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 Bumrungrad Al 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.

2.2 Business Overview 

Corporate structure:

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  Bumrungrad Hospital Public Company Limited (“the Company”) operates a
  private hospital business in Bangkok with a licensed capacity of 538
  beds and 4,500 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 Accreditation (JCIA).

  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, one 51%-owned
  subsidiary, Asia Renal Care (Thailand) Company Limited, two associated
  companies, including 31.5%-owned Bumrungrad International Limited and
  30%-owned CDE Trading Company Limited, and one related company, which
  is a 14%-owned Global Care Solutions S.A. in Luxemburg.

  Bumrungrad Medical Center Limited (“BMC”) is the owner of the
  Bumrungrad International Hospital Building, which is leased to the
  Company.

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

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

  Asia Renal Care (Thailand) Company Limited (“ARC Thailand”) is a
  joint-venture between the Company and Asia Renal Care (SEA) Limited.
  ARC Thailand has a 20% investment in Nephromed Company Limited, a
  dialysis service provider with 16 dialysis clinics in Thailand.

  Bumrungrad International Limited is the Company’s international
  investment arm. Bumrungrad International Limited currently has 104
  clinics and hospitals in 8 countries. 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 presence
  in their respective regions, thereby providing important sources of
  new investment opportunities and referral network 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
  asset, 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 a dormant company.

2.3 Revenue Structure

  Unit: Baht Million

  -------------------------------------------------------------------------------------------------
  Product line Operate by      % Shareholding 2009              2008              2007      
  / Business                   by Company                                                   
  Group                                                                                     
  ------------ --------------- -------------- --------- ------- --------- ------- --------- -------
                                              Revenue   %       Revenue   %       Revenue   %

  Healthcare   Bumrungrad                     8,955     95.4    8,540     95.7    8,227     87.4
               Hospital Pcl.                                                                

  Healthcare   Vitallife       100.0          114       1.2     89        1.0     97        1.0
               Corporation                                                                  
               Ltd.                                                                         

  Total                                       9,069     96.6    8,629     96.7    8,324     88.4
  Healthcare                                                                                

  Hospital     Bumrungrad      31.5*          -         -       -         -       17        0.2
  Management   International                                                                
               Ltd.                                                                         

  Total                                       -         -       -         -       17        0.2
  Hospital                                                                                  
  Management                                                                                

  Rental       Bumrungrad                     132       1.4     128       1.4     132       1.4
               Hospital Pcl.                                                                

  Total Rental                                132       1.4     128       1.4     132       1.4

  Others       Bumrungrad                     180       2.0     167       1.9     925       9.9
               Hospital Pcl.**                                                              

  Others       Bumrungrad      100.0          -         -       1         -       2         -
               Medical Center                                                               
               Ltd.                                                                         

  Others       Bumrungrad      31.5           -         -       -         -       13        0.1
               International                                                                
               Ltd.                                                                         

  Others       Asia Global     100.0          4         -       -         -       -         -
               Research Ltd.                                                                

  Total                                       184       2.0     168       1.9     940       10.0
  Others***                                                                                 

  Total                                       9,385     100.0   8,925     100.0   9,413     100.0
  -------------------------------------------------------------------------------------------------

  * Bumrungrad International Limited changed its status from a
  subsidiary to an associated company in April 2007, after which the
  Company no longer reported revenue from hospital management which was
  Bumrungrad International Limited’s revenue, as Bumrungrad
  International Limited’s accounts were no longer consolidated into the
  Company’s.

  ** In 2007, Bumrungrad Hospital Pcl. reported other revenues of Baht
  925 million, of which Baht 829 million was the share of profit from
  investments in CDE Trading Co., Ltd. (previously Global Care Solutions
  (Thailand) Co., Ltd.), a one-time non-operating gain from sale of
  assets in CDE Trading, netted off with CDE Trading’s operations.

  *** Other revenues include share of income from investments in joint
  venture and associated companies.