PART I EXECUTIVE SUMMARY

The business of Laguna Resorts and Hotels Plc 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 Laguna Resorts and Hotels
Plc either owns or has an ownership stake:

-   Banyan Tree Phuket – 121 exclusive villa’s, 50 with Jacuzzis and 71
    of which their own swimming pools. The resort is managed by
    Hotelbrands Management Pte. Limited (formerly Banyan Tree Hotels and
    Resorts Pte Limited).

-   Dusit Laguna Resort – 224 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 – 252 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 lease the units to Sheraton Overseas
  Management Corporation to manage for them, 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
  Hotelbrands Management 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 Laguna Resorts and Hotels Plc.

  Laguna Homes is a housing plot development. There are 74 land plots
  located around the golf course. The land plots are for sale to the
  public. 20 land plots have been reserved for the sale of Golf Villas,
  which is a “house and land” package that was introduced in 2001. A new
  development, Laguna Townhomes, was introduced in the last quarter of
  2002.

  Banyan Tree Two Bedroom Pool Villas are a luxury development project
  attached to the Banyan Tree Phuket. The villas have all now been sold
  to the public, with the remainder of the villas being sold during the
  course of 2001. The individual owners may earn a return on their
  investment by contracting Hotelbrands Management Pte. Ltd. to manage
  their unit for them.

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

  The Allamanda Vacation Club 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 and Angsana Resort and 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

Performance for the 2002 Financial Year

The profit attributable to the shareholders of Baht 153 million for the
year ended 31 December 2002 was Baht 172 million lower than the prior
year result. The result has been distorted by the one-off recognition in
the profit and loss account of the permanent diminution in the value of
the Groups investment in available-for-sale securities. This has had the
effect of reducing the net profit by Baht 284 million.

Before this exceptional item, the net earnings for the year ended 31
December 2002 was Baht 436 million which represents a Baht 112 million
or 34% increase over the prior year. The increase in profitability was
despite difficult trading conditions in the hotel and property sales
divisions and was largely achieved by financial management measures
whereby corporate income tax was significantly reduced due to the
benefits resulting from tax planning projects undertaken in 2001. In
addition a reduction in the share of profit in subsidiaries to minority
interests was achieved which was due to the purchase of the minority
interests in the 2 largest hotels of the Group, the Sheraton Grande
Laguna Phuket and the Banyan Tree Phuket in late 2001 and early 2002
respectively.

Otherwise operating revenues and profits for the hotel and property
sales divisions were lower than the prior year level.