PART I

EXECUTIVE SUMMARY

1. Core Business

Laguna Resorts & Hotels Public Company Limited (“the Company”) was
incorporated as a public limited company in the Stock Exchange of
Thailand on the 25^(th) of November 1993. It was involved in the
development of an abandoned tin mine at Bangtao Bay, Phuket, Thailand
which was later developed to become the Laguna Phuket integrated resort
complex. Currently registered share capital is Baht 2,117 million (Fully
paid-up is Baht 1,667 million).

The key business of the Company comprises of hotel operations, property
development operations, holiday club membership operations and office
rental operations. The Company’s major business investment largely
revolves around the operation and management of the integrated resort of
Laguna Phuket, located on the island of Phuket in Thailand, as well as
its investments in the Banyan Tree Bangkok and the Banyan Tree Lijiang,
People’s Republic of China.

The Company has 5 hotels in Laguna Phuket, a hotel in Bangkok and a
hotel in the People’s Republic of China which are as follows:

-   Dusit Thani Laguna Phuket

-   Laguna Beach Resort in Laguna Phuket

-   Sheraton Grande Laguna Phuket

-   Banyan Tree Phuket

-   Banyan Tree Bangkok

-   Laguna Holiday Club Phuket Resort

-   Banyan Tree Lijiang, People’s Republic of China

In addition to these core properties, the Company also provides the
following services and facilities:

-   Laguna Services

-   Laguna Phuket Golf Club

-   Quest Laguna Phuket Adventure

-   Canal Village Laguna Shopping

-   Banyan Tree and Angsana Gallery

-   Laguna Wedding Chapel

The Property Sales operation offers a range of residential and vacation
properties such as apartments, semi-detached and detached villas
including hotel residences such as the high-end Dusit Thani Pool Villas
and Banyan Tree Residences that are situated within a resort or hotel
property.

The Holiday Club membership operation entitles participants to an annual
vacation at the various club properties as well as at over 4,000 resorts
in more than 100 countries through reciprocal arrangements with RCI and
Interval International.

  The Company also owns offices in Thai Wah Tower I, a 24-storey
  building located on Sathorn Road in Bangkok, which are rented as
  commercial offices.

2.  Major Risk Factors

The risk factors that impact the business and financial performance of
LRH are set out in Part II, section 1. These are summarised as follows:

-   Currency fluctuation

-   Economy and tourism in Thailand

-   Competition

    -   Destination

    -   Hotels

    -   Low season

-   Land title

-   Thai labour laws

-   Operating risks inherent in the hospitality industry

-   Operating risks inherent in the property industry

3.  Financial Performance

For the year 2008, the Company achieved total income of Baht 6,912
million which was mainly from hotel operations of Baht 3,954 million (57
percent of total income) and property sales operations of Baht 2,489
million (36 percent of total income).

-   Income from hotel operations decreased by Baht 170 million or 4
    percent mainly due to lower occupancies from 71 percent to 63
    percent in Laguna Phuket and from 67 percent to 57 percent in Banyan
    Tree Bangkok resulting from the global economic downturn and local
    political turmoil.

-   Income from the property sales operations decreased by Baht 320
    million or 11 percent due to lower sales as buyers curtailed their
    spending on properties owing to the global economic crisis.

-   The decrease in hotel and property income was partially offset by an
    increase in other income of Baht 251 million. This was mainly due to
    the settlement of an insurance claim relating to the tsunami in 2004
    of Baht 226 million.

For the reasons stated above, the Company recorded a net profit of Baht
1,104 million representing a decrease of Baht 186 million or 14 percent
as compared to the prior year. Further details are contained in section
12.