Annual Report 2005 - Parkway Pantai

We Believeannual report 2005PARKWAY HOLDINGS LIMITED

Chairman’s Letter to Shareholders 10A Letter from the Managing Director 13Milestones for 2005 17A Premier Regional Healthcare Provider 182005 in Review 20Financial Review 2005 26Board of Directors 30PARKWAY HOLDINGS LIMITEDSenior Management 33(Co. Reg No. 197400320R)Corporate Information 341 Grange Road#11-01 ContentsOrchard Building Financial Contents 35Singapore 239693Tel: (65) 6796 0600Fax: (65) 6796 0634/5www.parkwayholdings.comVision Our vision is to be a leading international healthcare providerof choice with a passion for people and progress.Mission We aim to deliver comprehensive healthcare servicesand quality care consistently to provide value to our customers. Weachieve this through responsible practices and continuous investmentsin our people and technology to meet the challenges of tomorrow.b

We believe... in delivering the very best to our patients.... in investing in leading-edge medical capabilitiesand technologies.... in training and equipping our people.... in extending a helping hand to our community.Trust is fundamental in any relationship but never a given.But with trust comes belief. Like a child knowing that therewill always be a safe pair of hands to fall back on. Or the samebelief that’s shared by each and every one of our patients whowalk through our doors, knowing that they are indeed in thevery best of hands.Parkway Holdings Limited is a leading fully integrated healthcareorganisation in Asia, with one of the largest network of hospitals andhealthcare services in the region.Parkway owns three premier hospitals in Singapore – East Shore,Gleneagles and Mount Elizabeth. It has a network of hospitals in Malaysia,India and Brunei.The Group’s healthcare network includes Parkway Shenton Pte. Ltd.,a major provider of primary healthcare services; Medi-Rad Associates Ltd.,a leading radiology services provider; and Parkway Laboratory ServicesLtd., a major provider of laboratory services. The Group offers contractresearch services through Gleneagles CRC Pte. Ltd.1

2We believe in going the extra mile.Distinguishing Parkway through unparalleledpatient care experience.

We believe that our patients are our fi rst priority. Delivering unmatched patient careexperience at every turn possible. Our limousine service for maternity patients is one of themany ways that we continue to heighten the Parkway experience. Making a difference andan impact on our patients is our driving force.3

4We believe in investing in our capabilities andremaining at the forefront of medical developments.

Built on a rich tradition of medical excellence and innovative spirit, Parkway continuesto be at the forefront of cutting-edge technologies and capabilities. This enables usto meet the increasingly complex medical needs of our patients.5

6We believe in investing in our future.The people behind Parkway.

Parkway is committed to investing in our staff. Through our robust trainingand development programmes, our people have earned a reputation for theirspecialist skills and exceptional service.7

8We believe that there is not a moment or a life to lose,extending a hand for mankind.

Parkway remains an organisation with a heart. We have a wider role to play,and that involves leveraging on our expertise and skills to care for those in need.9

Chairman’s Letter to ShareholdersRichard SeowChairmanDear Shareholders,I am delighted to come on board as Parkway’s Chairman asyour company stands poised for its next phase of growth.Over the past few years, you have witnessed Parkway’sdedicated focus on its core healthcare business,the establishment of our Centres of Excellence, newacquisitions, regional healthcare joint ventures and thecontinued divestment of non-core assets. Today, thesestrategies are starting to show returns. In addition, we haveseen a 39% increase in foreign patients visiting our facilitiesin Singapore over the last 2 years. We are well positioned toachieve our objective of being the premier private healthcareprovider of choice in the region.Our 2005 fi nancial results were positive and a goodimprovement from the previous year. Revenue of $549.0million and net profi t of $62.0 million brought Parkway’searnings to a record high. Our improvement in Return onEquity to 15% in 2005 indicates positive momentum inproviding better returns on our capital employed. We willcontinue to seek more opportunities to further improve keyaspects of our fi nancial performance.A signifi cant milestone for this year was the entryof Newbridge Capital and Associates as signifi cantshareholders of the Company. The acquisition of a 26%stake in Parkway Holdings lends testimony to the uniquehealthcare platform that Parkway has built in Asia.Newbridge is a proven healthcare investor and bringsconsiderable international healthcare experience, fi nancialsavvy and a global network of expertise to the Parkwayequation. I am confi dent that the entry of Newbridge willprovide the impetus for further growth for Parkway.In September 2005, we expanded our presence inMalaysia through the acquisition of a 31% stake in PantaiHoldings. With this investment, Parkway has become thelargest shareholder of Malaysia’s leading healthcare serviceprovider. Parkway has a long and successful presence inMalaysia and this move will expand our business basesignifi cantly and provide a critical mass of services andfacilities. In Malaysia we have grown from 2 to 9 hospitalsand ancillary facilities across the country. Malaysia is a keymarket for us and our investment in Pantai is a strategicmove to continue building on our strengths and growth inkey regional markets.Despite our leadership position, we recognise that wecannot rest on our laurels. Moving forward, our next stepis to achieve sustained growth and generate continuedshareholders’ value. We will achieve this through:10

“It is both a privilege and a great responsibility that patientsand their families entrust us with their well-being.We must never lose sight of our primary objective of providingour patients with the highest standards of healthcare andservice excellence….and we will continue to keep this fundamentalbelief ingrained in the minds of all at Parkway.”• A continued commitment to put patients fi rst.It is both a privilege and a great responsibilitythat patients and their families entrust us withtheir well-being. We must never lose sight of ourprimary objective of providing our patients withthe highest standards of healthcare and serviceexcellence. It will be our continued and relentlessfocus on serving our patients’ needs that will setus apart and establish our service quality andfacilities as the “Gold Standard” in our industry.We will continue to keep this fundamental beliefingrained in the minds of all at Parkway – from ouradministrators, to our nurses and from our doctorsright through to our management and the Board.• Continuing to recruit and attract the best specialistsand physicians who want to practice in theprivate healthcare arena. Our doctors’ standardsand reputation are respected and well regardedinternationally. Parkway’s role is to continue toprovide our doctors with the best possible workenvironment, superior medical support servicesand cutting-edge technologies.• Maintaining our niche as a specialist high-endvalue-added healthcare provider. Our expertisecovers areas such as cardiology, oncology,neurology, haematology, liver and stem celltransplants. With this, Parkway is able to leverageon its unique expertise and knowledge to caterto the complex needs and medical care requiredin the region, particularly in developing countrieswhere these services are largely limited.• Tapping on the growth in regional medical tourism.Healthcare has been identifi ed as a growth sectorand the Singapore government has been activelypromoting Singapore as a regional medical hub.We are well positioned to expand our roleas a leader in regional private healthcare. Atthe Parkway hospitals, our international patientservices team seeks to meet specifi c needs ofindividual foreign patients and their families.We recently introduced dedicated internationalpatient facilities, more translation services,special menus and new Arabic and Bangladeshistaff. Regionally, we have set up more medicalreferral centres and employed more marketingrepresentatives to reach out to the increasingnumber of international patients.11

• Growing our presence in the region. In 2005, we builtup our Malaysian platform and expanded in Indiawith our joint venture with Apollo Hospitals Enterpriseto establish and operate a radio imaging centre inHyderabad. We also signed an agreement with theAsian Heart Institute and Research Centre to providemanagement and operational support in Mumbai.Moving forward, both parties intend to exploreopportunities to set up Centres of Excellence in tertiaryspecialties in Mumbai. Parkway will continue to seekregional opportunities that are synergistic to Parkway.• Ongoing investments in technology and training.Parkway’s recent developments include a newNeurosurgery Centre and a cutting-edge tomotheraphymachine. This adds to other quaternary services suchas a Haematology and Stem Cell Transplant Centre,a liver disease intensive care facility and a highlyadvanced robotic enhanced surgery programme. Wewill continue to remain at the forefront of adoptinginnovative technologies and medical capabilities toenhance our level of medical care. Training remainscentral to our organisation. In 2005, we launched theParkway-Toshiba training centre, Southeast Asia’s fi rstregional training centre for CT technology.Parkway is an excellent platform to fuel future growth ofhealthcare in the region. With our strategies outlinedabove, I am confi dent that we will be well poised to take onthe strong demand and high growth opportunities in Asiaand continue to maintain our position as a premier regionalhealthcare provider.At this point, I would like to acknowledge the signifi cantcontribution of my predecessor, Mr Anil Thadani. He hada clear vision for Parkway and over the last fi ve years,worked tirelessly to restructure the company and to buildthis excellent platform that Parkway is today. It is with hisleadership that Parkway has achieved its current success.I would also like to thank Mr Tony Tan, Mr Tan Kai Seng,Mr Ang Guan Seng and Dr Prathap Reddy for theirinvaluable contributions during their years of service asdirectors of the Group.Further changes to the Board have also been made andI welcome Mr Sunil Chandiramani as Vice-Chairman,and other new Non-executive Directors. Together, theybring extensive experience in international healthcare andinvestment.Now that the baton has been passed, I hope to carry on thegood work and achieve new levels of success for Parkway.I am confi dent that with the support of your Board andmanagement, we are well equipped for the challengesahead.In conclusion, I would like to extend my sincereappreciation to my colleagues, the doctors, nurses and allstaff at Parkway for their hard work. Special thanks alsoto our patients, partners and shareholders for their beliefin Parkway. This organisation would not have achieved itsstatus as the healthcare provider of choice in Asia withoutyour support. I look forward to your continued contributionin the year ahead.Mr Richard SeowChairmanParkway Holdings Limited12

A Letter from the Managing DirectorDr Lim Cheok PengManaging DirectorDear Shareholders,2005 was a good year for Parkway. Financially, we reachedanother high. Operationally, we saw further growth in all ourdivisions as we deepened our capabilities and expandedour services and network both locally and internationally.We have raised the hurdle higher yet again.2005 saw Parkway’s revenue increase by 35% comparedto 2004. Revenue in 2004 was $407.8 million and thisgrew to $549.0 million in 2005. Similarly, EBITDA grew by22%, from $110.9 million in 2004 to reach $135.0 millionin 2005. Net profi t hit $62.0 million in 2005 compared to$50.5 million, and this is a 23% increase over 2004.Parkway’s 2005 strong performance was driven by growthacross all businesses with the International Hospitals divisioncontributing the most.Our past strategies are showing results. We have createda distinctive platform for Parkway to springboard into thenext phase of growth.13

Let us take a closer look at each of our three core businessdivisions:Singapore Hospitals DivisionThis division includes East Shore, Gleneagles and MountElizabeth hospitals. Our local hospitals are reputed fortheir extensive expertise in specialist and quaternaryhealthcare.Revenue for the Singapore Hospitals division grew by 16%,from $258.6 million in 2004 to $300.3 million in 2005.EBITDA in 2004 was $79.7 million and this grew by 11%to reach $88.3 million in 2005.The growth in hospital revenue and EBITDA areattributable to the increase in foreign patient admissionsand high-end cases treated at our hospitals. Parkway iswell poised to tap into the government’s latest initiativeof creating Singapore into a medical hub for the region.Our reputation for top-notch specialised care and state-ofthe-artequipment attracted both local and foreign patients.Over the last 2 years, foreign patient load to Singaporeincreased by 39%. As the number of foreign patientsseeking specialised treatment in Singapore continuesto grow, Parkway will enjoy its leadership role in medicaltourism in Asia. Parkway’s foreign patients come fromcountries in the region such as Indonesia, Malaysia, SouthAsia and more recently, the Middle East.The year 2005 also saw Parkway spearheading many newinitiatives. We set another record when we introducedthe fi rst tomotherapy machine to Southeast Asia. Thishighly advanced radiation therapy equipment aims toprovide more precise treatment and reduces radiation tosurrounding healthy cells. In addition, Parkway establishedanother Centre of Excellence with a new NeurosurgeryCentre at East Shore Hospital to cater to the growingdemand for full-service neurology care. We also launchedthe Parkway-Toshiba regional CT technology training centrefor radiologists and radiographers from the ASEAN region,as well as from Australia, China, India and Pakistan.At Parkway, we endeavour to maintain our premier statusin Singapore. This implies continual innovation, furtherinvestment in facilities, greater value-added services andhighly-trained staff.International Hospitals DivisionWe are excited about the growth demonstrated in thisdivision. Revenue contribution from our internationaloperations has been growing steadily. In 2004, we targetedto grow our international revenue to 50% of total revenueby 2009. We have now surpassed our target. Our fourthquarter 2005 international revenue is already half our totalrevenue.Revenue for the International division saw the largestgrowth compared to the other divisions. In 2004, Parkwayreported divisional revenue of $54.0 million and this grewby a significant 94% to hit $104.5 million in 2005. The largejump in revenue is due to the incorporation of revenue fromPantai Holdings in fourth quarter 2005.The expansion of the Malaysian platform through the Pantaiinvestment played a signifi cant role in the 2005 results.Our Penang, Kuala Lumpur, Brunei and Kolkata hospitalsalso saw increases in revenue, EBITDA and patientadmissions, with Penang and Kuala Lumpur seeingincreases in high-intensity cases.14

“2005 was a good year for Parkway. Financially, we reachedanother high. Operationally, we saw further growth in all ourdivisions as we deepened our capabilities and expandedour services and network both locally and internationally.We have raised the hurdle higher yet again.”In 2005, Parkway heightened its activity in the region.In India, Parkway entered into a joint venture with ApolloHospitals Enterprise to establish a radio imaging centrein Hyderabad. Parkway also sealed a managementcontract with the Asian Heart Institute and ResearchCentre in Mumbai.Moving forward, Parkway will look to both organic growthas well as acquisitions to increase the performance ofthe International Hospitals division. We will exploreopportunities that are synergistic to our existingoperations and strategies.Healthcare Services DivisionParkway’s Healthcare Services division consists ofthe following core businesses: Parkway Shenton,Medi-Rad Associates and Parkway Laboratory. Thisdivision saw revenue increase from $93.0 million in2004 to $142.4 million in 2005, which is a 53% rise.EBITDA also improved by 53% from $20.6 million to$31.5 million.In 2005, we extended our foray into China. Parkwayestablished a joint venture with Shanghai HuashanHealth Development, with plans to own and managemedical and surgical centres, clinics and hospitals.In Vietnam, Parkway obtained its operating licencefor a Plastic Surgery and Aesthetics Centre in Ho ChiMinh City.The Healthcare Services division remains akey contributing sector for Parkway and we willendeavour to strengthen our facilities and servicesin this division. Under Parkway Shenton’s extensivenetwork, we have over 30 owned or managed clinicsand 260 HealthNet clinics. Under Medi-Rad, weremain equipped with the latest service and state-ofthe-artequipment. We recently introduced Xper CT,Angio with CT capabilities and 2 additional 64-sliceCTs for more advanced diagnosis of heart- and neurorelateddiseases as well as cancers. In addition, weintroduced a web distribution service whereby digitalversions of patients’ X-rays are put on a secured website.Patients can now benefi t from faster results anddiagnosis. At Parkway Laboratory, we will seek toexpand its market share through enhancing its facilityand expertise.15

ConclusionParkway is well poised for future growth. However, we willnot be complacent. A bird fl u epidemic remains a threatto our business, as well as to the region as a whole. Wewill continue to remain vigilant in these times, throughthe enforcement of infection control protocols, stockpilingon vaccines and training of our personnel. Ultimately, wehave a vital role in caring for the healthcare needs of ourcommunities.As Parkway broadens its local and international presence,we want to ensure that even as we grow, Parkway remainsan organisation with a heart. So while we continue ourpursuit of medical excellence, we do not want to forget thosewho need a helping hand. The tsunami and earthquakedisasters saw Parkway stepping in. Over the last year, wedispatched 3 teams of highly-skilled doctors, nurses andlogistics personnel to affected areas to provide medical aidand supplies. Such humanitarian aid is integral to Parkway’smission and we continue to remain dedicated to serving ourcommunity.The year 2005 saw many signifi cant milestones for Parkway.The entry of Newbridge Capital and Associates saw somechanges to the Board. At this point, I would like to extenda warm welcome to our new Chairman, Mr Richard Seowand our new directors. We have been working closelytogether over the last 6 months and their contribution hasbeen invaluable. The management at Parkway continuesto remain committed as we journey ahead.These are exciting times for Parkway. I am confi dentthat through your continued belief and support for theorganisation, we will be able to take Parkway to newheights. Once again, my heartfelt thanks to all customers,shareholders, partners and staff.Dr Lim Cheok PengManaging DirectorParkway Holdings Limited16

Milestones for 2005January• Parkway provides humanitarian aid to tsunamivictims in Sri Lanka and Indonesia.March• Parkway’s subsidiary Parkway-Healthcare (Mauritius)Ltd. enters into a joint venture agreement withApollo Hospitals Enterprise Ltd. to jointly establishand operate a radio imaging centre in Hyderabad,India.May• Parkway’s subsidiary, Parkway Group HealthcarePte. Ltd. establishes a Sino-Foreign Contractualjoint venture contract with Shanghai HuashanHealth Development Co. Ltd. with plans to ownand manage medical and surgical centres, clinicsand hospitals in China.• Parkway Hospitals Singapore (Gleneagles andMount Elizabeth) achieves medical milestone withthe successful separation of Indonesian conjoinedtwins, Anggi and Anjeli.June• Newbridge Capital and Associates acquire 26%stake in Parkway Holdings Ltd.July• East Shore Hospital opens a Neurosurgery Centre.August• Parkway’s subsidiary, Parkway Promotions Pte.Ltd. organises the International HealthcareFacilities Exhibition & Conference 2005, thespecialised trade event for world-class medicalexperts, market leaders, health offi cials andhealthcare providers.September• Parkway acquires 31% of Pantai Holdings Bhd.to increase its stable of hospitals in Malaysia from2 to 9.• Parkway offi cially opens its marketingrepresentative offi ce in Vladivostok, Russia.• Gleneagles Hospital launches high-speed wirelessbroadband internet access.October• Parkway sends a medical disaster relief team of12 doctors and nurses to Pakistan to treat victimsof the 8 October earthquake measuring 7.6 on theRichter scale.• Gleneagles Hospital wins awards for Patient Safety/ Quality Medical Care and Internal Service at theAsian Hospital Management Awards 2005.• Staff of Gleneagles and Mount Elizabeth hospitalsgarner a total of 233 Singapore Excellent ServiceAwards (EXSA) for excellent service. The Parkwayhospitals are the only private hospitals to win.• Gleneagles Hospital won the HealthcareHumanitarian Award 2005 in Singapore.November• Chefs from Mount Elizabeth Hospital were part ofthe Singapore Culinary National Team which wascrowned the Overall Winner in the Salon CulinaireMondial, a prestigious international culinarycompetition held only once in 6 years. This year’scompetition took place in Basel, Switzerland.December• Parkway Shenton Pte. Ltd. obtains its operatinglicence for its Plastic Surgery and AestheticsCentre in Ho Chi Minh City, Vietnam.• Mount Elizabeth Hospital doctors remove a massive2 kg tumour in the neck (one of the largest in theAsia Pacific) of a 12-year-old Indonesian islandboy, giving him a new lease of life.• Parkway launches the fi rst regional trainingcentre for computed tomography (CT) technologyfor more accurate and effi cient patient diagnosisand improved emergency care.17

Parkway Holdings- A Premier Regional Healthcare ProviderParkway has an extensive presence throughout Asia.Our operations cover 14 hospitals with about 2,800beds in countries including Brunei, India, Malaysiaand Singapore. Parkway has also established medicalreferral centres throughout the world includingBangladesh, Brunei, Canada, China, Hong Kong, India,Indonesia, Malaysia, Myanmar, Pakistan, Philippines,Russia, Sri Lanka, Thailand, United Arab Emirates,United Kingdom and Vietnam.With over 1,200 accredited specialists covering over 40areas of specialty, Parkway delivers medical excellenceacross the full range of healthcare services.18

IndiaHOSPITALApollo Gleneagles Hospital,KolkataNo. of beds: 300BruneiHOSPITALGleneagles JPMC,BruneiNo. of beds: 20MalaysiaHOSPITALSGleneagles Medical Centre,PenangNo. of beds: 212Gleneagles IntanMedical Centre,Kuala LumpurNo. of beds: 331Pantai Medical Centre,Kuala LumpurNo. of beds: 264Pantai CherasMedical Centre,Kuala LumpurNo. of beds: 139Pantai Klang SpecialistMedical Centre,KlangNo. of beds: 69Hospital Pantai Mutiara,PenangNo. of beds: 180Hospital Pantai Ayer Keroh,MelakaNo. of beds: 250Hospital Pantai Indah,Kuala LumpurNo. of beds: 86Hospital Pantai Putri,IpohNo. of beds: 121SingaporeHOSPITALSMount Elizabeth HospitalNo. of beds: 505Gleneagles HospitalNo. of beds: 380East Shore HospitalNo. of beds: 157HEALTHCARE SERVICESDIVISIONPrimary HealthcareGP ServicesNo.of clinics: 39Dental ServicesNo. of clinics: 3Diagnostic ServicesRadiology ServicesMedi-Rad AssociatesNo. of clinics: 7Laboratory ServicesParkway Laboratory ServicesNo. of laboratories: 4Clinical ResearchGleneagles CRC HQConsultancy ServicesHospital DevelopmentHospital ManagementParkway facilities in SingaporeParkway International HospitalsParkway Healthcare Services(Clinical Research Offi ces & Clinic)Parkway Medical Referral Centre(Please refer to back page for complete list)19

2005 in ReviewAs one of the leading healthcare providers in Asia,thousands of patients place their trust in us each year andat Parkway,We believe in a patient-fi rst approachWe believe in innovation and medical excellenceWe believe in our peopleWe believe in our communityBelieving In A Patient-First ApproachAt Parkway we are driven by a patient-fi rst approach indeveloping our medical and service potential. We seekto provide unrivalled patient experience with variousinnovative patient services and unmatched medical carethrough momentous investments in our clinical expertise,cutting-edge technology, staff and infrastructure. Not onlywill our emphasis on providing exceptional patient carepropel us ahead of our competitors, it will empower us tomeet the challenges of tomorrow.Caring for patients at Parkway extends from providingexcellent medical care to delivering innovative hospitalityand lifestyle services. Our new initiatives in service, workredesign and training ensure that Parkway continuesto deliver distinctive patient care and experience. Newpatient initiatives include shuttle bus services, massagechairs, complimentary massage for maternity patientsand spouses, in-house spa services, hair-styling services,wireless hi-speed broadband internet access, a roof terracecafé and wide-screen plasma televisions. In addition, tocater to our growing international patients, we have setup an international patient lounge, hired new Arabic andBangladeshi foreign staff, created a special Arabic menuand other ‘customised food’ as well as expanded on ourtranslation services.Increasing the speed of service to our patients, Parkway’sRadiology division introduced a web distribution servicewhereby digital versions of patients’ X-rays are put on asecured internet site. This will enable doctors to view theirpatients’ images and report through the internet from theiroffi ces or home. Patients benefi t from much faster resultsand diagnosis.We continue to pursue service excellence throughvarious service initiatives such as “Our Winning Attitude”,“Innovation” and “Whale Done” training programmes.These not only help deliver memorable service to ourpatients, they boost customer service ratings and decreasestaff turnover.As a testament to Parkway’s vision of having a “passion forpeople and progress”, we are pleased to have once againbeen awarded the following prestigious awards:• The Asian Hospital Management Award recogniseshospital management practices and thrusts outstandinghospital projects into the regional spotlight. Parkway hasbeen the proud recipient of this award for the past twoyears and the year 2005 was no exception – GleneaglesHospital clinched awards in 2 major categories: PatientSafety / Quality Medical Care and Internal Service.20

• The Singapore Excellent Service Award (EXSA)recognises organisations for their effort in promotingservice excellence and continuous training foremployees. The staff at both Gleneagles and MountElizabeth hospitals received a total of 233 EXSAawards. The Parkway hospitals were also the onlyprivate hospitals to receive this award.• The Superbrands Award identifi es the strongestcorporate brands in the country and is awarded byan independent panel of judges. Gleneagles Hospitaland Mount Elizabeth Hospital are proud to be awardedSuperbrands status every year since its inceptionin 2002.• The Singapore Quality Class (SQC) is a schemethat recognises organisations that have attaineda commendable level of performance in the journeytowards business excellence. Mount Elizabeth Hospitaland Gleneagles Hospital are proud to have heldthat distinction since 1998 and have been re-certifi edtill 2007.• The Salon Culinaire Mondial is a prestigious internationalculinary competition held only once in 6 years.Chefs from Mount Elizabeth Hospital were part of theSingapore Culinary National Team which was crownedthe Overall Winner in the Salon Culinaire Mondial.This year’s competition took place in Basel,Switzerland.Parkway’s position as a leader has commissioned our activecontributions not only to our local community, but also toaddress pressing healthcare issues in the world today.Spearheading the global sharing of medical ideas andtechnology, Parkway’s subsidiary, Parkway PromotionsPte. Ltd. organised the International Healthcare FacilitiesExhibition & Conference (IHFEC) in 2005. The IHFEC 2005addressed the growing needs of healthcare facilities in Asiaand the Middle East, and is the fi rst-of-its-kind outside theUnited States since its inception.21

Believing In Innovation And Medical ExcellenceOur patients are at the center of everything we do.At Parkway, what sets us apart is our focus on medicalexcellence and our innovative spirit to explore new groundsand deliver specialist, high-quality medical care to meetthe increasingly complex needs of our patients today.Parkway is reputed for providing not just a wide spectrumof specialist care but quaternary healthcare as well.We continue to deliver this through our cutting-edgeexpertise, such as in haematology and stem cell transplant,living-related liver transplant and kidney transplant. In2005, we have heightened our offering in providing thebest in complex clinical areas.Separation of Conjoined twinsIn May 2005, through our multidisciplinary team of topexperts, Parkway achieved a medical milestone with thesuccessful separation of a pair of Indonesian conjoinedtwins after a 10-hour operation.Neurosurgery CentreTo stay at the forefront of neurosurgical advancement,we launched another Neurosurgery Centre at East ShoreHospital in July 2005. The centre will provide a full rangeof services from screening to surgeries and rehabilitationtherapy for general neurosurgical conditions, includingstroke, brain / spinal cord tumours and degenerative spineconditions.OncologyIn the area of oncology, Parkway further enhanced itstreatment in cancer by investing in a highly advancedtomotherapy machine. We have become the fi rst inSoutheast Asia to introduce this new medical equipment.The new system provides revolutionary advancement inradiation therapy and is designed to ensure more precisedelivery of treatment and minimises radiation to thesurrounding healthy tissues. The new investment adds toParkway’s competitive advantage in cancer treatment.Parkway-Toshiba regional training centre for CT technologyParkway’s investment in medical excellence goes beyondadopting cutting-edge technologies and methodologies.It extends to training and education. In September 2005,Parkway launched the fi rst regional training centre for CTtechnology. This training centre will target radiographersand radiologists from the ASEAN region as well as fromAustralia, China, India and Pakistan. Training programmeswill equip trainees with the skills and knowledge to use thehigh-end CT scanners and will also incorporate the lateste-learning techniques and hands-on sessions.22

Believing In Our PeopleOur staff forms the backbone of our organisation.At Parkway, we recognise that in order to deliver highquality and exceptional service, staff training, developmentand welfare are fundamental.The Parkway Hospitals are proud to have some ofthe fi nest specialists in the region accredited with us.We are committed to ensuring that in addition to providingexcellent care for patients, we also cater to the professionaldevelopment of these specialists.Continual medical education talks are conducted for ourdoctors at each of our three hospitals on a weekly basis.In addition, Mount Elizabeth and Gleneagles hospitalsorganise an Annual Scientifi c meeting and an AnnualSeminar for doctors accredited with them. Our hospitalsalso make arrangements to ensure that the appropriatespecialists are trained and become familiar with all newmedical equipment our hospitals acquire.The Parkway Academy was set up to conduct leadership,clinical skills and service quality related training. TheAcademy employs a team of well-qualifi ed instructors andeducators who use advanced training methods including ahighly sophisticated Clinical Simulation Centre. In addition,we have nursing colleges in Malaysia to meet our nursingmanpower needs.Our effort and commitment to excellence through clinicaland non-clinical training has not gone unrecognised. Ourhospitals have received numerous awards including:• The People Developer Award - Parkway hospitals havebeen consistently awarded with the People DeveloperStandard since 2000. This standard aims to motivatestaff to constantly upgrade their skills and remainrelevant to the current dynamic environment andthereby achieve excellence in their relevant industries.• National Quality Circle Convention - Parkway remainsactive in the area of quality and training. Since 1997,our hospitals have been receiving numerous awardsthrough their participation at the National Quality CircleConvention, organised by SPRING Singapore.• Singapore Quality Class - This award acknowledgesbusiness excellence including staff development andtraining. Mount Elizabeth and Gleneagles hospitalshave received this award since 1998.At Parkway, providing unsurpassed patient care is ourdriving force. With all the above programmes in place, ourhighly skilled and motivated staff are well placed to provideour patients with exceptional service.23

Believing In Extending A Helping Hand To Those In NeedExemplifying the spirit of volunteerism, our Parkway hospitalsheld their annual Christmas Light-Up and Charity Drive thispast Christmas season, to collect funds for various charitybenefi ciaries. This fund raising initiative has been ongoingfor the last ten years.Beyond Singapore, our volunteers promptly reacted tothe devastating 2004 Boxing Day tsunami disaster thatclaimed the lives of many off the Indian Ocean. A 28-manteam of doctors, nurses and support staff from Parkway’sthree hospitals - East Shore, Gleneagles and MountElizabeth – left for Sri Lanka on New Year’s Day 2005. Theteam brought with them medicine, medical supplies andequipment to work in some of the worst affected areas.In February 2005, another mission headed for Indonesia toprovide medical relief and aid to the Aceh refugees.Then in October 2005, an earthquake measuring 7.6 onthe Richter scale unleashed its devastating powers ontoPakistan, India, and Afghanistan. This time, Parkwayorganised a 14-man team comprising four doctors,six nurses, two support staff and two logisticians, whoheaded for Pakistan to provide humanitarian aid to victimsthere. The team treated an average of 400 patients a dayduring their 11-day mission in Pakistan.Extending Our Beliefs To The RegionHaving established a strong presence in Singapore withour premier hospitals, Parkway is setting its sights on theoverseas market. Ultimately, we aim to leverage on ourspecialist knowledge and medical expertise to meet thegrowing need for medical excellence in the region.This year alone, Parkway took signifi cant strides to extendits footprint in Asia. This began with the joint ventureagreement between Parkway’s subsidiary Parkway-Healthcare (Mauritius) Ltd. and Apollo Hospitals EnterpriseLtd., to establish and operate a radio imaging centre inHyderabad, India.In June 2005, private equity fi rm, Newbridge Capital andAssociates acquired approximately 26% stake in ParkwayHoldings and this made it the fi rst major healthcareinvestment for Newbridge Capital in Singapore.24

Newbridge Capital is a major investor in the healthcareand life sciences sector and brings to Parkway signifi cantexpertise in international healthcare management andpractices, which will further boost Parkway’s regionalgrowth plans.A milestone growth strategy for Parkway took place in thelater half of the year with the acquisition of approximately31% stake in Pantai Holdings Bhd. This resulted inParkway being the largest shareholder of Malaysia’s leadinghealthcare service provider. The acquisition escalatedParkway’s presence in Malaysia from 2 to 9 hospitals andancillary facilities across the country.Other joint ventures established in the region includedthe partnership between Parkway’s subsidiary, ParkwayGroup Healthcare Pte. Ltd. and Shanghai Huashan HealthDevelopment Co. Ltd., to manage medical and surgicalcentres, clinics and hospitals in China.On 31 December 2005, Parkway’s primary healthcarearm, Parkway Shenton Pte. Ltd. obtained its operatinglicence for its Plastic Surgery and Aesthetics Centre in HoChi Minh City, Vietnam. This clinic will be fully operationalby fi rst quarter 2006 and is Parkway’s fi rst entry into theVietnam healthcare market.To date, Parkway’s presence in the region covers 14hospitals in countries including Singapore, Malaysia, Indiaand Brunei. Parkway has also established representativeoffi ces throughout the world including Bangladesh, Brunei,Canada, China, Hong Kong, India, Indonesia, Malaysia,Myanmar, Philippines, Sri Lanka, Thailand, United ArabEmirates, United Kingdom and Vietnam. The latestaddition is the offi cial opening of a representative offi ce inVladivostok, Russia.25

Financial Review 2005Net Profi tS$ m -70 -OverviewIn 2005, Parkway delivered another set of strong fi nancialresults. Revenue for the full year surged to a record highof $549.0 million in 2005 as the year saw increasedcontributions from all our core healthcare services. Growingcontinuously over the last 5 years, net profi t attributable toshareholders hit $62.0 million.60 -50 -40 -30 -20 -33.333.650.562.0With Parkway’s strategies yielding tangible results, weexpect to see more organic growth moving forward. Ourfocus on providing high value-added healthcare services,state-of-the-art equipment, facilities and services andincreasing our marketing efforts are the key growth drivers.In addition, the investment in Pantai saw its maidencontribution in the fourth quarter of this year.Moving forward, Parkway will seek to enhance its fi nancialand strategic position with other new businesses andpossible acquisitions that are synergistic to the Group whilefocusing on our key strategies for growth.Revenue by Business SegmentS$ m -300 -250 -300.3258.620052004200 -150 -100 -104.5142.493.050 -1.82.212.510 -200154.02002200320042005RevenueThe Group’s revenue for the year surged by 35%, increasingfrom $407.8 million in 2004 to $549.0 million in 2005.This is due largely to strong international growth with Pantaicontributing about $92.0 million in the fourth quarter.The revenue for the International Hospital division sawthe largest increase of 94% to reach $104.5 million,compared to $54.0 million in FY2004. The other twodivisions, the Singapore Hospitals and Healthcare Servicessaw revenues of $300.3 million and $142.4 million orrevenue growth of 16% and 53% respectively.SingaporeHospitalInternationalHospitalHealthcareServicesOthers26

Singapore Hospitals2004 2005 2005vs 2004Number of Hospitals 3 3 0.0%Inpatient Admissions 49,109 49,980 1.8%Number of Day Cases* 13,011 13,444 3.3%Average Length of Stay (days) 3.48 3.56 2.3%* Day Ward Admissions onlyOur Singapore Hospitals showed an increase in inpatient admissions and day cases, driven largelyby the increase in foreign patients. Average length of stay increased with more high intensitypatient admissions.International Hospitals2004 2005 2005vs 2004Number of Hospitals 4 11 175.0%Statistics for 2 Majority-owned FacilitiesInpatient Admissions 15,461 16,649 7.7%Average Length of Stay (days) 3.32 3.37 1.5%Our international hospitals increased from 4 to 11. The table above shows the increase ininpatient volume as well as average length of stay in the Brunei and Penang hospitals.27

Financial Review 2005EBITDA20052004EarningsThe Group’s EBITDA in 2005 mirrored the growth inrevenue, increasing by 22% from $110.9 million in 2004to $135.0 million in 2005.S$ m -90 -80 -70 -88.379.7The Group’s EBITDA grew by $24.1 million or 22% inFY2005. $8.6 million of this increase was from the SingaporeHospitals division. The International division contributed$7.9 million and the Healthcare services added another$10.9 million. There was a reduction in the Others segmentcompared to 2004, when there was a gain from the sale ofour stake in Lee Hing last year.60 -50 -40 -30 -20 -10 -15.47.531.520.60.13.2Net Financial IncomeThe strong growth of 22% in EBITDA translated to acorresponding increase of 23% in net income. The resultis a fi ve year high net income of $62.0 million in FY2005compared to the $50.5 million in FY2004.DividendsThe directors proposed a fi nal dividend of 5.0 cents perordinary share compared to 4.5 cents per ordinary sharein the preceding year. Together with the interim dividendsof 5.5 cents, this brings annual dividend to 10.5 cents perordinary share for the full year 2005.SingaporeHospitalInternationalHospitalHealthcareServicesOthers28

Group Consolidated Statements2005 2004 # 2003 2002 2001$’ 000 $’ 000 $’ 000 $’ 000 $’ 000Profi t and Loss AccountRevenueHealthcare 547,221 405,614 344,743 325,096 344,775Others 1,750 2,218 3,905 12,463 12,357548,971 407,832 348,648 337,559 357,132Earnings before interest expense, tax, depreciationand amortisation (EBITDA) ~ 134,982 110,925 85,865 89,201 86,848% of revenue 24.6% 27.2% 24.6% 26.4% 24.3%Earnings before interest expense, taxand exceptional items (EBIT) 96,429 71,922 55,381 58,547 56,115% of revenue 17.6% 17.6% 15.9% 17.3% 15.7%Earnings after tax and minority interest but beforeexceptional items 61,969 50,463 33,608 33,301 24,891% of revenue 11.3% 12.4% 9.6% 9.9% 7.0%Net Profi t for the year 61,969 50,463 33,608 33,301 12,479% of revenue 11.3% 12.4% 9.6% 9.9% 3.5%Balance SheetTotal Assets 1,304,179 937,049 815,460 832,881 824,280Net Borrowings 336,114 192,951 233,853 242,645 217,874Total Shareholders’ Funds 415,517 425,027 430,500 427,970 411,107Profi tability Ratios (%):Return on Shareholders’ FundsBefore exceptional items 14.9 11.9 7.8 7.8 6.1After exceptional items 14.9 11.9 7.8 7.8 3.0Return on AssetsBefore exceptional items 4.8 5.4 4.1 4.0 3.0After exceptional items 4.8 5.4 4.1 4.0 1.5Gearing Ratio:Net debt equity ratio 0.81 0.45 0.54 0.57 0.53Per share Data:Earnings per share (S$)Before exceptional items 0.09 0.07 0.05 0.05 0.03After exceptional items 0.09 0.07 0.05 0.05 0.02Gross dividend (S$) + 0.105 0.09 0.06 0.05 0.03Net tangible asset backing per share (S$) 0.32 0.54 0.55 0.55 0.57Net asset value backing per share (S$) 0.57 0.59 0.60 0.59 0.57~ Earnings before exceptional items, exchange differences and share of results of associates.# Certain comparative fi gures in FY2004 have been restated for comparative purposes due to the adoption of the new and revised accounting standards that wereimplemented in 2005.+ Gross dividend comprises interim dividend declared during the year and fi nal dividend proposed by directors in respect of that fi nancial year under review.29

Mr Richard Seow Yung LiangChairmanMr Sunil ChandiramaniVice ChairmanDr Lim Cheok PengManaging DirectorMr Alain Ahkong Chuen FahNon-executive DirectorBoard of DirectorsMr Daniel Ashton CarrollNon-executive DirectorMr Chang See HiangNon-executive DirectorMr Timothy David DattelsNon-executive DirectorMr Ho Kian GuanNon-executive DirectorDr Ronald Ling Jih WenNon-executive Director30Mr Ashish Jaiprakash ShastryNon-executive DirectorMr David R. WhiteNon-executive Director

Mr Richard Seow Yung LiangChairmanMr Richard Seow was appointed Chairman of the Boardof Parkway Holdings and the Executive Committee in July2005. A former investment banker with over 16 years ofindustry experience, he was previously with Citigroup,Goldman Sachs and JP Morgan. Mr Seow is also a directorof Twinwood Engineering Limited, Lee Hing DevelopmentLimited and a member of the Anglo Chinese School Boardof Governors.Mr Sunil ChandiramaniVice ChairmanMr Sunil Chandiramani is a Director and Partner ofSymphony Group of companies which invest in Healthcareand other consumer businesses throughout the Asia Pacifi cregion. Mr Chandiramani is a member of the ExecutiveCommittee and various other committees and sits on theboards of several companies.Dr Lim Cheok PengManaging DirectorDr Lim Cheok Peng is the Managing Director of ParkwayHoldings and he sits on the Executive Committee. Dr Limhas been steering the Group’s healthcare efforts since 1987and was recently appointed a director of Pantai HoldingsBerhad. He is also a cardiologist by profession.Mr Alain Ahkong Chuen FahNon-executive DirectorMr Alain Ahkong is the Chairman of the Audit Committeeof Parkway Holdings. Currently a Director of PioneerManagement Services Pte Ltd, Mr Ahkong also holdsdirectorships in several companies, including listedcompany, Twinwood Engineering Limited.Mr Daniel Ashton CarrollNon-executive DirectorMr Daniel Carroll is a Managing Partner of NewbridgeCapital, LLC, which he joined in 1995. Mr Carroll runsNewbridge’s investment committee and oversees the fi rm’sinvestment strategy and operations. Mr Carroll is a Directorof Shenzhen Development Bank and AIT (Mauritius) Ltd.Mr Chang See HiangNon-executive DirectorMr Chang See Hiang sits on various committees of ParkwayHoldings. An Advocate and Solicitor of the Supreme Courtof Singapore, he is the Senior Partner of his own law fi rm,M/s Chang See Hiang and Partners. Mr Chang is a Directorof Jardine Cycle & Carriage Limited, MCL Land Limited,Yeo Hiap Seng Limited, Singapore Technologies AerospaceLtd, STT Communications Ltd and Honorary Secretary andmember, Management Committee of the Singapore TurfClub.31

Mr Timothy David DattelsNon-executive DirectorMr Timothy Dattels is a Managing Director of NewbridgeCapital, LLC. Prior to joining Newbridge in 2002,Mr Dattels was a Managing Director of Goldman Sachsand led the fi rm’s investment banking business in Asia.Mr Dattels is a Director of Shenzhen Development Bank,SingTao News Corp. Limited, Shangri-La Asia Ltd andPrimedia Inc.Mr Ho Kian GuanNon-executive DirectorMr Ho Kian Guan has been a director of Parkway Holdingssince 1985. Mr Ho is also the Chairman of publicly-listedKeck Seng (Malaysia) Berhad whose principal activitiesinclude palm oil cultivation, the processing and refi ningof palm oil and real estate development.Dr Ronald Ling Jih WenNon-executive DirectorDr Ronald Ling trained as a medical doctor and subsequentlyworked as a management consultant with McKinsey & Co.in London, and as General Manager with Parkway GroupHealthcare. Dr Ling is a Principal with the SymphonyGroup of companies which invest in Healthcare and otherconsumer businesses throughout the Asia Pacifi c region.He also sits on the Boards of Twinwood Engineering Limitedin Singapore and Strides Arcolabs Limited in India.Mr Ashish Jaiprakash ShastryNon-executive DirectorMr Ashish Shastry is a Director and Head of SoutheastAsia at Newbridge Capital, LLC. Mr Shastry has workedat Newbridge since 1998, during which time he has beenbased in Singapore and Hong Kong, focusing on Newbridge’sinvestment activities in India, Australia and Southeast Asia.He serves on boards of Pantai Holdings Berhad (Malaysia),Lee Hing Development Limited (Hong Kong) and MatrixLaboratories Ltd (India; Alternate Director).Mr David R. WhiteNon-executive DirectorMr David White is the Chairman of the Board and ChiefExecutive Offi cer of Iasis Healthcare LLC, headquartered inthe United States. Mr White was also previously ExecutiveVice President and Chief Executive Offi cer of CommunityHealth Systems, Inc., a hospital management companythat operated about 20 acute care hospitals in the UnitedStates.Mr Ho Kian Hock(alternate director to Mr Ho Kian Guan)32

Senior ManagementDr Lim Cheok PengManaging DirectorDr Lim Cheok Peng, 59, is the Managing Director ofParkway Holdings and he sits on the Executive Committee.Dr Lim has been steering the Group’s healthcare effortssince 1987. He is also a cardiologist by profession.Molly FooChief Financial Offi cerMolly Foo, 46, was appointed as Chief Financial Offi cer on1 April 2003. Ms Foo started with Mount Elizabeth Hospitalin August 1993 and was the General Manager, Finance.Prior to this, Ms Foo was the Financial Controller for MountAlvernia Hospital from 1990 to 1993. Ms Foo graduatedwith a Bachelor in Accountancy from the National Universityof Singapore.Vivek JetleySenior Vice President/HeadInternational Business DevelopmentVivek Jetley, 48, joined Parkway on 16 January 2004, andis responsible for the formulation and implementation ofParkway’s international business strategy. Prior to joiningParkway, Mr Jetley was the Managing Director of Max IndiaLtd, a listed multi business enterprise, from 1998 to 2003.Mr Jetley holds a Master in Business Management fromBanaras Hindu University and is a Fellow Member of theInstitute of Cost and Works Accountants of India.Dr Timothy LowGeneral ManagerGleneagles HospitalDr Timothy Low, 43, joined Parkway as General Manager ofGleneagles Hospital on 1 August 2000 and is responsiblefor the general management and operations of the Hospital.Prior to joining Parkway, Dr Low was the Senior RegionalDirector of Covance (ASIA) Pte Ltd from 1995 to 2000 andRegional Medical Advisor with Glaxo Wellcome SingaporePte Ltd from 1993 to 1995. Dr Low graduated with a MBBSfrom the National University of Singapore.Nellie TangGeneral ManagerMount Elizabeth HospitalNellie Tang, 61, was appointed as General Manager ofMount Elizabeth Hospital on 1 July 1998 and is responsiblefor the general management and operations of the Hospital.Mrs Tang started with Mount Elizabeth Hospital in May1981 and was Director of Nursing prior to her appointmentas General Manager, Patient Care Services in 1998.Mrs Tang holds a Master of Science in HealthcareManagement from the University of Wales, UK.Dr Goh Jin HianExecutive DirectorParkway Shenton Pte LtdDr Goh Jin Hian, 37, was appointed as Executive Directorof Parkway Shenton on 1 April 1999. Dr Goh is responsiblefor the general management of all the primary care servicesunder Parkway Shenton which includes, Shenton FamilyClinics, Executive Health Screeners, Nippon Medical Careand Maritime Medical.Prior to joining Parkway, Dr Goh was with the Ministryof Health. Dr Goh graduated with a MBBS from theNational University of Singapore and holds an MBA fromthe University of Hull, UK and completed the AdvancedManagement Programme at Wharton.Lim Poh SuanGeneral ManagerMedi-Rad Associates LtdLim Poh Suan, 53, was appointed as General Managerof Medi-Rad on 1 March 2002, and is responsible forthe general management and operations of the Group’sradiology services. Ms Lim started with Mount ElizabethHospital in July 1984 and was Head of Radiology with theHospital prior to her appointment with Medi-Rad.Ms Lim graduated with a Bachelor of Science in Economicsfrom the University of London and holds a Diploma of theCollege of Radiographers.George PusavatGeneral ManagerParkway Laboratory Services LtdGeorge Pusavat, 53, was appointed General Managerof Parkway Laboratory Services on 1 July 1997 and isresponsible for the general management and operations ofthe Group’s laboratory services. Prior to joining the Group,Mr Pusavat was Project and Systems Manager with SanJoaquin Community Hospital, USA from 1992 to 1994.Mr. Pusavat graduated with a Bachelor of Science inBiochemistry from University of California at Los Angeles, aBachelor of Science in Medical Technology from CaliforniaState University and a Master of Business Administrationfrom University of Southern California. He also holds aMT(ASCP) from American Society for Clinical Pathologyand a CLS from State of California, USA.33

Corporate InformationBOARD OF DIRECTORSRichard Seow Yung LiangChairmanSunil ChandiramaniVice ChairmanDr Lim Cheok PengManaging DirectorAlain Ahkong Chuen FahNon-executive DirectorDaniel Ashton CarrollNon-executive DirectorChang See HiangNon-executive DirectorTimothy David DattelsNon-executive DirectorHo Kian GuanNon-executive DirectorDr Ronald Ling Jih WenNon-executive DirectorAshish Jaiprakash ShastryNon-executive DirectorDavid R WhiteNon-executive DirectorHo Kian Hock(Alternate Director to Ho Kian Guan)EXECUTIVE COMMITTEERichard Seow Yung LiangChairmanSunil ChandiramaniDr Lim Cheok PengAshish Jaiprakash ShastryAUDIT COMMITTEEAlain Ahkong Chuen FahChairmanChang See HiangHo Kian GuanAshish Jaiprakash ShastryMANAGEMENT COMMITTEEDr Lim Cheok PengChairmanRichard Seow Yung LiangAshish Jaiprakash ShastrySHARE OPTION SCHEME COMMITTEETimothy David DattelsChairmanRichard Seow Yung LiangSunil ChandiramaniAshish Jaiprakash ShastryREMUNERATION COMMITTEETimothy David DattelsChairmanRichard Seow Yung LiangSunil ChandiramaniAshish Jaiprakash ShastryNOMINATING COMMITTEEChang See HiangChairmanRichard Seow Yung LiangSunil ChandiramaniAlain Ahkong Chuen FahTimothy David DattelsSHARE PURCHASE COMMITTEEChang See HiangChairmanRichard Seow Yung LiangSunil ChandiramaniHo Kian GuanAshish Jaiprakash ShastrySTRATEGIC PLANNING COMMITTEERichard Seow Yung LiangChairmanDr Lim Cheok PengDr Ronald Ling Jih WenAshish Jaiprakash ShastryDavid R WhiteREGISTERED OFFICE1 Grange Road #11-01Orchard BuildingSingapore 239693Tel: (65) 6796 0600http://www.parkwayholdings.comCOMPANY SECRETARIESJune Tay Kwok FungHo Li LiSHARE REGISTRARM & C Services Private Limited138 Robinson Road #17-00The Corporate Offi ceSingapore 068906Tel: (65) 6227 6660AUDITORSKPMGCertifi ed Public AccountantsSingaporePartner-In-Charge since theFinancial year ended 31 December 2005– Tay Puay ChengPRINCIPAL BANKERSABN AMRO Bank N.V.Calyon, Singapore BranchCitibank N.A., Singapore BranchDBS Bank LtdThe Hongkong and ShanghaiBanking Corporation LimitedOversea-Chinese BankingCorporation LimitedStandard Chartered BankUnited Overseas Bank Limited34

ContentsDirectors’ Report 36Statement by Directors 42Report of the Auditors 43Balance Sheets 44Consolidated Profit and Loss Account 45Consolidated Statement of Changes in Equity 46Statement of Changes in Equity 49Consolidated Statement of Cash Flows 50Notes to the Financial Statements 52Supplementary Information –SGX-ST Listing Manual Requirements 102Analysis of Shareholdings 119Notice of Annual General Meeting 121Proxy Form35

Directors’ ReportYear ended 31 December 2005We are pleased to submit this annual report to the members of the Company, together with the audited financial statements for thefinancial year ended 31 December 2005.DirectorsThe directors in office at the date of this report are as follows:Richard Seow Yung Liang (Chairman) (Appointed on 10 June 2005)Sunil Chandiramani(Vice Chairman)Dr Lim Cheok Peng(Managing Director)Alain Ahkong Chuen FahDaniel Ashton Carroll (Appointed on 10 June 2005)Chang See HiangTimothy David Dattels (Appointed on 10 June 2005)Ho Kian GuanDr Ronald Ling Jih Wen (Appointed on 15 July 2005)Ashish Jaiprakash Shastry (Appointed on 10 June 2005)David R. White (Appointed on 15 July 2005)Ho Kian Hock(alternate to Ho Kian Guan)Directors’ InterestsAccording to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the Act), particularsof interests of directors who held office at the end of the financial year (including those held by their spouses and infant children) inshares, debentures, warrants and share options in the Company and in related corporations (other than wholly-owned subsidiaries) areas follows:Holdings in the nameOther holdings in whichName of director and corporation of the director, spouse the director is deemedin which interests are held or infant children to have an interestAt beginning At end At beginning At endof the year of the year of the year of the yearCompanyOrdinary Shares fully paidSunil Chandiramani 50,000 50,000 – –Dr Lim Cheok Peng 2,000 2,000 – –Chang See Hiang – 125,000 – –Ho Kian Guan 625,000 693,000 – 10,000,000Ho Kian Hock 50,000 100,000 – 10,000,000Holdings atHoldingsName of director and corporation beginning of at endin which interests are held the year of the yearParkway Share Option Scheme 2001Options to subscribe for Ordinary Shares(exercise price at $0.865 per share andexercisable between 10/4/2002 and 9/4/2006)Dr Lim Cheok Peng 500,000 500,00036

Directors’ ReportYear ended 31 December 2005Directors’ Interests (Cont’d)Holdings atHoldingsName of director and corporation beginning of at endin which interests are held the year of the yearParkway Share Option Scheme 2001 (Cont’d)Options to subscribe for Ordinary Shares(exercise price at $0.94 per share andCompany (Cont’d) exercisable between 20/9/2002 and 19/9/2006)Sunil Chandiramani 200,000 200,000Alain Ahkong Chuen Fah 150,000 150,000Chang See Hiang 100,000 25,000Ho Kian Guan 25,000 –Ho Kian Hock 50,000 –Options to subscribe for Ordinary Shares(exercise price at $0.835 per share andexercisable between 20/4/2003 and 19/4/2007)Sunil Chandiramani 200,000 200,000Dr Lim Cheok Peng 500,000 500,000Alain Ahkong Chuen Fah 150,000 150,000Chang See Hiang 100,000 50,000Ho Kian Guan 50,000 25,000Options to subscribe for Ordinary Shares(exercise price at $1.4267 per share andexercisable between 20/11/2005 and 19/11/2009)Sunil Chandiramani 100,000 100,000Dr Lim Cheok Peng 500,000 500,000Alain Ahkong Chuen Fah 100,000 100,000Chang See Hiang 100,000 100,000Ho Kian Guan 75,000 57,000Holdings atbeginning ofHoldingsName of director and corporation the year / Date at endin which interests are held of appointment of the yearParkway Share Option Scheme 2001Options to subscribe for Ordinary Shares(exercise price at $2.087 per share andexercisable between 10/12/2006 and 9/12/2010)Richard Seow Yung Liang – 1,000,000Sunil Chandiramani – 100,000Dr Lim Cheok Peng – 1,500,000Alain Ahkong Chuen Fah – 100,000Chang See Hiang – 100,000Ho Kian Guan – 100,000Dr Ronald Ling Jih Wen – 50,000Ashish Jaiprakash Shastry – 60,00037

Directors’ ReportYear ended 31 December 2005Directors’ Interests (Cont’d)Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures,warrants or share options of the Company, or of related corporations, either at the beginning of the financial year, or date of appointmentif later, or at the end of the financial year.Subsequent to the end of the financial year and before 21 January 2006, the following directors accepted the share options granted on9 December 2005 as follows:Options to subscribe for OrdinaryShares (exercise price at $2.087per share and exercisable between10/12/2006 and 9/12/2010)Daniel Ashton Carroll 60,000Timothy David Dattels 60,000David R. White 50,000Except as disclosed in this report, there were no changes in any of the above-mentioned interests in the Company between the end ofthe financial year and 21 January 2006.Except as disclosed under the “Share Options” section of this report, neither at the end of, nor at any time during the financial year, wasthe Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company toacquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.During the year, certain transactions were made between the Company and/or its subsidiaries and its directors, or the subsidiaries’directors or a firm in which one of the directors is a member or companies in which the directors of the Company or its subsidiaries havesubstantial financial interest in the ordinary course of business. However, these directors have neither received nor will they becomeentitled to receive any benefit from these transactions other than as suppliers, directors and members of these firms/companies.Except for salaries, bonuses and fees and those benefits that are disclosed in this report and in notes 23 and 29 to the financialstatements, since the end of the last financial year, no director has received or become entitled to receive, a benefit by reason of acontract made by the Company or a related corporation with the director, or with a firm of which he is a member or with a company inwhich he has a substantial financial interest.Share OptionsParkway Share Option Scheme 2001 (Parkway Scheme 2001)The Parkway Scheme 2001 was approved by the shareholders of the Company at an Extraordinary General Meeting held on 18 January2001. Details of the Parkway Scheme 2001 and amendments effected by a resolution passed at the Extraordinary General Meeting ofthe Company held on 4 July 2001 were set out in the Directors’ Report for the year ended 31 December 2001. The Parkway Scheme2001 is administered by the Company’s Share Option Scheme Committee, comprising 4 directors, Timothy David Dattels, Richard SeowYung Liang, Sunil Chandiramani and Ashish Jaiprakash Shastry.Information regarding the Parkway Scheme 2001 is set out below:(i)(ii)The exercise price of the option is determined at the average of the last dealt price of the Company’s shares on the SingaporeExchange Securities Trading Limited (SGX-ST) prevailing on the three consecutive trading days immediately preceding the date ofgrant of such options.The options vest one year after the grant date in accordance with the vesting schedule set out below:Vesting schedulePercentage of shares over whichthe options are exercisableOn or before the first anniversary of the grant dateNilAfter the first anniversary, and on or before the second anniversary of the grant date 25%After the second anniversary, and on or before the third anniversary of the grant date 50%After the third anniversary, and on or before the fourth anniversary of the grant date 75%After the fourth anniversary, and on or before the fifth anniversary of the grant date 100%38

Directors’ ReportYear ended 31 December 2005Share Options (Cont’d)Parkway Share Option Scheme 2001 (Parkway Scheme 2001) (Cont’d)(iii)The options granted expire on the fifth anniversary of the grant date unless they have been cancelled or have lapsed prior tothat date.At the end of the financial year, details of the options granted under the Parkway Scheme 2001 on the unissued ordinary shares of theCompany are as follows:NumberOptions Options of optionDate of Exercise outstanding outstanding holdersgrant of price per at 1 Jan Options Options Options at 31 Dec at 31 Dec Exerciseoptions share 2005 granted exercised cancelled 2005 2005 period9/4/2001 $0.8650 1,869,750 – 1,120,750 13,000 736,000 16 10/4/2002 to9/4/20068/5/2001 $0.9933 100,000 – 100,000 – – – 9/5/2002 to8/5/200619/9/2001 $0.9400 1,115,000 – 652,500 87,500 375,000 3 20/9/2002 to19/9/200619/4/2002 $0.8350 5,237,250 – 2,040,500 200,000 2,996,750 202 20/4/2003 to19/4/200719/11/2004 $1.4267 2,600,000 – 188,000 275,000 2,137,000 29 20/11/2005 to19/11/200915/11/2005 $2.053 – 3,855,000 – – 3,855,000 59 16/11/2006 to15/11/20109/12/2005 $2.087 – 3,010,000 # – – 3,010,000 8 10/12/2006 to9/12/201010,922,000 6,865,000 4,101,750 575,500 13,109,750#Excludes 170,000 options granted on 9 December 2005 but accepted only subsequent to the end of the financial year.Details of options granted to directors of the Company under the Parkway Scheme 2001 are as follows:Aggregate Aggregate AggregateOptions options granted options options Aggregategranted for since exercised since cancelled since optionsfinancial commencement commencement commencement outstandingyear ended of scheme to of scheme to of scheme to as atName of director 31 Dec 2005 31 Dec 2005 31 Dec 2005 31 Dec 2005 31 Dec 2005Richard Seow Yung Liang 1,000,000 1,000,000 – – 1,000,000Sunil Chandiramani 100,000 600,000 – – 600,000Dr Lim Cheok Peng 1,500,000 3,000,000 – – 3,000,000Alain Ahkong Chuen Fah 100,000 500,000 – – 500,000Daniel Ashton Carroll 60,000 60,000 – – – *Chang See Hiang 100,000 400,000 125,000 – 275,000Timothy David Dattels 60,000 60,000 – – – *Ho Kian Guan 100,000 375,000 193,000 – 182,000Dr Ronald Ling Jih Wen 50,000 50,000 – – 50,000Ashish Jaiprakash Shastry 60,000 60,000 – – 60,000David R. White 50,000 50,000 – – – *Ho Kian Hock – 100,000 100,000 – –*The options granted were accepted subsequent to the end of the financial year.Since the commencement of the Parkway Scheme 2001, no options have been granted to the controlling shareholders of the Companyor their associates.39

Directors’ ReportYear ended 31 December 2005Share Options (Cont’d)Parkway Share Option Scheme 2001 (Parkway Scheme 2001) (Cont’d)Since the commencement of the Parkway Scheme 2001, no participant under the Parkway Scheme 2001 has been granted 5% or moreof the total options available under the Parkway Scheme 2001.During the financial year, 6,865,000 options were granted to and accepted by the employees and non-executive directors of theCompany and its subsidiaries under the Parkway Scheme 2001. 19,295,000 options have been granted to the employees andnon-executive directors of the Company and its subsidiaries since the commencement of the Parkway Scheme 2001 to the end of thefinancial year under review.Subsequent to the balance sheet date, 170,000 share options which were granted during the financial year were accepted while296,500 share options were exercised under the Parkway Scheme 2001.Except as disclosed above, there were no unissued shares of the Company or its subsidiaries under options granted by the Company orits subsidiaries as at the end of the financial year.The options granted by the Company and its subsidiaries do not entitle the holders of the options, by virtue of such holding, to any rightsto participate in any share issue of any other company.Audit CommitteeThe members of the Audit Committee during the year and at the date of this report are as follows:Alain Ahkong Chuen Fah (Chairman), non-executive directorChang See Hiang, non-executive directorHo Kian Guan, non-executive directorAshish Jaiprakash Shastry, non-executive directorAng Guan Seng, non-executive director**resigned on 10 June 2005The Audit Committee performs the functions specified in Section 201B of the Act, the SGX-ST Listing Manual (the Listing Manual), theSGX-ST Best Practices Guide and the Code of Corporate Governance.The Audit Committee met four times during the year.The principal responsibility of the Audit Committee is to assist the Board of Directors in the identification and monitoring of areas ofsignificant business risks including the following:• the effectiveness of the management of principal business risks;• the effectiveness of the management of financial business risks and the reliability of management and financial reporting;• compliance with laws and regulations, particularly those of the Act and the Listing Manual, and its own code of business conduct;• the appropriateness of quarterly and full year announcements and reports;• the effectiveness of the Group’s system of internal controls;• the effectiveness and efficiency of internal and external audits; and• interested person transactions.40

Directors’ ReportYear ended 31 December 2005Audit Committee (Cont’d)Specific functions of the Audit Committee include reviewing the scope of work of the internal and external auditors, reviewing the levelof assistance provided by the Company’s officers to the internal and external auditors, receiving and considering the reports of theinternal and external auditors, and ensuring that management responds to recommendations made by the internal and external auditors.The committee also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees.In addition, the Audit Committee has, in accordance with Chapter 9 of the Listing Manual, reviewed the requirements for approval anddisclosure of interested person transactions, and with the assistance of the internal auditors, reviewed the interested person transactions.The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has fullauthority and discretion to invite any director or executive officer to attend its meetings.The Audit Committee carried out a review of the external auditors’ remuneration, non-audit services provided by the external auditors,and the independence of the external auditors as required under Section 206(1A) of the Act and Rule 1207(6b) of the Listing Manualand determined that the auditors were independent in carrying out their audit of the financial statements. The Audit Committee hasrecommended to the Board of Directors that the auditors, KPMG, be nominated for re-appointment as auditors at the forthcomingAnnual General Meeting of the Company.The auditors, KPMG, have indicated their willingness to accept re-appointment.On behalf of the Board of DirectorsRichard Seow Yung LiangDirectorDr Lim Cheok PengDirector24 February 200641

Statement by DirectorsYear ended 31 December 2005In our opinion:(a)(b)the financial statements set out on pages 44 to 101 are drawn up so as to give a true and fair view of the state of affairs of the Groupand of the Company as at 31 December 2005 and of the results, changes in equity and cash flows of the Group and of the changesin equity of the Company for the year ended on that date; andat the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and whenthey fall due.The Board of Directors has, on the date of this statement, authorised these financial statements for issue.On behalf of the Board of DirectorsRichard Seow Yung LiangDirectorDr Lim Cheok PengDirector24 February 200642

Report of the Auditorsto the Members of Parkway Holdings LimitedWe have audited the accompanying financial statements of Parkway Holdings Limited and its subsidiaries for the year ended 31December 2005 as set out on pages 44 to 101. These financial statements are the responsibility of the Company’s directors. Ourresponsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basis for our opinion.In our opinion:(a)(b)the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company areproperly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (the Act) and Singapore Financial ReportingStandards to give a true and fair view of the state of affairs of the Group and of the Company as at31 December 2005 and of the results, changes in equity and cash flows of the Group and of the changes in equity of the Companyfor the year ended on that date; andthe accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated inSingapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.KPMGCertified Public AccountantsSingapore24 February 200643

Balance Sheetsas at 31 December 2005GroupCompanyNote 2005 2004 2005 2004$’000 $’000 $’000 $’000Non-current assetsProperty, plant and equipment 3 765,830 542,873 – –Intangible assets 4 180,901 31,361 – –Interests in subsidiaries 5 – – 690,137 546,689Interests in associates 6 54,390 14,362 (4,329) (4,524)Interests in partnerships 7 123 191 – –Other financial assets 8 28,884 46,656 – –Notes receivables 9 35,463 42,106 35,463 42,106Deferred tax assets 10 1,813 – 212 –1,067,404 677,549 721,483 584,271Current assetsCompleted properties held for resale 11 579 579 – –Inventories 12 16,947 10,063 – –Trade receivables 13 75,413 32,886 – –Other receivables, deposits and prepayments 14 23,696 9,336 437 634Tax recoverable 7,875 4,066 2,118 2,967Notes receivables 9 6,021 6,194 6,021 6,194Other financial assets 8 220 211 – –Cash and cash equivalents 15 106,024 196,165 8,692 174,125236,775 259,500 17,268 183,920Total assets 1,304,179 937,049 738,751 768,191Equity attributable to equity holders of the CompanyShare capital 16 181,753 180,728 181,753 180,728Share premium 18 114,041 111,412 114,041 111,412Other reserves 18 (20,517) (5,048) 12,968 12,691Accumulated profits 140,240 137,935 116,214 120,233415,517 425,027 424,976 425,064Minority interests 231,230 9,548 – –Total equity 646,747 434,575 424,976 425,064Non-current liabilitiesInterest-bearing borrowings 19 394,611 310,793 310,000 310,000Deferred tax liabilities 10 35,541 27,970 – 35430,152 338,763 310,000 310,035Current liabilitiesBank overdrafts 15 3,349 997 – –Trade payables and accrued operating expenses 112,600 55,641 3,213 2,582Other payables 20 39,455 10,180 562 510Interest-bearing borrowings 19 44,178 77,326 – 30,000Employee benefits 17 2,455 2,188 – –Current tax payable 25,243 17,379 – –227,280 163,711 3,775 33,092Total liabilities 657,432 502,474 313,775 343,127Total equity and liabilities 1,304,179 937,049 738,751 768,191The accompanying notes form an integral part of these financial statements.44

Consolidated Profit and Loss AccountYear ended 31 December 2005GroupNote 2005 2004$’000 $’000Revenue 21 548,971 407,832Other operating income 18,231 16,524Inventories and consumables used (134,140) (64,568)Purchased and contracted services (42,682) (36,370)Costs of investments/properties sold – (327)Depreciation and impairment losses of property, plant and equipment 3 (34,245) (30,713)Amortisation of intangible assets 4 (3,499) (1,811)Staff costs (184,460) (155,693)Other operating expenses (69,818) (59,981)Finance costs (10,056) (5,103)Share of profits/(losses) of associates 720 (2,102)Share of profits of partnerships 7 376 288Profit from operations before taxation 22 89,398 67,976Income tax expense 24 (22,008) (15,232)Profit for the year 67,390 52,744Attributable to:Equity holders of the Company 61,969 50,463Minority interests 5,421 2,281Profit for the year 67,390 52,744Earnings per share (cents):Basic 25 8.55 7.00Diluted 25 8.51 6.97The accompanying notes form an integral part of these financial statements.45

Consolidated Statement of Changes in EquityYear ended 31 December 2005TotalattributableExchange Fair Share to equityShare Share fluctuation value option Accumulated holders of Minority TotalNote capital premium reserves reserve reserve profits the Company interests equity$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000GroupAt 1 January 2004 179,996 116,493 (6,144) – – 140,155 430,500 8,492 438,992Exchange differences onretranslation of openingnet assets of foreignsubsidiaries and associates – – (835) – – – (835) (285) (1,120)Effects arising on disposal ofan associate – (6,890) (787) – – (3,645) (11,322) – (11,322)Net losses recogniseddirectly in equity – (6,890) (1,622) – – (3,645) (12,157) (285) (12,442)Exchange loss on long-termforeign investmentsnow realised – – 2,683 – – – 2,683 – 2,683Net profit for the year – – – – – 50,463 50,463 2,281 52,744Total recognised income andexpense for the year – (6,890) 1,061 – – 46,818 40,989 1,996 42,985Issue of shares under shareoption scheme 16 732 1,809 – – – – 2,541 – 2,541Value of employee servicesreceived for issue of shareoptions – – – – 35 – 35 – 35Final dividend paid of4.0 cents per shareless tax at 20% in respectof year 2003 – – – – – (23,056) (23,056) – (23,056)Interim dividend paid of4.5 cents per shareless tax at 20% – – – – – (25,982) (25,982) – (25,982)Dividends paid to minorityshareholders – – – – – – – (940) (940)At 31 December 2004 180,728 111,412 (5,083) – 35 137,935 425,027 9,548 434,575The accompanying notes form an integral part of these financial statements.46

Consolidated Statement of Changes in EquityYear ended 31 December 2005TotalattributableExchange Fair Share to equityShare Share fluctuation value option Accumulated holders of Minority TotalNote capital premium reserves reserve reserve profits the Company interests equity$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000GroupAt 31 December 2004,as previously reported 180,728 111,412 (5,083) – – 137,970 425,027 9,548 434,575Effects of adopting FRS 102 – – – – 35 (35) – – –At 31 December 2004, restated 180,728 111,412 (5,083) – 35 137,935 425,027 9,548 434,575Effects of adopting FRS 39 – – – (13,398) – (1,665) (15,063) – (15,063)At 1 January 2005, restated 180,728 111,412 (5,083) (13,398) 35 136,270 409,964 9,548 419,512Exchange differences onretranslation of openingnet assets of foreignsubsidiaries and associates – – (1,582) – – – (1,582) (2,766) (4,348)Changes in fair value ofavailable-for-salefinancial assets – – – (368) – – (368) – (368)Net losses recogniseddirectly in equity – – (1,582) (368) – – (1,950) (2,766) (4,716)Effects on disposal ofavailable-for-salefinancial assets – – – (464) – – (464) – (464)Effects arising on disposalof subsidiaries 28 – – 18 – – – 18 (684) (666)Net profit for the year – – – – – 61,969 61,969 5,421 67,390Total recognised income andexpense for the year – – (1,564) (832) – 61,969 59,573 1,971 61,544Balance carried forward 180,728 111,412 (6,647) (14,230) 35 198,239 469,537 11,519 481,056The accompanying notes form an integral part of these financial statements.47

Statement of Changes in EquityYear ended 31 December 2005Share Share Capital Share option AccumulatedNote capital premium reserves reserve profits Total$’000 $’000 $’000 $’000 $’000 $’000CompanyAt 1 January 2004 179,996 109,603 12,656 – 106,953 409,208Net profit for the year – – – – 62,318 62,318Total recognised income andexpense for the year – – – – 62,318 62,318Issue of shares undershare option scheme 16 732 1,809 – – – 2,541Value of employee servicesreceived for issue of share options – – – 35 – 35Final dividend paid of 4.0 centsper share less tax at 20%in respect of year 2003 – – – – (23,056) (23,056)Interim dividend paid of 4.5 centsper share less tax at 20% – – – – (25,982) (25,982)At 31 December 2004 180,728 111,412 12,656 35 120,233 425,064At 31 December 2004,as previously reported 180,728 111,412 12,656 – 120,268 425,064Effects of adopting FRS 102 – – – 35 (35) –At 31 December 2004, restated 180,728 111,412 12,656 35 120,233 425,064Effects of adopting FRS 39 – – – – (1,665) (1,665)At 1 January 2005, restated 180,728 111,412 12,656 35 118,568 423,399Net profit for the year – – – – 55,645 55,645Total recognised income andexpense for the year – – – – 55,645 55,645Issue of shares undershare option scheme 16 1,025 2,629 – – – 3,654Value of employee servicesreceived for issue of share options – – – 277 – 277Final dividend paid of 4.5 centsper share less tax at 20%in respect of year 2004 – – – – (26,068) (26,068)Interim dividend paid of 5.5 centsper share less tax at 20% – – – – (31,931) (31,931)At 31 December 2005 181,753 114,041 12,656 312 116,214 424,976The accompanying notes form an integral part of these financial statements.49

Consolidated Statement of Cash FlowsYear ended 31 December 2005Group2005 2004$’000 $’000Operating activitiesProfit from operations before taxation 89,398 67,976Adjustments for:Exchange difference (573) 4,037Depreciation and impairment losses of property, plant and equipment 34,245 30,713Amortisation of intangible assets 3,499 1,811Allowance for doubtful receivables from associates 516 1,848Impairment loss on/Allowance for diminution in value of non-current available-for-sale financial assets 1,557 1,447Gain on disposal of non-current equity investments (283) (647)Loss/(Gain) on disposal of property, plant and equipment 462 (92)Loss on dilution of interests in subsidiaries 2,141 –Loss on disposal of subsidiaries 92 –Gain on disposal of an associate – (3,461)Share of (profits)/losses of associates (720) 2,102Share of profits of partnerships (376) (288)Share option expense 444 35Dividend income (1,616) (1,750)Interest income (3,025) (1,158)Interest expense 10,056 5,103Loan forgiven by former corporate shareholder of a subsidiary (1,150) (500)Operating profit before working capital changes 134,667 107,176Changes in working capital:Inventories (612) (69)Trade and other receivables (20,840) 339Financial assets available-for-sale and held for trading (4) 12Trade and other payables 20,523 (1,376)Cash generated from operations 133,734 106,082Income taxes paid (13,951) (8,898)Cash flows from operating activities carried forward 119,783 97,18450

Consolidated Statement of Cash FlowsYear ended 31 December 2005GroupNote 2005 2004$’000 $’000Cash flows from operating activities brought forward 119,783 97,184Investing activitiesPurchase of property, plant and equipment (36,959) (24,911)Proceeds from redemption of notes receivables 6,205 –Proceeds from sale of property, plant and equipment 3,307 2,857Acquisition of subsidiaries, net of cash acquired 28 (102,369) –Investments in associates (2,300) (1,074)Proceeds from disposal of subsidiaries (net) 1,559 –Proceeds from liquidation of associates – 174Net repayment by/(Advances to) associates 272 (1,405)Interests in partnerships 444 150Proceeds from disposal of non-current equity investments 2,801 4,920Dividends received 1,616 1,750Interest received 2,045 835Partial proceeds from disposal of an associate (net) – 12,140Cash flows from investing activities (123,379) (4,564)Financing activitiesIssue of shares under share option scheme 3,654 2,541Repayment of bank loans (89,127) (43,440)Proceeds from bank loans 80,600 40,000Repayment of finance lease obligations (1,424) (416)Issue of floating rate notes – 430,000Redemption of floating rate notes (30,000) (452,000)Repurchase of floating rate notes (77,000) –Re-issue of floating rate notes 77,000 –Issue of fixed rate notes – 150,000Interest paid (8,891) (4,129)Dividends paid (57,999) (49,038)Issue of shares to minority shareholders 6,125 –Dividends paid to minority shareholders (4,452) (940)Pledged deposits withdrawn from sinking fund 54 –Cash flows from financing activities (101,460) 72,578Net (decrease)/increase in cash and cash equivalents (105,056) 165,198Cash and cash equivalents at beginning of the year 195,168 29,925Exchange fluctuation on cash and cash equivalents (991) 45Cash and cash equivalents at end of the year 15 89,121 195,168During the year, property, plant and equipment amounting to $1,686,000 (2004: $341,000) was acquired under finance leases.The accompanying notes form an integral part of these financial statements.51

Notes to the Financial Statements31 December 2005These notes form an integral part of the financial statements.The financial statements were authorised for issue by the directors on 24 February 2006.1 Domicile and ActivitiesParkway Holdings Limited (the Company) is incorporated in the Republic of Singapore and has its registered office at No. 1 GrangeRoad, #11-01 Orchard Building, Singapore 239693.The principal activities of the Company are those relating to investment holding while those of the subsidiaries consist of thebusiness of private hospital ownership and management and related healthcare services, ownership and management of medicalclinics, practice of dental surgeons and the operation of dental clinics, provision of clinical research services, ownership andmanagement of radiology clinics, provision of comprehensive diagnostic laboratory services, provision of managed care and relatedservices, underwriting of accident and healthcare insurance policies, and investment holding and trading.The consolidated financial statements relate to the Company and its subsidiaries (referred to as the Group) and the Group’sinterests in associates and partnerships.2 Summary of Significant Accounting Policies2.1 Basis of preparationThe financial statements are prepared in accordance with Singapore Financial Reporting Standards (FRS) including relatedInterpretations promulgated by the Council on Corporate Disclosure and Governance.In 2005, the Group adopted the following new/revised FRSs which are relevant to its operations:FRS 1 (revised)FRS 2 (revised)FRS 8 (revised)FRS 10 (revised)FRS 16 (revised)FRS 17 (revised)FRS 21 (revised)FRS 24 (revised)FRS 27 (revised)FRS 28 (revised)FRS 32 (revised)FRS 33 (revised)FRS 36 (revised)FRS 38 (revised)FRS 39FRS 102FRS 103FRS 104Presentation of Financial StatementsInventoriesAccounting Policies, Changes in Accounting Estimates and ErrorsEvents after the Balances Sheet DateProperty, Plant and EquipmentLeasesThe Effects of Changes in Foreign Exchange RatesRelated Party DisclosuresConsolidated and Separate Financial StatementsInvestments in AssociatesFinancial Instruments: Disclosure and PresentationEarnings Per ShareImpairment of AssetsIntangible AssetsFinancial Instruments: Recognition and MeasurementShare-based PaymentBusiness CombinationsInsurance ContractsThe effects of adopting the new/revised FRSs in 2005 are set out in note 26.The financial statements are presented in Singapore dollars and rounded to the nearest thousand, unless otherwise stated. Theyare prepared on the historical cost basis except for certain financial assets and financial liabilities which are stated at fair value.The preparation of financial statements in conformity with FRSs requires management to make judgements, estimates andassumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimatesand associated assumptions are based on historical experience and various other factors that are believed to be reasonable underthe circumstances, the results of which form the basis of making the judgements about carrying amounts of assets and liabilitiesthat are not readily apparent from other sources.52

Notes to the Financial Statements31 December 20052 Summary of Significant Accounting Policies (Cont’d)2.1 Basis of preparation (Cont’d)The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised inthe period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods,if the revision affects both current and future periods.Judgements made by management in the application of FRSs that have a significant effect on the financial statements and inarriving at estimates wih a significant risk of material adjustment in the following year are discussed in note 35.2.2 ConsolidationSubsidiaries are those companies controlled by the Company. Control exists when the Company has the power, directly or indirectly,to govern the financial and operating policies of a company so as to obtain benefits from its activities.Investments in subsidiaries are stated in the Company’s balance sheet at cost less impairment losses. The financial statements ofsubsidiaries are included in the consolidated financial statements from the date that control commences until the date that controlceases.Associates are companies in which the Group has significant influence, but not control, over the financial and operating policies.Investments in associates are stated in the Company’s balance sheet at cost less impairment losses. In the Group’s financialstatements, they are accounted for using the equity method of accounting from the date that significant influence commencesuntil the date that significant influence ceases. The Group’s investment in these entities includes goodwill on acquisition. When theGroup’s share of losses exceeds the carrying amount of its interest in the associate, the carrying amount is fully written down andrecognition of further losses is discontinued except to the extent that the Group has incurred obligations in respect of the associate.Partnerships are those entities where the Group exercises joint control with the other partners over the financial and operationaldecisions.Investments in partnerships are accounted for using the equity method of accounting from the date that partnership commencesuntil the date that partnership ceases.Business combinations are accounted for under the purchase method. The cost of an acquisition is measured at the fair value ofthe assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributableto the acquisition.The excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost ofacquisition is credited to the profit and loss account in the period of the acquisition.All significant intra group transactions, balances and unrealised gains or losses are eliminated on consolidation. Unrealised gainsresulting from transactions with associates are eliminated to the extent of the Group’s interest in the enterprise. Unrealised lossesare eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.2.3 Foreign currenciesForeign currency transactionsTransactions in foreign currencies are translated at foreign exchange rates ruling at the dates of the transactions. Monetary assetsand liabilities denominated in foreign currencies at the balance sheet date are translated into Singapore dollars at foreign exchangerate ruling at that date. Foreign exchange differences arising from translation are recognised in the profit and loss account.Non-monetary assets and liabilities measured at cost in foreign currencies are translated using exchange rates at the date of thetransaction. Non-monetary assets and liabilities measured at fair value in foreign currencies are translated to Singapore dollars atforeign exchange rates ruling at the dates the fair value was determined.Net investment in a foreign operationExchange differences arising from monetary items that in substance form part of the Company’s net investment in a foreignoperation, are recognised in the Company’s profit and loss account. Such exchange differences are reclassified to equity in theconsolidated financial statements only when the loan is denominated in either the functional currency of the Company or theforeign operation. Deferred exchange differences are released to the profit and loss account upon disposal of the investment.53

Notes to the Financial Statements31 December 20052 Summary of Significant Accounting Policies (Cont’d)2.3 Foreign currencies (Cont’d)Foreign operationsAssets and liabilities of foreign operations are translated into Singapore dollars for consolidation at the rates of exchange ruling atthe balance sheet date. Revenue and expenses of foreign operations are translated at exchange rates ruling at the dates ofthe transactions. Goodwill and fair value adjustments arising on the acquisition of foreign operations after1 January 2005 are translated into Singapore dollars at the rates of exchange ruling at the balance sheet date. However, goodwilland fair value adjustments arising on the acquisition of foreign operations before 1 January 2005 continued to be translated intoSingapore dollars at exchange rates ruling on transaction dates. Exchange differences arising on translation are recognised directlyin the exchange fluctuation reserves. On disposal, the accumulated translation differences are recognised in the consolidatedprofit and loss account as part of the gain or loss on disposal.2.4 Property, plant and equipmentProperty, plant and equipment are stated at cost less accumulated depreciation and impairment losses.Property, plant and equipment acquired through finance leases are capitalised at the lower of its fair value and the present valueof the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Leasepayments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate ofinterest on the remaining balance of the liability. Finance charges are charged directly against the profit and loss account. Capitalisedleased assets are depreciated over the shorter of the economic useful life of the asset and the lease term.Depreciation is provided on a straight-line basis so as to write off items of property, plant and equipment over their estimated usefullives as follows:Leasehold land – remaining term of the leaseFreehold buildings – 2%Freehold medical centre suites – 2%Leasehold buildings – 2%Leasehold office premises – 2%Renovation and improvements – 4% to 33 1 /3%Hospital and medical equipment, and furniture, fittings and equipment – 6 2 /3% to 33 1 /3%Motor vehicles – 20%No depreciation is provided on freehold land and construction in progress. In respect of fully depreciated or impaired assets,the cost and accumulated depreciation and impairment losses are retained in the financial statements until they are no longer in use.The useful lives and residual values, if not insignificant, are reassessed annually.2.5 Intangible assetsGoodwillGoodwill in a business combination represents the excess of the cost of acquisition over the fair value of the Group’s share of theidentifiable net assets acquired. Goodwill is stated at cost less impairment losses. Goodwill on the acquisition of subsidiaries ispresented as intangible assets. Goodwill on acquisition of associates is included in interests in associates. In arriving at the gain orloss on disposal of an entity, the balance of goodwill after impairment losses relating to the entity disposed of is included as part ofthe cost of investment.Goodwill is tested for impairment on an annual basis as described in note 2.13.Goodwill that has previously been taken to reserves is not taken to the profit and loss account when (a) the business is disposed or(b) the goodwill is impaired. Similarly, negative goodwill that has previously been taken to reserves is not taken to the profit and lossaccount when the business is disposed of.54

Notes to the Financial Statements31 December 20052 Summary of Significant Accounting Policies (Cont’d)2.5 Intangible assets (Cont’d)Other intangible assetsOther intangible assets with finite lives are stated at cost less accumulated amortisation and impairment losses. Other intangible assetsare amortised on a straight-line basis from the date the asset is available for use and over its estimated useful lives of 6 to 10 years.Intangible assets that have indefinite lives or that are not available for use are stated at cost less impairment losses. Such intangibleassets are tested for impairment annually as described in note 2.13.2.6 InvestmentsFinancial instruments held for trading are classified as current assets and are stated at fair value, with any resultant gain or lossrecognised in the profit and loss account.When the Group has the positive intent and ability to hold debt securities to maturity, they are stated at amortised cost lessimpairment losses.Other financial instruments held by the Group are classified as being available-for-sale and are stated at fair value, with anyresultant gain or loss being recognised directly in equity. The exceptions are impairment losses and foreign exchange gains andlosses on monetary items such as debt securities, which are recognised in the profit and loss account. When these investments arederecognised, the cumulative gain or loss previously recognised directly in equity is recognised in the profit and loss account.Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in the profit andloss account.The fair value of financial instruments classified as held-for-trading and available-for-sale is determined as the quoted bid price atthe balance sheet date.Financial instruments are recognised by the Group on the date it receives the investments, and derecognised on the date the assetis delivered by the Group. Changes in fair value of held-for-trading and available-for-sale financial instruments between the tradedate and the settlement date are recognised in the profit and loss account and equity respectively.2.7 DerivativesDerivative financial instruments are used to manage exposures to foreign exchange and interest rate risks arising from financingand investment activities. Derivative financial instruments are not used for trading purposes. However, derivatives that do notqualify for hedge accounting are accounted for as trading instruments.Derivative financial instruments are recognised initially at fair value. Subsequently to initial recognition, derivative financial instrumentsare remeasured at fair value. The gain or loss on remeasurement to fair value is recognised immediately in the profit and loss account.The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap at thebalance sheet date, taking into account current interest rates and the current credit worthiness of the swap counterparties. The fairvalue of forward exchange contracts is their quoted market price at the balance sheet date, being the present value of the quotedforward price.2.8 HedgingHedge of monetary assets and liabilitiesWhere a derivative financial instrument is used to hedge economically the foreign exchange exposure of a recognised monetary assetor liability, no hedge accounting is applied and any gain or loss on the hedging instrument is recognised in the profit and loss account.55

Notes to the Financial Statements31 December 20052 Summary of Significant Accounting Policies (Cont’d)2.8 Hedging (Cont’d)Cash flow hedgeWhere a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability, ora highly probable forecast transaction, the effective part of any gain or loss on the derivative financial instrument is recogniseddirectly in equity. When the forecast transaction subsequently results in the recognition of a non-financial asset or non-financialliability, or the forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for which fairvalue hedge accounting is applied, the associated cumulative gain or loss is removed from equity and included in the initial cost orother carrying amount of the non-financial asset or liability. If a hedge of a forecast transaction subsequently results in the recognitionof a financial asset or financial liability, the associated gains or losses that were recognised directly in equity are reclassified into theprofit and loss account in the same period or periods during which the asset acquired or liability assumed affects the profit and lossaccount (i.e. when interest income or expense is recognised). For other cash flow hedges, the associated cumulative gain or lossis removed from equity and recognised in the profit and loss account in the same period or periods during which the hedgedforecast transaction affects the profit and loss account. The ineffective part of any gain or loss is recognised immediately in theprofit and loss account.When a hedging instrument expires or is sold, terminated or exercised, or the entity revokes designation of the hedge relationshipbut the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity and isrecognised in accordance with the above policy when the transaction occurs. If the hedged transaction is no longer expected totake place, the cumulative unrealised gain or loss recognised in equity is recognised immediately in the profit and loss account.Fair value hedgeWhere a derivative financial instrument hedges the changes in fair value of a recognised asset or liability or an unrecognised firmcommitment (or an identified portion of such asset, liability or firm commitment), any gain or loss on the hedging instrument isrecognised in the profit and loss account. The hedged item is also stated at fair value in respect of the risk being hedged, with anygain or loss recognised in the profit and loss account.2.9 Completed properties held for resaleCompleted properties are those properties which are held with the intention of sale in the ordinary course of business and areclassified as current assets.All completed properties held for resale are stated at the lower of cost and estimated net realisable value.2.10 InventoriesInventories comprising mainly pharmacy, hospital and surgical supplies are stated at the lower of cost and net realisable value.Cost is calculated using the weighted average cost formula and comprises all costs of purchase and other costs incurred in bringingthe inventories to their present location and condition. Due allowance is made for all damaged, expired and slow moving items.Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to makethe sale.When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the relatedrevenue is recognised. The amount of any allowance for write-down of inventories to net realisable value and all losses of inventoriesare recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any allowance for writedownof inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventoriesrecognised as an expense in the period in which the reversal occurs.2.11 Trade and other receivablesTrade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effectiveinterest method, less allowances for impairment.56

Notes to the Financial Statements31 December 20052 Summary of Significant Accounting Policies (Cont’d)2.12 Cash and cash equivalentsCash and cash equivalents comprise cash and bank balances, bank deposits and commercial papers. For the purpose of thestatement of cash flows, cash and cash equivalents are presented net of bank overdrafts which are repayable on demand andwhich form an integral part of the Group’s cash management.2.13 ImpairmentThe carrying amounts of the Group’s assets, other than inventories, are reviewed at each balance sheet date to determine whetherthere is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverableamount. Impairment losses are charged to the profit and loss account.Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairmentannually and as and when indicators of impairment are identified.Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwillallocated to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets in the unit (groupof units) on a pro rated basis.When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objectiveevidence that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised inthe profit and loss account even though the financial asset has not been derecognised. The amount of the cumulative loss that isrecognised in the profit and loss account is the difference between the acquisition cost and current fair value, less any impairmentloss on that financial asset previously recognised in the profit and loss account.Calculation of recoverable amountThe recoverable amount of the Group’s investment in held-to-maturity securities and receivables carried at amortised cost iscalculated as the present value of estimated future cash flows, discounted at the original effective interest rate (i.e. the effectiveinterest rate computed at initial recognition of these financial assets). Receivables with a short duration are not discounted.The recoverable amount of other assets is the greater of their net selling price and value in use. In assessing value in use, theestimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current marketassessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independentcash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belong.Reversal of impairmentAn impairment loss in respect of a held-to-maturity security or receivable carried at amortised cost is reversed if the subsequentincrease in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised.An impairment loss in respect of an investment in an equity instrument classified as available-for-sale is not reversed through theprofit and loss account. If the fair value of a debt instrument classified as available-for-sale increases and the increase can beobjectively related to an event occurring after the impairment loss was recognised in the profit and loss account, the impairmentloss shall be reversed, with the amount of the reversal recognised in the profit and loss account.An impairment loss in respect of other assets is reversed if there has been a change in the estimates used to determine therecoverable amount. However, an impairment loss in respect of goodwill is not reversed.An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that wouldhave been determined, net of depreciation or amortisation, if no impairment loss had been recognised.57

Notes to the Financial Statements31 December 2005582 Summary of Significant Accounting Policies (Cont’d)2.14 Liabilities and interest-bearing borrowingsTrade and other payables are recognised initially at fair value. Interest-bearing borrowings are recognised initially at fair value lessattributable transaction costs. Subsequent to initial recognition, trade and other payables and interest-bearing borrowings arestated at amortised cost with any difference between cost and redemption value being recognised in the profit and loss accountover the period of the borrowings on an effective interest basis.2.15 Employee benefitsShare-based paymentsThe share option programme allows the Group employees and non-executive directors to acquire shares of the Company. The fairvalue of options granted is recognised as an expense in the profit and loss account with a corresponding increase in equity. Thefair value is measured at grant date and spread over the period during which the holders become unconditionally entitled to theoptions. At each balance sheet date, the Company revises its estimates of the number of options that are expected to becomeexercisable. It recognises the impact of the revision of original estimates in share option expense and in a corresponding adjustmentto equity over the remaining vesting period.The proceeds received net of any directly attributable transactions costs are credited to share capital (nominal value) and sharepremium when the options are exercised.Defined contribution planObligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss accountas incurred.Short-term compensated absencesShort-term accumulating compensated absences are recognised when the employees render service that increases their entitlementto future compensated absences.2.16 Income taxIncome tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the profit and lossaccount except where it relates to items recognised directly to equity, in which case it is recognised in equity.Current tax is the expected tax payable on the taxable income for the year, using the tax rates enacted or substantively enacted atthe balance sheet date, and any adjustment to tax payable in respect of previous years.Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets andliabilities and their carrying amounts in the financial statements. Temporary differences are not recognised for goodwill not deductiblefor tax purposes and for the initial recognition of assets or liabilities that affect neither accounting nor taxable profit. The amountof deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets andliabilities, using tax rates enacted or substantively enacted at the balance sheet date.A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available against which thetemporary differences can be utilised.Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timingof the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not be reversedin the foreseeable future.2.17 Share capitalDividendsDividends on ordinary shares are recognised as a liability in the period in which they are declared.

Notes to the Financial Statements31 December 20052 Summary of Significant Accounting Policies (Cont’d)2.18 Revenue recognitionPerformance of servicesRevenue from the performance of services is recognised on the completion of services rendered.Sales of completed properties held for resaleProfit from the sale of completed properties is recognised when the units are sold and the corresponding costs are then taken tothe profit and loss account. Allowance is made for anticipated losses if and when they can be determined.Rental incomeRental income receivable under operating leases is recognised in the profit and loss account on a straight-line basis over the termof the lease. Lease incentives granted are recognised as an integral part of the total rental income to be received. Contingentrentals are recognised as income in the accounting period in which they are earned.DividendsDividend income is recognised in the profit and loss account when the shareholder’s right to receive payment is established.Interest incomeInterest income from bank deposits, commercial papers and notes is accrued on a time-apportioned basis.2.19 Operating leasesWhere the Group has the use of assets under operating leases, payments made under the leases are recognised in the profit andloss account on a straight-line basis over the term of the lease. Lease incentives received are recognised in the profit and lossaccount as an integral part of the total lease payments made. Contingent rentals are charged to the profit and loss account in theaccounting period in which they are incurred.2.20 Finance costsInterest expense and similar charges are expensed in the profit and loss account in the period in which they are incurred.The interest component of finance lease payments is recognised in the profit and loss account using the effective interestrate method.59

Notes to the Financial Statements31 December 20053 Property, Plant and Equipment – Group60Hospital landFreeholdand buildings Construction medicalNote Freehold Leasehold in progress centre suites$’000 $’000 $’000 $’000CostAt 1 January 2004 200,955 330,933 4,867 7,828Additions 252 43 9,685 –Disposals/Write off (139) (685) (119) –Transfers 2,087 1,683 (11,995) –Translation differences onconsolidation (879) – – –At 31 December 2004 202,276 331,974 2,438 7,828At 1 January 2005 202,276 331,974 2,438 7,828Additions 756 83 9,763 –Assets acquired in businesscombinations 28 80,695 101,472 5,429 –Assets disposed on disposalof subsidiaries 28 – – – –Disposals/Write off (1,772) (11,254) – –Transfers 22 1,532 (2,983) –Translation differences onconsolidation (599) (1,366) (72) –At 31 December 2005 281,378 422,441 14,575 7,828Accumulated depreciation and impairment lossesAt 1 January 2004 21,300 56,039 – 385Depreciation charge for the year 2,371 5,991 – 72Impairment losses for the year – – – –Disposals/Write off (127) (214) – –Translation differences onconsolidation (100) – – –At 31 December 2004 23,444 61,816 – 457At 1 January 2005 23,444 61,816 – 457Depreciation charge for the year 2,672 6,558 – 72Impairment losses for the year – – – –Assets acquired in businesscombinations 28 6,889 5,974 – –Assets disposed on disposalof subsidiaries 28 – – – –Disposals/Write off (93) (10,910) – –Translation differences onconsolidation (36) (81) – –At 31 December 2005 32,876 63,357 – 529Carrying amountAt 1 January 2004 179,655 274,894 4,867 7,443At 31 December 2004 178,832 270,158 2,438 7,371At 1 January 2005 178,832 270,158 2,438 7,371At 31 December 2005 248,502 359,084 14,575 7,299

Notes to the Financial Statements31 December 2005Hospital andmedicalLeasehold Renovation equipment andoffice and and furniture, fittings Motorpremises improvements and equipment vehicles Total$’000 $’000 $’000 $’000 $’0004,297 9,371 211,380 3,158 772,789– 844 13,830 598 25,252(2,963) (290) (12,107) (266) (16,569)– – 8,225 – –– (1) (579) (11) (1,470)1,334 9,924 220,749 3,479 780,0021,334 9,924 220,749 3,479 780,002– 3,298 23,129 1,616 38,645– 11,873 114,902 4,086 318,457– – (318) (499) (817)– (97) (13,697) (1,686) (28,506)– (101) 1,530 – –– (161) (1,213) (47) (3,458)1,334 24,736 345,082 6,949 1,104,3231,496 4,496 134,826 2,043 220,58564 1,336 20,296 483 30,613– – 58 42 100(1,075) (233) (11,935) (220) (13,804)– (1) (256) (8) (365)485 5,598 142,989 2,340 237,129485 5,598 142,989 2,340 237,12923 1,546 22,691 594 34,156– – 89 – 89– 4,731 73,254 2,501 93,349– – (271) (177) (448)– (51) (12,413) (1,265) (24,732)– (63) (840) (30) (1,050)508 11,761 225,499 3,963 338,4932,801 4,875 76,554 1,115 552,204849 4,326 77,760 1,139 542,873849 4,326 77,760 1,139 542,873826 12,975 119,583 2,986 765,83061

Notes to the Financial Statements31 December 20053 Property, Plant and Equipment – Group (Cont’d)Property, plant and equipment with carrying value amounting to $121,206,000 (2004: $18,287,000) have been mortgaged tofinancial institutions for bonds and credit facilities granted to certain subsidiaries.The carrying amount of property, plant and equipment includes amounts totalling $7,273,000 (2004: $1,057,000) in respect ofassets held under finance leases.4 Intangible Assets – GroupCostGoodwill on OtherNote consolidation intangibles Total$’000 $’000 $’000At 1 January and 31 December 2004 36,213 – 36,213At 1 January 2005, as previously reported 36,213 – 36,213Effect of adopting FRS 103 (4,852) – (4,852)At 1 January 2005, as restated 31,361 – 31,361Acquisition through business combination 28 59,662 96,639 156,301Goodwill written off on dilution of interests in subsidiaries (1,158) – (1,158)Translation differences on consolidation (804) (1,301) (2,105)At 31 December 2005 89,061 95,338 184,399Accumulated amortisation and impairment lossesAt 1 January 2004 3,041 – 3,041Amortisation charge for the year 1,811 – 1,811At 31 December 2004 4,852 – 4,852At 1 January 2005, as previously reported 4,852 – 4,852Effect of adopting FRS 103 (4,852) – (4,852)At 1 January 2005, as restated – – –Amortisation charge for the year – 3,499 3,499Translation differences on consolidation – (1) (1)At 31 December 2005 – 3,498 3,498Carrying amountAt 1 January 2004 33,172 – 33,172At 31 December 2004 31,361 – 31,361At 1 January 2005 31,361 – 31,361At 31 December 2005 89,061 91,840 180,901Impairment test for cash-generating units containing goodwillGoodwill is allocated to the Group’s cash-generating units (CGU) identified according to business segment as follows:2005 2004$’000 $’000Healthcare Services 31,361 31,361Unallocated 57,700 –89,061 31,36162

Notes to the Financial Statements31 December 20054 Intangible Assets – Group (Cont’d)The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow projectionsbased on financial budgets approved by management covering a five-year period. The growth rate does not exceed the long-termaverage growth rate for the relevant business segment in which the CGU operates.Key assumptions used for value-in-use calculationsHealthcareServices Unallocated% %Gross margin 73.8 38.2Growth rate 7.9 4.8Discount rate 7.8 11.0These assumptions have been used for the analysis of each CGU within the business segment. Management determined thebudgeted gross margin based on past performance and its expectation for market development. The discount rates used arepre-tax and reflect specific risks relating to the relevant segments.5 Interests in Subsidiaries – Company2005 2004$’000 $’000Investments in subsidiaries 754,410 754,410Amounts due from subsidiaries (non-trade) 413,861 531,463Allowance for doubtful receivables (28,436) (70,100)385,425 461,363Amounts due to subsidiaries (non-trade) (449,698) (669,084)690,137 546,689The amounts due from/to subsidiaries form part of the Company’s net investment in the subsidiaries. These amounts are unsecuredand settlement is neither planned nor likely to occur in the foreseeable future.The amounts due from subsidiaries consist of $81,623,000 (2004: $150,624,000) interest-free loans and $332,238,000 (2004:$380,839,000) loans which bear interest at between 1% to 3.1525% per annum (2004: 1% to 3.1525% per annum).The amounts due to subsidiaries consist of $448,755,000 (2004: $668,150,000) interest-free loans and $943,000 (2004: $934,000)loans which bear interest at 1% per annum (2004: 1% per annum).Effective interest rates and repricing analysisEffective Within 1 to 5 Afterinterest rate 1 year years 5 years Total% $’000 $’000 $’000 $’0002005Amounts due from subsidiaries 1 to 3.1525 182,238 150,000 – 332,238Amounts due to subsidiaries 1 943 – – 9432004Amounts due from subsidiaries 1 to 3.1525 230,839 150,000 – 380,839Amounts due to subsidiaries 1 934 – – 93463

Notes to the Financial Statements31 December 20055 Interests in Subsidiaries – Company (Cont’d)Details of subsidiaries are as follows:Place ofincorporationEquity interestName of subsidiary Principal activities and business 2005 2004% %1Parkway Properties Pte Ltd Investment holding Singapore 100 100and its subsidiary:1Parkway Promotions Pte Ltd Promoters and organisers of Singapore 100 100conferences and seminars1M & P Investments Pte Ltd Investment trading and Singapore 100 100and its subsidiary:property development1S.P.I. Pte Ltd Investment trading Singapore 100 1001Weian Investments Pte Ltd Dormant Singapore 51 511Westront Pte Ltd Investment holding Singapore 100 100Fantasy Line Limited Liquidated during the year Channel Islands – 1001Parkway Hospitals Singapore Private hospitals ownership Singapore 100 100Pte Ltdand management1Parkway Group Healthcare Investment holding Singapore 100 100Pte Ltd and its subsidiaries:1iXchange Pte Ltd Agent and administrator Singapore 100 100(formerly known asfor managed care andAPIC Integrated Carerelated servicesPte Ltd)1Gleneagles Medical Provision of healthcare and Singapore 100 100Global Care Pte Ltdrelated services3Parkway-Healthcare Investment holding Mauritius 100 –(Mauritius) Ltd1Shenton Insurance Pte. Ltd. Underwrite accident and Singapore 100 –healthcare insurance policies1Mount Elizabeth Healthcare Investment holding Singapore 100 100Holdings Ltd and its subsidiaries:1Mount Elizabeth Medical Investment holding, rental and Singapore 100 100Holdings Ltdsale of medical suites andand its subsidiaries:retail units1East Shore Medical Investment holding Singapore 100 100Holdings Pte Ltd1MENA Services Pte Ltd Nursing agency Singapore 100 10064

Notes to the Financial Statements31 December 20055 Interests in Subsidiaries – Company (Cont’d)Place ofincorporationEquity interestName of subsidiary Principal activities and business 2005 2004% %1Mount Elizabeth Rental of medical equipment Singapore 66.48 66.48Ophthalmic Investments used for eye operationsPte Ltd1Charter Asia Behavioural Dormant Singapore 100 100Health Services Pte Ltd2Mount Elizabeth Provision of laboratory services Malaysia 100 100Healthcare Services to hospitals and clinicsSdn Bhd and its subsidiary:2Orifolio Options Sdn Bhd Investment holding Malaysia 100 1001Parkway Healthtech Investment holding Singapore 100 100Investments Pte Ltdand its subsidiaries:1Goldlink Investments Investment holding Singapore 100 100Pte. Ltd. and its subsidiaries:1Medi-Rad Associates Ltd Operation of radiology clinics Singapore 100 100and its subsidiaries:** Khim Medicare Dormant Singapore 75.51 75.51Private Limited1Radiology Consultants Radiology consultancy and Singapore 100 100Pte Ltdinterpretative services** The Diagnostic X-Ray Dormant Singapore 100 100Centre Pte Ltd1Drayson Investments Pte. Ltd. Investment holding Singapore 100 100and its subsidiary:1Parkway Laboratory Provision of comprehensive Singapore 100 100Services Ltddiagnostic laboratory services1Gleneagles Medical Holdings Investment holding Singapore 100 100Limited and its subsidiaries:1Gleneagles Medical Centre Medical centre development, Singapore 100 100Ltdownership and management1Gleneagles Radiology Radiology consultancy and Singapore 100 100Consultants Pte Ltdinterpretative services1C-Med Pte Ltd Dormant Singapore 100 10065

Notes to the Financial Statements31 December 20055 Interests in Subsidiaries – Company (Cont’d)Place ofincorporationEquity interestName of subsidiary Principal activities and business 2005 2004% %1Gleneagles CRC Pte Ltd Operation of a clinical Singapore 100 100and its subsidiaries:research centre4Gleneagles CRC (Thailand) To conduct global and local Thailand 100 100Company Limitedclinical trials5Gleneagles CRC (China) To conduct global and local People’s Republic 100 100Pte Ltd. clinical trials of China(formerly known asBeijing Parkway GleneaglesMedical and PharmaceuticalTechnology ConsultingPte Ltd)1Gleneagles Clinical Operation of a clinical Singapore 100 100Research International research centrePte. Ltd.1Gleneagles International Investment holding Singapore 100 100Pte. Ltd. and its subsidiaries:2Gleneagles JPMC Sdn Bhd Management and operation Brunei Darussalam 75 75of a cardiac and cardiothoraciccare centre2Gleneagles (Malaysia) Investment holding Malaysia 100 100Sdn Bhd and its subsidiary:6Pulau Pinang Clinic Private hospital ownership Malaysia 70 70Sdn. Bhd.and management1Gleneagles Management Provision of advisory, Singapore 100 100Services Pte Ltd andadministrative, managementits subsidiary:and consultancy services tohealthcare facilities* Gleneagles Heritage Dormant British Virgin Islands 75 75Hospital ManagementLimitedThermal International (S) Trading in medical supplies, Singapore – 51Pte Ltdequipment and healthcare productsThermal International Limited Dormant Hong Kong – 511Gleneagles Pharmacy Pte Ltd Medical centre ownership Singapore 100 1001Gleneagles Development Developing and managing Singapore 100 100Pte Ltdturnkey hospital projects1Parkway Informatics Pte Ltd Dormant Singapore 100 10066

Notes to the Financial Statements31 December 20055 Interests in Subsidiaries – Company (Cont’d)Place ofincorporationEquity interestName of subsidiary Principal activities and business 2005 2004% %7Gleneagles Hospital (UK) Investment holding United Kingdom 65 65Limited and its subsidiaries:7Cavendish Clinic Limited Dormant United Kingdom 100 1007The Heart Hospital Limited Under company voluntary United Kingdom 100 100arrangement* The Heart Hospital Dormant United Kingdom 100 100Properties Limited* Wholebond Limited Dormant United Kingdom 100 100* Merlion Healthcare Limited Dormant United Kingdom 100 1001Gleneagles Technologies To provide consultancy services, Singapore 100 100Services Pte Ltdperform equipment planning,procurement, testing andcommissioning, andmanage a healthcare facility1Ko, Djeng Gleneagles Pte Ltd To carry on the practice of Singapore 60 60dental surgeons and tooperate dental clinics** Gleneagles International Investment holding Singapore Note 32 68Laboratory ServicesPte Ltd and its subsidiary:** Gleneagles Investment Dormant Singapore Note 32 100Fujian Pte Ltd1Parkway Shenton Pte Ltd Investment holding and operation Singapore 100 100and its subsidiaries:of a network of clinics andprovision of comprehensivemedical and surgical advisoryservices1GMMC Maritime Medical Dormant Singapore 100 100Centre Pte. Ltd.(formerly known asGleneagles MaritimeMedical Centre Pte Ltd)* Gleneagles Maritime Dormant Hong Kong 100 100Medical Centre (China)Limited1Nippon Medical Care Pte Ltd Operation of clinics Singapore 70 7067

Notes to the Financial Statements31 December 2005685 Interests in Subsidiaries – Company (Cont’d)Place ofincorporationEquity interestName of subsidiary Principal activities and business 2005 2004% %1Parkway Shenton Investment holding Singapore 100 100International HoldingsPte. Ltd. and its subsidiary:8Parkway Shenton Operation of primary Vietnam 100 –Vietnam Limitedhealthcare centre1Shenton Family Medical Clinics To provide, establish and carry Singapore 100 100Pte Ltdon the business of clinics1Shenton Medical Holdings Investment holding Singapore 100 100Pte Ltd and its subsidiaries:1Shenton Medical Centre Dormant Singapore 100 100Pte Ltd1SMG Medical Group Pte. Ltd. Dormant Singapore 100 100(formerly known asThe Shenton MedicalGroup Pte Ltd)1EHS Health Screeners Dormant Singapore 100 100Pte. Ltd. (formerly known asExecutive Health ScreenersPte Ltd)2Swiss Zone Sdn Bhd Investment holding Malaysia 100 –and its subsidiaries:2Pantai Holdings Berhad Investment holding Malaysia 28.52 ^ –and its subsidiaries:2Pantai Group Resources Investment holding Malaysia 100 –Sdn. Bhd. and its subsidiaries:2Pantai Hospitals Sdn. Bhd. Investment holding and Malaysia 100 –and its subsidiaries: provision of managementand consultation servicesto hospitals and medicalcentres2Pantai Medical Centre Provision of medical, surgical Malaysia 100 –Sdn. Bhd.and hospital servicesand its subsidiaries:2Angiography Sdn. Bhd. Provision of cardiac Malaysia 66.8 –catherisation services2Magnetom Imaging Provision of medical diagnostic Malaysia 51.4 –Sdn. Bhd.services and other related ventures2PMC Radio-Surgery Provision of radiotherapy facilities Malaysia 100 –Sdn. Bhd.

Notes to the Financial Statements31 December 20055 Interests in Subsidiaries – Company (Cont’d)Place ofincorporationEquity interestName of subsidiary Principal activities and business 2005 2004% %2Ganda Gema Sdn. Bhd. Dormant Malaysia 100 –2Cheras Medical Centre Provision of medical, surgical Malaysia 100 –Sdn. Bhd.and hospital services2Pantai Klang Specialist Provision of medical, surgical Malaysia 100 –Medical Centre and hospital servicesSdn. Bhd.2Syarikat Tunas Pantai Provision of medical, surgical Malaysia 80.7 –Sdn. Bhd.and hospital services2Paloh Medical Centre Provision of medical, surgical Malaysia 77.8 –Sdn. Bhd.and hospital services2Hospital Pantai Provision of medical, surgical Malaysia 70 –Ayer Keroh Sdn. Bhd. and hospital servicesand its subsidiaries:2Mikrogema Sdn. Bhd. Provision of cardiac Malaysia 100 –catherisation services2HPAK Lithotripsy Provision of lithotripter services Malaysia 80 –Services Sdn. Bhd.2HPAK Cancer Centre Provision of services for Malaysia 70 –Sdn. Bhd.cancer diseases2Hospital Pantai Indah Provision of medical, surgical Malaysia 100 –Sdn. Bhd.and hospital servicesand its subsidiary:2HPI Dialysis Centre Dormant Malaysia 100 –Sdn. Bhd.2PT. Pantai Healthcare Dormant Indonesia 50 ## –Consulting2Pantai Support Services Investment holding and Malaysia 100 –Sdn. Bhd.provision of management andand its subsidiaries: consultation services tohealthcare related service sectors2Pantai Premier Pathology Provision of medical laboratory Malaysia 100 –Sdn. Bhd.services2Pantai Education Provision of educational programs Malaysia 100 –Sdn. Bhd.and training courses forhealthcare and related fields2Pantai Columbia Dormant Malaysia 100 –Sdn. Bhd.2Golden Home Care Provision of geriatric, rehabilitation Malaysia 100 –Sdn. Bhd.and convalescence care69

Notes to the Financial Statements31 December 20055 Interests in Subsidiaries – Company (Cont’d)Place ofincorporationEquity interestName of subsidiary Principal activities and business 2005 2004% %2Pantai Integrated Rehab Provision of rehabilitation services Malaysia 85 –Services Sdn. Bhd.2Pantai Fomema & Investment holding and supervision Malaysia 100 –Systems Sdn. Bhd. of medical examination of foreignand its subsidiary: workers in Malaysia2Fomema Sdn. Bhd. Monitoring of medical examination Malaysia 75 –of foreign workers in Malaysia2Pengkalan Usaha (M) Supervision of medical examination Malaysia 100 –Sdn. Bhd.of foreign workers in Malaysia2Healthpac Industries Dormant Malaysia 100 –Sdn. Bhd.2Conso-Asli Sdn. Bhd. Investment holding Malaysia 100 –and its subsidiary:2Kuala Lumpur Medical Dormant Malaysia 51 –Centre (Asia Pacific)Sdn. Bhd.2Cyberwide Finance Limited Investment holding British Virgin 100 –and its subsidiary:Islands2Maxgold Investments Investment holding British Virgin 100 –Group LimitedIslandsand its subsidiary:2Glossmere Investments Investment holding British Virgin 100 –LimitedIslands2Pantai Management Provision of administration Malaysia 100 –Resources Sdn. Bhd. support, training, research anddevelopment services2Credit Enterprise Sdn. Bhd. Dormant Malaysia 100 –2Seraya Sensa Sdn. Bhd. Investment holding Malaysia 100 –702Pantai Medivest Lanka Dormant Sri Lanka 50 # –(Private) Limited2PT. Pantai Healthcare Dormant Indonesia 50 ## –Consulting2Pantai Medivest Sdn. Bhd. Provision of clinical waste Malaysia 100 –and its subsidiaries: management, cleaning andmaintenance services for hospitals2Aroma Laundry & Provision of laundry and Malaysia 50.01 –Dry Cleaners Sdn. Bhd. dry cleaning servicesand its subsidiaries:

Notes to the Financial Statements31 December 20055 Interests in Subsidiaries – Company (Cont’d)Place ofincorporationEquity interestName of subsidiary Principal activities and business 2005 2004% %2Zoom Valet Services Provision of laundry and Malaysia 100 –Sdn. Bhd.dry cleaning services2Mediwash Sdn. Bhd. Dormant Malaysia 100 –2Pantai Medivest Lanka Dormant Sri Lanka 50 # –(Private) Limited2Pantai Medivest (India) Dormant India 100 –Private Limited1 Audited by KPMG, Singapore2 Audited by other member firms of KPMG International3 Audited by Nexia Baker & Arenson, Mauritius4 Audited by PLP Auditing Office, Thailand5 Audited by Beijing Yongtuo Certified Public Accountants, People’s Republic of China6 Audited by PricewaterhouseCoopers, Malaysia7 Audited by HH Burke & Company Limited, United Kingdom8 Audited by STT Audit & Advisory Partnership, Vietnam* Not required to be audited by law of country of incorporation** To commence liquidation before the forthcoming annual general meeting^Notwithstanding that the equity interest is not more than 50%, for the purpose of the financial statements, the Company hasaccounted for Pantai Holdings Berhad as a subsidiary in accordance with FRS 27, on the basis that, inter alia, the Company hasboard control of the latter.# Accounted for as a subsidiary as 50% of Pantai Medivest Lanka (Private) Limited is each held by Pantai Group ResourcesSdn. Bhd. and Pantai Medivest Sdn. Bhd.## Accounted for as a subsidiary as 50% of PT. Pantai Healthcare Consulting is each held by Pantai Hospitals Sdn. Bhd. and PantaiGroup Resources Sdn. Bhd.6 Interests in AssociatesGroupCompany2005 2004 2005 2004$’000 $’000 $’000 $’000Unquoted equity shares, at cost – – 64 64Share of net assets 48,857 8,377 – –48,857 8,377 64 64Amounts due from associates (mainly non-trade) 22,363 21,446 – –Allowance for doubtful receivables (11,917) (10,682) – –10,446 10,764 – –Amounts due to associates (mainly non-trade) (4,913) (4,779) (4,393) (4,588)Group54,390 14,362 (4,329) (4,524)The amounts due from associates include amounts totalling $22,014,000 (2004: $21,123,000) which form part of the Group’s netinvestment in the associates. These amounts are unsecured and interest-free, and settlement is neither planned nor likely to occurin the foreseeable future. The remaining balances are unsecured and interest-free, and are intended not to be repaid within thenext twelve months.The amounts due to associates include amounts totalling $4,500,000 (2004: $4,588,000) which form part of the Group’s netinvestment in the associates. These amounts are unsecured and interest-free, and settlement is neither planned nor likely to occurin the foreseeable future. The remaining balances are unsecured and interest-free, and are intended not to be repaid within thenext twelve months.71

Notes to the Financial Statements31 December 20056 Interests in Associates (Cont’d)CompanyThe amount due to associate forms part of the Company’s net investment in the associate. The amount is unsecured andinterest-free, and settlement is neither planned nor likely to occur in the foreseeable future.Details of associates are set out in note 32.The financial information of the associates are as follows:2005 2004$’000 $’000Assets and liabilitiesTotal assets 633,108 158,784Total liabilities (334,239) (174,333)2005 2004$’000 $’000ResultsRevenue 97,487 72,985Profit/(Loss) after taxation 11,002 (8,571)7 Interests in Partnerships – GroupThese comprise interests in the following partnerships:Effective interestPlace ofheld by theincorporationGroupName of partnership Principal activities and business 2005 2004% %Shenton Family Medical Clinic Operations of medical clinic Singapore 60 60(Bukit Gombak)Shenton Family Medical Clinic Operations of medical clinic Singapore 50 50(Serangoon)Shenton Family Medical Clinic Operations of medical clinic Singapore 50 50(Bedok Reservoir)Shenton Family Medical Clinic Operations of medical clinic Singapore 50 50(Jurong East)Shenton Family Medical Clinic Operations of medical clinic Singapore 50 –(Tampines)The Group exercises joint control with the other partners over the financial and operational decisions of these partnerships.Accordingly, the results in these partnerships are equity accounted for in the Group’s financial statements.72

Notes to the Financial Statements31 December 20057 Interests in Partnerships – Group (Cont’d)The interests in partnerships comprise:2005 2004$’000 $’000Current accountsCapital contributions 206 166Share of post-acquisition profits:At 1 January 695 407Share of current year’s profits 376 288At 31 December 1,071 6951,277 861Amounts due from partnerships (mainly non-trade) – 35Amounts due to partnerships (mainly non-trade) (1,154) (705)Total 123 191The amounts due from/to partnerships are unsecured and interest-free, and are intended not to be repaid within the next twelvemonths.The partners’ current account balances are represented as follows:2005 2004$’000 $’000Property, plant and equipment 16 28Goodwill 67 –Inventories 216 116Trade receivables 54 60Other receivables, deposits and prepayments 167 145Amount due from the Group 1,154 705Amounts due from other partners 969 620Cash and cash equivalents 408 4473,051 2,121Trade payables (38) (45)Other payables and accrued operating expenses (45) (51)Amount due to the Group – (35)(83) (131)Net assets 2,968 1,990Partners’ current accounts:Capital contributions:The Group 206 166Other partners 183 143389 309Share of post-acquisition profits:The Group 1,071 695Other partners 1,508 9862,579 1,6812,968 1,99073

Notes to the Financial Statements31 December 20058 Other Financial AssetsGroupCompany2005 2004 2005 2004$’000 $’000 $’000 $’000Club memberships 122 114 – –Non-current investments:Quoted equity securities available-for-sale 28,726 45,811 – –Unquoted equity securities available-for-sale 4,566 5,341 1,013 1,013Impairment losses (4,530) (4,610) (1,013) (1,013)36 731 – –28,884 46,656 – –Group2005 2004$’000 $’000Current investmentsQuoted equity securities available-for-sale 39 42Quoted equity securities held for trading 181 169220 211With the adoption of FRS 39, the Group states available-for-sale investments at fair value. The differences between the fair valuesand the carrying amounts of these investments at 1 January 2005, excluding impairment losses, are taken to the opening balanceof the fair value reserve at that date. Impairment losses at 1 January 2005 are taken to the opening balance of accumulated profitsat that date.Non-current investments in unquoted available-for-sale equity securities are stated at cost as their fair values cannot be reliablymeasured in view that they do not have a quoted market price in an active market, the range of reasonable fair value estimates issignificant and the probabilities of the various estimates cannot be reasonably assessed.Non-current investments in quoted available-for-sale equity securities include a 22% effective equity interest held in Auric PacificGroup Ltd with a carrying value of $28,043,000 (2004: $43,838,000). The investment has been accounted for as a non-currentinvestment as the Group does not have significant influence over the financial and operational policies of the investee.9 Notes Receivables – Group and CompanyNotes receivables relate to the consideration receivable in respect of the Group’s divestment in an associate in the prior year. Thenotes are denominated in Hong Kong dollars and are unsecured and bear interest at a fixed rate of 1% per annum. The periods inwhich they mature are as follows:Effective Within 1 to 5 Afterinterest rate 1 year years 5 years Total% $’000 $’000 $’000 $’0002005Non-current 3.82 – 35,463 – 35,463Current 3.07 6,021 – – 6,0212004Non-current 1 – 42,106 – 42,106Current 1 6,194 – – 6,19474

Notes to the Financial Statements31 December 200510 Deferred Tax (Assets) / LiabilitiesMovements in deferred tax assets and liabilities (prior to offsetting of balances) during the year are as follows:GroupCharged/Effects of Acquisition of Disposal of (Credited)At adopting subsidiaries subsidiaries to profit and Translation At1 Jan 2005 FRS 39 (Note 28) (Note 28) loss account differences 31 Dec 2005$’000 $’000 $’000 $’000 $’000 $’000 $’000Deferred tax assetsTrade receivables (10) – (270) – (275) 10 (545)Other allowances (82) – – – 29 – (53)Notes receivables – (421) – – 209 – (212)Tax value of unutilised taxlosses carried forward – – (3,169) – 1,312 116 (1,741)Tax value of unabsorbedinvestment allowancescarried forward (250) – – – 250 – –(342) (421) (3,439) – 1,525 126 (2,551)Deferred tax liabilitiesProperty, plant andequipment 28,277 – 8,722 (9) (445) (266) 36,279Interest receivables 35 – – _ (35) – –28,312 – 8,722 (9) (480) (266) 36,279Net deferred tax liabilities 27,970 (421) 5,283 (9) 1,045 (140) 33,728CompanyDeferred tax assetNotes receivables – (421) – – 209 – (212)Deferred tax liabilityInterest receivables 35 – – – (35) – –Net deferred taxliabilities/(assets) 35 (421) – – 174 – (212)Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against current taxliabilities and when the deferred taxes relate to the same taxation authority. The amounts determined after appropriate offsettingare included in the balance sheet as follows:Group2005 2004$’000 $’000Deferred tax assets (1,813) –Deferred tax liabilities 35,541 27,97075

Notes to the Financial Statements31 December 200511 Completed Properties Held for Resale – Group2005 2004$’000 $’000Completed properties held for resale, at cost 806 806Allowance for foreseeable losses (227) (227)12 Inventories – Group579 5792005 2004$’000 $’000Inventories 17,294 10,438Allowance for inventory obsolescence (347) (375)16,947 10,063Inventories with carrying value of $844,000 (2004: Nil) have been pledged as security for bank overdraft facilities granted tocertain subsidiaries.13 Trade Receivables – Group2005 2004$’000 $’000Trade receivables 93,247 43,693Allowance for doubtful receivables (17,834) (10,807)75,413 32,88614 Other Receivables, Deposits and PrepaymentsGroupCompany2005 2004 2005 2004$’000 $’000 $’000 $’000Interest receivables 258 325 203 322Prepayments 2,349 1,533 216 295Sundry deposits 4,973 3,683 2 17,580 5,541 421 618Other receivables 16,366 4,046 16 16Allowance for doubtful receivables (250) (251) – –16,116 3,795 16 1623,696 9,336 437 634Other receivables are unsecured and interest-free, and are repayable within the next twelve months.76

Notes to the Financial Statements31 December 200515 Cash and Cash EquivalentsGroupCompany2005 2004 2005 2004$’000 $’000 $’000 $’000Commercial papers – 28,000 – 28,000Fixed deposits with financial institutions 52,995 145,891 3,215 144,069Cash and bank balances 53,029 22,274 5,477 2,056106,024 196,165 8,692 174,125Bank overdrafts:– secured (2,288) –– unsecured (1,061) (997)(3,349) (997)Fixed deposits pledged (13,554) –Cash and cash equivalents inConsolidated Statement of Cash Flows 89,121 195,168Fixed deposits pledged comprise sinking fund for the redemption of bonds and those pledged to banks and finance companies forcredit facilities granted to certain subsidiaries.The bank overdrafts are secured by certain property, plant and equipment and other assets as disclosed in note 19(c).The effective interest rates per annum relating to commercial papers, fixed deposits with financial institutions and bank overdraftsat the balance sheet date are as follows:GroupCompany2005 2004 2005 2004% % % %Commercial papers – 1.5875 – 1.5875Fixed deposits with financial institutions 1.44 to 4 0.1875 to 1.2 3 to 4 0.1875 to 1.2Bank overdrafts 7.25 to 7.75 5.25 – –Interest rates reprice at intervals of one, three or six months.16 Share Capital – Company2005 2004No. ofNo. ofshares $’000 shares $’000Authorised:Ordinary shares of $0.25 each 2,000,000,000 500,000 2,000,000,000 500,000Issued and fully-paid:At 1 January 722,911,462 180,728 719,983,462 179,996Issue of shares under share option scheme 4,101,750 1,025 2,928,000 732At 31 December 727,013,212 181,753 722,911,462 180,728The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per shareat meetings of the Company. All shares rank equally with regard to the Company’s residual assets.During the financial year, the Company issued the following ordinary shares pursuant to the Parkway Share Option Scheme 2001:(i)(ii)(iii)(iv)(v)1,120,750 ordinary shares of $0.25 each at a premium of $0.615 per share;100,000 ordinary shares of $0.25 each at a premium of $0.7433 per share;652,500 ordinary shares of $0.25 each at a premium of $0.69 per share;2,040,500 ordinary shares of $0.25 each at a premium of $0.585 per share; and188,000 ordinary shares of $0.25 each at a premium of $1.1767 per share.77

Notes to the Financial Statements31 December 200517 Employee BenefitsEmployee benefits in the financial statements represent liabilities for short-term accumulating compensated absences.In addition, certain employees are eligible to participate in the following equity compensation benefits:Parkway Share Option Scheme 2001 (Parkway Scheme 2001)The Parkway Scheme 2001 was approved by the shareholders of the Company at an Extraordinary General Meeting held on 18January 2001. Details of the Parkway Scheme 2001 and amendments effected by a resolution passed at the Extraordinary GeneralMeeting of the Company held on 4 July 2001 were set out in the Directors’ Report for the year ended31 December 2001. The Parkway Scheme 2001 is administered by the Company’s Share Option Scheme Committee, comprising4 directors, Timothy David Dattels, Richard Seow Yung Liang, Sunil Chandiramani and Ashish Jaiprakash Shastry.Other statutory information regarding the Parkway Scheme 2001 is set out below:(i)(ii)The exercise price of the option is determined at the average of the last dealt price of the Company’s shares on the SingaporeExchange Securities Trading Limited (SGX-ST) prevailing on the three consecutive trading days immediately preceding thedate of grant of such options.The options vest one year after the grant date in accordance with the vesting schedule set out below:Vesting schedulePercentage of shares overwhich the options are exercisableOn or before the first anniversary of the grant dateNilAfter the first anniversary, and on or before the second anniversary of the grant date 25%After the second anniversary, and on or before the third anniversary of the grant date 50%After the third anniversary, and on or before the fourth anniversary of the grant date 75%After the fourth anniversary, and on or before the fifth anniversary of the grant date 100%(iii)The options granted expire on the fifth anniversary of the grant date unless they have been cancelled or have lapsed prior tothat date.Movements in the number of share options and their related weighted average exercise prices are as follows:WeightedWeightedaverageaverageexercise No. of exercise No. ofprice options price options2005 2005 2004 2004$ $At 1 January 0.9932 10,922,000 0.8600 11,420,500Granted and accepted 2.0679 6,865,000 1.4267 2,600,000Exercised 0.8909 (4,101,750) 0.8676 (2,928,000)Cancelled 1.1344 (575,500) 0.8412 (170,500)At 31 December 1.5818 13,109,750 0.9932 10,922,000Exercisable at 31 December 0.9629 3,425,250 0.8637 4,932,187Options exercised during the year resulted in 4,101,750 (2004: 2,928,000) new ordinary shares being issued at a weightedaverage price of $0.8909 (2004: $0.8676) each. Options were exercised on a regular basis throughout both years. The weightedaverage share price during the year was $1.86 (2004: $1.23) per share.78

Notes to the Financial Statements31 December 200517 Employee Benefits (Cont’d)Parkway Share Option Scheme 2001 (Parkway Scheme 2001) (Cont’d)Share options outstanding at the end of the year have the following expiry dates and exercise prices:Exercise Options Optionsprice outstanding outstandingDate of grant of options Expiry date $ 2005 20049 April 2001 9 April 2006 0.8650 736,000 1,869,7508 May 2001 8 May 2006 0.9933 – 100,00019 September 2001 19 September 2006 0.9400 375,000 1,115,00019 April 2002 19 April 2007 0.8350 2,996,750 5,237,25019 November 2004 19 November 2009 1.4267 2,137,000 2,600,00015 November 2005 15 November 2010 2.0530 3,855,000 –9 December 2005 9 December 2010 2.0870 3,010,000 –13,109,750 10,922,000The fair value of services received in return for share options granted are measured by reference to the fair value of share optionsgranted. The estimate of the fair value of the services received is measured based on the Trinomial option pricing model. Theexpected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability,exercise restrictions and behavioural considerations.19 November 15 November 9 DecemberDate of grant of options 2004 2005 2005Fair value of share options and assumptionsFair value at measurement date $0.217 $0.258 $0.388Share price $1.45 $2.01 $2.14Exercise price $1.4267 $2.053 $2.087Expected volatility 28.0% 28.0% 28.0%Expected option life 3.3 years 3.5 years 4.0 yearsExpected dividends 29.0% 29.0% 29.0%Risk-free interest rate 1.87% 2.89% 3.13%The expected volatility is based on the historic volatility (calculated based on the weighted average expected life of the shareoptions), adjusted for any expected changes to future volatility due to publicly available information.There are no market conditions associated with the share option grants. Service conditions and non-market performance conditionsare not taken into account in the grant date fair value measurement of the services received.Pantai Holdings Berhad Employee Share Option Scheme (Pantai ESOS)The Pantai ESOS was approved by the shareholders and bondholders of Pantai Holdings Berhad at an Extraordinary GeneralMeeting held on 5 February 2002.At an Extraordinary General Meeting held on 14 September 2004, the subsidiary obtained approval from its shareholders andbondholders to vary certain Bye-Laws of its existing Pantai ESOS and certain clauses of the subsidiary’s Articles of Association aftertaking into consideration the amendments to the Bursa Securities Listing Requirements in relation to share schemes for employees,which became effective on 10 February 2004.Details of the Pantai ESOS were set out in the Directors’ Report of the subsidiary for the year ended 30 June 2005.The Pantai ESOS is administered by the subsidiary’s Options Committee.79

Notes to the Financial Statements31 December 200517 Employee Benefits (Cont’d)Pantai Holdings Berhad Employee Share Option Scheme (Pantai ESOS) (Cont’d)Other statutory information regarding the Pantai ESOS is set out below:(i)(ii)the exercise price of the option is determined at a discount of not more than 10% from the weighted average of the meanmarket quotation of the ordinary shares of the subsidiary as quoted and shown in the daily official list issued by the BursaMalaysia Securities Berhad for the five preceding market days prior to the date of offer or at par value of the ordinary sharesof the subsidiary, whichever is higher;The options vest from the date of grant and are in accordance with the vesting schedule set out below:For employees and directors who are granted between 1 and 49,999 options, the options expire after three years unless theyhave been cancelled or lapsed prior to that date. The vesting schedule for the options is as follows:Vesting schedulePercentage of shares overwhich the options are exercisableOn or before the first anniversary of the grant date 40%After the first anniversary, and on or before the second anniversary of the grant date 80%After the second anniversary, and on or before the third anniversary of the grant date 100%For employees and directors who are granted 50,000 or more options, the options expire after five years unless they havebeen cancelled or lapsed prior to that date. The vesting schedule for the options is as follows:Vesting schedulePercentage of shares overwhich the options are exercisableOn or before the first anniversary of the grant date 40%After the first anniversary, and on or before the second anniversary of the grant date 60%After the second anniversary, and on or before the third anniversary of the grant date 80%After the third anniversary, and on or before the fourth anniversary of the grant date 90%After the fourth anniversary, and on or before the fifth anniversary of the grant date 100%Movements in the number of share options and their related weighted average exercise prices are as follows:Weightedaverageexercise No. ofprice options2005 2005RMAt date of acquisition 1.00 18,704,800Granted 1.00 –Exercised 1.00 (13,801,800)Cancelled 1.00 (3,500)At 31 December 2005 1.00 4,899,500Exercisable at 31 December 1.00 3,286,420Options exercised from the date of acquisition to 31 December 2005 resulted in 13,801,800 new ordinary shares in the subsidiariesbeing issued at a weighted average price of RM1.00 each. Options were exercised on a regular basis throughout the period. Theweighted average share price during the period was RM1.87 per share.80

Notes to the Financial Statements31 December 200517 Employee Benefits (Cont’d)Pantai Holdings Berhad Employee Share Option Scheme (Pantai ESOS) (Cont’d)Share options outstanding at the end of the year have the following expiry dates and exercise prices:ExerciseOptionspriceoutstandingDate of grant of options Expiry date RM 200524 June 2002 24 June 2007* 1.00 1,106,00024 June 2002 24 June 2007 1.00 246,2005 September 2002 5 September 2007* 1.00 16,0005 September 2002 5 September 2007 1.00 6,00016 June 2003 16 June 2006 1.00 45,00016 June 2003 16 June 2008 1.00 33,4005 November 2003 5 November 2006 1.00 1,347,2005 November 2003 5 November 2008 1.00 174,6008 December 2004 8 December 2007 1.00 571,7008 December 2004 8 December 2009 1.00 21,9001 August 2005 1 August 2008 1.00 1,226,9001 August 2005 1 August 2010 1.00 104,6004,899,500The fair value of services received in return for share options granted are measured by reference to the fair value of share optionsgranted. The estimate of the fair value of the services received is measured based on the Trinomial option pricing model. Theexpected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability,exercise restrictions and behavioural considerations.24 Jun 5 Sept 1 Mar 16 Jun 5 Nov 8 Dec 1 AugDate of grant of options 2002* 2002* 2003** 2003 2003 2004 2005Fair value of share options and assumptionsFair value at modification/measurement date RM0.086 RM0.086 RM0.141 RM0.176 RM0.312 RM0.189 RM0.117Share price RM0.990 RM0.990 RM0.665 RM0.775 RM1.000 RM0.935 RM1.030Exercise price RM1.00 RM1.00 RM1.00 RM1.00 RM1.00 RM1.00 RM1.00Expected volatility 26% 26% 51% 48% 49% 44% 26%Expected option life 1 year 1 year 3.7 year 3.49 year 3.27 year 2.44 year 1.14 yearExpected dividends 5% 5% 5% 5% 5% 5% 5%Risk-free interest rate 2.350% 2.350% 3.035% 2.944% 3.617% 2.663% 2.356%* On 20 June 2005, the contractual expiration of the options belonging to employees and directors who were granted 1 to 49,999 options wasextended by 2 years from 24 June 2005 and 5 September 2005 to 24 June 2007 and 5 September 2007 respectively.** The options, which were not yet vested as at 1 January 2005, became vested and were fully exercised during the financial year.The expected volatility is based on the historic volatility (calculated based on the weighted average expected life of the shareoptions), adjusted for any expected changes to future volatility due to publicly available information.There are no market conditions associated with the share option grants. Service conditions and non-market performance conditionsare not taken into account in the grant date fair value measurement of the services received.81

Notes to the Financial Statements31 December 200518 ReservesThe application of the share premium account of the Company is governed by Section 69 of the Companies Act, Chapter 50.The capital reserves comprise premium on bonds previously issued, net of issuing expenses.The exchange fluctuation reserves of the Group comprise foreign exchange differences arising from the translation of the financialstatements of foreign operations whose functional currencies are different from the functional currency of the Company and theexchange differences on monetary items which form part of the Group’s net investment in the foreign operation, provided certainconditions are met.The fair value reserve includes the cumulative net change in the fair value of available-for-sale investments until the investmentis derecognised.The share option reserve comprises the cumulative value of employee services received for the issue of share options.19 Interest-Bearing BorrowingsGroupCompany2005 2004 2005 2004$’000 $’000 $’000 $’000Non-current liabilitiesSecured term loans 17,623 – – –Redeemable secured bonds 63,005 – – –Unsecured floating rate notes 160,000 160,000 160,000 160,000Unsecured fixed rate notes 150,000 150,000 150,000 150,000Finance lease liabilities 3,983 793 – –394,611 310,793 310,000 310,000Current liabilitiesSecured term loans 2,481 – – –Unsecured floating rate notes – 30,000 – 30,000Unsecured short-term credit facilities 40,000 46,968 – –Finance lease liabilities 1,697 358 – –44,178 77,326 – 30,000Total borrowings 438,789 388,119 310,000 340,000Maturity of borrowingsGroupAfter 1 yearWithin but within After1 year 5 years 5 years Total$’000 $’000 $’000 $’0002005Secured term loans:RM variable at 7.50% to 7.75% per annum 1,601 5,707 133 7,441RM fixed at 6.22% to 6.75% per annum 880 11,783 – 12,663Redeemable secured bonds:RM fixed at 5% per annum – 63,005 – 63,005Unsecured floating rate notes:S$ variable at 1.5875% to 2.5875% per annum – 160,000 – 160,000Unsecured fixed rate notes:S$ fixed at 2.45% to 3.10% per annum – 150,000 – 150,000Unsecured short-term credit facilities:S$ fixed at 1.6375% to 2.27% per annum 40,000 – – 40,000Finance lease liabilities:Fixed at 3.06% to 8.15% per annum 1,697 3,983 – 5,68044,178 394,478 133 438,78982

Notes to the Financial Statements31 December 200519 Interest-Bearing Borrowings (Cont’d)Maturity of borrowings (Cont’d)After 1 yearWithin but within After1 year 5 years 5 years Total$’000 $’000 $’000 $’000Group2004Unsecured floating rate notes:S$ variable at 1.5875% to 2.24045% per annum 30,000 160,000 – 190,000Unsecured fixed rate notes:S$ fixed at 2.45% to 3.10% per annum – 150,000 – 150,000Unsecured short-term credit facilities:S$ fixed at 1.49% to 1.6375% per annum 46,968 – – 46,968Finance lease liabilities:Fixed at 3.54% to 9.45% per annum 358 793 – 1,151Company77,326 310,793 – 388,1192005Unsecured floating rate notes:S$ variable at 1.5875% to 2.5875% per annum – 160,000 – 160,000Unsecured fixed rate notes:S$ fixed at 2.45% to 3.10% per annum – 150,000 – 150,000– 310,000 – 310,0002004Unsecured floating rate notes:S$ variable at 1.5875% to 2.24045% per annum 30,000 160,000 – 190,000Unsecured fixed rate notes:S$ fixed at 2.45% to 3.10% per annum – 150,000 – 150,00030,000 310,000 – 340,000(a)In 1999, the Company entered into a Dual Currency Medium Term Notes Programme (DCMTN Programme) with a bank toissue up to $200 million 7-year Floating Rate Notes (FRN).The FRNs constitute direct and unconditional obligations of the Company. Pursuant to the DCMTN Programme, there is anegative pledge that the Company and its principal subsidiaries will not create any security over their assets except asprovided for under the terms of the DCMTN Programme. The FRNs rank pari passu without any preference or priority amongthemselves and at least pari passu with all other unsecured obligations of the Company (other than subordinated obligationsand obligations having priorities created by law). Unless previously redeemed or purchased and cancelled, the FRNs areredeemable at their respective principal amounts on their maturity date.The following floating rate notes are outstanding as at the balance sheet date:2005 2004$’000 $’000Floating rate notes due in October 2009 100,000 100,00083

Notes to the Financial Statements31 December 200519 Interest-Bearing Borrowings (Cont’d)(b)In 2001, the Company established a Multi-Currency Unsecured Medium Term Note Programme (MCMTN Programme) withanother bank to issue fixed or floating rate notes to refinance existing loans and for working capital requirements.In this connection, the Company entered into a Trust Deed which includes the following terms:(i)(ii)the Company and its subsidiaries will not create any security on or over their respective assets except for any existingsecurities; andthe Company must ensure that it will continue to own directly or indirectly not less than 75% in Gleneagles MedicalHoldings Limited and Mount Elizabeth Medical Holdings Ltd.The following fixed rate and floating rate notes are outstanding as at the balance sheet date:2005 2004$’000 $’000Fixed rate notes due in:– October 2007 75,000 75,000– October 2009 75,000 75,000150,000 150,000Floating rate notes due in:– June 2005 – 30,000– October 2007 30,000 30,000– October 2009 30,000 30,00060,000 90,000(c)The secured bank overdrafts and term loans of subsidiaries are secured by the following:(i)(ii)(iii)first fixed charge over freehold land and leasehold land and buildings of certain subsidiaries;fixed and floating charge over assets of certain subsidiaries; andcorporate guarantee by a subsidiary.(d)The RM150 million 5% Redeemable Secured Bonds 2002/2007 (Bonds) were constituted by a Trust Deed dated 21 January2002 made between a subsidiary and the Trustee for the holders of the Bonds. Fixed coupon rate of 5% per annum ispayable semi-annually in arrears until the maturity date and the Bonds will be redeemed at 100% of their principal amounttogether with interest accrued to the maturity date unless they have been previously redeemed or purchased and cancelled.The carrying value of the Bonds at 31 December 2005 included unamortised discount amounting to RM6,790,000.The Bonds are secured against the following:(i)a first legal charge on lands and buildings owned by a subsidiary; and(ii) a Deed of Assignment of Sinking Fund Account (Note 15).84

Notes to the Financial Statements31 December 200519 Interest-Bearing Borrowings (Cont’d)Finance lease liabilitiesThe Group has obligations under finance leases that are repayable as follows:Payments Interest Principal Payments Interest Principal2005 2005 2005 2004 2004 2004$’000 $’000 $’000 $’000 $’000 $’000Repayable:Within 1 year 2,031 334 1,697 426 68 358After 1 year butwithin 5 years 4,426 443 3,983 870 77 793Under the terms of the lease agreements, no contingent rents are payable.Effective interest rates and repricing/maturing analysis6,457 777 5,680 1,296 145 1,151EffectiveFixed interest rate maturinginterest Floating within 1 to 5 afterrate interest 1 year years 5 years Total% $’000 $’000 $’000 $’000 $’000Group2005Secured term loans 6.22 to 7.75 7,441 880 11,783 – 20,104Redeemable secured bonds 8.62 – – 63,005 – 63,005Unsecured floating rate notes 1.5875 to 160,000 – – – 160,0002.5875Unsecured fixed rate notes 2.45 to 3.10 – – 150,000 – 150,000Unsecured short-termcredit facilities 1.6375 to 2.27 – 40,000 – – 40,000Finance lease liabilities 3.06 to 8.15 – 317 5,363 – 5,6802004Unsecured floating rate notes 1.5875 to 190,000 – – – 190,0002.24045Unsecured fixed rate notes 2.45 to 3.10 – – 150,000 – 150,000Unsecured short-term credit facilities 1.49 to 1.6375 – 46,968 – – 46,968Finance lease liabilities 3.54 to 9.45 – 25 1,126 – 1,151Company2005Unsecured floating rate notes 1.5875 to 160,000 – – – 160,0002.5875Unsecured fixed rate notes 2.45 to 3.10 – – 150,000 – 150,0002004Unsecured floating rate notes 1.5875 to 190,000 – – – 190,0002.24045Unsecured fixed rate notes 2.45 to 3.10 – – 150,000 – 150,00085

Notes to the Financial Statements31 December 200520 Other PayablesGroupCompany2005 2004 2005 2004$’000 $’000 $’000 $’000Other payables 36,773 7,943 562 510Rental deposits 1,343 1,185 – –Deposits and advances 397 59 – –Advanced billings 942 993 – –Other payables are unsecured and interest-free, and are repayable within the next twelve months.39,455 10,180 562 51021 Revenue – GroupRevenue represents invoiced value of hospital and other healthcare services rendered, proceeds from sale of equity investments,rental income and dividend income, after eliminating inter-company transactions.The amount of each significant category of revenue recognised during the year is as follows:2005 2004$’000 $’000Revenue from hospital services and other healthcare services 539,341 398,560Proceeds from sale of equity investments – 350Rental income 8,014 7,172Gross dividends:– Quoted equity investments 1,615 1,492– Unquoted equity investments 1 258548,971 407,83222 Profit from Operations before Taxation – GroupProfit from operations before taxation includes the following:2005 2004$’000 $’000Interest income received and receivable from:– Banks and financial institutions 1,532 615–Others 446 543Imputed interest income 1,047 –Non-audit fees paid to auditors of the Company (104) (223)Contributions to defined contribution plans included in staff costs (12,625) (11,579)Increase in liability for short-term accumulating compensated absences (267) (633)Value of employee services received for issue of share options (444) (35)Exchange gain/(loss) (net) 612 (4,377)Property, plant and equipment written off (152) (130)Inventories written off (109) (29)(Loss)/Gain on disposal of property, plant and equipment (462) 92Gain on disposal of non-current equity investments 283 671Gain on disposal of an associate – 3,461Loss on disposal of subsidiaries (92) –Loss on dilution of interests in subsidiaries (2,141) –Changes in fair value of financial assets held for trading 8 (11)Impairment loss on/Allowance for diminution in value of available-for-sale financial assets (1,580) (1,447)86

Notes to the Financial Statements31 December 200522 Profit from Operations before Taxation – Group (Cont’d)2005 2004$’000 $’000Allowance for doubtful debts:– Amounts due from associates (516) (1,848)–Trade receivables (2,633) (2,460)Operating lease expenses (8,343) (6,546)Interest paid and payable to:– Banks and financial institutions (1,331) (695)– Fixed and floating rate notes (6,745) (4,061)– Bonds (841) ––Others (541) (347)Amortisation of discount on bonds (598) –23 Key Management Personnel Compensation – GroupKey management personnel of the Group are those persons having the authority and responsibility for planning, directing andcontrolling the activities of the Group. The Directors of the Company and the General Managers of the significant subsidiaries areconsidered as key management personnel of the Group.The key management personnel compensation are as follows:2005 2004$’000 $’000Short-term employee benefits 6,709 4,639Termination benefits 1,037 –Equity compensated benefits 219 –7,965 4,63924 Income Tax Expense – GroupNote 2005 2004$’000 $’000Current tax expenseCurrent year 20,792 15,125Underprovided in prior years 11 6020,803 15,185Deferred tax expenseMovements in temporary differences 920 1,193Reduction in tax rate – (2,380)Underprovided in prior years 125 83610 1,045 (351)Foreign taxation 160 398Income tax expense 22,008 15,23287

Notes to the Financial Statements31 December 200524 Income Taxes – Group (Cont’d)Reconciliation of effective tax rate2005 2004% $’000 % $’000Profit from operations before taxation 89,398 67,976Income tax using Singapore tax rate 20.0 17,880 20.0 13,595Effect of reduction in tax rate – – (3.5) (2,380)Effect of different tax rates in other countries 1.4 1,221 0.8 575Income not subject to tax (1.4) (1,228) (2.7) (1,837)Expenses not deductible for tax purposes 4.5 4,039 5.0 3,423Utilisation of previously unrecognised tax losses (0.2) (206) (0.4) (289)Deferred tax asset not recognised – 6 1.3 851Underprovided in prior years 0.1 136 1.3 896Foreign taxation 0.2 160 0.6 398Unrecognised temporary differencesThe following temporary differences have not been recognised:24.6 22,008 22.4 15,2322005 2004$’000 $’000(Taxable)/deductible temporary differences (647) 825Unutilised tax losses 19,800 16,342Unabsorbed wear and tear allowances 561 50919,714 17,676The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective countries inwhich certain subsidiaries operate. The deductible temporary differences do not expire under current tax legislation. Deferred taxassets of the Group have not been recognised in respect of these items because it is not probable that future taxable profit will beavailable against which the Group can utilise the benefits.25 Earnings Per Share2005 2004$’000 $’000Basic earnings per shareBasic earnings per share is based on:Net profit attributable to ordinary shareholders 61,969 50,4632005 2004Number of sharesWeighted average number of ordinary shares 725,046,367 721,274,79688

Notes to the Financial Statements31 December 200525 Earnings Per Share (Cont’d)Diluted earnings per shareFor the purpose of calculating the diluted earnings per ordinary share, the weighted average number of ordinary shares in issue isadjusted to take into account the dilutive effect arising from the dilutive share options, with the potential ordinary shares weightedfor the period outstanding.The effect of the exercise of share options on the weighted average number of ordinary shares in issue is as follows:2005 2004Number of sharesWeighted average number of ordinary shares,used in the calculation of basic earnings per share 725,046,367 721,274,796Weighted average number of unissued ordinary shares under share options 6,806,106 8,322,000Weighted average number of shares that would have beenissued at average market price (3,580,295) (5,842,729)Weighted average number of ordinary shares (diluted) 728,272,178 723,754,067In prior year, options to purchase 2,600,000 ordinary shares at $1.4267 per share were outstanding but were not included in thecomputation of diluted earnings per share because these options were anti-dilutive.26 Changes in Accounting PoliciesThe accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31December 2005.The changes in accounting policies arising from the adoption of FRS 39 Financial Instruments: Recognition and Measurement,FRS 102 Share-based Payment, FRS103 Business Combinations, FRS 36 (revised) Impairment of Assets and FRS 38 (revised)Intangible Assets are summarised below:FRS 39 Financial Instruments: Recognition and MeasurementThe adoption of FRS 39 resulted in the Group measuring its available-for-sale and trading investments at fair values. Loans andreceivables and financial liabilities are stated at amortised cost instead of cost. Previously, investments held for long-term arestated at cost less allowance for diminution in value, which in the opinion of the directors, are other than temporary, while investmentsheld for short-term are stated at the lower of cost and market value.The above changes have been accounted for by decreasing the opening balance at 1 January 2005 of fair value reserve by$13,398,000 and of accumulated profit by $1,665,000. Comparatives have not been restated.FRS 102 Share-based PaymentIn accordance with the transitional provisions, FRS 102 has been applied to all grants after 22 November 2002 that were not yetvested as at 1 January 2005. The adoption of FRS 102 has resulted in a change in the Group’s accounting policy for share-basedpayments, whereby the Group charges the cost of share options to the profit and loss account.89

Notes to the Financial Statements31 December 200526 Changes in Accounting Policies (Cont’d)FRS 102 Share-based Payment (Cont’d)The adoption of FRS 102 resulted in:Group2005 2004$’000 $’000Decrease in opening accumulated profit (35) –Increase in opening share option reserve 35 –Increase in staff costs 444 35Decrease in basic earnings per share (cents) (0.06) –Decrease in diluted earnings per share (cents) (0.06) (0.01)FRS 103 Business Combinations, FRS 36 (revised) Impairment of Assets and FRS 38 (revised) Intangible AssetsThe adoption of FRS 103, FRS 36 (revised) and FRS 38 (revised) has resulted in a change in the accounting policy for goodwill.Goodwill is stated at cost less accumulated impairment losses and is no longer amortised. Instead, goodwill impairment is testedannually, or when circumstances change, indicating that goodwill might be impaired.Had there not been a change in accounting policy, the net profit attributable to shareholders for the financial year ended31 December 2005 would decrease by $1,811,000.27 FRS yet to be adoptedThe Group has not applied the following standards and interpretations that have been issued as of the balance sheet date but arenot yet effective:• FRS 40 Investment Property• FRS 106 Exploration for and Evaluation of Mineral Resources• Amendments to FRS 19 Employees Benefits – Actuarial Gains and Losses, Group Plans and Disclosures• Amendments to FRS 39 Financial Instruments: Recognition and Measurement – Cash Flow Hedge Accounting of ForecastIntragroup Transactions• INT FRS 104 Determining whether an Arrangement contains a Lease• INT FRS 105 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation FundsThe initial application of these standards and interpretations are not expected to have any material impact on the Group’s financialstatements, except for FRS 40 and INT FRS 104.Under FRS 40, investment properties are permitted to be stated at either fair value or cost less accumulated depreciation. Propertiesheld for rental are currently treated as properties in accordance with FRS 16 Property, Plant and Equipment and are stated at cost lessaccumulated depreciation and impairment losses. As a result of adopting FRS 40, these properties will be reclassified as investmentproperties. Property interests held under operating leases and recognised as investment properties are required to be measured atfair value. The Group is currently evaluating the impact the standard will have on the Group’s financial statements.INT FRS 104 addresses arrangements that do not take the legal form of a lease, but convey rights to use items for agreed periodsof time in return for a payment or series of payments. INT FRS 104 provides guidance for evaluating whether such arrangementsare, or contain, leases should be accounted for under FRS 17 Leases. If an agreement is determined to contain a lease, then INTFRS 104 requires FRS 17 to be applied to classify and account for the lease. The Group is currently evaluating the impact theinterpretation will have on the Group’s financial statements.The entity has not considered the impact of accounting standards issued after the balance sheet date.90

Notes to the Financial Statements31 December 200528 Acquisitions and Disposals of SubsidiariesOn 13 September 2005 and 20 September 2005, the Group completed the acquisition of 35,000,000 and 89,700,000 ordinaryshares of RM1 each in Pantai Holdings Berhad respectively, and 24,300,000 warrants 2002/2007 issued by the company for totalconsideration amounting to RM320,264,000. This represents 31.34% of the issued and paid-up capital in the company (excludingthe shares which are held by the company as treasury shares) and 36.27% of the outstanding warrants issued by the company.During the period from the acquisition date to 31 December 2005, Pantai Holdings Berhad and its subsidiaries contributed netprofit of $4,242,000 to the consolidated net profit for the year. If the acquisition had occurred on 1 January 2005, Group revenuewould have been $799,276,000 and net profit would have been $76,759,000.The effects of the above acquisitions are set out below:ProvisionalCarrying fair value Recognisedamounts adjustments values2005 2005 2005$’000 $’000 $’000Property, plant and equipment 199,558 25,550 225,108Intangible assets 65,723 30,916 96,639Interests in associates 54,130 (15,843) 38,287Available-for-sale financial assets 371 – 371Deferred tax assets 2,155 – 2,155Inventories 6,510 – 6,510Trade receivables 36,865 (6,893) 29,972Other receivables, deposits and prepayments 16,043 862 16,905Tax recoverable 3,848 210 4,058Fixed deposits pledged 13,608 – 13,608Cash and cash equivalents 40,455 – 40,455Trade payables and accrued operating expenses (44,622) – (44,622)Other payables (29,140) – (29,140)Current tax payable (3,726) 1,226 (2,500)Interest-bearing borrowings (90,226) – (90,226)Deferred tax liabilities (2,724) (4,714) (7,438)Minority interests (213,441) (3,539) (216,980)Net identifiable assets and liabilities 55,387 27,775 83,162Goodwill on acquisition 59,662Cash consideration 142,824Less: Cash and cash equivalents acquired (40,455)Net cash outflow 102,369Subsequent to the acquisition, the Group’s interest in Pantai Holdings Berhad was diluted to 28.51% as at 31 December 2005.Consequently, the Group recognised a loss on dilution of interests in subsidiaries amounting to $2,141,000 in the profit and lossaccount.There were no acquisitions of subsidiaries in the year ended 31 December 2004.On 9 June 2005, the Group completed the disposal of its 51% interests in Thermal International (S) Pte Ltd and Thermal InternationalLimited. Consequently, the Group’s 68% interests in Gleneagles International Laboratory Services Pte Ltd and Gleneagles InvestmentFujian Pte Ltd were diluted to 45%. During the period from 1 January 2005 to the date of disposal, the subsidiaries contributed netprofit of $36,000 to the consolidated net profit for the year.91

Notes to the Financial Statements31 December 200528 Acquisitions and Disposals of Subsidiaries (Cont’d)The effects of the above disposals are set out below:2005$’000Property, plant and equipment 369Inventories 169Trade receivables 7,447Other receivables, deposits and prepayments 1,377Cash and cash equivalents (949)Trade payables and accrued operating expenses (5,497)Other payables (204)Current tax payable (197)Finance lease obligations (1,120)Deferred tax liabilities (9)Minority interests (684)Net assets disposed 702Loss on disposal of subsidiaries (92)Cash consideration 610Cash and cash equivalents disposed 949Net cash flow from disposal of subsidiaries 1,559There were no disposals of subsidiaries in the year ended 31 December 2004.9229 Significant Related Party Transactions – GroupFor the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directlyor indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or viceversa, or where the Group and the party are subject to common control or common significant influence. Related parties may beindividuals or other entities.During the year, there were the following significant related party transactions carried out on terms agreed between the parties:2005 2004$’000 $’000AssociatesManagement fees received 116 876Project management fees received – 1,110Rental income received 577 447Sales made 177 80Purchases made 1,216 1,193A firm in which a director is a memberProfessional fees paid 15 114Director of the CompanyRental income received 9 20Directors of subsidiariesConsultancy fees paid 341 366Corporate shareholders of subsidiariesConsultancy fees paid 844 –Management fees paid 180 170Professional fees paid 51 61

Notes to the Financial Statements31 December 200529 Significant Related Party Transactions – Group (Cont’d)The directors of the Company also participate in the Parkway Scheme 2001. 3,180,000 share options (2004: 1,450,000) weregranted to the directors of the Company during the year. The share options were granted on the same terms and conditions asthose offered to other employees of the Group as described in note 17. At the balance sheet date, 5,667,000 (2004: 5,255,000)of the share options granted to the directors were outstanding.30 Contingent LiabilitiesAt 31 December 2005, there were contingent liabilities in respect of the following:GroupCompany2005 2004 2005 2004$’000 $’000 $’000 $’000Unsecured contingent liabilities in respect ofguarantees for banking facilities granted to:– subsidiaries – – 2,546 10,205– associates 10,000 10,000 10,000 10,00031 CommitmentsGroup2005 2004$’000 $’000(a)Capital commitments not provided for in the financial statements:– Amounts authorised and contracted for 22,532 8,080– Amounts authorised but not contracted for 14,330 9,00836,862 17,088(b) Commitments for equity investments – 818(c)Non-cancellable operating leases payable:– Within 1 year 8,807 6,267– After 1 year but within 5 years 10,659 4,628– After 5 years – –19,466 10,895(d)Non-cancellable operating leases receivable:– Within 1 year 6,893 3,932– After 1 year but within 5 years 7,448 2,127– After 5 years – 1914,341 6,078(e)After the balance sheet date, the directors proposed the following dividends. The dividends have not been provided for.2005 2004$’000 $’000Final dividend proposed of 5.0 cents(2004: 4.5 cents) per share less tax at 20% (2004: 20%) 29,081 26,02593

Notes to the Financial Statements31 December 20059432 AssociatesPlace ofEffective equityincorporationinterest heldName of associate Principal activities and business 2005 2004% %Phil, Inc Dormant United States of America 40 40Gleneagles Medical Centre Medical centre development, Malaysia 30 30(Kuala Lumpur) Sdn Bhdownership and managementGleneagles Hospital Private hospital ownership Malaysia 30 30(Kuala Lumpur) Sdn Bhdand managementGleneagles Dialysis International Provision of dialysis care Singapore 40 40Pte Ltd and its subsidiary:Gleneagles Dialysis Centre Provision of business management, Singapore 44 44Pte Ltdconsultancy and specialisedmedical servicesPT Tritunggal Sentra Provision of medical Indonesia 30 30Utama Surabayadiagnostic servicesKyami Pty Ltd and its subsidiary: Investment holding Australia 30 30Royalmist Properties Pty Ltd Property investment and Australia 30 30developmentKarington Holdings Pte Ltd Investment holding Singapore 50 50and its associate:Shanghai Modern Elecom Property investment and People’s Republic 25 25Trading Centre Building Co. Ltd. development of ChinaGleneagles International Hospital Dormant Sri Lanka 40 40(Lanka) LimitedApollo Gleneagles Hospital Ltd Private hospital ownership and India 50 51 *managementApollo Gleneagles PET-CT Limited Operation of PET-CT radio India 50 –imaging centreGleneagles Heritage Holdings Investment holding British Virgin Islands 40 40Limited and its subsidiary:Gleneagles Heritage Dormant British Virgin Islands 40 40International LimitedAsia Renal Care Provision of medical services Singapore 20 20Mount Elizabeth Pte LtdAsia Renal Care (Katong) Pte Ltd Provision of medical services Singapore 20 20IAG Healthsciences Pte Ltd Provision of medical and health Singapore 29.09 32products, clinic management andconsultancy services

Notes to the Financial Statements31 December 200532 Associates (Cont’d)Place ofEffective equityincorporationinterest heldName of associate Principal activities and business 2005 2004% %Onemedhub Pte Ltd Provision of electronic Singapore 40 40(formerly known ascommerce servicesOnemedhub.com Pte Ltd)Positron Tracers Pte. Ltd. Ownership and operation Singapore 33 33of a cyclotronCPG Healthcare Facilities Provision of specialised Singapore 50 50Management Pte. Ltd.healthcare facilities managementservices to healthcare facilitiesIGS Pte Ltd Specialised medical services Singapore – 21Korean Clinic Pte. Ltd. Operation of clinic Singapore 40 40Gleneagles International Investment holding Singapore 45 Note 5Laboratory Services Pte Ltdand its subsidiary:Gleneagles Investment Dormant Singapore 45 Note 5Fujian Pte LtdWorldcare Health (Malaysia) Provision of telemedicine services Malaysia 8.55# –Sdn. Bhd.Avenue Capital Resources Berhad Investment holding and provision Malaysia 4.88# –of management services* Apollo Gleneagles Hospital Ltd (AGHL) has been accounted for as an associate in view of equal board representations and joint control betweenthe Group and the other shareholder of AGHL.# Worldcare Health (Malaysia) Sdn. Bhd. and Avenue Capital Resources Berhad have been accounted for as associates in accordance withFRS 28 by virtue of the Group’s interests in Pantai Holdings Berhad.None of the associates are considered significant for the purpose of Rule 717 of the SGX-ST Listing Manual.33 Financial InstrumentsThe Group has put in place a set of risk management policies and guidelines governing all investment and business risks. Thesepolicies and procedures set out the Group’s overall business strategies, its tolerance for risk and general risk management philosophy.In addition, management has established processes to monitor and control such risks in a timely and accurate manner. Wherenecessary, the Group may enter into transactions to hedge against these risks in order to keep them at an acceptable level. Finally,all investment and divestment decisions are required to be approved by the Executive Committee.Credit riskManagement has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations areperformed on all customers requiring credit over a certain amount. For the hospital operations, the Group does not grant credit tonon-corporate customers. Instead, a non-corporate customer is requested to place an initial deposit at the time of admission to thehospital. Additional deposit is requested from the customer when the hospital charges exceed a certain level.Cash and fixed deposits are placed with financial institutions which are regulated.95

Notes to the Financial Statements31 December 200533 Financial Instruments (Cont’d)Credit risk (Cont’d)Similarly, investments and transactions involving financial instruments are allowed to be entered into only with counterparties thatare of high credit quality. As such, management does not expect any counterparty to fail to meet their obligations.At the balance sheet date, the Group has outstanding notes receivables amounting to $41,484,000 (2004: $48,300,000) due fromLee Hing Development Limited relating to the residual consideration receivable in connection with shares purchased by the latter.Other than these notes receivables, there were no significant concentrations of credit risk. The maximum exposure to credit risk isrepresented by the carrying amount of each financial asset in the balance sheet.Liquidity riskThe Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management tofinance the Group’s operations and to mitigate the effects of fluctuations in cash flows.Interest rate riskThis relates to changes in interest rates which affect mainly the Group’s fixed deposits, notes receivables, commercial papers, fixedand floating rate notes, fixed rate redeemable bonds, and its debt obligations with banks and financial institutions.The Group’s policy is to manage its interest cost using a mix of fixed and variable rate debts as well as by rolling over its fixeddeposits and variable rate borrowings on a short-term basis. In respect of long-term borrowings, the Group may enter into interestrate derivatives to manage its exposure to adverse movements in interest rates.Foreign currency riskThe Group is exposed to foreign exchange risk on sales, purchases, notes receivables, borrowings and investments that aredenominated in currencies other than Singapore dollars. The currencies giving rise to this risk are primarily Malaysian ringgit, HongKong dollars and Indian rupee. In respect of exposure that is certain, the Group will partially hedge these risks in order to keepthem at an acceptable level.Fair valueQuoted investmentsFair value is based on quoted market prices at the balance sheet date without any deduction for transaction costs.Interest-bearing loans and borrowingsFair value is calculated based on discounted expected future principal and interest cash flows.Finance lease liabilitiesThe fair value of finance lease liabilities is estimated as the present value of future cash flows, discounted at market interest ratesfor homogeneous lease agreements. The estimated fair values reflect change in interest rates.Other financial assets and liabilitiesThe notional amounts of financial assets and liabilities with a maturity of less than one year or which reprice frequently (includingtrade and other receivables, cash and cash equivalents, trade and other payables and short-term or variable rate interest-bearingborrowings) are assumed to approximate their fair values. All other financial assets and liabilities are discounted to determine theirfair values.96

Notes to the Financial Statements31 December 200533 Financial Instruments (Cont’d)Fair value (Cont’d)The aggregate net fair values of recognised financial assets and liabilities which are not carried at fair value in the balance sheet asat 31 December are represented in the following table:GroupCarrying Fair Carrying Fairamount value amount valueNote 2005 2005 2004 2004$’000 $’000 $’000 $’000Financial assetsAmounts due from associates (non-current) 6 349 316 323 308Amounts due from partnerships (non-current) 7 – – 35 33Notes receivables 9 41,484 40,715 48,300 47,86541,833 41,031 48,658 48,206Financial liabilitiesAmounts due to associates (non-current) 6 (413) (373) (191) (182)Amounts due to partnerships (non-current) 7 (1,154) (1,044) (705) (672)Secured term loans 19 (12,663) (12,679) – –Redeemable secured bonds 19 (63,005) (63,744) – –Unsecured fixed rate notes 19 (150,000) (145,382) (150,000) (156,317)Finance lease liabilities 19 (5,680) (5,823) (1,151) (1,000)(232,915) (229,045) (152,047) (158,171)Total (191,082) (188,014) (103,389) (109,965)Unrecognised gain/(loss) 3,068 (6,576)CompanyFinancial assetNotes receivables 9 41,484 40,715 48,300 47,865Financial liabilityUnsecured fixed rate notes 19 (150,000) (145,382) (150,000) (156,317)Total (108,516) (104,667) (101,700) (108,452)Unrecognised gain/(loss) 3,849 (6,752)It is not practicable to reliably estimate the fair value of unquoted equity shares due to the lack of quoted market prices in an activemarket, significant range of reasonable fair value estimates, and the inability to reasonably assess the probabilities of the variousestimates. However, management believes that the carrying amounts recorded at balance sheet date reflect the corresponding fairvalues.97

Notes to the Financial Statements31 December 200534 Segment ReportingA segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment),or in providing products or services within a particular economic environment (geographical segment), which is subject to risksand rewards that are different from those of other segments.Segment information is presented in respect of the Group’s business and geographical segments. The primary format, businesssegments, is based on the Group’s management and internal reporting structure.Inter-segment pricing is determined on mutually agreed terms.Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on areasonable basis. Unallocated items mainly comprise interest expenses and related liabilities.Segment capital expenditure is the total costs incurred during the year to acquire segment assets that are expected to be used formore than one period.Business SegmentsThe Group comprises the following main business segments:HealthcareSingapore Hospitals: The operation of private hospitals, rental and sale of medical units which form part of the hospital complex inSingapore.International Hospitals: The operation of private hospitals outside Singapore.Healthcare Services: Trading in medical supplies, equipment and healthcare products, operation of medical clinics and provisionof primary healthcare services, practice of dental surgeons and the operation of dental clinics, provision of clinical researchservices, ownership and management of radiology clinics, provision of comprehensive diagnostic laboratory services, underwritingof accident and healthcare insurance policies, and provision of managed care and related services.Non-HealthcareThe sale of properties, investment holding and trading.Geographical SegmentsThe healthcare segment operates principally in Singapore and Malaysia while the property rental, investment holding and tradingsegments operate mainly in Singapore.In presenting information on the basis of geographical segments, segment revenue is based on the geographical location ofcustomers. Segment assets are based on the geographical location of the assets.98

Notes to the Financial Statements31 December 200534 Segment Reporting (Cont’d)Business SegmentsSingapore International Healthcare Healthcare Non-Hospitals Hospitals Services Subtotal Healthcare Eliminations Unallocated Consolidated$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000Revenue and expenses2005Total revenue fromexternal customers 300,283 104,516 142,422 547,221 1,750 – – 548,971Inter-segment revenue 12,720 – 37,411 50,131 – (50,131) – –Total 313,003 104,516 179,833 597,352 1,750 (50,131) – 548,971Segment results 65,017 11,005 21,532 97,554 2,945 – (2,141) 98,358Finance costs (10,056)Share of profits /(losses) of associates – 79 (210) (131) 851 – – 720Share of profits ofpartnerships – – 376 376 – – – 376Income tax expense (22,008)Net profit for the year 67,3902004Total revenue fromexternal customers 258,584 53,994 93,036 405,614 2,218 – – 407,832Inter-segment revenue 12,261 35 55,895 68,191 – (68,191) – –Total 270,845 54,029 148,931 473,805 2,218 (68,191) – 407,832Segment results 56,100 5,919 13,003 75,022 (129) – – 74,893Finance costs (5,103)Share of (losses) /profits of associates – (2,357) 104 (2,253) 151 – – (2,102)Share of profits ofpartnerships – – 288 288 – – – 288Income tax expense (15,232)Net profit for the year 52,74499

Notes to the Financial Statements31 December 200534 Segment Reporting (Cont’d)Business Segments (Cont’d)Singapore International Healthcare Healthcare Non-Hospitals Hospitals Services Subtotal Healthcare Consolidated$’000 $’000 $’000 $’000 $’000 $’000Assets and liabilities2005Segment assets 510,737 290,766 264,675 1,066,178 125,788 1,191,966Interests in associates – 9,374 3,719 13,093 41,297 54,390Interests in partnerships – – 123 123 – 123510,737 300,140 268,517 1,079,394 167,085 1,246,479Unallocated assets 57,700Total assets 1,304,179Segment liabilities 73,275 83,019 74,306 230,600 76,832 307,432Unallocated liabilities 350,000Total liabilities 657,4322004Segment assets 504,015 39,408 102,789 646,212 276,284 922,496Interests in associates – 8,530 2,623 11,153 3,209 14,362Interests in partnerships – – 191 191 – 191Total assets 504,015 47,938 105,603 657,556 279,493 937,049Segment liabilities 56,514 14,965 38,079 109,558 5,948 115,506Unallocated liabilities 386,968Total liabilities 502,474Other segmental information2005Capital expenditure 20,490 8,164 9,768 38,422 223 38,645Depreciation and impairment lossesof property, plant and equipment 23,298 4,358 6,474 34,130 115 34,245Amortisation of intangibleassets/goodwill – 99 3,400 3,499 – 3,4992004Capital expenditure 21,496 901 2,855 25,252 – 25,252Depreciation and impairment lossesof property, plant and equipment 23,583 1,578 5,458 30,619 94 30,713Amortisation of goodwill – – 1,811 1,811 – 1,811100

Notes to the Financial Statements31 December 200534 Segment Reporting (Cont’d)Geographical SegmentsSingapore Malaysia Other regions Consolidated$’000 $’000 $’000 $’0002005Total revenue from external customers 397,954 133,480 17,537 548,971Segment assets 696,731 484,980 10,255 1,191,966Capital expenditure 29,358 8,845 442 38,6452004Total revenue from external customers 352,867 39,140 15,825 407,832Segment assets 881,385 33,059 8,052 922,496Capital expenditure 24,339 830 83 25,25235 Accounting Estimates and JudgementKey sources of estimation uncertaintyNote 4 contains information about the assumptions and their risk factors relating to goodwill impairment. Estimates and assumptionsused in determining the fair value of share options granted are disclosed in note 17. The methods and estimates applied indetermining the fair values of financial assets and liabilities are disclosed in notes 2 and 33.36 Comparative InformationComparatives in the financial statements have been changed from the previous year due to the changes in accounting policies asdescribed in note 26 and to be consistent with current year presentation.101

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20051 Summary of Major PropertiesThe major properties of the Group are:Site areaDescription Location (sq m)SingaporeGleneagles Hospital and Medical Centre, Lot 1345 Town sub-division 14,947a 380-bed hospital with 164 medical25 situated at 6/6A Napier Roadsuites and 402 car park lotsMount Elizabeth Hospital and Medical Lot 858 Town sub-division 15,204Centre, a 505-bed hospital with 21427 situated at 3 Mount Elizabethmedical suites and 368 car park lotsEast Shore Hospital and Medical Centre,Lot 6912 Mukim 26 situated ata 157-bed hospital with 28 medical 321 Joo Chiat Place 6,200suites and 73 car park lotsWarehouse and store Lot 2301/U2 Mukim 1 situated at 940213 Henderson Road, #01-02, #02-02,#03-02, #04-02 Henderson Industrial ParkEastern Specialist Centre Lot 5188 Mukim 27 situated at 380Block 210 New Upper Changi Road #01-699Radiologic Clinic Lot 5350 Mukim 5 situated at 145Block 130 Jurong East Street 13 #01-219OverseasGleneagles Medical Centre, 1 Jalan Pangkor Penang, Malaysia 7,319a 158-bed private hospital102

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 2005Approximate total lettable/Group’s effectiveExisting use saleable area (sq m) interest % TenureHospital building – 25,000 100 FreeholdMedical centre – 10,800 4 FreeholdHospital building – 38,626 100 99-year leasecommencing1 October 1976Medical centre – 19,940 4 99-year leasecommencing1 October 1976Hospital and – 10,926 100 Freeholdmedical centreWarehouse – 940 100 Freeholdand storeClinic – 380 100 86-year leasecommencing1 July 1992Clinic – 145 100 91-year leasecommencing1 April 1993Hospital building – 18,600 70 Freehold103

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20052 Interested Person TransactionsInterested PersonAggregate value of alltransactions during theAggregate value of allfinancial year ended 31/12/05 transactions conducted(excluding transactionsunder a shareholders’less than $100,000 and transactions mandate pursuant to Rule 920conducted under a shareholders’ of the SGX-ST Listing Manualmandate pursuant to Rule 920 (excluding transactionsof the SGX-ST Listing Manual) less than $100,000)$’000 $’000Dr Prathap C. Reddy– Pharmacy revenue payable byApollo Hospitals Enterprise Limited (“AHEL”) toApollo Gleneagles Hospital Limited (“AGHL”) 192 –– Food and beverage costs payable byAGHL to Apollo Sindoori Hotels Limited 370 –– Rental revenue and electricity expensespayable by AHEL to AGHL 12 –Chang See Hiang– Professional fees paid by the Group 15 –589 –3 Material ContractsExcept as disclosed in Interested Person Transactions, there were no other material contracts of the Company or its subsidiariesinvolving the interests of the Chief Executive Officer, each director or controlling shareholder, either still subsisting at the end of thefinancial year or if not then subsisting, entered into since the end of the previous financial year.4 Corporate Governance StatementThe Company is committed to complying with the Code of Corporate Governance (“CCG”) issued by the Corporate GovernanceCommittee in March 2001 so as to ensure greater transparency and protection of shareholders’ interests. This statement outlinesthe main corporate governance practices that are adopted by the Company.Board of DirectorsRole of the Board of DirectorsThe primary role of the board of directors of the Company (the “Board”) is to protect and enhance long-term shareholder value. Itsets the overall strategy for the Group and supervises the management of the Group (the “Management”). It is also responsible forthe overall corporate governance of the Group including setting its strategic direction, establishing goals for Management andmonitoring the achievement of these goals.104

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)Board ProcessesTo assist in the execution of its responsibilities, the Board has established the following specialised committees:a) the Executive Committee;b) the Audit Committee;c) the Nominating Committee;d) the Remuneration Committee;e) the Share Option Scheme Committee;f) the Management Committee;g) the Share Purchase Committee; andh) the Strategic Planning Committee.Each of the above committees has its respective written mandates and operating procedures, which will be reviewed on aregular basis.The Board intends to hold about four scheduled meetings each year. It may, however, hold unscheduled strategy meetings and/oremergency meetings to address/consider certain specific significant matters or transactions that may arise from time to time.The Articles of Association of the Company allow Board meetings to be conducted by way of telephonic and video conference(CCG, Guidance Note 1.1).Directors’ meetings held in 2005During the financial year ended 31 December 2005, the Board held five meetings. The Directors’ attendance at those meetings aredisclosed below (CCG, Guidance Note 1.1):Name of directorBoard meetings attendedRichard Seow Yung Liang (Appointed on 10 June 2005) 3Sunil Chandiramani 4Dr Lim Cheok Peng 5Alain Ahkong Chuen Fah 5Daniel Ashton Carroll (Appointed on 10 June 2005) –Chang See Hiang 5Timothy David Dattels (Appointed on 10 June 2005) 3Ho Kian Guan 5Dr Ronald Ling Jih Wen (Appointed on 15 July 2005) 2Ashish Jaiprakash Shastry (Appointed on 10 June 2005) 3David R. White (Appointed on 15 July 2005) 2Ho Kian Hock (alternate to Mr Ho Kian Guan) 1Anil Thadani (Resigned on 15 July 2005) 3Tony Tan Choon Keat (Resigned on 10 June 2005) 2Ang Guan Seng (Resigned on 10 June 2005) 2Dr Prathap C. Reddy (Resigned on 15 July 2005) 1Tan Kai Seng (Resigned on 10 June 2005) 2Matters Requiring Board ApprovalThe Board meets to consider the following, without limitation, corporate events and/or actions:• approval of quarterly results announcements;• approval of the annual report and financial statements;• declaration of interim dividends and proposal of final dividends;• approval of corporate strategies;• authorisation of major transactions; and• convening of shareholders’ meetings.Training for DirectorsThe Executive Directors may participate in seminars and/or discussion groups to keep abreast of latest developments which arerelevant to the Group (CCG, Guidance Note 1.3).105

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)106Board Composition and BalanceThe names of the directors of the Company in office as at the date of this report are set out in the Directors’ Report. The Board hasreviewed its composition and is satisfied that such composition is appropriate. The Board will constantly examine its size with aview to determining its impact upon its effectiveness (CCG, Guidance Note 2.3).As at the date of this report, the Board comprises eleven suitably qualified members (CCG, Guidance Note 2.4):Academic andName of Date of Nature of professionaldirector appointment appointment Prime function Other functions qualificationsRichard Seow 10/06/2005 Non-executive / Chairman Chairman of Executive BS (Economics)Yung Liang independent and Strategic Planning MBA (Finance)Age: 43Committees, andMember of Share OptionScheme, Remuneration,Share Purchase,Nominating andManagement CommitteesSunil Chandiramani 17/12/1999 Non-executive / Vice Chairman Member of Executive, B Com (Hons),Age: 43 independent Share Option Scheme, MBARemuneration,Share Purchase andNominating CommitteesDr Lim Cheok Peng 07/06/2000 Executive / Managing Chairman of Management MBBS,Age: 59 non-independent Director Committee, and Member of M.Med.Int.Med.,Executive and Strategic MRCP,Planning Committees FRCP (Edin),FRCP (Glasg),FAMS (Cardiology)Alain Ahkong 14/02/2001 Non-executive / Member Chairman of Audit CharteredChuen Fah independent Committee and Member of Tax AdviserAge: 58Nominating CommitteeDaniel Ashton 10/06/2005 Non-executive / Member – BA Economics,Carroll independent MBAAge: 45Chang See Hiang 28/08/1997 Non-executive / Member Chairman of Nominating LL.B (Hons)Age: 52 independent and Share Purchase Committees,and Member of Audit CommitteeTimothy David 10/06/2005 Non-executive / Member Chairman of Share Option BA (Hons),Dattels independent Scheme and Remuneration MBAAge: 48Committees, and Member ofNominating CommitteeHo Kian Guan 25/06/1985 Non-executive / Member Member of Audit and BA CommAge: 60 independent Share Purchase CommitteesDr Ronald 15/07/2005 Non-executive / Member Member of Strategic MBBS,Ling Jih Wen independent Planning Committee MA Hons (Oxon),Age: 41MBA (INSEAD)

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)Board Composition and Balance (Cont’d)Academic andName of Date of Nature of professionaldirector appointment appointment Prime function Other functions qualificationsAshish Jaiprakash 10/06/2005 Non-executive / Member Member of Executive, A.B. in EconsShastry independent Share Option Scheme, (Hons)Age: 30 Remuneration, Share Purchase,Audit, Strategic Planningand Management CommitteesDavid R. White 15/07/2005 Non-executive / Member Member of Strategic BS, MSAge: 58 independent Planning CommitteeHo Kian Hock* 25/06/1985 Non-executive / Member – BSc EngineeringAge: 58independent*Alternate to Ho Kian GuanParticulars of interests of directors who held office at the end of the financial year in shares, debentures, warrants and shareoptions in the Company and in related corporations (other than wholly-owned subsidiaries) are set out in the Directors’ Report.Independent Members of the Board of DirectorsThe Board has ten independent members, representing 90.9% of the Board. They are Mr Richard Seow Yung Liang, Mr SunilChandiramani, Mr Alain Ahkong Chuen Fah, Mr Daniel Ashton Carroll, Mr Chang See Hiang, Mr Timothy David Dattels, Mr Ho KianGuan, Dr Ronald Ling Jih Wen, Mr Ashish Jaiprakash Shastry and Mr David R. White. The criterion of independence is based onthe definition given in the CCG. The Board considers an “independent” director as one who has no relationship with the Company,its subsidiaries or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director’s independentbusiness judgement with a view to the best interests of the Company (CCG, Guidance Note 2.1).Non-executive members of the Board exercise no management functions in the Company or any of its subsidiaries. Although allthe directors have equal responsibility for the performance of the Group, the role of the non-executive directors is particularlyimportant in ensuring that the strategies proposed by the executive management are fully discussed, rigorously examined andshall take into account the long-term interests of the shareholders, employees, customers, suppliers and the communities in whichthe Group conducts its business.Chairman and Managing DirectorThere is a clear division of responsibilities between the Chairman and the Managing Director, which ensures that there is a balanceof power and authority at the top of the Group. The posts of Chairman and Managing Director are kept separate and these positionsare held by Mr Richard Seow Yung Liang and Dr Lim Cheok Peng respectively (CCG, Guidance Note 3.1).The Board has delegated the day-to-day running of the Group to the Managing Director and members of the Executive Committee.Both the Chairman and the Managing Director exercise control over the quality, quantity and timeliness of information flow betweenthe Management and the Board (CCG, Guidance Note 3.2).The Chairman shall, in addition:a) schedule meetings that enable the Board to perform its duties responsibly while not interfering with the flow of the Company’soperations;b) prepare meeting agenda in consultation with the Managing Director; andc) assist in ensuring compliance with Company’s guidelines on corporate governance (CCG, Guidance Note 3.2).107

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)Board CommitteesTo assist the Board in the execution of its duties, the Board has delegated specific functions to the following committees:Executive CommitteeThe Executive Committee was established in February 1987. It is currently chaired by Mr Richard Seow Yung Liang and comprisesboth non-executive directors and the executive director. The Executive Committee is entrusted with the review of the Group’sbusiness and affairs, in line with the overall strategy set by the Board. Meetings of the Executive Committee are held regularly.There were six meetings held during the year and attendance was as follows (CCG, Guidance Note 1.1):Name of director Appointment Number of meetings attendedRichard Seow Yung Liang (Chairman) Non-executive Director 3(Appointed on 15 July 2005)Sunil Chandiramani (Member) Non-executive Director 5Dr Lim Cheok Peng (Member) Executive Director 6Ashish Jaiprakash Shastry (Member) Non-executive Director 3(Appointed on 15 July 2005)Anil Thadani (Chairman) Non-executive Director 3(Resigned on 15 July 2005)Tony Tan Choon Keat (Member) Non-executive Director 2(Resigned on 10 June 2005)Tan Kai Seng (Member) Executive Director 3(Resigned on 10 June 2005)Audit CommitteeThe Audit Committee was established in June 1990. It is currently chaired by Mr Alain Ahkong Chuen Fah and comprises threeother non-executive directors, namely Mr Chang See Hiang, Mr Ho Kian Guan and Mr Ashish Jaiprakash Shastry. All four directorsare non-executive and independent (CCG, Guidance Note 11.1).The Audit Committee assists the Board in fulfilling its responsibilities in financial reporting, management of financial and controlrisks, and monitoring of the internal control systems.The Board is of the view that the members of the Audit Committee are appropriately qualified to discharge their responsibilities andthey have accounting and/or related financial management expertise or business experience, as the Board interprets such qualificationin its business judgement (CCG, Guidance Note 11.2).The Audit Committee has explicit authority to investigate any matter within its terms of reference, full access to and co-operation byManagement and full discretion to invite any director or executive officer to attend its meetings, and reasonable resources toenable it to discharge its functions properly (CCG, Guidance Note 11.3).The Audit Committee has reviewed the scope and results of the audit and its cost effectiveness and the independence andobjectivity of the external auditors and such reviews are conducted on an annual basis (CCG, Guidance Note 11.6). Where theexternal auditors also supply a substantial volume of non-audit services to the Company, the Audit Committee shall keep the natureand extent of such services under review so as to seek to balance the maintenance of objectivity and value for money (CCG,Guidance Note 11.4).108

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)Board Committees (Cont’d)Audit Committee (Cont’d)The Audit Committee can hold meetings with the external auditors, without the presence of Management, to discuss any mattersthat the Audit Committee or the auditors believe should be discussed in private (CCG, Guidance Note 11.5).The Audit Committee has reviewed and will review the financial reporting process, the system of internal controls, the managementof financial risks, the audit process, and the Group’s process for monitoring compliance with the laws and regulations and its owncode of business conduct.The Audit Committee has reviewed the Company’s risk management and based on the Internal Auditor’s reports as applicable andthe internal controls in place, it is satisfied that there are adequate internal controls in the Company (CCG, Guidance Note 12.2).The Internal Auditor’s primary line of reporting is to the Chairman of the Audit Committee although the Internal Auditor also reportsadministratively to the Managing Director (CCG, Guidance Note 13.1).The Audit Committee has reviewed the adequacy of the internal audit function by ensuring that the internal audit function isadequately resourced and has appropriate standing within the Company and such reviews are conducted on an annual basis(CCG, Guidance Notes 13.3 and 13.4).There were four meetings held during the year and attendance was as follows (CCG, Guidance Note 11.7):Name of director Appointment Number of meetings attendedAlain Ahkong Chuen Fah (Chairman) Non-executive / independent 4Chang See Hiang (Member) Non-executive / independent 4Ho Kian Guan (Member) Non-executive / independent 2(Appointed on 15 July 2005)Ashish Jaiprakash Shastry (Member) Non-executive / independent 2(Appointed on 15 July 2005)Ang Guan Seng (Member) Non-executive / independent 2(Resigned on 10 June 2005)Nominating CommitteeThe Nominating Committee was established on 24 February 2003 and comprises five independent directors, namelyMr Chang See Hiang (Chairman), Mr Richard Seow Yung Liang, Mr Sunil Chandiramani, Mr Alain Ahkong Chuen Fah andMr Timothy David Dattels (CCG, Guidance Note 4.1).The role of the Nominating Committee is to:(a)(b)(c)make recommendations to the Board on all Board and Board committees appointments and re-nominations, includingrecommending the Chairman for the Board and for each Board committee (CCG, Guidance Notes 4.1 & 4.2);determine annually whether a director is independent and whether he is able to carry out his duties as a director (CCG,Guidance Notes 4.3 & 4.4); andassess the effectiveness of the Board as a whole and the contribution by each individual director to the effectiveness of theBoard.109

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)Board Committees (Cont’d)Nominating Committee (Cont’d)The Nominating Committee has adopted a formal assessment process to evaluate the Board’s performance and contribution ofeach individual director by (a) reviewing a completed individual director self-assessment form, and (b) using a board self-assessmentchecklist (CCG, Guidance Note 5.3). The Nominating Committee has also adopted internal guidelines to address the competingtime commitments that are faced when directors serve on multiple boards (CCG, Guidance Note 4.4).The Nominating Committee has adopted a set of performance criteria, that is linked to long-term shareholders’ value, to be usedfor performance evaluation of the Board. The set of performance criteria includes the Company’s share price performance over afive year period benchmarked against the Singapore Straits Times Index and against the benchmark index of the Company’sindustry peers, return on assets, return on equity and profitability on capital employed (CCG, Guidance Notes 5.1, 5.2 and 5.3).The Nominating Committee will also review and recommend to the Board on the appointment of key executives, including but notlimited to the Managing Director.There was one meeting held during the year and attendance was as follows (CCG, Guidance Note 1.1):Name of director Appointment Number of meetings attendedChang See Hiang (Chairman) Non-executive / independent 1Richard Seow Yung Liang (Member) Non-executive / independent –(Appointed on 15 July 2005)Sunil Chandiramani (Member) Non-executive / independent –(Appointed on 15 July 2005)Alain Ahkong Chuen Fah (Member) Non-executive / independent 1Timothy David Dattels (Member) Non-executive / independent –(Appointed on 15 July 2005)Anil Thadani (Chairman) Non-executive / independent 1(Resigned on 15 July 2005)Tony Tan Choon Keat (Member) Non-executive / independent 1(Resigned on 10 June 2005)Ang Guan Seng (Member) Non-executive / independent 1(Resigned on 10 June 2005)110

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)Board Committees (Cont’d)Further to the disclosure set out under the Board Composition and Balance section of the Corporate Governance Statement,additional information on the directors is as follows (CCG, Guidance Note 4.5):Date of last Directorships or chairmanships both present and thosere-election held over the preceding three years in other listed companies andName of director as a director other major appointmentsRichard Seow Yung Liang N/A Twinwood Engineering LimitedLee Hing Development LimitedSunil Chandiramani 31/3/2004 Apollo Hospitals Enterprise Limited **(Appointed wef 18/4/2005, resigned wef 4/8/2005)Strides Arcolab Ltd ** (Resigned wef 22/6/2005)Dr Lim Cheok Peng 6/4/2005 Pantai Holdings Berhad (Appointed wef 12/9/2005)Alain Ahkong Chuen Fah 28/3/2003 Twinwood Engineering LimitedDaniel Ashton Carroll N/A Advanced Interconnect TechnologiesShenzhen Development BankChang See Hiang 6/4/2005 CWT Distribution Limited (Retired wef 16/5/2003)Yeo Hiap Seng LimitedJardine Cycle & Carriage LimitedMCL Land LimitedSingapore Turf ClubTimothy David Dattels N/A Primedia Inc.Shangri-La Asia LtdAsian Art Museum, San Francisco as TrusteeShenzhen Development BankSingTao News Corp. LimitedHo Kian Guan 31/3/2004 Keck Seng (Malaysia) BerhadPelangi BerhadPetaling Garden BerhadShangri-la Hotel LtdShangri-la Asia LtdKeck Seng Investments (HK) LtdDr Ronald Ling Jih Wen N/A Strides Acrolab LtdTwinwood Engineering LimitedAshish Jaiprakash Shastry N/A Matrix Laboratories Limited **Pantai Holdings BerhadLee Hing Development LimitedDavid R. White N/A Iasis Healthcare CorporationHo Kian Hock N/A Keck Seng Investments (HK) Ltd(alternate to Ho Kian Guan)Keck Seng (Malaysia) BerhadShangri-la Hotel Ltd **Shangri-la Asia Ltd **Pelangi Berhad **Petaling Garden Berhad ****Alternate director111

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)Board Committees (Cont’d)Remuneration CommitteeThe Remuneration Committee was established in March 1988. It is currently chaired by Mr Timothy David Dattels, an independentnon-executive director and comprises three other independent non-executive directors, namely Mr Richard Seow Yung Liang,Mr Sunil Chandiramani and Mr Ashish Jaiprakash Shastry (CCG, Guidance Notes 7.1 and 7.2).While none of the members specialise in the area of executive compensation, the committee would have access to independentprofessional expert advice as stated under the Access to Information section of the Corporate Governance Statement. Moreover, theyhave unrestricted access to the Company’s records and information and shall receive detailed financial and operational reports fromthe Management so as to enable them to carry out their duties. They may also liaise with the Management, and may consult with otheremployees and seek additional information if required. The Group’s Manpower Development General Manager would thus provide themembers of the Remuneration Committee with any assistance they need in this area (CCG, Guidance Note 7.2).The Remuneration Committee, which offers an independent perspective, reviews the remuneration packages and the proceduresfor fixing the remuneration packages of individual directors and key executives. However, members of the Remuneration Committeewill ensure that they do not set their own remuneration.The Remuneration Committee will recommend a framework of remuneration for the Board and key executives after consultationwith the Chairman of the Board and submit the recommended framework for endorsement by the entire Board (CCG, GuidanceNote 7.3).The Remuneration Committee shall:a) ensure that non-executive directors should not be over-compensated to the extent that their independence may be compromised;b) have the authority to consult experts on the remuneration of non-executive directors, if considered necessary; andc) recommend the remuneration of the non-executive directors for approval at the annual general meeting (“AGM”) (CCG,Guidance Note 8.3).There were two meetings held during the year and attendance was as follows (CCG, Guidance Note 1.1):Name of director Appointment Number of meetings attendedTimothy David Dattels (Chairman) Non-executive / independent 1(Appointed on 15 July 2005)Richard Seow Yung Liang (Member) Non-executive / independent 2(Appointed on 15 July 2005)Sunil Chandiramani (Member) Non-executive / independent 2Ashish Jaiprakash Shastry (Member) Non-executive / independent 2(Appointed on 15 July 2005)Anil Thadani (Chairman) Non-executive / independent –(Resigned on 15 July 2005)Ang Guan Seng (Member) Non-executive / independent –(Resigned on 10 June 2005)112

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)Board Committees (Cont’d)Share Option Scheme CommitteeThe Share Option Scheme Committee was established in January 2001 and comprises four independent, non-executivedirectors, namely Mr Timothy David Dattels (Chairman), Mr Richard Seow Yung Liang, Mr Sunil Chandiramani and Mr AshishJaiprakash Shastry.The Share Option Scheme Committee administers the Parkway Share Option Scheme 2001 (“Parkway Scheme 2001”) in accordancewith the rules of the scheme, and determines and approves the list of grantees of the share options, the date of the grant and theprice thereof. Members of the Share Option Scheme Committee will ensure that they do not determine or approve any grant ofshare options to themselves.There were two meetings held during the year and attendance was as follows (CCG, Guidance Note 1.1):Name of director Appointment Number of meetings attendedTimothy David Dattels (Chairman) Non-executive 1(Appointed on 15 July 2005)Richard Seow Yung Liang (Member) Non-executive 2(Appointed on 15 July 2005)Sunil Chandiramani (Member) Non-executive 2Ashish Jaiprakash Shastry (Member) Non-executive 2(Appointed on 15 July 2005)Anil Thadani (Member) Non-executive –(Resigned on 15 July 2005)Ang Guan Seng (Member) Non-executive –(Resigned on 10 June 2005)Management CommitteeThe Management Committee was established in April 1985 and comprises one executive director, Dr Lim Cheok Peng (Chairman)and two non-executive directors, Mr Richard Seow Yung Liang and Mr Ashish Jaiprakash Shastry.The duties of the Management Committee include approving of transfers, amalgamations and splitting of shares, transferableshare subscriptions rights, loan stocks and the issue of new certificates to replace any lost certificates in respect of any of theabove-mentioned securities and in respect of the Parkway Scheme 2001.There were six resolutions in writing circulated during the year with no physical meeting held.Share Purchase CommitteeThe Share Purchase Committee was established in May 2003. It is currently chaired by Mr Chang See Hiang, an independentnon-executive director and comprises four other independent non-executive directors, namely Mr Richard Seow Yung Liang,Mr Sunil Chandiramani, Mr Ho Kian Guan and Mr Ashish Jaiprakash Shastry.The role of the Share Purchase Committee is to determine/decide the number of shares to purchase and the price at which theshares may be purchased, for and on behalf of the Company.No shares were purchased during the financial year ended 31 December 2005.There was no resolution in writing circulated and no physical meeting held during the year.113

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)Board Committees (Cont’d)Strategic Planning CommitteeThe Strategic Planning Committee was established in July 2005. It is chaired by Mr Richard Seow Yung Liang and comprises fourother members, namely, Dr Lim Cheok Peng, Dr Ronald Ling Jih Wen, Mr Ashish Jaiprakash Shastry and Mr David R. White.The Committee was established to explore, develop, and recommend medium and long-term business strategies and initiatives forthe Group in the local, regional and international markets.There was one meeting held during the year and attendance was as follows (CCG, Guidance Note 1.1):Name of director Appointment Number of meetings attendedRichard Seow Yung Liang (Chairman) Non-executive 1Dr Lim Cheok Peng (Member) Executive 1Dr Ronald Ling Jih Wen (Member) Non-executive 1Ashish Jaiprakash Shastry (Member) Non-executive 1David R. White (Member) Non-executive –(Appointed on 7 November 2005)Criteria for Board MembershipCandidates for the Board are selected for their character, judgement, business experience and acumen. Scientific expertise, priorgovernment service and familiarity with national and international issues affecting business will also be relevant criteria forconsideration (CCG, Guidance Note 2.4). Where a director has multiple board representations, the Nominating Committee willevaluate whether or not a director is able to and has been adequately carrying out his duties as director of the Company (CCG,Guidance Note 4.4). Final approval of a candidate is determined by the Board.The Articles of Association of the Company provide that at each AGM of the Company, one-third of the directors, including theManaging Director, shall retire from office by rotation provided always that every director, including a managing director, shall retirefrom office at least once in every three years (CCG, Guidance Note 4.2). The selection of directors to retire is on the basis of thosewho have been longest in office since their last election and as between directors of equal seniority, the directors to retire shall beselected from among them by agreement or, in the absence thereof, by lot. A retiring director is eligible for re-election by shareholdersof the Company at the AGM.New directors may be appointed by way of a Board resolution upon the recommendation of the Nominating Committee but suchdirectors shall submit themselves for re-election at the next AGM.Access to InformationThe Company fully recognises that the continual flow of relevant information on an accurate and timely basis is critical for theBoard to be effective in the discharge of its duties.Accordingly, directors will receive a regular supply of information from Management about the Group so that they are equipped toplay as full a part as possible in Board meetings. Detailed Board papers are prepared for each meeting of the Board. The Boardpapers shall include sufficient information from Management on financial, business and corporate issues of the Company toenable the directors to be properly briefed on issues to be considered at Board meetings. Information provided shall includebackground or explanatory information relating to matters to be brought before the Board, copies of disclosure documents, budgets,forecasts and monthly internal financial statements (CCG, Guidance Notes 6.1 and 6.2).114

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)Access to Information (Cont’d)All directors shall have unrestricted access to the Group’s records and information and shall receive detailed financial and operationalreports from the Management so as to enable them to carry out their duties. Directors may also liaise with the Management, andmay consult with other employees and seek additional information if required (CCG, Guidance Notes 6.1 and 6.2).In addition, directors shall have separate and independent access to advices and services of the Company Secretary, who isresponsible to the Board for advising on and implementation of the Group’s compliance requirements pursuant to the relevantstatutes and regulations. The Company Secretary should attend all board meetings (CCG, Guidance Note 6.3).Each director has the right to seek independent legal and other professional advice, at the Company’s expense, concerning anyaspect of the Group’s operations or undertakings in order to fulfil his role and responsibilities as a director (CCG, Guidance Note 6.4).Remuneration MattersThe Group’s remuneration policy is to provide compensation packages at market rates which will reward successful performanceand attract, retain and motivate managers and directors.The Company currently does not have a formal service contract with non-executive directors. The executive director has a servicecontract, which is subject to termination by the relevant subsidiary of the Company by giving not less than three months’ notice(CCG, Guidance Note 8.4).Company’s directors receiving remuneration from the Group for the years ended 31 December 2005 and 31 December 2004 areset out below (CCG, Guidance Notes 9.1 and 9.2):Remuneration bandNumber of directors2005 2004S$750,000 and above 2 1S$500,000 to below S$750,000 – 1S$250,000 to below S$500,000 – –Below S$250,000 14 8Total 16 10Summary compensation table for the directors of the Company and key executives of the Group for the year ended 31 December2005 is set out below (CCG, Guidance Notes 9.1 and 9.2):Directors of the CompanyAllowancesand otherSalary Bonus Fees benefits Total% % % % %S$750,000 and aboveDr Lim Cheok Peng 53 47 – – 100Tan Kai Seng(Resigned as a director on 10 June 2005and ceased to be an executive on 15 July 2005) 24 1 – 75* 100*Includes amounts paid to the director in connection with the cessation of his employment with the Group.115

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)Remuneration Matters (Cont’d)Directors of the CompanyAllowancesand otherSalary Bonus Fees benefits Total% % % % %Below S$250,000Richard Seow Yung Liang (Appointed on 10 June 2005) – – 100 – 100Sunil Chandiramani – – 100 – 100Alain Ahkong Chuen Fah – – 100 – 100Daniel Ashton Carroll (Appointed on 10 June 2005) – – 100 – 100Chang See Hiang – – 100 – 100Timothy David Dattels (Appointed on 10 June 2005) – – 100 – 100Ho Kian Guan – – 100 – 100Dr Ronald Ling Jih Wen (Appointed on 15 July 2005) – – 100 – 100Ashish Jaiprakash Shastry (Appointed on 10 June 2005) – – 100 – 100David R. White (Appointed on 15 July 2005) – – 100 – 100Anil Thadani (Resigned on 15 July 2005) – – 100 – 100Tony Tan Choon Keat (Resigned on 10 June 2005) – – 100 – 100Ang Guan Seng (Resigned on 10 June 2005) – – 100 – 100Dr Prathap C. Reddy (Resigned on 15 July 2005) – – 100 – 100Key Executives of the GroupS$500,000 to below S$750,000Vivek Jetley 83 7 – 10 100S$250,000 to below S$500,000Nellie Tang 63 31 – 6 100Molly Foo 68 27 – 5 100Dr Timothy Low 73 21 – 6 100Dr Goh Jin Hian 66 28 – 6 100George Pusavat 62 31 – 7 100Lim Poh Suan 61 31 – 8 100The Company does not have any long-term incentive scheme apart from the existing Parkway Scheme 2001 (CCG, GuidanceNote 9.4). Details of the Parkway Scheme 2001 including the vesting schedule adopted by the Company are set out in theDirectors’ Report (CCG, Guidance Notes 8.5 and 9.4).None of the employees holding managerial position within the Group during the year was an immediate family member of anydirector or the Managing Director of the Company (CCG, Guidance Note 9.3).Accountability and AuditIn presenting the annual financial statements and quarterly announcements to Shareholders, it is the aim of the Board to provideShareholders with a balanced and comprehensible assessment of the Group’s position and prospects on a quarterly basis (CCG,Guidance Note 10.1). Management currently provides the Board with appropriately detailed management accounts of the Group’sperformance, position and prospects on a monthly basis (CCG, Guidance Note 10.2).116

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)Internal ControlsThe Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effectiveinternal control system will preclude all errors and irregularities, as a system is designed to manage rather than eliminate the riskof failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatementor loss. Nonetheless, the Audit Committee will:a) satisfy itself, by such means as it shall consider appropriate, that adequate counter measures (i.e. mechanisms andprocesses, such as sound internal control systems) are in place to identify and mitigate any material business risksassociated with the Group;b) ensure that a review of the effectiveness of the Group’s material internal controls, including financial, operating and compliancecontrols, and risk management, is conducted at least annually. Such review can be carried out by internal and/or externalauditors (CCG, Guidance Note 12.1);c) ensure that the internal control recommendations made by internal and external auditors have been implemented by theManagement; andd) ensure that the Board is in the position to comment on the adequacy of the internal controls of the Group.Based on the Audit Committee’s review, the Board is satisfied that there are adequate internal controls in the Company (CCG,Guidance Note 12.2).Internal AuditThe Group has an in-house internal audit function that is independent of the activities it audits. The internal audit unit wasestablished in 1996 to review the effectiveness of the material internal controls of the Group. The internal auditors are expected tomeet or exceed the standards set by nationally or internationally recognised professional bodies including the Standards for theProfessional Practice of Internal Auditing set by The Institute of Internal Auditors (CCG, Guidance Note 13.2).In this framework, the internal audit function provides reasonable assurance that the risks incurred by the Group in its activitieshave been identified, analysed and adequately managed by the Management. Internal audit also makes recommendations toenhance the effectiveness and efficiency of the Group.Communication with ShareholdersIn line with continuous disclosure obligations of the Company, pursuant to the SGX-ST Listing Manual and the Singapore CompaniesAct, Chapter 50 (the “Act”), the Board’s policy is that Shareholders are informed of all major developments of the Group.Information shall be communicated to Shareholders on a timely basis. Where there is inadvertent disclosure made to a selectedgroup, the Company will make the same disclosure publicly as soon as practicable (CCG, Guidance Note 14.2). Communication ismade through:a) annual reports that are prepared and issued to Shareholders. The Board makes every effort to ensure that the annual reportincludes all relevant information about the Group, including future developments and other disclosures required by the Actand Singapore Financial Reporting Standards;b) quarterly results announcements comprising a summary of the financial information and affairs of the Group for the relevant period;c) notices of and explanatory memoranda for annual general meetings and extraordinary general meetings;d) press and analyst briefings for the Group’s financial results as well as other briefings, as appropriate;e) press releases on major developments of the Group;f) disclosures to the SGX-ST; andg) the Group’s website at http://www.parkwayholdings.com at which Shareholders can access information on the Group.117

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 20054 Corporate Governance Statement (Cont’d)Communication with Shareholders (Cont’d)In addition, Shareholders are encouraged to attend the AGM to ensure a high level of accountability and to stay informed of theGroup’s strategy and goals. The AGM is the principal forum for dialogue with Shareholders (CCG, Principle 15 and Guidance Note15.1). The chairpersons of the Audit Committee, Nominating Committee and/or Remuneration Committee shall be present andavailable to address questions at general meetings. The external auditor shall also be present to assist the directors in addressingany relevant queries by Shareholders (CCG, Guidance Note 15.3).The notice of the AGM is despatched to Shareholders, together with explanatory notes or a circular on items of special business, atleast 16 days before the meeting. The Board welcomes questions from Shareholders who have an opportunity to raise issues eitherinformally or formally before or at the AGM (CCG, Guidance Note 15.1).Each item of special business included in the notice of the meeting is accompanied, where appropriate, by an explanation forthe proposed resolution. Separate resolutions are proposed for substantially separate issues at the meeting (CCG, GuidanceNote 15.2).5. Best Practices Guide – Dealing in SecuritiesThe Company has issued a policy on dealings in the securities of the Company to its directors and Management, setting out theimplications of insider trading and guidance on such dealings. It has adopted the Best Practices Guide on Dealings in Securitiesissued by the SGX-ST.118

Analysis of Shareholdingsas at 2 March 2006Range of No. of No. ofShareholdings Shareholders % Shares %1 to 999 260 5.42 107,648 0.021,000 to 10,000 3,730 77.79 15,877,955 2.1810,001 to 1,000,000 792 16.52 37,094,902 5.101,000,001 AND ABOVE 13 0.27 674,495,207 92.70TOTAL 4,795 100.00 727,575,712 100.00TOP TWENTY SHAREHOLDERS AS AT 2 MARCH 2006(as shown in the Register of Members)No. ofNo. Name of Shareholders Shares %1 RAFFLES NOMINEES PTE LTD 198,567,605 27.292 DBS NOMINEES PTE LTD 105,974,652 14.573 NEWBRIDGE SINGAPORE CO-INVESTMENT PTE LTD 61,486,486 8.454 NEWBRIDGE SINGAPORE HEALTHCARE PARTNERS PTE LTD 56,756,757 7.805 NEWBRIDGE SINGAPORE MEDICAL PARTNERS PTE LTD 56,756,757 7.806 CITIBANK NOMINEES SINGAPORE PTE LTD 45,695,940 6.287 HSBC (SINGAPORE) NOMINEES PTE LTD 45,481,004 6.258 UNITED OVERSEAS BANK NOMINEES PTE LTD 44,358,165 6.109 MERRILL LYNCH (SINGAPORE) PTE LTD 35,810,025 4.9210 MORGAN STANLEY ASIA (SINGAPORE) PTE LTD 15,408,421 2.1211 DB NOMINEES (S) PTE LTD 3,812,925 0.5212 SOCIETE GENERALE SINGAPORE BRANCH 2,621,470 0.3613 OCBC NOMINEES SINGAPORE PTE LTD 1,765,000 0.2414 HEXACON CONSTRUCTION PTE LTD 1,000,000 0.1415 LEE FOUNDATION 788,154 0.1116 ROYAL BANK OF CANADA (ASIA) LTD 736,000 0.1017 LEE LATEX PTE LIMITED 719,712 0.1018 UNIVERSITY OF MALAYSIA 710,640 0.1019 UOB KAY HIAN PTE LTD 689,664 0.0920 TENET INSURANCE COMPANY LTD 580,000 0.08(Others - Less than 580,000 shares each) 47,856,335 6.58TOTAL 727,575,712 100.00PUBLIC FLOATRule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited requires that at least 10% of the equity securities(excluding preference shares and convertible equity securities) of a listed company in a class that is listed is at all times held by thepublic. The Company has complied with this requirement. As at 2 March 2006, approximately 56% of its ordinary shares listed on theSingapore Exchange Securities Trading Limited were held in the hands of the public.SUBSTANTIAL SHAREHOLDERS AS AT 2 MARCH 2006(as shown in the Register of Substantial Shareholders)BeneficialDeemedNo. Name of Shareholders Shareholdings Shareholdings1 BLUM CAPITAL PARTNERS, L.P. Note 1 – 208,107,9882 BLUM G.A. III, LLC Note 1 – 208,107,9883 BLUM INVESTMENT PARTNERS, INC. Note 1 – 208,107,9884 COBALT LIMITED – 54,394,284 –5 DINAKAR SINGH Note 2 – 94,594,4746 DINAKAR SINGH LLC Note 2 – 94,594,4747 DINAKAR SINGH II LLC Note 5 – 61,486,4868 FMR CORP. – – 56,651,0009 JEFFREY D. EKBERG Note 7 – 56,756,75710 NEWBRIDGE ASIA III, L.P. Note 3 – 89,864,745119

Analysis of Shareholdingsas at 2 March 2006SUBSTANTIAL SHAREHOLDERS AS AT 2 MARCH 2006 (Cont’d)(as shown in the Register of Substantial Shareholders)BeneficialDeemedNo. Name of Shareholders Shareholdings Shareholdings11 NEWBRIDGE ASIA IV, L.P. Note 7 – 56,756,75712 NEWBRIDGE ASIA ADVISORS III, INC. Note 4 – 151,351,23113 NEWBRIDGE ASIA ADVISORS IV, INC. Note 7 – 56,756,75714 NEWBRIDGE ASIA GENPAR III, L.P. Note 4 – 151,351,23115 NEWBRIDGE ASIA GENPAR IV, L.P. Note 7 – 56,756,75716 NEWBRIDGE MAURITIUS CO-INVESTMENT LIMITED Note 5 – 61,486,48617 NEWBRIDGE MAURITIUS HEALTHCARE Note 6 – 56,756,757PARTNERS LIMITED18 NEWBRIDGE MAURITIUS MEDICAL PARTNERS Note 7 – 56,756,757LIMITED19 NEWBRIDGE PARKWAY, L.P. Note 5 – 61,486,48620 NEWBRIDGE PARKWAY III, L.P. Note 6 – 56,756,75721 NEWBRIDGE PARKWAY IV, L.P. Note 7 – 56,756,75722 NEWBRIDGE SINGAPORE CO-INVESTMENT – 61,486,486 –PTE. LTD.23 NEWBRIDGE SINGAPORE HEALTHCARE – 56,756,757 –PARTNERS PTE. LTD.24 NEWBRIDGE SINGAPORE MEDICAL – 56,756,757 –PARTNERS PTE. LTD.25 RICHARD C BLUM Note 1 – 208,107,98826 TARRANT ADVISORS, INC. Note 1 – 208,107,98827 TPG-AXON CAPITAL MANAGEMENT, L.P. Note 2 – 94,594,47428 TPG-AXON GP, LLC Note 2 – 94,594,47429 TPG HF MANAGEMENT, LLC Note 2 – 94,594,47430 TPG-AXON PARTNERS (OFFSHORE), LTD Note 8 – 94,594,47431 TPG-AXON PARTNERS, L.P. Note 5 – 61,486,48632 TPG-AXON PARTNERS GP, L.P. Note 5 – 61,486,486Notes:Note 1 – Deemed interest by virtue of being associated with Newbridge Asia III, L.P. (“Newbridge”), Newbridge Singapore Medical Partners Pte. Ltd.(“NSMP”) and Newbridge Singapore Co-Investment Pte. Ltd. (“NSCI”) under Section 7 of the Companies Act.Note 2 – Deemed interest by virtue by being associated with TPG-Axon Partners (Offshore), Ltd (“TPG-Axon”) under Section 7 of the Companies Act.Note 3 – (i) Deemed interest by virtue of being associated with Newbridge Singapore Healthcare Partners Pte. Ltd. (“NSHP”) under Section 7 of theCompanies Act.(ii) Deemed interested in 2,000 shares in Parkway held by Dr Lim Cheok Peng (“LCP”) pursuant to an agreement dated 10 June 2005between LCP, Newbridge and TPG-Axon.(iii) Deemed interested in 33,105,988 shares in Parkway collectively held by Keck Seng Malaysia Berhad (“KS Malaysia”), Ocean Inc. (“Ocean”)and their respective affiliates and nominees pursuant to an agreement dated 6 July 2005 between KS Malaysia, Ocean, Newbridge andTPG-Axon.Note 4 – Deemed interest by virtue of being associated with NSCI and Newbridge under Section 7 of the Companies Act.Note 5 – Deemed interest by virtue of being associated with NSCI under Section 7 of the Companies Act.Note 6 – Deemed interest by virtue of being associated with NSHP under Section 7 of the Companies Act.Note 7 – Deemed interest by virtue of being associated with NSMP under Section 7 of the Companies Act.Note 8 – (i) Deemed interest by virtue of being associated with NSCI under Section 7 of the Companies Act.(ii) Deemed interested in 2,000 shares in Parkway held by LCP pursuant to an agreement dated 10 June 2005 between LCP, Newbridge andTPG-Axon.(iii) Deemed interested in 33,105,988 shares in Parkway collectively held by KS Malaysia, Ocean and their respective affiliates and nomineespursuant to an agreement dated 6 July 2005 between KS Malaysia, Ocean, Newbridge and TPG-Axon.120

Notice of Annual General MeetingParkway Holdings Limited(Co. Reg. No. 197400320R)NOTICE IS HEREBY GIVEN That the Thirty-Third Annual General Meeting of the Company will be held on Wednesday, 12 April 2006 at11.00 am at The Lecture Theatre, Level 3, Gleneagles Hospital, 6A Napier Road, Singapore 258500 for the purpose of transacting thefollowing businesses:1. To receive and, if approved, to adopt the Directors' Report and Audited Accounts for the year ended 31st December 2005 and theAuditors' Report thereon.2. To declare a Final Dividend of 5 cents per ordinary share less tax in respect of the year ended 31st December 2005.3. (a) To re-elect Mr. Richard Seow Yung Liang who retires pursuant to Article 103 of the Articles of Association of the Company,as Director of the Company.(b)(c)(d)(e)To re-elect Mr. Timothy David Dattels who retires pursuant to Article 103 of the Articles of Association of the Company,as Director of the Company.To re-elect Dr. Ronald Ling Jih Wen who retires pursuant to Article 103 of the Articles of Association of the Company,as Director of the Company.To re-elect Mr. Ashish Jaiprakash Shastry who retires pursuant to Article 103 of the Articles of Association of the Company,as Director of the Company.To re-elect Mr. David R. White who retires pursuant to Article 103 of the Articles of Association of the Company, as Directorof the Company.4. (a) To re-elect Mr. Alain Ahkong Chuen Fah who retires pursuant to Article 97 of the Articles of Association of the Company,as Director of the Company.(b)To re-elect Mr. Sunil Chandiramani who retires pursuant to Article 97 of the Articles of Association of the Company, as Directorof the Company.5. To approve Directors’ Fees of $679,863 for 2005 (2004 : $630,000).6. To re-appoint Messrs. KPMG as Auditors and to authorise the Directors to fix their remuneration.7. As Special Business:To consider and, if thought fit, to pass (with or without modifications) the following resolutions (a) and (b) as ordinary resolutions:(a)That subject to Section 161 of the Companies Act, Cap. 50, the Articles of Association of the Company and the approval of therelevant Stock Exchange and/or other governmental or regulatory bodies where such approval is necessary, the Board ofDirectors of the Company be and is hereby authorised to allot and issue shares and convertible securities in the Company atany time to such persons, upon such terms and conditions and for such purposes as the Board of Directors may deem fitPROVIDED ALWAYS THAT:(I)the aggregate number of shares to be issued pursuant to this Resolution does not exceed fifty per cent. of the issuedshare capital of the Company at the time of the passing of this Resolution, of which the aggregate number of sharesissued other than on a pro rata basis to existing shareholders does not exceed twenty per cent. of the Company’s issuedshare capital;121

Notice of Annual General Meeting(II)(subject to such manner of calculation as prescribed by the Singapore Exchange Securities Trading Limited (the“SGX-ST”)) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (I)above, the percentage of the issued share capital of the Company is based on the Company’s issued share capital at thetime of passing of this Resolution after adjusting for:(i)(ii)(iii)new shares arising from the conversion or exercise of convertible securities;new shares arising from the exercise of share options outstanding or subsisting at the time of the passing of thisResolution, provided the options were granted in compliance with Part VIII of Chapter 8 of the SGX-ST ListingManual; andany subsequent consolidation or subdivision of shares; and(III) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continuein force until the conclusion of the next Annual General Meeting of the Company or the date by which the next AnnualGeneral Meeting of the Company is required by law to be held, whichever is the earlier.(b)That the Board of Directors of the Company be and is hereby authorised to issue and allot from time to time such number ofShares as may be required to be issued pursuant to the exercise of options granted under the Parkway Share Option Scheme2001 ("Parkway Scheme 2001") PROVIDED ALWAYS THAT the aggregate number of Shares to be issued pursuant to theParkway Scheme 2001 does not exceed fifteen per cent. of the issued share capital of the Company from time to time.8. To transact any other business which may normally be dealt with at an Annual General Meeting.Books Closure & Dividend Payment DateThe Share Transfer Books and Register of Members of the Company will be closed on 24 April 2006 to determine Members’ entitlementsto the final dividend of 5 cents less tax.Duly completed registrable transfers in respect of shares in the Company received up to the close of business at 5:00 pm on 21 April 2006by the Company's Share Registrar, M & C Services Private Limited of 138 Robinson Road #17-00, The Corporate Office, Singapore068906, will be registered to determine Members’ entitlements to such dividend. Members whose Securities Accounts with the CentralDepository (Pte) Limited are credited with shares in the Company as at 5:00 pm on 21 April 2006 will be entitled to such proposed dividend.The proposed final dividend, if approved at the Thirty-Third Annual General Meeting, will be paid on 4 May 2006.By Order of the BoardJune Tay Kwok FungHo Li LiCompany SecretariesSingapore, 24 March 2006122

Notice of Annual General MeetingNotes:1. A member entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote instead of him. Aproxy need not be a member of the Company.2. Where a member appoints two proxies, the Company may treat the appointments as invalid unless the member specifies the proportion of hisshareholding (expressed as a percentage of the whole) to be represented by each proxy.3. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at No. 1 Grange Road#11-01, Orchard Building, Singapore 239693 not less than 48 hours before the time appointed for the Annual General Meeting.4. The instrument appointing a proxy or proxies must be under the hand of the appointer or of his attorney duly authorised in writing. Where theinstrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer orattorney duly authorised.5. Mr. Alain Ahkong Chuen Fah, if re-elected, will remain as an independent member and the Chairman of the Audit Committee.6. Mr. Ashish Jaiprakash Shastry, if re-elected, will remain as an independent member of the Audit Committee.7. Mr. Daniel Ashton Carroll was appointed as a director of the Company during the financial year ended 31 December 2005 and pursuant to Article83 of the Articles of Association of the Company, Mr. Carroll will retire from office at this Annual General Meeting. Although Mr. Carroll is eligible forre-election, Mr. Carroll has confirmed to the Company that he does not wish to stand for re-election.Explanatory Notes on special business to be transacted8. (a) The ordinary resolution proposed in item 7 (a) above, if passed, will empower the Board of Directors of the Company, from the date of theabove Meeting until the next Annual General Meeting, to issue shares in the Company up to an amount not exceeding in total fifty per cent.(50%) of the issued share capital of the Company for the time being for such purposes as they consider would be in the interest of theCompany. This authority will, unless revoked or varied at a general meeting, expire at the next Annual General Meeting of the Company.(b)The ordinary resolution proposed in item 7 (b) above, if passed, will enable the Board of Directors of the Company, from the date of the aboveMeeting until the next Annual General Meeting, to issue shares in the Company up to an amount not exceeding in total fifteen per cent. (15%)of the issued share capital of the Company for the time being pursuant to the exercise of the options under the Parkway Scheme 2001. Thisauthority will, unless revoked or varied at a general meeting, expire at the next Annual General Meeting of the Company.123

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Proxy FormParkway Holdings Limited(Incorporated in the Republic of Singapore)(Co. Reg. No. 197400320R)IMPORTANTFor investors who have used their CPF monies to buy shares in thecapital of Parkway Holdings Limited, this Annual Report is sent tothem at the request of their CPF Approved Nominees and is sentsolely FOR INFORMATION ONLY. This Proxy Form is not valid foruse by CPF investors and shall be ineffective for all intents andpurposes if used or purported to be used by them.I/Weofbeing a Member(s) of Parkway Holdings Limited hereby appointofor failing him,ofas my / our proxy to vote for me / us on my / our behalf at the Thirty-Third Annual General Meeting of the said Company tobe held on Wednesday, 12 April 2006 and at any adjournment thereof.By Show of HandsBy PollNo. of Votes No. of VotesNo. Resolutions For* Against* For** Against**1. Adoption of Directors’ Reports,Audited Accounts and Auditors’ Report.2. Declaration of Final Dividend of 5 centsless tax.3. Re-election of Director under Article 103:a. Mr. Richard Seow Yung Liangb. Mr. Timothy David Dattelsc. Dr. Ronald Ling Jih Wend. Mr. Ashish Jaiprakash Shastrye. Mr. David R. White4. Re-election of Director under Article 97:a. Mr. Alain Ahkong Chuen Fahb. Mr. Sunil Chandiramani5. Approval of Directors’ fees for 2005.6. Appointment of Auditors and fixing of theirremuneration.7. Special Businesses:a. Authority to issue and allot shares pursuantto Section 161 of the Companies Act, Cap.50.b. Authority to issue and allot sharespursuant to the exercise of options underthe Parkway Share Option Scheme 2001.8. Any Other Business.* Please indicate your vote “For” or “Against” with a “̌” within the box provided.** If you wish to exercise all your votes “For” or “Against”, please indicate with a “̌” within the box provided.Alternatively, please indicate the number of votes “For” or “Against” each resolution within the box provided.If the Form of Proxy contains no indication as to how the proxyshould vote in relation to each resolution, the proxy will vote asthe proxy deems fit or abstain from voting.NUMBER OF SHARES HELDAs witness my/our hand(s)this day of 2006(Signature or Common Seal of Member)1

Proxy FormNotes:1. Please insert the total number of Shares held by you. If you only have Shares entered against your name in the Depository Register(as defined in Section 130A of the Companies Act, Cap. 50), you should insert that number of Shares. If you only have Shares registeredin your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your name in theDepository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Sharesentered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted,this instrument of Proxy will be deemed to relate to all the Shares held by you.2. A member entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote instead ofhim. A proxy need not be a member of the Company.3. Where a member appoints two proxies, the Company may treat the appointments as invalid unless the member specifies the proportion ofhis shareholding (expressed as a percentage of the whole) to be represented by each proxy.4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at No. 1 Grange Road #11-01,Orchard Building, Singapore 239693 not less than 48 hours before the time appointed for the Annual General Meeting.5. The instrument appointing a proxy or proxies must be under the hand of the appointer or of his attorney duly authorised in writing. Wherethe instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand ofan officer or attorney duly authorised.6. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible orwhere the true intentions of the appointer are not ascertainable from the instructions of the appointer specified in the instrument appointinga proxy or proxies. In addition, in the case of members whose Shares are entered against their names in the Depository Register, theCompany may reject any instrument appointing a proxy or proxies lodged if such member is not shown to have Shares entered againsthis/its names in the Depository Register 48 hours before the time appointed for holding the Annual General Meeting as certified byThe Central Depository (Pte) Limited to the Company.7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act asits representative at the Annual General Meeting in accordance with Section 179 of the Companies Act, Cap. 50. The representativeattending the meeting must produce evidence of his authority.2

Corporate Offi cePARKWAY HOLDINGSLIMITED1 Grange Road#11-01 Orchard BuildingSingapore 239693Tel: (65) 6796 0600Fax: (65) 6796 0634/5www.parkwayholdings.comSingapore HospitalsEAST SHORE HOSPITAL321 Joo Chiat PlaceSingapore 427990Tel: (65) 6344 7588Fax: (65) 6345 4966www.eastshore.com.sgGLENEAGLES HOSPITAL6A Napier RoadSingapore 258500Tel: (65) 6473 7222Fax: (65) 6472 5816www.gleneagles.com.sgMOUNT ELIZABETHHOSPITAL3 Mount ElizabethSingapore 228510Tel: (65) 6737 2666Fax: (65) 6737 1189www.mountelizabeth.com.sgInternational HospitalsGLENEAGLES INTANMEDICAL CENTRE,KUALA LUMPUR282 & 286 Jln Ampang50450 Kuala LumpurTel: (60-3) 4257 1300Fax: (60-3) 4257 9233www.gimc.com.myGLENEAGLES MEDICALCENTRE, PENANG1 Jln Pangkor, 10050 PenangMalaysiaTel: (60-4) 227 6111Fax: (60-4) 226 2994www.gleneagles-penang.comAPOLLO GLENEAGLESHOSPITAL, KOLKATA58 Canal Circular RoadKolkata 700 054India, West BengalTel: (91-33) 2320 5211-15Fax: (91-33) 2320 5184www.apollogleneagleshospitals.comGLENEAGLES JPMC,BRUNEIJerudong Park, BG 3122Brunei DarussalamTel: (673) 261 1883Fax: (673) 261 1886www.gleneaglesjpmc.com.bnPANTAI MEDICAL CENTRENo. 8, Jalan Bukit Pantai59100 Kuala LumpurTel: (60-3) 2296 0888Fax: (60-3) 2282 1557Email: pmc@pantai.com.myPANTAI CHERAS MEDICALCENTRE1, Jalan 1/96ATaman Cheras Makmur56100 Kuala LumpurTel: (60-3) 9132 2022Fax: (60-3) 9132 0687Email: cpantai@tm.net.myPANTAI KLANG SPECIALISTMEDICAL CENTRE42, Jalan Persiaran Raja MudaMusa41100 Klang, SelangorTel: (60-3) 3372 5222Fax: (60-3) 3371 5705Email: infoklang@pantai.com.myHOSPITAL PANTAI PUTRI126, Jalan Tambun31400 Ipoh, PerakTel: (60-5) 548 4333Fax: (60-5) 545 1163Email: pantaihp@tm.net.myHOSPITAL PANTAI MUTIARA82, Jalan TengahBayan Baru11900 Pulau PinangTel: (60-4) 643 3888Fax: (60-4) 643 2888Email:admin@hpm.com.myHOSPITAL PANTAI AYERKEROHNo. 2418-1, KM 8Lebuh Ayer Keroh75450 MelakaTel: (60-6) 231 9999Fax: (60-6) 231 3299Email:hpak@po.jaring.myHOSPITAL PANTAI INDAHJalan Perubatan 1Pandan Indah55100 Kuala LumpurTel: (60-3) 4289 2828Fax: (60-3) 4289 2829Email:hpi@pantai.com.myKey Healthcare ServicesGLENEAGLES CRCPTE LTD*111 Somerset Road#11-02, Singapore PowerBuildingSingapore 238164Tel: (65) 6737 3642Fax: (65) 6471 3642www.gleneaglescrc.comPARKWAY LABORATORYSERVICES LTD*28 Ayer Rajah Crescent #03-08Singapore 139959Tel: (65) 6278 9188Fax: (65) 6248 5878www.parkwaylab.com.sgMEDI-RAD ASSOCIATES LTD*302 Orchard Road#18-01, Tong BuildingSingapore 238862Tel: (65) 6736 3538 ext 37Fax: (65) 6732 7776www.medirad.com.sgPARKWAY SHENTONPTE LTD*Cyberhub Building20 Bendemeer Road # 01-02/06Singapore 339914Tel: (65) 6227 7777Fax: (65) 6225 3735www.parkwayshenton.comFOMEMA SDN BHDLot G8 & G9, Level 5, Block G (Central)Pusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel: (60-3) 2094 6188Fax: (60-3) 2094 6802www.fomema.com.myWe Believeannual report 2005PANTAI MEDIVESTSDN BHDMezzanine Floor, West WingBangunan AvenueNo. 8, Jalan Damansara EndahDamansara Heights50490 Kuala LumpurTel: (60-3) 2092 1000Fax: (60-3) 2092 5000Email: custsvc@medivest.com.myPANTAI PREMIERPATHOLOGY SDN BHD3rd Floor, Block APantai Medical CentreNo. 8, Jalan Bukit Pantai59100 Kuala LumpurTel: (60-3) 2282 8795Fax: (60-3) 2282 2131Email: admin@premierpathology.com.myMedical Referral CentresSINGAPORE83 Clemenceau Avenue#10-05/06/07UE SquareSingapore 039920Tel: (65) 6735 5000 (24-hour hotline)Fax: (65) 6732 6733www.imrc.com.sgEmail: mrc@parkway.sgBANGLADESHChittagongDhakaBRUNEI DARUSSALAMCANADAVancouverCHINAShanghaiHONG KONGINDIAChennaiMumbaiNew DelhiPunjabINDONESIABalikpapanBandungBanjarmasinBatamJakartaJambiMakassarManadoMedanPadangPalembangPekan BaruPontianakSamarindaSemarangSolo/YogyaSurabayaMALAYSIAJohor BahruKota KinabaluKuala LumpurKuchingMYANMARYangonNIGERIALagosPAKISTANLahoreKarachiIslamabadPHILIPPINESManilaRUSSIAVladivostokSRI LANKAColomboTHAILANDBangkokUNITED ARAB EMIRATESAbu DhabiUNITED KINGDOMLondonVIETNAMHanoiHo Chi Minh* Corporate liaison office35design & production by Q-PLUS design

PARKWAY HOLDINGS LIMITED(Co. Reg No. 197400320R)1 Grange Road#11-01 Orchard BuildingSingapore 239693Tel: (65) 6796 0600Fax: (65) 6796 0634/5www.parkwayholdings.com