11 Related party transactions 

During the 2001, the Company had significant business transactions with
its subsidiaries, associated and related companies (related by way of
common shareholders and/or common directors).

Laguna Resorts & Hotels plc by the nature of its product and its complex
group structure has a large number of related party transactions. Laguna
Phuket is an integrated resort with a number of hotels and associated
resort services being incorporated in different companies within the
group. This in itself results in a significant number of related party
transactions which are considered to be necessary and reasonable for the
operation of Laguna Phuket. The nature of these transactions are
summarised below:

-   Loans to subsidiary companies. These are unsecured and are
    denominated in Thai Baht. The loans are repayable on demand and
    carry interest at a rate equal to the lenders cost of funds per
    annum plus a margin of 1.1%.

-   Costs are often incurred in one company within the group which are
    reimbursed by the company to which the expense relates. Actual costs
    are reimbursed with no handling costs applied.

-   In a number of instances goods and services that are consumed by
    customers in one part of the Laguna Phuket are billed centrally to
    the customer at the hotel at which the customer is staying. Such
    charges relate to meals at restaurants, golf fees, treatments at
    Spa’s and goods purchased at shops in the resort. On receiving the
    funds centrally from the customer, the hotel reimburses the company
    in which the goods and services are consumed. Actual receipts are
    paid and handling charges are generally not charged with the
    exception of credit card commissions as noted below.

-   When monies are received in a different company in which the revenue
    was earned, credit card commissions are deducted from the gross
    receipts of customers in the company in which the monies were
    received. As a result there is an inter company charge that passes
    on the cost to the company in which the revenue is recognised. The
    rates charged range from 1% to 3.5% of the revenue and are based on
    the actual commissions charged by the credit card companies.

-   Commissions earned on the sale of properties to external third
    parties are paid at the rate of 1% of the property sales value. The
    sales agents are employed by the related company’s receiving the
    sales agent fees which are then paid in full to the sales agent.

-   There is a charge from the golf course to the hotels on the basis
    that the golf course is a facility for all of the hotels in Laguna
    Phuket to use. The rate charged to each hotel is Baht 10,000 per
    hotel room per annum.

-   Laguna Service Co., Ltd. provides centralised services to each
    operation in the group located at Laguna Phuket which are charged at
    the following rates:

    - Utility charge : at the determined price and actual usage

    - Laundry charge : at the price as per price list

    - Beach cleaning and transportation charge : based on actual cost

    - Marketing fee : at the rate of 1 % of hotel revenue

-   The employees of the PCD division of LRH manage projects that are
    undertaken by the groups operations during the year. The contracted
    fee is set at a rate of 5% of the actual or budgeted costs of the
    project which is on normal commercial terms and conditions.

-   Operating agreements to manage the hotels are as follows:

(i) the management contract of the Banyan Tree Phuket Hotel pays a basic
    management fee of 2% of total revenue and an incentive management
    fee of 7.5% of gross operating profit. In addition, expenses
    relating to the sharing of promotional campaigns and adverts, sales
    staff salaries, central reservations and international sales offices
    incurred by the Banyan Tree corporate head office are reimbursed on
    the basis of each of the individual hotels revenue in the Banyan
    Tree group.

(ii) the management contract of the Dusit Laguna Resort pays a basic
     management fee of 2% of total revenue and an incentive management
     fee of 5% of gross operating profit. In addition the sharing of
     promotional campaigns and adverts incurred by the Dusit Thani
     corporate head office are reimbursed.

(iii) the management of the golf course is governed by the Technical
      Assistance Agreement to conduct the golf business and technical
      assistance in the planning, building, furnishing, equipping and
      decorating the operation of the Banyan Tree Phuket Golf clubhouse
      and golf course. The terms of the agreement set a basic management
      fee of 3% of total revenue and an incentive management fee of 10%
      of gross operating profit.

  All management fees are consistent with industry practice and the
  share of group marketing costs incurred by LBT and LRH are the
  reimbursement of costs. As a result these transactions are on normal
  commercial terms and conditions.

-   A Service Agreement is in place to share expenses for Group
    Corporate Finance, Human Resources, Information Technology, Legal,
    Corporate Affairs and Administration, with TWC. Actual expenses are
    allocated on pre-agreed formulas which are based on factors relating
    to the function of the corporate head office department (e.g. human
    resources on headcount, legal on time and number of court cases).
    The allocation of these expenses are on normal commercial terms.

-   Discounts are provided on retail sales between group companies as
    follows:

(i) sales from Banyan Tree Gallery (Thailand) Limited and other Thai
    subsidiary companies which are priced at a 30% to 50% discount to
    the retail price; and

(ii) sales from Banyan Tree Gallery (Thailand) Limited to Banyan Tree
     Gallery (Singapore) Pte Ltd. which are priced at cost plus a
     handling fee of 5%. In this instance BTG (T) acts as a purchasing
     agent on behalf of BTG (S) in order to centralise the purchasing
     function.

-   Rent is paid for premises and land and are on the following bases

  (i) Rental of hotel premises and service income is on the basis of 5%
  to 11.5% of sales revenue which is dependent on criteria such as the
  location, budgeted sales, term of the lease, size of area leased and
  type of operation. Rent charged is on normal commercial terms and
  conditions.

(ii) rental of office space with monthly rent varying from Baht 350 to
     Baht 550 per square metre which is dependent on criteria such as
     the location, term of the lease, size of area leased.

(iii) rental of land on which hotel premises are located at the rate of
      Baht 109,331 per month.

(iv) rental of hotel premises and is on the basis of Baht 893 to 900 per
     square metre which is dependent on criteria such as the location,
     term of the lease, size of area leased.

(v) rental of land on which hotel premises are located at the rate of
    Baht 11.9 million per annum.

(vi) rental of land on which hotel operations are located at the rate of
     Baht 1.30 million per annum.

(vii) rental of a marquee which is rented on normal commercial terms.

  Rents charged and paid are on normal commercial terms and conditions
  and are on an arms length basis.

-   The sale of units to Allamanda Vacation Club Limited for use as
    inventory in its timeshare business. Sales prices are based on
    normal selling price after deducting a certain discount.

-   The purchase by LRH of a land owning company, Laguna (3) Co.,
    Limited, from TWC, as on this land the Banyan Tree Phuket has been
    constructed. The purchase price was the net book value of the
    company and was on normal terms and conditions.

-   The purchase of Bangna Place Realty Limited from TWC, to provide a
    tax shelter for the future operations Sheraton Grande Laguna Phuket.
    The purchase will realise a significant return on investment.

It is the group’s policy to ensure that there is no conflict of interest
when related party transactions are executed. All existing related party
transactions are communicated by each of the operations within Laguna
Phuket on a quarterly basis and reviewed by management. New proposed
related party transactions are identified by and/or communicated to
higher level management and the transactions are approved in accordance
with the requirements of the SEC. All efforts are made to ensure that
interested executives and shareholders, where applicable, do not take
part in approving the transaction. This is achieved by obtaining the
approval of such transactions by the independent directors via the Audit
Committee.

Related party transactions, which have been concluded on the terms and
bases determined by the Company and those companies, or in accordance
with the agreement, are detailed below. Significant transactions greater
than Baht 1 million are disclosed separately and non significant
transactions have been grouped.

RELATED PARTY TRANSACTIONS IN YEAR 2001

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

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  ------- ----- ----- ---------- --------- ------------ ------- --- ----- ------- ----------- ---- ----- ---- ----- ------
  OTHER                                                                                                             

  71      LRH   TWC   Purchase   Net book  Audited      46.40   -   TWC   Major   Expansion   NA   Yes   NA   (b)   KP,
                      of 100%    value of  financial                      Shr     of Banyan                         KC,
                      interest   the       statements                             Tree Phuket                       SSU,
                      in the     company                                          on this                           CH
                      shares in                                                   land by                           
                      Laguna (3)                                                  building 14                       
                      Co.                                                         super                             
                      Limited                                                     luxury                            
                                                                                  villas                            
  ------- ----- ----- ---------- --------- ------------ ------- --- ----- ------- ----------- ---- ----- ---- ----- ------

RELATED PARTY TRANSACTIONS IN YEAR 2001 (CONT’D)

[TABLE]

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REFERENCE FOR REASON of Having Related Person Being a Shareholder in
lieu of the Co.

+----+----------------------+-----------------------------------------+
| Re |   Relationship       |   Reason                                |
| f. |                      |                                         |
+----+----------------------+-----------------------------------------+
| (  |   TWC owns 34.8% in  |   TWC was the original joint venture    |
| a) |   LRH and 10% in LBC |   partner in LBC which subsequently     |
|    |                      |   sold all but 10% of its shares to LRH |
+----+----------------------+-----------------------------------------+
| (  |   TWC owns:          |   TWC has interests in hotels and       |
| b) |                      |   resorts and LRH was a spin off from   |
|    |   - 34.8% in LRH,    |   TWC when it consolidated most of its  |
|    |                      |   hotel interests into LRH. Apart from  |
|    |   - 87.45% in TWPL,  |   LRH, TWC also has hotel interests     |
|    |                      |   through TRL. TWC's other interests    |
|    |   - 19.80% in TRL,   |   include commercial and residential    |
|    |                      |   property development (through TWPL,   |
|    |   - 45.45% in TWFP,  |   TWRL, MJ) as well as consumer food    |
|    |                      |   products (through TWFP).              |
|    |   - 99.99% in TWRL,  |                                         |
|    |                      |                                         |
|    |   - 49.99% in MJ     |                                         |
+----+----------------------+-----------------------------------------+
| (  |   BTHL owns :        |   BTHL has interests in hotel           |
| c) |                      |   operations worldwide and Thailand is  |
|    |   - 29.53% in LRH,   |   one of these countries. BTHL and LRH  |
|    |                      |   have a joint venture relationship in  |
|    |   - 49.00% in LBTL,  |   several companies in using the Banyan |
|    |                      |   Tree brandname and know-how for the   |
|    |   - 49.00% in BTS,   |   mutual benefit of maximising the      |
|    |                      |   return on such investments.           |
|    |   - 49.00% in BTG    |                                         |
|    |   (T),               |                                         |
|    |                      |                                         |
|    |   - 49.00% in BTG    |                                         |
|    |   (S),               |                                         |
|    |                      |                                         |
|    |   - 100.00% in BTHR, |                                         |
|    |                      |                                         |
|    |   - 100.00% in BTGC, |                                         |
|    |                      |                                         |
|    |   - 100.00% in BTR   |                                         |
+----+----------------------+-----------------------------------------+
| (  |   TRL owns:          |   TRL has interests in hotels and       |
| d) |                      |   resorts and TWC and BTHL were a spin  |
|    | -   1.45% in BTHL    |   off from TRL when it consolidated     |
|    |                      |   most of its hotels interests into TWC |
|    | -   40.00% in TRMC   |   and BTHL.                             |
|    |                      |                                         |
|    | -   100.00% in THL   |                                         |
|    |     through TRMC     |                                         |
|    |                      |                                         |
|    | -   100.00% in GSI   |                                         |
+----+----------------------+-----------------------------------------+

REFERENCE FOR Procedures for Approving Related Transaction

  ----------- -------------------------------------------------------------
  Reference   Reason

  1           Transaction is less than 0.03% of the Company’s NTA.

  2           Normal course of business pursuant to clause 8 (1) of SET’s
              regulations under “Notification of the Stock Exchange of
              Thailand Re : Rules, Procedures, and Disclosures of Connected
              Transactions of Listed Companies”.

  3           Normal course of business pursuant to clause 8 (2) of SET’s
              regulations under “Notification of the Stock Exchange of
              Thailand Re : Rules, Procedures, and Disclosures of Connected
              Transactions of Listed Companies”.
  ----------- -------------------------------------------------------------

REFERENCE FOR Valuation Price / Rental Fee Assessed by 3rd Parties

+-----+-----+----------------------------------------------------------+
| Ref | Tr  | Justification for Transactions                           |
| ere | ans |                                                          |
| nce | act |                                                          |
|     | ion |                                                          |
|     | T   |                                                          |
|     | ype |                                                          |
+-----+-----+----------------------------------------------------------+
| A   | Ret | - Rental rate set at a sqm basis is in line with market  |
|     | ail | rate.                                                    |
|     | Ren |                                                          |
|     | tal | - The majority of the rental of Banyan Tree Gallery, Spa |
|     |     | and Courtyard are contracted on a % of revenue basis and |
|     |     | have been separately negotiated with the management of   |
|     |     | each hotel operation.                                    |
|     |     |                                                          |
|     |     | - Spa contracts being negotiated with other unrelated    |
|     |     | hotel operators are also structured on a % of revenue    |
|     |     | basis i.e. this is the general rental policy applied by  |
|     |     | the Banyan Tree Group.                                   |
+-----+-----+----------------------------------------------------------+
| B   | Off | - Rental rate is in line with market rate. Generally in  |
|     | ice | the upper range if compared to the same building in a    |
|     | Ren | similar location.                                        |
|     | tal |                                                          |
|     |     | - Terms and conditions in the agreement are similar to   |
|     |     | other customers and the market.                          |
|     |     |                                                          |
|     |     | - Service has been separated from rental for tax         |
|     |     | reasons.                                                 |
+-----+-----+----------------------------------------------------------+
| C   | L   | - Land lease rates are very different in the market      |
|     | and | depending on the location and type of land.              |
|     | Ren |                                                          |
|     | tal | - NPV calculation of rent charged has been compared to   |
|     |     | valuations as performed by an independent property       |
|     |     | valuer.                                                  |
+-----+-----+----------------------------------------------------------+

  Financial Assistance

  In 2001, the Company entered into significant transactions with
  related companies which there were persons with mutual interest as
  follows:-

  Lending

Million Baht or million US$

[TABLE]

  Guarantees

Million Baht or Million US$

+------+-----+----+-----+-----+------------+-------------------------+
| G    | Deb | 20 | 2   | P   | Nature of  | Necessity /             |
| uara | tor | 01 | 001 | ers | Re         | Reasonableness of       |
| ntor |     | De | Amo | ons | lationship | contract                |
|      |     | ce | unt | w   |            |                         |
|      |     | mb |     | ith |            |                         |
|      |     | er |     | mut |            |                         |
|      |     | Am |     | ual |            |                         |
|      |     | ou |     | in  |            |                         |
|      |     | nt |     | ter |            |                         |
|      |     |    |     | est |            |                         |
+------+-----+----+-----+-----+------------+-------------------------+
| LRH  | L   | 1  | 14  | T   | Common     | 1. Due to their         |
|      | BTL | 8. | .00 | WC, | S          | financial size, the     |
|      |     | 00 |     | B   | hareholder | debtors are not able to |
|      |     |    |     | THL |            | obtain favorable        |
|      |     |    |     |     |            | borrowing terms from    |
|      |     |    |     |     |            | banks without the       |
|      |     |    |     |     |            | guarantee of LRH /      |
|      |     |    |     |     |            | TWRH.                   |
|      |     |    |     |     |            |                         |
|      |     |    |     |     |            | 2. It is a generally    |
|      |     |    |     |     |            | accepted practice to    |
|      |     |    |     |     |            | rely on the parent      |
|      |     |    |     |     |            | company's financial     |
|      |     |    |     |     |            | strength to act as a    |
|      |     |    |     |     |            | guarantor for its       |
|      |     |    |     |     |            | subsidiaries borrowings |
|      |     |    |     |     |            | to obtain favorable     |
|      |     |    |     |     |            | terms which result in   |
|      |     |    |     |     |            | higher profitability    |
|      |     |    |     |     |            | for the group.          |
+------+-----+----+-----+-----+------------+-------------------------+
| LRH  | LSC | 2. | 2   | T   | Common     |                         |
|      |     | 00 | .00 | WC, | S          |                         |
|      |     |    |     | B   | hareholder |                         |
|      |     |    |     | THL |            |                         |
+------+-----+----+-----+-----+------------+-------------------------+
| LRH  | BTG | 7. | 7   | T   | Common     |                         |
|      | (T) | 00 | .00 | WC, | S          |                         |
|      |     |    |     | B   | hareholder |                         |
|      |     |    |     | THL |            |                         |
+------+-----+----+-----+-----+------------+-------------------------+
| LRH  | PCD | 0. | 0   | TWC | Common     |                         |
|      |     | 50 | .50 |     | S          |                         |
|      |     |    |     |     | hareholder |                         |
+------+-----+----+-----+-----+------------+-------------------------+
| LRH  | WEN | 1. | 1   | KP  | Common     |                         |
|      |     | 00 | .00 |     | Director   |                         |
+------+-----+----+-----+-----+------------+-------------------------+
| LRH  | LBC | -  | 28  | TWC | Common     |                         |
|      |     |    | .00 |     | S          |                         |
|      |     |    |     |     | hareholder |                         |
+------+-----+----+-----+-----+------------+-------------------------+
| TWRH | L   | -  | 0   | T   | Common     |                         |
|      | BTL |    | .03 | WC, | S          |                         |
|      |     |    |     | B   | hareholder |                         |
|      |     |    |     | THL |            |                         |
+------+-----+----+-----+-----+------------+-------------------------+
| BTD  | L   | 48 | 480 | T   | Common     |                         |
|      | BTL | 0. | .00 | WC, | S          |                         |
|      |     | 00 |     | B   | hareholder |                         |
|      |     |    |     | THL |            |                         |
+------+-----+----+-----+-----+------------+-------------------------+
| T    |     | 5  | 532 |     |            |                         |
| otal |     | 08 | .53 |     |            |                         |
| G    |     | .5 |     |     |            |                         |
| uara |     |    |     |     |            |                         |
| ntee |     |    |     |     |            |                         |
| Baht |     |    |     |     |            |                         |
+------+-----+----+-----+-----+------------+-------------------------+

  Investment in convertible loan

Million Baht or Million US$

[TABLE]

ABBREVIATIONS

+-------+---------------------------+-------+-------------------------+
|   AVC |   Allamanda Vacation Club |   LRH |   Laguna Resorts &      |
|       |   Ltd.                    |       |   Hotels Plc.           |
+-------+---------------------------+-------+-------------------------+
|   BLH |   Boklom Holdings Ltd.    |   LSC |   Laguna Services Co.,  |
|       |                           |       |   Ltd.                  |
+-------+---------------------------+-------+-------------------------+
|   BTG |   Banyan Tree Gallery     |   MCP |   Mae Chan Property     |
|   (T) |   (Thailand) Ltd.         |       |   Co., Ltd.             |
+-------+---------------------------+-------+-------------------------+
|   BTG |   Banyan Tree Gallery     |   MJ  |   Mae Joe Land Co.,     |
|   (S) |   (Singapore) Pte., Ltd.  |       |   Ltd.                  |
+-------+---------------------------+-------+-------------------------+
|       |   Banyan Tree Golf Club   |   PCD |   PCD Limited           |
|  BTGC |   Ltd.                    |       |                         |
+-------+---------------------------+-------+-------------------------+
|       |   Banyan Tree Holdings    |       |   Phuket Resorts        |
|  BTHL |   Pte., Ltd.              |  PKRD |   Development Co., Ltd. |
+-------+---------------------------+-------+-------------------------+
|       |   Banyan Tree Hotels &    |       |   Sheraton Grande       |
|  BTHR |   Resorts Pte., Ltd.      |  SGLP |   Laguna Phuket Resort  |
+-------+---------------------------+-------+-------------------------+
|   BTR |   Banyan Tree Resorts     |   THL |   Tropical Hotels       |
|       |   Ltd.                    |       |   Limited               |
+-------+---------------------------+-------+-------------------------+
|   BTS |   Banyan Tree Spa Co.,    |       |   Tropical Resorts      |
|       |   Ltd.                    |  TRMC |   Management Co., Ltd.  |
+-------+---------------------------+-------+-------------------------+
|   DSL |   Dusit Laguna Resort     |   TRL |   Tropical Resorts Ltd. |
+-------+---------------------------+-------+-------------------------+
|   GSI |   Gold Sand Investments   |   TWC |   Thai Wah Plc          |
|       |   Ltd.                    |       |                         |
+-------+---------------------------+-------+-------------------------+
|   HO  |   Head Office             |       |   Thai Wah Food         |
|       |                           |  TWFP |   Products Plc          |
+-------+---------------------------+-------+-------------------------+
|   KRL |   Kingley Realty Ltd      |       |   Thai Wah Plaza Ltd.   |
|       |                           |  TWPL |                         |
+-------+---------------------------+-------+-------------------------+
|   L3  |   Laguna (3) Co., Ltd.    |       |   TWR-Holdings Ltd.     |
|       |                           |  TWRH |                         |
+-------+---------------------------+-------+-------------------------+
|   LBC |   Laguna Beach Club Ltd.  |       |   Thai Wah Realty Ltd.  |
|       |                           |  TWRL |                         |
+-------+---------------------------+-------+-------------------------+
|       |   Laguna Banyan Tree Ltd. |   WEN |   Wenco - Thai Ltd.     |
|  LBTL |                           |       |                         |
+-------+---------------------------+-------+-------------------------+
|   LGL |   Laguna Grande Ltd.      |       |                         |
+-------+---------------------------+-------+-------------------------+

INITIALS

+-----+-----------------------------+-------+-------------------------+
|     |   Mr Ho Kwon Ping           |   JRB |   Mr James R. Batt      |
|  KP |                             |       |                         |
+-----+-----------------------------+-------+-------------------------+
|     |   Mr Ho Kwon Cjan           |   SS  |   Dr Sretsei            |
| KCH |                             |       |   Saittagaroon          |
+-----+-----------------------------+-------+-------------------------+
|     |   Ms Chiang See Ngor        |   MA  |   Mr Michael Ramon      |
| CSN |                             |       |   Ayling                |
+-----+-----------------------------+-------+-------------------------+
|     |   Mr Ariel P. Vera          |   NT  |   Mr Niyom              |
| APV |                             |       |   Tassaneetipagorn      |
+-----+-----------------------------+-------+-------------------------+
|     |   Mr Tee Hwee Liang         |   CH  |   Mr Kuan Chiet         |
| HLT |                             |       |                         |
+-----+-----------------------------+-------+-------------------------+
|     |   Mr Surapon Surpratya      |   NS  |   Ms Nongporn           |
| SSU |                             |       |   Siripattanadolk       |
+-----+-----------------------------+-------+-------------------------+
|     |   Mr. Phitak                |       |                         |
|  PB |   Boonpojanasoontorn        |       |                         |
+-----+-----------------------------+-------+-------------------------+