Annual Report 2011/12 - International Entertainment Corporation

Notes to the Consolidated Financial StatementsFor the year ended 31 March 201232. OPERATING LEASE COMMITMENTSThe Group as lessorAn indirect subsidiary of the Company acquired on 11 October 2007, signed a contract with PAGCOR on 14 March2003 to lease equipped gaming premises and office premises for a period of twelve years commencing from 31 March2004. The monthly rental would be based on a certain percentage of net gaming revenue of the casino operated byPAGCOR or a fixed amount of Peso100,000 (equivalent to approximately HK$18,000 (2011: HK$17,000)), whichever ishigher.PAGCOR is chartered under Presidential Decree No. 1869, as amended (“PAGCOR Charter”) to operate thecasino in the Philippines. The PAGCOR Charter expired on 10 July 2008 and renewal was granted in June 2007for 25 years from 11 July 2008. Casino rental income earned during the year was approximately HK$291,026,000(2011: HK$275,231,000), including contingent rental charges amounting to approximately HK$290,810,000 (2011:HK$275,027,000).The Group as lesseeAt 31 March 2012, the Group had commitments for future minimum lease payments under non-cancellable operatingleases which fall due as follows:2012 2011HK$’000 HK$’000Within one year 5,458 6,632In the second to fifth year inclusive 19,210 19,746Over five years 57,293 61,88381,961 88,261Operating lease payments represent rentals payable by the Group in respect of leasehold land, condominium units,office premises and staff quarters. Leases are negotiated for terms ranging from two to twenty years and rentals arefixed for the lease period.84International Entertainment Corporation - Annual Report 2011/12