht 560,000 per month. The Company has entered into a land rental agreement for construction of an OPD building for a periodof 30 years from 28 September 2004 to 27 September 2034. The first payment date is 10 October 2005 at the rental fee of Baht 50,000 per month. The rate will be increased by 10% of the latest rental of every three years. The Company has entered into a land rental agreement for a car parking for a period of 7 years from 1 September 2005 to 31 August 2012 and the rental is paid on a monthly basis. The first payment date is 1 September 2005 at the rate of Baht 131,000 per month. The rental rate will be Baht 175,000 per month starting from 1 September 2006 onward.

Number of employees at end of year (persons)

Employee costs for the year (Thousand Baht)

11,628

4,072,338

2007

10,505

3,431,790

2006


2,553

1,237,509

2007

2,544

1,091,508

2006

100

The Company has entered into a land rental agreement for a period of 30 years from 1 January 2006 to 31 December 2036 and the rental is paid on a monthly basis. The first payment date is 5 January 2006 and rental to be paid at Baht 30,000 per month and from 1 January 2027 onward at Baht 100,000 per month. The Company has entered into an agreement to construct a hospital building on land owned by a government authority. The condition of the agreement states that upon completion of the building construction,the Company has to transfer the ownership over such building to that authority. After the authority acceptssuch transfer, in 2006 the Company entered into another land and hospital building rental agreement with that government authority. The agreement will cover a period of 30 years after the signing date of the agreement and the Company is obliged to pay rental on a yearly basis. The rental fee for the first 5 years is Baht 492,676 per year and this fee is to be increased every 5 years. The rental for the last 5 years willthus be Baht 990,943 per year.

Samitivej Public Company Limited The subsidiary company has entered into a rental agreement for a parking building dated 10 September2003, for 30 years, effective from 8 December 2004. The total rental fee over the lease will thus be Baht 155.11 million. The subsidiary company is committed to pay Baht 38.78 million as prepaid rental as per the schedule. The remaining rental fee will be paid on a monthly basis. In addition, the subsidiary companyhas entered into a service agreement with the same company for providing of services in the parking building for 30 years total of Baht 103.41 million.

BNH Medical Center Co., Ltd. The subsidiary company entered into an agreement with an association which is a shareholder, to leaseland for the construction of a hospital for a period of 30 years, commencing 1 September 1993, with optionsto renew.

29. COMMITMENTS AND CONTINGENT LIABILITIES As at 31 December 2007 commitments and contingent liabilities are as follows:-

29.1 Commitments

29.2 LitigationsThe Subsidiaries A subsidiary has a contingent liabilities as a defendant in a legal case related to the building constructionretention of Baht 14.37 million. The case is being considered by the Central Bankruptcy court. However, thesubsidiary had set up provision of Baht 10 million for contingent liabilities. 30. PURCHASE OF SUBSIDIARY COMPANIES During the year ended 31 December 2006, the Company has invested in ordinary shares of new subsidiary companies namely Angkor Pisith Co., Ltd., Bangkok Ratchasima Hospital Co., Ltd., Bangkok Health Insurance Limited, Asia International Healthcare Co., Ltd. and Phnom Penh Medical Services Co., Ltd.The Company also had additionally invested in Bangkok Pattaya Hospital Co., Ltd., resulting in that companychanging its status from an associated company to a subsidiary company. In addition, Samitivej Public Co., Ltd. had additionally invested in ordinary shares of Samitivej Sriracha Co., Ltd., previously an associatedcompany of Samitivej Public Co., Ltd. and changed its status to be a subsidiary company. Fair values of assets purchased and liabilities as at purchase dates as follows :-

Contractual commitments

- the land and building rental contracts (including long-term agreements in Note 28)

- the office equipment rental and maintenance contracts

- the medical equipment providing and maintenance contracts

- the construction and building decoration contracts

Contingent liabilities

- For letters of guarantee issued by banks to guarantee contractual performance

- For letters of guarantee issued by banks electricity use and others

Total

707

184

59

302

8

64

1,324

Consolidated financial statements Seperate financial statements

184

51

12

73

-

15

335


101

663,103,007

33,540,821

150,915,886

36,314,335

80,369,641

422,772

44,931,884

2,285,640,678

4,099,808

2,368,414

(108,510,927)

(147,387,269)

(23,429,279)

(2,897,501)

(60,799,778)

(214,182,501)

(123,880,471)

(28,072,433)

(498,552,866)

(1,273,525)

(292,384)

2,092,428,312

(305,000,325)

1,787,427,987

(591,133,789)

(295,117,441)

901,176,757

457,843,235

1,359,019,992

(482,270,262)

876,749,730

(663,103,007)

213,646,723


Cash and cash equivalents

Short-term investments

Trade accounts receivable - net

Inventories - net

Other current assets

Restricted bank deposit

Investments

Property, plant and equipment - net

Intangible assets - net

Other non-current assets

Bank overdraft and short-term loans from financial institutions


Accounts payable - construction and retention


Other payable


Accrued expenses


Long-term loans

Hire purchase and financial lease agreement


Net assets

Less : Gain from shareholding restructure (Note 33)

Net acquired assets

Changes in investment from change of the status from associated to subsidiary companies

Changes in minority interest from change of the status from associated to subsidiary companies

Net assets from acquisition of subsidiary companies

Add : Goodwill

Cash paid for additional investment during the period

Less : Assets transfer for purchase of investment

Cash payment for purchase of investment in the period

Less : Cash and cash equivalents of subsidiary companies

Net cash paid for acquisition of subsidiary companies

31. SEGMENT INFORMATION The Company and its subsidiaries operate mainly in the hospital business in Thailand. As a result all of the revenues, operating profits and assets as reflected in these financial statements pertain to the aforementioned industry segment and geographic area.

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

102

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

33. SHAREHOLDING RESTRUCTURE On 17 October 2005, the Extraordinary General Meeting of the Company's shareholders No. 1/2005 passed a resolution approving a capital reduction on unissued 17,089,892 shares and approved the increasein registered share capital of 20,000,000 ordinary shares. The increase and decrease in share capital was registered on 28 October 2005 and the Company's registered share capital is Baht 1,183,410,108. In addition, such meeting approved the Company's restructuring planning by acquisition of shares from all other shareholders of the eastern hospital group, which comprised Bangkok Pattaya Hospital Co., Ltd., Bangkok Trad Hospital Co., Ltd., Wattanavej Co., Ltd., and Bangkok Rayong Co., Ltd.. Such purchase was subject to the condition that those shareholders must purchase the Company's shares by using all proceedsreceived from the Company for such purchase as payment for the Company's shares. The Company's shares to be offered to the shareholders of the eastern hospital group would comprise of the above new 20 million ordinary shares and/or the shares of the Company held by Bangkok Pattaya Hospital Co., Ltd..

103

All of them would be offered to those shareholders in the same time at the price of Baht 14.59 each. For the purpose of eliminating cross shareholding between the Company and Bangkok Pattaya Hospital Co., Ltd., the entire shares of Company which are held by Bangkok Pattaya Hospital Co., Ltd. would be offered to those shareholders before the new ordinary shares of the Company. In 2006, the Company already restructured the said shareholding by way of actual payments and also issuance of 17,627,692 new ordinary shares, in addition to the shares repurchased from Bangkok Pattaya Hospital Co., Ltd. to the shareholders of the eastern hospital group companies. This transaction increases the issued share capital of the Company to 1,181,037,800 shares at Baht 1 each and premium on ordinary shares of such transaction amounted to approximately Baht 239.6 million. In addition, as a result of such shareholding restructure, a subsidiary company had a net gain from suchtransaction of approximately Baht 305 million, which is presented as "Difference from shareholding restructure" in premium and 3,082,995 shares of the Company with a total value of approximately Baht 45 million were held by two subsidiaries. In December 2006, the Extraordinary Board of Director's meeting No. 2/2006 has passed a resolution approving subsidiaries, Bangkok Pattaya Hospital Co., Ltd. and WattanavejCo., Ltd. to sell the said Company's shares held by subsidiaries to Bangkok Airway Co., Ltd. at Baht 35 per share. Gain of selling of these shares totalling of Baht 63 million was included in caption of "Share Premium".

34. FINANCIAL INSTRUMENTS The Company and its subsidiaries' financial instruments, as defined under Thai Accounting Standard No. 48 "Financial Instruments: Disclosure and Presentations", principally comprise cash and cash equivalents,short-term investment, trade accounts receivable, loans, investments, short-term loan, trade accounts payable, convertible debentures and long-term loans. The financial risks associated with these financial instruments and how they are managed is described below.

34.1 Financial risk management The Company and its subsidiaries are exposed to risk arising from changes in market interest rates and from nonperformance of contractual obligation by counterparties in the future. The Company and its subsidiaries use derivative instruments, as and when they consider appropriate, to manage such risks. Theydo not hold or issue derivative financial instruments for speculative or trading purposes.

34.2 Interest rate risk The Company's and subsidiaries' exposure to interest rate risk relates primarily to its cash at banks, bank overdrafts, short-term loans, convertible debentures and long-term borrowings. However, since most of the Company's financial assets and liabilities bear floating interest rates or fixed interest rates which areclose to the market rate, the Company and its subsidiaries, therefore, have not entered into any forward exchange contract to reduce this risk. The convertible debenture and long-term loans were presented in note 32 and 21 respectively. Significant financial assets and liabilities as at 31 December 2007 classified by type of interest rates aresummarised in the table below.

Financial Assets- Cash equivalent (exclude cash)- Short-term investments- Trade accounts receivable- Restricted bank deposit- Investments

Financial liabilities- Trade accounts payable- Bank overdrafts and short-term loans from financial institution- Short-term loans from related parties- Convertible debentures- Liabilities under hire purchase and financial lease agreements- Long-term loans

1056

-17

-83

-71014

3,52828862

4,602

------

-108---

6,6886,796

--

1,334-

1,9143,248

855-----855

1056

1,33417

1,9143,331

85581814

3,528288

6,75012,253

Fixedinterest rates

Non-interest bearing Total

Floatinginterest rate



104

34.3 Foreign currency risk The Company's and subsidiaries' exposure to foreign currency risk arises mainly from trading transactionsthat are denominated in foreign currencies. However, the amount was not significant, the Company and its subsidiaries do not expected any significant loss from this foreign currency risk.

34.4 Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable, loans, notes and other receivable. The Company and its subsidiaries manage the risk by adoptingappropriate credit control policies and procedures and therefore does not expect to incur material financiallosses. In addition, the Company and its subsidiaries do not have high concentration of credit risk since it has a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of receivables,loans, other receivables and notes receivable as stated in the balance sheet.

34.5 Fair values of financial instruments A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm's length transaction. The fair value is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument. Since the majority of the financial instruments assets and liabilities of the Company and its subsidiaries are short-term in nature and the long term loans and debentures bear interest at the market rate or close to the market rate, their fair value is not expected to be materially different from the amounts presented in the balance sheets.

35. ACQUISITION OF INVESTMENTS IN RAMKHAMHAENG HOSPITAL PUBLIC CO., LTD. AND ISSUANCE OF DEBENTURES IN BAHT CURRENCY On 26 December 2007, the Extraordinary General Meeting of Shareholders' No. 1/2007 of the Companyhas approved for acquisition of all shares in Ramkhamhaeng Hospital Public Company by making a mendatory tender offer for all remaining 8.9 million shares at Baht 480 per share total of Baht 4,252.0 millionwhich represented 73.82 percent of the registered capital. The Company submitted declaration of intent fortender offer for securities on 2 January 2008. In addition, the Meeting has approved the issuance and offering of name-registered, unsubordinated and unsecured debentures denominated in Baht in the total amount not exceeding Baht 7,000 million. The maturity date will be not more than 10 years from the issue date.

36. APPROVAL OF FINANCIAL STATEMENTS These financial statements have been authorised for issue by the Company's authorised directors on 20 February 2008.

Financial Assets- Trade accounts receivable- Short-term loans to related party - Investments

Financial liabilities- Trade accounts payable- Bank overdrafts and short-term loans from financial institution- Convertible debentures- Liabilities under hire purchase and financial lease agreements- Long-term loans

----

-680

3,52825-

4,233

----

----

1,9351,935

5751

1,8342,410

324----324

5751

1,8342,410

324680

3,52825

1,9356,492

Seperate financial statements


Fixedinterest rates

Non-interest bearing Total

Floatinginterest rate

BANGKOK HOSPITAL MEDICAL CENTER2 Soi Soonvijai 7 New Phetchburi Rd. Huay Kwang, Bangkok 10310

Tel. (02) 310-3000, 1719 website : www.bangkokhospital.com

BANGKOK HOSPITAL PRAPRADAENG288 Suksawat Rd. Amphur Muang, Samutrprakarn 10290

Tel. (02) 818-9000 Fax : (02) 425-9859 website : www.bpdhospital.com

BANGKOK HOSPITAL PATTAYA301 Sukhumvit KM 143, Pattaya, Chonburi 20150

Tel. (038) 259-999 Fax : (038) 727-307e-mail : [email protected] website : www.bangkokpattayahospital.com

BANGKOK HOSPITAL RAYONG8 Moo 2 Soi saengchanneramit Amphur Muang, Rayong 21000

Tel. (038) 921-999 Fax : (038) 921-925, (038) 921-990e-mail : [email protected] website : www.rayonghospital.com

BANGKOK HOSPITAL CHANTHABURI25/14 Taluang Rd., Watmai Sub District, Muang, Chanthaburi 22000

Tel. (039) 319-8888 Fax : (039) 321-202 website : www.bangkokchanthaburi.com

BANGKOK HOSPITAL TRAT276 Sukhumvit Rd. Amphur Muang, Trat 23000

Tel. (039) 532-735 Fax : (039) 522-567, (039) 530-375 # 213e-mail : [email protected] website : www.bangkoktrathospital.com

CLINIC INTERNATIONAL KHAO CHANG14/16 Moo 4 Had Sai Khao Khing Amphur Khao Chang, Trat 23170

Tel. (039) 551-555, (039) 551-151-2 Fax : (039) 551-150

BANGKOK HOSPITAL PHUKET2/1 Hongyok-uthit Rd., Amphur Muang, Phuket 83000

Tel. (076) 254-421-9 Fax : (076) 254-430e-mail : [email protected] website : www.phukethospital.com

BANGKOK HOSPITAL HATYAI75 Soi 15 Petchakasem Rd., Amphur Hatyai, Songkla 90110

Tel. (074) 272-800 Fax : (074) 365-790e-mail : [email protected] website : www.bangkokhatyai.com

BANGKOK HOSPITAL SAMUI57 Moo 3, Koh Samui, Suratthani 84320

Tel. (077) 429-500 Fax: (077) 429-540 website : www.samuihospital.com

Bangkok Dusit Medical Servic

BANGKOK HOSPITAL NAKORNRATCHASIMA1308/9 Mitrapap Rd. Amphur Muang, Nakornratchasima 30000

Tel. (044) 262-000 Fax : (044) 256-421e-mail : [email protected] website : www.bangkokratchasima.com

BNH MEDICAL CENTER9/1 Convent Rd, Silom, Bangrak, Bangkok 10500

Tel. (02) 686-2700 Fax. (02) 632-0577-9, (02) 632-0578e-mail : [email protected] website : www.bnhhospital.com

SAMITIVEJ HOSPITAL SUKHUMVIT133 Sukhumvit 49 Klongtan, Wattana, Bangkok 10110

Tel. (02) 392-0011, (02) 382-2000, (02) 711-8000 Fax : (02) 381-3490e-mail : [email protected] website : www.samitivej.co.th

SAMITIVEJ HOSPITAL SRINAKARIN488 Srinakarin Rd, Suanluang, Bangkok 10250

Tel. (02) 731-7000 Fax : (02) 731-7358e-mail : [email protected] website : www.samitivej.co.th

SAMITIVEJ HOSPITAL SRIRACHA8 Soi Laemket, Jermjormpol Rd., Sriracha, Chonburi 20110

Tel. (038) 324-100 Fax : (038) 312-963e-mail : [email protected] website : www.samitivej.co.th

CAMBODIAROYAL ANGKOR INTERNATIONAL HOSPITAL

National Route#6, Phum Kasekam, Khum Sra Ngea, Seam Reap (Angkor), CambodiaTel. (855) 63 761 888 Fax : (855) 63 963 274

e-mail : [email protected] website : www.RoyalAngkorHospital.com

ROYAL RATTANAK HOSPITAL No. 10, Street 592, Toul Kok District, Phnom Penh, Cambodia 12152

Tel. (855) 23 365 555 (24hrs), (855) 12 182 9993, (855) 16 366 995 Fax : (855) 23 366 669e-mail : [email protected] website : www.RoyalRattanakHospital.com

es Plc. Network

Samitivej Sukumvit Hospital

Samitivej Srinakarin Hospital

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

Bangkok HospitalBangkok Heart Hospital

Bangkok International HospitalWattanosoth Hospital

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