April 2009 A Strategic Perspective - EnrichMentors · April 2009 EnRichMentor$ Company Review...

63
April 2009 EnRichMentor$ Company Review Banyan Tree Holdings A Strategic Perspective

Transcript of April 2009 A Strategic Perspective - EnrichMentors · April 2009 EnRichMentor$ Company Review...

April 2009

EnRichMentor$ Company Review

Banyan Tree Holdings

A Strategic Perspective

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

1EnRichMentor$ Company Review

Disclaimer

This EnRichMentor$ Company Review (“ECR”) has been prepared by EnRichMentor$ Singapore based on information provided by Banyan Tree Holdings, Singapore (hereinafter referred as “BTH” or the “Company”) on its website and other information by sources identified herein, solely for the purpose of sharing our views on the Strategies intended to be adopted by the company and exploring if we can help the company in either improving the strategies or execution. It may also be used to share our perspective on the company with other Interested Parties who may like to purchase it for a consideration

The ECR is being issued in order to assist the company and Interested Parties in evaluating the strategy development opportunities and deciding whether to proceed with the opportunities. The information and data contained in this ECR is confidential and should not be divulged or disclosed to any person or entity or reproduced or disseminated, in whole or in part, except as agreed individually with each one of them. Any person in possession of this ECR should familiarise himself with such agreement before reading, circulating or using the ECR.

The information contained in this ECR is selective and is subject to updation, expansion, revision and amendment. EnRichMentor$ has not independently verified any of the information and data contained herein. While the information provided herein is believed to be accurate and reliable, EnRichMentor$ (nor any of their respective affiliates, subsidiaries, advisors and agents thereof) do not make any representations or warranties, expressed or implied, as to the accuracy or completeness of such information and data. Nothing contained in this ECR is, or shall be relied upon, as a promise or representation by the company or EnRichMentor$. Interested Parties are responsible for conducting their own due diligence.

This ECR is being distributed to the company and Interested Parties only on the basis that each party to whom this ECR is issued is a person sufficiently expert to understand the risks involved in the perspectives of such nature. In furnishing this ECR, EnRichMentor$ reserves the right to replace or amend the ECR at any time and undertakes no obligation to provide the Interested Parties with access to any additional information. The management of EnRichMentor$ reserve the right to enter into negotiations with one or more of the Interested Parties at any time or terminate any negotiation without stating any reason thereof. EnRichMentor$ will arrange all responses to the Interested Parties. The shareholders and management of the company should not be contacted directly.

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

2EnRichMentor$ Company Review

Glossary

BT Banyan TreeCAGR Compounded Annual Growth Rate CEO Chief Executive OfficerCOGS Cost of Goods SoldDFO Design fees and others EPS Earnings Per ShareFDA Food and Drugs AdministrationFEMA Foreign Exchange Management ActFL Financial LeverageFY Financial YearGDP Gross Domestic Product GM Gross MarginGO Gallery OperationsHI Hotel InvestmentHM Hotel ManagementHR Hotel ResidencesIIM Indian Institute of ManagementINR Indian National RupeeJ&J Johnson and JohnsonMIS Management Information SystemMn MillionMNC Multi National CompanyNPM Net profit MarginPAT Profit After TaxPBT Profit Before TaxPER Price Earnings RatioPS Property SalesR&D Research and Development RBI Reserve Bank of IndiaROA Return On AssetROE Return On EquityS&D Sales and DistributionSGD Singapore DollarSO Spa OperationsTAT Total Asset TurnoverUSA United States of AmericaUSD/US$ United States Dollar

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

3EnRichMentor$ Company Review

Contents

1. The Executive Summary 4

2. Analytical Framework 6

3. Business Overview 10

4. Current Situation 21

– Financial 22

– Strategic 25

5. Current Strategies & Plans 26

6. Evaluation of Current Strategies 28

7. Financials and Earnings Projections 2009-2011 30

8. Potential Strategy Development Opportunities 34

9. Contact & Profile 36

10. Annexures 42

Page No.

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

4EnRichMentor$ Company Review

The Executive Summary

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

5EnRichMentor$ Company Review

The Executive Summary

Banyan Tree Holdings is passing through a some what challenging time with sales revenue stagnating in 2008 coupled with sharp

reduction in the profitability of the company. The challenges are primarily of operational nature with overall company strategy being

very sound, though a bit over ambitious in places.

The company has identified many of the factors that has caused this decline in the company performance and has articulated many

strategies and plans to arrest this stagnation in revenue and the decline in profitability.

Our assessment of the company strategy and plan indicates that while the company will be able to improve its profitability over next

three to a reasonable level, it has much more potential given its product market positioning.

The task of exploiting the fuller potential of the company will require the following new initiatives to be formulated and executed in near

future.

Formulation of a clearer Company VisionWill provide a more coherent and clear direction to all the people in the companyChannel the efforts of the all the people in same direction ensuring better execution of the plans

Review of Divisional Strategic Planning ProcessWill ensure that the longer terms goals like that of 2011 are more attainableExploit the growth potential of smaller but strategic segments like Spas

Formulation of a Organizational StrategyWill ensure that the organization structure is optimally designed for the companyImproved the cost structure of the smaller divisions and overall company

Review of Brand Development Planning Process for AngsanaWill improve the revenue and occupancy of the Angsana hotels

Formulation of R&D StrategyEnsure that R&D efforts are aligned with other functional strategies and aims to deliver the company goals

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

6EnRichMentor$ Company Review

Analytical Framework

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

7EnRichMentor$ Company Review

Business Strategy- Definition

Winning Business StrategyWinning Business Strategy is a combination of the goals you are trying to achieve and the means by which you can get there. The key elements of the Winning Business Strategy areHow will you compete broadly in the categories you have chosen to build the business?What are the sales, market share and profitability goals for next 3-5 years?What product and service line will you have?Which markets and customers will you target to build your businessHow will you generate the demand for your products and services?How will you sell and distribute your products and services?How will you purchase the materials and manufacture your products and servicesHow will you get the right people and get best out of them?How will you develop the new products and services?How will you finance your business and exercise management control?

GoalsDefinition of how the business is

going to compete

Objectives for sales growth,

Market Share &

Profitability

Product Line Target Markets

MarketingFinance & Control

Sales & Distribution

Purchase & ManufacturingPeople

Research & Dev

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

8EnRichMentor$ Company Review

Key Factors considered for evaluating the Business Strategy

At the broadest levelAt the broadest level Winning Business StrategyWinning Business Strategy formulation involves the consideration of four key factors that determine the extent you can be successfulCompany Strengths and Weaknesses are your assets and skills relative to the competitors including financial resources, technology posture, brand identification etc.The personal values of an organization are the motivations and needs of the key executives and other personnel who will implement the chosen strategyStrength & Weaknesses combined with Values determine the internal limits of the Winning Strategy you can successfully adoptThe external limits are determined by the industry and broader environmentIndustry Opportunity and Threats define the competitive environment with its attendant risks and potential rewardsSocietal Expectations reflect the impact on the company of such things as government policy, social concerns, evolving mores etc

These four factors must be considered before you develop a realistic and implementable Winning Business StrategyWinning Business Strategy

WinningBusiness Strategy

Product LineCompany

Strength and Weaknesses

Industry Opportunities and Threats

Broader Societal

Expectations

Personal Values of the

Key Implementers

Factors External to the

Company

Factors Internal to the

Company

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

9EnRichMentor$ Company Review

Evaluation Process for the Business Strategy

You can determine if your Business Strategy will really make youYou can determine if your Business Strategy will really make yououtperform your competitors by testing for the followingoutperform your competitors by testing for the following

Internal ConsistencyAre your goals mutually achievable?Do the key operating policies address the goals?Do the key operating policies reinforce each other?Environmental FitDo the goals and polices exploit industry opportunities?Do the goals and polices deal with industry threats to the degree possible with

available resources?Does the timing of the goals and polices reflect the ability of environment to

absorb the actions?Are the goals and policies responsive to broader societal concerns?Resource FitDo the goals and polices match the resources available to the company relative

to competitors?Does the timing of goals and polices reflect the organization’s ability to change?Communication and ImplementationAre the goals well understood by the key implementers?Are the implementers committed these goals and policies?Is there sufficient managerial capability for effective implementation?

Product LineCompany

Strength and Weaknesses

Industry Opportunities and Threats

Broader Societal

Expectations

Personal Values of the

Key Implementers

Factors External

to the Company

Factors Internal to

the Company

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

10EnRichMentor$ Company Review

Business Overview

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

11EnRichMentor$ Company Review

Company overview

•Banyan Tree Holdings Limited (“Banyan Tree” or the “Group”) is a leading manager

and developer of premium resorts, hotels and spas in the Asia Pacific, with 25 resorts

and hotels, 68 spas, 65 retail galleries, and two golf courses.

• The Group manages and/or has ownership interests in niche resorts and hotels. The

resorts each typically has between 50 and 100 rooms and commands room rates at

the high end of each property’s particular market.

•Banyan Tree has seven operating business segments: hotel investment, hotel

residence sales, hotel management, spa operations, gallery operations, property

sales, design fees and others (design and project management, golf course operations

and other businesses).

•The Group’s primary business is the management, development and ownership of

resorts and hotels. This is centered on two award winning brands: Banyan Tree and

Angsana. Banyan Tree also operates the leading integrated resort in Thailand –

Laguna Phuket, through the Group’s subsidiary, Laguna Resorts & Hotels Public

Company Limited.

•As a leading operator of spas in the Asia Pacific, Banyan Tree’s spas are one of the

key features in their resorts and hotels. Banyan Tree galleries, which complement

their resorts, hotels and spas, help to extend the reach and scope of their brands.

•Since the launch of the first Banyan Tree resort, Banyan Tree Phuket, in 1994,

Banyan Tree has received over 300 awards and accolades for the resorts, hotels and

spas that the Group manages. The Group has also received recognition for its

commitment to environmental protection and emphasis on corporate social

responsibility.

Source: 2007 Annual Report

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

12EnRichMentor$ Company Review

Business overview

• The seven key businesses of the Group are

– Hotel investment (HI)

– Hotel management (HM)

– Hotel Residences (HR)

– Spa operations (SO)

– Property sales (PS)

– Gallery operations (GO)

– Design fees and others (DFO)

• Hotel Investment is the largest of the business with 49%

contribution to the total business. This business made health

23% operating profit margin in 2007

• Hotel Residences is second largest business with a 18%

contribution to total revenue and very health operating profit

margin of 51%

• Property Sales business ranks 3rd in terms of revenue

contribution of 13% and a healthy operating margin of 23%

• Other business are small in terms of contribution to sales and

have low profitability

15.34%

78.518%

10.83%

23.66%

20549%

52.313%

27.17%

HI

HM

HR

SO

PS

GS

DFO

Segment wise sales 2008 (Mn S$)

Source: Company Website

-9.61

51.32

8.343.62

10.36

23.3722.93

-20

-10

0

10

20

30

40

50

60

HI HM HR SO PS GS DFO

Segment wise Profitability 2008 -% Operating Profit

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

13EnRichMentor$ Company Review

Hotel investments

• Hotel Investments (HI) business owns and manages luxury hotels under their own brands as well as hotels that are managed by other world class operators.

• It has equity Interest in 15 hotels, comprising over 1,600 keys.

• The company is developing new resorts in China, Maldives and Vietnam.

Source: 2007 Annual Report

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

14EnRichMentor$ Company Review

Hotel Management• The Hotel Management business manages properties under the Banyan Tree and Angsana brands for other owners as well.

This is mostly done under straight forward management agreements. It also manages the Banyan Tree Private collection, an asset-backed destination club.

• The company has signed 13 new management agreements in 2007 and it is targeting to have number of keys exceeding 8,000 by 2011 under Hotel Management

Source: 2007 Annual Report

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

15EnRichMentor$ Company Review

Hotel residences• Hotel Residences business deals with properties that are primarily sold under the brand name “Banyan Tree Residences”,

which are part of their hotel operations.• The Initial revenue of this business was from sale of Double Pool Villas in Banyan Tree Phuket.• Banyan Tree Residences are now available for sale in Phuket, Seychelles, Lijiang, Bintan and Bangkok.

Source: 2007 Annual Report

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

16EnRichMentor$ Company Review

Property sales• Property Sales business deals with the properties that are sold by their subsidiary company Laguna Resorts & Hotels and

its subsidiaries. It also manage Laguna Holiday Club, a timeshare vacation club memberships.• All property sales for this business are currently in Laguna Phuket.• Its properties are primarily town homes & bungalows located within the vicinity of their resorts but not part of hotel operation.

Source: 2007 Annual Report

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

17EnRichMentor$ Company Review

Spa operations

• Spa Operations manages spas within company resorts and also in other developers/owners’ hotels and resorts. It pioneered the tropical garden spa concept and has 64 spas worldwide

• It added two new training facilities Banyan Tree Lijiang in Yunnan Province, China and Banyan Tree Bangkok. This is in addition to the cornerstone Banyan Tree Spa Academy in Phuket and facility in Bintan.

Source: 2007 Annual Report

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

18EnRichMentor$ Company Review

Gallery operations

• The retail arm of the group, Banyan Tree Gallery supports indigenous artistry, livelihoods of village artisans and environmental conservation.

• It comprises Banyan Tree Galleries, Angsana Galleries and Museum Shops by

Banyan Tree.• This business has produced

43 collections of over 280 products and partners 49 not-for-profit organizations.

Source: 2007 Annual Report

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

19EnRichMentor$ Company Review

Design fees & others

• This business of BT receive fees for

design services and income from

operating golf clubs. Most of the

company resorts are planned and

designed by its in-house

architectural and design team.

• The construction of new resorts

determines its revenue from design

fees.

• It also operate two golf clubs

(Bintan and Phuket).

Source: 2007 Annual Report

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

20EnRichMentor$ Company Review

Cost Structure Overview

Salaries, Operating Supplies, Other Operating Expenses and Admin Expenses account for bulk of

the operating costs of the company

Sales & Marketing Expenses are on low side of the cost structure at 4.84% of the total revenue

Source: 2008 Annual Results of the Company

% of Sales Break-up 2008

19.21

27.81

14.09

4.84

15.04

8.081.143.575.814.45

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008

Profit After Tax

Income Tax

Net Finance Cost

Amortization

Depreciation

Other Operating Exp

Sales & MarketingExpAdmin Exp

Salary & related Exp

Operating Supplies

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

21EnRichMentor$ Company Review

Current Situation

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

22EnRichMentor$ Company Review

Current Situation- Financial

The sales revenue of the company grew rapidly from 187 Mn S$ in 2005 to a peak of 422 Mn S$ in 2007. The sales revenue has remained stagnant in 2008 at 412 Mn S$

The growth in Sales revenue during 2005-2007 is attributed to the broad rebound in regional tourism after the Asian Tsunami at the end of 2004, development of innovative new products and geographic expansion in strategic locations

The Company sales remained stagnant due to political turmoil in Thailand and the global recession in the 4th

quarter of 2008

The total cost & expenses sales has continued to increase since 2006 from 67.08% to a high of 80.99% in 2008.

This has resulted in continued deterioration in the Operating profits of the company from 33.23% in 2006 to 22.72% in 2008.

This can be attributed to the rising salaries and administrative expenses driven by too wide a geographical expansion without commensurate increase in revenues

The financial situation has been somewhat mitigated with the rise in other income of 3.71% in 2008 which is due to one off items such as insurance claims arising from the Tsunami, gain on capital distribution from an associated company and course & academy fees

0

100

200

300

400

500

2004 2005 2006 2007 2008

0

20

40

60

80

100

2004 2005 2006 2007 2008

% Total Cost & Exp % Op Profit % Other Income

Revenue in Mn S$

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

23EnRichMentor$ Company Review

Current Situation- Financial

Salaries & related expenses are the largest part of the operating expenses of the company and they have increased form 22.99% in 2006 to 27.81% in 2008, affecting the company profitability significantly

Admin Expenses have also increased from 7.11% in 2006 to 14.1%, affecting the company profitability the most

Operating Supplies and Sales & Marketing Expenses have remained in control as they are around 19% and 5% of the revenue during 2006-2008

Other Operating Expenses, though very significant, have increased marginally from 14.2% in 2006 to 15% in 2008

The Depreciation and Finance cost have remained in control during the period 2006 to 2008 ranging between 6-8% and around 4% respectively, though 4% finance cost is rather high in itself

The stagnant revenue and rising operating cost has lead the company to a significant lower PAT of 4.45% in 2008 vs. a PAT of 12.64% in 2006

0

10

20

30

40

2005 2006 2007 2008

% Operating Supplies % Salaries% Admin Exp % Sales & Marketing Exp% Other Operating Exp

-20

-10

0

10

20

30

2005 2006 2007 2008

% Depreciation % Finance Cost % Exceptional Item % PBT % PAT

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

24EnRichMentor$ Company Review

Current Situation-Financial

During 2005-2007 ,Banyan Tree Holdings Net profit margin (NPM) grew significantly from 0.55% to 19.41% but it dropped considerably to 1.7% in 2008. This decline is due to sharply rising operating cost.

Return on Equity (ROE) peaked in 2007 at 13.56% and has declined to 1.26% in 2008 .This is mainly due to the significant decline in the Net income in the same period.

The total asset turnover (TAT) ratio was relatively stagnant, a total range of O.27 to 0.37 implying opportunity to improve utilization of its assets.

The financial Leverage (FL) of Banyan Tree Holdings peaked at 3.61 in 2006 and has been relatively stable in the range of 2.54-2.64 since. This implies that it relies on lesser debt in financing its assets. Hence, this decreases their financial risk making it more stable and secure.

Source: 2005-2008 Annual Reports of the Company, Company Website, Refer annexure 14 and 18.

02468

101214161820

2005 2006 2007 2008

NPMROE

0

0.5

1

1.5

2

2.5

3

3.5

4

2005 2006 2007 2008

TATFL

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

25EnRichMentor$ Company Review

Current Situation- Strategic

Threats•Global Recession•Continued Political Turmoil in Thailand•Season and Cyclical Fluctuations•Country specific event risks like terrorism, epidemics and natural disasters, especially in Thailand like Tsunami in 2004 end

Weaknesses•High dependence on Thailand business~60% of the total revenue•Many small business like Hotel Residences, Spa Operations, Gallery Sales, Design Fee & Others•Overlapping Businesses in Property Sales and Hotel Residences•Heavy Administrative Cost Structure (14% of revenue in 2008)•High Financing Cost ~4% of revenue•Poor operating margins in Hotel Management, Spa Operation and Gallery Sales businesses•Lower occupancy of Angsana vs. Banyan Tree Hotels

Opportunities•Property Development and sales in Seychelles, Vietnam and Lhasa•Aggressive growth in spa operations and Hotel Management business within existing fixed cost structure•Merge Gallery Operations with Spa Operations to improve the operating margins of both businesses•Merge Property Operations and Hotel Residences into one Business Unit•Optimize the Administrative Infrastructure•Strengthen Angsana Brand

Strengths•549 ha land bank that is spread over Phuket, the Seychelles, Vietnam, Lijiang and Lhasa•Integrated business model•Strong Brand Recognition•Integrated capabilities- including in-house design, project management and centralized marketing•Reduced time needed to launch new offerings•7000 people from 50 nationalities•BTH Management Academy•4 Spa training facility with capability to turn out 200 therapist a year•Low cost operating environment•Experienced, qualified management team

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

26EnRichMentor$ Company Review

Current Strategy & Plans

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

27EnRichMentor$ Company Review

Current Business Strategy

•Finance through a combination of Equity, loans and development fundsFinance & Control

Research & Development

•Training people in house to provide consistent quality of service around the world- skills as well as core BT valuesPeople

•Managed Properties will account for some 60% of the new properties coming on stream from 2008 to 2011Purchase & Manufacturing

•Sales generated online and through regional offices and GSAs incentivization•Provide service in the hotels, spa and gallery through own staff fully trained to provide a exceptional experience

Sales & Distribution

•Road Shows, exhibitions, public relations, advertising•Prices at the high end of the market•Online marketing•Cross promotions

Marketing

•Beyond 2008, the Banyan Tree brand will be winning more converts to its concept properties by opening in Greece, Turkey, Oman, India, Vietnam and widening its presence in China and Thailand.•High End Travelers- Affluent Customers in Host countries

Target Market

•High end resorts, hotels and spas that provide luxurious, romantic travel experience•New recurring fee-based income

Product Line

•70 resorts, 9349 keys and 124-180 spas by 2011Sales, Market Share & Profitability Objectives

•“Becoming global has always been part of our vision because a long-term, sustainable businessrequires that we grow our revenue base and diversify worldwide.”•It has always been Banyan Tree’s vision to be a global business with a string of properties strategically spread around the globe•Greater breath and depth globally- Strategic geographic expansion- Expand into low cost locations close to key customer markets

Vision and Overall Strategy

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

28EnRichMentor$ Company Review

Evaluation of Current Strategy

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

29EnRichMentor$ Company Review

Evaluation of Current Strategy

•Finance through a combination of Equity, loans and development funds

•Training people in house to provide consistent quality of service around the world-skills as well as core BT values

•Managed Properties will account for some 60% of the new properties coming on stream from 2008 to 2011

•Sales generated online and through regional offices and GSAs incentivization•Provide service in the hotels, spa and gallery through own staff fully trained to provide a exceptional experience

•Road Shows, exhibitions, public relations, advertising•Prices at the high end of the market•Online marketing•Cross promotions

•Beyond 2008, the Banyan Tree brand will be winning more converts to its concept properties by opening in Greece, Turkey, Oman, India, Vietnam and widening its presence in China and Thailand.•High End Travelers- Affluent Customers in Host countries

•High end resorts, hotels and spas that provide luxurious, romantic travel experience under Banyan Tree and Angsana Brand name•New recurring fee-based income

•70 resorts, 9349 keys and 124-180 spas by 2011

•“Becoming global has always been part of our vision because a long-term, sustainable business requires that we grow our revenue base and diversify worldwide.”•It has always been Banyan Tree’s vision to be a global business with a string of properties strategically spread around the globe•Greater breath and depth globally- Strategic geographic expansion- Expand into low cost locations close to key customer markets

•No plans to optimize admin and smaller divisions’ cost structure

No clear strategy on how the new products and services will be developed

•Right focus in training and retraining people in-house on skills and values

•Right approach to focus more on Managed business but need to improve the cost structure to make it more profitable

•Right focus on Regional sales offices and GSAs incentivization

•Right focus on high end pricing, online marketing, road shows, exhibitions, Public relation, advertising and cross promotions•No Plans to strengthen Angsana brand

•Absence of plans to capitalize on the land bank in Lhasa

•Right focus on high end hotels, resorts and spas

•Very ambitions goals in 2011 without demonstrated capability to achieve them•Conservative Spa operations growth plans

•Vision of being global brands articulated in many places in pieces•Overall business strategy also not clearly articulated•Right focus on becoming global in strategic low cost locations to grow the revenue profitably and reduce the country specific evenrisk to business like Thailand

Finance & Control

Research & Development

People

Purchase & Manufacturing

Sales & Distribution

Marketing

Target Market

Product Line

Sales, Market Share & Profitability Goals

Vision and Overall Strategy

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

30EnRichMentor$ Company Review

Financials and Earnings Projections 2009-2011

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

31EnRichMentor$ Company Review

Revenue Projections for 2009-2011

946.851616.834541.447Total Estimated Revenue

10.1483.8430The additional number of keys will also face the impact of recession. Revenue for 2009 for the additional keys will remain the same, but that for 2010 and 2011 will increase by 2% as recession will ease.

507.421192.127128.835Due to the companys expansion strategy , number of total keys will increase to 3837, 4344 and 6638 in the years 2009, 2010, and 2011 respectively. (Refer to Annexure 15). These additional keys will contribute to the revenue.

429.282420.864412.612412.612421.859335.321187.268218Taking the current number of total room keys as 2924 (Refer to Annexure 15), revenue for 2009 same as 2008 as growth will be flat (Refer to Annexure 16). Year 2010 and 2011 will have a growth of 2% as recession will ease.( Refer to Annexure 12)

20112010200920082007200620052004Year

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

32EnRichMentor$ Company Review

Financial Projections for 2009-2011

Assumptions/ Calculations Mn S$ % Mn S$ % Mn S$ % Mn S$ % Mn S$ %As derived Revenue 421.859 100 412.612 100.00 541.447 100 616.834 100 946.851 100.00In proportion to the number of keys Other income 2.272 0.54% 15.309 3.71% 20.089 3.71% 22.744 3.69% 34.754 3.67%

Cost and expensesIn proportion to the number of keys Operating supplies (83.760) -19.85% (79.277) -19.21% (104.031) -19.21% (117.777) -19.09% (179.973) -19.01%In proportion to the number of keys Salaries & related expneses (98.778) -23.41% (114.747) -27.81% (150.576) -27.81% (170.472) -27.64% (260.496) -27.51%10% for 2011 Administrative expenses (39.486) -9.36% (58.129) -14.09% (76.279) -14.09% (73.550) -11.92% (93.700) -9.90%In proportion to the number of keys Sales & marekting expenses (21.327) -5.06% (19.980) -4.84% (26.219) -4.84% (29.683) -4.81% (45.358) -4.79%In proportion to the number of keys Other operating Expenses (58.237) -13.80% (62.039) -15.04% (81.410) -15.04% (92.167) -14.94% (140.840) -14.87%

Total costs and expenses (301.588) -71.49% (334.172) -80.99% (438.515) -80.99% (483.649) -78.41% (720.367) -76.08%Operating profit 122.543 29.05% 93.749 22.72% 123.022 22.72% 155.928 25.28% 261.238 27.59%

2.7% of Total assets Depreciation of property, plant & equipment (26.243) -6.22% (33.335) -8.08% (45.830) -8.46% (49.344) -8.00% (65.059) -6.87%0.3% of Total assets Amortization of lease rentals & land use rights (4.137) -0.98% (4.689) -1.14% (5.092) -0.94% (5.483) -0.89% (7.229) -0.76%

Profit from Operations 92.163 21.85% 55.725 13.51% 72.099 13.32% 101.102 16.39% 188.951 19.96%Nil Finance income 4.174 0.99% 3.397 0.82% - 0.00% - 0.00% - 0.00%5% of Debts Finace Costs (16.421) -3.89% (18.096) -4.39% (35.075) -6.48% (34.227) -5.55% (42.198) -4.46%5% of 2% of Total assets Share of results of associated companies 2.032 0.48% 1.317 0.32% 1.697 0.31% 1.828 0.30% 2.410 0.25%Nil Share of results of joint venture companies (0.006) 0.00% (0.005) 0.00% 0.00% 0.00% 0.00%

(Loss)/ Profit before exceptional items 81.942 19.42% 42.338 10.26% 38.721 7.15% 68.702 11.14% 149.162 15.75%Nil Exceptional item 44.535 10.56% - 0.00% 0.00% 0.00% - 0.00%

(Loss)/ Profit before taxation 126.477 29.98% 42.338 10.26% 38.721 7.15% 68.702 11.14% 149.162 15.75%Average of 2005-2008 I(ncome tax expense/Proft before taxation) Income tax expenses (24.036) -5.70% (23.991) -5.81% (12.004) -2.22% (21.298) -3.45% (23.991) -2.53%

(Loss)/ Profit after taxation 102.441 24.28% 18.347 4.45% 26.718 4.93% 47.404 7.69% 125.171 13.22%

2009 2010 201120082007

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

33EnRichMentor$ Company Review

Financial Projections 2009-2011

Assumptions:

•Future Total assets and common equity calculations (Refer annexure 17)

•Additional number of shares have been calculated by taking the difference between the common equity of two consecutive years anddividing it with the year end share price (Refer annexure 13)

•Price Earnings ratio is calculated at 13 due to easing of recession from 2009 and an increase in risk appetite for equities.

Implications:

•Net profit Margin will improve every year indicating better income from per unit sales.

•Total Asset Turnover will more of less remain in the range of 0.32-0.39 indicating opportunity for improvement.

•Financial Leverage will remain stable in the range of 2.95-2.98 which shows Banyan tree will be financially stable and secure

•ROE will improve over the years due to improvement in the Net Profit Margin from 2009 to 2011

•The Share Price of Banyan Tree will improve from 2009 due to a stable PER and an improving EPS.

In Mn S$ 2006 2007 2008 2009 2010 2011Profit attributable to equity holders 27.107 81.866 7.026 26.718 47.404 125.171Total Assets 911.3 1459.657 1467.363 1697.420 1827.543 2409.588Common Equity 359.051 568.708 556.549 574.737 616.945 807.921Net Sales 335.321 421.859 412.612 541.447 616.834 946.851Net Profit Margin 8.08 19.41 1.70 4.93 7.69 13.22Total Asset Turnover 0.37 0.29 0.28 0.32 0.34 0.39Financial Leverage 2.54 2.57 2.64 2.95 2.96 2.98Return On Equity 7.55 13.56 1.26 4.65 7.68 15.49EPS(Earnings/ No of shares) 0.039 0.108 0.009 0.033 0.052 0.105No of shares 691.243 761.110 758.402 810.339 908.813 1190.452Price Earnings ratio (Price/EPS) 10.91 3.61 37.800 13.000 13.000 13.000Price 0.428 0.388 0.350 0.429 0.678 1.367

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

34EnRichMentor$ Company Review

Potential Strategy Development Opportunities

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

35EnRichMentor$ Company Review

Potential Strategy Development Opportunities & Expected Benefits

• Formulation of a clearer Company VisionWill provide a more coherent and clear direction to all the people in the companyChannel the efforts of the all the people in same direction ensuring better execution of the plans

• Review of Divisional Strategic Planning ProcessWill ensure that the longer terms goals like that of 2011 are more attainableExploit the growth potential of smaller but strategic segments like Spas

• Formulation of a Organizational StrategyWill ensure that the organization structure is optimally designed for the companyImproved the cost structure of the smaller divisions and overall company

• Review of Brand Development Planning Process for AngsanaWill improve the revenue and occupancy of the Angsana hotels

• Formulation of R&D StrategyEnsure that R&D efforts are aligned with other functional strategies and aims to deliver the company goals

April 2009

EnRichMentor$ Company Review

Contact & Profile

www.enrichmentors.com

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

37EnRichMentor$ Company Review

Contact

Arun SinghalEnRichMentor$Hume Park 2, Block 19, #09-01 Hume Avenue, Upper Bukit Timah RoadSingapore 598727

tel.: +65-81303675 e-mail: [email protected]

[email protected]

Pratibha SinghalEnRichMentor$Hume Park 2, Block 19, #09-01 Hume Avenue, Upper Bukit Timah RoadSingapore 598727

tel.: +65-91470943 e-mail: [email protected]

Richa SinghalEnRichMentor$Hume Park 2, Block 19, #09-01 Hume Avenue, Upper Bukit Timah RoadSingapore 598727

tel.: + 81303675e-mail: [email protected]

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

38EnRichMentor$ Company Review

Who are we?A family firm set with the object of providing consultation, counseling and

coaching to the Individuals, Small and Medium Enterprises for better health and wealth

– Management consulting for Small and Medium Enterprises to grow business faster profitably– Career Counseling to do better on the job– Financial consultation to get better return on the investment– Alternative medical consultation for better health

Core Management Team

Arun Singhal– Post Graduate in Management from IIM Bangalore (1981) in Marketing & Finance– 26 Years experience in Hindustan Unilever, Johnson & Johnson and Dumex India in sales, marketing, operations

and general management– Proven career in building and growing businesses faster and developing people– In-depth knowledge of Indian Financial Markets in generating superior returns on investment– Over 10 years education and experience in providing homeopathic consultation for better health

Pratibha Singhal– Post Graduate in Life Sciences and Management– Over 20 years education & experience in providing alternative medical consultation for better health

Richa Singhal– Graduate in Business Management from SIM, Singapore with special interest in Equity Analysis– 2 year experience in business development and management

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

39EnRichMentor$ Company Review

Who are we?Our Resources

PC Gupte– Customs & Central Excise/Service Tax consultant– Arts Graduate with Logistics Diploma from National University of Singapore– Worked over 35 years with J&J India in Operations (Logistics) including Central Excise matters– Visiting faculty for a Management Institute over 14 years for subjects covering Indirect Taxation– Well versed with Central Excise Rules with Documentation / Correspondence

– Excellent rapport / PR with top officials of Customs & Central Excise

H H Asrani– B. Tech. in Mechanical Engineering– Certified Green Belt– Ex- General Manger Planning and Project, J&J India– 38 years experience with Johnson & Johnson on Manufacturing operations in consumer and Health care products– Well versed with Quality Educations Systems, Project Management, Six Sigma, Process Excellence, Continuous Improvement, Business Process

Improvement, Sales and Operations Planning, Organization Diagnosis, Performance Management, Competency Assessment and DevelopmentSanjay Panwalkar

– First Class Commerce Graduate of Mumbai University, became Chartered Accountant in 1985 – Fellow member of Institute of Chartered Accountants of India and practicing for last 22 years in partnership firm M/S Panvalkar & associates.– Well versed with Direct and Indirect taxes (Except Excise), Foreign Exchange Management Act and related Regulations, setting up MIS systems,

costing and familiar with all basic laws like Companies Act, Laws relating to property, Labour Law etc. – Traveled extensively overseas on the assignments. – Advisor to various Medium and Small Enterprises on matters related to Direct, Indirect Taxes, preparation of project report, matters related to

FEMA and RBI and MIS.

– Excellent connections with Income Tax Department and Banks.V D Deshmukh

– Bachelor in Science and Law Graduate– Ex-Joint Commissioner, FDA Maharashtra

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

40EnRichMentor$ Company Review

Why us?• Over a century of hand on experience in

– Building and growing business in India and Asia Pacific– Improving operations continuously– Handling logistics, direct and indirect taxation efficiently and effectively– Building management information system and financial advisory– Supporting in meeting FDA requirements

• Unique set of skills and competences that can help you improve your business– Development of winning business strategy– Formulation of Effective and Efficient Marketing Plans– Sales and advertising development– Cost reduction and profit improvement– New product development– Quality improvement– Customer Service improvement– Inventory reduction– Logistics Cost Optimization– Excellent relationship with indirect and direct tax authorities– Cost and Management Accounting– Understanding and interpretation of complex FDA requirements

• Competent and Cost Effective resources– Professionally qualified and highly experienced– Willing to work as a business partner– Result oriented– Flexible cost structure– Value for money

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

41EnRichMentor$ Company Review

How we work

• Understand the business issue• Discuss and approve a Business Proposal for

Engagement• Discuss and agree

– The Business Issue– Business Improvement Plan– Implementation Plan– Monthly Business Review Plan

• Support the execution of the Implementation Plan

April 2009

EnRichMentor$ Company Review

Annexures

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

43EnRichMentor$ Company Review

Annexure 1: Historical Milestones

2003Colours of Angsana (COA) was launched with the opening of Gyalthang Dzong Hotel in Shangri-la, Yunnan, China. Banyan Tree spa opened its first spa in Shanghai, China.2004The second COA hotel, Deer Park Hotel, is launched in Sri Lanka.2005The opening of Maison Souvannaphoum Hotel in Laos marked the planting of our third COA property. The same year saw us launching our first resort in China – Banyan Tree Ringha, Shangri-la. Thai Wah Plaza, which includes Banyan Tree Bangkok was acquired by Banyan Tree Holdings.2006Banyan Tree Lijiang, our first villa-style resort in China, opens, cementing our reputation for fine properties in Yunnan. Banyan Tree Private Collection is boldly launched to cater to the growing niche for destination club membership. Banyan Tree Hotels and Resorts and Okura Hotels and Resorts sign a joint marketing alliance. Just in time for F1, we celebrated the official opening of Banyan Tree Desert Spa and Resort, Al Areen, Bahrain, our first resort in the Middle East. An exclusive hideaway, Angsana Maldives Velavaru opens in thesouth of Maldives.On 14 June, Banyan Tree Holdings Limited makes its debut on the On 14 June, Banyan Tree Holdings Limited makes its debut on the Singapore Singapore ExchangeExchange..2007Launched in UK and Hong Kong markets, Banyan Tree Residences allow investors to buy their own signature villa, townhouse or apartment in Banyan Tree resorts. Mid-year, we welcome Banyan Tree Maldives Madivaru, the first to introduce Tented Pool Villas in the Maldives. Towards year-end, Angsana Riads Collection, Morocco debuts in Morocco, a superb oasis of style and history.2008Executive Chairman Ho Kwon Ping receives CEO of the Year award at the Singapore Corporate Awards.

1984Laguna Resorts & Hotels (LRH), a subsidiary of Banyan Tree Holdings, acquired over 550 acres of land on the site of an abandoned tin mine at Bang Tao Bay, Phuket, Thailand.1987 - 1992After extensive rehabilitation of the site, LRH launched Dusit Laguna Resort Hotel and Laguna Beach Resort. LRH began marketing Laguna Phuket as a destination within Phuket.1994Backed by the experience of transforming a worthless plot of land into a veritable haven, Executive Chairman Ho Kwon Ping decided it was time to launch the company’s own global hotel brand targeting high-end travelers.Banyan Tree Hotels & Resorts was set up to build and manage luxury boutique hotels and resorts, steeped in Asian traditions and sensitive to the environment. Banyan Tree Phuket, the flagship resort of the group, was launched in Laguna Phuket. The resort includes the first Banyan Tree Spa and Banyan Tree Gallery.Banyan Tree Hotels & Resorts Pte Ltd is established, as well as companies to operate spas and galleries.1995 - 1999Banyan Tree Maldives and Banyan Tree Bintan were launched.2000The Angsana brand was launched with the opening of Angsana Bintan and Angsana Great Barrier Reef. Banyan Tree Hotels & Resorts, as well as several subsidiaries operating our spas and galleries, became part of Banyan Tree Holdings Pte Ltd, which was established this year.2001We opened the Banyan Tree Spa Academy Phuket, Angsana Maldives and Angsana Oasis Bangalore.2002We entered into a strategic alliance with the Oberoi Group of India to manage spas. Banyan Tree Seychelles was launched and Westin Banyan Tree was rebranded to Banyan Tree Bangkok.

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

44EnRichMentor$ Company Review

Annexure 2: Global Presence

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

45EnRichMentor$ Company Review

Annexure 3 : Business Segment Review 2008

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

46EnRichMentor$ Company Review

Annexure 3 : Business Segment Review 2008 (Contd.)

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

47EnRichMentor$ Company Review

Annexure 3 : Business Segment Review 2008 (Contd.)

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

48EnRichMentor$ Company Review

Annexure 4 : Mission Statement

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

49EnRichMentor$ Company Review

Annexure 5 : Executive Chairman’s Statement in 2006 Annual Report

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

50EnRichMentor$ Company Review

Annexure 6 : Executive Chairman’s Statement in 2007 Annual Report

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

51EnRichMentor$ Company Review

Annexure 7: Company Financials 2004-2008

Mn S$ % Mn S$ % Mn S$ % Mn S$ % Mn S$ %

Revenue 218.800 100 187.268 100 335.321 100 421.859 100 412.612 100.00Other income 2.272 1.04% 0.854 0.46% 1.039 0.31% 2.272 0.54% 15.309 3.71%Cost and expensesOperating supplies 0.00% (28.469) -15.20% (63.745) -19.01% (83.760) -19.85% (79.277) -19.21%Salaries & related expneses 0.00% (59.141) -31.58% (77.079) -22.99% (98.778) -23.41% (114.747) -27.81%Administrative expenses 0.00% (22.564) -12.05% (23.844) -7.11% (39.486) -9.36% (58.129) -14.09%Sales & marekting expenses 0.00% (9.913) -5.29% (12.791) -3.81% (21.327) -5.06% (19.980) -4.84%Other operating Expenses 0.00% (33.354) -17.81% (47.474) -14.16% (58.237) -13.80% (62.039) -15.04%Total costs and expenses 141.372 64.61% (153.441) -81.94% (224.933) -67.08% (301.588) -71.49% (334.172) -80.99%

Operating profit 79.700 36.43% 34.681 18.52% 111.427 33.23% 122.543 29.05% 93.749 22.72%Depreciation of property, plant & equipmen 0.00% (19.882) -10.62% (23.644) -7.05% (26.243) -6.22% (33.335) -8.08%Amortization of lease rentals & land use rig 0.00% (2.944) -1.57% (3.940) -1.17% (4.137) -0.98% (4.689) -1.14%Profit from Operations 0.00% 11.855 6.33% 83.843 25.00% 92.163 21.85% 55.725 13.51%Finance income 0.00% 0.794 0.42% 2.955 0.88% 4.174 0.99% 3.397 0.82%Finace Costs 0.00% (9.726) -5.19% (14.013) -4.18% (16.421) -3.89% (18.096) -4.39%Share of results of associated companies 0.00% 0.610 0.33% 1.870 0.56% 2.032 0.48% 1.317 0.32%Share of results of joint venture companies 0.00% (0.035) -0.02% 0.001 0.00% (0.006) 0.00% (0.005) 0.00%(Loss)/ Profit before exceptiona 60.900 27.83% 3.498 1.87% 74.656 22.26% 81.942 19.42% 42.338 10.26%Exceptional item 0.00% - 0.00% (7.760) -2.31% 44.535 10.56% - 0.00%(Loss)/ Profit before taxation 0.00% 3.498 1.87% 66.896 19.95% 126.477 29.98% 42.338 10.26%Income tax expenses 0.00% (3.521) -1.88% (24.521) -7.31% (24.036) -5.70% (23.991) -5.81%(Loss)/ Profit after taxation 49.500 22.62% - 0.00% 42.375 12.64% 102.441 24.28% 18.347 4.45%

20082004 2005 2006 2007

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

52EnRichMentor$ Company Review

Annexure 8: Revenue and Profitability by segments

Revenue Mn S$ 2005 2006 2007 2008Hotel Investment 111.553 169.591 215.018 205.111Hotel Management 6.64 7.015 14.698 15.246Hotel Residences 47.33 46.314 78.505Spa Operations 17.437 22.053 24.870 27.052Property Sales 30.973 62.381 86.027 52.276Gallery Sales 6.828 10.847 10.697 10.787Design Fess and Oth 13.837 16.104 24.235 23.635

Total 187.268 335.321 421.859 412.612

Operating Profit Mn S$ 2005 2006 2007 2008Hotel Investment 13.386 39.006 63.176 47.038Hotel Management 3.851 3.858 1.282 (1.465) Hotel Residences 0.000 0.000 21.143 40.285Spa Operations 3.487 6.836 5.560 2.803Property Sales 11.150 33.686 33.778 12.219Gallery Sales 0.546 1.193 2.010 0.900Design Fess and Others 5.950 5.636 7.507 0.855Head Office Expenses (14.185) (20.617) Net Other Income 1.039 2.272 11.731Total 35.581 110.656 122.543 93.749

Operating Profit % To Rev 2005 2006 2007 2008Hotel Investment 12 23 29.38 22.93Hotel Management 58 55 8.72 -9.61Hotel Residences 45.65 51.32Spa Operations 20 31 22.36 10.36Property Sales 36 54 39.26 23.37Gallery Sales 8 11 18.79 8.34Design Fess and Others 43 35 30.98 3.62Head Office Expenses -3.36 -5.00Net Other Income 0.54 2.84Total 19 33 29.05 22.72

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

53EnRichMentor$ Company Review

Annexure 9 : Average Occupancy 2007-2008

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

54EnRichMentor$ Company Review

Annexure 10: Growth Pipeline.

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

55EnRichMentor$ Company Review

Annexure 11: Future Plans

2856

37564256

6531

0

1000

2000

3000

4000

5000

6000

7000

2008 2009 2010 2011

# Keys

64

8188

107

0

20

40

60

80

100

120

2007 2009 2010 2011

Spas

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

56EnRichMentor$ Company Review

Annexure 12: Recession Outlook

Outlook for developing regions In East Asia and the Pacific, GDP growth slowed to an estimated 8.5 percent in 2008 and is expected to drop to 6.7 percent in 2009. The region has been hit by a heavy sell-off of equities and sharp downturns in export volumes. China’s growth is projected to slow from 9.4 percent in 2008 to 7.5 percent in 2009, but the government’s recently announced $586 billion stimulus program may edge China’s growth back to 8.5 percent in 2010.

GDP growth in Europe and Central Asia is expected to slow to 5.3 percent in 2008, falling to 2.7 percent in 2009. The downturn is being driven by lower investment tied to difficult financing conditions and weaker export market demand. Russia’s growth will likely be 6 percent in 2008, down from 8.1 percent in 2007, as the banking crisis and low oil prices remain in play.

In Latin America and the Caribbean, GDP growth—expected to be 4.4 percent in 2008—is at risk, pressuring private sector investment. As commodity prices weaken, major exporters like Argentina may record current account deficits. Others like Brazil and Mexico will see a drop in exports to the recession-hit United States and Europe. The regional outlook is expected to worsen in 2009, with GDP dropping to 2.1 percent, driven by a decline in capital spending.

The Middle East and North Africa region appears to have held up well in 2008, growing at an unchanged 5.8 percent in 2008, but the aggregate number hides substantial swings in trade, current account positions and external financing requirements. With oil exporters facing diminished revenues in 2009, regional growth is expected to be just 3.9 percent in 2009.Growth in South Asia eased to 6.3 percent in 2008 from 8.4 percent in 2007 and is expected to slip to 5.4 percent in 2009. High food and fuel prices, tighter credit conditions, and weaker foreign demand have led to worsening external accounts and slower investment growth. The downturn is most apparent in India and Pakistan, where industrial production fell sharply.

Source: World Bank Website (Data and Research)

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

57EnRichMentor$ Company Review

Annexure 13: Historical Stock Chart 2008-2009

Source: Company Website

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

58EnRichMentor$ Company Review

Annexure 14: Financial Ratios 2006-2008

Source: Company website

Full Year Full Year Full YearDec-08 Dec-07 Dec-06

EPS (SGD) $0.00926 $0.10795 $0.03574

(Earnings/Latest No. Of Shares)NAV (SGD) $0.7338 $0.7959 $0.4734(Shareholders' Equity/Latest No. Of Shares)Price Earnings Ratio (PER) 37.8 3.24 9.79(Price/EPS)Price/Revenue 0.643 0.629 0.795(Price x Current No. Of Shares/Revenue)Net Earnings Margin 1.70% 19.41% 8.08%(Net Earnings/Revenue)Revenue Growth -2.19% 25.81% n.a.((Current Year Revenue - Last Year Revenue) / Last Year Revenue)Net Earnings Growth n.a. 202.01% n.a.((Current Year Earnings - Last Year Earnings) / Last Year Earnings)Return On Asset (ROA) 0.48% 5.47% 2.97%(Net Earnings/Total Assets)Return On Equity (ROE) 1.26% 13.56% 7.55%(Net Earnings/Equity)Current Ratio 1.253 1.637 1.374(Current Assets/Current Liabilities)

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

59EnRichMentor$ Company Review

Annexure 15: Total number of keys

Year 2006 2007 2008 2009 2010 2011 2012Number of Spas total 53 64 68 81 88 107 117Number of keys total 2198 2330 2856 3756 4256 6531 7412Total number of keys 2251 2394 2924 3837 4344 6638 7529

Year 2008 2009 2010 2011Total number of keys 2924 3837 4344 6638Additional keys per year 913 507 229440% of additional keys are owned 365 203 918Total number of owned Keys 2924 3289 3492 4410

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

60EnRichMentor$ Company Review

Annexure 16: Reflection on Asia

Reflecting On AsiaWill this now stalled growth engine become the first region to show signs of recovery?By Jeff Weinstein, Editor In Chief -- Hotels, 4/1/2009While good news is at a premium, even in what has been such a robust region as Asia Pacific, hoteliers there generally seem steadfast and hopeful about potentially positive momentum by the end of 2009. After all, as in past downturns, pent-up business travel demand starts to build, emerging middle classes crave to satisfy their wanderlust and a region so vibrant for the last 20 years by all accounts still remains the best long term opportunity for development anywhere in the world. As a result, domestic and global brands continue to grow their pipelines as best they can under the circumstances, as well as jockey for the best positions and partnerships.To no one's surprise, however, results for the first quarter of 2009 across Asia Pacific have been choppy at best, ranging from 50% RevPAR declines in Beijing and Shanghai to 20% to 25% declines in rate and occupancy in India. It leaves the impression that this serious recession is, indeed, a global one. "The fact that many of the economies here [in Asia] are export-driven and thus linked to the consumer-driven U.S. and EU economies means that we will be subject to [their] ups and downs," says Stephen Ho, senior vice president of development for Starwood Hotels & Resorts, Asia Pacific. "However, Asia was the last part of the world to really feel the impact and I believe will be the first to recover."Even amidst the current gloom, there are pockets of welcome news from Smith Travel Research in January, which reports positive rate growth in Bali, Jakarta, Kuala Lumpur and Tokyo. Operators such as Indochina Hotels & Resorts, Ho Chi Minh City, report that while ADR and occupancy are slipping at its hotels and resorts, cost-saving initiatives and strong domestic growth may actually lead to an improved bottom line in 2009.Minor Hotel Group COO Dillip Rajakarier says he is planning to achieve the same results as last year, which was a net profit of 1.9 billion baht (US$53,000).Dusit International, Bangkok, while suffering a double-digit decline in the first quarter of 2009 versus 2008, reports some of its properties are performing much better than expected, such as Dusit Thani Phuket, according to Senior Vice President Octavio Gamarra. Even Dusit Thani Bangkok improved its RevPAR position for the first two months of 2009, says Gamarra, who believes intra-regional traffic will help sustain Asia Pacific until the more mature markets return to pre-2009 levels. In Australia, Jones Lang LaSalle Hotels' Craig Collins says meetings are still occurring, but on a much smaller scale, with increased interest in properties located within a few hours' drive of city centers. In addition, more Australians are expected to holiday within the country this year, and January was a great start for many resorts, particularly in Queensland. However, reduced inbound travel is likely to result in overall lower leisure demand this year. RevPAR growth across Australia's 10 major markets is now forecast to average 1.9% per annum between 2008 and 2011 compared with 8.4% between 2004 and 2007. So, no, the state of affairs in Asia Pacific is not quite dire. Certainly, the remainder of 2009 will be a struggle in key markets and operators must tailor their offers to match the climate, but the resilient region seems poised to prevail in the long run.

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

61EnRichMentor$ Company Review

Annexure 17 : Assets and Equity 2007-2011

Assumptions/ Calculations 2007 2008 2009 2010 2011In proportion to the number of owned keys A. Total Non Current Assets 1121.283 1217.121 1369.136 1453.552 1835.505

Current assets

Balance cash of previous year +current profit +current depreciation Cash generated (1) 113.765 210.513 400.74313% of revenue Cash and other bank balance retained (2) 115.716 53.712 70.388 80.188 123.091

Cash offset on Current borrowings (1-2) 43.377 130.324 277.652In proportion to the revenue Others (3) 222.655 196.53 257.895 293.802 450.992

B. Total current assets (2+3) 338.371 250.242 328.283 373.991 574.082Total Assets (A+B) 1459.657 1467.363 1697.420 1827.543 2409.587

Current LiabiltiesIn proportion to the revenue Current liabilties others 111.769 121.615 159.588 181.808 279.079

Interest bearing loans and borrowings 168.695 192.182 295.004Total Current Liabilities 205.846 199.733 328.283 373.991 574.082Non current liabilities

Debt Equity ratio is 1:1 Interest bearing loand and borrowings and notes payable 247.957 259.322 574.737 616.945 807.921Constant as of 2008 Deferred income 16.158 16.158 16.158 16.158Constant as of 2008 Loan stock 0.509 0.552 0.552 0.552 0.552Constant as of 2008 Redeemable preference shares 0.926 0 0.000 0.000 0.000Constant as of 2008 Other Non current liabilties 4.092 2.511 2.511 2.511 2.511Constant as of 2008 Deferred Tax liabilities 194.164 198.778 198.778 198.778 198.778Constant as of 2008 Loan from minority shareholder of a subsidiary company 1.67 1.664 1.664 1.664 1.664

Total non current Liabilties 449.318 478.985 794.400 836.608 1027.584Debt Equity ratio is 1:1 Equity 568.708 556.549 574.737 616.945 807.921

Consulting, Counseling & Coaching for better health and wealth …….Safer and Surer…..24x7

62EnRichMentor$ Company Review

Annexure 18: Financial Performance 2004-2008

In Mn S$ 2004 2005 2006 2007 2008Profit attributable to equity holders 30.4 1.028 27.107 81.866 7.026Total Assets 498.7 682 911.3 1459.657 1467.363Common Equity 188.823 359.051 568.708 556.549Net Sales 218.8 187.268 335.321 421.859 412.612Net Profit Margin 13.89 0.55 8.08 19.41 1.70Total Asset Turnover 0.44 0.27 0.37 0.29 0.28Financial Leverage 3.61 2.54 2.57 2.64Return On Equity 0.54 7.55 13.56 1.26EPS(Earnings/ No of shares) 0.051 0.003 0.039 0.108 0.009No of shares 596.078 300.964 691.243 761.110 758.402Price Earnings ratio (Price/EPS) 10.91 3.61 37.800Price 0 0 0.428 0.388 0.350