Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
58<br />
NOTES TO THE FINANCIAL STATEMENTS CONTINUED<br />
16 Borrowings continued<br />
b) Finance lease<br />
Minimum lease payments<br />
MANDARIN ORIENTAL INTERNATIONAL LIMITED<br />
2005 2004<br />
US$m US$m<br />
Within one year – 1.4<br />
Between two and five years – 6.6<br />
Beyond five years – 314.4<br />
– 322.4<br />
Less: Future finance charges on finance lease – (314.4)<br />
Present value of finance lease liabilities – 8.0<br />
The present value of finance lease liabilities may be analysed as follows:<br />
Within one year – 0.1<br />
Between two and five years – 0.3<br />
Beyond five years – 7.6<br />
– 8.0<br />
Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.<br />
17 Tax increment financing<br />
At 1st January 34.1 34.7<br />
Amortization in the year (0.9) (0.6)<br />
At 31st December 33.2 34.1<br />
Netted off against the net book value of the property (refer note 9) 31.5 32.4<br />
Loan (refer note 16) 1.7 1.7<br />
33.2 34.1<br />
A development agreement was entered into between one of the Group’s subsidiaries with the District of Columbia<br />
(‘District’), pursuant to which the District agreed to provide certain funds to the subsidiary out of the net proceeds<br />
obtained through the issuance and sale of certain tax increment financing bonds (‘TIF Bonds’) for the<br />
development and construction of <strong>Mandarin</strong> <strong>Oriental</strong>,Washington D.C.<br />
The District agreed to contribute to the subsidiary US$33.0 million through the issuance of TIF Bonds in<br />
addition to US$1.7 million issued in the form of a loan, bearing simple interest at an annual rate of 6.0%.The<br />
US$1.7 million loan plus all accrued interest will be due on the earlier of 10th April 2017 or the date of the first<br />
sale of the hotel.<br />
The receipt of the TIF Bonds has been treated as a government grant and netted off against the net book value in<br />
respect of the property (refer note 9).The loan of US$1.7 million (2004: US$1.7 million) is included in long-term<br />
borrowings (refer note 16).