Opinion of The Independent Financial Advisor Regarding Connected Transaction of Bumrungrad Hospital Public Company Limited

(Translation)
Opinion of the Independent Financial Advisor

Regarding Connected Transaction of
Bumrungrad Hospital Public Company Limited
(Translation)
No. AP. 001 - 08

January 4, 2008
Subject Opinion of Independent Financial Advisor on connected transaction of Bumrungrad Hospital Public
Company Limited
To Board of Directors and shareholders
Bumrungrad Hospital Public Company Limited
The meeting of the Board of Directors of Bumrungrad Hospital Public Company Limited ("the
Company" or "BH") no. 7/2550 held on November 29, 2007 approved the purchase of land and buildings of BH
Towers 1 and 2 from Bangkok Bank Public Company Limited (“BBL”) in an amount of Bt. 470 million.
In accordance with the Stock Exchange of Thailand ("SET")'s notification concerning disclosure
of information and action by listed companies pertaining to connected transactions, B.E. 2546, the above
transaction, as calculated from its size, is regarded as a connected transaction and, thus, is subject to the
approval of the shareholders' meeting. The letter of invitation to such shareholders' meeting is required to be
accompanied by a report on the independent financial advisor's opinion regarding (1) the reasonableness and
benefits of the transaction to the listed company, (2) the fairness of price and conditions of the transaction, and
(3) recommendation as to whether the shareholders should vote in favor of the transaction, together with
reasons. Therefore, BH has appointed Advisory Plus Co., Ltd. as the Independent Financial Advisor ("the IFA")
to provide such opinion to the shareholders of the Company.
As the IFA, we would like to give our opinion on the transaction to the Board of Directors and
the shareholders as a basis of your voting decision, with the details as follows:
Conclusion of the IFA’s opinion
We are of the opinion that the transaction is reasonable as the Company will benefit from
obtaining the ownership over the land and buildings of BH Towers 1 and 2. Moreover, the return obtainable
from its investment in the refurbishment of BH Tower 1 into inpatient facility will be greater than the
investment cost. For these reasons, we recommend that the shareholders approve the transaction on acquisition
of the land and buildings of BH Towers 1 and 2. However, the final decision rests principally with the
shareholders’ own discretion.
1
Opinion of Independent Financial Advisor on connected transaction
1. Characteristics and details of the transaction

1.1 Type and size of the transaction
The Company intends to buy the land and buildings of BH Towers 1 and 2from BBL at the price
of Bt. 470 million and plans to refurbish the serviced apartment at BH Tower 1 into an inpatient facility to
correspond with its plan to boost the outpatient operations at the new hospital building from 3,500 patients per
day to 6,000 patients per day over the next five years by gradually opening the said outpatient service areas
according to the demand growth.
The new hospital building is a 22-storied building, consisting of parking spaces of 10 floors and
outpatient clinics of 12 floors. The building was completely constructed in 2003 and was opened to service in
late 2006, initially with the opening of only the parking spaces on underground to 9th floors and the health
screening center on the 11th floor. The Company plans to open another seven floors to service by May 2008,
which will feature outpatient clinics and business support areas such as lobby, restaurants and medical
workshops. The additional opening of outpatient facility will ensure sufficiency of service areas at present and
in the next five years.
Therefore, to ensure an availability of inpatient beds and a balance between inpatient and
outpatient service capacities, BH will renovate floors 10-17 of BH Tower 1, which now is a 74-room serviced
apartment, into an inpatient facility of 109 beds. The Company has operated 449 inpatient beds at the main
hospital building as of year-end 2006 and plans to begin the renovation of BH Tower 1 in 2009 and to gradually
open it to service as from 2011 onwards, with the 109 beds expected to be fully operated by 2013.
The said transaction, calculated in accordance with the SET’s notification, is valued at 15.53%
of the Company’s net tangible assets based on the consolidated financial statements as of September 30, 2007.
As the said transaction size is greater than the 3% criteria set forth, the transaction is classified as a connected
transaction of the asset and service category, whereby the Company is obliged to prepare and disclose a report
on the transaction to the SET and also to seek approval for the transaction from the shareholders’ meeting.
Approval must be given by a vote of not less than three-fourths of the total number of votes of the shareholders
or their proxies (if any) who attend the meeting and have the right to vote, excluding the shareholders with a
conflict of interest.
1.2 Nature of the transaction

BH was founded in 1980 to operate a hospital business, known to be the first private hospital
located in the heart of Bangkok. The Company has prospered consistently and was listed on the SET in 1989.
In 1995, the Company constructed a new 554-bed building, which was financed by a foreign currency loan.
The building was opened to service in 1997, coinciding with the eruption of economic and financial crisis in
Thailand and a subsequent baht devaluation. As a consequence, the said loan owed by the Company mounted
up substantially in baht term and was far beyond the Company’s ability to pay.
2
In 2000, the Company undertook debt restructuring with BBL and two other creditors, involving
total debt of Bt. 2,721.07 million, by way of an issue of convertible debentures and ordinary shares and asset
settlement to the three creditors. In such year, the Company subsequently transferred BH Towers for debt
settlement to BBL, under an agreement that grants the first right of refusal to the Company in case BBL wishes
to sell such assets in the future.
At that time, the Company needed to continue using BH Tower 1 as car park facility and
serviced apartment and BH Tower 2 as outpatient clinics. It accordingly leased the land and buildings of BH
Towers 1 and 2 from BBL under a contract signed on July 8, 2002 and made retroactive to August 29, 2000.
The contract was on a three-year term and ended on August 28, 2003, following which the Company has
renewed the contract annually. In this respect, the Company must pay a rental fee to BBL at 75% of its net
revenues from sub-lease of BH Towers 1 and 2 spaces, but not lower than Bt. 8 million a year. Over the past
three years from 2004 to 2006, BH paid such fee at Bt. 19.67 million, Bt. 20.12 million, and Bt. 31.51 million
respectively to BBL.
The Company currently operates five buildings to cater for the patients and their family,
comprising 1) main hospital building, 2) new hospital building, 3) BH Tower 1, 4) BH Tower 2, and 5)
Bumrungrad Hospitality Suite, with details as follows:
1. Main hospital building

This is a 13-storied building offering both outpatient and inpatient services, with 32 outpatient
specialty centers, 19 operating theaters, and 554 inpatient beds. As of December 31, 2006, the
number of beds in service was 449.
The land is owned by BH and the building by Bumrungrad Medical Center Co., Ltd., a 100%
owned subsidiary of BH. The said land and building have been mortgaged to a financial
institution as loan security.
2. New hospital building

This is a 22-storied outpatient building, which is opened to service floor by floor based on
demand growth and is expected to be fully opened within three to six years from 2007. Another
seven floors, which are under decoration, will be opened by May 2008, featuring outpatient
clinics, lobby and restaurants. Here are details of the space utilization:
Utilization of the 22-storied new hospital building:
Floor Usage Present status
Underground -9 Parking Opened
10 Lobby and restaurants Scheduled for opening by May 2008
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11 Health screening center Opened
12 Outpatient clinics and medical workshops Scheduled for opening by May 2008
14 New heart center Scheduled for opening by May 2008
15 - 16 Outpatient clinics, under decision to be of Scheduled for opening by May 2008
which specialty center
17 - 21 Outpatient clinics To be gradually opened during
2009-2012
The land and building are under BH’s ownership and have been mortgaged to a financial
institution as loan security.
3. BH Tower 1
This is an 18-storied building consisting of car park and a serviced apartment. Here are details
of the space utilization:
Utilization of the 18-storied BH Tower 1 building:
Underground Medical records room Opened
G Rented space for a fitness center, a mini- Opened
mart and a restaurant
Fl 2 – 8 Parking spaces Opened
Fl 9 Nurse training center Opened
Fl 10 Office for rent Opened
Fl 11 Muslim praying room Opened
Fl 12 -18 Serviced apartment of 74 rooms Opened
Deck Sub-leased to Microsoft (Thailand) Co., Opened
Ltd. (“Microsoft”), which has no relation
to the Company
The land and building are owned by BBL and have been leased to BH since 2000.
4
4. BH Tower 2
This is an 8-storied building. Here are details of the space utilization:
Utilization of the 8-storied BH Tower 2 building:
G–2 Sub-leased to Vitallife Clinic, operated by Opened
Vitallife Corporation Ltd., which is a
100%-owned subsidiary of the Company.
Fl 3 BH skin center Opened
Fl 4 BH plastic surgery center Opened
Fl 5 -8 BH staff’s offices Opened
The land and building are owned by BBL and have been leased to BH since 2000.
5. Bumrungrad Hospitality Suite

This is a 7-storied building plus one underground floor, featuring a serviced apartment with 51
rooms to cater for patients’ families and relatives.
BH has leased this building from G.M. Complex Co., Ltd., an outside party not related to the
Company, for a three-year period from April 1, 2005 to March 31, 2008, which is extendable for
another two years until 2010.
5
Map of hospital location
Sukhumvit Road
vit 1
New Hospital Bldg. Main Hospital Bldg.
m
Soi Sukhu
Nua)
BH Tower 1
vit 3 (Nana
BH Tower 2
Soi Sukhum
Bumrungrad
Hospitality Suites
New Petchaburi Road
On October 26, 2007, BBL informed the Company in writing of its intention to sell the land
and building of BH Towers 1 and 2 with the first right of refusal granted to the Company as agreed.
The rationale behind such sale was that BBL was to comply with the Bank of Thailand’s rules under the
Circulation No. BOT. SorNorSor. (12) Wor. 4411/2542 regarding an extension of holding period for
immovable properties, whereby commercial banks are required to gradually dispose of immovable
properties after having been held by them for five years, beginning in the year immediately after the end
of such five-year period. BBL has so far held BH Towers for seven years since 2000 and must
accordingly sell out such assets.
The below table illustrates the ratio of outpatient to inpatient revenues earned by BH during 2003-2006
and the first nine months of 2007 (January-September):
6
Unit: %
2003 2004 2005 2006 2007
(Jan-Sep)
% revenues from outpatient service 46 46 47 49 49
% revenues from inpatient service 54 54 53 51 51
The below table demonstrates the ratio of Thai to foreign patients using BH’s services during 2003-2006
and the first nine months of 2007 (January-September):
Unit: %
2003 2004 2005 2006 2007
(Jan-Sep)
% Thai patients 67 64 62 59 59
% foreign patients 33 36 38 41 41
It is evident that the number of foreign patients to Thai patients has been steadily rising, from 33% to
41% in 2006. These foreign patients came mainly from the Middle East and the USA, making up
around 40% of total number of foreign patients.
1.3 Details of assets

The assets to be bought from BBL are land and buildings of BH Towers 1 and 2, as follows:
1.3.1 Land
Title deed no. 4030 covering 1-0-67.7 rai on which BH Tower 1 is located
Title deed no. 4031 covering 0-3-53.9 rai on which BH Tower 1 is located
Title deed no. 141138 covering 0-1-49 rai on which BH Tower 2 is located
Total area 2-1-70.6 rai
1.3.2 BH Tower 1 (car park and serviced apartment)

Description of asset : An 18-storied building, with one underground floor and a deck,
located on land with title deeds no. 4030 and 4031 in Khlong Tan
Sub-district, Phra Khanong District, Bangkok, covering total area
of 2-0-21.6 rai
Building space : 30,530 square meters
Useful life : Based on an independent appraiser’s report prepared on December
6, 2007, BH Tower 1 has been in use for 13 years since 1994 and
has a useful life of about 40 years or ending in 2034, hence a
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remaining useful life of 27 years.

Location : No. 68 Soi Sukhumvit 1, Sukhumvit Road, Khlong Tan Sub-
district, Phra Khanong District, Bangkok
Owner : BBL
Appraiser : American Appraisal (Thailand) Ltd. (“AAT”)
Appraised value : AAT has appraised the land by the market comparable approach
and the building by the replacement cost less depreciation
approach.
Space utilization : Underground Medical records room
G Fitness center, restaurant & mini mart
Floors 2-8 Parking areas
Floor 9 Nurse training center
Floor 10 Rented office of outsiders
Floor 11 Islamic praying room
Floors 12-18 Serviced apartment
Deck Sub-leased to Microsoft, which is not related
to the Company
Note: The sub-lease to third parties is mostly on a one-year term
and the Company does not have any commitment to the sub-
lessee.
1.3.3 BH Tower 2 (Vitallife Clinic, skin center, plastic surgery center and office space)
Description of asset : An 8-storied building, located on land with title deed no. 141138
in Khlong Tan Sub-district, Phra Khanong District, Bangkok,
covering total area of 0-1-49 rai
Building space : 2,830 square meters
Useful life : Based on an independent appraiser’s report prepared on December
6, 2007, BH Tower 2 has been in use for 16 years since 1997 and
has a useful life of about 40 years or ending in 2031, hence a
remaining useful life of 24 years.
Location : No. 68 Soi Sukhumvit 1, Sukhumvit Road, Khlong Tan Sub-
district, Phra Khanong District, Bangkok
Owner : BBL
Appraiser : American Appraisal (Thailand) Ltd. (“AAT”)
Appraised value : AAT has appraised the land by the market comparable approach
and the building by the replacement cost less depreciation
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approach.
Space utilization : Floors G-2 Sub-leased to Vitallife Clinic
Floor 3 BH’s skin center
Floor 4 BH’s plastic surgery center
Floors 5-8 BH staff’s offices
1.4 Transaction value and consideration

In this transaction, BH must pay for the land and buildings of BH Towers 1 and 2 to BBL in
a total amount of Bt. 470 million, which has been agreed upon between the Company and BBL based on
the tentative appraised value, fully in cash on the date of ownership transfer of the land and buildings of
BH Towers 1 and 2 after obtaining approval from the shareholders’ meeting.
1.5 Connected parties and persons with a conflict of interest in the transaction
Buyer : BH
Seller : BBL
As Khun Chatri Sophonpanich, who is BBL’s authorized director and shareholder, is a director of BH,
and Khun Kulathida Sivayathorn, who is Executive Vice President & Manager, Accounting and Finance
of BBL, also is a director of BH, the transaction made by the Company with BBL is therefore
considered a connected transaction. Listed below are the parties having a conflict of interest and not
entitled to vote on the transaction at the shareholders’ meeting to be held on January 22, 2008:
1. Parties having a conflict of interest and not entitled to vote on this transaction:*
Name No. of shares in BH % shareholding Nature of relationship
(shares) in BH
1. BBL group 71,158,279 9.74
1.1 BBL 7,899,765 1.08 Having common directors with the
Company, i.e. Khun Chatri
Sophonpanich and Khun Kulathida
Sivayathorn
1.2 Sinsubtawee Asset Management 63,258,514 8.66 Being a 99.99% owned subsidiary of
Co., Ltd. BBL
2. Bangkok Insurance Plc. 95,816,502 13.12 Having Khun Chai Sophonpanich, a
younger brother of Khun Chatri
Sophonpanich who is BBL’s
shareholder and authorized director,
as shareholder and authorized
9
Name No. of shares in BH % shareholding Nature of relationship

(shares) in BH
director
3. The Sophonpanich Co., Ltd. 25,121,875 3.44 Having the Sophonpanich group as
shareholders and board members
4. Khun Chai Sophonpanich 7,608,060 1.04 Being a younger brother of Khun
Chatri Sophonpanich
5. Khun Charlie Sophonpanich 5,277,500 0.72 Being a son of Khun Chatri
Sophonpanich
6. Khunying Chodchoi Sophonpanich 3,984,375 0.55 Being a younger sister of Khun
Chatri Sophonpanich
7. Khun Chatri Sophonpanich 3,666,035 0.50 Being BBL’s shareholder and
authorized director
8. Khun Cherdchu Sophonpanich 1,782,775 0.24 Being a younger brother of Khun
Chatri Sophonpanich
9. Khun Chan Sophonpanich 1,550,500 0.21 Being a younger brother of Khun
Chatri Sophonpanich
10. Khun Rabin Sophonpanich 562,500 0.08 Being an elder brother of Khun
Chatri Sophonpanich
11. Khun Chote Sophonpanich 145,000 0.02 Being a younger brother of Khun
Chatri Sophonpanich
Total non-voting shares 216,673,401 29.66
Note: * Shareholding is inclusive of ordinary shares and preferred shares. BH has a total of 730,052,000 issued ordinary shares and preferred
shares as of September 30, 2007.
The number and percentage of shareholding above are subject to change, depending finally on the most recent share register closing date,
which is January 2, 2008.
2. BH’s directors who are connected with BBL:

Name Position in BH Position in BBL (Seller)
1. Mr. Chatri Sophonpanich Director Board Chairman
2. Mrs. Kulathida Sivayathorn Director Executive Vice President & Manager,
Accounting and Finance
3. Mr. Chai Sophonpanich* Board Chairman -
* Being a younger brother of Mr. Chatri Sophonpanich, who is BBL’s Chairman
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1.6 Industry situation

Based on the National Statistical Office’s most recent records as of end-2004, Thailand has a total
1,334 hospitals with 143,090 inpatient beds, consisting of 980 state-run hospitals with 106,902 beds and 354
private hospitals with 36,188 beds. Out of the total private hospitals, 103 facilities are in Bangkok, offering
15,434 beds.
Total hospitals State hospitals Private hospitals
No. of No. of beds No. of No. of beds No. of No. of beds
hospitals hospitals hospitals
Bangkok 145 31,973 42 16,539 103 15,434
Central region 372 40,044 252 29,914 120 10,130
Northern region 261 24,579 209 19,652 52 4,927
Northeastern region 347 29,179 305 25,980 42 3,199
Southern region 209 17,315 172 14,817 37 2,498
Total 1,334 143,090 980 106,902 354 36,188
Source: National Statistical Office
The Thai government’s policy to make Thailand the Medical Hub of Asia and the Tourism
Authority of Thailand’s promotion of Health Tourism have prompted many private hospital operators to
increasingly concentrate their marketing on expatriates who have high purchasing power. As a result, the
number of foreign patients treated by Thai private hospitals grew steadily from 630,000 persons in 2002 to 1.1
million in 2004 and 1.4 million in 2006. Most of them were from Japan, the US, Europe and the Middle East.
The archrivals of Thai private hospitals are private hospitals in Singapore, Malaysia and India which are in the
same region as Thailand and similarly aim to upgrade their healthcare systems and facilities so as to become a
medical hub in this region.
However, Thai players have competitive edges over their foreign rivals as follows:
1) Strengths in lower treatment costs, complete amenities for hospital operations, and
international name-recognition
• While employing medical equipment of comparable quality to their Singaporean
competitors, Thai private hospitals charge lower treatment fees, thus leading patients to
likely opt for Thai hospitals.
• Despite their cost efficiency, Indian private hospitals have inferior amenities and
cleanliness awareness to Thai hospitals, potentially making Thai hospitals more preferable
among international patients.
• Malaysian hospitals utilize medical equipment of comparable standard and cost to Thai
hospitals, but still gain less name recognition than Thai hospitals at international level,
hence prompting patients to prefer Thai hospitals.
11
2) Readiness of supporting businesses
Thai players are able to apply Thai herbs, spa and massage services, which are globally
accepted traditional Thai wisdom, to their treatment so that patients could have a broader
choice of treatment methods and could more quickly recover after the treatment.
3) Magnificent tourist attractions and abundance of goods outlets

Thailand is home to several magnificent tourist spots and widespread goods outlets, which are
suitable for patients who need to recuperate from their illness and to relax with comfortable
natural surroundings and attractions, as well as enjoy shopping at leading brand-name goods
outlets scattered across the country. These are fit particularly for patients joining health
tourism programs. At the same time, their accompanying families and attendants can also visit
the tourist spots and enjoy the shopping while the patients are being treated and after that.
Competition
Although there were as many as 103 private hospitals with inpatient service capacity of 15,434 beds
in Bangkok in 2004, there are currently only three hospitals having comparable preparedness in personnel and
equipment and receiving international accreditation like BH, which is the first hospital in Asia to obtain the US
standard accreditation from the Joint Commission International Accreditation (JCIA). Those three hospitals are
Bangkok Hospital Medical Center, BNH Hospital, and Samitivej Hospital, all of which are at the forefront of
Thai private hospital industry with service capacity, treatment and service fees, and target groups close to those
of BH.
Private hospital Inpatient capacity (beds)
1. Bangkok Dusit Medical Services Plc. (BGH) group 1,524
Bangkok Hospital Medical Center * 745*
Samitivej Hospital ** 675**
BNH Hospital 225
2. Bumrungrad Hospital 554
Notes: * Bangkok Hospital Medical Center includes Bangkok Hospital (550 beds), Bangkok Heart Hospital (70), Wattanosoth
Cancer Hospital (35), and Bangkok International Hospital (90).
** Samitivej Hospital includes Samitivej Sukhumvit Hospital (275) and Samitivej Srinakarin Hospital (400).
2.2 Top 10 shareholders as of the latest share register closing date of August 22, 2007 (inclusive of
preferred shares)
Name No. of shares % No. of shares %
1. Bangkok Insurance Plc. 95,816,502 13.12
2. HSBC (Singapore) Nominees Pte. Ltd. 75,563,400 10.35
3. BBL group 71,158,279 9.74
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Name No. of shares % No. of shares %

- BBL 7,899,765 1.08
- Sinsubtawee Asset Management Co., Ltd. 63,258,514 8.66
4. Istithmar PJSC 43,370,743 5.94
5. Thai NVDR Co., Ltd. 36,441,650 4.99
6. Littledown Nominees Ltd. 9 34,760,100 4.76
7. UOB Kay Hian Private Ltd. 30,920,390 4.24
8 The Sophonpanich Co., Ltd. 25,121,875 3.44
9 Citibank Nominees Singapore Pte. Ltd. -
Aranda Investments Pte. Ltd.* 21,685,372 2.97
10 TLS Alpha Pte. Ltd.* 21,685,371 2.97
Note: * Temasek Holding group
The number and percentage of shareholding above are subject to change, depending finally on the most recent share
register closing date, which is January 2, 2008.
Board of Directors
The Board of Directors of BH as of November 15, 2007 was composed of 16 members as listed below:
Name Position
1. Mr. Chai Sophonpanich Chairman
2. Mr. Chanvit Tanphiphat Vice Chairman
3. Mrs. Linda Lisahapanya Managing Director
4. Mr. Curtis John Schroeder Director
5. Mr. Dhanit Dheandhanoo Director
6. Mr. Chatri Sophonpanich Director
7. Mr. Anant Tejavej Director
8. Mr. John Yangpichitt Director
9. Dr. Khun Sawanya Dej-Udom Director
10. Mrs. Kulathida Sivayathorn Director
11. Mr. Chong Toh Director
12. Mr. Sinn Anuras Director
13. Dr. Jennifer Lee Director
14. Miss Sophavadee Uttamobol Chairman of the Audit Committee
15. Mr. Boonpakorn Chokvathana Member of the Audit Committee
16. Mr. Soradis Vinyaratn Member of the Audit Committee
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Summary of financial position

Shown below is a summary of BH’s financial position and performance according to the financial statements
duly audited by Ms. Sumalee Reewarabandith, an auditor from Ernst & Young Office Ltd., for the period ended
December 31 of 2004-2006 and the reviewed financial statement for the period of January-September 2007:
(Unit: Bt. 000’s)
Consolidated financial statements
2004 2005 2006 2007
(Jan-Sep)
Current assets
Cash and cash equivalents 652,882 543,506 853,860 440,891
Current investments-fixed deposits at financial 470,000 - 10,000 -
institutions
Trade accounts receivable-net 234,958 339,475 525,197 621,990
Inventories 104,451 149,896 166,413 192,542
Other current assets 5,208 9,697 11,373 2,295
Total current assets 1,503,740 1,103,842 1,629,054 1,354,509
Non-current assets
Pledged fixed deposits at financial institutions 229,828 229,884 9,605 9,605
Investments accounted for under equity method* 209 481,415 464,949 1,091,503
Property, plant and equipment-net 2,801,618 3,269,655 3,751,951 3,953,229
Intangible assets-net 476,128 624,219 732,093 595,820
Other non-current assets 7,516 16,456 16,824 18,464
Total non-current assets 3,517,346 4,623,676 4,993,840 5,670,668
Total assets 5,021,086 5,727,518 6,622,894 7,025,177
Note : Investment in subsidiaries regarding the Company solely financial statement as of the end of 2006 was 1,772.51 million
baht, decreasing to 1,172.51 million baht as of September 30, 2007 because BIL raised its paid-up capital again from Bt. 1,176. 47
million to Bt. 1,904.76 million through an issue of 7,282,908 new shares at Bt. 153.52 per share. BH had declined the rights issue
of 3,714,283 shares allocated to the Company, thereby leading its stake in BIL to be diluted to only 31.5% and changing BIL’s
status from a subsidiary to an associated company.
14

2004 2005 2006 2007
(Jan-Sep)
Liabilities and shareholders’ equity
Current liabilities
Short-term loans from financial institutions - - - 200,000
Trade accounts payable 413,413 484,362 551,815 584,475
Amount due to a related party - - 1,800 21,663
Current portion of long-term loans 328,552 328,552 328,552 389,459
Accrued physicians’ fees 167,002 213,241 255,562 259,865
Corporate income tax payable 60,893 205,623 196,122 131,393
Accrued expenses 136,154 203,357 137,850 276,549
Other current liabilities 21,316 33,579 40,032 39,704
Total current liabilities 1,181,395 1,580,759 1,571,898 1,938,214
Non-current liabilities
Long-term loans 1,779,493 1,450,971 1,422,449 1,465,121
Total liabilities 2,960,888 3,031,730 2,994,347 3,403,335
Shareholders’ equity
Share capital
Issued and paid-up capital
728,202,772 ordinary shares (as of Sep 30, 2007) of Bt. 727,359 727,691 727,825 728,202
1 each
1,849,450 preferred shares (as of Sep 30, 2007) of Bt. 1 2,693 2,361 2,227 1,850
each
Premium on ordinary shares 285,568 285,568 285,568 285,568
Unrealized gain resulting from the sale of subsidiary's - - 156,135 252,174
shares to the public in excess of par value
Translation adjustment - 30,829 13,046 3,932
Convertible bonds treated as equity securities 550,000 550,000 550,000 550,000
Excess of investment over book value of a subsidiary (192,662) (192,662) (192,662) (192,662)
Retained earnings 687,240 1,211,449 1,742,112 1,992,778
Total equity attributable to company's shareholders 2,060,198 2,615,236 3,284,251 3,621,842
Minority interest - equity attributable to minority - 80,553 344,296 -
shareholders of subsidiaries
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2004 2005 2006 2007
(Jan-Sep)
Total shareholders’ equity 2,060,197 2,695,789 3,628,547 3,621,842
Total liabilities and shareholders’ equity 5,021,086 5,727,518 6,622,894 7,025,177
Revenues
Revenues from hospital operations 5,685,055 6,646,518 7,650,579 6,274,159
Revenues from hospital management - 6,877 57,094 17,456
Rental income 53,075 89,088 118,423 99,122
Interest income 25,434 8,414 18,480 11,381
Gain on exchange rate 16,099 25,216 15,219 21,298
Other income 28,636 27,502 27,959 29,255
Share of income from investments accounted for under - 3,160 7,764 15,280
equity method
Total revenues 5,809,299 6,806,775 7,895,518 6,467,951
Expenses
Cost of hospital operations 3,665,508 4,145,590 4,775,142 3,848,638
Depreciation and amortization 242,005 291,816 342,094 303,226
Administrative expenses 767,519 986,096 1,148,590 985,317
Goodwill write-off (1,366) - - -
Allowance for loss on impairment of assets (reversal) 9,000 11,430 10,427 -
Total expenses 4,682,764 5,434,932 6,276,253 5,137,181
Income before interest expense and income tax 1,126,535 1,371,843 1,619,265 1,330,770
Interest expense (118,886) (106,868) (109,946) (82,974)
Corporate income tax (128,636) (217,908) (432,140) (365,701)
Profit (Loss) before minority interest 879,013 1,047,067 1,077,179 882,095
Net loss attributable to minority interest (8,444) 5,672 18,523 2,204
Earnings from normal operations 870,569 1,052,739 1,095,702 884,299
Extraordinary item-gain on conversion of debentures into 63,978 - - -
ordinary shares
Net earnings for the year 934,547 1,052,739 1,095,702 884,299
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Financial ratios
2004 2005 2006 2007
(Jan-Sep)
Liquidity ratio (time) 1.27 0.70 1.04 0.70
Return on assets (%) 19.72 19.59 17.74 17.28*
Debt to equity (time) 1.44 1.16 0.91 0.94
Return on equity (%) 56.30 44.27 34.65 32.52*
Note: *Annualized for comparative purpose
Financial position and working performance

Total assets
Total assets according to the financial statements for 2004-2006 amounted to Bt. 5,021.09 million, Bt.
5,727.52 million and Bt. 6,622.89 million respectively. Growth in total assets in 2005 and 2006 partly resulted
from an increase in property, plant and equipment, due to construction of a new hospital building as outpatient
clinics and car park, from Bt. 2,801.62 million in 2004 to Bt. 3,269.66 million in 2005 and Bt. 3,751.95 million
in 2006. Moreover, the rise in total assets in 2006 was attributed to a surge in cash from Bt. 543.41 million in
2005 by Bt. 310.35 million to Bt. 853.86 million as a result of capital increase of Bt. 453 million of a
subsidiary, Bumrungrad International Co., Ltd. (“BIL”) in which BH owns a 51% stake. However, in 2007 BIL
raised its paid-up capital again from Bt. 1,176. 47 million to Bt. 1,904.76 million through an issue of 7,282,908
new shares at Bt. 153.52 per share. BH had declined the rights issue of 3,714,283 shares allocated to the
Company, thereby leading its stake in BIL to be diluted to only 31.5% and changing BIL’s status from a
subsidiary to an associated company.
Total assets as of September 30, 2007 were Bt. 7,025.18 million, up by Bt. 402.28 million from Bt.
6,622.89 million as of end-2006. The total assets growth was ascribed to a rise in trade accounts receivable
from a growing number of customers which are insurance companies and foreign contract counterparties.
Moreover, a capital increase by BIL in 2007 led the Company’s investments in associated companies to go up.
Its property, plant and equipment rose by Bt. 201.28 million from Bt. 3,751.95 million in 2006 to Bt. 3,953.23
million as of September 30, 2007, as a result of the renovation of the new hospital building.
Total liabilities and shareholders’ equity
Total liabilities as shown in the financial statements for 2004-2006 stood at Bt. 2,960.89 million, Bt.
3,031.73 million and Bt. 2,994.35 million respectively. The total liabilities in 2005 increased slightly from
2004, due to a rise in trade accounts payable, accrued physicians’ fees, corporate income tax payable, and
accrued expenses, as well as the repayment of current-due loans of Bt. 329 million. The total liabilities in 2006
dropped slightly from 2005 because, despite the repayment of current-due loans of Bt. 329 million, the
17
Company additionally drew down the long-term loans of Bt. 300 million in Q4/2006 to fund the decoration of
the new hospital building and the procurement of medical equipment to replace the old one.
As of September 30, 2007, total liabilities were Bt. 3,403.34 million, rising by Bt. 408.99 million from
Bt. 2,994.35 million as of year-end 2006. Such increase stemmed partly from additional long-term borrowing
of Bt. 350 million to fund the decoration of the new hospital building and the procurement of medical
equipment to replace the old one.
Shareholders’ equity (exclusive of minority shareholders of subsidiaries) according to the financial
statements for 2004-2006 stood at Bt. 2,060.20 million, Bt. 2,615.23 million and Bt. 3,284.25 million
respectively. The rise in shareholders’ equity in 2005 and 2006 was attributable to the net profit earned at Bt.
1,052.74 million and Bt. 1,095.70 million respectively. Further, the increase in shareholders’ equity in 2006
came from the sale of newly issued shares by BIL, the Company’s associated company, to a strategic partner in
excess of par value by Bt. 156 million.
As of September 30, 2007, the shareholders’ equity was Bt. 3,621.84 million, increasing by Bt. 337.59
million from Bt. 3,284.25 million as of end-2006, owing partly to an operating profit of Bt. 884.30 million
recorded in the first nine months of 2007.
Company Performance
Over 2004-2006, BH recorded total revenues of Bt. 5,809.30 million, Bt. 6,806.76 million and Bt.
7,895.52 million respectively. The main income source was revenues from hospital operations, accounting for
Bt. 5,685.06 million, Bt. 6,646.52 million and Bt. 7,650.58 million respectively. Of such revenues from
hospital operations, the ratio of outpatient to inpatient revenues stood at 46:54 in 2004, 47:53 in 2005, and
49:51 in 2006. Such revenue growth was thanks to the continual rise in revenues from both outpatient and
inpatient services.
In the first nine months of 2007, total revenues were Bt. 6,467.95 million, advancing from Bt.
5,953.84 million in the corresponding period of 2006 thanks to steady growth in outpatient and inpatient
services.
Total expenses were recorded at Bt. 4,682.76 million, Bt. 5,434.93 million and Bt. 6,276.25 million
during 2004-2006 respectively, increasing continuously in line with the revenue growth. Meanwhile,
administrative expenses moved up correspondingly with the business growth.
Total expenses in the first nine months of 2007 amounted to Bt. 5,137.18 million, mounting by Bt.
437.45 million from Bt. 4,699.73 million in the same period of 2006 due to increases in cost of hospital
operations and administrative expenses in line with the revenue growth.
The Company posted net earnings, as shown in the consolidated financial statements for 2004-2006,
of Bt. 934.55 million, Bt. 1,052.74 million and Bt. 1,095.70 million respectively, expanding in line with the
revenue growth over those years.
18
Net earnings in the first three quarters of 2007 were Bt. 884.30 million, rising from the corresponding
figures of Bt. 842.11 million in the previous year on account of the revenue growth.
Financial ratios
From 2004 to 2006, the Company recorded a liquidity ratio of 1.27, 0.70 and 1.04 respectively. A
drop in such ratio in 2005 resulted from a decrease in cash and cash equivalents and current investments-fixed
deposits at financial institutions which were used mainly for loan repayment and dividend payment. The ratio
edged up in 2006 owing to increased cash caused by a capital increase of Bt. 453 million by BIL in such year
(as of the end of 2006, BIL remained the Company’s 51%-owned subsidiary).
In the first nine months of 2007, the liquidity ratio fell to 0.70 from that as of end-2006, springing
from a sharp decline in cash from Bt. 853.86 million to Bt. 440.89 million caused by a reduction in BH’s
shareholding in BIL from 51% to 31.5%. As such, BIL no longer is a subsidiary of the Company and will not
be consolidated into the Company’s financial statements, but will only be presented in the investments in
associated companies item. This accordingly led to a drop in current assets in the first three quarters of 2007,
hence a lowered liquidity ratio.
Return on assets stood at 19.72% in 2004, 19.59% in 2005 and 17.74% in 2006. A slight fall in ROA
in 2006 was ascribed to an increase in property, plant and equipment due to the construction of a new hospital
building, which drove the total assets up considerably from 2005.
In the first nine months of 2007, ROA was 17.28%, down marginally from the end of 2006 owing to a
rise in investments in associated companies.
Debt to equity ratio edged down steadily from 1.44 in 2004 to 1.16 in 2005 and 0.91 in 2006 thanks to
a continual increase in shareholders’ equity caused by the annually growing retained earnings.
In the first three quarters of 2007, D/E ratio rose slightly to 0.94 as a result of short-term borrowing of
Bt. 200 million raised in such period.
Return on equity over 2004-2006 was 56.30%, 44.27% and 34.65% respectively, representing a
consistent drop due to growth in shareholders’ equity from Bt. 2,020 million in 2004 to Bt. 3,628.55 million in
2006 caused by the annually rising retained earnings.
In the first nine months of 2007, ROE fell slightly to 32.52% from the end of 2006 owing to growth in
retained earnings which relatively drove up the shareholders’ equity.
2. Reasonableness of the transaction

2.1 Objectives and necessity of the transaction
BH was the original owner of the land and buildings of BH Towers 1 and 2 and used these
buildings as rented accommodations for expatriate patients and their families. In 2000, the Company
19
undertook a debt restructuring with BBL and two other creditors with total debt of Bt. 2,721.07 million
by issue of convertible debentures and ordinary shares and transfer of assets for debt settlement to the
three creditors. In this respect, the Company transferred the land and buildings of BH Towers 1 and 2 to
BBL as part of such debt settlement under an agreement that if in the future BBL wishes to sell these
assets, it shall give the first right of refusal to BH and shall not sell the assets to other party unless BH
declines to buy them back.
The Company has since 2000 leased BH Towers 1 and 2 from BBL for use in its hospital
operations (BH paid the rental fees for these buildings over 2000-2006 totaling Bt. 121.17 million and
spent repair and maintenance cost of Bt. 15.74 million during 2001-2006) and has renovated the
buildings to match its application purposes. BH Tower 1 currently features rented accommodations for
patients and their families, offices, retail shops, restaurants, and parking spaces, whereas BH Tower 2
consists of BH’s skin center and plastic surgery center, rented space to Vitallife Clinic, and its own
office spaces.
With BBL showing an intention to sell BH Towers 1 and 2 and grant the first right of refusal
to BH, the Company therefore is desirous to buy the assets back from BBL based on the following
rationales:
1) Given BH declines to buy the said assets, BBL will sell them to other party. In this
case, it is possible that the new owner may revise the leasing terms and conditions or
not renew the lease contract for the Company. If the Company is unable to find a new
facility of similar structure, size and location to BH Towers 1 and 2, its service capacity
and other amenities such as parking space, retail shops, restaurants, etc. will reduce for
it will have to relocate the skin center and plastic surgery center as well as car park
from BH Towers to the main hospital building and the new hospital building. This will
relatively lead to a decrease in the number of patients it can treat and thus hurt its
revenues, profitability and ability to pay dividend. Moreover, the reduced parking
spaces may hinder patients from visiting its hospital.
2) The Company already has a plan to expand its inpatient capacity in the next five years
by an additional 109 beds (its current inpatient capacity is about 500 beds) to be aligned
with its outpatient capacity which will be boosted from 3,500 patients per day to 6,000
patients per day in the next five years as well. The buy-back of the land and buildings
of BH Towers 1 and 2 will help to ensure the soundness of its inpatient capacity
expansion project. That is, by implementing the project on the property under its
ownership, the Company can rest assured that it will enjoy the benefits and cash flow
provided from its investment in such project from the break-even point and
continuingly thereafter. On the contrary, if the Company instead develops the project
on a leased property, it will risk failing to obtain a lease renewal and to reach the break-
20
even of the project. Currently, it leases BH Towers 1 and 2 from BBL on a yearly
renewal basis. If the Company declines to buy the assets back and BBL sells them to a
third party, it may not be granted the right to continue to lease the assets or may face
less favorable terms and conditions, which will put its expansion project at a risk.
For the above reasons, the meeting of the Board of Directors of the Company no. 7/2550
held on November 29, 2007 resolved for the Company to buy the land and buildings of BH Towers 1
and 2 from BBL at a price of Bt. 470 million.
2.2 Pros and cons of the transaction

2.2.1 Pros
a) Ownership over BH Towers
By purchasing the assets from BBL this time, the Company will change from being a lessee to an
owner and to be the owner itself will help mitigate risk of failing to obtain the lease renewal and will
strengthen the Company’s confidence that BH Towers 1 and 2, which currently are parts of its
existing hospital facilities featuring several specialty centers, rented spaces, and amenities for
patients and their families, will continue to support its operations. Moreover, it will be easier for the
Company, as the owner than as the lessee, to undertake any refurbishment of the buildings to meet
its operational needs in the future.
b) Ability to serve present and future service demand

BH originally operated only one hospital building, i.e. the main hospital building which is already
fully occupied. With a plan to expand its inpatient and outpatient capacities in the future, the
Company has accordingly expanded the skin center, plastic surgery center, and part of the office to
BH Tower 2 and also plans to increase inpatient capacity at BH Tower 1. It has constructed a new
22-storied building (the new hospital building) to locate car park, health screening center, and
outpatient facility.
Additionally, the purchase of BH Towers 1 and 2 will ensure that the Company will have enough
service spaces to accommodate the inpatient capacity expansion and its future business expansion.
c) No further need to pay rental fee

At present, the Company has to pay a rental fee for BH Towers 1 and 2 (exclusive of repair and
maintenance cost) to BBL at a rate of 75% of its net revenues from sublease of BH Towers 1 and 2
spaces, but not less than Bt. 8 million a year. The fee paid in 2004-2006 amounted to Bt. 19.67
million, Bt. 20.12 million and Bt. 31.51 million respectively (making up a total of Bt. 71.30
million).
21
By purchasing BH Towers 1 and 2, the Company will become the owner of the assets and no longer
have to pay the rental fee, hence a cost saving of around Bt. 20 million – Bt. 30 million a year.
However, the Company still is to carry the repair and maintenance cost of around Bt. 2 million – 4
million a year, whether it is the owner or the lessee of the assets.
2.2.2 Cons
a) Increased debt and interest expense
The purchase of BH Towers 1 and 2 from BBL at Bt. 470 million will be funded partly by a long-term
loan of Bt. 400 million from a financial institution and partly by its working capital of Bt. 70 million.
The working capital will come from cash flow provided from either operating activities or financing
activities by borrowing from the financial institution. We have thus conducted a worst case scenario
whereby the Company will acquire the working capital from borrowing from the financial institution
and hence the Company will have to borrow the total Bt. 470 million to fund the purchase of BH Tower
1 and 2. Moreover, the renovation of floors 10-17 of BH Tower 1 into additional inpatient beds has
been projected by the IFA to be financed by loans from financial institutions in an approximate amount
of Bt. 869 million, divided into around Bt. 747 million for the renovation of BH Tower 1 (BH hired a
specialist to preliminarily appraise the renovation project cost) and another Bt. 122 million as working
capital.
The purchase of the land and buildings of BH Towers 1 and 2 will lead the Company to raise the entire
Bt. 470 million from borrowing from the financial institution, following which its D/E ratio will edge up
from 0.94 to 1.07 times (based on the financial statement as of September 30, 2007). By factoring in
another borrowing of Bt. 869 million for the inpatient capacity expansion, the ratio will reach 1.31
times.
Table showing D/E ratio based on the financial statement as of September 30, 2007
Pre-borrowing Post-borrowing Post-borrowing
of Bt. 400 million of Bt. 869 million
Total debt (Bt. million) 3,403.34 3,873.34 4,742.34
Shareholders’ equity (Bt. million) 3,621.84 3,621.84 3,621.84
D/E ratio (time) 0.94 1.07 1.31
The above borrowings will lead the Company to bear additional interest expense of about Bt. 3.77
million – Bt. 62.24 million a year throughout the project life. This is calculated based on MLR-1.25%,
which is the current interest rate borne by the Company (MLR = 6.875% quoted by Krung Thai Bank as
of July 23, 2007). (See details in the Attachment, item 6, Loans for project investments.)
22
b) Additional cost arising from depreciation of BH Towers 1 and 2

Based on an appraisal conducted on December 6, 2007 by American Appraisal (Thailand) Co., Ltd., an
SEC-approved independent appraiser, BH Towers 1 and 2 have a remaining useful life of 27 years and
24 years and depreciation cost of about Bt. 9.15 million and Bt. 1.04 million a year respectively.
Therefore, the Company, by purchasing these buildings, will bear expenses on the depreciation of BH
Towers 1 and 2 in a total amount of some Bt. 10.19 million a year.
Date of Useful Remaining Appraised value Depreciation
completed life useful life ( replacement cost cost/year
construction (year) (year) new less (Bt. million)
depreciation
method)
(Bt. million)
BH Tower 1 1994 40 27 247.00 9.15
BH Tower 2 1991 40 24 25.00 1.04
Total 272.00 10.19
Despite such additional expenses from the interest payable and depreciation of BH Towers 1 and 2, the
Company will be able to save the costs of rental fees paid for these buildings to BBL at around Bt. 20 million –
30 million a year.
However, the depreciation is a non-cash expense and accordingly will not hurt the Company’s cash flow at
all, but will only impact its accounting profit.
2.3 Pros and cons of not making the transaction

2.3.1 Pros
No increase in debt and interest expense
Given that the Company does not buy BH Towers 1 and 2 back from BBL, it will not have to raise the
loan of Bt. 470 million to fund such purchase.
If the Company does not have to raise the loan of Bt. 470 million, its D/E ratio will be unchanged at 0.94
(based on the financial statement as of September 30, 2007). Therefore, the Company will still have the
ability to borrow loans in the future and will not have to bear additional interest expense for the time
being.
2.3.2 Cons
a) Risk from changing terms and conditions on BH Towers 1 and 2 lease contract with a new
owner
23
If the Company declines to buy BH Towers 1 and 2 back from BBL and BBL sells the assets to
other party, it is unpredictable as to who will become the new owner and the new owner will allow
the Company to continue leasing the assets or not or the new owner may use the assets for other
purpose or if allowing the Company to continue the lease, may revise the lease terms and
conditions.
We have thus conducted a worst case scenario where the new owner agrees not to continue the
lease contract with BH and the Company will have to find a new facility suitable for its business
and not far away from its existing hospital to replace BH Towers 1 and 2. This will involve an
extra cost and the Company may have to pay a higher rental fee than currently paid to BBL.
Furthermore, in finding a new facility of similar structure, size and location to replace BH Towers 1
and 2, it is evident that BH Towers 1 and 2 are adjacent to BH hospital and have utilization areas
that already match the hospital business. When comparing with other buildings of similar structure
and suitable for hospital operation, it has been found that there are no buildings of similar structure
in nearby areas, whereas the buildings in close proximity to BH hospital do not match the structure
and size of BH Towers 1 and 2. Therefore, the Company is unable to find any building of such
desired structure, size and location to replace BH Towers 1 and 2. If it fails to obtain the lease
extension, its service capacity and amenities will reduce for it will have to relocate the skin center
and plastic surgery center as well as car park from BH Towers to the main hospital building and the
new hospital building. This will relatively hurt its revenues.
b) Risk from non-worthwhile investment in the inpatient capacity expansion project

Although in case the Company declines to buy BH Towers 1 and 2 back from BBL and BBL sells
the assets to other party, it is unpredictable as to who will become the new owner. Given that the
new owner renews the lease for BH under the unchanged terms and conditions, that is, a one-year
lease term which is renewable on a yearly basis, the Company will still bear risk from the non-
worthwhile investment in its expansion of an additional 109 inpatient beds, with the project to begin
in 2009 and the payback period expected to be 9 years and 3 months, or break-even in 2019. If the
new owner does not renew the lease contract for the Company in any year before 2019, the break-
even year, the investment in such project will not be worthwhile.
In the event the new owner extends the contract for the Company until 2019, but does not grant the
renewal in any year after 2019, the Company will not fully achieve the benefits and cash flow as
expected.
24
2.4 Pros and cons between making the transaction with a connected party and with an outsider
Currently, BBL, which is a connected party of the Company, is the owner of BH Towers 1 and 2 that
were transferred to BBL under the debt restructuring agreement made in 2000. As such, it is impossible
for the Company to buy the assets from an outsider.
By comparing the purchase of BH Towers 1 and 2 from BBL and the purchase of other buildings from
an outsider, it has been found that the latter case is harder to achieve than the former case because:
(1) In nearby areas, there are no buildings of the structure and size suitable for renovation into
spaces for rent, offices and other facilities similar to BH Towers 1 and 2. Besides, in buying
new buildings other than BH Towers 1 and 2, the Company will have to bear an extra cost of
refurbishment.
(2) If the Company wishes to acquire other buildings of similar structure and size to BH Towers 1
and 2, it will have to buy one quite far away from its hospital, resulting in an inconvenient
traveling by patients and their families between the two locations and difficult coordination in
the hospital operations. In addition, the Company may have to bear additional expenses on
vehicles and transportation of the patients and their families, hospital staff members, stuffs and
documents between the two buildings.
Nonetheless, although the purchase of BH Towers 1 and 2 from BBL is a transaction made with a
connected party, the Company will benefit from this transaction. That is, it will become the owner of
the assets (the Company was the original owner if the assets), which have been leased for use in its
hospital operations as a location of several specialty centers and offices as well as amenities for patients
and their families. The assets will further accommodate the Company’s inpatient capacity expansion.
3. Fairness of price and conditions of the transaction
3.1 Reasonableness of price and other considerations

We have identified the appropriateness of this transaction on the purchase of “BH Towers 1 and
2” from BBL by using three valuation approaches and have also presented herein an appraisal conducted by an
independent appraiser, American Appraisal (Thailand) Co., Ltd. (“AAT”) as a basis for decision making along
with other valuation approaches, details of which are as follows:
Valuation by AAT
3.1.1 Appraised price by AAT
In this transaction, BH has engaged AAT, an SEC-approved independent appraiser, to identify a
fair value of BH Towers, in addition to the valuation by the IFA. AAT appraised the assets on
December 6, 2007 by dividing them into three portions, with the details and outcome as follows:
25
Particulars Valuation approach Appraised

value
(Bt. million)
1. Land* Title deeds no. 4030, 4031 and 141138 Sales comparison 297
with total areas of about 2 rai 1 ngan approach
1.60 sq. wah or a total of 901.60 sq.
wah, appraised at Bt. 330,000 per sq.
wah
2. Buildings 1) “BH Tower 1” of 18 stories with Replacement cost less 272
total areas of about 30,530 sq.m. at depreciation approach
an appraised price of Bt.
8,090.40/sq.m.
2) “BH Tower 2” of 8 stories with
total areas of approximately 2,830
sq.m. at an appraised price of Bt.
8,833.92/sq.m.
3. Building Lifts and public utility systems Replacement cost less 7
equipment depreciation approach
Total appraised value 576
* The actual total areas of land under title deeds no. 4030, 4031, and 141138 are approximately 2 rai 1
ngan 70.6 sq. wah or totaling 970.60 sq. wah. However, since a part of the plot no. 4030 of 69 sq. wah
is registered as an easement way, AAT therefore appraised only the land of 901.60 sq. wah by excluding
the easement area.
3.1.2 Valuation by the IFA

To identify the reasonableness of the purchase price of the land and buildings of BH Towers 1
and 2, we have used three valuation approaches: the net present value (NPV, the internal rate of
return (IRR) and the payback period (PB) approaches.
We have not compared the worthiness of investment in the purchase of the land and buildings of
BH Towers 1 and 2 and the continued lease of the assets from BBL. This is because BBL sent a
letter of October 26, 2007 informing the Company of its intention to sell these assets by granting
the first right of refusal to the Company as agreed and if the Company declines to buy back the
assets, BBL will further sell them to other party. What prompts BBL to dispose of the assets is
the requirement under the BOT’s Circulation No. BOT. SorNorSor. (12) Wor. 4411/2542
regarding an extension of holding period for immovable properties, whereby commercial banks
are required to gradually dispose of immovable properties after having been held by them for
26
five years, beginning in the year immediately after the end of such five-year period. BBL has so
far held such land and buildings for seven years since 2000 and must accordingly sell out such
assets.
Therefore, if the ownership over the land and buildings of BH Towers 1 and 2 changes from
BBL to other party, it is unpredictable as to who will become the new owner and the new owner
may wish to use the assets for any purpose other than leasing them out or otherwise may change
the terms and conditions of the lease. Considering these factors, we have not made the valuation
in case the Company continues to lease the assets from BBL.
3.1.2.1 Net present value approach (NPV)
The Company’s purpose of acquiring BH Towers at Bt. 470 million is to expand its inpatient
capacity by an additional 109 beds in the next five years. We have therefore adopted the NPV
approach to identify the reasonableness of the purchase price. This method focuses on a
comparison of worthwhile investment between the initial investment and the NPV of cash flow
receivable from the inpatient service during 2008-2034, using the following calculation formula:
NPV = - CF0 + PV(CF1) + PV(CF2) + PV(CF3) + … + PV(CFn)
CF0 = Initial investment
PV(CF1)…PV(CFn) = Present value of cash flow in year 1 through final year of project (year n)
Based on the above formula, we have figured out the NPV by dividing the calculation into two
portions: 1) initial investment and 2) discounted cash flow, as detailed below:
1) Initial investment
The initial investment includes the cost of BH Towers acquisition from BBL and other
relevant expenses. It is expected that the assets will be acquired in early 2008 at a total cost
of Bt. 480 million, as follows:
Unit: Bt. million
Items Amount
1. Purchase price of BH Towers 470
1/
2. Land ownership transfer fee 9
2/
3. Other expenses 1
Total initial investment 480
Notes:
1/ The ownership transfer fee is set to be 2% of the appraised price of BH Towers by the
Land Department, assumed herein to be equal to the purchase price of Bt. 470 million.
2/ Other expenses are expense on shareholder meeting arrangement, legal & financial
advisory fees, etc.
27
After the purchase of BH Towers from BBL, the Company plans to refurbish BH Tower 1
into 109 inpatient beds. The refurbishment will be made only on floors 10 through 17 and
will begin in mid-2009 and is scheduled for completion in 2013. The building renovation
and medical equipment procurement will require an additional investment of around Bt. 747
million, with details of yearly investment as follows:
(Unit: Bt. million) 2008 2009 2010 2011 2012 2013 Total
Investment cost 7 79 288 111 175 87 747
We have deducted the above investment cost from the net cash flow receivable in each year
in portion 2 (discounted cash flow) below as a part of the calculation of NPV of the project.
2) Discounted cash flow

The discounted cash flow is figured out by finding the present value of free cash flow
expected from the project in each year based on the financial projection for 2008-2034.
During the pre-refurbishment period of 2008-2010 until completion of some floors in 2011,
the cash flow will come from revenues from rental of the serviced apartment and retail shops,
while during 2011-2034, from the soft opening of some finished floors until the end of the
project, the cash flow will be from revenues from inpatient service and rental of retails shops
on floor G that have not been renovated and have been uninterruptedly rented.
The project life is determined according to the useful life of the buildings based on AAT’s
appraisal conducted on December 6, 2007, which set the useful life of the buildings at 40
years. As BH Tower 1 was completely constructed in 1994, it has remaining useful life of
about 27 years.
The above financial projection has been prepared by the Company based chiefly on the net
cash flow receivable from BH Tower 1. We have then adjusted such projection at our
discretion (see details of the assumptions for the projection in the Attachment), using the
information available from the Company’s team and based on the assumption that the
Company will continue as a going-concern until 2034, which is the end of the useful life of
BH Tower.
The financial projection is used for finding out the discounted cash flow of the project under
the present economic condition and circumstances and is used solely for this transaction.
The valuation results from this method may deviate should there be any significant changes
28
in the economic condition and any other external factors affecting the Company’s operations
as well as in the project plans and situation. Moreover, the valuated price so derived may not
be used as a reference for any purposes other than that mentioned above.
Discount rate used for the calculation of the present value of expected free cash flow is based
on the Company’s weighted average cost of capital or WACC.
Here is the calculation of WACC:

WACC = Ke(E/V) + Kd(1-t)(D/V)
= (13.43 %*( 3,622/5,677)) + ((5.63%*0.7)*(2,055/5,677))
= 10%
BH Source
Ke Cost of equity 13.43%
Kd Interest on loan 5.63% BH’s loan agreement, quoted at MLR* -1.25%
V D+E Bt. 5,677 million BH’s consolidated financial statements as of Sep 30,
2007
D Interest bearing debt Bt. 2,055 million BH’s consolidated financial statements as of Sep 30,
2007
E Equity Bt. 3,622 million BH’s consolidated financial statements as of Sep 30,
2007
T Corporate income tax 30%
*MLR = 6.875% (quoted by Krung Thai Bank as of July 23, 2007)
Ke = Rf + β(Rm – Rf)
= 5.65%+0.815*(15.20%-5.65%)
= 13.43%
Source
Rf Risk-free rate 5.65% 20-year government bond yield as of Dec 13,
2007
Rm Return on the SET 15.20% Based on the SET Index during the
retrospective 20 years (1987-2006)
β Coefficient of variation between 0.815 Beta of BH shares over the past two years
(Beta) average return on the SET and share from 16/12/2005 to 7/12/2007 (source:
price Bloomberg)
29
Based on the assumptions for the calculation of expected free cash flow as shown in the
Attachment, using WACC derived at 10% as the discount rate, we have obtained the discounted
cash flow of Bt. 2,116 million (exclusive of present land value). However, when the project ends
and the Company discontinues its business, it will still have core valued asset, which is the project
land with present value of Bt. 297 million. Therefore, to reflect the overall return on the project, the
said present value of land of Bt. 297 million has been factored into the valuation, leading the
discounted cash flow to equal Bt. 2,413 million.
However, in order for the discounted cash flow to reflect the total cost, we have factored the interest
expense, which is a financial cost, into the calculation, following which the discounted cash flow
would drop to Bt. 2,131 million.
By adopting the outcomes derived in 1) and 2) in the calculation of NPV of the project, the result is
as follows:
Items Value (Bt. million)

Discounted cash flow 2,116
Add PV of land 297
Discounted cash flow before financial cost 2,413
Less PV of interest expense 282
Net discounted cash flow 2,131
Less Initial investment 470
NPV 1,651
In sum, the NPV of return on investment in the purchase of BH Towers from BBL and the
renovation into inpatient beds, after deduction of interest expense and investment, is equivalent to
Bt. 1,651 million.
We have also conducted a sensitivity analysis by adjusting the two factors, 1) Ke and 2) occupancy
rate, with a 10% increase and decrease from the base case in order to cover the impact expected
from such changing factors. The outcome is as follows:
30
Sensitivity -10% 0% +10%

Sensitivity Occupancy rate 40% - 72% 43% - 80% 48% - 88%
Ke
Best case -10% 12.09% 1,656 1,939 2,222
Base case 0% 13.43% 1,399 1,651 1,903
Worst case +10% 14.78% 1,179 1,404 1,628
As shown in the above table, in the best case, where the occupancy rate is increased by 10% from
the base case to a range of 48% – 88% and Ke is cut to 12.09%, the NPV will rise to Bt. 2,222
million. In the worst case, where the occupancy rate is reduced by 10% from the base case to 40%
– 72% and Ke is raised to 14.78%, the NPV will drop to Bt. 1,179 million. It is apparent that even
though the occupancy rate is decreased by 10% from the base case and Ke is raised to 14.78%, the
Company will still enjoy a return, after interest expense and investment, of Bt. 1,179 million.
Accordingly, the investment in this project is considered appropriate.
3.1.2.2 Internal rate of return approach (IRR)

Internal rate of return (IRR) refers to a discount rate that makes the PV of expected cash flow
payable for the investment equal to the discounted cash flow under the following formula:
N
-CFO + ∑ CFt = 0
t=1 (1+IRR)
n = Project life of 27 years from 2008 to 2034

CFt = Expected cash flow throughout the project life from late 2008 to 2034
CF
= Initial investment of Bt. 480 million (see details in 3.1.2.1)
O
IRR = Internal rate of return
Based on the expected cash flow throughout the project life (inclusive of PV of land) under the
same assumptions as in 3.1.2.1, we have derived the IRR of 27.58%, and based on the sensitivity
analysis under the same assumptions as in 3.1.2.1, the IRR will range from 25.96% to 29.10%. In
any case, the IRR is still higher than the cost of investment, which herein is WACC of 10%. As
such, the return on investment in this project will be greater than the cost of investment of the
Company, hence making this project investment worthwhile.
31
3.1.2.3 Payback period approach

Payback period approach is a means of finding the period of expected cash flow from the project
that fully covers the initial investment. Given that the Company is able to operate the inpatient
capacity expansion project as planned and achieve the performance as projected in 3.1.2.1, the
payback period will be 9.25 years or about 9 years and 3 months. Based on the sensitivity analysis
under the same assumptions as in 3.1.2.1, the payback period will become 9.05-9.57 or about 9
years and 1 month and 9 years and 7 months. Such increased and decreased payback period is only
about one-third of the remaining project life. The Company will therefore be able to fully reap the
benefits from the project for the rest two-thirds of the project life.
Conclusion
Comparison of price, or herein the return on investment, is shown below:
Unit: Bt. million
Valuation approach Valuated
Appraiser
price/return
AAT 1. Sales comparison approach and replacement cost less depreciation 576
approach
IFA 2. Net present value approach (NPV) 1,179-2,222
3. Internal rate of return approach (IRR) 25.96-29.10%
4. Payback period approach (PB) 9 years 1 month -
9 years 7 months
In identifying the appropriateness of the price of this transaction, we have used the NPV approach,
which is considered suitable for the valuation for it is a broadly used method to analyze the
economic viability of a project or worthiness of an investment. The NPV is value of return on a
project, after deduction of investment cost, to be received by the shareholders. Where the NPV is
greater than or equal to zero, it means that such project has net cash flow exceeding investment
cost.
In figuring out the NPV of the project to purchase BH Towers for renovation into inpatient facility
as described in 3.1.2.1, the NPV is estimated to be Bt. 1,651 million, which is greater than zero.
Therefore, the Company can invest in this project.
We have also figured out the IRR and PB as a basis for consideration. The IRR is derived at
27.58%, which is higher than the WACC of 10%. The PB comes out to be 9 years and 3 months.
Meantime, the appraised price of Bt. 576 million figured out by AAT is higher than the agreed
purchase price of Bt. 470 million by Bt. 106 million. Therefore, we view that the purchase price of
32
Bt. 470 million of BH Towers is reasonable and worthwhile for the investment and will enable the
Company to bring in additional income.
3.2 Appropriateness of transaction conditions
In undertaking this transaction to sell and to buy BH Towers between the Company and BBL,
there are additional conditions set forth, other than the reasonableness of the agreed price as described in 3.1.2,
as follows:
1. Prior approval must be sought from the shareholders’ meeting of the Company for the purchase
of BH Towers at the price and under the conditions proposed.
2. The seller agrees to sell and the buyer agrees to buy the land of BH Towers covering a total area
of 2 rai 1 ngan 70.6 sq. wah at a lump-sum price of Bt. 470 million. If it later appears that the
land area is greater or lesser, the two parties agree not to either increase or decrease such price.
We have preliminarily considered the chance of the land area increasing or decreasing, based on
AAT’s report prepared on December 6, 2007. We have discovered that the total land area is
970.60 sq. wah, of which 69 sq. wah was registered by the Company as an easement way, thus
leaving a total usable area of 901.60 sq. wah. However, such reduced land area has no impact on
the Company’s current operations and AAT has appraised the land of 901.60 sq. wah only. The
total appraised value for the land and buildings is Bt. 576 million, which is still higher than the
agreed price of Bt. 470 million by Bt. 106 million.
3. The seller and the buyer agree on the land ownership transfer expenses as follows:
Expenses Borne by
- Ownership transfer fee and stamp duty BH
- Withholding income tax on sale of immovable properties BBL
- Specific business tax and duty BBL
The ownership transfer expense to be borne by the Company is equivalent to 2% of the value of
BH Towers land and buildings appraised by the Land Department. We have preliminarily
estimated this expense at Bt. 9 million and have factored it into the initial investment in 3.1.2.1.
4. If BH agrees to buy back the land and buildings of BH Towers 1 and 2 from BBL, it will have to
pay for these assets fully in cash of Bt. 470 million to BBL on the transfer date, which will be
carried out after obtaining approval from the shareholders.
33
In our opinion, the above terms and conditions are the general conditions and depend on the
negotiation between the seller and the buyer. We view that the conditions are reasonable.
4. Conclusion of the IFA’s opinion

We consider that this transaction is reasonable. The Company will benefit from becoming
the owner of the land and buildings of BH Towers 1 and 2 as it presently has to lease these assets from
BBL to operate hospital-supporting businesses. If it declines to buy the assets back this time, the assets
will fall under the ownership of other party. The new owner will possibly use the assets for other
purpose, which will relatively impact the facilitation of BH’s patients and their families and the
operations of the Company and its subsidiaries which also use BH Tower 2 as their clinics and offices.
If the Company is to find a new facility to replace BH Towers, the new building may not be convenient
or in close proximity to BH hospital, resulting in inconvenient coordination between the two sites.
Moreover, the purchase of BH Towers 1 and 2 will enable the Company to increase its
inpatient capacity by an additional 109 beds to respond to the future demand, which will generate a
return to the Company equivalent to a net present value of as much as Bt. 1,651 million and an IRR of
27.58%, higher than the average cost of the Company. Thus, the project investment is considered
appropriate.
In view of the benefit from this transaction and the reasonable rate of return from the
renovation of BH Tower 1 into inpatient facility as mentioned above, we recommend that the
shareholders approve the purchase of land and buildings of BH Towers 1 and 2. However, the final
decision rests principally with the shareholders at their own discretion.
We have given our opinion based on the study and analysis of the information obtained from
the Company’s management, comprising the resolution of the Board meeting no. 7/2550 on November
29, 2007, information memorandum notified to the SET on November 29, 2007 and information
memorandum (revised) notified on December 4, 2007, BH’s audited financial statements ended
December 31, 2004-2006 and reviewed financial statements ended September 30, 2007, and other
relevant information and documents obtained from the Company, as well as the interviews with the
Company’s management and the publicly disclosed information.
Our opinion is given based on the assumption that the information and documents obtained
from the Company and the interviews with the Company’s management are true and correct. Moreover,
the assumptions used are based on the economic condition and the information prevailing at the time of
34
this study. As a result, any significant changes in all these factors may relatively impact our opinion
provided herein.
Yours sincerely,
Advisory Plus Company Limited
Prasert Patradhilok
(Prasert Patradhilok)
President
35
Attachment
Bumrungrad Hospital Plc.
Key assumptions used in the financial projection are as follows:

This financial projection has been prepared by the Company and adjusted by the IFA. We consider the projection
reasonable, as follows:
1. The projection of revenues and expenses to be incurred from BH Towers 1 and 2 is based on
historical data of these buildings during 2004-2006. The projection of rental revenues from BH
Tower 1 is made only until mid-2009 when the Company will begin the refurbishment of BH
Tower 1 and will have to close the serviced apartment, but will continue generating income from
rental of retail shops on floor G, which will not be closed for renovation, until the end of the
project life in 2034. However, the rental revenues from BH Tower 2 will be earned until 2031
according to the remaining useful life of the building.
2. The projection of revenues and expenses from the future inpatient service at BH Tower 1 during
2011 – 2034 is made based on historical records of BH hospital over 2004-2006 and January-
October 2007. The renovation of BH Tower 1 will commence in mid-2009 until 2010 when
some floors will be finished. The finished floors will be gradually occupied in 2011 and the
entire 109 beds will be completely occupied by 2013. Thus, the Company will begin earning
revenues from inpatient service in 2011 onwards.
Summary of projection of revenues and expenses during 2007 -2034

2007F 2008F 2009F 2010F 2011F 2012F 2013F 2014F-2034F
Inpatient service revenue - - - - 209 516 894 1,338 -5,641
Rental revenue from service 45 46 24 - - - - -
apartment
Rental revenue from BH 15 16 16 17 17 18 18 19-31*
Tower 2
Other rental revenue 5 5 5 5 6 6 6 6-11
Total revenue 65 67 45 22 232 540 918 1,363-5,652
Selling and administration 56 26 15 5 179 400 672 994-4,271
expense
EBITDA 9 41 30 17 53 140 246 369-1,381
* Rental revenue from BH Tower 2 will be earned until 2031 according to the remaining useful life of the
building
-1-
1. Revenues from inpatient service

2011 F 2012 F 2013 F 2014 F 2015 F 2016 F-2034 F
No. of beds in service (beds) 31 52 109 109 109 109
No. of beds occupied (beds) 13 31 51 72 87 87
Occupancy rate (%) 42 60 47 66 80 80
No. of room/nights per visit 4 4 4 4 4 4
1/
Service fee growth rate (%) 6 6 6 6 6 6
Inpatient revenues (Bt. million) 209 516 893 1,338 1,729 1,740-5,641
2/
Revenue growth (%) - 147 73 50 29 6
Notes: 1/ Growth rate compared with inpatient revenues of the main hospital building.
2/ Since in 2010, BH Tower 1 is still under renovation and has not yet brought in any revenues, no data are thus
available for the growth projection for 2011.
1.1 No. of beds in service (beds)
BH will partially opened the finished floors in 2011, with 31 inpatient beds in service, increasing to 52
beds in 2012 and to the entire 109 beds in 2013. As such, during 2013-2034, the number of beds in
service will be constant at 109 beds.
1.2 Occupancy rate (%)

The occupancy rate of BH Tower 1 is based on the projected number of supply shortfall at the main
hospital building which will accordingly be covered by the renovated inpatient facility at BH Tower 1.
The occupancy rate of BH Tower 1 in 2011, when only some floors will be finished, is projected at 42%,
scaling up to 60% in 2012 in line with the projected outpatient service growth after gradual opening of the
new hospital building whose outpatient service capacity will be boosted from 3,500 patients/day in 2006
to 6,000 patients/day in 2011.
For 2013 when the entire inpatient beds will be finished, the number of beds will sharply rise from 52 to
109. However, as the occupancy rate grows at a slower pace than the number of beds in service, the
occupancy rate will fall to 47% in 2013.
The occupancy rate will increase to 66% in 2014 and remain constant at 80% during 2015-2034. The
occupancy rate in 2014 and 2015 will go up steadily. As the number of inpatients will change in the same
direction as the number of outpatients and the number of outpatients in 2013 will not yet reach the full
capacity of the main hospital building and the two new hospital buildings, amounting to only 66%, the
-2-
Company therefore will attempt to boost the number of outpatients by developing and introducing new and
more sophisticated service innovations to serve new target groups and expanding the target groups to a
broader extent.
1.3 No. of room/night per visit

The number of room/night per visit is set to be 4 room/night, based on the average number of room/night
stay at the main hospital building during 2004-2006 and January-September 2007, which is 4
room/night.
1.4 Service fee growth rate (%)

Service fee growth rate is projected at 6% over 2011-2034, based on the growth rate of inpatient service
fee of the main hospital building during 2004-2006 and January-September 2007, which was 18% in
2004, 10% in 2005-2006, and 8% in January-September 2007. However, we have adjusted the service
fee growth rate down to 6% throughout the project life in order to correspond with the likely intensified
competition in the future.
2. Rental revenues from serviced apartment

2005A 2006A 2007F 2008F 2009F
Rental revenue growth from serviced apartment 4 27 3 3 3
(%)
Rental revenues from the serviced apartment which is accommodation for patients’ families were Bt. 34 million
in 2004, Bt. 35 million in 2005 and Bt. 45 million in 2006, representing a growth rate of 4% in 2005 and 27%
in 2006.
Rental revenues from the serviced apartment are projected to increase 3% over 2007-2009, equivalent to the
average inflation rate in the past 10 years (1997-2006). Such revenues will be brought in only until mid-2009
when BH Tower 1 is expected to be closed for renovation of the serviced apartment into inpatient facility.
3. Other rental revenues

2005A 2006A 2007F 2008F – 2031 F
Rental revenue growth from BH Tower 2 (%) (8) 13 3 3
-3-
Rental revenues from BH Tower 2 were Bt. 14.52 million in 2004, dropping to Bt. 13.33 million in 2005 due to
reduction in usage of rented areas, and rising to Bt. 15.02 million in 2006, representing a growth rate of (8)% in
2005 and 13% in 2006.
Rental revenues from BH Tower 2 are projected to increase 3% over 2007-2034, equivalent to the average
inflation rate in the past 10 years (1997-2006).
4. Other rental revenue

2005A 2006A 2007F 2008F – 2034F
Growth rate of other rental revenues (%) 26 13 3 3
Rental revenues from retail shops at BH Tower 1 were Bt. 3.36 in 2004, Bt. 4.22 million in 2005 and Bt. 4.76
million in 2006, representing a growth rate of 26% in 2005 and 13% in 2006.
Rental revenues from retail shops are set to grow by 3% during 2007-2034, in line with the average inflation
rate in the past 10 years (1997-2006). Such revenues will be brought in continuously as they will be earned
from the retail shops on floor G of BH Tower 1.
5. Cost of sales and administrative expenses

Administrative expenses (excluding depreciation) are divided into two phases: phase 1 before BH Tower 1
renovation until the renovation period, or between 2008 and 2010, with the projection based on past expense
data of BH Tower 1 over 2004-2006, and phase 2 starting from first date of income earning from inpatient
service in 2011, with the projection based on past expense data of BH hospital over 2004-2006, as follows:
Phase 1 Cost of sales and administrative expenses to total revenues were 85% in 2004-2005, 82%
in 2006 and are set to be 86% in 2007, down to 39% in 2008, 33% in 2009, and 25% in
2010. This is because it is projected that the Company will acquire the ownership of BH
Towers in 2008 and will thus no longer bear any rental fee payable to BBL. In 2006, the
rental fee paid to BBL was Bt. 32 million or 52% of total revenues.
Phase 2 Cost of sales and administrative expenses to total revenues will be 77% in 2011 and 73%-
76% during 2012-2034. In 2011, as it is the first year of inpatient service operations, the
assets will still not generate income at a full scale while the fixed cost will be fully borne
by the Company.
-4-
6. Investment in property, plant and equipment

Investment in the renovation of the serviced apartment into inpatient facility, exclusive of the initial investment
of Bt. 480 million, based on the information from the Company which hired a specialist to make a preliminary
projection of such investment cost, already includes equipment for inpatient service and other relevant
expenses. The refurbishment is expected to commence around mid-2009 and be complete in 2013.
Construction and 7 79 288 81 158 34 647
other relevant
expense
Equipment expense 0 0 0 24 15 45 84
IT expense 0 0 0 6 2 8 16
Total investment 7 79 288 111 175 87 747
Investment will be Bt. 7 million in 2008, encompassing cost of engaging a refurbishment specialist, and will
rise to Bt. 79 million in 2009 as the renovation will begin in the middle of the year. It will then mount to Bt.
288 million in 2010, down to Bt. 111 million in 2011, Bt. 175 million in 2012 and Bt. 87 million in 2013.
In addition, there will be expenses on hard renovation to maintain the buildings in good condition every seven
years, that is in 2020 and 2027 in an amount of Bt. 106 million and Bt. 207 million respectively.
7. Loans for project investments

In this projection, the total project cost will be covered by loans from financial institutions, divided into two
tranches:
Tranche 1) A long-term loan of Bt. 400 million to fund the purchase of BH Towers, with the remaining cost of
Bt. 70 million to be self-financed from working capital which is included in Tranche 2 loan. The
loan will be repayable in 8 years each of Bt. 50 million, starting in 2011. Interest is charged at
MLR-1.25% (MLR = 6.875% quoted by Krung Thai Bank as of July 23, 2007).
Tranche 2) A short-term loan that is convertible into a long-term loan of Bt. 939 million, to be borrowed
annually as follows:
-5-
Loan amount 100 93 330 161 155 100 939
The repayment period is 8 years, the first 7 years each of Bt. 115 million and the remainder payable
in the 8th year. The first payment will be due in 2014. Interest is charged at MLR-1.25% (MLR =
6.875% quoted by Krung Thai Bank as of July 23, 2007).
8. Residual value of remaining assets after the end of the project

As of the end of the project life, the residual value of only the remaining assets after the end of the project will
be taken into consideration, that is land which has the present value of Bt. 297 million (based on the appraisal
by AAT on December 6, 2007). Meantime, the value of buildings will not be factored in because as of the end
of the project life the buildings will also reach their useful life of 40 years despite the fact that the buildings
have been regularly repaired and maintained to always be in good condition and will accordingly have a
lengthened useful life. As such, for conservative projection, the residual value of the buildings is not taken
into account.
-6-

Opinion of The Independent Financial Advisor Regarding Connected Transaction of Bumrungrad Hospital Public Company Limited

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Opinion of The Independent Financial Advisor Regarding Connected Transaction of Bumrungrad Hospital Public Company Limited

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Opinion of the Independent Financial Advisor

No. AP. 001 - 08

1. Characteristics and details of the transaction

1.2 Nature of the transaction

1. Main hospital building

2. New hospital building

Floor Usage Present status

5. Bumrungrad Hospitality Suite

Map of hospital location

New Petchaburi Road

1.3 Details of assets

1.3.2 BH Tower 1 (car park and serviced apartment)

remaining useful life of 27 years.

1.4 Transaction value and consideration

Name No. of shares in BH % shareholding Nature of relationship

2. BH’s directors who are connected with BBL:

1.6 Industry situation

3) Magnificent tourist attractions and abundance of goods outlets

Name No. of shares % No. of shares %

Summary of financial position

Consolidated financial statements

Consolidated financial statements

Financial position and working performance

2. Reasonableness of the transaction

2.2 Pros and cons of the transaction

b) Ability to serve present and future service demand

c) No further need to pay rental fee

b) Additional cost arising from depreciation of BH Towers 1 and 2

2.3 Pros and cons of not making the transaction

b) Risk from non-worthwhile investment in the inpatient capacity expansion project

3. Fairness of price and conditions of the transaction

3.1 Reasonableness of price and other considerations

Particulars Valuation approach Appraised

3.1.2 Valuation by the IFA

2) Discounted cash flow

Here is the calculation of WACC:

Items Value (Bt. million)

Sensitivity -10% 0% +10%

3.1.2.2 Internal rate of return approach (IRR)

n = Project life of 27 years from 2008 to 2034

3.1.2.3 Payback period approach

3.2 Appropriateness of transaction conditions

4. Conclusion of the IFA’s opinion

Bumrungrad Hospital Plc.

Key assumptions used in the financial projection are as follows:

Summary of projection of revenues and expenses during 2007 -2034

1. Revenues from inpatient service

1.2 Occupancy rate (%)

1.3 No. of room/night per visit

1.4 Service fee growth rate (%)

2. Rental revenues from serviced apartment

3. Other rental revenues

4. Other rental revenue

5. Cost of sales and administrative expenses

6. Investment in property, plant and equipment

7. Loans for project investments

8. Residual value of remaining assets after the end of the project

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