<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
This amendment is being filed due to the fact that the Form 10-K filed
by Sonesta International Hotels Corporation on March 31, 1995 did not
contain the Financial Statements of a significant subsidiary, R.I.F. Resort
Hotel N.V., under PART VI, item 14(a)3.
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994 Commission file number 0-9032
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _________________ to ___________________
SONESTA INTERNATIONAL HOTELS CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 13-5648107
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Clarendon Street, Boston, Massachusetts 02116
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 421-5400
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which registered
<S> <C>
Class A Common Stock NONE
$.80 par value
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
<PAGE>
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Section 229,405 of this chapter) is not
contained herein and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
referenced in Part III of this Form 10-K or any amendment to this
Form 10-K [X]
The aggregate market value of the common stock held by non-affiliates of
the registrant as of the close of business on March 21, 1995 was $6,321,869.
The number of shares outstanding of the registrant's common stock as of
the close of business on March 21, 1995 was: 2,075,281.
<PAGE>
Item 14(a)3
RIF RESORT HOTEL
FINANCIAL STATEMENTS 1994
CONTENTS
Report of the Managing Director
Recommendation of the Board of Supervisory Directors
Annexes
<TABLE>
<C> <S>
1. Balance sheet as at December 31, 1994
2. Profit and loss account 1994
3. Notes to the financial statements
3.1 General
3.2 Financial position
3.3 Notes to the balance sheet as at December 31, 1994
3.4 Notes to the profit and loss account 1994
4. Auditors' report
5. Additional information
5.1 Specification of fixed assets
5.2 Specification of long term loans
</TABLE>
<PAGE>
REPORT OF THE MANAGING DIRECTOR OVER THE YEAR 1994
THE HOTEL
The hotel opened in December 1992 under a management agreement with Sonesta
Curacao Hotel Corporation N.V., a wholly owned subsidiary of Sonesta
International Hotel Corporation.
THE FINANCING OF THE HOTEL
The equity participation, by Sonesta Curacao Hotel Corporation N.V. and the
Netherlands Harbourworks Company (Netherlands Antilles) N.V., was deposited
in the course of the year.
The total investment in fixed assets at the end of 1994 amounted to
NAf 87,729,549. In this amount a total claims value from contractors of
NAf 2,600,000 is included. The claims were financed by loans obtained from
the contractors Netherlands Harbourworks Company (Netherlands Antilles)
N.V. and Croon Electrotechniek B.V. for periods of 3 to 6 years. The first
redemption and interest payments took place in January 1995.
The 1993 debt service on the bond loan of NAf 30,000,000 and on the
consortium II loan of NAf 5,400,000 in part deferred to be paid in October
1994, was paid as agreed.
The 1994 debt service for all loans was deferred to be paid in April 1995
after agreement was reached with the financiers concerned.
THE DEBT SERVICE
The 1993 debt-service that became due on October 1, 1993 was paid as
follows:
<TABLE>
<S> <C> <C> <C>
January/February 1994 NAf 1,764,026 (vide the deficit guarantee loan of NAf 3,600,000)
October 1994 NAf 1,400,087 (vide cash flow of the hotel)
Additional interest NAf 147,314 (vide cash flow of the hotel)
---------
NAf 3,311,427
---------
---------
</TABLE>
For the 1994 debt-service negotiations again were held with the financiers,
who agreed to defer payment to April 1995.
In April 1995 the debt-service of NAf 3,183,991, including NAf 113,724
additional interest was paid.
Also the first redemption and interest payments on the claim loan were made
from the hotel cash flow in January 1995 - NAf 770,148.
For the 1995 and 1996 debt-service it is necessary to again approach the
financiers to postpone the due date by six months in order to make use of
the high season cash flow.
In 1997 when part of the loans come up for redemption refinancing must be
sought as was discussed at the time of the loan agreements.
<PAGE>
PERFORMANCE OF THE HOTEL
Personnel and service level
The hotel operates with 372 local staff, supported by 22 expatriates of
which 8 were locally recruited. The service level is excellent as can be
ascertained from the many compliments received from the guests. Training
and motivation courses are given continuously. In 1994 the hotel received
the "Four Diamond Award" from the American Automobile Association.
The marketing
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Occupancy 77.3% 55.4%
Average daily rate USD 113.44 USD 102.34
Rooms revenue USD 7,929,819 USD 5,362,719
</TABLE>
The comparison indicates clearly the growth experienced in both the
occupancy as the average daily rate.
The advertising strategy was to reach a wide variety of audiences that have
the best potential to generate business. In the U.S. and South America, the
primary focus has been on travel agents and wholesalers. European marketing
efforts have been supported by advertising with tour operators and a
limited travel trade advertising schedule. The South American markets have
been an important source of business for the casino.
The direction for 1995 is to expand the hotel's advertising efforts
exponentially in all areas, but particularly to the travel trade,
wholesalers and group markets.
1995 ANNUAL PLAN
<TABLE>
<S> <C> <C>
Occupancy 73.7% (high 83.3% - low 54.4%)
Average daily rate USD 119.78 (high US$ 164.63 - low US$ 97.83)
Rooms revenue USD 7,872,100
</TABLE>
As shown above, occupancy may fall compared to 1994, however, an increased
average room rate almost offsets the drop.
The island at the moment has not established itself as a high rate
destination. This will take time. The fact that the Sonesta Beach Hotel and
Casino as yet is not accompanied by more hotels of the same category makes
it more difficult.
Futhermore heavy competition is felt from the top resort markets in the
region.
<PAGE>
CURACAO'S TOURISM IN RELATION TO THE SONESTA HOTEL
Tourism in general showed an increase in 1994. This growing line has not
continued in early 1995, however, major efforts are being made to remedy
this situation. The USA and the Netherlands are leading the market. New
markets are expected to develop from Germany and Brazil. Sonesta Beach
Hotel & Casino may well be able to increase its market share. The challenge
will lay in increasing the average room rate.
THE HOTEL IN RELATION TO THE ECONOMY OF CURACAO
The hotel employs 394 workers of which 22 are expatriate staff. In 1994 a
total of NAf 8,750,000 was paid in salaries and wages. The various forms of
tax contribution such as occupancy tax and gaming tax amount to NAf
1,884,000. The wage tax paid to the Government amounted to NAf 1,500,000.
Total revenues amounted to NAf 31,570,000.
The foreign exchange contribution to the economy is estimated to have been
in excess of NAf 40,000,000.
May 1995
Stanley T. Pietersz
Managing Director
<PAGE>
RECOMMENDATION OF THE BOARD OF SUPERVISORY DIRECTORS
To the General Shareholders' Meeting of Rif Resort Hotel N.V.:
Pursuant to Article 22 of the Articles of Incorporation of Rif Resort Hotel
N.V., we have the honor to declare that the report, presented by the
Managing Director, as well as the financial statements for the year ended
December 31, 1994 have been examined by us.
We recommend that the financial statements for the year 1994 be approved by
you.
THE BOARD OF SUPERVISORY DIRECTORS OF RIF RESORT HOTEL N.V.
L. Capriles
Chairman
Supervisory director on behalf of shares C
E. Halabi
Supervisory director on behalf of shares C
R. Lucia
Supervisory director on behalf of shares A
H.Th. Lopez
Supervisory director on behalf of shares A
S. Sonnabend
Supervisory director on behalf of shares B
T. Hernandez
Supervisory director on behalf of Island Territory of Curacao
<PAGE>
ANNEX 1
RIF RESORT HOTEL N.V.
CURACAO
BALANCE SHEET AS AT DECEMBER 31, 1994 (1993)
<TABLE>
<CAPTION>
1994 1993
---------- -----------
<S> <C> <C> <C>
Notes NAf NAf
ASSETS
FIXED ASSETS (1) 75,267,238 80,611,121
CURRENT ASSETS
Inventories (2) 1,179,861 1,459,052
Receivables and prepayments (3) 3,689,594 2,875,550
Receivable from shareholders - 3,975,000
Cash and bank balances (4) 2,228,850 1,583,781
---------- ----------
7,098,305 9,893,383
---------- ----------
TOTAL 82,365,543 90,504,504
---------- ----------
---------- ----------
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital (5) 16,372,000 16,372,000
Accumulated losses (20,175,722) (12,597,052)
---------- ----------
(3,803,722) 3,774,948
LONG TERM LOANS AND LIABILITIES (6) 74,660,581 70,721,944
CURRENT LIABILITIES AND ACCRUALS (7) 11,508,684 16,007,612
---------- ----------
TOTAL 82,365,543 90,504,504
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ANNEX 2, PAGE 1
RIF RESORT HOTEL N.V.
CURACAO
PROFIT AND LOSS ACCOUNT 1994
<TABLE>
<CAPTION>
1994 1993
---------- -----------
<S> <C> <C>
NAf NAf
DEPARTMENTAL REVENUES
Room 14,115,078 9,545,640
Food and beverage 9,016,788 6,558,771
Telephone 1,664,095 1,424,368
Other 1,458,544 1,337,213
---------- ----------
26,254,505 18,865,992
Casino win (note 1) 5,315,917 5,041,309
---------- ----------
31,570,422 23,907,301
DEPARTMENTAL EXPENSES (NOTE 2)
Room 3,647,337 3,083,049
Food and beverage 7,360,115 6,549,836
Telephone 750,772 635,531
Other 133,406 118,751
---------- ----------
11,891,630 10,387,167
Casino 4,217,349 4,018,791
---------- ----------
16,108,979 14,405,958
---------- ----------
Gross operating profit 15,461,443 9,501,343
UNALLOCATED OPERATING EXPENSES (NOTE 3)
Administration and general 3,721,499 2,804,682
Human resources 611,861 579,433
Guest relations and transportation 471,616 452,093
Sales and marketing 2,546,986 2,427,037
Marketing fees 393,439 282,990
Heat, light and power 2,105,409 2,340,773
Repairs and maintenance 1,320,386 1,158,313
---------- ----------
11,171,196 10,045,321
---------- ----------
Operating profit (loss) from hotel
and casino operations (to carryforward) 4,290,247 (543,978)
</TABLE>
<PAGE>
ANNEX 2, PAGE 2
RIF RESORT HOTEL N.V.
CURACAO
<TABLE>
<CAPTION>
1994 1993
---------- -----------
<S> <C> <C>
NAf NAf
Operating profit (loss) from hotel
and casino operations (carried forward) 4,290,247 (543,978)
DEPRECIATION 6,262,901 6,199,410
INTEREST 4,360,943 4,067,958
OTHER CHARGES
Management fees 788,011 565,980
Building insurance 129,475 138,051
Building storage 47,838 47,482
Equipment lease 97,483 115,234
Land rent 51,812 51,818
Other expenses 130,454 163,670
---------- ----------
1,245,073 1,082,235
---------- ----------
11,868,917 11,349,603
---------- ----------
Loss for the book year (7,578,670) (11,893,581)
Loss previous year (12,597,052) (703,471)
---------- ----------
Accumulated losses (20,175,722) (12,597,052)
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ANNEX 3.1, PAGE 1
RIF RESORT HOTEL N.V.
CURACAO
NOTES TO THE FINANCIAL STATEMENTS
GENERAL
PURPOSE OF THE COMPANY
The company was incorporated on January 13, 1987. The articles of
incorporation of the company were changed in April 1990. The purpose of the
company is the preparation, development and the construction and the
subsequent maintenance, leasing or operating by the company itself of a
hotel and a casino on Curacao.
The company has been involved in the development of a hotel and casino on
Curacao, known as the Sonesta Beach Hotel & Casino Curacao which started
operations in December 1992. The company has been granted a tax holiday for
the operation of the hotel and casino for a period of 11 years.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FIXED ASSETS
The company started the operation of the Sonesta Beach Hotel and Casino
December 1, 1992. All organization, development, financing, construction
and furnishing costs incurred prior to that date are capitalized.
ACCOUNTS RECEIVABLE
Accounts receivable are stated at nominal value less an allowance for
doubtful amounts.
INVENTORIES
Inventories are stated at the lower of cost (determined on a first in first
out basis) or market value.
OTHER
All other assets and liabilities are presented at nominal value.
<PAGE>
ANNEX 3.1, PAGE 2
RIF RESORT HOTEL N.V.
CURACAO
PRINCIPLES OF DETERMINATION OF INCOME AND EXPENSES
Income and expenses are determined on an accrual basis.
Losses are charged to the profit and loss when foreseeable.
FOREIGN CURRENCIES
Transactions and assets and liabilities in US dollars have been translated
into Netherlands Antilles guilders at US$ 1 = NAf 1.78.
Resulting exchange gains and losses are credited or charged against current
income.
MANAGEMENT AGREEMENT
The Hotel and Casino is operated under a management agreement between the
Owner and the Operator dated April 30, 1990, which was amended and restated
as of April 2, 1992. The initial term of the agreement is ten calendar
years from the date of commencement of operations with four options to
extend for a period of five years each for a total of twenty years.
The annual remuneration for the Operator's services is:
- - a basic fee equal to 3% of gross revenues
- - a marketing reimbursement equal to 1.5% of gross revenues
- - an incentive fee, which is equal to the greater of:
A - the difference between (1) 22% of the sum of the net operating
income and the sum of the basic fee and the marketing reimbursement,
and (2) the sum of the basic fee and the marketing reimbursement, or
B - 50% of the first US$ 2,000,000 of cash flow as defined in the
management agreement, until Operator has received an aggregate
incentive fee of US$ 2,000,000 from the commencement date; and
thereafter, the incentive fee shall be calculated solely pursuant
to above.
The incentive fee shall be payable solely out of 50% of the adjusted cash
flow calculated in accordance with the management agreement. Any amount of
the incentive fee which is earned, but not paid due to insufficient cash
flow, shall be deferred and paid out of 50% of future cash flows after
payment of the then current incentive fee.
Up to 1994 no incentive fee has been paid.
<PAGE>
ANNEX 3.2
RIF RESORT HOTEL N.V.
CURACAO
FINANCIAL POSITION
The 1994 profit and loss account shows a loss as expected and budgetted. As
a consequence of this loss current liabilities exceed current assets by
approximately NAf 4,400,000 as at December 1994.
According to the budget for 1995 inclusive of estimated investments of
NAf 900,000 this liquidity shortage is expected to increase to approximately
NAf 5.800,000 as per the end of 1995. Actual results through April 1995 are
slightly below budget.
The shortage in liquidities is a matter of concern. However, as there is
presently no indication that financiers will not continue to cooperate as in
the past, management believes that the company will be able to continue its
activities.
<PAGE>
ANNEX 3.3, PAGE 1
RIF RESORT HOTEL N.V.
CURACAO
NOTES TO THE BALANCE SHEET AS AT DECEMBER 31, 1994
1. FIXED ASSETS
<TABLE>
<CAPTION>
NAf
<S> <C>
Balance as at December 31, 1993 80,611,121
Investments in 1994 919,018
----------
81,530,139
Depreciation 1994 (6,262,901)
----------
Balance as at December 31, 1994 75,267,238
----------
----------
</TABLE>
A specification of the total investment is given in annex 5.1. The
investments for the year 1994, amounting to NAf 919,018, mainly consist of
investments in furniture, fixtures and equipment.
The real estate of the company is mortgaged for an amount of NAf 49,331,944.
Also a lien on furniture, fixtures and equipment has been granted for loans
totalling NAf 6,571,944.
The depreciation is calculated as follows:
- - buildings and building improvements inclusive of landscaping and technical
installations, are depreciated over a 25 year period, on the straight line
basis.
- - pre-opening expenses and expenses caused by delays in the construction,
over a 5 year period, on the straight line basis.
- - other fixed assets over 7 years, on the straight line basis.
For the calculation of the depreciation the costs of consultants,
development fee, pre-project costs, costs of project office and
miscellaneous expenses are distributed to the three different types of fixed
assets.
The investment of NAf 87,729,549 is inclusive of claims, which have been
settled with two contractors, but exclusive of NAf 1,000,000 that might
become due to the same contractors. The latter amount is related to the
development of a hotel, next to the Sonesta hotel, by Rif Low Rise Hotel
N.V. Originally construction costs of the Sonesta project were decreased by
the contractors by NAf 1,000,000 provided they would be involved in the
development of the project of Rif Low Rise Hotel N.V.
The Company has advanced to Rif Low Rise Hotel N.V. NAf 1,000,000, for which
Rif Low Rise Hotel N.V. accepted the obligation to pay NAf 1,000,000 to the
contractors if their project could not be realized.
As the land on which Rif Low Rise Hotel N.V. intended to develop its project
has been assigned to another developer, this NAf 1,000,000 receivable has
been transfered to construction costs.
<PAGE>
ANNEX 3.3, PAGE 2
RIF RESORT HOTEL N.V.
CURACAO
If the project would have been realized Rif Low Rise Hotel N.V. would have
repaid the NAf 1,000,000 advance to Rif Resort Hotel N.V.
Now that the land has been assigned to third parties and Rif Low Rise Hotel
N.V. has already expensed the NAf 1,000,000 advance for preparation of the
construction of the second hotel, there is a remote risk that Rif Resort
Hotel N.V. will have to pay another NAf 1,000,000, excluding interest,
according to the contractual documents.
2. INVENTORIES
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
NAf NAf
FOOD AND BEVERAGE
Food 225,827 284,998
Beverage 119,564 182,530
---------- ----------
345,391 467,528
OTHER
Printing and stationary 185,558 316,050
Guest supplies 127,088 237,587
Uniforms 93,425 162,655
Linnen 241,569 129,144
Glassware, china, silver and utensils 78,388 26,177
Food and beverage supplies 10,739 20,637
Menus 19,954
Cleaning supplies 28,562 18,432
Paper supplies 14,379 13,325
Casino supplies 11,536
Sales promotion 18,071 4,480
Other 36,691 31,547
---------- ----------
834,470 991,524
---------- ----------
Total inventories 1,179,861 1,459,052
</TABLE>
<PAGE>
ANNEX 3.3, PAGE 3
RIF RESORT HOTEL N.V.
CURACAO
3. RECEIVABLES AND PREPAYMENTS
<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
NAf NAf
TRADE RECEIVABLES
Guest ledger 678,527 587,024
City ledger 2,581,012 1,752,330
Casino markers 93,245 175,036
Less: allowance for doubtful amounts 256,193 202,843
---------- ----------
3,096,591 2,311,547
Other receivables 261,320 183,105
---------- ----------
3,357,911 2,494,652
---------- ----------
---------- ----------
LOANS AND ADVANCES
Employees advances 17,149 20,831
Other advances 4,400
---------- ----------
17,149 25,231
---------- ----------
---------- ----------
DEPOSITS
Kodela 90,000 90,000
Other 13,435 11,344
---------- ----------
103,435 101,344
---------- ----------
---------- ----------
</TABLE>
<PAGE>
ANNEX 3.3, PAGE 4
RIF RESORT HOTEL N.V.
CURACAO
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
NAf NAf
PREPAID EXPENSES
Insurance 136,782 96,864
Advertising 32,667 62,441
Maintenance contracts 8,371 10,055
Rent 7,958 8,213
Directories 26,812
Licenses and permits 12,931
Real estate expenses 8,634
Other 25,321 28,373
---------- ----------
211,099 254,323
---------- ----------
---------- ----------
SUMMARY
Trade receivable 3,357,911 2,494,652
Loans and advances 17,149 25,231
Deposits 103,435 101,344
Prepaid expenses 211,099 254,323
---------- ----------
3,689,594 2,875,550
---------- ----------
---------- ----------
4. CASH AND BANK BALANCES
Cash on hand 819,892 570,790
Cash in bank 1,408,958 1,012,991
---------- ----------
2,228,850 1,583,781
---------- ----------
---------- ----------
</TABLE>
<PAGE>
ANNEX 3.3, PAGE 5
RIF RESORT HOTEL N.V.
CURACAO
5. SHAREHOLDERS' EQUITY
The authorized share capital amounts to NAf 21,700,000 of which:
- - 10,770 shares A
- - 4,800 shares B
- - 6,130 shares C
All shares have a nominal value of NAf 1,000.
All shareholders have the same rights except for the following:
Shareholders A and B have the right of first refusal if either new A or B
shares are issued, or in case the company sells its own A or B shares.
The various classes of shareholders can make binding proposals for the
nomination of the members of the Supervisory Board of Directors as follows:
shareholders A 2 members
shareholders B 1 member
shareholders C 2 members
Also the Government of the Island Territory of Curacao has the right to make
a binding proposal for 1 member.
As at December 31, 1994, shares issued and paid up are as follows:
<TABLE>
<CAPTION>
NAf
<S> <C>
8,100 shares A 8,100,000
3,600 shares B 3,600,000
4,672 shares C 4,672,000
-----------
16,372,000
-----------
-----------
</TABLE>
Certain loan agreements forbid the declaration of dividends up to 6 years
after October 1992.
<PAGE>
ANNEX 3.3, PAGE 6
RIF RESORT HOTEL N.V.
CURACAO
<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
NAf NAf
6. LONG TERM LOANS AND LIABILITIES
Long term loans 73,850,581 70,271,944
Other long term liabilities 810,000 450,000
----------- -----------
74,660,581 70,721,944
----------- -----------
----------- -----------
</TABLE>
A specification of the long term loans is given in annex 5.2.
The other long term liabilities relate to deferred interest on the NAf
30,000,000 bonds loan amounting to NAf 810,000 and two claims settlements
with the contractors of the hotel amounting to in total NAf 2,600,000, which
will be paid in 3 and 6 yearly installments, the first ones due January 1,
1995. Interest is stated at Libor plus two, payable in arrears.
7. CURRENT LIABILITIES AND ACCRUALS
<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
NAf NAf
Overdraft Maduro and Curiel's Bank N.V. 975,061
Creditors for construction hotel and casino 158,696 3,145,186
Trade creditors operation 678,358 1,926,982
Interest accrual 4,173,006 4,910,371
Accruals, water, electricity and telephone 942,733 1,590,766
Room, game and payroll taxes 2,093,826 1,573,582
Sonesta International Hotel Corporation 515,319 481,027
Salaries and wages payable 919,918 288,979
Accrued leave and vacation pay 387,266 302,208
Accrued year-end bonus 322,497 23,311
Other accruals 241,131 327,164
Progressive game payable 212,710 154,860
Refundable deposits 803,386 101,955
Other accounts payable 59,838 206,160
----------- -----------
11,508,684 16,007,612
----------- -----------
----------- -----------
</TABLE>
<PAGE>
ANNEX 3.3, PAGE 7
RIF RESORT HOTEL N.V.
CURACAO
8. CONTINGENT LIABILITIES
GUARANTEE
Maduro & Curiel's Bank N.V. has undertaken a guarantee of NAf 100,000 in
favour of "Landsontvanger" on behalf of the hotel and casino.
GAMING TAX
On January 1, 1993, the Government increased the gaming tax rate from 3.5%
to 5%.
During 1993 no gaming tax was paid by the Hotel and Casino, because
representatives of the casino industry in Curacao are negotiating with the
Government authorities to reverse the increase of the gaming tax rate. In
1994 the casino paid the 1992, 1993 and 1994 gaming tax at a rate of 3.5%.
Gaming tax is accrued in the financial statements at the legal gaming tax of
5% less payments made at a rate of 3.5%. Management however, believes that
neither the 1.5% difference, nor any fines, will ever be enforced.
Should the Government decide not to reverse the rate increase and to impose
the maximum penalty, the hotel and casino will be liable for a fine of
US$ 290,000, which is not accrued for in these financial statements; should
the Government decide to reverse the rate increase and not to impose any
fines the gaming tax is overaccrued by approximately US$ 290,000.
CLAIMS CONTRACTORS
Because the development of a new hotel next to the Sonesta by Rif Low Rise
Hotel N.V. is canceled, contractors that were involved in the construction
of the Sonesta have a claim against the company of NAf 1,000,000. This claim
might be off-set by receipt of the same amount from Rif Low Rise Hotel N.V.
We refer to note 1 to the balance sheet.
<PAGE>
ANNEX 3.4, PAGE 1
RIF RESORT HOTEL N.V.
CURACAO
NOTES TO THE PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
1. CASINO WIN
1994 1993
----------- -----------
<S> <C> <C>
NAf NAf
NET WIN ON TABLES
Drop 15,625,509 13,712,245
Pay-out (12,507,042) (10,367,495)
----------- -----------
3,118,467 3,344,750
NET WIN ON SLOT MACHINES
Drop 2,452,781 1,995,205
Pay-out (270,515) (302,591)
----------- -----------
2,182,266 1,692,614
MISCELLANEOUS INCOME 15,184 3,945
----------- -----------
5,315,917 5,041,309
----------- -----------
----------- -----------
2. DEPARTMENTAL EXPENSES
COST OF PERSONNEL
Rooms 1,715,147 1,605,480
Food and beverage 3,107,570 2,931,165
Telephone 86,569 69,696
Other 85,515 78,822
----------- -----------
4,994,801 4,685,163
Casino 2,408,842 2,166,712
----------- -----------
7,403,643 6,851,875
----------- -----------
----------- -----------
</TABLE>
<PAGE>
ANNEX 3.4, PAGE 2
RIF RESORT HOTEL N.V.
CURACAO
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
NAf NAf
OTHER EXPENSES
Rooms 1,932,190 1,477,569
Food and beverage - cost of sales 3,058,750 2,382,801
Food and beverage - other 1,193,795 1,235,870
Telephone - cost of sales 662,101 559,922
Telephone - other 2,102 5,913
Other 47,891 39,929
----------- -----------
6,896,829 5,702,004
Casino - gaming tax 648,826 1,050,615
Casino - other 1,159,681 801,464
----------- -----------
8,705,336 7,554,083
----------- -----------
----------- -----------
TOTAL
Room 3,647,337 3,083,049
Food and beverage 7,360,115 6,549,836
Telephone 750,772 635,531
Other 133,406 118,751
----------- -----------
11,891,630 10,387,167
Casino 4,217,349 4,018,791
----------- -----------
16,108,979 14,405,958
----------- -----------
----------- -----------
</TABLE>
<PAGE>
ANNEX 3.4, PAGE 3
RIF RESORT HOTEL N.V.
CURACAO
3. UNALLOCATED OPERATING EXPENSES
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
NAf NAf
COST OF PERSONNEL
Administration and general 1,902,176 1,461,227
Human resources 249,878 237,176
Guest relations and transportation 151,790 164,117
Sales and marketing 606,613 470,386
Repairs and maintenance 439,049 376,919
----------- -----------
3,349,506 2,709,825
----------- -----------
----------- -----------
OTHER EXPENSES
Administration and general 1,819,323 1,343,455
Human resources 361,983 342,257
Guest relations and transportation 319,826 287,976
Sales and marketing 1,940,373 1,956,651
Marketing fees 393,439 282,990
Electricity and water 2,105,409 2,340,772
Repairs and maintenance 881,337 781,395
----------- -----------
7,821,690 7,335,496
----------- -----------
----------- -----------
TOTAL
Administration and general 3,721,499 2,804,682
Human resources 611,861 579,433
Guest relations and transportation 471,616 452,093
Sales and marketing 2,546,986 2,427,037
Marketing fees 393,439 282,990
Electricity and water 2,105,409 2,340,772
Repairs and maintenance 1,320,386 1,158,314
----------- -----------
11,171,196 10,045,321
----------- -----------
----------- -----------
</TABLE>
<PAGE>
ANNEX 4
RIF RESORT HOTEL N.V.
CURACAO
AUDITOR'S REPORT
We have audited the financial statements of Rif Hotel N.V., in Curacao,
Netherlands Antilles, for the year 1994. We have conducted our audit in
accordance with auditing standards generally accepted in the Netherlands.
In our opinion, these financial statements give a true and fair view
of the company's financial position at December 31, 1994 and of the result
for the year then ended.
Annex 3.2 of the notes to the financial statements indicates that the
continuation of the company is uncertain. However, the explanation provided
shows that it is not impossible that business operations will be maintained
in the long term. As a consequence, the accounting principles applied are
based on the assumption that the company will be able to continue as a going
concern.
Moret Ernst & Young Accountants
Willemstad, May 22, 1995
<PAGE>
ANNEX 5.1
RIF RESORT HOTEL N.V.
CURACAO
SPECIFICATION OF FIXED ASSETS
<TABLE>
<S> <C>
(x NAf 1,000)
Building works 42,087
Outdoor facilities 9,565
F.F. & E. 15,008
Consultants 8,115
Development fee 800
Pre-opening expenses 2,774
Pre-project costs 384
Project office 608
Costs caused by delays 3,574
Miscellaneous 4,815
-------
87,730
-------
-------
Cost caused by delays:
Project office 460
Running costs (electricity, security, garden maintenance, land rent etc.) 784
Interest period April 1 till December 1, 1992 2,134
Other financing costs 113
Adjustments of agreements 76
Miscellaneous 7
-------
3,574
-------
-------
Miscellaneous:
Building permit 95
Land rent during construction 112
Interest, exchange differences etc. 4,242
Notary fees etc. mortgage deed 118
Representation 112
Various 136
-------
4,815
-------
-------
</TABLE>
<PAGE>
ANNEX 5.2, PAGE 1
RIF RESORT HOTEL N.V.
CURACAO
SPECIFICATION OF LONG TERM LOANS
(i). Soft loan from Eilandgebied Curacao (via O.B.N.A.)
Principal: NAf 8,800,000
Term: October 1, 1990 thru September 30, 2020
Interest grace period: October 1, 1992 thru September 30, 1997
Interest after grace period: 2.5%
Payment of interest: Yearly
Redemption: 20 yearly annuities the first one due
October 1, 2001
Guaranteed: No
Secured by mortgage: No
(ii). Subordinated soft loan from Eilandgebied Curacao (via O.B.N.A.)
Principal: NAf 8,000,000
Term: October 1, 1990 thru September 30, 2020
Interest grace period: October 1, 1992 thru September 30, 1997
Interest after grace period: 2.5%
Payment of interest: Yearly
Redemption: 20 yearly annuities the first one due
October 1, 2001
Guaranteed: No
Secured by mortgage: No
(iii). Debenture loan (bonds) Local consortium (A)
Principal: NAf 12,000,000
Term: October 1, 1992 thru September 30, 1997. A
one-time roll-over for another 5 years at
the discretion of Rif Resort Hotel N.V.
Interest year 1 thru 5: 6.5%, payable yearly, plus 2.5% per year
which will accumulate interest free and will
be paid at the end of the 6th year if the
liquidity position of Rif Resort Hotel N.V.
such permits, or as soon as possible
thereafter.
Interest year 6 thru 10: To be negotiated
Payment of interest: Yearly in arrears
Redemption: In full latest September 30, 2002
Guaranteed: Yes
Secured by mortgage: No
<PAGE>
ANNEX 5.2, PAGE 2
RIF RESORT HOTEL N.V.
CURACAO
(iv). Debenture loan (bonds) Local consortium (B)
Principal: NAf 12,000,000
Term: October 1, 1992 thru September 30, 1997. A
one-time roll-over for another 5 years at
the discretion of Rif Resort Hotel N.V.
Interest year 1 thru 5: 8.5%, payable yearly, plus 0.5% per year
which will accumulate interest free and will
be paid at the end of the 6th year if the
liquidity position of Rif Resort Hotel N.V.
such permits, or as soon as possible
thereafter.
Interest year 6 thru 10: To be negotiated
Payment of interest: Yearly in arrears
Redemption: In full latest September 30, 2002
Guaranteed: Yes
Secured by mortgage: No
(v). Debenture loan (bonds) Local consortium (C)
Principal: NAf 6,000,000
Term: October 1, 1992 thru September 30, 1997. A
one-time roll-over for another 5 years at
the discretion of Rif Resort Hotel N.V.
Interest year 1 thru 5: 9%
Interest year 6 thru 10: To be negotiated
Payment of interest: Yearly in arrears
Redemption: In full latest September 30, 2002
Guaranteed: Yes
Secured by mortgage: No
(vi). Soft loan NPMNA
Principal: NAf 9,000,000
Term: October 1, 1992 thru September 30, 2022
Interest year 1 thru 5: 2.5%
Interest year 6 thru 8: 2.5%
Interest year 9 thru 10: n.a.
Payment of interest: Yearly in arrears
Redemption: 22 yearly annuities from October 1, 2000
Guaranteed: No
Secured by mortgage: Yes
<PAGE>
ANNEX 5.2, PAGE 3
RIF RESORT HOTEL N.V.
CURACAO
(vii). Soft loan Korpodeko
Principal: NAf 5,031,944
Term: October 1, 1992 thru September 30, 2022
Interest year 1 thru 5: 2.5%
Interest year 6 thru 8: 2.5%
Interest year 9 thru 10: n.a.
Payment of interest: Yearly in arrears
Redemption: 22 yearly annuities, the first payable
September 30, 2001
Guaranteed: No
Secured by mortgage: mortgage and second lien on F.F. & E.
(viii). Loan from Local consortium
Principal: NAf 4,300,000
Term: October 1, 1992 thru September 30, 1997
Interest year 1 thru 5: 6.5%
Payment of interest: Quarterly in arrears
Redemption: In full September 30, 1997
Guaranteed: No
Secured by mortgage: Yes
(ix). Loan from Local consortium
Principal: NAf 1,000,000
Term: October 1, 1992 thru September 30, 1997
Interest year 1 thru 5: 8.5%
Payment of interest: Quarterly in arrears
Redemption: In full September 30, 1997
Guaranteed: No
Secured by mortgage: Yes
(x). Loan from Maduro & Curiel's Bank N.V. (Working Capital)
Principal: NAf 1,540,000
Term: December 1, 1992 thru latest
December 31, 1997
Interest 11%
Payment of interest: Monthly
Redemption: In full latest September 30, 1997
Guaranteed: No
Secured by mortgage: F.F. & E., stock, accounts receivable
<PAGE>
ANNEX 5.2, PAGE 4
RIF RESORT HOTEL N.V.
CURACAO
(xi). Claim settlement with Croon Electrotechniek B.V., Rotterdam, The
Netherlands
Principal: NAf 1,600,000
Term: January 1, 1994 thru January 1, 2000
Interest Libor + 2%
Payment of interest: Yearly in arrears
Redemption: 5 yearly installments of NAf 280,000 the
first payable January 1, 1995 and NAf
200,000 payable January 1, 2000
Guaranteed: No
(xii). Claim settlement with Netherlands Harbourworks Company (Netherlands
Antilles) N.V.
Principal: NAf 1,000,000
Term: January 1, 1994 thru January 1, 1997
Interest Libor + 2%
Payment of interest: Yearly in arrears
Redemption: 3 yearly installments of NAf 333,333 the
first payable January 1, 1995
Guaranteed: No
(xiii). Loan from ABN AMRO Bank (cash reserve loan)
Principal: NAf 3,600,000
Term: February 1994 thru October 31, 1997
Interest 9%
Payment of interest: Monthly in arrears
Redemption: In full latest October 31, 1997
Guaranteed: Yes
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SONESTA INTERNATIONAL HOTELS CORPORATION
(Registrant)
By: ________________________ Date: June 28, 1995
Boy van Riel
Vice President and Treasurer
