2015_LCC Annual Report

PRINCE EDWARD ISLAND LIQUOR CONTROL COMMISSION Notes to Financial Statements March 31,2015

12.

Leases and Commitments

The Commission leases fourteen retail outlets. Eleven of those outlets are classified as operating leases and three retail outlets are classified as finance leases.

Finance Leases

The following are the future minimum lease payments and present values for the finance leases as at March 31,2015:

Within 1 Year

1 to 5 Years

After 5 Years

$

$

$

$

Minimum ease payments

143,502 132,670

574,008 437,957

1,960,807

2,678,317 1,373,396

Present value

802,769

The present value was calculated by discounting the minimum lease payments using the estimated interest rates implicit in the lease over the same period as the length of the lease including any renewal options. Estimated interest rates implicit in the lease range between 7.27 and 9.27 percent.

Operating Leases

The following are the Commission’s future minimum lease payments for the operating leases:

Within 1 Year

1 to 5 Years

After 5 Years

Renewal ODtions

I2J

$

$

$

$

$

March 31,2015 March 31, 2014

471,429 639,837

839,479

559,746 671,508

4,468,560 5,545,150

6,339,214 8,051,627

1,195,132

Total future minimum operating lease payments include lease renewal options which can be exercised by the Commission for periods above their current lease contract. Lease payments recognized as an expense during the period are $632,021 (2014 - $759,284). Dependent on the terms of the lease, other costs incurred by the Commission associated with property leases generally include insurance, taxes, repairs and maintenance, and leasehold improvements.

Commitments

The Commission has

entered

into contracts with various

suppliers

for

hardware

maintenance, software support services,

internet access, marketing and security services.

The total of these contracts is $783,935 and they expire in one to three years.