9. Management

  9.1 Management Structure as at 31 December 2009

1.  Structure of the Board of Directors and its Sub-Committees

Board of Directors

  The Board of Directors of the Company comprises 12 Directors, four of
  whom are Independent Directors representing one-third of total Board
  members as follows:

  ---------------------- ---------------------- --------------------------
  Name                                          Position

  1. Mr. Ho              KwonPing               Chairman

  2. Mr. Surapon         Supratya               Director

  3. Mr. Michael         Ramon Ayling           Director

  4. Mr. Ho              KwonCjan               Director

  5. Mr. Vudhiphol       Suriyabhivadh          Independent Director*

  6. Dr. Jingjai         Hanchanlash            Independent Director*

  7. Mr. Udom            Vichayabhai            Independent Director*

  8. Mr. Satit           Rungkasiri             Independent Director*

  9. Mr. Steven          Murray Small           Director

  10. Mr. Ariel          P. Vera                Director

  11. Mr. Bernold        Olaf Schroeder         Director

  12. Mr. Stuart         David Reading          Director
  ---------------------- ---------------------- --------------------------

  * The definition of “Independent Director” is disclosed under the
  section of “Corporate Governance”.

  Duties and Responsibilities of the Company’s Board of Directors

  The Board’s primary functions are to set Company’s policy and overall
  strategy for the Group and to provide effective oversight of the
  management of the Group’s business and affairs. Apart from its
  statutory duties, the responsibilities of the Board include:

  1. formulating and approving broad policies, strategies and financial
  objectives of the Group;

  2. reviewing the financial performance and taking responsibility for
  the financial statements of the Group;

  3. monitoring and approving the Group’s key operational initiatives,
  annual budget, major investment and funding decisions;

  4. ensuring that the adequacy of internal controls and risk management
  of the Group is regularly reviewed and evaluated;

  5. approving the nominations of Board of Directors and appointments to
  the various Board committees;

  6. assuming responsibility for corporate governance; and

  7. approving the Charter of the Audit and Risk Committee and
  Nomination and Remuneration Committee so as to clearly state the scope
  of its duties and responsibilities.

  These functions are either carried out directly by the Board or
  through Sub-Committees established by the Board, principally the Audit
  and Risk Committee and Nomination and Remuneration Committee. The
  delegation of authority by the Board to Sub-Committees enables the
  Board to achieve operational efficiency by empowering these
  Sub-Committees to decide on matters within certain limits of authority
  and yet maintain control over major policies and decisions.

  The Term of Office

  The term of office of a director of the Board shall be 3 years. A
  director of the Board who vacates his/her office by rotation may be
  re-appointed.

  Audit and Risk Committee

  The Audit and Risk Committee comprises 3 Independent Directors of the
  Company as follows:

  --------------------- ------------------------------ ------------------
  Name                                                 Position

  1. Mr. Vudhiphol      Suriyabhivadh                  Chairman

  2. Dr. Jingjai        Hanchanlash                    Member

  3. Mr. Udom           Vichayabhai                    Member
  --------------------- ------------------------------ ------------------

  Mr. Vudhiphol Suriyabhivadh, the Chairman of the Audit and Risk
  Committee, has adequate expertise and experience to review the
  creditability of the financial reports. He gains his experience in
  reviewing the financial reports of some listed companies in the Stock
  Exchange of Thailand.

  Duties and Responsibilities of the Audit and Risk Committee

1.  To seek to ensure that the financial reports of the Company are
    accurate and sufficient;

2.  To seek to ensure that the Company has appropriate and effective
    internal controls and internal audit systems as well as to determine
    the independence of the internal audit unit, and to approve the
    appointment, transfer and termination of employment of the chief of
    the internal audit unit;

3.  To consider, select, nominate an independent person to be the
    external auditor of the Company and propose fees for such person, as
    well as to attend a non-management meeting with the external auditor
    at least once a year;

4.  To be responsible for the resolution of disagreements between
    management and the external auditor regarding financial reporting;

5.  To seek to ensure that the Company has complied with the law on
    securities and exchange, the Stock Exchange of Thailand’s
    regulations, and the laws related to the business of the Company;

6.  To seek to ensure that the connected transactions or transactions
    that may lead to conflicts of interests are in compliance with the
    laws and the Stock Exchange of Thailand’s regulations, and are
    reasonable and for the highest benefit of the Company;

7.  To review or discuss, as and when appropriate, policies regarding
    risk assessment and risk management and the steps management has
    taken to monitor and control such exposures;

8.  To seek to oversee and ensure a continuous process for managing risk
    and to report on all areas of concern to the Board;

9.  To review and assess the adequacy of the Charter of Audit and Risk
    Committee annually and recommend modification to the Board as
    needed;

10. To prepare a report of the Audit and Risk Committee to be disclosed
    in the annual report of the Company, which must be signed by the
    Chairman of the Audit and Risk Committee; comprising at least the
    following information:

    a.  an opinion on the accuracy, completeness and creditability of
        the Company’s financial report,

    b.  an opinion on the adequacy of the Company’s internal control
        system,

    c.  an opinion on the compliance with the law on securities and
        exchange, the Stock Exchange of Thailand’s regulations, or the
        laws related to the business of the Company,

    d.  an opinion on the suitability of an auditor,

    e.  an opinion on the transactions that may lead to conflicts of
        interests,

    f.  the number of the Audit and Risk Committee meetings, and the
        attendance of such meetings by each committee member,

    g.  an opinion or overview comment received by the Audit and Risk
        committee from its performance of duties in accordance with the
        charter, and

    h.  other transactions which, according to the Audit and Risk
        committee’s opinion, should be known to the shareholders and
        general investors, subject to the scope of duties and
        responsibilities assigned by the Board;

11. In performing the duty of the Audit and Risk Committee, if there is
    a transaction or any of the following acts which may materially
    affect the Company’s financial condition and operating results:

a.  a transaction which causes a conflict of interest;

b.  any fraud, irregularity, or material defect in an internal control
    system; or

c.  an infringement of the law on securities and exchange, the Stock
    Exchange of Thailand’s regulations, or any law related to the
    business of the Company.

  the Audit and Risk Committee shall report such transaction or act to
  the Board for rectification within the period of time that the Audit
  and Risk Committee thinks fit. If the Board or management fails to
  make a rectification within such period of time, any Audit and Risk
  Committee member may report on such transaction or act to the Office
  of the Securities and Exchange Commission or the Stock Exchange of
  Thailand;

12. To investigate and report the preliminary result to the Office of
    the Securities and Exchange Commission and the external auditor
    within 30 days upon receipt of the fact from the external auditor in
    relation to any suspicious circumstance that the director, manager
    or any person responsible for the operation of the Company commits
    an offence under the law on securities and exchange; and

13. To perform any other acts authorised by the Board of Directors of
    the Company with the approval of the Audit and Risk Committee.

  In order that the duties and responsibilities of the Audit and Risk
  Committee can be fulfilled, the Audit and Risk Committee shall have
  the power to investigate related persons and matters within the scope
  of the authority and duty of the Audit and Risk Committee and, with
  the approval of the Board of Directors, shall have the power to employ
  or ask a specialist to provide advice and opinions as deemed
  appropriate by the Audit and Risk Committee.

  The Term of Office

  The term of office of a member of the Audit and Risk Committee shall
  be 2 years. A member of the Audit and Risk Committee who vacates
  his/her office by rotation may be re-appointed.

  Nomination and Remuneration Committee

  The Remuneration Committee comprises 3 Independent Directors of the
  Company as follows:

  --------------------- -------------------- -----------------------------
  Name                                       Position

  1. Dr. Jingjai        Hanchanlash          Chairman

  2. Mr. Udom           Vichayabhai          Member

  3. Mr. Satit          Rungkasiri           Member
  --------------------- -------------------- -----------------------------

Duties and Responsibilities of the Nomination and Remuneration Committee

  1. To propose guidelines and make broad recommendations for the annual
  salary increment and bonus policies for the Company;

  2. To review and if necessary, propose changes to the remuneration of
  the Company’s directors serving on the Board of Directors, Audit and
  Risk Committee and Nomination and Remuneration Committee;

  3. To review and if necessary, propose changes or additions to senior
  management welfare, benefits, (such as employee stock options and
  other employee welfare allowances, subsidies and schemes), salary
  increment and bonus policies. The emoluments of individual employees
  shall be determined by the management of the Company;

  4. To establish criteria for Board membership;

  5. To formulate a standard and transparent process for the selection
  of directors;

  6. To propose and/or evaluate directorial candidates and Board
  committee members for consideration by the Board when there is a
  vacancy;

  7. To assess independent directors to identify if the independence of
  any is compromised and if new independent directors are required under
  the Board’s policy;

  8. To inform the Board of the names of directors and Board committee
  members who are retiring by rotation and make recommendations to the
  Board as to whether the Board should support the renomination of those
  retiring directors and committee members;

  9. To review the Committee Charter at least once a year and recommend
  modifications to the Board of Directors as needed; and

  10. To report to the Board of Directors on the Committee’s activities
  and findings.

  To assist the Remuneration Committee in achieving its objectives, the
  Remuneration Committee shall have the discretion to appoint
  appropriate third party consultants to review existing employee
  related policies, propose new employee benefit and welfare programs
  and/or undertake other HR related research and studies.

  The Term of Office

  The term of office of a member of the Remuneration Committee shall be
  2 years. A member of the Remuneration Committee who vacates his/her
  office by rotation may be re-appointed.

9.1.2 Structure of Management

  Management

+------------------+--------------+-----------------------------------+
| Name             |              | Position                          |
+------------------+--------------+-----------------------------------+
| 1. Mr. Ho        | KwonPing     | Chief Executive Officer           |
+------------------+--------------+-----------------------------------+
| 2. Mr. Surapon   | Supratya     | Deputy Chairman                   |
+------------------+--------------+-----------------------------------+
| 3. Mr. Michael   | R. Ayling    | Managing Director                 |
+------------------+--------------+-----------------------------------+
| 4. Mr. Ho        | KwonCjan     | Managing Director (Design         |
|                  |              | Services)                         |
+------------------+--------------+-----------------------------------+
| 5. Mr. Stuart    | D. Reading   | Senior Assistant Vice President - |
|                  |              | Finance                           |
+------------------+--------------+-----------------------------------+
| 6. Ms. Sirivan   | Sku          | Senior Assistant Vice President – |
|                  | lkerevathana | Finance and Company Secretary     |
+------------------+--------------+-----------------------------------+
| 7. Mr. Kuan      | Chiet        | Senior Assistant Vice President - |
|                  |              |                                   |
|                  |              | Group Asset Management            |
+------------------+--------------+-----------------------------------+
| 8. Mr. Niyom     | Tass         | Senior Assistant Vice President - |
|                  | aneetipagorn | Corporate Affairs and Community   |
|                  |              | Relations                         |
+------------------+--------------+-----------------------------------+
| 9. Mr. Niphon    | Kitisook     | Senior Assistant Vice President - |
|                  |              | Resort and Property Development,  |
|                  |              | Laguna Phuket                     |
+------------------+--------------+-----------------------------------+

  9.2 Method of Appointment and Removal of Directors as included in the
  Company’s Articles of Association

  9.2.1 Appointment of Directors

(a) The number of the Board of Directors shall not be less than 5
    directors and at least half of the total directors shall reside in
    Thailand.

(b) Directors shall be elected in shareholders’ meeting in accordance
    with following rules and procedures:

-   In voting to elect directors, the votes shall be non-cumulative.

-   In voting, the shares of each shareholder shall be counted as one
    vote for every share.

(c) If any vacancy occurs in the Board of Directors other than by
    rotation, the Board of Directors shall elect another person who is
    qualified and has not been prohibited by Section 68 of the Public
    Limited Company Act. B.E. 2535 to be a director for the next
    directors’ meeting, except when the period of office for the
    vacating director is less than 2 months, it is then not necessary to
    appoint any new director. The appointed person shall stay in office
    for the remaining period of the vacating director.

  In the event where there are director positions vacant and the number
  of remaining directors are unable to form a quorum, the remaining
  directors shall transact on behalf of the Board of Directors only to
  arrange for shareholders’ meeting to appoint new directors for the
  vacant positions.

  The shareholders’ meeting to appoint new directors to fill the vacant
  positions shall be made within 1 month from the date they became
  vacant.

  9.2.2 Removal of Directors

(a) At each Annual General Meeting, one-third of the directors shall
    retire from office, or if their number shall not be a multiple of 3,
    then the number nearest to one-third shall retire from office.

  Retiring directors are eligible for re-election.

(b) Apart from retiring by rotation, a director position shall also be
    vacated upon:-

-   Death

-   Resignation

-   Lack of qualification or subject to any prohibition under Articles
    68 of the Public Limited Company Act B.E. 2535

-   Removal by a resolution of a shareholders’ meeting

-   Removal by a court order

(c) A director may be removed by a resolution of the shareholders’
    meeting passed by a vote of not less than three-fourths of the
    number of the shareholders who attend the meeting and are entitled
    to vote and the shares which voted shall not be less than half of
    the total shares of the shareholders who attended the meeting and
    are entitled to vote thereon.

  9.3 Remuneration

1.  Remuneration Policy

  Employees’ Remuneration

  The Group’s remuneration policy is built on a transparent appraisal
  system and formulated to drive performance of its employees, who are
  its most important asset. The objective of the Group’s remuneration
  policy is to attract, motivate, reward and retain quality staff. The
  typical compensation package for employees comprises basic salary,
  variable performance bonus, allowances, as well as benefits. In
  determining the composition of the package, the nature of the role
  performed and market practice are taken into consideration. To ensure
  that its remuneration package is competitive with the industry’s
  benchmark, the Group periodically reviews its base salary ranges and
  benefits package with comparative groups in the hospitality sector.

  The remuneration for the Group’s senior management and senior
  executives aims to motivate them to achieve the Group’s annual and
  long-term goals to ensure that they are aligned with shareholders’
  interests. Performance-related elements therefore form a part of
  senior management and senior executives’ total remuneration.

  The Group’s approach to rewarding employees not only helps to attract,
  retain and motivate talented employees but also fosters a
  performance-oriented culture across the organization that will help
  attain the Group’s financial objectives.

  Directors’ Remuneration

  The fees for Independent Directors, Non-Executive Directors and
  Executive Directors reflect the scope and extent of a director’s
  responsibilities and obligations. They are measured against industry
  benchmarks and are competitive. Directors’ fees are subject to
  shareholders’ approval at the AGM. In addition to directors’ fees,
  Independent Directors also receive compensation in kind in terms of
  goods and services provided at hotels operated by the Group.

  Remuneration paid to directors of the Board and management in 2009 is
  disclosed in the Company’s 2009 annual report under the section
  “Remuneration & Other Benefits of the Directors during the Year 2009”.

2.  Remuneration and Other Benefits of the Directors during the Year
    2009

[]

 

  9.3.3 Directors’ and Managements’ Remuneration

Monetary Remuneration

(a) Directors

  Monetary remuneration for the Directors and Sub-Committee Members in
  2009 was in the total amount of Baht 8,450,000.

  Details as shown in the section “Remuneration & Other Benefits of the
  Directors during the Year 2009”.

(b) Management

  Monetary remuneration for 9 management in 2009 was in the total amount
  of Baht 65,853,303.04 consisting of salaries, bonus, car allowance,
  housing allowance, social security payment, provident fund payment,
  tax paid by the Company, laptop allowance, children education subsidy,
  medical expenses, etc.

  Non-Monetary Remunerations

(a) Directors

  Benefits in the form of spa and gallery vouchers for the Independent
  Directors in 2009 were in the total amount of Baht 742,500.

  Details as shown in the section “Remuneration & Other Benefits of the
  Directors during the Year 2009”.

(b) Management

  Employee benefits such as personal accident and health insurance and
  complimentary vouchers, etc., for 9 management in 2009 were in the
  total amount of Baht 4,313,670.55.

  9.4 Corporate Governance

  The Company is committed to maintaining high standards of corporate
  governance within the Company in order to protect and enhance
  long-term shareholder value. The Company has adopted and continuously
  developed a set of good corporate governance practices and policies
  which are modeled on principles advocated by The Stock Exchange of
  Thailand (SET) as per the details set out in the following sections.

  1. Rights of Shareholders

  The Company recognises the importance of shareholders' rights. In
  2009, the Company’s Annual General Meeting was held on April 24, 2009.
  The Company conducted the meeting and fully complied with all relevant
  laws and regulations in respect of shareholders’ rights in the
  following manner.

  1.1 All shareholders have the same basis and rights in the casting of
  votes at meetings and the receipt of dividends when declared by the
  Company. These are calculated based on their respective shareholding
  in the Company.

  1.2 At every shareholders’ meeting, shareholders are given the right
  to approve important matters such as election of directors
  (shareholders can elect directors individually), directors’
  remuneration, appointment of auditors and dividend payment, etc.

  1.3 The Company does not invite the minority shareholders to propose
  matters not included in the meeting agendas as additional items before
  the meeting date. This is because although Section 89/28 of the
  Securities and Exchange Act (as amended) provides that the
  shareholders may propose that the Board of Directors include the
  matter proposed by the shareholders to be an item on the agenda of a
  shareholders’ meeting, however, the exercise of the right under the
  said Section 89/28 must be in compliance with the notification
  announced by the Capital Market Supervisory Board. Currently, there is
  no such notification in force. Therefore, the Company considers it
  appropriate to still comply with the Public Companies Act (the Plc
  Act). That is, the shareholders are allowed to propose additional
  items for the agenda after a shareholders’ meeting has considered all
  of the items on the agendas set out in the invitation letter.

  1.4 The Company also does not invite the minority shareholders to
  nominate their own candidates to be appointed as the Company's
  directors ahead of the meeting. This is because the Company already
  gives all shareholders an opportunity to nominate their own candidates
  (who meet the requirements under the Plc Act) and to vote for
  candidates at the shareholders’ meeting.

  1.5 The Company has assigned Thailand Securities Depository Company
  Limited, which is the Company’s share registrar, to distribute a
  package containing the notice and agenda of the meeting to the
  shareholders at least 10 days prior to the meeting. The meeting
  documents include the facts and rationales and opinions of the Board
  as well as other information relating to the agenda items such as
  information on the persons nominated for election as directors,
  auditors’ profiles, the part of the Company’s Articles of Association
  that relates to the shareholders' meeting, map to the venue of the
  shareholders’ meeting convenient for attendance, proxy forms,
  documents and evidence of entitlement to attend the meeting, etc. This
  is to enable the shareholders to prepare themselves for the meeting.
  In addition, the notice of the shareholders’ meeting will be
  advertised in the press, all information contained in the meeting
  documents will also be posted on the Company’s website
  (www.lagunaresorts.com) at least 1 month prior to the meeting.
  Moreover, shareholders are always invited to register at least 1 hour
  before the meeting begins.

  1.6 Before the start of every shareholder’s meeting, the Company
  Secretary will explain the voting methodology to shareholders. A team
  of legal counsels from a leading international law firm is invited to
  verify the registration procedure before the Chairman of the meeting
  announces to the shareholders, the number of shareholders and proxy
  holders present at the meeting and the number of shares held by them.
  The legal counsels also verify the vote counting procedure in respect
  of each agenda item before the votes are announced as resolution of
  the shareholders’ meeting. Shareholders may verify the detailed
  results of the vote of each agenda item at the end of each meeting.
  The same results and a summary of questions from shareholders will
  also be included in the minutes of the meeting which are accurately
  and completely documented in all material aspects and will be sent to
  all shareholders for their review prior to the following meeting. The
  minutes of the 2009 Annual General Meeting was posted on the Company’s
  website www.lagunaresorts.com within 14 days after the meeting was
  held.

  1.7 The Company’s policy in conducting shareholders’ meetings is not
  only to meet all legal requirements but to also provide a platform and
  opportunity for shareholders to communicate their views and ask the
  directors and the management questions regarding matters affecting the
  Company. The Chairman allocates sufficient time for the meeting and
  conducts the meeting in an appropriate and transparent manner. During
  the meeting, shareholders are allowed to give comments and ask
  questions before the resolution on each agenda item is summarized. In
  addition, to facilitate shareholders in protecting their rights,
  shareholders who have any questions that require the Company’s
  clarification during the meeting may send their questions in advance
  at “ir@lagunaresorts.com” or fax them to 66 (2) 2285 0733.

  1.8 Apart from the external auditor who will attend the Annual General
  Meeting, the Chairman of the Board, the Chairman of the Audit and Risk
  Committee and the Chairman of the Nomination and Remuneration
  Committee, and all of the Company’s directors will also endeavour as
  far as reasonably practicable to be present at the shareholders’
  meeting in order to assist the Board in addressing queries raised by
  the shareholders. The Company also invites its legal counsels from a
  leading international law firm to attend the meeting in case a legal
  question requiring clarification arises during the meeting.
  Furthermore, the Company provides a professional translator to be
  present at the meeting to assist shareholders and the Board to
  communicate more effectively in English and Thai. At the previous 2009
  Annual General Meeting, 10 out of total 12 directors were present at
  the Meeting, comprising the Chairman of the Board, the Chairman of the
  Audit and Risk Committee, the Chairman of the Nomination and
  Remuneration Committee, and other directors. Details of their names
  are stated in the minutes of the 2009 Annual General Meeting.

  1.9 Any shareholders who arrive at the meeting after the meeting has
  begun are still entitled to vote on the agenda items that are still
  under consideration and have not been voted upon.

  1.10 News and information relating to the Company is disseminated
  through the Company’s website (www.lagunaresorts.com), which includes
  information such as the resolutions of the Company’s Board of
  Directors on important matters, resolutions of the shareholders’
  meetings, financial information, information which may affect the
  Company's share price, Annual Report, etc.

  1.11 According to the assessment carried out by the Thai Investors
  Association, which assessed the quality of the 2009 Annual General
  Meeting, the Company was rated very good.

  2. Equal Treatment of Shareholders

  The Company recognises its duty to ensure equal treatment of
  shareholders by complying with all relevant laws and regulations as
  follows:

  2.1 For shareholders who are unable to attend a meeting in person, the
  Company provides opportunity for such shareholders to appoint another
  person as proxy to attend the meeting on their behalf by using proxy
  form B sent by the Company. Proxy form B is one of the forms
  prescribed by the Ministry of Commerce which allow shareholders to
  make voting directions. Moreover, the Company provides opportunity for
  shareholders to appoint the Company’s independent director as proxy to
  undertake proxy voting on behalf of shareholders who are unable to
  attend the meeting. The name of the independent director is provided
  in the proxy forms, together with the profile of that independent
  director who has been given proxy to vote on behalf of shareholders
  who are unable to attend the meeting, all of which are attached as
  part of the meeting documents.

  2.2 The Company ensures that directors and management are aware of
  their duty to report a change in their holding of the Company’s
  securities to the SEC within 3 business days in accordance with the
  Securities and Exchange Act. The securities holding report is also
  included in the agenda of the Board meeting for the Board's
  acknowledgment once every 3 months.

  2.3 Any director or management who has an interest in, or is related
  to, any transaction between the Company and an interested or related
  person will not participate in the decision making process involving
  such transaction.

  2.4 The Company has formulated a Code of Business Conduct to provide
  guidelines for the Board, senior management and employees of all
  levels to comply with. The Statement includes the prohibition on the
  improper use of insider information for personal benefit or to benefit
  others. Additionally, the Board approved the policy on dealing in
  securities of the Company which prohibits the dealing in the Company's
  shares while in possession of unpublished confidential and
  price-sensitive information during the “embargo period”. Details are
  further described under the heading "Supervision on the Use of Inside
  Information" in the Form 56-1 and in the Company’s Annual Report.
  There is no violation of the policy found during 2009.

  3. Role of Stakeholders

  In its pursuit for sustainable growth and financial returns for its
  shareholders, the Company strives to become a role model corporate
  citizen. It respects the rights of all its stakeholders and conducts
  its operations fairly and strictly in compliance with all laws, rules
  and regulations.

+------------+---------------------------------------------------------+
| Sha        | The Board of Directors is committed to perform its      |
| reholders: | duties honestly, transparently and diligently in the    |
|            | best interest of all its shareholders to preserve and   |
|            | enhance long-term shareholder value. All important      |
|            | information which may have an impact on the Company’s   |
|            | share price and/or shareholders decisions are fully     |
|            | disclosed on a timely manner.                           |
+------------+---------------------------------------------------------+
| Employees: | Being in the hospitality industry, the Company believes |
|            | that its people are its greatest asset. The Company has |
|            | taken steps to ensure that all labour laws are complied |
|            | with and all employees are treated fairly without       |
|            | discrimination or favoritism. The Company offers        |
|            | competitive pay packages and welfare benefits to all    |
|            | its employees and has continual upgrading programs.     |
|            | Additionally, the Company provides its employees a safe |
|            | and conducive working environment, air-conditioned      |
|            | buses and a provident fund. Furthermore, the Company    |
|            | also encourages its employees to attend training        |
|            | related to their line of responsibility to enhance      |
|            | their knowledge and skills.                             |
|            |                                                         |
|            | The Company's Board of Directors approved the Whistle   |
|            | Blowing Policy and communicated this throughout the     |
|            | organization. The policy has provided guidance and a    |
|            | confidential procedure to the Company's employees who   |
|            | feel they need to raise an issue concerning a major     |
|            | wrongdoing, irregularity or impropriety within the      |
|            | Company. As far as the Company’s Board of Directors is  |
|            | aware, there have been no claims or allegations under   |
|            | such policies up until the present.                     |
+------------+---------------------------------------------------------+
| Customers: | The Company aims to provide its guests a safe and       |
|            | unforgettable experience at its hotels and resorts.     |
|            | Safety of its guests is one of the Company’s top        |
|            | priorities and in this regard a safety committee has    |
|            | been formed at each property with the objective of      |
|            | improving the safety of our guests.                     |
+------------+---------------------------------------------------------+
| Co         | The Company believes that competition is the essence of |
| mpetitors: | a free and open market and therefore avoids any actions |
|            | which may prevent, obstruct or discourage potential     |
|            | competitors from entering the markets in which the      |
|            | Company operates in. The Company takes the view that    |
|            | healthy competition encourages product and service      |
|            | innovations in the market place which would increase    |
|            | market standards and ultimately benefit consumers and   |
|            | society at large. The Company will not engage in any    |
|            | fraudulent act to violate or obtain competitors' trade  |
|            | secrets.                                                |
+------------+---------------------------------------------------------+
| Society &  | The Company aims to be a socially responsible company   |
|            | by establishing the Corporate Social Responsibility     |
| En         | Committee to contribute towards environmental           |
| vironment: | conservation programs and to the local community by     |
|            | organizing and participating in various activities such |
|            | as the UNICEF Youth Career Development Programme,       |
|            | National Children’s Day, Education Support, Mangrove    |
|            | Tree Planting, the Sea Turtle Conservation Program,     |
|            | etc.                                                    |
+------------+---------------------------------------------------------+
| Suppliers: | The Company strives to forge long-term business         |
|            | relationships with its suppliers and therefore has the  |
|            | policy to always give a fair profit to its suppliers    |
|            | and to respect payment terms and conditions. In         |
|            | addition, in selecting its suppliers, the Company gives |
|            | all suppliers an equal opportunity to propose their     |
|            | bid.                                                    |
+------------+---------------------------------------------------------+
| Creditors: | The Company considers creditors as important business   |
|            | partners and therefore aims to fulfill all its          |
|            | obligations to its creditors.                           |
+------------+---------------------------------------------------------+

  4. Information Disclosure and Transparency

  The Company’s emphasis on the disclosure of accurate and complete
  information in a transparent and timely manner is shown by the
  following.

  4.1 In the previous year, the Company disclosed all general and
  financial information as well as information which may affect the
  price of the Company’s securities correctly, completely, transparently
  and on a timely manner, in accordance with the rules and regulations
  of the SEC and the SET. All information is communicated to investors,
  shareholders and relevant sectors through the channels of the SET and
  the Company's website (www.lagunaresorts.com).

  4.2 Individual investors, shareholders, stock analysts and state
  agencies may contact the Company through Corporate Affairs Department
  at telephone number 66 (0) 2677 4455 or at “ir@lagunaresorts.com”.

  4.3 The Company’s financial statements contain accurate and complete
  information and are prepared in accordance with generally accepted
  accounting standards. In addition, they are audited/reviewed by
  auditors from a well-known auditing firm (currently Ernst & Young
  Office Limited) and are approved by the Company's Audit and Risk
  Committee and Board before being disclosed through the SET. The
  information relating to the "Board of Directors' Responsibility for
  the Company’s Financial Statements" is available in the Company's
  Annual Report. In 2009, the Company's quarterly and annual financial
  statements were certified unconditionally from the auditor.

4.  The Company wishes to refer the following matters to the disclosure
    made in other places:

-   The name of directors and the scope of the powers, duties and
    responsibilities of the Board and other committees are detailed
    under the heading "Management Structure" in the Form 56-1 and in the
    Company’s Annual Report.

-   The professional experience of the directors and members of other
    committees is detailed in Attachment 1 to Form 56-1 and under the
    heading "Board of Directors and Management" in the Company’s Annual
    Report.

-   The number of Board meetings held and the number of Board meetings
    attended by each director in 2009 are detailed in clause 5 hereof:
    "Board Responsibility".

-   The performance of the Audit and Risk Committee in the past year is
    detailed in Attachment 4 to Form 56-1, and under the heading "Report
    of the Audit and Risk Committee" in the Company’s Annual Report.

-   The performance of the Nomination and Remuneration Committee in the
    past year is detailed in Attachment 5 to Form 56-1, or under the
    heading "Report of the Nomination and Remuneration Committee" in the
    Company’s Annual Report.

-   The remuneration for directors and management is detailed under the
    heading "Directors’ and Management’s Remuneration" in Form 56-1 and
    in the Company’s Annual Report.

  4.5 In 2009, the Company made full disclosure of information within
  the time frame specified in the regulations of the SET and the SEC. In
  addition, neither the SET nor the SEC challenged that the Company had
  failed to comply with any disclosure requirement.

5. Board Responsibility

  5.1 Board Structure

  5.1.1 Members of the Board

  The Company's Board of Directors currently comprises 12 members, four
  of whom are Independent Directors namely Mr. Vudhiphol Suriyabhivadh,
  Mr. Udom Vichayabhai, Dr. Jingjai Hanchanlash and Mr. Satit Rungkasiri
  representing one-third of the total Board members. The Board comprises
  business leaders and professionals with financial, accounting, legal
  and business management backgrounds.

  The Company’s policy to fix the term of office of directors is under
  Article 14 of the Company’s Articles of Association.

  5.1.2 Definition of "Independent Director"

  “Independent Directors” means the persons who have all the necessary
  qualifications and independence in accordance with the regulations of
  the office of the SEC. At present, the said regulation prescribes that
  the qualifications of Independent Director are as follows:

  (a) holding shares not exceeding one per cent of the total number of
  voting rights of the company, its parent company, subsidiary,
  affiliate or juristic person which may have conflicts of interest,
  including the shares held by related persons of the independent
  director;

  (b) neither being nor having been an executive director, employee,
  staff, or advisor who receives salary, or a controlling person of the
  company, its parent company, subsidiary, affiliate, same-level
  subsidiary or juristic person who may have conflicts of interest
  unless the foregoing status has ended not less than two years prior to
  the date of appointment;

  (c) not being a person related by blood or registration under laws,
  such as father, mother, spouse, sibling, and child, including spouse
  of the children, executives, major shareholders, controlling persons,
  or persons to be nominated as executive or controlling persons of the
  company or its subsidiary;

  (d) not having a business relationship with the company, its parent
  company, subsidiary, affiliate or juristic person who may have
  conflicts of interest, in the manner which may interfere with his
  independent judgement, and neither being nor having been a major
  shareholder, non-independent director or executive of any person
  having business relationship with the company, its parent company,
  subsidiary, affiliate or juristic person who may have conflicts of
  interest unless the foregoing relationship has ended not less than two
  years prior to the date of appointment.

  The term ‘business relationship’ aforementioned under paragraph one
  includes any normal business transaction, rental or lease of immovable
  property, transaction relating to assets or services or grant or
  receipt of financial assistance through receiving or extending loans,
  guarantee, providing assets as collateral, including any other similar
  actions, which result in the company or his counterparty being subject
  to indebtedness payable to the other party in the amount of three
  percent or more of the net tangible assets of the company or Baht 20
  million or more, whichever is lower. The amount of such indebtedness
  shall be calculated according to the calculation method for value of
  connected transactions under the Notification of the Board of
  Governors of the Stock Exchange of Thailand Re: Disclosure of
  Information and Act of Listed Companies Concerning the Connected
  Transactions mutatis mutandis. The combination of such indebtedness
  shall include indebtedness taking place during the course of one year
  prior to the date on which the business relationship with the person
  commences;

  (e) neither being nor having been an auditor of the company, its
  parent company, subsidiary, affiliate or juristic person who may have
  conflicts of interest, and not being a major shareholder,
  non-independent director, executive or partner of an audit firm which
  employs auditors of the company, its parent company, subsidiary,
  affiliate or juristic person who may have conflicts of interest unless
  the foregoing relationship has ended not less than two years from the
  date of appointment;

(f) neither being nor having been any professional advisor including
    legal advisor or financial advisor who receives an annual service
    fee exceeding Baht 2 million from the company, its parent company,
    subsidiary, affiliate or juristic person who may have conflicts of
    interest, and neither being nor having been a major shareholder,
    non-independent director, executive or partner of the professional
    advisor unless the foregoing relationship has ended not less than
    two years from the date of appointment;

  (g) not being a director who has been appointed as a representative of
  the company’s director, major shareholder or shareholders who are
  related to the company’s major shareholder;

  (h) not operate any business which has the same nature as and is in
  significant competition with the business of the applicant or
  subsidiary, or not being a principal partner in any partnership, or
  not being an executive director, employee, staff, or advisor who
  receives salary; or holding shares not exceeding one per cent of the
  total number of voting rights of any other company operating business
  which has the same nature as and is in significant competition with
  the business of the applicant or subsidiary;

  (i) not having any characteristics which make him incapable of
  expressing independent opinions with regard to the company’s business
  affairs.

  After having been appointed as independent director with
  qualifications complying with the criteria under (a) to (i) of
  paragraph one, the independent director may be assigned by the board
  of directors to take part in the business decision of the company, its
  parent company, subsidiary, affiliate, same-level subsidiary or
  juristic person who may have conflicts of interest on the condition
  that such decision must be a collective one.

  5.1.3 Nomination of Directors

  Each candidate for a Company directorship must have the qualifications
  prescribed by the SET, the SEC and the Public Limited Companies Act,
  and must be nominated by the Nomination and Remuneration Committee.
  Additional details are described under the heading “Method of
  Appointment and Removal of Directors as included in the Company’s
  Articles of Association".

  In February 2009, the Board approved to expand the scope of duties and
  responsibilities of the Remuneration Committee to also cover the
  nomination responsibilities. The Board also approved to rename the
  “Remuneration Committee" to be the "Nomination and Remuneration
  Committee” to be responsible for the nomination of directors in lieu
  of the Board accordingly.

  5.1.4 Aggregation or Separation of Positions – Chairman of the Board
  and Chief Executive Officer

  Currently, Mr. Ho KwonPing is the Chairman of the Board and the Chief
  Executive Officer of the Company. He is closely associated with the
  Group’s Success. The Board is of the view that the current structure
  is appropriate and adequate given that Mr. Ho KwonPing has been able
  to effectively and competently execute the responsibilities of both
  the Chairman of the Board and Chief Executive Officer positions.

2.  Sub-Committees

  The Board approved the establishment of two sub-committees comprising
  all Independent Directors to assist the Board to screen details in
  order to achieve operational efficiency. Additionally, in order to
  perform their duties transparently and independently, the Chairman of
  the Board is neither a Chairman nor a member of both committees as
  follows:

  5.2.1 Audit and Risk Committee

  The Audit and Risk Committee comprises three Independent Directors,
  one of whom has adequate expertise and experience to review the
  creditability of the financial reports by reviewing the financial
  reports of some listed companies in the Stock Exchange of Thailand.
  The members and the scope of duties and responsibilities of the Audit
  and Risk Committee have been disclosed under the heading "Management
  Structure" in Form 56-1 and in the Company's Annual Report.

  5.2.2 Nomination and Remuneration Committee

  The Nomination and Remuneration Committee comprises three Independent
  Directors, thus forming a strong and independent element which will
  enable decisions on nomination and remuneration to be made
  independently. Members and the scope of duties and responsibilities of
  the Nomination and Remuneration Committee have been disclosed under
  the heading "Management Structure" in Form 56-1 and in the Company's
  Annual Report.

  In February 2009, the Board approved to expand the scope of duties and
  responsibilities of the Remuneration Committee to also cover the
  nomination responsibilities.  The Board also approved to rename the
  “Remuneration Committee" to be the "Nomination and Remuneration
  Committee” in order to enhance the good corporate governance of the
  Company.

  5.3 Role, Duty and Responsibility of the Board

  5.3.1 Corporate Governance Policy

  The Company is committed to maintaining high standards of good
  corporate governance within the Company. The Company has adopted and
  continuously developed a set of good corporate governance practices
  and policies which are modeled on the 2006 principles of good
  corporate governance for listed companies advocated by the SET. The
  Company has also adopted and continues to apply the Code of Business
  Conduct approved by the Board of Directors and communicated throughout
  the organization. The Standard Operating Procedures have also been
  documented and applied by the Company. In addition, new internal rules
  and regulations with an aim to continuously improve the good corporate
  governance of the Company are approved and announced from time to time
  with the latest policy on the new Code of Corporate Conduct of the
  Company being approved in November 2009. These are monitored on an
  on-going basis to ensure compliance by all employees.

  5.3.2 Code of Business Conduct

  The Company continuously encourages its officers, executive directors,
  associates and agents to conduct all business with good business
  ethics. In 2009, the Board of Directors has approved the new Code of
  Corporate Conduct to set the frame for its officers, executive
  directors, associates and agents to act in business matters solely for
  the benefit of the Company and not enter into any business or other
  transactions which cause or appear to cause a conflict of interest
  between him/her and a hotel within the group, the Company/subsidiary,
  owning company or any other related parties. The new Code of Corporate
  Conduct which replaced the original Code of Business Conduct approved
  by the Board of Directors was distributed to all relevant persons to
  read and to strictly adhere to the Code accordingly.

  During 2009, the Company's Board of Directors was not aware of any
  claim or allegation that the Company's Code of Business/Corporate
  Conduct was disobeyed.

  5.3.3 Leadership and Vision

  The Board’s primary functions are to set vision, mission, corporate
  policy and overall strategy for the Company and to provide effective
  oversight of the management of the Company’s business and affairs.

  The delegation of authority by the Board to the management is clear.
  All major investments require approval as follows:

-   Investments more than USD 10 million to be approved by the Board.

-   Investments between USD 5 million to USD 10 million to be jointly
    approved by the Chief Executive Officer and any one of the
    directors.

-   Investments less than USD 5 million to be approved by the Chief
    Executive Officer.

  The approval to enter into a significant transaction by the Company’s
  Board of Directors and/or shareholders’ meeting as well as all
  information disclosure must comply with rules and regulations of the
  Stock Exchange of Thailand and/or the Capital Market Supervisory
  Board.

  Duties and responsibilities of the Board have been disclosed under the
  heading “Management Structure” in Form 56-1 and the Company’s annual
  report.

  5.3.4 Conflict of Interest

  Transactions between the Company and its related parties which may
  give rise to a conflict of interest are scrutinized by the Audit and
  Risk Committee and if necessary, the approval to enter into such
  transactions is sought from the Board of Directors and/or
  shareholders.

  Such transactions are made on terms and pricing that has been
  negotiated on an arm’s length basis. In the event that the price is
  unavailable, the Company will then rely on the report of an
  independent appraiser appointed by the Company to value important
  related party transactions to arrive at a pricing which is fair to
  both the Company and the related party.

  All related party transactions are disclosed clearly and accurately.
  Details are further described under the heading "Connected
  Transactions" in Form 56-1 and under the heading "Persons with Mutual
  Interest and Connected Transactions" in the Company's Annual Report.

  5.3.5 Internal Audit and Control

  The Company realizes the significance of effective system of control,
  such as standard operating procedures, particularly in management and
  operations. Hence, the duties and responsibilities of the employees
  and the management are clearly defined. The Company has put in place
  policies to safeguard the Company’s assets and duties between the
  operators and the appraisal which are clearly separated for effective
  checks and balances. Furthermore, the Company has also implemented the
  internal audit of the financial and information technology systems.

  Internal Audit

  Internal audit is an independent function within the Company which
  reports directly to the Audit and Risk Committee on audit matters and
  to the Managing Director on administrative matters. Internal audits
  are performed to assist the Board and Management in the discharge of
  their corporate governance responsibilities and to improve and promote
  effective and efficient business processes within the Group. The
  internal auditor plans its internal audit schedules annually in
  consultation with, but independent of, Management and its plans are
  submitted to and approved by the Audit and Risk Committee. The Audit
  and Risk Committee reviews the activities of the internal auditors on
  a quarterly basis to ensure it is adequately resourced; and has
  appropriate standing within the Company to perform its role
  effectively.

  Enterprise Risk Management

  Starting from 2005 the Company appointed an external consultant to
  assist management in implementing a Risk Management framework for the
  business of the Company.  The Risk Management framework covers all
  aspects of the Company’s operations to enable significant business
  risks within the Group’s current business environment to be
  identified, assessed, monitored, managed and evaluated. As part of the
  on-going risk management process, the Company’s Group Risk Committee
  annually conducts a risk assessment, evaluation and treatment;
  considers the adoption of adequate and cost-effective system of
  internal controls to mitigate significant business risks; and provides
  for significant risks to be managed through regular reviews by the
  Company’s Group Risk Committee and the Audit and Risk Committee. The
  Audit and Risk Committee has reviewed the Group’s risk management
  processes and procedures and is satisfied that there are adequate
  internal controls in place to manage the significant risks identified.

  5.3.6 Meetings of the Board and Committees

  1. The Board

  The Company conducts regular scheduled Board meetings at least 4 times
  a year on quarterly bases which are planned and formally agreed upon
  in advance in the fourth quarter before the start of the new financial
  year. Additional meetings are convened as and when circumstances
  warrant. In 2009, the Company conducted 5 Board meetings and the
  attendance of all directors is shown below.

  -------------------- ---------------------- ---------------------------
  Name                                        Number of Attendances

  Mr. Ho               KwonPing               4

  Mr. Surapon          Supratya               5

  Mr. Michael          Ramon Ayling           5

  Mr. Ho               KwonCjan               4

  Mr. Vudhiphol        Suriyabhivadh          5

  Mr. Udom             Vichayabhai            5

  Dr. Jingjai          Hanchanlash            5

  Mr. Satit            Rungkasiri             4

  Mr. Steven           Murray Small           3

  Mr. Ariel            P Vera                 4

  Mr. Bernold          Olaf Schroeder         4

  Mr. Stuart           David Reading          5
  -------------------- ---------------------- ---------------------------

  The Board is of the view that the contribution of each director should
  not be focused only on his or her attendance at Board and/or Committee
  meetings. A director’s contribution may also extend beyond the
  confines of the formal environment of Board meetings, through the
  sharing of views, advice, experience and strategic networking
  relationships which would further the interests of the Company.

  2. Audit and Risk Committee

  The Company conducts regular scheduled Audit and Risk Committee’s
  meetings at least 4 times a year, prior to the Board meeting, on a
  quarterly basis which are planned and formally agreed upon in advance
  in the fourth quarter before the start of the new financial year.
  Additional meetings are convened as and when circumstances warrant. In
  2009, the Company conducted 5 Audit and Risk Committee’s meetings and
  all members of the Audit and Risk Committee attended those meetings as
  follows:

  --------------------- --------------------- ---------------------------
  Name                                        Number of Attendances

  Mr. Vudhiphol         Suriyabhivadh         5

  Mr. Udom              Vichayabhai           5

  Dr. Jingjai           Hanchanlash           4
  --------------------- --------------------- ---------------------------

  In addition, in 2009, the Audit and Risk Committee attended one
  non-management meeting with the external auditor to deliberate
  accounting approaches and audit plans.

  3. Nomination and Remuneration Committee

  The Company conducts regular scheduled Nomination and Remuneration
  Committee’s meetings, prior to the Board meeting, at least once a
  year. The meetings are planned and formally agreed upon in advance in
  the fourth quarter before the start of the new financial year.
  Additional meetings are convened as and when circumstances warrant. In
  2009, the Company conducted 2 Nomination and Remuneration Committee’s
  meetings and all members of the Nomination and Remuneration Committee
  attended those meetings as follows:

  --------------------- ---------------------- ---------------------------
  Name                                         Number of Attendances

  Dr. Jingjai           Hanchanlash            2

  Mr. Udom              Vichayabhai            2

  Mr. Satit             Rungkasiri             1
  --------------------- ---------------------- ---------------------------

  5.3.7 Board of Directors’ Report

  1. Financial Report

  The Board of Directors is accountable to its shareholders for the
  Company’s financial statements as well as the financial information as
  shown in the Annual Report. The Board of Directors is satisfied that
  the Company’s financial statements are prudently prepared in
  accordance with generally accepted accounting principles and are
  independently reviewed by the external auditors every quarter with a
  full audit performed at each year-end.

  Additionally, the Audit and Risk Committee has been tasked to
  independently review the Company’s financial report and internal
  control practices directly with the auditors. All pertinent
  information relating to the financial statements is clearly and
  completely disclosed in the accompanying notes.

  Details are described under the heading "Internal Control" in Form
  56-1 and under the heading "Opinion of the Board of Directors on the
  Company’s Internal Control" and the "Board of Directors’
  Responsibility for the Company’s Financial Statements" in the
  Company’s Annual Report.

  2. Minutes of Meeting

  The minutes of the meetings of the Board and other committees were
  accurately and completely recorded in all material aspects addressed
  at each meeting, including the questions, opinions and clarifications.
  The Company has a safe and secure filing system in place to keep the
  minutes of meetings and other supporting documents.

  5.3.8 Development of Directors and Management

  The Company's directors, management and employees are constantly
  encouraged to develop their skills by attending various seminars and
  training courses organised by various organisations, e.g. the Thai
  Institute of Directors, the SET and the SEC, etc. Furthermore,
  relevant information is regularly provided to the directors so that
  they are kept abreast of latest developments thus enabling them to
  make informed decisions. Details of the training previously undertaken
  by each director are set out in Attachment 1 to Form 56-1 and under
  the heading "Board of Directors and Management of the Company" in the
  Company’s Annual Report.

9.5 Supervision on the use of inside information

  In order to prevent the misuse of confidential and price-sensitive
  corporate information, the Board of Directors of the Company approved
  the policy on dealing in securities of the Company which prohibits any
  directors, management and employees, regardless of rank, from
  disclosing such confidential and price-sensitive corporate information
  for personal gain or for any other reason not in the Company’s
  interest or dealing in the Company's shares while in possession of
  unpublished confidential and price-sensitive information during the
  “embargo period” which is defined as two weeks before and up to the
  date of announcement of results for each of the first three quarters
  of the Company’s financial year, and one month before and up to the
  date of announcement of the full-year financial results. The policy
  and reminder of the embargo period have been communicated to
  directors, management and employees on an annual and quarterly basis
  to strictly comply with this policy. Confidential and price-sensitive
  information is also restricted to only directors, management and those
  officers who have a direct responsibility over such matters. Any
  violation of this policy shall be subject to disciplinary actions
  under the working regulation. Additionally, the Company monitors the
  trading of the Company’s shares by its directors, and senior
  management who are required to report to the Board of Directors on a
  quarterly basis on the holding of the Company’s shares and in
  accordance with the rules of the Securities and Exchange Commission.

6.  Human Resources

  The number of employees as at 31 December 2009 was 541 employees
  detailed below:

  ------------------------------------------------------- ---------------
  Department                                              No. of
                                                          Employees

  Management office                                       9

  Project Management Department                           14

  Cost, Contract Administration & Procurement Services    12

  Accounting                                              27

  Administration                                          13

  IT (Information Technology)                             8

  Corporate Affairs                                       14

  Finance                                                 3

  Human Resources                                         11

  Internal Audit                                          5

  Canal Village                                           5

  Legal                                                   6

  Wedding Chapel                                          2

  Property Development                                    12

  Group Asset Management                                  2

  Banyan Tree Academy                                     3

  Dusit Thani Laguna Phuket                               395

  Total                                                   541
  ------------------------------------------------------- ---------------

  Total remuneration and benefits paid to employees in 2009 in the total
  amount of Baht 296,862,804.31 consisting of salaries, bonus, car
  allowance, social security payment, provident fund payment, medical
  expense, personal accident and health insurance, meals, laundry,
  service charge, complimentary vouchers, etc.

  Human Resources Development Policy

  The group has established a centralized Training Centre in Laguna
  Phuket to create Management, English and Computer training courses to
  match with each operation’s requirement to ensure that the appropriate
  development needs of its employees and the required training resources
  are identified and allocated respectively.