Annual Report 2003 - Parkway Pantai

PASSION FORPEOPLE &PROGRESSPARKWAY HOLDINGSAnnual Report 2003PARKWAY HOLDINGS LIMITED

CONTENTSAbout Us 01Our Businesses 02Parkway’s Regional Network 03Chairman’s Letter to Shareholders 04Managing Director’s Message 08Highlights of 2003 12Financial Review 13Business Review 18Board of Directors 30Corporate Information 32Senior Management 33Financials 35

ABOUT USParkway Holdings Limited is Asia’s premier integrated healthcare provider withthe largest regional network of private hospitals and healthcare facilities.We provide quality healthcare with a passion for people and progress.Taking the lead in the regional healthcare industry, we strive to be at thecutting-edge of medical developments, anchored by our values of integrity,excellence, innovation and enterprise.At Parkway, we understand and build value.VISIONOur vision is to bea leading international healthcare provider of choicewith a passion for people and progress.MISSIONWe aim to delivercomprehensive healthcare services and quality care consistentlyto provide value to our customers. We achieve this throughresponsible practices and continuous investments inour people and technologyto meet the challenges of tomorrow.

OUR BUSINESSESAN INTERNATIONAL HEALTHCARE PROVIDER OF CHOICEThe Parkway Group is proud to be at the forefront of healthcare provision in Asia.Backed by close to 50 years of experience in hospital development, management and operations, we arecommitted to providing quality care to patients through a full range of healthcare services. Parkway’s 1,110specialists deliver the most advanced treatment across 40 specialties, and under one roof.PARKWAY HOLDINGS LIMITEDHOSPITAL DIVISIONHEALTHCARE SERVICESDIVISIONNON-HEALTHCARESINGAPOREHOSPITALS• East Shore Hospital• Gleneagles Hospital• Mount Elizabeth HospitalINTERNATIONALHOSPITALS• Gleneagles JPMC, Brunei• Apollo Gleneagles Hospital,Kolkata• Gleneagles Intan MedicalCentre, Kuala Lumpur• Gleneagles Medical Centre,PenangPRIMARY HEALTHCARE• GP Services• Dental ServicesDIAGNOSTIC SERVICES• Radiology Services• Laboratory ServicesCLINICAL RESEARCHCONSULTANCY SERVICES• Hospital Development• Hospital ManagementMANAGED CAREPROPERTY ANDOTHER INVESTMENTSMEDICAL ASSISTANCEDIALYSIS SERVICEPROCUREMENT SERVICESHEALTHCARE IT SERVICESHOMECARE ANDREHABILITATIONMEDICAL ASSISTANCE2Parkway Holdings Limited Annual Report 2003

Apollo Gleneagles Hospital, KolkataGleneagles JPMC, BruneiGleneagles Medical Centre, PenangGleneagles Intan, Kuala Lumpur

CHAIRMAN’S LETTER TO SHAREHOLDERS“The substantial investments which Parkway has madein our assets and our people are keys to sustainablelong-term growth and our success as a leader in theregional healthcare industry.”Dear Shareholders,2003 was a year of unprecedented challenge for the global economy.Across the world, businesses experienced a harsh economic climateaccentuated by uncertainties posed by the US-led Iraqi war and theoutbreak of Severe Acute Respiratory Syndrome (SARS) in Asia.These events had a significant impact on Parkway, but I am pleased to saythat our dedicated team of healthcare professionals rose admirably tomeet these challenges. Parkway’s people are our greatest asset and theirresolve in a year of crisis reaffirms the Group’s strength and demonstratesits readiness to take on greater challenges and opportunities in the future.The fact that the overall performance of the Group remained resilient istestimony to the soundness of our business model and the strength of ourfundamentals.Beyond SARS, 2003 was a year of consolidation for Parkway followingthree years of restructuring. Our efforts concentrated on fine-tuning andimplementing the Group’s ‘Integrated Healthcare’ strategy to build theParkway brand into Asia’s leading healthcare provider of choice, andtherefore to enhance the value of the corporation.Positioning the Group for sustained future growth has entailed continuedinvestment in both training and cutting-edge equipment and facilities.In particular, our ongoing focus on training and service improvement shouldcontinue to keep us at the top of the region’s healthcare industry.Our StrategyParkway is the only private healthcare provider in Asia with a presenceacross primary, secondary and tertiary care as well as a number ofestablished hospitals outside its home country. In the face of steadilygrowing demand for high quality healthcare across the region, Parkway isuniquely positioned to meet these needs in an integrated way, tappingsynergies across the spectrum of medical care and across geographies.4Parkway Holdings Limited Annual Report 2003

This is the essence of our ‘Integrated Healthcare’ strategy, which we believewill generate steady growth over time and build shareholder value as wecapitalise on our position at the forefront of the region’s healthcare industry.The different facets of this ‘Integrated Healthcare’ strategy comprise:• Continually strengthening our position in Singapore’s private healthcaresector as the market leader for tertiary and quaternary care;• Enhanced marketing efforts to attract an increasing number ofinternational patients to Singapore;• Investing in our Healthcare Services businesses as key drivers of growththrough introduction of new, innovative and cutting-edge technologies;• Tapping our operating expertise to further develop our network ofInternational Hospitals through growth of existing facilities and addingnew hospitals under management;• Identifying and investing selectively in new initiatives which arecomplementary to our core activities and which have the promise ofattractive returns; and• Continually developing our expertise and core competencies throughtraining and motivating our personnel to create a dynamic andprogressive environment for our people.Parkway Holdings Limited Annual Report 2003 5

CHAIRMAN’S LETTER TO SHAREHOLDERSIn line with this strategy, over the past year our Singapore Hospitals continuedto add to their capabilities in delivering specialised quaternary care in areassuch as cancer treatment and liver transplants. Our laboratories, radiology andprimary care businesses (‘Healthcare Services’) all implemented growth plansand introduced new services which will contribute to future growth.Our International Hospitals division is performing particularly well: the Malaysianhospitals continue to grow and the Gleneagles Jerudong Medical Centre inBrunei Darussalam has not only set new medical milestones for Brunei, buthas also become profitable in less than a year. Following on its success, we arelooking for additional opportunities in that market.The Apollo Gleneagles Hospital in Kolkata, our joint-venture with the ApolloHospitals Group in India, officially opened in November 2003, and has thepotential to become the hospital of choice for India’s north-eastern region andthe neighbouring countries. To reinforce our commitment to expandinternationally, we have recently brought in new managerial talent to lead ourinternational business development team.Outlook for 2004The Group’s business outlook for 2004 is generally positive. The number oflocal and international patients has almost returned to pre-SARS levels.Additionally, revenue intensity at our hospitals continues to grow in line with ourfocus on high value-added services. These favourable trends should translateinto good financial performance for the Group.Our brand-building and staff training efforts have also shown good results.Parkway won the Superbrands Award for excellent branding of its premier MountElizabeth and Gleneagles Hospitals. Gleneagles Hospital also won the AsianHospital Management Award for Internal Service, beating 103 internationalentries.During the year, the Group partnered with Singapore government agenciesin the SingaporeMedicine initiative, to actively market Singapore as aninternational healthcare hub. This is naturally complementary to our ownregional marketing efforts.6Parkway Holdings Limited Annual Report 2003

As the dominant player in the Singapore private healthcare market, we areconstantly looking for ways to leverage on the city’s strengths - its pro-businessenvironment, world-class infrastructure and high medical standards - tostrengthen Parkway’s brand and build shareholder value.Consistent with the regional expansion of our network, we have intensified ourmarketing efforts across Asia. A top choice for many patients around the world,Parkway currently attracts more than half of the international patients who visitSingapore each year. In 2002, some 200,000 foreign patients came toSingapore (Source: Singapore Tourism Board).As you know, we have also been divesting our non-core assets to position yourcompany as a pure healthcare services business. In line with this strategy,in January of 2004 we disposed of our 37% interest in Lee Hing DevelopmentLimited, one of our last remaining non-healthcare investments.ConclusionGiven the difficult year that we have all just come through, I am pleased thatyour company has been able to deliver a credible financial result. Thanks to astrong recovery in the third and fourth quarters of 2003, we were able to achievea level of profitability that enabled us to declare an increased dividend payoutover the previous year.Naturally, none of this would have been possible without the dedication andeffort of all our colleagues, doctors and business partners. Consequently,I wish to take this opportunity to thank all of you for your significantcontributions through a trying period. Your ongoing support will enable theGroup to continue to remain at the forefront of the healthcare service providercommunity and to develop its business reach as it expands through Asia.ANIL THADANICHAIRMANPARKWAY HOLDINGS LIMITEDParkway Holdings Limited Annual Report 2003 7

MANAGING DIRECTOR’S MESSAGE“The Parkway team’s strong performance in 2003,despite tough operating conditions, demonstrates thatour strategies are clearly able to create value.”Dear Shareholders,The Year in PerspectiveThe 2003 performance of the Parkway Group exceeded expectations,inspite of the ravages of the Severe Acute Respiratory Syndrome (SARS)outbreak on the regional economy.I am pleased to announce that the Group saw an improvement in earningscompared to 2002. Strong recovery in the third and fourth quarters bufferedthe impact of the SARS outbreak on the Group’s revenue earlier in 2003.As we remember at Parkway, the year 2003 focused largely on theindomitable spirit of the Parkway team and its ability to respond swiftly tochallenges. I applaud our doctors, nurses and personnel for showingcourage and commitment.During the SARS period the Group took all measures necessary to ensurean infection-free environment at all our facilities. Stringent infection controlprotocols were implemented to provide our patients and personnel addedprotection. Not only was Parkway the first private hospital group to installthermal scanners at our Singapore hospitals, we were also the first inSingapore to adopt cutting-edge bio-decontamination technology.During the year, Parkway’s experience in hospital management anddevelopment was recognised in the Superbrands Award given to MountElizabeth and Gleneagles Hospitals.Our Accomplishments in 2003During the year we consolidated our business strategies, fine-tuned ourfocus and moved towards greater integration of services.Our Singapore Hospitals registered higher admissions and revenueintensity due to increased competitiveness in common procedures and ourcontinued focus on high value-added tertiary and quaternary services,in which Parkway has a strategic advantage.Major investments in advanced equipment, new services and facilities weremade. The Group now offers the most advanced cancer diagnosis andmanagement techniques and the most comprehensive liver transplantservices in the region. Its newly upgraded Operating Theatre complex atMount Elizabeth Hospital is geared for complex procedures of the future.8Parkway Holdings Limited Annual Report 2003

In Healthcare Services, the Group invested for growth. Parkway LaboratoryServices’ fully automated clinical laboratory is now able to handle commonand esoteric tests in greater volume and with improved efficiency to meetregional demands. MediRad invested in the cutting-edge Positron EmissionTomography – Computerised Tomography (PET-CT) scan and Parkway Shentonnot only established a new flagship clinic at Republic Plaza, but it also set upseven other clinics as well.On the international front, the Group is developing strategic partnerships withestablished healthcare players in the region, with a focus on China, India,Malaysia, Indonesia and Vietnam. The official opening of Apollo GleneaglesHospital, Kolkata, augurs well for the Group’s expansion into India. Ourexisting International Hospitals are doing exceptionally well.Further extending the Parkway network across Asia, the Group set up six newMedical Referral Centres (MRC) in major Asian cities to attract internationalpatients, bringing the total to 14. The MRC, a free service, connects patients inreal time to relevant medical services and doctors across the Parkway Group.During the year, investment in expertise, training and service quality initiativeswas stepped up as we continue to develop our strong, highly experienced team.With the Parkway Centre for Medical Simulation, we now have the region’smost advanced simulation training facility, setting a gold standard for healthcaretraining.The pool of specialists at the Group’s Medical Centres in Singapore hasexpanded from over 850 to 1,110. This is testimony to the Parkway Group’ssound business model, excellent business practices and dynamic, progressiveenvironment.Whilst enhancing our topline, we continually review ways of managing costs.This year, some of the initiatives include switching to more cost-effectivealternatives in purchasing, as well as centralising our supplies and sterilisationdepartment.Financial PerformanceThe Parkway Group maintained its level of earnings in 2003, with a slightimprovement over the previous year, despite the impact of the SARS outbreakon the economy.For the financial year ended 31 December 2003, the Group achieved a netprofit after tax and minority interest of S$33.6 million, representing a 1%increase over the S$33.3 million achieved in the previous year.Higher patient admissions and revenue intensity in the final quarters of theyear mitigated the impact of SARS on the Group’s performance in the secondquarter of 2003.Revenues grew from S$337.6 million in 2002 to S$348.6 million in 2003,representing a 3% growth. This reflects modest improvements across all corehealthcare operations in the second half of the year.Parkway Holdings Limited Annual Report 2003 9

The Group’s EBITDA (earnings before interest, taxes, depreciation andamortisation) was slightly lower at S$85.8 million, relative to the S$89.4 millionin 2002. Strong contributions from the International and Singapore Hospitalssegments were offset by the weaker Healthcare Services segment which wasthe most badly impacted by SARS.Singapore HospitalsThe Group’s highest revenue contributor, the Singapore Hospitals segment,performed better than expected. Revenue contribution from this businesssegment rose to S$223.4 million in 2003, up 3% from S$217.1 million in 2002.This is mainly attributable to higher inpatient admissions and revenue intensityand strong recovery post-SARS in the third and fourth quarters.EBITDA for the Singapore Hospitals improved to S$64.7 million, a 3% rise fromthat of the previous year, supported by both higher volume and intensity.Healthcare ServicesThe Group’s Healthcare Services segment registered a slight 1% growth inrevenue from S$78.2 million in 2002 to SS$78.7 million in 2003. This was largelyattributable to new corporate contracts won by Parkway Shenton which helpedto offset the impact of SARS during the second quarter.Healthcare Services’ EBITDA, however, declined by 23% from S$18.1 millionin 2002 to S$13.9 million in 2003. The Group’s aggressive expansion plans inthis segment which had been put in place prior to SARS, resulted in additionaloperating costs in the face of revenue declines during the SARS period.International HospitalsThe Group’s International Hospitals posted an impressive 43% growth inrevenue from S$29.8 million in 2002 to S$42.6 million in 2003.International Hospitals made a significant 275% improvement in EBITDA fromS$1.62 million in the previous year to S$6.07 million in 2003.This strong improvement was due to higher revenue intensity and admissionsat the Gleneagles Medical Centre in Penang, and maiden contributions fromthe Group’s Cardiac Centre in Brunei.Non-HealthcareRevenue from the Non-Healthcare segment decreased from S$12.5 milllion in2002 to S$3.9 million in 2003 due to continued divestment of Non-Healthcareassets in the year. EBITDA from this segment declined by 83%, consistent withour divestment strategy.10 Parkway Holdings Limited Annual Report 2003

Prospects Looking ForwardThe Management is optimistic that operating performance in 2004 shouldimprove over 2003, provided that the economy remains strong and regionalstability prevails. The strategies the Group has put in place in the pastthree years are showing results and will enable the Group to capitalise onopportunities.In the year ahead, a strong revenue stream from recently introduced andupgraded specialty services can be expected. These include our PET-CT scanservices, micro-multileaf collimator radiosurgery and our Liver Centre.Additional new services which are now being planned will further extend theGroup’s already comprehensive range of services and contribute positively toperformance. These include enhancement of bone marrow transplant and stemcell therapy, a second In-Vitro Fertilisation (IVF) centre and a Hand andMicrosurgery Centre.To develop the Parkway network further, our reinforced international team willfocus closely on key markets such as China, India, Malaysia, Indonesia andVietnam that have the promise of good returns.In closing, I wish to take this opportunity to thank the Board of Directors fortheir leadership and support. My heartfelt thanks and praise go out to all ourstaff for their hard work and commitment in making our performance in 2003 agood one despite trying conditions. As a tribute, this year’s annual report isentitled “Passion for People and Progress”, as inspired by our corporate vision.Your continued support will strengthen the Parkway Group’s lead in theSingapore and regional healthcare market.DR LIM CHEOK PENGMANAGING DIRECTORPARKWAY HOLDINGS LIMITEDParkway Holdings Limited Annual Report 2003 11

PARKWAY: HIGHLIGHTS OF 2003February Upgrading of Mount Elizabeth Hospital’s Operating Theatres, Phases 4 and 5.The Operating Theatres have undergone a total facelift with structural modifications tailored tosupport complex surgical procedures.Set up in August 2002, Gleneagles Jerudong Park Medical Centre, Brunei Darussalam, wenton quickly to perform the first angiogram in Brunei Darussalam.MarchMayOnset of SARS outbreak in SingaporeMount Elizabeth Hospital:First hospital in Singapore to install a thermal scanner, in line with Parkway’s proactivemeasures to maintain its SARS-free status.Parkway’s hospitals are first to adopt state-of-the-art bio-decontamination technology toremain SARS-free.Gleneagles Jerudong Park Medical Centre performs the first open heart surgery in BruneiDarussalam.JuneThe World Health Organization officially declares Singapore SARS-free.Official launch of Parkway Centre for Medical Simulation, the region’s most advancedinteractive facility for medical simulation training.JulyAugustOctoberNovemberMount Elizabeth Hospital becomes the first private hospital in Singapore to offer PET-CT scans.At the same time, Medi-Rad Associates (a subsidiary of Parkway Holdings Limited), SingHealthand AsiaMedic, partner in the joint-venture Positron Tracers Pte Ltd, launch Singapore’s firstcyclotron facility to produce radioactive glucose isotopes for advanced diagnosticscanning via PET-CT scans.Parkway Laboratory Services:First in Asia to launch revolutionary prenatal screening test for genetic abnormalities.DNA-based quantitative fluorescent – polymerase chain reaction (QF-PCR) method providesrapid and effective prenatal diagnosis.Gleneagles Hospital:Set up Asia’s first specialised liver intensive care unit.Parkway Laboratory Services:Launch of first automated clinical laboratory in Asia outside Japan, in collaboration withGerman healthcare giant Bayer Diagnostics. Milestone collaboration boosts quality, efficiency,productivity and reinforces Singapore’s standing as a world class medical hub.Official opening of Apollo Gleneagles Hospital, Kolkata.Parkway’s joint-venture with the Apollo Hospitals Group signifies our expansion beyondSoutheast Asia into India.12 Parkway Holdings Limited Annual Report 2003

2003 FINANCIAL REVIEWGROUP CONSOLIDATED STATEMENTS2003S$’0002002S$’0002001S$’0002000#S$’0001999^S$’000Profit and Loss AccountRevenueHealthcareNon-core344,7433,905348,648325,09612,463337,559344,77512,357357,132337,49943,064380,563319,25956,023375,282Profit before interest, tax,depreciation and amortisation ∞% of revenue85,78824.6%89,39326.5%86,84824.3%103,68627.2%111,58029.7%Profit after tax and minority interestsbut before exceptional items% of revenue33,6089.6%33,3019.9%24,8917.0%23,4626.2%38,84110.3%Net profit after tax and minority interests% of revenue33,6089.6%33,3019.9%12,4793.5%131,44034.5%123,83333.0%Balance SheetTotal AssetsTotal BorrowingsTotal Shareholders’ funds815,460264,752430,500832,881290,485427,970824,280286,733411,1071,091,435363,186575,4801,592,412643,185794,845Profitability Ratios (%)Return on Shareholders’ fundsBefore exceptional itemsAfter exceptional items7.87.87.87.86.13.04.122.84.915.6Return on AssetsBefore exceptional itemsAfter exceptional items4.14.14.04.03.01.52.112.02.47.8Gearing RatioDebt equity ratio0.610.680.700.630.81Per Share DataEarnings per share (S$)Before exceptional itemsAfter exceptional items0.050.050.050.050.030.020.030.180.110.35Gross dividend (S$) +0.060.050.030.050.07Net tangible asset backing per share (S$)*0.550.550.571.602.21Net asset value backing per share (S$)*0.600.590.571.602.21∞ Profit before exceptional items, exchange differences and share of results of associates.# Certain comparative figures in FY2000 have been restated due to the adoption of the new and revised accounting standards that wereimplemented in 2001.^ Comparative figures for FY1999 have not been adjusted to take into account the adoption of the new and revised accounting standardsthat were implemented in 2001.* The net tangible asset and net asset value backing per share for FY2001 onwards were computed after taking into account the return ofcapital amounting to approximately S$180 million in 2001 and based on the enlarged share capital of the Company following the capitaldistribution exercise.+ Gross dividend comprises interim dividend declared during the year and final dividend proposed by directors in respect of that financialyear under review.Parkway Holdings Limited Annual Report 200313

FINANCIAL REVIEWOverviewDespite the impact of SARS in 2003, the Group not only posted positive earnings but its revenue and profit aftertax and minority interests (PATMI) also showed marginal increases.The 2003 results were largely driven by strong performance in the International and Singapore Hospitalssegments. The Healthcare Services segment was worst hit by SARS and showed weaker performance than inthe prior year.The second half of the year showed a strong recovery from SARS. Looking forward, drivers of growth for ourSingapore hospitals are our focus on high value-added services and marketing to international patients.The International Hospitals segment also has further growth potential as the Penang, Brunei and Kolkatahospitals mature. Finally, the Healthcare Services segment has significant recovery potential as a result ofrecent investments in new equipment, facilities and services.REVENUE BY BUSINESS SEGMENTS$ million250.0200.0223.4217.1150.0100.050.042.629.878.7 78.23.9 12.520032002SINGAPOREHOSPITALSINTERNATIONALHOSPITALSHEALTHCARESERVICESNON-CORESEGMENTRevenueThe effect of SARS in the second quarter was mitigated by strong patient volumes in the third and fourthquarters of 2003. As a result, Group revenues rose by 3% to S$348.6m in 2003 with increases in all thehealthcare businesses. Highest growth was generated by the International Hospitals segment, which saw a43% increase in revenues compared to 2002, resulting from maiden contributions from Gleneagles JPMC inBrunei and growth in the Gleneagles Medical Centre, Penang. The Singapore Hospitals segment grew by 3%compared to last year, largely due to strong patient volumes during the second half of 2003. The HealthcareServices segment was most impacted by SARS, with only marginal growth despite the introduction of severalnew services. Non-Core revenues declined in line with our strategy of divesting non-core assets.14 Parkway Holdings Limited Annual Report 2003

FINANCIAL REVIEWHospital StatisticsSINGAPORE HOSPITALS200220032003VS2002NUMBER OF HOSPITALS33INPATIENT ADMISSIONS43,75445,4703.9%NO. OF DAY CASES *11,67411,537-1.2%AVERAGE LENGTH OF STAY (days)3.553.52-0.8%PATIENT DAYS155,421160,2603.1%* Day Ward Admissions onlyDuring the year, the Group’s Singapore hospitals’ inpatient admissions grew by 3.9% compared to the previousyear. Strong patient volumes in the third and fourth quarters more than offset volume declines experiencedduring the SARS outbreak. Day cases however declined marginally by 1.2%. The Group’s focus on highervalue-added tertiary healthcare services continued to impact the performance of the Singapore hospitalspositively, resulting in a 3% increase in revenue intensity at the two tertiary hospitals, Mount Elizabeth andGleneagles.2002INTERNATIONAL HOSPITALS + 20032003++VS2002NUMBER OF HOSPITALS12INPATIENT ADMISSIONS13,43214,3927.1%NO. OF DAY CASES-95N.M.AVERAGE LENGTH OF STAY (days)3.203.19-0.3%PATIENT DAYS42,96145,9006.8%+ Excludes associates++ Includes Gleneagles JPMC, BruneiAdmissions in the international hospitals grew by 7.1% as a result of the opening of the Cardiac Centre inBrunei in May 2003 as well as growth at the Gleneagles Medical Centre, Penang.Parkway Holdings Limited Annual Report 200315

FINANCIAL REVIEWPROFIT BEFORE INTEREST, TAX, DEPRECIATION ANDAMORTISATION (EBITDA)* BY BUSINESS SEGMENTS$ million80.060.040.064.662.820.00.0SINGAPOREHOSPITALS6.11.6INTERNATIONALHOSPITALS13.918.1HEALTHCARESERVICES1.2 6.9NON-CORESEGMENT20032002 ^* EBITDA exclude exchange differences and share of results of associates^ Prior year’s figures have been restated for comparative purposesEBITDA registered a 4% decline to S$85.8m largely due to poorer performance in the Healthcare Servicessegment, as well as lower contributions from the Non-Core segment.The Singapore Hospitals and International Hospitals segments posted 3% and 275% growth in EBITDArespectively. Growth in the Singapore Hospitals was driven by increased hospital admissions and revenueintensity, whilst the International Hospitals segment grew due to maiden contributions from Gleneagles JPMC,Brunei and improved performance at Gleneagles Medical Centre, Penang.The Healthcare Services segment was significantly affected by SARS. In addition, the segment’s aggressiveexpansion plans, which had been put in place prior to SARS, resulted in higher operating costs from upgradingfacilities, acquisition of new equipment and opening of new clinics.The Non-Core segment generated lower contributions, in line with the Group’s divestment strategy.16 Parkway Holdings Limited Annual Report 2003

FINANCIAL REVIEWPROFIT AFTER TAX AND MINORITY INTERESTS (PATMI)*BY BUSINESS SEGMENTS$ million40.030.032.535.120.010.00.02.8(1.0)2.9 4.9(4.6) (5.7)2003(10.0)2002 ^SINGAPOREHOSPITALSINTERNATIONALHOSPITALSHEALTHCARESERVICESNON-CORESEGMENT* Includes share of results of associates^ Prior year’s figures have been restated for comparative purposesPATMI improved marginally by 1% to S$33.6m in 2003 despite a slightly lower EBITDA. The improvement inPATMI was largely due to the lower financing costs offset by higher income tax expense due to write back ofoverprovision of taxation in 2002.Group BorrowingsAs at 31 December 2003, total borrowings for the Group were S$265m with S$31m in cash and bank balances.Total borrowings were S$290m with S$48m in cash and bank balances as at 31 December 2002.DividendsThe Group has proposed a final dividend of 4 cents per ordinary share, which is higher than the 3.5 cents perordinary share declared in the previous year. This is in addition to the interim dividend of 2 cents per ordinaryshare paid in September 2003.Parkway Holdings Limited Annual Report 200317

37,876total number ofoperationsperformedin 2003To meet the rising demand for quality medical andsurgical services, the Parkway Group has investedheavily into state-of-the-art technology.Our equipment and operating theatres arecontinually being upgraded to enable us to offerpatients the most advanced treatment options ofinternational standards.

MEDICAL EXCELLENCEAs a leading international quality healthcare provider, the Parkway Group maintainsits cutting edge by continuously evolving and advancing to meet changing marketdemands. Our continual investment in state-of-the-art technology, equipment andfacilities has enabled us to offer the most advanced treatment options available, anddeliver our patients the best value.COMMITMENT TO MEDICAL EXCELLENCEAt Parkway, our passion for progress begins withour passion for people.Our patients are our top priority. Both local andinternational patients from all over the world seekquality medical care at Parkway. With this trustinvested in our professional competence, Parkwayis fully committed to upholding the highest levels ofmedical excellence to deliver the best treatment andpatient care.We deliver a comprehensive suite of specialisedtertiary and quaternary healthcare services throughan experienced multidisciplinary team which includes1,100 specialists across 40 specialties.To support our integrated delivery of services,significant capital expenditure has been made toacquire new equipment and technology, upgradefacilities and intensify training.These strategic investments are consistent withParkway’s vision to progressively develop valueaddedcapabilities and expand the Group’sextensive range of specialised services, to securelong-term sustainability and success.Moves have been made towards a seamlessintegrated hospital information system, leading toenhanced integration in the delivery of services.FACILITIES UPGRADINGAdding value to the Parkway experience, the Group’sSingapore Hospitals continued their major upgradingprogramme during the year.At Mount Elizabeth Hospital, major upgrading highlightsincluded the restructuring of operating rooms, suchas the endo-vascular and cardiac theatres, andsophisticated Mizuho operating tables in the neurosurgeryand urology theatres for finer operative care.In addition, two surgical wards, the maternity ward,the lobby and the business office were renovated.At Gleneagles Hospital, a medical ward wasrenovated to feature neuro and geriatric-friendlyfacilities.To enhance patients’ hospital stays, GleneaglesHospital introduced infotainment-on-demandservices in hospital rooms. This is a first inSingapore. A sophisticated Video-On-Demand (VOD)facility installed in hospital rooms allows patients toview videos and surf the Internet from their beds.This value-added service promotes patientrecovery by boosting psychological well-being, andis one of the many services Parkway has introducedto differentiate its hospitals from the competitors.Business ReviewParkway Holdings Limited Annual Report 200319

BUSINESS REVIEWWe make strategic investments in technology to support our specialists in providingour patients the latest treatment options, and, therefore, the best value.CENTRES OF EXCELLENCEOne of the cornerstones of our commitment tomedical excellence is the development ofmultidisciplinary centres for key specialties whichenable Parkway to offer the most advanced andsophisticated treatments in the region.These Centres of Excellence currently focus oncancer, liver, cardiac and neurology conditions.Parkway Cancer CentresDuring the year, Parkway made particular progressin developing its Cancer Centres at Gleneagles andMount Elizabeth Hospitals, which offer a comprehensiverange of oncology services, ranging fromdiagnosis to treatment and counselling.The Group has made significant capital investmentin cutting-edge equipment and facilities to maintainits lead in oncology services.Positron Emission Tomography -Computerised Tomography (PET-CT) ScannerConsistent with our focus on high value-addedservices, the Group invested almost S$5 million inthe highly sophisticated PET-CT scanner to providethis service to our cancer patients.From mid-July 2003, PET-CT scans were availableat Mount Elizabeth Hospital. The Hospital becamethe first private hospital in Singapore to offerPET-CT scans.PET-CT has been described as one of the top 10inventions of the century. This scanner enables datafusion from both the PET and CT, thus providinganother dimension to diagnostic imaging.The image from the PET-CT is based on the organs’physiological function while CT data is based purelyon anatomy. Data fusion of these two modalitiesprovides a quantum leap in diagnosis, makingPET-CT one of the most accurate and rapid meansof detecting and managing cancer and otherconditions which are otherwise impossible to detect.Recent developments have made PET-CT integralto the management of lung, colorectal, liver and braincancers, lymphomas, melanomas as well as epilepsyand coronary heart disease.Demand for PET-CT scan services will be fuelled bythe regional market.20 Parkway Holdings Limited Annual Report 2003

BUSINESS REVIEWMicro-multi-leaf collimator-based radiosurgeryThe Group has also recently added a specialisedoncology treatment to the extensive range ofservices offered at Gleneagles Cancer Centre.The multi-million equipment provides micro-multi-leafcollimator-based radiosurgery.BrainLab M3 micro-multi-leaf collimator-basedradiosurgery is one of the latest cancer treatmenttechniques that maximises irradiation to the tumourwhile minimising damage to healthy tissues, thusproviding cancer patients with significantimprovement in treatment outcomes.CanHOPEAs an extension of our oncology services, the Grouplaunched a free non-profit cancer counsellingservice, hotline and website, CanHOPE in August2003. Our professional counsellors offer cancerpatients emotional and psychosocial support, andassist them in making clear, informed decisions ontreatment options.Specialised Liver Intensive Care UnitBuilding upon our reputation for hepatobiliary andtransplant surgeries, the Group launched the LiverIntensive Care Unit at Gleneagles Hospital,Singapore, in October 2003.It is Asia’s onlydedicated ICU to serve the specialised needs ofpatients with acute liver failure (ALF).The Unit is fully equipped with sophisticateddiagnostic tools, monitoring devices, ventilators, liverand kidney dialysis machines and other equipment.It offers liver dialysis using the advanced MolecularAdsorbents Recirculating System (MARS).The Unit supplements the Group’s dedicatedoperating theatres for hepatobiliary and transplantsurgeries and state-of-the-art equipment for livingdonor liver transplant (LDLT).Serving both Parkway and non-Parkway patients,CanHOPE is an added resource to cancer patientsas well as our contribution to the community.Parkway Holdings Limited Annual Report 200321

BUSINESS REVIEWOur International Hospitals extend the unique Parkway brand across Asia.HEALTHCARE SERVICESParkway Laboratory ServicesParkway Laboratory Services (PLS), a wholly-ownedsubsidiary of Parkway Holdings Limited, set up aclinical laboratory automation system in November2003, in collaboration with German healthcare giantBayer Diagnostics.The first of its kind in Asia outside Japan, this new26,000 sq ft facility at Ayer Rajah Industrial Parkpositions PLS favourably to capture the potential ofthe vast regional market. Its capacity can potentiallybe scaled up to 10 million tests per year, comparedwith three million in 2002.The system speeds up result-reporting and increasesefficiency in patient data management, allowing forseamless integrated patient information system. Itsunique sample handling process treats each sampleindividually - precisely recognising where a sampleshould go, then routing it for optimal efficiency.PLS also became the first in Asia to develop andlaunch a revolutionary prenatal screening test forgenetic abnormalities.The DNA-based quantitative fluorescent-polymerasechain reaction method (QF-PCR) cuts reporting timefrom two weeks to a day and provides 99.9%accuracy, compared to the labour-intensive cultureanalysis.INTERNATIONAL HOSPITALSGleneagles Jerudong Park Medical Centre,Brunei DarussalamThe Gleneagles Jerudong Park Medical Centre,a 75:25 joint venture between Parkway andJerudong Park Medical Centre, became a fullfledgednational cardiovascular centre in 2003.Gleneagles JPMC became fully operational forinvasive and specialised cardiac andcardiothoracic procedures and became the firstmedical centre in Brunei Darussalam to performopen heart surgery.Apollo Gleneagles Hospital,KolkataParkway officially opened Apollo GleneaglesHospital, Kolkata, in November 2003. The 51:49joint venture with the Apollo Hospitals Group notonly symbolises the strategic partnership betweentwo healthcare leaders, it also marks Parkway’sfirst expansion into India.Epitomising Parkway’s and Apollo’s model ofproviding quality healthcare facilities, the 325-bedApollo Gleneagles will play a pivotal role inmeeting medical needs of the region and willshowcase telemedicine.Apollo Gleneagles has the potential to developinto the healthcare hub of the eastern region,covering the North Eastern states of India,Bangladesh, Nepal, Bhutan and Myanmar.22 Parkway Holdings Limited Annual Report 2003

BUSINESS REVIEWParkway Hospitals in MalaysiaParkway owns two hospitals in Malaysia: GleneaglesMedical Centre in Penang (70% equity) and GleneaglesMedical Centre in Kuala Lumpur (30% equity).Both hospitals have grown and contributed to theGroup significantly in the last year. The hospitals havenot only developed into leading medical centres intheir respective states but also regionally as well.Both hospitals are seeing an increasing number ofpatients for common procedures as well as nicheareas such as cardiology and cardiothoracic surgery.The Parkway Group is developing strategic alliances with established healthcare playersin the region. This initiative will maintain the Group's position at the forefront ofmedical excellence to benefit patients as well as enable us to grow as a corporationfrom strength to strength to benefit our investors and shareholders.Parkway Holdings Limited Annual Report 200323

45,470inpatients treatedin 2003The Parkway Group has consistently won awardsand accolades for superior service quality.In 2003, Gleneagles and Mount ElizabethHospitals were bestowed the Superbrands Awardfor outstanding branding. Gleneagles Hospital wonthe Asian Hospital Management Award forInternal Service excellence.

QUALITY SERVICEQuality service is one of the cornerstones of our position as a leading provider of totalhealthcare services. By fulfilling, even exceeding, customer expectations we enhanceour corporation’s value.COMMITMENT TO SERVICE EXCELLENCEParkway is fully committed to international standardsof service. Our hospitals and healthcare servicesuphold service excellence at all levels.Beyond professional competence, the Parkway teamprovides service from the heart.Bearing witness to our reputation, internationalpatients from Asia, the Middle East, Australia,Europe, Africa and the United States seek medicalattention at Parkway’s facilities each year.Access to quality treatment in comfort and privacy inan exclusive environment, attended by caring,experienced medical and surgical teams is thereason why more than half of the internationalpatients who visit Singapore each year make theParkway Group their top choice.AWARDS AND ACCOLADESExcellence in hospital management and servicequality has won Parkway’s premium hospitals awardsand accolades, locally and internationally.For outstanding service, Mount Elizabeth Hospitaland Gleneagles Hospital were bestowed with theSuperbrands Award in 2002/2003 for scoring highlyin market dominance, goodwill, customer loyalty andoverall market acceptance. This prestigious awardhas enhanced the Hospitals’ brand value.In 2003, Gleneagles Hospital won the AsianHospital Management Award in the Internal ServiceCategory. Competing against 103 internationalprojects from 25 well-established hospitals acrossseven countries, Gleneagles was a clear winner withits project “Going Beyond Service”.Business ReviewParkway Holdings Limited Annual Report 200325

BUSINESS REVIEWSERVICE ENHANCEMENTParkway ShentonIn the first quarter of 2003, Parkway Shenton openedits flagship outpatient clinic at Republic Plaza.Strategically located in the Central BusinessDistrict, it is well-positioned to serve its expandingcorporate client business. The 10,000 sq ft one-stopcentre provides GP services, health screening,dental, aviation medicine as well as laboratory andradiology services.Forefront of Infection ControlIn the interest of patient safety, Parkway’s Hospitalstook proactive steps to protect patients andhealthcare professionals, and maintain its SARS-freestatus. Mount Elizabeth Hospital became the firsthospital in Singapore to install a thermal scanner.Parkway also became the first in Singapore to adoptcutting-edge bio-decontamination technology.We engaged UK-based biodecontamination experts,BIOQUELL, to deploy their Room Bio-DeactivationService at our hospitals, for greater assurance.SERVICE FROM THE HEARTOur group-wide Customer Service Standardsinitiative ensures service consistency at all levels. Allour personnel undergo our Customer Service andQuality Training programme and are motivated toprovide service from the heart.East Shore Hospital’s WOW philosophy, which standsfor “We aim to wow our patients with our winningways”, has led to higher customer satisfaction.Gleneagles Hospital’s Going Beyond Service withCARE programme inspires exceptional service,resulting in greater customer satisfaction andcustomer loyalty.Mount Elizabeth Hospital’s “We EXCEL” programmehas led to greater consciousness of service qualityamong personnel, leading to finer service towardspatients as well as internal customers.26 Parkway Holdings Limited Annual Report 2003

BUSINESS REVIEWREGIONAL MEDICAL REFERRAL CENTRESTo uphold medical excellence, Parkway has set upMedical Referral Centres (MRC) as an integral aspectof the Group’s regional patient outreach network. MRCprovide international patients referrals to ourSingapore and International Hospitals.The MRC is a one-stop service designed to helppatients access the right channel of specialistexpertise, personalised patient care and cutting-edgetechnology available at all our hospitals.Access to quality treatment in comfort andprivacy in an exclusive environment,attended by caring, experienced medicaland surgical teams is the reason why morethan half of the international patients whovisit Singapore each year make the ParkwayGroup their top choice.The experienced teams of professionals manningthe MRCs connect patients to relevant medicalservices in real time. This free service is extended toanyone who seeks professional medical referrals andconsultation.In 2003, six new MRCs were set up in Chennai,Delhi, Kolkata,Manado,Medan and Shanghai,bringing the total number of MRCs to 14. Ourpresence in these cities will further extend Parkway’sreach across Asia.Plans are underway to increase the number of MRCsto satisfy growing regional demand for the Group’stertiary and quaternary services.Parkway Holdings Limited Annual Report 200327

More than half of200,000 *internationalpatientsyearlyMaking substantial investment into expertise andtraining, the Parkway Group has created adynamic, stimulating environment in whichdoctors and nurses keep pace with internationalmedical advances to provide the best patient care.

INVESTMENT IN EXPERTISEOur healthcare professionals are our most valuable assets. Parkway is dedicated tosecuring top specialised expertise as well as engaging in people development to upholdhigh standards of professionalism in private healthcare provision.DEDICATION TO PEOPLE DEVELOPMENTIn an increasingly complex healthcare environmentwhere patients have become discerning and a widechoice of services are available, Parkway recognisesthat our doctors and nurses are challenged to go theextra mile in delivering service quality.Parkway is a people developer centre withcomprehensive training and incentive schemes,conducive to the development of disciplined,selfmotivatedhealthcare professionals. Our SingaporeHospitals have won the People Developer Standardfor their commitment to education and training.To meet nursing manpower needs, Parkway providesquality nursing education at the Gleneagles IntanCollege of Nursing. In 2004, under a joint-venturecompany formed by Parkway, Gleneagles Penangand Gleneagles Kuala Lumpur, the College will berenamed Gleneagles-Parkway College of Nursing.It will offer a nursing diploma course and specialtytraining courses for the Group’s personnel.For our medical professionals, the Group facilitatesongoing exchanges of expertise with renownedspecialists by tapping into our links with reputablehospitals.With this dynamic, stimulating environment atParkway, world class doctors, specialists andsurgeons are attracted to set up at our MedicalCentres, and, in turn, contribute their expertise to ourHospitals and Healthcare Services.Business ReviewCentre for Minimally Invasive SurgeryA pioneer in recognising the increasing importanceof minimally invasive surgery (MIS), the Groupactively imparts knowledge of advancements in MISto medical professionals within and outside the Group.A highlight of the 2003 course series organised byGleneagles MIS Centre was New Approach to theRepair of Pelvic Floor Dysfunction, a live telesurgeryfor regional obstetricians, gynaecologists andurology specialists.Parkway Centre for Medical SimulationTo improve clinical quality and patient safety, theS$1 million hi-tech Parkway Centre for MedicalSimulation (PCMS) was launched. As the region’smost advanced interactive facility for medicalsimulation training, this initiative will enable Parkwayto take the lead in the education and training ofhealthcare professionals by creating a dynamiclearning environment in the region.Simulation-based training combines technology withquality interactive courses. Medical conditions aresimulated by practising on patient simulators, METIand SimMan,which have realistic computergeneratedsensory feedback.With PCMS as a training resource for healthcareprofessionals in Asia, Parkway has set its sights onthe regional healthcare training market. The ParkwayGroup is continually primed to provide strongleadership in Asia’s healthcare industry.Parkway Holdings Limited Annual Report 200329

BOARD OF DIRECTORSMr Anil ThadaniChairmanMr Thadani is the Chairman of Parkway Holdings and chairs the Group’s Executive,Remuneration and Nominating Committees. Mr Thadani is the Founder andChairman of Schroder Capital Partners Limited, a private investment advisory firmadvising institutional funds focused on direct investment, development capital andbuy-outs in the Asia-Pacific.Mr Tony Tan Choon KeatDeputy ChairmanMr Tan was appointed Deputy Chairman of Parkway Holdings in 2002. He has helddirectorships in the Group since 1985 and he was Managing Director of ParkwayHoldings until June 2000.Dr Lim Cheok PengManaging DirectorDr Lim is the Managing Director of Parkway Holdings and he sits on theExecutive Committee. Dr Lim has been steering the Group’s healthcare effortssince 1987. He is also a cardiologist by profession.Mr Tan Kai SengExecutive DirectorMr Tan is the Finance Director of Parkway Holdings and a member of theExecutive Committee and other committees. He has been with the Group since1980. He is a CPA and a Fellow Member of the Association of Chartered CertifiedAccountants, UK.Mr Alain Ahkong Chuen FahNon-executive DirectorMr Ahkong is Chairman of the Audit Committee of Parkway Holdings.Currently Director of Pioneer Management Services Pte Ltd, he also holdsdirectorships in several companies, including listed company, TwinwoodEngineering Ltd.30 Parkway Holdings Limited Annual Report 2003

Mr Ang Guan SengNon-executive DirectorMr Ang has been a director of Parkway Holdings since 1985 and is a member ofvarious committees. He is also the Managing Director of Malaysia-listed PetalingGarden Berhad.Mr Sunil ChandiramaniNon-executive DirectorMr Chandiramani is a member of the Executive Committee and various othercommittees. Director and Partner of Schroder Capital Partners Limited, aninvestment advisory firm specialising in development capital and buy-outs,Mr Chandiramani also sits on the boards of several private and public-listedcompanies.Mr Chang See HiangNon-executive DirectorMr Chang sits on various committees of Parkway Holdings. An Advocate andSolicitor of the Supreme Court of Singapore, he is Senior Partner of his ownlaw firm, M/s Chang See Hiang and Partners. He holds directorships in threepublic-listed companies and is also the Honorary Secretary of the Singapore TurfClub.Mr Ho Kian GuanNon-executive DirectorMr Ho has been a director of Parkway Holdings since 1985. He is also theChairman of publicly-listed Keck Seng (Malaysia) Bhd whose principal activitiesinclude palm oil cultivation, the processing and refining of palm oil and real estatedevelopment.Dr Prathap C ReddyNon-executive DirectorDr Reddy is the Founder and Chairman of the India-based Apollo Hospitals Group.He has received several awards from the Indian Government and internationalagencies in recognition of his contributions to India’s healthcare services sector.Mr Ho Kian Hock(alternate director to Mr Ho Kian Guan)Parkway Holdings Limited Annual Report 200331

CORPORATE INFORMATIONBOARD OF DIRECTORSAnil ThadaniChairmanTony Tan Choon KeatDeputy ChairmanDr Lim Cheok PengManaging DirectorAlain Ahkong Chuen FahNon-executive DirectorAng Guan SengNon-executive DirectorSunil ChandiramaniNon-executive DirectorChang See HiangNon-executive DirectorHo Kian GuanNon-executive DirectorDr Prathap C ReddyNon-executive DirectorTan Kai SengExecutive DirectorHo Kian Hock(alternate directorto Mr Ho Kian Guan)EXECUTIVE COMMITTEEAnil ThadaniChairmanSunil ChandiramaniDr Lim Cheok PengTony Tan Choon KeatTan Kai SengAUDIT COMMITTEEAlain Ahkong Chuen FahChairmanAng Guan SengChang See HiangSHARE OPTION SCHEMECOMMITTEEAnil ThadaniAng Guan SengSunil ChandiramaniREMUNERATION COMMITTEEAnil ThadaniChairmanAng Guan SengSunil ChandiramaniNOMINATING COMMITTEEAnil ThadaniChairmanAlain Ahkong Chuen FahAng Guan SengChang See HiangTony Tan Choon KeatSHARE PURCHASECOMMITTEEAnil ThadaniChang See HiangTony Tan Choon KeatTan Kai SengREGISTERED OFFICE1 Grange Road #11-01Orchard BuildingSingapore 239693Tel : (65) 6796 0600www.parkwayholdings.comCOMPANY SECRETARYJune Tay Kwok FungSHARE REGISTRARM&C Services Private Limited138 Robinson Road #17-00The Corporate OfficeSingapore 068906Tel : (65) 6227 6660AUDITORSKPMGCertified Public Accountants SingaporePartner-In-Charge since the financialyear ended 31 December 1999:Chay Fook YuenPRINCIPAL BANKERSABN AMRO Bank N.V.BNP Paribas, Singapore BranchCitibank N.A, Singapore BranchCrédit Agricole IndosuezDBS Bank LtdThe Hongkong and Shanghai BankingCorporation LimitedOversea-Chinese Banking CorporationLimitedUnited Overseas Bank Limited32 Parkway Holdings Limited Annual Report 2003

SENIOR MANAGEMENTDr Lim Cheok PengManaging Director(Refer to page 30 for profile)Mr Tan Kai SengExecutive Director(Refer to page 30 for profile)Vivek JetleySenior Vice President/Head, International Business DevelopmentVivek Jetley, 46, joined Parkway on 16 January 2004.Prior to joining Parkway, Mr Jetley was the Managing Director of Max India Ltd from 1989 to 2003.Mr Jetley holds a Master in Business Management from Banaras Hindu University and is a Fellow Memberof the Institute of Cost and Works Accountants of India and a Licenciate Member of the Institute of CompanySecretaries of India.Molly Foo Moh LeeChief Financial OfficerMolly Foo, 44, was appointed as Chief Financial Officer on 1 April 2003.Ms Foo started with Mount Elizabeth Hospital in August 1993 and was the General Manager, Finance.Prior to this, Ms Foo was the Financial Controller for Mount Alvernia Hospital from 1990 to 1993.Ms Foo graduated with a Bachelor in Accountancy from the National University of Singapore.Dr Timothy LowGeneral Manager, Gleneagles HospitalDr Timothy Low, 41, joined Parkway as General Manager of Gleneagles Hospital on 1 August 2000 andis responsible for the general management and operations of the Hospital.Prior to joining Parkway, Dr Low was the Senior Regional Director of Covance (ASIA) Pte Ltd from 1995 to 2000and Regional Medical Advisor with Glaxo Wellcome Singapore Pte Ltd from 1993 to 1995. Dr Low graduatedwith a MBBS from the National University of Singapore.Dr Ronnie TanGeneral Manager, East Shore HospitalDr Ronnie Tan, 49, was appointed as General Manager of East Shore Hospital on 5 August 2002 and isresponsible for the general management and operations of the Hospital.Prior to joining Parkway, Dr Tan was the President & Director of Healthwho.com Pte Ltd from 2000 andChief Executive Officer & Director of AsiaMedic Ltd from 1998 to 2000. Dr Tan graduated with a MBBS from theUniversity of Melbourne and holds a Master of Health Administration from Loma Linda University.Parkway Holdings Limited Annual Report 200333

SENIOR MANAGEMENTNellie TangGeneral Manager, Mount Elizabeth HospitalNellie Tang, 59, was appointed as General Manager of Mount Elizabeth Hospital on 1 July 1998 andis responsible for the general management and operations of the Hospital.Mrs Tang started with Mount Elizabeth Hospital in May 1981 and was Director of Nursing prior to herappointment as General Manager, Patient Care Services in 1998. Mrs Tang holds a Master of Science inHealthcare Management from the University of Wales, UK.Dr Goh Jin HianExecutive Director, Parkway Shenton Pte LtdDr Goh Jin Hian, 35, was appointed as Executive Director of Parkway Shenton on 1 April 1999. Dr Goh isresponsible for the general management of all the primary care services under Parkway Shenton whichincludes, Shenton Family Clinics, Executive Health Screeners, Nippon Medical Care and Maritime Medical.Prior to joining Parkway, Dr Goh was with the Ministry of Health. Dr Goh graduated with a MBBS from theNational University of Singapore.Lim Poh SuanGeneral Manager, Medi-Rad Associates LtdLim Poh Suan, 51, was appointed as General Manager of Medi-Rad on 1 March 2002, and is responsible for thegeneral management and operations of the Group’s radiology services.Ms Lim started with Mount Elizabeth Hospital in July 1984 and was Head of Radiology with the Hospital prior toher appointment with Medi-Rad. Ms Lim graduated with a Bachelor of Science in Economics from the Universityof London and holds a Diploma of the College of Radiographers.George PusavatGeneral Manager, Parkway Laboratory Services LtdGeorge Pusavat, 51, was appointed as General Manager of Parkway Laboratory Services on 1 July 1997 andis responsible for the general management and operations of the Group’s laboratory services.Prior to joining Parkway Laboratory, Mr Pusavat was the Systems/Project Manager for the San JoaquinCommunity Hospital from 1992 to 1994 and Laboratory System Manager with Kern Medical Centre, USA from1989 to 1991. Mr Pusavat graduated with a Bachelor of Science in Medical Technology from California StateUniversity Bakersfield and holds a Master of Business Administration from the University of SouthernCalifornia.34 Parkway Holdings Limited Annual Report 2003

CORPORATE OFFICEPARKWAY HOLDINGS LIMITED1 Grange Road, #11-01 Orchard BuildingSingapore 239693Tel: (65) 6796 0600Fax: (65) 6796 0634www.parkwayholdings.comHOSPITALSEAST SHORE HOSPITAL321 Joo Chiat Place, Singapore 427990Tel: (65) 6344 7588 Fax: (65) 6345 4966www.eastshore.com.sgGLENEAGLES HOSPITAL6A Napier Road, Singapore 258500Tel: (65) 6473 7222 Fax: (65) 6472 5816www.gleneagles.com.sgMOUNT ELIZABETH HOSPITAL3 Mount Elizabeth, Singapore 228510Tel: (65) 6737 2666 Fax: (65) 6737 1189www.mountelizabeth.com.sgGLENEAGLES INTAN MEDICAL CENTRE,KUALA LUMPUR282 & 286 Jln Ampang, 50450 Kuala LumpurTel: (60-3) 4257 1300 Fax: (60-3) 4257 9233www.gimc.com.myGLENEAGLES MEDICAL CENTRE, PENANG1 Jln Pangkor, 10050 Penang, MalaysiaTel: (60-4) 227 6111 Fax: (60-4) 226 2994www.gleneagles-penang.comAPOLLO GLENEAGLES HOSPITAL, KOLKATA58 Canal Circular Road, Kolkata 700 054,India, West BengalTel: (91-33) 2358 5217 Fax: (91-33) 2358 5198www.apollogleneagles.comGLENEAGLES JPMC, BRUNEIJerudong Park, BG 3122Brunei DarussalamTel: (673-2) 261 1883 Fax: Tel: (673-2) 261 1886KEY HEALTHCARE SERVICESGLENEAGLES CLINICAL RESEARCH CENTRE *6A Napier Road, Singapore 258500Tel: (65) 6470 5726 Fax: (65) 6471 3642www.gleneaglescrc.comPARKWAY LABORATORY SERVICES*28 Ayer Rajah Crescent #03-08Singapore 139959Tel: (65) 6248 5829 Fax: (65) 6248 5878www.parkwaylab.com.sgMEDI-RAD ASSOCIATES *3 Mount Elizabeth,Mount Elizabeth Medical Centre #01-01/02/06Singapore 228510Tel: (65) 6736 3538 Fax: (65) 6732 7776www.medirad.com.sgPARKWAY SHENTON*Cyberhub Building20 Bendemeer Road #03-11/14Singapore 339914Tel: (65) 6227 7777 Fax: (65) 6225 3735www.parkwayshenton.comMEDICAL REFERRAL CENTRES (MRCs)SINGAPORETel: (65) 6735 5000 (24-hour hotline)Fax: (65) 6732 6733www.imrc.com.sgBANGLADESHDhakaBRUNEI DARUSSALAMCHINAShanghaiHONG KONGINDIAChennaiKolkataNew DelhiINDONESIABalikpapanJakartaMedanManadoPalembangSurabayaMYANMARYangonRUSSIAVladivostokSRI LANKAColomboVIETNAMHanoi* Corporate officeCONCEPT, DESIGN & PRODUCTION BY GK CONSULTANCY PRIVATE LIMITED

B/C 1PARKWAY HOLDINGS LIMITED1 Grange Road#11-01 Orchard BuildingSingapore 239693Tel: (65) 6796 0600www.parkwayholdings.com

FINANCIALS 2003Directors’ Report 36Statement by Directors 43Report of the Auditors 44Balance Sheets 45Consolidated Profit and Loss Account 46Consolidated Statement of Changes in Equity 47Statement of Changes in Equity 48Consolidated Statement of Cash Flows 49Notes to the Financial Statements 51Supplementary Information -SGX-ST Listing Manual Requirements 100Analysis of Shareholdings 115Notice of Annual General Meeting 116Proxy Form 119

DIRECTORS’ REPORTYear ended 31 December 2003We are pleased to submit this annual report to the members of the Company together with the audited financial statementsfor the financial year ended 31 December 2003.DirectorsThe directors in office at the date of this report are as follows:Anil ThadaniTony Tan Choon KeatDr Lim Cheok PengAlain Ahkong Chuen FahAng Guan SengSunil ChandiramaniChang See HiangHo Kian GuanDr Prathap C ReddyTan Kai SengHo Kian Hock(Chairman)(Deputy Chairman)(Managing Director)(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”), particulars of interests of directors who held office at the end of the financial year (including those held by theirspouses and infant children) in shares, debentures, warrants and share options in the Company and in related corporations(other than wholly-owned subsidiaries) are as follows:Holdings in the nameof the director,spouse or infant childrenOther holdings in whichthe director is deemedto have an interestAt beginningof the yearAt endof the yearAt beginningof the yearAt endof the yearThe CompanyOrdinary Shares of S$0.25 each fully paidAnil ThadaniTony Tan Choon KeatDr Lim Cheok PengSunil ChandiramaniTan Kai SengHo Kian Guan1,200,00014,426,776202,00050,0001,100,000500,0001,200,00014,426,776202,00050,0001,100,000500,000-19,953,764-----20,073,764----Parkway Employee Share Option SchemeOptions to subscribe for Ordinary Shares of S$0.25 each(exercise price at S$1.33 per share and exercisablebetween 20/4/1999 and 19/2/2003)Dr Lim Cheok Peng150,000 - - -36Parkway Holdings Limited Annual Report 2003

Directors’ Interests (Cont’d)Holdings in the nameof the director,spouse or infant childrenOther holdings in whichthe director is deemedto have an interestAt beginningof the yearAt endof the yearAt beginningof the yearAt endof the yearParkway Share Option Scheme 2001The Company (Cont’d)Options to subscribe for Ordinary Shares of S$0.25 each(exercise price at S$0.865 per share and exercisablebetween 10/4/2002 and 9/4/2006)Dr Lim Cheok PengTan Kai Seng500,000250,000500,000250,000----Options to subscribe for Ordinary Shares of S$0.25 each(exercise price at S$0.94 per share and exercisablebetween 20/9/2002 and 19/9/2006)Anil ThadaniTony Tan Choon KeatAlain Ahkong Chuen FahAng Guan SengChang See HiangHo Kian GuanDr Prathap C ReddySunil ChandiramaniHo Kian Hock240,000100,000150,000150,000100,000100,000100,000200,000100,000240,000100,000150,000150,000100,000100,000100,000200,000100,000------------------Options to subscribe for Ordinary Shares of S$0.25 each(exercise price at S$0.835 per share and exercisablebetween 20/4/2003 and 19/4/2007)Anil ThadaniTony Tan Choon KeatDr Lim Cheok PengAlain Ahkong Chuen FahAng Guan SengChang See HiangHo Kian GuanDr Prathap C ReddySunil ChandiramaniTan Kai Seng240,000200,000500,000150,000150,000100,000100,000100,000200,000250,000240,000200,000500,000150,000150,000100,000100,000100,000200,000250,000--------------------SubsidiaryPulau Pinang Clinic Sdn. Bhd.Ordinary Shares of RM1.00 each fully paidTony Tan Choon Keat - - 394,352 394,352Except 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 or at the end of thefinancial year.Parkway Holdings Limited Annual Report 2003 37

DIRECTORS’ REPORTYear ended 31 December 2003Directors’ Interests (Cont’d)Except as disclosed in this report, there were no changes in any of the above-mentioned interests in the Company betweenthe end of the financial year and 21 January 2004.Except as disclosed under the “Share Options” section of this report, neither at the end of nor at any time during the financialyear was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors ofthe Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other bodycorporate.During the year, certain transactions were made between the Company and/or its subsidiaries and its directors, or thesubsidiaries’ directors or a firm in which one of the directors is deemed to have a substantial financial interest or companiesin which the directors of the Company or its subsidiaries have substantial financial interest in the ordinary course of business.However, these directors have neither received nor will they become entitled to receive any benefit from these transactionsother than as suppliers, directors and members of these firms/companies.Except as disclosed in this report and in note 31 to the financial statements, since the end of the last financial year, nodirector has received or become entitled to receive a benefit by reason of a contract made by the Company or a relatedcorporation with the director or with a firm of which he is a member or with a company in which he has a substantial financialinterest.Share OptionsParkway Employee Share Option Scheme (“Parkway Scheme”)Details of the Parkway Scheme were set out in the Directors’ Report for the year ended 31 December 1988, and amendmentswere effected by a resolution passed at the Extraordinary General Meeting of the Company held on 22 August 1994 andwhich were set out in the Directors’ Report for the year ended 31 December 1994.At the Extraordinary General Meeting held on 18 January 2001, the shareholders of the Company approved the terminationof the Parkway Scheme. Existing options granted under the Parkway Scheme but not exercised will not be prejudiced as therules of the scheme state that the termination of the Parkway Scheme shall not affect options which have been grantedunder the scheme, whether such options have been exercised (fully or partially) or not.Other statutory information regarding the Parkway Scheme is set out below:(i)(ii)(iii)The exercise price of the option is determined at the average of the middle market quotation computed from thehighest and lowest transacted prices of the Company’s shares on the Singapore Exchange Securities TradingLimited (“SGX-ST”) prevailing on the five business days immediately preceding the date of grant of such options.The options vest one year after the grant date.The options granted expire after 46 months from the vesting date unless they have been cancelled or have lapsedprior to that date.At the end of the financial year, details of the options granted under the Parkway Scheme on the unissued ordinary sharesof S$0.25 each of the Company are as follows:Date ofgrant ofoptionsExercisepriceper shareOptionsoutstandingat1 Jan 2003OptionsgrantedOptionsexercisedOptionslapsedOptionsoutstandingat31 Dec 2003Number ofoptionholders at31 Dec 2003Exerciseperiod20/4/1998 S$1.33 940,000--(940,000)--20/4/1999 to19/2/2003940,000--(940,000)-38Parkway Holdings Limited Annual Report 2003

Share Options (Cont’d)Parkway Employee Share Option Scheme (“Parkway Scheme”) (Cont’d)Details of options granted to directors of the Company under the scheme are as follows:Name of directorOptions grantedfor financialyear ended31 Dec 2003Aggregateoptions grantedsincecommencementof scheme to31 Dec 2003Aggregateoptions exercisedsincecommencementof scheme to31 Dec 2003Aggregateoptions lapsedsincecommencementof scheme to31 Dec 2003Aggregateoptionsoutstanding asat 31 Dec 2003Dr Lim Cheok PengTan Kai Seng--300,000600,000-(400,000)(300,000)(200,000)--In view that the Parkway Scheme was terminated in 2001, no options have been granted during the year. The last batch ofunexercised options under the Parkway Scheme has lapsed during the financial year.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 heldon 18 January 2001. Details of the Parkway Scheme 2001 and amendments effected by a resolution passed at theExtraordinary General Meeting of the Company held on 4 July 2001 were set out in the Directors’ Report for the years ended31 December 2001 and 31 December 2002. The Parkway Scheme 2001 is administered by the Company’s Share OptionScheme Committee, comprising 3 directors, Anil Thadani, Ang Guan Seng and Sunil Chandiramani.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 theSGX-ST prevailing on the three consecutive trading days immediately preceding the date of grant of such options.The options vest one year after the grant date in accordance with the vesting schedule set out below:Vesting ScheduleOn or before the first anniversary of the grant dateAfter the first anniversary, and on or before the secondanniversary of the grant dateAfter the second anniversary, and on or before the thirdanniversary of the grant dateAfter the third anniversary, and on or before the fourthanniversary of the grant dateAfter the fourth anniversary, and on or before the fifthanniversary of the grant datePercentage of shares over which theoptions are exercisableNil25%50%75%100%(iii)The options granted expire on the fifth anniversary of the grant date unless they have been cancelled or have lapsedprior to that date.Parkway Holdings Limited Annual Report 2003 39

DIRECTORS’ REPORTYear ended 31 December 2003Share Options (Cont’d)Parkway Share Option Scheme 2001 (“Parkway Scheme 2001”) (Cont’d)At the end of the financial year, details of the options granted under the Parkway Scheme 2001 on the unissued ordinaryshares of S$0.25 each of the Company are as follows:Date ofgrant ofoptionsExercisepriceper shareOptionsoutstandingat1 Jan 2003OptionsgrantedOptionsexercisedOptionscancelledOptionsoutstandingat31 Dec 2003Number ofoptionholders at31 Dec 2003Exerciseperiod9/4/20018/5/200119/9/200119/4/2002S$0.865S$0.993S$0.940S$0.8353,195,000400,0001,240,0007,005,000----(15,000)--(4,500)(110,000)--(290,000)3,070,000400,0001,240,0006,710,500592922110/4/2002 to9/4/20069/5/2002 to8/5/200620/9/2002 to19/9/200620/4/2003 to19/4/200711,840,000-(19,500)(400,000)11,420,500Except as disclosed above, there were no unissued shares of the Company or its subsidiaries under options granted by theCompany or its subsidiaries as at the end of the financial year.Details of options granted to directors of the Company under the Parkway Scheme 2001 are as follows:Name of directorOptions grantedfor financialyear ended31 Dec 2003Aggregateoptions grantedsincecommencementof scheme to31 Dec 2003Aggregateoptions exercisedsincecommencementof scheme to31 Dec 2003Aggregateoptions lapsedsincecommencementof scheme to31 Dec 2003Aggregateoptionsoutstandingas at31 Dec 2003Anil ThadaniTony Tan Choon KeatDr Lim Cheok PengAlain Ahkong Chuen FahAng Guan SengChang See HiangHo Kian GuanDr Prathap C ReddySunil ChandiramaniTan Kai SengHo Kian Hock-----------480,000300,0001,000,000300,000300,000200,000200,000200,000400,000500,000100,000----------------------480,000300,0001,000,000300,000300,000200,000200,000200,000400,000500,000100,000Since the commencement of the scheme, no options have been granted to the controlling shareholders of the Company ortheir associates.Except as disclosed above, no participant under the scheme has been granted 5% or more of the total options availableunder the scheme.40Parkway Holdings Limited Annual Report 2003

Share Options (Cont’d)Parkway Share Option Scheme 2001 (“Parkway Scheme 2001”) (Cont’d)Except as disclosed above, during the financial year, no options have been granted to the employees of the Company or itsrelated corporations who receive 5% or more of the total options available to the employees of the Company or its relatedcorporations under the Parkway Scheme 2001.During the financial year, there were no options granted to the employees of the Company or its related corporations underthe Parkway Scheme 2001. 9,660,000 options have been granted to the employees of the Company or its related corporationssince the commencement of the scheme to the end of the financial year under review.Subsequent to the balance sheet date, there have been no share options exercised under the Parkway Scheme 2001.The options granted by the Company do not entitle the holders of the options, by virtue of such holding, to any rights toparticipate 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:Alain Ahkong Chuen Fah (Chairman), non-executive directorAng Guan Seng, non-executive directorChang See Hiang, non-executive directorThe Audit Committee performs the functions specified in Section 201B of the Companies Act, the SGX-ST Listing Manual(“Listing Manual”), the SGX-ST Best Practices Guide, and the Code of Corporate Governance.The Audit Committee met five times during the year.The principal responsibility of the Audit Committee is to assist the Board of Directors in the identification and monitoring ofareas of significant 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 financialreporting;• compliance with laws and regulations, particularly those of the Companies Act and the Listing Manual, and its owncode 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.Specific functions of the Audit Committee include reviewing the scope of work of the internal and external auditors, reviewingthe level of assistance provided by the Company’s officers to the internal and external auditors, receiving and consideringthe reports of the internal and external auditors, and ensuring that management responds to recommendations made by theinternal and external auditors. The committee also recommends the appointment of the external auditors and reviews thelevel of audit and non-audit fees.In addition, the Audit Committee has, in accordance with Chapter 9 of the Listing Manual, reviewed the requirements forapproval and disclosure of interested person transactions, and with the assistance of the internal auditors, reviewed theinterested person transactions.Parkway Holdings Limited Annual Report 2003 41

DIRECTORS’ REPORTYear ended 31 December 2003Audit Committee (Cont’d)The Audit Committee has full access to management and is given the resources required for it to discharge its functions.It has full authority and discretion to invite any director or executive officer to attend its meetings.The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended tothe Board of Directors that the auditors, KPMG, be nominated for re-appointment as auditors at the forthcoming AnnualGeneral Meeting of the Company.AuditorsThe auditors, KPMG, have indicated their willingness to accept re-appointment.On behalf of the Board of DirectorsANIL THADANIChairmanDR LIM CHEOK PENGManaging DirectorSingapore11 February 200442Parkway Holdings Limited Annual Report 2003

STATEMENT BY DIRECTORSYear ended 31 December 2003In our opinion:(a)the financial statements set out on pages 45 to 99 are drawn up so as to give a true and fair view of the state of affairsof the Group and of the Company as at 31 December 2003 and of the results, changes in equity and cash flows ofthe Group and of the changes in equity of the Company for the year ended on that date; and(b)at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debtsas and when they 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 DirectorsANIL THADANIChairmanDR LIM CHEOK PENGManaging DirectorSingapore11 February 2004Parkway Holdings Limited Annual Report 2003 43

REPORT OF THE AUDITORSto the Members of Parkway Holdings LimitedWe have audited the accompanying financial statements of the Group and of the Company for the year ended 31 December2003 as set out on pages 45 to 99. 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 andperform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well asevaluating the overall financial statement 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 theCompany are properly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (the “Act”) andSingapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of theCompany as at 31 December 2003 and of the results, changes in equity and cash flows of the Group and ofthe changes in equity of the Company for the year ended on that date;the accounting and other records (excluding registers) required by the Act to be kept by the Company and by thosesubsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with theprovisions of the Act.We have considered the financial statements and auditors’ reports of all the subsidiaries of which we have not acted asauditors, and also considered the financial statements of those subsidiaries which are not required by the law of theircountry of incorporation to be audited, being financial statements that have been included in the consolidated financialstatements of the Group. The names of these subsidiaries are stated in note 5 to the financial statements.We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statementsof the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidatedfinancial statements of the Group and we have received satisfactory information and explanations as required by us forthose purposes.The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification, and in respect ofthe subsidiaries incorporated in Singapore, did not include any comment made under Section 207(3) of the Act.KPMGCertified Public AccountantsSingapore11 February 200444Parkway Holdings Limited Annual Report 2003

BALANCE SHEETSas at 31 December 2003Note2003S$’000The Group2002S$’000The Company2003S$’0002002S$’000Non-current assetsProperty, plant and equipmentGoodwill on consolidationInterests in subsidiariesInterests in associatesInterests in partnershipsOther investments345678(a)552,20433,172-85,6215352,379555,13434,983-83,37010054,187--655,721(4,526)----692,582(105,974)-13723,429727,774651,195586,621Current assetsLess:Current liabilities91692,031183,455105,107227,41912,01692,00320,379141,754Net current liabilities(91,424)(122,312) (79,987) (121,375)Non-current liabilities20(193,013)(170,222)(162,000)(140,000)Minority interests438,992(8,492)435,240(7,270)409,208-325,246-Net assets430,500427,970409,208325,246Share capitalReservesShare premiumCapital reservesExchange fluctuation reservesAccumulated profits2223179,996116,493-(6,144)140,155179,991116,481-(5,935)137,433179,996109,60312,656-106,953179,991109,59112,656-23,008Shareholders’ equity430,500427,970409,208325,246The accompanying notes form an integral part of these financial statements.Parkway Holdings Limited Annual Report 2003 45

CONSOLIDATED PROFIT AND LOSS ACCOUNTYear ended 31 December 2003The GroupNote2003S$’0002002S$’000RevenueOther operating incomeInventories and consumables usedPurchased and contracted servicesCosts of investments/properties soldDepreciation and impairment losses of property,plant and equipmentAmortisation of goodwill on consolidationStaff costsOther operating expenses2425(a)3425(b)348,6489,488(56,115)(26,570)(985)(29,658)(1,811)(140,184)(48,527)337,55916,181(48,294)(24,476)(6,108)(28,865)(1,230)(134,273)(51,880)Profit from operationsFinance costsShare of profits of associatesShare of profits of partnerships2527754,286(6,075)77719658,614(15,054)587143Profit from ordinary activities before taxationIncome tax expense2849,184(14,016)44,290(8,209)Profit from ordinary activities after taxationMinority interests35,168(1,560)36,081(2,780)Net profit for the year33,60833,301Earnings per share (cents)29Basic4.674.63Diluted4.674.63The accompanying notes form an integral part of these financial statements.46Parkway Holdings Limited Annual Report 2003

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYYear ended 31 December 2003NoteSharecapitalS$’000SharepremiumS$’000CapitalreservesS$’000ExchangefluctuationreservesS$’000AccumulatedprofitsS$’000TotalS$’000The GroupAt 1 January 2002179,991116,481-(8,380) 123,015411,107Exchange differences onretranslation of opening net assets offoreign subsidiaries and associates---2,445-2,445Reversal of goodwillpreviously written offagainst accumulated profitsarising from the deemeddisposal of a subsidiary----772772Net profit for the year----33,30133,301Final dividend paid of2 cents per share less taxat 22% in respect of year 2001----(11,231)(11,231)Interim dividend paid of1.5 cents per share less tax at 22%----(8,424)(8,424)At 31 December 2002179,991116,481-(5,935)137,433427,970At 1 January 2003179,991116,481-(5,935)137,433427,970Issue of shares undershare option scheme22512---17Exchange differences onretranslation of opening net assets offoreign subsidiaries and associates---(209)-(209)Net profit for the year----33,60833,608Final dividend paid of3.5 cents per share less taxat 22% in respect of year 2002----(19,655)(19,655)Interim dividend paid of2 cents per share less tax at 22%----(11,231)(11,231)At 31 December 2003179,996116,493-(6,144)140,155430,500The accompanying notes form an integral part of these financial statements.Parkway Holdings Limited Annual Report 2003 47

STATEMENT OF CHANGES IN EQUITYYear ended 31 December 2003NoteSharecapitalS$’000SharepremiumS$’000CapitalreservesS$’000ExchangefluctuationreservesS$’000Accumulatedprofits TotalS$’000 S$’000The CompanyAt 1 January 2002179,991109,59112,656(2,787)5,210304,661Realised exchange differences---2,787-2,787Net profit for the year----37,45337,453Final dividend paid of2 cents per share less taxat 22% in respect of year 2001----(11,231) (11,231)Interim dividend paid of1.5 cents per share less taxat 22%----(8,424)(8,424)At 31 December 2002179,991109,59112,656-23,008325,246At 1 January 2003179,991109,59112,656-23,008325,246Issue of shares undershare option scheme22512---17Net profit for the year----114,831114,831Final dividend paid of3.5 cents per share less taxat 22% in respect of year 2002----(19,655)(19,655)Interim dividend paid of2 cents per share less taxat 22%----(11,231) (11,231)At 31 December 2003179,996109,60312,656-106,953409,208The accompanying notes form an integral part of these financial statements.48Parkway Holdings Limited Annual Report 2003

CONSOLIDATED STATEMENT OF CASH FLOWSYear ended 31 December 20032003S$’0002002S$’000Operating activities:Profit from ordinary activities before taxationAdjustments for:Exchange differenceDepreciation and impairment losses of property, plant and equipmentReversal of goodwill previously written off against accumulated profitsAllowance for doubtful receivables due from associates (written back)/madeGain on disposal of long-term equity investmentsAllowance for diminution in value of long-term equity investmentsLoss on disposal of property, plant and equipmentShare of profits of associatesShare of profits of partnershipsAmortisation of deferred expenditureAmortisation of goodwill on consolidationProvision for indemnity provided for bankingfacilities granted to an associate written backDividend incomeInterest incomeInterest expenseOperating profit before working capital changesDecrease/(Increase) in working capital:Completed properties held for resaleInventoriesTrade and other receivablesOther investmentsTrade and other payablesCash generated from operationsIncome taxes paidCash flows from operating activities49,184(55)29,658-(81)(358)1,38048(777)(196)-1,811-(1,746)(223)5,77484,419227(260)(508)334(9,766)74,446(8,744)65,70244,29029428,8657723,004(3,298)48168(587)(143)2581,230(5,330)(1,994)(697)14,55081,4303736476,20951815,230104,407(15,775)88,632The accompanying notes form an integral part of these financial statements.Parkway Holdings Limited Annual Report 2003 49

CONSOLIDATED STATEMENT OF CASH FLOWSYear ended 31 December 2003Note2003S$’0002002S$’000Investing activities:Purchase of property, plant and equipmentProceeds from sale of property, plant and equipmentAcquisition of additional interests in subsidiariesAcquisition of subsidiaries, net of cash acquiredInvestments in associatesAcquisition of long-term investmentsProceeds from liquidation of associatesCash distribution arising from capital received frominvestee companiesAdvances to associatesDividends received from associatesInterests in partnershipsProceeds from disposal of long-term equity investmentsCash refunded for tenancy depositsDividends receivedInterest received30(c)(28,323)1,542-2,971(250)-145-(1,192)-243785-1,746225(41,421)599(47,393)-(2,331)(11)-8(717)5372138,402(6)1,994719Cash flows from investing activities(22,108)(79,407)Financing activities:Issue of shares under share option schemeRepayment of bank loansProceeds from bank loansRepayment of finance lease obligationsIssue of floating rate notesRedemption of floating rate notesIssue of fixed rate notesRedemption of fixed rate notesAdvances from former corporate shareholder of a subsidiaryInterest paidDividends paidDividends paid to minority shareholders17(22,151)36,968(2,183)152,000(130,000)-(60,000)1,650(5,781)(30,886)(228)-(182,684)30,000(457)140,000(42,250)60,000--(14,157)(19,655)(944)Cash flows from financing activities(60,594)(30,147)Net decrease in cash and cash equivalents(17,000)(20,922)Cash and cash equivalents at beginning of the yearExchange fluctuation on cash and cash equivalentsat beginning of the year46,63928646,92567,38018167,561Cash and cash equivalents at end of the year1529,92546,639The accompanying notes form an integral part of these financial statements.50Parkway Holdings Limited Annual Report 2003

NOTES TO THE FINANCIAL STATEMENTS31 December 2003These notes form an integral part of the financial statements.The financial statements were authorised for issue by the directors on 11 February 2004.1. Domicile and ActivitiesParkway Holdings Limited (the “Company”) is incorporated in the Republic of Singapore and has its registered officeat No. 1 Grange Road #11-01, Orchard Building, Singapore 239693.The principal activities of the Company are those relating to investment holding while those of the subsidiariesconsist of the business of private hospital ownership and management and related healthcare services, ownershipand management of medical clinics, dealing in medical supplies, equipment and healthcare products, practiceof 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 managedcare and related services, and investment holding and trading.The consolidated financial statements for the year ended 31 December 2003 relate to the Company and its subsidiaries(referred to as the “Group”) and the Group’s interests 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”) includingrelated Interpretations promulgated by the Council on Corporate Disclosure and Governance.The financial statements were previously prepared in accordance with Singapore Statements of Accounting Standards(“SAS”). The transition from SAS to FRS did not give rise to any adjustments to the opening balances of accumulatedprofits of the prior and current years or to changes in comparatives.The historical cost basis is used and amounts are expressed in Singapore dollars thousands, unless stated otherwise.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 itsactivities.Investments in subsidiaries are stated in the Company’s balance sheet at cost less impairment losses. The financialstatements of subsidiaries are included in the consolidated financial statements from the date that control commencesuntil the date that control ceases.Associates are companies in which the Group has significant influence, but not control, over the financial and operatingpolicies.Investments in associates are stated in the Company’s balance sheet at cost less impairment losses. In the Group’sfinancial statements, they are accounted for using the equity method of accounting from the date that significantinfluence commences until the date that significant influence ceases. The Group’s investments in these entitiesincludes goodwill (net of accumulated amortisation) on acquisition. When the Group’s share of losses exceeds thecarrying amount of the associate, the carrying amount is fully written down and recognition of further losses isdiscontinued except to the extent that the Group has incurred obligations in respect of the associate.Parkway Holdings Limited Annual Report 2003 51

NOTES TO THE FINANCIAL STATEMENTS31 December 20032. Summary of Significant Accounting Policies (Cont’d)2.2 Consolidation (Cont’d)Partnerships are those entities where the Group exercises joint control with the other partners over the financial andoperational decisions.Investments in partnerships are accounted for using the equity method of accounting from the date that partnershipcommences until the day that partnership ceases.All significant intra-group transactions, balances and unrealised gains or losses are eliminated on consolidation.Unrealised gains resulting from transactions with associates are eliminated to the extent of the Group’s interestin the enterprise. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extentthat there is no evidence of impairment.2.3 Foreign CurrenciesForeign Currency TransactionsMonetary assets and liabilities in foreign currencies are translated into Singapore dollars at rates of exchangeruling at the balance sheet date. Transactions in foreign currencies are translated at rates ruling on transactiondates. Foreign currency assets, being long-term non-monetary assets, the holding or the use or the subsequentdisposal of which will generate receipts in a foreign currency, hedged by foreign currency borrowings are translatedinto Singapore dollars at rates of exchange ruling at the balance sheet date. Translation differences are included inthe profit and loss account, except those arising from the translation at closing rates of foreign currency assetshedged by foreign currency borrowings, and the gains and losses on those foreign currency borrowings, which aretaken directly to exchange fluctuation reserves until disposal of the investment.Foreign EntitiesThe assets and liabilities of foreign entities are translated into Singapore dollars at rates of exchange ruling at thebalance sheet date. The results of foreign entities are translated at the average exchange rates for the year. Goodwilland fair value adjustments arising on the acquisition of foreign entities are stated at exchange rates ruling on transactiondates. Exchange differences arising on translation are recognised directly in the exchange fluctuation reserves. Ondisposal, the accumulated translation differences are recognised in the consolidated profit and loss account as partof the gain or loss on sale.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 thepresent value of the minimum lease payments at the inception of the lease less accumulated depreciation andimpairment losses. Lease payments are apportioned between the finance charges and reduction of the leaseliability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance chargesare charged directly against the profit and loss account. Capitalised leased assets are depreciated over the shorterof the economic useful life of the asset and the lease term.52Parkway Holdings Limited Annual Report 2003

2. Summary of Significant Accounting Policies (Cont’d)2.4 Property, Plant and Equipment (Cont’d)Depreciation is provided on a straight-line basis so as to write off items of property, plant and equipment over theirestimated useful lives as follows:Leasehold land and buildings - remaining term of the leaseFreehold buildings - 2%Freehold medical centre suites - 2%Leasehold office premises - 2%Hospital and medical equipment,and furniture, fittings and equipment - 6 2/3 % to 33 1/3 %Renovation and improvements - 4% to 33 1/3 %Motor vehicles - 20%No depreciation is provided on freehold land and construction in progress. In respect of fully depreciated assets, thecost and accumulated depreciation are retained in the financial statements until they are no longer in use.2.5 Goodwill on ConsolidationGoodwill arising on acquisition represents the excess of the cost of acquisition over the fair value of the Group’sshare of the identifiable net assets acquired. Goodwill is stated at cost less accumulated amortisation and impairmentlosses. Goodwill arising on acquisitions of associates is included in investments in associates. Goodwill is amortisedand recognised in the profit and loss account using the straight-line method over its estimated useful life of not morethan 20 years. In arriving at the gain or loss on disposal of an entity, the unamortised balance of goodwill relating tothe entity disposed of is included as part of the cost of investment.Goodwill on acquisitions of subsidiaries and associates that occurred prior to 1 January 2001 was written off againstreserves and has not been retrospectively capitalised and amortised. Upon disposal, such goodwill previouslywritten off against reserves is retained in the accumulated profits and is not taken into account in arriving at the gainor loss on disposal.Negative goodwill arising on acquisition represents the excess of the fair value of the identifiable net assets acquiredover the cost of acquisition.To the extent that negative goodwill relates to an expectation of future losses and expenses that are identified in theplan of acquisition and can be measured reliably, but which have not yet been recognised, it is recognised in theprofit and loss account when the future losses and expenses are recognised. Any remaining negative goodwill,but not exceeding the fair values of the non-monetary assets acquired, is recognised in the profit and loss accountover the weighted average useful life of those assets that are depreciable or amortisable. Negative goodwill inexcess of the fair values of the non-monetary assets acquired is recognised immediately in the profit and lossaccount.2.6 Financial AssetsDebt and equity securities held for long-term are stated at cost less allowance for diminution in value which, in theopinion of the directors, are other than temporary.Investments held for short-term are stated at the lower of cost and market value on an item-by-item basis. Anyincreases or decreases in carrying amount are included in the profit and loss account.Parkway Holdings Limited Annual Report 2003 53

NOTES TO THE FINANCIAL STATEMENTS31 December 20032. Summary of Significant Accounting Policies (Cont’d)2.7 Completed Properties Held for ResaleCompleted properties are those properties which are held with the intention of sale in the ordinary course of businessand are classified as current assets.All completed properties are stated at the lower of cost and estimated net realisable value.2.8 InventoriesInventories comprising mainly pharmacy, hospital and surgical supplies are stated at the lower of cost and netrealisable value.Cost is calculated using the weighted average cost formula and comprises all costs of purchase and other costsincurred in bringing the 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 necessaryto make the sale.When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period inwhich the related revenue is recognised. The amount of any allowance for write-down of inventories to net realisablevalue and all losses of inventories are recognised as an expense in the period the write-down or loss occurs.The amount of any reversal of any allowance for write-down of inventories, arising from an increase in net realisablevalue, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which thereversal occurs.2.9 Trade and Other ReceivablesTrade and other receivables are stated at cost less allowances for doubtful receivables.2.10 Deferred ExpenditureDeferred expenditure comprises management fees for arrangement of banking facilities.Management fees for arrangement of banking facilities are amortised over the period of the facilities.2.11 Cash and Cash EquivalentsCash and cash equivalents comprise cash balances and bank deposits. For the purpose of the statement of cashflows, cash and cash equivalents are presented net of bank overdrafts which are repayable on demand and whichform an integral part of the Group’s cash management.2.12 ImpairmentThe carrying amounts of the Group’s assets, other than inventories, are reviewed at each balance sheet date todetermine whether there is any indication of impairment. If any such indication exists, the asset’s recoverableamount is estimated.An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds itsrecoverable amount. Impairment losses are recognised in the profit and loss account.54Parkway Holdings Limited Annual Report 2003

2. Summary of Significant Accounting Policies (Cont’d)2.12 Impairment (Cont’d)The recoverable amount is the greater of the asset’s 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 currentmarket assessments of the time value of money and the risks specific to the asset. For an asset that does notgenerate cash inflows largely independent of those from other assets, the recoverable amount is determined for thecash-generating unit to which the asset belongs.An impairment loss is reversed if there has been a change in the estimates used to determine the recoverableamount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceedthe carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss hadbeen recognised. Reversals of impairment are recognised in the profit and loss account.An impairment loss in respect of goodwill is not reversed unless the loss was caused by a specific externalevent of an exceptional nature that is not expected to recur, and the increase in recoverable amount relates clearlyto the reversal of the effect of that specific event.2.13 Liabilities and Interest-Bearing BorrowingsTrade and other payables and interest-bearing borrowings are stated at cost.2.14 Employee BenefitsDefined Contribution PlanContributions to defined contribution pension plan (Central Provident Fund) are recognised as an expense inthe profit and loss account as incurred.Short-Term Compensated AbsencesShort-term accumulating compensated absences are recognised when the employees render service that increasestheir entitlement to future compensated absences.Employee Share OptionsNo compensation cost or obligation is recognised when share options are issued under employee incentiveprogrammes. When options are exercised, equity is increased by the amount of the proceeds received.2.15 Deferred TaxDeferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases ofassets and liabilities and their carrying amounts in the financial statements. Temporary differences are not recognisedfor goodwill not deductible for tax purposes and the initial recognition of assets and liabilities that affect neitheraccounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realisation orsettlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at thebalance sheet date.A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available againstwhich the temporary differences can be utilised.Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, exceptwhere the timing of the reversal of the temporary difference can be controlled and it is probable that the temporarydifference will not be reversed in the foreseeable future.Parkway Holdings Limited Annual Report 2003 55

NOTES TO THE FINANCIAL STATEMENTS31 December 20032. Summary of Significant Accounting Policies (Cont’d)2.16 Share CapitalDividendsDividends on ordinary shares are recognised as a liability in the period in which they are declared.2.17 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 arethen taken to the profit and loss account. Provision 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 basisover the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income tobe received. Contingent rentals 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 paymentis established.2.18Interest IncomeInterest income from bank deposits is accrued on a time-apportioned basis.2.19 Allowance for Doubtful DebtsSpecific allowance is made for accounts which are doubtful of collection. A general allowance calculated as apercentage of overdue debts is also made.2.20 Operating LeasesWhere the Group has the use of assets under operating leases, payments made under the leases are recognised inthe profit and loss account on a straight-line basis over the term of the lease. Lease incentives received are recognisedin the profit and loss account as an integral part of the total lease payments made. Contingent rentals are chargedto the profit and loss account in the accounting period in which they are incurred.56Parkway Holdings Limited Annual Report 2003

2. Summary of Significant Accounting Policies (Cont’d)2.21 Finance CostsInterest expense and similar charges are expensed in the profit and loss account in the period in which they areincurred.The interest component of finance lease payments is recognised in the profit and loss account using the effectiveinterest rate method.Parkway Holdings Limited Annual Report 2003 57

NOTES TO THE FINANCIAL STATEMENTS31 December 20033. Property, Plant and Equipment - The GroupHospital Landand BuildingsFreehold LeaseholdS$’000S$’000Constructionin ProgressS$’000FreeholdMedical CentreSuitesS$’000CostAt 1 January 2003AdditionsAssets acquired inbusiness combinationsDisposals/Write offTransfersTranslation differences199,880167-(1,557)2,869(404)325,457-6,18013,235- -(763)(12)6,194 (14,536)45-7,828-----At 31 December 2003200,955330,9334,8677,828Accumulated depreciation and impairment lossesAt 1 January 200320,745Depreciation for the year2,097Impairment losses for the year-Assets acquired inbusiness combinations-Disposals/Write off(1,501)Translation differences(41)50,9625,645--(613)45------31372----At 31 December 200321,30056,039-385Depreciation charge for 20022,7586,164-22Carrying amount31 December 2003179,655274,8944,8677,44331 December 2002179,135274,4956,1807,51558Parkway Holdings Limited Annual Report 2003

LeaseholdOfficePremisesS$’000Renovation &ImprovementsS$’000Hospital &MedicalEquipment &Furniture, Fittings &EquipmentS$’000MotorVehiclesS$’000TotalS$’0004,297-9,7621,826208,22712,8652,954230764,58528,323----6(461)(1,762)-1,302(18,030)7,235(219)135(158)-(3)1,443(20,981)-(581)4,2979,371211,3803,158772,789774856373,6571,276-131,33019,394-1,670452-209,45129,021637---6(443)-817(16,680)(35)77(154)(2)900(19,391)(33)1,4964,496134,8262,043220,585861,06518,35541528,8652,8014,87576,5541,115552,2043,5236,10576,8971,284555,134Parkway Holdings Limited Annual Report 2003 59

NOTES TO THE FINANCIAL STATEMENTS31 December 20033. Property, Plant and Equipment - The Group (Cont’d)Freehold and leasehold hospital land and buildings include the following one-off revaluations performedbetween 1 January 1984 and 31 December 1996. The revaluations were carried out in connection with theGroup’s acquisition of the respective subsidiaries holding these freehold and leasehold hospital land and buildings.Freehold Hospital Land and Buildings(a)(b)(c)The 1987 directors’ valuation of the land and buildings at Gleneagles Hospital and Medical Centre was basedon independent professional valuations carried out by Jones Lang LaSalle in May 1987 on the basis of openmarket valuation at S$28,422,000.The 1989 directors’ valuation of the land and buildings at Pulau Pinang Clinic was based on independentprofessional valuations carried out by Knight Frank Pte Ltd in October 1989 on the basis of open marketvaluation at RM13,916,000 (S$6,341,000).The 1995 directors’ valuation of the land and buildings at East Shore Hospital was based on independentprofessional valuations carried out by Knight Frank Pte Ltd in June 1995 on the basis of open marketvaluation at S$51,205,000.Leasehold Hospital Land and Buildings(a)The 1995 directors’ valuation of the land and buildings at Mount Elizabeth Hospital and Eastern SpecialistCentre was based on independent professional valuations carried out by Knight Frank Pte Ltd in June 1995on the basis of open market valuation at S$290,692,000.The freehold land and building of a subsidiary with carrying value amounting to S$19,129,000 (2002: S$19,580,000)have been mortgaged to a bank for credit facilities granted to the subsidiary (see notes 15 and 18).The carrying amount of property, plant and equipment includes amounts totalling S$1,124,000 (2002: S$4,051,000)in respect of assets held under finance leases.4. Goodwill on Consolidation – The GroupThe GroupS$’000CostAt 1 January and 31 December 2003Accumulated amortisation and impairment lossesAt 1 January 2003Amortisation charge for the yearAt 31 December 2003Carrying amountAt 31 December 2003At 31 December 200236,2131,2301,8113,04133,17234,98360Parkway Holdings Limited Annual Report 2003

5. Interests in Subsidiaries - The CompanyName of SubsidiaryPrincipalActivitiesPlace ofIncorporation/Business2003%EquityInterest2002%Cost ofInvestment2003S$’0002002S$’000Unquoted shares, at cost:1Parkway Properties Pte Ltdand its subsidiary:PropertyinvestmentSingapore100100160,120160,1201Parkway Promotions Pte LtdPromoters andorganisers ofconferences andseminarsSingapore100100* Parkway Panama Limited IncInvestment holdingPanama100100##1M & P Investments Pte Ltdand its subsidiary:Investment tradingand propertydevelopmentSingapore100100##1S.P.I. Pte LtdInvestment tradingSingapore100100Parkway InformationTechnologies Pte LtdLiquidated duringthe yearSingapore-100-#1Weian Investments Pte LtdDormantSingapore51511021021Parkway Group Healthcare## Pte Ltd and its subsidiaries:Investment holdingSingapore100100494,188494,1881APIC Integrated Care Pte Ltd(formerly known as AllianzParkway Integrated CarePte Ltd)Agent andadministrator formanaged care andrelated servicesSingapore100@1Gleneagles MedicalGlobal Care Pte LtdProvision ofhealthcare andrelated servicesSingapore1001001Mount Elizabeth HealthcareHoldings Ltd and itssubsidiaries:Investment holdingSingapore1001001Mount Elizabeth HospitalLtd and its subsidiaries:Private hospitaland medical centreownership andmanagementSingapore1001001East Shore Hospital Pte LtdPrivate hospitaland medical centreownership andmanagementSingapore100100Balance carried forward 654,410 654,410Parkway Holdings Limited Annual Report 2003 61

NOTES TO THE FINANCIAL STATEMENTS31 December 20035. Interests in Subsidiaries - The Company (Cont’d)Name of SubsidiaryPrincipalActivitiesPlace ofIncorporation/Business2003%EquityInterest2002%Cost ofInvestment2003S$’0002002S$’000Balance brought forward 654,410 654,4101MENA Services Pte LtdNursing agencySingapore1001001Mount Elizabeth OphthalmicInvestments Pte LtdRental of medicalequipment used foreye operationsSingapore66.4866.481Charter Asia BehaviouralHealth Services Pte LtdProvision ofpsychiatric andbehaviouralhealthcare servicesSingapore100@2Mount Elizabeth HealthcareServices Sdn Bhdand its subsidiary:Provision oflaboratory services tohospitals and clinicsMalaysia1001002Orifolio Options Sdn BhdInvestment holdingMalaysia1001001Parkway Healthtech InvestmentsPte Ltd and its subsidiaries:Investment holdingSingapore1001001Goldlink Investments Pte. Ltd.and its subsidiaries:Investment holdingSingapore1001001Medi-Rad Associates Ltdand its subsidiaries:Operation ofradiology clinicsSingapore1001001Khim MedicarePrivate LimitedDormantSingapore75.5175.511Radiology ConsultantsPte LtdRadiologyconsultancy andinterpretative servicesSingapore1001001The Diagnostic X-rayCentre Pte LtdDormantSingapore1001001Drayson Investments Pte.Ltd. and its subsidiary:Investment holdingSingapore1001001Parkway LaboratoryServices LtdProvision ofcomprehensivediagnosticlaboratory servicesSingapore100100Balance carried forward654,410 654,41062Parkway Holdings Limited Annual Report 2003

5. Interests in Subsidiaries - The Company (Cont’d)Name of SubsidiaryPrincipalActivitiesPlace ofIncorporation/Business2003%EquityInterest2002%Cost ofInvestment2003S$’0002002S$’000Balance brought forward 654,410 654,4101Gleneagles Hospital Limitedand its subsidiaries:Private hospital andmedical centreownership andmanagementSingapore1001001Gleneagles MedicalCentre LtdMedical centredevelopment,ownership andmanagementSingapore1001001Gleneagles RadiologyConsultants Pte LtdRadiologyconsultancy andinterpretativeservicesSingapore1001001C-Med Pte LtdCyber-medicineand other relatedhealthcare servicesSingapore100@1Gleneagles CRC Pte Ltdand its subsidiaries:Operation of aclinical research centreSingapore1001008Gleneagles CRC (Thailand)Company LimitedTo conduct global andlocal clinical trialsThailand1001009Beijing Parkway GleneaglesMedical andPharmaceuticalTechnology ConsultingPte LtdTo conduct global andlocal clinical trialsPeople’sRepublic ofChina1001001Gleneagles International Pte. Ltd.and its subsidiaries:Investment holdingand managementservicesSingapore1001003Gleneagles JPMC Sdn BhdManagement andoperation of acardiac andcardiothoraciccare centreBruneiDarussalam75752Gleneagles (Malaysia) SdnBhd and its subsidiary:Investment holdingMalaysia100100Balance carried forward 654,410 654,410Parkway Holdings Limited Annual Report 2003 63

NOTES TO THE FINANCIAL STATEMENTS31 December 20035. Interests in Subsidiaries - The Company (Cont’d)Name of SubsidiaryPrincipalActivitiesPlace ofIncorporation/Business2003%EquityInterest2002%Cost ofInvestment2003S$’0002002S$’000Balance brought forward654,410 654,4105Pulau Pinang ClinicSdn. Bhd.Private hospitalownership andmanagementMalaysia70701Gleneagles ManagementServices Pte Ltdand its subsidiary:Provision of advisory,administrative,management andconsultancy servicesto healthcare facilitiesSingapore100100* Gleneagles HeritageHospital ManagementLimitedDormantBritishVirginIslands75751Thermal International(S) Pte LtdDealing inmedical supplies,equipment andhealthcare productsSingapore51517Thermal International LimitedDormantHong Kong51511Gleneagles Pharmacy Pte LtdMedical centreownershipSingapore1001001Gleneagles DevelopmentPte LtdDeveloping andmanaging turnkeyhospital projectsSingapore1001001Parkway Informatics Pte LtdDormantSingapore1001004Gleneagles Hospital (UK)Limited and its subsidiaries:Investment holdingUnitedKingdom65654The Heart Hospital LimitedUnder companyvoluntaryarrangementUnitedKingdom1001004The Heart HospitalProperties LimitedDormantUnitedKingdom100100* Wholebond LimitedDormantUnitedKingdom1001004Cavendish Clinic LimitedDormantUnitedKingdom100100Balance carried forward 654,410 654,41064Parkway Holdings Limited Annual Report 2003

5. Interests in Subsidiaries - The Company (Cont’d)Name of SubsidiaryPrincipalActivitiesPlace ofIncorporation/Business2003%EquityInterest2002%Cost ofInvestment2003S$’0002002S$’000Balance brought forward654,410 654,410* Merlion Healthcare LimitedDormantUnitedKingdom1001001Gleneagles TechnologiesServices Pte LtdTo provideconsultancy services,perform equipmentplanning, procurement,testing andcommissioning, andmanage a healthcarefacilitySingapore1001001Ko, Djeng Gleneagles Pte LtdTo carry on thepractice of dentalsurgeons and tooperate dental clinicsSingapore60601Gleneagles InternationalLaboratory Services Pte Ltdand its subsidiary:To provideindustrial, clinical andmedical laboratorytesting andconsultancy servicesSingapore68681Gleneagles InvestmentFujian Pte LtdInvestment holdingSingapore1001001Parkway Shenton Pte Ltdand its subsidiaries:Investment holdingand operation of anetwork of clinics andprovision ofcomprehensivemedical and surgicaladvisory servicesSingapore1001001Gleneagles MaritimeMedical Centre Pte LtdDormantSingapore1001001Shenton Medical HoldingsPte Ltd and its subsidiaries:Investment holdingSingapore1001001Shenton Medical CentrePte LtdDormantSingapore1001001The Shenton MedicalGroup Pte LtdDormantSingapore100100Balance carried forward 654,410 654,410Parkway Holdings Limited Annual Report 2003 65

NOTES TO THE FINANCIAL STATEMENTS31 December 20035. Interests in Subsidiaries - The Company (Cont’d)Name of SubsidiaryPrincipalActivitiesPlace ofIncorporation/Business2003%EquityInterest2002%Cost ofInvestment2003S$’0002002S$’000Balance brought forward654,410 654,4101Executive HealthScreeners Pte LtdDormantSingapore1001001Shenton Family MedicalClinics Pte LtdTo provide, establishand carry on thebusiness of clinicsSingapore1001006Gleneagles MaritimeMedical Centre (China)LimitedDormantHong Kong1001001Nippon Medical Care Pte LtdOperation of clinicsSingapore7070** Parkway Shenton InternationalHoldings Pte. Ltd.Investment holdingSingapore100-* Harborview Corporation LimitedNo. I and its subsidiary:Liquidated duringthe yearUnited Statesof America-100-18,895* Harborview CorporationLimited No. IILiquidated duringthe yearUnited Statesof America-9210Nutpine Properties Limitedand its subsidiary:DormantUnitedKingdom1001002210Saltplains LimitedDormantUnitedKingdom1001001Westront Pte LtdInvestment holdingSingapore100100##* Fantasy Line LimitedInvestment holdingChannelIslands100100##Less:Impairment losses654,412-654,412673,307(18,895)654,412Amounts due from subsidiaries (non-trade)Allowance for doubtful receivablesAmounts due to subsidiaries (non-trade)329,265 360,005(74,773) (11,179)254,492 348,826(253,183) (310,656)655,721 692,58266Parkway Holdings Limited Annual Report 2003

5. Interests in Subsidiaries - The Company (Cont’d)1 Audited by KPMG, Singapore2 Audited by KPMG, Malaysia3 Audited by KPMG, Brunei Darussalam4 Audited by KPMG, United Kingdom5 Audited by PricewaterhouseCoopers, Malaysia6 Audited by H.C. Watt & Co., Hong Kong7 Audited by Heng & Tan, Hong Kong8 Audited by PLP Auditing Office, Thailand9 Audited by Beijing Yongtuo Certified Public Accountants, People’s Republic of China10 Audited by HH Burke & Company Limited, United Kingdom* Not required to be audited by law of country of incorporation** Not audited as the first set of financial statements have not been prepared since date of incorporation# Cost of investment less than S$1,000## Cost of investment in Parkway Group Healthcare Pte Ltd includes S$110,078,000 non-cumulative preference shares@ Was an associate of the Group during the financial year ended 31 December 2002Movements in impairment losses are as follows:At 1 JanuaryImpairment losses made during the yearImpairment losses utilised during the yearAt 31 December2003S$’00018,895-(18,895)-2002S$’00019,963800(1,868)18,895Balances with subsidiaries are unsecured and are intended not to be repaid within the next twelve months.The amounts due from subsidiaries consist of S$144,367,000 (2002: S$166,445,000) interest free loans andS$184,898,000 (2002: S$193,560,000) loans which bear interest at between 0.625% to 1% (2002: 0.6875% to1.1875%) per annum.The amounts due to subsidiaries consist of S$232,165,000 (2002: S$300,917,000) interest free loans andS$21,018,000 (2002: S$9,739,000) loans which bear interest at between 0.5% to 1% (2002: 0.6875% to1.1875%) per annum.Effective Interest Rates and Repricing Analysis2003EffectiveInterest Rate%Within1 yearS$’0001 to 5yearsS$’000After5 yearsS$’000TotalS$’000Amounts due from subsidiariesAmounts due to subsidiaries10.5624 to 1--184,89821,018--184,89821,0182002Amounts due from subsidiariesAmounts due to subsidiaries0.745 to 10.745 to 1.125--193,5609,739--193,5609,739Parkway Holdings Limited Annual Report 2003 67

NOTES TO THE FINANCIAL STATEMENTS31 December 20036. Interests in Associates2003S$’000The Group2002S$’000The Company2003S$’0002002S$’000Unquoted equity shares, at costShare of net assets in quoted investmentShare of net assets in unquoted investments-69,30816,83486,142-69,308166,919236,22764--6450,329--50,329Amounts due from associates (mainly non-trade)Allowance for doubtful receivablesAmounts due to associates (mainly non-trade)13,337(9,000)16,919(12,837)----4,337(4,858)4,082(156,939)-(4,590)-(156,303)85,621 83,370 (4,526) (105,974)Market value of quoted equity shares48,14352,371--The GroupBalances with associates are unsecured and interest free, and are not intended to be repaid within the next twelvemonths.The CompanyThe amounts due to associates are unsecured and interest free, and are not intended to be repaid within the nexttwelve months.Details of associates are set out in note 34.7. Interests in Partnerships - The GroupThese comprise interests in the following partnerships:Name of PartnershipPrincipalActivitiesPlace ofRegistration/BusinessEffective interestheld by the Group2003 2002%%Shenton Family Medical Clinic(Hougang)Operations of medical clinicSingapore-85Shenton Family Medical Clinic(Bukit Batok)Operations of medical clinicSingapore6060Shenton Family Medical Clinic(Serangoon)Operations of medical clinicSingapore5050Shenton Family Medical Clinic(Bedok Reservoir)Operations of medical clinicSingapore5050Shenton Family Medical Clinic(Jurong East)Operations of medical clinicSingapore50-68Parkway Holdings Limited Annual Report 2003

7. Interests in Partnerships - The Group (Cont’d)The Group exercises joint control with the other partners over the financial and operational decisions of thesepartnerships. Accordingly, the results in these partnerships are equity accounted for in the Group’s financial statements.The partnership with Shenton Family Medical Clinic (Hougang) was terminated on 14 May 2003.The interests in partnerships comprise:Current accountsCapital contributionsShare of post-acquisition profits/(losses):At 1 JanuaryShare of current year’s profitsReversal of share of losses on termination of a partnershipAt 31 DecemberAmounts due from partnerships (mainly non-trade)Amounts due to partnerships (mainly non-trade)Total2003S$’000166(81)19629240757360(580)532002S$’000237(224)143-(81)156148(204)100The amounts due from/(to) partnerships are unsecured and interest free, and have no fixed terms of repayment.The partners’ current account balances are represented as follows:Property, plant and equipmentInventoriesTrade receivablesOther receivables, deposits and prepaymentsAmounts due from the GroupAmounts due from other partnersCash and cash equivalentsTrade payablesOther payables and accrued operating expensesAmounts due to the Group2003S$’0007387391605803771461,4625648601641,2982002S$’00015456251932049213585926124148298561Partners’ current accounts:Capital contributions:The GroupOther partnersShare of post-acquisition profits/(losses):The GroupOther partners1661434075821,298237139(81)266561Parkway Holdings Limited Annual Report 2003 69

NOTES TO THE FINANCIAL STATEMENTS31 December 20038. Other Investments2003S$’000The Group2002S$’000The Company2003S$’0002002S$’000(a) Non-Current InvestmentsUnquoted equity shares, at costQuoted equity shares, at costOther unquoted investments, at costAllowance for diminution in value of investments5,34256,05311461,509(9,130)52,3795,34256,76311462,219(8,032)54,1871,013--1,013(1,013)-1,013--1,013(1,000)132003S$’000The Group2002S$’000(b) Current InvestmentsQuoted equity shares, at costAllowance for diminution in value of investments1,710(1,110)6004,150(3,216)9349. Current AssetsNote2003S$’000The Group2002S$’000The Company2003S$’0002002S$’000Completed properties held for resaleInventoriesTrade receivablesOther receivables, deposits and prepaymentsDeferred expenditureTax recoverableOther investmentsCash and cash equivalents10111213148(b)1557910,02734,6137,427-7,88660030,89992,0318069,68827,5274,917-13,39593447,840105,107---112-6,788-5,11612,016---45-12,105-8,22920,37910. Completed Properties Held for Resale - The GroupCompleted properties held for resale, at costAllowance for foreseeable losses2003S$’000806(227)5792002S$’000806-80670Parkway Holdings Limited Annual Report 2003

11. Inventories - The GroupInventoriesAllowance for inventory obsolescence2003S$’00010,357(330)10,0272002S$’0009,688-9,68812. Trade Receivables - The GroupTrade receivablesAllowance for doubtful receivables2003S$’00044,365(9,752)34,6132002S$’00038,490(10,963)27,52713. Other Receivables, Deposits and Prepayments2003S$’000The Group2002S$’000The Company2003S$’0002002S$’000Interest receivablesPrepaymentsSundry depositsNon-trade receivablesAllowance for doubtful receivables29111,7972,7104,968(251)4,7177,42747291,5782,3113,059(453)2,6064,917----112-112112-45-45---4514. Deferred ExpenditureNote2003S$’000The Group2002S$’000The Company2003S$’0002002S$’000At 1 JanuaryAmortisation during the yearAt 31 December25(c)---258(258)----258(258)-Parkway Holdings Limited Annual Report 2003 71

NOTES TO THE FINANCIAL STATEMENTS31 December 200315. Cash and Cash EquivalentsNote2003S$’000The Group2002S$’000The Company2003S$’0002002S$’000Fixed deposits with financial institutionsCash and bank balancesBank overdrafts- unsecured- secured9161,02829,87130,899(974)-(974)29,92520,05827,78247,840(1,005)(196)(1,201)46,639-5,1165,116---5,1164,1134,1168,229---8,229In the previous financial year, bank overdrafts of S$196,000 were secured on a subsidiary’s freehold propertystated in the financial statements at S$19,580,000 and a debenture over its assets (see note 3).Effective Interest Rates and Repricing AnalysisEffectiveInterest Rate%Within1 yearS$’0001 to 5yearsS$’000After5 yearsS$’000TotalS$’000Group2003Fixed deposits with financial institutionsBank overdrafts0.175 to 3.75.251,028(974)----1,028(974)2002Fixed deposits with financial institutionsBank overdrafts0.35 to 47.5 to 8.320,058(1,201)----20,058(1,201)Company2002Fixed deposits with financial institutions0.43754,113--4,11316. Current LiabilitiesNote2003S$’000The Group2002S$’000The Company2003S$’0002002S$’000Bank overdraftsTrade payables and accrued operating expensesOther payablesInterest-bearing borrowingsEmployee benefitsCurrent tax payable1517181997454,87210,698100,8381,55514,518183,4551,20149,69213,269145,8961,55915,802227,419-1,55245190,000--92,003-1,333421140,000--141,75472Parkway Holdings Limited Annual Report 2003

17. Other Payables2003S$’000The Group2002S$’000The Company2003S$’0002002S$’000Unclaimed dividendsNon-trade payablesRental depositsDeposits and advancesAdvanced billings4516,8321,2097281,47810,6984217,6091,1662,1541,91913,269451----451421----42118. Interest-Bearing Borrowings2003S$’000The Group2002S$’000The Company2003S$’0002002S$’000Non-currentSecured term loanUnsecured floating rate notesUnsecured fixed rate notesFinance lease liabilities-162,000-940162,94091390,00050,0002,475143,388-162,000--162,000-90,00050,000-140,000CurrentSecured term loanSecured revolving credit facilityUnsecured floating rate notesUnsecured fixed rate notesUnsecured short-term credit facilitiesFinance lease liabilities8962,688-50,00046,968286100,8389134,01550,00060,00030,000968145,896---50,00040,000-90,000--50,00060,00030,000-140,000Maturity of BorrowingsTotalS$’000Within1 yearS$’000After 1 year butwithin 5 yearsS$’000After5 yearsS$’000Group2003Secured term loan:MYR variable at 7% per annumSecured revolving credit facility:MYR variable at 4.8% per annumUnsecured floating rate notes:S$ variable at 1.15% to 1.655% per annumUnsecured fixed rate notes:S$ fixed at 4% per annumUnsecured short-term credit facilities:S$ fixed at 1.19% to 1.59% per annumFinance lease liabilities:Fixed at 3% to 9.36% per annum8962,688162,00050,00046,9681,226263,7788962,688-50,00046,968286100,838--132,000--940132,940--30,000---30,000Parkway Holdings Limited Annual Report 2003 73

NOTES TO THE FINANCIAL STATEMENTS31 December 200318. Interest-Bearing Borrowings (Cont’d)Maturity of Borrowings (Cont’d)TotalS$’000Within1 yearS$’000After 1 year butwithin 5 yearsS$’000After5 yearsS$’000Group2002Secured term loan:MYR variable at 7.6% per annumSecured revolving credit facility:MYR variable at 4.8% to 5.1% per annumUnsecured floating rate notes:S$ variable at 1.355% to 1.6715% per annumUnsecured fixed rate notes:S$ fixed at 2% to 4% per annumUnsecured short-term credit facilities:S$ fixed at 1.55% per annumFinance lease liabilities:Fixed at 3% to 10.25% per annum1,8264,015140,000110,00030,0003,443289,2849134,01550,00060,00030,000968145,896913-60,00050,000-2,330113,243--30,000--14530,145Company2003Unsecured floating rate notes:S$ variable at 1.15% to 1.655% per annumUnsecured fixed rate notes:S$ fixed at 4% per annumUnsecured short-term credit facilities:S$ fixed at 1.19% to 1.27% per annum162,00050,00040,000252,000-50,00040,00090,000132,000--132,00030,000--30,0002002Unsecured floating rate notes:S$ variable at 1.355% to 1.6715% per annumUnsecured fixed rate notes:S$ fixed at 2% to 4% per annumUnsecured short-term credit facilities:S$ fixed at 1.55% per annum140,000110,00030,000280,00050,00060,00030,000140,00060,00050,000-110,00030,000--30,000(a)The revolving credit facility and term loan are secured on a subsidiary’s freehold property stated in thefinancial statements at S$19,129,000 (2002: S$19,580,000) and a debenture over its assets (seenote 3).74Parkway Holdings Limited Annual Report 2003

18. Interest-Bearing Borrowings (Cont’d)(b)In 1999, the Company entered into a Dual Currency Medium Term Notes Programme (“DCMTN Programme”)with a bank to issue up to S$200 million 7-year FRNs.The FRNs constitute direct and unconditional obligations of the Company, and are secured by a negativepledge on its principal subsidiaries as defined in accordance with the DCMTN Programme. The FRNs rankpari passu without any preference or priority among themselves and at least pari passu with all other unsecuredobligations of the Company (other than subordinated obligations and obligations having priorities created bylaw). Unless previously redeemed or purchased and cancelled, the FRNs are redeemable at their respectiveprincipal amounts on their maturity date.As at 31 December 2003, there are outstanding floating rate notes of principal amount of S$30 million(2002: S$30 million) which are redeemable in December 2009. Floating rate notes of principal amount ofS$30 million, out of the outstanding aggregate principal amount of S$60 million as at 31 December 2002,were redeemed during the year.(c)In 2001, the Company established a Multi-Currency Unsecured Medium Term Note Programme (“MCMTNProgramme”) with another bank to issue fixed or floating rate notes to refinance existing loans and for workingcapital 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 exceptfor any existing securities; andthe Company must ensure that it will continue to own directly or indirectly not less than 75% inGleneagles Hospital Limited and Mount Elizabeth Hospital Ltd.As at 31 December 2003, there are outstanding fixed rate notes of principal amount of S$50 million(2002: S$50 million) which are redeemable in April 2004, and floating rate notes aggregating principalamount of S$30 million (2002: S$30 million), S$10 million (2002: S$Nil), S$42 million (2002: S$Nil) andS$50 million (2002: S$Nil) which are redeemable in June 2005, October 2006, September 2008 andDecember 2008 respectively.Finance Lease LiabilitiesThe Group had obligations under finance leases that are repayable as follows:Payments2003S$’000Interest2003S$’000Principal2003S$’000Payments2002S$’000Interest2002S$’000Principal2002S$’000Repayable:Within 1 yearAfter 1 year but within 5 yearsAfter 5 years3721,075-1,0751,4471,2362,6711482,8194,05526834133446129682,3301452,4753,44386 286135 940- -135 940221 1,226Under the terms of the lease agreements, no contingent rents are payable.Parkway Holdings Limited Annual Report 2003 75

NOTES TO THE FINANCIAL STATEMENTS31 December 200318. Interest-Bearing Borrowings (Cont’d)Effective Interest Rates and Repricing Analysis2003EffectiveInterest Rate%Within1 yearS$’0001 to 5yearsS$’000After5 yearsS$’000TotalS$’000GroupSecured term loanSecured revolving credit facilityUnsecured floating rate notesUnsecured fixed rate notesUnsecured short-term credit facilitiesFinance lease liabilities74.81.15 to 1.65541.19 to 1.593 to 9.368962,688162,00050,00046,96823-----44-----1,1598962,688162,00050,00046,9681,226CompanyUnsecured floating rate notesUnsecured fixed rate notesUnsecured short-term credit facilities1.15 to 1.65541.19 to 1.27162,00050,00040,000------162,00050,00040,0002002GroupSecured term loanSecured revolving credit facilityUnsecured floating rate notesUnsecured fixed rate notesUnsecured short-term credit facilitiesFinance lease liabilities7.64.8 to 5.11.355 to 1.67152 to 41.553 to 10.251,8264,015140,00060,00030,0004------50,000 ---2,108 1,3311,8264,015140,000110,00030,0003,443CompanyUnsecured floating rate notesUnsecured fixed rate notesUnsecured short-term credit facilities1.355 to 1.67152 to 41.55140,00060,00030,000-50,000----140,000110,00030,00019. Employee Benefits - The GroupEmployee benefits in the financial statements represent liabilities for short-term accumulating compensatedabsences.In addition, certain employees are eligible to participate in the following equity compensation benefits:Parkway Employee Share Option Scheme (“Parkway Scheme”)Details of the Parkway Scheme were set out in the Directors’ Report for the year ended 31 December 1988, andamendments were effected by a resolution passed at the Extraordinary General Meeting of the Company held on22 August 1994 and which were set out in the Directors’ Report for the year ended 31 December 1994.76Parkway Holdings Limited Annual Report 2003

19. Employee Benefits - The Group (Cont’d)Parkway Employee Share Option Scheme (“Parkway Scheme”) (Cont’d)At the Extraordinary General Meeting held on 18 January 2001, the shareholders of the Company approved thetermination of the Parkway Scheme. Existing options granted under the Parkway Scheme but not exercised willnot be prejudiced as the rules of the scheme state that the termination of the Parkway Scheme shall not affectoptions which have been granted under that scheme, whether such options have been exercised (fully or partially)or not.Other statutory information regarding the Parkway Scheme is set out below:(i)(ii)(iii)The exercise price of the option is determined at the average of the middle market quotation computed fromthe highest and lowest transacted prices of the Company’s shares on the Singapore Exchange SecuritiesTrading Limited (“SGX-ST”) prevailing on the five business days immediately preceding the date of grant ofsuch options.The options vest one year after the grant date.The options granted expire after 46 months from the vesting date unless they have been cancelled or havelapsed prior to that date.Parkway Holdings Limited Annual Report 2003 77

NOTES TO THE FINANCIAL STATEMENTS31 December 200319. Employee Benefits - The Group (Cont’d)Parkway Employee Share Option Scheme (“Parkway Scheme”) (Cont’d)Details of the options granted under the Parkway Scheme on the unissued ordinary shares of S$0.25 each of theCompany at the end of the financial year are as follows:Date ofgrant ofoptionsExercisepriceper shareNo. of optionsoutstandingat1 Jan 2003OptionsgrantedOptionsexercisedOptionslapsedNo. of optionsoutstandingat31 Dec 200320/4/1998S$1.33940,000--(940,000)-940,000--(940,000)-Parkway Share Option Scheme 2001 (“Parkway Scheme 2001”)The Parkway Scheme 2001 was approved by the shareholders of the Company at an Extraordinary General Meetingheld on 18 January 2001. Details of the Parkway Scheme 2001 and amendments effected by a resolution passed atthe Extraordinary General Meeting of the Company held on 4 July 2001 were set out in the Directors’ Report for theyears ended 31 December 2001 and 31 December 2002. The Parkway Scheme 2001 is administered by the Company’sShare Option Scheme Committee, comprising 3 directors, Anil Thadani, Ang Guan Seng and Sunil Chandiramani.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 shareson the SGX-ST prevailing on the three consecutive trading days immediately preceding the date of grant ofsuch options.The options vest one year after the grant date in accordance with the vesting schedule set out below:Vesting scheduleOn or before the first anniversary of the grant dateAfter the first anniversary, and on or before the secondanniversary of the grant dateAfter the second anniversary, and on or before the thirdanniversary of the grant dateAfter the third anniversary, and on or before the fourthanniversary of the grant dateAfter the fourth anniversary, and on or before the fifthanniversary of the grant datePercentage of shares over which theoptions are exercisableNil25%50%75%100%(iii)The options granted expire on the fifth anniversary of the grant date unless they have been cancelled or havelapsed prior to that date.78Parkway Holdings Limited Annual Report 2003

No. of optionsexercisable at1 Jan 2003No. of optionsexercisable at31 Dec 2003Proceeds on exercise ofoptions during the yearCredited to Credited toshare sharecapital premiumMarket priceof shares atdate of grantof optionExerciseperiod940,000---S$3.2820/4/1999 to 19/2/2003940,000---Parkway Holdings Limited Annual Report 2003 79

NOTES TO THE FINANCIAL STATEMENTS31 December 200319. Employee Benefits - The Group (Cont’d)Parkway Share Option Scheme 2001 (“Parkway Scheme 2001”) (Cont’d)Details of the options granted under the Parkway Scheme 2001 on the unissued ordinary shares of S$0.25 each ofthe Company at the end of the financial year are as follows:Date ofgrant ofoptionsExercisepriceper shareNo. of optionsoutstandingat1 Jan 2003OptionsgrantedOptionsexercisedOptionscancelledNo. of optionsoutstandingat31 Dec 20039/4/2001S$0.8653,195,000-(15,000)(110,000)3,070,0008/5/2001S$0.993400,000---400,00019/9/2001S$0.9401,240,000---1,240,00019/4/2002S$0.8357,005,000-(4,500)(290,000)6,710,50011,840,000-(19,500)(400,000)11,420,50080Parkway Holdings Limited Annual Report 2003

No. of optionsexercisable at1 Jan 2003No. of optionsexercisable at31 Dec 2003Proceeds on exercise ofoptions during the yearCredited to Credited toshare sharecapital premiumMarket priceof shares atdate of grantof optionExerciseperiod798,7501,535,000S$3,750S$9,225S$0.85510/4/2002 to 9/4/2006100,000200,000--S$1.0809/5/2002 to 8/5/2006310,000620,000--S$0.93520/9/2002 to 19/9/2006-1,677,625S$1,125S$2,633S$0.83520/4/2003 to 19/4/20071,208,7504,032,625S$4,875S$11,858Parkway Holdings Limited Annual Report 2003 81

NOTES TO THE FINANCIAL STATEMENTS31 December 200320. Non-Current LiabilitiesNote2003S$’000The Group2002S$’0002003S$’000The Company2002S$’000Non-trade payablesTenancy depositsInterest-bearing borrowingsDeferred tax liabilities18211,650-162,94028,423193,013-103143,38826,731170,222--162,000-162,000--140,000-140,000Non-trade payables relate to advances from a former corporate shareholder of a subsidiary. The loan isunsecured and interest free, and is intended not to be repaid within the next twelve months.21. Deferred Tax LiabilitiesMovements in deferred tax liabilities and assets during the year are as follows:At1 Jan 2003S$’000Charged/(credited)to profitand lossaccountS$’000SubsidiariesacquiredS$’000TranslationdifferencesS$’000At31 Dec 2003S$’000GroupDeferred tax liabilitiesProperty, plant and equipment27,749 1,738 19 (24) 29,482Deferred tax assetsTrade receivablesOther allowancesTax value of loss carried forwardTotal(975)(15)(28)(1,018)82(87)(36)(41)--------(893)(102)(64)(1,059)Net deferred tax liabilities26,7311,69719 (24)28,423Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assetsagainst current tax liabilities and when the deferred taxes relate to the same taxation authority.22. Share Capital - The Company2003Numberof sharesS$’0002002Numberof sharesS$’000Authorised:Ordinary shares of S$0.25 each2,000,000,000500,0002,000,000,000500,000Issued and fully paid:At 1 JanuaryIssue of shares under share option schemeAt 31 December719,963,96219,500719,983,462179,9915179,996719,963,962-719,963,962179,991-179,99182Parkway Holdings Limited Annual Report 2003

22. Share Capital - The Company (Cont’d)Pursuant to the Parkway Scheme 2001, 15,000 and 4,500 fully paid ordinary shares of S$0.25 each, were issuedfor cash at a premium of S$0.615 and S$0.585 per share respectively, by the Company during the year.At the end of the financial year, unissued shares of the Company under option are as follows:Parkway Scheme 2001(i)(ii)(iii)(iv)3,070,000 ordinary shares of S$0.25 each at S$0.865 per share exercisable between 10 April 2002 and9 April 2006.400,000 ordinary shares of S$0.25 each at S$0.993 per share exercisable between 9 May 2002 and 8 May2006.1,240,000 ordinary shares of S$0.25 each at S$0.94 per share exercisable between 20 September 2002 and19 September 2006.6,710,500 ordinary shares of S$0.25 each at S$0.835 per share exercisable between 20 April 2003 and19 April 2007.23. ReservesThe application of the share premium account of the Company is governed by Section 69 of the Companies Act,Chapter 50.The capital reserves comprise premium on bonds previously issued, net of issuing expenses.The exchange fluctuation reserves of the Group comprise all foreign exchange differences arising from the translationof the financial statements of foreign operations that are not integral to the operations of the Company. The exchangefluctuation reserves of the Company comprise foreign exchange differences arising from the translation of foreigninvestments.24. Revenue - The GroupRevenue represents invoiced value of hospital services, proceeds from sale of properties held for resale and equityinvestments, invoiced value of services rendered, rental income and dividend income, after eliminating inter-companytransactions.The amount of each significant category of revenue recognised during the year is as follows:Revenue from hospital servicesProceeds from sale of properties held for resaleProceeds from sale of equity investmentsRental incomeGross dividends:Other quoted equity investmentsOther unquoted equity investments2003S$’000338,3252571,7276,5931,746-348,6482002S$’000319,5068909,2545,9151,9922337,559Parkway Holdings Limited Annual Report 2003 83

NOTES TO THE FINANCIAL STATEMENTS31 December 200325. Profit from Operations - The GroupProfit from operations includes the following:2003S$’0002002S$’000(a) Other Operating IncomeInterest income received and receivable from:Banks and financial institutionsOthersAdministration fee incomeIncome from ancillary services rendered and othersProvision for indemnity provided for banking facilities granted toan associate written backOthers136877128,553--9,488610875379,6095,330816,181(b) Staff CostsWages and salariesContributions to defined contribution plansDecrease in liability for short-term accumulating compensated absences127,951 121,51112,237 13,174(4) (412)140,184 134,27320032002Number of employees as at 31 December 3,304 2,927Note2003S$’0002002S$’000(c) Other Operating ExpensesNon-audit fees paid to auditors of the CompanyAmortisation of deferred expenditureProperty, plant and equipment written offInventories written offLoss on disposal of property, plant and equipmentOperating lease expensesExchange loss (net)Liquidated damages arising from legal claim made against a subsidiary14223-305488486,172138-1792581797671685,3077871,97784Parkway Holdings Limited Annual Report 2003

26. Directors’ Remuneration - The GroupDirectors’ remuneration and fees are recognised in staff costs and other operating expenses in the profit and lossaccount:Staff costsRemuneration paid to directors as executives:Directors of the CompanyDirectors of subsidiariesOther operating expensesDirectors’ fees:Directors of the CompanyDirectors of subsidiaries2003S$’0001,827737550432002S$’0001,4351,47256526227. Finance Costs - The GroupInterest paid and payable to banksOthers2003S$’0005,7743016,0752002S$’00014,55050415,05428. Income Taxes - The GroupNote2003S$’0002002S$’000Current tax expense:Current yearOverprovided in prior years13,433(694)12,73911,516(2,705)8,811Deferred tax expense:Movements in temporary differencesReduction in tax rateUnderprovided in prior years21481-1,2161,697541(1,698)268(889)Share of tax of associates:Current and deferred tax expenseOverprovided in prior years33(678)(645)100-100Foreign taxation225187Income tax expense14,0168,209Parkway Holdings Limited Annual Report 2003 85

NOTES TO THE FINANCIAL STATEMENTS31 December 200328. Income Taxes - The Group (Cont’d)Reconciliation of Effective Tax Rate2003%2003S$’0002002%2002S$’000Profit before tax49,18444,290Income tax using Singapore tax rateEffect of reduction in tax ratesEffect of different tax rates in other countriesIncome not subject to taxExpenses not deductible for tax purposesTax exempt revenueUtilisation of previously unrecognised tax lossesOverprovided in prior yearsDeferred tax asset not recognisedLosses incurred by foreign subsidiariesnot allowed to be carried forwardForeign taxationGroup relief on losses of subsidiaries acquired22.0-0.7(1.1)7.9(0.3)(0.9)(0.3)0.20.10.4(0.2)28.510,820-328(521)3,890(150)(450)(156)9047225(107)14,01622.0(3.8)0.2(5.3)10.0(0.5)(1.8)(5.5)1.01.80.4-18.59,744(1,698)83(2,348)4,454(194)(805)(2,437)431792187-8,209Unrecognised Temporary DifferencesThe following temporary differences have not been recognised:2003S$’0002002S$’000Deductible temporary differencesUnutilised tax lossesUnabsorbed wear and tear allowances1,10118,7874,51924,40746410,6644,69415,822The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respectivecountries in which certain subsidiaries operate. The deductible temporary differences do not expire under current taxlegislation. Deferred tax assets of the Group have not been recognised in respect of these items because it is notprobable that future taxable profit will be available against which the Group can utilise the benefits.29. Earnings Per Share(a)Basic earnings per shareBasic earnings per share is based on:2003S$’0002002S$’000(i)Net profit for the year33,608 33,30186Parkway Holdings Limited Annual Report 2003

29. Earnings Per Share (Cont’d)(a)Basic earnings per share (Cont’d)2003No. ofShares2002No. ofShares(ii)Weighted average number of shares outstanding during the yearWeighted average number of shares issued under share option scheme719,963,9624,875719,968,837719,963,962-719,963,962(b)Diluted earnings per shareThe weighted average number of ordinary shares adjusted for the effects of all dilutive potential ordinaryshares is determined as follows:2003No. ofShares2002No. ofSharesWeighted average number of shares issued, used in the calculation ofbasic earnings per shareWeighted average number of unissued ordinary shares under share optionsNumber of shares that would have been issued at fair valueWeighted average number of ordinary shares (diluted)719,968,837--719,968,837719,963,962--719,963,96230. Acquisitions and Disposals of SubsidiariesDuring the financial year, there were the following acquisitions and disposals of subsidiaries:(a)(b)Parkway Shenton International Holdings Pte. Ltd. was incorporated in the Republic of Singapore with an authorisedshare capital of 5,000,000 ordinary shares of S$1 each and an issued and paid up capital of S$2. The effective equityinterest held by the Group is 100%.The following subsidiaries were voluntarily wound up:Name of SubsidiaryHarborview Corporation Limited No. IHarborview Corporation Limited No. IIParkway Information Technologies Pte LtdDate of Dissolution11 April 200311 April 200314 August 2003Parkway Holdings Limited Annual Report 2003 87

NOTES TO THE FINANCIAL STATEMENTS31 December 200330. Acquisitions and Disposals of Subsidiaries (Cont’d)(c)The Group acquired the remaining equity interests in the following entities, which became wholly-owned subsidiariesfollowing the completion of the acquisitions:Name of SubsidiaryEffective EquityInterest AcquiredConsiderationNet AssetsAcquiredAPIC Integrated Care Pte Ltd(formerly known as Allianz Parkway Integrated CarePte Ltd)C-Med Pte LtdCharter Asia Behavioural Health Services Pte Ltd50%50%50%S$1S$1S$1S$1S$1S$1The effect of the above acquisitions is set out below:Property, plant and equipmentInventoriesTrade receivablesOther receivables, deposits and prepaymentsCash and cash equivalentsTrade payables and accrued operating expensesOther payablesDeferred tax liabilitiesNet assets acquiredCash consideration paidLess: Cash acquiredCash flow on acquisition, net of cash acquired* Amount less than S$1,0002003S$’000544939,3083522,971(12,169)(1,080)(19)**(2,971)(2,971)2002S$’000------------31. Significant Related Party Transactions - The GroupFor the purposes of these financial statements, parties are considered to be related to the Group if the Group has theability, directly or indirectly, to control the party or exercise significant influence over the party in making financial andoperating decisions, or vice versa, or where the Group and the party are subject to common control or commonsignificant influence. Related parties may be individuals or other entities.88Parkway Holdings Limited Annual Report 2003

31. Significant Related Party Transactions - The Group (Cont’d)During the year, there were the following significant related party transactions carried out on terms agreed betweenthe parties:2003S$’0002002S$’000AssociatesManagement fees receivedRental incomeSales madePurchases madeConsultancy fees paidA firm in which a director is a memberProfessional fees paid7143421,418791120288473213,228669360215Director of the CompanyRental income received from a director of the Company363632. Contingent LiabilitiesAt 31 December 2003, there were contingent liabilities in respect of the following:2003S$’000The Group2002S$’000The Company2003S$’0002002S$’000Unsecured contingent liabilities in respect of guaranteesfor banking facilities granted to:- subsidiaries- associates-16,161-9,1779,92816,1612,9479,17733. Commitments2003S$’000The Group2002S$’000The Company2003S$’0002002S$’000(a)Capital commitments not provided forin the financial statements:Amounts authorised and contracted forAmounts authorised but not contracted for7,54613,23820,7845,82812,91418,742------(b)Commitments for equity investments851 867--(c)Non-cancellable operating leases payable:Within 1 yearAfter 1 year but within 5 yearsAfter 5 years5,4586,649294,6676,635-------Parkway Holdings Limited Annual Report 2003 89

NOTES TO THE FINANCIAL STATEMENTS31 December 200333. Commitments (Cont’d)2003S$’000The Group2002S$’000The Company2003S$’0002002S$’000(d)Non-cancellable operating leases receivable:Within 1 yearAfter 1 year but within 5 yearsAfter 5 years5,5114,105-5,4845,285-------(e)After the balance sheet date, the directors proposed the following dividends. The dividends have not beenprovided for.2003S$’0002002S$’000Final dividend proposed of 4 cents (2002: 3.5 cents)per share less tax at 22% (2002: 22%) 22,463 19,65590Parkway Holdings Limited Annual Report 2003

34. AssociatesName of AssociatePrincipal ActivitiesPlace ofIncorporation/BusinessEffectiveEquity Interest2003 2002% %Lee Hing Development Limitedand its subsidiaries:Property investment,management and agentHong Kong3737Kwai Ling EnterprisesCompany LimitedGeneral investmentHong Kong3737Lee Hing InvestmentCompany LimitedProperty and investment holdingHong Kong3737Lucky Term Company LimitedInvestment holdingHong Kong3737Tek Lee Nominees LimitedProperty and investment holdingHong Kong3737Wang Tak Company LimitedInvestment holdingHong Kong3737Diamond Way Inc.Investment holdingRepublic of Liberia3737HK 8 LimitedInvestment holdingRepublic of Liberia3737HK 9 LimitedInvestment holdingRepublic of Liberia3737HK 12 LimitedInvestment holdingRepublic of Liberia3737HK 28 LimitedInvestment holdingRepublic of Liberia3737HK 38 LimitedInvestment holdingRepublic of Liberia3737HK 68 LimitedInvestment holdingRepublic of Liberia3737HK 333 LimitedGeneral investmentRepublic of Liberia3737HK 368 LimitedInvestment holdingRepublic of Liberia3737HK 888 LimitedInvestment holdingRepublic of Liberia3737PRC 18 LimitedGeneral investmentRepublic of Liberia3737Sinonet Holdings LtdInvestment holdingBritish Virgin Islands3737Trademart Singapore Pte LtdLiquidated during the yearSingapore-50Phil, IncDormantUnited States ofAmerica4040Trademart Management Pte LtdLiquidated during the yearSingapore-50Parkway Holdings Limited Annual Report 2003 91

NOTES TO THE FINANCIAL STATEMENTS31 December 200334. Associates (Cont’d)Name of AssociatePrincipal ActivitiesPlace ofIncorporation/BusinessEffectiveEquity Interest2003 2002% %Blendkirk Limitedand its subsidiaries:Liquidated during the yearUnited Kingdom-50Validhill LimitedLiquidated during the yearUnited Kingdom-50Avidcrown Limitedand its subsidiary:Liquidated during the yearUnited Kingdom-5015 Upper GrosvenorStreet LimitedLiquidated during the yearUnited Kingdom-50Gleneagles Medical Centre(Kuala Lumpur) Sdn BhdMedical centre development,ownership and managementMalaysia3030Gleneagles Hospital(Kuala Lumpur) Sdn BhdPrivate hospital ownershipand managementMalaysia3030Gleneagles Dialysis InternationalPte Ltd and its subsidiary:Provision of dialysis careSingapore4040Gleneagles Dialysis CentrePte LtdProvision of businessmanagement, consultancyand specialised medical servicesSingapore4444PT Tritunggal SentraUtama SurabayaProvision of medical diagnosticservicesIndonesia3030Kyami Pty Ltdand its subsidiaries:Investment holdingAustralia3030Royalmist Properties Pty LtdProperty investmentand developmentAustralia3030Fireace Pty LtdLiquidated during the yearAustralia-30Syntami Pty LtdLiquidated during the yearAustralia-30Royalmist Pty LtdLiquidated during the yearAustralia-30Karington Holdings Pte Ltdand its associate:Investment holdingSingapore5050Shanghai ModernElecom TradingCentre Building Co. Ltd.Property developmentPeople’s Republicof China2525Gleneagles International Hospital(Lanka) LimitedDormantSri Lanka404092Parkway Holdings Limited Annual Report 2003

34. Associates (Cont’d)Name of AssociatePrincipal ActivitiesPlace ofIncorporation/BusinessEffectiveEquity Interest2003 2002% %Apollo Gleneagles Hospital LtdPrivate hospital ownershipand managementIndia51*51*Gleneagles Heritage HoldingsLimitedInvestment holdingBritish VirginIslands4040Asia Renal Care Mount ElizabethPte LtdProvision of medical servicesSingapore2020Asia Renal Care (Katong) Pte LtdProvision of medical servicesSingapore2020C-Med Pte LtdCyber-medicine and otherrelated healthcare servicesSingapore@50APIC Integrated Care Pte Ltd(formerly known as AllianzParkway Integrated Care Pte Ltd)Agent and administratorfor managed care andrelated servicesSingapore@50Charter Asia BehaviouralHealth Services Pte LtdProvision of psychiatric andbehavioural healthcare servicesSingapore@50Clinical Neuroscience ServicesPte LtdUnder members’ voluntaryliquidationSingapore4949IAG Healthsciences Pte LtdProvision of medical and healthproducts, clinic managementand consultancy servicesSingapore3232Onemedhub.com Pte LtdProvision of electronic commerceservicesSingapore4040Medechain Pte LtdProvision of logistic servicesSingapore3838Positron Tracers Pte LtdOwnership and operation ofa cyclotronSingapore3333CPG Healthcare FacilitiesManagement Pte LtdProvision of specialisedhealthcare facilities managementservices to healthcare facilitiesSingapore50-* Pursuant to a Shareholders Agreement (the “Agreement”) entered into by a wholly-owned subsidiary, GleneaglesDevelopment Pte Ltd (“GDPL”), with Apollo Hospitals Enterprise Limited (“AHEL”) in 2002, the Group’s equity interestin Apollo Gleneagles Hospitals Ltd (“AGHL”) has increased to 51%. Notwithstanding the 51% equity held in AGHL,AGHL remains as an associate in view that the board of directors of AGHL comprises equal representations from theGroup and AHEL, and both GDPL and AHEL have joint control over the financial and operational decisions of AGHLas stipulated under the terms of the Agreement.@Became a subsidiary of the Group during the current financial year.None of the associates is considered significant for the purpose of Rule 717 of the SGX-ST Listing Manual.Parkway Holdings Limited Annual Report 2003 93

NOTES TO THE FINANCIAL STATEMENTS31 December 200335. Financial Instruments(i)Financial Risk Management Objectives and PoliciesThe Group has put in place a set of risk management policies and guidelines governing all investment and businessrisks. These policies and procedures set out the Group’s overall business strategies, its tolerance for risk andgeneral risk management philosophy. In addition, management has established processes to monitor and controlsuch risks in a timely and accurate manner. Where necessary, the Group may enter into transactions to hedgeagainst these risks in order to keep them at an acceptable level. Finally, all investment and divestment decisionsare required to be approved by the Executive Committee.Foreign Currency RiskThe Group is exposed to foreign exchange risk on sales, purchases, borrowings and investments that are denominatedin currencies other than Singapore dollars. The currencies giving rise to this risk are primarily Malaysian ringgit,Indonesian rupiah, Hong Kong dollar and Indian rupee. In respect of exposure that is certain, the Group will hedgethese risks as they arise.Interest Rate RiskThis relates to changes in interest rates which affect mainly the Group’s fixed deposits, floating rate notes and itsdebt 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 overits fixed deposits and borrowings on a short-term basis.Credit RiskManagement has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Creditevaluations are performed on all customers requiring credit over a certain amount. For the hospital operations,the Group does not grant credit to non-corporate customers. Instead, a non-corporate customer is requestedto place an initial deposit at the time of admission to the hospital. Additional deposit is requested from the customerwhen the hospital charges exceed a certain level.Cash and fixed deposits are placed with financial institutions which are regulated.Similarly, investments and transactions involving financial instruments are allowed to be entered into only withcounterparties that are of high credit quality. As such, management does not expect any counterparty to fail tomeet their obligations.At the balance sheet date, there were no significant concentrations of credit risk. The maximum exposure to creditrisk is represented 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 bymanagement to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.94Parkway Holdings Limited Annual Report 2003

35. Financial Instruments (Cont’d)(ii)Fair ValueThe aggregate net fair values of recognised financial assets and liabilities which are not carried at fair value in thebalance sheet as at 31 December are represented in the following table:NoteCarryingAmount2003S$’000FairValue2003S$’000CarryingAmount2002S$’000FairValue2002S$’000GroupFinancial AssetsAmounts due from associatesAmounts due from partnershipsQuoted equity shares (non-current)Quoted equity shares (current)678(a)8(b)4,3376051,53360056,5304,1915837,14661542,0104,08214854,02493459,1883,90514230,16794435,158Financial LiabilitiesAmounts due to associatesAmounts due to partnershipsSecured term loanUnsecured fixed rate notesFinance lease liabilitiesTotalUnrecognised loss671818184,858580896-1,2267,56048,9704,694561886-1,1967,33734,67314,297156,9392041,82650,0003,443212,412150,1531951,86451,0043,333206,549(153,224) (171,391)18,167CompanyFinancial AssetAmounts due from subsidiaries5254,492251,332348,826339,165Financial LiabilitiesAmounts due to subsidiariesAmounts due to associatesUnsecured fixed rate notesTotalUnrecognised gain5618253,1834,590-257,773(3,281)245,2624,435-249,6971,6354,916310,656156,30350,000516,959(168,133)297,534149,54451,004498,082(158,917)9,216It is not practicable to estimate the fair value of the Group’s and the Company’s non-current unquoted equity sharesbecause of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs.However, management believes that the carrying amounts recorded at balance sheet date reflect the correspondingfair value.The carrying value of trade and other receivables, fixed deposits, cash and bank balances, trade and other payablesand the current interest-bearing borrowings are an approximation of their fair value because they are either carriedat fair value, short-term in nature or repriced frequently.Parkway Holdings Limited Annual Report 2003 95

NOTES TO THE FINANCIAL STATEMENTS31 December 200336. 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 (geographicalsegment), which is subject to risks and rewards that are different from those of other segments.Segment information is presented in respect of the Group’s business and geographical segments. The primaryformat, business segments, 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 beallocated on a reasonable 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 expectedto be used for more 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 thehospital complex in Singapore.International Hospitals: The operation of private hospitals outside Singapore.Healthcare Services: Dealing in medical supplies, equipment and healthcare products, practice of dental surgeonsand the operation of dental clinics, provision of clinical research services, ownership and management of radiologyclinics, provision of comprehensive diagnostic laboratory services, provision of primary healthcare servicesand provision of managed care and related services.Non-HealthcareThe sale of property, investment holding and trading.Geographical SegmentsThe healthcare segment operates principally in Singapore and Malaysia while the property rental, investment holdingand trading segments operate mainly in Singapore.In presenting information on the basis of geographical segments, segment revenue is based on the geographicallocation of customers. Segment assets are based on the geographical location of the assets.96Parkway Holdings Limited Annual Report 2003

36. Segment Reporting (Cont’d)(a)Business SegmentsSingaporeHospitalsS$’000InternationalHospitalsS$’000HealthcareServicesS$’000HealthcareSubtotalS$’000Non-HealthcareS$’000ConsolidatedS$’000Revenue and Expenses2003Total revenue fromexternal customers223,41642,64278,685344,7433,905348,648Segment results42,5954,6326,39653,62366354,286Profit from operationsFinance costsShare of profits of associatesShare of profits of partnershipsIncome tax expenseMinority interestsNet profit for the year54,286(6,075)777196(14,016)(1,560)33,6082002Total revenue fromexternal customers217,09229,76278,242325,09612,463337,559Segment results42,03620410,66352,9035,71158,614Profit from operationsFinance costsShare of profits of associatesShare of profits of partnershipsIncome tax expenseMinority interests58,614(15,054)587143(8,209)(2,780)Net profit for the year33,301Parkway Holdings Limited Annual Report 2003 97

NOTES TO THE FINANCIAL STATEMENTS31 December 200336. Segment Reporting (Cont’d)(a)Business Segments (Cont’d)SingaporeHospitalsS$’000InternationalHospitalsS$’000HealthcareServicesS$’000HealthcareSubtotalS$’000Non-HealthcareS$’000ConsolidatedS$’000Assets and Liabilities2003Segment assetsInterests in associatesInterests in partnerships506,285390-43,5127,629-108,0354,72253657,83212,7415371,95472,880-729,78685,62153Total assets506,67551,141112,810670,626144,834815,460Segment liabilitiesUnallocated liabilitiesTotal liabilities52,574 15,671 40,836 109,081 4,835 113,916262,552376,4682002Segment assetsInterests in associatesInterests in partnerships516,200952-41,5076,999-108,8133,392100666,52011,34310082,89172,027-749,41183,370100Total assets517,15248,506112,305677,963154,918832,881Segment liabilitiesUnallocated liabilities54,66514,99538,346108,0063,794111,800285,841Total liabilities397,641Other Segmental Information2003Capital expenditureDepreciation andimpairment lossesof property, plant andequipmentAmortisation of goodwill anddeferred expenditure18,87522,040-9111,439-8,5375,4111,81128,32328,8901,811-768-28,32329,6581,8112002Capital expenditureDepreciation andimpairment lossesof property, plant andequipmentAmortisation of goodwill anddeferred expenditure24,40020,695-1,5701,414-13,4495,6171,23039,41927,7261,2302,0021,13925841,42128,8651,48898Parkway Holdings Limited Annual Report 2003

36. Segment Reporting (Cont’d)(b)Geographical SegmentsSingaporeS$’000MalaysiaS$’000OtherRegionsS$’000ConsolidatedS$’0002003Total revenue from external customers305,14133,47110,036348,648Segment assets680,66634,13414,986729,786Capital expenditure27,40877514028,3232002Total revenue from external customers307,16430,081314337,559Segment assets701,26335,01013,138749,411Capital expenditure39,8141,50010741,42137. Subsequent EventSubsequent to the balance sheet date, the Group on 14 January 2004, divested its 37% interest in Lee HingDevelopment Limited resulting in a gain of approximately S$3.5 million.38. Comparative InformationComparatives in the financial statements have been reclassified to conform with the current year’s presentation.Parkway Holdings Limited Annual Report 2003 99

SUPPLEMENTARY INFORMATION - SGX-ST LISTING MANUAL REQUIREMENTS31 December 20031. Summary of Major PropertiesThe major properties of the Group are:DescriptionLocationSiteArea(sq m)ExistingUseApproximateTotalLettable/SaleableArea(sq m)Group’sEffectiveInterest%TenureSingapore1. Gleneagles Hospital and MedicalCentre, a 380-bed hospital with164 medical suites and 402 carpark lotsLot 1345 Townsubdivision 25situated at 6/6ANapier Road14,947HospitalBuildingMedicalCentre--25,00010,8001004FreeholdFreehold2. Mount Elizabeth Hospital andMedical Centre, a 505-bedhospital with 214 medical suitesand 368 car park lotsLot 858 Townsubdivision 27situated at3 Mount Elizabeth15,204HospitalBuildingMedicalCentre--38,62619,940100499-year leasecommencing1 October 197699-year leasecommencing1 October 19763. East Shore Hospital andMedical Centre, a 157-bedhospital with 28 medical suitesand 73 car park lotsLot 6912 Mukim 26situated at 321 JooChiat Place6,200HospitalandMedicalCentre-10,926100Freehold4. Warehouse and storeLot 2301/U2Mukim 1 situatedat 213 HendersonRoad, #01-02,#02-02, #03-02,#04-02 HendersonIndustrial Park940Warehouseandstore-940100Freehold5. Eastern Specialist CentreLot 5188 Mukim 27situated at Block210 New UpperChangi Road#01-699380Clinic-38010086-year leasecommencing1 July 19926. Radiologic ClinicLot 5350 Mukim 05situated at Block130 Jurong EastStreet 13 #01-219145Clinic-14510091-year leasecommencing1 April 1993Overseas7. Gleneagles Medical Centre,a 158-bed private hospital1 Jalan PangkorPenang, Malaysia7,319HospitalBuilding-18,60070Freehold100Parkway Holdings Limited Annual Report 2003

2. Interested Person TransactionsInterested PersonDr Prathap C Reddy- Management fees payableby Apollo Gleneagles HospitalLimited (“AGHL”) to a subsidiaryof the Group*- Management fees payableby AGHL to Apollo HospitalsEnterprise Limited (“AHEL”)*- Pharmacy revenue payable byAHEL to AGHL**- Food and beverage costs payableby AGHL to Apollo Sindoori HotelsLimited- Financial assistance, includingbut not limited to the giving ofcollaterals or guarantees to AGHLAggregate value of alltransactions (excludingtransactions conducted under ashareholders’ mandatepursuant to Rule 920 of theSGX-ST Listing Manual)S$’000317317^1452,0002,779Aggregate value of alltransactions conducted undera shareholders’ mandatepursuant to Rule 920 of theSGX-ST Listing ManualS$’000------^Amount less than S$100,000* Under the terms and conditions of the Shareholders Agreement dated 30 July 2002 and as amended by theSupplementary Agreement dated 30 December 2002, AGHL will pay management fee of 5% of the grossrevenue generated from the hospital and diagnostic centre of AGHL in equal proportion to a subsidiary ofthe Group and AHEL.** AHEL will set up and run the pharmacy operations at the hospital and diagnostic centre and pay 5% of the grossrevenue of the pharmacy operations to AGHL .3. Material ContractsExcept as disclosed in Interested Person Transactions, there were no other material contracts of the Company or itssubsidiaries involving the interests of the Chief Executive Officer, each director or controlling shareholder, either stillsubsisting at the end of the financial year or if not then subsisting, entered into since the end of the previous financialyear.Parkway Holdings Limited Annual Report 2003 101

SUPPLEMENTARY INFORMATION - SGX-ST LISTING MANUAL REQUIREMENTS31 December 20034. Corporate Governance StatementThe Company is committed to complying with the Code of Corporate Governance (“CCG”) issued by the CorporateGovernance Committee in March 2001 so as to ensure greater transparency and protection of shareholders’interests. This statement outlines the main corporate governance practices that are adopted by the Company.Board of DirectorsRole of the BoardThe primary role of the board of directors of the Company (the “Board”) is to protect and enhance long-term shareholdervalue. It sets the overall strategy for the Group and supervises the management of the Group (the “Management”).It is also responsible for the overall corporate governance of the Group including setting its strategic direction,establishing goals for Management and monitoring the achievement of these goals.Board ProcessesTo assist in the execution of its responsibilities, the Board has established the following specialised committees:(a)(b)(c)(d)(e)(f)(g)the Executive Committee;the Audit Committee;the Nominating Committee;the Remuneration Committee;the Share Option Scheme Committee;the Management Committee; andthe Share Purchase Committee.Each of the above committees has its respective written mandates and operating procedures, which will be reviewedon a regular basis.The Board intends to hold about four scheduled meetings each year. It may, however, hold unscheduled strategymeetings and/ or emergency meetings to address/ consider certain specific significant matters or transactionsthat may arise from time to time. The Company has proposed to amend its Articles of Association, subject toshareholders’ approval at an extraordinary general meeting to be convened, to provide for telephonic and video-conferencemeetings (CCG, Guidance Note 1.1).Directors’ meetings held in 2003During the financial year ended 31 December 2003, the Board held four meetings. The Directors’ attendanceat those meetings are disclosed below (CCG, Guidance Note 1.1):Name of directorBoard meetings attendedMr Anil Thadani 4Mr Tony Tan Choon Keat 4Dr Lim Cheok Peng 4Mr Alain Ahkong Chuen Fah 4Mr Ang Guan Seng 4Mr Sunil Chandiramani 4Mr Chang See Hiang 4Mr Ho Kian Guan 4Dr Prathap C Reddy 1Mr Tan Kai Seng 4Mr Ho Kian Hock (alternate to Mr Ho Kian Guan) -102Parkway Holdings Limited Annual Report 2003

4. Corporate Governance Statement (Cont’d)Matters 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 have on a regular basis participated in seminars and/ or discussion groups to keep abreastof latest developments which are relevant to the Group (CCG, Guidance Note 1.3).Board 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 has reviewed its composition and is satisfied that such composition is appropriate. The Board will constantlyexamine its size with a view to determining its impact upon its effectiveness (CCG, Guidance Note 2.3).As at the date of this report, the Board comprises ten suitably qualified members (CCG, Guidance Note 2.4):Name of directorDate ofappointmentNature ofappointmentPrimefunctionOtherfunctionsAcademic andprofessionalqualificationsAnil ThadaniAge: 5717/12/1999Non-executive/independentChairmanChairman of Executive,Nominating andRemunerationCommittees, Memberof Share OptionScheme and SharePurchase CommitteesB Tech, MSand MBATony Tan Choon KeatAge: 5508/05/1985Non-executive/independentDeputyChairmanMember of Executive,Nominating and SharePurchase CommitteesBSc (Chem Eng),MBADr Lim Cheok PengAge: 5707/06/2000Executive/non-independentManagingDirectorMember of Executiveand ManagementCommitteesMBBS (S’pore)M.Med.Int.Med. (S’pore)MRCP(UK), FRCP(Edin),FRCP(Glasg)Alain Ahkong ChuenFahAge: 5614/02/2001Non-executive/independentMemberChairman of AuditCommittee, Memberof NominatingCommitteeChartered Tax AdviserAng Guan SengAge: 6508/05/1985Non-executive/independentMemberMember of Audit,Nominating,Remuneration andShare Option SchemeCommittees-Parkway Holdings Limited Annual Report 2003 103

SUPPLEMENTARY INFORMATION - SGX-ST LISTING MANUAL REQUIREMENTS31 December 20034. Corporate Governance Statement (Cont’d)Board Composition and Balance (Cont’d)Name of directorDate ofappointmentNature ofappointmentPrimefunctionOtherfunctionsAcademic andprofessionalqualificationsSunil ChandiramaniAge: 4117/12/1999Non-executive/independentMemberMember of Executive,Remuneration andShare Option SchemeCommitteesB Com (Hons),MBAChang See HiangAge: 5028/08/1997Non-executive/independentMemberMember of Audit,Nominating and SharePurchase CommitteesLL.B (Hons)Ho Kian GuanAge: 5825/06/1985Non-executive/independentMember-BA CommDr Prathap C ReddyAge: 7204/07/2000Non-executive/independentMember-MBBS (India),FRCS (Edin)Tan Kai SengAge: 5215/01/1988Executive/non-independentMemberMember of Executive,Share Purchase andManagementCommitteesB Acc, CPA,FCCA (UK)Ho Kian Hock*Age: 5625/06/1985Non-executive/independentMember-BSc Engineering* Alternate to Ho Kian GuanParticulars of interests of directors who held office at the end of the financial year in shares, debentures, warrantsand share options in the Company and in related corporations (other than wholly-owned subsidiaries) are set out inthe Directors’ Report.Independent Members of the Board of DirectorsThe Board has eight independent members, representing 80% of the Board. They are Mr Anil Thadani, Mr Tony TanChoon Keat, Mr Ang Guan Seng, Mr Alain Ahkong Chuen Fah, Mr Chang See Hiang, Mr Sunil Chandiramani,Dr Prathap C Reddy and Mr Ho Kian Guan. The criterion of independence is based on the definition given in the CCG.The Board considers an “independent” director as one who has no relationship with the Company, its relatedcompanies or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director’sindependent business judgement (CCG, Guidance Note 2.1).Non-executive members of the Board exercise no management functions in the Company or any of its subsidiaries.Although all the directors have equal responsibility for the performance of the Group, the role of the non-executivedirectors is particularly important in ensuring that the strategies proposed by the executive management are fullydiscussed, rigorously examined and shall take into account the long-term interests of the shareholders, employees,customers, suppliers and the communities in which the Group conducts its business.104Parkway Holdings Limited Annual Report 2003

4. Corporate Governance Statement (Cont’d)Chairman and Managing DirectorThere is a clear division of responsibilities between the Chairman and the Managing Director, which ensures thatthere is a balance of power and authority at the top of the Group. The posts of Chairman and Managing Director arekept separate and these positions are held by Mr Anil Thadani and Dr Lim Cheok Peng respectively (CCG, GuidanceNote 3.1).The Board has delegated the day-to-day running of the Group to the Managing Director and members of the ExecutiveCommittee.Both the Chairman and the Managing Director exercise control over the quality, quantity and timeliness of informationflow between the Management and the Board (CCG, Guidance Note 3.2).The Chairman shall, in addition:(a)(b)(c)schedule meetings that enable the Board to perform its duties responsibly while not interfering with the flow ofthe Company’s operations;prepare meeting agenda in consultation with the Managing Director; andassist in ensuring compliance with Company’s guidelines on corporate governance (CCG, Guidance Note3.2).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 Anil Thadani and comprisesboth non-executive directors and executive directors. The Executive Committee is entrusted with the review of theGroup’s business and affairs, in line with the overall strategy set by the Board. Meetings of the Executive Committeeare held regularly.Meetings and attendance during the year are as follows (CCG, Guidance Note 1.1):Name of director Appointment Number of meetings attendedAnil Thadani (Chairman) Non-executive Director 8Tony Tan Choon Keat (Member) Non-executive Director 7Sunil Chandiramani (Member) Non-executive Director 7Dr Lim Cheok Peng (Member) Executive Director 8Tan Kai Seng (Member) Executive Director 8Parkway Holdings Limited Annual Report 2003 105

SUPPLEMENTARY INFORMATION - SGX-ST LISTING MANUAL REQUIREMENTS31 December 20034. Corporate Governance Statement (Cont’d)Board Committees (Cont’d)Audit CommitteeThe Audit Committee was established in June 1990. It is currently chaired by Mr Alain Ahkong Chuen Fah andcomprises two other non-executive directors, namely Mr Ang Guan Seng and Mr Chang See Hiang. All threedirectors are non-executive and independent (CCG, Guidance Note 11.1).The Audit Committee assists the Board in fulfilling its responsibilities in financial reporting, management offinancial and control risks, 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 theirresponsibilities and they have accounting and/ or related financial management expertise or businessexperience, as the Board interprets such qualification in 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 andco-operation by Management and full discretion to invite any director or executive officer to attend its meeting, andreasonable resources to enable it to discharge its functions properly (CCG, Guidance Note 11.3).The Audit Committee has reviewed the independence and objectivity of the external auditors and suchreviews are conducted on an annual basis (CCG, Guidance Note 11.6). Where the external auditors also supply asubstantial volume of non-audit services to the Company, the Audit Committee keeps the nature and extent of suchservices under review so as to seek to balance the maintenance of objectivity and value for money (CCG, GuidanceNote 11.4).The Audit Committee holds meetings with the external auditors, without the presence of Management, to discussany matters that the Audit Committee or the auditors believe should be discussed in private (CCG, Guidance Note11.5).The Audit Committee has reviewed and will review the financial reporting process, the system of internal controls,the management of financial risks, the audit process, and the Group’s process for monitoring compliance withthe laws and regulations and its own code of business conduct.The Audit Committee has reviewed the Company’s risk management and based on the Internal Auditor’s reports asapplicable and the 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 InternalAuditor also reports administratively 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 auditfunction is adequately resourced and has appropriate standing within the Company and such reviews areconducted on an annual basis (CCG, Guidance Note 13.3 and 13.4).Meetings and attendance during the year are as follows (CCG, Guidance Note 11.7):Name of director Appointment Number of meetings attendedAlain Ahkong Chuen Fah (Chairman) Non-executive / independent 5Ang Guan Seng (Member) Non-executive / independent 4Chang See Hiang (Member) Non-executive / independent 5106Parkway Holdings Limited Annual Report 2003

4. Corporate Governance Statement (Cont’d)Board Committees (Cont’d)Nominating CommitteeThe Nominating Committee was established on 24 February 2003 and comprises five independent directors,namely Mr Anil Thadani, Mr Tony Tan Choon Keat, Mr Alain Ahkong Chuen Fah, Mr Ang Guan Seng andMr Chang See Hiang (CCG, Guidance Note 4.1).The role of the Nominating Committee is to (a) make recommendations to the Board on all Board and Boardcommittees appointments and re-nominations, including recommending the Chairman for the Board and for eachBoard committee (CCG, Guidance Note 4.2), (b) determine annually whether a director is independent and whetherhe is able to carry out his duties as a director (CCG, Guidance Note 4.3), and (c) assess the effectiveness of theBoard as a whole and the contribution by each individual director to the effectiveness of the Board.The Nominating Committee has adopted a formal assessment process to evaluate the Board’s performance andcontribution of each individual director by (a) reviewing a completed individual director self-assessmentform, and (b) using a board self-assessment checklist (CCG, Guidance Note 5.3). The Nominating Committeehas also adopted internal guidelines to address the competing time commitments that are faced when directorsserve 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 used for performance evaluation of the Board. The set of performance criteria includes the Company’sshare price performance over a five year period benchmarked against the Singapore Straits Times Index, theCompany’s share price performance over a five year period benchmarked against the benchmark index of theCompany’s industry peers, return on assets, return on equity and profitability on capital employed (CCG, GuidanceNote 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 not limited to the Managing Director.Further to the disclosure set out under Board Composition and Balance section of the Corporate GovernanceStatement, additional information on the directors is as follows (CCG, Guidance Note 4.5):Name of directorDate of last re-electionas a directorDirectorships or chairmanships both presentand those held over the preceding three yearsin other listed companies and othermajor appointmentsAnil Thadani 24/4/2002DSG International LimitedBlue Dart Express LtdIndraprastha Medical Corporation LtdOrchid Chemicals & Pharmaceuticals Ltd(Retired as Director/ Re-elected as AlternateDirector on 29/7/2002)The Waterbase LimitedTwinwood Engineering Limited (Elected asChairman on 21/12/2000)Minor Corporation pclRajadamari Hotel Public Co. LtdRoyal Garden Resorts Public Co. Ltd.Apollo Hospitals Enterprise LtdStrides Arcolab Ltd**Minor Food Group Public Co. Ltd. (Resigned wef22 May 2001)Parkway Holdings Limited Annual Report 2003 107

SUPPLEMENTARY INFORMATION - SGX-ST LISTING MANUAL REQUIREMENTS31 December 20034. Corporate Governance Statement (Cont’d)Board Committees (Cont’d)Nominating Committee (Cont’d)Name of directorTony Tan Choon KeatDr Lim Cheok PengAlain Ahkong Chuen FahAng Guan SengSunil ChandiramaniChang See HiangHo Kian GuanDr Prathap C ReddyDate of last re-electionas a director24/5/20017/6/200028/3/200328/3/200324/4/200224/4/200224/5/200128/3/2003Directorships or chairmanships both presentand those held over the preceding three yearsin other listed companies and othermajor appointmentsMedi-Rad Associates Ltd* (Appointed on 22/2/2000,Resigned wef 17/7/2002)Parkway Laboratory Services Ltd* (Appointed on3/4/2000, Resigned wef 17/7/2002)Auric Pacific Group Ltd (Retired wef 23/4/2001)Lee Hing Development LtdIGB Corporation Berhad (Appointed on 15/7/2003)Medi-Rad Associates Ltd*Parkway Laboratory Services Ltd*Twinwood Engineering LimitedFlextronics International Limited (Resigned wef29/8/2002)Broadway Industrial Group Ltd (Resigned wef1/10/2002)Malayan United Industries BhdPetaling Garden BerhadPerlis Plantations BhdLee Hing Development LtdPearl River Tyre (Holdings) LtdStrides Arcolab LtdAshima Ltd (Resigned wef 1/2/2002)Nachmo Knitex Ltd (Resigned wef 1/2/2002)CWT Distribution Limited (Retired wef 16/5/2003)Pacific Carriers Limited (Resigned wef 31/7/2001)Yeo Hiap Seng LimitedJardine Cycle & Carriage LimitedMCL Land LimitedSingapore Turf ClubKeck Seng (Malaysia) BerhadPelangi BerhadPetaling Garden BerhadShangri-la Hotel LtdShangri-la Asia LtdKeck Seng Investments (HK) LtdIndraprastha Medical Corporation LtdThe Stock Exchange - Mumbai (Appointed on27/6/2003)IDBI Bank Limited (Appointed on 19/9/2003)108Parkway Holdings Limited Annual Report 2003

4. Corporate Governance Statement (Cont’d)Board Committees (Cont’d)Nominating Committee (Cont’d)Name of directorTan Kai SengDate of last re-electionas a director28/3/2003Directorships or chairmanships both presentand those held over the preceding three yearsin other listed companies and othermajor appointmentsMedi-Rad Associates Ltd*Parkway Laboratory Services Ltd*Lee Hing Development LtdAuric Pacific Group Ltd (Retired wef 23/4/2001)IGB Corporation Berhad (Appointed on 15/7/2003)Ho Kian Hock(alternate to Ho Kian Guan)Keck Seng Investments (HK) LtdKeck Seng (Malaysia) Berhad**Shangri-la Hotel Ltd**Pelangi Berhad**Petaling Garden Berhad*** These companies were privatised on 3/7/2002.** Alternate DirectorRemuneration CommitteeThe Remuneration Committee was established in March 1988. It is currently chaired by Mr Anil Thadani, an independentnon-executive director and comprises two other independent non-executive directors, namely Mr Ang Guan Sengand Mr Sunil Chandiramani (CCG, Guidance Note 7.1 and 7.2).While none of the members specialise in the area of executive compensation, the committee would have access toindependent professional expert advice as stated under Access to Information section of the Corporate GovernanceStatement. Moreover, they have unrestricted access to the Company’s records and information and shall receivedetailed financial and operational reports from the Management so as to enable them to carry out their duties.They may also liaise with the Management and may consult with other employees and seek additional informationif required. The Group’s Manpower Development General Manager would thus provide the members of theRemuneration 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 andthe procedures for fixing the remuneration packages of individual directors and key executives. However, membersof the Remuneration Committee will ensure that they do not set their own remuneration.The Remuneration Committee will recommend a framework of remuneration for the Board and key executivesafter consultation with the Chairman of the Board and submission for endorsement by the entire Board (CCG,Guidance Note 7.3).The Remuneration Committee shall:a) ensure that non-executive directors should not be over-compensated to the extent that their independence maybe 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 resolutions in writing circulated during the year with no physical meetings held.Parkway Holdings Limited Annual Report 2003 109

SUPPLEMENTARY INFORMATION - SGX-ST LISTING MANUAL REQUIREMENTS31 December 20034. Corporate Governance Statement (Cont’d)Board Committees (Cont’d)Share Option Scheme CommitteeThe Share Option Scheme Committee was established in January 2001 and comprises three independent,non-executive directors, namely Mr Anil Thadani, Mr Sunil Chandiramani and Mr Ang Guan Seng.The Share Option Scheme Committee administers the Parkway Share Option Scheme 2001 (“Parkway Scheme2001”) in accordance with the rules of the scheme, and determines and approves the list of grantees of theshare options, the date of the grant and the price thereof. Members of the Share Option Scheme Committeewill ensure that they do not determine or approve any grant of share options to themselves.There was no resolution in writing circulated during the year with no physical meeting held.Management CommitteeThe Management Committee was established in April 1985 and comprises two executive directors, namelyDr Lim Cheok Peng and Mr Tan Kai Seng.The duties of the Management Committee include approving of transfers, amalgamations and splitting of shares,transferable share subscriptions rights, loan stocks and the issue of new certificates to replace any lost certificates inrespect of any of the above-mentioned securities and in respect of the Parkway Scheme 2001.There was one resolution in writing circulated during the year with no physical meeting held.Share Purchase CommitteeThe Share Purchase Committee was established in May 2003 and comprises three independent, non-executivedirectors, namely Mr Anil Thadani, Mr Tony Tan Choon Keat and Mr Chang See Hiang and one non-independentexecutive director, Mr Tan Kai Seng.The role of the Share Purchase Committee is to determine/ decide the number of shares to purchase and the priceat which the shares may be purchased, for and on behalf of the Company.No shares were purchased during the financial year ended 31 December 2003.There was one resolution in writing circulated during the year with no physical meeting held.110Parkway Holdings Limited Annual Report 2003

4. Corporate Governance Statement (Cont’d)Criteria for Board MembershipCandidates for the Board are selected for their character, judgement, business experience and acumen. Scientificexpertise, prior government service and familiarity with national and international issues affecting business will alsobe relevant criteria for consideration (CCG, Guidance Note 2.4). Where a director has multiple board representations,the Nominating Committee will evaluate whether or not a director is able to and has been adequately carrying out hisduties as director of the Company (CCG, Guidance Note 4.4). Final approval of a candidate is determined by the fullBoard.At each AGM of the Company, one-third of the directors (who have been longest in office since their appointment orre-election) are to retire from office by rotation. A retiring director is eligible for re-election by the shareholders of theCompany (“Shareholders”) at the AGM. The Company has proposed to amend its Articles of Association, subject toshareholders’ approval at an extraordinary general meeting to be convened, to clarify that all directors, includinga managing director, is required to submit themselves for re-nomination and re-election at least once every threeyears (CCG, Guidance Note 4.2).Access to InformationThe Company fully recognises that the continual flow of relevant information on an accurate and timely basis iscritical for the Board to be effective in the discharge of its duties.Accordingly, directors will receive a regular supply of information from Management about the Group so thatthey are equipped to play as full a part as possible in Board meetings. Detailed Board papers are prepared foreach meeting of the Board. The Board papers shall include sufficient information from Management on financial,business and corporate issues of the Company to enable the directors to be properly briefed on issues to be consideredat Board meetings. Information provided shall include background or explanatory information relating to matters tobe brought before the Board, copies of disclosure documents, budgets, forecasts and monthly internal financialstatements (CCG, Guidance Note 6.1 and 6.2).All directors shall have unrestricted access to the Group’s records and information and shall receive detailedfinancial and operational reports from the Management so as to enable them to carry out their duties. Directors mayalso liaise with the Management, and may consult with other employees and seek additional information if required(CCG, Guidance Note 6.1 and 6.2).In addition, directors shall have separate and independent access to advices and services of the Company Secretary,who is responsible to the Board for advising on and implementation of the Group’s compliance requirements pursuantto the relevant statutes and regulations. The Company Secretary should attend all board meetings (CCG, GuidanceNote 6.3).Each director has the right to seek independent legal and other professional advice, at the Company’s expense,concerning any aspect of the Group’s operations or undertakings in order to fulfil his role and responsibilities as adirector (CCG, Guidance Note 6.4).Remuneration MattersThe Group’s remuneration policy is to provide compensation packages at market rates which will reward successfulperformance and attract, retain and motivate managers and directors.The Company currently does not have a formal service contract with non-executive directors. Executive directorseach has a service contract, which is subject to termination by the relevant subsidiaries of the Company by giving notless than three months notice (CCG, Guidance Note 8.4).Parkway Holdings Limited Annual Report 2003 111

SUPPLEMENTARY INFORMATION - SGX-ST LISTING MANUAL REQUIREMENTS31 December 20034. Corporate Governance Statement (Cont’d)Remuneration Matters (Cont’d)Company’s directors receiving remuneration from the Group for the year ended 31 December 2003 and 31 December2002 are set out below (CCG, Guidance Note 9.1 and 9.2):Number of directorsRemuneration band 2003 2002S$500,000 and aboveS$250,000 to below S$500,000Below S$250,000Total2-8102-911Summary compensation table for the directors and key executives of the Group for the year ended 31 December2003 is set out below (CCG, Guidance Note 9.1 and 9.2):Salary%Bonus%Fees%Allowancesand otherbenefits%Total%DirectorsS$750,000 and aboveDr Lim Cheok Peng7127-2100S$500,000 to below S$750,000Tan Kai Seng7818-4100Below S$250,000Anil ThadaniTony Tan Choon KeatAlain Ahkong Chuen FahAng Guan SengSunil ChandiramaniChang See HiangHo Kian GuanDr Prathap C Reddy----------------100100100100100100100100--------100100100100100100100100Key Executives of the GroupS$250,000 to below S$500,000Nellie TangMolly Foo Moh LeeTimothy Low Sim OngGoh Jin HianGeorge Somchai PusavatRonnie Tan Keh PooLim Poh Suan7064746866726720191420191419-------10171212151414100100100100100100100The Company does not have any long-term incentive scheme apart from the existing Parkway Share Option Scheme2001 (CCG, Guidance Note 9.4). Details of the Parkway Share Option Scheme 2001 including the vesting scheduleadopted by the Company are set out in the Directors’ Report (CCG, Guidance Note 8.5).112Parkway Holdings Limited Annual Report 2003

4. Corporate Governance Statement (Cont’d)Accountability and AuditIn presenting the annual financial statements and quarterly announcements to Shareholders, it is the aim of theBoard to provide Shareholders with a balanced and comprehensible assessment of the Group’s position and prospectson a quarterly basis (CCG, Guidance Note 10.1). Management currently provides the Board with appropriatelydetailed management accounts of the Group’s performance, position and prospects on a monthly basis (CCG,Guidance Note 10.2).Internal ControlsThe Board acknowledges that it is responsible for the overall internal control framework but recognises that no costeffective internal control system will preclude all errors and irregularities, as a system is designed to manage ratherthan eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absoluteassurance against material misstatement or loss. Nonetheless, the Audit Committee will:(a)(b)(c)(d)satisfy itself, by such means as it shall consider appropriate, that adequate counter measures (i.e. mechanismsand processes, such as sound internal control systems) are in place to identify and mitigate any materialbusiness risks associated with the Group;ensure that a review of the effectiveness of the Group’s material internal controls, including financial, operatingand compliance controls, and risk management, is conducted at least annually. Such review can be carriedout by internal and/ or external auditors (CCG, Guidance Note 12.1);ensure that the internal control recommendations made by internal and external auditors have beenimplemented by the Management; andensure the Board is in the position to comment on the adequacy of the internal controls of the Group.Internal AuditThe Group has an in-house internal audit function that is independent of the activities it audits. The internal audit unitwas established in 1996 to review the effectiveness of the material internal controls of the Group. The internalauditors are expected to meet or exceed the standards set by nationally or internationally recognised professionalbodies including the Standards for the Professional Practice of Internal Auditing set by The Institute of InternalAuditors (CCG, Guidance Note 13.2).In this framework, the internal audit function provides reasonable assurance that the risks incurred by the Group inits activities have been identified, analysed and adequately managed by the Management. Internal audit alsomakes recommendations to enhance the effectiveness and efficiency of the Group.Communication with ShareholdersIn line with continuous disclosure obligations of the Company, pursuant to the SGX-ST Listing Rules and theSingapore Companies Act, Chapter 50 (the “Act”), the Board’s policy is that Shareholders are informed of allmajor developments of the Group.Information shall be communicated to Shareholders on a timely basis. Where there is inadvertent disclosure madeto a selected group, the Company will make the same disclosure publicly as soon as practicable. Communicationis made through (CCG, Guidance Note 14.2):(a)annual reports that are prepared and issued to all Shareholders. The Board makes every effort to ensure thatthe annual report includes all relevant information about the Group, including future developments and otherdisclosures required by the Act and Singapore Financial Reporting Standards;Parkway Holdings Limited Annual Report 2003 113

SUPPLEMENTARY INFORMATION - SGX-ST LISTING MANUAL REQUIREMENTS31 December 20034. Corporate Governance Statement (Cont’d)Communication with Shareholders (Cont’d)(b)(c)(d)(e)(f)(g)quarterly results announcements comprising a summary of the financial information and affairs of the Groupfor the relevant period;notices of and explanatory memoranda for annual general meetings and extraordinary general meetings;press and analyst briefings for the Group’s quarterly and annual financial results as well as other briefings, asappropriate;press releases on major developments of the Group;disclosures to the SGX-ST; andthe Group’s website at http://www.parkwayholdings.com at which Shareholders can access informationon the Group.In addition, Shareholders are encouraged to attend the AGM to ensure a high level of accountability and to stayinformed of the Group’s strategy and goals. The AGM is the principal forum for dialogue with Shareholders (CCG,Principle 15 and Guidance Note 15.1). The chairpersons of the Audit Committee, Nominating Committee and/ orRemuneration Committee shall be present and available to address questions at general meetings. The externalauditor shall also be present to assist the directors in addressing any 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 ofspecial business, at least 16 days before the meeting. The Board welcomes questions from Shareholders who havean opportunity to raise issues either informally 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 anexplanation for the proposed resolution. Separate resolutions are proposed for substantially separate issues at themeeting (CCG, Guidance Note 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 the implications of insider trading and guidance on such dealings. It has adopted the Best PracticesGuide on Dealings in Securities issued by the SGX-ST.114Parkway Holdings Limited Annual Report 2003

ANALYSIS OF SHAREHOLDINGSas at 17 February 2004Range of Shareholdings No. of Shareholders % No. of Shares %1 - 9991,000 - 10,00010,001 - 1,000,0001,000,001 - AboveTOTAL2575,9771,590297,8533.2776.1120.250.37100.00110,48928,278,88271,815,491619,781,100719,985,9620.023.939.9786.08100.00TOP TWENTY SHAREHOLDERS AS AT 17 FEBRUARY 2004(as shown in the Register of Members)No. Name of Shareholders No. of Shares %1 RAFFLES NOMINEES PTE LTD2 CITIBANK NOMINEES SINGAPORE PTE LTD3 DBS NOMINEES PTE LTD4 OVERSEAS UNION BANK NOMINEES PTE LTD5 UNITED OVERSEAS BANK NOMINEES PTE LTD6 HSBC (SINGAPORE) NOMINEES PTE LTD7 HSBC PRIVATE BANK (SUISSE) SA8 HONG LEONG FINANCE NOMINEES PTE LTD9 HOE SENG COMPANY PTE. LIMITED10 WAH SEONG (MALAYA) TRADING COMPANY SDN BHD11 PETALING GARDEN (S) PTE LTD12 S L W SDN BHD13 OVERSEA-CHINESE BANK NOMINEES PTE LTD14 SU LAH WAH15 TAN KIM YEOW SENDIRIAN BERHAD16 MORGAN STANLEY ASIA (SINGAPORE) SECURITIES PTE LTD17 CHNG GIM HUAT18 ORLIT ENTERPRISES (S) PTE LTD19 TAN SUAT MING PAULINE20 OCBC SECURITIES PTE LTD(OTHERS - LESS THAN 2,842,384 SHARES EACH)190,523,66396,781,75561,152,43760,413,99438,308,99633,852,13632,047,05612,901,00012,715,00012,696,0009,147,6008,170,9205,993,0965,729,1605,619,0004,676,3373,740,0003,600,0003,336,2002,842,384115,739,22826.4613.448.498.395.324.704.451.791.771.761.271.140.830.800.780.650.520.500.460.4016.08TOTAL719,985,962 100.00PUBLIC FLOATRule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited requires that at least 10% of the equitysecurities (excluding preference shares and convertible equity securities) of a listed company in a class that is listed is at alltimes held by the public. The Company has complied with this requirement. As at 17 Feb 2004, approximately 77.77% of itsordinary shares listed on the Singapore Exchange Securities Trading Limited were held in the hands of the public.SUBSTANTIAL SHAREHOLDERS(as shown in the Register of Substantial Shareholders)as at 17 February 2004No.Name of Shareholders1 Ang Toon Chew & Sons Pte Ltd (Note 1)2 Cobalt Limited3 Hoe Seng Company Pte. Limited (Note 2)4 Petaling Garden (S) Pte LtdBeneficialShareholdings-54,394,28412,715,00055,379,582DeemedShareholdings68,094,582-55,379,582-Notes:1. Ang Toon Chew & Sons Pte Ltd is deemed to be interested in 68,094,582 shares, comprising 12,715,000 shares held by HoeSeng Company Pte. Limited and 55,379,582 shares held by Petaling Garden (S) Pte Ltd respectively, by virtue of Section 7 ofthe Companies Act, Cap. 50.2. Hoe Seng Company Pte. Limited is deemed to be interested in 55,379,582 shares held by Petaling Garden (S) Pte Ltd by virtue ofSection 7 of the Companies Act, Cap. 50.Parkway Holdings Limited Annual Report 2003 115

NOTICE OF ANNUAL GENERAL MEETINGNOTICE IS HEREBY GIVEN That the Thirty-First Annual General Meeting of the Company be held on Wednesday,31 March 2004 at 11.00 a.m. at The Lecture Theatre, Level 3, Gleneagles Hospital, 6A Napier Road, Singapore 258500for the purpose of transacting the following businesses:1. To receive and, if approved, to adopt the Directors’ Report and Audited Accounts for the year ended 31 December2003 and the Auditors’ Report thereon.2. To declare a Final Dividend of 4 cents (16%) per ordinary share of S$0.25 each less tax in respect of the year ended31 December 2003.3. (a) To re-elect Mr Tony Tan Choon Keat who retires pursuant to Article 97 of the Articles of Association of theCompany, as Director of the Company.(b)(c)To re-elect Mr Ho Kian Guan who retires pursuant to Article 97 of the Articles of Association of the Company,as Director of the Company.To re-elect Mr Sunil Chandiramani who retires pursuant to Article 97 of the Articles of Association of theCompany, as Director of the Company.4. To re-appoint Dr Prathap C Reddy, who retires pursuant to Section 153(6) of the Companies Act, Cap. 50, asDirector of the Company to hold office until the next Annual General Meeting.5. To approve Directors’ Fees of S$550,000 for 2003 (2002: S$565,000)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 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 andthe approval of the relevant Stock Exchange and/or other governmental or regulatory bodies where suchapproval is necessary, the Board of Directors of the Company be and is hereby authorised to allot and issueshares and convertible securities in the Company at any time to such persons, upon such terms andconditions and for such purposes as the Board of Directors may deem fit PROVIDED ALWAYS THAT:-(I)(II)the aggregate number of shares to be issued pursuant to this Resolution does not exceed fifty percent. of the issued share capital of the Company at the time of the passing of this Resolution, ofwhich the aggregate number of shares issued other than on a pro rata basis to existing shareholdersdoes not exceed twenty per cent. of the Company’s issued share capital;(subject to such manner of calculation as prescribed by the Singapore Exchange Securities TradingLimited ( the “SGX-ST” )) for the purpose of determining the aggregate number of shares that maybe issued under sub-paragraph (I) above, the percentage of the issued share capital of theCompany is based on the Company’s issued share capital at the time of passing of this Resolutionafter 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 ofthe passing of this Resolution, provided the options were granted in compliance with Part VIIIof Chapter 8 of the SGX-ST Listing Manual; andany subsequent consolidation or subdivision of shares; and(III)(unless revoked or varied by the Company in general meeting) the authority conferred by thisResolution shall continue in force until the conclusion of the next Annual General Meeting of theCompany or the date by which the next Annual General Meeting of the Company is required by lawto be held, whichever is the earlier.116Parkway Holdings Limited Annual Report 2003

(b)That the Board of Directors of the Company be and is hereby authorised to issue and allot from time to timesuch number of Shares as may be required to be issued pursuant to the exercise of options granted underthe Parkway Share Option Scheme 2001 (“Parkway Scheme 2001”) PROVIDED ALWAYS THAT the aggregatenumber of Shares to be issued pursuant to the Parkway Scheme 2001 does not exceed fifteen per cent. ofthe 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 8 April 2004 to determine Members’entitlements to the final dividend of 4 cents (16%) less tax.Duly completed registrable transfers in respect of shares in the Company received up to the close of business at 5:00 pm on7 April 2004 by the Company’s Share Registrar, M & C Services Private Limited of 138 Robinson Road #17-00, TheCorporate Office, Singapore 068906, will be registered to determine Members’ entitlements to such dividend. Memberswhose Securities Accounts with the Central Depository (Pte) Limited are credited with shares in the Company as at 5:00 pmon 7 April 2004 will be entitled to such proposed dividend.The proposed final dividend, if approved at the Thirty-First Annual General Meeting, will be paid on 20 April 2004.By Order of the BoardJune Tay Kwok FungCompany SecretarySingapore, 15 March 2004Parkway Holdings Limited Annual Report 2003 117

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 attendand vote instead of him. A proxy 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 memberspecifies the proportion of his shareholding (expressed as a percentage of the whole) to be represented by eachproxy.3. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company atNo. 1 Grange Road #11-01, Orchard Building, Singapore 239693 not less than 48 hours before the time appointedfor the Annual General Meeting.4. The instrument appointing a proxy or proxies must be under the hand of appointor or of his attorney duly authorisedin writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executedeither under its seal or under the hand of an officer or attorney duly authorised.Explanatory Notes on special business to be transacted5. (a) The ordinary resolution proposed in item 7 (a) above, if passed, will empower the Board of Directors of theCompany, from the date of the above Meeting until the next Annual General Meeting, to issue shares in theCompany up to an amount not exceeding in total fifty per cent. (50%) of the issued share capital of theCompany for the time being for such purposes as they consider would be in the interest of the Company. Thisauthority will, unless revoked or varied at a general meeting, expire at the next Annual General Meeting of theCompany.(b)The ordinary resolution proposed in item 7 (b) above, if passed, will enable the Board of Directors of theCompany, from the date of the above Meeting until the next Annual General Meeting, to issue shares in theCompany up to an amount not exceeding in total fifteen per cent. (15%) of the issued share capital of theCompany 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 theCompany.118Parkway Holdings Limited Annual Report 2003

PROXY FORMPARKWAY HOLDINGS LIMITED(incorporated in the Republic of Singapore)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-First Annual General Meeting of the saidCompany to be held on Wednesday, 31 March 2004 and at any adjournment thereof.By Show of HandsBy PollNo.ResolutionsFor * Against *No. of VotesFor **No. of VotesAgainst **1. Adoption of Directors’ Reports,Audited Accounts and Auditors’ Report.2.3.4.Declaration of Final Dividend of 4 cents(16%) less tax.Re-election of Director:a. Mr Tony Tan Choon Keatb. Mr Ho Kian Guanc. Mr Sunil ChandiramaniTo re-appoint Dr Prathap C Reddy pursuant toSection 153(6) of the Companies Act, Cap.50,as Director of the Company to hold office untilthe next Annual General Meeting of the Company.5.6.7.Approval of Directors’ fees for 2003.Appointment of Auditors and fixing of theirremuneration.Special Businesses:a. Authority to issue and allot sharespursuant to Section 161 of theCompanies 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 as theproxy deems fit or abstain from voting.NUMBER OF SHARES HELDAs witness my/our hand(s)this day of 2004(Signature or Common Seal of Member)Parkway Holdings Limited Annual Report 2003 119

Notes:1. Please insert the total number of Shares held by you. If you only have Shares entered against your namein the Depository Register (as defined in Section 130A of the Companies Act, Cap. 50), you should insert thatnumber of Shares. If you only have Shares registered in your name in the Register of Members, you shouldinsert that number of Shares. If you have Shares entered against your name in the Depository Register andShares 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.2. A member entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attendand vote instead of him. 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 memberspecifies the proportion of his shareholding (expressed as a percentage of the whole) to be represented by eachproxy.4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at No. 1Grange Road #11-01, Orchard Building, Singapore 239693 not less than 48 hours before the time appointed for theAnnual General Meeting.5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorneyduly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, itmust be executed either under its seal or under the hand of an officer or attorney duly authorised.6. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperlycompleted or illegible or where the true intentions of the appointor are not ascertainable from the instructions of theappointor specified in the instrument appointing a proxy or proxies. In addition, in the case of members whoseShares are entered against their names in the Depository Register, the Company may reject any instrument appointinga proxy or proxies lodged if such members are not shown to have Shares entered against their names in theDepository Register 48 hours before the time appointed for holding the Annual General Meeting as certified by theCentral 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 asit thinks fit to act as its representative at the Annual General Meeting in accordance with Section 179 of the CompaniesAct, Cap. 50. The representative attending the meeting must produce evidence of his authority.120Parkway Holdings Limited Annual Report 2003

CORPORATE OFFICEPARKWAY HOLDINGS LIMITED1 Grange Road, #11-01 Orchard BuildingSingapore 239693Tel: (65) 6796 0600Fax: (65) 6796 0634www.parkwayholdings.comHOSPITALSEAST SHORE HOSPITAL321 Joo Chiat Place, Singapore 427990Tel: (65) 6344 7588 Fax: (65) 6345 4966www.eastshore.com.sgGLENEAGLES HOSPITAL6A Napier Road, Singapore 258500Tel: (65) 6473 7222 Fax: (65) 6472 5816www.gleneagles.com.sgMOUNT ELIZABETH HOSPITAL3 Mount Elizabeth, Singapore 228510Tel: (65) 6737 2666 Fax: (65) 6737 1189www.mountelizabeth.com.sgGLENEAGLES INTAN MEDICAL CENTRE,KUALA LUMPUR282 & 286 Jln Ampang, 50450 Kuala LumpurTel: (60-3) 4257 1300 Fax: (60-3) 4257 9233www.gimc.com.myGLENEAGLES MEDICAL CENTRE, PENANG1 Jln Pangkor, 10050 Penang, MalaysiaTel: (60-4) 227 6111 Fax: (60-4) 226 2994www.gleneagles-penang.comAPOLLO GLENEAGLES HOSPITAL, KOLKATA58 Canal Circular Road, Kolkata 700 054,India, West BengalTel: (91-33) 2358 5217 Fax: (91-33) 2358 5198www.apollogleneagles.comGLENEAGLES JPMC, BRUNEIJerudong Park, BG 3122Brunei DarussalamTel: (673-2) 261 1883 Fax: Tel: (673-2) 261 1886KEY HEALTHCARE SERVICESGLENEAGLES CLINICAL RESEARCH CENTRE *6A Napier Road, Singapore 258500Tel: (65) 6470 5726 Fax: (65) 6471 3642www.gleneaglescrc.comPARKWAY LABORATORY SERVICES*28 Ayer Rajah Crescent #03-08Singapore 139959Tel: (65) 6248 5829 Fax: (65) 6248 5878www.parkwaylab.com.sgMEDI-RAD ASSOCIATES *3 Mount Elizabeth,Mount Elizabeth Medical Centre #01-01/02/06Singapore 228510Tel: (65) 6736 3538 Fax: (65) 6732 7776www.medirad.com.sgPARKWAY SHENTON*Cyberhub Building20 Bendemeer Road #03-11/14Singapore 339914Tel: (65) 6227 7777 Fax: (65) 6225 3735www.parkwayshenton.comMEDICAL REFERRAL CENTRES (MRCs)SINGAPORETel: (65) 6735 5000 (24-hour hotline)Fax: (65) 6732 6733www.imrc.com.sgBANGLADESHDhakaBRUNEI DARUSSALAMCHINAShanghaiHONG KONGINDIAChennaiKolkataNew DelhiINDONESIABalikpapanJakartaMedanManadoPalembangSurabayaMYANMARYangonRUSSIAVladivostokSRI LANKAColomboVIETNAMHanoi* Corporate officeCONCEPT, DESIGN & PRODUCTION BY GK CONSULTANCY PRIVATE LIMITED

B/C 1PARKWAY HOLDINGS LIMITED1 Grange Road#11-01 Orchard BuildingSingapore 239693Tel: (65) 6796 0600www.parkwayholdings.com