2. BUSINESS DESCRIPTION

2.1 Company History

  1980: Bumrungrad Hospital was the first private hospital to open in
  central Bangkok with a capacity of 220 beds.

  1989: Bumrungrad Hospital Public Company Limited (the “Company”)
  became a listed company on the Stock Exchange of Thailand.

  1997: The hospital opened the new replacement facility with capacity
  of 554 beds.

  1999: Bumrungrad Hospital received ISO9002 certification and was the
  first private hospital in Thailand to receive Thai Hospital
  Accreditation (HA).

  2000: The Company voluntarily requested for the suspension of the
  trading of its shares on the Stock Exchange of Thailand (SET), as the
  Company was in the process of negotiating with its creditors on the
  debt restructuring. In August of the same year, the Company
  successfully completed its debt restructuring.

  2001: Bumrungrad Hospital received ISO14001 standard for its
  environmental management, and was the first hospital in Asia to
  receive ISO9001:2000 accreditation. In addition, it was the first
  hospital to receive the renewal of Thai Hospital Accreditation, making
  it the first hospital in Thailand to have received all three standards
  at the same time. Regarding business expansion, the Company saw the
  opportunity to expand into the “preventive medicine” segment, and
  established Vitallife Corporation Limited (“Vitallife”), which
  commenced its operation as an anti-aging clinic on 28 August 2001.

  2002: The Company formally opened the International Patient Center to
  accommodate the increasing demand of international patients. In
  addition, the Company launched BH International, a business unit with
  the objective at that time to provide management and consultancy
  services to hospitals in the region. At present, BH International is
  operated under Bumrungrad International Limited. In the same year,
  Bumrungrad Hospital was the first hospital in Asia to receive the
  highly prestigious international standard hospital accreditation by
  the US-based Joint Commission International Accreditation (“JCIA”).

  2003: The Company succeeded in transferring its securities to the
  Healthcare Service Sector and the Company’s shares commenced trading
  on the SET again on 29 October 2003. In addition, the Company started
  its expansion plan by building a new outpatient facility to
  accommodate the increase in demand.

  2004: The Company reduced its par value from Baht 10 per share to Baht
  5 per share and used all the reduced paid-up share capital to settle
  against retained loss. In addition, the Company changed its par value
  from Baht 5 per share to Baht 1 per share (share split). On the
  international expansion, BH International business unit was
  transferred to be under the responsibility of Bumrungrad International
  Limited, the Company’s 100% subsidiary at the time. Bumrungrad
  International Limited’s policy was changed from providing consulting
  and management services to investments in hospitals in the region.

  2005: Bumrungrad International Limited invested an effective
  shareholding of 43.25% in Asian Hospital Inc. (“AHI”) which is the
  operator of 253-bed private hospital in Manila, the Philippines at
  that time.

  2006: Bumrungrad International Limited made a 49% investment in
  Bumrungrad Hospital Dubai LLC, the operator of a 250-bed private
  hospital in Dubai, United Arab Emirates. The investment size is
  expected to be Baht 388 million, of which Bumrungrad International
  Limited paid the initial investment of Baht 25.8 million in 2006. In
  addition, in 2006, Bumrungrad International Limited increased its
  capital through an issuance of 5,764,701 new shares to strategic
  partners, Temasek, Istithmar and Bangkok Bank Public Company Limited.
  As a result, the Company’s shareholding in Bumrungrad International
  Limited was decreased from 100% to 51%.

  2007: For the expansion of the Bangkok facility, the Company completed
  the construction of the new Bumrungrad International Clinic Building
  and opened the Health Screening Center on the 11^(th) floor and the
  parking in the beginning of 2007.

  In 2007, Bumrungrad International Limited increased its capital from
  Baht 1,176,470,100 to Baht 2,749,336,700 in two tranches: the first
  tranche to allow Asia Financial Holdings Group to become a 19.5%
  shareholder in Bumrungrad International Limited, resulting in a
  decrease in the Company’s shareholding in Bumrungrad International
  Limited from 51% to 31.5%; and the second tranche to raise additional
  capital for Bumrungrad International Limited’s investments.

  Bumrungrad International Limited invested US$ 75 million for a 100%
  stake of Asia Renal Care Limited (“ARC”), the largest private provider
  of dialysis and related services in Asia. Also, Bumrungrad
  International Limited signed a four-year agreement with the Health
  Authority of Abu Dhabi to manage Mafraq Hospital in Abu Dhabi, United
  Arab Emirates. In addition, Bumrungrad International Limited converted
  management fees received from AHI in the Philippines into equity
  stake, resulting in an increase in its shareholding in AHI from 43.25%
  to 45.5% as at 31 December 2007.

  Global Care Solutions (Thailand) Company Limited (“GCS Thailand”), the
  Company’s 30% associated company, sold its software and other assets
  to the Microsoft Group, resulting in a share of profit from GCS
  Thailand of Baht 829 million in the fourth quarter of 2007. GCS
  Thailand then changed its name from Global Care Solutions (Thailand)
  Company Limited to CDE Trading Company Limited.

  2008: For the Bangkok facility, the Company held a grand-opening of
  the new Bumrungrad International Clinic Building in June 2008, with
  seven additional floors opened, of which four floors are outpatient
  clinics. As a result, the hospital’s outpatient capacity increased
  from 3,500 patients per day to 4,500 patients per day. The hospital
  also invested in major technologies to improve its quality of service
  especially for patient safety, including the new state-of-the-art,
  fully-automated drug management system, the ‘Pharmacy Robot’, which is
  the first of its kind in Asia, and Thailand’s first modern medical lab
  automation system, Beckman Coulter’s Lab Automation. In addition, the
  Company bought back BH Tower from Bangkok Bank Public Company Limited
  for Baht 470 million. The building is currently being used as serviced
  apartments for patients and families and will be converted into
  inpatient beds as needed.

  For the international business, in February 2008, Bumrungrad
  International Limited increased its paid-up capital from Baht
  2,749,336,700 to Baht 3,199,336,700. The fund was used for the
  expansion of AHI in the Philippines, which is the construction of a
  new hospital building. As Bumrungrad International Limited was the
  only shareholder that participated in AHI’s capital increase, together
  with the conversion of management fees into equity stake, Bumrungrad
  International Limited’s shareholding in AHI increased from 45.5% to
  54.4% as at 31 December 2008.

  In December 2008, the Company, together with Asia Renal Care (SEA)
  Limited (“ARC (SEA)”), which is Bumrungrad International Limited’s
  100% subsidiary, through Asia Renal Care Limited, formed a joint
  venture, Asia Renal Care (Thailand) Co., Ltd. (“ARC Thailand”), with
  registered and paid-up capital of Baht 12 million. The Company has 51%
  shareholding in ARC Thailand while ARC (SEA) holds the remaining 49%.

  2009: Bumrungrad Hospital, Bangkok is in the process of renovating and
  upgrading all of its inpatient rooms. As at 31 December 2009, 341
  rooms have been renovated. The renovation is expected to be completed
  in May 2010.

  In February 2009, ARC Thailand made a 20% investment in Nephromed Co.,
  Ltd. (“Nephromed”), a dialysis service provider with 14 clinics in
  Thailand at the time. With ARC (SEA) directly holding another 40% in
  Nephromed, the group’s collective shareholding in Nephromed is 60%.

  In November 2009, Bumrungrad International Limited sold all of its
  shares in Bumrungrad Hospital Dubai LLC back to Istithmar World Group.
  Bumrungrad International Limited had made provision for the investment
  in its 2008 financial statements upon the temporarily suspension of
  the project. In addition, as at 31 December 2009, Bumrungrad
  International Limited’s shareholding in AHI was at 56.4%, an increase
  from 54.4%, as a result of the conversion of management fees into
  equity.

  In addition, in 2009, two 100%-owned subsidiaries have been
  incorporated: (1) Asia Global Health Limited (AGH) was registered in
  Hong Kong in March 2009, with paid-up capital of HK$ 4.8 million, or
  approximately Baht 22.08 million, with the objective to seek
  investment opportunities in healthcare and related businesses in the
  region; and (2) Asia Global Research Company Limited (AGR) was
  incorporated in June 2009, with registered capital of Baht 20 million,
  and with the objective to provide clinical research and related
  services.

  In 2009, the Company has been recognized by third-party organizations
  for its achievements in various areas and received awards as follows:

1.  “Growth Excellence Awards” by Frost & Sullivan.

2.  “Best Practice Workplace Award on Labor Relations and Labor Welfare
    Award 2009” in the ‘large-enterprise without Federation of Labor
    Union’ category by the Ministry of Labor.

3.  2009 “Thailand’s Top 10 Most Innovative Companies” award by
    Chulalongkorn University’s School of Business.

  2010: For Bumrungrad Hospital, Bangkok, renovating and upgrading all
  of its inpatient rooms finished on plan in May 2010. As at December
  2010, the number of available beds has been 484 beds. The Company
  celebrated on 30^(th) anniversary in September 2010 with special
  healthcare events and packages to clients.

  In March 2010, the Company received two additional disease-specific
  JCI Certifications: Diabetes Mellitus and Chronic Kidney Disease. The
  Company opened new Women Center at the second floor of Bumrungrad
  Hospital building.

  In May 2010, Bumrungrad International Limited signed a share purchase
  agreement in relation to the sale of all the shares of ARC to
  Fresenius Medical Care Beteiligungsgesellschaft mbH (“Fresenius
  Medical Care”), a company incorporated in Germany. ARC is a 100%
  indirectly owned subsidiary of Bumrungrad International Limited.

  In tandem with the above sale, the Company signed a share purchase
  agreement to sell all of the ARC Thailand shares held by the Company
  of 51% to Nephrocare (Thailand) Co., Ltd., an affiliated company of
  Fresenius Medical Care.

  In June 2010, the Company opened new Digestive Decease Center.

  In 2010, the Company has been recognized by third-party organizations
  for its achievements in various areas and received awards as follows:

1.  “Prime Minister’s Export Award 2010” for Best Service Provider
    (Hospital Service)

2.  “Thailand’s Top 10 Most Innovative Companies 2010” By Chulalongkorn
    University’s school of business

3.  “Best Practice Workplace Award on Labor Relations and Labor Welfare
    Award 2010” by the Ministry of Labor

4.  Thailand Tourism Award: “Award of Outstanding Performance in
    Medically-Oriented Establishment” by The Tourism Authority of
    Thailand

2.2 Business Overview 

Corporate structure:

[]

  Bumrungrad Hospital Public Company Limited (the “Company”) operates a
  private hospital business in Bangkok with the current capacity of 484
  beds and over 4,000 outpatients per day. The Company is one of the
  leading healthcare providers in Thailand and in the Southeast Asian
  region, providing complete healthcare services for both outpatients
  and inpatients. The Company has always emphasized the importance of
  quality healthcare and experienced physicians and staff. Bumrungrad
  International Hospital, Bangkok is the first hospital in Asia to
  receive the US standard accreditation from the Joint Commission
  International (JCI). The hospital has also received JCI’s Clinical
  Care Program Certification (CCPC) for specialties programs including
  the Primary Stroke Program, Myocardial Infarction with ST Segment
  Elevation, Diabetes Mellitus Type I and II and Chronic Kidney Disease
  Stage I to IV.

  The Company has four 100%-owned subsidiaries, including Bumrungrad
  Medical Center Limited, Vitallife Corporation Limited, Asia Global
  Research Company Limited and Asia Global Health Limited, two
  associated companies, including 31.5%-owned Bumrungrad International
  Limited and 30%-owned CDE Trading Company Limited, and one related
  company, which is 14%-owned Global Care Solutions S.A. in Luxemburg.

  Bumrungrad Medical Center Limited (“BMC”) currently does not have any
  business activities

  Vitallife Corporation Limited (“Vitallife”) is a pioneer in wellness
  and anti-aging which provides preventive care services targeted at
  health-conscious individuals. The Vitallife program brings together
  experienced medical professionals and world-class technologies to
  provide customers with customized exercise programs, nutrition plans,
  and food and vitamin supplements for healthy living. Vitallife is also
  the center in providing anti-aging services for other wellness
  clinics.

  Asia Global Health Limited (“AGH”) is a company that supports the
  strategy for regional investment in healthcare and related business.

  Asia Global Research Company Limited (“AGR”) is the provider of
  clinical research, both within Thailand and Southeast Asia. The
  services include (1) contract research organization (“CRO”), which
  performs multicenter clinical trials for international biotech,
  pharmaceutical and device companies, and (2) site management
  organization (“SMO”), which manages groups of investigational sites to
  provide quality research and quality data.

Bumrungrad International Limited is the Company’s international investment arm. Bumrungrad International Limited focuses on core business of hospital ownership and hospital management. Bumrungrad International Limited has a 56.5% effective investment in Asian Hospital Inc. (“AHI”) in the Philippines as at 31 December 2010. In addition, Bumrungrad International Limited has a four-year management agreement with the Health Authority of Abu Dhabi to operate Mafraq Hospital in Abu Dhabi, United Arab Emirates. Bumrungrad International Limited’s strategic partners are Istithmar, an investment arm of the United Arab Emirates government, Temasek of Singapore, Asia Financial Holdings in Hong Kong and Bangkok Bank Public Company Limited. These strategic partners are internationally well known with strong presences in their respective regions, thereby providing important sources of new investment opportunities and referral networks especially in the Middle East and Asia.

  CDE Trading Company Limited (“CDE Trading”) (previously Global Care
  Solutions (Thailand) Company Limited) was a software development
  company for healthcare business. In December 2007, Global Care
  Solutions (Thailand) Company Limited completed the sale of its core
  assets, which was the hospital software, and other assets to the
  Microsoft Group and changed its name from Global Care Solutions
  (Thailand) Company Limited to CDE Trading Company Limited. CDE Trading
  is currently a temporarily dormant company.

  Global Care Solutions S.A. (“GCS Luxemburg”) is currently a dormant
  company.

2.3 Revenue Structure

  Unit: Baht Million

  ----------------------------------------------------------------------------------------------
  Product line Operate by      % Shareholding 2010             2009             2008      
  / Business                   by Company                                                 
  Group                                                                                   
  ------------ --------------- -------------- --------- ------ --------- ------ --------- ------
                                              Revenue   %      Revenue   %      Revenue   %

  Healthcare   Bumrungrad                     9,636     95.7   8,955     95.9   8,552     96.3
               Hospital Pcl.                                                              

  Healthcare   Vitallife       100.0          170       1.7    114       1.2    77        0.9
               Corporation                                                                
               Ltd.                                                                       

  Total                                       9,806     97.4   9,069     97.1   8,629     97.2
  Healthcare                                                                              

  Rental       Bumrungrad                     130       1.3    132       1.4    128       1.4
               Hospital Pcl.                                                              

  Total Rental                                130       1.3    132       1.4    128       1.4

  Others       Bumrungrad                     127       1.3    133       1.4    124       1.4
               Hospital Pcl.                                                              

  Others       Bumrungrad      100.0          -         -      -         -      1         0.0
               Medical Center                                                             
               Ltd.                                                                       

  Others       Asia Global     100.0          6         0.1    4         0.0    -         -
               Research Ltd.                                                              

  Total Others                                133       1.3    137       1.5    125       1.4

  Total                                       10,069    100    9,338     100    8,882     100
  ----------------------------------------------------------------------------------------------