ANNUAL REPORT 2017 - hmi.com.sg

1 HEALTH MANAGEMENT INTERNATIONAL LTD. ANNUAL REPORT 2017 . ANNUAL REPORT 2017 . HEALTH MANAGEMENT INTERNATIONAL LTD. (Company Registration No. 199805241E) ADVANCING HEALTHCARE, 7 Temasek Boulevard #12-10 | Suntec Tower One | Singapore 038987. T (65) 6804 9888 | F (65) 6253 8259. CHANGING LIVES. CORPORATE. CONTENTS INFORMATION. 01 Vision & Mission BOARD OF DIRECTORS AUDIT AND RISK MANAGEMENT COMPANY SECRETARY. Dr Gan See Khem COMMITTEE Ms Noraini Binte 02 Corporate Structure Executive Chairman and Professor Annie Koh - Chairman Noor Mohamed Abdul Latiff Managing Director Professor Tan Chin Tiong 03 5-Year Financial Highlights Dr Cheah Way Mun SHARE REGISTRAR. 04 Chairman's Message Ms Chin Wei Jia Boardroom Corporate & Advisory Executive Director and NOMINATING COMMITTEE Services Pte. Ltd. 07 Group CEO's Message Group Chief Executive Officer Professor Tan Chin Tiong - Chairman 50 Raffles Place #32-01.

2 Review of Operations Professor Annie Koh Singapore Land Tower Mr Chin Wei Yao Dr Cheah Way Mun Singapore 048623. 14 Community Engagement Executive Director and Tel: (65) 6536 5355. Programmes Group Chief Financial Officer REMUNERATION COMMITTEE. 18 Board of Directors Professor Tan Chin Tiong - Chairman INDEPENDENT AUDITOR. Professor Annie Koh Professor Annie Koh PricewaterhouseCoopers LLP. 22 Senior Management Lead Independent Director Dr Cheah Way Mun 8 Cross Street #17-00. PWC Building 25 Code of Corporate Governance REPORT Dr Cheah Way Mun REGISTERED OFFICE Singapore 048424. Independent Non-Executive Director 7 Temasek Boulevard #12-10 Tel: (65) 6236 3388. 45 Financial Contents Suntec Tower One Professor Tan Chin Tiong Singapore 038987 Audit Partner-in-charge: Independent Non-Executive Director Tel: (65) 6804 9888 Mr Daniel Khoo Fax: (65) 6253 8259 Effective from the financial year Website: ended 30 June 2017 .

3 ANNUAL REPORT 2017 HEALTH MANAGEMENT INTERNATIONAL LTD 01. Advancing Health Management International Ltd ( HMI or the Group ) is a growing private healthcare provider with Healthcare, presence in Singapore, Malaysia and Indonesia. Changing The Group's key assets comprise of two tertiary hospitals in Malaysia, the 340 bed capacity Mahkota Medical Centre Lives ( Mahkota ) in Malacca and the 218 bed capacity Regency Specialist Hospital ( Regency ) in Johor. The hospitals are supported by a network of 16 patient referral centres across the region. The Group also owns and operates the HMI Institute of Health Sciences in Singapore. Vision Improving lives through quality healthcare Mission To be a leading regional healthcare company committed to the delivery of quality services with care and compassion, that: Creates sustainable stakeholder value.

4 Improves the quality of human life;. Adheres to the highest ethical standards; and Attracts and develops quality human capital 02 HEALTH MANAGEMENT INTERNATIONAL LTD ANNUAL REPORT 2017 . CORPORATE. STRUCTURE. 100% 100% 100%. Mahkota Regency HMI Institute of Medical Centre Specialist Hospital Health Sciences HIGHLIGHTS OF. OUR BUSINESSES. Mahkota Medical Centre Leader in Malaysian medical tourism with more Regency Specialist than 120 practicing Hospital One of the consultants fastest growing private hospitals in Malaysia with more than 70 practicing consultants HMI Institute of Health Sciences . Skills Future Singapore accredited Continuing and Education Centre. Trained more than 100,000 individuals in emergency life support skills. ANNUAL REPORT 2017 HEALTH MANAGEMENT INTERNATIONAL LTD 03. 5-YEAR FINANCIAL. HIGHLIGHTS. Group Revenue in RMm Group EBITDA(a) in RMm Revenue Contribution Mahkota Medical Centre 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Regency Specialist Hospital HMI Institute of Health Sciences Group PATMI in RMm Group Basic EPS in RM cents Growth Rates EBITDA.

5 REVENUE. PATMI. 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 . Units FY2013 FY2014 FY2015 FY2016 FY2017. Revenue RM'000 245,415 292,912 345,224 397,810 435,765. Revenue Growth % Earnings Before Interest, Taxes, Depreciation and Amortisation ( EBITDA )(a) RM'000 41,998 60,896 74,567 84,531 96,111. EBITDA Margin % Net Profit After Tax ( NPAT ) RM'000 19,171 36,042 53,357 45,451 42,213. Net Profit Attributable to Equity Holders ( PATMI ) RM'000 7,574 16,027 27,643 19,899 20,590. Basic Earnings per Share RM cents Total Debt RM'000 63,648 55,378 40,576 41,857 163,748. Net Debt/(Net Cash) RM'000 53,949 29,401 1,500 (37,071) 86,994. Net Debt/EBITDA x ( ) (a). EBITDA is adjusted for effects of asset restructuring exercise undertaken in FY2015; net currency gains or losses; share of profit of associated corporations;. and professional fees relating to the consolidation in the ownership of Mahkota and Regency which was completed on 27th March 2017 .

6 04 HEALTH MANAGEMENT INTERNATIONAL LTD ANNUAL REPORT 2017 . CHAIRMAN'S. MESSAGE. In view of the Group's financial performance and strong balance sheet, the Board is pleased to propose a final ordinary dividend of RM cents per share to reward shareholders for their strong support. DEAR SHAREHOLDERS, On behalf of the Board of Directors, I am pleased to present Consolidating in Pursuit of our Regional Healthcare our ANNUAL REPORT for the financial year ended 30 June 2017 Strategy ( FY2017 ). On 11 November 2016, we announced the agreement to In Malaysia, subdued economic growth continued to weigh consolidate the ownership of our two hospitals in Malaysia, on the economy while the weak Malaysian Ringgit contributed the previously Mahkota Medical Centre to rising costs and a dampening of consumer sentiment. In ( Mahkota ) and the Regency Specialist Indonesia, Southeast Asia's largest economy and our most Hospital ( Regency ) to 100% each, for an aggregate important overseas market, the resource-rich country has purchase price of RM million (S$ million1).

7 This been impacted by a drop in commodity prices leading to was funded by a combination of cash and million new subdued growth and declining household consumption. HMI shares issued to the non-controlling shareholders of Mahkota and Regency. The cash component was funded Despite the macroeconomic headwinds, the Group's resilient by a senior secured five-year term loan of S$ million, business model translated to sustained growth at our two a renounceable rights issue of new HMI shares of S$ hospitals as revenue increased year-on-year ( yoy ) to million and internal cash resources. RM million for FY2017. This growth in revenue was achieved in spite of two Hari Raya holidays falling within our With your support at our extraordinary general meeting financial year, a rare occurrence. Similarly, the Group's profit on 10 February 2017 , the rights issue was launched on after tax attributable to shareholders improved yoy to 23 February 2017 .

8 A total of million rights shares were RM million. Backed by robust operations, the Group's offered at S$ per share, on the basis of 11 rights shares core net profit attributable to shareholders increased for every 200 existing shares held. When the offer closed on yoy to RM million. In view of the Group's financial 9 March 2017 , we received applications for a total of performance and strong balance sheet, the Board is pleased million rights shares, representing approximately times to propose a final ordinary dividend of RM cents per share of the number of rights shares offered. Upon its conclusion, to reward shareholders for their strong support. we were successful in raising our target of S$ million towards funding of the consolidation. S$ :RM 1. ANNUAL REPORT 2017 HEALTH MANAGEMENT INTERNATIONAL LTD 05. In line with our strategy of enhancing long-term shareholder value, the consolidation exercise provided a positive financial impact to shareholders with an immediate accretion to earnings per share and net profit attributable to shareholders.

9 Following the conclusion of the consolidation of ownership on 27 March 2017 , our 4Q2017 results announcement represented the first quarter in which we reported a fully consolidated set of financial results. Accordingly, the Group's net profit attributable to shareholders increased yoy to RM million for 4Q2017. Going forward, HMI. shareholders will continue to benefit from a clearer ownership structure with 100% of Mahkota's and Regency's earnings being attributable to shareholders. In the years ahead, our enlarged listed healthcare platform will provide us with the foundation to execute our regional growth strategies with greater operational flexibility and options for funding. at Mahkota we have built one of the most comprehensive Delivering Healthcare Excellence with Care and cancer centres south of Kuala Lumpur with fully equipped Compassion suites for treatment and diagnostic facilities.

10 Our PET. scanner is the first and only one available in Malacca and During the course of the year, our hospitals saw more than complements our Center of Excellence ( COE ) in cancer. 445,000 patients, a record achievement for the Group. Similarly, at Regency, we have built the first and only Both Mahkota and Regency continue to go from strength Emergency Specialist Centre in Malaysia with round-the- to strength as leading tertiary hospitals serving the local clock coverage by emergency specialists capable of handling communities in Malacca and Johor, as well as patients from critical accident and emergency cases. across the region. With close to 200 practicing specialists, our one-stop multi-disciplinary hospitals offer a comprehensive While expanding our specialist offerings, we pride ourselves range of medical and surgical disciplines at a competitive on the ability to provide the highest level of patient care and price for both local and overseas patients.