5. Operating assets

1.  Operating assets of the Company and its subsidiaries

As at 31 December 2008, the principal fixed assets of the Company and
its subsidiaries that are used in its business operations are as
follows:

+----------+------------+-----+--------+----+-------+----+---------+
| C        | Type of    | Lo  | Size   | Ty | Posse | Bo | Cont    |
| ompany’s | asset      | cat |        | pe | ssion | ok | ingency |
| name     |            | ion |        | of |       | V  |         |
|          |            |     |        |    | Obje  | al |         |
|          |            |     |        | O  | ctive | ue |         |
|          |            |     |        | wn |       |    |         |
|          |            |     |        | er |       | (M |         |
|          |            |     |        | sh |       | il |         |
|          |            |     |        | ip |       | li |         |
|          |            |     |        |    |       | on |         |
|          |            |     |        |    |       | B  |         |
|          |            |     |        |    |       | ah |         |
|          |            |     |        |    |       | t) |         |
+----------+------------+-----+--------+----+-------+----+---------+
| Laguna   | 1. Dusit   | Phu | 226    | O  | Hotel | 1  | M       |
| Resorts  | Thani      | ket | rooms  | wn |       | ,2 | ortgage |
| & Hotels | Laguna     |     |        | er |       | 06 | with    |
| Pcl.     | Phuket     |     |        |    |       |    | bank    |
+----------+------------+-----+--------+----+-------+----+---------+
| Laguna   | 2. Banyan  | Phu | 109    | O  | Hotel | 1  | M       |
| Banyan   | Tree       | ket | rooms  | wn |       | ,7 | ortgage |
| Tree     | Phuket     |     |        | er |       | 58 | with    |
| Limited  |            |     |        |    |       |    | bank    |
+----------+------------+-----+--------+----+-------+----+---------+
| Bangtao  | 3.         | Phu | 335    | O  | Hotel | 1  | M       |
| Grande   | Sheraton   | ket | rooms  | wn |       | ,3 | ortgage |
| Limited  | Grande     |     |        | er |       | 71 | with    |
|          | Laguna     |     |        |    |       |    | bank    |
|          | Phuket     |     |        |    |       |    |         |
+----------+------------+-----+--------+----+-------+----+---------+
| Laguna   | 4. Laguna  | Phu | 254    | O  | Hotel | 9  | None    |
| Beach    | Beach      | ket | rooms  | wn |       | 16 |         |
| Club     | Resort     |     |        | er |       |    |         |
| Limited  |            |     |        |    |       |    |         |
+----------+------------+-----+--------+----+-------+----+---------+
| Thai Wah | 5. Banyan  | B   | 215    | O  | Hotel | 2  | M       |
| Plaza    | Tree       | ang | rooms  | wn |       | ,6 | ortgage |
| Limited  | Bangkok    | kok |        | er |       | 87 | with    |
|          |            |     |        |    |       |    | bank    |
+----------+------------+-----+--------+----+-------+----+---------+
| Laguna   | 6. Laguna  | Phu | 18     | O  | Golf  | 2  | None    |
| Grande   | Phuket     | ket | -hole, | wn | c     | 69 |         |
| Limited  | Golf Club  |     | par 71 | er | ourse |    |         |
+----------+------------+-----+--------+----+-------+----+---------+
| Laguna   | 7. Canal   | Phu | 52     | O  | R     | 24 | M       |
| Resorts  | Village    | ket | shops  | wn | etail |    | ortgage |
| & Hotels | Laguna     |     |        | er | shops |    | with    |
| Pcl.     | Shopping   |     |        |    | r     |    | bank    |
|          |            |     |        |    | ental |    |         |
+----------+------------+-----+--------+----+-------+----+---------+
| Laguna   | 8. Laguna  | Phu | 2 Rai  | O  | We    | 13 | None    |
| Resorts  | Wedding    | ket | 1 Ngan | wn | dding |    |         |
| & Hotels | Chapel     |     | 40.8   | er | c     |    |         |
| Pcl.     |            |     | Sqw    |    | hapel |    |         |
+----------+------------+-----+--------+----+-------+----+---------+
| Laguna   | 9. Laguna  | Phu | 6 Rai  | O  | Util  | 2  | M       |
| Service  | Service    | ket | 3 Ngan | wn | ities | 00 | ortgage |
| Company  |            |     | 54.8   | er | ser   |    | with    |
| Limited  |            |     | Sqw    |    | vices |    | bank    |
+----------+------------+-----+--------+----+-------+----+---------+
| Laguna   | 10. Laguna | Phu | -      | O  | To    | 30 | None    |
| Ex       | Tours &    | ket |        | wn | urism |    |         |
| cursions | Travel     |     |        | er | ser   |    |         |
| Limited  |            |     |        |    | vices |    |         |
+----------+------------+-----+--------+----+-------+----+---------+
| Su       | 11. Banyan | Phu | 11     | O  | R     | 24 | None    |
| bsidiary | Tree and   | ket | shops  | wn | etail |    |         |
| c        | Angsana    | /   |        | er | shops |    |         |
| ompanies | Gallery    | B   | 4      |    |       |    |         |
|          |            | ang | shops  |    |       |    |         |
|          |            | kok |        |    |       |    |         |
|          |            | /   |        |    |       |    |         |
|          |            | Sin |        |    |       |    |         |
|          |            | gap |        |    |       |    |         |
|          |            | ore |        |    |       |    |         |
+----------+------------+-----+--------+----+-------+----+---------+
| Su       | 12. Office | B   | 15,389 | O  | O     | 6  | M       |
| bsidiary | space in   | ang | Sqm    | wn | ffice | 70 | ortgage |
| c        | Thai Wah   | kok |        | er | r     |    | with    |
| ompanies | Tower 1    |     |        |    | ental |    | bank    |
+----------+------------+-----+--------+----+-------+----+---------+
| The      | 13.        | Phu | -      | O  | For   | 27 | None    |
| Company  | Buildings, | ket |        | wn | opera |    |         |
| and its  | office     | /   |        | er | tions |    |         |
| subs     | furniture  | B   |        |    |       |    |         |
| idiaries | and others | ang |        |    |       |    |         |
|          |            | kok |        |    |       |    |         |
+----------+------------+-----+--------+----+-------+----+---------+
| Su       | 14. Land   | B   | 2 Rai  | O  | Hotel | 3  | M       |
| bsidiary |            | ang | 1 Ngan | wn | loc   | 56 | ortgage |
| c        |            | kok | 92 Sqw | er | ation |    | with    |
| ompanies |            |     |        |    |       |    | bank    |
+----------+------------+-----+--------+----+-------+----+---------+
| The      | 15. Land   | Phu | 1,237  | O  | L     | 8  | Partial |
| Company  |            | ket | Rai 1  | wn | aguna | ,7 | m       |
| and its  |            |     | Ngan   | er | P     | 99 | ortgage |
| subs     |            |     | 61.4   |    | huket |    | with    |
| idiaries |            |     | Sqw    |    | loc   |    | bank    |
|          |            |     |        |    | ation |    |         |
+----------+------------+-----+--------+----+-------+----+---------+
|          |            |     |        |    | Total | 18 |         |
|          |            |     |        |    |       | ,3 |         |
|          |            |     |        |    |       | 50 |         |
+----------+------------+-----+--------+----+-------+----+---------+

  The Lands and buildings appraisal values of the Company and its
  subsidiaries were appraised by Knight Frank Chartered (Thailand) Co.,
  Ltd. on 27 November 2007. The above appraisal values have been shown
  in the Company and its subsidiary financial statements for the year
  ended 31 December 2008. As a policy, land and building revaluation by
  independent appraiser will be made every 3 years.

  5.2 Property development projects for sale

  As at 31 December 2008, the property development projects for sale of
  the Company and its subsidiaries are as follows:

+-----------+--------------+---------+---------+----+-----+----------+
| Company’s | Project      | Project | Project | Ty | B   | Con      |
| name      |              | L       | area    | pe | ook | tingency |
|           |              | ocation | (Rai-   | of | Va  |          |
|           |              |         |         |    | lue |          |
|           |              |         | Ng      | O  |     |          |
|           |              |         | an-Sqw) | wn | (M  |          |
|           |              |         |         | er | ill |          |
|           |              |         |         | sh | ion |          |
|           |              |         |         | ip | Ba  |          |
|           |              |         |         |    | ht) |          |
+-----------+--------------+---------+---------+----+-----+----------+
| Laguna    | 1. Laguna    | Phuket  | 11-     | O  | 129 | None     |
| Resorts & | Village      |         | 3-73.93 | wn |     |          |
| Hotels    | Villas       |         |         | er |     |          |
| Pcl.      |              |         |         |    |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| Laguna    | 2. The Lofts | Phuket  | 9-      | O  | 7   | None     |
| Holiday   |              |         | 0-72.74 | wn |     |          |
| Club      |              |         |         | er |     |          |
| Limited   |              |         |         |    |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| TWR       | 3. Laguna    | Phuket  | 18-     | O  | 10  | None     |
| -Holdings | Village      |         | 3-12.85 | wn |     |          |
| Limited   | Townhomes 1  |         |         | er |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| TWR       | 4. Laguna    | Phuket  | 4-      | O  | 24  | None     |
| -Holdings | Village      |         | 0-20.38 | wn |     |          |
| Limited   | Townhomes 3  |         |         | er |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| Laguna    | 5. Laguna    | Phuket  | 8-      | O  | 27  | None     |
| Holiday   | Village      |         | 2-08.00 | wn |     |          |
| Club      | Townhomes 4  |         |         | er |     |          |
| Limited   |              |         |         |    |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| TWR       | 6. Laguna    | Phuket  | 16-     | O  | 13  | None     |
| -Holdings | Village      |         | 0-40.30 | wn |     |          |
| Limited   | Residences 3 |         |         | er |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| TWR       | 7. Laguna    | Phuket  | 9-      | O  | 9   | None     |
| -Holdings | Village      |         | 1-16.58 | wn |     |          |
| Limited   | Residences 5 |         |         | er |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| Thai Wah  | 8. Laguna    | Phuket  | 9-      | O  | 24  | None     |
| Plaza     | Village      |         | 2-28.41 | wn |     |          |
| Limited   | Residences 6 |         |         | er |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| Laguna    | 9. Banyan    | Phuket  | 8-      | O  | 74  | None     |
| Banyan    | Tree Two     |         | 3-00.00 | wn |     |          |
| Tree      | Bedroom Pool |         |         | er |     |          |
| Limited   | Villa Phase  |         |         |    |     |          |
|           | 3            |         |         |    |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| Laguna    | 10. Banyan   | Phuket  | 40-     | O  | 58  | Baht 430 |
| Banyan    | Tree Double  |         | 3-10.00 | wn |     | million  |
| Tree      | Pool Villa   |         |         | er |     |          |
| Limited   |              |         |         |    |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| Laguna    | 11. Banyan   | Phuket  | 5-      | O  | 26  | None     |
| Banyan    | Tree Deluxe  |         | 0-03.00 | wn |     |          |
| Tree      | Double Pool  |         |         | er |     |          |
| Limited   | Villa        |         |         |    |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| Thai Wah  | 12. Banyan   | Bangkok | 1-      | O  | 111 | Baht 170 |
| Plaza     | Tree         |         | 3-80.00 | wn |     | million  |
| Limited   | Residences   |         |         | er |     |          |
|           | Bangkok      |         |         |    |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| Laguna    | 13. Laguna   | Phuket  | 19,084  | O  | 445 | Baht 220 |
| Holiday   | Holiday Club | /       | Sqm     | wn |     | million  |
| Club      |              | Chiang  |         | er |     |          |
| Limited   |              | Mai /   |         |    |     |          |
|           |              |         |         |    |     |          |
|           |              | Cha-Am  |         |    |     |          |
|           |              | / Hua   |         |    |     |          |
|           |              | Hin /   |         |    |     |          |
|           |              | Pattaya |         |    |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| PT. AVC   | 14. AVC      | In      | 14,435  | O  | 51  | None     |
| Indonesia | Indonesia    | donesia | Sqf     | wn |     |          |
|           |              |         |         | er |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
| S         | 15. Other    | Phuket  | -       | O  | 37  | None     |
| ubsidiary |              |         |         | wn |     |          |
| companies |              |         |         | er |     |          |
+-----------+--------------+---------+---------+----+-----+----------+
|           |              |         |         | T  | 1,  |          |
|           |              |         |         | ot | 045 |          |
|           |              |         |         | al |     |          |
+-----------+--------------+---------+---------+----+-----+----------+

5.3 Intangible Assets

  The intangible assets of the Company and its subsidiaries comprise of
  goodwill amounting to Baht 30 million from the acquisition of 100
  percent of Thai Wah Plaza Limited in 2005 and goodwill amounting to
  Baht 351 million from the acquisition of 49 percent of Laguna Banyan
  Tree Limited in 2002.

  The goodwill represents the excess of the purchase price over the fair
  value of net assets recorded in the balance sheet. From 1 January
  2008, the Company discontinued the amortization of goodwill and
  instead now tests for impairment in compliance with accounting
  standard no. 43 (revised 2007) regarding “Business Combinations”.

5.4 Investment policy in subsidiary and associated companies

  The Company has a policy of investing in subsidiary and associated
  companies which possess the same business activity and potential
  growth prospects. The appropriate return on capital is considered when
  making the investments. Such investments are made only after due
  consideration and approval either by the Board of Directors or
  Management depending on the size of investment as follows:

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

-   Investments between US$ 5 - 10 million to be jointly approved by the
    Chief Executive Officer and any 1 director.

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

  For subsidiary companies, the directors are appointed by the Company
  based on its controlling ownership interest. The directors are
  assigned the task of making significant policies, managing and
  controlling the subsidiary’s operation consistent with the Company’s
  policies, thereby ensuring a sufficient return on investment to it as
  well as the shareholders.

  For associated companies, the directors are appointed by the Company
  based on the percentage of ownership. However, the Company has no
  significant influence over the management of the associates.

  The current intention of management in regards to its investment
  policy is to pursue any investment opportunities both within and
  outside Laguna Phuket that provides the shareholders with a sufficient
  return on investment. Such opportunities are summarized in section 6
  below.