3. DESCRIPTION OF EACH BUSINESS LINE

3.1 Product Description 

  Bumrungrad Hospital Public Company Limited (“the Company”)

  The Company is the operator of Bumrungrad Hospital in Bangkok, which
  is the main revenue contributor. The Company’s revenue from hospital
  operations is 95.9% of total revenues.

  The hospital, which is supported by the advanced Hospital 2000 Medical
  Information System, has services which can be detailed as follows:

  1. Outpatient service has 34 outpatient clinics with 135 examination
  rooms, and capacity to service 3,500 patients per day, with the
  following details:

+---------------------------------+------------------------------------+
|   • Allergy Center              |   • Horizon Regional Cancer Center |
+---------------------------------+------------------------------------+
|   • Aviation Medicine Center    |   • Medical Center                 |
+---------------------------------+------------------------------------+
|   • Behavioral Health Center    |   • Neurology Center               |
+---------------------------------+------------------------------------+
|   • Breast Screening Center     |   • Orthopedic Center              |
+---------------------------------+------------------------------------+
|   • Children’s Center           |   • Pathology Center               |
+---------------------------------+------------------------------------+
|   • Dental Center               |   • Physiotherapy Center           |
+---------------------------------+------------------------------------+
|   • Diabetes Center             |   • Plastic Surgery Center         |
+---------------------------------+------------------------------------+
|   • Dialysis Center             |   • Pulmonary Physiology Center    |
+---------------------------------+------------------------------------+
|   • Digestive Disease Center    |   • Radiology Center               |
+---------------------------------+------------------------------------+
|   • Early Intervention Center   |   • Rehabilitation Center          |
+---------------------------------+------------------------------------+
|   • Emergency Center            |   • Skin Center                    |
+---------------------------------+------------------------------------+
|   • Endoscopic Center           |   • Skin Laser Center              |
+---------------------------------+------------------------------------+
|   • Eye and ENT Center          |   • Sleep Disorders Center         |
+---------------------------------+------------------------------------+
|   • Eye Laser Refraction Center |   • Stroke Center                  |
+---------------------------------+------------------------------------+
|   • Fertility Center            |   • Surgical Center                |
+---------------------------------+------------------------------------+
|   • Health Screening Center     |   • Urology Center                 |
+---------------------------------+------------------------------------+
|   • Heart Center                |   • Women’s Center                 |
+---------------------------------+------------------------------------+

  2. Inpatient service has 554 beds. As at 31 December 2006, the
  hospital has 449 beds in operation.

  3. Emergency facilities and operating theaters: The Company has
  emergency center open 24 hours, equipped with specialized physicians.
  In addition, the Company has 19 operating theaters fully equipped with
  modern medical equipment.

  In 2006, the Company has treated a total of over one million patients.
  The client base of the hospital can be segmented in 2 ways as follows:

  1. Inpatient and outpatient (% of total revenue)

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  Data as at 31 December 2006

  2. Domestic and international patients

  The Company has a strong and successful track record in increasing its
  presence in the international market. In 2006, Bumrungrad Hospital in
  Thailand treated over 430,000 international patients from over 190
  countries. The top three highest revenue contributors by country are
  the United Arab Emirates, the United States and Oman. The following
  graph shows the historical revenue contribution of international
  patients over the past five years.

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  []

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  The Company has a master plan to expand and upgrade its Bangkok
  facility over the next 5 years. The plan includes the opening of the
  new Bumrungrad International Clinic building, expanding its inpatient
  capacity to BH Tower building and renovating and upgrading the
  existing hospital building as it is entering its 10th year of
  operation.

  The new Bumrungrad International Clinic is a 22-storey outpatient
  facility, with the first 10 floors being used as parking spaces and
  the top 12 floors as outpatient clinics. The Company plans to
  gradually occupy the building floor by floor as the additional space
  is needed, and expects to take 5-7 years before the building is fully
  occupied. In February 2007, the parking space was open for patient
  use, while the health screening center was the first unit to occupy
  the 11th floor of the new Bumrungrad International Clinic in March
  2007.

  The Company also has a long-term plan to expand its inpatient capacity
  to grow in line with the expansion of its outpatient capacity. The
  Company plans to reacquire the BH Tower Building from Bangkok Bank
  Pcl. and to gradually convert the building into inpatient beds. The
  building was given to Bangkok Bank Pcl. as part of the Company’s debt
  restructuring plan after the economic crisis in 1997 and it is
  currently being leased from Bangkok Bank Pcl. to be used as the
  serviced apartments for patients’ families and relatives.

  The third part of the expansion plan is the renovation and upgrade of
  the existing hospital building as it is entering its 10^(th) year of
  operations. This includes rolling renovation of existing patient beds
  as well as expansion of the outpatient clinics that remain in this
  existing building while others move to the new Bumrungrad
  International Clinic Building.

  After the 5-7 years of expansion, the Company’s capacity will
  ultimately increase to 650 beds and 6,000 outpatients per day, almost
  doubling its current capacity, and making Bumrungrad one of the
  largest outpatient clinics in the world.

  Bumrungrad International Limited (BIL)

  Bumrungrad International Limited is the Company’s 51% subsidiary which
  operates as a holding company, with the objective to invest in
  overseas healthcare related businesses through joint ventures with
  local partners and to provide consulting and management services for
  those businesses. Currently, BIL has investments through its
  subsidiaries in two hospitals in the Philippines and in United Arab
  Emirates.

  BIL made a 43.25% investment in Asian Hospital Inc. (AHI) in 2005. AHI
  commenced its operations in 2002 and is one of the first large-scale
  private hospitals in Manila. It is a 258-bed hospital located in the
  south of Metro Manila and is well known for its modern medical
  equipment and experienced physicians, particularly in cardiology.
  Similar to the Bangkok facility, AHI also targets the middle class
  population.

  In 2006, BIL entered into a 49% joint venture with Istithmar PJSC, an
  investment arm of the United Arab Emirates government, to operate a
  250-bed private hospital under the name Bumrungrad Hospital Dubai.
  Currently, the hospital is under construction and is expected to be
  operational in 2009.

  In addition to the two existing investments, BIL is aggressively
  pursuing other investment opportunities in the region. In July 2006,
  BIL went through a capital increase process and invited Istithmar,
  Temasek and Bangkok Bank Pcl. as strategic partners. In addition to
  the capital availability, the strategic partners are also sources of
  new investment opportunities and network in their respective regions
  of presence. As a result of the capital increase, the Company’s
  shareholding in BIL was diluted from 100% to 51%.

3.2 Industry and Competition

  As at 2003, there were 346 private hospitals in Thailand, of which 100
  are in Bangkok. The demand for healthcare continues to grow with the
  growth of GDP and the rise of life expectancy. However, supply of
  private healthcare facilities in Thailand remains in excess of
  domestic demand and as a result competition for Thai patients remains
  intense. Many private hospitals have undergone upgrades to keep pace
  with Bumrungrad including quality of service and building renovations
  and expansion. In any case, the private healthcare industry in
  Thailand is a fragmented market and only a few hospitals are operating
  close to its full capacity.

  The bigger market that is growing faster than domestic demand is
  medical tourism. The global medical tourism industry is expected to
  see continued strong growth as more and more people are traveling
  abroad for healthcare services. Thailand’s regional competitors are
  hospitals in countries such as Singapore, Malaysia and India. Private
  hospitals in Thailand have a competitive advantage compared to many of
  the countries, as Thailand has a unique combination of high quality
  healthcare, accessibility and affordability, coupled with Thailand
  being a popular tourist destination with a good supporting
  infrastructure. Within Thailand itself, there are only a few private
  hospitals that have the technology and sophistication to address the
  needs of international patients.

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

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

Target Markets

  For domestic market, the Hospital targets middle to upper class Thais.

  International market can be divided into two types, expatriate
  community in Thailand and in the region, which is estimated to be
  approximately 3 million people, and medical tourism from countries
  where the healthcare services are not up to standard or too expensive,
  or there is a long waiting list for the healthcare services.

  In addition, the Company also targets patients from insurance
  companies and referral patients both within Thailand and from abroad.

Distribution and Marketing Channels 

  An effective way to attract customers is by way of obtaining patient
  referrals, both within Thailand and from other countries. With
  Bumrungrad Hospital as a reputable tertiary hospital of over 26 years,
  specializing in the treatments of complicated diseases, the Hospital
  has established excellent referral connections with hospitals and
  doctors both within Thailand and abroad.

  The hospital maintains over one thousand corporate and insurance
  contracts as a method for directing patients to the hospital.

  For its international marketing, the Company has set up twenty
  representative offices.

3.3 Sources of Products and Services

Capacity

As at 31 December

  -------------------------------------------------------------------------
  Inpatients                    2006          2005           2004
  ----------------------------- ------------- -------------- --------------
  Total number of beds          554           554            554

  Beds in operation             449           457            442

  Total capacity*               163,885       166,805        161,772

  Occupied beds per year (beds) 124,685       123,202        120,888

  Capacity Utilization          76.08         73.85          74.73
  (percent)                                                  
  -------------------------------------------------------------------------

*Total capacity is calculated by multiplying the number of beds in
operation with the number of days of service

As at 31 December

  -------------------------------- ------------ ------------ ------------
  Outpatients                      2006         2005         2004

  Capacity per day (persons)       3,500        3,500        3,500

  Average outpatients per day      2,833        2,768        2,686
  (persons)                                                  

  Capacity Utilization (percent)   80.94        79.09        76.76
  -------------------------------- ------------ ------------ ------------

  The Company’s patient volume continues to grow rapidly; the Hospital
  is constructing a 22-storey building to accommodate the rising demand.
  Details of the plan are in Section 6, Future Plan.

Raw Materials and Suppliers 

  Primary raw materials of the hospital business are pharmaceuticals,
  medical supplies and medical equipment. Suppliers of the raw materials
  are mainly companies with offices in Thailand. There are over 500
  suppliers and the Hospital has no trouble sourcing supplies. In
  addition, the Hospital has an efficient purchasing and inventory
  control system, which evaluates the appropriateness of the price, and
  effectiveness and quality of the raw materials.

Environmental Compliance 

  The Company values the significance of the environment, energy and
  natural resources conservation. The Company has set up an
  environmental policy to communicate to employees its views on
  environment preservation and encourages employees to help protect
  global environment. The Company is committed to controlling
  environmental impact to neighboring communities and efficiently
  utilizing natural resources by practicing energy conservation and
  supporting material recycling. All employees and contractors of the
  Company are expected to follow the government environmental
  regulations and the Company’s environmental policies.