PART I EXECUTIVE SUMMARY

The business of Laguna Resorts & Hotels Public Company Limited (“LRH”)
revolves around the integrated resort of Laguna Phuket, located on the
island of Phuket in Thailand. The operations of the group are summarised
as follows:

Hotels

Within Laguna Phuket, there are 4 hotels which LRH either owns or has an
ownership stake:

-   Banyan Tree Phuket – 115 exclusive villas, 44 with Jacuzzis and 71
    of which have their own swimming pools. The resort is managed by
    Banyan Tree Hotels & Resorts Pte. Ltd.

-   Dusit Laguna Resort – 226 rooms and suites, managed by Dusit Hotels
    and Resorts Co., Ltd.

-   Sheraton Grande Laguna Phuket – 343 rooms and suites, managed by
    Sheraton Overseas Management Corporation.

-   Laguna Beach Resort – 254 rooms and suites and is owner operated.

Property

  The Island Villas are a small condominium project attached to the
  Sheraton Grande Laguna Phuket. The units have been sold to the public.
  The individual owners may rent their units to the Group which in turn
  contracts Sheraton Overseas Management Corporation to manage the
  units, and in doing so earn a return on their investment.

  The Allamanda Laguna Phuket is a large condominium project. It is not
  attached to any other hotel. The units are for sale to the public. The
  individual owners may earn a return on their investment by contracting
  Banyan Tree Hotels & Resorts Pte. Ltd. to manage their unit for them.
  As most of the condominiums have been sold, the Allamanda Laguna
  Phuket is neither owned or managed by LRH

  Laguna Homes is a housing plot development. There are 54 land plots
  located around the golf course. The land plots have been fully sold to
  the public. Twenty land plots were reserved for the sale of Laguna
  Residences, a “house and land” package, that was introduced in 2001
  and was sold out in 2003. A new development, Laguna Townhomes, was
  introduced in the last quarter of 2002 and was sold out in 2004.
  Further developments of Laguna Residences and Laguna Townhomes were
  also fully sold out in 2004.

  Banyan Tree Two Bedroom Pool Villas are a luxury development project
  attached to the Banyan Tree Phuket. All of the twelve villa’s in Phase
  I have been sold to the public. A further 14 villas are currently
  being constructed and are available for sale. The individual owners
  may earn a return on their investment by contracting Banyan Tree
  Hotels & Resorts Pte. Ltd. to manage their unit for them.

  Located in Chiangrai is another housing plot development called Laguna
  Homes Chiangrai. This project has been suspended.

  The Allamanda Vacation Club changed its name to Laguna Holiday Club in
  2004, and sells memberships that entitle participants to annual
  vacations, for at least one week, at the participating member resorts
  of Allamanda Laguna Phuket, Sheraton Grande Laguna Phuket, Sheraton
  Golf Villas and Angsana Resort & Spa Bintan.

Others

  In addition to the above there are the following facilities in Laguna
  Phuket:

-   18-hole golf course

-   An outdoor management training program

-   Canal Village shopping complex

-   Banyan Tree Gallery retail outlets

-   The Wedding Chapel that was completed at the end of 2004

  A summary of the performance of the year ended 31 December 2004 is
  included as follows:

  ---------------------------------- ------------------ ------- ------------------
                                     2004               2003    

  Revenues                                                      

  Hotel Operations                   2,804              2,443   

  Property development operations    1,052              541     

                                                                

  Interest income                    12                 10      

  Other income                       91                 38      

                                     3,959              3,032   

  Earnings before interest expenses  1,202              778     
  and income tax                                                

                                                                

  Interest expense                   (40)               (57)    

  Corporate income tax               (157)              (158)   

  Minority shareholders interest     (79)               (62)    

  Extraordinary item                 (41)               -       

                                                                

  Net earnings                       885                501     

                                                                
  ---------------------------------- ------------------ ------- ------------------

  The net earnings attributable to the shareholders of Baht 885 million
  for the year ended 31^(st) December 2004 was Baht 385 million, or 77%,
  higher than that of the prior year. The increase in net earnings was
  due to the performance of the hotel operations and property sales
  division, both of which benefited from strong market conditions. The
  property market in Phuket was particularly buoyant in 2004 and the
  Group was well positioned with its planned developments and popular
  land and house products to capitalise on these conditions. The
  improvement in the hotel divisions performance was due to the Iraq War
  and SARS adversely impacting the prior year performance. In 2004 the
  Bird Flu impacted the February and March performance and the Tsunami
  the December performance but no-where near to the same extent as the
  crises experienced last year.

  The improvement in net earnings was despite a Baht 45 million
  provision for property damaged by the Tsunami in the Indian Ocean
  which hit Phuket on 26^(th) December 2004. However this was offset by
  the reversal of the provision for impairment in the value of a
  long-term investment amounting to Baht 41 million and was due to the
  carrying value of this investment increasing back to its original
  carrying value.

  Other points of note are that selling and administrative expenses
  increased by Baht 18 million as a result of a number of donations
  made, settlement of a legal issue and additional provision for tax and
  penalties assessed during the year. Offsetting this was the foreign
  exchange loss incurred which was Baht 14 million lower than last year.
  A decrease in the interest expense of Baht 17 million was due to the
  lower level of loans and the reduction in interest rates as compared
  to the prior year and taxation was at a similar level to the prior
  year despite the increase in operating profits. This was due to
  profits on the property sales operations being offset by losses in
  these companies which was not the case in the prior year.