annual report 2009

PAR

KW

AY H

OLD

ING

S LIM

ITED

Annual R

eport 2009

Parkway Holdings Limited Annual Report 2009

B u i l d i n g t h e F u t u r e o f H e a l t h c a r e

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

111 Somerset Road#15-01TripleOne SomersetSingapore 238164Tel: (65) 6307 7880Fax: (65) 6738 2036

Vision

To be the global leader in value-based integrated healthcare.

Our sights are set to establish ourselves to be leaders in

providing seamless, comprehensive healthcare of the highest

quality, based on specific values, as well as to focus on

creating and maintaining value for our people, patients, and

shareholders.

Mission

To make a difference in people’s lives through excellent patient care.

We know that in our business, when we provide the best

quality patient experience, very much everything else takes

care of itself. Above all, our people are called to do their best

to achieve the highest quality care to those entrusted to us.

We ValuePeople above all... by treating those we serve and each other

with compassion, dignity and respect.

Excellence... by acting with integrity and striving for the

highest quality care and service.

Results... by exceeding the expectations of the people we

serve and those we set for ourselves.

ContentsChairman’s Report 1

Executive Vice Chairman’s Report 5

Board of Directors 9

Senior Management 13

Operations Review 17

Financial Highlights 20

Financial Review 21

Corporate Information 23

Financial Report 25

1

CHAIRMAN’S REPORT

Economic uncertainty was a prevalent theme of 2009. The year saw many

companies scaling back their investment activity, some struggling to remain

viable and others reshaping their business models for tumultuous times. During

this period, your Company has remained focused on providing the best possible

care for our patients and on consolidating our position as the leading private

healthcare services provider in Singapore and the region. Your Company took

the opportunity to implement initiatives that have resulted in a leaner and more

efficient organization, which has allowed us to emerge from 2009 with a sterling

set of financial results and a solid platform for further growth. Consequently, we

are pleased to have been able to raise the standards of quality healthcare for our

patients while delivering attractive returns to all our shareholders

Delivering returns through consolidation and stability

We started 2009 with a two-pronged strategy: prudent management of our

current operations and cautious consideration of new investment opportunities.

While we wanted to expand our network in existing markets and look for fresh

areas of growth to tap into, we proceeded conservatively, bearing in mind the

global economic recession and the uncertainty of its duration. We focused our

efforts on strengthening our operations to enhance Parkway’s value proposition,

investing in our brand and taking a fresh look at the quality of patient care at all

our healthcare facilities.

Achieving the finest clinical outcomes and exceeding globally recognised

benchmarks have always been Parkway’s primary objectives. With an international

reputation for clinical excellence, the Parkway brand continues to attract potential

business partners, leading medical practitioners and patients from all parts of

the world.

Parkway’s journey to excellence begins with ensuring that we take care of our

staff. Following the belt-tightening and cost-cutting measures implemented in

2008, we made it a priority to reinstate salaries of staff as soon as possible.

This was achieved in April 2009, on the back of strong performance in the first

quarter of the financial year ended 31 December 2009. Throughout the year,

we concentrated on our nurses and staff, and we will continue to make our

people our priority in 2010 and beyond, and provide them with more training and

personal development opportunities.

In our quest to improve healthcare standards, we have been successful in

attracting new doctors to our Parkway system. To date, we have more than

1,200 accredited doctors in Singapore and we aim to increase this number in

the coming years. We have also seen an increase in nursing staff applications

to our hospitals, drawn by the prospect to gain from wide-ranging patient care

experiences and personal career development opportunities. Concurrently,

Richard Seow,Chairman,Parkway Holdings Limited

2

CHAIRMAN’S REPORT


through Parkway College, we train new nurses and other healthcare professionals who can

provide quality service that befits Parkway’s reputation. Through these various avenues, we

continue to attract new talent into the system, fuelling Parkway’s internal diversity.

Leading the way forward

As Singapore’s leading private healthcare services provider, we are constantly challenging

ourselves to look ahead and anticipate the healthcare needs of an increasingly sophisticated

consumer. What Singapore and the region have already begun to face is a shortage of quality

healthcare personnel and facilities. The operating environment is further challenged by the

rising expectations of the healthcare consumer and an increasing demand for better healthcare

quality and service standards. The challenge for healthcare service providers in Asia is to meet

the needs and demands of their various stakeholders and remain relevant, while providing

increasingly effective means of healthcare and growing at financially sustainable rates.

Our upcoming Parkway Novena Hospital and Parkway Novena Specialist Centre are key to

our efforts to meet the healthcare demands of the future. The hospital will set new standards

for healthcare services when it is completed, with its world-class medical facilities, dedicated

and personalised service, and luxurious, fully single-bedded patient suites that that allow

patients to recover in a tranquil and private environment. Parkway Novena Hospital and

Parkway Novena Specialist Centre are strategically located five minutes away from Orchard

Road, and conveniently accessible by both private and public transport. Construction is

currently underway and is progressing well.

We are extremely excited and encouraged by responses to the medical suites in Parkway

Novena Specialist Centre so far, with leading medical specialists having expressed enthusiasm

about setting up their clinics here. Parkway Novena Hospital and Parkway Novena Specialist

Centre will be significantly important in attracting medical tourists to Singapore, which will

benefit and strengthen the country’s position as a leading medical hub for the region.

Besides merely providing hospital beds and quality healthcare services, we expect Parkway to

play a crucial role in supporting the region’s healthcare needs through our involvement in the

region and sharing international best practices. We have already embarked on our next phase

of international growth through a consulting and management agreement with the Danat Al

Emarat Women and Children’s Hospital in Abu Dhabi. At this facility, we will provide clinical

development services and manage the hospital in accordance with the highest international

standards for patient care and safety. We have plans for the hospital to be at the forefront of

medical technology, with equipment to support the most advanced surgical and diagnostic

procedures and the support of a specialised and highly trained medical team. Entering into

management contracts is an effective means for Parkway to share its expertise and expand

our presence to new markets.

3

CHAIRMAN’S REPORT

Special thanks

The Board and I would like to thank the Parkway management team, our nurses and staff for

their unwavering commitment to the work they do in moving Parkway forward, while staying

true to our mission to make a difference in people’s lives through excellent patient care.

We would especially like to give recognition and thanks to our Group CEO and Managing

Director Dr Lim Cheok Peng for his vision and steadfast leadership of Parkway over the past

two decades. All of us who have been involved with the Company, past or present, have

been blessed to have Dr Lim as Parkway’s Group CEO, and we owe him a debt of gratitude

and thanks. For over twenty years, Dr Lim has been at the core of developing Parkway into

the success story that it is today. His knowledge and understanding of the intricacies of the

global healthcare industry are unparalleled, and he and his team have grown Parkway from a

Singapore-centric, single-hospital organisation into a leading provider of premium integrated

healthcare services, with 16 hospitals and 60 clinics throughout Asia. While he has made

the decision to step down as Chief Executive Officer, we are delighted that he has agreed

to continue adding value to Parkway as Executive Vice Chairman, where he will assist the

Company’s leadership on strategic and international initiatives.

It gives me great pleasure to welcome our incoming CEO, Dr Tan See Leng, into his new role

at the Company. A Parkway veteran, Dr Tan has proven his leadership skills and abilities in

both domestic and international assignments. We have full confidence in his abilities to lead

Parkway to new heights.

It would be remiss of me if I did not thank and recognize the invaluable role that all the

Directors of the Board have played, in particular, the Directors from TPG Capital, Mr Timothy

David Dattels; Mr Ranvir Dewan; Mr Steven Joseph Schneider; and Mr Ashish Jaiprakash

Shastry. Under TPG’s stewardship over the past five years, Parkway has grown into a truly

multinational company, ranging from Malaysia, with our partnership with the Pantai group, to

China, with the acquisition of the World Link clinic chain to India and Brunei. We have also

been forging new ground in Singapore, with the development of our Novena project. All these

would not have been possible without the guidance and value-added hands-on support of the

team from TPG. Of particular relevance to shareholders is the growth in market capitalisation

over the time that TPG has been an investor in the company: when TPG first bought a stake

in Parkway in 2005, the market capitalisation of the company was about S$1.4 billion; as of

March 2010, it has risen to S$3.5 billion.

Without our amazing doctors, nurses and staff, Parkway would be an empty shell of

sophisticated medical equipment and facilities. I stand in awe and admiration of the jobs they

do every minute of the day, every single day of the year. It is their human touch of dedication

and compassion and their skills as top-notch medical professionals that have helped establish

Parkway as the leading private healthcare provider in Asia with outstanding clinical outcomes

and clinical indicators.

4

CHAIRMAN’S REPORT


To all our shareholders, may I offer my humble thanks for your loyalty and continued support

of Parkway. I am grateful for your belief in the Company’s long term growth prospects. Be

assured that Parkway will continue to focus on making a difference in people’s lives through

excellent patient care and if we remain true in our focus, the returns to our shareholders will

remain attractive.

On a personal note, I would like to thank shareholders for supporting the directors and me

during my tenure on the Board. Thank you for allowing me the privilege and honour to serve

as your Chairman.

2010 will no doubt bring new challenges, opportunities and changes to Parkway. As in years

past, I have confidence that your Company will rise to the occasion and make that positive

difference in the lives of all our stakeholders.

5

EXECUTIVE VICE CHAIRMAN’S REPORT

The year 2009 was a watershed year for Parkway Holdings Limited. Given the

economic turmoil in 2008, we entered 2009 cautiously, taking a proactive stance

towards cost containment and implementing measures to optimise synergies and

increase productivity in all areas including manpower, equipment and central

purchasing. This was to ensure that Parkway maintained its strong platform for

long-term growth beyond 2009. This paid off, as we enjoyed healthy growth

each quarter throughout our financial year 2009 (FY 2009) and I am pleased to

report that we are now poised to strengthen our position as a global leader in

value-based integrated healthcare.

Healthy growth throughout FY 2009

Parkway’s revenue in FY 2009 grew 7% to reach S$979.2 million, compared to

S$914.8 million in FY 2008. This was driven primarily by the strong performance

of our healthcare services in Singapore, and our international hospitals. Our

healthcare division in Singapore registered a healthy 12% growth in revenue in FY

2009, bringing total revenue from our Singapore Operations to S$642.1 million, a

slight improvement over FY 2008’s S$633.2 million. Revenue from our International

Operations grew by 20% to reach S$337.1 million in FY 2009. This was a result

of the continued demand at our Apollo Gleneagles Hospital in Kolkata, as well

as the strong performance of our Pantai group of hospitals in Malaysia.

Earnings Before Interest, Taxes, Depreciation, Amortisation and REIT rental

(EBITDAR) rose by 9% in FY 2009 to reach S$237.0 million, compared to S$217.5

million in FY 2008. Profit After Tax and Minority Interests (PATMI), excluding

exceptional items was S$117.9 million in FY 2009, a 29% increase from S$91.7

million in FY 2008.

Following these positive results, the Board has resumed dividend payments by

declaring a final tax exempt one-tier dividend of 1.15 cents per ordinary share.

Going forward, dividend payments will be either on a half-yearly or annual basis,

subject to the performance of the Group.

Strengthening our position at home

Our hospitals in Singapore continued to perform well over the course of 2009.

During the year, we released the second issue of Reflections, our in-house annual

publication which measures the clinical quality initiatives and clinical performance

of our hospitals in Singapore. Based on internationally recognised clinical quality

indicators, Parkway hospitals did extremely well, reflecting our commitment to

quality clinical outcomes and patient safety. We remain the only private healthcare

player in Singapore to publish such data. It is our belief that clinical excellence

and value-creation for our patients are best achieved through a rigorous system

of measurement and making improvements using this information.

Dr Lim Cheok Peng,Executive Vice Chairman,Managing Director,Group President &Chief Executive Officer,Parkway Holdings Limited

6



This year, two of our hospitals, Mount Elizabeth Hospital and Gleneagles Hospital, underwent

the triennial audit by Joint Commission International (JCI) and I am pleased to share that

both hospitals continue to remain JCI-accredited, holding true to our commitment of ensuring

that we maintain the highest level of international healthcare standards. Congratulations

and thanks are in order for the staff and doctors at the hospitals who took part in the audit;

their hard work has paid off and we have secured re-accreditation. Parkway East Hospital,

formerly known as East Shore Hospital, will undergo a similar review of its JCI accreditation

in 2010.

At Parkway, our patients come first and we constantly innovate to cater to their needs. In

early 2009, we launched 40 fixed-fee surgical packages to help patients lower their healthcare

costs during the recessionary period. There was a strong demand for these packages and

by the end of the year, over 4,000 of the packages had been sold.

Parkway also strives to provide patients with the best medical facilities possible; during the

year, all three of our hospitals in Singapore underwent upgrading works. We refurbished the

High Dependency Units, Neonatal Intensive Care Units and laboratories at Mount Elizabeth

Hospital and the Ward 5 East maternity ward and public access areas at Gleneagles Hospital.

At Parkway East Hospital, major work was done to give it the look and feel of a boutique

establishment; the entire lobby area was renovated, and expansion work was carried out to

allow for new specialist clinics, new retail spaces and a new VIP suite. At Mount Elizabeth

Hospital, we also made more medical services available by establishing a liver transplant

programme, which is in addition to the liver transplant programme we already have at

Gleneagles Hospital.

The threat of the H1N1 virus was also something that kept us busy throughout 2009. We not

only stepped up infection control measures at all our hospitals, but Parkway Shenton was

also awarded the contract from the Ministry of Health to conduct temperature screenings at

all of Singapore’s land, air and sea entry points. In November 2009, Parkway Shenton was

involved in managing the threat of a second wave of the virus through the provision of the

H1N1 vaccine to patients through its wide network of clinics. We also reached out to the

community and worked with various grassroots clubs throughout Singapore to offer 1,000

free doses of the vaccine to the needy.

At Parkway, we recognise the importance of nurses in the healthcare arena, and in 2009,

Parkway also launched its “Thinking Nurses, With Heart” campaign. Parkway is well aware

of the crucial role that nurses play in our organisation and through this initiative we celebrate

the achievements of our nurses in their quest to provide quality care and make a difference

in their patients’ lives.

7


Training and continual development of our people is an ongoing emphasis at Parkway. We

continue to provide opportunities for life-long learning for our nurses, allowing them to pick

up skills and knowledge needed for them to remain effective in the workplace. This is provided

by our very own education arm at Parkway College. Parkway College made a significant

achievement in 2009, as it became the only private institution in Singapore to achieve full

accreditation from the Singapore Nursing Board for its Diploma in Nursing. This is testament

of the quality education offered at Parkway College. The College has also extended its

training capabilities beyond local shores, and is providing training to foreign healthcare

administrators and officials. Through the year, more than 100 officials from Kazakhstan

received training at the College. It also conducted training for college students from South

Korea and healthcare officials from China. Parkway College is currently collaborating with

Astana University in Kazakhstan to offer a healthcare administrative programme.

Perhaps our most eagerly anticipated project is the development of our new hospital in

Novena. This 333-bed hospital will be a pinnacle in healthcare in Singapore and throughout

the world, and will feature the high standards of clinical care and service that Parkway is

renowned for. The project is progressing well and we are on track for launch in 2012. We

have also received strong expressions of interest from many specialists about the medical

suites at the Novena development’s specialist centre. We believe that the Novena hospital

is key to Parkway’s growth, due to the increasing demand for quality healthcare from both

Singaporeans and foreigners in the coming years.

Expanding our regional footprint

During the year, we reviewed our presence in Malaysia and are now aggressively expanding

our network there. Our expansion into Malaysia is based on a hub and spoke model where

we plan to set up community hospitals in smaller towns across Malaysia. There is a lot of

demand for private healthcare in Malaysia; this demand is not only from medical tourists in

the region, but more importantly, there is a strong demand from the local population who are

seeking premier healthcare services and do not want to travel long distances to main cities

in Malaysia where most private hospitals are currently located.

This demand for healthcare can be seen in our existing Malaysian hospitals, which are

experiencing high occupancy levels. To that end, we are looking at new hospital developments

throughout the Peninsula, such as in Manjung, Perak and Medini, Johor. Expansion and

enhancement of the services and facilities at many of the existing hospitals were also carried

out in 2009, so as to provide patients and their visitors with even better experiences.

In India, we continue to enjoy a high level of growth at Apollo Gleneagles Hospital, Kolkata,

and the new oncology centre at the hospital is expected to begin operations in the first

quarter of 2010. Progress on our upcoming ParkwayHealth Khubchandani Hospital in Mumbai

continues to be made; construction is expected to begin in April 2010.

8



We continue to expand our presence in China, having signed a deal with Chinese partners to

manage more medical centres in Shanghai. In 2009, we also expanded the range of services

available at our current Shanghai clinics. For example, we opened an Allergy Centre, which

is a significant move for Parkway as this centre is the only comprehensive allergy service in

Shanghai providing allergy investigations, testing, treatment, and other professional allergy

medical services to adults and children. I am also pleased to share that Parkway will be

participating in the upcoming Shanghai World Expo. We have the distinction of being the

only healthcare provider with a clinic on-site to attend to the delegates throughout the period

of the Expo.

Finally, in the Middle East, we continue to enjoy a strong demand for our services from

patients in this region. Many continue to travel to Singapore to seek treatment at our hospitals

here. We have also begun to export our business to this region as well, having secured a

management contract with the upcoming Danat Al Emarat Women and Children’s Hospital

in Abu Dhabi. Construction works are scheduled to begin in Q1 of 2010.

We will continue to look to secure more of such management contracts in the Middle East

and other regions, in order to diversify our revenue streams. We anticipate that with Parkway’s

strong brand equity, we will be able to successfully export our healthcare services and

decades of knowledge overseas.

Achieving growth

Looking ahead, the growth potential for the Asia-Pacific healthcare industry remains bright.

Parkway is well positioned to leverage on the growth opportunities ahead, as we have

been prudent in our cost management and are now in a stronger position to tap on these

opportunities.

Parkway’s hospitals continue to be the premier choice for quality care and excellent clinical

outcomes. However, we will not rest on our laurels and will remain committed to setting new

benchmarks in the area of clinical performance and patient safety and service.

I would like to take this opportunity to thank our shareholders and business partners for the

support during the year. Finally, I extend my deepest gratitude to all management, staff,

nurses and doctors at Parkway. Your commitment and dedication to the Group and our

patients have helped us raise the bar with regards to healthcare in Singapore and the region.

Parkway has built a solid foundation through this challenging year and we are now on track

to ride the next wave of growth.

9

BOARD OF DIRECTORS

Richard Seow Yung Liang

Chairman

Richard Seow has been the Chairman of the Board of Parkway Holdings Limited and the

Executive Committee since July 2005. A former investment banker with over 16 years of

industry experience, he was previously with Citigroup, Goldman Sachs and JP Morgan.

Richard is the Chairman of the Anglo-Chinese School Board of Governors, Chairman of

Republic Polytechnic, Singapore, and a member of the Singapore Sports Council.

Dr Lim Cheok Peng

Executive Vice Chairman, Managing Director, Group President & CEO

Dr Lim Cheok Peng was appointed as Executive Vice Chairman of Parkway Holdings in April

2009 and is also the Managing Director, Group President & Chief Executive Officer. Cheok

Peng sits on the Executive Committee and has been steering the Group’s healthcare efforts

since 1987. He is a cardiologist by profession.

Dr Tan See Leng

Chief Executive Officer (Designate)

As Chief Executive Officer (Designate), Dr Tan See Leng leads all operational activities within

the Parkway Group.

Dr Tan first joined Parkway in September 2004 as Chief Operating Officer of Mount Elizabeth

Hospital. He was subsequently appointed Senior Vice President, International Operations in

November 2006 and was later seconded to Pantai Holdings Berhad as Chief Executive Officer

of the Hospitals Division, a position he held till February 2008.

Prior to joining Parkway, Dr Tan served as Medical Director and Consultant to various

government and private medical groups. Between 1992 and 2002, he founded the Healthway

Medical Group.

Dr Tan has more than 20 years of experience in the healthcare industry. He graduated with

a Bachelor of Medicine and Bachelor of Surgery (MBBS) and a Master of Medicine (Family

Medicine) from the National University of Singapore. He also has a Master of Business

Administration from the University of Chicago GSB.

Alain Ahkong Chuen Fah

Non-executive Director

Alain Ahkong is the Chairman of the Audit & Risk Management Committee of Parkway

Holdings Limited. Currently a Director of Pioneer Management Services Pte Ltd, Alain

also holds directorships in several companies, including listed company, Hup Soon Global

Corporation Limited.

10 Parkway Holdings Limited Annual Report 2009

BOARD OF DIRECTORS

Chang See Hiang


Chang See Hiang sits on various committees of Parkway Holdings Limited. An Advocate and

Solicitor of the Supreme Court of Singapore, he is the Senior Partner of his own law firm, M/s

Chang See Hiang and Partners. He is also a Director of Jardine Cycle & Carriage Limited,

MCL Land Limited, Yeo Hiap Seng Limited and STT Communications Ltd.

Timothy David Dattels


Timothy Dattels is a Partner of TPG Capital, LP based in San Francisco with a focus on Asian

investing. Prior to joining TPG, Timothy served as Managing Director of Goldman Sachs.

He was elected Partner in 1996 and was head of Investment Banking for all Asian countries

outside of Japan from 1996 – 2000 where he advised several of Asia’s leading entrepreneurs

and governments. In addition, he served on the firm’s Management Committee in Asia.

Timothy serves as a Director of SingTao News Corporation Limited, a Hong Kong based

media company and Shangri-La Asia, Asia’s leading hotel brand. He is a trustee of the Asian

Art Museum of San Francisco and also serves on the Dean’s Advisory Board of the Rothman

School of Business at the University of Toronto, as well as founder and member of the Asia

Pacific Council of The Nature Conservancy. He holds a BA (Honors) from The University of

Western Ontario, 1980, and an MBA from Harvard Business School, 1984.

Ranvir Dewan


Ranvir Dewan joined TPG Capital in July 2006 and is based in Singapore. He is currently

the Head of Financial Institutions Group Operations. From April 2000 to July 2006 he was

Executive Vice President and Chief Financial Officer of Standard Chartered First Bank

(formerly Korea First Bank) in Seoul, Korea.

Prior to that, Ranvir spent 13 years with Citibank and held various senior positions in its

international businesses.

Ranvir is a Fellow of the Institute of Chartered Accountants in England & Wales and a member

of the Canadian Institute of Chartered Accountants.

He serves on the Boards of Parkway Holdings Limited (Singapore), Shriram Transport Finance

Company Limited (India) and PT Bank Tabungan Pensiunan Nasional Tbk (Indonesia).

11

BOARD OF DIRECTORS

Dato’ Mohammed Azlan b. Hashim


Azlan is currently Chairman of Aseana Properties Limited, Westcomb Financial Group Limited

and Asiasons Capital Limited (formerly known as Integra2000 Ltd).

In Malaysia, Azlan is a board member of various government and non-government related

organisations including Khazanah Nasional Berhad, Labuan Offshore Financial Services

Authority and member of Employees Provident Fund Investment Panel.

Azlan also serves as Chairman of several public listed entities, listed on Bursa Malaysia

Securities Berhad including D&O Ventures Berhad and SILK Holdings Berhad. He is also a

director of Scomi Group Bhd. He has extensive experience working in the corporate sector,

including financial services and investments. Among others, he has served as Chief Executive,

Bumiputra Merchant Bankers Berhad, Group Managing Director, Amanah Capital Malaysia

Berhad and Executive Chairman, Bursa Malaysia Berhad (formerly known as Kuala Lumpur

Stock Exchange) Group.

Azlan holds a Bachelor of Economics from Monash University, Melbourne and qualified as

a Member of the Institute of Chartered Accountants, Australia. He is a Fellow Member of

the Institute of Chartered Accountants, Australia, Member of The Malaysian Institute of

Accountants, Fellow Member of Malaysian Institute of Directors, Fellow Member of the

Institute of Chartered Secretaries and Administrators and Hon. Member of The Institute of

Internal Auditors, Malaysia.

Ho Kian Guan


Ho Kian Guan has been a director of Parkway Holdings since 1985. Kian Guan is the Executive

Chairman of Keck Seng Group of Companies which include the publicly listed Keck Seng

(Malaysia) Berhad and Keck Seng Investments (Hong Kong) Limited. The principal activities

of the Keck Seng Group are palm oil cultivation/manufacturing, real estate development, and

hotel/resort investments. He also serves on the Board of Shangri-La Asia Limited, a Company

listed on the Hong Kong Stock Exchange.

Ganen Sarvananthan


Ganen Sarvananthan is Executive Director of Investments at Khazanah Nasional Berhad,

primarily responsible for overseeing new investments and divestments in targeted sectors and

geographies. Ganen is a barrister-at-law (Lincoln’s Inn, London). Prior to joining Khazanah,

he was at UBS Investment Bank serving in its Hong Kong, London and Singapore offices.


BOARD OF DIRECTORS

Steven Joseph Schneider


Steven Schneider is a Partner & Managing Director of TPG Capital, LP and responsible for

the Operating Group within TPG-Asia. Prior to joining TPG in 2005, Steven was the President

& CEO of GE Asia-Pacific and Chairman & CEO of GE China where he previously spent 20

years. He was a Company Officer and a member of the Corporate Executive Committee of

GE. Steven is currently the Co-Chairman and Non-executive Director of UTAC. Previously

he held Non-executive Directorships at Hanaro Telecom (Korea), Myer Department Store

(Australia) and NIS Financial Services (Japan). He is a graduate of Grove City College with

a degree in Business and currently resides in Hong Kong.

Ashish Jaiprakash Shastry


Ashish J. Shastry is a Managing Director and Head of Southeast Asia at TPG Capital. Since

joining TPG Capital in 1998, he has been based in Singapore and Hong Kong, focusing on

TPG Capital’s investment activities in India, Australia and Southeast Asia. He serves as a non-

executive director on the Boards of United Test Assembly Center Ltd and PT Bank Tabungan

Pensiunan Nasional Tbk.

Ho Kian Hock

(alternate director to Ho Kian Guan)

Tanguy Vincent Serra

(alternate director to Timothy David Dattels)

Ahmad Shahizam b. Mohd Shariff

(alternate director to Ganen Sarvananthan)

13

SENIOR MANAGEMENT

Dr Lim Cheok Peng

Executive Vice Chairman

Dr Lim Cheok Peng, 63, is the Executive Vice Chairman and he sits on the Executive

Committee. He has been steering the Group’s healthcare efforts since 1987. He is a

cardiologist by profession and holds the following qualifications: MBBS (Singapore),

M.Med. Int. Med (Singapore), MRCP (UK), FRCP (Edinburgh), FRCP (Glasgow), FAMS

(Cardiology).

Dr Tan See Leng

Chief Executive Officer (Designate)

As Chief Executive Officer (Designate), Dr Tan See Leng leads all operational activities within

the Parkway Group.

Dr Tan first joined Parkway in September 2004 as Chief Operating Officer of Mount Elizabeth

Hospital. He was subsequently appointed Senior Vice President, International Operations in

November 2006 and was later seconded to Pantai Holdings Berhad as Chief Executive Officer

of the Hospitals Division, a position he held till February 2008.

Prior to joining Parkway, Dr Tan served as Medical Director and Consultant to various

government and private medical groups. Between 1992 and 2002, he founded the Healthway

Medical Group.

Dr Tan has more than 20 years of experience in the healthcare industry. He graduated with

a Bachelor of Medicine and Bachelor of Surgery (MBBS) and a Master of Medicine (Family

Medicine) from the National University of Singapore. He also has a Master of Business

Administration from the University of Chicago GSB.

Tan See Haw

Group Chief Financial Officer

Tan See Haw, 53, is the Group Chief Financial Officer. He heads the Group’s Finance

Division. Prior to joining Parkway, See Haw was the Vice President of IT and Supply Chain of

Unisem (M) Bhd, overseeing the IT and supply chain functions for all of Unisem’s worldwide

operations. Concurrently, he was also the Chief Financial Officer of Advanced Interconnect

Technologies (AIT), a position which he held since 1999. Before joining AIT, See Haw held

key financial positions for major corporations such as Asia Pacific Breweries Ltd (Director of

Group Finance) and Pepsi-Cola International (Asia Division Financial Controller).

See Haw graduated with a Bachelor Degree in Accountancy from the former Singapore

University in 1980. He is also a Fellow of the Institute of Certified Public Accountants of

Singapore.


SENIOR MANAGEMENT

June Tay

Company Secretary, Senior Vice President, Legal & Risk

June Tay, 55, is the Company Secretary and Senior Vice President, Legal & Risk. June is

responsible for legal and corporate secretarial matters as well as risk management for

Parkway and its group of companies. June joined Parkway Properties Pte Ltd in May 1981 as

its Corporate Legal Officer and has been the Company Secretary of Parkway since 1985.

June graduated with a Bachelor of Laws (Honours) from the University of Singapore.

Molly Foo

Senior Vice President, Finance

Molly Foo, 50, is the Senior Vice President, Finance. Molly started with Mount Elizabeth

Hospital in August 1993 and was the General Manager, Finance. She was appointed as Chief

Financial Officer on 1 April 2003. Prior to this, Molly was the Financial Controller for Mount

Alvernia Hospital from 1990 to 1993.

Molly graduated with a Bachelor in Accountancy from the National University of Singapore.

Ann Yong

Senior Vice President, People Resource

Ann Yong, 56, is the Senior Vice President, People Resource. Ann is responsible for the

Group’s human resource, talent management, compensation & rewards management and

employee engagement functions. Prior to joining Parkway, Ann was Global HR Director with

Parlex Electronics, a USA based electronic firm in Shanghai. She was Regional HR Director

with IPACS/NCS from 2000 to 2006. Between the period 1993-1999, Ann was leading the

human resource function for Allen & Gledhill and Motorola Electronics (Tianjin).

Ann graduated with a Bachelor degree in Government & Public Administration from the

former Nanyang University and holds a Master of Science in Asia Pacific Human Resource

Management from the National University of Singapore.

15

SENIOR MANAGEMENT

Dr Goh Jin Hian

Senior Vice President, Growth, Innovation and Strategy

Dr Goh Jin Hian, 41, is the Senior Vice President, Growth, Innovation and Strategy and

is responsible for the business growth, development and strategic planning matters of

Parkway.

Dr Goh has been with Parkway since 1997. During this time, he has held a number of

Executive portfolios in Parkway Shenton from 1999 to 2006. He was the Chief Executive

Officer of Gleneagles Hospital from 2006 to 2007 and held the position of Division President

of Singapore Operations, Parkway, from 2008 to 2009.

Prior to joining Parkway, Dr Goh was with the Ministry of Health. He graduated with an MBBS

from the National University of Singapore and holds an MBA from the University of Hull, UK.

He has also completed the Advanced Management Programme at Wharton.

Fong Choon Khin

Senior Vice President, IT/Chief Information Officer

Fong Choon Khin, 52, is the Senior Vice President, IT/Chief Information Officer. Choon Khin

has more than 28 years working experience in the IT industry, of which 7 years are in the

healthcare field. Before joining Parkway, Choon Khin was with the SingHealth Group. Prior to

that, he had worked for corporations which include Media Corporation of Singapore, Transit

Link, Computer Systems Advisers Pte Ltd in Singapore.

Choon Khin graduated with a degree in Computer Science from the National University of

Singapore in 1981 and obtained his Master degree in Health Service Management from The

Flinders University of South Australia in 2005.

Raju Narayan

Division President, South Asia & Middle East Operations

Raju Narayan, 43, is the Division President, South Asia & Middle East Operations. Raju has

over 19 years of experience in healthcare and hospital management in India and in Singapore.

Prior to joining Parkway, Raju had worked with both government and private healthcare

facilities in Singapore, such as Tan Tock Seng Hospital, Changi General Hospital, and Raffles

Hospital, in various senior management positions.

Raju serves as a member of the Board of Directors for Parkway’s Joint Ventures in India and is

a key member of the Group’s International Operations management team providing services

for setting up and managing new healthcare facilities across South Asia and Middle-east

regions.

Raju has an Engineering degree in Electronics & Communications (Specialising in Biomedical

Instrumentation) from India.


SENIOR MANAGEMENT

Dr Jeffrey H Staples

Division President, North Asia Operations

Dr Jeffrey H Staples, 48, is the Division President, North Asia Operations. Dr Staples plays a

leadership role in directing, planning, implementing and evaluating all operations within North

Asia to ensure high quality clinical outcomes, service excellence and financial performance.

Prior to joining Parkway, Dr Staples was the Medical Director, Consulting and Corporate

Services for International SOS. Dr Staples has 15 years’ working experience in the healthcare

industry, of which he spent 8 years as a Primary Care physician and Clinical Consultant in

the United States and Japan.

Dr Staples graduated with a BA degree in Philosophy from Wesleyan University in 1984 and

obtained his MBA from San Francisco State University in 1989, and MD degree from Columbia

University in 1993.

17

OPERATIONS REVIEW

2009 was a year full of challenges for Parkway Holdings Limited, as the global economy experienced a slow recovery from the crisis the year before. Parkway started the year cautiously, and progressed well through the year with key milestones achieved, both locally and globally.

In Singapore

At its three hospitals in Singapore, Parkway conducted upgrading works to ensure that the hospitals are well-maintained and equipped with the latest medical equipment and facilities to cater to patients’ needs. The High Dependency Units (HDUs) and Neonatal Intensive Care Units (NICUs) at Mount Elizabeth Hospital and the Ward 5 East maternity ward at Gleneagles Hospital were refurbished, with the upgraded HDUs employing a new and technologically advanced patient monitoring system. Mount Elizabeth Hospital is the first hospital in Asia to utilise this system. At Parkway East Hospital, formerly known as East Shore Hospital, major upgrading works were carried out, adding a new VIP suite, new clinics, a new cafeteria and more retail options to the facilities available at the hospital. All of the upgrading works at the hospitals were carried out in the belief that a progressive and well-maintained hospital environment goes a long way to ensure patients’ total satisfaction.

Meanwhile, Parkway continued to make good progress in improving its clinical outcomes and performance at its Singapore hospitals. The hospitals achieved a perfect 5 score for 2009 for Parkway’s Clinical Quality Scorecard consisting of 8 globally recognised clinical indicators. This is testament to the effectiveness of patient safety and infection control measures implemented at the hospitals. The second edition of Reflections, Parkway’s inhouse publication measuring the clinical quality initiatives and clinical performance of the Group’s Singapore hospitals, was also published in 2009. Parkway remains the only private healthcare provider in Singapore to publish such data.

Following the completion of a stringent audit, Mount Elizabeth Hospital and Gleneagles Hospital were re-accredited by Joint Commission International (JCI), an international organisation that seeks to improve the safety of patient care through the provision of accreditation and certification standards. Based on the survey by JCI, the hospitals had scored well in areas of patient assessment, medication management and use, quality improvement and patient safety, infection control and prevention, hospital leadership and information management. All three Parkway hospitals in Singapore are JCI-accredited, a validation of the Group’s commitment to deliver excellent clinical outcomes and patient care.

With better clinical outcomes and improved service delivery, Parkway’s three hospitals in Singapore also scored well on the Customer Satisfaction Index of Singapore (CSISG) in 2009. In the nationwide study which covered eight key economic sectors, Parkway scored 72.1 on the index, which was higher than the national average of 68.9 for the healthcare sector. This reflects the Group’s commitment to quality service and patient care. First launched in April 2008, the CSISG is a landmark measure of customer satisfaction cutting across sectors and sub-sectors in the services industry of Singapore that is jointly developed by the Institute of Excellence at SMU (ISES) and the Singapore Workforce Development Agency (WDA).


In early 2009, the Influenza A (H1N1) virus sent the world into a cautious mode, due to concerns over a potential pandemic that could derail the economic recovery. Parkway immediately stepped up precautionary measures at all its hospitals and medical centres in preparation for an imminent outbreak. The virus turned out to be milder than expected and there was no major impact on Singapore and the region. Nonetheless, Parkway’s readiness to handle a crisis had been put to good test. Parkway also benefited through the awarding of a contract by the Ministry of Health to Parkway Shenton to conduct temperature screenings at all entry points into Singapore. In the latter part of the year, Parkway Shenton had the opportunity to offer the H1N1 vaccinations to the public, and also donated 1,000 doses of the vaccine to charity.

In April 2009, Parkway launched 40 fixed-fee packages for common procedures such as gastroscopies, colonoscopies and cataract extractions, in order to help patients lower their healthcare costs. The demand for these packages was strong with more than 4,000 packages taken up by the end of 2009. The launch of these fixed-fee surgical packages was part of the Group’s effort and commitment to continuously offer better value to patients and meet their changing needs through innovation.

As the premier private healthcare service provider in the region, Parkway recognises that its nurses, who provide top-notch care and service to patients, are one of the key differentiating factors that set the Group apart. In July 2009, the Group launched the “Thinking Nurses, With Heart” campaign to recognise the crucial role of nurses and their contribution to the organisation. Through this campaign, which was organised to tie in with Nursing Week, the Group distributed more than $60,000 worth of grocery vouchers to the nurses at the three hospitals. Three Parkway nurses were also awarded Merit Awards by the Ministry of Health based on their exemplary contributions to the nursing profession.

Training and continual learning remained a key focus of the Group in 2009 as Parkway continued to provide opportunities for life-long learning for employees to acquire new skills and knowledge to remain effective in the workplace. This is provided through Parkway’s own education arm, Parkway College. Parkway College achieved a significant milestone in 2009 where it became the only private institution in Singapore to achieve full accreditation from the Singapore Nursing Board for its Diploma in Nursing course. This is a strong testament of the high quality of the nursing education offered by Parkway College.

Parkway College made another significant achievement by extending its training capabilities beyond Singapore. Last year, more than 100 officials from Kazakhstan received training in healthcare management and healthcare accreditation at Parkway College. In October, Parkway College also provided training to college students from South Korea, while in December, healthcare management training was conducted for healthcare executives and leaders from Kunming, China. It is also currently collaborating with Astana University in Kazakhstan to jointly develop and offer a healthcare administrative programme.

Parkway was also able to expand its non-hospital healthcare operations in 2009, with Parkway Shenton opening 2 new clinics at Changi Business Park and Novena Medical Centre. In addition to the H1N1 screening contract from the Ministry of Health, Parkway Shenton also secured new corporate clients and renewed several major corporate accounts.

Parkway continued its strategy to further streamline its operations through the divestment of various non-core businesses or assets. In 2009, Parkway completed the disposal of its entire 60% shareholding in dental practice Ko, Djeng Gleneagles Pte Ltd. The Group also divested its 20% shareholding in the nursing education provider Gleneagles Academy of Nursing (M) Sdn Bhd. Moving forward, the Group will focus its business in nursing education through Parkway College in Singapore and Pantai Education in Malaysia. Parkway also divested its 21.88% shareholding in Auric Pacific Group.

OPERATIONS REVIEW

19

In the region

Besides achieving key milestones in Singapore, Parkway further expanded its presence overseas in 2009.

In Malaysia, the demand for quality healthcare has never been stronger. Parkway, through Gleneagles Hospital Kuala Lumpur, Gleneagles Medical Centre, Penang and its network of hospitals under the Pantai Group, continued to see healthy growth from both the local population and foreign patients. Parkway affirmed its commitment to patient care and safety through achieving JCI accreditation for Pantai Hospital Kuala Lumpur. Upgrading works were also done at Gleneagles Medical Centre, Penang and Pantai Hospital Kuala Lumpur to provide patients with even better standards of care.

To further expand its reach in Malaysia, Parkway, through Pantai Holdings, signed an MOU with YNH Property Bhd to build a new hospital in Manjung, Perak. The Group also has plans for a new hospital project in Medini, Johor. During the year, Parkway also completed the acquisition of Pantai Hospital Sungai Petani and Pantai Hospital Batu Pahat.

In India, Parkway’s Apollo Gleneagles Hospital in Kolkata continued to see positive growth. A new oncology centre has been commissioned at the hospital and it is expected to be operational by the end of the first quarter of 2010. In Mumbai, construction of the ParkwayHealth Khubchandani Hospital is scheduled to begin in April 2010.

In China, Parkway expanded the range of services and facilities at its clinics in Shanghai. Notably, it opened a new Allergy Centre, which provides allergy investigations, testing, treatment, and other professional allergy medical services to adults and children and is the only comprehensive allergy service centre in Shanghai. Parkway is also looking to further grow its presence in the Chinese market, having signed a cooperation agreement with a Chinese partner to establish more medical centres in Shanghai.

In the Middle East, the design works for the Danat Al Emarat Women & Children’s Hospital in Abu Dhabi progressed well and hospital construction work is expected to begin in the second quarter of 2010. The hospital will play a significant role in showcasing our capability to manage a world-class integrated hospital in the Middle East.

Moving Forward

Operationally, the Group is cognizant that the global economic recovery is still fragile, and its business may be impacted as a result. Thus, it will continue to upgrade existing facilities and service offerings so as to secure its footing as a leading provider of premier healthcare services. It will also continue to explore and implement necessary measures to contain costs and improve efficiency and quality.

In Singapore, the development of the highly anticipated Parkway Novena Hospital and Parkway Novena Specialist Centre is progressing well according to schedule. Expected to be completed by 2012, the development will feature comprehensive facilities that include more than 200 medical suites, over 300 patient beds and several outpatient specialty centres. The Group has already received strong expressions of interest in the suites at the Specialist Centre from physicians. This development will position Parkway at the forefront of medical innovation and clinical outcomes, reinforcing Parkway’s reputation for delivering world-class medical services and patient care.

While the Group continues to stay focused in Singapore, its contribution from overseas is likely to grow bigger as it actively seeks opportunities to enlarge its regional footprint in Malaysia, China, and India. The Group will continue to assess suitable opportunities to achieve further growth in its existing and new markets through joint ventures, collaborations, and new acquisitions.

OPERATIONS REVIEW

20

FINANCIAL HIGHLIGHTS


2009 2008 2007 2006 2005$’000 $’000 $’000 $’000 $’000

Profit and Loss AccountRevenue Hospital 672,841 631,722 635,831 595,450 416,338 Healthcare 299,522 274,299 229,379 268,058 144,538 Non-healthcare 6,844 8,802 4,472 3,496 2,740

979,207 914,823 869,682 867,004 563,616

Earnings before interest expenses, tax, depreciation, amortisation and REIT Rental (EBITDAR)~ 237,017 217,525 194,686 189,366 142,401 % of revenue 24.2% 23.8% 22.4% 21.8% 25.3%

Earnings before interest expense, tax and exceptional items (EBIT) 130,875 119,599 129,590 129,102 101,792 % of revenue 13.4% 13.1% 14.9% 14.9% 18.1%

Earnings after tax and minority interest but before exceptional items 117,926 91,666 87,225 66,680 63,806 % of revenue 12.0% 10.0% 10.0% 7.7% 11.3%

Profit attributable to equity holders of the Company 118,876 38,049 297,959 55,283 61,969 % of revenue 12.1% 4.2% 34.3% 6.4% 11.0%

Balance SheetTotal Assets 3,102,446 2,987,950 1,102,997 1,231,403 1,344,042Net Borrowings 584,045 681,373 43,191 354,570 367,497Total Shareholders’ Funds 1,537,200 1,413,438 605,633 435,161 646,747

Profitability Ratios (%)Return on Shareholders’ Funds Before exceptional items 7.7 6.5 14.4 15.3 9.9 After exceptional items 7.7 2.7 49.2 12.7 9.6

Return on Assets Before exceptional items 3.8 3.1 7.9 5.4 4.7 After exceptional items 3.8 1.3 27.0 4.5 4.6

Gearing RatiosNet debt equity ratio 0.38 0.48 0.07 0.81 0.57

Per share dataBasic earnings per share ($) Before exceptional items 0.10 0.09 0.10 0.09 0.09 After exceptional items 0.11 0.04 0.34 0.08 0.09

Gross dividend ($)+* 0.012 0.032 0.245 0.223 0.105

Net asset value backing per share ($) 1.29 1.19 0.75 0.55 0.57

Net tangible assets backing per share ($) 1.05 0.93 0.48 0.35 0.32

Note:For changes in accounting policies, adoption of new and/or revised accounting standards, as well as changes in the presentation of financial statements for the respective financial year under review, only the comparative figures for the previous year were restated to conform with the requirements arising from the said changes or adoption.

~ Earnings before exceptional items, exchange differences and share of results of associates.+ Gross dividend comprises interim dividend declared during the year and final dividend proposed by directors in

respect of that financial year under review.* Includes special dividend of 13.45 cents and 11.25 cents per share less tax paid in 2007 and 2006 respectively.

21

FINANCIAL REVIEW

Highlights:

• Grouprevenueincreasedby7%toS$979.2millionon better performance in Singapore Healthcare segment and International Hospital operations

• Full year PATMI excluding exceptional itemsjumped 29% to S$117.9 million

• Financial prudence throughout 2009 paves theway for future growth

Despite all the uncertainties and challenges facing the global economy, Parkway Holdings

Limited managed to conclude the year 2009 with better performance as compared to a year

ago. Total revenue for the Group reached S$979.2 million in FY 2009, 7% higher than S$914.8

million achieved in FY 2008.

In line with strong revenue performance, the Group’s EBITDAR increased by 9% to S$237.0

million from S$217.5 million in FY 2008. Net profit after minority interests, excluding

exceptional items also grew by 29% to S$117.9 million from S$91.7 million in FY 2008.

The strong set of results in FY 2009 was mainly driven by double-digit growth in revenue

and EBITDAR for both the Singapore Healthcare segment and International Hospital

Operations.

Parkway’s Singapore operations remained stable in FY 2009, registering a 1% growth in total

revenue to S$642.1 million from S$633.2 million in FY 2008. Singapore remained the largest

source of the Group’s revenue, accounting for 66% of total revenue for the year.

Revenue from Singapore Hospitals segment, comprising Mount Elizabeth Hospital, Gleneagles

Hospital and Parkway East Hospital, dropped by 2%, due to lower tourist arrivals in Singapore

as the global economy slowly recovered. Similarly, EBITDAR for this segment dropped by 7%

to S$112.9 million in FY 2009, from S$121.6 million in FY 2008.

Nonetheless, the Group’s Healthcare segment in Singapore registered strong growth for

the year, with 12% rise in revenue and 45% growth in EBITDAR in FY 2009. This was mainly

contributed by Parkway Shenton, which successfully renewed several major corporate client

accounts and enjoyed increased patient volumes in 2009. In addition, Parkway Shenton had

also benefited from a contract awarded by the Ministry of Health to conduct temperature

screening at all entry points into Singapore during the H1N1 outbreak period.


FINANCIAL REVIEW

Supported by the strong growth in the Healthcare segment, Parkway’s Singapore operations

reported an overall 3% growth in EBITDAR to S$161.4 million, up from S$156.7 million in FY

2008.

Parkway also experienced robust growth in its International Operations, which saw a 20%

increase in revenue in FY 2009 to S$337.1 million. This was driven mainly by the International

Hospitals segment, where revenue grew 31% in FY 2009 to S$206.4 million. EBITDAR for the

International Hospitals also increased by 30% to reach S$44.1 million.

The Pantai Group of hospitals in Malaysia was a main driver of revenue and EBITDAR for the

Group’s International Hospital operations, with steady demand for hospital services from the

Malaysian population and medical tourists. Also contributing to the good performance of

the International Hospitals was the Apollo Gleneagles Hospital in Kolkata, India, which saw

strong growth in patient admissions.

Revenue from International Healthcare services grew by 6% to S$130.8 million in FY 2009,

from S$123.5 million in FY 2008, and the EBITDAR for this segment increased by 16% to

S$31.5 million from S$27.2 million.

Parkway’s basic earnings per share (EPS) excluding exceptional items was 10.45 cents in FY

2009, a 15% increase over 9.07 cents in FY 2008.

In terms of financial position, the Group ended FY2009 in a better shape than the year before.

Group net asset value (NAV) per share grew 9% to S$1.29 as at 31 December 2009, from

S$1.19 as at 31 December 2008. Net debt as at 31 December 2009 was S$584.0 million, a

reduction from S$681.0 million a year ago. Net debt to equity ratio similarly improved from

0.48 to 0.38 over the same period.

The Board has resumed dividend payments by declaring a final tax exempt one-tier dividend

of 1.15 cents per ordinary share. Going forward, dividend payments will be either on a half-

yearly or annual basis, subject to the performance of the Group.

23

CORPORATE INFORMATION

Board of DirectorsRichard Seow Yung LiangChairman

Dr Lim Cheok PengExecutive Vice Chairman/Managing Director, Group President and Chief Executive Officer

Dr Tan See LengChief Executive Officer (Designate)(Appointed on 23 February 2010)

Alain Ahkong Chuen FahNon-executive Director

Chang See HiangNon-executive Director

Timothy David DattelsNon-executive Director

Ranvir DewanNon-executive Director

Dato’ Mohammed Azlan b. HashimNon-executive Director(Appointed on 13 October 2009)

Ho Kian GuanNon-executive Director

Ganen SarvananthanNon-executive Director

Steven Joseph SchneiderNon-executive Director

Ashish Jaiprakash ShastryNon-executive Director

Ho Kian Hock(Alternate Director to Ho Kian Guan)

Tanguy Vincent SerraAlternate Director to Timothy David Dattels

Ahmad Shahizam b. Mohd. ShariffAlternate Director to Ganen Sarvananthan

Audit & Risk Management CommitteeAlain Ahkong Chuen FahChairman

Chang See HiangHo Kian GuanAshish Jaiprakash Shastry

Executive CommitteeRichard Seow Yung LiangChairman

Dr Lim Cheok PengGanen SarvananthanAshish Jaiprakash Shastry

Management CommitteeDr Lim Cheok PengChairman

Richard Seow Yung LiangAshish Jaiprakash Shastry

Nominating CommitteeChang See HiangChairman

Alain Ahkong Chuen FahTimothy David DattelsGanen SarvananthanRichard Seow Yung Liang

Remuneration CommitteeTimothy David DattelsChairman

Ganen SarvananthanRichard Seow Yung LiangAshish Jaiprakash Shastry

Share Purchase CommitteeChang See HiangChairman



CORPORATE INFORMATION

Strategic Planning CommitteeRichard Seow Yung LiangChairman

Dr Lim Cheok PengSteven Joseph SchneiderAshish Jaiprakash Shastry

Registered OfficeParkway Holdings Limited111 Somerset Road #15-01TripleOne SomersetSingapore 238164Tel: (65) 6307 7880Fax: (65) 6738 1750www.parkwayholdings.com

Company SecretariesJune Tay Kwok FungHo Li Li

Share RegistrarM & C Services Private Limited138 Robinson Road #17-00The Corporate OfficeSingapore 068906Tel: (65) 6227 6660

AuditorsKPMG LLPPublic Accountants and Certified Public Accountants Singapore16 Raffles Quay #22-00Hong Leong BuildingSingapore 048581

Partner-in-Charge since the financial year ended 31 Dec 2009Quek Shu Ping

Principal BankersCrédit Agricole Corporate and Investment BankDBS Bank LtdOversea-Chinese Banking Corporation LimitedStandard Chartered BankThe Hongkong and Shanghai Banking Corporation LimitedThe Royal Bank of Scotland plc, Singapore Branch

25

Parkway Holdings Limited and its subsidiariesYEAR ENDED 31 DECEMBER 2009

DIRECTORS’ REPORT

We are pleased to submit this annual report to the members of the Company together with the audited financial

statements for the financial year ended 31 December 2009.

DIRECTORS

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

Richard Seow Yung Liang (Chairman)

Dr Lim Cheok Peng (Executive Vice Chairman/Managing Director)

Dr Tan See Leng# (CEO Designate)


Chang See Hiang


Ranvir Dewan

Dato’ Mohammed Azlan b. Hashim*

Ho Kian Guan

Ganendran Sarvananthan



Ho Kian Hock (alternate to Ho Kian Guan)

Ahmad Shahizam b. Mohd. Shariff (alternate to Ganendran Sarvananthan)

Tanguy Vincent Serra (alternate to Timothy David Dattels)

* Appointed on 13 October 2009# Appointed on 23 February 2010

DIRECTORS’ INTERESTS

According to the register kept by the Company for the purposes of Section 164 of the Singapore Companies Act,

Chapter 50 (the Act), particulars of interests of directors who held office at the end of the financial year (including

those held by their spouses and infant children) in shares, debentures, warrants and share options in the Company

and in related corporations (other than wholly-owned subsidiaries) are as follows:

Name of director and

corporation in which

interests are held

Holdings in the name of

the director, spouse or

infant children

Other holdings in which

the director is deemed to

have an interest

At beginning

of the year

At end

of the year

At beginning

of the year

At end

of the year

The Company Ordinary shares fully paid

Richard Seow Yung Liang 366,666 366,666 – –

Dr Lim Cheok Peng 1,880,000 2,255,000 – –

Chang See Hiang 454,000 504,000 – –

Ho Kian Guan 1,401,653 1,420,403 15,900,000 15,900,000

Ho Kian Hock 154,000 154,000 15,900,000 15,900,000

26


DIRECTORS’ REPORT


Name of director and corporation

in which interests are held

Holdings at

beginning of

the year

Holdings

at end

of the year

The Company (cont’d) Parkway Share Option Scheme 2001

Options to subscribe for ordinary

shares (exercise price at $0.9763 per share

and exercisable between

20/11/2005 and 19/11/2009)1

Dr Lim Cheok Peng 375,000 –

Alain Ahkong Chuen Fah 50,000 –

Chang See Hiang 50,000 –

Ho Kian Guan 18,750 –




10/12/2006 and 9/12/2010)1

Richard Seow Yung Liang 750,000 750,000

Dr Lim Cheok Peng 1,500,000 1,500,000

Alain Ahkong Chuen Fah 100,000 100,000

Chang See Hiang 75,000 75,000

Timothy David Dattels 60,000 60,000

Ho Kian Guan 50,000 50,000

Ashish Jaiprakash Shastry 60,000 60,000




10/3/2007 and 9/3/2011)1

Richard Seow Yung Liang 650,000 650,000

Dr Lim Cheok Peng 1,000,000 1,000,000




Ho Kian Guan 50,000 50,000





18/11/2008 and 17/11/2011)1


27


DIRECTORS’ REPORT



Holdings at

beginning of

the year

Holdings

at end

of the year

The Company (cont’d) Parkway Share Option Scheme 2001 (cont’d)




7/6/2008 and 6/6/2012)1

Dr Lim Cheok Peng 700,000 700,000


shares (exercise price at $3.3381 per

share and exercisable between

16/6/2008 and 15/6/2012)1

Richard Seow Yung Liang 1,000,000 1,000,000




Ranvir Dewan 100,000 100,000

Ho Kian Guan 100,000 100,000

Steven Joseph Schneider 100,000 100,000





7/3/2009 and 6/3/2013)1

Dr Lim Cheok Peng 815,000 815,000




7/3/2009 and 6/3/2013)1

Richard Seow Yung Liang 1,250,000 1,250,000




Ranvir Dewan 150,000 150,000

Ho Kian Guan 150,000 150,000

Steven Joseph Schneider 150,000 150,000


28


DIRECTORS’ REPORT




Holdings at

beginning of

the year

Holdings

at end

of the year

The Company (cont’d) Parkway Share Option Scheme 2001 (cont’d)




9/10/2010 and 8/10/2014)1

Richard Seow Yung Liang – 1,250,000

Alain Ahkong Chuen Fah – 300,000

Chang See Hiang – 250,000

Timothy David Dattels – 150,000

Ranvir Dewan – 150,000

Ho Kian Guan – 150,000

Steven Joseph Schneider – 150,000

Ashish Jaiprakash Shastry – 150,000

The Company (cont’d) Parkway Performance Share Plan (Share Plan)^

Dr Lim Cheok Peng Parkway Performance Share Plan (2007 Award)2

119,090 59,545

Parkway Performance Share Plan (2008 Award)2

611,924 407,950

Parkway Performance Share Plan (2009 Award)2

– 1,027,000

Parkway Performance Share Plan (2009 SIP+ Award)3

– 228,000

1 The options were granted in accordance with the Rules of the Parkway Share Option Scheme 2001 as set out in the Directors’ Report of Parkway Holdings Limited for the year ended 31 December 2009.

2 The actual number of performance shares to be delivered will depend on the achievement of prescribed performance targets over the performance qualifying period. The number of performance shares includes additional performance shares that may be delivered if performance targets are exceeded.

3 The delivery of the performance shares will depend on the achievement of prescribed performance targets over the performance qualifying period.

+ Special incentive plan award.

^ The performance shares were awarded in accordance with the Rules of the Share Plan as set out in the Directors’ Report of Parkway Holdings Limited for the year ended 31 December 2009.

29


DIRECTORS’ REPORT

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 or at the

end of the financial year.

Except as disclosed in this report, there were no changes in any of the above-mentioned interests in the Company

between the end of the financial year and 21 January 2010.

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 have substantial financial interest in the ordinary course of business. However, these

directors have neither received nor will they become entitled to receive any benefit from these 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 note 24 to the financial

statements, since the end of the last financial year, no director has received or become entitled to receive, a benefit

by reason of a contract 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 in which 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 January 2001. Details of the Parkway Scheme 2001 and amendments effected by resolutions passed at

the Extraordinary General Meetings of the Company held on 4 July 2001 and 2 November 2006 were set out in the

Directors’ Reports for the years ended 31 December 2001 and 31 December 2006, respectively.

The Parkway Scheme 2001 is administered by the Company’s Remuneration Committee, comprising four directors,

namely Timothy David Dattels, Richard Seow Yung Liang, Ganen Sarvananthan and Ashish Jaiprakash Shastry.

Information regarding the Parkway Scheme 2001 is set out below:

Market Price Options

(i) The exercise price of the option is determined at the average of the last dealt prices of the Company’s shares

on the Singapore Exchange Securities Trading Limited (SGX-ST) prevailing on the three consecutive trading

days immediately preceding the date of grant of such options (the Market Price).

(ii) The options shall be subject to such conditions (including any vesting schedule) as may be imposed by the

Remuneration Committee and shall be exercisable, in whole or in part, during the period commencing one year

after the grant date and expiring on the fifth anniversary of the grant date unless they have been cancelled or

have lapsed prior to that date.

30


DIRECTORS’ REPORT


Incentive Options(i) The exercise price of the option is determined by the Remuneration Committee at a discount to the Market Price,

provided that the maximum discount does not exceed 20% of the Market Price.

(ii) The options shall be subject to such conditions (including any vesting schedule) as may be imposed by the Remuneration Committee and shall be exercisable, in whole or in part, during the period commencing after the second anniversary of the grant date and expiring on the fifth anniversary of the grant date unless they have been cancelled or have lapsed prior to that date.

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

Date of grant of options

Exercise price per

share

Options outstanding

at 1 Jan 2009

Options granted

Options exercised

Options cancelled

Options outstanding

at 31 Dec 2009

Number of option

holders at 31 Dec

2009 Exercise period

19/11/2004 $0.9763 709,250 – 709,250 – – – 20/11/2005 to 19/11/2009

15/11/2005 $1.5935 1,389,250 – 664,250 27,500 697,500 20 16/11/2006 to 15/11/2010

9/12/2005 $1.6207 2,670,000 – – 75,000 2,595,000 7 10/12/2006 to 9/12/2010

9/3/2006 $1.8773 1,156,000 – 173,000 19,000 964,000 31 10/3/2007 to 9/3/2011

9/3/2006 $1.8625 2,175,000 – – 100,000 2,075,000 7 10/3/2007 to 9/3/2011

17/11/2006 $1.84511 150,000 – – – 150,000 1 18/11/2008 to 17/11/2011

17/11/2006 $1.89262 1,000,000 – – 500,000 500,000 1 18/11/2008 to 17/11/2011

6/6/2007 $3.5081 4,420,000 – – 780,000 3,640,000 55 7/6/2008 to 6/6/2012

15/6/2007 $3.3381 2,050,000 – – 200,000 1,850,000 8 16/6/2008 to 15/6/2012

6/3/2008 $2.5455 8,576,000 – 151,750 1,716,250 6,708,000 33 7/3/2009 to 6/3/2013

6/3/2008 $2.5177 2,850,000 – – 350,000 2,500,000 8 7/3/2009 to 6/3/2013

8/10/2009 $2.0900 – 2,700,000 – 150,000 2,550,000 8 9/10/2010 to 8/10/2014

27,145,500 2,700,000 1,698,250 3,917,750 24,229,500

1 Options granted at a discount of 16.21% of the Market Price.

2 Options granted at a discount of 15.15% of the Market Price.

31


DIRECTORS’ REPORT

Details of options granted to directors of the Company who held office at the end of the financial year under the

Parkway Scheme 2001 are as follows:

Name of director

Options

granted for

financial

year ended

31 Dec 2009

Aggregate

options

granted since

commencement

of scheme to

31 Dec 2009

Aggregate

options

exercised since

commencement

of scheme to

31 Dec 2009

Aggregate

options

cancelled since

commencement

of scheme to

31 Dec 2009

Aggregate

options

outstanding as

at 31 Dec 2009

Richard Seow Yung Liang 1,250,000 5,150,000 250,000 – 4,900,000

Dr Lim Cheok Peng – 5,515,000 1,500,000 – 4,015,000

Alain Ahkong Chuen Fah 300,000 1,550,000 400,000 – 1,150,000

Chang See Hiang 250,000 1,000,000 350,000 – 650,000

Timothy David Dattels 150,000 610,000 – – 610,000

Ranvir Dewan 150,000 400,000 – – 400,000

Ho Kian Guan 150,000 875,000 375,000 – 500,000

Ganen Sarvananthan 150,000 150,000 – 150,000 –

Steven Joseph Schneider 150,000 400,000 – – 400,000

Ashish Jaiprakash Shastry 150,000 610,000 – – 610,000

Ho Kian Hock – 100,000 100,000 – –

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

of the Company or their associates.

Since the commencement of the Parkway Scheme 2001, no participant under the Parkway Scheme 2001 has been

granted 5% or more of the total options available under the Parkway Scheme 2001.

During the financial year, 2,700,000 options were granted to non-executive directors of the Company and its subsidiaries

under the Parkway Scheme 2001. 50,251,000 options have been granted to the employees and non-executive directors

of the Company and its subsidiaries since the commencement of the Parkway Scheme 2001 to the end of the financial

year under review.

Subsequent to the balance sheet date up to 21 January 2010, 172,750 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 or its 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 rights to participate in any share issue of any other company.

32


DIRECTORS’ REPORT


Parkway Performance Share Plan (Share Plan)

At the same Extraordinary General Meeting held on 2 November 2006, the shareholders of the Company approved the

Share Plan. The Share Plan is administered by the Remuneration Committee, comprising four directors, namely Timothy

David Dattels, Richard Seow Yung Liang, Ganen Sarvananthan and Ashish Jaiprakash Shastry.

Under the Share Plan, eligible employees and non-executive directors of the Company and its subsidiaries will be

awarded with fully paid up ordinary shares of the Company, or cash in lieu of ordinary shares of the Company equivalent

to the aggregate market value of such performance shares or a combination of both, upon the expiry of the prescribed

vesting period when certain prescribed performance targets are met. The performance shares which may be issued

pursuant to awards granted under the Share Plan, when added to the aggregate number of ordinary shares issued

pursuant to other share-based incentive schemes of the Company, shall not exceed 15% of the total number of issued

ordinary shares of the Company on the day immediately preceding the date on which the award is granted.

During the year, conditional awards of up to 7,026,000 performance shares were granted and accepted by 69 key

executives of the Group for the performance qualifying periods from 2009 to 2011. The key executives include Dr Lim

Cheok Peng, an executive director of the Company, who was conditionally awarded up to 1,255,000 performance

shares. The actual number of performance shares to be delivered will depend on the achievement of prescribed

performance targets over the performance qualifying period.

At the end of the financial year, details of the performance shares awarded under the Share Plan are as follows:

Balance at

1/1/2009

Granted and accepted

during the

financial year Delivered Lapsed

Balance at

31/12/2009

No. of

holders

Performance

shares*

No. of

holders

Performance

shares*

No. of

holders

Performance

shares*

No. of

holders

Performance

shares*

No. of

holders

Performance

shares*

2007 award 5 204,151 – – – – 5 127,597 3 76,554

2008 award 6 1,566,071 – – – – 6 898,242 4 667,829

2009 award – – 67 5,723,000 – – 1 39,000 66 5,684,000

2009 SIP award – – 40 1,303,000 – – 1 19,000 39 1,284,000

* Includes additional performance shares that may be delivered if performance targets are exceeded.

Since the adoption of the Share Plan by the Company, up to 8,976,222 performance shares have been conditionally

awarded to and accepted by employees of the Company and its subsidiaries.

No performance shares have been granted to the controlling shareholders of the Company or their associates and no

participants under the Share Plan have been awarded 5% or more of the total number of performance shares which

may be issued under the Share Plan since the commencement of the Share Plan.

Subsequent to the balance sheet date up to 21 January 2010, there has been no change in the conditional awards

granted, delivered and/or lapsed under the Share Plan.

33


DIRECTORS’ REPORT

Audit & Risk Management Committee

The members of the Audit & Risk Management Committee (ARMC) during the year and at the date of this report are

as follows:

Alain Ahkong Chuen Fah (Chairman), non-executive director

Chang See Hiang, non-executive director

Ho Kian Guan, non-executive director

Ashish Jaiprakash Shastry, non-executive director

The ARMC performs the functions specified in Section 201B of the Act, the SGX-ST Listing Manual (the Listing Manual)

and the Code of Corporate Governance 2005.

The ARMC met five times during the year.

The principal responsibility of the ARMC is to assist the Board of Directors in the identification and monitoring of areas

of significant business risks including the following:

• theeffectivenessofthemanagementofprincipalbusinessrisks;

• theeffectivenessofthemanagementoffinancialbusinessrisksandthereliabilityofmanagementandfinancial

reporting;

• compliancewithlawsandregulations,particularlythoseoftheActandtheListingManual,anditsowncodeof

business conduct;

• theappropriatenessofquarterlyandfullyearannouncementsandreports;

• theeffectivenessoftheGroup’ssystemofinternalcontrols;

• theeffectivenessandefficiencyofinternalandexternalaudits;and

• interestedpersontransactions.

Specific functions of the ARMC include reviewing the scope of work of the internal and external auditors, reviewing the

level of assistance provided by the Company’s officers to the internal and external auditors, receiving and considering

the reports of the internal 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 ARMC has, in accordance with Chapter 9 of the Listing Manual, reviewed the requirements for

approval and disclosure of interested person transactions, and with the assistance of the internal auditors, reviewed

the interested person transactions.

The ARMC has full access to management and is given the resources required for it to discharge its functions. It has

full authority and discretion to invite any director or executive officer to attend its meetings.

34


DIRECTORS’ REPORT


The ARMC 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 Manual and determined that the auditors were independent in carrying out their audit of the financial

statements. The ARMC has recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for

re-appointment as auditors at the forthcoming Annual General Meeting of the Company.

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

On behalf of the Board of Directors


Director

Dr Lim Cheok Peng

Director

23 February 2010

35


STATEMENT BY DIRECTORS

In our opinion:

(a) the financial statements set out on pages 38 to 140 are drawn up so as to give a true and fair view of the state

of affairs of the Group and of the Company as at 31 December 2009 and the results, changes in equity and cash

flows of the Group and the changes in equity of the Company for the year ended on that date in accordance

with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards;

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 when they fall due.

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

On behalf of the Board of Directors


Director

Dr Lim Cheok Peng

Director

23 February 2010

36

Independent Auditors’ ReportMEMBERS OF THE COMPANYPARKWAY HOLDINGS LIMITED

INDEPENDENT AUDITORS’ REPORT


We have audited the financial statements of Parkway Holdings Limited (the Company) and its subsidiaries (the

Group), which comprise the balance sheets of the Group and the Company as at 31 December 2009, the statement

of comprehensive income, statement of changes in equity and cash flow statement of the Group and statement of

changes in equity of the Company for the year then ended, and a summary of significant accounting policies and other

explanatory notes, as set out on pages 38 to 140.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of these financial statements in accordance with

the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards.

This responsibility includes:

(a) devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance

that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly

authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss

accounts and balance sheets and to maintain accountability of assets;

(b) selecting and applying appropriate accounting policies; and

(c) making accounting estimates that are reasonable in the circumstances.

AUDITORS’ RESPONSIBILITY

Our responsibility 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 comply with ethical requirements

and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of

material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the

auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements

in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing

an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit

opinion.

37

Independent Auditors’ ReportMEMBERS OF THE COMPANY

PARKWAY HOLDINGS LIMITED

INDEPENDENT AUDITORS’ REPORT

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 are properly drawn up in accordance with the provisions of the Act and Singapore Financial

Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at

31 December 2009 and the results, changes in equity and cash flows of the Group and the changes in equity

of the Company for 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 in Singapore of which we are the auditors have been properly kept in accordance with the

provisions of the Act.

KPMG LLP

Public Accountants and

Certified Public Accountants

Singapore

23 February 2010

38

Balance sheetsAS AT 31 DECEMBER 2009

FINANCIAL STATEMENTS


Group Company

Note 2009 2008 2007 2009 2008

$’000 $’000 $’000 $’000 $’000

(Restated) (Restated)

Non-current assets

Property, plant and equipment 4 1,373,258 1,656,173 290,108 – –

Intangible assets 5 278,678 286,257 213,605 – –

Interests in subsidiaries 6 – – – 2,267,975 2,124,813

Interests in associates 7 205,085 194,129 205,117 (4,544) (3,539)

Deposits paid to minority shareholder

of a subsidiary 6 29,207 30,545 – – –

Amounts due from joint ventures 8 95,502 91,011 72,661 – –

Other financial assets 9 12,801 19,884 41,818 52 –

Deferred tax assets 10 8,439 8,752 7,489 – –

2,002,970 2,286,751 830,798 2,263,483 2,121,274

Current assets

Development property 11 360,185 – – – –

Inventories 12 22,341 18,722 17,575 – –

Trade and other receivables 13 103,544 137,378 159,070 922 605

Tax recoverable 2,541 2,681 1,786 – –

Other financial assets 9 597 356 1,062 – –

Cash and cash equivalents 16 610,268 542,062 143,372 230,444 390,211

1,099,476 701,199 322,865 231,366 390,816

Total assets 3,102,446 2,987,950 1,153,663 2,494,849 2,512,090

Equity attributable to equity holders

of the Company

Share capital 17 1,128,435 1,128,242 371,765 1,128,435 1,128,242

Treasury shares 17 (4,055) (9,660) (7,391) (4,055) (9,660)

Other reserves 18 (12,421) (10,244) 3,922 21,369 14,884

Accumulated profits 348,703 229,827 262,632 59,588 53,574

1,460,662 1,338,165 630,928 1,205,337 1,187,040

Minority interest 76,538 75,273 25,371 – –

Total equity carried forward 1,537,200 1,413,438 656,299 1,205,337 1,187,040

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

39

Balance sheetsAS AT 31 DECEMBER 2009


Group Company

Note 2009 2008 2007 2009 2008

$’000 $’000 $’000 $’000 $’000


Total equity brought forward 1,537,200 1,413,438 656,299 1,205,337 1,187,040

Non-current liabilities

Interest-bearing borrowings 19 1,178,625 1,177,374 145,252 498,755 497,977

Amounts due to joint venture partners 8 92,405 88,944 59,222 – –

Loans from subsidiaries 6 – – – 774,548 803,676

Deferred tax liabilities 10 25,397 26,613 25,506 145 97

1,296,427 1,292,931 229,980 1,273,448 1,301,750

Current liabilities

Bank overdrafts 16 1,347 1,612 679 – –

Trade payables and accrued

operating expenses 155,411 151,562 151,002 1,327 2,054

Other payables 21 39,722 45,074 32,373 830 7,947

Interest-bearing borrowings 19 14,341 44,449 40,632 – –

Financial derivatives 19 12,224 13,067 – 9,647 11,739

Intra-group financial guarantees 19 – – – 1 11

Employee benefits 20 6,856 2,498 3,661 – –

Current tax payable 38,918 23,319 39,037 4,259 1,549

268,819 281,581 267,384 16,064 23,300

Total liabilities 1,565,246 1,574,512 497,364 1,289,512 1,325,050

Total equity and liabilities 3,102,446 2,987,950 1,153,663 2,494,849 2,512,090


40

Consolidated Statement of Comprehensive IncomeYEAR ENDED 31 DECEMBER 2009



Group

Note 2009 2008

$’000 $’000

(Restated)

Revenue 22 979,207 914,823

Other operating income 33,711 24,979

Changes in inventories 3,582 122

Inventories and consumables (195,583) (174,551)

Purchased and contracted services (147,306) (142,236)

Depreciation and impairment losses of property, plant and equipment 4 (48,718) (43,022)

Amortisation of intangible assets 5 (6,152) (6,236)

Staff costs

– Salaries, wages and other staff benefits (296,067) (271,500)

– Restructuring costs 23 – (3,804)

Operating lease expenses (70,418) (69,699)

Other operating expenses (97,879) (98,878)

Finance costs 23 (11,805) (16,596)

Allowance (made)/reversed for impairment loss on trade

and other receivables

– Allowance based on specific and collective assessment 14,15 (15,266) (8,237)

– Other specific allowance 14 17,207 (34,414)

Impairment loss on available-for-sale financial assets 9 (2,199) (16,221)

Gain on disposal of available-for-sale financial assets 550 –

Impairment loss on intangible assets 5 (7,187) –

Loss on disposal and write off of property, plant and equipment (4,490) (6,057)

Share of profits of associates (net of tax) 23,852 11,127

Profit before income tax 23 155,039 59,600

Income tax expense 25 (30,175) (16,183)

Profit for the year 124,864 43,417

Other comprehensive income:

Exchange differences on retranslation of opening net assets

of foreign subsidiaries, joint ventures and associates (7,092) (7,517)

Changes in fair value of available-for-sale financial assets 275 (21,455)

Impairment loss on available-for-sale financial assets 2,199 16,221

Effects on disposal of available-for-sale financial assets (2,474) (67)

Effective portion of changes in fair value of cash flow hedges 1,008 (11,449)

Income tax relating to components of other comprehensive income – –

Other comprehensive income for the year, net of tax (6,084) (24,267)

Total comprehensive income for the year 118,780 19,150


41

Consolidated Statement of Comprehensive IncomeYEAR ENDED 31 DECEMBER 2009


Group

Note 2009 2008

$’000 $’000

(Restated)

Profit attributable to:

Equity holders of the Company 118,876 38,049

Minority interest 5,988 5,368

Profit for the year 124,864 43,417

Total comprehensive income attributable to:

Equity holders of the Company 113,550 17,456

Minority interest 5,230 1,694

Total comprehensive income for the year 118,780 19,150

Earnings per share (cents):

Basic 26 10.54 3.77

Diluted 26 10.50 3.75


42

Consolidated Statement of Changes in EquityYEAR ENDED 31 DECEMBER 2009



Note

Share

capital

Treasury

shares

Capital

reserve

Exchange

fluctuation

reserve

Hedge

reserve

Fair value

reserve

Equity

compensation

reserve

Accumulated

profits

Total

attributable

to equity

holders of

the Company

Minority

interest

Total

equity

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

Group

At 1 January 2008, as previously stated 371,765 (7,391) – (8,223) – 5,301 6,844 211,966 580,262 25,371 605,633

Effects of change in accounting policy 35 – – – – – – – 50,666 50,666 – 50,666

Balance as at 1 January 2008, as restated 371,765 (7,391) – (8,223) – 5,301 6,844 262,632 630,928 25,371 656,299

Total comprehensive income for the year – – – (3,843) (11,449) (5,301) – 38,049 17,456 1,694 19,150

Issue of shares under share option scheme 17 783 – – – – – – – 783 – 783

Issue of shares pursuant to rights issue 17 755,694 – – – – – – – 755,694 – 755,694

Value of employee services received

for issue of share options – – – – – – 6,209 – 6,209 – 6,209

Conditional award of performance shares – – – – – – 1,879 – 1,879 – 1,879

Purchase of treasury shares 17 – (5,106) – – – – – – (5,106) – (5,106)

Utilisation of treasury shares for share options

and vesting of performance shares 17 – 2,837 – – – – – – 2,837 – 2,837

Excess of treasury shares cost over exercise

price of share options – – (1,661) – – – – – (1,661) – (1,661)

Capital contribution from minority shareholders – – – – – – – – – 49,359 49,359

Dividends paid to minority shareholders – – – – – – – – – (1,151) (1,151)

Final tax exempt one-tier dividend paid of

4.51 cents per share in respect of year 2007 – – – – – – – (34,658) (34,658) – (34,658)

First interim tax exempt one-tier dividend

paid of 1.23 cents per share – – – – – – – (13,867) (13,867) – (13,867)

Second interim tax exempt one-tier dividend


Third interim tax exempt one-tier dividend


At 31 December 2008 1,128,242 (9,660) (1,661) (12,066) (11,449) – 14,932 229,827 1,338,165 75,273 1,413,438


43



Note

Share

capital

Treasury

shares

Capital

reserve

Exchange

fluctuation

reserve

Hedge

reserve

Fair value

reserve

Equity

compensation

reserve

Accumulated

profits

Total

attributable

to equity

holders of

the Company

Minority

interest

Total

equity

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

Group

At 1 January 2008, as previously stated 371,765 (7,391) – (8,223) – 5,301 6,844 211,966 580,262 25,371 605,633


Balance as at 1 January 2008, as restated 371,765 (7,391) – (8,223) – 5,301 6,844 262,632 630,928 25,371 656,299

Total comprehensive income for the year – – – (3,843) (11,449) (5,301) – 38,049 17,456 1,694 19,150


Issue of shares pursuant to rights issue 17 755,694 – – – – – – – 755,694 – 755,694




Purchase of treasury shares 17 – (5,106) – – – – – – (5,106) – (5,106)

Utilisation of treasury shares for share options

and vesting of performance shares 17 – 2,837 – – – – – – 2,837 – 2,837



Capital contribution from minority shareholders – – – – – – – – – 49,359 49,359


Final tax exempt one-tier dividend paid of

4.51 cents per share in respect of year 2007 – – – – – – – (34,658) (34,658) – (34,658)

First interim tax exempt one-tier dividend


Second interim tax exempt one-tier dividend


Third interim tax exempt one-tier dividend


At 31 December 2008 1,128,242 (9,660) (1,661) (12,066) (11,449) – 14,932 229,827 1,338,165 75,273 1,413,438

44




Note

Share

capital

Treasury

shares

Capital

reserve

Exchange

fluctuation

reserve

Hedge

reserve

Fair value

reserve

Equity

compensation

reserve

Accumulated

profits

Total

attributable

to equity

holders of

the Company

Minority

interest

Total

equity

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

Group

At 1 January 2009, as previously stated 1,128,242 (9,660) (1,661) (12,066) (11,449) – 14,932 175,941 1,284,279 75,273 1,359,552


Balance as at 1 January 2009, as restated 1,128,242 (9,660) (1,661) (12,066) (11,449) – 14,932 229,827 1,338,165 75,273 1,413,438

Total comprehensive income for the year – – – (6,334) 1,008 – – 118,876 113,550 5,230 118,780

Effect of acquisition of additional interest

in subsidiaries 27 – – – – – – – – – (2,637) (2,637)

Effect of disposal of interest in a subsidiary 28 – – – – – – – – – (155) (155)





Utilisation of treasury shares for share options 17 – 5,605 – – – – – – 5,605 – 5,605




At 31 December 2009 1,128,435 (4,055) (4,997) (18,400) (10,441) – 21,417 348,703 1,460,662 76,538 1,537,200


45



Note

Share

capital

Treasury

shares

Capital

reserve

Exchange

fluctuation

reserve

Hedge

reserve

Fair value

reserve

Equity

compensation

reserve

Accumulated

profits

Total

attributable

to equity

holders of

the Company

Minority

interest

Total

equity

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

Group

At 1 January 2009, as previously stated 1,128,242 (9,660) (1,661) (12,066) (11,449) – 14,932 175,941 1,284,279 75,273 1,359,552


Balance as at 1 January 2009, as restated 1,128,242 (9,660) (1,661) (12,066) (11,449) – 14,932 229,827 1,338,165 75,273 1,413,438

Total comprehensive income for the year – – – (6,334) 1,008 – – 118,876 113,550 5,230 118,780

Effect of acquisition of additional interest

in subsidiaries 27 – – – – – – – – – (2,637) (2,637)

Effect of disposal of interest in a subsidiary 28 – – – – – – – – – (155) (155)





Utilisation of treasury shares for share options 17 – 5,605 – – – – – – 5,605 – 5,605




At 31 December 2009 1,128,435 (4,055) (4,997) (18,400) (10,441) – 21,417 348,703 1,460,662 76,538 1,537,200

46

Statement of Changes in EquityYEAR ENDED 31 DECEMBER 2009



Note Share capital Treasury shares

Equity

compensation

reserve

Accumulated

profits Total

$’000 $’000 $’000 $’000 $’000

Company

At 1 January 2008 371,765 (7,391) 6,796 54,825 425,995

Total comprehensive income for the year – – – 69,603 69,603

Issue of shares under share option scheme 17 783 – – – 783

Issue of shares pursuant to rights issue 17 755,694 – – – 755,694

Purchase of treasury shares 17 – (5,106) – – (5,106)

Utilisation of treasury shares for share options and vesting of performance shares 17 – 2,837 – – 2,837

Value of employee services received for issue of share options – – 6,209 – 6,209

Conditional award of performance shares – – 1,879 – 1,879

Final tax exempt one-tier dividend paid of 4.51 cents per share in respect of year 2007 – – – (34,658) (34,658)

First interim tax exempt one-tier dividend paid of 1.23 cents per share – – – (13,867) (13,867)

Second interim tax exempt one-tier dividend paid of 1.23 cents per share – – – (13,871) (13,871)

Third interim tax exempt one-tier dividend paid of 0.75 cents per share – – – (8,458) (8,458)

At 31 December 2008 1,128,242 (9,660) 14,884 53,574 1,187,040

At 1 January 2009 1,128,242 (9,660) 14,884 53,574 1,187,040



Utilisation of treasury shares for share options 17 – 5,605 – – 5,605



At 31 December 2009 1,128,435 (4,055) 21,369 59,588 1,205,337


47

Statement of Changes in EquityYEAR ENDED 31 DECEMBER 2009


Note Share capital Treasury shares

Equity

compensation

reserve

Accumulated

profits Total

$’000 $’000 $’000 $’000 $’000

Company

At 1 January 2008 371,765 (7,391) 6,796 54,825 425,995



Issue of shares pursuant to rights issue 17 755,694 – – – 755,694

Purchase of treasury shares 17 – (5,106) – – (5,106)

Utilisation of treasury shares for share options and vesting of performance shares 17 – 2,837 – – 2,837



Final tax exempt one-tier dividend paid of 4.51 cents per share in respect of year 2007 – – – (34,658) (34,658)

First interim tax exempt one-tier dividend paid of 1.23 cents per share – – – (13,867) (13,867)

Second interim tax exempt one-tier dividend paid of 1.23 cents per share – – – (13,871) (13,871)

Third interim tax exempt one-tier dividend paid of 0.75 cents per share – – – (8,458) (8,458)

At 31 December 2008 1,128,242 (9,660) 14,884 53,574 1,187,040

At 1 January 2009 1,128,242 (9,660) 14,884 53,574 1,187,040



Utilisation of treasury shares for share options 17 – 5,605 – – 5,605



At 31 December 2009 1,128,435 (4,055) 21,369 59,588 1,205,337

48

Consolidated Cash Flow StatementYEAR ENDED 31 DECEMBER 2009



Group

2009 2008

$’000 $’000

(Restated)

Cash flows from operating activities

Profit before income tax 155,039 59,600

Adjustments for:

Exchange difference (21) (2,844)

Depreciation and impairment losses of property, plant and equipment 48,718 43,022

Amortisation of intangible assets 6,152 6,236

Impairment loss on intangible assets 7,187 –

Impairment loss on available-for-sale financial asset 2,199 16,221

Fair value loss on derivative financial instrument 330 4,079

Allowance for impairment loss on trade and other receivables (1,941) 42,651

Gain on disposal of equity investments – (69)

Gain on disposal of available-for-sale financial assets (550) –

Gain on liquidation of joint venture – (485)

Loss on disposal and write off of property, plant and equipment 4,490 6,057

Gain on disposal of subsidiary (171) –

Gain on disposal of associates (5) (22)

Share of profits of associates (23,852) (11,127)

Share option expense 3,458 6,209

Conditional award of performance shares 3,027 1,879

Dividend income – (1,925)

Interest income (9,457) (4,909)

Interest expense 11,805 16,596

206,408 181,169

Changes in working capital:

Increase in inventories (3,582) (122)

(Decrease)/Increase in trade and other receivables 36,590 (19,067)

(Increase)/Decrease in available-for-sale financial assets (250) 515

Increase in trade and other payables 8,828 8,256

Cash generated from operations 247,994 170,751

Income taxes paid (17,714) (37,835)

Net cash from operating activities carried forward 230,280 132,916


49




GroupNote 2009 2008

$’000 $’000(Restated)

Net cash from operating activities brought forward 230,280 132,916

Cash flows from investing activitiesPurchase of property, plant and equipment (61,358) (1,360,667)Development costs capitalised as property, plant and equipment (33,734) (10,056)Proceeds from sale of property, plant and equipment 2,849 3,166Acquisition of joint venture, net of cash acquired 27 (2,692) (39,855)Acquisition of additional interest in a subsidiary 27 (9,715) –Proceeds from disposal of associates 26 21Net repayment by associates 124 794Net advances to joint ventures (4,541) (27,229)Proceeds from disposal of available-for-sale equity investments – 221Proceeds from maturity of fixed income securities – 208Proceeds from disposal of subsidiary 28 8 –Proceeds from disposal of available-for-sale financial assets 12,922 –Purchase of other financial assets (5,115) –Deposit for option to purchase additional interest in a subsidiary – (28,650)Deposit for option to purchase interest in an investment (2,454) –Dividends received – 1,925Dividends received from associates 15,073 16,793Interest received 9,200 4,139Expenses incurred for land development rights capitalised – (1,065)Development of intellectual property (641) (391)

Net cash used in investing activities (80,048) (1,440,646)

Cash flows from financing activitiesIssue of shares under share option scheme 193 783Proceeds from rights issue – 755,694Purchase of treasury shares – (5,106)Repayment of bank loans (31,272) (5,821)Proceeds from bank loans 1,881 1,048,371Repayment of finance lease obligations (2,025) (586)Payment for interest rate cap – (2,219)Net loan from joint venture partner 2,176 30,277Interest paid (52,611) (39,562)Dividends paid – (70,854)Receipt of cash from re-issuance of treasury shares for share options exercised 2,270 1,176Dividends paid to minority shareholders (1,173) (1,151)Pledged deposits withdrawn/(transferred) (191,416) (5,659)

Net cash (used in)/from financing activities (271,977) 1,705,343

Net increase in cash and cash equivalents carried forward (121,745) 397,613

50




Group

Note 2009 2008

$’000 $’000

(Restated)

Net (decrease)/increase in cash and cash equivalents brought forward (121,745) 397,613

Cash and cash equivalents at 1 January 531,264 139,166

Exchange fluctuation on cash and cash equivalents (1,200) (5,515)

Cash and cash equivalents at 31 December 16 408,319 531,264

During the financial year, property, plant and equipment amounting to $2,463,000 (2008: $788,000) was acquired under

finance leases.


51

Notes to the Financial StatementsYEAR ENDED 31 DECEMBER 2009


These notes form an integral part of the financial statements.The financial statements were authorised for issue by the Board of Directors on 23 February 2010.

1 DOMICILE AND ACTIVITIESParkway Holdings Limited (the Company) is incorporated in the Republic of Singapore. The address of the Company’s registered office is 111 Somerset Road, #15-01, TripleOne Somerset, Singapore 238164.

The principal activities of the Company are those relating to investment holding while those of the subsidiaries consist of the business of private hospital ownership and management, and related healthcare services, management of medical clinics, provision of clinical research services, ownership and management of radiology clinics, provision of comprehensive diagnostic laboratory services, provision of managed care and related services, underwriting of accident and healthcare insurance policies, provision of fund management and consultancy services, and investment holding.

The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the Group) and the Group’s interests in joint ventures and associates.

2 BASIS OF PREPARATION2.1 Statement of compliance

The financial statements have been prepared in accordance with the Singapore Financial Reporting Standards (FRS).

2.2 Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following material items in the balance sheet:

• available-for-salefinancialassetsaremeasuredatfairvalue• investmentpropertyismeasuredatfairvalue• liabilitiesforcash-settledshare-basedpaymentarrangementsaremeasuredatfairvalue• derivativefinancialinstrumentsaremeasuredatfairvalue

2.3 Functional and presentation currency

These financial statements are presented in Singapore dollars which is the Company’s functional currency. All financial information presented in Singapore dollars has been rounded to the nearest thousand, unless otherwise stated.

2.4 Use of estimates and judgements

The preparation of financial statements in conformity with FRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in note 34.

52




2 BASIS OF PREPARATION (cont’d)

2.5 Changes in accounting policies

Overview

Starting as of 1 January 2009 on adoption of new/revised FRSs, the Group has changed its accounting

polices in the following areas:

• Presentationoffinancialstatements

• Determinationandpresentationofoperatingsegments

• Valuationofinvestmentproperties

Presentation of financial statements

The Group applies revised FRS 1 Presentation of Financial Statements (2008), which became effective as

of 1 January 2009. As a result, the Group presents in the consolidated statement of changes in equity

all owner changes in equity, whereas all non-owner changes in equity are presented in the consolidated

statement of comprehensive income.

Comparative information has been re-presented so that it is also in conformity with the revised standard.

Since the change in accounting policy only impacts presentation aspects, there is no impact on earnings

per share.

Determination and presentation of operating segments

As of 1 January 2009, the Group determines and presents operating segments based on the information

that is internally provided to the Board of Directors, which is the Group’s chief operating decision maker.

This change in accounting policy is due to the adoption of FRS 108 Operating Segments. Previously

operating segments were determined and presented in accordance with FRS 14 Segment Reporting. The

new accounting policy in respect of operating segment disclosures is presented as follows.

Comparative segment information has been re-presented in conformity with the transitional requirements

of such standard. Since the change in accounting policy only impacts presentation and disclosure, there

is no impact on earnings per share.

An operating segment is a component of the Group that engages in business activities from which it may

earn revenues and incur expenses, including revenues and expenses that relate to transactions with any

of the Group’s other components. An operating segment’s operating results are reviewed regularly by

the Board of Directors to make decisions about resources to be allocated to the segment and assess its

performance, and for which discrete financial information is available.

Segment results that are reported to the Board of Directors include items directly attributable to a segment

as well as those that can be allocated on a reasonable basis.

Segment capital expenditure is the total cost incurred during the period to acquire property, plant and

equipment, and intangible assets other than goodwill.

53



2 BASIS OF PREPARATION (cont’d)

2.5 Changes in accounting policies (cont’d)

Valuation of investment properties

In the year ended 31 December 2007, the Group adopted FRS 40 Investment Property when it became

effective on 1 January 2007 and opted to account for its investment properties using the cost model.

Under the cost model, the Group stated its investment properties at cost less accumulated depreciation

and impairment losses.

Pursuant to the disposal of the Group’s hospitals and medical suite units in Singapore to ParkwayLife

REIT in August 2007, the Group’s investment properties are now entirely held through its interests in

ParkwayLife REIT. As ParkwayLife REIT accounts for its investment properties at fair value, the directors

of the Company have considered it more appropriate to align the Group’s accounting policy to account

for its investment properties under the fair value model prescribed by FRS 40 Investment Property rather

than the cost model. Under the fair value model, the Group states its investment properties at fair values

and changes in fair values are recognised in the income statement.

The Group adopted this change in accounting policy with effect from 1 January 2009. The change in

accounting policy has been applied retrospectively in accordance with the provisions of FRS 8 Accounting

Policies, Changes in Accounting Estimates and Errors, with comparatives being restated (see note 35).

3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these financial

statements, and have been applied consistently by Group entities, except as explained in note 2.5, which

addresses changes in accounting policies.

Certain comparative amounts have been reclassified to conform with the current year’s presentation (see note

35).

3.1 Basis of consolidation

Business combinations

Business combinations are accounted for under the purchase method. The cost of an acquisition is

measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed

at the date of exchange, plus costs directly attributable to the acquisition.

Subsidiaries

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in

the consolidated financial statements from the date that control commences until the date that control

ceases. The accounting policies of subsidiaries have been changed where necessary to align them with

the policies adopted by the Group.

Joint venturesJoint ventures are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions. Joint ventures are accounted for using proportionate consolidation. The financial statements of joint ventures are proportionately consolidated from the date that joint control commences until the date that joint control ceases. Adjustments have been made to the financial statements of joint ventures to align their accounting policies with those adopted by the Group.

54




3 SIGNIFICANT ACCOUNTING POLICIES (cont’d)3.1 Basis of consolidation (cont’d)

AssociatesAssociates are those entities in which the Group has significant influence, but not control, over their financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Associates are accounted for using the equity method. The consolidated financial statements include the Group’s share of the income, expenses and equity movements of associates, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest (including any long-term investments) is reduced to zero and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate.

Transactions eliminated on consolidationIntra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Accounting for subsidiaries, associates and jointly controlled operationsInvestments in subsidiaries, associates and joint ventures are stated in the Company’s balance sheet at cost less accumulated impairment losses.

3.2 Foreign currencyForeign currency transactionsTransactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at the reporting date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the reporting period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments, a financial liability designated as hedges of the net investment in a foreign operation (see below) or qualifying cash flow hedges, which are recognised in other comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on

acquisition, are translated to Singapore dollars at exchange rates at the reporting date. The income and

expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated

to Singapore dollars at exchange rates at the dates of the transactions.

55



3 SIGNIFICANT ACCOUNTING POLICIES (cont’d)3.2 Foreign currency (cont’d)

Foreign operations (cont’d)Foreign currency differences are recognised in other comprehensive income. When a foreign operation is disposed of, in part or in full, the relevant amount in the foreign currency translation reserve is transferred to profit or loss as part of the profit or loss on disposal.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented within equity in the foreign currency translation reserve.

3.3 Financial instruments

Non-derivative financial assetsThe Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group has the following non-derivative financial assets: investments in equity and debt securities, trade and other receivables and cash and cash equivalents.

Financial assets at fair value through profit or loss

A financial asset is classified at fair value through profit or loss if it is classified as held for trading or is designated as such upon initial recognition. Financial assets are designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s documented risk management or investment strategy. Upon initial recognition, attributable transaction costs are recognised in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss.

Held-to-maturity financial assets

If the Group has the positive intent and ability to hold debt securities to maturity, then such financial assets are classified as held-to-maturity. Held-to-maturity financial assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition held-to-maturity financial assets are measured at amortised cost using the effective interest method, less any impairment losses.

56




3 SIGNIFICANT ACCOUNTING POLICIES (cont’d)3.3 Financial instruments (cont’d)

Non-derivative financial assets (cont’d)Loans and receivablesLoans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses.

Cash and cash equivalents comprise cash and bank balances and deposits with financial institution. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the cash flow statement.

Available-for-sale financial assetsAvailable-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale and that are not classified in any of the previous categories. The Group’s investments in equity securities and debt securities are classified as available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses (see note 3.10) and foreign currency differences on available-for-sale monetary items (see note 3.2), are recognised in other comprehensive income and presented within equity in the fair value reserve. When an investment is derecognised, the cumulative gain or loss in other comprehensive income is transferred to profit or loss.

Non-derivative financial liabilitiesThe Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group has the following non-derivative financial liabilities: financial liabilities and trade and other payables.

Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method.

Share capitalOrdinary sharesOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.

When share capital recognised as equity is repurchased (treasury shares), the amount of the consideration paid, including directly attributable costs, net of any tax effects, is presented as a deduction from equity. Where such shares are subsequently reissued, sold or cancelled, the consideration received is recognised as a change in equity. No gain or loss is recognised in the profit or loss.

57



3 SIGNIFICANT ACCOUNTING POLICIES (cont’d)

3.4 Property, plant and equipment

Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and

accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of

self-constructed assets includes the cost of materials and direct labour, any other costs directly

attributable to bringing the asset to a working condition for its intended use, the costs of dismantling

and removing the items and restoring the site on which they are located and capitalised borrowing costs.

Cost also may include transfers from other comprehensive income of any gain or loss on qualifying cash

flow hedges of foreign currency purchases of property, plant and equipment. Purchased software that is

integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted

for as separate items (major components) of property, plant and equipment.

Property that is being constructed for future use as investment property is accounted for as property,

plant and equipment until construction or development is complete, at which time it is reclassified as

investment property and measures at fair value.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing

the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised

net within other income in profit or loss. When revalued assets are sold, the amounts included in the

revaluation reserve are transferred to retained earnings.

Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount

of the item if it is probable that the future economic benefits embodied within the part will flow to the

Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised.

The costs of the day-to-day servicing of property, plant and equipment are recognised in the income

statement as incurred.

Property that is being constructed for future use as investment property is accounted for at fair value.

Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount

substituted for cost, less its residual value.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each

part of an item of property, plant and equipment, since this most closely reflects the expected pattern of

consumption of the future economic benefits embodied in the asset.

58




3 SIGNIFICANT ACCOUNTING POLICIES (cont’d)3.4 Property, plant and equipment (cont’d)

Depreciation (cont’d)The estimated useful lives for the current and comparative periods are as follows:

Leasehold land remaining term of the leaseFreehold buildings 2%Leasehold buildings 2%Renovation and improvements 4% to 331/3%Hospital and medical equipment, and furniture, fittings and equipment 62/3% to 331/3%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.

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

3.5 Intangible assets

GoodwillGoodwill and negative goodwill arise on the acquisition of subsidiaries, joint ventures and associates.

Acquisitions prior to 1 January 2001

Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets and liabilities of the acquiree.

Goodwill and negative goodwill on acquisitions were written off against retained profits in the year of acquisition.

Goodwill and negative goodwill that have previously been taken to reserves are not taken to the income statement when (a) the business is disposed of or (b) the goodwill is impaired.

Acquisitions occurring between 1 January 2001 and 1 January 2005

Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets and liabilities of the acquiree.

Goodwill arising on the acquisition of subsidiaries is presented in intangible assets. Goodwill arising on the acquisition of associates and joint ventures is presented together with investments in associates and joint ventures.

Goodwill was stated at cost from the date of initial recognition and amortised over its estimated useful life of 20 years. On 1 January 2005, the Group discontinued amortisation of this goodwill. This remaining goodwill balance is subject to testing for impairment, as described in note 3.10.

Negative goodwill was derecognised by crediting retained profits on 1 January 2005.

59



3 SIGNIFICANT ACCOUNTING POLICIES (cont’d)3.5 Intangible assets (cont’d)

Goodwill (cont’d)Acquisitions on or after 1 January 2005Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree.

Goodwill arising on the acquisition of subsidiaries is presented in intangible assets. Goodwill arising on the acquisition of associates and joint ventures is presented together with investments in associates and joint ventures.

Goodwill is measured at cost less accumulated impairment losses, and tested for impairment. Negative goodwill is recognised immediately in the income statement.

Acquisitions of minority interestGoodwill arising on the acquisition of a minority interest in a subsidiary represents the excess of the cost of the additional investment over the carrying amount of the net assets acquired at the date of exchange.

Research and developmentExpenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in profit or loss as incurred.

Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs. Other development expenditure is recognised in profit or loss as incurred.

The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use or more frequently when an indication of impairment arises during the reporting year. Upon completion, the development costs is amortised on a straight-line basis over the estimated useful life of 5 years and assessed for impairment whenever there is an indication that the intangible asset may be impaired.

Land use rightsLeases of land under which the lessor has not transferred all the risks and benefits of ownership are classified as operating leases.

Land use rights are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged on a straight-line basis over the lease term.

Other intangible assetsOther intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortisation and impairment losses. Other intangible assets are amortised in the income statement on a straight-line basis over their estimated useful lives of 6 to 20 years, from the date on which they are available for use.

Other intangible assets that have indefinite lives or that are not available for use are stated at cost less impairment losses. Such intangible assets are tested for impairment annually or as and when indicators of impairment are identified as described in note 3.10.

60




3 SIGNIFICANT ACCOUNTING POLICIES (cont’d)3.6 Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at fair value, with any change therein recognised in profit or loss.

When the use of a property changes such that it is reclassified as property, plant and equipment, its fair value at the date of reclassification becomes its cost for subsequent accounting.

3.7 Development property

Development property is stated at the lower of cost plus, where appropriate, a portion of the attributable profit, and estimated net realisable value, net of progress billings. Net realisable value represents the estimated selling price less costs to be incurred in selling the property.

The cost of property under development comprises specifically identified costs, including acquisition costs, development expenditure, borrowing costs and other related expenditure. Borrowing costs payable on loans funding a development property are also capitalised, on a specific identification basis, as part of the cost of the development property until the completion of development.

3.8 Leased assets

Leases in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Other leases are operating leases and, except for investment property, the leased assets are not recognised in the Group’s balance sheet. Investment property held under an operating lease is recognised in the Group’s balance sheet at its fair value.

3.9 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 bringing the inventories to their present location and condition. Due allowance is

made for all damaged, expired and slow moving items.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated

costs necessary to make the sale.

When inventories are sold, the carrying amount of those inventories is recognised as an expense in

the period in which the related revenue is recognised. The amount of any allowance for write-down of

inventories to net realisable value and all losses of inventories are recognised as an expense in the period

the write-down or loss occurs. The amount of any reversal of any allowance for write-down of inventories,

arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories

recognised as an expense in the period in which the reversal occurs.

61




3.10 Impairment

Financial assets (including receivables)

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to

determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective

evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the

loss event had a negative effect on the estimated future cash flows of that asset that can be estimated

reliably.

Objective evidence that financial assets (including equity securities) are impaired can include default or

delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would

not consider otherwise, indications that a debtor or issuer will enter bankruptcy, the disappearance of an

active market for a security. In addition, for an investment in an equity security, a significant or prolonged

decline in its fair value below its cost is objective evidence of impairment.

The Group considers evidence of impairment for receivables and held-to-maturity investment securities

at both a specific asset and collective level. All individually significant receivables and held-to-maturity

investment securities are assessed for specific impairment. All individually significant receivables and

held-to-maturity investment securities found not to be specifically impaired are then collectively assessed

for any impairment that has been incurred but not yet identified. Receivables and held-to-maturity investment

securities that are not individually significant are collectively assessed for impairment by grouping together

receivables and held-to-maturity investment securities with similar risk characteristics.

In assessing collective impairment, the Group uses historical trends of the probability of default, timing

of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether

current economic and credit conditions are such that the actual losses are likely to be greater or less

than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against receivables. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Impairment losses on available-for-sale investment securities are recognised by transferring the cumulative loss that has been recognised in other comprehensive income, and presented in the fair value reserve in equity, to profit or loss. The cumulative loss that is removed from other comprehensive income and recognised in profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss previously recognised in profit or loss. Changes in impairment attributable to time value are reflected as a component of interest income.

If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised in profit or loss, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive income.

62




3 SIGNIFICANT ACCOUNTING POLICIES (cont’d)3.10 Impairment (cont’d)

Non-financial assetsThe carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit, or CGU”). Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

3.11 Employee benefits

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed

contributions into a separate entity and will have no legal or constructive obligation to pay further amounts.

Obligations for contributions to defined contribution pension plans are recognised as an employee benefit

expense in profit or loss in the periods during which services are rendered by employees.

Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as

the related service is provided.

A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing

plans if the Group has a present legal or constructive obligation to pay this amount as a result of past

service provided by the employee and the obligation can be estimated reliably.

63




3.11 Employee benefits (cont’d)

Share-based payments

The share option programme allows the Group employees and non-executive directors to acquire shares

of the Company while the performance share plan awards eligible employees and non-executive directors

of the Group with fully paid up ordinary shares of the Company or cash in lieu of ordinary shares, or a

combination of both when certain prescribed performance targets are met. The fair value of these equity

instruments granted is recognised as an expense with a corresponding increase in equity. The fair value

is measured at grant date and spread over the period during which the holders become unconditionally

entitled to the equity instruments. At each balance sheet date, the Company revises its estimates of

the number of equity instruments that are expected to vest. It recognises the impact of the revision of

original estimates in the expense and in a corresponding adjustment to equity over the remaining vesting

period.

For share options granted, the proceeds received net of any directly attributable transactions costs are

credited to share capital when the options are exercised.

3.12 Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive

obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will

be required to settle the obligation. Provisions are determined by discounting the expected future cash

flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks

specific to the liability. The unwinding of the discount is recognised as finance cost.

3.13 Revenue recognition

Performance of services

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

Rental income

Rental income receivable under operating leases is recognised in the income statement on a straight-line

basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total

rental income to be received. Contingent rentals are recognised as income in the accounting period in

which they are earned.

Dividends

Dividend income is recognised on the date that the shareholder’s right to receive payment is established,

which in the case of quoted securities is the ex-dividend date.

Interest income

Interest income from bank deposits and debt securities is recognised as it accrues, using the effective

interest method.

Jobs Credit Scheme

Cash grants received from the government in relation to the Jobs Credit Scheme are recognised as

income upon receipt.

64





3.14 Lease payments

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the

term of the lease. Lease incentives received are recognised as an integral part of the total lease expense,

over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and

the reduction of the outstanding liability. The finance expense is allocated to each period during the lease

term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining

term of the lease when the lease adjustment is confirmed.

Determining whether an arrangement contains a lease

At inception of an arrangement, the Group determines whether such an arrangement is or contains a

lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use

of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to

the Group the right to control the use of the underlying asset.

At inception or upon reassessment of the arrangement, the Group separates payments and other

consideration required by such an arrangement into those for the lease and those for other elements on

the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable

to separate the payments reliably, an asset and a liability are recognised at an amount equal to the fair

value of the underlying asset. Subsequently, the liability is reduced as payments are made and an imputed

finance charge on the liability is recognised using the Group’s incremental borrowing rate.

3.15 Finance costs

Finance costs comprise interest expense on borrowings, finance lease liabilities and bonds, amortisation of

borrowings transaction costs and discount on bonds, bank charges and net losses on financial derivatives

that are recognised in the income statement.

All borrowing costs are recognised in the income statement using the effective interest method, except

to the extent that they are capitalised as being directly attributable to the acquisition, construction or

production of an asset which necessarily takes a substantial period of time to be prepared for its intended

use or sale. Capitalisation of borrowing costs is discontinued when substantially all the activities necessary

to prepare the asset for its intended use or sale are completed, which in the case of construction of

property, upon receipt of Temporary Occupation Permit issued by the relevant authority.

3.16 Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in

profit or loss except to the extent that it relates to a business combination, or items recognised directly

in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using

tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in

respect of previous years.

65




3.16 Income tax (cont’d)

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets

and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax

is not recognised for the following temporary differences: the initial recognition of assets or liabilities in

a transaction that is not a business combination and that affects neither accounting nor taxable profit or

loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent

that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not

recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax

is measured at the tax rates that are expected to be applied to temporary differences when they reverse,

based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax

assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and

assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or

on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their

tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences,

to the extent that it is probable that future taxable profits will be available against which they can be

utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is

no longer probable that the related tax benefit will be realised.

3.17 Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS

is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the

weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the

weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects

of all dilutive potential ordinary shares, which comprise share options granted to employees.

3.18 Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may

earn revenues and incur expenses, including revenues and expenses that relate to transactions with any

of the Group’s other components. All operating segments’ operating results are reviewed regularly by

the Group’s Board of Directors to make decisions about resources to be allocated to the segment and

assess its performance, and for which discrete financial information is available.

3.19 New standards and interpretations not yet adopted

New standards, amendments to standards and interpretations that are not yet effective for the year ended

31 December 2009 have not been applied in preparing these financial statements. None of these will have

an effect on the financial statements of the Group.

66




4 PROPERTY, PLANT AND EqUIPMENT – GROUP

Hospital landand buildings Construction- Renovation and

Hospitaland medical

equipment and furniture, fittings Motor

Note Freehold Leasehold in-progress improvements and equipment vehicles Total$’000 $’000 $’000 $’000 $’000 $’000 $’000

CostAt 1 January 2008 60,677 75,929 16,501 28,774 359,076 4,495 545,452Additions 9,633 1,285,635 66,368 3,416 28,597 683 1,394,332Effects of proportionate consolidation on acquisition of joint venture 27 32,885 – – – 17,869 67 50,821Disposals/Write off – (5,172) (1,303) (2,562) (15,220) (495) (24,752)Transfers 16 14,829 (23,240) 1,510 6,885 – –Translation differences on consolidation (2,546) (5,076) (999) 50 (6,912) (114) (15,597)

At 31 December 2008 100,665 1,366,145 57,327 31,188 390,295 4,636 1,950,256Additions 4,064 111 101,281 10,570 19,140 222 135,388Effects of proportionate consolidation on acquisition of joint venture 27 – – – 14 2,407 19 2,440Assets disposed on sale of subsidiary 28 – – – (162) (763) – (925)Disposals/Write off (256) (623) (3,668) (393) (20,538) (603) (26,081)Transfers 293 7,779 (30,955) 25 22,858 – –Transfer to development property 11 – (331,241) (28,944) – – – (360,185)Translation differences on consolidation (1,383) (651) 260 (373) (1,845) (18) (4,010)

At 31 December 2009 103,383 1,041,520 95,301 40,869 411,554 4,256 1,696,883

Accumulated depreciation and impairment lossesAt 1 January 2008 8,003 8,206 – 14,590 221,617 2,928 255,344Depreciation charge for the year 1,107 3,912 – 3,468 33,917 618 43,022Effects of proportionate consolidation on acquisition of joint venture 27 4,537 – – – 11,634 41 16,212Disposals/Write off – (899) – (2,027) (12,095) (442) (15,463)Translation differences on consolidation (267) (684) – 92 (4,105) (68) (5,032)

At 31 December 2008 13,380 10,535 – 16,123 250,968 3,077 294,083Depreciation charge for the year 1,435 4,853 – 3,554 38,255 621 48,718Effects of proportionate consolidation on acquisition of joint venture 27 – – – 3 1,857 16 1,876Assets disposed on sale of subsidiary 28 – – – (154) (544) – (698)Disposals/Write off (94) (455) – (415) (17,186) (527) (18,677)Translation differences on consolidation (169) (58) – (210) (1,218) (22) (1,677)

At 31 December 2009 14,552 14,875 – 18,901 272,132 3,165 323,625

Carrying amountAt 1 January 2008 52,674 67,723 16,501 14,184 137,459 1,567 290,108At 31 December 2008 87,285 1,355,610 57,327 15,065 139,327 1,559 1,656,173At 31 December 2009 88,831 1,026,645 95,301 21,968 139,422 1,091 1,373,258

67



4 PROPERTY, PLANT AND EqUIPMENT – GROUP

Hospital landand buildings Construction- Renovation and

Hospitaland medical

equipment and furniture, fittings Motor

Note Freehold Leasehold in-progress improvements and equipment vehicles Total$’000 $’000 $’000 $’000 $’000 $’000 $’000

CostAt 1 January 2008 60,677 75,929 16,501 28,774 359,076 4,495 545,452Additions 9,633 1,285,635 66,368 3,416 28,597 683 1,394,332Effects of proportionate consolidation on acquisition of joint venture 27 32,885 – – – 17,869 67 50,821Disposals/Write off – (5,172) (1,303) (2,562) (15,220) (495) (24,752)Transfers 16 14,829 (23,240) 1,510 6,885 – –Translation differences on consolidation (2,546) (5,076) (999) 50 (6,912) (114) (15,597)

At 31 December 2008 100,665 1,366,145 57,327 31,188 390,295 4,636 1,950,256Additions 4,064 111 101,281 10,570 19,140 222 135,388Effects of proportionate consolidation on acquisition of joint venture 27 – – – 14 2,407 19 2,440Assets disposed on sale of subsidiary 28 – – – (162) (763) – (925)Disposals/Write off (256) (623) (3,668) (393) (20,538) (603) (26,081)Transfers 293 7,779 (30,955) 25 22,858 – –Transfer to development property 11 – (331,241) (28,944) – – – (360,185)Translation differences on consolidation (1,383) (651) 260 (373) (1,845) (18) (4,010)

At 31 December 2009 103,383 1,041,520 95,301 40,869 411,554 4,256 1,696,883

Accumulated depreciation and impairment lossesAt 1 January 2008 8,003 8,206 – 14,590 221,617 2,928 255,344Depreciation charge for the year 1,107 3,912 – 3,468 33,917 618 43,022Effects of proportionate consolidation on acquisition of joint venture 27 4,537 – – – 11,634 41 16,212Disposals/Write off – (899) – (2,027) (12,095) (442) (15,463)Translation differences on consolidation (267) (684) – 92 (4,105) (68) (5,032)

At 31 December 2008 13,380 10,535 – 16,123 250,968 3,077 294,083Depreciation charge for the year 1,435 4,853 – 3,554 38,255 621 48,718Effects of proportionate consolidation on acquisition of joint venture 27 – – – 3 1,857 16 1,876Assets disposed on sale of subsidiary 28 – – – (154) (544) – (698)Disposals/Write off (94) (455) – (415) (17,186) (527) (18,677)Translation differences on consolidation (169) (58) – (210) (1,218) (22) (1,677)

At 31 December 2009 14,552 14,875 – 18,901 272,132 3,165 323,625

Carrying amountAt 1 January 2008 52,674 67,723 16,501 14,184 137,459 1,567 290,108At 31 December 2008 87,285 1,355,610 57,327 15,065 139,327 1,559 1,656,173At 31 December 2009 88,831 1,026,645 95,301 21,968 139,422 1,091 1,373,258

68




4 PROPERTY, PLANT AND EqUIPMENT – GROUP (cont’d)

In 2008, the Group acquired a 99-year leasehold land at Novena Terrace/Irrawaddy Road with the intention of

constructing a hospital and medical centre on the land. The cost of acquisition of the land was $1,283,581,000

(including stamp duty). The Group commenced construction of the hospital and medical centre in 2008. During

the year, construction costs amounting to $27,544,000 (2008: $7,111,000) was incurred and capitalised as

construction-in-progress.

During the year, borrowing costs of the Group amounting to $27,903,000 (2008: $24,613,000) have been

capitalised in construction-in-progress at rates ranging from 1.86% to 3.29% (2008: 1.49% to 3.07%) per

annum.

The leasehold land and developments thereon with a carrying amount of $1,035,567,000 (2008: $1,315,305,000)

have been pledged to a syndicate of banks for a loan facility granted to the Group (see note 19).

Property, plant and equipment with carrying value amounting to $101,857,000 (2008: $104,174,000) have been

mortgaged to financial institutions for credit facilities granted to certain joint ventures.

The carrying amount of property, plant and equipment includes amounts totalling $5,240,000 (2008: $6,309,000)

in respect of assets held under finance leases.

69



5 INTANGIBLE ASSETS – GROUP

NoteGoodwill on

consolidationLand use

rightsDevelopment

costsOther

intangibles Total$’000 $’000 $’000 $’000 $’000

CostAt 1 January 2008 173,049 – – 53,535 226,584Effect of proportionate consolidation on acquisition of joint venture 27 32,725 – – – 32,725Additions – 50,457 – – 50,457Additions – internally developed – – 391 – 391Translation differences on consolidation (663) (3,804) – (864) (5,331)

At 31 December 2008 205,111 46,653 391 52,671 304,826Effect of proportionate consolidation on acquisition of joint venture 27 2,424 – – – 2,424Effect of acquisition of additional interest in subsidiaries 27 7,151 – – – 7,151Additions – internally developed – – 641 – 641Translation differences on consolidation (3,511) (401) – (997) (4,909)

At 31 December 2009 211,175 46,252 1,032 51,674 310,133

Accumulated amortisation and impairment lossesAt 1 January 2008 – – – 12,979 12,979Amortisation charge for the year – – 5 6,231 6,236Translation differences on consolidation – – – (646) (646)

At 31 December 2008 – – 5 18,564 18,569Amortisation charge for the year – – 46 6,106 6,152Impairment loss – – – 7,187 7,187Translation differences on consolidation – – – (453) (453)

At 31 December 2009 – – 51 31,404 31,455

Carrying amountAt 1 January 2008 173,049 – – 40,556 213,605At 31 December 2008 205,111 46,653 386 34,107 286,257At 31 December 2009 211,175 46,252 981 20,270 278,678

70




5 INTANGIBLE ASSETS – GROUP (cont’d)

Impairment test for cash-generating units containing goodwill

For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions which represent

the lowest level within the Group at which the goodwill is monitored for internal management purposes.

The aggregate carrying amount of goodwill allocated to each unit identified according to business segment

are as follows:

2009 2008

$’000 $’000

Hospitals 119,098 118,483

Healthcare services 92,077 86,628

211,175 205,111

The recoverable amount of a cash-generating unit was based on its value in use. Value in use was determined by

discounting the future cash flows generated from the continuing use of the unit and was based on the following

key assumptions:

• Cashflowswereprojectedbasedonapprovedbudgetfor2010andthefive-yearbusinessplan.

• Theanticipatedannualrevenuegrowthincludedinthecashflowprojectionswas3%to14%perannum

for the years 2010 to 2014.

• Apre-taxdiscountrateof11%to12%wasappliedindeterminingtherecoverableamountoftheunits.

The discount rate was estimated based on the weighted average cost of capital of the entity to which

the units belong.

• The terminal valuewasestimatedusing theperpetuitygrowthmodel,withagrowth rate toperpetuity

of 3% to 6% per annum applied to steady-state estimated earnings at the end of the explicit forecast

period.

The values assigned to the key assumptions represent management’s assessment of future trends in the

healthcare industry and are based on both external sources and internal sources (historical data).

During the year, the Group recognised an impairment loss of $7,187,000 (2008: $NIL) in respect of concessions

held by its joint venture entities, which will end in 2011 and 2012. This impairment loss is recognised and

presented in the statement of comprehensive income for the year.

71



6 INTERESTS IN SUBSIDIARIES

Company

2009 2008

$’000 $’000

Unquoted equity investments, at cost 765,807 765,773

Impairment loss on investment in subsidiary (118,200) –

647,607 765,773

Amounts due from subsidiaries (non-trade) 1,681,128 1,417,949

Allowance for impairment loss (60,760) (58,909)

1,620,368 1,359,040

2,267,975 2,124,813

During the year, the Company recognised an impairment loss of $118,200,000 (2008: $NIL) in respect of

its investment in Parkway Properties Pte. Ltd to reflect the reduction in its net tangible assets to an amount

equivalent to its share capital following the settlement of a dividend from Parkway Properties Pte. Ltd to the

Company.

The amounts due from subsidiaries are unsecured and settlement is neither planned nor likely to occur in

the foreseeable future. As these amounts are, in substance, a part of the Company’s net investments in the

subsidiaries, they are stated at cost less accumulated impairment losses.

The amounts due from subsidiaries consist of $936,559,000 (2008: $663,265,000) interest-free loans and

$744,569,000 (2008: $754,684,000) loans which bear interest at between 1% to 2.34% (2008: 1% to 3.25%)

per annum.

Loans from subsidiaries are unsecured, interest free, mature on 1 January 2011, subject to extension at the

option of the Company. The management of the parties do not expect the amounts to be repaid within the next

twelve months.

72




6 INTERESTS IN SUBSIDIARIES (cont’d)

Effective interest rates and repricing analysis

Effective

interest rate

Within

1 year

1 to 5

Years

After

5 years Total

% $’000 $’000 $’000 $’000

2009

Amounts due from subsidiaries 1 to 2.34 744,569 – – 744,569

2008

Amounts due from subsidiaries 1 to 3.25 754,684 – – 754,684

In 2008, the Group entered into a master agreement with the minority shareholders of certain subsidiaries to

acquire an additional 10% equity interest in each of these subsidiaries for a consideration of US$7,000,000.

The Group completed its acquisition of the 10% equity interest in each of these subsidiaries on 1 July 2009

(see note 27).

Pursuant to the master agreement in 2008, the Group also entered into an option agreement under which the

minority shareholders will grant the Group call options to acquire the remaining 30% equity interest in each of

these subsidiaries for an aggregate consideration of approximately US$20,800,000 upon the terms and conditions

set out thereon. The deposits will either be refunded or applied towards the purchase consideration for the

additional equity interests in these subsidiaries in accordance with the terms set out in the option agreement.

Details of subsidiaries are as follows:

Name of subsidiary Principal activities

Place of

incorporation

and business Equity interest

2009 2008

% %

Parkway Properties Pte Ltd Investment holding Singapore 100 100

and its subsidiary:

Parkway Promotions Pte Ltd Promoters and organisers

of healthcare events

Singapore 100 100

M & P Investments Pte Ltd

and its subsidiary:

Investment holding Singapore 100 100

S.P.I. Pte Ltd Dormant Singapore 100 100

Westront Pte Ltd Investment holding Singapore 100 100

Parkway Hospitals Singapore

Pte Ltd

Private hospitals ownership

and management

Singapore 100 100

73




Place of

incorporation


2009 2008

% %

Parkway Trust Management

Limited

Provision of management

services to Parkway Life REIT

Singapore 100 100

Parkway Investments Pte. Ltd. Investment holding Singapore 100 100

Parkway Group Healthcare

Pte Ltd and its subsidiaries:


iXchange Pte Ltd Agent and administrator for

managed care and related

services

Singapore 100 100

Parkway-Healthcare

(Mauritius) Ltd

Investment holding Mauritius 100 100

Shenton Insurance Pte. Ltd. Underwrite accident and

healthcare insurance policies

Singapore 100 100

Mount Elizabeth Healthcare

Holdings Ltd and its

subsidiaries:


Mount Elizabeth Medical

Holdings Ltd

and its subsidiaries:


East Shore Medical

Holdings Pte Ltd


MENA Services Pte Ltd Nursing agency Singapore 100 100

Mount Elizabeth

Ophthalmic

Investments Pte Ltd

Rental of medical equipment

used for eye operations

Singapore 66.48 66.48

Mount Elizabeth

Healthcare Services

Sdn Bhd and its

subsidiary:

Provision of laboratory

services to hospitals and

clinics

Malaysia 100 100


74





Place of

incorporation


2009 2008

% %

Orifolio Options Sdn Bhd Investment holding Malaysia 100 100

Shanghai Gleneagles

International Medical and

Surgical Center

Provision of medical and

healthcare services

People’s

Republic of

China

70 70

Parkway Healthtech

Investments Pte Ltd



Goldlink Investments

Pte. Ltd. and its subsidiaries:


Medi-Rad Associates Ltd

and its subsidiary:

Operation of radiology clinics Singapore 100 100

Radiology

Consultants Pte Ltd

Radiology consultancy and

interpretative services

Singapore 100 100

Drayson Investments

Pte. Ltd. and its subsidiary:


Parkway Laboratory

Services Ltd

Provision of comprehensive

diagnostic laboratory services

Singapore 100 100

Gleneagles CRC Pte Ltd


Operation of a clinical

research centre

Singapore 100^^ –^^

Gleneagles CRC (Thailand)

Company Limited

To conduct global and local

clinical trials

Thailand 100^^ –^^

Gleneagles CRC

(China) Pte Ltd.


clinical trials

People’s

Republic of

China

100^^ –^^


75




Place of

incorporation


2009 2008

% %

Gleneagles Clinical

Research International

Pte. Ltd.


research centre

Singapore 100^^ –^^

Gleneagles CRC Pty Ltd To conduct global and local

clinical trials

Australia 100^^ –^^

Gleneagles Medical Holdings

Limited and its subsidiaries:


Gleneagles Medical

Centre Ltd

Dormant Singapore 100 100

Gleneagles Radiology

Consultants Pte Ltd


Gleneagles CRC Pte Ltd



research centre

Singapore –^^ 100^^

Gleneagles CRC

(Thailand) Company

Limited


clinical trials

Thailand –^^ 100^^

Gleneagles CRC (China)

Pte Ltd.


clinical trials

People’s

Republic

of China

–^^ 100^^

Gleneagles Clinical

Research International

Pte. Ltd.


research centre

Singapore –^^ 100^^

Gleneagles CRC Pty Ltd To conduct global and local

clinical trials

Australia –^^ 100^^

Gleneagles International




76





Place of

incorporation


2009 2008

% %

GEH Management Services

(M) Sdn. Bhd.

Provision of advisory,

administrative, management

and consultancy services to

healthcare facilities

Malaysia 100 100

Gleneagles JPMC Sdn Bhd Management and operation of

a cardiac and cardiothoracic

care centre

Brunei

Darussalam

75 75

Gleneagles (Malaysia)

Sdn Bhd and its subsidiary:

Investment holding Malaysia 100 100

Pulau Pinang Clinic

Sdn. Bhd.

Private hospital ownership and

management

Malaysia 70 70

Gleneagles Management

Services Pte Ltd

and its subsidiary:

Provision of advisory,

administrative, management



Singapore 100 100

Gleneagles Heritage

Hospital Management

Limited

Dormant British Virgin

Islands

75 75

Gleneagles Pharmacy

Pte Ltd


Gleneagles Development

Pte Ltd

Developing and managing

turnkey hospital projects

and investment holding

Singapore 100 100

Gleneagles Hospital (UK)

Limited and its subsidiaries:

Investment holding United

Kingdom

65 65


77




Place of

incorporation


2009 2008

% %

Cavendish Clinic Limited Dormant United

Kingdom

100 100

The Heart Hospital

Limited

Under company

voluntary arrangement

United

Kingdom

100 100

The Heart Hospital

Properties Limited

Dormant United

Kingdom

100 100

Wholebond Limited Dormant United

Kingdom

100 100

Merlion Healthcare Limited Dormant United

Kingdom

100 100

Gleneagles Technologies

Services Pte Ltd

To provide consultancy

services, perform equipment

planning, procurement, testing

and commissioning, and

manage a healthcare facility

Singapore 100 100

Ko, Djeng Gleneagles

Pte Ltd

To carry on the practice

of dental surgeons and to

operate dental clinics

Singapore – ^ 60

Parkway Shenton Pte Ltd


Investment holding and

operation of a network of

clinics and provision of

comprehensive medical and

surgical advisory services

Singapore 100 100

GMMC Maritime Medical

Centre Pte. Ltd.

Liquidated during the year Singapore – 100

Gleneagles Maritime

Medical Centre

(China) Limited

Dormant Hong Kong 100 100


78





Place of

incorporation


2009 2008

% %

Nippon Medical Care

Pte Ltd

Operation of clinics Singapore 70 70

Parkway Shenton International

Holdings Pte. Ltd. and its

subsidiary:


Parkway Shenton

Vietnam Limited

Dormant Vietnam 100 100

Shenton Family Medical

Clinics Pte Ltd

To provide, establish and carry

on the business of clinics

Singapore 100 100

Shenton Medical Holdings

Pte Ltd and its subsidiaries:


Shenton Medical Centre

Pte Ltd


SMG Medical Group

Pte. Ltd.


EHS Health Screeners

Pte. Ltd.


Medical Resources

International Pte Ltd



Shanghai Rui Xin

International Healthcare

Co. Ltd and its subsidiary:


healthcare outpatient services

People’s

Republic of

China

70 60


79




Place of

incorporation


2009 2008

% %

Shanghai Rui Pu Outpatient

Department Co. Ltd



People’s

Republic of

China

70 70

Shanghai Rui Hong

Clinic Co. Ltd

and its subsidiary:



People’s

Republic of

China

70 60

Shanghai Rui Xiang

Outpatient

Department Co. Ltd



People’s

Republic of

China

100 100

Shanghai Xin Rui International

Healthcare Co. Ltd



People’s

Republic of

China

70 60

Swiss Zone Sdn Bhd Investment holding Malaysia 100 100

Parkway (Shanghai) Hospital

Management Ltd

Provision of management



People’s

Republic of

China

100 100

Khubchandani Hospitals

Private Limited

Private hospital ownership India 50* 50*

Parkway Education Pte Ltd

and its subsidiary:


Parkway College of

Nursing and Allied

Health Pte Ltd

Provision of courses in

nursing and allied health

Singapore –^^^ 100^^^

Parkway College of

Nursing and Allied

Health Pte Ltd

Provision of courses in

nursing and allied health

Singapore 100^^^ –^^^


80





Place of

incorporation


2009 2008

% %

Parkway Novena Holdings



Parkway Novena Pte. Ltd. Hospital construction

and development

Singapore 100 100

Parkway Irrawaddy Pte. Ltd. Medical centre construction

and development

Singapore 100 100

^ Disposed during the year.

^^ Shares were transferred from Gleneagles Medical Holdings Limited to Parkway Group Healthcare Pte Ltd pursuant to an internal restructuring during the year.

^^^ Parkway Group Healthcare Pte Ltd holds almost 100% shares in Parkway College of Nursing and Allied Health Pte Ltd pursuant to an internal restructuring during the year. Parkway Education Pte Ltd holds only 1 share in Parkway College of Nursing and Allied Health Pte Ltd in both 2009 and 2008.

* Notwithstanding that the equity interest is not more than 50%, the Company has accounted for Khubchandani Hospitals Private Limited as a subsidiary in accordance with FRS 27 Consolidated and Separate Financial Statements, on the basis that the Company, by virtue of the existence of currently exercisable potential voting rights, has the ability to control the financing and operating decisions of the subsidiary.

KPMG LLP Singapore is the auditor of all Singapore-incorporated subsidiaries. Other member firms of KPMG

International are auditors of significant foreign-incorporated subsidiaries. For this purpose, a subsidiary is

considered significant as defined under the Singapore Exchange Securities Trading Limited (SGX-ST) Listing

Manual if its net tangible assets represent 20% or more of the Group’s consolidated net tangible assets, or if

its pre-tax profits account for 20% or more of the Group’s consolidated pre-tax profits.


81



7 INTERESTS IN ASSOCIATES

Group Company

2009 2008 2007 2009 2008

$’000 $’000 $’000 $’000 $’000


Unquoted equity shares, at cost – – – 64 64

Share of net assets 210,104 198,034 205,845 – –

210,104 198,034 205,845 64 64

Amounts due from associates

(mainly non-trade) 5,410 9,069 8,432 – –

Allowance for impairment loss (3,038) (3,050) (3,050) – –

2,372 6,019 5,382 – –

Amounts due to associates

(mainly non-trade) (7,391) (9,924) (6,110) (4,608) (3,603)

205,085 194,129 205,117 (4,544) (3,539)

Group

The amounts due from associates are unsecured and interest-free, and settlement is neither planned nor likely

to occur in the foreseeable future. As these amounts are, in substance, a part of the Group’s net investments

in the associates, they are stated at cost less accumulated impairment loss.

The amounts due to associates include amounts denominated primarily in Australian dollars which are unsecured

and interest-free, and settlement is neither planned nor likely to occur in the foreseeable future. As these amounts

are, in substance, a return of equity by the associates to the Group, they are stated at cost.

Details of associates are set out in note 32.

82




7 INTERESTS IN ASSOCIATES (cont’d)

Group (cont’d)

Summarised financial information on the associates, which is not adjusted for the percentage of ownership held

by the Group, is set out below:

2009 2008

$’000 $’000

Assets and liabilities

Non-current assets 1,175,443 1,067,337

Current assets 38,477 41,438

Total assets 1,213,920 1,108,775

Current liabilities (55,417) (56,820)

Non-current liabilities (297,925) (226,603)

Total liabilities (353,342) (283,423)

Results

Revenue 72,928 61,006

Profit after taxation 45,996 31,614

Company

The amount due to an associate which is denominated in Australian dollars, is unsecured and interest-free, and

settlement is neither planned nor likely to occur in the foreseeable future. As the amount is, in substance, a

return of equity by the associate to the Company, it is stated at cost.

83



8 BALANCES WITH JOINT VENTURES AND JOINT VENTURE PARTNERS – GROUP

Amounts due from joint ventures

The amounts due from joint ventures are unsecured and interest-free, and settlement is neither planned nor likely

to occur in the foreseeable future. As these amounts are, in substance, a part of the Group’s net investments

in these joint ventures, they are stated at cost less accumulated impairment loss.

Amounts due to joint venture partners

The non-current amounts due to joint venture partners are unsecured and interest-free, and settlement is neither

planned nor likely to occur in the foreseeable future. As these amounts are, in substance, a part of the joint

venture partners’ net investments in the joint ventures, they are stated at cost.

Details of joint ventures are set out in note 33.

The following summarised financial information on the joint ventures represents the Group’s share:

2009 2008

$’000 $’000


Non-current assets 360,930 341,962

Current assets 84,387 100,363

Total assets 445,317 442,325

Current liabilities (66,853) (89,309)

Non-current liabilities (239,394) (228,689)

Total liabilities (306,247) (317,998)

Results

Revenue 219,941 210,217

Expenses (196,357) (196,274)

Profit after taxation 23,584 13,943

Group’s share of joint ventures’ capital commitments 51,310 66,754

84




9 OTHER FINANCIAL ASSETS

Group Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Non-current investments:

Club memberships 138 138 – –

Singapore Government debt securities held to

maturity 10,122 5,140 – –

Available-for-sale quoted equity securities – 14,571 – –

Deposit for option to purchase interest in an

investment 2,454 – – –

Financial derivatives 52 – 52

12,628 19,711 52 –

Available-for-sale unquoted equity securities 4,565 4,565 1,013 1,013

Impairment losses (4,530) (4,530) (1,013) (1,013)

35 35 – –

12,801 19,884 52 –

Group

2009 2008

Current investments:

Available-for-sale unquoted other investments 597 356

Non-current investments in available-for-sale unquoted equity securities are stated at cost as their fair values

cannot be reliably measured in view that they do not have a quoted market price in an active market, the

range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be

reasonably assessed.

85



9 OTHER FINANCIAL ASSETS (cont’d)

In 2008, non-current investments in available-for-sale quoted equity securities include a 22% effective equity

interest held in Auric Pacific Group Ltd with a carrying value of $14,571,000. The investment had been accounted

for as a non-current investment as the Group does not have significant influence over the financial and

operational policies of the investee. During the financial year ended 31 December 2009, the Group divested its

interest in Auric Pacific Group Ltd for a consideration of $12,922,000.

During the year, the Group recognised an impairment loss of $2,199,000 (2008: $16,221,000) on its available-for-sale

quoted equity securities in accordance with FRS 39 Financial Instruments: Recognition and Measurement.

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels

have been defined as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,

either directly (i.e., as prices) or indirectly (i.e., derived from prices)

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable

inputs)

Level 1 Level 2 Level 3 Total

$’000 $’000 $’000 $’000

Group

31 December 2009

Financial derivatives – 52 – 52

31 December 2008

Available-for-sale quoted equity securities 14,571 – – 14,571

Company

31 December 2009

Financial derivatives – 52 – 52

86




10 DEFERRED TAX (ASSETS)/LIABILITIES

Movements in deferred tax assets and liabilities of the Group (prior to offsetting of balances) during the year

are as follows:

At 1 Jan

2008

Effect of

proportionate

consolidation

on acquisition

of joint venture

(note 27)

Charged/

(Credited)

to income

statement

(note 25)

Translation

differences on

consolidation

At 31 Dec

2008

$’000 $’000 $’000 $’000 $’000

Group

Deferred tax assets

Trade receivables (131) – (310) 7 (434)

Interests in associates (6,181) – – – (6,181)

Tax value of unutilised tax losses

carried forward (1,313) – (876) (6) (2,195)

Tax value of unabsorbed capital

allowances carried forward (17) – (95) 2 (110)

Other provisions (388) – (524) 29 (883)

(8,030) – (1,805) 32 (9,803)

Deferred tax liabilities

Property, plant and equipment 20,987 1,739 1,586 (440) 23,872

Intangible assets 5,054 – (1,694) 335 3,695

Other receivables 6 – 91 – 97

26,047 1,739 (17) (105) 27,664

Net deferred tax liabilities 18,017 1,739 (1,822) (73) 17,861

87



10 DEFERRED TAX (ASSETS)/LIABILITIES (cont’d)

At 1 Jan 2009

Effect of disposal of subsidiary (note 28)

Charged/ (Credited) to income statement

(note 25)

Translation differences on

consolidationAt 31 Dec

2009$’000 $’000 $’000 $’000 $’000

GroupDeferred tax assetsTrade receivables (434) – 160 5 (269)Interests in associates (6,181) – – – (6,181)Tax value of unutilised tax losses carried forward (2,195) – (107) 249 (2,053)Tax value of unabsorbed capital allowances carried forward (110) – – 2 (108)Other provisions (883) – (172) 17 (1,038)

(9,803) – (119) 273 (9,649)

Deferred tax liabilitiesProperty, plant and equipment 23,872 (29) (677) (42) 23,124Intangible assets 3,695 – (203) (106) 3,386Other receivables 97 – – – 97

27,664 (29) (880) (148) 26,607

Net deferred tax liabilities 17,861 (29) (999) 125 16,958

At 1 Jan 2008

Charged to income

statementAt 31 Dec

2008

Charged to income

statementAt 31 Dec

2009$’000 $’000 $’000 $’000 $’000

CompanyDeferred tax liabilityOther receivables 6 91 97 48 145

The amounts determined after appropriate offsetting are included in the balance sheet as follows:

Group Company2009 2008 2009 2008

$’000 $’000 $’000 $’000

Deferred tax assets (8,439) (8,752) – –Deferred tax liabilities 25,397 26,613 145 97

88




11 DEVELOPMENT PROPERTY – GROUP

2009 2008

$’000 $’000

At 1 January – –

Transfer from property, plant and equipment, at cost 360,185 –

At 31 December 360,185 –

During the year, management has designated property that is intended for sale to medical specialists with a

carrying value of $360,185,000 as development property.

Borrowing costs incurred amounting to $9,705,000 have been capitalised as cost of the development

property.

The development property thereon with a carrying amount of $360,185,000 has been pledged to a syndicate of

banks for a loan facility granted to the Group (see note 19).

12 INVENTORIES – GROUP

2009 2008

$’000 $’000

Inventories 22,367 18,764

Allowance for inventory obsolescence (26) (42)

22,341 18,722

Inventories with carrying value of $479,000 (2008: $466,000) have been pledged as security for bank overdraft

facilities granted to certain joint ventures as disclosed in note 19.

13 TRADE AND OTHER RECEIVABLES

Group Company

2009 2008 2009 2008

Note $’000 $’000 $’000 $’000

Trade receivables 14 88,507 115,543 – –

Deposits and other receivables 15 11,341 17,643 914 601

Loans and receivables 99,848 133,186 914 601

Prepayments 3,696 4,192 8 4

103,544 137,378 922 605

89



14 TRADE RECEIVABLES – GROUP

2009 2008

$’000 $’000

Trade receivables 117,837 173,594

Allowance for impairment loss (29,330) (58,051)

88,507 115,543

The Group’s primary exposure to credit risk arises through its trade receivables. Concentration of credit risk

relating to trade receivables is limited and the Group’s historical experience in the collection of accounts

receivable falls within the recorded allowances. Due to these factors, management believes that no additional

credit risk beyond amounts provided for collection losses is inherent in the Group’s trade receivables.

The maximum exposure to credit risk for trade receivables at the reporting date (by geographical distribution)

is:

2009 2008

$’000 $’000

Singapore 43,165 58,763

North Asia 7,943 8,399

South Asia and Middle East 18,725 42,651

South East Asia 43,468 51,671

Others 4,536 12,110

117,837 173,594

90




14 TRADE RECEIVABLES – GROUP (cont’d)

Impairment losses on trade receivables

The ageing of trade receivables at the reporting date is:

Gross

Allowance for

impairment

losses Gross

Allowance for

impairment

losses

2009 2009 2008 2008

$’000 $’000 $’000 $’000

Group

Not past due 23,680 79 22,144 266

Past due 0 – 30 days 31,393 172 27,262 922

Past due 31 – 180 days 29,765 2,218 38,806 970

Past due 181 days – 1 year 10,438 6,540 48,397 23,664

Past due more than 1 year 22,561 20,321 36,985 32,229

117,837 29,330 173,594 58,051

The movements in allowance for impairment loss in respect of trade receivables during the year are as

follows:

2009 2008

$’000 $’000

At 1 January 58,051 16,315

Impairment loss recognised/(reversed):

– allowance based on specific and collective assessment 15,155 8,237

– other specific allowance (17,207) 34,414

Impairment loss written off (26,661) (1,391)

Effect of proportionate consolidation on acquisition of joint venture 165 733

Disposal of subsidiary (5) –

Translation differences on consolidation (168) (257)

At 31 December 29,330 58,051

The Group provides for impairment allowance in respect of trade receivables based on historical default rates.

Specific impairment allowance is provided on a case-by-case basis depending on the circumstances.

In 2008, the Group recognised an allowance for impairment of $34,414,000 in respect of certain specific past

due receivables notwithstanding these receivables are backed by letters of guarantee. A final settlement was

reached during 2009 and the Group reversed the excess allowance amounting to $17,207,000.

91



15 DEPOSITS AND OTHER RECEIVABLES

Group Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Interest receivables 1,165 909 852 541

Sundry deposits 3,932 4,410 2 1

5,097 5,319 854 542

Other receivables 7,340 13,324 60 59

Allowance for impairment loss (1,096) (1,000) – –

6,244 12,324 60 59

11,341 17,643 914 601

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

There are no significant concentrations of credit risk arising from other receivables. The maximum exposure to

credit risk for other receivables at the reporting date (by geographical distribution) is:

2009 2008

$’000 $’000

Group

Singapore 2,744 4,124

North Asia 942 4,511

South Asia and Middle East 1,671 861

South East Asia 1,888 3,777

Others 95 51

7,340 13,324

92




15 DEPOSITS AND OTHER RECEIVABLES (cont’d)

Impairment losses on other receivables

The ageing of other receivables at the reporting date is:

Gross

Impairment

losses Gross

Impairment

losses

2009 2009 2008 2008

$’000 $’000 $’000 $’000

Group

Not past due 4,318 – 8,656 –

Past due 0 – 30 days 244 – 350 –

Past due 31 – 180 days 1,144 – 1,141 –

Past due 181 days – 1 year 102 93 1,582 –

Past due more than 1 year 1,532 1,003 1,595 1,000

7,340 1,096 13,324 1,000

The movements in allowance for impairment loss in respect of other receivables during the year are as

follows:

2009 2008

$’000 $’000

At 1 January 1,000 1,061

Impairment loss recognised 111 –

Impairment loss written off – (19)

Translation differences on consolidation (15) (42)

At 31 December 1,096 1,000

The Group provides for impairment allowance in respect of other receivables based on historical default rates.

Specific impairment allowance is provided on a case-by-case basis depending on the circumstances.

93



16 CASH AND CASH EqUIVALENTS

Group Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Fixed deposits with financial institutions 529,958 491,290 222,033 387,000

Cash and bank balances 80,310 50,772 8,411 3,211

610,268 542,062 230,444 390,211

Bank overdrafts (secured) (725) (1,612)

Bank overdrafts (unsecured) (622) –

(1,347) (1,612)

Fixed deposits pledged (200,602) (9,186)

Cash and cash equivalents in

Consolidated Cash Flow Statement 408,319 531,264

Fixed deposits with financial institutions include deposits pledged to banks and finance companies for credit

facilities granted to certain subsidiaries and joint ventures.

Bank overdrafts of $725,000 (2008: $1,612,000) are secured by certain property, plant and equipment and other

assets as disclosed in note 19(b).

The effective interest rates per annum relating to fixed deposits with financial institutions and bank overdrafts

at the balance sheet date are as follows:

Group Company

2009 2008 2009 2008

% % % %

Fixed deposits with financial institutions 0.02 to 12.00 0.05 to 12.00 0.38 to 1.25 0.75 to 1.25

Bank overdrafts 3.00 to 8.30 7.00 to 8.30 – –

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

94




17 SHARE CAPITAL

Group and Company

2009 2008

Number

of shares

Number

of shares

Fully-paid ordinary shares, with no par value:

At 1 January 1,127,734,784 769,188,160

Issue of shares under share option scheme 181,250 444,750

Transferred from treasury shares on exercise of share options 1,517,000 596,750

Transferred from treasury shares on vesting of performance shares – 171,000

Issue of new shares pursuant to rights issue – 358,716,124

Purchase of treasury shares – (1,382,000)

At 31 December 1,129,433,034 1,127,734,784

Treasury shares:

At 1 January 2,614,250 2,000,000

Purchase of treasury shares – 1,382,000

Utilisation for exercise of share options (1,517,000) (596,750)

Utilisation for vesting of performance shares – (171,000)

At 31 December 1,097,250 2,614,250

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to

one vote per share at 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) 156,250 ordinary shares issued on exercise of share options granted on 19/11/04 at $0.9763 per share;

(ii) 25,000 ordinary shares issued on exercise of share options granted on 15/1/05 at $1.5935 per share.

The Company utilised 1,517,000 (2008: 596,750) treasury shares on exercise of share options under Parkway

Share Option Scheme 2001 at exercise price ranging from $0.9763 to $2.5455 (2008: $0.9763 to $2.303) per

share. The average cost of these treasury shares amounted to $3.70 (2008: $3.70) and the loss on reissue of

treasury shares of $3,336,000 (2008: $1,661,000) has been recognised in capital reserve. In 2008, the Company

repurchased 1,382,000 ordinary shares from the open market at an average price of $3.69 which were held as

treasury shares.

95



17 SHARE CAPITAL (cont’d)Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. In order to maintain or achieve an optimal capital structure, the Group may adjust, in light of changes in economic conditions, the amount of dividend payment, return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings.

The Board seeks to maintain a balance between the higher returns that might be possible with higher level of borrowings and the advantages and security afforded by a sound capital position. Management aims to maintain an optimal gearing ratio of not more than six times. Gearing ratio is defined as net debt divided by earnings before interest, taxation, depreciation and amortisation (EBITDA). Net debt is calculated as borrowings less cash and cash equivalents.

There were no changes in the Group’s approach to capital management during the year.

The Group and the Company are in compliance with all externally imposed capital requirements for the financial years ended 31 December 2008 and 2009.

18 OTHER RESERVES

Group Company2009 2008 2009 2008

$’000 $’000 $’000 $’000

Capital reserve (4,997) (1,661) – –Exchange fluctuation reserve (18,400) (12,066) – –Hedge reserve (10,441) (11,449) – –Fair value reserve – – – –Equity compensation reserve 21,417 14,932 21,369 14,884

(12,421) (10,244) 21,369 14,884

The capital reserve comprise the cumulative net gain or loss on reissuance of treasury shares.

The exchange fluctuation reserve of the Group comprise foreign exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from the functional currency of the Company and the exchange differences on monetary items which form part of the Group’s net investment in the foreign operations, provided certain conditions are met.

The hedge reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments.

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

The equity compensation reserve comprises the cumulative value of employee services received for the issue of share options and conditional award of performance shares.

96




19 FINANCIAL LIABILITIES

Group Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Non-current liabilities

Secured term loans 676,460 676,103 – –

Unsecured term loans 498,755 497,977 498,755 497,977

Finance lease liabilities 3,410 3,294 – –

1,178,625 1,177,374 498,755 497,977

Current liabilities

Secured term loans 8,506 11,730 – –

Secured short-term credit facilities 4,093 20,041 – –

Unsecured short-term credit facilities – 11,066 – –

Finance lease liabilities 1,742 1,612 – –

14,341 44,449 – –

Financial derivatives 12,224 13,067 9,647 11,739

Intra-group financial guarantees – – 1 11

26,565 57,516 9,648 11,750

Total financial liabilities 1,205,190 1,234,890 508,403 509,727

Total borrowings 1,192,966 1,221,823 498,755 497,977

Total financial derivatives 12,224 13,067 9,647 11,739

Total intra-group financial guarantees – – 1 11

Total financial liabilities 1,205,190 1,234,890 508,403 509,727

(a) The secured SGD-denominated term loan of a subsidiary is secured by the following:

(i) pledge of leasehold land located at Novena Terrace/Irrawaddy Road and all the present and future

rights, title, interest, benefits, advantages, permits and licences arising from and in connection with

the land and any development thereon;

(ii) pledge of fixed deposits of $200,000,000; and

(iii) corporate guarantee by the Company.

(b) The secured RM-denominated bank overdrafts, short-term credit facilities and term loans of certain joint

ventures are secured by the following:

(i) first fixed charge over freehold land, and leasehold land and buildings of certain joint ventures;

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

(iii) charge over fixed deposits of certain joint ventures; and

(iv) corporate guarantee by a joint venture.

97



19 FINANCIAL LIABILITIES (cont’d)

(c) The secured INR-denominated term loans of certain joint ventures are secured by the following:

(i) first mortgage and charge over all immovable and movable assets of a joint venture;

(ii) first charge over all movable assets of a joint venture; and

(iii) hypothecation of the current assets and second charge on the property, plant and equipment of

a joint venture.

(d) Pursuant to a debt restructuring exercise undertaken in prior years, a joint venture’s indebtedness was

converted into an interest-free term loan. According to the terms of debt restructuring exercise, if the

joint venture defaults in repayment, the lenders have an option to convert the outstanding term loan not

exceeding 20% of the loan amount into fully paid equity shares of the joint venture.

(e) The short-term bank loan of a subsidiary is secured by corporate guarantees provided by the

Company.

Finance lease liabilities

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

Payments Interest Principal Payments Interest Principal

2009 2009 2009 2008 2008 2008

$’000 $’000 $’000 $’000 $’000 $’000

Repayable:

Within 1 year 1,970 228 1,742 1,824 212 1,612

Af ter 1 year

but within 5 years 3,633 228 3,405 3,509 215 3,294

After 5 years 6 1 5 – – –

5,609 457 5,152 5,333 427 4,906

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

Intra-group guarantees

Intra-group financial guarantees comprise guarantees granted by the Company to banks in respect of short-

term bank loans drawn down by certain subsidiaries totalling $8,180,000 (2008: $11,066,000) as at the balance

sheet date.

98





Maturity of borrowings

Within

1 year

After

1 year but

within

5 years

After

5 years Total

$’000 $’000 $’000 $’000

Group

2009

Secured term loans:

– S$ variable at 2.56% to 2.97% per annum – 550,031 – 550,031

– RM variable at 2.90% to 8.32% per annum 2,923 102,847 – 105,770

– RM fixed at 4.13% to 15.00% per annum 2,001 5,736 – 7,737

– INR variable at 9.75% to 16.25% per annum 3,582 16,388 916 20,886

– INR interest-free loan – 542 – 542

Secured short-term credit facilities:

– RM fixed at 2.90% to 10.00% per annum 4,093 – – 4,093

Unsecured term loan:


Finance lease liabilities:

– Fixed at 2.30% to 6.60% per annum 1,742 3,405 5 5,152

14,341 1,177,704 921 1,192,966

2008

Secured term loans:

– S$ variable at 2.97% per annum – 548,305 – 548,305

– RM variable at 4.15% to 8.25% per annum 2,970 107,284 – 110,254

– RM fixed at 5.00% to 15.50% per annum 6,944 559 – 7,503

– INR variable at 10.25% to 16.75% per annum 1,816 18,085 1,328 21,229

– INR interest-free loan – 542 – 542

Secured short-term credit facilities:

– RM fixed at 4.58% to 10.00% per annum 20,041 – – 20,041



Unsecured short-term credit facilities:

– S$ fixed at 3.34% per annum 5,000 – – 5,000

– RMB fixed at 6.57% to 7.23% per annum 6,066 – – 6,066

Finance lease liabilities:

– Fixed at 2.32% to 18.00% per annum 1,612 3,294 – 4,906

44,449 1,176,046 1,328 1,221,823

99




Maturity of borrowings (cont’d)

Within

1 year

After

1 year but

within

5 years

After

5 years Total

$’000 $’000 $’000 $’000

Company

2009



2008



The following are the expected contractual undiscounted cash outflows of financial liabilities, including interest

payments and excluding the impact of netting agreements:

Cash flows

Carrying

amount

Contractual

cash flows

Within

1 year

After

1 year but

within

5 years

After

5 years

$’000 $’000 $’000 $’000 $’000

Group

2009

Non-derivative financial liabilities

Va riable interest rate secured term loans 676,687 758,358 21,993 735,704 661

Fixed interest rate secured term loans 7,737 9,120 2,479 6,641 –

Interest-free secured term loan 542 542 – 542 –

Secured short-term credit facilities 4,093 4,197 4,197 – –

Unsecured term loan 498,755 518,508 9,254 509,254 –

Finance lease liabilities 5,152 5,609 1,970 3,633 6

Trade and other payables 192,509 192,509 192,509 – –

1,385,475 1,488,843 232,402 1,255,774 667

Derivative financial liabilities

Interest rate swaps used for hedging

– outflow 12,224 14,141 8,007 6,134 –

100





Cash flows

Carrying

amount

Contractual

cash flows

Within

1 year

After

1 year but

within

5 years

After

5 years

$’000 $’000 $’000 $’000 $’000

Group

2008


Va riable interest rate secured term loans 679,788 808,662 29,181 778,045 1,436

Fixed interest rate secured term loans 7,503 8,239 7,362 877 –

Interest-free secured term loan 542 542 – 542 –

Secured short-term credit facilities 20,041 21,012 21,012 – –


Unsecured short-term credit facilities 11,066 11,209 11,209 – –

Finance lease liabilities 4,906 5,333 1,824 3,509 –


1,416,541 1,580,789 275,721 1,303,632 1,436



– outflow 12,204 12,794 4,627 8,167 –

Interest rate caps used for hedging

– outflow 863 – – – –

101




Cash flows

Carrying

amount

Contractual

cash flows

Within

1 year

After

1 year but

within

5 years

After

5 years

$’000 $’000 $’000 $’000 $’000

Company

2009




500,912 520,665 11,411 509,254 –



– outflow 9,647 10,084 5,042 5,042 –

2008




507,978 541,075 20,416 520,659 –



– outflow 10,876 11,670 3,937 7,733 –

Interest rate caps used for hedging

– outflow 863 – – – –

102





Effective interest rates and repricing/maturing analysis

Effective Fixed interest rate maturing

interest

rate

Floating

interest

within

1 year

1 to 5

years

after

5 years Total

% $’000 $’000 $’000 $’000 $’000

Group

2009

Secured term loans 2.56 to 16.25 676,687 2,001 5,736 – 684,424

– effect of interest

rate swaps 0.57 to 1.43 (347,715) – 347,715 – –

Se cured short-term

credit facilities 2.90 to 10.00 – 4,093 – – 4,093

Unsecured term loan 1.86 to 2.34 498,755 – – – 498,755

Finance lease liabilities 2.30 to 6.54 – 1,742 3,405 5 5,152

827,727 7,836 356,856 5 1,192,424

2008

Secured term loans 2.97 to 16.75 679,788 6,944 559 – 687,291

– effect of interest

rate swaps 0.91 (348,730) – 348,730 – –

Se cured short-term


Unsecured term loan 2.07 497,977 – – – 497,977

Un secured short-term


Finance lease liabilities 2.32 to 18.00 – 1,612 3,294 – 4,906

829,035 39,663 352,583 – 1,221,281

Company

2009

Unsecured term loan 1.86 to 2.34 498,755 – – – 498,755

2008

Unsecured term loan 2.07 497,977 – – – 497,997

103



20 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 18 January 2001. Details of the Parkway Scheme 2001 and amendments effected by resolutions

passed at the Extraordinary General Meetings of the Company held on 4 July 2001 and 2 November 2006 were

set out in the Directors’ Reports for the years ended 31 December 2001 and 31 December 2006, respectively.

The Parkway Scheme 2001 is administered by the Company’s Remuneration Committee, comprising four

directors, namely Timothy David Dattels, Richard Seow Yung Liang, Ganen Sarvananthan and Ashish Jaiprakash

Shastry.

Information regarding the Parkway Scheme 2001 is set out below:

Market Price Options

(i) The exercise price of the option is determined at the average of the last dealt prices of the Company’s

shares on the Singapore Exchange Securities Trading Limited (SGX-ST) prevailing on the three consecutive

trading days immediately preceding the date of grant of such options (the Market Price).

(ii) The options shall be subject to such conditions (including any vesting schedule) as may be imposed by

the Remuneration Committee and shall be exercisable, in whole or in part, during the period commencing

one year after the grant date and expiring on the fifth anniversary of the grant date unless they have been

cancelled or have lapsed prior to that date.

Incentive Options

(i) The exercise price of the option is determined by the Remuneration Committee at a discount to the Market

Price, provided that the maximum discount does not exceed 20% of the Market Price.

(ii) The options shall be subject to such conditions (including any vesting schedule) as may be imposed by

the Remuneration Committee and shall be exercisable, in whole or in part, during the period commencing

after the second anniversary of the grant date and expiring on the fifth anniversary of the grant date unless

they have been cancelled or have lapsed prior to that date.

104




20 EMPLOYEE BENEFITS (cont’d)

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

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

Weighted

average

exercise

price

No. of

options

Weighted

average

exercise

price

No. of

options

2009 2009 2008 2008

$ $

At 1 January 2.7031 27,145,500 2.9145 17,698,750

Granted and accepted 2.0900 2,700,000 3.1000 11,820,000

Exercised 1.4497 (1,698,250) 1.5881 (1,041,500)

Cancelled 2.6293 (3,917,750) 2.9783 (1,331,750)

At 31 December 2.4700 24,229,500 2.7031 27,145,500

Exercisable at 31 December 2.0765 10,486,500 2.0779 6,180,500

Options exercised during the year resulted in 181,250 (2008: 444,750) new ordinary shares being issued and

1,517,000 (2008: 596,750) treasury shares being reissued at a weighted average price of $1.4497 (2008: $1.5881)

each. Options were exercised on a regular basis throughout both years. The weighted average share price during

the year was $2.22 (2008: $2.66) per share.

105




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

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

Date of grant of options Expiry date Exercise

Options

outstanding

Options

outstanding

price 2009 2008

$

19 November 2004 19 November 2009 0.9763 – 709,250

15 November 2005 15 November 2010 1.5935 697,500 1,389,250

9 December 2005 9 December 2010 1.6207 2,595,000 2,670,000

9 March 2006 9 March 2011 1.8625 2,075,000 2,175,000

9 March 2006 9 March 2011 1.8773 964,000 1,156,000

17 November 2006 17 November 2011 1.8451 150,000 150,000

17 November 2006 17 November 2011 1.8926 500,000 1,000,000

6 June 2007 6 June 2012 3.5081 3,640,000 4,420,000

15 June 2007 15 June 2012 3.3381 1,850,000 2,050,000

6 March 2008 6 March 2013 2.5177 2,500,000 2,850,000

6 March 2008 6 March 2013 2.5455 6,708,000 8,576,000

8 October 2009 8 October 2014 2.0900 2,550,000 –

24,229,500 27,145,500

The fair value of services received in return for share options granted are measured by reference to the fair

value of share options granted. The estimate of the fair value of the services received is measured based on the

Trinomial option pricing model. The expected 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.

106





Fair value of share options and assumptions

Date of grant of options 15 Nov 2005 9 Dec 2005 9 Mar 2006 9 Mar 2006 17 Nov 2006 17 Nov 2006 6 Jun 2007 15 Jun 2007 6 Mar 2008 6 Mar 2008 8 Oct 2009

Fair value at measurement date $0.258 $0.388 $0.333 $0.411 $0.975 $0.834 $0.890 $1.052 $0.565 $0.631 $0.816

Share price $3.0300 $3.0300 $3.0300 $3.0300 $3.0300 $3.0300 $3.0300 $3.0300 $3.0300 $3.0300 $2.2500

Exercise price $1.5935 $1.6207 $1.8773 $1.8625 $1.8451 $1.8926 $3.5081 $3.3381 $2.5455 $2.5177 $2.0900

Expected volatility 32.1% 29.4% 32.9% 28.0% 27.3% 28.6% 30.3% 25.8% 27.4% 24.3% 35.7%

Expected option life 3.5 years 4.0 years 3.4 years 4.5 years 4.5 years 3.0 years 3.0 years 4.5 years 3.0 years 4.5 years 4.5 years

Expected dividends 3.63% 3.63% 3.63% 3.63% 3.63% 3.63% 3.63% 3.63% 3.63% 3.63% 1.06%

Risk-free interest rate 0.85% 0.98% 0.85% 0.98% 1.26% 1.03% 1.15% 1.58% 1.17% 1.58% 1.27%

The expected volatility is based on the historic volatility (calculated based on the weighted average expected

life of the share options), 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 conditions are not taken into account in the measurement of the fair value of services to be received

at the grant date.

Parkway Performance Share Plan

At the same Extraordinary General Meeting held on 2 November 2006, the shareholders of the Company approved

the Share Plan. The Share Plan is administered by the Remuneration Committee, comprising four directors, namely

Timothy David Dattels, Richard Seow Yung Liang, Ganen Sarvananthan and Ashish Jaiprakash Shastry.


awarded with fully paid up ordinary shares of the Company, or cash in lieu of ordinary shares of the Company

equivalent to the aggregate market value of such performance shares or a combination of both, upon the expiry

of the prescribed vesting period when certain prescribed performance targets are met. The performance shares

which may be issued pursuant to awards granted under the Share Plan, when added to the aggregate number

of ordinary shares issued pursuant to other share-based incentive schemes of the Company, shall not exceed

15% of the total number of issued ordinary shares of the Company on the day immediately preceding the date

on which the award is granted.


executives of the Group for the performance qualifying periods from 2009 to 2011. The key executives include

Dr Lim Cheok Peng, an executive director of the Company, who was conditionally awarded up to 1,255,000

performance shares. The actual number of performance shares to be delivered will depend on the achievement

of prescribed performance targets over the performance qualifying period.

107




Fair value of share options and assumptions

Date of grant of options 15 Nov 2005 9 Dec 2005 9 Mar 2006 9 Mar 2006 17 Nov 2006 17 Nov 2006 6 Jun 2007 15 Jun 2007 6 Mar 2008 6 Mar 2008 8 Oct 2009

Fair value at measurement date $0.258 $0.388 $0.333 $0.411 $0.975 $0.834 $0.890 $1.052 $0.565 $0.631 $0.816

Share price $3.0300 $3.0300 $3.0300 $3.0300 $3.0300 $3.0300 $3.0300 $3.0300 $3.0300 $3.0300 $2.2500

Exercise price $1.5935 $1.6207 $1.8773 $1.8625 $1.8451 $1.8926 $3.5081 $3.3381 $2.5455 $2.5177 $2.0900

Expected volatility 32.1% 29.4% 32.9% 28.0% 27.3% 28.6% 30.3% 25.8% 27.4% 24.3% 35.7%

Expected option life 3.5 years 4.0 years 3.4 years 4.5 years 4.5 years 3.0 years 3.0 years 4.5 years 3.0 years 4.5 years 4.5 years

Expected dividends 3.63% 3.63% 3.63% 3.63% 3.63% 3.63% 3.63% 3.63% 3.63% 3.63% 1.06%

Risk-free interest rate 0.85% 0.98% 0.85% 0.98% 1.26% 1.03% 1.15% 1.58% 1.17% 1.58% 1.27%

The expected volatility is based on the historic volatility (calculated based on the weighted average expected

life of the share options), 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 conditions are not taken into account in the measurement of the fair value of services to be received

at the grant date.

Parkway Performance Share Plan

At the same Extraordinary General Meeting held on 2 November 2006, the shareholders of the Company approved

the Share Plan. The Share Plan is administered by the Remuneration Committee, comprising four directors, namely

Timothy David Dattels, Richard Seow Yung Liang, Ganen Sarvananthan and Ashish Jaiprakash Shastry.


awarded with fully paid up ordinary shares of the Company, or cash in lieu of ordinary shares of the Company

equivalent to the aggregate market value of such performance shares or a combination of both, upon the expiry

of the prescribed vesting period when certain prescribed performance targets are met. The performance shares

which may be issued pursuant to awards granted under the Share Plan, when added to the aggregate number

of ordinary shares issued pursuant to other share-based incentive schemes of the Company, shall not exceed

15% of the total number of issued ordinary shares of the Company on the day immediately preceding the date

on which the award is granted.


executives of the Group for the performance qualifying periods from 2009 to 2011. The key executives include

Dr Lim Cheok Peng, an executive director of the Company, who was conditionally awarded up to 1,255,000

performance shares. The actual number of performance shares to be delivered will depend on the achievement

of prescribed performance targets over the performance qualifying period.

108





Parkway Performance Share Plan (cont’d)

At the end of the financial year, details of the performance shares awarded under the Share Plan are as

follows:

Balance at 1/1/2009

Granted and accepted duringthe financial year Delivered Lapsed

Balance at31/12/2009

No. of holders

Performanceshares*

No. of holders

Performance shares*

No. of holders

Performance shares*

No. of holders

Performance shares*

No. of holders

Performanceshares*

2007 award 5 204,151 – – – – 5 127,597 3 76,554

2008 award 6 1,566,071 – – – – 6 898,242 4 667,829

2009 award – – 67 5,723,000 – – 1 39,000 66 5,684,000

2009 SIP award – – 40 1,303,000 – – 1 19,000 39 1,284,000

* Includes additional performance shares that may be delivered if performance targets are exceeded.

Since the adoption of the Share Plan by the Company, up to 8,976,222 performance shares have been

conditionally awarded to and accepted by employees of the Company and its subsidiaries.

No performance shares have been granted to the controlling shareholders of the Company or their associates

and no participants under the Share Plan have been awarded 5% or more of the total number of performance

shares which may be issued under the Share Plan since the commencement of the Share Plan.

Subsequent to the balance sheet date up to 21 January 2010, there has been no change in the conditional

awards granted, delivered and/or lapsed under the Share Plan.

The fair value of services received in return for performance shares granted are measured by reference to the

fair value of performance shares granted. The estimate of the fair value of the conditional awards granted is

determined using the Monte Carlo simulation method at the measurement date which project future share price

assuming log normal distribution based on Geometric Brownian Motion Theory. The fair value and assumptions

are set out below:

Year of awards 2009 2008 2007

Average fair value at measurement date $1.57 $2.71 $2.41

Volatility of Parkway shares 41.08% 27.29% 27.29%

Volatility of Straits Times Index (STI) 29.60% 16.02% 16.02%

Correlation of Parkway share price vs STI 69% 61% 61%

Share price at grant/adjustment date $1.86 $3.43 $3.43

Expected dividend yield 1.06% 3.18% 3.18%

Risk-free interest rate 0.36% to 0.67% 0.85% to 0.96% 0.85% to 0.96%

109



21 OTHER PAYABLES

Group Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Other payables 31,460 31,195 830 850

Rental deposits 2,616 2,432 – –

Deposits and advances 1,140 428 – –

Advanced billings 2,626 1,918 – –

Interest payable 1,880 9,101 – 7,097

39,722 45,074 830 7,947

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

22 REVENUE – GROUP

Revenue represents invoiced value of hospital and other healthcare services rendered, rental income and dividend

income, and management and acquisition fees, after eliminating inter-company transactions.

The amount of each significant category of revenue recognised during the year is as follows:

2009 2008

$’000 $’000

(Restated)

Revenue from hospital and other healthcare services 958,352 897,626

Rental income 13,221 8,400

Gross dividends from available-for-sale quoted equity investments – 1,925

Management and acquisition fees 7,634 6,872

979,207 914,823

110




23 PROFIT BEFORE INCOME TAX – GROUP

The following income/(expense) items have been included in arriving at profit before income tax:

2009 2008

$’000 $’000

Interest income received and receivable from:

– Banks and financial institutions 8,635 4,593

– Others 822 310

Imputed interest income – 6

Grants received under Jobs Credit Scheme 8,939 –

Non-audit fees paid to auditors of the Company (134) (182)

Contributions to defined contribution plans included in staff costs (24,246) (18,760)

(In crease)/Decrease in liability for short-term

accumulating compensated absences (5,765) 1,163

Value of employee services received for:

– Issue of share options (3,458) (6,209)

– Conditional award of performance shares (3,027) (1,879)

Exchange (loss)/gain (net) (1,221) 1,056

Inventories written off (222) (51)

Loss on disposal and write off of property, plant and equipment (4,490) (6,057)

Gain on disposal of available-for-sale equity investments – 69

Gain on liquidation of interest in joint ventures – 485

Gain on disposal of associates 5 22

Gain on disposal of subsidiary 171 –

Allowance for impairment loss written back/(made):

– Trade and other receivables 1,941 (42,651)

Operating lease expenses (70,418) (69,699)

Finance costs:

Interest paid and payable to:

– Banks and financial institutions (9,013) (10,801)

– Others (272) (102)

Other finance costs (2,190) (1,614)

Ch anges in fair value of financial instruments at fair value through profit or loss (330) (4,079)

(11,805) (16,596)

In 2008, the Group announced that it will implement various cost containment measures which included a

reduction in the Group’s total workforce of approximately 150 employees. The Group recognised one-off costs

associated with the reduction in workforce which amounted to $3,804,000.

111



24 RELATED PARTIES – GROUP

For the purposes of these financial statements, parties are considered to be related to the Group if the Group

has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making

financial and operating decisions, or vice versa, or where the Group and the party are subject to common control

or common significant influence. Related parties may be individuals or other entities.

Key management personnel compensation

Key management personnel of the Group are those persons having the authority and responsibility for planning,

directing and controlling the activities of the Group. The directors of the Company and the Group Senior

Leadership Team are considered as key management personnel of the Group.

Key management personnel compensation comprises:

2009 2008

$’000 $’000

Short-term employee benefits 6,386 4,524

Share-based payments 3,266 5,715

9,652 10,239

The directors of the Company also participate in the Parkway Scheme 2001 and an executive director of

the Company also participates in the Share Plan. During the year, 2,700,000 (2008: 3,315,000) share options

were granted to the directors of the Company and up to 1,255,000 (2008: 540,000) performance shares have

been conditionally awarded to an executive director of the Company. The share options and performance

shares that were granted in 2009 were on the same terms and conditions as those offered to other employees

of the Company and its subsidiaries as described in note 20. At the balance sheet date, 13,235,000 (2008:

11,178,750) and 1,722,494 (2008: 731,014) of those share options and performance shares, respectively, were

outstanding.

Other transactions with key management personnel

2009 2008

$’000 $’000

Director of the Company

Rental income received 10 10

Directors of subsidiaries

Consultancy fees paid 42 223

A firm in which a director is a member

Professional fees paid 95 140

112




24 RELATED PARTIES – GROUP (cont’d)

Other related party transactions

Other than as disclosed elsewhere in the financial statements, transactions carried out on terms agreed with

related parties are as follows:

2009 2008

$’000 $’000

Associates

Management fees received 6,863 6,966

Rental income received 70 44

Sales 8 23

Purchases 515 683

Corporate shareholders of subsidiaries

Management fees paid 240 240

Professional fees paid – 6

Corporate shareholders of joint ventures

Consultancy fees paid 917 1,153

25 INCOME TAX EXPENSE – GROUP

Note 2009 2008

$’000 $’000

Current tax expense

Current year 31,672 20,336

Overprovided in prior years (638) (2,453)

31,034 17,883

Deferred tax expense

Origination and reversal of temporary differences (1,030) (966)

Reduction in tax rates (771) (1,408)

Underprovided in prior years 802 552

10 (999) (1,822)

Foreign taxation 140 122

Income tax expense 30,175 16,183

113



25 INCOME TAX EXPENSE – GROUP (cont’d)

Reconciliation of effective tax rate

2009 2008

% $’000 % $’000

(Restated)

Profit before income tax 155,039 59,600

Tax calculated using Singapore tax rate 17.0 26,357 18.0 10,728

Effect of reduction in tax rates (0.5) (771) (2.4) (1,408)

Effects of different tax rates in other countries 2.1 3,291 2.9 1,722

Income not subject to tax (3.7) (5,792) (7.5) (4,489)

Expenses not deductible for tax purposes 4.9 7,633 19.9 11,855

Utilisation of previously unrecognised

tax losses (0.3) (479) (0.7) (446)

Deferred tax assets not recognised (0.2) (368) – –

Under/(over)provided in prior years 0.1 164 (3.2) (1,901)

Foreign taxation 0.1 140 0.2 122

19.5 30,175 27.2 16,183

Unrecognised temporary differences

The following temporary differences have not been recognised:

2009 2008

$’000 $’000

Deductible temporary differences 1,494 2,712

Unabsorbed capital allowances 121 174

Unutilised tax losses 12,722 16,204

14,337 19,090

The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the

respective countries in which certain subsidiaries or joint ventures operate. The deductible temporary differences

do not expire under current tax legislation. Deferred tax assets of the Group have not been recognised in respect

of these items because it is not probable that future taxable profit will be available against which the respective

entities within the Group can utilise the benefits.

114




26 EARNINGS PER SHARE – GROUP

2009 2008$’000 $’000

(Restated)

Basic earnings per shareBasic earnings per share is based on:Net profit attributable to ordinary shareholders 118,876 38,049

2009 2008

Number of shares

Issued ordinary shares at beginning of the year 1,127,734,784 769,188,160

Effects of share options exercised 49,263 250,305

Effects of rights shares issued – 195,573,996

Effects of performance shares issued – 140,164

Purchase of treasury shares – (1,275,206)

Effects of treasury shares issued 223,612 415,958

Adjustment for effects of rights issue – 46,099,813

Weighted average number of ordinary shares

in issue during the year 1,128,007,659 1,010,393,190

Diluted earnings per share

For the purpose of calculating the diluted earnings per ordinary share, the weighted average number of ordinary

shares in issue is adjusted to take into account the dilutive effect arising from the dilutive share options and

performance shares, with the potential ordinary shares weighted for the period outstanding.

115



26 EARNINGS PER SHARE – GROUP (cont’d)

Diluted earnings per share (cont’d)

The effects of the exercise of share options and issue of contingently issuable shares on the weighted average

number of ordinary shares in issue are as follows:

2009 2008

Number of shares

Weighted average number of ordinary shares, used in

the calculation of basic earnings per share 1,128,007,659 1,010,393,190

Weighted average number of unissued ordinary shares

under share options 4,001,750 10,588,750

Weighted average number of shares that would have

been issued at average market price (8,305,249) (8,061,537)

Potential ordinary shares issuable under contingently

issuable shares 8,336,476 1,182,122

Weighted average number of ordinary issued and

potential shares assuming full conversion 1,132,040,636 1,014,102,525

Share options totalled 25,337,000 outstanding at the end of the year (2008: 17,896,000) were not included in

the computation of diluted earnings per share due to their anti-dilutive nature.

27 ACqUISITION OF JOINT VENTURES AND MINORITY INTERESTS

Acquisition of joint ventures

On 1 May 2009, the Group’s 40% owned joint venture, Pantai Hospitals Sdn. Bhd, completed the acquisition of

Hospital Pantai Sungai Petani Sdn. Bhd. (HPSP) for a consideration of RM13,375,000 (equivalent to $2,211,000).

During the period from the acquisition date to 31 December 2009, Hospital Pantai Sungai Petani Sdn. Bhd.

contributed a net profit of $334,000 to the consolidated net profit for the year. If the acquisition had occurred on

1 January 2009, Group revenue would have been $981,309,000 and net profit would have been $121,072,000.

On 18 November 2008, the Group’s 40% owned joint venture, Pantai Irama Ventures Sdn Bhd, completed the

acquisition of 70% equity interest in Gleneagles Hospital (Kuala Lumpur) Sdn Bhd (GHKL) for a consideration

of RM101,391,000 (equivalent to $41,840,000). Together with its existing equity of 30% in GHKL, the Group

now has a total effective equity interest of 58% in GHKL. Accordingly, GHKL is proportionately consolidated

as a 58% owned joint venture. During the period from the acquisition date to 31 December 2008, GHKL and its

subsidiary contributed net profit of $392,000 to the consolidated net profit for the year. If the acquisition had

occurred on 1 January 2008, Group revenue and net profit attributable to shareholders, as restated, would have

been $946,520,000 and $41,750,000 respectively.

116




27 ACqUISITION OF JOINT VENTURES AND MINORITY INTERESTS (cont’d)

Acquisition of joint ventures (cont’d)

The effects of the above acquisitions are set out below:

Carrying

amounts

Provisional

fair value

adjustments

Recognised

values

Carrying

amounts

Provisional

fair value

adjustments

Recognised

values

Note 2009 2009 2009 2008 2008 2008

$’000 $’000 $’000 $’000 $’000 $’000

Property, plant and equipment 4 564 – 564 27,094 7,515 34,609

Inventories 143 – 143 1,247 – 1,247

Trade receivables 483 – 483 5,547 – 5,547

Other receivables, deposits and

prepayments 166 – 166 454 – 454

Cash and cash equivalents 33 – 33 1,985 – 1,985

Bank overdrafts (514) – (514) – – –

Trade payables and accrued

operating expenses (464) – (464) (9,341) – (9,341)

Other payables (624) – (624) (12) – (12)

Interest-bearing borrowings – – – (5,966) – (5,966)

Current tax payable – – – (155) – (155)

Deferred tax liabilities 10 – – – (1,739) – (1,739)

Cumulative redeemable preference

shares – – – (6,457) – (6,457)

Dividends payable on preference shares – – – (5,558) – (5,558)

Reversal of interest in associate on

acquisition of additional interest – – – (5,499) – (5,499)

Net identifiable assets and liabilities (213) – (213) 1,600 7,515 9,115

Goodwill on acquisition 5 2,424 32,725

Cash consideration 2,211 41,840

Less: Cash and cash equivalents acquired (33) (1,985)

Add: Bank overdrafts acquired 514 –

Net cash outflow 2,692 39,855

117



27 ACqUISITION OF JOINT VENTURES AND MINORITY INTERESTS (cont’d)

Acquisition of joint ventures (cont’d)

Pre-acquisition carrying amounts were determined based on applicable FRSs immediately before the acquisition.

The values of assets, liabilities and contingent liabilities recognised on acquisition are their estimated fair

values.

The goodwill recognised on the above acquisitions is attributable mainly to the synergies expected to be achieved

from integrating the operations of HPSP and GHKL, whose principal activities are those relating to private hospital

ownership and management in Malaysia, into the Group’s existing business in Malaysia.

Acquisition of minority interests

On 1 July 2009, the Group completed its acquisition of an additional 10% interest in Shanghai Rui Xin International

Healthcare Co. Ltd and its subsidiaries, Shanghai Rui Hong Clinic Co. Ltd and its subsidiaries, and Shanghai

Rui Xin International Co. Ltd (collectively “World Link Group”) for $9,715,000 cash. The carrying amount of the

World Link Group’s net assets in the financial statements on the date of acquisition was $28,278,000. The Group

recognised a decrease in minority interest of $2,637,000 and goodwill of $7,151,000.

28 DISPOSAL OF SUBSIDIARY

On 14 April 2009, the Group disposed its 60% interest in Ko Djeng Pte Ltd for $403,000. The carrying amount

of Ko Djeng’s net assets in the financial statements on the date of disposal were as follows:

Note 2009

$’000

Property, plant and equipment 4 227

Inventories 13

Trade receivables 20

Other receivables, deposits and prepayments 70

Cash and cash equivalents 659

Trade payables and accrued operating expenses (403)

Current tax payable (147)

Deferred tax liabilities 10 (29)

Interest-bearing borrowings (23)

Minority interests (155)

Net identifiable assets and liabilities disposed 232

Gain on disposal of subsidiary 171

Cash consideration 403

Less: Cash and cash equivalents disposed (395)

Cash flow on disposal, net of cash disposed 8

118




29 COMMITMENTS

Group

2009 2008

$’000 $’000

(a) Capital commitments not provided for in the financial statements:

– Amounts authorised and contracted for 45,996 97,964

– Amounts authorised but not contracted for 756,502 831,847

802,498 929,811

(b) Non-cancellable operating leases payable:

– Within 1 year 69,017 66,097

– After 1 year but within 5 years 231,166 219,591

– After 5 years 403,322 446,370

703,505 732,058

(c) Non-cancellable operating leases receivable:

– Within 1 year 11,161 7,753

– After 1 year but within 5 years 16,618 7,642

– After 5 years 50 –

27,829 15,395

(d) Subsequent to the balance sheet date, the directors proposed the following dividends. The dividends

have not been provided for.

2009 2008

$’000 $’000

Final tax exempt one-tier dividend proposed of

1.15 cents (2008: nil) per ordinary share 12,988 –

30 FINANCIAL RISK MANAGEMENT

The Group has exposure to the following risks from its use of its financial instruments:

• Creditrisk

• Liquidityrisk

• Marketrisk

• Interestraterisk

• Foreigncurrencyrisk

• Fairvalue

119



30 FINANCIAL RISK MANAGEMENT (cont’d)This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout these financial statements.

Risk management frameworkThe Group has put in place a set of risk management policies and guidelines governing all investment and business risks. These policies and procedures set out the Group’s overall business strategies, its tolerance for risk and general risk management philosophy. The Group also has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. In addition, management has established processes to monitor and control such risks in a timely and accurate manner and to ensure that an appropriate balance between risk and control is achieved. Where necessary, 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.

The Audit and Risk Management Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

Credit risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on major customers requiring credit over a certain amount. For the hospital operations, the Group does not grant credit to non-corporate customers. Instead, a non-corporate customer is requested to place an initial deposit at the time of admission to the hospital. Additional deposit is requested from the customer when the hospital charges exceed a certain level.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets.

The allowance account in respect of trade and other receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible. At that point, the financial asset is considered irrecoverable and the amount charged to the allowance account is written off against the carrying amount of the impaired financial asset.

Cash and fixed deposits are placed with financial institutions which are regulated.

Similarly, investments and transactions involving financial instruments are allowed to be entered into only with counterparties who have sound credit ratings. As such, management does not expect any counterparty to fail to meet their obligations.

At the balance sheet date, the Group has outstanding amount owing from joint ventures of $95,502,000 (2008: $91,011,000), and trade receivables from the most significant customer of $6,934,000 (2008: $39,906,000) for which allowance for impairment of $889,000 (2008: $34,414,000) has been recognised. Other than these receivables, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.

120




30 FINANCIAL RISK MANAGEMENT (cont’d)

Liquidity risk

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by

management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows. The

Group ensures that it has sufficient cash on demand to meet expected operational expenses, including the

servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot

reasonably be predicted, such as natural disasters.

Market risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity

prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of

market risk management is to manage and control market risk exposures within acceptable parameters, while

optimising the return on risk.

Sensitivity analysis

A 10% increase/(decrease) in the underlying equity prices at the reporting date would increase/(decrease) the

amounts credited/(charged) to equity or income statement as shown below:

Group

2009 2008

$’000 $’000

Increase in equity prices

– Equity – 1,457

Decrease in equity prices

– Income statement – (1,457)

Interest rate risk

This relates to changes in interest rates which affect mainly the Group’s fixed deposits and its debt obligations

with banks and financial institutions. The Group’s fixed-rate financial assets and borrowings are exposed to

a risk of change in their fair value due to changes in interest rates while the variable-rate financial assets and

borrowings are exposed to a risk of change in cash flows due to changes in interest rates.

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 fixed deposits and variable rate borrowings on a short-term basis. In respect of long-term borrowings, the

Group may enter into interest rate derivatives to manage its exposure to adverse movements in interest rates.

Interest rate swaps have been entered into to achieve an appropriate mix of fixed and floating rate exposures

within the Group’s policy. The swaps mature over the next 3 years following the maturity of the related loans.

As at 31 December 2009, the Group has interest rate swaps with a notional contract amount of $348,622,000

(2008: $350,096,000).

The net fair value of interest rate swaps at 31 December 2009 was $12,224,000 (2008: $12,204,000), comprising

liabilities of $12,224,000 (2008: $12,204,000).

121




Interest rate risk (cont’d)

The Group has also entered into interest rate caps to hedge against exposure to rising interest rates on its

variable rate term loans. The interest rate caps mature over the next 2 years following the maturity of the related

loans. As of 31 December 2009, the Group has interest rate caps with a notional contract amount of $200,000,000

(2008: $200,000,000).

The net fair value of interest rate caps at 31 December 2009 was $52,000 (2008: $863,000), comprising assets

of $52,000 (2008: $NIL) and liabilities of $NIL (2008: $863,000).


For interest rate swaps and other variable rate financial assets and liabilities, a change of 100 bp in interest rate

at the reporting date would increase/(decrease) amounts charged or credited to assets, income statement or

equity as shown below:

Assets* Income statement Equity

100 bp 100 bp 100 bp 100 bp 100 bp 100 bp

increase decrease increase decrease increase decrease

$’000 $’000 $’000 $’000 $’000 $’000

Group

31 December 2009

Variable rate instruments 10,600 (10,600) (1,268) 1,268 – –

Interest rate swaps (2,500) 2,500 986 (986) 2,499 (2,561)

Interest rate caps – – 231 (39) – –

8,100 (8,100) (51) 243 2,499 (2,561)

31 December 2008

Variable rate instruments 10,600 (10,600) (1,317) 1,317 – –

Interest rate swaps (2,500) 2,500 986 (986) 5,645 (5,824)

Interest rate caps – – 221 (64) – –

8,100 (8,100) (110) 267 5,645 (5,824)

* Relates to interest capitalised in construction-in-progress and development properties.

Foreign currency risk

The Group is exposed to foreign exchange risk on sales, purchases, cash and cash equivalents and notes

receivable that are denominated in a currency other than the respective financial currencies of Group entities.

The currencies giving rise to this risk are primarily the United States dollar, the Australian dollar, the Chinese

Renminbi and the Malaysian Ringgit. In respect of exposure that is certain, the Group will partially hedge these

risks in order to keep them at an acceptable level.

122





Foreign currency risk (cont’d)

The Group’s and Company’s exposures to foreign currency are as follows:

Australian

Dollar

British

Pound

Chinese

Renminbi

Hong Kong

Dollar

Malaysian

Ringgit US Dollar

$’000 $’000 $’000 $’000 $’000 $’000

Group

31 December 2009

Deposits paid to minority

shareholder of a subsidiary – – – – – 29,207

Trade and other receivables – – – – – 5,608

Intra-group receivables 246 – 168 – 492 440

Cash and cash equivalents 3 64 – 18 – 8,000

Trade and other payables (1) – – (54) – (302)

Intra-group payables (4,608) – – – – (758)

(4,360) 64 168 (36) 492 42,195

31 December 2008

Deposits paid to minority

shareholder of a subsidiary – – – – – 30,545

Trade and other receivables – 3 4,021 – – 5,033

Intra-group receivables 206 – 130 – 1,861 538

Cash and cash equivalents 2 59 – 19 – 6,191

Trade and other payables – – – – – (182)

Intra-group payables (3,604) – – – (1,959) –

(3,396) 62 4,151 19 (98) 42,125

Australian

Dollar

British

Pound

Hong Kong

Dollar

$’000 $’000 $’000

Company

31 December 2009

Cash and cash equivalents – 64 18

Intra-group payables (4,608) – –

(4,608) 64 18

31 December 2008

Trade and other receivables – 3 –

Cash and cash equivalents – 59 19

Intra-group payables (3,604) – –

(3,604) 62 19

123




Foreign currency risk (cont’d)


A 10% strengthening of the Singapore dollar against the following currencies at the reporting date would

increase/(decrease) amounts charged or credited to equity or income statement as shown below. This analysis

assumes that all other variables, in particular interest rates, remain constant.

Group Company

Equity

Income

statement Equity

Income

statement

$’000 $’000 $’000 $’000

Group

31 December 2009

Australian dollar – 436 – 461

British pound – (6) – (6)

Chinese renminbi – (17) – –

Hong Kong dollar – 4 – (2)

Malaysian ringgit – (49) – –

US dollar – (4,220) – –

– (3,852) – 453

31 December 2008

Australian dollar – 340 – 360

British pound – (6) – (6)

Chinese renminbi – (415) – –

Hong Kong dollar – (2) – (2)

Malaysian ringgit – 10 – –

US dollar – (4,213) – –

– (4,286) – 352

Fair value

Quoted investments

The fair value of financial assets at fair value through profit or loss and available-for-sale financial assets is determined by reference to their quoted bid prices at the reporting date.

Derivatives

The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual period to maturity of the contract using a risk-free interest rate (based on government bonds).

The fair value of interest rate swaps and caps is based on broker quotes. These quotes are tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date.

124





Fair value (cont’d)

Non-derivatives interest-bearing borrowings

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future

principal and interest cash flows, discounted at the market rate of interest at the reporting date. For finance

leases, the market rate of interest is determined by reference to similar lease agreements. The notional amounts

of financial liabilities with a maturity of less than one year or which reprice frequently approximate their fair

values.

Intra-group financial guarantees

The value of financial guarantees provided by the Company to its subsidiaries is determined by reference to

the difference in the interest rates, by comparing the actual rates charged by the bank with these guarantees

made available, with the estimated rates that the banks would have charged had these guarantees not been

available.

Other financial assets and liabilities

The notional amounts of financial assets and liabilities with a maturity of less than one year including trade and

other receivables, cash and cash equivalents, trade and other payables approximate their fair values because

of the short period to maturity. All other financial assets and liabilities are discounted to determine their fair

values.

The aggregate net fair values of recognised financial assets and liabilities which are not carried at fair value in

the balance sheet as at 31 December are represented in the following table:

Carrying

amount

Fair

value

Carrying

amount

Fair

value

Note 2009 2009 2008 2008

$’000 $’000 $’000 $’000

Group

Financial liabilities

Amounts due to associates 7 (2,784) (2,634) (6,321) (5,897)

Secured term loans 19 (8,279) (7,640) (8,045) (7,694)

Finance lease liabilities 19 (5,152) (4,856) (4,906) (4,874)

(16,215) (15,130) (19,272) (18,465)

Unrecognised gain 1,085 807

It is not practicable to reliably estimate the fair value of unquoted equity shares due to the lack of quoted market

prices in an active market, significant range of reasonable fair value estimates, and the inability to reasonably

assess the probabilities of the various estimates. However, management believes that the carrying amounts

recorded at balance sheet date reflect the corresponding fair values.

125



31 SEGMENT REPORTING

The Group has six reportable segments, as described below, which are the Group’s strategic business units. The

strategic business units offer different products and services in different locations, and are managed separately.

For each of the strategic business units, the Group’s Board of Directors reviews internal management reports

on at least a quarterly basis.

The Group’s reportable segments comprises:

• Singapore Hospitals: Operation of private hospitals, rental and sale of medical units which form part of

the hospital complex in Singapore.

• International Hospitals: Operation of private hospitals outside Singapore.

• Singapore Healthcare Services: Operation of medical clinics and provision of primary healthcare services,

provision of clinical research services, ownership and management of radiology clinics, provision of

comprehensive diagnostic laboratory services, underwriting of accident and healthcare insurance policies,

provision of courses in nursing and allied health, and provision of managed care and related services in

Singapore.

• International Healthcare Services: Operation of medical clinics and provision of primary healthcare services,

provision of comprehensive diagnostic laboratory services, provision of medical waste management and

cleaning services, provision of medical examination of foreign workers services, and provision of managed

care and related services outside Singapore.

• Singapore Non-healthcare Services: Investment in Parkway Life REIT and other investment holding companies

in Singapore.

• International Non-healthcare Services: Investment holding companies outside Singapore.

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 a reasonable basis. Unallocated items mainly comprise goodwill, interest expenses and related

liabilities, and income tax assets and liabilities.

Segment capital expenditure is the total costs incurred during the year to acquire property, plant and equipment,

and intangible assets other than goodwill.

126




31 SEGMENT REPORTING (cont’d)

Operating Segments

Singaporehospitals

Internationalhospitals

Singaporehealthcare

services

Internationalhealthcare

services

Singaporenon-healthcare

services

Internationalnon-healthcare

services Eliminations Consolidated$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Revenue and expenses2009Total revenue from external customers 466,479 206,362 168,746 130,776 6,838 6 – 979,207Inter-segment revenue 19,499 291 32,942 5,759 – – (58,491) –

Total segment revenue 485,978 206,653 201,688 136,535 6,838 6 (58,491) 979,207

Earnings before interest, tax, depreciation, amortisation and REIT rental (EBITDAR) 112,869 44,117 44,957 31,542 3,599 (67) – 237,017Depreciation and impairment losses of property, plant and equipment (48,718)Amortisation of intangible assets (6,152)Exchange losses (1,221)Finance costs (11,805)Interest income 9,457Share of profits of associates (net of tax) 23,852REIT rental expense (51,272)Exceptional items 3,881

Profit before income tax 155,039Income tax (30,175)

Net profit for the year 124,864

2008 (Restated)Total revenue from external customers 473,610 158,112 150,814 123,485 8,796 6 – 914,823Inter-segment revenue 20,073 251 31,982 4,608 – – (56,914) –


Earnings before interest, tax, depreciation, amortisation and REIT rental (EBITDAR) 121,557 33,918 31,094 27,163 4,005 (212) – 217,525Depreciation and impairment losses of property, plant and equipment (43,022)Amortisation of intangible assets (6,236)Exchange gains 1,056Finance costs (16,596)Interest income 4,909Share of profits of associates (net of tax) 11,127REIT rental expense (48,667)Exceptional items (60,496)



127




Operating Segments

Singaporehospitals

Internationalhospitals

Singaporehealthcare

services

Internationalhealthcare

services

Singaporenon-healthcare

services

Internationalnon-healthcare

services Eliminations Consolidated$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Revenue and expenses2009Total revenue from external customers 466,479 206,362 168,746 130,776 6,838 6 – 979,207Inter-segment revenue 19,499 291 32,942 5,759 – – (58,491) –


Earnings before interest, tax, depreciation, amortisation and REIT rental (EBITDAR) 112,869 44,117 44,957 31,542 3,599 (67) – 237,017Depreciation and impairment losses of property, plant and equipment (48,718)Amortisation of intangible assets (6,152)Exchange losses (1,221)Finance costs (11,805)Interest income 9,457Share of profits of associates (net of tax) 23,852REIT rental expense (51,272)Exceptional items 3,881



2008 (Restated)Total revenue from external customers 473,610 158,112 150,814 123,485 8,796 6 – 914,823Inter-segment revenue 20,073 251 31,982 4,608 – – (56,914) –


Earnings before interest, tax, depreciation, amortisation and REIT rental (EBITDAR) 121,557 33,918 31,094 27,163 4,005 (212) – 217,525Depreciation and impairment losses of property, plant and equipment (43,022)Amortisation of intangible assets (6,236)Exchange gains 1,056Finance costs (16,596)Interest income 4,909Share of profits of associates (net of tax) 11,127REIT rental expense (48,667)Exceptional items (60,496)



128





Operating Segments (cont’d)

Singapore

hospitals

International

hospitals

Singapore

healthcare

services

International

healthcare

services

Singapore

non-healthcare

services

International

non-healthcare

services Consolidated

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


2009

Segment assets 1,733,708 414,557 130,796 198,886 234,107 2,916 2,714,970

Interests in associates – 1,251 1,126 184 202,524 – 205,085

1,733,708 415,808 131,922 199,070 436,631 2,916 2,920,055

Unallocated assets 182,391

Total assets 3,102,446

Segment liabilities 1,151,729 117,669 47,474 127,172 20,417 13,170 1,477,631

Unallocated liabilities 87,615

Total liabilities 1,565,246

2008 (Restated)

Segment assets 1,473,573 389,807 121,270 203,999 410,297 18,105 2,617,051

Interests in associates – 769 1,087 201 192,072 – 194,129

1,473,573 390,576 122,357 204,200 602,369 18,105 2,811,180






129




Operating Segments (cont’d)

Singapore

hospitals

International

hospitals

Singapore

healthcare

services

International

healthcare

services

Singapore

non-healthcare

services

International

non-healthcare

services Consolidated

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


2009

Segment assets 1,733,708 414,557 130,796 198,886 234,107 2,916 2,714,970

Interests in associates – 1,251 1,126 184 202,524 – 205,085

1,733,708 415,808 131,922 199,070 436,631 2,916 2,920,055






2008 (Restated)

Segment assets 1,473,573 389,807 121,270 203,999 410,297 18,105 2,617,051

Interests in associates – 769 1,087 201 192,072 – 194,129

1,473,573 390,576 122,357 204,200 602,369 18,105 2,811,180






130





Geographical Segments

Singapore Malaysia China

Other

Regions Consolidated

$’000 $’000 $’000 $’000 $’000

2009

Total revenue from external customers 642,063 230,121 62,255 44,768 979,207

Segment assets 2,098,611 319,023 142,756 154,580 2,714,970

Capital expenditure 101,585 25,279 1,396 7,128 135,388

2008 (Restated)

Total revenue from external customers 633,220 191,061 51,786 38,756 914,823

Segment assets 2,005,140 327,472 138,472 145,967 2,617,051

Capital expenditure 1,360,238 22,622 3,512 7,960 1,394,332

131



32 ASSOCIATESDetails of associates are as follows:

Name of associate Principal activities

Place ofincorporation and business

Effective equityinterest held

2009 2008% %

Phil, Inc Dormant United States of America

40 40

Gleneagles Medical Centre (Kuala Lumpur) Sdn Bhd

Medical centredevelopment, ownership

and management

Malaysia 30 30

Gleneagles Academy of Nursing (M) Sdn Bhd

Nursing College Malaysia – ^ 20

PT Tritunggal Sentra Utama Surabaya

Provision of medicaldiagnostic services

Indonesia 30 30

Kyami Pty Ltd and its subsidiary:

Investment holding Australia 30 30

Royalmist Properties Pty Ltd

Property investmentand development

Australia 30 30

Gleneagles International Hospital (Lanka) Limited

Dormant Sri Lanka 40 40

Gleneagles Heritage Holdings Limited and its subsidiary:

Investment holding British VirginIslands

40 40

Gleneagles Heritage International Limited

Dormant British VirginIslands

40 40

Asia Renal Care Mount Elizabeth Pte Ltd

Provision of medical services Singapore 20 20

Asia Renal Care (Katong) Pte Ltd

Provision of medical services Singapore 20 20

Onemedhub Pte Ltd Striked off during the year Singapore – 40

Positron Tracers Pte. Ltd. Ownership andoperation of a cyclotron

Singapore 33 33

Parkway Life Real Estate Investment Trust

Real estate investment trust Singapore 35.71* 35.59

* During the year, the Group’s effective interest in Parkway Life REIT increased due to additional units issued to the Group in satisfaction of management fees payable by the latter.

^ Disposed during the year.

132




32 ASSOCIATES (cont’d)

KPMG Singapore is the auditor of all significant Singapore-incorporated associates. None of the

foreign-incorporated associates are considered significant in accordance with Rule 718 of the SGX-ST Listing

Manual. For this purpose, an associate is considered significant as defined under the SGX-ST Listing Manual if

the Group’s share of its net tangible assets represents 20% or more of the Group’s consolidated net tangible

assets, or if the Group’s share of its pre-tax profit accounts for 20% or more of the Group’s consolidated

pre-tax profits.

33 JOINT VENTURES

Details of joint ventures are as follows:

Name of joint venture Principal activities

Place ofincorporationand business


2009 2008% %

Apollo Gleneagles Hospital Ltd Private hospitalownership and management

India 50 50

Apollo Gleneagles PET-CT Limited Operation of PET-CTradio imaging centre

India 50 50

Hale Medical Clinic (Concourse) Pte Ltd

Operation of medical clinic Singapore 50 50

Shenton Family Medical Clinic (Bukit Gombak)


Shenton Family Medical Clinic (Serangoon)


Shenton Family Medical Clinic (Bedok Reservoir)


Shenton Family Medical Clinic (Jurong East)


Shenton Family Medical Clinic (Tampines)


Shenton Family Medical Clinic (Yishun)


Gleneagles Maritime Medical Center (GMMC)


Karington Holdings Pte Ltd Dormant Singapore 50 50

133



33 JOINT VENTURES (cont’d)




2009 2008% %

Pantai Irama Ventures Sdn Bhd and its subsidiaries:


Pantai Holdings Berhad and its subsidiaries:


Pantai Group Resources Sdn. Bhd. and its subsidiaries:


Pantai Hospitals Sdn. Bhd. and its subsidiaries:

Investment holding andprovision of managementand consultation services

to hospitals and medical centres

Malaysia 40 40

Pantai Medical Centre Sdn. Bhd. and its subsidiaries:

Provision of medical,surgical and

hospital services

Malaysia 40 40

Angiography Sdn. Bhd. Provision of cardiaccatherisation services

Malaysia 40 39.12

Magnetom Imaging Sdn. Bhd.

Provision of medicaldiagnostic services and

other related ventures

Malaysia 20.56 20.56

PMC Radio-Surgery Sdn. Bhd.

Provision ofradiotherapy facilities

Malaysia 40 40

Pantai-ARC Dialysis Services Sdn Bhd

Provision ofhaemodialysis services

Malaysia 20.4 20.4

Kuala Lumpur Medical Centre (Asia Pacific) Sdn. Bhd.

Dormant Malaysia 20.4 20.4

Cheras Medical Centre Sdn. Bhd.

Provision of medical, surgical and

hospital services

Malaysia 40 40

Pantai Klang Specialist Medical Centre Sdn. Bhd.


hospital services

Malaysia 40 40

Syarikat Tunas Pantai Sdn. Bhd.


hospital services


134








2009 2008% %

Paloh Medical Centre Sdn. Bhd.


hospital services


Hospital Pantai Ayer Keroh Sdn. Bhd. and its subsidiaries:

Provision of medical, surgical and

hospital services

Malaysia 40 40

HPAK Lithotripsy Services Sdn. Bhd.

Provision oflithotripter services

Malaysia 40 40

HPAK Cancer Centre Sdn. Bhd.

Provision ofservices for

cancer diseases

Malaysia 40 40

Hospital Pantai Indah Sdn. Bhd. and its subsidiary:

Provision ofmedical, surgical and

hospital services

Malaysia 40 40

Pantai Screening Services Sdn. Bhd. (formerly known as Pantai Central Sterilisation Services Sdn. Bhd.)

Managers andadministrator for

health screening services

Malaysia –### 40###

Pantai Screening Services Sdn. Bhd. (formerly known as Pantai Central Sterilisation Services Sdn. Bhd.)

Managers andadministrator for

health screening services

Malaysia 40### –###

Hospital Pantai Sungai Petani Sdn. Bhd. (formerly known as Strand Hospital & Retirement Home Sdn. Bhd.)


hospital services

Malaysia 40 –

135







2009 2008% %

P.T. Pantai Healthcare Consulting

Provision ofhealthcare consultingservices in Indonesia

Indonesia 40# 40#

Pantai Support Services Sdn. Bhd. and its subsidiaries:

Investment holding and provision of management and consultation services

to healthcare related service sectors

Malaysia 40 40

Pantai Premier Pathology Sdn. Bhd.

Provision of medical laboratory services

Malaysia 40 40

Pantai Education Sdn. Bhd.

Provision of educational programs and training courses for healthcare

and related fields

Malaysia 40 40

Pantai Health Infomatics Sdn. Bhd. (formerly Golden Home Care Sdn. Bhd.)

Dormant Malaysia 40 40

Pantai Integrated Rehab Services Sdn. Bhd.

Provision of rehabilitation services

Malaysia 34 34

Pantai Fomema & Systems Sdn. Bhd. and its subsidiary:

Investment holding and supervision of medical examination of foreign

workers in Malaysia

Malaysia 40 40

Fomema Sdn. Bhd. Monitoring of medical examination of foreign

workers in Malaysia

Malaysia 30 30

Pengkalan Usaha (M) Sdn. Bhd.


136








2009 2008% %

Healthpac Industries Sdn. Bhd.


Pantai Management Resources Sdn. Bhd.

Provision of administration support, training, research and development services

Malaysia 40 40

Credit Enterprise Sdn. Bhd. Dormant Malaysia 40 40

Cyberwide Finance Limited and its subsidiary:

In member’s voluntary liquidation

British Virgin Islands

40 40

Maxgold Investments Group Limited and its subsidiary:

Liquidated during the year British Virgin Islands

– 40

Glossmere Investments Limited

Liquidated during the year British Virgin Islands

– 40

Pantai Diagnostic Indonesia Sdn. Bhd. and its subsidiary:

Investment Holding Malaysia 40 40

P.T. Pantai Bethany Care International

Investment Holding Indonesia 26 –

Pantai Medivest Lanka (Private) Limited

Dormant Sri Lanka 40## 40##

P.T. Pantai Healthcare Consulting

Provision of healthcare consulting services in Indonesia

Indonesia 40# 40#

Pantai Medivest Sdn. Bhd. and its subsidiaries:

Provision of clinical waste management,

cleaning and maintenance services for hospitals

Malaysia 40 40

Aroma Laundry & Dry Cleaners Sdn. Bhd. and its subsidiary:

Provision of laundry and dry cleaning services

Malaysia 20 20

Zoom Valet Services Sdn. Bhd.

Dormant Malaysia –^ 20

Pantai Medivest Lanka (Private) Limited

Dormant Sri Lanka 40## 40##

137







2009 2008% %

Pantai Medivest (India) Private Limited

Dormant India 40 40

P.T. Jasa Medivest Provision of waste management services

in Indonesia

Indonesia 38 38

Gleneagles Hospital (Kuala Lumpur) Sdn Bhd and its subsidiary:

Private hospital ownership and management

Malaysia 58@ 58@

Oncology Centre (KL) Sdn Bhd

Provision of comprehensive oncological services

Malaysia 58@ 58@

# Effective equity interest of 20% each held by Pantai Hospitals Sdn. Bhd. and Pantai Group Resources

Sdn. Bhd.## Effective equity interest of 20% each held by Pantai Medivest Sdn. Bhd. and Pantai Group Resources

Sdn. Bhd.### Shares transferred from Hospital Pantai Indah Sdn. Bhd. to Pantai Hospitals Sdn. Bhd. pursuant to an

internal restructuring during the year.@ Effective equity interest of 28% and 30% held by Pantai Irama Ventures Sdn Bhd and Gleneagles (Malaysia)

Sdn Bhd, respectively.

^ Disposed during the year and the disposal did not have any financial effect to the income statements.

None of the Singapore-incorporated joint ventures are considered significant in accordance with Rule 718 of the

SGX-ST Listing Manual. Other member firms of KPMG International are auditors of significant foreign-incorporated

joint ventures. A joint venture is considered significant if the Group’s proportionate share of its net tangible

assets represents 20% or more of the Group’s consolidated net tangible assets, or if the Group’s proportionate

share of its pre-tax profit accounts for 20% or more of the Group’s consolidated pre-tax profits.

138




34 ACCOUNTING ESTIMATES AND JUDGEMENT IN APPLYING ACCOUNTING POLICIES

The Group makes estimates and assumptions that affect the reported amounts of assets and liabilities within

the next financial year. Estimates and judgements are continually evaluated and are based on historical

experience and other factors, including expectations of future events that are believed to be reasonable under

the circumstances.

Key source of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet

date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities

within the next financial year are discussed below:

Depreciation of and impairment loss on property, plant and equipment

Property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives, after

taking into account the estimated residual value. The Group reviews the estimated useful lives of the assets

regularly in order to determine the amount of depreciation expense to be recorded during any reporting period.

The useful lives are based on the Group’s historical experience with similar assets and taking into account

anticipated technological changes. Depreciation expense for future periods is adjusted if there are significant

changes from previous estimates.

Impairment losses would be made for property, plant and equipment whenever there is objective evidence that

the assets are impaired. The required level of impairment losses to be made is estimated by reference to the

estimated value in use or price quotations from independent third parties.

Impairment loss on intangible assets

Other intangible assets are measured at cost less accumulated amortisation and impairment losses. The Group

reviews the carrying value of these assets with the recoverable amount from the cash-generating unit to which the

intangible asset arises. The recoverable amount represents the estimated value in use based on key assumptions

as disclosed in note 5 of the financial statements.

Impairment loss on trade receivables

The Group evaluates whether there is any objective evidence that trade receivables are impaired and determines

the amount of impairment loss as a result of the inability of the debtors to make required payments. The Group

bases the estimates on the ageing of the trade receivables balance, credit-worthiness of the debtors and

historical write-off experience. If the financial conditions of the debtors were to deteriorate, actual write-offs

would be higher than estimated.

Income taxes

Significant judgement is required in determining the availability of tax losses for offset against taxable income,

capital allowances, taxability of certain income and deductibility of certain expenses during the estimation of

the provision for income taxes.

139



35 COMPARATIVE INFORMATION

Change in accounting policy

The financial impact on the Group arising from the change in accounting policy (see note 2.5) is as follows:

1 January

2009

1 January

2008

S$’000 S$’000

Statement of changes in equity

Increase in accumulated profits 53,886 50,666

31 December

2009

31 December

2008

S$’000 S$’000

Statement of financial position

Increase in interests in associates 68,369 53,886

Increase in accumulated profits 68,369 53,886

Income statement

Increase in share of profits of associates 14,483 3,220

Increase in profit for the period 14,483 3,220

Earnings per share

Increase in basic earnings per share (cents) 1.28 0.32

Increase in diluted earnings per share (cents) 1.28 0.32

Change in classification

During the year, the Group modified the income statement presentation of specialist fees from gross basis to

net basis, to reflect more appropriately the way in which economic costs and benefits are derived. Comparative

amounts were reclassified for consistency, which resulted costs of $30,563,000 in relation to specialist fees

earned being reclassified from purchase and contracted services to revenue.

36 SUBSEqUENT EVENTS

On 14 January 2010, Parkway Group Healthcare Pte. Ltd. (PGH), a wholly-owned subsidiary of Parkway Holdings

Limited, entered into a subscription agreement with Mitsui & Co. Ltd. (Mitsui), where Mitsui will subscribe for

490,000 shares in the capital of Gleneagles CRC Pte. Ltd. (GCRC), a wholly-owned subsidiary of PGH, for a

consideration of $6,500,000. Upon completion, Mitsui will have a 49% stake in GCRC and PGH’s investment

will be reduced to 51%.

140




37 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET ADOPTED

The Group has not applied the following accounting standards (including their consequential amendments) and

interpretations that have been issued as of the balance sheet date but are not yet effective:

Amendments to FRS 32 Financial Instruments: Presentation – Classification of Rights Issues

Amendments to FRS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Items

Amendments to FRS 102 Share-based Payment – Group Cash-settled Share-based Payment Transactions

FRS 103 (revised)

and FRS 27 (revised)

FRS 103 (revised) Business Combinations and FRS 27 (revised) Consolidated

and Separate Financial Statements

Various FRSs Improvements to FRSs 2009

INT FRS 117 Distributions of Non-Cash Assets to Owners

The amendments to FRS 39 on eligible hedged items will become effective for the Group’s financial statements

for the year ending 31 December 2010. The amendments clarify how the principles that determine whether a

hedged risk or portion of cash flows is eligible for designation should be applied in two particular situations: (i)

the designation of a one-sided risk in a hedged item; and (ii) the designation of inflation in particular situations.

The application of these amendments is not expected to have any significant impact on the Group’s financial

statements.

FRS 103 (revised) and FRS 27 (revised) will become effective for the Group’s financial statements for the year

ending 31 December 2010. FRS 103 (revised) introduces significant changes to the accounting for business

combinations both at the acquisition date and post acquisition, and requires greater use of fair values. The

revised FRS 103 will be applied prospectively and therefore there will be no impact on prior periods in the Group’s

financial statements for the year ending 31 December 2010. FRS 27 (revised) requires accounting for changes

in ownership interests by the Group in a subsidiary, while maintaining control, to be recognised as an equity

transaction. When the Group loses control of a subsidiary, any interest retained in the former subsidiary will be

measured at fair value with the gain or loss recognised in profit or loss. The revised FRS 27 is not expected to

have a significant impact on the consolidated financial statements.

Improvements to FRSs 2009 will become effective for the Group’s financial statements for the year ending 31

December 2010. Improvements to FRSs 2009 contain amendments to numerous accounting standards that result

in accounting changes for presentation, recognition or measurement and disclosure purposes. The Group is in

the process of assessing the impact of these amendments.

INT FRS 117 will become effective for the Group’s financial statements for the year ending 31 December 2010.

INT FRS 117 prescribes the accounting treatment of distributions of non-cash assets by an entity to owners. It

clarifies that such distributions should be measured at the fair value of the non-cash assets and the difference

between the carrying amount and the fair value of non-cash assets to be distributed should be recognised in

the profit or loss. INT FRS 117 will be applied prospectively.

The initial application of these standards (and its consequential amendments) and interpretations is not expected

to have any material impact on the Group’s financial statements. The Group has not considered the impact of

accounting standards issued after the balance sheet date.

141

SGX-ST Listing Manual RequirementsYEAR ENDED 31 DECEMBER 2009

SUPPLEMENTARY INFORMATION

1 SUMMARY OF MAJOR PROPERTIES

The major properties of the Group are:

Description Location

Site area

(sq m) Existing use

Approximate

total lettable/

saleable area

(sq m)

Group’s

effective

interest % Tenure

Singapore

Warehouse

and store

Lot 2301/U2 Mukim

1 situated at 213

Henderson Road,

#01-02, #02-02,

#03-02, #04-02

Henderson

Industrial Park

940 Warehouse

and store

– 940 100 Freehold

Radiologic Clinic Lot 5350 Mukim 5

situated at Block 130

Jurong East Street 13

#01-219

145 Clinic – 145 100 91-year lease

commencing

1 April 1993

Leasehold land Lot 794V Town-

subdivision 29,

Parcel 726

17,226 In the

course of

construction

– 17,226 100 99-year lease

commencing

20 May 2008

Overseas

Gleneagles

Medical Centre,

a 217-bed private

hospital

1 Jalan Pangkor

Penang, Malaysia

7,319 Hospital

building

– 18,600 70 Freehold

142




2 INTERESTED PERSON TRANSACTIONS

Aggregate value of all

transactions during the

financial year ended

(excluding transactions

less than $100,000 and

transactions conducted

under a shareholders’

mandate pursuant to

Rule 920 of the

SGX-ST Listing Manual)

Aggregate value of all

transactions conducted

under a shareholders’

mandate pursuant to

Rule 920 of the

SGX-ST Listing Manual

(excluding transactions

less than $100,000)

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Interested person

Provision of goods and services

Malaysian Airline System Berhad – 121 197 –

Pantai Holdings Berhad – 695 649 –

Parkway Life REIT 6,068 6,872 – –

Telekom Malaysia Berhad – 399 895 –

Tenaga Nasional Berhad – 3,906 8,070 –

TNB Integrated Learning Solutions Sdn Bhd – 273 603 –

Purchase of goods and services

Chiang See Hiang – 140 – –

Pantai Education Sdn. Bhd. – 235 – –

Pantai Integrated Rehab Services Sdn Bhd – – 288 –

Parkway Life REIT 51,272 48,668 – –

Telekom Malaysia Berhad – 260 696 –

Tenaga National Berhad – 1,870 3,761 –

TPG Capital, LP 202 – – –

3 MATERIAL CONTRACTS

Except as disclosed in Interested Person Transactions, there were no other material contracts of the Company

or its subsidiaries involving the interests of the Chief Executive Officer, each director or controlling shareholder,

either still subsisting at the end of the financial year or if not then subsisting, entered into since the end of the

previous financial year.

143



4 CORPORATE GOVERNANCE STATEMENT

The Company is committed to complying with the Code of Corporate Governance issued by the Corporate

Governance Committee in March 2001 and revised in 2005 (CCG 2005) so as to ensure greater transparency

and protection of shareholders’ interests. This statement outlines the main corporate governance practices that

are adopted by the Company.

Board of 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. It sets the overall strategy for the Group and supervises the management of the Group (the

Management). It is also responsible for the overall corporate governance of the Group including setting its

strategic direction, establishing goals for Management and monitoring the achievement of these goals.

Board Processes

To assist in the execution of its responsibilities, the Board has established the following specialised committees

(CCG 2005, Guideline 1.3):

(a) the Executive Committee;

(b) the Audit & Risk Management Committee;

(c) the Nominating Committee;

(d) the Remuneration Committee;

(e) the Management Committee;

(f) the Share Purchase Committee; and

(g) the Strategic Planning Committee.

Each of the above committees has its respective written mandates and operating procedures, which will be

reviewed on a regular basis.

The Board intends to hold about four scheduled meetings each year. It may, however, hold unscheduled strategy

meetings and/or emergency 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 2005, Guideline 1.4).

144




4 CORPORATE GOVERNANCE STATEMENT (cont’d)

Directors’ meetings held in 2009

During the financial year ended 31 December 2009, the Board held six meetings. The Directors’ attendance at

those meetings are disclosed below (CCG 2005, Guideline 1.4):

Name of director Board meetings attended

Richard Seow Yung Liang 6

Dr Lim Cheok Peng 6

Alain Ahkong Chuen Fah 5

Chang See Hiang 5

Timothy David Dattels 5

Ranvir Dewan 3

Dato’ Mohammed Azlan b. Hashim* 1

Ho Kian Guan 6

Ganen Sarvananthan 5

Steven Joseph Schneider 5

Ashish Jaiprakash Shastry 6

Ho Kian Hock

(alternate to Mr Ho Kian Guan) –


(alternate to Mr Timothy David Dattels) 1

Ahmad Shahizam b. Mohd Shariff

(Alternate to Mr Ganen Sarvananthan) 4

* Appointed on 13 October 2009

Matters Requiring Board Approval

The Board meets to consider the following, without limitation, corporate events and/or actions (CCG 2005,

Guideline 1.5):

• approvalofquarterlyresultsannouncements;

• approvaloftheannualreportandfinancialstatements;

• declarationofinterimdividendsandproposaloffinaldividends;

• approvalofcorporatestrategies;

• authorisationofmajortransactions;and

• conveningofshareholders’meetings.

145




Training for Directors

The Directors may participate in seminars and/or discussion groups to keep abreast of latest developments

which are relevant to the Group (CCG 2005, Guideline 1.6).

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 has reviewed its composition and is satisfied that such composition is appropriate. The

Board will constantly examine its size with a view to determining its impact upon its effectiveness (CCG 2005,

Guideline 2.3).

As at the date of this report, the Board comprises twelve suitably qualified members (CCG 2005, Guidelines

2.4 and 4.6):

Name of director

Date of

appointment

Nature of

appointment

Prime

function Other functions

Academic and

professional

qualifications

Richard Seow

Yung Liang

Age: 48

10/06/2005 Non-executive/

independent

Chairman Chairman of Executive

and Strategic Planning

Committees, and

Member of Remuneration,

Nominating and

Management

Committees

BS (Economics),

MBA (Finance)

Dr Lim Cheok Peng

Age: 63

07/06/2000 Executive/

non-independent

Executive Vice

Chairman/

Managing

Director

Chairman of Management

Committee and Member

of Executive and Strategic

Planning

Committees

MBBS,

M. Med. Int. Med.,

MRCP,

FRCP (Edin),

FRCP (Glasg),

FAMS

(Cardiology)

Dr Tan See Leng

Age: 45

23/02/2010 Executive/

non-independent

CEO

Designate

– MBBS, MMed,

FCFPS, MBA

(ChicagoBooth)

Alain Ahkong

Chuen Fah

Age: 62


independent

Member Chairman of Audit

& Risk Management

Committee and Member

of Nominating and Share

Purchase Committees

Chartered Tax

Adviser

146





Board Composition and Balance (cont’d)

Name of director

Date of

appointment

Nature of

appointment

Prime


Academic and

professional

qualifications

Chang See Hiang

Age: 56


independent

Member Chairman of Nominating

and Share Purchase

Committees, and

Member of Audit & Risk

Management Committee

LL.B (Hons)

Timothy David

Dattels

Age: 52


independent

Member Chairman of

Remuneration

Committee and

Member of

Nominating

Committee

BA (Hons), MBA

Ranvir Dewan

Age: 56


independent

Member – B Com (Hons)

FCA (ICAEW)

CA (CICA)

Dato’ Mohammed

Azlan b. Hashim

Age: 53


non-independent

Member – Bachelor of

Economics

(Monash),

Fellow, Institute

of Chartered

Accountants,

Australia,

Member,

Malaysian

Institute of

Accountants,

Academy

of Fellows,

Malaysian

Institute of

Directors

Ho Kian Guan

Age: 64


independent

Member Member of Audit & Risk


BA Comm

147




Board Composition and Balance (cont’d)

Name of director

Date of

appointment

Nature of

appointment

Prime


Academic and

professional

qualifications

Ganen

Sarvananthan

Age: 35


non-independent

Member Member of Executive,

Remuneration and

Nominating Committees

LL.B (Hons),

Barrister-at-law,

England & Wales

Steven Joseph

Schneider

Age: 50


independent

Member Member of Strategic

Planning Committee

BA of Business

Administration

Ashish Jaiprakash

Shastry

Age: 34


independent

Member Member of Executive,

Remuneration, Audit &

Risk Management,

Strategic Planning

and Management

Committees

A.B. in Econs

(Hons)

Ho Kian Hock

Age: 62

25/06/1985 – Alternate to

Ho Kian Guan

– BSc Engineering

Tanguy Vincent

Serra

Age: 31


Timothy David

Dattels

– ESCP-EAP

Ahmad Shahizam

b. Mohd. Shariff

Age: 38


Ganen

Sarvananthan

– LL.B (Hons),

Master in Public

Administration

Particulars of interests of directors who held office at the end of the financial year in shares, debentures, warrants

and share options in the Company and in related corporations (other than wholly-owned subsidiaries) are set

out in the Directors’ Report.

148





Independent Members of the Board of Directors

The Board has eight independent members, representing 67% of the Board. They are Mr Richard Seow Yung

Liang, Mr Alain Ahkong Chuen Fah, Mr Chang See Hiang, Mr Timothy David Dattels, Mr Ranvir Dewan, Mr Ho

Kian Guan, Mr Steven Joseph Schneider and Mr Ashish Jaiprakash Shastry. The criterion of independence is

based on the definition given in the CCG 2005. The Board considers an “independent” director as one who has

no relationship with the Company, its related companies or its officers that could interfere, or be reasonably

perceived to interfere, with the exercise of the director’s independent business judgement with a view to the

best interests of the Company (CCG 2005, Guideline 2.1).

Non-executive members of the Board exercise no management functions in the Company or any of its

subsidiaries. Although all the directors have equal responsibility for the performance of the Group, the role of

the non-executive directors is particularly important in ensuring that the performance of management in meeting

agreed goals and objectives is reviewed and the reporting of performance is monitored; and the strategies

proposed by the management are fully discussed, rigorously examined and shall take into account the long-term

interests of the shareholders, employees, customers, suppliers and the communities in which the Group conducts

its business (CCG 2005, Guideline 2.5).

Chairman and Managing Director

There is a clear division of responsibilities between the Chairman and the Managing Director, which ensures

that there is a balance of power and authority at the top of the Group. The posts of Chairman and Managing

Director are kept separate and these positions are held by Mr Richard Seow Yung Liang and Dr Lim Cheok Peng

respectively (CCG 2005, Principle 3 and Guideline 3.1).

The Board has delegated the day-to-day running of the Group to the Managing Director. Both the Chairman

and the Managing Director shall ensure an appropriate balance of power, increased accountability and greater

capacity of the Board for independent decision making (CCG 2005, Guideline 3.1). The Chairman shall, in

addition:

(a) lead the Board to ensure its effectiveness on all aspects of its role and set its agenda;

(b) ensure that the directors receive accurate, timely and clear information;

(c) ensure effective communication with shareholders;

(d) encourage constructive relations between the Board and the Management;

(e) facilitate the effective contribution of Non-executive Directors in particular;

(f) encourage constructive relations between the Executive Directors and Non-executive Directors; and

(g) promote high standards of corporate governance. (CCG 2005, Guideline 3.2)

149




Board Committees

To assist the Board in the execution of its duties, the Board has delegated specific functions to the following

committees (CCG 2005, Guideline 1.3):

Executive Committee

The Executive Committee was established in February 1987. It is currently chaired by Mr Richard Seow Yung Liang

and comprises both non-executive directors and the executive director. The Executive Committee is entrusted

with the review of the Group’s business and affairs, in line with the overall strategy set by the Board. Meetings

of the Executive Committee are held regularly.

There were seven meetings held during the year and attendance was as follows (CCG 2005, Guideline 1.4):

Name of director Appointment Number of meetings attended


(Chairman)

Non-executive Director 7

Dr Lim Cheok Peng Executive Director 7

(Member)

Ganen Sarvananthan Non-executive Director 4

(Member)


(Member)

Non-executive Director 6

Audit & Risk Management Committee

The Audit Committee was established in June 1990 and in May 2007, the scope of the Audit Committee’s

responsibilities was extended to include risk management and the Committee was re-designated as the Audit

and Risk Management Committee (ARMC). It is currently chaired by Mr Alain Ahkong Chuen Fah and comprises

three other non-executive directors, namely Mr Chang See Hiang, Mr Ho Kian Guan and Mr Ashish Jaiprakash

Shastry. All four directors are non-executive and independent (CCG 2005, Guidelines 11.1 and 11.8).

The ARMC assists the Board in fulfilling its responsibilities in financial reporting, management of financial and

control risks, and monitoring of the internal control systems.

The Board is of the view that the members of the ARMC are appropriately qualified to discharge their

responsibilities and they have accounting and/or related financial management expertise or business experience,

as the Board interprets such qualification in its business judgement (CCG 2005, Guideline 11.2).

The ARMC has explicit authority to investigate any matter within its terms of reference, full access to and

co-operation by the Management and full discretion to invite any director or executive officer to attend its

meetings, and reasonable resources to enable it to discharge its functions properly (CCG 2005, Guideline

11.3).

150





Board Committees (cont’d)

Audit & Risk Management Committee (cont’d)

The ARMC has reviewed the scope and results of the audit and its cost effectiveness and the independence and

objectivity of the external auditors and such reviews are conducted on an annual basis (CCG 2005, Guidelines

11.4(a) and 11.6). Where the external auditors also supply a substantial volume of non-audit services to the

Company, the ARMC shall keep the nature and extent of such services under review so as to seek to balance

the maintenance of objectivity and value for money (CCG 2005, Guideline 11.4(a)).

The ARMC can hold meetings with the external auditors, without the presence of the Management, to discuss

any matters that the Audit Committee or the auditors believe should be discussed in private (CCG 2005,

Guideline 11.5).

The ARMC has reviewed and will review the significant financial reporting issues and judgements, formal

announcements relating to the Company’s financial performance, the adequacy of internal controls, the

management of financial risks, the effectiveness of the Company’s internal audit function, and the Group’s

process for monitoring compliance with the laws and regulations and its own code of business conduct (CCG

2005, Guidelines 11.4(b) to (e)).

All interested person transactions, including those carried out pursuant to the IPT Mandate approved by

shareholders at the Extraordinary General Meeting held on 15 April 2009 (“IPT Mandate”), have been reviewed

by the ARMC to ensure that such transactions have been carried out on normal commercial terms and that the

terms are not prejudicial to the interests of the Company and its minority shareholders. In accordance with the

IPT Mandate, the ARMC has also considered and reviewed the methods and/or procedures for the review of

interested person transactions and is of the view that these methods and/or procedures remain appropriate and

sufficient. Details of the interested person transactions for the financial year ended 31 December 2009 are set

out on page 142 of the Annual Report.

The ARMC shall review arrangements by which staff of the Company may, in confidence, raise concerns about

possible improprieties in matters of financial reporting or other matters. The ARMC shall ensure that arrangements

are in place for independent investigation of such matters and for appropriate follow up action (CCG 2005,

Guideline 11.7).

The ARMC has reviewed the Company’s risk management policies and systems, internal financial controls,

operational and compliance controls. Based on the Internal Auditor’s reports, as applicable, and the internal

controls in place, it is satisfied that there are adequate internal controls in the Company (CCG 2005, Guideline

12.1).

The Internal Auditor’s primary line of reporting is to the Chairman of the ARMC although the Internal Auditor

also reports administratively to the Managing Director (CCG 2005, Guideline 13.1).

The ARMC has reviewed the adequacy of the internal audit function by ensuring that the internal audit function

is adequately resourced and has appropriate standing within the Company and such reviews are conducted on

an annual basis (CCG 2005, Guidelines 13.3 and 13.4).

151





Audit & Risk Management Committee (cont’d)

As part of its risk management function, the Committee assists the Board in ensuring that the Management

maintains a sound system of internal controls and risk management processes to safeguard and enhance

enterprise value. The ARMC seeks regular assurance from Management to ensure alignment of risk management

strategies and culture with the Group’s business objectives and that key risks are effectively managed; that

appropriate risk reporting structure is established to facilitate reporting of risks to Management and the Board;

that a comprehensive risk management approach is in place to identify risks, communicate risk interrelationships

and manage risk profiles across the organisation; and that there are adequate resources to support the Group’s

risk management function in fulfilling its responsibilities.

There were five meetings held during the year and attendance was as follows (CCG 2005, Guideline 11.8):



(Chairman)

Non-executive/independent 5

Chang See Hiang

(Member)


Ho Kian Guan

(Member)



(Member)


Nominating Committee

The Nominating Committee was established on 24 February 2003 and comprises five members, four of whom

are independent, namely Mr Chang See Hiang (Chairman), Mr Richard Seow Yung Liang, Mr Alain Ahkong

Chuen Fah, Mr Timothy David Dattels and one non-independent director, Mr Ganen Sarvananthan (CCG 2005,

Guideline 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,

including recommending the Chairman for the Board and for each Board committee (CCG 2005, Guidelines

4.1 and 4.2);

(b) determine annually whether a director is independent and whether he is able to carry out his duties as a

director (CCG 2005, Guidelines 4.3 and 4.4); and

(c) assess the effectiveness of the Board as a whole and the contribution by each individual director to the

effectiveness of the Board (CCG 2005, Principle 5).

152






Nominating Committee (cont’d)

The Nominating Committee has adopted a formal assessment process to evaluate the Board’s performance and

contribution of each individual director by (a) reviewing a completed individual director self-assessment form,

and (b) using a board self-assessment checklist (CCG 2005, Guidelines 5.1 and 5.4). The Nominating Committee

has also adopted internal guidelines to address the competing time commitments that are faced when directors

serve on multiple boards (CCG 2005, Guidelines 4.4 and 5.4).

The Nominating Committee has adopted a set of performance criteria that is linked to long-term shareholders’

value to be used for performance evaluation of the Board. The set of performance criteria includes the Company’s

share price performance over a five year period benchmarked against the Singapore Straits Times Index and

against the benchmark index of the Company’s industry peers, return on assets, return on equity and profitability

on capital employed (CCG 2005, Guidelines 5.2, 5.3 and 5.5).

The Nominating Committee will also review and recommend to the Board on the appointment of key executives,

including but not limited to the Managing Director.

There were three meetings held during the year and attendance was as follows (CCG 2005, Guideline 1.4):


Chang See Hiang

(Chairman)



(Member)



(Member)



(Member)


Ganen Sarvananthan

(Member)

Non-executive/non

independent

2

153






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 2005, Guideline 4.6):

Name of director

Date of last re-election

as a director

Directorships or chairmanships both present

and those held over the preceding three

years in other listed companies and other

major appointments

Richard Seow Yung Liang 25/4/2008 Chairman of the Anglo-Chinese School

Board of Governors, Singapore

Chairman of Republic Polytechnic,

Singapore

Hup Soon Global Corporation Limited

(Resigned wef 30/4/2008)

Lee Hing Development Limited


Dr Lim Cheok Peng 12/4/2007 Parkway Trust Management Limited

Dr Tan See Leng N/A CFPS Holdings Pte Ltd

Chairman of Board of Trustees of CFPS

Holdings Pte Ltd

Chairman of College Building Committee,

College of Family Physicians’ Singapore

Alain Ahkong Chuen Fah 15/4/2009 Hup Soon Global Corporation Limited

Chang See Hiang 12/4/2007 Yeo Hiap Seng Limited

Jardine Cycle & Carriage Limited

MCL Land Limited

STT Communications Ltd

Timothy David Dattels 25/4/2008 Asian Art Museum, San Francisco as Trustee

Shangri-La Asia Ltd

SingTao News Corp. Limited

Ranvir Dewan 12/4/2007 Shriram Transport Finance Co. Ltd

PT Bank Tabungan Pensiunan Nasional Tbk

Bank Thai Public Co. Ltd


154







Name of director


as a director




major appointments

Dato’ Mohammed Azlan b. Hashim N/A Aseana Properties Limited

Asiasons Capital Limited

D&O Ventures Berhad

Scomi Group Bhd

Westcomb Financial Group Ltd

SILK Holdings Berhad

Proten Holdings Berhad (Resigned wef

12/2009)

Golden Pharos Berhad (Resigned wef 06/2008)

PECD Berhad (Resigned wef 02/2008)

Ho Kian Guan 15/4/2009 Keck Seng (Malaysia) Berhad

Keck Seng Investments (HK) Ltd

Shangri-La Asia Ltd

Shangri-La Hotel Ltd (Resigned wef 8/9/2008)

Ganen Sarvananthan 15/4/2009 Executive Director, Investments, Khazanah

Nasional Berhad

MobileOne Ltd (Resigned wef 24/7/2008)

Steven Joseph Schneider 12/4/2007 United Test and Assembly Center Ltd

(Appointed wef 01/2009)

Hanaro Telecom Inc., (Resigned wef 06/2008)

Myer Group Pty Ltd (Resigned wef 10/2009)

NIS Group Co., Ltd (Resigned wef 06/2009)

Ashish Jaiprakash Shastry 15/4/2009 United Test and Assembly Center Ltd

PT Bank Tabungan Pensiunan Nasional Tbk

Parkway Trust Management Limited


Lee Hing Development Limited


155






Name of director


as a director




major appointments

Ho Kian Hock

(alternate to Ho Kian Guan)

N/A Keck Seng Investments (HK) Ltd

Keck Seng (Malaysia) Berhad

Shangri-La Asia Ltd*

Shangri-La Hotel Ltd* (Resigned wef 8/9/2008)


(alternate to Timothy

David Dattels)

N/A TDF SAS (Resigned wef 18/9/2008)

Ahmad Shahizam b. Mohd.

Shariff (alternate to Ganen

Sarvananthan)

N/A Director, Investments, Khazanah Nasional

Berhad

* Alternate director

156





Remuneration Committee

The Remuneration Committee was established in March 1988. It is currently chaired by Mr Timothy David Dattels,

an independent non-executive director and comprises three other non-executive directors, namely Mr Richard

Seow Yung Liang, Mr Ashish Jaiprakash Shastry and Ganen Sarvananthan (CCG 2005, Guideline 7.1).

The Remuneration Committee, which offers an independent perspective, reviews the remuneration packages

and the procedures for fixing the remuneration packages of individual directors and key executives. However,

members of the Remuneration Committee will ensure that they do not set their own remuneration (CCG 2005,

Principle 7).

The Remuneration Committee will recommend a framework of remuneration for the Board and key executives

and submit the recommended framework for endorsement by the entire Board (CCG 2005, Guideline 7.2).

The Remuneration Committee shall:

(a) ensure that non-executive directors should not be over-compensated to the extent that their independence

may be compromised (CCG 2005, Guideline 8.2);

(b) have the authority to consult experts (inside and/or outside the Company) on the remuneration of all

directors, if considered necessary (CCG 2005, Guideline 7.3); and

(c) recommend the remuneration of the non-executive directors for approval at the annual general meeting

(AGM).

In addition, the Remuneration Committee is responsible for the administration of the Parkway Performance Share

Plan (the Share Plan) in accordance with the Rules of the Share Plan. The powers and duties of the Remuneration

Committee under the Rules of the Share Plan include, inter alia, the determination and approval of the list of

participants of the Share Plan, the number of shares which are the subject of an award, the date on which the

award will be granted, the prescribed performance targets, the performance period, the vesting period (if any)

and the extent which the shares under an award shall be released on the performance target(s) being satisfied.

Members of the Remuneration Committee will ensure that they do not determine or approve the grant of any

award to themselves (CCG 2005, Principle 7).

The Remuneration Committee is also assigned the responsibility of administering the Parkway Share Option

Scheme 2001 (Parkway Scheme 2001) in accordance with the rules of the scheme, to determine and approve the

list of grantees of the share options, the date of the grant and the price thereof. Members of the Remuneration

Committee will ensure that they do not determine or approve any grant of share options to themselves (CCG

2005, Principle 7).

157




There were two meetings held during the year and attendance was as follows (CCG 2005, Guidelines 1.4 and

9.1):



(Chairman)



(Member)



(Member)


Ganen Sarvananthan

(Member)

Non-executive/non- independent –


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, transferable share subscriptions rights, loan stocks and the issue of new certificates to replace any lost

certificates in respect of any of the above-mentioned securities and in respect of the Parkway Scheme 2001.

There were ten 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 independent non-executive director with Mr Alain Ahkong Chuen Fah, also an independent non-executive

director, being the one member.

The role of the Share Purchase Committee is to determine/decide the number of shares of the Company to

purchase and the price at which such shares may be purchased, for and on behalf of the Company. During the

financial year ended 31 December 2009, the Company did not purchase any of the Company’s shares.

There was no resolution in writing circulated and no physical meeting held during the year (CCG 2005, Guidelines

1.4).

158





Strategic Planning Committee

The Strategic Planning Committee was established in July 2005. It is chaired by Mr Richard Seow Yung Liang

and comprises three other members, namely, Dr Lim Cheok Peng, Mr Ashish Jaiprakash Shastry and Mr Steven

Joseph Schneider.

The Committee was established to explore, develop, and recommend medium and long-term business strategies

and initiatives for the Group in the local, regional and international markets.

There was one meeting held during the year and attendance was as follows (CCG 2005, Guidelines 1.4):

Name of director Appointment Number of meeting attended


(Chairman)


Dr Lim Cheok Peng

(Member)

Executive/non-independent 1


(Member)

Non-executive/independent –


(Member)


Criteria for Board Membership

Candidates for the Board are selected for their character, judgement, business experience and acumen. Scientific

expertise, prior government service and familiarity with national and international issues affecting business will

also be relevant criteria for consideration (CCG 2005, Guideline 2.4). In the selection and appointment of new

directors to the Board, the Nominating Committee will evaluate the capabilities of the nominated new director

taking into consideration his academic and professional qualifications, experience and where applicable, his

shareholding in the Company and its subsidiaries as well as consider how such nominated new director will

fit in the overall competent matrix of the Board before making its recommendation to the Board (CCG 2005,

Guideline 4.5).

Where a director has multiple board representations, the Nominating Committee will evaluate whether or not

a director is able to and has been adequately carrying out his duties as director of the Company (CCG 2005,

Guideline 4.4). Final approval of a candidate is determined by the Board. New directors may be appointed by

way of a Board resolution upon the recommendation of the Nominating Committee but such directors shall

submit themselves for re-election at the next AGM.

159




Criteria for Board Membership (cont’d)

The Articles of Association of the Company provide that at each AGM of the Company, one-third of the

directors, including the Managing Director, shall retire from office by rotation provided always that every director,

including a managing director, shall retire from office at least once in every three years (CCG 2005, Guideline

4.2). The selection of directors to retire is on the basis of those who have been longest in office since their last

election and as between directors of equal seniority, the directors to retire shall be selected from among them

by agreement or, in the absence thereof, by lot. A retiring director is eligible for re-election by shareholders of

the Company at the AGM.

Access to Information

The Company fully recognises that the continual flow of relevant information on an accurate and timely basis

is critical for the Board to be effective in the discharge of its duties.

Accordingly, directors will receive a regular supply of information from Management about the Group so that

they are equipped to play as full a part as possible in Board meetings. Detailed Board papers are prepared for

each meeting of the Board. The Board papers shall include sufficient information from Management on financial,

business and corporate issues of the Company to enable the directors to be properly briefed on issues to be

considered at Board meetings. Information provided shall include background or explanatory information relating

to matters to be brought before the Board, copies of disclosure documents, budgets, forecasts and monthly

internal financial statements (CCG 2005, Guidelines 6.1 and 6.2).

All directors shall have unrestricted access to the Group’s records and information and shall receive detailed

financial and operational reports from the Management so as to enable them to carry out their duties. Directors

may also liaise with the Management, and may consult with other employees and seek additional information if

required (CCG 2005, Guidelines 6.1 and 6.2).

In addition, directors shall have separate and independent access to advices and services of the Company

Secretary, who is responsible to the Board for advising on and implementation of the Group’s compliance

requirements pursuant to the relevant statutes and regulations. Under the direction of the Chairman, the

Company Secretary’s responsibilities shall include ensuring good information flows within the Board and its

committees and between Management and Non-executive Directors, as well as facilitating orientation and

assisting with professional development as required. The Company Secretary should attend all board meetings

(CCG 2005, Guideline 6.3).

The appointment and the removal of the Company Secretary shall be a matter for the Board as a whole (CCG

2005, Guideline 6.4).

Each director has the right to seek independent legal and other professional advice, at the Company’s expense,

concerning any aspect of the Group’s operations or undertakings in order to fulfil his role and responsibilities

as a director (CCG 2005, Guideline 6.5).

160





Remuneration Matters

The Group’s remuneration policy is to provide compensation packages at market rates which will reward

successful performance and attract, retain and motivate managers and directors (CCG 2005, Principles 8 and

9, Guideline 8.5).

The Company currently does not have a formal service contract with non-executive directors. The executive

directors each has a service contract, which is subject to termination by the relevant subsidiary of the Company

by giving not less than three months’ notice (CCG 2005, Guidelines 8.3 and 8.6).

Company’s directors receiving remuneration from the Group for the years ended 31 December 2009 and 31

December 2008 are set out below (CCG 2005, Guidelines 9.1 and 9.2):

Number of directors

2009 2008

Remuneration band^

S$2,250,000 to below S$2,500,000 – 1

S$2,000,000 to below S$2,250,000 1 –

S$750,000 to below S$1,000,000 – 1

S$500,000 to below S$750,000 1 –

S$250,000 to below S$500,000 1 –

Below S$250,000 8 9

Total 11 11

Summary compensation table for the directors of the Company and key executives of the Group for the year

ended 31 December 2009 is set out below (CCG 2005, Guidelines 9.1 and 9.2):

Salary Bonus Fees

Allowances

and other

benefits^ Total

% % % % %

Directors of the Company

S$2,000,000 to below S$2,250,000

Dr Lim Cheok Peng 30 27 – 43 100

S$500,000 to below S$750,000

Richard Seow Yung Liang – – 20 80 100

S$250,000 to below S$500,000

Alain Ahkong Chuen Fah – – 47 53 100

161




Remuneration Banding (cont’d)

Salary Bonus Fees

Allowances

and other

benefits^ Total

% % % % %

Directors of the Company (cont’d)

Below S$250,000

Chang See Hiang – – 50 50 100

Timothy David Dattels – – 44 56 100

Ranvir Dewan – – 48 52 100

Dato’ Mohammed Azlan b. Hashim* – – 100 – 100

Ho Kian Guan – – 54 46 100

Ganen Sarvananthan – – 100 – 100

Steven Joseph Schneider – – 48 52 100

Ashish Jaiprakash Shastry – – 67 33 100

Key Executives of the Group

S$750,000 to below S$1,000,000

Tan See Leng** 44 24 – 32 100

Daniel James Snyder# 38 – – 62 100

S$500,000 to below S$750,000

Goh Jin Hian 44 17 – 39 100

Molly Foo 56 13 – 31 100

Jeffrey H Staples 45 8 – 47 100

Tan See Haw 70 12 – 18 100

June Tay 53 15 – 32 100

S$250,000 to below S$500,000

Fong Choon Khin 58 13 – 29 100

Raju Narayan 60 13 – 27 100

Ann Yong 55 15 – 30 100

^ Includes equity compensation awarded under the Parkway Scheme 2001 and Share Plan, based on fair value at grant date. The actual number of performance shares to be delivered will depend on the achievement of prescribed performance targets as set out in the Share Plan.

* Appointed on 13/10/2009** For the period from 16/03/2009 to 31/12/2009# Left on 18/06/2009

162





Remuneration Banding (cont’d)

The Company does not have any long-term incentive scheme apart from the existing Parkway Scheme 2001 and

the Share Plan (CCG 2005, Guidelines 9.2 and 9.4). Details of the Parkway Scheme 2001 and the Share Plan

are set out in the Directors’ Report (CCG 2005, Guidelines 8.4 and 9.4).

None of the employees holding managerial position within the Group during the year was an immediate family

member of any director or the Managing Director of the Company (CCG 2005, Guideline 9.3).

Accountability and Audit

In presenting the annual financial statements and quarterly announcements to Shareholders, it is the aim of the

Board to provide Shareholders with a balanced and comprehensible assessment of the Group’s performance,

position and prospects which extends to interim and other price sensitive public reports, and reports to regulators

(if required) (CCG 2005, Guideline 10.1). Management currently provides the Board with appropriately detailed

management accounts of the Group’s performance, position and prospects on a monthly basis (CCG 2005,

Guideline 10.2).

Internal Controls

The Board acknowledges that it is responsible for the overall internal control framework, but recognises that

no cost effective internal control system will preclude all errors and irregularities, as a system is designed to

manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable

and not absolute assurance against material misstatement or loss. Nonetheless, the ARMC will:

(a) satisfy itself, by such means as it shall consider appropriate, that adequate counter measures (i.e.

mechanisms and processes, such as sound internal control systems) are in place to identify and mitigate

any material business risks associated with the Group;

(b) ensure that a review of the effectiveness and adequacy of the Group’s internal controls, including financial,

operational and compliance controls, and risk management policies and systems, is conducted at least

annually. Such review can be carried out by internal and/or external auditors (CCG 2005, Guideline

12.1);

(c) ensure that the internal control recommendations made by internal and external auditors have been

implemented by the Management; 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 ACRM review, the Board is satisfied that there are adequate internal controls including financial,

operational, compliance controls and risk management systems in the Company (CCG 2005, Guideline 12.2).

163




Internal Audit

The Group has an in-house internal audit function that is independent of the activities it audits (CCG 2005,

Principle 13). The internal audit unit was established in 1996 to review the effectiveness of the material internal

controls of the Group. The internal auditors are expected to meet or exceed the standards set by nationally or

internationally recognised professional bodies including the Standards for the Professional Practice of Internal

Auditing set by The Institute of Internal Auditors (CCG 2005, Guideline 13.2).

In this framework, the internal audit function provides reasonable assurance that the risks incurred by the Group

in its activities have been identified, analysed and adequately managed by the Management. Internal audit also

makes recommendations to enhance 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 Companies Act, 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 selected group, the Company will make the same disclosure publicly as soon as practicable (CCG

2005, Guideline 14.2). Communication is made through:

(a) annual reports that are prepared and issued to Shareholders. The Board makes every effort to ensure

that the annual report includes all relevant information about the Group, including future developments

and other disclosures required by the Act and 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.

In addition, Shareholders are encouraged to attend the AGM to ensure a high level of accountability and to stay

informed of the Group’s strategy and goals. The AGM is the principal forum for dialogue with Shareholders. The

chairpersons of the ARMC, Nominating Committee and/or Remuneration Committee should, where possible, be

present and available to address questions at general meetings. The external auditor should, where possible,

also be present to assist the directors in addressing any relevant queries by Shareholders (CCG 2005, Guideline

15.3).

164





The notice of the AGM is despatched to Shareholders, together with explanatory notes or a circular on items of

special business, at least 16 days before the meeting. The Board welcomes questions from Shareholders who

have an opportunity to raise issues either informally or formally before or at the AGM (CCG 2005, Guideline

15.1).

Each item of special business included in the notice of the meeting is accompanied, where appropriate, by an

explanation for the proposed resolution. Separate resolutions are proposed for substantially separate issues at

the meeting (CCG 2005, Guideline 15.2).

5 DEALING IN SECURITIES

The Company has issued a policy on dealings in the securities of the Company to its directors and Management,

setting out the implications of insider trading and guidance on such dealings. It has adopted the best practices

on dealings in securities as set out in Rule 1207 (18) of the SGX-ST Listing Manual.

165

Analysis of ShareholdingsAS AT 3 MARCH 2010

Size of Shareholdings

No. of

Shareholders %

No. of

Shares %

1 to 999 339 4.38 99,916 0.01

1,000 to 10,000 5,861 75.80 25,353,695 2.24

10,001 to 1,000,000 1,510 19.53 60,000,435 5.31

1,000,001 AND ABOVE 22 0.29 1,045,076,238 92.44

TOTAL 7,732 100.00 1,130,530,284 100.00

TOP 20 SHAREHOLDERS AS AT 3 MARCH 2010

(as shown in the Register of Members)

No. Name of Shareholders No. of Shares %

1 RAFFLES NOMINEES (PTE) LTD 288,568,214 25.53

2 CITIBANK NOMINEES SINGAPORE PTE LTD 117,165,253 10.36

3 DBS NOMINEES PTE LTD 110,359,638 9.76

4 NEWBRIDGE SINGAPORE CO-INVESTMENT PTE. LTD 94,689,188 8.38

5 HSBC (SINGAPORE) NOMINEES PTE LTD 90,665,299 8.02

6 NEWBRIDGE SINGAPORE HEALTHCARE PARTNERS PTE. LTD 87,405,404 7.73

7 NEWBRIDGE SINGAPORE MEDICAL PARTNERS PTE. LTD 87,405,404 7.73

8 DBSN SERVICES PTE LTD 78,707,049 6.96

9 KECK SENG (M) BERHAD 33,703,468 2.98

10 UNITED OVERSEAS BANK NOMINEES (PTE) LTD 15,258,970 1.35

11 MERRILL LYNCH (SINGAPORE) PTE LTD 14,952,703 1.32

12 DB NOMINEES (SINGAPORE) PTE LTD 7,372,167 0.65

13 MORGAN STANLEY ASIA (SINGAPORE) PTE LTD 3,750,260 0.33

14 ING NOMINEES (SINGAPORE) PTE LTD 2,460,133 0.22

15 BNP PARIBAS SECURITIES SERVICES SINGAPORE 2,310,348 0.20

16 LIM CHEOK PENG 2,255,000 0.20

17 UOB KAY HIAN PTE LTD 1,601,956 0.14

18 OCBC NOMINEES SINGAPORE PRIVATE LIMITED 1,561,762 0.14

19 PHILLIP SECURITIES PTE LTD 1,422,043 0.13

20 LEE FOUNDATION 1,213,756 0.11

(Others – Less than 1,213,756 shares each) 87,702,269 7.76

TOTAL 1,130,530,284 100.00

PUBLIC FLOAT

Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited requires that at least 10% of the

total number of issued shares excluding treasury shares (excluding preference shares and convertible equity securities)

of a listed company in a class that is listed is at all times held by the public. The Company has complied with this

requirement. As at 3 March 2010, approximately 38.85% of its ordinary shares listed on the Singapore Exchange

Securities Trading Limited were held in the hands of the public.

166



SUBSTANTIAL SHAREHOLDERS AS AT 3 MARCH 2010

(as shown in the Register of Substantial Shareholders)

No. Name of Shareholders

Beneficial

Shareholdings

Deemed

Shareholdings

1 BLUM CAPITAL PARTNERS, L.P. Note 1 – 184,341,258^

2 BLUM G.A. III, LLC Note 1 – 184,341,258^

3 BLUM INVESTMENT PARTNERS, INC. Note 1 – 184,341,258^

4 DAVID BONDERMAN Note 2 – 201,438,403

5 FRANKLIN RESOURCES, INC. – – 67,638,101

6 JAMES COULTER Note 2 – 201,438,403

7 KHAZANAH NASIONAL BERHAD Note 3 – 263,000,352

8 MOUNT KINABALU INVESTMENTS LTD – 263,000,352 –

9 NEWBRIDGE ASIA III, L.P. Note 4 – 89,652,070^

10 NEWBRIDGE ASIA IV, L.P. Note 5 – 182,094,592

11 NEWBRIDGE ASIA ADVISORS III, INC. Note 1 – 184,341,258^

12 NEWBRIDGE ASIA ADVISORS IV, INC. Note 6 – 182,094,592

13 NEWBRIDGE ASIA GENPAR III, L.P. Note 1 – 184,341,258^

14 NEWBRIDGE ASIA GENPAR IV, L.P. Note 6 – 182,094,592

15 NEWBRIDGE MAURITIUS CO-INVESTMENT LIMITED Note 7 – 94,689,188^

16 NEWBRIDGE MAURITIUS HEALTHCARE PARTNERS

LIMITED

Note 8 – 87,405,404^

17 NEWBRIDGE MAURITIUS MEDICAL PARTNERS

LIMITED

Note 9 – 87,405,404^

18 TPG PARKWAY III, L.P. (formerly known as

NEWBRIDGE PARKWAY III, L.P) ^

Note 8 – 87,405,404^

19 TPG PARKWAY IV, L.P. (formerly known as

NEWBRIDGE PARKWAY IV, L.P.) ^

Note 9 – 87,405,404^

20 NEWBRIDGE SINGAPORE CO-INVESTMENT

PTE. LTD.

– 94,689,188^ –

21 NEWBRIDGE SINGAPORE HEALTHCARE PARTNERS

PTE. LTD.

– 87,405,404^ –

22 NEWBRIDGE SINGAPORE MEDICAL PARTNERS

PTE. LTD.

– 87,405,404^ –

23 NEWTON INVESTMENT MANAGEMENT LIMITED Note 10 67,725,695 –

24 RICHARD C BLUM Note 1 – 184,341,258^

25 TARRANT ADVISORS, INC. Note 11 – 271,746,662^

26 TARRANT CAPITAL ADVISORS, INC. Note 11 – 271,746,662^

27 TEMPLETON GLOBAL ADVISORS LIMITED Note 18 – 56,950,998

28 TEMPLETON GLOBAL HOLDINGS LIMITED Note 17 – 56,950,998

29 TEMPLETON INTERNATIONAL, INC. Note 16 – 67,388,101

30 TEMPLETON WORLDWIDE, INC. Note 15 – 67,388,101

31 THE BANK OF NEW YORK MELLON CORPORATION – – 67,758,890

32 TPG ASIA ADVISORS V, INC Note 12 – 133,376,810

167


No. Name of Shareholders

Beneficial

Shareholdings

Deemed

Shareholdings

33 TPG ASIA GENPAR V, L.P. Note 12 – 133,376,810

34 TPG ASIA V, L.P. Note 13 – 133,376,810

35 TPG HEALTHCARE ASIA V, LTD Note 14 – 60,496,821

36 TPG PARKWAY, L.P. (formerly known as

NEWBRIDGE PARKWAY, L.P.)

Note 7 – 94,689,188^

37 TPG PROFESSIONALS, L.P. Note 6 – 182,094,592

38 TPG 2006 VSC, L.P. Note 6 – 182,094,592

39 TPG 2007 VSC, L.P. Note 6 – 182,094,592

^ As confirmed by the TPG Group. Adjustments to shareholdings were primarily due to the subscription of rights shares pursuant to the Rights Issues of the Company which were completed on 14 December 2006 and 16 June 2008 without any resulting change in the percentage level of interests in the Company.

Note 1 – Deemed interest by virtue of being associated with Newbridge Asia III, L.P. and Newbridge Singapore Co-Investment Pte Ltd under Section 7 of the Companies Act.

Note 2 – Deemed interest by virtue of being associated with Newbridge Singapore Co-Investment Pte Ltd, Newbridge Singapore Medical Partners Pte Ltd and TPG Healthcare Asia V, Ltd.

Note 3 – Mount Kinabalu Investments Ltd (“MRI”) is a wholly-owned subsidiary of Khazanah Nasional Berhad (“Khazanah”) and pursuant to Section 7 of the Companies Act, Khazanah is deemed to have an interest in MRI’s shares in Parkway Holdings Limited.

Note 4 – (i) Deemed interest by virtue of being associated with Newbridge Singapore Healthcare Partners Pte Ltd under Section 7 of the Companies Act

(ii) Deemed interest in shares in Parkway Holdings Limited held by Lim Cheok Peng pursuant to an agreement dated 10 June 2005 between, inter alia, Lim Cheok Peng and Newbridge Asia III, L.P.

(iii) Deemed interest in shares in Parkway Holdings Limited held by Richard Seow pursuant to agreements dated 10 June 2005 between, inter alia, Richard Seow and Newbridge Asia III, L.P.

Note 5 – Deemed interest by virtue of being associated with Newbridge Singapore Medical Partners Pte Ltd and TPG Parkway, LP (formerly known as Newbridge Parkway, LP) under Section 7 of the Companies Act.

Note 6 – Deemed interest by virtue of being associated with Newbridge Asia IV, LP under Section 7 of the Companies Act.Note 7 – Deemed interest by virtue of being associated with Newbridge Singapore Co-Investment Pte Ltd under Section 7 of the

Companies Act.Note 8 – Deemed interest by virtue of being associated with Newbridge Singapore Healthcare Partners Pte Ltd under Section 7

of the Companies Act.Note 9 – Deemed interest by virtue of being associated with Newbridge Singapore Medical Partners Pte Ltd under Section 7 of

the Companies Act.Note 10 – Subsidiary of The Bank of New York Mellon Corporation.Note 11 – Deemed interest by virtue of being associated with Newbridge Asia Ill, L.P., Newbridge Singapore Co-Investment Pte

Ltd and Newbridge Singapore Medical Partners Pte Ltd under Section 7 of the Companies Act.Note 12 – Deemed interest by virtue of being associated with TPG Asia V, LP under Section 7 of the Companies Act.Note 13 – Deemed interest by virtue of being associated with TPG Healthcare Asia V, Ltd and TPG Parkway, LP (formerly known as

Newbridge Parkway, LP) under Section 7 of the Companies Act.

168



Note 14 – Deemed interest under Section 7 of the Companies Act in:(i) 19,343,811 shares in Parkway Holdings Limited held by Newbridge Singapore Medical Partners Pte Ltd pursuant to an

exchangeable note agreement dated 9 June 2008 entered into between TPG Healthcare Asia V, Ltd and Newbridge Mauritius Medical Partners Limited.

(ii) 19,343,811 shares in Parkway Holdings Limited held by Newbridge Singapore Healthcare Partners Pte Ltd pursuant to an exchangeable note agreement dated 9 June 2008 entered into between TPG Healthcare Asia V, Ltd and Newbridge Mauritius Healthcare Partners Limited.

(iii) 21,809,199 shares in Parkway Holdings Limited held by Newbridge Singapore Co-Investment Pte Ltd pursuant to an exchangeable note agreement dated 9 June 2008 entered into between TPG Healthcare Asia V, Ltd and Newbridge Mauritius Co-Investment Limited.

Note 15 – Wholly-owned subsidiary of Franklin Resources, Inc.Note 16 – Wholly-owned subsidiary of Templeton Worldwide, Inc. which is a wholly-owned subsidiary of Franklin Resources, Inc.Note 17 – Wholly-owned subsidiary of Templeton Global Holdings Ltd., which is wholly-owned subsidiary of Templetion International

Inc., which is wholly-owned subsidiary of Templeton Worldwide, Inc. which is a wholly-owned subsidiary of Franklin Resources, Inc.

Note 18 – Wholly-owned subsidiary of Templetion International Inc., which is wholly-owned subsidiary of Templeton Worldwide, Inc. which is a wholly-owned subsidiary of Franklin Resources, Inc.

PAR

KW

AY H

OLD

ING

S LIM

ITED

Annual R

eport 2009


B u i l d i n g t h e F u t u r e o f H e a l t h c a r e

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

111 Somerset Road#15-01TripleOne SomersetSingapore 238164Tel: (65) 6307 7880Fax: (65) 6738 2036