We Believe - Parkway Pantai PANTAI MEDIVEST SDN BHD Mezzanine Floor, West Wing ... We believe that our patients are our ﬁ rst priority. Delivering unmatched patient care

We Believeannual report 2005

PARKWAY HOLDINGS LIMITED

1 Grange Road#11-01 Orchard BuildingSingapore 239693Tel: (65) 6796 0600Fax: (65) 6796 0634/5www.parkwayholdings.com

PARKWAY HOLDINGS LIMITED(Co. Reg No. 197400320R)




b

Chairman’s Letter to Shareholders 10

A Letter from the Managing Director 13

Milestones for 2005 17

A Premier Regional Healthcare Provider 18

2005 in Review 20

Financial Review 2005 26

Board of Directors 30

Senior Management 33

Corporate Information 34

Financial Contents 35Contents

Vision Our vision is to be a leading international healthcare provider of choice with a passion for people and progress.

Mission We aim to deliver comprehensive healthcare services and quality care consistently to provide value to our customers. We achieve this through responsible practices and continuous investments in our people and technology to meet the challenges of tomorrow.

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Corporate Offi ce

PARKWAY HOLDINGS LIMITED1 Grange Road#11-01 Orchard BuildingSingapore 239693Tel: (65) 6796 0600Fax: (65) 6796 0634/5www.parkwayholdings.com

Singapore Hospitals

EAST SHORE HOSPITAL321 Joo Chiat PlaceSingapore 427990Tel: (65) 6344 7588Fax: (65) 6345 4966www.eastshore.com.sg

GLENEAGLES HOSPITAL6A Napier RoadSingapore 258500Tel: (65) 6473 7222Fax: (65) 6472 5816www.gleneagles.com.sg

MOUNT ELIZABETHHOSPITAL3 Mount ElizabethSingapore 228510Tel: (65) 6737 2666Fax: (65) 6737 1189www.mountelizabeth.com.sg

International Hospitals

GLENEAGLES INTAN MEDICAL CENTRE, KUALA LUMPUR282 & 286 Jln Ampang50450 Kuala LumpurTel: (60-3) 4257 1300Fax: (60-3) 4257 9233www.gimc.com.my

GLENEAGLES MEDICAL CENTRE, PENANG1 Jln Pangkor, 10050 PenangMalaysiaTel: (60-4) 227 6111Fax: (60-4) 226 2994www.gleneagles-penang.com

APOLLO GLENEAGLES HOSPITAL, KOLKATA58 Canal Circular RoadKolkata 700 054India, West BengalTel: (91-33) 2320 5211-15Fax: (91-33) 2320 5184www.apollogleneagleshospitals.com

GLENEAGLES JPMC, BRUNEIJerudong Park, BG 3122Brunei DarussalamTel: (673) 261 1883Fax: (673) 261 1886www.gleneaglesjpmc.com.bn

PANTAI MEDICAL CENTRENo. 8, Jalan Bukit Pantai59100 Kuala LumpurTel: (60-3) 2296 0888Fax: (60-3) 2282 1557Email: [email protected]

PANTAI CHERAS MEDICAL CENTRE1, Jalan 1/96ATaman Cheras Makmur56100 Kuala LumpurTel: (60-3) 9132 2022Fax: (60-3) 9132 0687Email: [email protected]

PANTAI KLANG SPECIALIST MEDICAL CENTRE42, Jalan Persiaran Raja Muda Musa41100 Klang, SelangorTel: (60-3) 3372 5222Fax: (60-3) 3371 5705Email: [email protected]

HOSPITAL PANTAI PUTRI126, Jalan Tambun31400 Ipoh, PerakTel: (60-5) 548 4333Fax: (60-5) 545 1163Email: [email protected]

HOSPITAL PANTAI MUTIARA82, Jalan TengahBayan Baru11900 Pulau PinangTel: (60-4) 643 3888Fax: (60-4) 643 2888Email:[email protected]

HOSPITAL PANTAI AYER KEROHNo. 2418-1, KM 8Lebuh Ayer Keroh75450 MelakaTel: (60-6) 231 9999Fax: (60-6) 231 3299Email:[email protected]

HOSPITAL PANTAI INDAHJalan Perubatan 1Pandan Indah55100 Kuala LumpurTel: (60-3) 4289 2828Fax: (60-3) 4289 2829Email:[email protected]

Key Healthcare Services

GLENEAGLES CRC PTE LTD*111 Somerset Road#11-02, Singapore Power BuildingSingapore 238164Tel: (65) 6737 3642Fax: (65) 6471 3642www.gleneaglescrc.com

PARKWAY LABORATORYSERVICES LTD*28 Ayer Rajah Crescent #03-08Singapore 139959Tel: (65) 6278 9188Fax: (65) 6248 5878www.parkwaylab.com.sg

MEDI-RAD ASSOCIATES LTD*302 Orchard Road#18-01, Tong BuildingSingapore 238862Tel: (65) 6736 3538 ext 37Fax: (65) 6732 7776www.medirad.com.sg

PARKWAY SHENTON PTE LTD*Cyberhub Building20 Bendemeer Road # 01-02/06Singapore 339914Tel: (65) 6227 7777Fax: (65) 6225 3735www.parkwayshenton.com

FOMEMA SDN BHDLot G8 & G9, Level 5, Block G (Central)Pusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel: (60-3) 2094 6188Fax: (60-3) 2094 6802www.fomema.com.my

PANTAI MEDIVEST SDN BHDMezzanine Floor, West WingBangunan AvenueNo. 8, Jalan Damansara EndahDamansara Heights50490 Kuala LumpurTel: (60-3) 2092 1000Fax: (60-3) 2092 5000Email: [email protected]

PANTAI PREMIER PATHOLOGY SDN BHD3rd Floor, Block APantai Medical CentreNo. 8, Jalan Bukit Pantai59100 Kuala LumpurTel: (60-3) 2282 8795Fax: (60-3) 2282 2131Email: [email protected]

Medical Referral Centres

SINGAPORE83 Clemenceau Avenue#10-05/06/07UE SquareSingapore 039920Tel: (65) 6735 5000 (24-hour hotline)Fax: (65) 6732 6733www.imrc.com.sgEmail: [email protected]

BANGLADESHChittagongDhaka

BRUNEI DARUSSALAM

CANADAVancouver

CHINAShanghai

HONG KONG

INDIAChennaiMumbaiNew DelhiPunjab

INDONESIABalikpapanBandungBanjarmasinBatamJakartaJambiMakassarManadoMedanPadangPalembangPekan BaruPontianakSamarindaSemarangSolo/YogyaSurabaya

MALAYSIAJohor Bahru Kota KinabaluKuala LumpurKuching

MYANMARYangon

NIGERIALagos

PAKISTANLahoreKarachiIslamabad

PHILIPPINESManila

RUSSIAVladivostok

SRI LANKAColombo

THAILANDBangkok

UNITED ARAB EMIRATESAbu Dhabi

UNITED KINGDOMLondon

VIETNAMHanoiHo Chi Minh

* Corporate liaison offi ce

design & production by Q-PLUS design

1

Parkway Holdings Limited is a leading fully integrated healthcare organisation in Asia, with one of the largest network of hospitals and healthcare services in the region.

Parkway owns three premier hospitals in Singapore – East Shore, Gleneagles and Mount Elizabeth. It has a network of hospitals in Malaysia, India and Brunei.

The Group’s healthcare network includes Parkway Shenton Pte. Ltd., a major provider of primary healthcare services; Medi-Rad Associates Ltd., a leading radiology services provider; and Parkway Laboratory Services Ltd., a major provider of laboratory services. The Group offers contract research services through Gleneagles CRC Pte. Ltd.

... in delivering the very best to our patients.

... in investing in leading-edge medical capabilities and technologies.

... in training and equipping our people.

... in extending a helping hand to our community.

Trust is fundamental in any relationship but never a given. But with trust comes belief. Like a child knowing that there will always be a safe pair of hands to fall back on. Or the same belief that’s shared by each and every one of our patients who walk through our doors, knowing that they are indeed in the very best of hands.

We believe

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We believe in going the extra mile. Distinguishing Parkway through unparalleled patient care experience.

3

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

4

We believe in investing in our capabilities and remaining at the forefront of medical developments.

5

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

6

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

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

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

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

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Chairman’s Letter to Shareholders

Richard SeowChairman

Dear Shareholders,

I am delighted to come on board as Parkway’s Chairman as

your company stands poised for its next phase of growth.

Over the past few years, you have witnessed Parkway’s

dedicated focus on its core healthcare business,

the establishment of our Centres of Excellence, new

acquisitions, regional healthcare joint ventures and the

continued divestment of non-core assets. Today, these

strategies are starting to show returns. In addition, we have

seen a 39% increase in foreign patients visiting our facilities

in Singapore over the last 2 years. We are well positioned to

achieve our objective of being the premier private healthcare

provider of choice in the region.

Our 2005 fi nancial results were positive and a good

improvement from the previous year. Revenue of $549.0

million and net profi t of $62.0 million brought Parkway’s

earnings to a record high. Our improvement in Return on

Equity to 15% in 2005 indicates positive momentum in

providing better returns on our capital employed. We will

continue to seek more opportunities to further improve key

aspects of our fi nancial performance.

A signifi cant milestone for this year was the entry

of Newbridge Capital and Associates as signifi cant

shareholders of the Company. The acquisition of a 26%

stake in Parkway Holdings lends testimony to the unique

healthcare platform that Parkway has built in Asia.

Newbridge is a proven healthcare investor and brings

considerable international healthcare experience, fi nancial

savvy and a global network of expertise to the Parkway

equation. I am confi dent that the entry of Newbridge will

provide the impetus for further growth for Parkway.

In September 2005, we expanded our presence in

Malaysia through the acquisition of a 31% stake in Pantai

Holdings. With this investment, Parkway has become the

largest shareholder of Malaysia’s leading healthcare service

provider. Parkway has a long and successful presence in

Malaysia and this move will expand our business base

signifi cantly and provide a critical mass of services and

facilities. In Malaysia we have grown from 2 to 9 hospitals

and ancillary facilities across the country. Malaysia is a key

market for us and our investment in Pantai is a strategic

move to continue building on our strengths and growth in

key regional markets.

Despite our leadership position, we recognise that we

cannot rest on our laurels. Moving forward, our next step

is to achieve sustained growth and generate continued

shareholders’ value. We will achieve this through:

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“It is both a privilege and a great responsibility that patients and their families entrust us with their well-being.

We must never lose sight of our primary objective of providing our patients with the highest standards of healthcare and

service excellence….and we will continue to keep this fundamental belief ingrained in the minds of all at Parkway.”

• A continued commitment to put patients fi rst.

It is both a privilege and a great responsibility

that patients and their families entrust us with

their well-being. We must never lose sight of our

primary objective of providing our patients with

the highest standards of healthcare and service

excellence. It will be our continued and relentless

focus on serving our patients’ needs that will set

us apart and establish our service quality and

facilities as the “Gold Standard” in our industry.

We will continue to keep this fundamental belief

ingrained in the minds of all at Parkway – from our

administrators, to our nurses and from our doctors

right through to our management and the Board.

• Continuing to recruit and attract the best specialists

and physicians who want to practice in the

private healthcare arena. Our doctors’ standards

and reputation are respected and well regarded

internationally. Parkway’s role is to continue to

provide our doctors with the best possible work

environment, superior medical support services

and cutting-edge technologies.

• Maintaining our niche as a specialist high-end

value-added healthcare provider. Our expertise

covers areas such as cardiology, oncology,

neurology, haematology, liver and stem cell

transplants. With this, Parkway is able to leverage

on its unique expertise and knowledge to cater

to the complex needs and medical care required

in the region, particularly in developing countries

where these services are largely limited.

• Tapping on the growth in regional medical tourism.

Healthcare has been identifi ed as a growth sector

and the Singapore government has been actively

promoting Singapore as a regional medical hub.

We are well positioned to expand our role

as a leader in regional private healthcare. At

the Parkway hospitals, our international patient

services team seeks to meet specifi c needs of

individual foreign patients and their families.

We recently introduced dedicated international

patient facilities, more translation services,

special menus and new Arabic and Bangladeshi

staff. Regionally, we have set up more medical

referral centres and employed more marketing

representatives to reach out to the increasing

number of international patients.

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• Growing our presence in the region. In 2005, we built

up our Malaysian platform and expanded in India

with our joint venture with Apollo Hospitals Enterprise

to establish and operate a radio imaging centre in

Hyderabad. We also signed an agreement with the

Asian Heart Institute and Research Centre to provide

management and operational support in Mumbai.

Moving forward, both parties intend to explore

opportunities to set up Centres of Excellence in tertiary

specialties in Mumbai. Parkway will continue to seek

regional opportunities that are synergistic to Parkway.

• Ongoing investments in technology and training.

Parkway’s recent developments include a new

Neurosurgery Centre and a cutting-edge tomotheraphy

machine. This adds to other quaternary services such

as a Haematology and Stem Cell Transplant Centre,

a liver disease intensive care facility and a highly

advanced robotic enhanced surgery programme. We

will continue to remain at the forefront of adopting

innovative technologies and medical capabilities to

enhance our level of medical care. Training remains

central to our organisation. In 2005, we launched the

Parkway-Toshiba training centre, Southeast Asia’s fi rst

regional training centre for CT technology.

Parkway is an excellent platform to fuel future growth of

healthcare in the region. With our strategies outlined

above, I am confi dent that we will be well poised to take on

the strong demand and high growth opportunities in Asia

and continue to maintain our position as a premier regional

healthcare provider.

At this point, I would like to acknowledge the signifi cant

contribution of my predecessor, Mr Anil Thadani. He had

a clear vision for Parkway and over the last fi ve years,

worked tirelessly to restructure the company and to build

this excellent platform that Parkway is today. It is with his

leadership that Parkway has achieved its current success.

I would also like to thank Mr Tony Tan, Mr Tan Kai Seng,

Mr Ang Guan Seng and Dr Prathap Reddy for their

invaluable contributions during their years of service as

directors of the Group.

Further changes to the Board have also been made and

I welcome Mr Sunil Chandiramani as Vice-Chairman,

and other new Non-executive Directors. Together, they

bring extensive experience in international healthcare and

investment.

Now that the baton has been passed, I hope to carry on the

good work and achieve new levels of success for Parkway.

I am confi dent that with the support of your Board and

management, we are well equipped for the challenges

ahead.

In conclusion, I would like to extend my sincere

appreciation to my colleagues, the doctors, nurses and all

staff at Parkway for their hard work. Special thanks also

to our patients, partners and shareholders for their belief

in Parkway. This organisation would not have achieved its

status as the healthcare provider of choice in Asia without

your support. I look forward to your continued contribution

in the year ahead.

Mr Richard Seow

Chairman

Parkway Holdings Limited

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Dear Shareholders,

2005 was a good year for Parkway. Financially, we reached

another high. Operationally, we saw further growth in all our

divisions as we deepened our capabilities and expanded

our services and network both locally and internationally.

We have raised the hurdle higher yet again.

2005 saw Parkway’s revenue increase by 35% compared

to 2004. Revenue in 2004 was $407.8 million and this

grew to $549.0 million in 2005. Similarly, EBITDA grew by

22%, from $110.9 million in 2004 to reach $135.0 million

in 2005. Net profi t hit $62.0 million in 2005 compared to

$50.5 million, and this is a 23% increase over 2004.

Parkway’s 2005 strong performance was driven by growth

across all businesses with the International Hospitals division

contributing the most.

Our past strategies are showing results. We have created

a distinctive platform for Parkway to springboard into the

next phase of growth.

A Letter from the Managing Director

Dr Lim Cheok PengManaging Director

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Let us take a closer look at each of our three core business

divisions:

Singapore Hospitals Division

This division includes East Shore, Gleneagles and Mount

Elizabeth hospitals. Our local hospitals are reputed for

their extensive expertise in specialist and quaternary

healthcare.

Revenue for the Singapore Hospitals division grew by 16%,

from $258.6 million in 2004 to $300.3 million in 2005.

EBITDA in 2004 was $79.7 million and this grew by 11%

to reach $88.3 million in 2005.

The growth in hospital revenue and EBITDA are

attributable to the increase in foreign patient admissions

and high-end cases treated at our hospitals. Parkway is

well poised to tap into the government’s latest initiative

of creating Singapore into a medical hub for the region.

Our reputation for top-notch specialised care and state-of-

the-art equipment attracted both local and foreign patients.

Over the last 2 years, foreign patient load to Singapore

increased by 39%. As the number of foreign patients

seeking specialised treatment in Singapore continues

to grow, Parkway will enjoy its leadership role in medical

tourism in Asia. Parkway’s foreign patients come from

countries in the region such as Indonesia, Malaysia, South

Asia and more recently, the Middle East.

The year 2005 also saw Parkway spearheading many new

initiatives. We set another record when we introduced

the fi rst tomotherapy machine to Southeast Asia. This

highly advanced radiation therapy equipment aims to

provide more precise treatment and reduces radiation to

surrounding healthy cells. In addition, Parkway established

another Centre of Excellence with a new Neurosurgery

Centre at East Shore Hospital to cater to the growing

demand for full-service neurology care. We also launched

the Parkway-Toshiba regional CT technology training centre

for radiologists and radiographers from the ASEAN region,

as well as from Australia, China, India and Pakistan.

At Parkway, we endeavour to maintain our premier status

in Singapore. This implies continual innovation, further

investment in facilities, greater value-added services and

highly-trained staff.

International Hospitals Division

We are excited about the growth demonstrated in this

division. Revenue contribution from our international

operations has been growing steadily. In 2004, we targeted

to grow our international revenue to 50% of total revenue

by 2009. We have now surpassed our target. Our fourth

quarter 2005 international revenue is already half our total

revenue.

Revenue for the International division saw the largest

growth compared to the other divisions. In 2004, Parkway

reported divisional revenue of $54.0 million and this grew

by a signifi cant 94% to hit $104.5 million in 2005. The large

jump in revenue is due to the incorporation of revenue from

Pantai Holdings in fourth quarter 2005.

The expansion of the Malaysian platform through the Pantai

investment played a signifi cant role in the 2005 results.

Our Penang, Kuala Lumpur, Brunei and Kolkata hospitals

also saw increases in revenue, EBITDA and patient

admissions, with Penang and Kuala Lumpur seeing

increases in high-intensity cases.

15

In 2005, Parkway heightened its activity in the region.

In India, Parkway entered into a joint venture with Apollo

Hospitals Enterprise to establish a radio imaging centre

in Hyderabad. Parkway also sealed a management

contract with the Asian Heart Institute and Research

Centre in Mumbai.

Moving forward, Parkway will look to both organic growth

as well as acquisitions to increase the performance of

the International Hospitals division. We will explore

opportunities that are synergistic to our existing

operations and strategies.

Healthcare Services Division

Parkway’s Healthcare Services division consists of

the following core businesses: Parkway Shenton,

Medi-Rad Associates and Parkway Laboratory. This

division saw revenue increase from $93.0 million in

2004 to $142.4 million in 2005, which is a 53% rise.

EBITDA also improved by 53% from $20.6 million to

$31.5 million.

In 2005, we extended our foray into China. Parkway

established a joint venture with Shanghai Huashan

Health Development, with plans to own and manage

medical and surgical centres, clinics and hospitals.

In Vietnam, Parkway obtained its operating licence

for a Plastic Surgery and Aesthetics Centre in Ho Chi

Minh City.

The Healthcare Services division remains a

key contributing sector for Parkway and we will

endeavour to strengthen our facilities and services

in this division. Under Parkway Shenton’s extensive

network, we have over 30 owned or managed clinics

and 260 HealthNet clinics. Under Medi-Rad, we

remain equipped with the latest service and state-of-

the-art equipment. We recently introduced Xper CT,

Angio with CT capabilities and 2 additional 64-slice

CTs for more advanced diagnosis of heart- and neuro-

related diseases as well as cancers. In addition, we

introduced a web distribution service whereby digital

versions of patients’ X-rays are put on a secured web-

site. Patients can now benefi t from faster results and

diagnosis. At Parkway Laboratory, we will seek to

expand its market share through enhancing its facility

and expertise.

“2005 was a good year for Parkway. Financially, we reached another high. Operationally, we saw further growth in all our

divisions as we deepened our capabilities and expanded our services and network both locally and internationally.

We have raised the hurdle higher yet again.”

16

Conclusion

Parkway is well poised for future growth. However, we will

not be complacent. A bird fl u epidemic remains a threat

to our business, as well as to the region as a whole. We

will continue to remain vigilant in these times, through

the enforcement of infection control protocols, stockpiling

on vaccines and training of our personnel. Ultimately, we

have a vital role in caring for the healthcare needs of our

communities.

As Parkway broadens its local and international presence,

we want to ensure that even as we grow, Parkway remains

an organisation with a heart. So while we continue our

pursuit of medical excellence, we do not want to forget those

who need a helping hand. The tsunami and earthquake

disasters saw Parkway stepping in. Over the last year, we

dispatched 3 teams of highly-skilled doctors, nurses and

logistics personnel to affected areas to provide medical aid

and supplies. Such humanitarian aid is integral to Parkway’s

mission and we continue to remain dedicated to serving our

community.

The year 2005 saw many signifi cant milestones for Parkway.

The entry of Newbridge Capital and Associates saw some

changes to the Board. At this point, I would like to extend

a warm welcome to our new Chairman, Mr Richard Seow

and our new directors. We have been working closely

together over the last 6 months and their contribution has

been invaluable. The management at Parkway continues

to remain committed as we journey ahead.

These are exciting times for Parkway. I am confi dent

that through your continued belief and support for the

organisation, we will be able to take Parkway to new

heights. Once again, my heartfelt thanks to all customers,

shareholders, partners and staff.

Dr Lim Cheok Peng

Managing Director

Parkway Holdings Limited

17

Milestones for 2005

January • Parkway provides humanitarian aid to tsunami

victims in Sri Lanka and Indonesia.

March• Parkway’s subsidiary Parkway-Healthcare (Mauritius)

Ltd. enters into a joint venture agreement with Apollo Hospitals Enterprise Ltd. to jointly establish and operate a radio imaging centre in Hyderabad, India.

May • Parkway’s subsidiary, Parkway Group Healthcare

Pte. Ltd. establishes a Sino-Foreign Contractual joint venture contract with Shanghai Huashan Health Development Co. Ltd. with plans to own and manage medical and surgical centres, clinics and hospitals in China.

• Parkway Hospitals Singapore (Gleneagles and Mount Elizabeth) achieves medical milestone with the successful separation of Indonesian conjoined twins, Anggi and Anjeli.

June• Newbridge Capital and Associates acquire 26%

stake in Parkway Holdings Ltd.

July• East Shore Hospital opens a Neurosurgery Centre.

August• Parkway’s subsidiary, Parkway Promotions Pte.

Ltd. organises the International Healthcare Facilities Exhibition & Conference 2005, the specialised trade event for world-class medical experts, market leaders, health offi cials and healthcare providers.

September• Parkway acquires 31% of Pantai Holdings Bhd.

to increase its stable of hospitals in Malaysia from 2 to 9.

• Parkway launches the fi rst regional training centre for computed tomography (CT) technology for more accurate and effi cient patient diagnosis and improved emergency care.

• Parkway offi cially opens its marketing representative offi ce in Vladivostok, Russia.

• Gleneagles Hospital launches high-speed wireless broadband internet access.

October• Parkway sends a medical disaster relief team of

12 doctors and nurses to Pakistan to treat victims of the 8 October earthquake measuring 7.6 on the Richter scale.

• Gleneagles Hospital wins awards for Patient Safety / Quality Medical Care and Internal Service at the Asian Hospital Management Awards 2005.

• Staff of Gleneagles and Mount Elizabeth hospitals garner a total of 233 Singapore Excellent Service Awards (EXSA) for excellent service. The Parkway hospitals are the only private hospitals to win.

• Gleneagles Hospital won the Healthcare

Humanitarian Award 2005 in Singapore.

November• Chefs from Mount Elizabeth Hospital were part of

the Singapore Culinary National Team which was crowned the Overall Winner in the Salon Culinaire Mondial, a prestigious international culinary competition held only once in 6 years. This year’s competition took place in Basel, Switzerland.

December• Parkway Shenton Pte. Ltd. obtains its operating

licence for its Plastic Surgery and Aesthetics Centre in Ho Chi Minh City, Vietnam.

• Mount Elizabeth Hospital doctors remove a massive 2 kg tumour in the neck (one of the largest in the Asia Pacifi c) of a 12-year-old Indonesian island boy, giving him a new lease of life.

18

Parkway has an extensive presence throughout Asia. Our operations cover 14 hospitals with about 2,800 beds in countries including Brunei, India, Malaysia and Singapore. Parkway has also established medical referral centres throughout the world including Bangladesh, Brunei, Canada, China, Hong Kong, India, Indonesia, Malaysia, Myanmar, Pakistan, Philippines, Russia, Sri Lanka, Thailand, United Arab Emirates, United Kingdom and Vietnam.

With over 1,200 accredited specialists covering over 40 areas of specialty, Parkway delivers medical excellence across the full range of healthcare services.

Parkway Holdings- A Premier Regional Healthcare Provider

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Parkway facilities in Singapore

Parkway International Hospitals

Parkway Healthcare Services(Clinical Research Offi ces & Clinic)

Parkway Medical Referral Centre

Malaysia

HOSPITALSGleneagles Medical Centre, PenangNo. of beds: 212

Gleneagles Intan Medical Centre, Kuala LumpurNo. of beds: 331

Pantai Medical Centre, Kuala LumpurNo. of beds: 264

Pantai Cheras Medical Centre,Kuala LumpurNo. of beds: 139

Pantai Klang Specialist Medical Centre,KlangNo. of beds: 69

Hospital Pantai Mutiara, PenangNo. of beds: 180

Hospital Pantai Ayer Keroh, MelakaNo. of beds: 250

Hospital Pantai Indah, Kuala LumpurNo. of beds: 86

Hospital Pantai Putri, IpohNo. of beds: 121

Brunei

HOSPITALGleneagles JPMC, BruneiNo. of beds: 20

India

HOSPITALApollo Gleneagles Hospital,KolkataNo. of beds: 300

Singapore

HOSPITALSMount Elizabeth HospitalNo. of beds: 505

Gleneagles HospitalNo. of beds: 380

East Shore HospitalNo. of beds: 157

HEALTHCARE SERVICES DIVISIONPrimary HealthcareGP ServicesNo.of clinics: 39

Dental ServicesNo. of clinics: 3

Diagnostic ServicesRadiology ServicesMedi-Rad AssociatesNo. of clinics: 7

Laboratory ServicesParkway Laboratory ServicesNo. of laboratories: 4

Clinical ResearchGleneagles CRC HQ

Consultancy ServicesHospital Development

Hospital Management

(Please refer to back page for complete list)

20

As one of the leading healthcare providers in Asia, thousands of patients place their trust in us each year and at Parkway,

We believe in a patient-fi rst approachWe believe in innovation and medical excellenceWe believe in our peopleWe believe in our community

Believing In A Patient-First Approach At Parkway we are driven by a patient-fi rst approach in developing our medical and service potential. We seek to provide unrivalled patient experience with various innovative patient services and unmatched medical care through momentous investments in our clinical expertise, cutting-edge technology, staff and infrastructure. Not only will our emphasis on providing exceptional patient care propel us ahead of our competitors, it will empower us to meet the challenges of tomorrow.

Caring for patients at Parkway extends from providing excellent medical care to delivering innovative hospitality and lifestyle services. Our new initiatives in service, work redesign and training ensure that Parkway continues to deliver distinctive patient care and experience. New patient initiatives include shuttle bus services, massage chairs, complimentary massage for maternity patients and spouses, in-house spa services, hair-styling services, wireless hi-speed broadband internet access, a roof terrace café and wide-screen plasma televisions. In addition, to cater to our growing international patients, we have set

up an international patient lounge, hired new Arabic and Bangladeshi foreign staff, created a special Arabic menu and other ‘customised food’ as well as expanded on our translation services.

Increasing the speed of service to our patients, Parkway’s Radiology division introduced a web distribution service whereby digital versions of patients’ X-rays are put on a secured internet site. This will enable doctors to view their patients’ images and report through the internet from their offi ces or home. Patients benefi t from much faster results and diagnosis.

We continue to pursue service excellence through various service initiatives such as “Our Winning Attitude”, “Innovation” and “Whale Done” training programmes. These not only help deliver memorable service to our patients, they boost customer service ratings and decrease staff turnover.

As a testament to Parkway’s vision of having a “passion for people and progress”, we are pleased to have once again been awarded the following prestigious awards:

• The Asian Hospital Management Award recognises hospital management practices and thrusts outstanding hospital projects into the regional spotlight. Parkway has been the proud recipient of this award for the past two years and the year 2005 was no exception – Gleneagles Hospital clinched awards in 2 major categories: Patient Safety / Quality Medical Care and Internal Service.

2005 in Review

21

• The Singapore Excellent Service Award (EXSA) recognises organisations for their effort in promoting service excellence and continuous training for employees. The staff at both Gleneagles and Mount Elizabeth hospitals received a total of 233 EXSA awards. The Parkway hospitals were also the only private hospitals to receive this award.

• The Superbrands Award identifi es the strongest corporate brands in the country and is awarded by an independent panel of judges. Gleneagles Hospital and Mount Elizabeth Hospital are proud to be awarded Superbrands status every year since its inception in 2002.

• The Singapore Quality Class (SQC) is a scheme that recognises organisations that have attained a commendable level of performance in the journey towards business excellence. Mount Elizabeth Hospital and Gleneagles Hospital are proud to have held that distinction since 1998 and have been re-certifi ed till 2007.

• The Salon Culinaire Mondial is a prestigious international culinary competition held only once in 6 years. Chefs from Mount Elizabeth Hospital were part of the Singapore Culinary National Team which was crowned the Overall Winner in the Salon Culinaire Mondial. This year’s competition took place in Basel, Switzerland.

Parkway’s position as a leader has commissioned our active contributions not only to our local community, but also to address pressing healthcare issues in the world today.

Spearheading the global sharing of medical ideas and technology, Parkway’s subsidiary, Parkway Promotions Pte. Ltd. organised the International Healthcare Facilities Exhibition & Conference (IHFEC) in 2005. The IHFEC 2005 addressed the growing needs of healthcare facilities in Asia and the Middle East, and is the fi rst-of-its-kind outside the United States since its inception.

22

Believing In Innovation And Medical ExcellenceOur patients are at the center of everything we do. At Parkway, what sets us apart is our focus on medical excellence and our innovative spirit to explore new grounds and deliver specialist, high-quality medical care to meet the increasingly complex needs of our patients today.

Parkway is reputed for providing not just a wide spectrum of specialist care but quaternary healthcare as well. We continue to deliver this through our cutting-edge expertise, such as in haematology and stem cell transplant, living-related liver transplant and kidney transplant. In 2005, we have heightened our offering in providing the best in complex clinical areas.

Separation of Conjoined twinsIn May 2005, through our multidisciplinary team of top experts, Parkway achieved a medical milestone with the successful separation of a pair of Indonesian conjoined twins after a 10-hour operation.

Neurosurgery CentreTo stay at the forefront of neurosurgical advancement, we launched another Neurosurgery Centre at East Shore Hospital in July 2005. The centre will provide a full range of services from screening to surgeries and rehabilitation therapy for general neurosurgical conditions, including stroke, brain / spinal cord tumours and degenerative spine conditions.

OncologyIn the area of oncology, Parkway further enhanced its treatment in cancer by investing in a highly advanced tomotherapy machine. We have become the fi rst in Southeast Asia to introduce this new medical equipment. The new system provides revolutionary advancement in radiation therapy and is designed to ensure more precise delivery of treatment and minimises radiation to the surrounding healthy tissues. The new investment adds to Parkway’s competitive advantage in cancer treatment.

Parkway-Toshiba regional training centre for CT technologyParkway’s investment in medical excellence goes beyond adopting cutting-edge technologies and methodologies. It extends to training and education. In September 2005, Parkway launched the fi rst regional training centre for CT technology. This training centre will target radiographers and radiologists from the ASEAN region as well as from Australia, China, India and Pakistan. Training programmes will equip trainees with the skills and knowledge to use the high-end CT scanners and will also incorporate the latest e-learning techniques and hands-on sessions.

23

Believing In Our PeopleOur staff forms the backbone of our organisation. At Parkway, we recognise that in order to deliver high quality and exceptional service, staff training, development and welfare are fundamental.

The Parkway Hospitals are proud to have some of the fi nest specialists in the region accredited with us. We are committed to ensuring that in addition to providing excellent care for patients, we also cater to the professional development of these specialists. Continual medical education talks are conducted for our doctors at each of our three hospitals on a weekly basis. In addition, Mount Elizabeth and Gleneagles hospitals organise an Annual Scientifi c meeting and an Annual Seminar for doctors accredited with them. Our hospitals also make arrangements to ensure that the appropriate specialists are trained and become familiar with all new medical equipment our hospitals acquire.

The Parkway Academy was set up to conduct leadership, clinical skills and service quality related training. The Academy employs a team of well-qualifi ed instructors and educators who use advanced training methods including a highly sophisticated Clinical Simulation Centre. In addition, we have nursing colleges in Malaysia to meet our nursing manpower needs.

Our effort and commitment to excellence through clinical and non-clinical training has not gone unrecognised. Our hospitals have received numerous awards including:

• The People Developer Award - Parkway hospitals have been consistently awarded with the People Developer Standard since 2000. This standard aims to motivate staff to constantly upgrade their skills and remain relevant to the current dynamic environment and thereby achieve excellence in their relevant industries.

• National Quality Circle Convention - Parkway remains active in the area of quality and training. Since 1997, our hospitals have been receiving numerous awards through their participation at the National Quality Circle Convention, organised by SPRING Singapore.

• Singapore Quality Class - This award acknowledges business excellence including staff development and training. Mount Elizabeth and Gleneagles hospitals have received this award since 1998.

At Parkway, providing unsurpassed patient care is our driving force. With all the above programmes in place, our highly skilled and motivated staff are well placed to provide our patients with exceptional service.

24

Believing In Extending A Helping Hand To Those In NeedExemplifying the spirit of volunteerism, our Parkway hospitals held their annual Christmas Light-Up and Charity Drive this past Christmas season, to collect funds for various charity benefi ciaries. This fund raising initiative has been ongoing for the last ten years.

Beyond Singapore, our volunteers promptly reacted to the devastating 2004 Boxing Day tsunami disaster that claimed the lives of many off the Indian Ocean. A 28-man team of doctors, nurses and support staff from Parkway’s three hospitals - East Shore, Gleneagles and Mount Elizabeth – left for Sri Lanka on New Year’s Day 2005. The team brought with them medicine, medical supplies and equipment to work in some of the worst affected areas. In February 2005, another mission headed for Indonesia to provide medical relief and aid to the Aceh refugees.

Then in October 2005, an earthquake measuring 7.6 on the Richter scale unleashed its devastating powers onto Pakistan, India, and Afghanistan. This time, Parkway organised a 14-man team comprising four doctors, six nurses, two support staff and two logisticians, who

headed for Pakistan to provide humanitarian aid to victims there. The team treated an average of 400 patients a day during their 11-day mission in Pakistan.

Extending Our Beliefs To The RegionHaving established a strong presence in Singapore with our premier hospitals, Parkway is setting its sights on the overseas market. Ultimately, we aim to leverage on our specialist knowledge and medical expertise to meet the growing need for medical excellence in the region.

This year alone, Parkway took signifi cant strides to extend its footprint in Asia. This began with the joint venture agreement between Parkway’s subsidiary Parkway-Healthcare (Mauritius) Ltd. and Apollo Hospitals Enterprise Ltd., to establish and operate a radio imaging centre in Hyderabad, India.

In June 2005, private equity fi rm, Newbridge Capital andAssociates acquired approximately 26% stake in Parkway Holdings and this made it the fi rst major healthcare investment for Newbridge Capital in Singapore.

25

Newbridge Capital is a major investor in the healthcare and life sciences sector and brings to Parkway signifi cant expertise in international healthcare management and practices, which will further boost Parkway’s regional growth plans.

A milestone growth strategy for Parkway took place in the later half of the year with the acquisition of approximately 31% stake in Pantai Holdings Bhd. This resulted in Parkway being the largest shareholder of Malaysia’s leading healthcare service provider. The acquisition escalated Parkway’s presence in Malaysia from 2 to 9 hospitals and ancillary facilities across the country.

To date, Parkway’s presence in the region covers 14 hospitals in countries including Singapore, Malaysia, India and Brunei. Parkway has also established representative offi ces throughout the world including Bangladesh, Brunei, Canada, China, Hong Kong, India, Indonesia, Malaysia, Myanmar, Philippines, Sri Lanka, Thailand, United Arab Emirates, United Kingdom and Vietnam. The latest addition is the offi cial opening of a representative offi ce in Vladivostok, Russia.

Other joint ventures established in the region included the partnership between Parkway’s subsidiary, Parkway Group Healthcare Pte. Ltd. and Shanghai Huashan Health Development Co. Ltd., to manage medical and surgical centres, clinics and hospitals in China.

On 31 December 2005, Parkway’s primary healthcare arm, Parkway Shenton Pte. Ltd. obtained its operating licence for its Plastic Surgery and Aesthetics Centre in Ho Chi Minh City, Vietnam. This clinic will be fully operational by fi rst quarter 2006 and is Parkway’s fi rst entry into the Vietnam healthcare market.

26

Financial Review 2005

OverviewIn 2005, Parkway delivered another set of strong fi nancial results. Revenue for the full year surged to a record high of $549.0 million in 2005 as the year saw increased contributions from all our core healthcare services. Growing continuously over the last 5 years, net profi t attributable to shareholders hit $62.0 million. With Parkway’s strategies yielding tangible results, we expect to see more organic growth moving forward. Our focus on providing high value-added healthcare services, state-of-the-art equipment, facilities and services and increasing our marketing efforts are the key growth drivers. In addition, the investment in Pantai saw its maiden contribution in the fourth quarter of this year.

Moving forward, Parkway will seek to enhance its fi nancial and strategic position with other new businesses and possible acquisitions that are synergistic to the Group while focusing on our key strategies for growth.

300.

325

8.6

104.

554

.0

142.

493

.0

1.8

2.2

Revenue by Business Segment

S$ m -

300 -

250 -

200 -

150 -

100 -

50 -

SingaporeHospital

InternationalHospital

HealthcareServices

Others

20052004

Net Profi t

S$ m -

70 -

60 -

50 -

40 -

30 -

20 -

10 -

12.5

2001

62.0

2005

50.5

2004

33.6

2003

33.3

2002

RevenueThe Group’s revenue for the year surged by 35%, increasing from $407.8 million in 2004 to $549.0 million in 2005. This is due largely to strong international growth with Pantai contributing about $92.0 million in the fourth quarter. The revenue for the International Hospital division saw the largest increase of 94% to reach $104.5 million, compared to $54.0 million in FY2004. The other two divisions, the Singapore Hospitals and Healthcare Services saw revenues of $300.3 million and $142.4 million or revenue growth of 16% and 53% respectively.

27

Singapore Hospitals 2004 2005 2005 vs 2004

Number of Hospitals 3 3 0.0%Inpatient Admissions 49,109 49,980 1.8%Number of Day Cases* 13,011 13,444 3.3%Average Length of Stay (days) 3.48 3.56 2.3%* Day Ward Admissions only

Our Singapore Hospitals showed an increase in inpatient admissions and day cases, driven largely by the increase in foreign patients. Average length of stay increased with more high intensity patient admissions.

International Hospitals 2004 2005 2005 vs 2004

Number of Hospitals 4 11 175.0%

Statistics for 2 Majority-owned Facilities Inpatient Admissions 15,461 16,649 7.7%Average Length of Stay (days) 3.32 3.37 1.5%

Our international hospitals increased from 4 to 11. The table above shows the increase in inpatient volume as well as average length of stay in the Brunei and Penang hospitals.

28

Financial Review 200588

.379

.7

15.4

7.5

31.5

20.6

0.1 3.2

EBITDA

S$ m -

90 -

80 -

70 -

60 -

50 -

40 -

30 -

20 -

10 -

SingaporeHospital

InternationalHospital

HealthcareServices

Others

20052004

EarningsThe Group’s EBITDA in 2005 mirrored the growth in revenue, increasing by 22% from $110.9 million in 2004 to $135.0 million in 2005.

The Group’s EBITDA grew by $24.1 million or 22% in FY2005. $8.6 million of this increase was from the Singapore Hospitals division. The International division contributed $7.9 million and the Healthcare services added another $10.9 million. There was a reduction in the Others segment compared to 2004, when there was a gain from the sale of our stake in Lee Hing last year.

Net Financial Income The strong growth of 22% in EBITDA translated to a corresponding increase of 23% in net income. The result is a fi ve year high net income of $62.0 million in FY2005 compared to the $50.5 million in FY2004.

DividendsThe directors proposed a fi nal dividend of 5.0 cents per ordinary share compared to 4.5 cents per ordinary share in the preceding year. Together with the interim dividends of 5.5 cents, this brings annual dividend to 10.5 cents per ordinary share for the full year 2005.

29

Group Consolidated Statements 2005 2004 # 2003 2002 2001 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 Profi t and Loss Account Revenue Healthcare 547,221 405,614 344,743 325,096 344,775 Others 1,750 2,218 3,905 12,463 12,357 548,971 407,832 348,648 337,559 357,132 Earnings before interest expense, tax, depreciation and amortisation (EBITDA)~ 134,982 110,925 85,865 89,201 86,848 % of revenue 24.6% 27.2% 24.6% 26.4% 24.3% Earnings before interest expense, tax and exceptional items (EBIT) 96,429 71,922 55,381 58,547 56,115 % of revenue 17.6% 17.6% 15.9% 17.3% 15.7% Earnings after tax and minority interest but before exceptional items 61,969 50,463 33,608 33,301 24,891 % of revenue 11.3% 12.4% 9.6% 9.9% 7.0% Net Profi t for the year 61,969 50,463 33,608 33,301 12,479 % of revenue 11.3% 12.4% 9.6% 9.9% 3.5% Balance Sheet Total Assets 1,304,179 937,049 815,460 832,881 824,280 Net Borrowings 336,114 192,951 233,853 242,645 217,874 Total Shareholders’ Funds 415,517 425,027 430,500 427,970 411,107 Profi tability Ratios (%): Return on Shareholders’ Funds Before exceptional items 14.9 11.9 7.8 7.8 6.1 After exceptional items 14.9 11.9 7.8 7.8 3.0 Return on Assets Before exceptional items 4.8 5.4 4.1 4.0 3.0 After exceptional items 4.8 5.4 4.1 4.0 1.5 Gearing Ratio: Net debt equity ratio 0.81 0.45 0.54 0.57 0.53 Per share Data: Earnings per share (S$) Before exceptional items 0.09 0.07 0.05 0.05 0.03 After exceptional items 0.09 0.07 0.05 0.05 0.02 Gross dividend (S$)+ 0.105 0.09 0.06 0.05 0.03 Net tangible asset backing per share (S$) 0.32 0.54 0.55 0.55 0.57 Net asset value backing per share (S$) 0.57 0.59 0.60 0.59 0.57

~ Earnings before exceptional items, exchange differences and share of results of associates.

# Certain comparative fi gures in FY2004 have been restated for comparative purposes due to the adoption of the new and revised accounting standards that were implemented in 2005.

+ Gross dividend comprises interim dividend declared during the year and fi nal dividend proposed by directors in respect of that fi nancial year under review.

30

Board of Directors

Mr Sunil ChandiramaniVice Chairman

Mr Daniel Ashton CarrollNon-executive Director

Dr Ronald Ling Jih WenNon-executive Director

Mr Richard Seow Yung LiangChairman

Mr Ho Kian GuanNon-executive Director


Mr Chang See HiangNon-executive Director

Mr Ashish Jaiprakash ShastryNon-executive Director

Mr Alain Ahkong Chuen FahNon-executive Director

Mr Timothy David DattelsNon-executive Director

Mr David R. WhiteNon-executive Director

31

Mr Richard Seow Yung LiangChairmanMr Richard Seow was appointed Chairman of the Board of Parkway Holdings and the Executive Committee in July 2005. A former investment banker with over 16 years of industry experience, he was previously with Citigroup, Goldman Sachs and JP Morgan. Mr Seow is also a director of Twinwood Engineering Limited, Lee Hing Development Limited and a member of the Anglo Chinese School Board of Governors.

Mr Sunil ChandiramaniVice ChairmanMr Sunil Chandiramani is a Director and Partner of Symphony Group of companies which invest in Healthcare and other consumer businesses throughout the Asia Pacifi c region. Mr Chandiramani is a member of the Executive Committee and various other committees and sits on the boards of several companies.

Dr Lim Cheok PengManaging DirectorDr Lim Cheok Peng is the Managing Director of Parkway Holdings and he sits on the Executive Committee. Dr Lim has been steering the Group’s healthcare efforts since 1987 and was recently appointed a director of Pantai Holdings Berhad. He is also a cardiologist by profession.

Mr Alain Ahkong Chuen FahNon-executive DirectorMr Alain Ahkong is the Chairman of the Audit Committee of Parkway Holdings. Currently a Director of Pioneer Management Services Pte Ltd, Mr Ahkong also holds directorships in several companies, including listed company, Twinwood Engineering Limited.

Mr Daniel Ashton CarrollNon-executive DirectorMr Daniel Carroll is a Managing Partner of Newbridge Capital, LLC, which he joined in 1995. Mr Carroll runs Newbridge’s investment committee and oversees the fi rm’s investment strategy and operations. Mr Carroll is a Director of Shenzhen Development Bank and AIT (Mauritius) Ltd.

Mr Chang See HiangNon-executive DirectorMr Chang See Hiang sits on various committees of Parkway Holdings. An Advocate and Solicitor of the Supreme Court of Singapore, he is the Senior Partner of his own law fi rm, M/s Chang See Hiang and Partners. Mr Chang is a Director of Jardine Cycle & Carriage Limited, MCL Land Limited, Yeo Hiap Seng Limited, Singapore Technologies Aerospace Ltd, STT Communications Ltd and Honorary Secretary and member, Management Committee of the Singapore Turf Club.

32

Mr Timothy David DattelsNon-executive DirectorMr Timothy Dattels is a Managing Director of Newbridge Capital, LLC. Prior to joining Newbridge in 2002, Mr Dattels was a Managing Director of Goldman Sachs and led the fi rm’s investment banking business in Asia. Mr Dattels is a Director of Shenzhen Development Bank, SingTao News Corp. Limited, Shangri-La Asia Ltd and Primedia Inc.

Mr Ho Kian GuanNon-executive DirectorMr Ho Kian Guan has been a director of Parkway Holdings since 1985. Mr Ho is also the Chairman of publicly-listed Keck Seng (Malaysia) Berhad whose principal activities include palm oil cultivation, the processing and refi ning of palm oil and real estate development.

Dr Ronald Ling Jih WenNon-executive DirectorDr Ronald Ling trained as a medical doctor and subsequently worked as a management consultant with McKinsey & Co. in London, and as General Manager with Parkway Group Healthcare. Dr Ling is a Principal with the Symphony Group of companies which invest in Healthcare and other consumer businesses throughout the Asia Pacifi c region. He also sits on the Boards of Twinwood Engineering Limited in Singapore and Strides Arcolabs Limited in India.

Mr Ashish Jaiprakash ShastryNon-executive DirectorMr Ashish Shastry is a Director and Head of Southeast Asia at Newbridge Capital, LLC. Mr Shastry has worked at Newbridge since 1998, during which time he has been based in Singapore and Hong Kong, focusing on Newbridge’s investment activities in India, Australia and Southeast Asia. He serves on boards of Pantai Holdings Berhad (Malaysia), Lee Hing Development Limited (Hong Kong) and Matrix Laboratories Ltd (India; Alternate Director). Mr David R. WhiteNon-executive DirectorMr David White is the Chairman of the Board and Chief Executive Offi cer of Iasis Healthcare LLC, headquartered in the United States. Mr White was also previously Executive Vice President and Chief Executive Offi cer of Community Health Systems, Inc., a hospital management company that operated about 20 acute care hospitals in the United States. Mr Ho Kian Hock (alternate director to Mr Ho Kian Guan)

33

Dr Lim Cheok Peng Managing DirectorDr Lim Cheok Peng, 59, is the Managing Director of Parkway Holdings and he sits on the Executive Committee. Dr Lim has been steering the Group’s healthcare efforts since 1987. He is also a cardiologist by profession. Molly Foo Chief Financial Offi cerMolly Foo, 46, was appointed as Chief Financial Offi cer 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. Vivek Jetley Senior Vice President/HeadInternational Business DevelopmentVivek Jetley, 48, joined Parkway on 16 January 2004, and is responsible for the formulation and implementation of Parkway’s international business strategy. Prior to joining Parkway, Mr Jetley was the Managing Director of Max India Ltd, a listed multi business enterprise, from 1998 to 2003. Mr Jetley holds a Master in Business Management from Banaras Hindu University and is a Fellow Member of the Institute of Cost and Works Accountants of India. Dr Timothy Low General ManagerGleneagles HospitalDr Timothy Low, 43, joined Parkway as General Manager of Gleneagles Hospital on 1 August 2000 and is 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 2000 and Regional Medical Advisor with Glaxo Wellcome Singapore Pte Ltd from 1993 to 1995. Dr Low graduated with a MBBS from the National University of Singapore. Nellie Tang General ManagerMount Elizabeth HospitalNellie Tang, 61, was appointed as General Manager of Mount Elizabeth Hospital on 1 July 1998 and is 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 her appointment as General Manager, Patient Care Services in 1998.

Senior Management

Mrs Tang holds a Master of Science in Healthcare Management from the University of Wales, UK. Dr Goh Jin Hian Executive DirectorParkway Shenton Pte LtdDr Goh Jin Hian, 37, was appointed as Executive Director of Parkway Shenton on 1 April 1999. Dr Goh is responsible for the general management of all the primary care services under Parkway Shenton which includes, 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 the National University of Singapore and holds an MBA from the University of Hull, UK and completed the Advanced Management Programme at Wharton. Lim Poh Suan General ManagerMedi-Rad Associates LtdLim Poh Suan, 53, was appointed as General Manager of Medi-Rad on 1 March 2002, and is responsible for the general 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 to her appointment with Medi-Rad.

Ms Lim graduated with a Bachelor of Science in Economics from the University of London and holds a Diploma of the College of Radiographers. George Pusavat General ManagerParkway Laboratory Services LtdGeorge Pusavat, 53, was appointed General Manager of Parkway Laboratory Services on 1 July 1997 and is responsible for the general management and operations of the Group’s laboratory services. Prior to joining the Group, Mr Pusavat was Project and Systems Manager with San Joaquin Community Hospital, USA from 1992 to 1994. Mr. Pusavat graduated with a Bachelor of Science in Biochemistry from University of California at Los Angeles, a Bachelor of Science in Medical Technology from California State University and a Master of Business Administration from University of Southern California. He also holds a MT(ASCP) from American Society for Clinical Pathology and a CLS from State of California, USA.

34

BOARD OF DIRECTORS

Richard Seow Yung LiangChairman

Sunil ChandiramaniVice Chairman


Alain Ahkong Chuen FahNon-executive Director

Daniel Ashton CarrollNon-executive Director

Chang See HiangNon-executive Director

Timothy David DattelsNon-executive Director

Ho Kian GuanNon-executive Director

Dr Ronald Ling Jih WenNon-executive Director

Ashish Jaiprakash ShastryNon-executive Director

David R WhiteNon-executive Director

Ho Kian Hock (Alternate Director to Ho Kian Guan)

EXECUTIVE COMMITTEE


Sunil Chandiramani

Dr Lim Cheok Peng

Ashish Jaiprakash Shastry

AUDIT COMMITTEE

Alain Ahkong Chuen FahChairman

Chang See Hiang

Ho Kian Guan


MANAGEMENT COMMITTEE

Dr Lim Cheok PengChairman

Richard Seow Yung Liang


SHARE OPTION SCHEME COMMITTEE

Timothy David DattelsChairman


Sunil Chandiramani


REMUNERATION COMMITTEE

Timothy David DattelsChairman


Sunil Chandiramani


NOMINATING COMMITTEE

Chang See HiangChairman


Sunil Chandiramani

Alain Ahkong Chuen Fah

Timothy David Dattels

SHARE PURCHASE COMMITTEE

Chang See HiangChairman


Sunil Chandiramani

Ho Kian Guan


STRATEGIC PLANNING COMMITTEE


Dr Lim Cheok Peng

Dr Ronald Ling Jih Wen


David R White

REGISTERED OFFICE1 Grange Road #11-01 Orchard BuildingSingapore 239693Tel: (65) 6796 0600 http://www.parkwayholdings.com

COMPANY SECRETARIES

June Tay Kwok Fung

Ho Li Li

SHARE REGISTRAR

M & C Services Private Limited138 Robinson Road #17-00The Corporate Offi ceSingapore 068906Tel: (65) 6227 6660

AUDITORS

KPMG Certifi ed Public AccountantsSingapore Partner-In-Charge since theFinancial year ended 31 December 2005– Tay Puay Cheng

PRINCIPAL BANKERS

ABN AMRO Bank N.V.

Calyon, Singapore Branch

Citibank N.A., Singapore Branch

DBS Bank Ltd

The Hongkong and ShanghaiBanking Corporation Limited

Oversea-Chinese BankingCorporation Limited

Standard Chartered Bank

United Overseas Bank Limited

Corporate Information

35

Contents

Directors’ Report 36

Statement by Directors 42

Report of the Auditors 43

Balance Sheets 44

Consolidated Profit and Loss Account 45

Consolidated Statement of Changes in Equity 46

Statement of Changes in Equity 49

Consolidated Statement of Cash Flows 50

Notes to the Financial Statements 52

Supplementary Information –SGX-ST Listing Manual Requirements 102

Analysis of Shareholdings 119

Notice of Annual General Meeting 121

Proxy Form

36

Directors’ ReportYear ended 31 December 2005

We are pleased to submit this annual report to the members of the Company, together with the audited financial statements for thefinancial year ended 31 December 2005.

Directors

The directors in office at the date of this report are as follows:

Richard Seow Yung Liang (Chairman) (Appointed on 10 June 2005)Sunil Chandiramani (Vice Chairman)Dr Lim Cheok Peng (Managing Director)Alain Ahkong Chuen FahDaniel Ashton Carroll (Appointed on 10 June 2005)Chang See HiangTimothy David Dattels (Appointed on 10 June 2005)Ho Kian GuanDr Ronald Ling Jih Wen (Appointed on 15 July 2005)Ashish Jaiprakash Shastry (Appointed on 10 June 2005)David R. White (Appointed on 15 July 2005)Ho Kian Hock (alternate to Ho Kian Guan)

Directors’ Interests

According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the Act), particularsof interests of directors who held office at the end of the financial year (including those held by their spouses and infant children) inshares, debentures, warrants and share options in the Company and in related corporations (other than wholly-owned subsidiaries) areas follows:

Holdings in the name Other holdings in whichName of director and corporation of the director, spouse the director is deemedin which interests are held or infant children to have an interest

At beginning At end At beginning At endof the year of the year of the year of the year

Company Ordinary Shares fully paid

Sunil Chandiramani 50,000 50,000 – –Dr Lim Cheok Peng 2,000 2,000 – –Chang See Hiang – 125,000 – –Ho Kian Guan 625,000 693,000 – 10,000,000Ho Kian Hock 50,000 100,000 – 10,000,000

Holdings at HoldingsName of director and corporation beginning of at endin which interests are held the year of the year

Parkway Share Option Scheme 2001

Options to subscribe for Ordinary Shares(exercise price at $0.865 per share and

exercisable between 10/4/2002 and 9/4/2006)

Dr Lim Cheok Peng 500,000 500,000

37


Directors’ Interests (Cont’d)

Holdings at HoldingsName of director and corporation beginning of at endin which interests are held the year of the year

Parkway Share Option Scheme 2001 (Cont’d)


Company (Cont’d) exercisable between 20/9/2002 and 19/9/2006)

Sunil Chandiramani 200,000 200,000Alain Ahkong Chuen Fah 150,000 150,000Chang See Hiang 100,000 25,000Ho Kian Guan 25,000 –Ho Kian Hock 50,000 –



Sunil Chandiramani 200,000 200,000Dr Lim Cheok Peng 500,000 500,000Alain Ahkong Chuen Fah 150,000 150,000Chang See Hiang 100,000 50,000Ho Kian Guan 50,000 25,000



Sunil Chandiramani 100,000 100,000Dr Lim Cheok Peng 500,000 500,000Alain Ahkong Chuen Fah 100,000 100,000Chang See Hiang 100,000 100,000Ho Kian Guan 75,000 57,000

Holdings atbeginning of Holdings

Name of director and corporation the year / Date at endin which interests are held of appointment of the year

Parkway Share Option Scheme 2001



Richard Seow Yung Liang – 1,000,000Sunil Chandiramani – 100,000Dr Lim Cheok Peng – 1,500,000Alain Ahkong Chuen Fah – 100,000Chang See Hiang – 100,000Ho Kian Guan – 100,000Dr Ronald Ling Jih Wen – 50,000Ashish Jaiprakash Shastry – 60,000

38


Directors’ Interests (Cont’d)

Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures,warrants or share options of the Company, or of related corporations, either at the beginning of the financial year, or date of appointmentif later, or at the end of the financial year.

Subsequent to the end of the financial year and before 21 January 2006, the following directors accepted the share options granted on9 December 2005 as follows:

Options to subscribe for OrdinaryShares (exercise price at $2.087

per share and exercisable between10/12/2006 and 9/12/2010)

Daniel Ashton Carroll 60,000Timothy David Dattels 60,000David R. White 50,000

Except as disclosed in this report, there were no changes in any of the above-mentioned interests in the Company between the end ofthe financial year and 21 January 2006.

Except as disclosed under the “Share Options” section of this report, neither at the end of, nor at any time during the financial year, wasthe Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company toacquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

During the year, certain transactions were made between the Company and/or its subsidiaries and its directors, or the subsidiaries’directors or a firm in which one of the directors is a member or companies in which the directors of the Company or its subsidiaries havesubstantial financial interest in the ordinary course of business. However, these directors have neither received nor will they becomeentitled to receive any benefit from these transactions other than as suppliers, directors and members of these firms/companies.

Except for salaries, bonuses and fees and those benefits that are disclosed in this report and in notes 23 and 29 to the financialstatements, since the end of the last financial year, no director has received or become entitled to receive, a benefit by reason of acontract made by the Company or a related corporation with the director, or with a firm of which he is a member or with a company inwhich he has a substantial financial interest.

Share Options

Parkway Share Option Scheme 2001 (Parkway Scheme 2001)

The Parkway Scheme 2001 was approved by the shareholders of the Company at an Extraordinary General Meeting held on 18 January2001. Details of the Parkway Scheme 2001 and amendments effected by a resolution passed at the Extraordinary General Meeting ofthe Company held on 4 July 2001 were set out in the Directors’ Report for the year ended 31 December 2001. The Parkway Scheme2001 is administered by the Company’s Share Option Scheme Committee, comprising 4 directors, Timothy David Dattels, Richard SeowYung Liang, Sunil Chandiramani and Ashish Jaiprakash Shastry.

Information regarding the Parkway Scheme 2001 is set out below:

(i) The exercise price of the option is determined at the average of the last dealt price of the Company’s shares on the SingaporeExchange Securities Trading Limited (SGX-ST) prevailing on the three consecutive trading days immediately preceding the date ofgrant of such options.

(ii) The options vest one year after the grant date in accordance with the vesting schedule set out below:

Percentage of shares over whichVesting schedule the options are exercisable

On or before the first anniversary of the grant date NilAfter the first anniversary, and on or before the second anniversary of the grant date 25%After the second anniversary, and on or before the third anniversary of the grant date 50%After the third anniversary, and on or before the fourth anniversary of the grant date 75%After the fourth anniversary, and on or before the fifth anniversary of the grant date 100%

39


Share Options (Cont’d)

Parkway Share Option Scheme 2001 (Parkway Scheme 2001) (Cont’d)

(iii) The options granted expire on the fifth anniversary of the grant date unless they have been cancelled or have lapsed prior tothat date.

At the end of the financial year, details of the options granted under the Parkway Scheme 2001 on the unissued ordinary shares of theCompany are as follows:

NumberOptions Options of option

Date of Exercise outstanding outstanding holdersgrant of price per at 1 Jan Options Options Options at 31 Dec at 31 Dec Exerciseoptions share 2005 granted exercised cancelled 2005 2005 period

9/4/2001 $0.8650 1,869,750 – 1,120,750 13,000 736,000 16 10/4/2002 to9/4/2006

8/5/2001 $0.9933 100,000 – 100,000 – – – 9/5/2002 to8/5/2006

19/9/2001 $0.9400 1,115,000 – 652,500 87,500 375,000 3 20/9/2002 to19/9/2006

19/4/2002 $0.8350 5,237,250 – 2,040,500 200,000 2,996,750 202 20/4/2003 to19/4/2007

19/11/2004 $1.4267 2,600,000 – 188,000 275,000 2,137,000 29 20/11/2005 to19/11/2009

15/11/2005 $2.053 – 3,855,000 – – 3,855,000 59 16/11/2006 to15/11/2010

9/12/2005 $2.087 – 3,010,000# – – 3,010,000 8 10/12/2006 to9/12/2010

10,922,000 6,865,000 4,101,750 575,500 13,109,750

# Excludes 170,000 options granted on 9 December 2005 but accepted only subsequent to the end of the financial year.

Details of options granted to directors of the Company under the Parkway Scheme 2001 are as follows:

Aggregate Aggregate AggregateOptions options granted options options Aggregate

granted for since exercised since cancelled since optionsfinancial commencement commencement commencement outstanding

year ended of scheme to of scheme to of scheme to as atName of director 31 Dec 2005 31 Dec 2005 31 Dec 2005 31 Dec 2005 31 Dec 2005

Richard Seow Yung Liang 1,000,000 1,000,000 – – 1,000,000Sunil Chandiramani 100,000 600,000 – – 600,000Dr Lim Cheok Peng 1,500,000 3,000,000 – – 3,000,000Alain Ahkong Chuen Fah 100,000 500,000 – – 500,000Daniel Ashton Carroll 60,000 60,000 – – – *Chang See Hiang 100,000 400,000 125,000 – 275,000Timothy David Dattels 60,000 60,000 – – – *Ho Kian Guan 100,000 375,000 193,000 – 182,000Dr Ronald Ling Jih Wen 50,000 50,000 – – 50,000Ashish Jaiprakash Shastry 60,000 60,000 – – 60,000David R. White 50,000 50,000 – – – *Ho Kian Hock – 100,000 100,000 – –

*The options granted were accepted subsequent to the end of the financial year.

Since the commencement of the Parkway Scheme 2001, no options have been granted to the controlling shareholders of the Companyor their associates.

40


Share Options (Cont’d)


Since the commencement of the Parkway Scheme 2001, no participant under the Parkway Scheme 2001 has been granted 5% or moreof the total options available under the Parkway Scheme 2001.

During the financial year, 6,865,000 options were granted to and accepted by the employees and non-executive directors of theCompany and its subsidiaries under the Parkway Scheme 2001. 19,295,000 options have been granted to the employees andnon-executive directors of the Company and its subsidiaries since the commencement of the Parkway Scheme 2001 to the end of thefinancial year under review.

Subsequent to the balance sheet date, 170,000 share options which were granted during the financial year were accepted while296,500 share options were exercised under the Parkway Scheme 2001.

Except as disclosed above, there were no unissued shares of the Company or its subsidiaries under options granted by the Company orits subsidiaries as at the end of the financial year.

The options granted by the Company and its subsidiaries do not entitle the holders of the options, by virtue of such holding, to any rightsto participate in any share issue of any other company.

Audit Committee

The members of the Audit Committee during the year and at the date of this report are as follows:

Alain Ahkong Chuen Fah (Chairman), non-executive directorChang See Hiang, non-executive directorHo Kian Guan, non-executive directorAshish Jaiprakash Shastry, non-executive directorAng Guan Seng, non-executive director*

*resigned on 10 June 2005

The Audit Committee performs the functions specified in Section 201B of the Act, the SGX-ST Listing Manual (the Listing Manual), theSGX-ST Best Practices Guide and the Code of Corporate Governance.

The Audit Committee met four times during the year.

The principal responsibility of the Audit Committee is to assist the Board of Directors in the identification and monitoring of areas ofsignificant business risks including the following:

• the effectiveness of the management of principal business risks;

• the effectiveness of the management of financial business risks and the reliability of management and financial reporting;

• compliance with laws and regulations, particularly those of the Act and the Listing Manual, and its own code of business conduct;

• the appropriateness of quarterly and full year announcements and reports;

• the effectiveness of the Group’s system of internal controls;

• the effectiveness and efficiency of internal and external audits; and

• interested person transactions.

41


Audit Committee (Cont’d)

Specific functions of the Audit Committee include reviewing the scope of work of the internal and external auditors, reviewing the levelof assistance provided by the Company’s officers to the internal and external auditors, receiving and considering the reports of theinternal and external auditors, and ensuring that management responds to recommendations made by the internal and external auditors.The committee also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees.

In addition, the Audit Committee has, in accordance with Chapter 9 of the Listing Manual, reviewed the requirements for approval anddisclosure of interested person transactions, and with the assistance of the internal auditors, reviewed the interested person transactions.

The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has fullauthority and discretion to invite any director or executive officer to attend its meetings.

The Audit Committee carried out a review of the external auditors’ remuneration, non-audit services provided by the external auditors,and the independence of the external auditors as required under Section 206(1A) of the Act and Rule 1207(6b) of the Listing Manualand determined that the auditors were independent in carrying out their audit of the financial statements. The Audit Committee hasrecommended to the Board of Directors that the auditors, KPMG, be nominated for re-appointment as auditors at the forthcomingAnnual General Meeting of the Company.

The auditors, KPMG, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

Richard Seow Yung LiangDirector

Dr Lim Cheok PengDirector

24 February 2006

42

Statement by DirectorsYear ended 31 December 2005

In our opinion:

(a) the financial statements set out on pages 44 to 101 are drawn up so as to give a true and fair view of the state of affairs of the Groupand of the Company as at 31 December 2005 and of the results, changes in equity and cash flows of the Group and of the changesin equity of the Company for the year ended on that date; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and whenthey fall due.

The Board of Directors has, on the date of this statement, authorised these financial statements for issue.

On behalf of the Board of Directors

Richard Seow Yung LiangDirector

Dr Lim Cheok PengDirector

24 February 2006

43

Report of the Auditorsto the Members of Parkway Holdings Limited

We have audited the accompanying financial statements of Parkway Holdings Limited and its subsidiaries for the year ended 31December 2005 as set out on pages 44 to 101. These financial statements are the responsibility of the Company’s directors. Ourresponsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:

(a) the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company areproperly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (the Act) and Singapore Financial ReportingStandards to give a true and fair view of the state of affairs of the Group and of the Company as at31 December 2005 and of the results, changes in equity and cash flows of the Group and of the changes in equity of the Companyfor the year ended on that date; and

(b) the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated inSingapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

KPMGCertified Public Accountants

Singapore

24 February 2006

44

Balance Sheetsas at 31 December 2005

Group Company

Note 2005 2004 2005 2004$’000 $’000 $’000 $’000

Non-current assetsProperty, plant and equipment 3 765,830 542,873 – –Intangible assets 4 180,901 31,361 – –Interests in subsidiaries 5 – – 690,137 546,689Interests in associates 6 54,390 14,362 (4,329) (4,524)Interests in partnerships 7 123 191 – –Other financial assets 8 28,884 46,656 – –Notes receivables 9 35,463 42,106 35,463 42,106Deferred tax assets 10 1,813 – 212 –

1,067,404 677,549 721,483 584,271

Current assetsCompleted properties held for resale 11 579 579 – –Inventories 12 16,947 10,063 – –Trade receivables 13 75,413 32,886 – –Other receivables, deposits and prepayments 14 23,696 9,336 437 634Tax recoverable 7,875 4,066 2,118 2,967Notes receivables 9 6,021 6,194 6,021 6,194Other financial assets 8 220 211 – –Cash and cash equivalents 15 106,024 196,165 8,692 174,125

236,775 259,500 17,268 183,920

Total assets 1,304,179 937,049 738,751 768,191

Equity attributable to equity holders of the CompanyShare capital 16 181,753 180,728 181,753 180,728Share premium 18 114,041 111,412 114,041 111,412Other reserves 18 (20,517) (5,048) 12,968 12,691Accumulated profits 140,240 137,935 116,214 120,233

415,517 425,027 424,976 425,064Minority interests 231,230 9,548 – –

Total equity 646,747 434,575 424,976 425,064

Non-current liabilitiesInterest-bearing borrowings 19 394,611 310,793 310,000 310,000Deferred tax liabilities 10 35,541 27,970 – 35

430,152 338,763 310,000 310,035Current liabilitiesBank overdrafts 15 3,349 997 – –Trade payables and accrued operating expenses 112,600 55,641 3,213 2,582Other payables 20 39,455 10,180 562 510Interest-bearing borrowings 19 44,178 77,326 – 30,000Employee benefits 17 2,455 2,188 – –Current tax payable 25,243 17,379 – –

227,280 163,711 3,775 33,092

Total liabilities 657,432 502,474 313,775 343,127

Total equity and liabilities 1,304,179 937,049 738,751 768,191

The accompanying notes form an integral part of these financial statements.

45

Consolidated Profit and Loss AccountYear ended 31 December 2005

Group

Note 2005 2004$’000 $’000

Revenue 21 548,971 407,832Other operating income 18,231 16,524Inventories and consumables used (134,140) (64,568)Purchased and contracted services (42,682) (36,370)Costs of investments/properties sold – (327)Depreciation and impairment losses of property, plant and equipment 3 (34,245) (30,713)Amortisation of intangible assets 4 (3,499) (1,811)Staff costs (184,460) (155,693)Other operating expenses (69,818) (59,981)Finance costs (10,056) (5,103)Share of profits/(losses) of associates 720 (2,102)Share of profits of partnerships 7 376 288

Profit from operations before taxation 22 89,398 67,976

Income tax expense 24 (22,008) (15,232)

Profit for the year 67,390 52,744

Attributable to:Equity holders of the Company 61,969 50,463Minority interests 5,421 2,281

Profit for the year 67,390 52,744

Earnings per share (cents):Basic 25 8.55 7.00

Diluted 25 8.51 6.97


46

Consolidated Statement of Changes in EquityYear ended 31 December 2005

Totalattributable

Exchange Fair Share to equityShare Share fluctuation value option Accumulated holders of Minority Total

Note capital premium reserves reserve reserve profits the Company interests equity$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

At 1 January 2004 179,996 116,493 (6,144) – – 140,155 430,500 8,492 438,992

Exchange differences onretranslation of openingnet assets of foreignsubsidiaries and associates – – (835) – – – (835) (285) (1,120)

Effects arising on disposal ofan associate – (6,890) (787) – – (3,645) (11,322) – (11,322)

Net losses recogniseddirectly in equity – (6,890) (1,622) – – (3,645) (12,157) (285) (12,442)

Exchange loss on long-termforeign investmentsnow realised – – 2,683 – – – 2,683 – 2,683

Net profit for the year – – – – – 50,463 50,463 2,281 52,744

Total recognised income andexpense for the year – (6,890) 1,061 – – 46,818 40,989 1,996 42,985

Issue of shares under shareoption scheme 16 732 1,809 – – – – 2,541 – 2,541

Value of employee servicesreceived for issue of shareoptions – – – – 35 – 35 – 35

Final dividend paid of4.0 cents per shareless tax at 20% in respectof year 2003 – – – – – (23,056) (23,056) – (23,056)

Interim dividend paid of4.5 cents per shareless tax at 20% – – – – – (25,982) (25,982) – (25,982)

Dividends paid to minorityshareholders – – – – – – – (940) (940)

At 31 December 2004 180,728 111,412 (5,083) – 35 137,935 425,027 9,548 434,575


47


Totalattributable



Group

At 31 December 2004,as previously reported 180,728 111,412 (5,083) – – 137,970 425,027 9,548 434,575

Effects of adopting FRS 102 – – – – 35 (35) – – –

At 31 December 2004, restated 180,728 111,412 (5,083) – 35 137,935 425,027 9,548 434,575

Effects of adopting FRS 39 – – – (13,398) – (1,665) (15,063) – (15,063)

At 1 January 2005, restated 180,728 111,412 (5,083) (13,398) 35 136,270 409,964 9,548 419,512

Exchange differences onretranslation of openingnet assets of foreignsubsidiaries and associates – – (1,582) – – – (1,582) (2,766) (4,348)

Changes in fair value ofavailable-for-salefinancial assets – – – (368) – – (368) – (368)

Net losses recogniseddirectly in equity – – (1,582) (368) – – (1,950) (2,766) (4,716)

Effects on disposal ofavailable-for-salefinancial assets – – – (464) – – (464) – (464)

Effects arising on disposalof subsidiaries 28 – – 18 – – – 18 (684) (666)

Net profit for the year – – – – – 61,969 61,969 5,421 67,390

Total recognised income andexpense for the year – – (1,564) (832) – 61,969 59,573 1,971 61,544

Balance carried forward 180,728 111,412 (6,647) (14,230) 35 198,239 469,537 11,519 481,056


48


Totalattributable



Group

Balance brought forward 180,728 111,412 (6,647) (14,230) 35 198,239 469,537 11,519 481,056

Issue of shares undershare option scheme 16 1,025 2,629 – – – – 3,654 – 3,654

Value of employee servicesreceived for issue ofshare options – – – – 325 – 325 119 444

Effects arising on acquisitionof subsidiaries 28 – – – – – – – 216,980 216,980

Effects arising on dilution ofinterests in subsidiaries – – – – – – – 7,064 7,064

Final dividend paid of4.5 cents per shareless tax at 20%in respect of year 2004 – – – – – (26,068) (26,068) – (26,068)

Interim dividend paid of5.5 cents per shareless tax at 20% – – – – – (31,931) (31,931) – (31,931)

Dividend paid tominority shareholders – – – – – – – (4,452) (4,452)

At 31 December 2005 181,753 114,041 (6,647) (14,230) 360 140,240 415,517 231,230 646,747


49

Statement of Changes in EquityYear ended 31 December 2005

Share Share Capital Share option AccumulatedNote capital premium reserves reserve profits Total

$’000 $’000 $’000 $’000 $’000 $’000

Company

At 1 January 2004 179,996 109,603 12,656 – 106,953 409,208

Net profit for the year – – – – 62,318 62,318

Total recognised income andexpense for the year – – – – 62,318 62,318

Issue of shares undershare option scheme 16 732 1,809 – – – 2,541

Value of employee servicesreceived for issue of share options – – – 35 – 35

Final dividend paid of 4.0 centsper share less tax at 20%in respect of year 2003 – – – – (23,056) (23,056)

Interim dividend paid of 4.5 centsper share less tax at 20% – – – – (25,982) (25,982)

At 31 December 2004 180,728 111,412 12,656 35 120,233 425,064

At 31 December 2004,as previously reported 180,728 111,412 12,656 – 120,268 425,064

Effects of adopting FRS 102 – – – 35 (35) –

At 31 December 2004, restated 180,728 111,412 12,656 35 120,233 425,064

Effects of adopting FRS 39 – – – – (1,665) (1,665)

At 1 January 2005, restated 180,728 111,412 12,656 35 118,568 423,399

Net profit for the year – – – – 55,645 55,645

Total recognised income andexpense for the year – – – – 55,645 55,645

Issue of shares undershare option scheme 16 1,025 2,629 – – – 3,654

Value of employee servicesreceived for issue of share options – – – 277 – 277

Final dividend paid of 4.5 centsper share less tax at 20%in respect of year 2004 – – – – (26,068) (26,068)

Interim dividend paid of 5.5 centsper share less tax at 20% – – – – (31,931) (31,931)

At 31 December 2005 181,753 114,041 12,656 312 116,214 424,976


50

Consolidated Statement of Cash FlowsYear ended 31 December 2005

Group

2005 2004$’000 $’000

Operating activitiesProfit from operations before taxation 89,398 67,976

Adjustments for:Exchange difference (573) 4,037Depreciation and impairment losses of property, plant and equipment 34,245 30,713Amortisation of intangible assets 3,499 1,811Allowance for doubtful receivables from associates 516 1,848Impairment loss on/Allowance for diminution in value of non-current available-for-sale financial assets 1,557 1,447Gain on disposal of non-current equity investments (283) (647)Loss/(Gain) on disposal of property, plant and equipment 462 (92)Loss on dilution of interests in subsidiaries 2,141 –Loss on disposal of subsidiaries 92 –Gain on disposal of an associate – (3,461)Share of (profits)/losses of associates (720) 2,102Share of profits of partnerships (376) (288)Share option expense 444 35Dividend income (1,616) (1,750)Interest income (3,025) (1,158)Interest expense 10,056 5,103Loan forgiven by former corporate shareholder of a subsidiary (1,150) (500)

Operating profit before working capital changes 134,667 107,176

Changes in working capital:Inventories (612) (69)Trade and other receivables (20,840) 339Financial assets available-for-sale and held for trading (4) 12Trade and other payables 20,523 (1,376)

Cash generated from operations 133,734 106,082

Income taxes paid (13,951) (8,898)

Cash flows from operating activities carried forward 119,783 97,184

51

Consolidated Statement of Cash FlowsYear ended 31 December 2005

Group

Note 2005 2004$’000 $’000

Cash flows from operating activities brought forward 119,783 97,184

Investing activitiesPurchase of property, plant and equipment (36,959) (24,911)Proceeds from redemption of notes receivables 6,205 –Proceeds from sale of property, plant and equipment 3,307 2,857Acquisition of subsidiaries, net of cash acquired 28 (102,369) –Investments in associates (2,300) (1,074)Proceeds from disposal of subsidiaries (net) 1,559 –Proceeds from liquidation of associates – 174Net repayment by/(Advances to) associates 272 (1,405)Interests in partnerships 444 150Proceeds from disposal of non-current equity investments 2,801 4,920Dividends received 1,616 1,750Interest received 2,045 835Partial proceeds from disposal of an associate (net) – 12,140

Cash flows from investing activities (123,379) (4,564)

Financing activitiesIssue of shares under share option scheme 3,654 2,541Repayment of bank loans (89,127) (43,440)Proceeds from bank loans 80,600 40,000Repayment of finance lease obligations (1,424) (416)Issue of floating rate notes – 430,000Redemption of floating rate notes (30,000) (452,000)Repurchase of floating rate notes (77,000) –Re-issue of floating rate notes 77,000 –Issue of fixed rate notes – 150,000Interest paid (8,891) (4,129)Dividends paid (57,999) (49,038)Issue of shares to minority shareholders 6,125 –Dividends paid to minority shareholders (4,452) (940)Pledged deposits withdrawn from sinking fund 54 –

Cash flows from financing activities (101,460) 72,578

Net (decrease)/increase in cash and cash equivalents (105,056) 165,198Cash and cash equivalents at beginning of the year 195,168 29,925Exchange fluctuation on cash and cash equivalents (991) 45

Cash and cash equivalents at end of the year 15 89,121 195,168

During the year, property, plant and equipment amounting to $1,686,000 (2004: $341,000) was acquired under finance leases.


52

Notes to the Financial Statements31 December 2005

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the directors on 24 February 2006.

1 Domicile and Activities

Parkway Holdings Limited (the Company) is incorporated in the Republic of Singapore and has its registered office at No. 1 GrangeRoad, #11-01 Orchard Building, Singapore 239693.

The principal activities of the Company are those relating to investment holding while those of the subsidiaries consist of thebusiness of private hospital ownership and management and related healthcare services, ownership and management of medicalclinics, practice of dental surgeons and the operation of dental clinics, provision of clinical research services, ownership andmanagement of radiology clinics, provision of comprehensive diagnostic laboratory services, provision of managed care and relatedservices, underwriting of accident and healthcare insurance policies, and investment holding and trading.

The consolidated financial statements relate to the Company and its subsidiaries (referred to as the Group) and the Group’sinterests in associates and partnerships.

2 Summary of Significant Accounting Policies

2.1 Basis of preparation

The financial statements are prepared in accordance with Singapore Financial Reporting Standards (FRS) including relatedInterpretations promulgated by the Council on Corporate Disclosure and Governance.

In 2005, the Group adopted the following new/revised FRSs which are relevant to its operations:

FRS 1 (revised) Presentation of Financial StatementsFRS 2 (revised) InventoriesFRS 8 (revised) Accounting Policies, Changes in Accounting Estimates and ErrorsFRS 10 (revised) Events after the Balances Sheet DateFRS 16 (revised) Property, Plant and EquipmentFRS 17 (revised) LeasesFRS 21 (revised) The Effects of Changes in Foreign Exchange RatesFRS 24 (revised) Related Party DisclosuresFRS 27 (revised) Consolidated and Separate Financial StatementsFRS 28 (revised) Investments in AssociatesFRS 32 (revised) Financial Instruments: Disclosure and PresentationFRS 33 (revised) Earnings Per ShareFRS 36 (revised) Impairment of AssetsFRS 38 (revised) Intangible AssetsFRS 39 Financial Instruments: Recognition and MeasurementFRS 102 Share-based PaymentFRS 103 Business CombinationsFRS 104 Insurance Contracts

The effects of adopting the new/revised FRSs in 2005 are set out in note 26.

The financial statements are presented in Singapore dollars and rounded to the nearest thousand, unless otherwise stated. Theyare prepared on the historical cost basis except for certain financial assets and financial liabilities which are stated at fair value.

The preparation of financial statements in conformity with FRSs requires management to make judgements, estimates andassumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimatesand associated assumptions are based on historical experience and various other factors that are believed to be reasonable underthe circumstances, the results of which form the basis of making the judgements about carrying amounts of assets and liabilitiesthat are not readily apparent from other sources.

53


2 Summary of Significant Accounting Policies (Cont’d)

2.1 Basis of preparation (Cont’d)

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised inthe period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods,if the revision affects both current and future periods.

Judgements made by management in the application of FRSs that have a significant effect on the financial statements and inarriving at estimates wih a significant risk of material adjustment in the following year are discussed in note 35.

2.2 Consolidation

Subsidiaries are those companies controlled by the Company. Control exists when the Company has the power, directly or indirectly,to govern the financial and operating policies of a company so as to obtain benefits from its activities.

Investments in subsidiaries are stated in the Company’s balance sheet at cost less impairment losses. The financial statements ofsubsidiaries are included in the consolidated financial statements from the date that control commences until the date that controlceases.

Associates are companies in which the Group has significant influence, but not control, over the financial and operating policies.

Investments in associates are stated in the Company’s balance sheet at cost less impairment losses. In the Group’s financialstatements, they are accounted for using the equity method of accounting from the date that significant influence commencesuntil the date that significant influence ceases. The Group’s investment in these entities includes goodwill on acquisition. When theGroup’s share of losses exceeds the carrying amount of its interest in the associate, the carrying amount is fully written down andrecognition of further losses is discontinued except to the extent that the Group has incurred obligations in respect of the associate.

Partnerships are those entities where the Group exercises joint control with the other partners over the financial and operationaldecisions.

Investments in partnerships are accounted for using the equity method of accounting from the date that partnership commencesuntil the date that partnership ceases.

Business combinations are accounted for under the purchase method. The cost of an acquisition is measured at the fair value ofthe assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributableto the acquisition.

The excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost ofacquisition is credited to the profit and loss account in the period of the acquisition.

All significant intra group transactions, balances and unrealised gains or losses are eliminated on consolidation. Unrealised gainsresulting from transactions with associates are eliminated to the extent of the Group’s interest in the enterprise. Unrealised lossesare eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

2.3 Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated at foreign exchange rates ruling at the dates of the transactions. Monetary assetsand liabilities denominated in foreign currencies at the balance sheet date are translated into Singapore dollars at foreign exchangerate ruling at that date. Foreign exchange differences arising from translation are recognised in the profit and loss account.Non-monetary assets and liabilities measured at cost in foreign currencies are translated using exchange rates at the date of thetransaction. Non-monetary assets and liabilities measured at fair value in foreign currencies are translated to Singapore dollars atforeign exchange rates ruling at the dates the fair value was determined.

Net investment in a foreign operation

Exchange differences arising from monetary items that in substance form part of the Company’s net investment in a foreignoperation, are recognised in the Company’s profit and loss account. Such exchange differences are reclassified to equity in theconsolidated financial statements only when the loan is denominated in either the functional currency of the Company or theforeign operation. Deferred exchange differences are released to the profit and loss account upon disposal of the investment.

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2.3 Foreign currencies (Cont’d)

Foreign operations

Assets and liabilities of foreign operations are translated into Singapore dollars for consolidation at the rates of exchange ruling atthe balance sheet date. Revenue and expenses of foreign operations are translated at exchange rates ruling at the dates ofthe transactions. Goodwill and fair value adjustments arising on the acquisition of foreign operations after1 January 2005 are translated into Singapore dollars at the rates of exchange ruling at the balance sheet date. However, goodwilland fair value adjustments arising on the acquisition of foreign operations before 1 January 2005 continued to be translated intoSingapore dollars at exchange rates ruling on transaction dates. Exchange differences arising on translation are recognised directlyin the exchange fluctuation reserves. On disposal, the accumulated translation differences are recognised in the consolidatedprofit and loss account as part of the gain or loss on disposal.

2.4 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Property, plant and equipment acquired through finance leases are capitalised at the lower of its fair value and the present valueof the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Leasepayments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate ofinterest on the remaining balance of the liability. Finance charges are charged directly against the profit and loss account. Capitalisedleased assets are depreciated over the shorter of the economic useful life of the asset and the lease term.

Depreciation is provided on a straight-line basis so as to write off items of property, plant and equipment over their estimated usefullives as follows:

Leasehold land – remaining term of the leaseFreehold buildings – 2%Freehold medical centre suites – 2%Leasehold buildings – 2%Leasehold office premises – 2%Renovation and improvements – 4% to 33 1/3%Hospital and medical equipment, and furniture, fittings and equipment – 6 2/3% to 33 1/3%Motor vehicles – 20%

No depreciation is provided on freehold land and construction in progress. In respect of fully depreciated or impaired assets,the cost and accumulated depreciation and impairment losses are retained in the financial statements until they are no longer in use.

The useful lives and residual values, if not insignificant, are reassessed annually.

2.5 Intangible assets

Goodwill

Goodwill in a business combination represents the excess of the cost of acquisition over the fair value of the Group’s share of theidentifiable net assets acquired. Goodwill is stated at cost less impairment losses. Goodwill on the acquisition of subsidiaries ispresented as intangible assets. Goodwill on acquisition of associates is included in interests in associates. In arriving at the gain orloss on disposal of an entity, the balance of goodwill after impairment losses relating to the entity disposed of is included as part ofthe cost of investment.

Goodwill is tested for impairment on an annual basis as described in note 2.13.

Goodwill that has previously been taken to reserves is not taken to the profit and loss account when (a) the business is disposed or(b) the goodwill is impaired. Similarly, negative goodwill that has previously been taken to reserves is not taken to the profit and lossaccount when the business is disposed of.

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2.5 Intangible assets (Cont’d)

Other intangible assets

Other intangible assets with finite lives are stated at cost less accumulated amortisation and impairment losses. Other intangible assetsare amortised on a straight-line basis from the date the asset is available for use and over its estimated useful lives of 6 to 10 years.

Intangible assets that have indefinite lives or that are not available for use are stated at cost less impairment losses. Such intangibleassets are tested for impairment annually as described in note 2.13.

2.6 Investments

Financial instruments held for trading are classified as current assets and are stated at fair value, with any resultant gain or lossrecognised in the profit and loss account.

When the Group has the positive intent and ability to hold debt securities to maturity, they are stated at amortised cost lessimpairment losses.

Other financial instruments held by the Group are classified as being available-for-sale and are stated at fair value, with anyresultant gain or loss being recognised directly in equity. The exceptions are impairment losses and foreign exchange gains andlosses on monetary items such as debt securities, which are recognised in the profit and loss account. When these investments arederecognised, the cumulative gain or loss previously recognised directly in equity is recognised in the profit and loss account.Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in the profit andloss account.

The fair value of financial instruments classified as held-for-trading and available-for-sale is determined as the quoted bid price atthe balance sheet date.

Financial instruments are recognised by the Group on the date it receives the investments, and derecognised on the date the assetis delivered by the Group. Changes in fair value of held-for-trading and available-for-sale financial instruments between the tradedate and the settlement date are recognised in the profit and loss account and equity respectively.

2.7 Derivatives

Derivative financial instruments are used to manage exposures to foreign exchange and interest rate risks arising from financingand investment activities. Derivative financial instruments are not used for trading purposes. However, derivatives that do notqualify for hedge accounting are accounted for as trading instruments.

Derivative financial instruments are recognised initially at fair value. Subsequently to initial recognition, derivative financial instrumentsare remeasured at fair value. The gain or loss on remeasurement to fair value is recognised immediately in the profit and loss account.

The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap at thebalance sheet date, taking into account current interest rates and the current credit worthiness of the swap counterparties. The fairvalue of forward exchange contracts is their quoted market price at the balance sheet date, being the present value of the quotedforward price.

2.8 Hedging

Hedge of monetary assets and liabilities

Where a derivative financial instrument is used to hedge economically the foreign exchange exposure of a recognised monetary assetor liability, no hedge accounting is applied and any gain or loss on the hedging instrument is recognised in the profit and loss account.

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2.8 Hedging (Cont’d)

Cash flow hedge

Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability, ora highly probable forecast transaction, the effective part of any gain or loss on the derivative financial instrument is recogniseddirectly in equity. When the forecast transaction subsequently results in the recognition of a non-financial asset or non-financialliability, or the forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for which fairvalue hedge accounting is applied, the associated cumulative gain or loss is removed from equity and included in the initial cost orother carrying amount of the non-financial asset or liability. If a hedge of a forecast transaction subsequently results in the recognitionof a financial asset or financial liability, the associated gains or losses that were recognised directly in equity are reclassified into theprofit and loss account in the same period or periods during which the asset acquired or liability assumed affects the profit and lossaccount (i.e. when interest income or expense is recognised). For other cash flow hedges, the associated cumulative gain or lossis removed from equity and recognised in the profit and loss account in the same period or periods during which the hedgedforecast transaction affects the profit and loss account. The ineffective part of any gain or loss is recognised immediately in theprofit and loss account.

When a hedging instrument expires or is sold, terminated or exercised, or the entity revokes designation of the hedge relationshipbut the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity and isrecognised in accordance with the above policy when the transaction occurs. If the hedged transaction is no longer expected totake place, the cumulative unrealised gain or loss recognised in equity is recognised immediately in the profit and loss account.

Fair value hedge

Where a derivative financial instrument hedges the changes in fair value of a recognised asset or liability or an unrecognised firmcommitment (or an identified portion of such asset, liability or firm commitment), any gain or loss on the hedging instrument isrecognised in the profit and loss account. The hedged item is also stated at fair value in respect of the risk being hedged, with anygain or loss recognised in the profit and loss account.

2.9 Completed properties held for resale

Completed properties are those properties which are held with the intention of sale in the ordinary course of business and areclassified as current assets.

All completed properties held for resale are stated at the lower of cost and estimated net realisable value.

2.10 Inventories

Inventories comprising mainly pharmacy, hospital and surgical supplies are stated at the lower of cost and net realisable value.

Cost is calculated using the weighted average cost formula and comprises all costs of purchase and other costs incurred in bringingthe inventories to their present location and condition. Due allowance is made for all damaged, expired and slow moving items.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to makethe sale.

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the relatedrevenue is recognised. The amount of any allowance for write-down of inventories to net realisable value and all losses of inventoriesare recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any allowance for write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventoriesrecognised as an expense in the period in which the reversal occurs.

2.11 Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effectiveinterest method, less allowances for impairment.

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2.12 Cash and cash equivalents

Cash and cash equivalents comprise cash and bank balances, bank deposits and commercial papers. For the purpose of thestatement of cash flows, cash and cash equivalents are presented net of bank overdrafts which are repayable on demand andwhich form an integral part of the Group’s cash management.

2.13 Impairment

The carrying amounts of the Group’s assets, other than inventories, are reviewed at each balance sheet date to determine whetherthere is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverableamount. Impairment losses are charged to the profit and loss account.

Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairmentannually and as and when indicators of impairment are identified.

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwillallocated to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets in the unit (groupof units) on a pro rated basis.

When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objectiveevidence that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised inthe profit and loss account even though the financial asset has not been derecognised. The amount of the cumulative loss that isrecognised in the profit and loss account is the difference between the acquisition cost and current fair value, less any impairmentloss on that financial asset previously recognised in the profit and loss account.

Calculation of recoverable amount

The recoverable amount of the Group’s investment in held-to-maturity securities and receivables carried at amortised cost iscalculated as the present value of estimated future cash flows, discounted at the original effective interest rate (i.e. the effectiveinterest rate computed at initial recognition of these financial assets). Receivables with a short duration are not discounted.

The recoverable amount of other assets is the greater of their net selling price and value in use. In assessing value in use, theestimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current marketassessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independentcash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belong.

Reversal of impairment

An impairment loss in respect of a held-to-maturity security or receivable carried at amortised cost is reversed if the subsequentincrease in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised.

An impairment loss in respect of an investment in an equity instrument classified as available-for-sale is not reversed through theprofit and loss account. If the fair value of a debt instrument classified as available-for-sale increases and the increase can beobjectively related to an event occurring after the impairment loss was recognised in the profit and loss account, the impairmentloss shall be reversed, with the amount of the reversal recognised in the profit and loss account.

An impairment loss in respect of other assets is reversed if there has been a change in the estimates used to determine therecoverable amount. However, an impairment loss in respect of goodwill is not reversed.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that wouldhave been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

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2.14 Liabilities and interest-bearing borrowings

Trade and other payables are recognised initially at fair value. Interest-bearing borrowings are recognised initially at fair value lessattributable transaction costs. Subsequent to initial recognition, trade and other payables and interest-bearing borrowings arestated at amortised cost with any difference between cost and redemption value being recognised in the profit and loss accountover the period of the borrowings on an effective interest basis.

2.15 Employee benefits

Share-based payments

The share option programme allows the Group employees and non-executive directors to acquire shares of the Company. The fairvalue of options granted is recognised as an expense in the profit and loss account with a corresponding increase in equity. Thefair value is measured at grant date and spread over the period during which the holders become unconditionally entitled to theoptions. At each balance sheet date, the Company revises its estimates of the number of options that are expected to becomeexercisable. It recognises the impact of the revision of original estimates in share option expense and in a corresponding adjustmentto equity over the remaining vesting period.

The proceeds received net of any directly attributable transactions costs are credited to share capital (nominal value) and sharepremium when the options are exercised.

Defined contribution plan

Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss accountas incurred.

Short-term compensated absences

Short-term accumulating compensated absences are recognised when the employees render service that increases their entitlementto future compensated absences.

2.16 Income tax

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the profit and lossaccount except where it relates to items recognised directly to equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using the tax rates enacted or substantively enacted atthe balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets andliabilities and their carrying amounts in the financial statements. Temporary differences are not recognised for goodwill not deductiblefor tax purposes and for the initial recognition of assets or liabilities that affect neither accounting nor taxable profit. The amountof deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets andliabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available against which thetemporary differences can be utilised.

Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timingof the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not be reversedin the foreseeable future.

2.17 Share capital

Dividends

Dividends on ordinary shares are recognised as a liability in the period in which they are declared.

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2.18 Revenue recognition

Performance of services

Revenue from the performance of services is recognised on the completion of services rendered.

Sales of completed properties held for resale

Profit from the sale of completed properties is recognised when the units are sold and the corresponding costs are then taken tothe profit and loss account. Allowance is made for anticipated losses if and when they can be determined.

Rental income

Rental income receivable under operating leases is recognised in the profit and loss account on a straight-line basis over the termof the lease. Lease incentives granted are recognised as an integral part of the total rental income to be received. Contingentrentals are recognised as income in the accounting period in which they are earned.

Dividends

Dividend income is recognised in the profit and loss account when the shareholder’s right to receive payment is established.

Interest income

Interest income from bank deposits, commercial papers and notes is accrued on a time-apportioned basis.

2.19 Operating leases

Where the Group has the use of assets under operating leases, payments made under the leases are recognised in the profit andloss account on a straight-line basis over the term of the lease. Lease incentives received are recognised in the profit and lossaccount as an integral part of the total lease payments made. Contingent rentals are charged to the profit and loss account in theaccounting period in which they are incurred.

2.20 Finance costs

Interest expense and similar charges are expensed in the profit and loss account in the period in which they are incurred.

The interest component of finance lease payments is recognised in the profit and loss account using the effective interestrate method.

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3 Property, Plant and Equipment – Group

Hospital land Freeholdand buildings Construction medical

Note Freehold Leasehold in progress centre suites$’000 $’000 $’000 $’000

Cost

At 1 January 2004 200,955 330,933 4,867 7,828Additions 252 43 9,685 –Disposals/Write off (139) (685) (119) –Transfers 2,087 1,683 (11,995) –Translation differences on

consolidation (879) – – –

At 31 December 2004 202,276 331,974 2,438 7,828

At 1 January 2005 202,276 331,974 2,438 7,828Additions 756 83 9,763 –Assets acquired in business

combinations 28 80,695 101,472 5,429 –Assets disposed on disposal

of subsidiaries 28 – – – –Disposals/Write off (1,772) (11,254) – –Transfers 22 1,532 (2,983) –Translation differences on

consolidation (599) (1,366) (72) –

At 31 December 2005 281,378 422,441 14,575 7,828

Accumulated depreciation and impairment losses

At 1 January 2004 21,300 56,039 – 385Depreciation charge for the year 2,371 5,991 – 72Impairment losses for the year – – – –Disposals/Write off (127) (214) – –Translation differences on

consolidation (100) – – –

At 31 December 2004 23,444 61,816 – 457

At 1 January 2005 23,444 61,816 – 457Depreciation charge for the year 2,672 6,558 – 72Impairment losses for the year – – – –Assets acquired in business

combinations 28 6,889 5,974 – –Assets disposed on disposal

of subsidiaries 28 – – – –Disposals/Write off (93) (10,910) – –Translation differences on

consolidation (36) (81) – –

At 31 December 2005 32,876 63,357 – 529

Carrying amount

At 1 January 2004 179,655 274,894 4,867 7,443

At 31 December 2004 178,832 270,158 2,438 7,371

At 1 January 2005 178,832 270,158 2,438 7,371

At 31 December 2005 248,502 359,084 14,575 7,299

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Hospital andmedical

Leasehold Renovation equipment andoffice and and furniture, fittings Motor

premises improvements and equipment vehicles Total$’000 $’000 $’000 $’000 $’000

4,297 9,371 211,380 3,158 772,789– 844 13,830 598 25,252

(2,963) (290) (12,107) (266) (16,569)– – 8,225 – –

– (1) (579) (11) (1,470)

1,334 9,924 220,749 3,479 780,002

1,334 9,924 220,749 3,479 780,002– 3,298 23,129 1,616 38,645

– 11,873 114,902 4,086 318,457

– – (318) (499) (817)– (97) (13,697) (1,686) (28,506)– (101) 1,530 – –

– (161) (1,213) (47) (3,458)

1,334 24,736 345,082 6,949 1,104,323

1,496 4,496 134,826 2,043 220,58564 1,336 20,296 483 30,613

– – 58 42 100(1,075) (233) (11,935) (220) (13,804)

– (1) (256) (8) (365)

485 5,598 142,989 2,340 237,129

485 5,598 142,989 2,340 237,12923 1,546 22,691 594 34,156

– – 89 – 89

– 4,731 73,254 2,501 93,349

– – (271) (177) (448)– (51) (12,413) (1,265) (24,732)

– (63) (840) (30) (1,050)

508 11,761 225,499 3,963 338,493

2,801 4,875 76,554 1,115 552,204

849 4,326 77,760 1,139 542,873

849 4,326 77,760 1,139 542,873

826 12,975 119,583 2,986 765,830

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3 Property, Plant and Equipment – Group (Cont’d)

Property, plant and equipment with carrying value amounting to $121,206,000 (2004: $18,287,000) have been mortgaged tofinancial institutions for bonds and credit facilities granted to certain subsidiaries.

The carrying amount of property, plant and equipment includes amounts totalling $7,273,000 (2004: $1,057,000) in respect ofassets held under finance leases.

4 Intangible Assets – GroupGoodwill on Other

Note consolidation intangibles Total$’000 $’000 $’000

Cost

At 1 January and 31 December 2004 36,213 – 36,213

At 1 January 2005, as previously reported 36,213 – 36,213Effect of adopting FRS 103 (4,852) – (4,852)

At 1 January 2005, as restated 31,361 – 31,361Acquisition through business combination 28 59,662 96,639 156,301Goodwill written off on dilution of interests in subsidiaries (1,158) – (1,158)Translation differences on consolidation (804) (1,301) (2,105)

At 31 December 2005 89,061 95,338 184,399

Accumulated amortisation and impairment losses

At 1 January 2004 3,041 – 3,041Amortisation charge for the year 1,811 – 1,811

At 31 December 2004 4,852 – 4,852

At 1 January 2005, as previously reported 4,852 – 4,852Effect of adopting FRS 103 (4,852) – (4,852)

At 1 January 2005, as restated – – –Amortisation charge for the year – 3,499 3,499Translation differences on consolidation – (1) (1)

At 31 December 2005 – 3,498 3,498

Carrying amount

At 1 January 2004 33,172 – 33,172

At 31 December 2004 31,361 – 31,361

At 1 January 2005 31,361 – 31,361

At 31 December 2005 89,061 91,840 180,901

Impairment test for cash-generating units containing goodwill

Goodwill is allocated to the Group’s cash-generating units (CGU) identified according to business segment as follows:

2005 2004$’000 $’000

Healthcare Services 31,361 31,361Unallocated 57,700 –

89,061 31,361

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4 Intangible Assets – Group (Cont’d)

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow projectionsbased on financial budgets approved by management covering a five-year period. The growth rate does not exceed the long-termaverage growth rate for the relevant business segment in which the CGU operates.

Key assumptions used for value-in-use calculations

HealthcareServices Unallocated

% %

Gross margin 73.8 38.2Growth rate 7.9 4.8Discount rate 7.8 11.0

These assumptions have been used for the analysis of each CGU within the business segment. Management determined thebudgeted gross margin based on past performance and its expectation for market development. The discount rates used arepre-tax and reflect specific risks relating to the relevant segments.

5 Interests in Subsidiaries – Company2005 2004$’000 $’000

Investments in subsidiaries 754,410 754,410Amounts due from subsidiaries (non-trade) 413,861 531,463Allowance for doubtful receivables (28,436) (70,100)

385,425 461,363

Amounts due to subsidiaries (non-trade) (449,698) (669,084)

690,137 546,689

The amounts due from/to subsidiaries form part of the Company’s net investment in the subsidiaries. These amounts are unsecuredand settlement is neither planned nor likely to occur in the foreseeable future.

The amounts due from subsidiaries consist of $81,623,000 (2004: $150,624,000) interest-free loans and $332,238,000 (2004:$380,839,000) loans which bear interest at between 1% to 3.1525% per annum (2004: 1% to 3.1525% per annum).

The amounts due to subsidiaries consist of $448,755,000 (2004: $668,150,000) interest-free loans and $943,000 (2004: $934,000)loans which bear interest at 1% per annum (2004: 1% per annum).

Effective interest rates and repricing analysis

Effective Within 1 to 5 Afterinterest rate 1 year years 5 years Total

% $’000 $’000 $’000 $’000

2005Amounts due from subsidiaries 1 to 3.1525 182,238 150,000 – 332,238Amounts due to subsidiaries 1 943 – – 943

2004Amounts due from subsidiaries 1 to 3.1525 230,839 150,000 – 380,839Amounts due to subsidiaries 1 934 – – 934

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5 Interests in Subsidiaries – Company (Cont’d)

Details of subsidiaries are as follows:

Place ofincorporation Equity interest

Name of subsidiary Principal activities and business 2005 2004% %

1 Parkway Properties Pte Ltd Investment holding Singapore 100 100and its subsidiary:

1 Parkway Promotions Pte Ltd Promoters and organisers of Singapore 100 100conferences and seminars

1 M & P Investments Pte Ltd Investment trading and Singapore 100 100and its subsidiary: property development

1 S.P.I. Pte Ltd Investment trading Singapore 100 100

1 Weian Investments Pte Ltd Dormant Singapore 51 51

1 Westront Pte Ltd Investment holding Singapore 100 100

Fantasy Line Limited Liquidated during the year Channel Islands – 100

1 Parkway Hospitals Singapore Private hospitals ownership Singapore 100 100Pte Ltd and management

1 Parkway Group Healthcare Investment holding Singapore 100 100Pte Ltd and its subsidiaries:

1 iXchange Pte Ltd Agent and administrator Singapore 100 100(formerly known as for managed care andAPIC Integrated Care related servicesPte Ltd)

1 Gleneagles Medical Provision of healthcare and Singapore 100 100Global Care Pte Ltd related services

3 Parkway-Healthcare Investment holding Mauritius 100 –(Mauritius) Ltd

1 Shenton Insurance Pte. Ltd. Underwrite accident and Singapore 100 –healthcare insurance policies

1 Mount Elizabeth Healthcare Investment holding Singapore 100 100Holdings Ltd and its subsidiaries:

1 Mount Elizabeth Medical Investment holding, rental and Singapore 100 100Holdings Ltd sale of medical suites andand its subsidiaries: retail units

1 East Shore Medical Investment holding Singapore 100 100Holdings Pte Ltd

1 MENA Services Pte Ltd Nursing agency Singapore 100 100

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1 Mount Elizabeth Rental of medical equipment Singapore 66.48 66.48Ophthalmic Investments used for eye operationsPte Ltd

1 Charter Asia Behavioural Dormant Singapore 100 100Health Services Pte Ltd

2 Mount Elizabeth Provision of laboratory services Malaysia 100 100Healthcare Services to hospitals and clinicsSdn Bhd and its subsidiary:

2 Orifolio Options Sdn Bhd Investment holding Malaysia 100 100

1 Parkway Healthtech Investment holding Singapore 100 100Investments Pte Ltdand its subsidiaries:

1 Goldlink Investments Investment holding Singapore 100 100Pte. Ltd. and its subsidiaries:

1 Medi-Rad Associates Ltd Operation of radiology clinics Singapore 100 100and its subsidiaries:

** Khim Medicare Dormant Singapore 75.51 75.51Private Limited

1 Radiology Consultants Radiology consultancy and Singapore 100 100Pte Ltd interpretative services

** The Diagnostic X-Ray Dormant Singapore 100 100Centre Pte Ltd

1 Drayson Investments Pte. Ltd. Investment holding Singapore 100 100and its subsidiary:

1 Parkway Laboratory Provision of comprehensive Singapore 100 100Services Ltd diagnostic laboratory services

1 Gleneagles Medical Holdings Investment holding Singapore 100 100Limited and its subsidiaries:

1 Gleneagles Medical Centre Medical centre development, Singapore 100 100Ltd ownership and management

1 Gleneagles Radiology Radiology consultancy and Singapore 100 100Consultants Pte Ltd interpretative services

1 C-Med Pte Ltd Dormant Singapore 100 100

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1 Gleneagles CRC Pte Ltd Operation of a clinical Singapore 100 100and its subsidiaries: research centre

4 Gleneagles CRC (Thailand) To conduct global and local Thailand 100 100Company Limited clinical trials

5 Gleneagles CRC (China) To conduct global and local People’s Republic 100 100Pte Ltd. clinical trials of China(formerly known asBeijing Parkway GleneaglesMedical and PharmaceuticalTechnology ConsultingPte Ltd)

1 Gleneagles Clinical Operation of a clinical Singapore 100 100Research International research centrePte. Ltd.

1 Gleneagles International Investment holding Singapore 100 100Pte. Ltd. and its subsidiaries:

2 Gleneagles JPMC Sdn Bhd Management and operation Brunei Darussalam 75 75of a cardiac and cardiothoraciccare centre

2 Gleneagles (Malaysia) Investment holding Malaysia 100 100Sdn Bhd and its subsidiary:

6 Pulau Pinang Clinic Private hospital ownership Malaysia 70 70Sdn. Bhd. and management

1 Gleneagles Management Provision of advisory, Singapore 100 100Services Pte Ltd and administrative, managementits subsidiary: and consultancy services to

healthcare facilities

* Gleneagles Heritage Dormant British Virgin Islands 75 75Hospital ManagementLimited

Thermal International (S) Trading in medical supplies, Singapore – 51Pte Ltd equipment and healthcare products

Thermal International Limited Dormant Hong Kong – 51

1 Gleneagles Pharmacy Pte Ltd Medical centre ownership Singapore 100 100

1 Gleneagles Development Developing and managing Singapore 100 100Pte Ltd turnkey hospital projects

1 Parkway Informatics Pte Ltd Dormant Singapore 100 100

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7 Gleneagles Hospital (UK) Investment holding United Kingdom 65 65Limited and its subsidiaries:

7 Cavendish Clinic Limited Dormant United Kingdom 100 100

7 The Heart Hospital Limited Under company voluntary United Kingdom 100 100arrangement

* The Heart Hospital Dormant United Kingdom 100 100Properties Limited

* Wholebond Limited Dormant United Kingdom 100 100

* Merlion Healthcare Limited Dormant United Kingdom 100 100

1 Gleneagles Technologies To provide consultancy services, Singapore 100 100Services Pte Ltd perform equipment planning,

procurement, testing andcommissioning, andmanage a healthcare facility

1 Ko, Djeng Gleneagles Pte Ltd To carry on the practice of Singapore 60 60dental surgeons and tooperate dental clinics

** Gleneagles International Investment holding Singapore Note 32 68Laboratory ServicesPte Ltd and its subsidiary:

** Gleneagles Investment Dormant Singapore Note 32 100Fujian Pte Ltd

1 Parkway Shenton Pte Ltd Investment holding and operation Singapore 100 100and its subsidiaries: of a network of clinics and

provision of comprehensivemedical and surgical advisoryservices

1 GMMC Maritime Medical Dormant Singapore 100 100Centre Pte. Ltd.(formerly known asGleneagles MaritimeMedical Centre Pte Ltd)

* Gleneagles Maritime Dormant Hong Kong 100 100Medical Centre (China)Limited

1 Nippon Medical Care Pte Ltd Operation of clinics Singapore 70 70

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1 Parkway Shenton Investment holding Singapore 100 100International HoldingsPte. Ltd. and its subsidiary:

8 Parkway Shenton Operation of primary Vietnam 100 –Vietnam Limited healthcare centre

1 Shenton Family Medical Clinics To provide, establish and carry Singapore 100 100Pte Ltd on the business of clinics

1 Shenton Medical Holdings Investment holding Singapore 100 100Pte Ltd and its subsidiaries:

1 Shenton Medical Centre Dormant Singapore 100 100Pte Ltd

1 SMG Medical Group Pte. Ltd. Dormant Singapore 100 100(formerly known asThe Shenton MedicalGroup Pte Ltd)

1 EHS Health Screeners Dormant Singapore 100 100Pte. Ltd. (formerly known asExecutive Health ScreenersPte Ltd)

2 Swiss Zone Sdn Bhd Investment holding Malaysia 100 –and its subsidiaries:

2 Pantai Holdings Berhad Investment holding Malaysia 28.52 ^ –and its subsidiaries:

2 Pantai Group Resources Investment holding Malaysia 100 –Sdn. Bhd. and its subsidiaries:

2 Pantai Hospitals Sdn. Bhd. Investment holding and Malaysia 100 –and its subsidiaries: provision of management

and consultation servicesto hospitals and medicalcentres

2 Pantai Medical Centre Provision of medical, surgical Malaysia 100 –Sdn. Bhd. and hospital servicesand its subsidiaries:

2 Angiography Sdn. Bhd. Provision of cardiac Malaysia 66.8 –catherisation services

2 Magnetom Imaging Provision of medical diagnostic Malaysia 51.4 –Sdn. Bhd. services and other related ventures

2 PMC Radio-Surgery Provision of radiotherapy facilities Malaysia 100 –Sdn. Bhd.

69





2 Ganda Gema Sdn. Bhd. Dormant Malaysia 100 –

2 Cheras Medical Centre Provision of medical, surgical Malaysia 100 –Sdn. Bhd. and hospital services

2 Pantai Klang Specialist Provision of medical, surgical Malaysia 100 –Medical Centre and hospital servicesSdn. Bhd.

2 Syarikat Tunas Pantai Provision of medical, surgical Malaysia 80.7 –Sdn. Bhd. and hospital services

2 Paloh Medical Centre Provision of medical, surgical Malaysia 77.8 –Sdn. Bhd. and hospital services

2 Hospital Pantai Provision of medical, surgical Malaysia 70 –Ayer Keroh Sdn. Bhd. and hospital servicesand its subsidiaries:

2 Mikrogema Sdn. Bhd. Provision of cardiac Malaysia 100 –catherisation services

2 HPAK Lithotripsy Provision of lithotripter services Malaysia 80 –Services Sdn. Bhd.

2 HPAK Cancer Centre Provision of services for Malaysia 70 –Sdn. Bhd. cancer diseases

2 Hospital Pantai Indah Provision of medical, surgical Malaysia 100 –Sdn. Bhd. and hospital servicesand its subsidiary:

2 HPI Dialysis Centre Dormant Malaysia 100 –Sdn. Bhd.

2 PT. Pantai Healthcare Dormant Indonesia 50 ## –Consulting

2 Pantai Support Services Investment holding and Malaysia 100 –Sdn. Bhd. provision of management andand its subsidiaries: consultation services to

healthcare related service sectors

2 Pantai Premier Pathology Provision of medical laboratory Malaysia 100 –Sdn. Bhd. services

2 Pantai Education Provision of educational programs Malaysia 100 –Sdn. Bhd. and training courses for

healthcare and related fields

2 Pantai Columbia Dormant Malaysia 100 –Sdn. Bhd.

2 Golden Home Care Provision of geriatric, rehabilitation Malaysia 100 –Sdn. Bhd. and convalescence care

70





2 Pantai Integrated Rehab Provision of rehabilitation services Malaysia 85 –Services Sdn. Bhd.

2 Pantai Fomema & Investment holding and supervision Malaysia 100 –Systems Sdn. Bhd. of medical examination of foreignand its subsidiary: workers in Malaysia

2 Fomema Sdn. Bhd. Monitoring of medical examination Malaysia 75 –of foreign workers in Malaysia

2 Pengkalan Usaha (M) Supervision of medical examination Malaysia 100 –Sdn. Bhd. of foreign workers in Malaysia

2 Healthpac Industries Dormant Malaysia 100 –Sdn. Bhd.

2 Conso-Asli Sdn. Bhd. Investment holding Malaysia 100 –and its subsidiary:

2 Kuala Lumpur Medical Dormant Malaysia 51 –Centre (Asia Pacific)Sdn. Bhd.

2 Cyberwide Finance Limited Investment holding British Virgin 100 –and its subsidiary: Islands

2 Maxgold Investments Investment holding British Virgin 100 –Group Limited Islandsand its subsidiary:

2 Glossmere Investments Investment holding British Virgin 100 –Limited Islands

2 Pantai Management Provision of administration Malaysia 100 –Resources Sdn. Bhd. support, training, research and

development services

2 Credit Enterprise Sdn. Bhd. Dormant Malaysia 100 –

2 Seraya Sensa Sdn. Bhd. Investment holding Malaysia 100 –

2 Pantai Medivest Lanka Dormant Sri Lanka 50 # –(Private) Limited

2 PT. Pantai Healthcare Dormant Indonesia 50 ## –Consulting

2 Pantai Medivest Sdn. Bhd. Provision of clinical waste Malaysia 100 –and its subsidiaries: management, cleaning and

maintenance services for hospitals

2 Aroma Laundry & Provision of laundry and Malaysia 50.01 –Dry Cleaners Sdn. Bhd. dry cleaning servicesand its subsidiaries:

71





2 Zoom Valet Services Provision of laundry and Malaysia 100 –Sdn. Bhd. dry cleaning services

2 Mediwash Sdn. Bhd. Dormant Malaysia 100 –

2 Pantai Medivest Lanka Dormant Sri Lanka 50 # –(Private) Limited

2 Pantai Medivest (India) Dormant India 100 –Private Limited

1 Audited by KPMG, Singapore2 Audited by other member firms of KPMG International3 Audited by Nexia Baker & Arenson, Mauritius4 Audited by PLP Auditing Office, Thailand5 Audited by Beijing Yongtuo Certified Public Accountants, People’s Republic of China6 Audited by PricewaterhouseCoopers, Malaysia7 Audited by HH Burke & Company Limited, United Kingdom8 Audited by STT Audit & Advisory Partnership, Vietnam* Not required to be audited by law of country of incorporation** To commence liquidation before the forthcoming annual general meeting^ Notwithstanding that the equity interest is not more than 50%, for the purpose of the financial statements, the Company has

accounted for Pantai Holdings Berhad as a subsidiary in accordance with FRS 27, on the basis that, inter alia, the Company hasboard control of the latter.

# Accounted for as a subsidiary as 50% of Pantai Medivest Lanka (Private) Limited is each held by Pantai Group ResourcesSdn. Bhd. and Pantai Medivest Sdn. Bhd.

## Accounted for as a subsidiary as 50% of PT. Pantai Healthcare Consulting is each held by Pantai Hospitals Sdn. Bhd. and PantaiGroup Resources Sdn. Bhd.

6 Interests in AssociatesGroup Company

2005 2004 2005 2004$’000 $’000 $’000 $’000

Unquoted equity shares, at cost – – 64 64Share of net assets 48,857 8,377 – –

48,857 8,377 64 64

Amounts due from associates (mainly non-trade) 22,363 21,446 – –Allowance for doubtful receivables (11,917) (10,682) – –

10,446 10,764 – –Amounts due to associates (mainly non-trade) (4,913) (4,779) (4,393) (4,588)

54,390 14,362 (4,329) (4,524)Group

The amounts due from associates include amounts totalling $22,014,000 (2004: $21,123,000) which form part of the Group’s netinvestment in the associates. These amounts are unsecured and interest-free, and settlement is neither planned nor likely to occurin the foreseeable future. The remaining balances are unsecured and interest-free, and are intended not to be repaid within thenext twelve months.

The amounts due to associates include amounts totalling $4,500,000 (2004: $4,588,000) which form part of the Group’s netinvestment in the associates. These amounts are unsecured and interest-free, and settlement is neither planned nor likely to occurin the foreseeable future. The remaining balances are unsecured and interest-free, and are intended not to be repaid within thenext twelve months.

72


6 Interests in Associates (Cont’d)

Company

The amount due to associate forms part of the Company’s net investment in the associate. The amount is unsecured andinterest-free, and settlement is neither planned nor likely to occur in the foreseeable future.

Details of associates are set out in note 32.

The financial information of the associates are as follows:

2005 2004$’000 $’000

Assets and liabilities

Total assets 633,108 158,784

Total liabilities (334,239) (174,333)

2005 2004$’000 $’000

Results

Revenue 97,487 72,985

Profit / (Loss) after taxation 11,002 (8,571)

7 Interests in Partnerships – Group

These comprise interests in the following partnerships:

Effective interestPlace of held by the

incorporation GroupName of partnership Principal activities and business 2005 2004

% %

Shenton Family Medical Clinic Operations of medical clinic Singapore 60 60(Bukit Gombak)

Shenton Family Medical Clinic Operations of medical clinic Singapore 50 50(Serangoon)

Shenton Family Medical Clinic Operations of medical clinic Singapore 50 50(Bedok Reservoir)

Shenton Family Medical Clinic Operations of medical clinic Singapore 50 50(Jurong East)

Shenton Family Medical Clinic Operations of medical clinic Singapore 50 –(Tampines)

The Group exercises joint control with the other partners over the financial and operational decisions of these partnerships.Accordingly, the results in these partnerships are equity accounted for in the Group’s financial statements.

73


7 Interests in Partnerships – Group (Cont’d)

The interests in partnerships comprise:2005 2004$’000 $’000

Current accountsCapital contributions 206 166

Share of post-acquisition profits:At 1 January 695 407Share of current year’s profits 376 288

At 31 December 1,071 695

1,277 861

Amounts due from partnerships (mainly non-trade) – 35Amounts due to partnerships (mainly non-trade) (1,154) (705)

Total 123 191

The amounts due from/to partnerships are unsecured and interest-free, and are intended not to be repaid within the next twelvemonths.

The partners’ current account balances are represented as follows:2005 2004$’000 $’000

Property, plant and equipment 16 28Goodwill 67 –Inventories 216 116Trade receivables 54 60Other receivables, deposits and prepayments 167 145Amount due from the Group 1,154 705Amounts due from other partners 969 620Cash and cash equivalents 408 447

3,051 2,121

Trade payables (38) (45)Other payables and accrued operating expenses (45) (51)Amount due to the Group – (35)

(83) (131)

Net assets 2,968 1,990

Partners’ current accounts:Capital contributions:

The Group 206 166Other partners 183 143

389 309Share of post-acquisition profits:

The Group 1,071 695Other partners 1,508 986

2,579 1,681

2,968 1,990

74


8 Other Financial AssetsGroup Company

2005 2004 2005 2004$’000 $’000 $’000 $’000

Club memberships 122 114 – –

Non-current investments:Quoted equity securities available-for-sale 28,726 45,811 – –

Unquoted equity securities available-for-sale 4,566 5,341 1,013 1,013Impairment losses (4,530) (4,610) (1,013) (1,013)

36 731 – –

28,884 46,656 – –

Group

2005 2004$’000 $’000

Current investmentsQuoted equity securities available-for-sale 39 42Quoted equity securities held for trading 181 169

220 211

With the adoption of FRS 39, the Group states available-for-sale investments at fair value. The differences between the fair valuesand the carrying amounts of these investments at 1 January 2005, excluding impairment losses, are taken to the opening balanceof the fair value reserve at that date. Impairment losses at 1 January 2005 are taken to the opening balance of accumulated profitsat that date.

Non-current investments in unquoted available-for-sale equity securities are stated at cost as their fair values cannot be reliablymeasured in view that they do not have a quoted market price in an active market, the range of reasonable fair value estimates issignificant and the probabilities of the various estimates cannot be reasonably assessed.

Non-current investments in quoted available-for-sale equity securities include a 22% effective equity interest held in Auric PacificGroup Ltd with a carrying value of $28,043,000 (2004: $43,838,000). The investment has been accounted for as a non-currentinvestment as the Group does not have significant influence over the financial and operational policies of the investee.

9 Notes Receivables – Group and Company

Notes receivables relate to the consideration receivable in respect of the Group’s divestment in an associate in the prior year. Thenotes are denominated in Hong Kong dollars and are unsecured and bear interest at a fixed rate of 1% per annum. The periods inwhich they mature are as follows:

Effective Within 1 to 5 Afterinterest rate 1 year years 5 years Total

% $’000 $’000 $’000 $’000

2005Non-current 3.82 – 35,463 – 35,463Current 3.07 6,021 – – 6,021

2004Non-current 1 – 42,106 – 42,106Current 1 6,194 – – 6,194

75


10 Deferred Tax (Assets) / Liabilities

Movements in deferred tax assets and liabilities (prior to offsetting of balances) during the year are as follows:

Charged/Effects of Acquisition of Disposal of (Credited)

At adopting subsidiaries subsidiaries to profit and Translation At1 Jan 2005 FRS 39 (Note 28) (Note 28) loss account differences 31 Dec 2005

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

Deferred tax assetsTrade receivables (10) – (270) – (275) 10 (545)Other allowances (82) – – – 29 – (53)Notes receivables – (421) – – 209 – (212)Tax value of unutilised tax

losses carried forward – – (3,169) – 1,312 116 (1,741)Tax value of unabsorbed

investment allowancescarried forward (250) – – – 250 – –

(342) (421) (3,439) – 1,525 126 (2,551)

Deferred tax liabilitiesProperty, plant and

equipment 28,277 – 8,722 (9) (445) (266) 36,279Interest receivables 35 – – _ (35) – –

28,312 – 8,722 (9) (480) (266) 36,279

Net deferred tax liabilities 27,970 (421) 5,283 (9) 1,045 (140) 33,728

Company

Deferred tax assetNotes receivables – (421) – – 209 – (212)

Deferred tax liabilityInterest receivables 35 – – – (35) – –

Net deferred taxliabilities/(assets) 35 (421) – – 174 – (212)

Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against current taxliabilities and when the deferred taxes relate to the same taxation authority. The amounts determined after appropriate offsettingare included in the balance sheet as follows:

Group

2005 2004$’000 $’000

Deferred tax assets (1,813) –Deferred tax liabilities 35,541 27,970

76


11 Completed Properties Held for Resale – Group

2005 2004$’000 $’000

Completed properties held for resale, at cost 806 806Allowance for foreseeable losses (227) (227)

579 579

12 Inventories – Group

2005 2004$’000 $’000

Inventories 17,294 10,438Allowance for inventory obsolescence (347) (375)

16,947 10,063

Inventories with carrying value of $844,000 (2004: Nil) have been pledged as security for bank overdraft facilities granted tocertain subsidiaries.

13 Trade Receivables – Group

2005 2004$’000 $’000

Trade receivables 93,247 43,693Allowance for doubtful receivables (17,834) (10,807)

75,413 32,886

14 Other Receivables, Deposits and Prepayments

Group Company

2005 2004 2005 2004$’000 $’000 $’000 $’000

Interest receivables 258 325 203 322Prepayments 2,349 1,533 216 295Sundry deposits 4,973 3,683 2 1

7,580 5,541 421 618

Other receivables 16,366 4,046 16 16Allowance for doubtful receivables (250) (251) – –

16,116 3,795 16 16

23,696 9,336 437 634

Other receivables are unsecured and interest-free, and are repayable within the next twelve months.

77


15 Cash and Cash Equivalents

Group Company

2005 2004 2005 2004$’000 $’000 $’000 $’000

Commercial papers – 28,000 – 28,000Fixed deposits with financial institutions 52,995 145,891 3,215 144,069Cash and bank balances 53,029 22,274 5,477 2,056

106,024 196,165 8,692 174,125Bank overdrafts:– secured (2,288) –– unsecured (1,061) (997)

(3,349) (997)

Fixed deposits pledged (13,554) –

Cash and cash equivalents inConsolidated Statement of Cash Flows 89,121 195,168

Fixed deposits pledged comprise sinking fund for the redemption of bonds and those pledged to banks and finance companies forcredit facilities granted to certain subsidiaries.

The bank overdrafts are secured by certain property, plant and equipment and other assets as disclosed in note 19(c).

The effective interest rates per annum relating to commercial papers, fixed deposits with financial institutions and bank overdraftsat the balance sheet date are as follows:

Group Company

2005 2004 2005 2004% % % %

Commercial papers – 1.5875 – 1.5875Fixed deposits with financial institutions 1.44 to 4 0.1875 to 1.2 3 to 4 0.1875 to 1.2Bank overdrafts 7.25 to 7.75 5.25 – –

Interest rates reprice at intervals of one, three or six months.

16 Share Capital – Company2005 2004

No. of No. ofshares $’000 shares $’000

Authorised:Ordinary shares of $0.25 each 2,000,000,000 500,000 2,000,000,000 500,000

Issued and fully-paid:At 1 January 722,911,462 180,728 719,983,462 179,996Issue of shares under share option scheme 4,101,750 1,025 2,928,000 732

At 31 December 727,013,212 181,753 722,911,462 180,728

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per shareat meetings of the Company. All shares rank equally with regard to the Company’s residual assets.

During the financial year, the Company issued the following ordinary shares pursuant to the Parkway Share Option Scheme 2001:

(i) 1,120,750 ordinary shares of $0.25 each at a premium of $0.615 per share;(ii) 100,000 ordinary shares of $0.25 each at a premium of $0.7433 per share;(iii) 652,500 ordinary shares of $0.25 each at a premium of $0.69 per share;(iv) 2,040,500 ordinary shares of $0.25 each at a premium of $0.585 per share; and(v) 188,000 ordinary shares of $0.25 each at a premium of $1.1767 per share.

78


17 Employee Benefits

Employee benefits in the financial statements represent liabilities for short-term accumulating compensated absences.

In addition, certain employees are eligible to participate in the following equity compensation benefits:

Parkway Share Option Scheme 2001 (Parkway Scheme 2001)

The Parkway Scheme 2001 was approved by the shareholders of the Company at an Extraordinary General Meeting held on 18January 2001. Details of the Parkway Scheme 2001 and amendments effected by a resolution passed at the Extraordinary GeneralMeeting of the Company held on 4 July 2001 were set out in the Directors’ Report for the year ended31 December 2001. The Parkway Scheme 2001 is administered by the Company’s Share Option Scheme Committee, comprising4 directors, Timothy David Dattels, Richard Seow Yung Liang, Sunil Chandiramani and Ashish Jaiprakash Shastry.

Other statutory information regarding the Parkway Scheme 2001 is set out below:

(i) The exercise price of the option is determined at the average of the last dealt price of the Company’s shares on the SingaporeExchange Securities Trading Limited (SGX-ST) prevailing on the three consecutive trading days immediately preceding thedate of grant of such options.

(ii) The options vest one year after the grant date in accordance with the vesting schedule set out below:

Percentage of shares overVesting schedule which the options are exercisable

On or before the first anniversary of the grant date Nil

After the first anniversary, and on or before the second anniversary of the grant date 25%

After the second anniversary, and on or before the third anniversary of the grant date 50%

After the third anniversary, and on or before the fourth anniversary of the grant date 75%

After the fourth anniversary, and on or before the fifth anniversary of the grant date 100%

(iii) The options granted expire on the fifth anniversary of the grant date unless they have been cancelled or have lapsed prior tothat date.

Movements in the number of share options and their related weighted average exercise prices are as follows:

Weighted Weightedaverage averageexercise No. of exercise No. of

price options price options2005 2005 2004 2004

$ $

At 1 January 0.9932 10,922,000 0.8600 11,420,500Granted and accepted 2.0679 6,865,000 1.4267 2,600,000Exercised 0.8909 (4,101,750) 0.8676 (2,928,000)Cancelled 1.1344 (575,500) 0.8412 (170,500)

At 31 December 1.5818 13,109,750 0.9932 10,922,000

Exercisable at 31 December 0.9629 3,425,250 0.8637 4,932,187

Options exercised during the year resulted in 4,101,750 (2004: 2,928,000) new ordinary shares being issued at a weightedaverage price of $0.8909 (2004: $0.8676) each. Options were exercised on a regular basis throughout both years. The weightedaverage share price during the year was $1.86 (2004: $1.23) per share.

79


17 Employee Benefits (Cont’d)


Share options outstanding at the end of the year have the following expiry dates and exercise prices:

Exercise Options Optionsprice outstanding outstanding

Date of grant of options Expiry date $ 2005 2004

9 April 2001 9 April 2006 0.8650 736,000 1,869,7508 May 2001 8 May 2006 0.9933 – 100,00019 September 2001 19 September 2006 0.9400 375,000 1,115,00019 April 2002 19 April 2007 0.8350 2,996,750 5,237,25019 November 2004 19 November 2009 1.4267 2,137,000 2,600,00015 November 2005 15 November 2010 2.0530 3,855,000 –9 December 2005 9 December 2010 2.0870 3,010,000 –

13,109,750 10,922,000

The fair value of services received in return for share options granted are measured by reference to the fair value of share optionsgranted. The estimate of the fair value of the services received is measured based on the Trinomial option pricing model. Theexpected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability,exercise restrictions and behavioural considerations.

19 November 15 November 9 DecemberDate of grant of options 2004 2005 2005

Fair value of share options and assumptions

Fair value at measurement date $0.217 $0.258 $0.388

Share price $1.45 $2.01 $2.14Exercise price $1.4267 $2.053 $2.087Expected volatility 28.0% 28.0% 28.0%Expected option life 3.3 years 3.5 years 4.0 yearsExpected dividends 29.0% 29.0% 29.0%Risk-free interest rate 1.87% 2.89% 3.13%

The expected volatility is based on the historic volatility (calculated based on the weighted average expected life of the shareoptions), adjusted for any expected changes to future volatility due to publicly available information.

There are no market conditions associated with the share option grants. Service conditions and non-market performance conditionsare not taken into account in the grant date fair value measurement of the services received.

Pantai Holdings Berhad Employee Share Option Scheme (Pantai ESOS)

The Pantai ESOS was approved by the shareholders and bondholders of Pantai Holdings Berhad at an Extraordinary GeneralMeeting held on 5 February 2002.

At an Extraordinary General Meeting held on 14 September 2004, the subsidiary obtained approval from its shareholders andbondholders to vary certain Bye-Laws of its existing Pantai ESOS and certain clauses of the subsidiary’s Articles of Association aftertaking into consideration the amendments to the Bursa Securities Listing Requirements in relation to share schemes for employees,which became effective on 10 February 2004.

Details of the Pantai ESOS were set out in the Directors’ Report of the subsidiary for the year ended 30 June 2005.

The Pantai ESOS is administered by the subsidiary’s Options Committee.

80



Pantai Holdings Berhad Employee Share Option Scheme (Pantai ESOS) (Cont’d)

Other statutory information regarding the Pantai ESOS is set out below:

(i) the exercise price of the option is determined at a discount of not more than 10% from the weighted average of the meanmarket quotation of the ordinary shares of the subsidiary as quoted and shown in the daily official list issued by the BursaMalaysia Securities Berhad for the five preceding market days prior to the date of offer or at par value of the ordinary sharesof the subsidiary, whichever is higher;

(ii) The options vest from the date of grant and are in accordance with the vesting schedule set out below:

For employees and directors who are granted between 1 and 49,999 options, the options expire after three years unless theyhave been cancelled or lapsed prior to that date. The vesting schedule for the options is as follows:


On or before the first anniversary of the grant date 40%



For employees and directors who are granted 50,000 or more options, the options expire after five years unless they havebeen cancelled or lapsed prior to that date. The vesting schedule for the options is as follows:


On or before the first anniversary of the grant date 40%



After the third anniversary, and on or before the fourth anniversary of the grant date 90%

After the fourth anniversary, and on or before the fifth anniversary of the grant date 100%

Movements in the number of share options and their related weighted average exercise prices are as follows:

Weightedaverageexercise No. of

price options2005 2005RM

At date of acquisition 1.00 18,704,800Granted 1.00 –Exercised 1.00 (13,801,800)Cancelled 1.00 (3,500)

At 31 December 2005 1.00 4,899,500

Exercisable at 31 December 1.00 3,286,420

Options exercised from the date of acquisition to 31 December 2005 resulted in 13,801,800 new ordinary shares in the subsidiariesbeing issued at a weighted average price of RM1.00 each. Options were exercised on a regular basis throughout the period. Theweighted average share price during the period was RM1.87 per share.

81



Pantai Holdings Berhad Employee Share Option Scheme (Pantai ESOS) (Cont’d)

Share options outstanding at the end of the year have the following expiry dates and exercise prices:

Exercise Optionsprice outstanding

Date of grant of options Expiry date RM 2005

24 June 2002 24 June 2007* 1.00 1,106,000

24 June 2002 24 June 2007 1.00 246,200

5 September 2002 5 September 2007* 1.00 16,000

5 September 2002 5 September 2007 1.00 6,000

16 June 2003 16 June 2006 1.00 45,000

16 June 2003 16 June 2008 1.00 33,400

5 November 2003 5 November 2006 1.00 1,347,200

5 November 2003 5 November 2008 1.00 174,600

8 December 2004 8 December 2007 1.00 571,700

8 December 2004 8 December 2009 1.00 21,900

1 August 2005 1 August 2008 1.00 1,226,900

1 August 2005 1 August 2010 1.00 104,600

4,899,500

The fair value of services received in return for share options granted are measured by reference to the fair value of share optionsgranted. The estimate of the fair value of the services received is measured based on the Trinomial option pricing model. Theexpected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability,exercise restrictions and behavioural considerations.

24 Jun 5 Sept 1 Mar 16 Jun 5 Nov 8 Dec 1 AugDate of grant of options 2002* 2002* 2003** 2003 2003 2004 2005

Fair value of share options and assumptions

Fair value at modification/measurement date RM0.086 RM0.086 RM0.141 RM0.176 RM0.312 RM0.189 RM0.117

Share price RM0.990 RM0.990 RM0.665 RM0.775 RM1.000 RM0.935 RM1.030Exercise price RM1.00 RM1.00 RM1.00 RM1.00 RM1.00 RM1.00 RM1.00Expected volatility 26% 26% 51% 48% 49% 44% 26%Expected option life 1 year 1 year 3.7 year 3.49 year 3.27 year 2.44 year 1.14 yearExpected dividends 5% 5% 5% 5% 5% 5% 5%Risk-free interest rate 2.350% 2.350% 3.035% 2.944% 3.617% 2.663% 2.356%

* On 20 June 2005, the contractual expiration of the options belonging to employees and directors who were granted 1 to 49,999 options wasextended by 2 years from 24 June 2005 and 5 September 2005 to 24 June 2007 and 5 September 2007 respectively.

** The options, which were not yet vested as at 1 January 2005, became vested and were fully exercised during the financial year.

The expected volatility is based on the historic volatility (calculated based on the weighted average expected life of the shareoptions), adjusted for any expected changes to future volatility due to publicly available information.

There are no market conditions associated with the share option grants. Service conditions and non-market performance conditionsare not taken into account in the grant date fair value measurement of the services received.

82


18 Reserves

The application of the share premium account of the Company is governed by Section 69 of the Companies Act, Chapter 50.

The capital reserves comprise premium on bonds previously issued, net of issuing expenses.

The exchange fluctuation reserves of the Group comprise foreign exchange differences arising from the translation of the financialstatements of foreign operations whose functional currencies are different from the functional currency of the Company and theexchange differences on monetary items which form part of the Group’s net investment in the foreign operation, provided certainconditions are met.

The fair value reserve includes the cumulative net change in the fair value of available-for-sale investments until the investmentis derecognised.

The share option reserve comprises the cumulative value of employee services received for the issue of share options.

19 Interest-Bearing BorrowingsGroup Company

2005 2004 2005 2004$’000 $’000 $’000 $’000

Non-current liabilitiesSecured term loans 17,623 – – –Redeemable secured bonds 63,005 – – –Unsecured floating rate notes 160,000 160,000 160,000 160,000Unsecured fixed rate notes 150,000 150,000 150,000 150,000Finance lease liabilities 3,983 793 – –

394,611 310,793 310,000 310,000Current liabilitiesSecured term loans 2,481 – – –Unsecured floating rate notes – 30,000 – 30,000Unsecured short-term credit facilities 40,000 46,968 – –Finance lease liabilities 1,697 358 – –

44,178 77,326 – 30,000

Total borrowings 438,789 388,119 310,000 340,000

Maturity of borrowingsAfter 1 year

Within but within After1 year 5 years 5 years Total$’000 $’000 $’000 $’000

Group

2005Secured term loans:

RM variable at 7.50% to 7.75% per annum 1,601 5,707 133 7,441RM fixed at 6.22% to 6.75% per annum 880 11,783 – 12,663

Redeemable secured bonds:RM fixed at 5% per annum – 63,005 – 63,005

Unsecured floating rate notes:S$ variable at 1.5875% to 2.5875% per annum – 160,000 – 160,000

Unsecured fixed rate notes:S$ fixed at 2.45% to 3.10% per annum – 150,000 – 150,000

Unsecured short-term credit facilities:S$ fixed at 1.6375% to 2.27% per annum 40,000 – – 40,000

Finance lease liabilities:Fixed at 3.06% to 8.15% per annum 1,697 3,983 – 5,680

44,178 394,478 133 438,789

83


19 Interest-Bearing Borrowings (Cont’d)

Maturity of borrowings (Cont’d)

After 1 yearWithin but within After1 year 5 years 5 years Total$’000 $’000 $’000 $’000

Group

2004Unsecured floating rate notes:

S$ variable at 1.5875% to 2.24045% per annum 30,000 160,000 – 190,000Unsecured fixed rate notes:

S$ fixed at 2.45% to 3.10% per annum – 150,000 – 150,000Unsecured short-term credit facilities:

S$ fixed at 1.49% to 1.6375% per annum 46,968 – – 46,968Finance lease liabilities:

Fixed at 3.54% to 9.45% per annum 358 793 – 1,151

77,326 310,793 – 388,119

Company


S$ variable at 1.5875% to 2.5875% per annum – 160,000 – 160,000Unsecured fixed rate notes:

S$ fixed at 2.45% to 3.10% per annum – 150,000 – 150,000

– 310,000 – 310,000


S$ variable at 1.5875% to 2.24045% per annum 30,000 160,000 – 190,000Unsecured fixed rate notes:

S$ fixed at 2.45% to 3.10% per annum – 150,000 – 150,000

30,000 310,000 – 340,000

(a) In 1999, the Company entered into a Dual Currency Medium Term Notes Programme (DCMTN Programme) with a bank toissue up to $200 million 7-year Floating Rate Notes (FRN).

The FRNs constitute direct and unconditional obligations of the Company. Pursuant to the DCMTN Programme, there is anegative pledge that the Company and its principal subsidiaries will not create any security over their assets except asprovided for under the terms of the DCMTN Programme. The FRNs rank pari passu without any preference or priority amongthemselves and at least pari passu with all other unsecured obligations of the Company (other than subordinated obligationsand obligations having priorities created by law). Unless previously redeemed or purchased and cancelled, the FRNs areredeemable at their respective principal amounts on their maturity date.

The following floating rate notes are outstanding as at the balance sheet date:

2005 2004$’000 $’000

Floating rate notes due in October 2009 100,000 100,000

84



(b) In 2001, the Company established a Multi-Currency Unsecured Medium Term Note Programme (MCMTN Programme) withanother bank to issue fixed or floating rate notes to refinance existing loans and for working capital requirements.

In this connection, the Company entered into a Trust Deed which includes the following terms:

(i) the Company and its subsidiaries will not create any security on or over their respective assets except for any existingsecurities; and

(ii) the Company must ensure that it will continue to own directly or indirectly not less than 75% in Gleneagles MedicalHoldings Limited and Mount Elizabeth Medical Holdings Ltd.

The following fixed rate and floating rate notes are outstanding as at the balance sheet date:

2005 2004$’000 $’000

Fixed rate notes due in:– October 2007 75,000 75,000– October 2009 75,000 75,000

150,000 150,000

Floating rate notes due in:– June 2005 – 30,000– October 2007 30,000 30,000– October 2009 30,000 30,000

60,000 90,000

(c) The secured bank overdrafts and term loans of subsidiaries are secured by the following:

(i) first fixed charge over freehold land and leasehold land and buildings of certain subsidiaries;

(ii) fixed and floating charge over assets of certain subsidiaries; and

(iii) corporate guarantee by a subsidiary.

(d) The RM150 million 5% Redeemable Secured Bonds 2002/2007 (Bonds) were constituted by a Trust Deed dated 21 January2002 made between a subsidiary and the Trustee for the holders of the Bonds. Fixed coupon rate of 5% per annum ispayable semi-annually in arrears until the maturity date and the Bonds will be redeemed at 100% of their principal amounttogether with interest accrued to the maturity date unless they have been previously redeemed or purchased and cancelled.

The carrying value of the Bonds at 31 December 2005 included unamortised discount amounting to RM6,790,000.

The Bonds are secured against the following:

(i) a first legal charge on lands and buildings owned by a subsidiary; and

(ii) a Deed of Assignment of Sinking Fund Account (Note 15).

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Finance lease liabilities

The Group has obligations under finance leases that are repayable as follows:

Payments Interest Principal Payments Interest Principal2005 2005 2005 2004 2004 2004$’000 $’000 $’000 $’000 $’000 $’000

Repayable:Within 1 year 2,031 334 1,697 426 68 358After 1 year but

within 5 years 4,426 443 3,983 870 77 793

6,457 777 5,680 1,296 145 1,151

Under the terms of the lease agreements, no contingent rents are payable.

Effective interest rates and repricing/maturing analysis

Effective Fixed interest rate maturinginterest Floating within 1 to 5 after

rate interest 1 year years 5 years Total% $’000 $’000 $’000 $’000 $’000

Group

2005

Secured term loans 6.22 to 7.75 7,441 880 11,783 – 20,104Redeemable secured bonds 8.62 – – 63,005 – 63,005Unsecured floating rate notes 1.5875 to 160,000 – – – 160,000

2.5875Unsecured fixed rate notes 2.45 to 3.10 – – 150,000 – 150,000Unsecured short-term

credit facilities 1.6375 to 2.27 – 40,000 – – 40,000Finance lease liabilities 3.06 to 8.15 – 317 5,363 – 5,680

2004

Unsecured floating rate notes 1.5875 to 190,000 – – – 190,0002.24045

Unsecured fixed rate notes 2.45 to 3.10 – – 150,000 – 150,000Unsecured short-term credit facilities 1.49 to 1.6375 – 46,968 – – 46,968Finance lease liabilities 3.54 to 9.45 – 25 1,126 – 1,151

Company

2005


Unsecured fixed rate notes 2.45 to 3.10 – – 150,000 – 150,000

2004


Unsecured fixed rate notes 2.45 to 3.10 – – 150,000 – 150,000

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20 Other PayablesGroup Company

2005 2004 2005 2004$’000 $’000 $’000 $’000

Other payables 36,773 7,943 562 510Rental deposits 1,343 1,185 – –Deposits and advances 397 59 – –Advanced billings 942 993 – –

39,455 10,180 562 510

Other payables are unsecured and interest-free, and are repayable within the next twelve months.

21 Revenue – Group

Revenue represents invoiced value of hospital and other healthcare services rendered, proceeds from sale of equity investments,rental income and dividend income, after eliminating inter-company transactions.

The amount of each significant category of revenue recognised during the year is as follows:2005 2004$’000 $’000

Revenue from hospital services and other healthcare services 539,341 398,560Proceeds from sale of equity investments – 350Rental income 8,014 7,172Gross dividends:– Quoted equity investments 1,615 1,492– Unquoted equity investments 1 258

548,971 407,832

22 Profit from Operations before Taxation – Group

Profit from operations before taxation includes the following:2005 2004$’000 $’000

Interest income received and receivable from:– Banks and financial institutions 1,532 615– Others 446 543Imputed interest income 1,047 –Non-audit fees paid to auditors of the Company (104) (223)Contributions to defined contribution plans included in staff costs (12,625) (11,579)Increase in liability for short-term accumulating compensated absences (267) (633)Value of employee services received for issue of share options (444) (35)Exchange gain/(loss) (net) 612 (4,377)Property, plant and equipment written off (152) (130)Inventories written off (109) (29)(Loss)/Gain on disposal of property, plant and equipment (462) 92Gain on disposal of non-current equity investments 283 671Gain on disposal of an associate – 3,461Loss on disposal of subsidiaries (92) –Loss on dilution of interests in subsidiaries (2,141) –Changes in fair value of financial assets held for trading 8 (11)Impairment loss on/Allowance for diminution in value of available-for-sale financial assets (1,580) (1,447)

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22 Profit from Operations before Taxation – Group (Cont’d)

2005 2004$’000 $’000

Allowance for doubtful debts:– Amounts due from associates (516) (1,848)– Trade receivables (2,633) (2,460)Operating lease expenses (8,343) (6,546)Interest paid and payable to:– Banks and financial institutions (1,331) (695)– Fixed and floating rate notes (6,745) (4,061)– Bonds (841) –– Others (541) (347)Amortisation of discount on bonds (598) –

23 Key Management Personnel Compensation – Group

Key management personnel of the Group are those persons having the authority and responsibility for planning, directing andcontrolling the activities of the Group. The Directors of the Company and the General Managers of the significant subsidiaries areconsidered as key management personnel of the Group.

The key management personnel compensation are as follows:

2005 2004$’000 $’000

Short-term employee benefits 6,709 4,639Termination benefits 1,037 –Equity compensated benefits 219 –

7,965 4,639

24 Income Tax Expense – Group

Note 2005 2004$’000 $’000

Current tax expenseCurrent year 20,792 15,125Underprovided in prior years 11 60

20,803 15,185

Deferred tax expenseMovements in temporary differences 920 1,193Reduction in tax rate – (2,380)Underprovided in prior years 125 836

10 1,045 (351)

Foreign taxation 160 398

Income tax expense 22,008 15,232

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24 Income Taxes – Group (Cont’d)

Reconciliation of effective tax rate

2005 2004% $’000 % $’000

Profit from operations before taxation 89,398 67,976

Income tax using Singapore tax rate 20.0 17,880 20.0 13,595Effect of reduction in tax rate – – (3.5) (2,380)Effect of different tax rates in other countries 1.4 1,221 0.8 575Income not subject to tax (1.4) (1,228) (2.7) (1,837)Expenses not deductible for tax purposes 4.5 4,039 5.0 3,423Utilisation of previously unrecognised tax losses (0.2) (206) (0.4) (289)Deferred tax asset not recognised – 6 1.3 851Underprovided in prior years 0.1 136 1.3 896Foreign taxation 0.2 160 0.6 398

24.6 22,008 22.4 15,232

Unrecognised temporary differences

The following temporary differences have not been recognised:

2005 2004$’000 $’000

(Taxable)/deductible temporary differences (647) 825Unutilised tax losses 19,800 16,342Unabsorbed wear and tear allowances 561 509

19,714 17,676

The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective countries inwhich certain subsidiaries operate. The deductible temporary differences do not expire under current tax legislation. Deferred taxassets of the Group have not been recognised in respect of these items because it is not probable that future taxable profit will beavailable against which the Group can utilise the benefits.

25 Earnings Per Share

2005 2004$’000 $’000

Basic earnings per shareBasic earnings per share is based on:Net profit attributable to ordinary shareholders 61,969 50,463

2005 2004Number of shares

Weighted average number of ordinary shares 725,046,367 721,274,796

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25 Earnings Per Share (Cont’d)

Diluted earnings per share

For the purpose of calculating the diluted earnings per ordinary share, the weighted average number of ordinary shares in issue isadjusted to take into account the dilutive effect arising from the dilutive share options, with the potential ordinary shares weightedfor the period outstanding.

The effect of the exercise of share options on the weighted average number of ordinary shares in issue is as follows:

2005 2004Number of shares

Weighted average number of ordinary shares,used in the calculation of basic earnings per share 725,046,367 721,274,796

Weighted average number of unissued ordinary shares under share options 6,806,106 8,322,000Weighted average number of shares that would have been

issued at average market price (3,580,295) (5,842,729)

Weighted average number of ordinary shares (diluted) 728,272,178 723,754,067

In prior year, options to purchase 2,600,000 ordinary shares at $1.4267 per share were outstanding but were not included in thecomputation of diluted earnings per share because these options were anti-dilutive.

26 Changes in Accounting Policies

The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31December 2005.

The changes in accounting policies arising from the adoption of FRS 39 Financial Instruments: Recognition and Measurement,FRS 102 Share-based Payment, FRS103 Business Combinations, FRS 36 (revised) Impairment of Assets and FRS 38 (revised)Intangible Assets are summarised below:

FRS 39 Financial Instruments: Recognition and Measurement

The adoption of FRS 39 resulted in the Group measuring its available-for-sale and trading investments at fair values. Loans andreceivables and financial liabilities are stated at amortised cost instead of cost. Previously, investments held for long-term arestated at cost less allowance for diminution in value, which in the opinion of the directors, are other than temporary, while investmentsheld for short-term are stated at the lower of cost and market value.

The above changes have been accounted for by decreasing the opening balance at 1 January 2005 of fair value reserve by$13,398,000 and of accumulated profit by $1,665,000. Comparatives have not been restated.

FRS 102 Share-based Payment

In accordance with the transitional provisions, FRS 102 has been applied to all grants after 22 November 2002 that were not yetvested as at 1 January 2005. The adoption of FRS 102 has resulted in a change in the Group’s accounting policy for share-basedpayments, whereby the Group charges the cost of share options to the profit and loss account.

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26 Changes in Accounting Policies (Cont’d)

FRS 102 Share-based Payment (Cont’d)

The adoption of FRS 102 resulted in:Group

2005 2004$’000 $’000

Decrease in opening accumulated profit (35) –

Increase in opening share option reserve 35 –

Increase in staff costs 444 35

Decrease in basic earnings per share (cents) (0.06) –

Decrease in diluted earnings per share (cents) (0.06) (0.01)

FRS 103 Business Combinations, FRS 36 (revised) Impairment of Assets and FRS 38 (revised) Intangible Assets

The adoption of FRS 103, FRS 36 (revised) and FRS 38 (revised) has resulted in a change in the accounting policy for goodwill.

Goodwill is stated at cost less accumulated impairment losses and is no longer amortised. Instead, goodwill impairment is testedannually, or when circumstances change, indicating that goodwill might be impaired.

Had there not been a change in accounting policy, the net profit attributable to shareholders for the financial year ended31 December 2005 would decrease by $1,811,000.

27 FRS yet to be adopted

The Group has not applied the following standards and interpretations that have been issued as of the balance sheet date but arenot yet effective:

• FRS 40 Investment Property• FRS 106 Exploration for and Evaluation of Mineral Resources• Amendments to FRS 19 Employees Benefits – Actuarial Gains and Losses, Group Plans and Disclosures• Amendments to FRS 39 Financial Instruments: Recognition and Measurement – Cash Flow Hedge Accounting of Forecast

Intragroup Transactions• INT FRS 104 Determining whether an Arrangement contains a Lease• INT FRS 105 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

The initial application of these standards and interpretations are not expected to have any material impact on the Group’s financialstatements, except for FRS 40 and INT FRS 104.

Under FRS 40, investment properties are permitted to be stated at either fair value or cost less accumulated depreciation. Propertiesheld for rental are currently treated as properties in accordance with FRS 16 Property, Plant and Equipment and are stated at cost lessaccumulated depreciation and impairment losses. As a result of adopting FRS 40, these properties will be reclassified as investmentproperties. Property interests held under operating leases and recognised as investment properties are required to be measured atfair value. The Group is currently evaluating the impact the standard will have on the Group’s financial statements.

INT FRS 104 addresses arrangements that do not take the legal form of a lease, but convey rights to use items for agreed periodsof time in return for a payment or series of payments. INT FRS 104 provides guidance for evaluating whether such arrangementsare, or contain, leases should be accounted for under FRS 17 Leases. If an agreement is determined to contain a lease, then INTFRS 104 requires FRS 17 to be applied to classify and account for the lease. The Group is currently evaluating the impact theinterpretation will have on the Group’s financial statements.

The entity has not considered the impact of accounting standards issued after the balance sheet date.

91


28 Acquisitions and Disposals of Subsidiaries

On 13 September 2005 and 20 September 2005, the Group completed the acquisition of 35,000,000 and 89,700,000 ordinaryshares of RM1 each in Pantai Holdings Berhad respectively, and 24,300,000 warrants 2002/2007 issued by the company for totalconsideration amounting to RM320,264,000. This represents 31.34% of the issued and paid-up capital in the company (excludingthe shares which are held by the company as treasury shares) and 36.27% of the outstanding warrants issued by the company.During the period from the acquisition date to 31 December 2005, Pantai Holdings Berhad and its subsidiaries contributed netprofit of $4,242,000 to the consolidated net profit for the year. If the acquisition had occurred on 1 January 2005, Group revenuewould have been $799,276,000 and net profit would have been $76,759,000.

The effects of the above acquisitions are set out below:Provisional

Carrying fair value Recognisedamounts adjustments values

2005 2005 2005$’000 $’000 $’000

Property, plant and equipment 199,558 25,550 225,108Intangible assets 65,723 30,916 96,639Interests in associates 54,130 (15,843) 38,287Available-for-sale financial assets 371 – 371Deferred tax assets 2,155 – 2,155Inventories 6,510 – 6,510Trade receivables 36,865 (6,893) 29,972Other receivables, deposits and prepayments 16,043 862 16,905Tax recoverable 3,848 210 4,058Fixed deposits pledged 13,608 – 13,608Cash and cash equivalents 40,455 – 40,455Trade payables and accrued operating expenses (44,622) – (44,622)Other payables (29,140) – (29,140)Current tax payable (3,726) 1,226 (2,500)Interest-bearing borrowings (90,226) – (90,226)Deferred tax liabilities (2,724) (4,714) (7,438)Minority interests (213,441) (3,539) (216,980)

Net identifiable assets and liabilities 55,387 27,775 83,162Goodwill on acquisition 59,662

Cash consideration 142,824Less: Cash and cash equivalents acquired (40,455)

Net cash outflow 102,369

Subsequent to the acquisition, the Group’s interest in Pantai Holdings Berhad was diluted to 28.51% as at 31 December 2005.Consequently, the Group recognised a loss on dilution of interests in subsidiaries amounting to $2,141,000 in the profit and lossaccount.

There were no acquisitions of subsidiaries in the year ended 31 December 2004.

On 9 June 2005, the Group completed the disposal of its 51% interests in Thermal International (S) Pte Ltd and Thermal InternationalLimited. Consequently, the Group’s 68% interests in Gleneagles International Laboratory Services Pte Ltd and Gleneagles InvestmentFujian Pte Ltd were diluted to 45%. During the period from 1 January 2005 to the date of disposal, the subsidiaries contributed netprofit of $36,000 to the consolidated net profit for the year.

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28 Acquisitions and Disposals of Subsidiaries (Cont’d)

The effects of the above disposals are set out below:2005$’000

Property, plant and equipment 369Inventories 169Trade receivables 7,447Other receivables, deposits and prepayments 1,377Cash and cash equivalents (949)Trade payables and accrued operating expenses (5,497)Other payables (204)Current tax payable (197)Finance lease obligations (1,120)Deferred tax liabilities (9)Minority interests (684)

Net assets disposed 702Loss on disposal of subsidiaries (92)

Cash consideration 610Cash and cash equivalents disposed 949

Net cash flow from disposal of subsidiaries 1,559

There were no disposals of subsidiaries in the year ended 31 December 2004.

29 Significant Related Party Transactions – Group

For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directlyor indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or viceversa, or where the Group and the party are subject to common control or common significant influence. Related parties may beindividuals or other entities.

During the year, there were the following significant related party transactions carried out on terms agreed between the parties:

2005 2004$’000 $’000

AssociatesManagement fees received 116 876Project management fees received – 1,110Rental income received 577 447Sales made 177 80Purchases made 1,216 1,193

A firm in which a director is a memberProfessional fees paid 15 114

Director of the CompanyRental income received 9 20

Directors of subsidiariesConsultancy fees paid 341 366

Corporate shareholders of subsidiariesConsultancy fees paid 844 –Management fees paid 180 170Professional fees paid 51 61

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29 Significant Related Party Transactions – Group (Cont’d)

The directors of the Company also participate in the Parkway Scheme 2001. 3,180,000 share options (2004: 1,450,000) weregranted to the directors of the Company during the year. The share options were granted on the same terms and conditions asthose offered to other employees of the Group as described in note 17. At the balance sheet date, 5,667,000 (2004: 5,255,000)of the share options granted to the directors were outstanding.

30 Contingent Liabilities

At 31 December 2005, there were contingent liabilities in respect of the following:

Group Company

2005 2004 2005 2004$’000 $’000 $’000 $’000

Unsecured contingent liabilities in respect ofguarantees for banking facilities granted to:– subsidiaries – – 2,546 10,205– associates 10,000 10,000 10,000 10,000

31 CommitmentsGroup

2005 2004$’000 $’000

(a) Capital commitments not provided for in the financial statements:– Amounts authorised and contracted for 22,532 8,080– Amounts authorised but not contracted for 14,330 9,008

36,862 17,088

(b) Commitments for equity investments – 818

(c) Non-cancellable operating leases payable:

– Within 1 year 8,807 6,267– After 1 year but within 5 years 10,659 4,628– After 5 years – –

19,466 10,895

(d) Non-cancellable operating leases receivable:

– Within 1 year 6,893 3,932– After 1 year but within 5 years 7,448 2,127– After 5 years – 19

14,341 6,078

(e) After the balance sheet date, the directors proposed the following dividends. The dividends have not been provided for.

2005 2004$’000 $’000

Final dividend proposed of 5.0 cents(2004: 4.5 cents) per share less tax at 20% (2004: 20%) 29,081 26,025

94


32 Associates

Place of Effective equityincorporation interest held

Name of associate Principal activities and business 2005 2004% %

Phil, Inc Dormant United States of America 40 40

Gleneagles Medical Centre Medical centre development, Malaysia 30 30(Kuala Lumpur) Sdn Bhd ownership and management

Gleneagles Hospital Private hospital ownership Malaysia 30 30(Kuala Lumpur) Sdn Bhd and management

Gleneagles Dialysis International Provision of dialysis care Singapore 40 40Pte Ltd and its subsidiary:

Gleneagles Dialysis Centre Provision of business management, Singapore 44 44Pte Ltd consultancy and specialised

medical services

PT Tritunggal Sentra Provision of medical Indonesia 30 30Utama Surabaya diagnostic services

Kyami Pty Ltd and its subsidiary: Investment holding Australia 30 30

Royalmist Properties Pty Ltd Property investment and Australia 30 30development

Karington Holdings Pte Ltd Investment holding Singapore 50 50and its associate:

Shanghai Modern Elecom Property investment and People’s Republic 25 25Trading Centre Building Co. Ltd. development of China

Gleneagles International Hospital Dormant Sri Lanka 40 40(Lanka) Limited

Apollo Gleneagles Hospital Ltd Private hospital ownership and India 50 51 *management

Apollo Gleneagles PET-CT Limited Operation of PET-CT radio India 50 –imaging centre

Gleneagles Heritage Holdings Investment holding British Virgin Islands 40 40Limited and its subsidiary:

Gleneagles Heritage Dormant British Virgin Islands 40 40International Limited

Asia Renal Care Provision of medical services Singapore 20 20Mount Elizabeth Pte Ltd

Asia Renal Care (Katong) Pte Ltd Provision of medical services Singapore 20 20

IAG Healthsciences Pte Ltd Provision of medical and health Singapore 29.09 32products, clinic management andconsultancy services

95


32 Associates (Cont’d)

Place of Effective equityincorporation interest held

Name of associate Principal activities and business 2005 2004% %

Onemedhub Pte Ltd Provision of electronic Singapore 40 40(formerly known as commerce servicesOnemedhub.com Pte Ltd)

Positron Tracers Pte. Ltd. Ownership and operation Singapore 33 33of a cyclotron

CPG Healthcare Facilities Provision of specialised Singapore 50 50Management Pte. Ltd. healthcare facilities management

services to healthcare facilities

IGS Pte Ltd Specialised medical services Singapore – 21

Korean Clinic Pte. Ltd. Operation of clinic Singapore 40 40

Gleneagles International Investment holding Singapore 45 Note 5Laboratory Services Pte Ltdand its subsidiary:

Gleneagles Investment Dormant Singapore 45 Note 5Fujian Pte Ltd

Worldcare Health (Malaysia) Provision of telemedicine services Malaysia 8.55# –Sdn. Bhd.

Avenue Capital Resources Berhad Investment holding and provision Malaysia 4.88# –of management services

* Apollo Gleneagles Hospital Ltd (AGHL) has been accounted for as an associate in view of equal board representations and joint control betweenthe Group and the other shareholder of AGHL.

# Worldcare Health (Malaysia) Sdn. Bhd. and Avenue Capital Resources Berhad have been accounted for as associates in accordance withFRS 28 by virtue of the Group’s interests in Pantai Holdings Berhad.

None of the associates are considered significant for the purpose of Rule 717 of the SGX-ST Listing Manual.

33 Financial Instruments

The Group has put in place a set of risk management policies and guidelines governing all investment and business risks. Thesepolicies and procedures set out the Group’s overall business strategies, its tolerance for risk and general risk management philosophy.In addition, management has established processes to monitor and control such risks in a timely and accurate manner. Wherenecessary, the Group may enter into transactions to hedge against these risks in order to keep them at an acceptable level. Finally,all investment and divestment decisions are required to be approved by the Executive Committee.

Credit risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations areperformed on all customers requiring credit over a certain amount. For the hospital operations, the Group does not grant credit tonon-corporate customers. Instead, a non-corporate customer is requested to place an initial deposit at the time of admission to thehospital. Additional deposit is requested from the customer when the hospital charges exceed a certain level.

Cash and fixed deposits are placed with financial institutions which are regulated.

96


33 Financial Instruments (Cont’d)

Credit risk (Cont’d)

Similarly, investments and transactions involving financial instruments are allowed to be entered into only with counterparties thatare of high credit quality. As such, management does not expect any counterparty to fail to meet their obligations.

At the balance sheet date, the Group has outstanding notes receivables amounting to $41,484,000 (2004: $48,300,000) due fromLee Hing Development Limited relating to the residual consideration receivable in connection with shares purchased by the latter.Other than these notes receivables, there were no significant concentrations of credit risk. The maximum exposure to credit risk isrepresented by the carrying amount of each financial asset in the balance sheet.

Liquidity risk

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management tofinance the Group’s operations and to mitigate the effects of fluctuations in cash flows.

Interest rate risk

This relates to changes in interest rates which affect mainly the Group’s fixed deposits, notes receivables, commercial papers, fixedand floating rate notes, fixed rate redeemable bonds, and its debt obligations with banks and financial institutions.

The Group’s policy is to manage its interest cost using a mix of fixed and variable rate debts as well as by rolling over its fixeddeposits and variable rate borrowings on a short-term basis. In respect of long-term borrowings, the Group may enter into interestrate derivatives to manage its exposure to adverse movements in interest rates.

Foreign currency risk

The Group is exposed to foreign exchange risk on sales, purchases, notes receivables, borrowings and investments that aredenominated in currencies other than Singapore dollars. The currencies giving rise to this risk are primarily Malaysian ringgit, HongKong dollars and Indian rupee. In respect of exposure that is certain, the Group will partially hedge these risks in order to keepthem at an acceptable level.

Fair value

Quoted investments

Fair value is based on quoted market prices at the balance sheet date without any deduction for transaction costs.

Interest-bearing loans and borrowings

Fair value is calculated based on discounted expected future principal and interest cash flows.

Finance lease liabilities

The fair value of finance lease liabilities is estimated as the present value of future cash flows, discounted at market interest ratesfor homogeneous lease agreements. The estimated fair values reflect change in interest rates.

Other financial assets and liabilities

The notional amounts of financial assets and liabilities with a maturity of less than one year or which reprice frequently (includingtrade and other receivables, cash and cash equivalents, trade and other payables and short-term or variable rate interest-bearingborrowings) are assumed to approximate their fair values. All other financial assets and liabilities are discounted to determine theirfair values.

97


33 Financial Instruments (Cont’d)

Fair value (Cont’d)

The aggregate net fair values of recognised financial assets and liabilities which are not carried at fair value in the balance sheet asat 31 December are represented in the following table:

Carrying Fair Carrying Fairamount value amount value

Note 2005 2005 2004 2004$’000 $’000 $’000 $’000

Group

Financial assetsAmounts due from associates (non-current) 6 349 316 323 308Amounts due from partnerships (non-current) 7 – – 35 33Notes receivables 9 41,484 40,715 48,300 47,865

41,833 41,031 48,658 48,206

Financial liabilitiesAmounts due to associates (non-current) 6 (413) (373) (191) (182)Amounts due to partnerships (non-current) 7 (1,154) (1,044) (705) (672)Secured term loans 19 (12,663) (12,679) – –Redeemable secured bonds 19 (63,005) (63,744) – –Unsecured fixed rate notes 19 (150,000) (145,382) (150,000) (156,317)Finance lease liabilities 19 (5,680) (5,823) (1,151) (1,000)

(232,915) (229,045) (152,047) (158,171)

Total (191,082) (188,014) (103,389) (109,965)

Unrecognised gain/(loss) 3,068 (6,576)

Company

Financial assetNotes receivables 9 41,484 40,715 48,300 47,865

Financial liabilityUnsecured fixed rate notes 19 (150,000) (145,382) (150,000) (156,317)

Total (108,516) (104,667) (101,700) (108,452)

Unrecognised gain/(loss) 3,849 (6,752)

It is not practicable to reliably estimate the fair value of unquoted equity shares due to the lack of quoted market prices in an activemarket, significant range of reasonable fair value estimates, and the inability to reasonably assess the probabilities of the variousestimates. However, management believes that the carrying amounts recorded at balance sheet date reflect the corresponding fairvalues.

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34 Segment Reporting

A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment),or in providing products or services within a particular economic environment (geographical segment), which is subject to risksand rewards that are different from those of other segments.

Segment information is presented in respect of the Group’s business and geographical segments. The primary format, businesssegments, is based on the Group’s management and internal reporting structure.

Inter-segment pricing is determined on mutually agreed terms.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on areasonable basis. Unallocated items mainly comprise interest expenses and related liabilities.

Segment capital expenditure is the total costs incurred during the year to acquire segment assets that are expected to be used formore than one period.

Business Segments

The Group comprises the following main business segments:

Healthcare

Singapore Hospitals: The operation of private hospitals, rental and sale of medical units which form part of the hospital complex inSingapore.

International Hospitals: The operation of private hospitals outside Singapore.

Healthcare Services: Trading in medical supplies, equipment and healthcare products, operation of medical clinics and provisionof primary healthcare services, practice of dental surgeons and the operation of dental clinics, provision of clinical researchservices, ownership and management of radiology clinics, provision of comprehensive diagnostic laboratory services, underwritingof accident and healthcare insurance policies, and provision of managed care and related services.

Non-Healthcare

The sale of properties, investment holding and trading.

Geographical Segments

The healthcare segment operates principally in Singapore and Malaysia while the property rental, investment holding and tradingsegments operate mainly in Singapore.

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location ofcustomers. Segment assets are based on the geographical location of the assets.

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34 Segment Reporting (Cont’d)

Business Segments

Singapore International Healthcare Healthcare Non-Hospitals Hospitals Services Subtotal Healthcare Eliminations Unallocated Consolidated

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Revenue and expenses2005Total revenue from

external customers 300,283 104,516 142,422 547,221 1,750 – – 548,971Inter-segment revenue 12,720 – 37,411 50,131 – (50,131) – –

Total 313,003 104,516 179,833 597,352 1,750 (50,131) – 548,971

Segment results 65,017 11,005 21,532 97,554 2,945 – (2,141) 98,358Finance costs (10,056)Share of profits /

(losses) of associates – 79 (210) (131) 851 – – 720Share of profits of

partnerships – – 376 376 – – – 376Income tax expense (22,008)

Net profit for the year 67,390

2004Total revenue from

external customers 258,584 53,994 93,036 405,614 2,218 – – 407,832Inter-segment revenue 12,261 35 55,895 68,191 – (68,191) – –

Total 270,845 54,029 148,931 473,805 2,218 (68,191) – 407,832

Segment results 56,100 5,919 13,003 75,022 (129) – – 74,893Finance costs (5,103)Share of (losses) /

profits of associates – (2,357) 104 (2,253) 151 – – (2,102)Share of profits of

partnerships – – 288 288 – – – 288Income tax expense (15,232)

Net profit for the year 52,744

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Business Segments (Cont’d)

Singapore International Healthcare Healthcare Non-Hospitals Hospitals Services Subtotal Healthcare Consolidated

$’000 $’000 $’000 $’000 $’000 $’000

Assets and liabilities2005Segment assets 510,737 290,766 264,675 1,066,178 125,788 1,191,966Interests in associates – 9,374 3,719 13,093 41,297 54,390Interests in partnerships – – 123 123 – 123

510,737 300,140 268,517 1,079,394 167,085 1,246,479

Unallocated assets 57,700

Total assets 1,304,179

Segment liabilities 73,275 83,019 74,306 230,600 76,832 307,432Unallocated liabilities 350,000

Total liabilities 657,432

2004Segment assets 504,015 39,408 102,789 646,212 276,284 922,496Interests in associates – 8,530 2,623 11,153 3,209 14,362Interests in partnerships – – 191 191 – 191

Total assets 504,015 47,938 105,603 657,556 279,493 937,049

Segment liabilities 56,514 14,965 38,079 109,558 5,948 115,506Unallocated liabilities 386,968

Total liabilities 502,474

Other segmental information2005Capital expenditure 20,490 8,164 9,768 38,422 223 38,645Depreciation and impairment losses

of property, plant and equipment 23,298 4,358 6,474 34,130 115 34,245Amortisation of intangible

assets/goodwill – 99 3,400 3,499 – 3,499

2004Capital expenditure 21,496 901 2,855 25,252 – 25,252Depreciation and impairment losses

of property, plant and equipment 23,583 1,578 5,458 30,619 94 30,713Amortisation of goodwill – – 1,811 1,811 – 1,811

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Geographical Segments

Singapore Malaysia Other regions Consolidated$’000 $’000 $’000 $’000

2005

Total revenue from external customers 397,954 133,480 17,537 548,971

Segment assets 696,731 484,980 10,255 1,191,966

Capital expenditure 29,358 8,845 442 38,645

2004

Total revenue from external customers 352,867 39,140 15,825 407,832

Segment assets 881,385 33,059 8,052 922,496

Capital expenditure 24,339 830 83 25,252

35 Accounting Estimates and Judgement

Key sources of estimation uncertainty

Note 4 contains information about the assumptions and their risk factors relating to goodwill impairment. Estimates and assumptionsused in determining the fair value of share options granted are disclosed in note 17. The methods and estimates applied indetermining the fair values of financial assets and liabilities are disclosed in notes 2 and 33.

36 Comparative Information

Comparatives in the financial statements have been changed from the previous year due to the changes in accounting policies asdescribed in note 26 and to be consistent with current year presentation.

102

Supplementary Information –SGX-ST Listing Manual RequirementsYear ended 31 December 2005

1 Summary of Major Properties

The major properties of the Group are:

Site areaDescription Location (sq m)

Singapore

Gleneagles Hospital and Medical Centre, Lot 1345 Town sub-division 14,947a 380-bed hospital with 164 medical 25 situated at 6/6A Napier Roadsuites and 402 car park lots

Mount Elizabeth Hospital and Medical Lot 858 Town sub-division 15,204 Centre, a 505-bed hospital with 214 27 situated at 3 Mount Elizabeth medical suites and 368 car park lots

East Shore Hospital and Medical Centre, Lot 6912 Mukim 26 situated ata 157-bed hospital with 28 medical 321 Joo Chiat Place 6,200suites and 73 car park lots

Warehouse and store Lot 2301/U2 Mukim 1 situated at 940213 Henderson Road, #01-02, #02-02,#03-02, #04-02 Henderson Industrial Park

Eastern Specialist Centre Lot 5188 Mukim 27 situated at 380Block 210 New Upper Changi Road #01-699

Radiologic Clinic Lot 5350 Mukim 5 situated at 145Block 130 Jurong East Street 13 #01-219

Overseas

Gleneagles Medical Centre, 1 Jalan Pangkor Penang, Malaysia 7,319a 158-bed private hospital

103

Approximate total lettable/ Group’s effectiveExisting use saleable area (sq m) interest % Tenure

Hospital building – 25,000 100 Freehold

Medical centre – 10,800 4 Freehold

Hospital building – 38,626 100 99-year leasecommencing1 October 1976

Medical centre – 19,940 4 99-year leasecommencing1 October 1976

Hospital and – 10,926 100 Freeholdmedical centre

Warehouse – 940 100 Freeholdand store

Clinic – 380 100 86-year leasecommencing1 July 1992

Clinic – 145 100 91-year leasecommencing1 April 1993

Hospital building – 18,600 70 Freehold


104


2 Interested Person Transactions

Aggregate value of alltransactions during the Aggregate value of all

financial year ended 31/12/05 transactions conducted(excluding transactions under a shareholders’

less than $100,000 and transactions mandate pursuant to Rule 920conducted under a shareholders’ of the SGX-ST Listing Manualmandate pursuant to Rule 920 (excluding transactionsof the SGX-ST Listing Manual) less than $100,000)

$’000 $’000

Interested Person

Dr Prathap C. Reddy– Pharmacy revenue payable by

Apollo Hospitals Enterprise Limited (“AHEL”) toApollo Gleneagles Hospital Limited (“AGHL”) 192 –

– Food and beverage costs payable byAGHL to Apollo Sindoori Hotels Limited 370 –

– Rental revenue and electricity expensespayable by AHEL to AGHL 12 –

Chang See Hiang– Professional fees paid by the Group 15 –

589 –

3 Material Contracts

Except as disclosed in Interested Person Transactions, there were no other material contracts of the Company or its subsidiariesinvolving the interests of the Chief Executive Officer, each director or controlling shareholder, either still subsisting at the end of thefinancial year or if not then subsisting, entered into since the end of the previous financial year.

4 Corporate Governance Statement

The Company is committed to complying with the Code of Corporate Governance (“CCG”) issued by the Corporate GovernanceCommittee in March 2001 so as to ensure greater transparency and protection of shareholders’ interests. This statement outlinesthe main corporate governance practices that are adopted by the Company.

Board of Directors

Role of the Board of Directors

The primary role of the board of directors of the Company (the “Board”) is to protect and enhance long-term shareholder value. Itsets the overall strategy for the Group and supervises the management of the Group (the “Management”). It is also responsible forthe overall corporate governance of the Group including setting its strategic direction, establishing goals for Management andmonitoring the achievement of these goals.

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4 Corporate Governance Statement (Cont’d)

Board Processes

To assist in the execution of its responsibilities, the Board has established the following specialised committees:

a) the Executive Committee;b) the Audit Committee;c) the Nominating Committee;d) the Remuneration Committee;e) the Share Option Scheme Committee;f) the Management Committee;g) the Share Purchase Committee; andh) the Strategic Planning Committee.

Each of the above committees has its respective written mandates and operating procedures, which will be reviewed on aregular basis.

The Board intends to hold about four scheduled meetings each year. It may, however, hold unscheduled strategy meetings and/oremergency meetings to address/consider certain specific significant matters or transactions that may arise from time to time.The Articles of Association of the Company allow Board meetings to be conducted by way of telephonic and video conference(CCG, Guidance Note 1.1).

Directors’ meetings held in 2005

During the financial year ended 31 December 2005, the Board held five meetings. The Directors’ attendance at those meetings aredisclosed below (CCG, Guidance Note 1.1):

Name of director Board meetings attended

Richard Seow Yung Liang (Appointed on 10 June 2005) 3Sunil Chandiramani 4Dr Lim Cheok Peng 5Alain Ahkong Chuen Fah 5Daniel Ashton Carroll (Appointed on 10 June 2005) –Chang See Hiang 5Timothy David Dattels (Appointed on 10 June 2005) 3Ho Kian Guan 5Dr Ronald Ling Jih Wen (Appointed on 15 July 2005) 2Ashish Jaiprakash Shastry (Appointed on 10 June 2005) 3David R. White (Appointed on 15 July 2005) 2Ho Kian Hock (alternate to Mr Ho Kian Guan) 1Anil Thadani (Resigned on 15 July 2005) 3Tony Tan Choon Keat (Resigned on 10 June 2005) 2Ang Guan Seng (Resigned on 10 June 2005) 2Dr Prathap C. Reddy (Resigned on 15 July 2005) 1Tan Kai Seng (Resigned on 10 June 2005) 2

Matters Requiring Board Approval

The 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 Directors

The Executive Directors may participate in seminars and/or discussion groups to keep abreast of latest developments which arerelevant to the Group (CCG, Guidance Note 1.3).

106



Board Composition and Balance

The names of the directors of the Company in office as at the date of this report are set out in the Directors’ Report. The Board hasreviewed its composition and is satisfied that such composition is appropriate. The Board will constantly examine its size with aview to determining its impact upon its effectiveness (CCG, Guidance Note 2.3).

As at the date of this report, the Board comprises eleven suitably qualified members (CCG, Guidance Note 2.4):

Academic andName of Date of Nature of professionaldirector appointment appointment Prime function Other functions qualifications

Richard Seow 10/06/2005 Non-executive / Chairman Chairman of Executive BS (Economics)Yung Liang independent and Strategic Planning MBA (Finance)Age: 43 Committees, and

Member of Share OptionScheme, Remuneration,

Share Purchase,Nominating and

Management Committees

Sunil Chandiramani 17/12/1999 Non-executive / Vice Chairman Member of Executive, B Com (Hons),Age: 43 independent Share Option Scheme, MBA

Remuneration,Share Purchase and

Nominating Committees

Dr Lim Cheok Peng 07/06/2000 Executive / Managing Chairman of Management MBBS,Age: 59 non-independent Director Committee, and Member of M.Med.Int.Med.,

Executive and Strategic MRCP,Planning Committees FRCP (Edin),

FRCP (Glasg),FAMS (Cardiology)

Alain Ahkong 14/02/2001 Non-executive / Member Chairman of Audit CharteredChuen Fah independent Committee and Member of Tax AdviserAge: 58 Nominating Committee

Daniel Ashton 10/06/2005 Non-executive / Member – BA Economics,Carroll independent MBAAge: 45

Chang See Hiang 28/08/1997 Non-executive / Member Chairman of Nominating LL.B (Hons)Age: 52 independent and Share Purchase Committees,

and Member of Audit Committee

Timothy David 10/06/2005 Non-executive / Member Chairman of Share Option BA (Hons),Dattels independent Scheme and Remuneration MBAAge: 48 Committees, and Member of

Nominating Committee

Ho Kian Guan 25/06/1985 Non-executive / Member Member of Audit and BA CommAge: 60 independent Share Purchase Committees

Dr Ronald 15/07/2005 Non-executive / Member Member of Strategic MBBS,Ling Jih Wen independent Planning Committee MA Hons (Oxon),Age: 41 MBA (INSEAD)

107



Board Composition and Balance (Cont’d)

Academic andName of Date of Nature of professionaldirector appointment appointment Prime function Other functions qualifications

Ashish Jaiprakash 10/06/2005 Non-executive / Member Member of Executive, A.B. in EconsShastry independent Share Option Scheme, (Hons)Age: 30 Remuneration, Share Purchase,

Audit, Strategic Planningand Management Committees

David R. White 15/07/2005 Non-executive / Member Member of Strategic BS, MSAge: 58 independent Planning Committee

Ho Kian Hock* 25/06/1985 Non-executive / Member – BSc EngineeringAge: 58 independent

*Alternate to Ho Kian Guan

Particulars of interests of directors who held office at the end of the financial year in shares, debentures, warrants and shareoptions in the Company and in related corporations (other than wholly-owned subsidiaries) are set out in the Directors’ Report.

Independent Members of the Board of Directors

The Board has ten independent members, representing 90.9% of the Board. They are Mr Richard Seow Yung Liang, Mr SunilChandiramani, Mr Alain Ahkong Chuen Fah, Mr Daniel Ashton Carroll, Mr Chang See Hiang, Mr Timothy David Dattels, Mr Ho KianGuan, Dr Ronald Ling Jih Wen, Mr Ashish Jaiprakash Shastry and Mr David R. White. The criterion of independence is based onthe definition given in the CCG. The Board considers an “independent” director as one who has no relationship with the Company,its subsidiaries or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director’s independentbusiness judgement with a view to the best interests of the Company (CCG, Guidance Note 2.1).

Non-executive members of the Board exercise no management functions in the Company or any of its subsidiaries. Although allthe directors have equal responsibility for the performance of the Group, the role of the non-executive directors is particularlyimportant in ensuring that the strategies proposed by the executive management are fully discussed, rigorously examined andshall take into account the long-term interests of the shareholders, employees, customers, suppliers and the communities in whichthe Group conducts its business.

Chairman and Managing Director

There is a clear division of responsibilities between the Chairman and the Managing Director, which ensures that there is a balanceof power and authority at the top of the Group. The posts of Chairman and Managing Director are kept separate and these positionsare held by Mr Richard Seow Yung Liang and Dr Lim Cheok Peng respectively (CCG, Guidance Note 3.1).

The Board has delegated the day-to-day running of the Group to the Managing Director and members of the Executive Committee.

Both the Chairman and the Managing Director exercise control over the quality, quantity and timeliness of information flow betweenthe Management and the Board (CCG, Guidance Note 3.2).

The Chairman shall, in addition:

a) schedule meetings that enable the Board to perform its duties responsibly while not interfering with the flow of the Company’soperations;

b) prepare meeting agenda in consultation with the Managing Director; and

c) assist in ensuring compliance with Company’s guidelines on corporate governance (CCG, Guidance Note 3.2).

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Board Committees

To assist the Board in the execution of its duties, the Board has delegated specific functions to the following committees:

Executive Committee

The Executive Committee was established in February 1987. It is currently chaired by Mr Richard Seow Yung Liang and comprisesboth non-executive directors and the executive director. The Executive Committee is entrusted with the review of the Group’sbusiness and affairs, in line with the overall strategy set by the Board. Meetings of the Executive Committee are held regularly.

There were six meetings held during the year and attendance was as follows (CCG, Guidance Note 1.1):

Name of director Appointment Number of meetings attended

Richard Seow Yung Liang (Chairman) Non-executive Director 3(Appointed on 15 July 2005)

Sunil Chandiramani (Member) Non-executive Director 5

Dr Lim Cheok Peng (Member) Executive Director 6

Ashish Jaiprakash Shastry (Member) Non-executive Director 3(Appointed on 15 July 2005)

Anil Thadani (Chairman) Non-executive Director 3(Resigned on 15 July 2005)

Tony Tan Choon Keat (Member) Non-executive Director 2(Resigned on 10 June 2005)

Tan Kai Seng (Member) Executive Director 3(Resigned on 10 June 2005)

Audit Committee

The Audit Committee was established in June 1990. It is currently chaired by Mr Alain Ahkong Chuen Fah and comprises threeother non-executive directors, namely Mr Chang See Hiang, Mr Ho Kian Guan and Mr Ashish Jaiprakash Shastry. All four directorsare non-executive and independent (CCG, Guidance Note 11.1).

The Audit Committee assists the Board in fulfilling its responsibilities in financial reporting, management of financial and controlrisks, and monitoring of the internal control systems.

The Board is of the view that the members of the Audit Committee are appropriately qualified to discharge their responsibilities andthey have accounting and/or related financial management expertise or business experience, as the Board interprets such qualificationin its business judgement (CCG, Guidance Note 11.2).

The Audit Committee has explicit authority to investigate any matter within its terms of reference, full access to and co-operation byManagement and full discretion to invite any director or executive officer to attend its meetings, and reasonable resources toenable it to discharge its functions properly (CCG, Guidance Note 11.3).

The Audit Committee has reviewed the scope and results of the audit and its cost effectiveness and the independence andobjectivity of the external auditors and such reviews are conducted on an annual basis (CCG, Guidance Note 11.6). Where theexternal auditors also supply a substantial volume of non-audit services to the Company, the Audit Committee shall keep the natureand extent of such services under review so as to seek to balance the maintenance of objectivity and value for money (CCG,Guidance Note 11.4).

109



Board Committees (Cont’d)

Audit Committee (Cont’d)

The Audit Committee can hold meetings with the external auditors, without the presence of Management, to discuss any mattersthat the Audit Committee or the auditors believe should be discussed in private (CCG, Guidance Note 11.5).

The Audit Committee has reviewed and will review the financial reporting process, the system of internal controls, the managementof financial risks, the audit process, and the Group’s process for monitoring compliance with the laws and regulations and its owncode of business conduct.

The Audit Committee has reviewed the Company’s risk management and based on the Internal Auditor’s reports as applicable andthe internal controls in place, it is satisfied that there are adequate internal controls in the Company (CCG, Guidance Note 12.2).

The Internal Auditor’s primary line of reporting is to the Chairman of the Audit Committee although the Internal Auditor also reportsadministratively to the Managing Director (CCG, Guidance Note 13.1).

The Audit Committee has reviewed the adequacy of the internal audit function by ensuring that the internal audit function isadequately resourced and has appropriate standing within the Company and such reviews are conducted on an annual basis(CCG, Guidance Notes 13.3 and 13.4).

There were four meetings held during the year and attendance was as follows (CCG, Guidance Note 11.7):


Alain Ahkong Chuen Fah (Chairman) Non-executive / independent 4

Chang See Hiang (Member) Non-executive / independent 4

Ho Kian Guan (Member) Non-executive / independent 2(Appointed on 15 July 2005)

Ashish Jaiprakash Shastry (Member) Non-executive / independent 2(Appointed on 15 July 2005)

Ang Guan Seng (Member) Non-executive / independent 2(Resigned on 10 June 2005)

Nominating Committee

The Nominating Committee was established on 24 February 2003 and comprises five independent directors, namelyMr Chang See Hiang (Chairman), Mr Richard Seow Yung Liang, Mr Sunil Chandiramani, Mr Alain Ahkong Chuen Fah andMr Timothy David Dattels (CCG, Guidance Note 4.1).

The role of the Nominating Committee is to:

(a) make recommendations to the Board on all Board and Board committees appointments and re-nominations, includingrecommending the Chairman for the Board and for each Board committee (CCG, Guidance Notes 4.1 & 4.2);

(b) determine annually whether a director is independent and whether he is able to carry out his duties as a director (CCG,Guidance Notes 4.3 & 4.4); and

(c) assess the effectiveness of the Board as a whole and the contribution by each individual director to the effectiveness of theBoard.

110




Nominating Committee (Cont’d)

The Nominating Committee has adopted a formal assessment process to evaluate the Board’s performance and contribution ofeach individual director by (a) reviewing a completed individual director self-assessment form, and (b) using a board self-assessmentchecklist (CCG, Guidance Note 5.3). The Nominating Committee has also adopted internal guidelines to address the competingtime commitments that are faced when directors serve on multiple boards (CCG, Guidance Note 4.4).

The Nominating Committee has adopted a set of performance criteria, that is linked to long-term shareholders’ value, to be usedfor performance evaluation of the Board. The set of performance criteria includes the Company’s share price performance over afive year period benchmarked against the Singapore Straits Times Index and against the benchmark index of the Company’sindustry peers, return on assets, return on equity and profitability on capital employed (CCG, Guidance Notes 5.1, 5.2 and 5.3).

The Nominating Committee will also review and recommend to the Board on the appointment of key executives, including but notlimited to the Managing Director.

There was one meeting held during the year and attendance was as follows (CCG, Guidance Note 1.1):


Chang See Hiang (Chairman) Non-executive / independent 1

Richard Seow Yung Liang (Member) Non-executive / independent –(Appointed on 15 July 2005)

Sunil Chandiramani (Member) Non-executive / independent –(Appointed on 15 July 2005)

Alain Ahkong Chuen Fah (Member) Non-executive / independent 1

Timothy David Dattels (Member) Non-executive / independent –(Appointed on 15 July 2005)

Anil Thadani (Chairman) Non-executive / independent 1(Resigned on 15 July 2005)

Tony Tan Choon Keat (Member) Non-executive / independent 1(Resigned on 10 June 2005)

Ang Guan Seng (Member) Non-executive / independent 1(Resigned on 10 June 2005)

111




Further to the disclosure set out under the Board Composition and Balance section of the Corporate Governance Statement,additional information on the directors is as follows (CCG, Guidance Note 4.5):

Date of last Directorships or chairmanships both present and thosere-election held over the preceding three years in other listed companies and

Name of director as a director other major appointments

Richard Seow Yung Liang N/A Twinwood Engineering LimitedLee Hing Development Limited

Sunil Chandiramani 31/3/2004 Apollo Hospitals Enterprise Limited**

(Appointed wef 18/4/2005, resigned wef 4/8/2005)Strides Arcolab Ltd** (Resigned wef 22/6/2005)

Dr Lim Cheok Peng 6/4/2005 Pantai Holdings Berhad (Appointed wef 12/9/2005)

Alain Ahkong Chuen Fah 28/3/2003 Twinwood Engineering Limited

Daniel Ashton Carroll N/A Advanced Interconnect TechnologiesShenzhen Development Bank

Chang See Hiang 6/4/2005 CWT Distribution Limited (Retired wef 16/5/2003)Yeo Hiap Seng LimitedJardine Cycle & Carriage LimitedMCL Land LimitedSingapore Turf Club

Timothy David Dattels N/A Primedia Inc.Shangri-La Asia LtdAsian Art Museum, San Francisco as TrusteeShenzhen Development BankSingTao News Corp. Limited

Ho Kian Guan 31/3/2004 Keck Seng (Malaysia) BerhadPelangi BerhadPetaling Garden BerhadShangri-la Hotel LtdShangri-la Asia LtdKeck Seng Investments (HK) Ltd

Dr Ronald Ling Jih Wen N/A Strides Acrolab LtdTwinwood Engineering Limited

Ashish Jaiprakash Shastry N/A Matrix Laboratories Limited**

Pantai Holdings BerhadLee Hing Development Limited

David R. White N/A Iasis Healthcare Corporation

Ho Kian Hock N/A Keck Seng Investments (HK) Ltd(alternate to Ho Kian Guan) Keck Seng (Malaysia) Berhad

Shangri-la Hotel Ltd**

Shangri-la Asia Ltd**

Pelangi Berhad**

Petaling Garden Berhad**

** Alternate director

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Remuneration Committee

The Remuneration Committee was established in March 1988. It is currently chaired by Mr Timothy David Dattels, an independentnon-executive director and comprises three other independent non-executive directors, namely Mr Richard Seow Yung Liang,Mr Sunil Chandiramani and Mr Ashish Jaiprakash Shastry (CCG, Guidance Notes 7.1 and 7.2).

While none of the members specialise in the area of executive compensation, the committee would have access to independentprofessional expert advice as stated under the Access to Information section of the Corporate Governance Statement. Moreover, theyhave unrestricted access to the Company’s records and information and shall receive detailed financial and operational reports fromthe Management so as to enable them to carry out their duties. They may also liaise with the Management, and may consult with otheremployees and seek additional information if required. The Group’s Manpower Development General Manager would thus provide themembers of the Remuneration Committee with any assistance they need in this area (CCG, Guidance Note 7.2).

The Remuneration Committee, which offers an independent perspective, reviews the remuneration packages and the proceduresfor fixing the remuneration packages of individual directors and key executives. However, members of the Remuneration Committeewill ensure that they do not set their own remuneration.

The Remuneration Committee will recommend a framework of remuneration for the Board and key executives after consultationwith the Chairman of the Board and submit the recommended framework for endorsement by the entire Board (CCG, GuidanceNote 7.3).

The Remuneration Committee shall:

a) ensure that non-executive directors should not be over-compensated to the extent that their independence may be compromised;

b) have the authority to consult experts on the remuneration of non-executive directors, if considered necessary; and

c) recommend the remuneration of the non-executive directors for approval at the annual general meeting (“AGM”) (CCG,Guidance Note 8.3).

There were two meetings held during the year and attendance was as follows (CCG, Guidance Note 1.1):


Timothy David Dattels (Chairman) Non-executive / independent 1(Appointed on 15 July 2005)

Richard Seow Yung Liang (Member) Non-executive / independent 2(Appointed on 15 July 2005)

Sunil Chandiramani (Member) Non-executive / independent 2

Ashish Jaiprakash Shastry (Member) Non-executive / independent 2(Appointed on 15 July 2005)

Anil Thadani (Chairman) Non-executive / independent –(Resigned on 15 July 2005)

Ang Guan Seng (Member) Non-executive / independent –(Resigned on 10 June 2005)

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Share Option Scheme Committee

The Share Option Scheme Committee was established in January 2001 and comprises four independent, non-executivedirectors, namely Mr Timothy David Dattels (Chairman), Mr Richard Seow Yung Liang, Mr Sunil Chandiramani and Mr AshishJaiprakash Shastry.

The Share Option Scheme Committee administers the Parkway Share Option Scheme 2001 (“Parkway Scheme 2001”) in accordancewith the rules of the scheme, and determines and approves the list of grantees of the share options, the date of the grant and theprice thereof. Members of the Share Option Scheme Committee will ensure that they do not determine or approve any grant ofshare options to themselves.

There were two meetings held during the year and attendance was as follows (CCG, Guidance Note 1.1):


Timothy David Dattels (Chairman) Non-executive 1(Appointed on 15 July 2005)

Richard Seow Yung Liang (Member) Non-executive 2(Appointed on 15 July 2005)

Sunil Chandiramani (Member) Non-executive 2

Ashish Jaiprakash Shastry (Member) Non-executive 2(Appointed on 15 July 2005)

Anil Thadani (Member) Non-executive –(Resigned on 15 July 2005)

Ang Guan Seng (Member) Non-executive –(Resigned on 10 June 2005)

Management Committee

The Management Committee was established in April 1985 and comprises one executive director, Dr Lim Cheok Peng (Chairman)and two non-executive directors, Mr Richard Seow Yung Liang and Mr Ashish Jaiprakash Shastry.

The duties of the Management Committee include approving of transfers, amalgamations and splitting of shares, transferableshare subscriptions rights, loan stocks and the issue of new certificates to replace any lost certificates in respect of any of theabove-mentioned securities and in respect of the Parkway Scheme 2001.

There were six resolutions in writing circulated during the year with no physical meeting held.

Share Purchase Committee

The Share Purchase Committee was established in May 2003. It is currently chaired by Mr Chang See Hiang, an independentnon-executive director and comprises four other independent non-executive directors, namely Mr Richard Seow Yung Liang,Mr Sunil Chandiramani, Mr Ho Kian Guan and Mr Ashish Jaiprakash Shastry.

The role of the Share Purchase Committee is to determine/decide the number of shares to purchase and the price at which theshares may be purchased, for and on behalf of the Company.

No shares were purchased during the financial year ended 31 December 2005.

There was no resolution in writing circulated and no physical meeting held during the year.

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Strategic Planning Committee

The Strategic Planning Committee was established in July 2005. It is chaired by Mr Richard Seow Yung Liang and comprises fourother members, namely, Dr Lim Cheok Peng, Dr Ronald Ling Jih Wen, Mr Ashish Jaiprakash Shastry and Mr David R. White.

The Committee was established to explore, develop, and recommend medium and long-term business strategies and initiatives forthe Group in the local, regional and international markets.

There was one meeting held during the year and attendance was as follows (CCG, Guidance Note 1.1):


Richard Seow Yung Liang (Chairman) Non-executive 1

Dr Lim Cheok Peng (Member) Executive 1

Dr Ronald Ling Jih Wen (Member) Non-executive 1

Ashish Jaiprakash Shastry (Member) Non-executive 1

David R. White (Member) Non-executive –(Appointed on 7 November 2005)

Criteria for Board Membership

Candidates for the Board are selected for their character, judgement, business experience and acumen. Scientific expertise, priorgovernment service and familiarity with national and international issues affecting business will also be relevant criteria forconsideration (CCG, Guidance Note 2.4). Where a director has multiple board representations, the Nominating Committee willevaluate whether or not a director is able to and has been adequately carrying out his duties as director of the Company (CCG,Guidance Note 4.4). Final approval of a candidate is determined by the Board.

The Articles of Association of the Company provide that at each AGM of the Company, one-third of the directors, including theManaging Director, shall retire from office by rotation provided always that every director, including a managing director, shall retirefrom office at least once in every three years (CCG, Guidance Note 4.2). The selection of directors to retire is on the basis of thosewho have been longest in office since their last election and as between directors of equal seniority, the directors to retire shall beselected from among them by agreement or, in the absence thereof, by lot. A retiring director is eligible for re-election by shareholdersof the Company at the AGM.

New directors may be appointed by way of a Board resolution upon the recommendation of the Nominating Committee but suchdirectors shall submit themselves for re-election at the next AGM.

Access to Information

The Company fully recognises that the continual flow of relevant information on an accurate and timely basis is critical for theBoard to be effective in the discharge of its duties.

Accordingly, directors will receive a regular supply of information from Management about the Group so that they are equipped toplay as full a part as possible in Board meetings. Detailed Board papers are prepared for each meeting of the Board. The Boardpapers shall include sufficient information from Management on financial, business and corporate issues of the Company toenable the directors to be properly briefed on issues to be considered at Board meetings. Information provided shall includebackground or explanatory information relating to matters to be brought before the Board, copies of disclosure documents, budgets,forecasts and monthly internal financial statements (CCG, Guidance Notes 6.1 and 6.2).

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Access to Information (Cont’d)

All directors shall have unrestricted access to the Group’s records and information and shall receive detailed financial and operationalreports from the Management so as to enable them to carry out their duties. Directors may also liaise with the Management, andmay consult with other employees and seek additional information if required (CCG, Guidance Notes 6.1 and 6.2).

In addition, directors shall have separate and independent access to advices and services of the Company Secretary, who isresponsible to the Board for advising on and implementation of the Group’s compliance requirements pursuant to the relevantstatutes and regulations. The Company Secretary should attend all board meetings (CCG, Guidance Note 6.3).

Each director has the right to seek independent legal and other professional advice, at the Company’s expense, concerning anyaspect of the Group’s operations or undertakings in order to fulfil his role and responsibilities as a director (CCG, Guidance Note 6.4).

Remuneration Matters

The Group’s remuneration policy is to provide compensation packages at market rates which will reward successful performanceand attract, retain and motivate managers and directors.

The Company currently does not have a formal service contract with non-executive directors. The executive director has a servicecontract, which is subject to termination by the relevant subsidiary of the Company by giving not less than three months’ notice(CCG, Guidance Note 8.4).

Company’s directors receiving remuneration from the Group for the years ended 31 December 2005 and 31 December 2004 areset out below (CCG, Guidance Notes 9.1 and 9.2):

Number of directors

2005 2004

Remuneration band

S$750,000 and above 2 1S$500,000 to below S$750,000 – 1S$250,000 to below S$500,000 – –Below S$250,000 14 8

Total 16 10

Summary compensation table for the directors of the Company and key executives of the Group for the year ended 31 December2005 is set out below (CCG, Guidance Notes 9.1 and 9.2):

Allowancesand other

Salary Bonus Fees benefits Total% % % % %

Directors of the Company

S$750,000 and aboveDr Lim Cheok Peng 53 47 – – 100

Tan Kai Seng(Resigned as a director on 10 June 2005and ceased to be an executive on 15 July 2005) 24 1 – 75* 100

*Includes amounts paid to the director in connection with the cessation of his employment with the Group.

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Remuneration Matters (Cont’d)

Allowancesand other

Salary Bonus Fees benefits Total% % % % %

Directors of the Company

Below S$250,000Richard Seow Yung Liang (Appointed on 10 June 2005) – – 100 – 100Sunil Chandiramani – – 100 – 100Alain Ahkong Chuen Fah – – 100 – 100Daniel Ashton Carroll (Appointed on 10 June 2005) – – 100 – 100Chang See Hiang – – 100 – 100Timothy David Dattels (Appointed on 10 June 2005) – – 100 – 100Ho Kian Guan – – 100 – 100Dr Ronald Ling Jih Wen (Appointed on 15 July 2005) – – 100 – 100Ashish Jaiprakash Shastry (Appointed on 10 June 2005) – – 100 – 100David R. White (Appointed on 15 July 2005) – – 100 – 100Anil Thadani (Resigned on 15 July 2005) – – 100 – 100Tony Tan Choon Keat (Resigned on 10 June 2005) – – 100 – 100Ang Guan Seng (Resigned on 10 June 2005) – – 100 – 100Dr Prathap C. Reddy (Resigned on 15 July 2005) – – 100 – 100

Key Executives of the Group

S$500,000 to below S$750,000Vivek Jetley 83 7 – 10 100

S$250,000 to below S$500,000Nellie Tang 63 31 – 6 100Molly Foo 68 27 – 5 100Dr Timothy Low 73 21 – 6 100Dr Goh Jin Hian 66 28 – 6 100George Pusavat 62 31 – 7 100Lim Poh Suan 61 31 – 8 100

The Company does not have any long-term incentive scheme apart from the existing Parkway Scheme 2001 (CCG, GuidanceNote 9.4). Details of the Parkway Scheme 2001 including the vesting schedule adopted by the Company are set out in theDirectors’ Report (CCG, Guidance Notes 8.5 and 9.4).

None of the employees holding managerial position within the Group during the year was an immediate family member of anydirector or the Managing Director of the Company (CCG, Guidance Note 9.3).

Accountability and Audit

In presenting the annual financial statements and quarterly announcements to Shareholders, it is the aim of the Board to provideShareholders with a balanced and comprehensible assessment of the Group’s position and prospects on a quarterly basis (CCG,Guidance Note 10.1). Management currently provides the Board with appropriately detailed management accounts of the Group’sperformance, position and prospects on a monthly basis (CCG, Guidance Note 10.2).

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Internal Controls

The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effectiveinternal control system will preclude all errors and irregularities, as a system is designed to manage rather than eliminate the riskof failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatementor loss. Nonetheless, the Audit Committee will:

a) satisfy itself, by such means as it shall consider appropriate, that adequate counter measures (i.e. mechanisms andprocesses, such as sound internal control systems) are in place to identify and mitigate any material business risksassociated with the Group;

b) ensure that a review of the effectiveness of the Group’s material internal controls, including financial, operating and compliancecontrols, and risk management, is conducted at least annually. Such review can be carried out by internal and/or externalauditors (CCG, Guidance Note 12.1);

c) ensure that the internal control recommendations made by internal and external auditors have been implemented by theManagement; and

d) ensure that the Board is in the position to comment on the adequacy of the internal controls of the Group.

Based on the Audit Committee’s review, the Board is satisfied that there are adequate internal controls in the Company (CCG,Guidance Note 12.2).

Internal Audit

The Group has an in-house internal audit function that is independent of the activities it audits. The internal audit unit wasestablished in 1996 to review the effectiveness of the material internal controls of the Group. The internal auditors are expected tomeet or exceed the standards set by nationally or internationally recognised professional bodies including the Standards for theProfessional Practice of Internal Auditing set by The Institute of Internal Auditors (CCG, Guidance Note 13.2).

In this framework, the internal audit function provides reasonable assurance that the risks incurred by the Group in its activitieshave been identified, analysed and adequately managed by the Management. Internal audit also makes recommendations toenhance the effectiveness and efficiency of the Group.

Communication with Shareholders

In line with continuous disclosure obligations of the Company, pursuant to the SGX-ST Listing Manual and the Singapore CompaniesAct, Chapter 50 (the “Act”), the Board’s policy is that Shareholders are informed of all major developments of the Group.

Information shall be communicated to Shareholders on a timely basis. Where there is inadvertent disclosure made to a selectedgroup, the Company will make the same disclosure publicly as soon as practicable (CCG, Guidance Note 14.2). Communication ismade through:

a) annual reports that are prepared and issued to Shareholders. The Board makes every effort to ensure that the annual reportincludes all relevant information about the Group, including future developments and other disclosures required by the Actand Singapore Financial Reporting Standards;

b) quarterly results announcements comprising a summary of the financial information and affairs of the Group for the relevant period;

c) notices of and explanatory memoranda for annual general meetings and extraordinary general meetings;

d) press and analyst briefings for the Group’s financial results as well as other briefings, as appropriate;

e) press releases on major developments of the Group;

f) disclosures to the SGX-ST; and

g) the Group’s website at http://www.parkwayholdings.com at which Shareholders can access information on the Group.

118


Communication with Shareholders (Cont’d)

In addition, Shareholders are encouraged to attend the AGM to ensure a high level of accountability and to stay informed of theGroup’s strategy and goals. The AGM is the principal forum for dialogue with Shareholders (CCG, Principle 15 and Guidance Note15.1). The chairpersons of the Audit Committee, Nominating Committee and/or Remuneration Committee shall be present andavailable to address questions at general meetings. The external auditor shall also be present to assist the directors in addressingany relevant queries by Shareholders (CCG, Guidance Note 15.3).

The notice of the AGM is despatched to Shareholders, together with explanatory notes or a circular on items of special business, atleast 16 days before the meeting. The Board welcomes questions from Shareholders who have an opportunity to raise issues eitherinformally or formally before or at the AGM (CCG, Guidance Note 15.1).

Each item of special business included in the notice of the meeting is accompanied, where appropriate, by an explanation forthe proposed resolution. Separate resolutions are proposed for substantially separate issues at the meeting (CCG, GuidanceNote 15.2).

5. Best Practices Guide – Dealing in Securities

The Company has issued a policy on dealings in the securities of the Company to its directors and Management, setting out theimplications of insider trading and guidance on such dealings. It has adopted the Best Practices Guide on Dealings in Securitiesissued by the SGX-ST.


119

Analysis of Shareholdingsas at 2 March 2006

Range of No. of No. ofShareholdings Shareholders % Shares %

1 to 999 260 5.42 107,648 0.021,000 to 10,000 3,730 77.79 15,877,955 2.1810,001 to 1,000,000 792 16.52 37,094,902 5.101,000,001 AND ABOVE 13 0.27 674,495,207 92.70

TOTAL 4,795 100.00 727,575,712 100.00

TOP TWENTY SHAREHOLDERS AS AT 2 MARCH 2006(as shown in the Register of Members)

No. ofNo. Name of Shareholders Shares %

1 RAFFLES NOMINEES PTE LTD 198,567,605 27.292 DBS NOMINEES PTE LTD 105,974,652 14.573 NEWBRIDGE SINGAPORE CO-INVESTMENT PTE LTD 61,486,486 8.454 NEWBRIDGE SINGAPORE HEALTHCARE PARTNERS PTE LTD 56,756,757 7.805 NEWBRIDGE SINGAPORE MEDICAL PARTNERS PTE LTD 56,756,757 7.806 CITIBANK NOMINEES SINGAPORE PTE LTD 45,695,940 6.287 HSBC (SINGAPORE) NOMINEES PTE LTD 45,481,004 6.258 UNITED OVERSEAS BANK NOMINEES PTE LTD 44,358,165 6.109 MERRILL LYNCH (SINGAPORE) PTE LTD 35,810,025 4.9210 MORGAN STANLEY ASIA (SINGAPORE) PTE LTD 15,408,421 2.1211 DB NOMINEES (S) PTE LTD 3,812,925 0.5212 SOCIETE GENERALE SINGAPORE BRANCH 2,621,470 0.3613 OCBC NOMINEES SINGAPORE PTE LTD 1,765,000 0.2414 HEXACON CONSTRUCTION PTE LTD 1,000,000 0.1415 LEE FOUNDATION 788,154 0.1116 ROYAL BANK OF CANADA (ASIA) LTD 736,000 0.1017 LEE LATEX PTE LIMITED 719,712 0.1018 UNIVERSITY OF MALAYSIA 710,640 0.1019 UOB KAY HIAN PTE LTD 689,664 0.0920 TENET INSURANCE COMPANY LTD 580,000 0.08

(Others - Less than 580,000 shares each) 47,856,335 6.58

TOTAL 727,575,712 100.00

PUBLIC FLOATRule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited requires that at least 10% of the equity securities(excluding preference shares and convertible equity securities) of a listed company in a class that is listed is at all times held by thepublic. The Company has complied with this requirement. As at 2 March 2006, approximately 56% of its ordinary shares listed on theSingapore Exchange Securities Trading Limited were held in the hands of the public.

SUBSTANTIAL SHAREHOLDERS AS AT 2 MARCH 2006(as shown in the Register of Substantial Shareholders)

Beneficial DeemedNo. Name of Shareholders Shareholdings Shareholdings

1 BLUM CAPITAL PARTNERS, L.P. Note 1 – 208,107,9882 BLUM G.A. III, LLC Note 1 – 208,107,9883 BLUM INVESTMENT PARTNERS, INC. Note 1 – 208,107,9884 COBALT LIMITED – 54,394,284 –5 DINAKAR SINGH Note 2 – 94,594,4746 DINAKAR SINGH LLC Note 2 – 94,594,4747 DINAKAR SINGH II LLC Note 5 – 61,486,4868 FMR CORP. – – 56,651,0009 JEFFREY D. EKBERG Note 7 – 56,756,75710 NEWBRIDGE ASIA III, L.P. Note 3 – 89,864,745

120

Analysis of Shareholdingsas at 2 March 2006

SUBSTANTIAL SHAREHOLDERS AS AT 2 MARCH 2006 (Cont’d)(as shown in the Register of Substantial Shareholders)

Beneficial DeemedNo. Name of Shareholders Shareholdings Shareholdings

11 NEWBRIDGE ASIA IV, L.P. Note 7 – 56,756,75712 NEWBRIDGE ASIA ADVISORS III, INC. Note 4 – 151,351,23113 NEWBRIDGE ASIA ADVISORS IV, INC. Note 7 – 56,756,75714 NEWBRIDGE ASIA GENPAR III, L.P. Note 4 – 151,351,23115 NEWBRIDGE ASIA GENPAR IV, L.P. Note 7 – 56,756,75716 NEWBRIDGE MAURITIUS CO-INVESTMENT LIMITED Note 5 – 61,486,48617 NEWBRIDGE MAURITIUS HEALTHCARE Note 6 – 56,756,757

PARTNERS LIMITED18 NEWBRIDGE MAURITIUS MEDICAL PARTNERS Note 7 – 56,756,757

LIMITED19 NEWBRIDGE PARKWAY, L.P. Note 5 – 61,486,48620 NEWBRIDGE PARKWAY III, L.P. Note 6 – 56,756,75721 NEWBRIDGE PARKWAY IV, L.P. Note 7 – 56,756,75722 NEWBRIDGE SINGAPORE CO-INVESTMENT – 61,486,486 –

PTE. LTD.23 NEWBRIDGE SINGAPORE HEALTHCARE – 56,756,757 –

PARTNERS PTE. LTD.24 NEWBRIDGE SINGAPORE MEDICAL – 56,756,757 –

PARTNERS PTE. LTD.25 RICHARD C BLUM Note 1 – 208,107,98826 TARRANT ADVISORS, INC. Note 1 – 208,107,98827 TPG-AXON CAPITAL MANAGEMENT, L.P. Note 2 – 94,594,47428 TPG-AXON GP, LLC Note 2 – 94,594,47429 TPG HF MANAGEMENT, LLC Note 2 – 94,594,47430 TPG-AXON PARTNERS (OFFSHORE), LTD Note 8 – 94,594,47431 TPG-AXON PARTNERS, L.P. Note 5 – 61,486,48632 TPG-AXON PARTNERS GP, L.P. Note 5 – 61,486,486

Notes:Note 1 – Deemed interest by virtue of being associated with Newbridge Asia III, L.P. (“Newbridge”), Newbridge Singapore Medical Partners Pte. Ltd.

(“NSMP”) and Newbridge Singapore Co-Investment Pte. Ltd. (“NSCI”) under Section 7 of the Companies Act.

Note 2 – Deemed interest by virtue by being associated with TPG-Axon Partners (Offshore), Ltd (“TPG-Axon”) under Section 7 of the Companies Act.

Note 3 – (i) Deemed interest by virtue of being associated with Newbridge Singapore Healthcare Partners Pte. Ltd. (“NSHP”) under Section 7 of theCompanies Act.

(ii) Deemed interested in 2,000 shares in Parkway held by Dr Lim Cheok Peng (“LCP”) pursuant to an agreement dated 10 June 2005between LCP, Newbridge and TPG-Axon.

(iii) Deemed interested in 33,105,988 shares in Parkway collectively held by Keck Seng Malaysia Berhad (“KS Malaysia”), Ocean Inc. (“Ocean”)and their respective affiliates and nominees pursuant to an agreement dated 6 July 2005 between KS Malaysia, Ocean, Newbridge andTPG-Axon.

Note 4 – Deemed interest by virtue of being associated with NSCI and Newbridge under Section 7 of the Companies Act.

Note 5 – Deemed interest by virtue of being associated with NSCI under Section 7 of the Companies Act.

Note 6 – Deemed interest by virtue of being associated with NSHP under Section 7 of the Companies Act.

Note 7 – Deemed interest by virtue of being associated with NSMP under Section 7 of the Companies Act.

Note 8 – (i) Deemed interest by virtue of being associated with NSCI under Section 7 of the Companies Act.

(ii) Deemed interested in 2,000 shares in Parkway held by LCP pursuant to an agreement dated 10 June 2005 between LCP, Newbridge andTPG-Axon.

(iii) Deemed interested in 33,105,988 shares in Parkway collectively held by KS Malaysia, Ocean and their respective affiliates and nomineespursuant to an agreement dated 6 July 2005 between KS Malaysia, Ocean, Newbridge and TPG-Axon.

121

NOTICE IS HEREBY GIVEN That the Thirty-Third Annual General Meeting of the Company will be held on Wednesday, 12 April 2006 at11.00 am at The Lecture Theatre, Level 3, Gleneagles Hospital, 6A Napier Road, Singapore 258500 for the purpose of transacting thefollowing businesses:

1. To receive and, if approved, to adopt the Directors' Report and Audited Accounts for the year ended 31st December 2005 and theAuditors' Report thereon.

2. To declare a Final Dividend of 5 cents per ordinary share less tax in respect of the year ended 31st December 2005.

3. (a) To re-elect Mr. Richard Seow Yung Liang who retires pursuant to Article 103 of the Articles of Association of the Company,as Director of the Company.

(b) To re-elect Mr. Timothy David Dattels who retires pursuant to Article 103 of the Articles of Association of the Company,as Director of the Company.

(c) To re-elect Dr. Ronald Ling Jih Wen who retires pursuant to Article 103 of the Articles of Association of the Company,as Director of the Company.

(d) To re-elect Mr. Ashish Jaiprakash Shastry who retires pursuant to Article 103 of the Articles of Association of the Company,as Director of the Company.

(e) To re-elect Mr. David R. White who retires pursuant to Article 103 of the Articles of Association of the Company, as Directorof the Company.

4. (a) To re-elect Mr. Alain Ahkong Chuen Fah who retires pursuant to Article 97 of the Articles of Association of the Company,as Director of the Company.

(b) To re-elect Mr. Sunil Chandiramani who retires pursuant to Article 97 of the Articles of Association of the Company, as Directorof the Company.

5. To approve Directors’ Fees of $679,863 for 2005 (2004 : $630,000).

6. To re-appoint Messrs. KPMG as Auditors and to authorise the Directors to fix their remuneration.

7. As Special Business:

To consider and, if thought fit, to pass (with or without modifications) the following resolutions (a) and (b) as ordinary resolutions:

(a) That subject to Section 161 of the Companies Act, Cap. 50, the Articles of Association of the Company and the approval of therelevant Stock Exchange and/or other governmental or regulatory bodies where such approval is necessary, the Board ofDirectors of the Company be and is hereby authorised to allot and issue shares and convertible securities in the Company atany time to such persons, upon such terms and conditions and for such purposes as the Board of Directors may deem fitPROVIDED ALWAYS THAT:

(I) the aggregate number of shares to be issued pursuant to this Resolution does not exceed fifty per cent. of the issuedshare capital of the Company at the time of the passing of this Resolution, of which the aggregate number of sharesissued other than on a pro rata basis to existing shareholders does not exceed twenty per cent. of the Company’s issuedshare capital;

Notice of Annual General MeetingParkway Holdings Limited(Co. Reg. No. 197400320R)

122

(II) (subject to such manner of calculation as prescribed by the Singapore Exchange Securities Trading Limited (the“SGX-ST”)) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (I)above, the percentage of the issued share capital of the Company is based on the Company’s issued share capital at thetime of passing of this Resolution after adjusting for:

(i) new shares arising from the conversion or exercise of convertible securities;

(ii) new shares arising from the exercise of share options outstanding or subsisting at the time of the passing of thisResolution, provided the options were granted in compliance with Part VIII of Chapter 8 of the SGX-ST ListingManual; and

(iii) any subsequent consolidation or subdivision of shares; and

(III) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continuein force until the conclusion of the next Annual General Meeting of the Company or the date by which the next AnnualGeneral Meeting of the Company is required by law to be held, whichever is the earlier.

(b) That the Board of Directors of the Company be and is hereby authorised to issue and allot from time to time such number ofShares as may be required to be issued pursuant to the exercise of options granted under the Parkway Share Option Scheme2001 ("Parkway Scheme 2001") PROVIDED ALWAYS THAT the aggregate number of Shares to be issued pursuant to theParkway Scheme 2001 does not exceed fifteen per cent. of the issued share capital of the Company from time to time.

8. To transact any other business which may normally be dealt with at an Annual General Meeting.

Books Closure & Dividend Payment Date

The Share Transfer Books and Register of Members of the Company will be closed on 24 April 2006 to determine Members’ entitlementsto the final dividend of 5 cents less tax.

Duly completed registrable transfers in respect of shares in the Company received up to the close of business at 5:00 pm on 21 April 2006by the Company's Share Registrar, M & C Services Private Limited of 138 Robinson Road #17-00, The Corporate Office, Singapore068906, will be registered to determine Members’ entitlements to such dividend. Members whose Securities Accounts with the CentralDepository (Pte) Limited are credited with shares in the Company as at 5:00 pm on 21 April 2006 will be entitled to such proposed dividend.

The proposed final dividend, if approved at the Thirty-Third Annual General Meeting, will be paid on 4 May 2006.

By Order of the Board

June Tay Kwok FungHo Li LiCompany Secretaries

Singapore, 24 March 2006

Notice of Annual General Meeting

123

Notes:

1. A member entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote instead of him. Aproxy need not be a member of the Company.

2. Where a member appoints two proxies, the Company may treat the appointments as invalid unless the member specifies the proportion of hisshareholding (expressed as a percentage of the whole) to be represented by each proxy.

3. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at No. 1 Grange Road#11-01, Orchard Building, Singapore 239693 not less than 48 hours before the time appointed for the Annual General Meeting.

4. The instrument appointing a proxy or proxies must be under the hand of the appointer or of his attorney duly authorised in writing. Where theinstrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer orattorney duly authorised.

5. Mr. Alain Ahkong Chuen Fah, if re-elected, will remain as an independent member and the Chairman of the Audit Committee.

6. Mr. Ashish Jaiprakash Shastry, if re-elected, will remain as an independent member of the Audit Committee.

7. Mr. Daniel Ashton Carroll was appointed as a director of the Company during the financial year ended 31 December 2005 and pursuant to Article83 of the Articles of Association of the Company, Mr. Carroll will retire from office at this Annual General Meeting. Although Mr. Carroll is eligible forre-election, Mr. Carroll has confirmed to the Company that he does not wish to stand for re-election.

Explanatory Notes on special business to be transacted

8. (a) The ordinary resolution proposed in item 7 (a) above, if passed, will empower the Board of Directors of the Company, from the date of theabove Meeting until the next Annual General Meeting, to issue shares in the Company up to an amount not exceeding in total fifty per cent.(50%) of the issued share capital of the Company for the time being for such purposes as they consider would be in the interest of theCompany. This authority will, unless revoked or varied at a general meeting, expire at the next Annual General Meeting of the Company.

(b) The ordinary resolution proposed in item 7 (b) above, if passed, will enable the Board of Directors of the Company, from the date of the aboveMeeting until the next Annual General Meeting, to issue shares in the Company up to an amount not exceeding in total fifteen per cent. (15%)of the issued share capital of the Company for the time being pursuant to the exercise of the options under the Parkway Scheme 2001. Thisauthority will, unless revoked or varied at a general meeting, expire at the next Annual General Meeting of the Company.

Notice of Annual General Meeting

124

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1

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.

Proxy Form

Parkway Holdings Limited(Incorporated in the Republic of Singapore)(Co. Reg. No. 197400320R)

* Please indicate your vote “For” or “Against” with a “�” within the box provided.** If you wish to exercise all your votes “For” or “Against”, please indicate with a “�” within the box provided.

Alternatively, please indicate the number of votes “For” or “Against” each resolution within the box provided.

If the Form of Proxy contains no indication as to how the proxyshould vote in relation to each resolution, the proxy will vote asthe proxy deems fit or abstain from voting.

As witness my/our hand(s)

NUMBER OF SHARES HELD

(Signature or Common Seal of Member)

�

I/We

of

being a Member(s) of Parkway Holdings Limited hereby appoint

of

or failing him,

ofas my / our proxy to vote for me / us on my / our behalf at the Thirty-Third Annual General Meeting of the said Company tobe held on Wednesday, 12 April 2006 and at any adjournment thereof.

By Show of Hands By PollNo. of Votes No. of Votes

No. Resolutions For* Against* For** Against**

1. Adoption of Directors’ Reports,Audited Accounts and Auditors’ Report.

2. Declaration of Final Dividend of 5 centsless tax.

3. Re-election of Director under Article 103:a. Mr. Richard Seow Yung Liang

b. Mr. Timothy David Dattels

c. Dr. Ronald Ling Jih Wen

d. Mr. Ashish Jaiprakash Shastry

e. Mr. David R. White

4. Re-election of Director under Article 97:a. Mr. Alain Ahkong Chuen Fah

b. Mr. Sunil Chandiramani

5. Approval of Directors’ fees for 2005.

6. Appointment of Auditors and fixing of theirremuneration.

7. Special Businesses:a. Authority to issue and allot shares pursuant

to Section 161 of the Companies Act, Cap.50.

b. Authority to issue and allot sharespursuant to the exercise of options underthe Parkway Share Option Scheme 2001.

8. Any Other Business.

this day of 2006

2

Notes:

1. Please insert the total number of Shares held by you. If you only have Shares entered against your name in the Depository Register(as defined in Section 130A of the Companies Act, Cap. 50), you should insert that number of Shares. If you only have Shares registeredin your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your name in theDepository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Sharesentered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted,this instrument of Proxy will be deemed to relate to all the Shares held by you.

2. A member entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote instead ofhim. A proxy need not be a member of the Company.

3. Where a member appoints two proxies, the Company may treat the appointments as invalid unless the member specifies the proportion ofhis shareholding (expressed as a percentage of the whole) to be represented by each proxy.

4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at No. 1 Grange Road #11-01,Orchard Building, Singapore 239693 not less than 48 hours before the time appointed for the Annual General Meeting.

5. The instrument appointing a proxy or proxies must be under the hand of the appointer or of his attorney duly authorised in writing. Wherethe instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand ofan officer or attorney duly authorised.

6. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible orwhere the true intentions of the appointer are not ascertainable from the instructions of the appointer specified in the instrument appointinga proxy or proxies. In addition, in the case of members whose Shares are entered against their names in the Depository Register, theCompany may reject any instrument appointing a proxy or proxies lodged if such member is not shown to have Shares entered againsthis/ its names in the Depository Register 48 hours before the time appointed for holding the Annual General Meeting as certified byThe Central Depository (Pte) Limited to the Company.

7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act asits representative at the Annual General Meeting in accordance with Section 179 of the Companies Act, Cap. 50. The representativeattending the meeting must produce evidence of his authority.

Proxy Form




b

Chairman’s Letter to Shareholders 10

A Letter from the Managing Director 13

Milestones for 2005 17

A Premier Regional Healthcare Provider 18

2005 in Review 20

Financial Review 2005 26

Board of Directors 30

Senior Management 33

Corporate Information 34

Financial Contents 35Contents

Vision Our vision is to be a leading international healthcare provider of choice with a passion for people and progress.

Mission We aim to deliver comprehensive healthcare services and quality care consistently to provide value to our customers. We achieve this through responsible practices and continuous investments in our people and technology to meet the challenges of tomorrow.

35

Corporate Offi ce

PARKWAY HOLDINGS LIMITED1 Grange Road#11-01 Orchard BuildingSingapore 239693Tel: (65) 6796 0600Fax: (65) 6796 0634/5www.parkwayholdings.com

Singapore Hospitals

EAST SHORE HOSPITAL321 Joo Chiat PlaceSingapore 427990Tel: (65) 6344 7588Fax: (65) 6345 4966www.eastshore.com.sg

GLENEAGLES HOSPITAL6A Napier RoadSingapore 258500Tel: (65) 6473 7222Fax: (65) 6472 5816www.gleneagles.com.sg

MOUNT ELIZABETHHOSPITAL3 Mount ElizabethSingapore 228510Tel: (65) 6737 2666Fax: (65) 6737 1189www.mountelizabeth.com.sg

International Hospitals

GLENEAGLES INTAN MEDICAL CENTRE, KUALA LUMPUR282 & 286 Jln Ampang50450 Kuala LumpurTel: (60-3) 4257 1300Fax: (60-3) 4257 9233www.gimc.com.my

GLENEAGLES MEDICAL CENTRE, PENANG1 Jln Pangkor, 10050 PenangMalaysiaTel: (60-4) 227 6111Fax: (60-4) 226 2994www.gleneagles-penang.com

APOLLO GLENEAGLES HOSPITAL, KOLKATA58 Canal Circular RoadKolkata 700 054India, West BengalTel: (91-33) 2320 5211-15Fax: (91-33) 2320 5184www.apollogleneagleshospitals.com

GLENEAGLES JPMC, BRUNEIJerudong Park, BG 3122Brunei DarussalamTel: (673) 261 1883Fax: (673) 261 1886www.gleneaglesjpmc.com.bn

PANTAI MEDICAL CENTRENo. 8, Jalan Bukit Pantai59100 Kuala LumpurTel: (60-3) 2296 0888Fax: (60-3) 2282 1557Email: [email protected]

PANTAI CHERAS MEDICAL CENTRE1, Jalan 1/96ATaman Cheras Makmur56100 Kuala LumpurTel: (60-3) 9132 2022Fax: (60-3) 9132 0687Email: [email protected]

PANTAI KLANG SPECIALIST MEDICAL CENTRE42, Jalan Persiaran Raja Muda Musa41100 Klang, SelangorTel: (60-3) 3372 5222Fax: (60-3) 3371 5705Email: [email protected]

HOSPITAL PANTAI PUTRI126, Jalan Tambun31400 Ipoh, PerakTel: (60-5) 548 4333Fax: (60-5) 545 1163Email: [email protected]

HOSPITAL PANTAI MUTIARA82, Jalan TengahBayan Baru11900 Pulau PinangTel: (60-4) 643 3888Fax: (60-4) 643 2888Email:[email protected]

HOSPITAL PANTAI AYER KEROHNo. 2418-1, KM 8Lebuh Ayer Keroh75450 MelakaTel: (60-6) 231 9999Fax: (60-6) 231 3299Email:[email protected]

HOSPITAL PANTAI INDAHJalan Perubatan 1Pandan Indah55100 Kuala LumpurTel: (60-3) 4289 2828Fax: (60-3) 4289 2829Email:[email protected]

Key Healthcare Services

GLENEAGLES CRC PTE LTD*111 Somerset Road#11-02, Singapore Power BuildingSingapore 238164Tel: (65) 6737 3642Fax: (65) 6471 3642www.gleneaglescrc.com

PARKWAY LABORATORYSERVICES LTD*28 Ayer Rajah Crescent #03-08Singapore 139959Tel: (65) 6278 9188Fax: (65) 6248 5878www.parkwaylab.com.sg

MEDI-RAD ASSOCIATES LTD*302 Orchard Road#18-01, Tong BuildingSingapore 238862Tel: (65) 6736 3538 ext 37Fax: (65) 6732 7776www.medirad.com.sg

PARKWAY SHENTON PTE LTD*Cyberhub Building20 Bendemeer Road # 01-02/06Singapore 339914Tel: (65) 6227 7777Fax: (65) 6225 3735www.parkwayshenton.com

FOMEMA SDN BHDLot G8 & G9, Level 5, Block G (Central)Pusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel: (60-3) 2094 6188Fax: (60-3) 2094 6802www.fomema.com.my

PANTAI MEDIVEST SDN BHDMezzanine Floor, West WingBangunan AvenueNo. 8, Jalan Damansara EndahDamansara Heights50490 Kuala LumpurTel: (60-3) 2092 1000Fax: (60-3) 2092 5000Email: [email protected]

PANTAI PREMIER PATHOLOGY SDN BHD3rd Floor, Block APantai Medical CentreNo. 8, Jalan Bukit Pantai59100 Kuala LumpurTel: (60-3) 2282 8795Fax: (60-3) 2282 2131Email: [email protected]

Medical Referral Centres

SINGAPORE83 Clemenceau Avenue#10-05/06/07UE SquareSingapore 039920Tel: (65) 6735 5000 (24-hour hotline)Fax: (65) 6732 6733www.imrc.com.sgEmail: [email protected]

BANGLADESHChittagongDhaka

BRUNEI DARUSSALAM

CANADAVancouver

CHINAShanghai

HONG KONG

INDIAChennaiMumbaiNew DelhiPunjab

INDONESIABalikpapanBandungBanjarmasinBatamJakartaJambiMakassarManadoMedanPadangPalembangPekan BaruPontianakSamarindaSemarangSolo/YogyaSurabaya

MALAYSIAJohor Bahru Kota KinabaluKuala LumpurKuching

MYANMARYangon

NIGERIALagos

PAKISTANLahoreKarachiIslamabad

PHILIPPINESManila

RUSSIAVladivostok

SRI LANKAColombo

THAILANDBangkok

UNITED ARAB EMIRATESAbu Dhabi

UNITED KINGDOMLondon

VIETNAMHanoiHo Chi Minh

* Corporate liaison offi ce

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PARKWAY HOLDINGS LIMITED



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We Believe - Parkway Pantai PANTAI MEDIVEST SDN BHD Mezzanine Floor, West Wing ... We believe that our patients are our ﬁ rst priority. Delivering unmatched patient care