Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

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Notes to the Financial Statements Continued 16 Borrowings continued The borrowings are further summarized as follows: 62 Mandarin Oriental International Limited Fixed rate borrowings Weighted Weighted average average period Floating rate interest rates outstanding borrowings Total % Years US$m US$m US$m 2008 Euro 5.9 4.7 13.0 – 13.0 Hong Kong Dollar 2.4 4.3 179.4 185.3 364.7 Swiss Franc 2.7 23.0 2.2 39.4 41.6 United Kingdom Sterling 4.4 5.5 30.4 91.2 121.6 United States Dollar 3.9 1.6 47.7 47.9 95.6 Japanese Yen 1.2 – – 24.3 24.3 Philippine Peso 8.9 – – 0.5 0.5 272.7 388.6 661.3 2007 Euro 5.8 0.7 14.8 – 14.8 Hong Kong Dollar 3.9 1.2 146.2 203.4 349.6 Swiss Franc 4.4 24.0 2.2 18.6 20.8 United Kingdom Sterling 6.8 6.5 42.4 127.3 169.7 United States Dollar 5.3 2.6 49.7 53.0 102.7 Japanese Yen 1.2 – – 19.7 19.7 255.3 422.0 677.3 The weighted average interest rates and period of fixed rate borrowings are stated after taking into account of hedging transactions (refer note 26).
16 Borrowings continued The remaining contractual maturities of the borrowings, including related interest payments, are analyzed below. The interest payments are computed using contractual rates and, in the case of floating rate borrowings, based on market rates at the balance sheet date before taking into account of hedging transaction. Cash flows denominated in currencies other than United States dollars are converted into United States dollars at the rates of exchange ruling at the balance sheet date. 2008 2007 US$m US$m Within one year 27.0 45.3 Between one and two years 134.3 38.3 Between two and three years 18.8 143.4 Between three and four years 20.0 28.7 Between four and five years 25.4 28.7 Beyond five years 539.0 577.3 764.5 861.7 Secured 628.8 649.5 Unsecured 32.5 27.8 661.3 677.3 Borrowings of US$628.8 million (2007: US$649.5 million) are secured against the tangible fixed assets of certain subsidiary undertakings. The book value of these tangible fixed assets as at 31st December 2008 was US$836.8 million (2007: US$951.0 million). 17 Tax increment financing 2008 2007 US$m US$m Netted off against the net book value of the property (refer note 9) 29.0 29.8 Loan (refer note 16) 1.7 1.7 30.7 31.5 A development agreement was entered into between one of the Group’s subsidiaries and the District of Columbia (‘District’), pursuant to which the District agreed to provide certain funds to the subsidiary out of the net proceeds obtained through the issuance and sale of certain tax increment financing bonds (‘TIF Bonds’) for the development and construction of Mandarin Oriental, Washington D.C. The District agreed to contribute to the subsidiary US$33.0 million through the issuance of TIF Bonds in addition to US$1.7 million issued in the form of a loan, bearing simple interest at an annual rate of 6.0%. The 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 sale of the hotel. The receipt of the TIF Bonds has been treated as a government grant and netted off against the net book value in respect of the property (refer note 9). The loan of US$1.7 million (2007: US$1.7 million) is included in long-term borrowings (refer note 16). Annual Report 2008 63
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Mandarin Oriental International Lim
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Contents 1 Corporate Overview 3 Cor
Page 6 and 7:
Highlights Mandarin Oriental Intern
Page 8 and 9:
Chairman’s Statement Overview Des
Page 10 and 11:
Group Chief Executive’s Review Bu
Page 12 and 13:
Group Chief Executive’s Review Co
Page 14 and 15: Group Chief Executive’s Review Co
Page 16 and 17: Operating Summary There are 23 hote
Page 18 and 19: Development Portfolio Mandarin Orie
Page 20 and 21: International Recognition Continued
Page 22 and 23: Financial Review Continued In 2008,
Page 24 and 25: Financial Review Continued Cash flo
Page 26 and 27: Financial Review Continued Treasury
Page 28 and 29: Directors’ Profiles Continued Lor
Page 30 and 31: Consolidated Balance Sheet as at 31
Page 32 and 33: Consolidated Cash Flow Statement fo
Page 34 and 35: Principal Accounting Policies Conti
Page 42 and 43: Financial Risk Management A Financi
Page 44 and 45: Financial Risk Management Continued
Page 46 and 47: Critical Accounting Estimates and J
Page 48 and 49: Notes to the Financial Statements 1
Page 50 and 51: Notes to the Financial Statements C
Page 76 and 77: Principal Subsidiaries, Associates,
Page 78 and 79: Independent Auditor’s Report To t
Page 80 and 81: Responsibility Statement The Direct
Page 82 and 83: Corporate Governance Continued Dire
Page 84 and 85: Corporate Governance Continued Dire
Page 86 and 87: Principal Risks and Uncertainties C
Page 88 and 89: Mandarin Oriental Hotel Group Conta
Page 90 and 91: Sales and Reservations Offices Mand
Page 92: Mandarin Oriental International Lim
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