Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

Notes to the Financial Statements Continued
28 Commitments
72 Mandarin Oriental International Limited
2008 2007
US$m US$m
Capital commitments:
Authorized not contracted 42.0 48.0
Contracted not provided 49.1 14.6
91.1 62.6
Operating lease commitments:
The future aggregate minimum lease payments under non-cancellable operating leases
are as follows:
Within one year 8.4 6.3
Between one and two years 8.3 6.2
Between two and three years 17.6 6.2
Between three and four years 20.1 6.2
Between four and five years 20.1 6.2
Over five years 410.6 133.8
485.1 164.9
Total future sublease payments receivable relating to the above operating leases amounted to US$0.1 million
(2007: US$0.1 million).
Operating lease commitments principally include payments in respect of the Group’s hotel in Tokyo and the Group’s
hotel in Paris which is under development.
In addition, the Group has operating lease commitments with rentals determined in relation to sales. It is not possible
to quantify accurately future rentals payable under such leases.
29 Related party transactions
The parent company of the Group is Jardine Strategic Holdings Limited and the ultimate holding company of the
Group is Jardine Matheson Holdings Limited (‘JMH’). Both companies are incorporated in Bermuda.
In the normal course of business, the Group undertakes a variety of transactions with its associates and with
JMH and its subsidiaries and associates. In addition, the Group paid a management fee of US$0.3 million
(2007: US$0.5 million) to Jardine Matheson Limited (‘JML’), a subsidiary of JMH, being a fee of 0.5% of the
Group’s net profit in consideration for certain management consultancy services provided by JML. The outstanding
balance with JML as at 31st December 2008 amounted to US$0.1 million (2007: nil).
During 2008, the Group managed seven associate and joint venture hotels and received management fees of
US$14.5 million (2007: US$15.7 million) based on long-term management agreements on normal commercial
terms. The outstanding balances with associates and joint venture are set out in debtors and prepayment in note 14.
The Group engages Gammon Construction Limited (‘Gammon’), a joint venture of JMH, as contractor for certain
of the Group’s hotel renovation projects. No management fees have been paid by the Group to Gammon in 2008.
During 2007, management fees paid to Gammon amounted to US$0.4 million. The Group has no outstanding
balance with Gammon as at 31st December 2008 (2007: nil).