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 29, 1996 did not contain the
Financial Statements of a significant subsidiary, R.I.F. Resort Hotel N.V.,
under PART IV, Item 14(a)3.
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995 Commission file number 0-9032
OR
[X] 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:
Title of each class Name of each exchange on which registered
Class A Common Stock NONE
$ .80 par value
Securities registered pursuant to Section 12 (g) of the Act:
NONE
(Title of Class)
<PAGE>
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 and Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
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 (ss.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 reference 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, 1996 was $ 5,648,104.
The number of shares outstanding of the registrant's common stock as of
the close of business on March 21, 1996 was: 2,067,237
- -------------------------------------------------------------------------------
<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, 1996
Boy van Riel
Vice President and Treasurer
<PAGE>
Item 14(a)3
RIF RESORT HOTEL
FINANCIAL STATEMENTS
1995
Rif Resort Hotel N.V., Van Goghstraat 24
P.O. Box 6101, CURACAO, Neth. Antilles
Tel.: (599-9)369211, Fx:(599-9)369213
<PAGE>
CONTENTS
Report of the Managing Director
Recommendation of the Board of Supervisory Directors
Annexes
1. Balance Sheet as at December 31, 1995 (1994)
2. Profit and loss account 1995
3. Notes to the financial statements
3.1 General
3.2 Financial position
3.3 Notes to the balance sheet as at December 31, 1995
3.4 Notes to the profit and loss account 1995
4. Auditor's report
5. Additional information
5.1 Specification of long term loans
<PAGE>
REPORT OF THE MANAGING DIRECTOR OVER THE YEAR 1995
The hotel
The hotel is operated under a management agreement with Sonesta CURACAO Hotel
Corporation N.V., a wholly-owned subsidiary of Sonesta International Hotels
Corporation. The name of the hotel has been changed into Sonesta Beach Resort
------
and Casino to reflect more so the services given by this world class resort.
The financing of the hotel
All shares issued are paid up in full, totaling Naf 16.372.000.
In 1995 the debt service deferred from October 1994 was paid as agreed with
financiers. The 1995 debt service for all loans was deferred to be paid in April
1996 after agreement was reached with the various financiers. In April 1996
payment was made as agreed.
The debt-service
Negotiations were held with the financiers who agreed to defer the October 1995
dues to April 1996. In April 1996 the debt-service of Naf 3.199.175 including
Naf 113.110 additional interest was paid. The redemption and interest payments
on the claim loans due in January 1995 were paid in time Naf 770.148. For the
1996 debt-service due in October 1996 the financiers will again be approached to
postpone the due date to April 1997. From the very start negotiations have been
held with financiers to arrange the yearly deferment of the debt-service by six
months to April of the following year. This necessity was born from the late
opening of the hotel in December 1992 whereby the season 1992/1993 was lost. In
1996 negotiations will be started to arrive at refinancing of three important
loans.
Local consortium loan of NAf 5.300.000
Working capital loan NAf 1.540.000
Cash reserve loan NAf 3.600.000
-----------------
NAf 10.440.000
The cash reserve loan is currently guaranteed by the "Eilandbegied CURACAO". The
debenture loan totaling NAf 30.000.000 comes up for redemption September 1997,
however, Rif Resort Hotel N.V. will make use of the one-time roll-over facility
to extend the loan for another 5 years.
<PAGE>
Performance of the hotel
Personnel and service level
- ---------------------------
The hotel operates with approximately 420 workers, of which 16 are ex-patriates.
About 75 of the staff are casino-related. Therefore, the hotel operates with
approximately 345 employees, or 1.4 per available room. This is slightly higher
than industry averages in order to maintain the high quality levels found at the
resort. Human Resource training courses and motivational programs are used
extensively to increase service levels and staff morale. Guest reaction to the
service levels is extremely positive, and the resort consistently earns very
high marks from an independent rating service.
Facilities
- ----------
Although the resort is in overall good condition, the artificial beach, due to
gradual erosion, has suffered serious loss of sand through and around the
visible and submerged breakwaters, thus exposing boulders and coral rubble on
the beach. Considerable negative guest comment has been caused by this
condition, especially from European guests. Together with the Department of
Public Works of the island, studies are ongoing on how to improve the situation,
and we are hoping for a solution to be implemented in 1996.
The marketing
- -------------
Plan 1995 1995 1994
--------- ---- ----
Occupancy 73.9% 71.6% 77.3%
Average daily rate US$ 117.65 US$ 128.75 US$ 113.44
Rooms revenue US$ 7,872,100 US$ 8,346,300 US$ 7,929,800
A drop in occupancy was experienced in 1995 compared with 1994 and the annual
plan, due primarily to reduced tour operator and charter volume from all
markets, resulting from a very mild winter for the first part of 1995. As of
July, business continued soft due to a reduction in travel from South America.
Average room rates, however, climbed to offset reduced occupancies and achieve
room revenue objectives.
1996 Annual Plan
- ----------------
Occupancy 74.7%
Average daily rate US$ 131.29
Rooms Revenue US$ 8,902,700
<PAGE>
The projected gross revenues are expected to increase by 6.7%. Both the
occupancy and average rates will post gains. 1996's actual results will of
course be significantly affected if assumptions or expectations are not
realized.
CURACAO's tourism in relation to the Sonesta Hotel
The island is more vulnerable than most others in the Caribbean. This is due to
a number of reasons including lack of air lift and destination awareness, a low
number and limited range of resorts and hotels and non-competitive pricing.
CURACAO is simply not as well known as other Caribbean destinations. CURACAO's
promotional and advertising campaigns are only a few years old and not as
extensive as the competitors. There are not enough "anchor" hotels to contribute
to creating awareness of the destination. As one of our wholesalers stated
"Sonesta CURACAO is an oasis on the Island". Despite these challenges our
occupancy is relatively high and the average increase is above the norm. This is
due to ongoing marketing efforts and the physical beauty of the resort along
with its consistently high quality service. Furthermore multiple efforts are
being made by the Government and tourism and hotel organisations to improve on
this situation. It is our hope that these efforts will reflect in the hotel's
future results.
The hotel in relation to the economy of CURACAO
The hotel employed at end 1995: 412 workers of which 16 are ex-patriate staff.
In 1995 a total of NAf 10,814,689 was paid in salaries and wages. The various
forms of tax contribution such as land rent, occupancy tax and gaming tax
amounted to NAf 1,648,744. The wage tax paid to the Government amounted to NAf
1,506,901. The S.V.B. old-age Pension premium amounted to NAf 773,872.
May 21, 1996
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,
1995 have been examined by us.
We recommend that the financial statements for the year 1995 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, 1995 (1994)
1995 1994
---- ----
Notes NAf NAf
Assets
------
Fixed Assets (1) 69,493,717 75,267,238
Current Assets
Inventories (2) 1,026,549 1,179,861
Receivables and prepayments (3) 2,679,610 3,689,594
Cash and bank balances (4) 1,989,834 2,228,850
--------- ---------
5,695,993 7,098,305
--------- ---------
TOTAL 75,189,710 82,365,543
========== ==========
Equity and Liabilities
----------------------
Shareholders' equity
Share capital (5) 16,372,000 16,372,000
Accumulated losses (25,888,916) (20,175,722)
------------ ------------
(9,516,916) (3,803,722)
Long term loans and liabilities (6) 73,763,484 74,660,581
Current liabilities and accruals (7) 10,943,142 11,508,684
---------- ----------
TOTAL 75,189,710 82,365,543
========== ==========
See accompanying notes to financial statements.
<PAGE>
Annex 2, page 1
RIF RESORT HOTEL N.V.
CURACAO
PROFIT AND LOSS ACCOUNT 1995
1995 1994
---- ----
NAf NAf
Departmental revenues
Room 14,856,409 14,115,078
Food and beverage 9,596,427 9,016,788
Telephone 1,547,788 1,664,095
Other 1,755,756 1,458,544
--------- ---------
27,756,380 26,254,505
Casino win (note 1) 5,285,144 5,315,917
--------- ---------
33,041,524 31,570,422
Departmental expenses (note 2)
Room 3,761,936 3,647,337
Food and beverage 7,761,768 7,360,115
Telephone 685,841 750,772
Other 99,637 133,406
------ -------
12,309,182 11,891,630
Casino 3,278,600 4,217,349
--------- ---------
15,587,782 16,108,979
---------- ----------
Gross operating profit 17,453,742 15,461,443
Unallocated operating expenses (note 3)
Administration and general 3,936,086 3,721,499
Human resources 716,222 611,861
Guest relations and transportation 542,222 471,616
Sales and marketing 2,438,306 2,546,986
Marketing fees 416,385 393,439
Heat, light and power 2,234,471 2,105,409
Repairs and maintenance 1,633,346 1,320,386
--------- ---------
11,917,038 11,171,196
---------- ----------
Operating profit from hotel and casino operations
(to carry forward) 5,536,704 4,290,247
<PAGE>
Annex 2, page 2
RIF RESORT HOTEL N.V.
CURACAO
1995 1994
---- ----
NAf NAf
Operating profit from hotel and casino
operations (carried forward) 5,536,704 4,290,247
Depreciation 6,368,915 6,262,901
Interest 3,595,374 4,360,943
Other charges
Management fees 832,766 788,011
Building insurance 134,378 129,475
Building storage 48,040 47,838
Equipment lease 96,576 97,483
Land rent 51,810 51,812
Other expenses 122,039 130,454
------- -------
1,285,609 1,245,073
--------- ---------
11,249,898 11,868,917
---------- ----------
Loss for the book year (5,713,194) (7,578,670)
Losses previous years (20,175,722) (12,597,052)
------------ ------------
Accumulated losses (25,888,916) (20,175,722)
============ ============
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 casino on CURACAO.
The Company has been involved in the development of a hotel and casino on
CURACAO, known as the Sonesta Beach Resort & 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 Resort 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 as nominal value less and 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 1995 no incentive fee has been paid.
<PAGE>
Annex 3.2
RIF RESORT HOTEL N.V.
CURACAO
FINANCIAL POSITION
The 1995 profit and loss account shows a loss as expected and budgeted. As a
consequence of this loss and earlier losses current liabilities exceed current
assets by approximately NAf 5,200,000 as at December, 1995. Budgeted was a
liquidity shortage of NAf 5,800,000.
According to the budget for 1996 inclusive of estimated investments of NAf
1,000,000 this liquidity shortage is expected to decrease to approximately NAf
4,900,000 as per the end of 1996. Actual results through March 1996 are
approximately NAf 700,000 below budget. Furthermore, the budget 1996 does not
take the sales tax into account. The sales tax will probably be introduced as of
July 1, 1996.
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, 1995
1. Fixed Assets
NAf
Balance as at December 31, 1994 75,267,238
Investments in 1995 595,394
-------
75,862,632
Depreciation 1995 (6,368,915)
-----------
Balance as at December 31, 1995 69,493,717
==========
The investments for the year 1995, amounting to NAf 595,394 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
totaling 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 original investment of NAf 88,324,943 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.
<PAGE>
Annex 3.3, page 2
RIF RESORT HOTEL N.V.
CURACAO
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
transferred to construction costs. 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
1995 1994
---- ----
NAf NAf
Food and beverage
Food 184,924 225,827
Beverage 126,560 119,564
------- -------
311,484 345,391
Other
Printing and stationery 181,537 185,558
Guest supplies 68,010 127,088
Uniforms 60,508 93,425
Linen 203,374 241,569
Glassware, china, silver and utensils 139,312 78,388
Food and beverage supplies 14,236 10,739
Cleaning supplies 17,474 28,562
Paper supplies 17,118 14,379
Sales promotion 18,071
Other 13,496 36,691
------ ------
715,065 834,470
------- -------
Total inventories 1,026,549 1,179,861
========= =========
<PAGE>
Annex 3.3, page 3
RIF RESORT HOTEL N.V.
CURACAO
3. Receivables and prepayments
1995 1994
---- ----
NAf NAf
Trade Receivables
Guest ledger 449,122 678,527
City ledger 1,567,614 2,581,012
Casino markers 178,356 93,245
Less: allowance for doubtful amounts (292,205) (256,193)
--------- ---------
1,902,887 3,096,591
Other receivables 459,776 261,320
------- -------
2,362,663 3,357,911
========= =========
Loans and advances
Employees advances 26,422 17,149
------ ------
26,422 17,149
====== ======
Deposits
Kodela 90,000 90,000
Other 24,913 13,435
------ ------
114,913 103,435
======= =======
<PAGE>
Annex 3.3, page 4
RIF RESORT HOTEL N.V.
CURACAO
1995 1994
---- ----
NAf NAf
Prepaid expenses
Insurance 131,286 136,782
Advertising 32,667
Maintenance contracts 8,921 8,371
Rent 12,456 7,958
Other 22,949 25,321
------ ------
175,612 211,099
======= =======
Summary
Trade receivable 2,362,663 3,357,911
Loans and advances 26,422 17,149
Deposits 114,913 103,435
Prepaid expenses 175,612 211,099
------- -------
2,679,610 3,689,594
========= =========
4. Cash and bank balances
Cash on hand 752,867 819,892
Cash in bank 1,236,967 1,408,958
--------- ---------
1,989,834 2,228,850
========= =========
<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, 1995, shares issued and paid up are as follows:
NAf
8,100 shares A 8,100,000
3,600 shares B 3,600,000
4,672 shares C 4,672,000
---------
16,372,000
==========
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
6. Long term loans and liabilities
1995 1994
---- ----
NAf NAf
Long term loans 72,593,484 73,850,581
Other long term liabilities 1,170,000 810,000
--------- -------
73,763,484 74,660,581
========== ==========
A specification of the long term loans is given in annex 5.1.
The other long term liabilities relate to deferred interest on the NAf
30,000,000 bonds loan amounting to NAf 1,170,000.
7. Current liabilities and accruals
1995 1994
---- ----
NAf NAf
Payable long term loans (less than one year) 613,333
Creditors for construction hotel and casino 158,696
Trade creditors operation 839,304 678,358
Interest accrual 3,602,438 4,173,006
Accruals, water, electricity and telephone 408,423 942,733
Room, game and payroll taxes 2,566,842 2,093,826
Sonesta International Hotel Corporation 271,169 515,319
Salaries and wages payable 955,977 919,918
Accrued leave and vacation pay 459,098 387,266
Accrued year-end bonus 160,152 322,497
Other accruals 225,572 241,131
Progressive game payable 175,145 212,710
Refundable deposits 563,851 803,386
Other accounts payable 101,838 59,838
------- ------
10,943,142 11,508,684
========== ==========
<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.
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
offset 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 1995
1. Casino win
1995 1994
---- ----
NAf NAf
Net win on tables
Drop 13,556,946 15,625,509
Pay-out (10,218,325) (12,507,042)
------------ ------------
3,338,621 3,118,467
Net win on slot machines
Drop 2,196,411 2,452,781
Pay-out (266,197) (270,515)
--------- ---------
1,930,214 2,182,266
Miscellaneous income 16,309 15,184
------ ------
5,285,144 5,315,917
========= =========
2. Departmental expenses
Cost of personnel
Rooms 1,907,414 1,715,147
Food and beverage 3,333,470 3,107,570
Telephone 99,372 86,569
Other 83,331 85,515
------ ------
5,423,587 4,994,801
Casino 2,434,789 2,408,842
--------- ---------
7,858,376 7,403,643
========= =========
<PAGE>
Annex 3.4, page 2
RIF RESORT HOTEL N.V.
CURACAO
1995 1994
---- ----
NAf NAf
Other expenses
Rooms 1,854,521 1,932,190
Food and beverage -- cost of sales 3,202,909 3,058,750
Food and beverage -- other 1,225,389 1,193,795
Telephone -- cost of sales 582,813 662,101
Telephone -- other 3,656 2,102
Other 16,307 47,891
------ ------
6,885,595 6,896,829
Casino -- gaming tax 48,694 648,826
Casino -- other 795,117 1,159,681
------- ---------
7,729,406 8,705,336
========= =========
Total
Room 3,761,935 3,647,337
Food and beverage 7,761,768 7,360,115
Telephone 685,841 750,772
Other 99,638 133,406
------ -------
12,309,182 11,891,630
Casino 3,278,600 4,217,349
--------- ---------
15,587,782 16,108,979
========== ==========
<PAGE>
Annex 3.4, page 3
RIF RESORT HOTEL N.V.
CURACAO
3. Unallocated operating expenses
1995 1994
---- ----
NAf NAf
Cost of personnel
Administration and general 2,400,638 1,902,176
Human resources 246,507 249,878
Guest relations and transportation 345,984 151,790
Sales and marketing 625,296 606,613
Repairs and maintenance 506,257 439,049
------- -------
4,124,682 3,349,506
Other expenses
Administration and general 1,535,446 1,819,323
Human resources 469,715 361,983
Guest relations and transportation 196,238 319,826
Sales and marketing 1,813,012 1,940,373
Marketing fees 416,385 393,439
Electricity and water 2,234,471 2,105,409
Repairs and maintenance 1,127,089 881,337
--------- -------
7,792,356 7,821,690
========= =========
Total
Administration and general 3,936,084 3,721,499
Human resources 716,222 611,861
Guest relations and transportation 542,222 471,616
Sales and marketing 2,438,308 2,546,986
Marketing fees 416,385 393,439
Electricity and water 2,234,471 2,105,409
Repairs and maintenance 1,633,346 1,320,386
--------- ---------
11,917,038 11,171,196
========== ==========
<PAGE>
Annex 4
RIF RESORT HOTEL N.V.
CURACAO
AUDITOR'S REPORT
Introduction
We have audited the 1995 financial statements of Rif Resort Hotel N.V. in
CURACAO, Netherlands Antilles. These financial statements are the responsibility
of the company's management. Our responsibility is to express an opinion based
on our audit.
Scope
We conducted our audit in accordance with auditing standards generally accepted
in the Netherlands. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial presentation. We
believe that our audit provides a reasonable basis for our opinion.
Opinion
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.
In our opinion, the financial statements give a true and fair view of the
financial position of the company as of 31 December 1995 and of the result for
the year then ended in accordance with International Accounting Standards.
Willemstad, May 21, 1996
Moret Ernst & Young Accountants
<PAGE>
Annex 5.1, 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 year 5: 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. An
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 5.1, 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. An
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. An
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, 2002
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 5.1, page 3
RIF RESORT HOTEL N.V.
CURACAO
(vii). Soft loan from Korpodeko
- --------------------------------
Principal: NAf 5,031,944
Term: October 1, 1992 thru September 30, 2002
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 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 year 1 thru 5: 11%
Payment of interest: Monthly
Redemption: In full latest December 31, 1997
Guaranteed: No
Secured by mortgage: F.F. & E., stock, accounts receivable
<PAGE>
Annex 5.1, 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: 3 yearly installments of NAf 333,333 the
first payable January 1, 1995
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
