Cineworld Group Annual Report 2020

FY2020 Annual Report · Cineworld Group

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The Best Place
to Watch a Movie

ANNUAL REPORT AND ACCOUNTS 2020

THE BEST PLACE TO WATCH A MOVIE
2020 has been an incredibly challenging
year for Cineworld. Despite COVID-19 causing
doubts about the industry, the pandemic only
strengthens our belief in our business’s future as
there is a clear demand and desire among our
customers to go out when it is safe to do so. We
offer a superior entertainment experience with
the latest technology and this offer will be more
important than ever when the crisis is over. We
are proud of our journey and unwavering vision
to be The Best Place to Watch a Movie.

CONTENTS

2020 HIGHLIGHTS

Strategic Report

p01–31
02 Chair’s Letter

04 Chief Executive Officer’s Review

06 Market Drivers

08 Our Business Model

10 Strategic Priorities and KPIs

14 Risk Management

15 Principal Risks and Uncertainties

20 Viability Statement

22 Resources and Relationships

26 Chief Financial Officer’s Review

Corporate Governance

p32–87
32 Chair’s Introduction
to Governance

35 Board of Directors

38 Corporate Governance

Statement

49 Nomination Committee Report

52 Audit Committee Report

56 Remuneration Committee

57 Directors’ Remuneration Report
(including Remuneration Policy)

80 Directors’ Report

87 Statement of Directors’

Responsibilities

Financial Statements

p88–177
88 Independent Auditor’s Report

98 Consolidated Statement

of Profit or Loss

99 Consolidated Statement

of Comprehensive Income

100 Consolidated Statement
of Financial Position

101 Consolidated Statement
of Changes in Equity

102 Consolidated Statement

of Cash Flows

103 Notes to the Consolidated
Financial Statements

163 Company Statement

of Financial Position

164 Company Statement
of Changes in Equity

165 Notes to the Company
Financial Statements

177 Shareholder Information

Sites

767

2019: 787

Screens

9,311

2019: 9,500

Admissions

54.4m

2019: 275.0m

Group Revenue

$852.3m

2019: $4,369.7m

Adjusted EBITDA(1)

($115.1m)

2019: $1,580.3m

(Loss)/Profit After Tax

($2,651.5m)

2019: $180.3m

Adjusted (Loss)/Profit
After Tax(2)

($913.2m)

2019: $293.0m

Diluted EPS

(193.2¢)

2019: 13.1¢

Adjusted Diluted EPS(2)

Dividend Per Share

(66.5¢)

2019: 21.3¢

–

2019: 15.5¢

For more information visit:
www.cineworldplc.com

Footnotes:

(1 ) Refer to Note 2 for the full definition and reconciliation.

(2) Refer to Notes 2 and 7 for the full definition and reconciliation.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsCHAIR'S LETTER

Strong foundations
for the future

“ The Group has demonstrated resilience
through what has been a very difficult
year and I am extremely proud of the
commitment our colleagues have shown
during these exceptional times. Despite
the significant challenges that COVID-19
continues to present, we look forward
to reopening cinemas worldwide and
welcoming our guests.”

Alicja Kornasiewicz
Chair

COVID-19 has presented the theatrical
industry with extraordinary challenges,
not least the temporary closure of all
our cinemas, and has therefore had
a substantial impact on the Group’s
financial results. I am hugely grateful
to all those who work at Cineworld
around the world and would like to
thank them for their hard work during
this difficult period. I am extremely
proud of how the organisation has
responded, and I am humbled by
the commitment and dedication our
people are showing to ensure the
survival of the business through
this crisis.

During this period of temporary closure,
our focus has been on supporting our
people at a time of great uncertainty,
ensuring that the business has enough
liquidity and minimising cash burn,
while planning for the reopening of
our cinemas. I believe that we have
successfully met those objectives.
The Group finished the year in as strong
a position as it could given current
circumstances, material uncertainty
remains with regards to the Group's
ability to continue as a going concern
(as disclosed in Note 1 to the Financial
Statements). We are well placed to
recover in the long term supported by a
strong backlog of movies to be released.

Our people and culture
Across the Group, a range of initiatives
have been deployed to support our
people through the COVID-19 crisis.
Government salary support was

available across most of our territories
including the US, UK and ROW
territories and additional support
has been provided locally through
mechanisms such as employee
assistance programmes and
hardship funds.

Our aim since March 2020 was to
maintain consistent communications
with our employees to help support
their wellbeing and to ensure that,
once our businesses reopened, they
were fully prepared to deliver great
experiences for our guests with a
culture that places guests at the heart
of everything we do. We achieved
this through a focus on direct
communication, welfare, and support.

The Group’s Management concurrently
took extensive action to reorganise and
simplify the business to minimise cash
burn, which included salary deferrals for
the Executive Directors. The pandemic
has impacted our sector more than
others and, during this difficult time
of extended closure, we have tried
to protect as many jobs as possible.
However, there have unfortunately
and inevitably been redundancies
and reductions in working hours.

Financial results
Our financial performance has been
severely impacted by closure of
cinemas since mid-March last year.
The immediate priorities of the senior
leadership team were our people’s
welfare and protecting liquidity.

We acted quickly to mitigate our costs
and minimise cash burn.

The majority of our cinema and
HQ employees were furloughed and,
through our proactive, direct approach
with our landlords, we secured
agreements protecting our rent position
with most of our key properties. In
addition, we raised $810.8m through
new debt and an extension of our
revolving credit facility, secured a
covenant waiver and accelerated our tax
year in the United States, anticipating
a tax refund of $200m by April 2021.

As a result of our cinemas remaining
closed for the majority of 2020 due to
COVID-19, our revenue for the year
declined by (80.5%) and adjusted
EBITDA was a loss of $115.1m. The
uncertainties arising from COVID-19
and current closures have led to the
net impairment of assets of $1,344.5m,
which has been reflected in the
Balance Sheet.

Despite the encouraging news about
the international rollouts of vaccines, the
pace and shape of the recovery remains
uncertain as trading remains dependent
on government guidance and the timing
of key studio releases. Details of our
financial performance can be found on
pages 26 to 31.

Cineworld Group plc Annual Report and Accounts 2020Corporate responsibility
and sustainability
Despite these challenging times,
managing our business in a sustainable
manner remains a key element of our
culture and strategy. Our customers
benefit from our affordable, safe, out
of home entertainment which allows
access to a high quality, diverse and
cultural offering that is essential to
our communities.

Our ongoing engagement with
employees has been vital during periods
of closure and we have maintained a
strong focus on our people’s wellbeing.
Through our open and inclusive culture,
we aim to create an environment which
allows our people to develop and thrive.
We are proud of the training and
development opportunities we offer
and strive to provide progression
opportunities to all of our people.

Separately, we are always looking
for ways to minimise the impact of
our operations on the environment,
exercising tight control on energy and
food waste, limiting the use of single-
use plastic, and through refurbishments
and installation of new energy initiatives.

We recognise that our people are critical
to our ability to achieve our goals in a
responsible and sustainable manner.
We also have exceptional leaders and
are proud of what we have achieved to
date in gender diversity. Although there
is more to do, as at the year end we had
27.3% female representation on the
Cineworld Group Board and 31.1% on
the Senior Executive Team.

Governance and the Board
Our well established Corporate
Governance procedures enabled
the organisation to react quickly to
changing government guidance and the
risk the pandemic posed to the Group.
The Board’s activities and processes
have changed and adapted in response
to the events of this year, including
increased frequency of meetings, all of
which were held virtually, and weekly
interaction with Senior Management.
A structured approach to Board and
executive decision-making ensured that
action could be swiftly taken across the
Group in response to the changing
situation. The Board has been actively
involved in monitoring and supervising
the business through these
extraordinary times, and its focus will
continue to be the long-term success
of the Group, balancing the needs of
our stakeholders including our people,
landlords, lenders, communities,
suppliers, and customers.

As a Board, we spend time ensuring that
our guest-centred culture is aligned to
and supports the Company’s strategy,
values and business model.

We remain committed to achieving
the highest standards of Corporate
Governance, as outlined in detail in our
Corporate Governance Statement on
pages 38 to 48.

As previously announced, Anthony
Bloom stepped down as Chair following
the AGM in May 2020, having been
Chair of Cineworld since its inception in
1995. Our thanks go to Anthony for the
remarkable contribution that he made
to the Board over the past 25 years and
I consider it a great honour to take on
the role of Chair and continue our
incredible journey.

On 13 May 2020, Helen Weir, Non-
Executive Director and member of the
Audit Committee and Remuneration
Committee, stepped down to pursue
other interests.

On 1 August 2020, Damian Sanders
was appointed to the Board as an
independent Non-Executive Director
and member of the Audit Committee.
Mr Sanders brings extensive financial
and commercial expertise to the Board,
following over 20 years as a senior
equity audit partner at Deloitte, during
which time he acted as adviser and
corporate governance specialist for
a number of FTSE boards.

Subsequent to the year end, on
22 March 2021, we were delighted to
announce the appointment of Ashley
Steel as Non-Executive Director and
member of the Audit and Remuneration
Committees with effect from 1 April
2021. Eric (Rick) Senat, who has been a
Non-Executive Director of the Company
since 2010, and Senior Independent

Section 172(1) statement

Director, will be stepping down from the
Board at the conclusion of the
Company’s 2021 Annual General
Meeting. I would also like to thank our
long-standing and deeply respected
outgoing Board member, Rick Senat.

Cineplex
In June 2020, Cineworld terminated the
arrangement agreement with Cineplex
Inc. (“Cineplex”) due to breaches
by Cineplex and, accordingly, this
transaction will no longer proceed.
Cineplex denies that it breached the
arrangement agreement and has
initiated proceedings against Cineworld
to seek damages for the termination
and, what it describes as, breaches
by Cineworld. Cineworld denies that it
breached the arrangement agreement
and has submitted a defence to the
Cineplex claim. Cineworld has itself filed
a counterclaim against Cineplex for
Cineworld’s damages and losses
suffered as a result of Cineplex’s
breaches and the termination of the
arrangement agreement, including
Cineworld’s lost financing costs,
advisory fees and other costs incurred.

Looking ahead, the vaccine rollouts
globally will be critical to removing the
physical restrictions on our business, as
well as providing confidence to studios
to release the strong slate of films
that we are expecting, and which are
essential for us to return to normal levels
of trading. The immediate outlook
remains challenging as our estate
remains closed. However, in the longer
term, we believe that our high quality
and refurbished estate is well positioned
to take advantage of future growth
opportunities as the market recovers.

Alicja Kornasiewicz
Chair
25 March 2021

The Board actively considers the interests of the Group’s employees and
other stakeholders, including the impact of its activities on the community,
environment, and the Group’s reputation, when making decisions. In addition,
while acting fairly between members and in good faith, the Board closely
takes into account what is most likely to promote the success of the Group
for its shareholders in the long term.

Read more page 14

Read more page 22

Cineworld Group plc Annual Report and Accounts 2020Be technological leaders...

…in the industry to offer the latest audio and
visual technology

We want to be at the forefront of providing the latest
technology to our customers. We continue to strengthen
and deepen our partnerships and relationships with our
technology partners.

What we achieved
− We are one of the largest operators of IMAX screens

Priorities for 2021
− Continue our investment in providing a range

in the United States and across Europe

of premium formats

− Rollout of laser projectors across the estate

− The Group is the only provider of 4DX in the UK
and an extensive provider in the United States
and Europe

− Installed a total of 1,794 laser projectors across the

estate, nearly four times more energy efficient

Measuring our progress

Number of premium formats

134

IMAX screens
(2019: 135)

4DX screens
(2019: 83)

ScreenX
(2019: 50)

125

PLF
(2019: 116)

Risks
− Availability of content tailored for specific technology

Sustainability drivers
− Energy saving through rollout of laser projectors

− Change in technology

− Ensure safety requirement of stakeholders

− Strength of relationship with technology partners

− Maintain long-term relationship with our

− Environment and sustainability

technology partners

Read more page 14

Read more page 22

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsSTRATEGIC PRIORITIES AND KPIs CONTINUED

Expand, enhance and
optimise our estate…

…to provide consistent, sustainable, high quality,
modern cinemas

When selecting new sites for development or sites for
refurbishment, we consider the location, accessibility,
competition, and other local economic factors. We also have
a selective site closure programme when the lease terms
have expired and it is not commercially beneficial or feasible
to renew these leases.

What we achieved
− Opening of two new sites: one in the United States and

Priorities for 2021
− Further optimise our estate through closure of loss

one in Romania

making sites and selective site opening

− Completed nine refurbishments; five in the United

− Reduce our environmental impact through

States; four in the UK

refurbishments and installation of new energy initiatives

− Closure of 20 loss making sites in the United States,

one site in Israel and one site in the UK

− Emissions intensity ratio impacted by low revenue

Measuring our progress

Number of
new sites

2019: 14

Number of major refurbishments
completed

Emissions intensity tonnes CO2e
per $1m revenue

2019: 10

302.4

2019: 125.9

Risks
− Quality of the cinemas

Sustainability drivers
− Durability of refurbishment

− State and maintenance of the theatres

− Collaboration with local authorities

− Opening and refurbishment dependent on

− Energy efficient new builds

planning laws and building permits

Read more page 14

Read more page 22

Cineworld Group plc Annual Report and Accounts 2020Drive value for shareholders...

…by delivering our growth plans in an efficient,
sustainable and effective way

To be able to reward our shareholders we remain focused on
driving revenues, increasing earnings and prudently managing
our cash position.

What we achieved
− Minimised cash burn during cinema closures

Priorities for 2021
− Cash flow generation from operations

− Raised $810.8m during the year to support the

− Commitment to reduce debt

business through the pandemic

− Continued focus on driving efficiencies across

the Group

− Group financial covenant waiver through June

2022 and are currently operating under a minimum
liquidity covenant

Measuring our progress

− Employee engagement

Revenue
$m

Adjusted EBITDA
$m

$852.3m

2019: $4,369.7m

($115.1m)

2019: $1,580.3m

Adjusted diluted
EPS¢

(66.5¢)

2019: 21.3¢

Net Debt
(ex. lease liabilities)

$4,344.5m

2019: $3,482.5m

Risks
− Retain strategic employees

Sustainability drivers
− Effective and proactive estate management

− Deliver on strategic initiatives and performance

− Engagement with local communities and charities

− Timing of Cinema reopening and availability of

− Employee support

film content

− Financial covenants

− Reduction of food waste and single-use plastics

Read more page 14

Read more page 22

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsRISK MANAGEMENT
Supporting growth through effective risk management

Principal risks and uncertainties
Operating as a cinema chain in ten
different countries presents a number
of risks and uncertainties that continue
to be the focus of the Board’s
ongoing attention.

Risk management approach
The Group’s approach to risk
management and internal control is
designed to manage risk at all levels.
Where possible, the Group has
implemented appropriate mitigation
strategies to reduce the overall risk
exposure in line with the Board’s risk
appetite. For further details please see
the Group approach to risk management
set out on pages 46 to 48.

Principal risk assessment
The Board has undertaken a robust
assessment of the principal risks facing
the Group during the year, including
those that would threaten its business
model, future performance, solvency
and liquidity. Emerging risks, including
those related to climate change, are
identified by leveraging external
thinking and research. Their potential
impacts are presented to and monitored
by the Board.

The time-frame horizon for
consideration of the principal risks is
aligned to the three-year period used
when considering the future viability
of the Group. For further details, please
see the Group’s Viability Statement on
pages 20 and 21.

After the Board’s review of existing risk
and potential emerging risk, the Board
believes the existing principal risks
reflect the Group’s risk profile.

The Board has remained vigilant
on the impact of the UK’s exit from
the European Union (“Brexit”), and
consideration has been given to the
risks that may have a significant impact
on the underlying trading performance
of the Group going forward. See Risk 5
of our principal risks on page 16.

The Board has evaluated the current
and future impact of COVID-19 and we
are taking measures to ensure we are
prepared for all eventualities. We expect
conditions to improve; however, if
conditions do not improve, we have
measures available to reduce the impact
on our business including capex delay
and further cost reduction.

Appetite
The Board undertook a formal review
of risk appetite to ensure that the
view it has established for each of
the principal risks reflects its current
perspective and willingness to accept
risk in pursuit of the strategic objectives
of the Group. For further details please
see the Group approach to risk
management set out on pages 46 to 48.

Viability
In addition, the Directors’ viability
assessment has taken into consideration
the potential impact of the principal
risks in the business model, future
performance, solvency and liquidity
over the period, including principal
mitigating actions such as reducing
capital expenditure. More details about
the viability assessment may be found
on pages 20 and 21.

Strategic relevance

PRINCIPAL RISKS
Risk

1. Technology and Data Control

2. Availability and Performance of Film Content

3. Provision of Next-Generation Cinemas

4. Viewer Experience and Competition

5. Revenue from Retail/Concession Offerings

6. Cinema Operations

7. Regulatory Breach

8. Strategy and Performance

9. Retention and Attraction

10. Governance and Internal Control

11. Major Incident

12. Treasury Management

Trend













Owner

Deputy CEO

CCO

CEO

CCO

CEO

CFO

Deputy CEO

CFO

CEO

CFO

Provide the best
cinema experience

Be technological
leaders in the industry

Expand and
enhance our estate

Drive value for
shareholders

Key

Cineworld Group plc Annual Report and Accounts 2020

PRINCIPAL RISKS AND UNCERTAINTIES

TECHNOLOGY
AND DATA CONTROL

AVAILABILITY AND
PERFORMANCE OF
FILM CONTENT





PROVISION OF NEXT-
GENERATION CINEMAS



A critical system interruption
or major IT security breach
encountered.

Lack of access to high quality,
diverse and well publicised
movie product.

Maintaining/refurbishing existing
sites and/or developing new
sites fails to provide a circuit
of next-generation cinemas.

Link to strategy

Risk owner
Deputy CEO

Risk owner
CCO

Risk owner
CEO

Impact
Any critical system interruption for a sustained
period could have a significant impact on
the Group’s performance. In addition, any
breach (cyber or otherwise) of data protection
rules or security measures surrounding
the storage of confidential and proprietary
information (including movie content)
could result in unauthorised access, loss or
disclosure of this information. This could lead
to claims, regulatory penalties, disruption
of operations of the Group and ultimately
reputational damage.

Impact
Underpinning the overall success of the Group
is the quality of the movie slate, the timeliness
of release, the release window and the appeal
of such movies to our customers. Where the
movie studios do not produce sufficiently
attractive movies, or movies underperform,
this has a direct impact on cinema attendance
and, therefore, box office revenue for the
Group may decline.

Impact
Ensuring our cinemas are of state-of-the-
art design and have the latest cutting-edge
cinema experience technology are both key
for our strategy to provide “The Best Place to
Watch a Movie”. A deviation from this could
have a direct impact on admissions and the
financial health of the Group.

Mitigation activity
− The Group IT function monitors, manages

Mitigation activity
− We work closely with distributors to

and optimises our systems, including
ensuring their resilience through regular
back-ups and the implementation of
security measures.

− External experts are employed where

necessary to oversee and help manage
major projects involving the upgrading
or replacement of key systems.

− Under the direction of the Group Data

Protection Officer there is a Data Privacy/
Security Committee (supported by
external professional advisers) that drives
the programme of data protection across
the Group.

Changes in the year
− Threat protection tools have been
standardised across the Group.

− During the pandemic, IT environments have
been scaled accordingly with no disruption
to security patch cycles, vulnerability scans
or account audits.

− Remote working capabilities have

been hardened.

− Oversight of Group data initiatives have

continued to ensure we remain compliant.

Opportunity
− Continuing the programme of investment
in systems and ensuring our processes
are robust will strengthen the day-to-day
operations across the Group.

Mitigation activity
− We perform a site prioritisation analysis for
the selection of refurbishments, new sites
and or closures.

− Project management expertise that allows
the unique position of renovating without
cinema closures.

− Ensuring access to the latest cutting-edge
technology through our ability to secure
agreements with key suppliers.

− Maintaining long-term working

relationships with key contractors to
ensure continued access to knowledge
and experience.

acquaint ourselves, as early as possible,
with the upcoming film slate in order to
forecast likely movie performance.

− Although access to the latest movie

slate is reliant on our relationship with the
distributors, the Group’s strategy is to show
a wide range of movies over and above
the traditional Hollywood blockbusters.
This allows us to capitalise on specific
local area demand for type and content
of movies shown.

− While we have no control over the

availability of film content, in order to
reduce this risk, we are remaining active in
industry associations and maintaining our
studio relationships to ensure theatrical
release remains priority for delayed and
future releases.

Changes in the year
− The shift in the film release schedule

Changes in the year
− Opening of new sites: five in the UK and

as a result of the pandemic and related
restrictions have caused a significant lack
of availability of high quality film content
in the current year.

− Some of our competitors have agreed with
certain studios to reduce the theatrical
release window and share in downstream
premium VOD revenue. While we have seen
changes in the theatrical release window
policy in our industry during 2020, our
position remains unchanged. We see the
window is an essential part of our business
and most of our studio partners remain
committed to it as big supporters of the
theatrical business.

Opportunity
− Enhance tailored content depending

on local demographic.

− Continue to grow event cinema business

to satisfy customers’ appetite for
alternative content.

− There is a strong film slate for 2021 forward.

two in the ROW.

− Completed nine refurbishments: four in the

UK and five in the US.

− Closure of 20 underperforming sites in the

United States.

For further details see the Chief Executive
Officer’s Review on pages 04 to 05.

Opportunity
− Further optimise our estate through

closure of loss making sites and selective
site opening.

− Continue long-term refurbishment

programme in the US and UK.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED

VIEWER EXPERIENCE
AND COMPETITION



REVENUE FROM
RETAIL/CONCESSION
OFFERINGS

CINEMA OPERATIONS



Failure to deal with competition
effectively by not offering quality
products and services that meet the
needs of the customer and deliver
an enhanced viewer experience.

Delivery of a retail/concession
offering that does not meet the
requirements and preferences
of our customers.

Failure to maintain and operate well
run and cost-effective cinemas.

Link to strategy

Risk owner
CCO

Risk owner
CEO

Impact
Although cinema admissions are
predominantly driven by the quality and
availability of films, ensuring that the Group
continually enhances the viewer experience
is crucial. Any decrease in the quality of the
services we offer, from the ease of booking
and the technology we use to a friendly
farewell on departure, could result in loss
of customers to competitors and/or other
leisure/entertainment attractions.

Mitigation activity
− Our strategy is focused on continually

improving the quality of services we offer
to customers and making a visit to our
cinemas a unique experience.

− This includes increasing the efficiency

of online booking, cutting edge cinema
design, removing clutter from the foyers,
investing in technical innovation and
premium offerings (ScreenX, 4DX and other
large screen formats), upgrading seating
options, further rollout of the VIP offering
and improving retail offers.

− We also focus on our approach to customer
interaction with the Group outside of the
cinema environment.

Changes in the year
− Due to the global pandemic all cinemas
were closed for the majority of the year.

− We are one of the largest operators of IMAX

in the United States and across Europe.

− The Group is the only provider of 4DX in the
UK and an extensive provider in the United
States and Europe.

− Installed 1,794 laser projectors to date

across the estate.

Opportunity
− Further expansion of concession offering in

the United States.

− Rollout of laser projectors across the estate.

− Continue our investment in providing a

range of premium formats.

Impact
Retail/concession sales generally fluctuate
in line with admissions and the genre of film
on show. Therefore, if admissions were to
fall, revenue from retail sales could decrease.
Retail spend may also decrease due to
changes in customer preferences, decreased
disposable income or other economic and
cultural factors. In addition, the cost of items
such as energy and foodstuffs, as well as the
introduction of the Soft Drinks Industry Levy,
has a direct impact on price.

Mitigation activity
− Monitor various metrics, including spend
per person, in order to understand and
react quickly to changing customer needs.

− A key strategy for the Group is to maintain
a strong relationship with the principal
retail suppliers.

− We run targeted promotions and bring
in different ranges of products to meet
changing customer demand.

− We work closely with our drinks partners

to mitigate the potential impact of the Soft
Drinks Industry Levy by broadening our
ranges of diet and sugar free options along
with water and are trialling innovation with
reformulated products while still providing
consumer choice based on preferences.

− Brexit risk identification and mitigation

planning to respond to any impact on our
retail supply chain. We remain focused to
ensure potential operational disruption is
mitigated as effectively as possible.

Changes in the year
− Enhanced mobile applications to provide
customers with the ability to book tickets
and pre-order concessions online more
easily and through mobile applications.

− Due to the global pandemic all cinemas
were closed for the majority of the year
resulting in lower revenue from retail
and concession.

For further details see the Chief Executive
Officer’s Review on page 04 and Chief
Financial Officer’s Review on page 26.

Opportunity
− Upon reopening there will be new Lavazza
and B-Fresh locations opening for the
first time.

− Continue to enhance online offerings and
increase tickets and concessions sold
through our mobile platforms.

Impact
Operating cinemas well is pivotal to the
overall success of the Group. The key is to
ensure that cinema management understand
the local market (film scheduling, pricing
and retail offerings), effectively manage
employees, maintain service standards
and increased COVID-related health and
safety requirements, and are able to react
to incidents should they occur. A reduction
in performance in any area can directly
affect overall viewer experience, reputation
of cinemas, and ultimately the Group’s
financial performance.

Mitigation activity
− Cinema management continually

monitor their staffing requirements,
making adjustments to scheduling based
on customer demand, forecasts and
film scheduling.

− On a monthly basis detailed operational and
financial reviews are undertaken by cinema
management teams to ensure performance
matches expected targets.

− Ongoing evolution and updating of cinema
operational processes and procedures.

− Monitoring health and safety requirements
to ensure we have implemented sufficient
health and safety measures.

Changes in the year
− Due to the global pandemic all cinemas
were closed for the majority of the year.

− Health and safety guidelines established

to ensure safe operations during
the pandemic.

− Evolved IT systems to provide customers
with the ability to book tickets and pre-
order concessions online more easily and
through mobile applications.

For further details please see Resources and
Relationships on page 22.

Opportunity
− Upon reopening there will be new cinemas

ready for business in US and UK.

− Continue to deploy operational best

practices across the Group.

Cineworld Group plc Annual Report and Accounts 2020

REGULATORY BREACH

STRATEGY AND
PERFORMANCE



Key

Provide the best
cinema experience



Be technological
leaders in the industry

A major statutory, regulatory or
contractual compliance breach.

The approach to setting,
communicating, monitoring and
executing a clear strategy fails to
deliver long-term objectives.

Link to strategy

Expand and
enhance our estate

Drive value for
shareholders

Risk owner
CFO

Risk owner
Deputy CEO

Impact
The Group’s business and operations are
affected by regulations covering such matters
as planning, the environment, health and
safety (cinemas and construction sites),
licensing, food and drink retailing, data
protection and the minimum wage. Failure to
ensure ongoing compliance with regulation/
legislation could result in fines and/or
suspension of activity.

Impact
Although the overall strategy for the Group
is not a complex one, it is key that this
is executed.

Any diversion from this strategy could result in
loss of market share to competitors, failure to
capitalise on emerging market opportunities,
reduction in potential revenue/profits and
therefore loss in shareholder value.

Mitigation activity
− Management operate an ongoing cinema

Mitigation activity
− A structure is in place to support

compliance programme, supplemented by
independent compliance assurance reviews
by external advisers where appropriate.

− Group support functions use a combination
of ongoing staff development as well as
updates from professional advisers to
ensure management are aware of the
latest regulations in key areas.

− Robust health and safety protocols have
been implemented to ensure compliance
with COVID-19 compliance requirements.

− Management have secured favourable
payment arrangements with the bulk
of suppliers and landlords to avoid
default action.

effective strategy development, as well
as ongoing reporting and monitoring
of business performance on a daily,
weekly, monthly, quarterly and annual
basis. Monitoring Senior Management
performance against their agreed personal
objectives is an ongoing exercise.

− There are various communication strategies
(emails, meetings and conferences) used
to ensure the strategic goals of the Group
are clearly understood and executed by
Senior Management.

Changes in the year
− The global pandemic has sparked various

Changes in the year
− Our performance was significantly

compliance requirements that are fluid and
vary by country, state, and municipality.

For further details please see Risk and Internal
Control section pages 46 to 48.

impacted by the COVID-19 pandemic
with the closure of our cinemas globally.
During the period of closure, our focus was
on supporting our people, ensuring that our
financial position was robust and minimising
cash burn at a time of great uncertainty.

Opportunity
− Continue to align the approach to health

and safety audits across the Group.

− Continue data privacy compliance initiatives

across the Group.

− Continue the evolution of our approach to

compliance to ensure it is embedded in our
day-to-day operations.

Opportunity
− The Group’s strategy includes identifying
potential profitable opportunities to grow
and expand the business.

− Continual focus on and review of strategy
ensures the Board is well placed to assess
value adding opportunities as they arise.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED

RETENTION AND
ATTRACTION

GOVERNANCE AND
INTERNAL CONTROL



MAJOR INCIDENT



Failure to attract and retain Senior
Management and/or other key
personnel.

A critical internal control and/or
governance failing occurs.

Inability to respond to
a major incident.

Link to strategy

Risk owner
Deputy CEO

Risk owner
CFO

Risk owner
CEO

Impact
The Group’s performance and its ability to
mitigate significant risks within its control
depend on its employees and Senior
Management teams. Therefore, reliance
is placed on the Group’s ability to recruit,
develop and retain Senior Management and
other key employees. If the Group loses key
people, this could have an impact on its ability
to deliver business objectives.

Impact
Maintaining Corporate Governance standards
and an effective and efficient risk management
and internal control system, proportionate to
the needs of the Group, is a key part of short
and long-term success. Any failure and/or
weakness in this area (financial and non-
financial) could have an impact on the efficient
and effective operations of the Group.

Impact
Cinema attendance may be affected by
political events, such as terrorist attacks on,
or wars or threatened wars in territories in
which we operate, health-related epidemics
and random acts of violence, any one of which
could cause people to avoid our cinemas
or other public places where large crowds
are in attendance. In addition, due to our
concentration in certain markets, natural
disasters such as hurricanes, earthquakes and
severe storms in those markets could adversely
affect our overall results of operations.

Mitigation activity
− We receive communications from

relevant government authorities and
law enforcement agencies which keep
us informed and allow us, when needed,
to monitor any potential impact external
events could have on the security and
safety of our cinema estate.

− Various security systems and/or personnel

are in place across the Group.

− Should an incident occur at one of

the Group’s sites, business continuity
and disaster recovery plans are in
place to ensure that management can
react appropriately.

− Appropriate insurance is in place to mitigate
the financial consequences as a result of
property damage.

Changes in the year
− The pandemic has resulted in cinema

closures, reduced seating capacity and film
content and has caused some reluctance to
go into social environments.

− Health and safety procedures have been
implemented in the cinemas to ensure
compliance with jurisdictional COVID-19
compliance requirements.

Mitigation activity
− The Group uses various mechanisms
to support the implementation and
effectiveness of controls.

− These include:

− implementation of the Group Risk

Management Framework;

− ongoing self-assessment process for
monitoring cinema compliance and
financial control standards;

− regular consultation and advice from

external advisers;

− a risk-based cinema compliance and
financial control audit programme;

− the delivery of targeted risk-based

internal audit reviews; and

− the use of technology for live

forensic monitoring.

Changes in the year
− Obtaining a Group leverage covenant

waiver until June 2022 and are
currently operating under a minimum
liquidity covenant.

For further details please see Risk and Internal
Control on pages 46 to 48.

Opportunity
− Continue to enhance the use of technology
for embedding automated controls and
providing ongoing live assurance.

− Increase internal audit resources focusing
on improving Group compliance activities.

Opportunity
− Enhanced United States active shooter
training to provide computer-based
learning and annual certification.

− Continuous review of processes which can
identify areas for operational improvement
and improve overall safety at our sites.

Mitigation activity
− To ensure the long-term success of the
Group, it uses a variety of techniques to
attract, retain and motivate its staff, with
particular attention to those in key roles.

− These techniques include the regular review
of remuneration packages, share incentive
schemes, training, regular communication
with staff and an annual performance
review process.

Changes in the year
− The pandemic and resulting cinema

closures have forced management to take
some cost-saving measures including
permanent and temporary workforce
reduction in order to protect liquidity and
ensure the Company’s long-term viability.

− To offset the risk of failure to attract
and retain talent, the Company is
providing measures including: clear and
constant communication with active
and furloughed employees; remote work
options; and providing a safe and sanitary
work environment.

For further details please see Resources and
Relationships on page 22.

Opportunity
− The growth of the Group has increased

the opportunities for internal promotion,
and transfers.

Cineworld Group plc Annual Report and Accounts 2020

TREASURY
MANAGEMENT

Key

Provide the best
cinema experience



Be technological
leaders in the industry

Expand and
enhance our estate

Drive value for
shareholders

Ineffective treasury management
slows down our ability to service our
debt obligations and deliver against
our planned strategic initiatives (e.g.
refurbishment programmes).

Link to strategy

Risk owner
CFO

Impact
A key future strategy for the Group is ensuring
it has the ability to use the cash generative
nature of the business to reduce the net debt
to Adjusted EBITDA ratio. Balancing this with
the level of planned investment in strategic
initiatives globally will be a continual focus
for the Board.

Mitigation activity
− Integration of Regal and Cineworld

treasury functions.

− Ongoing review of financial instruments

being used.

Changes in the year
− Secured a new debt facility of $810.8m

and issue of equity warrants.

− Obtaining a Group covenant waiver until
June 2022 and are currently operating
under a minimum liquidity covenant.

− Accelerated tax year closure to bring

forward an expected tax refund of over
$200m to 2021.

Opportunity
− Continue to monitor liquidity.

− Continue long-term objective of debt

reduction through cash flow generation
and costs optimisation.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Viability Statement

In accordance with Provision 31 of the
2018 UK Corporate Governance Code,
the directors are required to assess the
prospects of the Company, explain the
period over which we have done so and
state whether we have a reasonable
expectation that the Company will be
able to continue in operation and meet
liabilities as they fall due over this period
of assessment.

The Directors have determined that
a three-year period from the date of
approving the financial statements
constitutes an appropriate period over
which to provide its viability statement.
Three years was determined based on
the maturity period of the Group’s
financing facilities, the forecast recovery
from the COVID-19 pandemic, the
visibility of the future film slate, the
Group’s planned investment in its
estate, investment in technology and
relationships with the film distributors.

The Directors’ viability assessment has
taken into consideration the potential
impacts of the principal risks in the
business model, future performance,
solvency and liquidity over the period,
including principal mitigating actions
such as reducing capital expenditure
and additional sources of liquidity.

For the purpose of assessing the
Group’s viability, the Directors identified
that of the principal risks detailed on
pages 15 to 19 the following are the
most important to the assessment
of the viability of the Group:

− availability and performance of

film content,

− viewer experience and competition,

− major incident,

− treasury management.

With the exception of viewer experience
and competition, each of the above risks
are considered to have increased in
2020, largely due to the impact of the
COVID-19 pandemic, with the availability
of film content and the Group’s liquidity
both having been constrained by the
impact of the interruption caused by
a major external factor.

The impact of the COVID-19 pandemic
has caused a significant level of
uncertainty in cinema markets across
the world, including all of those in which
the Group operates. As set out in the
Directors’ Going Concern assessment in
note 1 to the Financial Statements, the
Group expects cinema attendance to
return to levels observed in the year
prior to the pandemic by the end of the
viability assessment period. However,
the directors acknowledge the
uncertainty in the precise timing of the
return to such levels and therefore have
considered scenarios reflecting varying
rates of recovery. Key factors driving
the outcomes of such scenarios are
focussed more on short term factors,
due to the current state of lockdown
across the Groups operating territories
and forecast roll-out of vaccination
programs and the release of restrictions
on operating.

The Group has performed a weighted
scenario analysis, set out in the Going
Concern disclosure on page 103.
The Group’s base case scenario assumes
a gradual recovery from the current
shutdown, with cinemas across all
territories opening in May 2021 at 60%
of comparable levels to 2019, returning
to admissions levels of 90% of
comparable periods in 2019 by the end
of the year. Admissions are then forecast
to remain on average 10% below 2019
levels throughout 2022 and 5% below
through 2023. This weighted base case,
when considered with waivers obtained
on liquidity covenants on its Revolving
Credit Facilities, forecasts that the
Group will maintain sufficient liquidity
and headroom against key covenant
metrics through its recovery from the
pandemic in 2021 and 21 months beyond
the Going Concern assessment period.

To assess the Group’s viability,
management performed scenario
analysis considering key factors
expected to drive uncertainty in the
recovery profile. Based on the principal
risks identified above, the scenarios
applied included:

− a more gradual return to pre-
pandemic levels of cinema
attendance, driven by restrictions
and consumer appetite following
the current lockdown;

Reopening at 35% of 2019 admissions
levels in May and rising to 75% by
September. Admissions would remain
on average 12.5% below 2019 levels
throughout 2022 and 10% below
through 2023. Levels observed in 2019
would not be achieved until 2024 under
this scenario. Mitigating actions in such
circumstances would include further
reductions to all capital expenditure
and considering all additional external
sources of liquidity.

Under this scenario assessment, the
Group would still be able to continue
to meet its day to day liabilities as they
fall due over the three-year period.
However, the Group would be in breach
of financial covenants on its debt
facilities in June 2021.

− A delay to the expected reopening

date caused by restrictions and a lack
of film content, with a gradual return
to pre-pandemic levels of
cinema attendance.

This scenario is consistent with one
of the severe but plausible cases
considered in the Group’s Going
Concern analysis on page 103.
All cinemas would remain closed until
August 2021, at which point 60% of 2019
admissions would be achieved, rising to
75% by December 2021. Admissions
would remain at 80% of 2019 levels until
2024, when 90% would be achieved,
with performance returning to previous
levels in 2025. Mitigating actions in such
circumstances would include significant
reductions to all capital expenditure and
considering all additional external
sources of liquidity.

Under this scenario assessment, the
Group would require additional liquidity
to continue operating by September
2021. The Group would be in breach of
financial covenants on its debt facilities
in May 2021.

− A delay in the receipt of the cash tax

receipt in respect of the US CARES Act

This scenario is also consistent with one
of the severe but plausible cases
considered in the Group’s Going
Concern analysis on page 103.
Mitigating actions would include steps
to raise additional liquidity.

Cineworld Group plc Annual Report and Accounts 2020Under this scenario, additional liquidity
would be required by May 2021.

There is also a risk that no agreement
is reached with the dissenting
shareholders and that they wish to
challenge any failure to pay them in
accordance with a judgement.

Whilst the reviews performed do not
consider all of the risks that the Group
may face, the Directors consider that
the scenario based assessment
prepared of the Group’s prospects is
reasonable in the circumstances of the
inherent uncertainty involved.

The Directors believe the risk
management and internal control
systems in place allow them to monitor
the key variables that have the ability
to impact the liquidity and the solvency
of the Group and have a reasonable
expectation that the Group will be able
to continue to meet liabilities as they fall
due over the coming three-year period.
However, as described, there is a risk of
covenant breach should the weighted
base case scenario not be realised.
In addition, if disruption caused by the
COVID-19 pandemic is more prolonged
than modelled in the Group’s weighted
base case, there is a possibility that the
Group could be required to find
additional sources of liquidity.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsRESOURCES AND RELATIONSHIPS
The key resources and relationships that support
our strategic objectives

During this unprecedented time, a key
priority for the Group has been the
health and safety of our customers
and employees.

Introduction
The Group’s key relationships are
with our customers, our people, our
commercial partners and our wider
communities. How we behave and
interact with each of these parties,
including in these challenging times,
reflects on our reputation, an asset that
will underpin the successful delivery of
our strategy following reopening.

Our ethics policies seek to guide the
behaviour of our people by specifying
principles which establish common
values through which we do business.

We strive to ensure that we act in
appropriate ways to maintain and
enhance our reputation. The Group
seeks to act with honesty and integrity
in its dealings with customers,
employees, shareholders, regulators,
suppliers and our wider community.

Read more about how we
engage with our key stakeholders
on pages 42 to 45.

Our customers
Our customers are key to our success.
We believe that by listening and being
responsive to our customer feedback,
we can consistently deliver enhanced
experiences, which help us continue to
be the very best place to watch a movie.

Our customer feedback programme
is supported by the “Rant and Rave”
engagement solution, which was first
launched in 2018 and built upon in
subsequent years. It has proved to be an
invaluable tool for channelling customer
sentiment in these unprecedented
circumstances, empowering our teams
to address feedback in real time.

After the first closure of our cinemas
due to the COVID-19 global pandemic,
we implemented health and safety
protocols in all cinemas to ensure the
welfare of our customers
and employees.

The “CinemaSafe” protocols, developed
by leading epidemiologists and industry
experts, are guidelines developed to
ensure the health and safety of the
movie-going public and our employees.
When our customers see the
“CinemaSafe”’ badge, they can feel
confident in our commitment to their
health and safety as they return to their
favourite pastime. Through the
implementation of the “CinemaSafe”
protocols, we also developed
innovations to the movie-going

experience. Through the mobile apps,
our customers can now experience a
complete contactless trip to the cinema
with the ability to purchase their movie
ticket and concessions in many of
our cinemas.

In normal times, we focus on providing
our customers with a wide variety of
on-screen entertainment, showcasing
the best film product from all the major
studio and independent production
houses, plus a range of burgeoning
on-screen entertainment including live
theatrical, dance and musical events.
We are passionate about providing our
customers with the most innovative
cinematic experiences, with a range
of immersive premium large screen
formats offering the latest theatrical
technology now available in many of our
cinemas, including IMAX, 4DX, ScreenX,
Superscreen, RPX (Regal Premium
Experience) and VIP.

We also have initiatives which aim
to extend the relationship with our
customers beyond a single visit.
In the UK, we have the long established
Unlimited membership service for a
fixed monthly (or annual) subscription,
enabling customers to watch as many
films as they wish (with uplifts available
for premium large formats). This scheme
was successfully launched in Poland at
the end of 2015 and in the United States
in 2019. Engaging our members with
targeted offers and exclusive benefits
has enabled us to retain our core
subscriber bases in all three markets,
despite the extended disruptions in
operations. We have prolonged the
validity of subscriptions, vouchers and

Non-financial information statement

The Company has complied with the Non-Financial Reporting Directive
contained in sections 414CA and 414CB of the Companies Act 2006.

Where to find related information:

Environmental

Employees

Social

Human
rights

Anti-
corruption
and anti-
bribery

Principal
risks

Business
model

See pages
25 and 85

See pages
23, 44 and 84

See pages
24 and 45

See page 24

See pages
25 and 48

See pages
14 to 19

See pages
08 to 09

Cineworld Group plc Annual Report and Accounts 2020gift cards across the Group to ensure
customers' opportunity for redemption
remains unaffected by the closures of
our cinemas.

In addition to Unlimited, members of
the Regal Crown Club® in the United
States earn credits for each dollar
spent at the Regal cinemas, and can
then redeem such credits for movie
tickets, concession items, and movie
memorabilia at the cinema, online,
or via the Regal mobile app. We also
have a number of other successful
membership schemes across the
Group’s territories, which offer
discounts and added value benefits,
allowing us to interact frequently with
each respective customer base.

Event cinema screenings bring a wider
range of content to our customers,
enabling our audiences to watch live
shows taking place around the world.
Operating in this way supports such
productions, making them more
commercially viable, accessible to more
people and, in turn, attracting more
people to our cinemas.

The Group actively encourages our
future cinema-going audience by
specifically tailoring film schedules
to attract families and younger
customers. Where necessary, these
performances are dubbed into the
native language to ensure that all
customers can enjoy the full cinema
experience. Concessionary rates are
offered for senior citizens and students
at certain times of the day.

Flexibility around the changing market
environment enables us to maximise
admissions, making the best use
of available product, including
repertoire titles.

Retail
As many of our customers still consider
going to the cinema as a treat or special
occasion, they expect traditional
cinema snacks as part of their
experience. We offer a range of
products to our customers, and we
work closely with our partners to
provide healthier or low sugar

alternatives where possible and in line
with customer or legislative demands.

Access for all
The Group promotes a philosophy of
access for all by offering accessible
cinemas for the disabled, offering a wide
range of films, film formats and event
cinema. Employees receive disability
awareness training and specific advice
on welcoming disabled customers.
Many of our cinemas offer audio-
descriptive, autism-friendly and
subtitled performances, and in some
territories, the Group allows customers
with disabilities to be accompanied by
a carer, free of charge. All new cinemas
are designed to exceed current
statutory requirements and provide
buildings which are technically
advanced, accessible and safe.
When cinemas undergo major
refurbishment, as part of an ongoing
programme of improvements and
renovations, the opportunity is taken
to enhance access within cinemas
where practicable to do so.

Our people
The global pandemic has been hugely
disruptive to businesses such as ours,
and for this reason many of our “usual”
people plans were postponed during
2020. This said, we adapted quickly in
order to support our people in many
various ways despite the situation at
times being rapidly evolving.

Recognising this was a hugely
challenging time for our teams and
communication was key, especially
as our teams became dispersed very
quickly either due to home-working
or being placed on furlough. We
established daily conference calls with
the Executive Teams in each territory.
This ensured there was a clear and quick
flow of vital information and that our
teams were engaged with what was
happening in the business. Additionally,
a core HR team continued working
throughout the pandemic to ensure

that ever changing information was
communicated as quickly as possible,
and the UK HR team and US Benefits
team were on hand to answer questions
and to provide useful information and
guidance to management teams and
employees alike. Furthermore, in the
United States, given the scale of the
operation, Regional Directors and
District Managers played an active and
key role in caring for General Managers
and their cinemas throughout
the pandemic.

We also established various learning and
development support tools and plans,
including home-working policies, which
guided management to work with
remote teams in the most effective
way and ensured employee welfare
remained a priority. Additionally, as we
experienced many phases of operation
across the year from being closed, to
opening and closed again, we also
supported our teams with information
packs during temporary closures.
These covered a number of items such
as tips on gaining financial advice,
government help, health and wellbeing
support, and the use of our Employee
Assistance Programme in the UK.
We promoted and encouraged the
use of Cine-Learn, our online learning
platform which can also be accessed
remotely, as this has a wealth of varied
resources such as helping with change,
wellbeing, positive thinking, relaxation
tips and much, much more.

Sadly, due to the pandemic, some of
our people found themselves in difficult
financial circumstances and for this
reason, we are proud to have also
launched a hardship fund. We made
hundreds of grants from the fund
across the Group, some as one-off
payments and others made over
a number of months depending
on individual circumstances.

Needless to say, we made full use
of the furlough schemes in various
countries meaning that in certain
territories we continued paying our
people and, importantly, it provided
the ability to retain many of our people
so that their valuable knowledge, skills
and talents can be utilised again when
cinemas reopen. Furthermore, in the
UK in particular, when the furlough
scheme was about to end, we lobbied
government to ensure it was continued

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsRESOURCES AND RELATIONSHIPS CONTINUED

for the good of our people. We also
promoted other relevant external
schemes, such as the “Film and TV
COVID Recovery Fund”, so that our
people could benefit from these if they
wished to do so.

We also implemented many COVID
measures to ensure our environments
were safe and secure and liaised with
health and safety representatives, where
relevant, to ensure our plans, including
new training plans, were fit for purpose.
These measures and plans will continue
to evolve as we move through the
pandemic, and of course, our teams will
continue to be engaged in various ways
so that we can open in full force again in
2021. More information on our safety
measures may be found in the Health
and Safety section below. We look
forward to building on our people plans,
once again, throughout 2021, to create
“The Best Place to Work in the Movies”.

Diversity and human rights
The Group is an equal opportunity
employer and seeks to recruit, retain
and promote staff on the basis of their
qualifications, skills, aptitude and
attitude. A wide range of applicants
are encouraged to apply for all roles.
In employment-related decisions, the
business complies with all relevant
legislation, including that which is
specifically targeted at preventing
discrimination, and such principles are
embedded through the business by
requisite policies.

Our commercial relationships
Having strong commercial relationships
is also key to operating our
business successfully.

With years of experience in the cinema
industry, our teams have worked hard
to develop strong working relationships
with a range of film studios and
distributors, both major and
independent. Our focus on driving
cinema admissions and on providing our
customers with a wide range of movies
has resulted in many opportunities
for us to work with film studios on
simplifying the film buying process and
on promoting smaller films to a wider
audience. We actively engage with our
distribution partners to ensure that

slated films retain their theatrical
releases, and that the theatrical
experience remains at the core
of their businesses.

The Group is committed to protecting
the intellectual property rights of
films and event cinema. Policies and
procedures are constantly reviewed
and developed to ensure cinema
management are able to effectively
monitor and prevent film piracy.
Night-vision technology is utilised and
there is an increased vigilance around
high profile titles which are particularly
vulnerable. The Group will continue to
work closely with relevant industry and
law enforcement organisations in order
to help reduce and prevent film piracy.

Building relationships with developers,
landlords and local planners is vital for
maintaining a robust pipeline of new
sites to expand our estate, as well as
being able to upgrade our existing
facilities as a part of our extensive
refurbishment programme. These
relationships have also helped us
achieve deferrals and discounts on rent
payments, which were much needed in
this economic climate.

We continue to work with suppliers of
innovative technology, demonstrated
by the introduction of laser projectors
across our cinemas, providing a superior
customer experience, while driving
down energy costs. This, coupled with
our continuing rollout of ScreenX, 4DX
and IMAX in all our markets, ensures
that we continue to deliver on our
customer promise of being the best
place to watch a movie as well as
maximising box office revenue.
Even during the pandemic we have
continued to support the development
and rollout of innovative technology
allowing us to schedule films, trailers
and adverts remotely, maximising
revenue and reducing operating costs.

Strong relationships with our principal
retail suppliers enable us to work
together on promotions that help to
drive retail sales. We seek to manage
relationships with our suppliers fairly,
and to work in accordance with our
aspirations as set out in our
ethical policies.

During the pandemic, our long-standing
relationships with key suppliers have
allowed us to achieve significant cost
savings and support of our cash flow
through payment plans. Cost control
and monitoring remain at the core of
our commercial operations.

Our communities
Our work with charities, schools
and community groups across all our
territories is of paramount importance
to us. In normal times, we are involved
with a wide range of activities, such as
working with distributors on charity
screenings, providing free shows for
organisations and working closely
with local schools.

In the United States, the Regal
Foundation supports the communities
in which Regal operates by partnering
with selected charities dedicated to
the assistance of persons affected
by economic, social, physical or
educational disadvantages.

Cineworld proudly partners with a
number of UK charities. This year, our
fundraising activities have regrettably
been impacted by the pandemic-related
cinema closures. However, we still
managed to provide a Sunshine Coach
for Variety, the Children’s Charity.
We very much look forward to working
closely with BBC Children in Need, the
Film & TV Charity, MediCinema and
Variety once our cinemas reopen.

Although activities have been curtailed
for 2020, in usual times the Picturehouse
education team works closely with
teachers, film festivals and partner
organisations to deliver a diverse
programme at Picturehouse cinemas
across the UK, where screenings and
events are specially curated for Nursery,
Primary, Secondary and Special
Educational Needs (“SEN”) and
Additional Support Needs (“ASN”)
Schools and for adult learners.

Following this same theme, Cineworld felt
compelled to help local school children,
particularly in a disadvantaged area,
during the recent period of national
lockdown due to COVID-19. As we know,
all children have been undertaking home
schooling, but sadly not all children have
access to the necessary IT equipment.
As a result, Cineworld re-purposed a
number of tablets and donated them to a
school. We were delighted to have made
a difference to young people in our local
community during this especially
challenging time.

Cineworld Group plc Annual Report and Accounts 2020our duty of care to our customers and
staff. Each year, cinemas in the Group
are subject to health and safety
assessments (including aspects of fire,
food and occupational safety). Results
are monitored and any significant issues
are followed up by management teams,
with the assistance of specialist external
consultants where needed.

Anti-bribery and corruption
The Group has in place a range of
governance-related policies, including
Whistleblowing, Gifts and Hospitality,
and Health and Safety. The Company
has implemented these policies and
procedures to ensure it is prepared,
to the fullest extent possible, to prevent
corrupt practices across our business
relationships. The Group endeavours
to conduct its business with integrity,
aims to be a responsible employer, and
adopts values and standards designed
to help guide our staff in their conduct
and business relationships.

Environment
We seek to comply with all relevant
environmental legislation and to operate
in an environmentally sensitive manner.
The Board of Directors acknowledges
the impact that the business has on the
environment and seeks to mitigate it.
Often changes which help to mitigate
our environmental impact also reduce
our operating costs.

Being a multisite business, the
Group is conscious of its total energy
consumption and amount of waste
materials generated, and is actively
working on reducing both. The Group’s
mandatory greenhouse gas report can
be found in the Directors’ Report on
pages 85 and 86. In addition, the
Company is aware of the need to report
under the Task Force on Climate-related
Financial Disclosures framework for the
financial year ending 31 December 2021,
and is working to ensure that it meets all
requirements to enable it to do so.

Our cinema websites enable e-tickets
to be purchased and used, avoiding
the need to print tickets. In new and
refurbished cinemas, poster cases are
now digital, reducing the need to deliver,
install and ultimately throw away large
paper posters. All of these efforts help
to reduce our use of resources and, in
turn, our carbon footprint.

Health and safety
Health and safety is of major importance
to us when considering the day-to-day
health, safety and welfare of our
customers, employees and contractors.

Extensive health and safety measures in
relation to COVID-19 restrictions have
been implemented at our cinemas
across the Group, in response to the
challenges of the global pandemic.
We have been liaising with national and
local governments to ensure that when
cinemas reopen, we will provide a safe
environment for all, so that customers,
employees and contractors can be
confident that their return to the cinema
will be a relaxing and safe experience.
In the United States, "CinemaSafe"
health and safety protocols were
implemented, and in the UK we have
liaised closely with the UK Cinema
Association. For more information on
safety measures in cinemas, see the
section "Our customers" above.

All employees have been COVID trained
and all cinemas have been equipped
with sanitising stations, customer flow
signage and protective equipment for
our employees.

The Group seeks to maintain the highest
standards in the effective management
of our health and safety obligations and

GENDER REPRESENTATION

Gender breakdown
of the Board(1)

Gender breakdown
of Senior Managers(2)

Gender breakdown of
total employees(3)

Male

Female

Total Board of Directors

Male

Female

Male

Female

Total Senior Managers

119

Total employees

(1 ) Figures in the chart above are as at 31 December 2020.

(2) Figures include the executive committee, the senior management team, and the Company Secretary

(3) Data is based on the average headcount for 2020.

17,369

13,063

30,432

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsCHIEF FINANCIAL OFFICER’S REVIEW
Preserving liquidity for recovery

“ As widely reported, the industry
has been severely impacted by
the global COVID-19 pandemic,
which had a significant adverse
effect on the Group’s results for
the period.”

Nisan Cohen
Chief Financial Officer

Year ended
31 December
2020

54.4m

Year ended
31 December
2019

275.0m

448.6

232.2

171.5

852.3

2,536.1

1,240.3

593.3

4,369.7

movement

(80.2%)

(82.3%)

(81.3%)

(71.1%)

(80.5%)

membership schemes which provide customers with access
to screenings in exchange for subscriptions fees, and this
revenue is reported within box office.

The Group’s second most significant revenue stream is from
retail sales of food and drink for consumption within cinemas,
which made up 27.2% (2019: 28.4%) of total revenue. Retail
revenue across the Group is driven by admissions trends
within each operating territory.

Other Income represents 20.1% (2019: 13.6%) of total Group
revenue. Other Income is made up of all income other
than box office and retail, predominantly revenue from
advertisements shown on screen prior to film screenings and
revenue from booking fees associated with the purchase of
tickets online. The Group also generates distribution revenue
in the UK and ROW, which is included within Other Income.

Admissions

Box office

Retail

Other Income

Total revenue

Cineworld Group plc (the “Group”) results are presented for
the year ended 31 December 2020 and reflect the trading and
financial position of the US, UK and Ireland (“UK&I”) and the
Rest of the World (“ROW”) reporting segments. As widely
reported, the industry has been severely impacted by the
global COVID-19 pandemic, which had a significant adverse
effect on the Group’s results for the period. Although the
Group is now looking to re-opening and recovery from the
impact of the pandemic, material uncertainty around its ability
to continue as a going concern remains (as set out in note 1).

Total admissions decreased by 80.2% year on year to 54.4m,
reflecting closures required due to lockdown measures
implemented to control the spread of COVID-19 and a lack
of major film releases. Total revenue for the year ended
31 December 2020 was $852.3m, a decrease of 80.5%
on the prior year.

The principal revenue stream for the Group is box office
revenue, which made up 52.6% (2019: 58.0%) of total revenue.
Box office revenue is a function of the number of admissions
and the ticket price per admission, less sales tax. Admissions
(one of the Group’s Key Performance Indicators) depend on
the number, timing and popularity of the movies the Group is
able to show in its cinemas. In addition, the Group operates

Cineworld Group plc Annual Report and Accounts 2020Retail
Retail revenue represented 28.0% of total revenue
(2019: 29.7%). Retail revenue decreased as a result of the
cinema closures during the year. Retail spend per person
decreased by 0.5% to $5.35 (2019: $5.38).

Other Income
Other Income represented 23.4% of total revenue
(2019: 12.3%). Other Income is made up of on-screen
advertising revenue, corporate and theatre income and
revenue from online booking fees charged on the purchase
of tickets for screenings, which is driven by the demand for
tickets and the propensity of customers to book tickets online.
Screen advertising revenue is earned through the Group’s
agreements with National CineMedia (“NCM”) and direct
contracts with concession vendors and distributors. NCM
operates on behalf of a number of United States exhibitors to
sell advertising time prior to screenings. Advertising revenues
are driven primarily by admissions levels and the value of
advertising sold. Other Income also includes less significant
elements related to the sale of gift cards and bulk ticket
programmes and the hire of theatres for events. Other Income
has decreased by 66.0% due to the impact of cinema closures.
The impact on Other Income has not been as great due to
certain contractual advertising revenues being recognised
regardless of cinemas being closed.

United States
The results below show the Group’s performance in the
United States.

Year ended
31 December
2020

Year ended
31 December
2019

movement

Admissions

30.1m

177.3m

(83.0%)

Box office

Retail

Other Income

Total revenue

280.3

161.1

134.5

575.9

1,859.6

953.9

396.1

3,209.6

(84.9%)

(83.1%)

(66.0%)

(82.1%)

Box office
Box office revenue represented 48.7% (2019: 57.9%) of total
revenue. Admissions and box office revenue decreased by
83.0% and 84.9% respectively. These results reflect the
impact of the closure of cinemas for significant periods
during the year and the lack of major film releases.

Regal announced the closure of all cinemas in the United
States on 17 March 2020. This shutdown remained in place
until cinemas began reopening on 21 August 2020. Many of
the cinemas opened to reduced operating hours with library
content and reduced ticket pricing to encourage patrons to
return to the cinema. On 21 August, Regal initially opened 182
cinemas, reopened an additional 104 cinemas on 28 August
and 75 additional cinemas opened during September 2020.
Some states, such as New York and California, remained
closed for theatrical exhibition. The local restrictions in these
key markets continued throughout the remainder of the year
and, as a result, studios were reluctant to release major titles.
Regal announced a second closure of the entire circuit
effective 8 October 2020 and remained closed for the
rest of the year.

The total North American industry box office revenue for the
year was 80.7% lower compared with the prior year (source:
Comscore). The top three movies in 2020 were “Bad Boys for
Life”, “1917” and “Sonic the Hedgehog”, which in total grossed
$507m. The top three movies in 2019 were “Avengers:
Endgame”, “The Lion King” and “Toy Story 4”, which in total
grossed $1.8bn. During the year, 20 sites were closed in the
United States, and the net cash flow generated by these
sites in the year ended 31 December 2019 was negative.
These closures did not have a significant impact on
performance during 2020.

The average ticket price achieved in the United States
decreased by 11.2% to $9.31 (2019: $10.49). The decrease
reflects the lack of premium film releases available across
our premium offerings.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsCHIEF FINANCIAL OFFICER’S REVIEW CONTINUED

UK & Ireland
The results below for the UK&I include the two cinema brands
in the UK and Ireland: Cineworld and Picturehouse.

Rest of the World
The results below for the ROW include Poland, Romania,
Hungary, the Czech Republic, Bulgaria, Slovakia and Israel.

Year ended
31 December
2020

Year ended
31 December
2019

movement

Year ended
31 December
2020

Year ended
31 December
2019

movement

Admissions

11.4m

48.2m

(76.3%)

Admissions

12.9m

49.5m

(73.9%)

Box office

Retail

Other Income

Total revenue

99.4

37.2

17.3

153.9

405.7

156.7

86.0

648.4

(75.5%)

(76.3%)

(79.9%)

(76.3%)

Box office

Retail

Other Income

Total revenue

68.9

33.9

19.7

122.5

270.8

129.7

111.2

511.7

(74.6%)

(73.9%)

(82.3%)

(76.1%)

Box office
Box office revenue represented 64.6% of total revenue
(2019: 62.6%). Admissions decreased by 76.3% and box office
revenue decreased by 75.5%. Admission and box office trends
reflect the closure of cinemas for significant parts of the year
due to lockdown restrictions and a lack of major film releases.
All of the Group’s cinemas were closed on 17 March in
response to the first wave of COVID-19. The estate was
reopened on 31 July. However, the strength of the
performance in the subsequent weeks and further delays
to major film release dates resulted in the announcement of
a further closure on 5 October. The entire UK&I estate
remained closed for the rest of the year.

In the UK&I, the top three grossing movies were “1917”, “Sonic
the Hedgehog” and “Tenet”, which grossed $96.1m (source:
Comscore). This compares to the top three titles in 2019 which
were “Avengers: Endgame”, “The Lion King” and “Toy Story 4”,
which grossed $273.2m (source: Comscore).

Box office
Box office revenue represented 56.2% (2019: 52.9%) of total
revenue. Admissions in the ROW decreased by 73.9% and box
office revenue decreased 74.6% compared to the prior year.
Admission across all ROW territories decreased significantly
from the prior year due to prolonged closure periods resulting
from lockdown restrictions and delays to major film releases.

All ROW territories closed in March in response to lockdowns
and measures taken in response to the first wave of COVID-19.
The first territories to reopen were the Czech Republic and
Slovakia in June. Poland, Hungary, Romania, and Bulgaria
opened in July. Cinemas across all ROW territories closed
again in November. Israel remained closed from March for
the remainder of the year.

The average ticket price decreased by 2.4% to $5.34 (2019:
$5.47). The decrease reflects the lack of premium film releases
available across our premium offerings.

The average ticket price achieved in the UK&I increased by
3.6% to $8.72 (2019: $8.42). This increase was largely driven
by the types of releases during the period that cinemas were
open during 2020.

Retail
Retail revenue represented 27.7% of the total revenue
(2019: 25.3%). Retail spend per person was $2.63 (2019:
$2.62).

Other Income
Other Income includes distribution, advertising and other
revenues and represents 16.1% (2019: 21.7%) of total revenue.
Forum Film is the Group’s distribution business for the ROW
and distributes movies on behalf of certain major Hollywood
studios as well as owning the distribution rights to certain
independent films. Other Income and distribution revenue
performed in line with admission trends generally in 2020.

Retail
Retail revenue represented 24.2% (2019: 24.2%) of total
revenue. Retail revenue decreased by 76.3% from the prior
year, driven by cinema closures during the year. Retail spend
per person increased by 0.4% to $3.26 (2019: $3.25).

Other Income
Other Income decreased by 79.9% from 2019 and represented
11.2% (2019: 13.3%) of total revenue. Other Income includes all
other revenue streams outside of box office and retail, mainly
advertising, online booking fee revenue and some distribution
revenue through Picturehouse. Advertising revenue is
primarily generated by on-screen adverts and is earned
though our joint venture screen advertising business Digital
Cinema Media Limited (“DCM”). DCM sells advertising time
on screen on behalf of the UK cinema industry and advertising
revenue is impacted by admissions trends and the value of
advertising sold.

Cineworld Group plc Annual Report and Accounts 2020Financial performance

Admissions

Box office

Retail

Other Income

Total revenue

Adjusted EBITDA (as defined in Note 2)

Operating (loss)/profit

Finance income

Finance expenses

Net finance costs

Share of (loss)/profit from joint ventures

Loss/(profit) on ordinary activities
before tax

Tax on (loss)/profit on ordinary activities

(Loss)/profit for the year attributable
to equity holders of the Group

30.1m

280.3

161.1

134.5

575.9

Year ended 31 December 2020

UK&I

11.4m

99.4

37.2

17.3

153.9

ROW

12.9m

68.9

33.9

19.7

122.5

Year ended
31 December
2019

Total Group

54.4m

275.0m

448.6

232.2

171.5

852.3

(115.1)

(2,257.7)

69.6

(786.8)

(717.2)

(33.0)

(3,007.9)

356.4

2,536.1

1,240.3

593.3

4,369.7

1,580.3

724.7

26.3

(568.0)

(541.7)

29.3

212.3

(32.0)

(2,651.5)

180.3

Adjusted EBITDA
Adjusted EBITDA has decreased to a loss of $115.1m (2019:
profit of $1,580.3m). This was mainly driven by the impact of
the reduction in admissions caused by closures in response
to the COVID-19 pandemic.

Adjusted EBITDA generated by the US, UK and ROW was
negative $(87.2)m, negative $(35.0)m and $7.1m respectively
for 2020, compared with $1,197.1m, $192.2m and $191.0m in
2019. Decreases across all segments were driven by the loss
of revenue caused by the COVID-19 pandemic.

Operating loss
Due to the impact of COVID-19 the Group reported an
operating loss for the first time of $2,257.7m compared
with an operating profit of $724.7m in 2019, representing
a decrease of $2,982.4m.

Certain material one-off items have been included within
operating profit in 2020, most significantly the impairment
charges described below. In addition to impairment charges,
within operating profit there are a number of non-recurring
and non-trade-related items that have a net negative impact
of $127.2m (2019: net negative impact $12.8m), including
$19.9m relating to costs arising from the Group’s response
to the COVID-19 pandemic, $60.8m in transaction and
reorganisation costs and $46.6m in refinancing costs.
These items are excluded from Adjusted EBITDA and
have been set out in detail in Note 2.

The total depreciation and amortisation charge (included in
administrative expenses) in the year totalled $643.3m (2019:
$729.8m). The charge is lower year on year due to impairment
charges reducing the value of the Group’s depreciable assets
and amendments to leases during the year reducing a large
number of right-of-use assets, with the reductions caused
by a higher incremental borrowing rate applied to lease
cash flows.

Where available, government support for companies to
continue paying employees through the shutdown was
accessed. In some cases, employees were paid directly.
In others, the Group reclaimed amounts once paid to
employees. In such instances, amounts received are shown
reducing staff cost in the period, detail of amounts reclaimed
are set out in note 8. Where available the Group has also
accessed business rates relief.

The impact of the COVID-19 pandemic on the Group’s
forecast cash flows, in addition to increased uncertainty in the
market, a higher discount rate reflecting the increased cost of
debt and changes to forecast cash flows, have resulted in the
impairment of property, plant and equipment and right-of-use
assets at cinema cash-generating units (“CGUs”), as well as
goodwill in country level CGUs and the Group’s investment
in National Cinemedia Inc amounting to a total net charge
of $1,344.4m (2019: $46.9m in respect of property, plant
and equipment and right-of-use assets at cinema CGUs).
These impairments are considered to be largely driven by the
impact of the pandemic and are considered to be exceptional
charges in the current period. Full details of impairment
charges are disclosed in Notes 11, 12, 13, 14 and 20.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsCHIEF FINANCIAL OFFICER’S REVIEW CONTINUED

Leases
The impact of COVID-19 and the associated shutdown has
resulted in the Group renegotiating over 450 leases by the
Balance Sheet date and accessed government relief from
payment of leases in certain countries. The Group has sought
to agree the waiver and deferral of contractual rent under
existing leases in order to manage cash flow during the
shutdown and recovery from the impact of the virus.
Payment of lease liabilities has decreased to $198.6m from
$613.3m in 2019, reflecting negotiation with landlords and
amendments agreed to date.

Amendments to leases, additions in the period, changes to
discount rates applied in the calculation of lease balances,
and cash flows in the period have resulted in total right-of-use
assets of $2,306.4m (2019: $3,441.2m), with a deprecation
charge of $348.7m (2019: $398.2m), with lease liabilities of
$3,971.7m (2019: $4,197.5m) and an interest cost of $349.0m
(2019: $304.2m). For leases amended during the year, higher
incremental borrowing rates reflecting the Group’s higher
costs of debt a lower credit rating have been applied to cash
flows, resulting in lower assets and liabilities and higher lease
interest cost for these leases. With the impact of the virus
continuing and discussions ongoing with a number of
landlords, there will be significant further modification to
leases subsequent to the year end.

Net finance costs
At 31 December 2019 the Group had USD term loans of
$3.4bn and a Euro term loan of $215.4m, and a $462.5m
revolving credit facility (“RCF”) of which $95.0m had been
drawn upon.

In June 2020, the Group agreed the terms for an extension of
$110.8m on the RCF with a maturity of December 2020 and a
new $250.0m secured private loan with a maturity of 2023
with private institutional investors.

In November 2020, the Group agreed the terms of a further
facility of $450.0m with a group of existing term loan lenders.
Alongside the new debt facility, the Group issued to
participating lenders 153,539,786 equity warrants
representing in aggregate 9.99% of the fully diluted ordinary
share capital of the Company assuming full exercise of the
warrants. The new debt facility also includes certain financial
and operating covenants and entitles the lenders to appoint
a Board observer.

The Group further agreed the amendment of the previously
agreed incremental RCF of $110.8m to a term loan with a
maturity of May 2024. The amendment to this facility was
considered to represent a discount to the face value of the
debt at the time of the agreement and therefore resulted in
a gain on extinguishment of debt of $33.2m, which has been
recognised within finance income.

At 31 December 2020 the Group had USD term loans
outstanding totalling $3.9bn, a Euro term loan of $233.8m, a
private placement loan of $250.0m and a $462.5m RCF which
was fully drawn.

Net financing costs totalled $717.2m during the period (2019:
$541.7m). Finance income of $69.6m (2019: $26.3m) included
interest income of $7.4m (2019: $4.5m), a gain of $9.0m on
the movement of the fair value of financial derivatives (2019:
$10.4m), $8.3m on the unwind of the discount on non-current
assets (2019: $3.4m) and $0.7m in respect of the unwind of
the discount on sub-lease assets (2019: $0.7m). A gain of

$33.2m relating to the gain on extinguishment on amending
the extended RCF was also recognised in the year.

Foreign exchange gains of $10.9m (2019: $7.3m) were
incurred in respect of monetary assets and non-USD
denominated loans.

The Group had previously designated the Euro leg of three
cross currency swaps held as a net investment hedge against
the assets of certain Euro denominated subsidiaries.
During the period the hedge relationship became ineffective
and the hedge relationship ended. This resulted in $9.8m
credit to the hedge reserve and charge to the
income statement.

During the year the Group designated a net investment hedge
relationship between the Group’s Euro term loan and a portion
of the carrying value of the Group investments in Euro
denominated investments in order to mitigate the risk
of reported foreign exchange movements in respect
of these items.

In 2019 the Group entered a contingent forward contract and
a contingent swap contracts in order to hedge certain cash
flows expected to take place on completion of the proposed
Cineplex combination. Due to the termination of the deal,
the contingent elements of the derivatives were not met.
The Group terminated the swap resulting in a gain of $4.5m
and a loss of $10.4m on the deal contingent forward in line
with the fair values reported at 31 December 2019. In addition,
the forward contract was modified on termination, resulting
in an additional loss of $10.2m and $16.8m which has been
assessed to be in respect of debt issuance costs which have
been capitalised and have been amortised over the remainder
of the year.

The finance expense of $786.8m (2019: $568.0m) has
increased due to higher incremental borrowing rates being
applied to lease liabilities that were amended during the
year, driven upward by changes in the Group’s credit rating.
Lease liability interest for the year was $349.0m (2019:
$304.2m). A lower average LIBOR rate in 2020 compared
with 2019, the timing to the Group’s refinancing in 2019 and
the new debt facilities during the year also had an impact on
the overall finance expense.

Interest on bank loans and overdrafts in the period totalled
$166.3m (2019: $167.3m) benefiting from reduction in the
LIBOR level compared with the previous year. The other
finance costs included: $33.1m (2019: $27.2m) of amortised
prepaid finance costs, $49.4m (2019: $51.3m) in respect of the
unwind of discount on deferred revenue and loss of $153.4m
on the movement of the fair value of financial derivatives
(2019: $8.1m). This included the movements on the fair value
of the derivative liability in respect of the equity warrants
issued in the year and two additional embedded derivatives
recognised on the refinancing entered into in November.
In addition, $11.8m in respect of foreign exchange losses
(2019: $9.9m) were incurred in the year.

Upon modifications being made to existing debt agreements
during the year, which implemented a 1% floor in LIBOR-linked
interest rates applied to US dollar-denominated term loans,
embedded derivative liabilities with a total value of $98.0m
were identified. These derivatives were initially recognised
as an exceptional finance cost, with subsequent movements
of $5.6m being recorded within movement on financial
derivatives during the year. Subsequent to the year end,

Cineworld Group plc Annual Report and Accounts 2020it is expected that the underlying contracts relating to
these derivatives will be further modified, resulting in
their de-recognition.

Taxation
The overall tax credit during the year was $356.4m, giving an
effective tax rate of 11.8% (2019: 15.1%) on the loss before tax
for the year.

The tax credit includes a current tax credit of $224.0m.
This primarily relates to a carry back of 2020 US tax losses
against profits of earlier periods under the Coronavirus Aid,
Relief and Economic Security (“CARES”) Act, resulting in
a cash tax refund which we expect to receive in April 2021.

The effective tax rate for the year reflects one-off factors.
The rate is increased by the carry back of 2020 tax losses
against profits of earlier periods in which the United States
Federal tax rate was 35% (2019: 21%). Cash tax repayments
relating to these years will reflect the higher rate. The rate is
decreased by a partial de-recognition of deferred tax assets.

Tax uncertainties and risks are increasing for all multinational
groups which could affect the future tax rate. The Group takes
a responsible attitude to tax, recognising that it affects all our
stakeholders. The Group seeks at all times to comply with
the law in each of the jurisdictions in which we operate, and
to build open and transparent relationships with those
jurisdictions’ tax authorities. The Group’s tax strategy is
aligned with the commercial activities of the business, and
within our overall governance structure the governance of
tax and tax risk is given a high priority by the Board.

Earnings
The loss on ordinary activities after tax in the period
was $2,651.5m, compared with a profit in the prior year of
$180.3m. The decrease is the result of the loss of revenue due
to closures and a lack of major film releases, both caused by
the COVID-19 pandemic. There have also been significant
non-recurring charges and expenses, including total non-cash
impairment charges set out above, which significantly
increase the loss in the year.

Basic Earnings Per Share amounted to (193.2)¢ (2019: 13.1¢).
Eliminating the one-off, non-trade-related items totalling
$1,738.3m, Adjusted diluted Earnings Per Share were (66.5)¢
(2019: 21.3¢).

Statement of cash flows and statement of
financial position
Overall, net assets have decreased by $2,711.4m to $226.3m
since 31 December 2019. Total assets decreased by $1,825.3m.
This is predominantly driven by the impairment of property,
plant and equipment and right-of-use assets at cinema CGUs
and goodwill at country CGUs. The total liabilities have
increased by $886.1m, primarily due to additional debt
obtained in order to secure liquidity.

With the material loss of revenue following the outbreak
of the COVID-19 pandemic, the Group agreed new sources
of liquidity and entered lease negotiations as set out above.
These measures are reflected in the Group statement of cash
flows. Total net used in operating activities in the year was
$227.6m (2019: cash generated $1,293.7m). Net debt of
$8.3bn at the year end is $0.6bn higher than the balance
at 31 December 2019 primarily due to losses driven by the
impact of COVID-19 and the additional financing raised
during the year.

Dividends
The interim dividend of 3.75 United States cents per ordinary
share in respect of the third quarter of 2019 was paid to
shareholders on 10 January 2020. The total cash
consideration was $51.4m.

The distribution of dividends on our ordinary shares is subject
to validation by the Board of Directors and must be in line
with applicable law. The board of directors validates the
amount of future dividends to be paid, taking into account
the cash balance then available, the anticipated cash
requirements, the overall financial situation, restrictions on
loan agreements, future prospects for profits and cash flows,
as well as other relevant factors. On 7 April 2020 the Board
announced the suspension of the 2019 fourth quarter dividend
of 4.25 cents per share to conserve cash for the Group.

Nisan Cohen
Chief Financial Officer
25 March 2021

The strategic report from pages 1 to 31 was approved by the
Board and signed on its behalf by:

Moshe Greidinger
Chief Executive Officer
25 March 2021

Israel Greidinger
Deputy Chief
Executive Officer

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsCHAIR’S INTRODUCTION TO GOVERNANCE
Robust and effective oversight, in
unprecedented times

“ With the considerable

challenges that we face
as a business in light of the
COVID-19 pandemic, a key
focus has been to ensure
that sound governance
principles underpin all
our decisions as a Board.”

Alicja Kornasiewicz
Chair

Dear shareholders
I am pleased to present the Corporate
Governance Statement for 2020, my
first as Chair of the Company.

I was privileged to take up the role
of Chair, in May 2020, when Anthony
Bloom stepped down after nearly 25
years of service. Together, we enjoyed
a productive handover process which
has enabled an orderly transition,
despite the exceptionally challenging
times we face as a result of the global
COVID-19 pandemic.

On behalf of all of the Board, I extend
my thanks and appreciation to Anthony
for his invaluable contribution and
unwavering dedication over the years,
including driving the combination with
Cinema City in 2014 and, later, the
transformational acquisition of Regal
in 2018.

I believe that strong and effective
governance is a discipline that becomes
even more important during times of
change and challenge. With the
considerable challenges that we face
as a business in light of the COVID-19
pandemic, a key focus has been to
ensure that sound governance principles
underpin all our decisions as a Board.

The critical focus of the Board in
2020 was, of course, the Company’s
COVID-19 response strategy. This work
included the development and oversight
of crucial plans to manage and mitigate
the extensive and ever-evolving impact
on our business. Following the
temporary closure in April 2020 of the
Group’s entire estate of cinemas across

ten countries, the Board held regular
update meetings, to consider various
operational and financial matters,
meeting in excess of 50 times by
the year end. The Board received
continuous updates from the Executive
Management Team on the developing
situation across all markets throughout
the pandemic. Management have
worked tirelessly throughout to
implement key actions to mitigate the
impact of the closures, while prioritising
the welfare of employees, customers
and other stakeholders.

The Board’s frequent review of cash
flow and liquidity, going concern and
viability was inextricably linked with the
extensive work of the Board in relation
to the new financing arrangements,
announced in November 2020, a critical
milestone that included the securing of
a new debt facility of $450m and Group
leverage covenant waivers until June
2022. Together with the $250m private
loan and incremental 110.8m RCF raised
in June 2020, the new measures
delivered over $800m in extra liquidity
through debt, with an additional $200m
expected from a tax refund, to preserve
and maximise shareholder value over
the long term.

While the Board believes that these
measures, together with planned further
cost-reduction initiatives, will drive the
business through to a successful
recovery, it is under no illusions about
how difficult it will be to restore the
Company to the levels of profitability
to which it aspires. As a Board, we
commend the remarkable focus,
dedication and abilities of our Executive
Management Team, and I am pleased to
say that throughout such increased
activity at Board level, all Board

members worked with exceptional
purpose, focus, and determination as
we navigated our way through the crisis.

The COVID-19 pandemic has also had a
sizeable impact on the work of the Audit
Committee, in crucial areas such as
going concern, lease arrangements,
impairments, and accounting for
the new financing arrangements.
The Committee also closely monitored
risk, including emerging risk in the
context of the evolving consequences
of the pandemic. More details can be
found in the Audit Committee Report
on pages 52 to 55 and the Principal
Risks and Uncertainties section on
pages 14 to 19.

The Board has taken a responsible
approach to remuneration during the
year. The severe impact of the pandemic
on the business was taken into account
in all decisions made by the Committee
on executive remuneration outcomes
for 2020. In summary, salaries were not
increased in 2020 and no bonus will
be paid to the Executive Directors in
respect of the financial year. The
Long-Term Incentive Plan (“LTIP”)
Awards for Executive Directors, which
were due to vest in April 2021, lapsed
in full. At an early point in the year, to
conserve cash, the Executive Directors
voluntarily agreed to defer payment of
their salaries, and the Non-Executive
Directors also voluntarily agreed to
defer their fees, in each case for a period
of time. The deferrals have made a
substantial contribution to the cash
flow of the Company and outstanding
amounts will be paid when the business
returns to more normal circumstances.

Cineworld Group plc Annual Report and Accounts 2020Due to the exceptional situation of the
Group and the impact of the multiple
issues and disruption on the business
and the Executive Team, it became clear
over the year that an evolved approach
to remuneration was needed. Current
structures had meant that existing
incentivisation mechanisms were no
longer fit for purpose. As a result of this,
in January 2021, the Remuneration
Committee decided to propose a new
LTIP to support the Group’s recovery
by aligning the interests of the Executive
Directors and other senior executives
with the interests of shareholders.

Based on share price targets over
the coming three years, the plan was
carefully designed to recognise the
significant transformational work
required of the Management team in
order to enable the business to recover,
paying out only in circumstances where
such significant progress has been
achieved, and where shareholders
have also received substantial returns.
Whilst we acknowledge that some
shareholders did not support our
plan, the scheme was approved at the
General Meeting held earlier this year
and, as a Board, we are grateful for the
support of our shareholder community.

As indicated in last year’s Annual
Report, the Remuneration Committee
has also conducted a full review of the
Company’s Remuneration Policy, to take
account of the changes pursuant to the
2018 UK Corporate Governance Code
(the “Code”), and proposes to make
some changes to the Policy this year
to ensure it remains fit for purpose.
More information on the vital work
of the Remuneration Committee,
and details of the proposed changes
to the Policy, can be found in the
Remuneration Report on pages 57 to
80. We hope that these governance-
related changes will be viewed
positively by shareholders.

In addition to becoming Chair of the
Company, in May 2020, I also took up
the role of Chair of the Nomination
Committee. A key task was to
strengthen our Board by appointing
one, preferably two, additional
independent Non-Executive Directors
to the Board. We were therefore
immensely pleased to announce the
appointment in July 2020 of Damian
Sanders and, subsequently, the
appointment of Dr. Ashley Steel in
March 2021. Ashley will become a
Board member on 1 April 2021.

Taking into account Ashley’s
appointment, as also announced in

March, Eric (Rick) Senat, who has
been a Non-Executive Director of
the Company since 2010, and Senior
Independent Director, will be stepping
down from the Board at the conclusion
of the Company’s 2021 Annual General
Meeting. I would like to thank Rick for
his exceptional contribution to the
Company, having been involved since
the time of its inception, and we are
grateful for his commitment and
invaluable guidance over the years.
We wish Rick every future success.

In light of Rick’s pending departure,
Dean Moore has taken up the role of
Senior Independent Director. We also
announced some other changes to our
Committee compositions, as set out in
more detail on page 40. I believe that
with the appointment of Damian and
Ashley, together with our updated
Committee memberships, the Board
is well-positioned to move forward
with an advantageous set of skills,
experience, and capabilities, which will
provide strong support to the Executive
Management Team.

During the year, we undertook an
internal evaluation of the composition
and effectiveness of the Board, and I am
pleased to report that it supported the
view that the Board and its Committees
are operating efficiently and
productively. More details of the work
of the Nomination Committee and of
the Board evaluation can be found
on pages 49 to 51.

In terms of our more usual work as
a Board in 2020, we considered our
purpose, values and strategy, and
undertook a review of our corporate
culture, assessing the extent to which
our values have been embedded
throughout the Group. Due to COVID-19,
our analysis incorporated a more limited
range of key cultural indicators than
the previous year. However, the Board
was satisfied with the results of our
review. In addition, the Board reviewed
and monitored whistleblowing statistics
and themes.

Our employees bring our values and our
culture to life in the day-to-day running
of the business. As a Board, we are
acutely aware of the severe impact
the closures have had on our workforce.
In 2020, Dean Moore was appointed as
the Non-Executive Director to represent
employees in the Boardroom, in line
with the requirements of the Code.
Unfortunately, due to the onset of
COVID-19 and the related closures of
sites across the Group, the plans for
2020 were impacted to a significant

extent, but we are looking forward to
resuming our plans as soon as we are
able. Our HR teams have quickly
adapted to the evolving COVID-19
situation, undertaking numerous
initiatives to support our people,
including the establishment of various
learning and development tools,
support packs containing information
on gaining financial advice and
government help, and advice on health
and wellbeing in these difficult times.
To assist those facing challenging
financial circumstances, the business
launched a hardship fund, making
hundreds of grants across the Group.
We are proud of these efforts of our HR
teams, and more details of the Group’s
people-related initiatives, the Employee
Voice programme, and employee
engagement can be found on pages 23
to 24, 44 to 45, and 85.

Pursuant to the Code requirements
in relation to stakeholder engagement,
together with the obligations arising
under section 172 of the Companies
Act, we have taken time as a Board
to focus on how we engage with our key
stakeholders and how we consider their
needs, concerns and expectations in
Board discussions and decision-making.
Given the pervasive impact of the
pandemic on all our key work during
the year, we have illustrated how the
Directors have had regard to the
matters set out in sections 172(1) (a)-(f)
when discharging their duties by
describing these in the context of
our COVID-19 response strategy.
Our case-study on this can be
found on page 43.

To conclude, I believe that keeping
strong governance principles at the
centre of our work will support the
implementation of our recovery
strategy, help us to meet our business
goals set in the context of our current
challenges, and provide a foundation
for the creation of long-term value for
our shareholders, our people, and our
other stakeholders. As a Board, we are
committed to supporting our continued
strategic objectives as we move forward
out of the pandemic, to pursue our
vision to be “The Best Place to Watch
a Movie”.

Alicja Kornasiewicz
Chair, 25 March 2021

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsCHAIR’S INTRODUCTION TO GOVERNANCE CONTINUED

BOARD STATEMENTS

Requirement

Board statement

Compliance with
the UK Corporate
Governance Code

Read more pages 23 to 24

Customers
Our customers are key to our success. We focus on
ensuring that they have a positive experience every
time to increase the likelihood of repeat visits.
In 2020, in light of the COVID-19 pandemic, a key
priority for the Company was the health and safety
of our customers in cinemas.

Engagement
mechanisms
− Primarily through the
voice of the customer
programme “Rant
and Rave”

− Customer contact

What do they care
about most?
− Quality of

cinema experience

− Customer

service in cinema

− Innovation

− Social media

− Unlimited

membership
and feedback

− Site visits

− Booking efficiency

and smart technology

− Sustainability

Shareholders
The Chief Executive Officer, Deputy Chief Executive
Officer, and Chief Financial Officer provide focal points
for shareholders’ enquiries and dialogue throughout
the year. The Board uses the AGM to communicate with
private and institutional investors. Regular updates have
been given to our shareholders throughout the period
of the pandemic.

What do they care
about most?
− Strategy

− Strong leadership

− Strong returns

Engagement
mechanisms
− Investor meetings

− Governance meetings
with the Chair and
Committee Chairs

− AGM

− Investor conference

participation

Cineworld Group plc Annual Report and Accounts 2020
Employees
Despite certain “usual” engagement mechanisms
being disrupted as a result of the pandemic, we
adapted quickly in order to support our people in
various ways. With many of our teams home-working
or being placed on furlough, communication was key
and daily conference calls took place with Executive
Teams in all territories. This ensured good information
flow and engagement.

Engagement
mechanisms
− Employee engagement
surveys across Group

− Site visits feedback

− Whistleblowing line

− Turnover data

− Gender and diversity

information

What do they care
about most?
− Being able to develop

careers within
the business

− Feeling involved

− Being listened to

− Being motivated

− Managers
motivating
and standing up
for employees

Engaging with our
stakeholders and
responding to
their needs

Suppliers
Some of our usual engagement activities were
curtailed by the pandemic, but we continue to
work hard at developing and maintaining good
relationships with a range of film studios and
distributors. Strong relationships with our principal
retail suppliers enable us to work together on
promotions that help drive retail sales.

What do they care
about most?
− Collaborative
relationships

− Good

communication

Engagement
mechanisms
− Supplier exhibitions

− Regular meetings

− Payment practice

reporting and analysis

− Property relationships
– developers, landlords
and local planners

− Innovation –
commercial
relationships with
suppliers
of technology

− Retail – commercial
relationships with
suppliers of retail

− Industry body
memberships

Wider community
Our usual work with charities, schools, and community groups
across all our territories is very important to us where we are
involved with a wide range of activities including working with
distributors on charity screenings, providing free shows for
organisations and working closely with local schools.

Despite the challenges we faced in 2020, we managed to work
with children’s charity Variety to organise a “Sunshine Coach”.
We look forward to resuming our regular charitable activities
as soon as we are able.

Engagement
mechanisms
− Social media

What do they care
about most?
− Jobs and local investment

− Numerous local initiatives

− Active support for local

charities and organisations

− Dialogues with local

businesses, schools, councils
and charities

− Requests from charities

received directly

− Partnership with charities

− Our apprenticeship

programmes

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Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements

CORPORATE GOVERNANCE STATEMENT CONTINUED

Audit
The Board is responsible for the
preparation of the Annual Report and
ensuring that the financial statements
present a fair, balanced and
understandable assessment of the
Group’s financial position and prospects.
The detailed work to ensure this, and to
substantiate the fair, balanced and
understandable statement, is
undertaken by the Audit Committee.

Risk and internal control
The Board has overall responsibility for
establishing, monitoring and maintaining
an effective system of risk management
and internal control. These systems
provide reasonable assurance that the
Group’s assets are safeguarded, and
that material financial errors and
irregularities are prevented or detected
with a minimum delay. The Group
approach is implemented using the
principles of the Three Lines of Defence
model, as illustrated in the
diagram below.

During the year, the Board has directly,
and through delegated authority to the
Executive Management Team and the
Audit Committee, overseen and
reviewed the performance and evolution
of the approach to risk management
and internal control. As part of this
review process, a detailed report is
prepared by the Head of Risk and
Assurance and presented to the Audit
Committee, which considers the details
of the report and has the opportunity
to ask questions. The Audit Committee
in turn reports to the Board on the
effectiveness review, and the findings
arising thereunder.

The ongoing review and evaluation of
risk management and internal control
is undertaken by the Risk and Assurance
team whose key responsibilities are:

− risk management;

− internal audit; and

− fraud detection and loss prevention.

The Board confirms that, in
accordance with the Code:

− there is an ongoing and robust

process for identifying, evaluating
and managing the emerging and
principal risks faced by the Group
(for more details please see
Principal Risks and Uncertainties
on pages 14 to 19);

− the Company’s systems of risk

management and internal control
have been in place for the year
under review, and up to the date
of approval of this Annual Report,
are regularly reviewed by the
Executive Directors and the Board,
and are deemed to be effective
with no significant weaknesses
identified; and

− the systems comply with the FRC
Guidance on risk management,
internal control and related
financial and business reporting.

Board and Committees

OPERATIONS
US UK ROW

1st Line

Executive Directors

SUPPORT
FUNCTIONS

2nd Line

Process and control implementation
and development at cinemas

Operationalise:

— Cinema operating manuals
(policies and processes)

— Regional/District
Manager oversight

Group and territory oversight/
monitoring and strategy/
policy setting

Support and review:

— Operational performance reviews

— Executive Directors’ oversight

and challenge

— Training and development

— Group Board and Committee

— Regulation and compliance

oversight and challenge

— Financial oversight and review

— Risk Management Framework design

and implementation

— Assistance in process and

control development

— Management self-assessments

— Customer satisfaction surveys

3rd Line

Independent challenge to the
levels of assurance provided by
Management on the effectiveness
of governance, risk management
and internal controls

Challenge and assure:

— Risk-based audits

— Financial controls reviews

— Cinema compliance

assurance programme

— Health and safety

assurance programme

— Insurance inspections

— Fraud and loss

prevention monitoring

— PCI Testing

— Data privacy testing

— IT and information security

assurance activity

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Cineworld Group plc Annual Report and Accounts 2020

Board to clearly set out the nature and
extent of the risk the Group is willing to
accept, and the level of investment in
control in pursuit of the Group’s
strategic objectives.

Escalation, monitoring and reporting –
A clear escalation policy is in place to
ensure changes to risk exposure are
notified up through the governance
structure as required. Risk owners are
identified for all risks and have the
responsibility for ongoing monitoring of
the effectiveness of current controls and
the progress against the implementation
of further mitigating actions.

There is a cycle of ongoing monitoring
and reporting activities in place with
risk information being presented to
the Board and Audit Committee.

Culture – To support embedding the
application of the Risk Management
Framework into the culture and
behaviours of the Group, ongoing
training has been delivered by the
Risk and Assurance team.

Internal control
While the Board has overall
responsibility for the Group’s system
of internal control and for reviewing
its effectiveness, it has delegated
responsibility for the operation of
the system of internal control to
the Executive Management Team.
The detailed review of internal control
has been delegated to the Audit
Committee. Senior Management within
each part of the Group are responsible
for internal control and risk management
within their own area and for ensuring
compliance with the Group’s policies
and procedures.

The Audit Committee has oversight of
the programme of assurance activities
to allow for its ongoing review of the
effectiveness of internal control.
The delivery of this assurance
programme is undertaken by the Risk
and Assurance team, which is supported
by specialist advisers as required.

Details of the activities of the Audit
Committee during 2020 are set out
on page 53.

Risk
The Board, supported by the Audit
Committee and the Executive
Management Team, has overall
responsibility for implementing an
effective risk management approach.
The Group’s approach is governed by its
Risk Management Framework that sets
out the policy, oversight structure,
accountability and processes for the
monitoring and reporting of risk within
the Group, and facilitates the following
objectives for risk management:

− to identify, measure, control and

report on business risk that would
potentially undermine the
achievement of the Group strategic
objectives, both strategically and
operationally, through appropriate
analysis and assessment criteria;

− to better allocate effort and resources

for the management of key and
emerging risks;

− to drive business improvements and
improve intelligence for key decision-
making; and

− to support and develop the Group’s
reputation as a well governed and
trusted organisation.

The application of the key components
of the Risk Management Framework
have been as follows:

Oversight structure and accountability
– The risk management oversight and
accountability structure has ensured
that risk consideration is from both
a “top-down” and “bottom-up”
perspective. The Group maintains
a Principal Risk Register as well as
operational risk registers for support
functions, cinema operations and
specific projects.

Ongoing process – At each level the risk
assessment process is based on five
key steps:

1. Risk identification (using cause and

effect analysis)

2. Assessment of inherent risk severity

3. Identification of existing controls and

assessment of effectiveness

4. Assessment of residual risk severity

5. Development and implementation

of risk mitigation

Details of the Group’s principal risks
and how they are being managed
or mitigated are provided on pages 14
to 19.

As part of this process, risk appetite is
considered by the Board annually for
each of the principal risks, allowing the

Internal audit – The internal audit plan is
a combination of Group-wide risk-based
reviews (providing assurance over the
key controls relied upon for the principal
risks), financial and information
technology controls testing and
additional specific reviews requested
by Management. For 2020, the Audit
Committee determined that the
Company’s own internal resources,
headed by the Head of Risk and
Assurance, would replace BDO and
be used to undertake the Company’s
internal audit plans. Certain aspects
of the internal audit were rescheduled
to a later date due to the onset of the
COVID-19 pandemic.

Following consideration by the Audit
Committee, it is intended that internal
resources will continue to be used for
future internal audit plans, although
for specialist projects, such as IT-based
technical reviews, external advisers may
provide support if required

Cinema compliance – The Cinema
Compliance programme has operated
across the Group with reviews being
undertaken to understand the
application of the key controls within the
operational procedures in the areas of
cash, retail, payroll/HR and operations.
This programme was halted as a result
of the cinema closures in March of 2020.
Cinema compliance reviews will resume
once the cinemas reopen.

Each cinema in the Group has been
risk assessed based on operational and
management information to determine
which cinemas would be included in the
audit programme for the year.

Quarterly management reporting of
key themes and trends help support the
Group to make continued improvements.

In addition to the programme of on-site
reviews conducted by the Risk and
Assurance team, an annual self-
assessment audit is undertaken by
each cinema in the Group. The self-
assessment audit was halted when the
cinemas closed in March of 2020 and
will resume once the cinemas reopen.

Fraud detection and loss prevention
– To support the Group in fraud
detection and loss prevention, ongoing
analysis of our key data sources is
undertaken to identify any irregular
transaction activity that could indicate
instances of fraud, loss or failure of
procedural compliance.

External audit – The External Auditor
provides a supplementary, independent

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsCORPORATE GOVERNANCE STATEMENT CONTINUED

and autonomous perspective on those
areas of the internal control system
which it assesses in the course of its
work. Its findings are reported to the
Audit Committee.

Operational controls – The Executive
Directors, on a day-to-day basis, are
involved in reviewing the key operations
of the business through their interaction
with their Senior Management teams
across the Group and their discussions
on operational performance
and delivery.

Financial control – The Group has
internal control and risk management
procedures in relation to the Group’s
financial reporting processes and the
preparation of its Consolidated Financial
Statements. These procedures ensure
the maintenance of records which
accurately and fairly reflect transactions,
to enable the preparation of financial
statements in accordance with
International Financial Reporting
Standards or FRS 101, as appropriate,
with reasonable assurance, and that
require reported data to be reviewed
and reconciled, with appropriate
monitoring internally and by the
Audit Committee.

Ongoing financial performance is
monitored through regular reporting to
the Executive Directors and the Board.

Capital investment and all revenue
expenditure is regulated by a budgetary
process and authorisation levels, with
post-investment and period end reviews
as required. A comprehensive budgeting
system allows managers to submit
detailed budgets which are reviewed
and amended by the Executive
Directors prior to submission to the
Board for approval.

Other assurance activities – A
programme of health and safety/food
safety audits (delivered by outsourced
providers) takes place in the UK and US.
The health and safety/food safety
reviews were halted when the cinemas
closed in March of 2020.

As a result of the General Data
Protection Regulation (“GDPR”),
additional assurance activities have
been undertaken that focused on
reviewing the maturity of the Group
in the application of the regulation.

In line with requirements under the
Payment Card Industry Data Security
Standard, an independent security
assessor provides reports on
compliance (where applicable).

Policies and procedures – The Group
has in place a range of governance-
related policies which are regularly
reviewed and communicated to
employees. These include Gifts and
Hospitality, Anti-Fraud and Bribery, and
Health and Safety. In addition, the Group
has in place whistleblowing policies so
that the workforce may raise concerns
in confidence. Whistleblowing data is
routinely reviewed by the Board and
follow up actions are considered.
For more details of the Group’s policies
see page 25.

Cineworld Group plc Annual Report and Accounts 2020NOMINATION COMMITTEE REPORT

REPORT OF THE
NOMINATION
COMMITTEE FOR 2020

Chair

Committee
members

Alicja Kornasiewicz

Scott Rosenblum
Arni Samuelsson

The Company Secretary acts as
Secretary to the Committee

Dear shareholders
I am delighted to present the report
of the Nomination Committee.

In May 2020, I was pleased to assume
the role of Chair of the Committee,
taking over from Rick Senat who led
the Committee through some crucial
junctures during his tenure. I would like
to thank Rick, on behalf of the Board,
for his hard work on the Committee
over the years.

One immediate task, following my
appointment, was to strengthen the
Board by recruiting one, preferably
two, additional Non-Executive Directors
following the stepping down of both
Anthony Bloom and Helen Weir at the
2020 AGM. In light of our wider
circumstances as a business, due
to COVID-19, we anticipated that this
exercise may be more difficult than
in normal times, which is why I am
particularly pleased to say that, despite
our challenges, we were successful
in our aims.

In terms of our search, as a
Committee, we initially considered
the requirements for the positions,
taking into account such factors
as skills needed, focus areas for
the Company, and independence.

Following an internal nomination and
an in-depth interview process, involving
several Executive and Non-Executive
members of the Board, we were
delighted, in July, to announce the
appointment of Damian Sanders, who
took up the role from 1 August 2020.
Damian, who was also appointed as a
member of the Audit Committee, is an
FCA-qualified member of the Institute
of Chartered Accountants in England
and Wales (“ICAEW”) and brings
extensive financial and commercial
experience to the Board, including
over 20 years as a senior equity audit
partner at Deloitte acting as adviser
and corporate governance specialist
for a number of FTSE-listed companies.
Recently, we announced that Damian
would take up the position of Audit
Committee Chair, from 1 April 2021.

Then, in March 2021, after a rigorous
recruitment process supported by
external search agency Russell
Reynolds Associates, we were
delighted to also announce the
appointment of Dr. Ashley Steel, as an
independent Non-Executive Director,
with effect from 1 April 2021. Ashley
is a former Vice Chair and member of
the UK and European boards of KPMG,
with significant international, financial
and commercial experience.
Given Ashley’s skills and expertise, she
will also become a member of the
Audit and Remuneration Committees
when she joins.

We also announced some further
changes to the structure of the Board
and its Committees. Rick Senat, who
has been a Non-Executive Director of
the Company since 2010, and a deeply
respected and well-regarded Board
member, will be stepping down from
the Board at the conclusion of the
Company’s 2021 Annual General
Meeting. In light of Rick’s pending
departure, Dean Moore has taken up
the role of Senior Independent Director.
We also announced our new Committee
compositions, which will take effect
on 1 April 2021, and are described on
page 40.

The Committee believes that the
addition of Damian and Ashley to
the Board, together with our updated
Committee memberships, will assist
the Board to move forward with a
strong and suitably diverse set of skills,
knowledge and experience.

Following 2019’s external evaluation
of the Board, we opted for an internal
evaluation of the composition and
effectiveness of the Board this year.

I am pleased to report that the internal
evaluation found the Board and its
Committees to be operating efficiently
and productively. More details of the
work of the Nomination Committee and
the outcomes of our Board evaluation
can be found on pages 50 to 51.

Other activities of the Committee
during the year included discussions
on diversity and succession planning,
and consideration of how we can
best support and encourage the
development of talent at Senior
Manager level. For the second year
in succession, we were pleased to be
included in the Hampton-Alexander
Review’s “Top Ten Best Performers”
in relation to Executive Committee
and Direct Reports , and we retained
our first place in the Travel and Leisure
sector. Details regarding the gender
balance of our employees and of the
Executive Management Team can be
found on page 25.

Finally, regarding the gender balance
on our Board, I would like to note that,
when Ashley Steel joins our Board on
1 April, we will have four female Board
members, out of twelve, and will
therefore be glad to have met
the recommendation of the
Hampton-Alexander Review for
one third female representation.

Alicja Kornasiewicz
Chair of the Nomination Committee

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsNOMINATION COMMITTEE REPORT CONTINUED

Gender breakdown
of the Board(1)

Balance of
the Board(1)

Length of tenure
of Non-Executive
Directors(1)

Male

Female

Total Board of Directors

(1) As at 31 December 2020.

Chair

Executive Directors

Non-Executive Directors

0-2 years

3-6 years

7+ years

Nomination Committee
composition
During the year, the Committee
comprised three Non-Executive
Directors. Until 13 May 2020, Rick Senat
was Chair of the Committee, and Scott
Rosenblum and Arni Samuelsson were
members. On 13 May 2020, Alicja
Kornasiewicz took over from Rick Senat
as Chair of the Committee. While Rick
Senat and Arni Samuelsson are
considered to be independent, Scott
Rosenblum is not. In addition, as Alicja
Kornasiewicz is Chair of the Company,
she is not considered independent
under the Provisions of the Code
for the purposes of the Committee
composition. However, due to
the importance of the work of the
Nomination Committee, particularly in
relation to the recruitment of additional
non-executive directors, it was
beneficial for Alicja to perform the
role of Committee Chair, alongside
continuing members Scott Rosenblum
and Arni Samuelsson. On 22 March 2021,
it was announced that Scott Rosenblum
would stand down from the Committee
on 1 April 2021, and Camela Galano and
Damian Sanders would join as members,
ensuring compliance with the
composition requirements under
the Code.

The role, responsibilities and
activities of the Nomination
Committee
The Committee assists the Board in
discharging its responsibilities relating
to the composition of the Board. It is
responsible for evaluating the balance
of skills, knowledge and experience on
the Board, its size and structure, and
retirements and appointments of
additional and replacement Directors.
In addition, the independence of
Directors, the development of the talent
pool of the business, are also areas of
responsibility, and the Committee makes
appropriate recommendations to the
Board on all such matters. It is also
responsible for ensuring that Directors
have sufficient time to discharge their
duties on appointment, and thereafter,
with such matters being specifically
addressed in the letters of appointment
of the Non-Executive Directors.
Prior approval is sought before a
Director accepts an external
appointment. The terms of reference
of the Committee are available on the
Company’s website
(www.cineworldplc.com/en/about-us/
corporate-governance).

The Committee met on numerous
occasions in the year, to deal with
a variety of key tasks, including the
recruitment of additional independent
Non-Executive Directors to the Board
– a successful project that led to the
appointment of Damian Sanders and
Dr. Ashley Steel.

During the year the Committee also
reviewed its own performance, reviewed
the structure of the Board and the three
Committees, and discussed succession
and diversity issues.

Board evaluation
Towards the end of the year, a
performance evaluation was carried
out in respect of the Board, the Audit,
Remuneration and Nomination
Committees, and each individual
Director, including the Chair. As an
external facilitator had been engaged
for the 2019 performance evaluation, the
Board decided to carry out the exercise
without external assistance in 2020.
The process adopted involved
the completion of assessment
questionnaires by each of the Directors
and Committee members. The results
were then collated by the Company
Secretary, and a summary presented to
the relevant Committee and the Board.
The process was constructive and
confirmed that overall the Board and
Committee processes were working
appropriately. A few matters were
identified where Directors felt that
more time should be allocated,
including a focus on succession
planning and additional training
and development opportunities.

In order to address the feedback
received as part of the evaluation
process, a sub-committee of the Board
was established for this purpose.
The sub-committee met in early 2021,
and follow up actions have been
discussed and agreed upon, so that the
recommendations of the evaluation can
be incorporated into the Board agenda

Cineworld Group plc Annual Report and Accounts 2020Associates were appointed to assist
with the search process. A full brief was
drawn up for the role, which included
the request for experience in the field
of remuneration. Following an initial
consideration of potential candidates,
a shortlist was prepared and, following
interviews carried out by members of
the Nomination Committee, the Chief
Executive Officer and the Deputy Chief
Executive Officer, and the Chair of the
Audit and Remuneration Committees,
the Committee recommended to the
Board that Ashley should be appointed
as an independent Non–Executive
Director and a member of the Audit and
Remuneration Committees. The Board
agreed with this recommendation.

Russell Reynolds Associates, the
external search consultancy used for
this search, has no connections with the
Group or any of its Directors and was
chosen on the basis of discussions and
a review process undertaken by the
Nomination Committee.

for the coming year. As part of its work,
the Nomination Committee takes into
account the outcomes of the evaluation
process when considering and assessing
the composition of the Board.

Skills, experience
and knowledge
All Directors have a good understanding
of the markets, territories, regulatory and
risk management frameworks within
which the Group operates, as well as the
technology it uses. The biographies of
the Directors, as set out on pages 35 to
37, highlight the skills and experience
each Director brings to the Board.
The Nomination Committee monitors
the length of tenure and the skills and
experience of the Non-Executive
Directors to assist in succession
planning. The Committee is confident
that the Board has the necessary mix of
skills and experience to contribute to the
Company’s strategic objectives.

Tenure
The tenure of each of the Directors is set
out in their biographies on pages 35 to
37, and summarised on page 50.

Succession planning and
the pipeline of talent
To find the most suitable candidates for
the Board, the Nomination Committee
considers the skills, experience and
attributes required to create a diverse
Board which is capable of driving the
Company forward successfully in
fulfilment of its purpose and strategic
goals. The Committee also considers
the initiatives that are in place to
develop the talent pipeline at a senior
level across the business. Initiatives that
were reviewed by the Committee in
relation to development of talent at a
senior level included advanced coaching
schemes, management conferences,
training on leadership, sessions on
wellbeing, resilience and mental health
awareness, and access to mentoring
schemes. More information on the
development initiatives for Senior
Management can be found on pages 23
to 24 of the Resources and
Relationships section.

Policy on diversity and inclusion
While the Committee considers diversity
to be important when reviewing the
composition of the Board and possible
new appointees, it believes that the
single most important factor is to
identify, recruit and retain the people
it considers, on merit, to be the best
candidates for each particular role.
These principles are reflected in
the Diversity Policy that has been
established by the Committee. It is not
currently in favour of setting specific
targets for Board representation to be
achieved by particular dates. As part of
the process of recruiting new Directors,
it has agreed that candidates from a
wide variety of backgrounds, including
different ethnic backgrounds, should
be considered and, where reasonably
possible, shortlists should comprise
candidates of different genders.
Diversity extends beyond the
Boardroom and the Committee
is supportive of Management’s efforts
to build a diverse organisation and
maintain a diverse talent pipeline.
For more information about the Group’s
approach to diversity, please see the
“Employees” section of the Directors’
Report on page 84 and the “Diversity
and human rights” section of Resources
and Relationships on page 24.

Recruitment process for
Board Directors
It was announced on 22 July 2020 that
Damian Sanders had been appointed
to the Board as an independent
Non-Executive Director, with effect
from 1 August 2020. With regard to the
appointment of Damian, the services
of an external search agency were not
required, as Damian was nominated by
an internal source. This initial nomination
was followed by a rigorous and
independent interview process, led
by the Nomination Committee, during
which Damian met with the Nomination
Committee members, the Chief
Executive Officer and the Deputy Chief
Executive Officer, the Chief Financial
Officer, and the Chair of the Audit
Committee. Following these interviews,
the Committee recommended to the
Board that Damian should be appointed
as an independent Non–Executive
Director and a member of the Audit
Committee. The Board agreed with
this recommendation.

It was further announced on 22 March
2021 that Dr. Ashley Steel had been
appointed to the Board as an
independent Non-Executive Director,
with effect from 1 April 2021. With regard
to the appointment of Ashley, external
search consultancy Russell Reynolds

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsAUDIT COMMITTEE REPORT

REPORT OF THE
AUDIT COMMITTEE
FOR 2020

Chair

Committee
members

Dean Moore

Camela Galano
Damian Sanders
Rick Senat

The Company Secretary acts as
Secretary to the Committee

Dear shareholders
I am pleased to present the Audit
Committee Report for the year to
31 December 2020. As recently
announced, Damian Sanders will take
up the position of Chair of the Audit
Committee (the “Committee”), with
effect from 1 April 2021. I will remain as
a member of the Committee, and wish
Damian every success in the role. Dr.
Ashley Steel will also join as a member
of the Committee on 1 April 2021,
bringing substantial business, risk, and
financial experience. We look forward
to welcoming Ashley in due course.

This report sets out details of the
activities undertaken by the Committee
during the period, in order to discharge
its responsibilities in relation to
supporting the Board, its oversight
and monitoring of the robustness and
integrity of financial reporting, and in
gaining assurance on the effectiveness
of the risk management and internal
control system in place at Cineworld.

As can be seen from the information
set out below, the impact of the
global COVID-19 pandemic has had a
fundamental bearing on the work of the
Committee, in crucial areas such as going
concern, viability, lease arrangements,
impairment, and accounting for the new
financing arrangements that were
announced in November 2020.

During the year, multiple additional
Committee meetings were arranged, in
addition to our normal cycle of activity.
Such meetings involved intensive
discussions with both the Executive
Management Team and our Auditor,
to discuss critical matters flowing from
COVID-19 and the challenges we faced
as a business, with going concern being
a key focus.

As part of our work on going concern,
as a Committee we reviewed numerous
financial models, including a base case
scenario to consider headroom for
2021 and beyond. We took time to
understand and challenge, where
necessary, significant judgements
and assumptions in the modelling, and
monitored the work of Management
and the ongoing discussions with
the Auditor. More details in relation
to going concern can be found
on pages 53 and 103.

Despite the severe disruption to the
business, as a Committee we continued
our work on the essential oversight of
internal control and risk management
systems, which included a
comprehensive review of the
effectiveness of our internal audit
systems and controls, in accordance
with the requirements of the Code.
In-depth discussions on emerging risk
took place throughout the period, and
the Committee received regular updates
on the ever-evolving COVID-related
operational requirements across the
territories in which the Group operates.

We took time to carefully consider the
new risk profile of the Group, in light of
the pandemic, receiving a number of
updates from the Risk and Assurance
team and Management. Details of our
principal risks and uncertainties, how
these have been revised to take account
of the COVID-19 pandemic, and how we
consider these risks in the context of our
wider strategic objectives, can be found
on pages 14 to 19.

In leading up to the publication of the
Annual Report, one of the Committee’s
key responsibilities was to consider and
report on the significant risks and issues
in relation to the financial statements,
and how these should be addressed.
Valuation of PPE and right-of-use assets,
valuation of goodwill, leases, accounting
for the new financing arrangements,
and the recoverability of deferred tax
assets have been identified as significant
matters for 2020, and our formal
position on these issues is set out
on pages 54 to 55 of the Audit
Committee Report.

In drawing to a close, I would like to
thank Rick Senat, who will step down
from the Committee on 1 April 2021,
when Ashley joins. I am grateful to my
fellow Committee members for their
commitment and dedication, and we
look forward to continuing with our
work to support the Board and
Management as we progress to more
positive times, and the reopening of
our business in 2021.

Dean Moore
Chair of the Audit Committee

Composition
For the duration of the year,
the Committee comprised a minimum
of three independent Non-Executive
Directors. At the start of the year, the
Committee comprised Dean Moore
(Chair), Alicja Kornasiewicz, and Helen
Weir. Following Alicja Kornasiewicz’s
succession to the role of Chair of the
Company, and the stepping down of
Helen Weir on 13 May 2020, Camela
Galano and Rick Senat both joined the
Committee as members. On 22 July
2020 it was announced that Damian
Sanders would also join the Committee,
with effect from 1 August 2020.

Therefore, at the year end, the
Committee comprised Dean Moore
(Chair), Camela Galano, Damian
Sanders, and Rick Senat. Both Dean and
Damian are qualified accountants, and
are considered by the Board to have
recent and relevant financial experience.
The Committee as a whole is considered
to have competence relevant to the
sector in which the Company operates.

On 22 March 2021, it was announced
that Damian Sanders would become
Chair of the Committee, Ashley Steel
would be appointed as a member,
and Rick Senat would step down
from the Committee with effect from
1 April 2021. Dean Moore will continue
as a member.

The Chair, the Chief Executive Officer,
the Deputy Chief Executive Officer, the
Chief Financial Officer, other Directors
and senior executives, the Head of Risk
and Assurance, the Internal Auditor and
the External Auditor may be invited to
attend meetings, but are not members.

The role, responsibilities
and activities of the
Audit Committee
The Committee has a clear set of
responsibilities that are set out in its
terms of reference, which are available

Cineworld Group plc Annual Report and Accounts 2020on the Company’s website
(www.cineworldplc.com/en/about-us/
corporate-governance). The Committee
assists the Board in discharging its
responsibilities with regard to financial
reporting, the integrity of financial
statements, the control environment,
the work of the External and Internal
Auditors, and the Risk and Assurance
team, including:

− monitoring the financial

reporting process;

− reviewing the integrity of the Annual

and Interim Reports, including
reviewing significant financial
judgements therein;

− reviewing the Group’s risk assessment

process, the output of that
assessment and the associated risk
management systems;

− reviewing the effectiveness of the

Group’s internal controls;

− considering the scope of the Internal
and External Auditors’ activities, and
the work of the Risk and Assurance
team, their reports and
their effectiveness;

− reviewing and monitoring the extent
of the non-audit work undertaken
by the External Auditor; and

− advising on the appointment of

the External Auditor.

The ultimate responsibility for reviewing
and approving the Annual and Interim
Reports remains with the Board.

What the Committee
did in 2020
The Committee met on numerous
occasions during the year, to address
some of the critical challenges
presented by the COVID-19 pandemic,
in addition to its usual scheduled
meetings, during which time it:

− monitored the financial reporting

process and reviewed the interim and
annual financial statements (including
the preliminary announcement) with
particular reference to the impact
of the COVID-19-related closures,
accounting policies, principal risks and
uncertainties, together with significant
estimates and financial reporting
judgements and the disclosures
made therein;

− considered and agreed changes

to the reporting timetable to take
into account the impact of
COVID-19 closures;

− considered the interim results and the
Annual Report and Accounts in the
context of the requirement that they
are fair, balanced and understandable;

− received and discussed (in the

absence of Management, where
appropriate) reports from the External
Auditor in respect of its review of the
interim results, the internal audit plan
for the year and the results of the
annual audit. These reports included
the scope for the interim review and
annual audit, the approach to be
adopted by the External Auditor to
evaluate and conclude on key areas
of the audit, its assessment of
materiality, the terms of engagement
and raising awareness of the likely
impact of future changes to regulation
and accounting standards;

− monitored the performance of

the Risk and Assurance team, and
reviewed the effectiveness of the
Group’s internal financial controls
together with its broader internal
control and Risk Management
Framework, to ensure consistent and
appropriate financial controls across
the Group;

− reviewed the accounting papers

provided by Management in relation
to key accounting topics;

− monitored the implementation of the
Group’s internal audit plan for 2020;

− reviewed the results of non-financial
audits (including food hygiene and
fire safety) and where applicable
agreed enhancements to procedures
and reviewed remedial actions;

− oversaw the Group’s relations with

the External Auditor, determined its
independence and monitored the
effectiveness of the audit process;

− discussed the requirements for a

longer-term Viability Statement and
the related assessment work to enable
the Board to make such a statement;
and

− reviewed the Committee’s terms
of reference and carried out a
performance evaluation as required
by the Code. The results of the
evaluation confirmed that the
Committee is performing satisfactorily
and providing strong support to
the Board.

Fair, balanced and
understandable
During the year, the Committee
considered the interim results and
the Annual Report and Accounts in the
context of the requirement that they
are fair, balanced, and understandable
by reviewing papers prepared by
Management with regard to this
principle. This included reviewing
the documents to ensure that the
description of the business agrees with
the Committee’s own understanding,

the risks reflect the issues that
concern the Group, the discussion
of performance properly reflects the
relevant period, and there is a clear
link between all the areas of disclosure.

Going concern
The COVID-19 pandemic and the
resultant closures in response to it have
had a significant impact on the Group’s
financial resources and forecasts. The
cinema industry has been materially
negatively impacted through 2020 with
the Group experiencing closures across
all territories.

The Committee challenges the Group’s
application of the going concern basis
and its viability at each reporting date.
During 2020, continuing uncertainty
around the cinema market as well as
economies generally has contributed to
greater detail and consideration being
applied in those making challenges.

The Group took several steps in securing
additional liquidity in response to the
challenges presented by the pandemic
and to ensure financial stability going
forward. In addition, covenant waivers
were obtained for leverage ratio testing
points within the going concern period
on the Group’s existing debt.

Management prepared scenario analysis
based on the parameters of the liquidity
position at the year end and facilities in
place, covenants in place on new debt
arrangements agreed in the year, the
forecast reopening of cinemas and
return to pre-pandemic levels of trading
as well as certain key cash flows.

The Committee considered the scenario
analysis and challenged Management’s
key assumptions and mitigating actions.
Key assumptions around reopening,
recovery and certain key cash flows
remain uncertain. Details of the scenario
analysis and the specific uncertainties
are provided in note 1 to the
Financial Statements.

Having considered both weighted and
severe but plausible scenarios in detail,
the Committee recognised the material
uncertainties that remain around the
Group’s ability to continue as a going
concern, as set out by Management, and
consider details with regard to these
uncertainties disclosed in note 1 to the
financial statements to be appropriate.
On this basis, the Committee
recommended to the Board that the
going concern assumption should
continue to be adopted.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsAUDIT COMMITTEE REPORT CONTINUED

Viability
Part of the Committee’s work in the year
has been to discuss and consider the
requirement under the Code for a
longer-term viability statement, and the
related assessment work needed in
order to enable the Directors to make
such a statement. The Directors’
Viability Statement, together with
details of the assessment work, is set
out on pages 20 and 21 (with a summary
on page 34, “Board Statements”).

Significant issues considered
in relation to the financial
statements
During the year the Committee,
Management and the External Auditor
considered and concluded what the
significant risks and issues were in
relation to the financial statements
and how these would be addressed.
In relation to the 2020 Group financial
statements, significant risks have been
identified which are outlined as follows:

Valuation of property, plant
and equipment and right
of use assets
As detailed in Note 12 to the financial
statements, there is an inherent risk that
elements of the value of Group’s PPE
assets may prove to be irrecoverable,
due to fluctuations in the performance
of cinemas or one-off events.
Given the number of factors involved in
forecasting the performance of cinema
sites operated by the Group, in multiple
countries, this results in an element
of judgement being applied to the
valuation of an individual cash
generating unit (“CGU”), predominantly
at cinema site level. At each Balance
Sheet date, Management prepares an
assessment which estimates the value
in use of the CGUs to which the
tangible fixed assets are allocated.
Where individual sites’ cash flows are
not considered independent from one
another, mainly due to strategic or
managerial decisions being made
across more than one site, they may
be combined into a single CGU.
The resulting calculation is sensitive
to the assumptions in respect of future
cash flows and the discount
rate applied.

The main assumptions over growth
rates, the impact of one-off events,
expected cost increases and
discount rates are updated to reflect
Management’s best estimate. The
impact of the COVID-19 pandemic,
its impact on the Group’s forecast
revenue and the Group’s credit rating
resulted in material one off reductions
in value in CGUs in each territory.

When considering the appropriateness
of the discount rate, Management
assess the territory specific discount
rates, and ensure that they are updated
for current market information and
the Group’s current leverage. The
assessment for the current year
included consideration of the
deterioration in the Group’s credit
rating and changes to its cost of debt
due to new issuances in the year.

At the year-end Management prepared
their valuation models for the
Committee’s consideration, together
with their proposed site impairments,
and drew the Committee’s attention to
any specific judgements taken within
the models. Management confirmed to
the Committee that they have applied
a consistent Group-wide methodology
in the preparation of the valuation
models. This included applying
reduction in forecast cash flows at a
CGU level, implied by the weighted
scenario forecast analysis carried out for
the Group’s Going Concern assessment.

The Committee satisfied itself that
the approach was appropriate, the
assumptions reasonable and the
impairments proposed were complete
and accurate. The Committee also
satisfied itself through enquiry of
Management and review of the Board
papers that all significant events which
may have impacted on the valuation of
PPE and right of use assets had been
appropriately captured in Management’s
assumptions and reflected in the
valuation models and that appropriate
disclosures, including in relation to
sensitivities, had been included in the
financial statements.

Valuation of goodwill
As detailed in Note 13 to the financial
statements, the impact of the COVID-19
pandemic resulted in an increased risk
to the valuation of goodwill arising on
consolidation for each of the Group’s
country CGUs. This risk was driven by
increases in the Group’s weighted
average cost of capital (“WACC”),
applied as a discount rate assessing
goodwill valuation, and forecast cash
flows for each CGU. Each of these
components of the calculation requires
judgement and results in sensitivity in
the valuation of goodwill. Management’s
forecast cash flows were applied
through use of the weighted scenario
forecasts considered in the Group’s
Going Concern assessment. A WACC
was derived using relevant external
market data and considering the
Group’s credit worthiness at the date
of the assessment. The Committee has

considered information supplied by
Management and satisfied itself that
the approach and methodology applied
by Management was appropriate.
The Committee further satisfied itself
that advice from professional service
firm was taken in assessing the WACC
used in the valuation, that the forecast
cash flows applied were consistent with
the Group’s forecasting analysis and
that the necessary disclosure and
sensitivity analysis has been included
in the financial statements.

Accounting new financing
arrangements
During the year the Group entered new
financing agreements. The nature and
complexity of certain features of these
arrangements are such that their
treatment and valuation represent a
greater risk than other agreements the
Group has previously been party to.
These agreements included the issue of
equity warrants in connection with new
debt facilities during the year, certain
embedded derivative financial
instruments and debt instruments
recognised at a discount due to current
credit risk. Each component of the new
arrangement, their contractual terms
and interaction with other contract in
place and the appropriate treatment
under IFRS 9: Financial Instruments
were considered by Management.
Detailed disclosures in respect of these
treatments and valuations and their
impact on the financial statements
are set out in note 26.

Having considered documentation and
analysis presented to it, the Committee
satisfied itself that Management
obtained appropriate professional
advice in addressing these contractual
arrangements and correctly recognised
them in the financial statements.

In addition to the instruments described
above, a floor on the LIBOR-linked
interest rates on certain existing loans
was entered into upon amending an
existing credit agreement for the
purpose of refinancing. This feature
resulted in an embedded derivative
being identified and separately
accounted for in the Group’s Statement
of Financial Position. The Committee has
reviewed the treatment of this derivative
and has satisfied itself that it has been
accurately accounted for. In addition,
the Committee has considered
Management’s assertion that further
amendments to the underlying credit
agreement, subsequent to the year end,
are likely to result in the de-recognition
of the derivative liability and found it to
be accurate.

Cineworld Group plc Annual Report and Accounts 2020IFRS 16: Leases
As detailed in note 20, from 1 January
2019, on adoption of IFRS 16 “Leases”
leases are recognised as a right-of-use
asset and a corresponding liability at
the date at which the leased asset is
available for use by the Group in the
Consolidated Statement of Financial
Position. Each lease payment is
allocated between the liability and
finance cost. The finance cost is charged
to the Consolidated Statement of Profit
or Loss over the lease period so as to
produce a constant periodic rate of
interest on the remaining balance of the
liability for each period. Both principal
and finance cost elements of lease
payments are recognised within
financing cash flows within the
Consolidated Statement of Cash Flows.
The depreciation charge recognised on
the right-of-use assets is being charged
to administration expenses in the
Group’s Statement of Profit and Loss.

The impact of the COVID-19 pandemic
resulted in a large number of lease
agreements in the period being
renegotiated. The number and nature
of amendments made are such that
judgements taken were significant.
These judgments included the lease
term, discount rate applied, the date
amendments took place and the
treatment of amendment as
modifications under IFRS 16.
Based on the Committee’s enquiries of
Management and review of accounting
papers, the Committee has satisfied
itself that:

− The details and timing of amendments
to leases during the year, including the
calculation of deferred and waived
rent, have been applied correctly in
accordance with IFRS 16;

− The judgement applied by

Management in assessing whether
a lease option period should be
included in the lease liability has been
carefully considered, taking into
account the facts and circumstances
around the lease and the historic
decisions taken over lease options
and the decision making process prior
to executing a lease option; and

− The discount rates used to discount

the lease payments have been
provided by an independent
professional services firm and the
rates have been calculated for
portfolios of leases with similar
characteristics, as permitted under
IFRS 16, with lease term and asset-
specific adjustments and reflecting
the Group’s current cost of borrowing
and credit rating.

Recoverability of deferred
tax assets
The Group recognises deferred tax
assets and liabilities for the future tax
consequences attributable to temporary
differences between the financial
statement carrying amounts of existing
assets and liabilities and their respective
tax bases, unused tax losses and unused
tax credits. Disclosures in respect to of
deferred tax assets and liabilities are set
out in notes 10 and 16. The COVID-19
pandemic and its effect on the Group’s
taxable profits over a forecast five-year
period have resulted in greater
uncertainty over the recognition
of deferred tax assets. In particular,
judgement exists around the recognition
of deferred tax assets in respect of
losses incurred and whether sufficient
taxable profits will be generated to
utilise them in future periods.
Management have applied their scenario
weighted forecasting and relevant tax
regulations in assessing whether assets
should be recognised in each territory.
The Committee have considered
calculation and forecast prepared by
Management and are satisfied that
appropriate judgements have been
made in respect of the recoverability
of deferred tax assets in the
financial statements.

External Audit
The Committee reviews the
appointment of the External Auditor
each year before the cycle of audit
commences and in deciding whether
to renew the appointment takes note
of the quality of the service received,
the proposed fees and the Auditor’s
independence. Management and
all members of the Committee are
consulted during the process.
Further details of these processes
are set out below.

Audit Tender
PwC was appointed as External Auditor
to the Company following an audit
tender process carried out in 2019.

The Company will continue to comply
with the relevant tendering and auditor
rotation requirements applicable under
UK and EU regulations, which require
the next external audit tender to occur
by 2029. In addition, the External
Auditor will be required to rotate the
audit partner responsible for the Group
audit every five years and, as a result,
the current lead audit partner,
Christopher Richmond, will be required
to change in 2024. The Committee
continues to review the auditor
appointment and the need to tender
the audit.

The Company considers it has complied
with the Competition and Markets
Authority’s Statutory Audit
Services Order.

Independence and Effectiveness
During the year, the Committee evaluated
the performance and objectivity of
PwC and reviewed its independence
and effectiveness as External Auditor
in relation to the prior year accounts.
The effectiveness of the 2019 audit was
assessed by reference to the following:

− the effectiveness of the lead audit,
engagement partner, including the
support provided to the Committee;

− the planning and scope of the audit
including identification of areas of
audit risk and communication of any
changes to the plan, and changes in
perceived audit risks;

− the quality of communication with

the Committee, including the regular
reports on accounting matters,
governance and control;

− the competence with which the
External Auditor handled key
accounting and audit judgements
and communication of those to
Management and the Committee;

− PWC’s reputation and standing,
including its independence and
objectivity and its internal quality
procedures; and

− the quality of the formal report

to shareholders.

Further, at the conclusion of each year’s
audit, the Committee discusses the
performance of the External Auditor
with the Executive Directors and
relevant senior finance managers
considering areas such as the quality of
the audit team, business understanding,
audit approach and management.
Where appropriate, actions are agreed
against points raised and subsequently
monitored for progress. There were no
significant findings from the evaluation
this year.

After taking into account all of
the above factors, the Committee
concluded that PwC, as External
Auditor, had been effective. In addition,
the Committee is satisfied that it has
sufficient oversight of the External
Auditor and its independence and
objectivity is not compromised due
to the safeguards in place.

Independence of the Auditors
The External Auditor is required to
periodically assess whether, in its
professional opinion, it is independent
and confirm this to the Committee.
PwC has provided this confirmation.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsAUDIT COMMITTEE REPORT
CONTINUED

REMUNERATION COMMITTEE

Non-Audit services
The Committee considers the
independence of the External Auditor
on an ongoing basis and has established
policies to consider the appropriateness
or otherwise of appointing the External
Auditor to perform non-audit services.
In particular, all non-audit work and the
associated fees need to be approved by
the Committee. The only non-audit
service subject to Audit Committee
approval provided by PwC to the Group
during 2020 related to its review of the
Group’s interim statement and fees
relating to the Cineplex transaction
resulting in total fees of £0.8m.
The Committee is satisfied that the
above work was best undertaken by the
External Auditor and that its objectivity
and independence as Auditor has not
been impaired by reason of this further
work. An analysis of audit and non-audit
fees may be found in Note 6 to the
financial statements.

Insurance
It is not practical or possible to insure
against every risk to the fullest extent.
The Group has in place an insurance
programme to help protect it against
certain insurable risks. The portfolio of
insurance policies is kept under regular
review with the Company’s insurance
broker to ensure that the policies are
appropriate to the Group’s activities
and exposures, taking into account cost,
and the likelihood and magnitude of the
risks involved.

Remuneration Committee
composition
At the start of the year, the Company’s
Remuneration Committee comprised
four Non-Executive Directors, namely
Alicja Kornasiewicz (Chair), Dean
Moore, Camela Galano, and Helen Weir.
Dean Moore assumed the role of Chair
of the Remuneration Committee at the
conclusion of the AGM on 13 May 2020,
and Helen Weir stepped down from the
Board. Alicja Kornasiewicz remained
on the Committee as a member. At the
year end, therefore, the Committee
comprised Dean Moore (Chair), Alicja
Kornasiewicz, and Camela Galano.

As Alicja Kornasiewicz is Chair of
the Company, she is not considered
independent under the Provisions of the
Code for the purposes of the Committee
composition. However, it was considered
beneficial for continuity purposes for
Alicja to remain as a Committee member
after stepping down from the role of
Committee Chair, while the search for an
additional Non-Executive Director to join
the Committee progressed. On 22 March
2021, it was announced that Ashley Steel
would join the Board as an independent
Non-Executive Director with effect from
1 April 2021, and that she would also
become a member of the Remuneration
Committee. At this time, Alicja will
step down as a member, handing
over to Ashley. Ashley has significant
remuneration experience and is also
independent, meaning that Committee
composition will be fully compliant with
the Code requirements following this
period of transition.

The Committee met for multiple
meetings in the year, with four of these
meetings being scheduled meetings.
The additional meetings were held to
address specific issues arising out of
the COVID-19 pandemic, and in relation
to the 2021 LTIP. More details on the
work of the Committee are set out in
the Directors’ Remuneration Report
on pages 57 to 79.

The Company Secretary acts as Secretary
to the Remuneration Committee.

Roles and responsibilities
The activities of the Committee are
covered in the Directors’ Remuneration
Report on pages 57 to 79, and are
incorporated into this Corporate
Governance Statement by reference.

The Committee assists the Board
in determining its responsibilities in
relation to remuneration, including
making recommendations to the Board
on the Group’s policy on executive
remuneration, determining the
individual remuneration and benefits
package of each of the Executive
Directors, and monitoring and
approving the remuneration of Senior
Management below Board level.

The Committee appointed FIT
Consultants as external advisers
in December 2020 and took advice
from them during the year. Prior to
the appointment of FIT Consultants,
EY were external advisers. Neither
FIT Consultants nor EY have any
connections with Cineworld or its
Directors, save for the provision of
transactional advisory services and
tax advice to the Group by EY.

The Committee is comfortable that
the engagement partners and team
of the external advisers do not have
connections with the Company
or Directors of the Company that
may impair their independence.
On appointment as advisers, the
Committee reviewed the potential for
conflicts of interest and judged that
there were no conflicts or potential
conflicts arising. The Company receives
advice in relation to the Remuneration
Policy and its implementation in
respect of the Chair, Executive
Directors, Company Secretary
and Senior Management.

The terms of engagement with EY
and FIT Consultants are available on
request from the Company Secretary.

The Chief Executive Officer is consulted
on the remuneration packages of
the other senior executives and
attends discussions by invitation
except when his own position is being
discussed. The Committee does not
deal with the fees paid to the Non-
Executive Directors. The report of the
Remuneration Committee is set out on
pages 57 to 79.

The terms of reference of the Committee
are available on the Company’s website
(www.cineworldplc.com/en/about-us/
corporate-governance).

By order of the Board

Alicja Kornasiewicz
Chair
25 March 2021

Cineworld Group plc Annual Report and Accounts 2020DIRECTORS’ REMUNERATION REPORT
Evolving our Remuneration Policy
so that it remains fit for purpose

“ The COVID-19 pandemic

had a profound impact on
Cineworld in 2020. Decisions
in relation to executive
remuneration outcomes
made by the Committee were
taken in the context of this
challenging backdrop.”

Dean Moore
Chair of the Remuneration Committee

Annual Statement
Dear shareholders
I was pleased to become Chair of
the Remuneration Committee once
again in May 2020, following Alicja
Kornasiewicz’s succession to the role
of Chair of the Company.

In addition, we look forward to
welcoming Dr. Ashley Steel as a new
Committee member. Ashley, who will
join the Committee on 1 April 2021,
brings substantial experience in the
field of remuneration, and I have no
doubt that we will benefit significantly
from her skills and knowledge as we
move forward.

It has been a particularly busy period
for the Committee, to a large extent as
a result of the COVID-19 pandemic and
its far-reaching effects on the Group’s
business. As well as the COVID-related
tasks and issues that we have dealt with
as a Committee this year, one important
focus of our work leading up to this
Report was our review of the
Remuneration Policy, which we have
updated, mainly to take into account
the requirements of the Corporate
Governance Code and other institutional
guidelines. We hope that shareholders
view these changes as positive, and
more details on the proposed updates
are set out below.

The impact of COVID-19 on
business performance in 2020
The COVID-19 global pandemic had a
profound impact on Cineworld in 2020.
The challenging theatrical landscape
and sustained key market closures
meant that our cinemas were shut for
a significant portion of the year.

The closures had a severe impact
on our performance, and on our
employees. The Board has been
immensely grateful and proud of the
hard work of employees throughout the
business when our cinemas were open,
and for their courage while they have
been closed.

As a result of the pandemic, the Board’s
main priorities over the year have been
the safety of customers and employees,
cash preservation and cost reduction.
The refinancing of the Group announced
in November 2020 was a crucial
milestone, and will help us through this
challenging period until our markets
return nearer to normal. The decisions
in relation to executive remuneration
outcomes made by the Committee
were taken in the context of this
challenging backdrop.

Key decisions during the year
To conserve cash, the Executive and
Non-Executive Directors volunteered
to defer 100% of their salary and fees,
in each case for a period of time in
2020. The deferral made a significant
contribution to the cash flow of the
Company, and the outstanding amounts
will be repaid when the business returns
to more normal circumstances.

Salaries were not increased in 2020 and
no bonus will be paid to the Executive

Directors in respect of the financial
year. In addition, the 2018 LTIP awards
for Executive Directors, which were
due to vest in April 2021, lapsed in full.

As part of our usual annual cycle,
awards were made under the 2017
Cineworld Long-Term Incentive Plan
to Executive Directors in April 2020,
with vesting linked to a stretching EPS
target range set by the Committee.

2021 LTIP
It became clear, during the year, that
the highly unusual challenges facing
the Company required a new approach
to remuneration. The Chair of the
Board and I engaged with our largest
shareholders on a new and very simple
one-off Long-Term Incentive Plan
(the “2021 LTIP”).

The plan was approved at a General
Meeting in January 2021, supported by
a majority of 70.15% of votes. The plan
is simple, but reaching the targets will
not be easy. The performance period is
for three years, with a further two-year
holding period after that. More details
may be found on page 63. We of
course acknowledge that some
shareholders did not support the plan,
and we intend to continue our dialogue
with them over the coming months.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsActivities over the year
The Remuneration Committee met multiple times throughout 2020, including for its usual four scheduled meetings. At these
scheduled meetings, the activities of the Committees were as follows:

March
2020

May
2020

December
2020

✓

We intend to continue our dialogue with
shareholders on remuneration matters,
and we hope that investors will be able
to support the new Directors’
Remuneration Policy, and the
changes we have made.

Dean Moore
Chair of the Remuneration Committee
25 March 2021

Overall remuneration
Considering the remuneration arrangements across the Group

Annual bonus
Deciding the targets for the annual bonus scheme

Determining bonus payments to be awarded,
including for the wider workforce

LTIP
Making awards under the 2017 Long-Term Incentive Plan

Approving vesting of awards under the 2007 Performance Share Plan (“PSP”)

Governance
Reviewing the 2020 AGM voting figures and considering the views
of shareholders

Review and update of Committee terms of reference

Committee evaluation

Review of Directors’ Remuneration Report

Agreeing Forward-Looking Agenda

Review of Gender Pay reporting outcomes

Consideration of proposed revisions to the UK Corporate
Governance Code

Feb
2020

✓

− A two-year holding period in relation
to Long-Term Incentive Plan awards
has been formally incorporated into
the Policy.

− The shareholding guidelines have
been increased to 200% of salary
(from 150% of salary) for each
Executive Director. The Policy
also provides for post-cessation
shareholdings, in line with the
requirements of the UK Corporate
Governance Code.

− Malus and clawback have been

extended to apply to any element of
annual bonus awarded under the new
Policy and the “triggers” have been
aligned with the clawback “triggers”
agreed by shareholders when the
2021 Long-Term Incentive Plan
was approved.

− Additional flexibility has been

introduced within the Policy, to ensure
that the Remuneration Committee
can operate pay appropriately without
requiring additional formal approvals
for minor changes (for example,
the flexibility to apply different
performance measures under the
annual bonus in future years).

The Directors’ Remuneration
Policy – Summary of Changes
The Directors’ Remuneration Policy
was put to shareholders at the General
Meeting in January 2021 to allow our
shareholders to vote on both the 2021
LTIP and the Directors’ Remuneration
Policy, which had been updated to
include the new plan. At the time, we
confirmed that the Committee would
conduct a full review of the Policy to
take into account the requirements of
the 2018 UK Corporate Governance
Code, in readiness for the 2021 AGM.

We have therefore reviewed the Policy
in detail, and have made a number of
governance-related changes which are
summarised below:

− Executive Directors will receive a

pension contribution (or cash in lieu)
aligned with that of employees in their
country of residence. The CFO and
the CCO are both based in Israel and
their pension arrangements are
already aligned with those of
employees generally at 14.8% of
salary. Pension contributions for the
CEO and Deputy CEO, who are also
based in Israel, will be reduced to align
with this rate from 1 January 2023,
representing a 5% reduction
in entitlement.

− The Policy explicitly provides for

discretion to enable the Remuneration
Committee to override formulaic
outturns under the variable
pay arrangements.

Cineworld Group plc Annual Report and Accounts 2020DIRECTORS’ REMUNERATION REPORT CONTINUEDDirectors' Remuneration Policy Report

Introduction
This section describes the Committee’s
Policy on the remuneration of Executive
and Non-Executive Directors. The
Directors’ Remuneration Policy (the
“Policy”) will be put to shareholders for
approval at the Annual General Meeting
to be held on 12 May 2021. Following
approval at the Annual General Meeting,
remuneration payments and payment
for loss of office to Directors can only
be made if they are consistent with this
Policy or this Policy as amended with
the approval of shareholders.

The existing Policy, approved by
shareholders in January 2021, will
continue to apply until the revised Policy
is approved. In the Notice of Meeting for
the General Meeting held in January
2021, the Committee stated its intention
to seek approval for a new Directors’
Remuneration Policy at the 2021 AGM
to reflect the requirements of the UK
Corporate Governance Code and
certain other updates, including to

reflect the Company’s current Directors
and the existing employee share plans.

Policy overview
The objective of the Group’s
Remuneration Policy is that Executive
Directors should receive appropriate
remuneration for their performance,
responsibility, skills and experience.
Remuneration packages are designed
to enable the Group to attract and
retain key employees by ensuring they
are remunerated appropriately and
competitively, and that they are
motivated to achieve the highest level
of Group performance in line with the
best interests of shareholders. This is
balanced with the need to mitigate
risk and accordingly incentives are
structured to ensure that no Director
is encouraged to take inappropriate
risks because of the level of potential
variable rewards.

To determine the elements and level
of remuneration appropriate for each

Executive Director, the Committee
considers, when appropriate,
benchmark remuneration data for
selected comparable companies and
seeks to ensure that an appropriately
significant proportion of potential pay
is performance-related, and that total
pay opportunity is consistent with
appropriate superior levels of pay for
superior performance.

The policy of the Committee is to set
performance conditions for annual
bonuses and long-term incentives
which are appropriately stretching but
fair given the environment in which the
Group operates, taking into account
internal and external expectations.

The Board’s normal practice is to
operate within the above parameters.
It will also take account individual
circumstances and tailor
remuneration packages.

The Remuneration Committee does not currently consult with employees specifically to explain the alignment of executive
remuneration with wider company pay policy. During the year, the Committee considered its obligations under the UK
Corporate Governance Code and concluded that the previous Directors’ Remuneration Policy operated as intended during the
year and that remuneration outturns in the year were appropriate and reflective of Company performance and shareholders’
experience. The Remuneration Committee addressed the following factors when reviewing the Directors’ Remuneration Policy,
as set out in the UK Corporate Governance Code and, taking these into account, is of the opinion that the Policy will support
the Company’s strategy over the next three years:

Clarity

Simplicity

Risk

Predictability

Proportionality

The proposed Directors’ Remuneration Policy provides a clear link between pay and performance, with no
further long-term incentive awards anticipated to be granted under this Policy. The 2021 LTIP, under which
awards were granted in February 2021, is clear and provides a direct link between Executive Directors’
reward and the shareholder experience.

In a challenging external environment, share price was considered to be the simplest measure of overall
performance against which to base the Executive Directors’ primary element of variable pay, with no further
long-term incentive awards anticipated to Executive Directors in 2021, 2022 or 2023.

The level of stretch under the 2021 LTIP ensures that only exceptional performance can result in reward to our
Executive Directors. Share price, as a market measure, incorporates all areas of Cineworld’s performance and
provides a rounded assessment of the Company’s performance and future prospects.

Through the use of share price measures under the 2021 LTIP, performance outcomes are entirely formulaic.
In addition, a cap applies to outturns under the 2021 LTIP to avoid any unexpected outcomes. All elements
of variable pay are capped under the Policy.

A significant element of the Executive Directors’ total remuneration is directly linked to shareholders’
experience through the 2021 LTIP awards granted in February 2021. Exceptional share price growth must
be achieved for any vesting to occur under the 2021 LTIP, and potential reward is capped at a notional share
price of £3.80. The 2021 awards replace the PSP awards for the next three years.

Alignment to culture

Pay for performance is key to Cineworld’s remuneration strategy. Our philosophy on pay is to drive long-term
value creation and our Directors’ Remuneration Policy directly aligns our Executive Directors’ pay to this aim.

Changes to the remuneration policy
that were approved by shareholders
at the 2021 General Meeting (“GM”)
The Policy which was approved by
shareholders at the January 2021 GM
introduced the new long-term incentive
(the “2021 LTIP”), which seeks to reward
and incentivise the Executive Directors
and other senior executives in light of
the challenging market conditions

Cineworld faces globally. These awards
were granted on 8 February 2021 and,
consequently, no further awards under
the 2017 LTIP or the 2021 LTIP will
be granted to the current Executive
Directors under the revised Policy
in 2021, 2022 or 2023.

Proposed Policy
Set out below is a summary of the main
elements of the newly proposed Policy
for Directors, together with further
information on how these aspects of
remuneration are intended to operate.
The proposed changes are primarily to
reflect the new requirements of the UK
Corporate Governance Code.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsPolicy Table
Executive Directors’ remuneration currently comprises an annual salary, a performance-related bonus, participation in a
share-based incentive scheme, pension contributions and other benefits as explained below. Executive Directors who received
awards under the 2021 LTIP will not receive further long-term incentive awards in 2021, 2022 or 2023 under this Directors’
Remuneration Policy. A summary of the Policy changes being proposed may be found on page 58.

The table below summarises the Policy for each element of pay.

Our strategy

Provide the best cinema
experience – give our
customers a choice of how
to watch a movie, with a
range of retail offerings, all
underpinned by the best
customer service

Expand and enhance our
estate – to provide
consistent, high quality,
modern cinemas

Be technological leaders in
the industry – to offer the
latest audio and visual
technology

Drive value for shareholders
– by delivering our growth
plans in an efficient and
effective way

Element of reward

Purpose

Annual bonus

To incentivise the
annual delivery
of financial and
operational targets.

Base salary and
pension benefits

To provide a core level
of remuneration and
market competitive
benefits to enable
Cineworld to attract
and retain skilled, high
calibre executives to
deliver its strategy.

Long-Term
Incentive Plan

Shareholding
requirement

To provide alignment
between Executive
Directors
and shareholders.

To incentivise
sustainable profitability
over a period of time
aligned to the overall
objective of achieving
sustainable growth,
and to reward the
achievement of share
price increases over the
medium term.

Element and link
to strategy

Base salary

To provide a core
level of remuneration
to enable the
Company to attract
and retain skilled,
high calibre
executives to deliver
its strategy

Opportunity

Operation

Salaries may be adjusted and any
increase will ordinarily be (in
percentage terms) in line with
those across the Group, in
aggregate, allowing for location.

Percentage increases beyond
those granted to the wider
workforce may be awarded
in certain circumstances such
as where there is a change in
responsibility, progression in the
role, experience or a significant
increase in the scale of the role
and/or size, value and/or
complexity of the Group.

Executive Directors’ salary levels are agreed on joining and
thereafter reviewed annually, generally on 1 July each year.

The Committee considers both the nature and the status of the
Company’s operations and the responsibilities, skills, experience
and performance of each Executive Director. The Committee
compares the Group’s remuneration packages for its Executive
Directors and employees with those of Directors and
employees of similar seniority in companies whose activities
are comparable with the Group. The Committee also takes
into account the progress made by the Group, contractual
considerations and salary increases across the rest of
the Group.

Pension

To provide market
competitive
retirement benefits

Monthly employer contribution
up to 20% of basic salary or in the
form of a cash pension allowance.

All employees, including Executive Directors, are invited to
participate in a Group Personal Pension Plan which is a money
purchase plan. Bonuses are not pensionable.

Executive Directors will receive
a pension contribution (or cash
allowance) in line with the rate
offered to the majority of
employees in their country of
residence, with all incumbent
Executive Directors aligned
from 1 January 2023.

Executive Directors may choose to opt out of the Group
scheme and instead receive a cash pension allowance
equivalent to employer pension contribution.

The Company’s pension contribution may be conditional on
the Executive Director contributing a percentage of their base
salary to the pension scheme in line with general scheme
requirements. Executives may make pension contributions
under “salary sacrifice” arrangements. Savings as a result
of such an arrangement may be shared with the Executive
Director in the form of an additional pension contribution.

Cineworld Group plc Annual Report and Accounts 2020DIRECTORS’ REMUNERATION REPORT CONTINUED

Element and link
to strategy

Other benefits

Opportunity

Operation

To provide market
competitive benefits
and support the
health and safety
of individuals

The cost to the Group of
providing such benefits will vary
from year to year in accordance
with the cost of insuring
such benefits.

Benefits in kind for Executive Directors include but are not
limited to the provision of a company car or car allowance,
private mileage, life insurance, permanent health insurance,
private medical cover and a disturbance allowance.

Benefits are tailored to the individual circumstances of
Directors to ensure that overall packages are attractive and
additional benefits may be introduced where appropriate.
A limited flexible benefits scheme operates for all employees
(including Executive Directors) and the intention is to expand
it over a period of time.

The Remuneration Committee retains the flexibility to provide
certain relocation benefits to Executive Directors on a time-
limited basis, where required.

Annual bonus

To incentivise the
annual delivery
of financial and
operational targets

Maximum opportunity for
Executive Directors of 150%
of salary.

A majority of the annual bonus will normally be based on
financial performance measures, such as Adjusted EBITDA,
with personal or strategic measures applying to any balance.

For 2021, the bonus is based on a combination of performance
against the agreed financial budget and personal performance
targets. The Board and Remuneration Committee will review
the budget and targets as our cinemas reopen during 2021.
The weighting of these measures is circa 70% financial
performance and 30% personal performance.

The choice of these measures for 2021 reflects the Committee’s
belief that any incentive compensation should be tied both to
the overall performance of the Group and to those areas of the
business that the relevant individual can directly influence.

The performance measures and targets are reviewed annually
to ensure alignment to strategy. The measures and weightings
may vary in future years.

The Remuneration Committee retains the discretion to override
formulaic outturns under the Annual Bonus, if these are not
considered to be appropriate in the context of wider
Group performance.

The bonus will be paid in cash save for any bonus earned above
100% of salary which will be deferred into shares for a period of
two years. Dividends are paid on deferred shares in the normal
way, and there are no requirements for continued employment
in respect of deferred shares.

Where a Director leaves and is considered a good leaver, he/
she will be paid on the usual payment date a proportion of any
bonus entitlement, which would have otherwise accrued,
reflecting that part of the bonus period which was
actually worked.

Malus and clawback provisions apply.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements

Opportunity

Operation

Maximum opportunity for
Executive Directors of 200%
of base salary.

Annual awards of conditional shares or nil cost options are
made to Executive Directors and members of the Senior
Management Team at the discretion of the Committee.

No awards under the 2017 LTIP
will be made in 2021, 2022 or
2023 to Executive Directors who
participate in the 2021 LTIP.

Awards may vest after three years, subject to continuing
employment and the achievement of stretching three-year
EPS growth performance conditions. An additional two-year
post-vesting holding period applies to all grants made under
this plan from 2019 onwards.

The vesting of a majority of the awards will normally be
based on financial performance measures, such as EPS.
The Remuneration Committee may introduce non-financial
performance targets in the future.

Measures, weightings and targets will be reviewed and
calibrated annually to ensure they are sufficiently stretching in
light of both internal and external performance expectations.
Threshold performance is generally intended to align to the
performance of the relevant market and/or of competitors.
If the stretch performance level is achieved, it would be
expected that the Company would have significantly
outperformed the relevant market and/or competitors.

At the threshold performance level, up to 25% of an award will
vest. At the stretch level of performance, 100% of an award will
vest. Between these levels, vesting will be determined on a
straight-line basis.

On vesting, participants will also receive additional shares or
a cash sum equivalent to the dividends that would have been
paid on the vested shares in respect of dividend record dates
occurring between grant and vesting.

At the discretion of the Committee, each participant may have
a proportional part of their performance share award replaced
by an HMRC approved share option granted under the CSOP
schedule to the 2017 LTIP (“CSOP”), up to the maximum value
of options permitted by legislation (currently £30,000).
Such awards are subject to identical performance vesting
conditions as the performance shares they replace.

The conditions applicable to awards may be varied in
exceptional circumstances following the grant of an award so
as to achieve their original purpose, but not so as to make their
achievement any more or less difficult to satisfy. Awards may
also be adjusted to reflect corporate events, such as rights
issues, to maintain a holder’s position, but not so as to
enhance it.

The Remuneration Committee retains the discretion to override
formulaic outturns under the 2017 LTIP, if these are not
considered to be appropriate in the context of wider Group
performance. It is the Committee’s intention to settle awards in
shares, but the plan rules allow for flexibility to settle in cash if
required. Malus and clawback provisions apply.

Element and link
to strategy

2017 LTIP

To encourage
sustainable
profitability over
a period of time
aligned to the overall
objective of
achieving
sustainable growth

Cineworld Group plc Annual Report and Accounts 2020DIRECTORS’ REMUNERATION REPORT CONTINUEDElement and link
to strategy

2021 LTIP

To provide a long-
term performance
and retention
incentive for the
Executive Directors
and other senior
executives
involving the
Company’s shares

To link long-term
rewards to the
creation of long-
term sustainable
shareholder value by
way of delivering on
the Group’s agreed
strategic objectives

Opportunity

Operation

Maximum opportunity for each
of Moshe Greidinger and Israel
Greidinger is an award over 1.25%
of the issued share capital, and
for each of Nisan Cohen and
Renana Teperberg an award over
0.4% of the issued share capital.
Awards over a further 0.7%
of the issued share capital (in
aggregate) may be granted to
other senior executives who
participate in the 2021 LTIP.

Awards were granted under the
2021 LTIP in February 2021 and
it is not anticipated that further
awards would be made to
Executive Directors under
this plan.

Awards of nil cost options (or such other form of award as may
be granted to participants in overseas jurisdictions in order to
comply with local requirements) may be made to the Executive
Directors and other senior executives at the discretion of the
Committee. These awards shall replace awards to the Executive
Directors under the 2017 LTIP for 2021, 2022 and 2023.

Awards may vest after three years, subject to continuing
employment and the achievement of absolute share price
targets. Awards may continue to vest after cessation of
employment in certain scenarios as permitted by the plan rules.

If the performance conditions are achieved, awards will be
subject to a two-year post-vesting holding period.

The Committee will assess the performance targets after the
three-year performance period. Threshold performance is
generally intended to align to the performance of the relevant
market and/or of competitors. If the maximum performance
level is achieved, it would be expected that the Company would
have significantly outperformed the relevant market,
competitors and/or analyst forecasts.

At the threshold performance level, 25% of an award will vest.
At the maximum level of performance, 100% of an award will
vest. Between these levels, vesting will be determined on a
straight-line basis.

Participants will also receive additional shares or a cash sum
equivalent to the dividends that would have been paid on the
vested shares in respect of dividend record dates occurring
between grant and the release of the applicable holding period
or, if later, the date on which options are exercised.

The conditions applicable to awards may be varied in
exceptional circumstances following the grant of an award so
as to achieve their original purpose, but not so as to make their
achievement any more or less difficult to satisfy as compared
to the date of grant. Awards may also be adjusted to reflect
corporate events, such as rights issues, to maintain a holder’s
position, but not so as to enhance it.

The rules of the 2021 LTIP provide that the aggregate value
of shares delivered under the 2021 LTIP to any one participant
cannot exceed the GBP figure calculated by multiplying the
number of shares subject to an award at the date of grant
by £3.80. Any award that exceeds this limit will be reduced
accordingly, and the award will lapse as to the balance on
the vesting date. Malus and clawback provisions apply.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsOpportunity

Operation

Element and link
to strategy

Share Ownership Guidelines

To provide
alignment between
Executive Directors
and shareholders

N/A

Cineworld Group Sharesave Scheme

To enable Group
employees to
become Cineworld
shareholders,
encouraging
alignment and
rewarding for
Group performance

The maximum saving level is
aligned with that for all
employees and the limit under
legislation (currently £500
per month).

The Chair’s and the Non-Executive Directors’ fees

To attract and retain
high calibre Non-
Executive Directors

The Chair and the Non-Executive
Directors receive a fixed fee for
their services as members of the
Board and its Committees.

Non-Executive Directors do not
participate in the Company’s
share incentives or otherwise
receive performance-related pay
but may receive reimbursement
for travel and incidental costs
incurred in furtherance of
Company business.

Each Executive Director is expected to build up a shareholding
equal to 200% of their base salary.

In order to achieve this level of shareholding, Executive
Directors are expected to retain 50% of any shares they acquire
under the PSP/LTIP or on the exercise of options, after allowing
for the sale of shares to pay tax and other deductions, until
such time as they have built up such a holding.

For the purposes of these guidelines, only beneficially owned
shares will generally count towards the holding – however, the
Remuneration Committee retains discretion to determine
whether the requirement has been met in specific circumstances.

For newly appointed Executive Directors, the share ownership
requirements continue to operate in full for two years following
the cessation of employment. Incumbent Executive Directors
would be required to hold any vested shares awarded under
LTIPs and any unvested deferred bonus shares following the
cessation of employment, to the extent the applicable holding
periods existing within those schemes apply.

Executive Directors are eligible to participate in the Sharesave
Scheme, which is an HMRC approved scheme open to all
employees of nominated Group companies.

Under the Sharesave Scheme, employees are eligible to acquire
shares in the Company at a discount of up to 20% of the market
value at grant if they agree to enter into a savings contract for
a three-year period. Consistent with the relevant legislation,
no performance conditions apply.

Awards may also be adjusted to reflect corporate events, such
as rights issues, to maintain a holder’s position, but not so as
to enhance it.

This Policy also provides the ability for Executive Directors
to participate in any other all-employee plan which may be
introduced in future up to the limits which apply to
other employees.

The level of fees is determined by the Board after taking into
account appropriate advice (except in the case of the Chair
whose level of fee is determined by the Remuneration
Committee), in line with prevailing market conditions and at a
level that will attract individuals with the necessary experience
and ability to make a significant contribution to the
Company’s affairs.

No Director participates in discussions relating to the setting
of his or her own remuneration.

Fee levels are reviewed on an annual basis.

The Board may introduce additional fees for material
international travel if it believes that this is appropriate
to reflect the required time commitment.

The Chair and the Non-Executive Directors are entitled to
the reimbursement of reasonable business-related expenses
(including any tax payable thereon). They may also receive
limited travel or accommodation-related benefits in connection
with their role as a Director.

Cineworld Group plc Annual Report and Accounts 2020DIRECTORS’ REMUNERATION REPORT CONTINUEDMalus and clawback
Annual bonus
The Remuneration Committee reserves
the discretion to apply “malus” by
reducing or withholding annual bonus
payments from the formulaic outcome
(for example, in the event of
misstatement of financial results,
misconduct or inappropriate behaviour).
Following payment, the Committee will
retain the discretion to “claw back”
bonuses in the case of misconduct or
misstatement of financial results.

2017 Long-Term Incentive Plan
The rules of the 2017 LTIP include
“clawback” provisions that will apply to
Awards granted to Executive Directors
and may, if the Committee determines,
apply to any other Award other than an
option granted pursuant to the CSOP.

The provisions apply where it is found
(within two years of the vesting of an
Award) that there has been a material
misstatement in the financial results of
the Company and/or an act of gross
misconduct on the part of the Award
Holder (that takes place before the
vesting date of the Award but only comes
to light after the Award vests) and such
misstatement or gross misconduct has
resulted in an Award vesting to a greater
extent than it otherwise should have
done (“Excessive Award”).

In these circumstances, the Committee
may make reductions (up to the value of
the Excessive Award) to other Awards
held by the Award Holder in question
which would otherwise vest under the
2017 LTIP (including cash awards) and/
or require the Award holder in question
to pay an amount equal to the value of
the Excessive Award which has not
otherwise been recovered (after taking
into account any income tax and social
security paid by the Award holder in
relation to the Excessive Award).

2021 Long-Term Incentive Plan
The rules of the 2021 LTIP include
provisions under which the Committee
may, in its discretion, reduce an Award
(including to zero) or impose additional
conditions on an Award before it is
exercised (“malus”) and/or seek to
“claw back” some or all of any shares
following exercise of an Award.
The recovery period during which the
malus and clawback provisions may
be exercised will run for five years from
the date of grant of an award, or, if an
investigation into the conduct or actions
of any participant of any member of the
Group has started, such longer period
as the Committee may determine in
order to allow the investigation to
be completed.

The Committee may invoke these malus
and clawback provisions in certain
circumstances, including but not
limited to; a material misstatement in
the published results of any member
of the Group, an error in assessing the
performance targets or the number
of shares subject to an award, or the
assessment of the performance targets
and/or the number of shares subject to
an award being based on inaccurate or
misleading information and/or
misconduct on the part of the
participant concerned.

The Committee may require the
satisfaction of clawback in a number of
ways, including by way of reduction to
other Awards held by the Award Holder
in question under the 2021 LTIP and/or
any other employee share scheme
operated by the Company, or to require
the Award Holder to return some or all
of the shares acquired under the Award
and/or a requirement to make a cash
payment to the Company in respect
of the shares delivered.

Satisfaction of Share Options
and Share Awards
Awards under the 2021 LTIP, the 2017
LTIP, the PSP, the Sharesave Scheme
and the CSOP adopted by the Company
in 2010 (“2010 CSOP”) can be satisfied
using new issue shares, shares held in
treasury or shares purchased in the
market in conjunction with the
Cineworld Group Employee Benefit
Trust (the “Trust”), established by
the Company on 24 March 2006 with
independent trustees based in Jersey.

If new issue shares are used, the
following limits will be followed:

− In any ten-year period, the number of
shares which may be issued under the
2021 LTIP, the 2017 LTIP, the PSP and
under any other executive share or
option scheme established by the
Company, and operated on a
discretionary basis, may not exceed
5% of the issued ordinary share capital
of the Company from time to time.

− In any ten-year period, the number of
shares which may be issued under any
employees’ share or option scheme
established by the Company may not
exceed 10% of the issued ordinary
share capital of the Company from
time to time.

Resulting total pay levels under
different scenarios
The chart on the next page illustrates
how the potential future compensation
of the Executive Directors may vary at
different levels of performance and the
percentage each element may form

together with the possible total value.
While no awards are expected to be
made to the Executive Directors under
this Policy, we show for completeness
the potential value of the 2021 LTIP
awards which were granted in
February 2021.

For the purpose of this chart, the
following assumptions have been made:

− The base salary levels are those in
effect as at the date of the 2021
General Meeting. Bonus opportunity
and LTIP award levels are the
maximum levels set out in the Policy
Table above.

− Fixed elements comprise base salary,

pension and other benefits.

− Benefits levels are assumed to be the
same as in 2020 for each Executive
Director. Pension levels have been
assumed at the same percentage
of salary as in 2020.

− For target performance, assumptions
of bonus pay-out of 67% of maximum
and threshold vesting (25%) for LTIP
awards have been made.

− For maximum performance,

assumptions of bonus pay-out of
100% of maximum and maximum
vesting (100%) for LTIP awards have
been made. As the face value of
awards under the 2021 LTIP is
expressed as a fixed number of
shares, the illustrations below assume
the 2020 year-end closing share price
of 64.1p.

− No share price increase has

been assumed.

− The reporting regulations additionally
require companies to disclose the
level of remuneration receivable under
any long-term incentives assuming
share price appreciation of 50%.
Awards under the 2021 LTIP require
share price growth significantly above
50% in order to achieve the threshold
performance target of £1.30 (c.103%
growth based on the year-end share
price of 64.1 pence) and so no value
would be received under the 2021
LTIP for 50% growth. Growth of
c.196% would be required to achieve
the maximum performance target of
£1.90 and for the 2021 LTIP awards to
vest in full.

− In any event, the value of shares which
ultimately vest under the 2021 LTIP
will be capped at a notional share
price of £3.80 (double the share price
required to achieve the full vesting
target). To the extent that the share
price at vesting exceeds this cap, the
number of shares vesting will be
scaled back.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsCEO

Deputy CEO

12,755

12,422

86%

89%

12,755

12,422

4,187

66%

3,917

70%

791

15%

791

15%

650

13%

100%

19%

100%

17%

466
100%

86%

Minimum

89%

CFO

Minimum

On-Target

Maximum

Minimum

On-Target

Maximum

Minimum

CCO

4,187

66%

3,917

4,391

4,380

70%

80%

1,617

1,608

13%

17%

466
100%

54%

466
17%
100%
29%

54%

17%
29%

9%
11%

460
100%

55%

460
100%

17%
29%

55%

17%
29%

9%
11%

On-Target

Maximum

Minimum

On-Target

Maximum

Minimum

On-Target

Maximum

791

15%

791

15%

650

13%

100%

19%

100%

17%

Minimum

On-Target

Maximum

Minimum

On-Target

Salary shown in £000s

Salary, benefits & pension

Bonus

LTIP

Recruitment
Remuneration Policy
New Executive Directors will generally
be appointed on remuneration packages
with the same structure and elements
as described in the Policy Table above.
On appointment, base salary level will
be set taking into account a range of
factors including market levels,
experience, internal relativities and cost.
Annual bonus opportunity will be no
greater than 150% of salary and the
maximum performance share award
will be 200% of salary.

For external appointments, although
there are no plans to offer additional
benefits, cash and/or share-based
elements on recruitment, the Committee
reserves the right to do so when it
considers this to be in the best interests
of the Company and shareholders.
Such payments will take account of
4,391
remuneration relinquished when leaving
the former employer and, to the extent
possible, would reflect the nature, time
horizons and performance requirements
attaching to that remuneration.

4,391

4,380

80%

1,617

54%

466
100%

17%
29%

80%

1,617

80%
If it is necessary in the circumstances,
1,608
the Committee reserves the right to
offer a longer initial notice period than
55%
one year. In such a circumstance, this
9%
17%
would reduce to a notice period of at
29%
11%
most 12 months.
On-Target

460
100%

On-Target

Maximum

Minimum

17%
29%

9%
11%

54%

Minimum

On-Target

1,608

55%

17%
29%

9%
11%

On-Target

Maximum

Shareholders will be informed of
any Director appointment and the
individual’s remuneration arrangements
as soon as practicable following the
appointment via an announcement to
the regulatory news services and on
the Group’s website.

For an internal appointment, any
variable pay element awarded in respect
of the prior role may be allowed to pay
out according to its terms, adjusted
as relevant to take into account the
appointment. In addition, any other
ongoing remuneration obligations
existing prior to appointment
may continue.

Cineworld Group plc Annual Report and Accounts 2020DIRECTORS’ REMUNERATION REPORT CONTINUEDService contracts
The Group’s policy in entering into service contracts with Executive Directors is to enable the recruitment of high quality
executives and to obtain protection from their sudden departure, whether or not to competitor companies.

In addition, service contracts are an important element in maintaining protection for the Group’s business and its commercially
sensitive information.

A summary of the key terms of the Executive Directors’ service contracts is set out below:

Effective date
of contract

Notice period

Remuneration

Moshe Greidinger

Israel Greidinger

Nisan Cohen

Renana Teperberg

27 February 2014

11 January 2017

19 July 2018

12 months

Base salary

12 months

Base salary

12 months

Base salary

12 months

Base salary

Pension contribution

Company car or
car allowance

Entitlement to
participate in annual
bonus scheme

Disturbance allowance

Life assurance cover

Medical insurance

Permanent
health insurance

Termination

Non-competition

Company has right to
terminate on payment
on pre-agreed basis

During employment
and for
12 months thereafter

During employment
and for
6 months thereafter

(1 ) The Group’s policy is to have notice periods for Executive Directors which are between 6 and 12 months.

(2) In order to align with the Chief Executive Officer, the notice period for the Deputy Chief Executive Officer and Chief Financial Officer was increased to

12 months with effect from the date of the AGM in 2018.

The Executive Directors are, under the
terms of their service contracts, entitled
to an annual review of their base salary
each year.

Loss of Office Policy
The Company’s policy is to endeavour
to minimise any payment on early
termination by insisting on mitigation
of any loss where possible. To allow the
Company to terminate an Executive
Director’s employment contract legally
so it would not face a claim for wrongful
termination (although a claim for unfair
dismissal could still exist), its policy is to
pre-agree arrangements which would
apply on termination. Only the Company
has the right to trigger such
arrangements and it has complete
discretion as to whether it does.

Under the terms of their contracts, the
Company may, in lieu of giving notice,
terminate an Executive Director’s service
contract by making a payment
equivalent to 100% of base salary and
contractual benefits for the notice
period. In this event, the Executive

Director would not be entitled to any
bonus for the unworked portion of their
notice period, but would be eligible for
a pro rata bonus for the period up to the
date of the termination of their contract.

Where an Executive Director works their
notice, pension, benefits and bonus will
continue to accrue as normal up until
the date of the termination. Any bonus
entitlement will be paid as normal on
a pro-rated basis.

Leaving arrangements under the Share
and Share Option Schemes vary:

A. Under the Cineworld Group plc 2021
Long-Term Incentive Plan
An unvested award will lapse upon a
participant leaving the employment of
the Group unless the participant leaves
for a “permitted reason” or on their
death. A “permitted reason” is any of
injury, ill-health or disability (in each case
evidenced to the satisfaction of the
Committee), redundancy, the
participant’s employer company or the
business division in which the participant

works ceasing to be under the control of
the Company or any other reason as the
Remuneration Committee in its absolute
discretion otherwise determines.

Where a participant leaves for a
permitted reason or dies, an award
will (unless the Committee determines
otherwise) be reduced on a time-
apportioned basis, normally by reference
to the proportion of the performance
period during which the participant
was in employment. The financial
limit imposed under the plan for that
participant will also be reduced on the
same time-apportioned basis. The award
will then normally vest (to the extent the
performance conditions or any other
condition has been satisfied, measured
over the normal performance period)
and remain subject to any holding
period, as if the participant had not
ceased employment, unless the
Committee decides to measure the
performance condition and/or other
conditions over a shorter period and
to allow the award to vest following the
date of the participant’s cessation of

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statementsemployment and/or to release the award
from any holding period. Awards may
then be exercised for a period of
12 months (or such longer date as the
Committee may determine) from the end
of the normal vesting date or the date of
cessation of employment (or such other
date as the Committee may determine),
as applicable. If the Committee
determines that an award will vest
following the participant’s cessation of
employment, and if, as at such date, the
value of an Award (taking into account
the Company’s share price at the date of
cessation of employment), would exceed
the financial limit imposed under the plan
for that participant (as adjusted on a
time-apportioned basis), the award will
not vest in respect of such number of
options as are necessary to reduce the
total value of the award to the capped
figure. The proportion of the award
which does not vest will lapse
immediately. The Committee retains the
discretion to adjust the extent to which
an Award vests, taking into account the
underlying financial performance of the
Company and any other factors it
considers relevant.

If a participant dies, their award will
normally vest and be released on the
date of their death. Awards may then
be exercised for a period of 12 months
thereafter (or such longer period as
the Committee may determine).
The Committee retains the discretion
to adjust the extent to which an Award
vests, taking into account the underlying
financial performance of the Company
and any other factors it considers
relevant. If, at the date of death, the value
of an award (taking into account the
Company’s share price at the date of
death), would exceed the financial limit
imposed under the plan for that
participant (as adjusted on a time-
apportioned basis), the award will not
vest in respect of such number of options
as are necessary to reduce the total value
of the award to the capped figure. The
proportion of the award which does not
vest will lapse immediately.

If the participant ceases to be employed
within the Group as a result of the
company or business in which the
participant works being sold out of the
Group, the Committee may require that
an award is exchanged for an equivalent
award over shares in another company.

Awards that have already vested before
an Award Holder ceases to be employed
within the Group for any reason (other
than on summary dismissal), will be
retained by the participant. Vested
Awards may normally be exercised up
to 12 months from the date of cessation

of employment. In the event that a
participant dies holding a vested Award
it will normally be released on death (to
the extent the holding period still applies)
and may be exercised (to the extent not
already exercised) up to 12 months from
the date of death (or such longer period
as the Committee may decide).

In the event of a change of control,
scheme of arrangement or winding-up
of the Company all unvested awards will
immediately vest, all vested awards (to
the extent not exercised) and all shares
issued as a result of the exercise of an
award will be released (to the extent a
holding period still applies to the award).
Vested, unexercised Awards may then
be exercised for a period of one month,
after which they lapse. If the offer price
in connection with a change of control
of the Company exceeds £3.80, an
unvested Award will not vest in
connection with a change of control in
respect of such number of options as are
necessary to reduce the total value of the
Award to the GBP figure calculated by
multiplying the number of shares subject
to an Award at the date of grant by
£3.80. The proportion of the Award
which does not vest will lapse
immediately. Alternatively, with the
agreement of the acquiring company,
the participants may exchange their
awards for equivalent options to acquire
shares in the acquiring company or its
parent company.

B. Under the Cineworld Group plc 2017
Long-Term Incentive Plan
An award will normally lapse upon
a participant leaving the employment
of the Group unless the participant is
a “good leaver” (including death, injury,
ill-health or disability and redundancy)
or the Remuneration Committee
in its absolute discretion otherwise
determines. Any such discretion would
only be applied by the Committee where
it considers that continued participation
is justified by reference to past
performance to the date of leaving or
because of prevailing circumstances.
In such cases, the award would generally
become exercisable on the original
vesting date on a reduced basis taking
into account only that part of the
three-year performance period which
has elapsed and subject to the
satisfaction of performance conditions
unless the Remuneration Committee
determines other arrangements are
justified. In the case of death, options
will remain exercisable for a period of
12 months following the date of death.
Options that have already vested before
an Award holder ceases to be employed
by the Company or by one of its
subsidiaries but which have not yet been

exercised at the time that the Award
holder ceases to be so employed (for
whatever reason), will remain capable
of exercise in accordance with the rules
of the 2017 LTIP.

In the event of a change of control,
scheme of arrangement or winding-up
of the Company all awards will vest to
the extent that any performance targets
have, in the opinion of the Remuneration
Committee, been satisfied at that time,
on a reduced basis taking into account
only that part of the three-year
performance period which has elapsed
unless the Remuneration Committee
in its absolute discretion otherwise
determines. Alternatively, with the
agreement of the acquiring company,
the participants may exchange their
awards for equivalent options to acquire
shares in the acquiring company or its
parent company.

C. Under the PSP
An award will normally lapse upon
a participant leaving the employment
of the Group due to resignation or
“for≈cause”. If a participant leaves
employment for any other reason,
the award would generally become
exercisable on the original vesting date
on a reduced basis taking into account
only that part of the three-year
performance period which has elapsed
and subject to the satisfaction of
performance conditions unless the
Remuneration Committee determines
other arrangements are justified.

In the event of a change of control,
scheme of arrangement or winding-up
of the Company all awards will vest to
the extent that any performance targets
have, in the opinion of the Remuneration
Committee, been satisfied at that time,
on a reduced basis taking into account
only that part of the three-year
performance period which has elapsed
unless the Remuneration Committee in
its absolute discretion otherwise
determines. An award, to the extent it
becomes exercisable, may be exercised
during the period of one month after
which, to the extent unexercised, the
award will lapse. Alternatively, with the
agreement of the acquiring company, the
participants may exchange their awards
for equivalent options to acquire shares
in the acquiring company or its
parent company.

D. Under the CSOP
An option will normally lapse upon
a participant leaving the employment
of the Group. However, if a participant
leaves the Group by reason of death,
injury, ill-health, disability, redundancy,
retirement or any other reason as

Cineworld Group plc Annual Report and Accounts 2020DIRECTORS’ REMUNERATION REPORT CONTINUEDdetermined by the Remuneration
Committee or if the company or business
for which he or she works ceases to be
part of the Group, then unless the
Remuneration Committee in its absolute
discretion otherwise determines, his
option will become exercisable on the
original vesting date on a reduced basis
taking into account only that part of the
three-year performance period which
has elapsed. An option, to the extent it
becomes exercisable, may be exercised
during the period of six months after
which, to the extent unexercised, the
option shall lapse automatically.

In the event of a change of control,
scheme of arrangement or winding-up
of the Company all options will vest to
the extent that any performance targets
have, in the opinion of the Remuneration
Committee, been satisfied at that time,
on a reduced basis taking into account
only that part of the three-year
performance period which has elapsed
unless the Remuneration Committee
in its absolute discretion otherwise
determines. Such options become
exercisable for a limited period of time.
Alternatively, in the case of a takeover,
with the agreement of the acquiring
company, the participants may exchange
their options for equivalent options to
acquire shares in the acquiring company
or its parent company.

E. Under the Sharesave Scheme
An option granted may normally not
be exercised until the option holder has
completed their savings contract and
then not more than six months thereafter.
However, if a participant leaves the
Group by reason of death, injury,
ill-health, disability, redundancy,
retirement (on reaching 60 years or
any other contractual retirement age),
or if the company or business for which
he or she works ceases to be part of
the Group, the option will become
exercisable. An option, to the extent it
becomes exercisable, may be exercised
during the period of six months
(12 months in the case of death) after
which, to the extent unexercised, the
option will lapse automatically.

In the event of a change of control,
scheme of arrangement and/or a
winding-up of the Company, options
may be exercised for a limited period
of time. Alternatively, in the case of a
takeover, with the agreement of the
acquiring company, the participants may
exchange their options for equivalent
options to acquire shares in the acquiring
company or its parent company.

Non-Executive Directors
Letters of appointment
The dates of appointment of the Non-Executive Directors and their notice periods
are as follows:

Date of appointment

Notice period

26 May 2015

27 February 2014

19 July 2018

1 August 2020

11 January 2017

2 July 2010

27 February 2014

1 month

Where the Company’s pay policy for
Directors differs from its pay policies
for the wider workforce, this reflects the
appropriate market rate position and/or
typical practice for the relevant roles,
and the Executive Directors’ role in
broader strategy and value creation.

Consideration of shareholder
views in developing policy
The Committee will continue to engage
and communicate with shareholders as
appropriate regarding the Policy and
take suitable action when required.

Non-Executive Director

Alicja Kornasiewicz

Arni Samuelsson

Camela Galano

Damian Sanders

Dean Moore

Rick Senat

Scott Rosenblum

The Non-Executive Directors, including
the Chair, do not have service contracts
with the Company. The terms and
conditions of their appointment as
Non-Executive Directors are set out
in letters of appointment, which are
subject to the provisions of the Articles
of Association.

It is the Board’s policy that the
appointment of each Non-Executive
Director is terminable on a short notice
unless their appointment is terminated
by a resolution of the shareholders in
general meeting or if they fail to be
re-elected by shareholders in general
meeting when it aims to ensure no
notice is necessary.

Where a Non-Executive Director does
not serve until the end of his or her term,
the policy is to pay the fees due pro rata
to the date of cessation.

Consideration of wider
employee pay
Each year, prior to reviewing the
remuneration of the Executive Directors
and the members of the Executive
Team, the Remuneration Committee
takes into account average levels of
salary increases awarded to employees
generally. Salary increases will
normally be broadly in line with those
for other employees.

While the Company does not formally
consult employees in relation to the
remuneration policy, thorough
consideration is given to the wider
employee workforce when setting
executive pay and ensuring appropriate
alignment with executives. In addition,
the Company regularly carries out
engagement surveys which enable
employees to share their views
with Management.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsAnnual Report on Remuneration

Remuneration for 2020
This section covers the reporting period from 1 January 2020 to 31 December 2020 and provides details of the implementation
of the Company’s Remuneration Policy during the period.

Single Total Figure Table (audited information)
The table below gives a single figure for the total remuneration and breakdown for each Executive and Non-Executive Director
in respect of the 2020 financial year. Comparative figures for the 2019 financial year have also been provided.

Financial
year

Base salary
and fees
£000

Benefits(1)
£000

Annual
bonus
£000

PSP(2)

£000

Pension
£000

Total
fixed
pay

Total
variable
pay

Total(6)
£000

Executive Directors
Moshe Greidinger

Israel Greidinger

Nisan Cohen

Renana Teperberg

Non-Executive Directors
Alicja Kornasiewicz(4)

Anthony Bloom(9)

Arni Samuelsson

Camela Galano

Damian Sanders(3)

Dean Moore(7)

Helen Weir(5)

Rick Senat(8)

Scott Rosenblum

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

643

638

515

511

405

400

193

129

215

–

100

–

519

–

416

–

220

–

220

–

373

–

254

–

791

795

650

661

466

460

463

193

129

215

–

100

–

892

–

670

–

297

–

297

–

791

1,687

650

1,331

466

757

460

760

193

129

215

–

100

( 1 ) See page 71 for details of the benefits provided to the Executive Directors.

(2) As the performance targets were not met, no options for Executive Directors will vest in 2021.

(3) Damian Sanders was appointed to the Board on 1 August 2020. Figures in respect of Damian's 2020 remuneration reflect the portion of the year

for which Damian was a Director.

(4) Alicja Kornasiewicz was appointed Chair of the Board and Chair of the Nomination Committee on 13 May 2020. Alicja stepped down from her position

as Chair of the Remuneration Committee on 13 May 2020. The change in remuneration since 2019 reflects her changed appointments.

(5) Helen Weir stepped down from the Board on 13 May 2020. Figures in respect of Helen’s 2020 remuneration reflect the portion of the year for which

Helen was a Director.

(6) Includes amounts in respect of salary, fees, pension and benefits that were deferred for payment at a later date. See page 71 for details. A total

of £1,118,395 is currently owed to the Directors, and will be paid at a later date.

(7) Dean Moore was appointed as Remuneration Committee Chair on 13 May 2020 and as the NED designated for Employee matters with effect from

1 January 2020, both of which account for the increase in his remuneration.

(8) Rick stepped down as Chair of the Nomination Committee on 13 May 2020, which is reflected in the decrease in remuneration.

(9) Anthony Bloom stepped down from the Board on 13 May 2020. Figures in respect of Anthony’s 2020 remuneration reflect the portion of the year

for which Anthony was a Director.

Cineworld Group plc Annual Report and Accounts 2020DIRECTORS’ REMUNERATION REPORT CONTINUEDBase salary (audited information)
The base salaries of the Executive Directors are usually reviewed on an annual basis. As described in the Policy, the Committee
compares the Group’s remuneration packages for its Executive Directors and employees with those for Directors and
employees of similar seniority in companies whose activities are broadly comparable with those of the Group. It also takes
into account the progress made by the Group, contractual considerations, and salary increases across the rest of the Group.

In 2020, there were no salary increases for the Executive Directors.

Salary levels as at the end of the financial period were:

Moshe Greidinger

Israel Greidinger

Nisan Cohen

Renana Teperberg

£645,750

£517,625

£404,875

Part of Moshe Greidinger’s, Israel Greidinger’s, and Nisan Cohen’s salaries are paid in Israel to enable social security and
government healthcare deductions to be made.

Salary and Fee Deferrals in 2020
For the months of April 2020 to July 2020, the Executive Directors and the Non-Executive Directors deferred 100% of their
salary/fees (other than a minimal payment required by law in Israel). Such deferrals were volunteered by the Directors to
mitigate the severe impact of COVID-19 on the business, and to assist with cash flow. A total of £1,118,395 is currently owed
to the Directors, and will be paid at a later date.

Pension (audited information)
Executive Directors are invited to participate in a Group Personal Pension Plan, which is a money purchase plan, or alternatively
may receive a pension allowance in cash. The Executive Directors have elected not to participate in this scheme and instead
receive a cash pension allowance. For 2020 the cash pension allowance entitlement was up to 20% of salary for the CEO and
Deputy CEO, and up to 14.8% of salary for the CFO and CCO. Certain of these amounts due in 2020, and included in the Single
Total Figure Table, were also deferred for payment at a later point. See above for details. No Executive Director has a
prospective entitlement to a defined benefit plan.

Company pension contributions/allowances for the period were:

Moshe Greidinger

Israel Greidinger

Nisan Cohen

Renana Teperberg

£000

£93

£68

£60

Other benefits (audited information)
Benefits in kind for Executive Directors comprised the provision of a company car or car allowance, private mileage, life
insurance, permanent health insurance and private medical cover.

Benefit

Car/car allowance

Permanent health insurance/private medical cover

Life assurance

Disturbance allowance

Moshe
Greidinger

Israel
Greidinger

Nisan
Cohen

Renana
Teperberg

£14,000

–

£1,336

£12,537

£1,210

£40,000

–

Israel Greidinger and Moshe Greidinger both received a disturbance allowance of £40,000 for the period as, under the terms
of their employment contracts, they are required to spend a sufficient and proportionate amount of time at different locations
across the Group. Certain of these amounts due in 2020, and included in the Single Total Figure Table, were also deferred for
payment at a later point.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsAnnual bonus (audited information)
Annual bonus opportunity for the Executive Directors in the year was 150% of base salary for the CEO and Deputy CEO and
100% of base salary for the CFO and CCO. As described further below no bonus will be payable for the 2020 financial year, due
to the impact of the COVID-19 global pandemic. The Committee believes this is the right outcome for 2020, notwithstanding
the exceptional and highly rated performance of the Executive Directors.

Under the Policy, two thirds of the annual bonus for the year was determined by a matrix of Adjusted EBITDA compared to
budget, and the achievement of specified individual objectives. None of this element is payable if a minimum of 90% of
budgeted Adjusted EBITDA is achieved. This element of annual bonus is payable in full only if 110% of budgeted Adjusted
EBITDA has been met and performance against personal objectives has been exceptional. The choice of performance measures
reflects the Committee’s belief that variable compensation should be tied both to the overall performance of the Group and
to those areas for which the individual has clear accountability. The weighting between the Group’s financial performance and
personal performance for this element of the annual bonus was 80% and 20%, respectively.

As the threshold for Adjusted EBITDA performance was not achieved in 2020, as a result the impact of the global pandemic,
which had a severe effect on the business, none of the Adjusted EBITDA performance or personal objectives elements will
pay out.

The remaining third of the annual bonus for the year was to be determined based on the delivery of synergy benefits as a result
of the proposed Cineplex acquisition, measured through the Adjusted EBITDA synergies delivered during 2020. On 12 June
2020, Cineworld announced that the acquisition would not proceed and so none of this element of the bonus is payable.

In light of the financial performance in the year and the interests of our stakeholders and, especially, our employees, the
Remuneration Committee believes this is the right outcome for 2020.

2020 annual bonus outcome

Moshe Greidinger

Israel Greidinger

Nisan Cohen

Renana Teperberg

Adjusted EBITDA
performance

The budgeted
Adjusted
EBITDA bonus
threshold was
not met

Threshold bonus
opportunity
(£000)

Maximum bonus
opportunity
(£000)

% of maximum

196

157

969

776

405

% of
salary

Bonus paid

£000

–

The Cineworld Group 2017 Long Term Incentive Plan (“2017 LTIP”) (audited information)
Awards vesting following the end of the performance period ending 31 December 2020
Awards under the 2017 LTIP made in April 2018 were due to vest on 23 April 2021. As set out in note 7 to the financial
statements, the Group reported negative Adjusted Diluted EPS for the year. As a result, the minimum threshold for vesting was
not met, and so none of the awards granted in 2018 to the Executive Directors will vest. The performance condition that applied
to these awards is summarised below:

EPS growth performance

Less than 8% p.a.

8% p.a.

15% p.a.

Between 8% and 15% p.a.

Vesting level

Nil

25%

100%

Straight–line basis

Cineworld Group plc Annual Report and Accounts 2020DIRECTORS’ REMUNERATION REPORT CONTINUEDAwards made in the year (audited information)
Awards were made to the Executive Directors under the 2017 LTIP on 14 April 2020. The vesting of these awards will be based
on Cineworld’s three-year EPS growth performance, as summarised in the table below:

EPS growth performance

Less than 8% p.a.

8% p.a.

15% p.a.

Between 8% and 15% p.a.

Vesting level

Nil

25%

100%

Straight–line basis

The number and value of share options under the PSP/LTIP which were awarded to the Executive Directors and vested during
the period are set out on page 78 of this report.

Non-Executive Directors’ fees
The table below sets out the fees payable to Non-Executive Directors:

Position held

Chair
Deputy Chair(1)

Senior Independent Director

Non-Executive Director (base fee)

Audit Committee Chair

Remuneration Committee Chair

Nomination Committee Chair

Employee Representative

Committee member

Fees as at 31 December 2020

£215,000 p.a.

£118,000 p.a.

£10,000 p.a.

£57,500 p.a.

£20,000 p.a.

£10,000 p.a.

£Nil

(1 ) The role of Deputy Chair was created on 17 January 2019, when Alicja Kornasiewicz was appointed as Deputy Chair. On 13 May 2020, Alicja became

Chair of the Company following the stepping down of Anthony Bloom.

The Non-Executive Directors do not receive any share options, bonuses or other performance-related payments, nor do they
receive any pension entitlement or other benefits apart from expenses in relation to travel costs to attend Cineworld Board
meetings, including related sustenance and accommodation.

Loss of office payments (audited information)
There were no loss of office payments during the financial year.

Payments to past Directors (audited information)
There were no payments made to past Directors in 2020.

External appointments
None of the Executive Directors receive any fees in relation to external non-executive roles (as set out in their biographies on
pages 35 to 37).

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsDirectors’ shareholdings at 31 December 2020 (audited information)
The interests of Directors and their connected persons in ordinary shares as at 31 December 2020, including any interests in
shares and share options provisionally granted under the PSP, 2017 LTIP or 2021 LTIP, are presented below.

Executive Directors

Moshe Greidinger

Israel Greidinger

Nisan Cohen

Renana Teperberg

Non-Executive Directors
Camela Galano

Alicja Kornasiewicz

Dean Moore

Scott Rosenblum

Arni Samuelsson

Damian Sanders

Rick Senat

Ordinary shares at
31 December 2020

Ordinary shares at
23 March 2021

277,033,678(2)
276,620,443(2)

99,549

143,814

10,000

135,000

15,000

100,000

9,500

57,942

699,862

99,549]

143,814

10,000

135,000

15,000

100,000

9,500

57,942

699,862

Share options subject to
performance
conditions at
31 December 2020(1)

Share options subject to
performance
conditions at
23 March 2021

2,580,985

2,068,884

1,213,677

19,743,985(3)
19,231,884(3)
6,705,677(3)
6,705,677(3)

–

(1 ) Relates to unvested awards under the 2017 LTIP. This figure includes awards made in 2018, 2019 and 2020 as the vesting date of the 2018 awards

described above is not until 23 April 2021.

(2) At 31 December 2020, Global City Holdings B.V. (“GCH”) held 274,720,505 shares with a further 1,000,000 shares held by Global City Theatres B.V.,

a wholly owned subsidiary of GCH. Shares in GCH are held in trust for the benefit of the children of Moshe Greidinger and Israel Greidinger.

(3) This includes options awarded to the Executive Directors under the 2021 LTIP. More details can be found on page 78.

There are currently no vested but unexercised share options in respect of the Executive Directors and, other than as set out
in the table above, there were no other changes in share interests of any of the Directors after the year-end.

As described in the current Policy, each Executive Director is expected to build up, over a period of time, a holding in shares
equal to 150% of their base salary. Under the newly proposed Policy, this level will be raised to 200% of salary.

Executive Directors

Moshe Greidinger

Israel Greidinger

Nisan Cohen

Renana Teperberg

Shareholding
guidelines
(% of 2020
salary)

Shares owned
outright (at 31
December 2019)

Shares owned
outright (at
31 December
2020)

Current
shareholding (% of
salary as at
31 December
2020)

150%

1,015,168

696,754

38,230

82,495

1,313,173

899,938

99,549

143,814

130%

111%

16%

23%

Guidelines met

Building

In prior years, the shareholdings of Moshe Greidinger and Israel Greidinger have been sufficient to exceed the shareholding
guideline of 150% of salary. However, despite acquiring additional shares in the year through the vesting of PSP awards, the
extreme share price movements of 2020 have meant that the guideline was not met at the end of 2020. The share price used
for the purposes of this calculation was the share price at the 2020 year end.

Cineworld Group plc Annual Report and Accounts 2020DIRECTORS’ REMUNERATION REPORT CONTINUEDTen-year Total Shareholder Return performance and CEO pay
The graph below compares the Company’s Total Shareholder Return performance against the FTSE 250 and FTSE All-Share
Travel & Leisure indices over the past ten financial years. The Remuneration Committee believes these to be the most
appropriate comparators as Cineworld is a member of both indices.

)
0
0
1
o
t
d
e
s
a
b
e
r
(
n
r
u
t
e
R
r
e
d
o
h
e
r
a
h
S

a
t
o
T

500

400

300

200

100

Dec
2010

Dec
2011

Dec
2012

Dec
2013

Dec
2014

Dec
2015

Dec
2016

Dec
2017

Dec
2018

Dec
2019

Dec
2020

Cineworld

FTSE 250

FTSE All-Share Travel & Leisure

Financial year

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

CEO single
figure of total
remuneration
£000(1)

Bonus as
proportion of
maximum
opportunity

LTI vesting as
proportion of
maximum
opportunity

£791

£2,109

£2,756

£2,346
£2,973(2)

£1,213

£1,440

£1,326

£1,258

£1,252

54%

91%

79%

87%

76%

41%

60%

68%

100%

– (3)

100%

81%

99%

100%

(1 ) Up to 2013 these figures solely relate to Stephen Wiener who was CEO up to and including 27 February 2014. For 2014, it represents a combination of

two months of Stephen Wiener and ten months of Moshe Greidinger who both held the office of CEO during 2014.

(2) The increase in the CEO single figure between 2015 and 2016 primarily relates to the first vesting of a PSP award to the CEO since appointment.

The value of this award vesting increased due to the significant increase in the Company’s share price over the vesting period.

(3) Moshe Greidinger, CEO, did not have an LTIP which vested in this year. For those who did, the proportion was 100%.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements

Percentage increase in directors’ remuneration
The percentage changes in the value of salary, non-pension benefits and bonus between 2019 and 2020 for the Directors and
employees generally are set out in the table below:

Employees(1):
Executive Directors:
Moshe Greidinger

Israel Greidinger

Nisan Cohen

Renana Teperberg

Non-Executive Directors:
Alicja Kornasiewicz

Anthony Bloom

Arni Samuelsson

Camela Galano

Damian Sanders

Dean Moore

Rick Senat

Scott Rosenblum

Helen Weir

Base salary
and fees

63.04%(2)

38.46%(2)
(12.80%)(2)

Non-
Pension
benefits

Annual
bonus

0% (100%)

(4.21%) (100%)

(20.95%) (100%)

100% (100%)

(100%) (100%)

–

(1 ) The figures reflect increases for UK- and US-based salaried employees excluding the Senior Management group and employees employed on an hourly

rate basis. This group has been selected as being reflective of the jurisdictions in which the CEO spends a significant amount of his time.

(2) Alicja Kornasiewicz’s fees increased with effect from 13 May 2020 on her appointment as Chair of the Company. Rick Senat’s fees decreased with effect
from 13 May 2020 when he stepped down as Chair of the Nomination Committee. Dean Moore’s fees increased with effect from 1 January 2020 in
relation to his role as Employee Representative, and again on 13 May 2020 following his appointment as Chair of the Remuneration Committee.

Relative importance of spend on pay

The table below shows figures for people costs, shareholder dividends and a number of other significant distributions of
turnover that the Committee considers to be relevant in order to provide context to the relative importance of pay spend:

Directors’ remuneration costs(1)

Staff and employee costs

Corporation tax (paid)/received

Dividends paid

Retained earnings

2020

£3.0m

$244.1m

$6.2m

$51.4m

$(57.5)m

2019

£6.1m

$555.0m

$(108.1)m

$520.2m

$2,645.2m

% change

(51%)

(56%)

(106%)

(90%)

(102%)

Figures in the table above are set out in USD to align with the figures as stated in the financial statements, except for the
Directors’ Remuneration figures, which are set out in sterling to align with the figures contained in the Single Total Figure Table
on page 70.

Shareholder voting results from 2020 AGM
The Directors’ Annual Report on Remuneration was subject to a shareholder vote at the AGM on 13 May 2020, the results of
which were as follows:

Remuneration Report

For

Discretionary

Against

Total votes cast
Votes withheld(1)

(1) A vote withheld is not counted as a vote in law.

Number of votes

%
of votes cast

968,054,069

93.40%

184,088

68,295,101

1,036,533,258

43,030

0.01%

6.59%

100%

–

Cineworld Group plc Annual Report and Accounts 2020DIRECTORS’ REMUNERATION REPORT CONTINUEDShareholder voting results in respect of Remuneration Policy
The Remuneration Policy was subject to a shareholder vote at the GM on 25 January 2021, the results of which were as follows:

Remuneration Policy

For

Discretionary

Against

Total votes cast
Votes withheld(1)

Number of votes

%
of votes cast

632,316,759

4,769,191

282,835,313

919,921,263

168,554

68.73

0.52

30.75

100

–

(1 ) A vote withheld is not counted as a vote in law.

CEO to UK employee pay ratio
The table below presents the Company’s CEO to UK worker pay ratio. The ratios compare the unadjusted single total figure
of remuneration of the CEO with the equivalent figures for the lower quartile (P 25), median quartile (P 50) and upper quartile
(P 75) of all UK employees of the Group. The reporting will build up over time to show a rolling ten-year period.

Because a significant number of Cineworld’s UK employees were furloughed at 5 April 2020 (the snapshot date for our Gender
Pay Gap report), the Remuneration Committee did not believe Option B would result in a representative sample of Cineworld’s
employees. Instead, the calculation methodology used reflects Option C, adding back furloughed employees into the Gender
Pay Gap reporting sample on a full-time equivalent basis. This option builds upon data analysed within our Gender Pay Gap
report, with employees at the three quartiles identified from this analysis and their respective single figure values calculated.
This option was chosen as it represents the most consistent approach with the previous year. To ensure the identified
employees were representative, the total remuneration for a group of individuals above and below the identified employee
at each quartile within the Gender Pay Gap analysis were also reviewed.

Year

2020

2019

Method

P 25 pay ratio

P 50 pay ratio

P 75 pay ratio

Option C(1)

Option B

47: 1

95: 1

45: 1

91: 1

41: 1

80: 1

(1 ) Option C is considered to be the most consistent methodology to that used in 2019.

In order to calculate the base salary component for the representative employees, the hourly rate of pay was multiplied to arrive
at a full-time equivalent rate. Note that the pension rate available to the majority of the UK workforce (4%) was applied to the
full-time equivalent base salary rate for each representative employee. The base salary and total pay and benefits for each of
the representative employees are presented in the table below. No element of pay was omitted from the calculation.

Component

Base salary

Total pay and benefits

P 25 pay ratio

P 50 pay ratio

P 75 pay ratio

£16,185

£16,832

£17,004

£17,714

£18,584

£19,327

The Committee has reviewed the ratios and pay data for the individuals identified at each of the relevant quartiles and believes
they are a fair reflection of the Company’s wider pay, reward and progression policies of the UK workforce. The pay ratio results
reflect the impact of the vesting of annual and long-term incentives which make up a higher proportion of the Chief Executive
Officer’s total remuneration; the lower ratios in 2020 than in 2019 are primarily driven by the lack of annual bonus or long-term
incentive being paid in the year. It should be noted that the calculation is based solely on the UK workforce and hence the ratios
will not be representative of the Group as a whole. The UK workforce accounts for approximately 20% of the Group’s total
headcount and a proportion of the SMT are based outside the UK. Employees have been included on a full-time equivalent
basis, excluding the impact of furlough. This was considered by the Remuneration Committee to be the most consistent basis
for calculating the CEO pay ratio in order to allow for year-on-year comparison.

Cineworld has a range of policies and practices to ensure that employees are fairly rewarded for the work they undertake.
These include offering a valued total reward package that includes an all-employee bonus scheme that allows employees to
share in the success of the Group. We also operate a robust approach to salary management that is underpinned by market
benchmarking to ensure we offer competitive and fair rates of pay across all the different markets in which we operate.

Share and Share Option Awards granted and vesting during the year (audited information)
Awards or grants were made under the Company’s Share and Share Option Schemes as follows:

2017 LTIP: Awards consisting of nil cost options over shares were granted to the CEO, Deputy CEO, CFO and CCO equivalent
in value to 200%, 200%, 150% and 150% of their base salaries (as at 1 March 2020) respectively on 14 April 2020 which will
become exercisable after three years. Details of the awards are set out below. Awards are subject to continued employment
and the achievement of the performance conditions as set out on page 72.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsCineworld Group Performance Share Plan and 2017 Long Term Incentive Plan (audited information)
Details of awards made and vesting during the period are set out below. All figures have been adjusted for the February 2018
rights issue where applicable:

Name of Director

At 1
January
2020

Awarded
during

year(4),(5)

Vested
during
year

Exercised
during
year

Lapsed
during
year

At
31 December
2020

Exercise
price

Market value
at date of
exercise(1)

Exercise

period(2)

Gain(3)

Moshe Greidinger

1,206,929

1,672,061

298,005

Israel Greidinger

931,766 1,340,302

203,184

Nisan Cohen

488,730

786,266

Renana Teperberg 488,730

786,266

61,319

–

2,580,985

2,068,884

1,213,677

£Nil

£0.614 6 months £325,834

£0.614 6 months

£222,158

£0.614 6 months

£67,045

£0.614 6 months

£67,045

(1 ) This was the price per share received in respect of those shares which were sold.

(2) Subject to satisfaction of the relevant performance conditions (details of which, for the awards made in 2020, are set out on page 72).

(3) The gain has been calculated using the realised share price on the date of exercising and includes payment of a cash sum equivalent to the dividends

that would have been paid on the vested shares in respect of dividend record dates occurring between grant and vesting. The dividend equivalent
payments amounted to £142,873.33 for Moshe Greidinger, £97,413.06 for Israel Greidinger, £29,398.27 for Nisan Cohen, and £29,398.27 for
Renana Teperberg.

(4) Mid-market closing price of a Cineworld Group plc share on 14 April 2020 was £0.63 (award levels were based on the closing share price on 9 April
2020, being £0.7724). The face value of the awards to Israel Greidinger, Moshe Greidinger, Nisan Cohen and Renana Teperberg were £1,291,500,
£1,035,250, £607,312 and £607,312, respectively. All awards were granted as nil cost options. Threshold vesting is 25% of maximum.

Share and Share Options awards granted after the year end
Awards were granted on 8 February 2021 under the 2021 LTIP, as approved by shareholders at the January 2021 General
Meeting, which will vest after three years, subject to the achievement of applicable performance targets. A further two-year
post-vesting holding period will apply on any vesting shares. Awards were granted over 1.25% of the issued share capital to
each of Moshe Greidinger and Israel Greidinger and 0.4% of the issued share capital to each of Nisan Cohen and Renana
Teperberg. Details of the awards are set out below. Awards are subject to continued employment and the achievement of
the performance conditions as set out below.

Cineworld Group 2021 Long-Term Incentive Plan
Details of awards made on 8 February 2021 are set out below:

Name of Director

Moshe Greidinger

Israel Greidinger

Nisan Cohen

Renana Teperberg

Awards will vest subject to the share price targets set out below:

Target share price(1)

£1.30

£1.50

£1.70

£1.90

Awarded

17,163,000

5,492,000

Exercise
price

£Nil

Vesting
date

8 February 2024

Vesting(2)

(Threshold) 25%

50%

75%

(Maximum) 100%

(1 ) Target share price means the average share price over a three-month period ending on the last business day of the performance period.

(2) Where the average share price (calculated over a three-month period ending on the last business day of the performance period) is between one of

the targets above, awards will vest on a straight-line basis between 25% and 100%.

The aggregate value of shares delivered to any one participant under the new plan cannot exceed the GBP figure calculated
by multiplying the number of shares subject to an award at the date of grant by £3.80. Any award that exceeds this limit will
be reduced accordingly, and the award will lapse as to the balance on the vesting date.

Details of the awards for Executive Directors that were due to vest in April 2021 (audited information):

Name of Director

Date awarded

Number
awarded

Vesting date

Number
vesting

Number
lapsing

Exercise
price

Moshe Greidinger

Israel Greidinger

Nisan Cohen

Renana Teperberg

23 April 2018

487,238

23 April 2021

23 April 2018 390,564

23 April 2021

23 April 2018

229,118

23 April 2021

– 487,238

– 390,564

–

229,118

£Nil

Exercise period

6 months from vesting

Cineworld Group plc Annual Report and Accounts 2020DIRECTORS’ REMUNERATION REPORT CONTINUEDCineworld Group Company Share Option Plan (“CSOP”)
No Director was granted an option during the period and no options vested during the period under the CSOP.

No Director, past or present, holds a CSOP option which will vest in the 2021 financial year.

Cineworld Group Sharesave Scheme
No Directors currently participate in any Company Sharesave Scheme.

Implementation of Policy in 2021
The Remuneration Committee intends to implement the Directors’ Remuneration Policy for the financial year 2021 as follows:

In light of the current circumstances flowing from the COVID-19 pandemic, the Committee has decided that salaries and other
benefits for the Executive Directors will not be increased in July 2021, being the Company’s usual review date. In line with the
proposed approach to pension in the new Remuneration Policy, pension arrangements will remain unchanged for the CEO
and Deputy CEO in 2021 but will align with the employer contribution offered to other employees in Israel from 1 January 2023.
This represents a 5% reduction in their current entitlement. The CFO and CCO’s pension arrangements are already aligned
with employees in Israel.

The maximum annual bonus opportunity will be 150% of salary for the CEO and Deputy CEO and 100% of salary for the CFO
and CCO.

For 2021, the bonus is based on a combination of performance against the agreed budgeted financial measures and personal
performance levels. The budgeted financial measures were agreed in the context of uncertain cinema reopening dates, but the
Remuneration Committee will review budget and targets as cinemas reopen during 2021. The weighting of these measures is
circa 70% financial performance and 30% personal performance. Bonus targets are not disclosed on the grounds of commercial
sensitivity. Bonus payments will be subject to the Remuneration Committee’s discretion to apply “malus” and, following
payment, the Committee will retain the discretion to “claw back” bonuses in the case of misconduct or misstatement of
financial results.

Awards were granted under the 2021 LTIP in February 2021 and Executive Directors who received awards under the 2021 LTIP
will not receive further long-term incentive awards in 2021, 2022 or 2023 under the new Directors’ Remuneration Policy.

Remuneration Committee advisers
Until May 2020, the Company continued to receive advice from EY, who attended two scheduled meetings during the year at the
request of the Committee. In December 2020, following a review process by the Committee, FIT Remuneration Consultants LLP
(“FIT”) were appointd as advisers. FIT also provided advice to the Company and to the Remuneration Committee during the year,
from August 2020. As members of the Remuneration Consultants Group, both FIT and EY operate under the Voluntary Code of
Conduct in relation to executive remuneration consulting in the UK. The Committee is satisfied that the advice received from both
firms was objective and independent. Fees payable to FIT and EY for advice to the Remuneration Committee in 2020 were £16,530
plus VAT and £25,701 plus VAT respectively.

Other than the provision by EY of tax consultancy services to the Company, neither EY nor FIT has any other connection with the
Company or any of its individual Directors.

The Committee also received assistance from the Chair of the Company (Alicja Kornasiewicz), the Chief Executive Officer
(Moshe Greidinger), the Deputy Chief Executive Officer (Israel Greidinger), the Chief Financial Officer (Nisan Cohen), the Senior
Vice President of Human Resources (Tara Rooney) and the Company Secretary (Fiona Smith), although they did not participate
in discussions relating to the setting of their own remuneration. The Committee also consulted with the Chief Executive Officer
and received recommendations from him in respect of changes to remuneration packages for Senior Management.

Directors’ service contracts
All Directors’ service contracts and letters of appointment are available for inspection at the Company’s registered office.
All Executive Directors have a notice period of 12 months. The Non-Executive Directors of the Company do not have service
contracts but are appointed by letters of appointment, with each independent Non-Executive Director’s term of office running
for a maximum three-year period.

Incorporation by reference
The sections “The Remuneration Committee and its Role” and “Remuneration Committee advisers” also form part of the
Corporate Governance Statement, and are incorporated into that statement by reference.

By order of the Board

Dean Moore
Chair of the Remuneration Committee
25 March 2021

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsDIRECTORS’ REPORT

The Directors present their Annual Report and the audited Consolidated Financial Statements for the year ended 31 December
2020. The comparative period is the year ended 31 December 2019.

Management Report
This Directors’ Report, together with the Strategic Report on pages 1 to 31, form the Management Report for the purposes of
rule 4.1.8R of the Disclosure Guidance and Transparency Rules.

Information contained elsewhere in the Annual Report
Information required to be part of this Directors’ Report and certain other information can be found elsewhere in the Annual
Report as indicated in the table below, and is incorporated into this report by reference.

Information

Audit tendering

Corporate Governance Statement

Diversity, human rights and Our people

Directors’ biographies

Financial instruments: Information on the Group’s financial risk
management objectives and policies, and its exposure to credit
risk, liquidity risk, interest rate risk and foreign currency risk

Going Concern statement

Key Performance Indicators

An indication of likely future developments in the business
affecting the Company

Statement of Directors’ responsibilities in respect of the Annual
Report and Financial Statements

Viability Statement

Location in Annual Report

Page 55

Pages 32 to 56

Pages 23 to 24 (Resources and Relationships)

Pages 35 to 37

Pages 34, 53 to 54 and 103 to 105 – Note 1

Note 26, Page 156

Pages 10 to 13

Pages 1 to 31 (Strategic Report)

Page 87

Pages 20 and 21

Forward-looking statements
Certain statements in this Annual Report are forward-looking and so involve risk and uncertainty because they relate to events,
and depend on circumstances, that will occur in the future. Therefore, results and developments can differ materially from those
anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this
Annual Report, and the Group undertakes no obligation to update these forward-looking statements. Nothing in this Annual
Report should be construed as a profit forecast.

Results and dividends
The results for the Group for the year ended 31 December 2020 are presented under International Financial Reporting
Standards (“IFRSs”) and applicable law. However, the Company has elected to prepare its financial statements in accordance
with UK Accounting Standards, including FRS 101 “Reduced Disclosure Framework”. The Group results for the year are set out
in the Consolidated Statement of Profit or Loss on page 98.

The interim dividend of 3.75 United States cents per ordinary share in respect of the third quarter of 2019 was paid to
shareholders on 10 January 2020. The total cash consideration was $51.4m. The distribution of dividends on our ordinary shares
is subject to validation by the Board of Directors and must be in line with applicable law. The Board validates the amount of
future dividends to be paid, taking into account the cash balance then available, the anticipated cash requirements, the overall
financial situation, restrictions on loan agreements, future prospects for profits and cash flows, as well as other relevant factors.
On 7 April 2020 the Board announced the suspension of the 2019 fourth quarter dividend of 4.25 cents per share to conserve
cash for the Group.

Events affecting the Company since the year end
On 25 January 2021, the Group held a General Meeting. At this meeting the shareholders of the Company approved a new
Directors’ Remuneration Policy and the new Long-Term Incentive Plan. Grants under the new Long-Term Incentive Plan were
made on 8 February 2021, and more details may be found in the Directors’ Remuneration Report on page 78.

Financial risk management
The Board regularly reviews the financial requirements of the Group and the risks associated therewith. Full details are set out
in Note 26 to the financial statements, and are incorporated into this Directors’ Report by reference.

Funding and liquidity
The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Financial
Review on pages 26 to 31. In addition, Note 26 to the financial statements includes the Group’s objectives, policies and
processes for managing its capital, its financial risk management objectives, details of its financial instruments and hedging
activities, and its exposures to credit risk and liquidity risk. Such sections are incorporated into this Directors’ Report
by reference.

Cineworld Group plc Annual Report and Accounts 2020International operations and branches
At the year end, the Group had operations in the UK, US, Jersey, Ireland, Poland, Israel, Hungary, Czech Republic, Bulgaria,
Romania and Slovakia.

Substantial shareholdings
At 31 December 2020, the Group had been notified, pursuant to the Disclosure Guidance and Transparency Rules, of the
following interests in the voting rights of the Company. Notifications confirming a party’s interest has gone below the threshold
notification level have not been included:

Shareholder

Global City Holdings B.V.(2)

Jangho Group Company Ltd

Polaris Capital Management LLC

Morgan Stanley

Aggregate of Standard Life Aberdeen Plc
(affiliated investment management entities)

Aviva plc and its subsidiaries

Voting rights

% of total voting rights(1)

Nature of holding

275,720,505

128,940,251

98,089,253

90,212,076

75,965,923

67,027,369

20.08

Direct and Indirect

9.39

7.14

6.57

5.53

4.89

Direct

Indirect

Direct and Indirect

(1 ) Percentages are stated as at the time of notification. The total number of voting rights at 31 December 2020 was 1,372,797,489.

(2) At 31 December 2020, Global City Holdings B.V. (“GCH”) held 274,720,505 shares with a further 1,000,000 shares held by Global City Theatres B.V.,

a wholly owned subsidiary of GCH. Shares in GCH are held in trust for the benefit of the children of Moshe Greidinger and Israel Greidinger.

As at 23 March 2021, being the latest practicable date, the Company had been notified of the following updated positions:

Shareholder

Jangho Group Company Ltd

Polaris Capital Management LLC

Aggregate of Standard Life Aberdeen Plc
(affiliated investment management entities)

(1) Percentages are stated as at the time of notification.

Voting rights

% of total voting rights(1)

Nature of holding

165,382,410

111,749,317

12.05%

8.14%

Direct

Indirect

69,853,242

5.088%

Direct and Indirect

Major shareholder voting arrangements
Global City Theatres B.V. (“GCT”) is interested in aggregate in 20.08% of the rights to vote at general meetings of the Company.
The Company and GCT entered into a relationship agreement dated 5 December 2017 to regulate the relationship between
them. This agreement replaced the agreement between Global City Holdings and the Company of 10 January 2014 and is on
the same terms as the previous relationship agreement. Under the relationship agreement, the parties acknowledge that the
Group is capable of carrying on business independently, and that all arrangements between the Company and GCT will be
on arm’s length terms. The relationship agreement contains a requirement (where reasonably practical) to consult with and
consider the reasonable views of the Chair or Senior Independent Director of the Company prior to a disposal of ordinary
shares in the Company.

Share capital and control
The Company has only one class of share capital formed of ordinary shares. All shares forming part of the ordinary share capital
have the same rights and each carries one vote. Details of the share capital, and changes in it over the year, are shown in
Note 25 to the financial statements.

The holders of ordinary shares are entitled to receive Company reports and accounts, to attend and speak at general meetings
of the Company, to appoint proxies and to exercise voting rights.

There are no restrictions on transfers of, or limitations on the holding of, ordinary shares and there is also no requirement of any
prior approval of any transfers other than (i) those which may be applicable from time to time under existing laws or regulations
or, (ii) if a person with an interest in 0.25% of the issued share capital held in certificated form has been served with a disclosure
notice and fails to respond with the required information concerning interests in that share capital.

No ordinary shares carry any special rights with regard to control of the Company. Except as stated in the paragraph directly
above and the Major Shareholder Voting Arrangements section above, there are no restrictions on voting rights attaching to
the ordinary shares and the Company is not aware of any known agreements between shareholders that restrict the transfer
of voting rights attached to ordinary shares. No treasury shares are held by the Company and no shares are held by any trustee
in connection with any share scheme operated by the Group.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsDIRECTORS’ REPORT CONTINUED

Articles of Association
The Company’s Articles of Association (“Articles”), together with English law, define the Board’s powers. Changes to the
Articles must be approved by shareholders in accordance with the Articles themselves and legislation in force at the relevant
time. The last changes were approved by shareholders at the AGM held on 16 May 2018.

Change of control
There are no significant agreements which take effect, alter or terminate in the event of a change of control of the Company
except that (i) under its current banking arrangements, a change of control may trigger a right for lenders to require early
repayment of all sums outstanding, and (ii) provisions in the Company’s share schemes may cause options or awards granted
to employees to vest on a change of control.

No Director or employee is contractually entitled to compensation for loss of office or employment as a result of change in
control; however, as described above, options or awards granted to employees may vest on a change of control.

Issue of new shares and authority to purchase shares
At the AGM held on 13 May 2020, shareholders gave authority for the allotment of shares up to an aggregate nominal value
of £4,573,167.60 subject to certain conditions. This authority will expire at the 2021 AGM of the Company or on 12 August 2021,
whichever is earlier.

Between 1 January 2020 and 31 December 2020, a total of 847,196 shares were issued. Further details of the shares issued
in this period are set out in Note 25 to the financial statements.

At the AGM held on 13 May 2020, shareholders gave authority for the purchase of up to 137,195,020 ordinary shares in the
Company for cancellation or placing into treasury. No shares have been acquired under this authority.

The Board proposes to seek shareholder approval at the AGM to renew both the Company’s authority to issue new shares and
its authority to purchase its own ordinary shares for cancellation or placing in treasury. Details of the proposed resolutions are
set out in the Notice of AGM (the “AGM circular”) dispatched or made available to shareholders with the Annual Report and
Accounts (or on notification of its availability).

Equity Warrants
As announced on 23 November 2020, 153,539,786 equity warrants, which are each exercisable into one share of the Company
at an exercise price of 41.49 pence, were issued on a non-pre-emptive basis alongside new debt, with proceeds of such exercise
being retained by the Company. The warrants are exercisable at any time during the next five years and represent 9.99% of the
fully diluted ordinary share capital of the Company assuming full exercise of the warrants. More details may be found in the CFO
Review on pages 26 to 31.

Directors’ interests at year end

Director

Alicja Kornasiewicz

Nisan Cohen

Camela Galano

Israel Greidinger

Moshe Greidinger

Dean Moore

Scott Rosenblum

Arni Samuelsson

Damian Sanders

Rick Senat

Renana Teperberg

Ordinary shares held directly

Ordinary shares held by companies in which
a Director has a beneficial interest or is
connected

31 December
2019

31 December
2020

31 December
2019

31 December
2020

135,000

38,230

–

696,754

1,015,168

15,000

100,000

9,500

–

274,447

82,495

135,000

99,549

10,000

899,938

1,313,173

15,000

100,000

9,500

57,942

699,862

143,814

–

384,131,720(1)

275,720,505(1)

384,131,720(1)

275,720,505(1)

–

(1) Shares are held by Global City Holdings B.V. (“GCH”) and its wholly owned subsidiary Global City Theatres B.V. Shares in GCH are held in trust for the

benefit of the children of Moshe Greidinger and Israel Greidinger.

Cineworld Group plc Annual Report and Accounts 2020Directors’ interests at the latest practicable date

Director

Alicja Kornasiewicz

Nisan Cohen

Camela Galano

Israel Greidinger

Moshe Greidinger

Dean Moore

Scott Rosenblum

Arni Samuelsson

Damian Sanders

Rick Senat

Renana Teperberg

Ordinary shares
held directly

Ordinary shares held by
companies in which a
Director has a beneficial
interest or is connected

135,000

99,549

10,000

899,938

1,313,173

15,000

100,000

9,500

57,942

699,862

143,814

–

275,720,505(1)

–

(1 ) Shares are held by Global City Theatres B.V., a wholly owned subsidiary of Global City Holdings B.V. (“GCH”). GCH is owned by trusts for the benefit

of the children of Moshe Greidinger and Israel Greidinger.

The Directors who held office at the end of the financial year had interests in the ordinary shares of the Company at the
beginning and end of the year under review, and at the last practicable date, as set out in the tables above.

Details of the interests in the ordinary shares of the Company arising under the Group’s share option schemes are set out in the
Remuneration Report on page 74. No rights to subscribe for shares in or debentures of other Group companies were granted
to any of the Directors or their immediate families, or exercised by them, during the year. None of the Directors had any
discloseable interest in the shares of Group companies other than the Company.

Appointment and replacement of directors
The appointment and replacement of directors is governed by the Company’s Articles, the UK Corporate Governance Code
(the “Code”), the Companies Act 2006 and related legislation. All directors intending to continue in office seek election or
re-election by shareholders at each AGM. The Articles may be amended by a special resolution of the shareholders.

The directors of the Company who were in office during the year and up to the date of signing the financial statements were:

Director

Anthony Bloom

Alicja Kornasiewicz

Nisan Cohen

Camela Galano

Israel Greidinger

Moshe Greidinger

Dean Moore

Scott Rosenblum

Arni Samuelsson

Damian Sanders

Rick Senat

Renana Teperberg

Helen Weir

Stepped down from the Board on 13 May 2020

Appointed to the Board on 1 August 2020

Stepped down from the Board on 13 May 2020

Following the Board evaluation process undertaken in 2020, the Board is satisfied that each Director standing for re-election or
election continues to show the necessary commitment, and to be an effective member of the Board due to their skills, expertise
and business acumen.

Under the terms of the relationship agreement between the Company and GCT (described further in the Major Shareholder
Voting Arrangements section above), GCT has the right to appoint one Non-Executive Director (but only if none of Moshe
Greidinger, Israel Greidinger and Scott Rosenblum are on the Board) for so long as it holds at least 10% of the voting rights
in the Company.

Details of the Directors’ remuneration are set out in the Directors’ Remuneration Report on pages 57 to 79 and information
on their service contracts are set out in the Remuneration Policy on page 67.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsDIRECTORS’ REPORT CONTINUED

Conflicts of interest
The Articles permit the Board to consider and, if it sees fit, authorise situations where a Director has an interest that conflicts, or
may possibly conflict, with the interests of the Company. There is in place a formal system for the Board to consider authorising
such conflicts whereby the Directors who have no interest in the matter decide whether to authorise the conflict. In deciding
whether to authorise the conflict, the non-conflicted Directors are required to act in the way which they consider would be
most likely to promote the success of the Company for the benefit of all shareholders and they may, and do, impose conditions
to be attached to such authorisations. The Board believes that the arrangements for reporting and considering such conflicts
operate effectively.

Directors’ interests in contracts
The Group has a number of property lease agreements in place with Global City Holdings B.V. (“GCH”) (and/or its subsidiary
undertakings). Further details of the amounts paid under these agreements can be found in Note 28 to the financial statements.
Shares in GCH are held in trust for the benefit of the children of Moshe Greidinger and Israel Greidinger.

None of the Directors has a material interest in any contract of significance to which the Company or a subsidiary was a party
during the financial year, other than as disclosed above, in their service contracts or letters of appointment described
in the Directors’ Remuneration Report, in Note 28 to the financial statements and in the Remuneration Policy contained
on pages 60 to 69.

Directors’ and Officers’ insurance and indemnity
The Company maintains a qualifying third party indemnity insurance cover for all Directors and Officers of Group companies
against liabilities which may be incurred by them while acting as Directors and Officers.

As at the date of this report, indemnities are in force under which the Company has agreed to indemnify the Directors as
permitted by law and by the Articles against liabilities they may incur in the execution of their duties as Directors of the Company.

Political donations
In line with the Group’s policy, no donations to political parties were made during the year.

Employees
The health, welfare and development of the Group’s employees remain a priority. In view of the global COVID-19 pandemic, this
year in particular a number of extra health and safety measures have been established to ensure our environments are COVID
secure and our people remain safe and well. In support of this, we established new training materials, both online and on the
job, to ensure our teams understood the extra COVID safety measures that had been developed for both their benefit and
those of our customers. Furthermore, we undertook research and consulted with employee representatives, where relevant,
regarding the additional COVID measures being taken to ensure our teams were fully engaged and had the opportunity to
provide feedback on our plans.

More broadly, we remain intent on attracting, recruiting, developing and retaining key employees. Cineworld maintains a
number of policies and procedures for the benefit of its employees, which are available to all employees across the Group.
Continuing education, training and development are important to ensure the future success of the Group.

The policy is to recruit, employ and develop staff on the basis of the suitability of their qualifications and experience, regardless
of sex, marital status, race, nationality, age, sexual orientation or religion. It is Group policy to give full and fair consideration to
applications for employment from disabled people, having regard to their particular abilities and aptitudes. Full consideration
is given to continuing the employment of staff who become disabled, including considering them for other reasonable positions
and arranging appropriate training.

The Group supports individuals who wish to obtain appropriate further education qualifications and reimburses tuition fees,
where relevant, up to a specified level. Regular and open communication between management and employees is essential for
motivating the workforce. Briefings, in many various forms, are held regularly to provide updates on the Group’s business and
to provide opportunity for questions and feedback. The Group encourages the involvement of employees in its performance
through the operation of various bonus schemes throughout the Group.

Employee and stakeholder engagement
The Company is aware of its workforce engagement obligations and details of how the Directors have engaged with
employees, had regard to employee interests, and the impact of such regard on decisions taken by the Company during the
period can be found throughout this Annual Report, in particular in the Resources and Relationships section on pages 23 to 24.

Engagement with stakeholders (including suppliers, customers and others) has continued to be an area of focus and details
of the ways in which the Directors have sought to foster the Company’s commercial relationships and relationships with the
communities in which the Group operates its businesses, including in the context of the global pandemic, can be found within
the Resources and Relationships section of the report on pages 22 to 25 and on pages 44 to 45.

Cineworld Group plc Annual Report and Accounts 2020Environmental matters and greenhouse gas emissions
Information on the Group’s environmental policies is summarised in the Resources and Relationships section on page 25.
The greenhouse gas (“GHG”) emission data and supporting information required by the Companies Act 2006 (Strategic Report
and Directors’ Report) Regulations 2013 is set out below.

Mandatory disclosure
The information provided below complies with the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations
2013 and the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018;
the latter commonly referred to as Streamlined Energy and Carbon Reporting or “SECR”.

Organisational boundary, methodology and exclusions
The organisational boundary used for the Company’s GHG reporting is operational control. The below figures capture emissions
associated with the operation of cinemas, as well as any administrative buildings. The report refers to emissions from the UK,
US, and ROW. This information was collected and reported in line with the methodology set out in the UK government’s
Environmental Reporting Guidelines 2019.

Emissions have been calculated using the 2020 conversion factors provided by Department of Business, Energy and Industrial
Strategy. There are no material omissions from the mandatory scope 1 and 2 emissions. The reporting period is October 2019 to
September 2020. The financial year for Cineworld Group plc is January to December 2020. However, the reporting period has
been offset by three months to enable the collation of the maximum amount of data.

Reporting scope
The Company is reporting on emissions covered by scopes 1 and 2 (comprising electricity, gas, and fugitive F-gas emissions)
from global operations. As well as scope 1 and 2 emissions figures, scope 3 transmission and distribution (from electricity)
emissions have been reported voluntarily.

Emissions included
Mandatory emissions sources as specified by the Environmental Reporting Guidelines published by the Department for
Environment, Food and Rural Affairs (“Defra”) have been included in this report (see also “Estimates and exclusions” below).

GHG emissions data
The GHG emissions for the Group for the 12-month period to 30 September 2020 are shown in Table 1 below in tonnes of
carbon dioxide equivalent (tCO2e).

Table 1: 2020 emissions (tonnes tCO2e)
Emissions source

Natural gas

Electricity

Refrigerant

Transportation

Total emissions (tCO2e)

2019 tCO2e

2020 tCO2e

% Change

60,821

472,314

6,649

2,201

541,987

42,386

212,160

2,459

712

257,717

-30%

-55%

-63%

-68%

-52%

The GHG emissions for the Group broken down into their respective scopes are shown below in Table 2.

Table 2: 2020 emissions by Scope (tonnes tCO2e)
Emissions source

Natural gas

Electricity

Refrigerant

Transportation

Total

Scope 1

42,386

2,459

712

Scope 2

202,329

Scope 3

9,831

45,557

202,329

9,831

Share %

16.5%

82.3%

1.0%

0.3%

100%

Total

42,386

212,160

2,459

712

257,717

Energy consumption
As part of the requirements for compliance with the Streamlined Energy and Carbon Reporting scheme, Table 3 shows the
consumption data by source in kWh. As refrigerant use generates no kWh, this has been omitted.

Emissions source

Natural gas

Electricity

Transportation

Total

2019 kWh

2020 kWh

% Change

292,748,043

230,520,317

844,734,573

485,957,463

7,354,904

2,983,404

1,144,837,521

719,461,184

-21%

-42%

-59%

-37%

Share %

32.0%

67.5%

0.4%

100%

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsDIRECTORS’ REPORT CONTINUED

Estimates and exclusions
United States electricity data for April was estimated by site using an average kWh value based on the rest of the year.
This resulted in 4% of Group emissions being estimated.

Emissions intensity
The chosen carbon intensity measure is financial turnover due to ready availability of the data. The value for the year 2020 was
302.38 tonnes CO2e per $1m turnover. For comparison, 2019’s intensity was 125.9 tonnes CO2e per $1m turnover. The change in
total emissions in 2020 relative to 2019 reflects the severe impact that COVID closures had on Group turnover, as well as the
change in calculation methodology for 2020.

Energy efficiency measures – Group Initiatives
Cineworld Group plc has been working with Inenco, its external energy advisers, to try to reduce carbon emissions across the
UK estate by 5% annually against a baseline year of 2018. This project was started in May 2019.

As part of the project, a baseline model was created per cinema. The process for setting a baseline involved the investigation of
variables including cooling degree day and heating degree day indices, that affect the energy consumption in cinemas by using
single and multiple regression method. The results from the regression method are used to create a baseline energy model.
Following the results, energy efficiency measures were introduced and implemented in several larger cinemas in the UK,
focusing on optimised cooling systems. Measures included modifying temperature and time setpoints, and optimising the
Heating Ventilation and Air Conditional system overall, as this was the primary source of electricity usage.

The Company has also been investigating the impact of energy efficient projector systems and on-site generation would have,
while also raising energy awareness with regional management teams. Furthermore, the Inenco engineers carried out energy
audits in cinemas, evaluating the status and identifying further energy saving opportunities. It is anticipated that further work
in this area will be undertaken following the reopening of cinemas.

Task Force on Climate-related Financial Disclosures (“TCFD”)
The Company is aware of the need to report under the TCFD framework for the financial year year ending 31 December 2021,
and is working to ensure that it meets all requirements to enable it to do so.

Annual General Meeting
The Notice convening the AGM, to be held at Vantage London, Great West Road, Brentford TW8 9AG at 10.30am on 12 May
2021, is contained in the AGM circular. Details of all the resolutions to be proposed are set out in the AGM circular.

Auditor and tender
Following the audit tender process in 2019, PricewaterhouseCoopers LLP was formally appointed as External Auditor at the
AGM in 2020. The Company will continue to comply with the relevant tendering and auditor rotation requirements applicable
under UK and EU regulations.

Disclosure of information to Auditor
The Directors who held office at the date of approval of this Directors’ Report confirm that, so far as they are each aware, there
is no relevant audit information of which the Company’s auditor is unaware; and each Director has taken all steps that he or she
ought to have taken as a Director to make himself or herself aware of any relevant audit information, and to establish that the
Company’s Auditor is aware of that information.

By order of the Board

F Smith
Company Secretary
Cineworld Group plc

25 March 2021

Registered Office:
8th Floor
Vantage London
Great West Rotad
Brentford
TW8 9AG
Registered: England No: 5212407

Cineworld Group plc Annual Report and Accounts 2020STATEMENT OF DIRECTORS’ RESPONSIBILITIES

Statement of Directors’ responsibilities in respect of the Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report and the Group and parent Company Financial Statements
in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and parent Company Financial Statements for each financial year.
Under that law they are required to prepare the Group Financial Statements in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006 and applicable law. Additionally, the Financial
Conduct Authority’s Disclosure Guidance and Transparency Rules require the directors to prepare the group financial
statements in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002
as it applies in the European Union”). The Directors have elected to prepare the parent Company Financial Statements in
accordance with UK accounting standards, including FRS 101 Reduced Disclosure Framework.

Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and parent Company and of their profit or loss for that period. In preparing each of
the Group and parent Company Financial Statements, the Directors are required to:

− select suitable accounting policies and then apply them consistently;

− make judgements and estimates that are reasonable, relevant, reliable and prudent;

− for the Group Financial Statements, state whether they have been prepared in accordance with international accounting

standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union;

− for the parent Company Financial Statements, state whether applicable UK accounting standards have been followed, subject

to any material departures disclosed and explained in the parent Company Financial Statements;

− assess the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to

going concern; and

− use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease

operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and
enable them to ensure that its Financial Statements comply with the Companies Act 2006. They are responsible for such
internal control as they determine is necessary to enable the preparation of Financial Statements that are free from material
misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance Statement that comply with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
company’s website. Legislation in the UK governing the preparation and dissemination of Financial Statements may differ
from legislation in other jurisdictions.

Responsibility statement of the Directors in respect of the Annual Finance Report
We confirm that to the best of our knowledge:

− the Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view

of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation
taken as a whole; and

− the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer
and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and
uncertainties that they face.

We consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s position and performance, business model and strategy.

Moshe Greidinger
Chief Executive Officer
25 March 2021

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsINDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CINEWORLD GROUP PLC

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion
In our opinion:

− Cineworld Group plc’s group financial statements and

company financial statements (the “financial statements”)
give a true and fair view of the state of the group’s and of
the company’s affairs as at 31 December 2020 and of the
group’s and company’s loss and the group’s cash flows for
the year then ended;

− the group financial statements have been properly prepared

in accordance with international accounting standards
in conformity with the requirements of the Companies
Act 2006;

− the company financial statements have been properly

prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom
Accounting Standards, comprising FRS 101 “Reduced
Disclosure Framework”, and applicable law); and

− the financial statements have been prepared in accordance

with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the
Annual Report and Accounts 2020 (the “Annual Report”),
which comprise: consolidated statement of financial
position and company statement of financial position as
at 31 December 2020; consolidated statement of profit or
loss, consolidated statement of comprehensive income,
consolidated statement of changes in equity, company
statement of changes in equity and consolidated statement
of cash flows for the year then ended; and the notes to the
financial statements, which include a description of the
significant accounting policies.

Our opinion is consistent with our reporting to the
Audit Committee.

Separate opinion in relation to international
financial reporting standards adopted pursuant
to Regulation (EC) No 1606/2002 as it applies in
the European Union
As explained in note 1 to the group financial statements,
the group, in addition to applying international accounting
standards in conformity with the requirements of the
Companies Act 2006, has also applied international financial
reporting standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union.

In our opinion, the group financial statements have been
properly prepared in accordance with international financial
reporting standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union.

Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.

Independence
We remained independent of the group in accordance with
the ethical requirements that are relevant to our audit of
the financial statements in the UK, which includes the FRC’s
Ethical Standard, as applicable to listed public interest entities,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements.

To the best of our knowledge and belief, we declare that non-
audit services prohibited by the FRC’s Ethical Standard were
not provided to the group.

Other than those disclosed in note 6 to the financial
statements, we have provided no non-audit services to the
group in the period under audit.

Material uncertainty related to going concern
In forming our opinion on the financial statements, which
is not modified, we have considered the adequacy of
the disclosure made in note 1 to the financial statements
concerning the group’s and company’s ability to continue
as a going concern.

The global pandemic has had a significant impact on the
cinema exhibition industry, with the group’s cinemas being
closed for a significant part of 2020. During 2020, the group
secured additional liquidity, agreeing terms for an extension
of the $111 million existing revolving credit facility (RCF), a
new $250 million secured loan in the Rest of World, and a
further secured facility of $450 million. The group also agreed
waivers on pre-existing financial covenants until June 2022.
The new $450 million facility introduced a new minimum
liquidity covenant, whereby the group is required to maintain
an agreed monthly minimum level of liquidity, with restrictions
on expenditure up until the point that the group achieves
admission levels consistent with 80% of comparable periods
in 2019 for a period of three consecutive months.

In light of the ongoing global pandemic, there remain material
uncertainties over the short term in respect of the impact
that this will continue to have on the group and the cinema
exhibition industry. Management’s basis of preparation in note
1 to the financial statements sets out the key assumptions
in respect of both the weighted base case and severe but
plausible downside forecasts.

In respect of the weighted base case, this currently forecasts
sufficient liquidity for the going concern period, however it is
sensitive to the ability to open cinemas in May 2021 at 60% of
2019 admission levels (increasing to 90% of 2019 admission
levels by the fourth quarter of 2021), there being no significant
delays to the current forecast movie slate, and no increases in
government restrictions as a result of new Covid-19 variants,
including further lockdowns over the going concern period.
In the event of any of these situations materialising, a delay
in the US CARES act tax receipt post April 2021 or the
Dissenting Shareholders not agreeing to a deferred payment
plan, then changes to the minimum liquidity covenant and
further liquidity may be required as detailed in the severe but
plausible downside forecasts.

These conditions, along with other matters explained in note 1
to the financial statements, indicate the existence of material
uncertainties which may cast significant doubt about the
group’s and company’s ability to continue as a going concern.
The financial statements do not include the adjustments
that would result if the group and company were unable to
continue as a going concern.

In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the company’s
ability to continue to adopt the going concern basis of
accounting included:

− evaluating the directors’ assessment of the impact of

reduced admission levels, changes to the forecast movie

Cineworld Group plc Annual Report and Accounts 2020slate, further government restrictions as a result of new
Covid-19 variants or further lockdowns, changes to the
timing of contractual cash flows, and the ability of the
group to manage costs, together with consideration of
the covenant calculations;

− Impairment of goodwill and indefinite lived intangibles

(group)

− Impairment of investments (parent)

− Recoverability of deferred tax assets (group)

− In assessing the impact of the above scenarios, referred

− Accounting for additional financing (group)

to in note 1 of the financial statements, we performed the
following procedures on the directors’ assessment that the
group and company will continue as a going concern:

− agreed the underlying cash flow projections to

management approved forecasts, assessed how these
forecasts are compiled, and assessed the accuracy
of management’s forecasts by reviewing third-party
industry and analysts’ reports and applying appropriate
sensitivities to the growth projections where required;

− evaluated the assumptions in respect of the costs that

could be avoided in a period of reduced attendance and/
or closure of the cinemas;

− assessed the impact of the mitigating factors available to
management in respect of reducing cash flows over the
going concern period, in particular relating to the terms
of the covenants in place in restricting certain contractual
cash flows;

− checked the mathematical accuracy of the spreadsheet

used to model future financial performance and
determined in what circumstances there was a risk
that the covenants may be breached;

− held discussions with external legal advisors over the cash
flow restrictions within the new financing arrangement
and the enforceability of the clause under US law; and

− engaged our US tax experts to assess the likelihood and
timing of recovery of the US CARES Act tax cash receipt.

In relation to the company’s reporting on how they have
applied the UK Corporate Governance Code, other than
the material uncertainties identified in note 1 to the financial
statements, we have nothing material to add or draw attention
to in relation to the directors’ statement in the financial
statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting,
or in respect of the directors’ identification in the financial
statements of any material uncertainties which may cast
significant doubt upon the group’s and company’s ability to
continue to do so over a period of at least twelve months from
the date of approval of the financial statements.

Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.

Our audit approach
Overview
Audit scope
− The group operates in 10 countries, across 16 reporting units

− The eight reporting units, where we performed an audit of
their complete financial information, accounted for 88% of
group revenue and 89% of group loss before tax, adjusted
for exceptional items

Key audit matters
− Material uncertainty related to going concern

− Impairment of property, plant and equipment and right of

use assets (group)

− Consideration of the impact of Covid-19 (group and parent)

Materiality
− Overall group materiality: $14.1 million (2019: $14.1 million)
based on 5% of average absolute profit/loss before tax
(excluding exceptional items) over a three-year period
(2018, 2019, 2020). This would have resulted in an increase
in materiality given the size of the loss in 2020. Since we
consider an increase in materiality would be inappropriate
in the context of group’s results, we then capped this at the
overall materiality level from the prior year.

− Overall company materiality: $16.7 million (2019:

$43.6 million) based on 1% of total assets.

− Performance materiality: $9.2 million (group) (2019:
$9.2 million) and $10.9 million (company) (2019:
$28.3 million).

The scope of our audit
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements.

Capability of the audit in detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with
our responsibilities, outlined in the Auditors’ responsibilities
for the audit of the financial statements section, to detect
material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud, is detailed below.

Based on our understanding of the group and industry, we
identified that the principal risks of non-compliance with laws
and regulations related to the Listing rules, UK and US tax
legislation and employment legislation , and we considered
the extent to which non-compliance might have a material
effect on the financial statements. We also considered
those laws and regulations that have a direct impact on the
preparation of the financial statements such as the Companies
Act 2006. We evaluated management’s incentives and
opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls), and
determined that the principal risks were related to posting
inappropriate journal entries to increase revenue or reduce
expenditure, and management bias in accounting estimates.
The group engagement team shared this risk assessment
with the component auditors so that they could include
appropriate audit procedures in response to such risks in their
work. Audit procedures performed by the group engagement
team and/or component auditors included:

− Review of the financial statement disclosures to underlying
supporting documentation, review of correspondence with
legal advisors.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements − Enquiry of management, those charged with governance
and the group’s legal counsel around actual and potential
fraud and non-compliance with laws and regulations.

− Auditing the risk of management override of controls,
including through testing journal entries and other
adjustments for appropriateness, testing accounting
estimates (because of the risk of management bias), and
evaluating the business rationale of significant transactions
outside the normal course of business.

− Enquiry of group’s staff in tax and compliance functions
to identify any instances of non-compliance with laws
and regulations.

− Obtaining and understanding the results of whistle blowing

procedures and assessing any related investigations.

− Enquiry of the group’s Head of Internal Audit and reviewing

internal audit reports.

There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that
are not closely related to events and transactions reflected
in the financial statements. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.

Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the audit
of the financial statements of the current period and include
the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors,
including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters,
and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on
these matters.

In addition to going concern, described in the material
uncertainty related to going concern section above, we
determined the matters described below to be the key audit
matters to be communicated in our report. This is not a
complete list of all risks identified by our audit.

Recoverability of deferred tax assets, accounting for
additional financing and consideration of the impact of
Covid-19 are new key audit matters this year. Adoption of IFRS
16 was a key audit matter last year, and has been removed due
to a reduction in the risk assessment given we are no longer in
the year of implementation. Otherwise, the key audit matters
below are consistent with last year.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CINEWORLD GROUP PLC CONTINUEDCineworld Group plc Annual Report and Accounts 2020KEY AUDIT MATTER

HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER

Impairment of property, plant and equipment and right of use
assets (group)

Refer to the Report of the Audit Committee, Note 11 –
Property, Plant and Equipment and Note 20 – Leases.

The group has Property, Plant and Equipment (“PPE”)
of $1,788 million and Right of Use (“ROU”) assets of
$2,306 million as at 31 December 2020 (2019: $2,040 million
and $3,441 million respectively) . During the period
$1,345 million of net impairment has been recorded (2019:
$47 million).

We have identified the risk of impairment in PPE and ROU
assets as a significant risk for the group due to the inherent
level of management estimation involved in calculating the
value in use of the assets.

As part of its year-end reporting process, management
conducted an impairment trigger assessment of PPE and ROU
assets at the Cash Generating Unit (“CGU”) level as required
by IAS 36. For sites with an identified trigger for impairment,
management performed further detailed analysis at the CGU
level. Impairment valuations and assessment are based on
a number of key estimates and assumptions, which include
the discount rates, the period over which admissions will
recover back to a pre-pandemic level. forecasting admissions
growth, average ticket pricing and spend per person.
Admissions growth is highly correlated with the ability to open
cinemas and the strength of the film slate in any one year,
which management is not able to control.

Our procedures included understanding and evaluating
the controls related to the PPE and ROU asset impairment
process, together with performing substantive
audit procedures.

The procedures performed included the following:

− As a result of Covid-19 there was a clear impairment trigger

in the period. Our work has therefore focussed on the
estimates and judgements around when the industry will be
able to open its doors to customers again and how quickly
admissions will return. In doing so we have compared
management’s views against those of external analysts and
industry reports to assess the appropriateness.

− Testing the mathematical accuracy of the impairment

models including assessing that revenue and costs have
been appropriately allocated to each of the CGUs.

− Challenging management on the appropriateness of key
assumptions such as discount rates, admissions, ticket
prices and concession growth rates by comparing against
industry forecasts and historical trends.

− We have assessed impairment reversals driven by the

reduction in ROU asset carrying values in the period for
lease modifications where the Incremental Borrowing Rate
has increased since lease inception.

− Involving our internal experts to assess the appropriateness

of the discount rates used.

− Performing look back assessments to consider the historic
growth trends and therefore what growth may be achieved
in a post pandemic environment, also factoring in potential
changes to consumer behaviour.

− Performing independent sensitivity analysis to identify if we

considered there to be further impairments.

− As the group engagement team, we were specifically
involved in assessing the appropriateness of the audit
approach of each component team, where relevant.
This satisfied us that the area was well understood and
that sufficient focus was placed on the risk area with no
significant errors identified.

Based on our procedures we consider the impairment booked
in the period to be appropriate and we also consider the
disclosures around the sites which are sensitive to impairment
to be reasonable.

It is worth noting that the increase in the discount rate has
been a significant factor in driving some of the impairment
booked in the period. If and when the credit rating of the
group starts to improve, this may result in some of this
impairment reversing in future periods.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsKEY AUDIT MATTER

HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER

Impairment of goodwill and indefinite lived intangibles and
other intangibles (group)

The procedures performed by the group engagement team
included the following:

Refer to the Report of the Audit Committee and Note 12 –
Intangible Assets.

The group has goodwill of $4,868 million (2019:
$5,492 million) and indefinite lived intangibles of $365 million
(2019: $365 million) as at 31 December 2020. During the
period $657 million of goodwill impairment has been recorded
(2019: nil).

The Group assesses goodwill and indefinite lived intangibles
for impairment based upon groups of CGUs at the level
goodwill is monitored. These groups of CGUs are assessed
to be UK, US and Rest of World. The recoverable amounts
of these groups of CGUs are dependent on certain key
assumptions, including the forecast cash flows, short and
long term growth rates and the discount rate, all of which are
dependent upon management judgement and estimates.

As with PPE and ROU assets, one of the other key judgements
in the period has been the assessment of when the industry
will recover to pre-pandemic levels, and ensuring that
there is consistency in the assumptions applied across the
different models.

− Understanding the controls and procedures in place in
respect of the goodwill and indefinite lived intangibles
impairment model.

− Testing the mechanics and mathematical integrity of

management’s impairment model.

− Evaluating the process by which management prepared
its cash flow forecasts and comparing them to the Board
approved forecasts.

− Assessing the appropriateness of the assumptions around

the recovery profile back to a pre-pandemic level and
ensuring the consistency of assumptions with other
impairment models, and those used for the purposes
of the going concern and viability assessments.

− Performing look back assessments to consider the historic

growth trends and management forecasting reliability.

− Involving our internal experts to assess the appropriateness
of the discount rates used, in particular due to the increase
associated with the decline in the group’s credit rating.

− Benchmarking against the industry and peers, external

sources including industry and analysts’ outlook reports
and country inflation rates.

− Performing our own sensitivity analysis to understand the

impact of reasonably possible changes to key assumptions.

Based on these procedures we consider the impairment
booked in the period to be supportable and we also consider
the sensitivity disclosures provided to be appropriate.

Impairment of investments (parent)

The procedures performed included the following:

Refer to the Report of the Audit Committee and Note 31 –
Fixed Asset Investments.

− Confirming the mathematical integrity of the

impairment model.

The parent company has investments in subsidiaries of
$1,135 million as at 31 December 2020 (2019: $3,446 million).
During the period $2,510 million of impairment has been
recorded (2019: nil).

− Evaluating the appropriateness of key assumptions,

as noted in the PPE and ROU asset and goodwill and
intangible impairment sections above, ensuring there is
appropriate consistency in the key assumptions applied.

Due to the magnitude of these balances, the market
capitalisation at 31 December 2020, and the level of
estimation and judgement inherent within management’s
impairment model, this has been a focus area for our
company audit.

The valuation of these investments is dependent on certain
key assumptions including the forecast cash flows, short and
longer term growth rates and the discount rate. There is a risk
that significant changes to assumptions or underperformance
of trading could give rise to an impairment.

− Assessing the fair value of the external debt at year end
which has been deducted from the net present value of
the forecast cash flows of the group, and comparing the
outcome of the valuation to the market capitalisation.

− Performing sensitivity analysis to evaluate the impact of

reasonably possible changes to key assumptions.

Based on these procedures we consider the impairment
booked in the period to be appropriate and we also consider
the disclosures provided to be appropriate.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CINEWORLD GROUP PLC CONTINUEDCineworld Group plc Annual Report and Accounts 2020KEY AUDIT MATTER

HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER

Recoverability of deferred tax assets (group)

The procedures performed included the following:

Refer to the Report of the Audit Committee and Note 16 –
Deferred Tax Assets and Liabilities.

The group has recognised deferred tax assets of $278 million
(2019: $139 million) at 31 December 2020.

The recognition of deferred tax assets is on the basis of
future levels of profitability in the relevant tax jurisdiction.
The magnitude of the assets recognised necessitates the
need for significant judgement in assessing the future levels
of profitability over an extended period.

The loss reported for 2020 presents a heightened risk that
deferred tax assets are recognised inappropriately. Further,
there is an inherent increased level of uncertainty in the level
of forecast profits over an extended period.

− Evaluating management’s assessment as to the availability
of sufficient taxable profits in future periods to support the
recognition of deferred tax assets, taking into account both
business model and the tax jurisdiction.

− Assessing the future profit forecasts and the

underpinning assumptions.

− Where applicable, reconciling the forecasts used to

justify the recognition of deferred tax assets to those
used elsewhere in the business including for impairment
assessments, or for the Directors’ viability and going
concern statements.

− Assessing the adequacy of disclosures over this area.

Based on these procedures we consider the recognition
of deferred tax assets and the disclosures provided to
be appropriate.

Accounting for additional financing (group)

The procedures performed included the following:

Refer to the Report of the Audit Committee and Note 19 –
Loans and Borrowings.

The group entered into new and modified existing financing
arrangements in the year to secure additional liquidity
through the cinema closure period.

In May 2020 management extended an existing Revolving
Credit Facility (RCF) by $111 million and in June 2020 issued
a secured private loan of $250 million.

In November 2020, management converted the
aforementioned RCF of $111 million into a term loan, maturing
in May 2024, and issued further private debt of $450 million
(maturity May 2024) plus upfront fees that were added to the
outstanding loan balance. There were also financial covenants
attached to the debt, including restrictions on the payment
of other obligations and minimum liquidity covenants (refer
to the ‘Material uncertainty related to going concern’ section
above). A 1% Libor floor was also established on the existing
debt, which may reverse in 2021.

The November 2020 financing was also issued with 5-year
detachable equity warrants to the lenders of the private debt
giving the warrant holders the right to receive new shares in
the parent company on exercise any time up to 22 November
2025 at an exercise price of 41.49p per share (being a
10% discount to the share price on 20 November 2020).
The option is over 153,539,786 shares which represents 9.99%
of the fully diluted share capital of the parent company.

The additional financing included various clauses that were
recognised as embedded derivatives, including interest rate
floor, prepayment feature and default interest clauses.

Due to the magnitude and complexity of the additional
financing, this has been a focus area for our audit.

− Obtaining and reading the agreements to understand
the terms, restrictions and covenants, and obligations
pertaining to the new financing and warrants.

− Testing management’s classification of the additional
financing on the balance sheet as debt, including the
equity warrants.

− Understanding the nature of the various fees, including the
Payment in Kind interest and the impact on the effective
interest rate, and testing the accounting treatment of
the fees.

− Testing and recalculating the amortised cost of the loans.

− Engaging our valuation specialists to independently value

the equity warrants and embedded derivatives.

− Assessing the tax implications of the refinancing across the
group involving tax specialists in both the UK and the US.

− Reviewing the disclosures to ensure these were

appropriately presented in the financial statements,
including the details of the restrictions and covenants.

− Ensuring the cash flow restrictions and implications were
appropriately considered within management’s going
concern assessment.

The tax implications and embedded derivative established
as a result of the 1% Libor floor may reverse in 2021 if
management is able to successfully negotiate the removal
of this existing clause in the financing agreement.

Based on these procedures we consider the additional
financing to be accounted for and disclosed appropriately.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsKEY AUDIT MATTER

HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER

Consideration of the impact of Covid-19 (group and parent)

The Covid-19 pandemic has had a significant impact on
the cinema entertainment industry and the group with
consequences to the judgements and estimates, and current
and future operations of the business.

The procedures we have performed over impairment of
property, plant and equipment and right of use assets,
impairment of goodwill, impairment of investments,
recoverability of deferred tax assets, and accounting for
additional financing, and our conclusions, are set out in the
separate key audit matters above.

Additionally, the procedures we have performed over
going concern, and our conclusions are set out in ‘material
uncertainty related to going concern’ section above and the
‘corporate governance statement’ section below.

In those locations where we have undertaken our audit work
remotely, we did not encounter any significant difficulties
in performing our audit testing or in obtaining the required
evidence to support our audit conclusions.

We have also considered the presentation of the one-off
exceptionals associated with the impact which has resulted
in an Inventory write-off of $16 million and redundancy and
other costs of $4 million, considering both their nature and
whether there has been any historic charges of a similar
nature and magnitude. Based on this work we are comfortable
with the presentation.

The key impacts of Covid-19 on the group and parent
company financial statements are:

− The budgets and models supporting the impairment

assessments have been updated to reflect management’s
best estimate of the impacts of Covid-19. The assumptions
applied in this analysis have been determined internally,
however they incorporate views of external commentators
and other third-party data sources, where relevant.
Consideration of the impact on the carrying values is
described in the related key audit matters above.

− Similarly, management’s reassessment of the carrying value
of the company’s investment in subsidiary undertakings
resulted in a reduction to the valuation at the year end,
arising due to the impact of Covid-19 on the underlying
businesses, as described in the related key audit
matter above.

− The impact on the group resulted in the liquidity and

covenant challenges accumulating into the need to obtain
significant additional funding in November 2020 as
described in the related audit matter above.

− These models and related assumptions also underpin

management’s going concern and viability assessments.
Management has modelled severe but plausible downside
scenarios to its weighted base case forecast. The outcome
of these assessments is detailed in the material uncertainty
in respect of the going concern section above.

How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and controls,
and the industry in which they operate.

The group operates cinema sites within 10 countries, and there are 16 reporting components in total. We identified eight
reporting components across four countries for which we determined that a full scope audit is required. The reporting
components, excluding those audited by the group engagement team, were audited by the US and Poland component teams
and reporting over the Digital Cinema Implementation Partners joint operation was obtained from its auditor. The group
team performed the audit of the UK component. During the year the group engagement team held regular video conference
calls to discuss the audit approach and findings with the component teams, and to attend their clearance meetings with
local management.

Our audit scope was determined by considering the significance of each component’s contribution to profit/loss before tax,
excluding exceptionals, and individual financial statement line items, with specific consideration to obtaining sufficient coverage
over significant risks.

Our attendance at the clearance meetings via video conference, review of component team reporting results and workpapers
electronically, together with the additional procedures performed at group level, gave us the evidence required for our opinion
on the financial statements as a whole. Our audit procedures at the group level included the audit of the consolidations,
goodwill impairment review and accounting for additional financing. The group engagement team also performed the audit
of the parent company.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CINEWORLD GROUP PLC CONTINUEDCineworld Group plc Annual Report and Accounts 2020Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect
of misstatements, both individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Overall materiality

How we determined it

Rationale for
benchmark applied

FINANCIAL STATEMENTS – GROUP

FINANCIAL STATEMENTS – COMPANY

$14.1 million (2019: $14.1 million)

$16.7 million (2019: $43.6 million)

5% of average absolute profit/loss before tax
(excluding exceptional items) over a three-year
period (2018, 2019, 2020). This would have
resulted in an increase in materiality given the
size of the loss in 2020. Since we consider an
increase in materiality would be inappropriate
in the context of the group's results, we then
capped this at the overall materiality level from
the prior year.

Profit/loss on ordinary activities before tax,
adjusted for the impact of all non-recurring
exceptional items, provides us with a
consistent year-on-year basis for determining
materiality. It is, we believe, a metric commonly
used by the Shareholders as a body in
assessing the group's performance and is a
generally accepted auditing benchmark.

1% of total assets

We consider that total assets is the primary
measure used by the shareholders in
assessing the performance of a holding
company and is a generally accepted
auditing benchmark. For the purposes of the
group audit, we applied a lower materiality
of $13 million to company balances and
transactions, other than those which were
eliminated on consolidation in the group
financial statements.

For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality.
The range of materiality allocated across components was between $3 million and $13.3 million. Certain components were
audited to a local statutory audit materiality that was also less than our overall group materiality.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of
our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 65% of overall materiality, amounting to $9.2 million for the group
financial statements and $10.9 million for the company financial statements.

In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls – and concluded that an amount in the middle of our normal range
was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
$0.7 million (group audit) (2019: $0.7 million) and $0.8 million (company audit) (2019: $2.2 million) as well as misstatements
below those amounts that, in our view, warranted reporting for qualitative reasons.

Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The members are responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based
on these responsibilities.

With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions
and matters as described below.

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Directors’ Report for the year ended 31 December 2020 is consistent with the financial statements and has been prepared
in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the Strategic report and Directors’ Report.

Directors’ Remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with
the Companies Act 2006.

Corporate governance statement
The Listing Rules require us to review the members’ statements in relation to going concern, longer-term viability and that
part of the corporate governance statement relating to the company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review. Our additional responsibilities with respect to the corporate governance statement
as other information are described in the Reporting on other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit, and,
except for the matters reported in the section headed ‘Material uncertainty related to going concern’, we have nothing material
to add or draw attention to in relation to:

− The members’ confirmation that they have carried out a robust assessment of the emerging and principal risks;

− The disclosures in the Annual Report and Accounts 2020 that describe those principal risks, what procedures are in place

to identify emerging risks and an explanation of how these are being managed or mitigated;

− The members’ statement in the financial statements about whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their identification of any material uncertainties to the group’s
and company’s ability to continue to do so over a period of at least twelve months from the date of approval of the
financial statements;

− The members’ explanation as to their assessment of the group’s and company’s prospects, the period this assessment covers

and why the period is appropriate; and

− The members’ statement as to whether they have a reasonable expectation that the company will be able to continue in

operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the group was substantially less in scope than an
audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking that
the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the
statement is consistent with the financial statements and our knowledge and understanding of the group and company and
their environment obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the financial statements and our knowledge obtained during
the audit:

− The members’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the group’s and company’s position, performance, business
model and strategy;

− The section of the Annual Report that describes the review of effectiveness of risk management and internal control

systems; and

− The section of the Annual Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the members’ statement relating to the company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the
Listing Rules for review by the auditors.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CINEWORLD GROUP PLC CONTINUEDCineworld Group plc Annual Report and Accounts 2020Responsibilities for the financial statements and the audit
Responsibilities of the members for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities in respect of the Annual Report and the Financial
Statements, the members are responsible for the preparation of the financial statements in accordance with the applicable
framework and for being satisfied that they give a true and fair view. The members are also responsible for such internal control
as they determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.

In preparing the financial statements, the members are responsible for assessing the group’s and the company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the members either intend to liquidate the group or the company or to cease operations, or have no realistic
alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete
populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.

OTHER REQUIRED REPORTING

Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:

− we have not obtained all the information and explanations we require for our audit; or

− adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received

from branches not visited by us; or

− certain disclosures of members’ remuneration specified by law are not made; or

− the company financial statements and the part of the Directors’ remuneration report to be audited are not in agreement with

the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment
Following the recommendation of the Audit Committee, we were appointed by the directors on 17 June 2019 to audit the
financial statements for the year ended 31 December 2019 and subsequent financial periods. The period of total uninterrupted
engagement is two years, covering the years ended 31 December 2019 to 31 December 2020.

Christopher Richmond (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
25 March 2021

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsCONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2020

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

Note

Revenue
Cost of sales

Gross (loss)/profit
Other operating income
Administrative expenses
Net impairment of goodwill, property, plant and equipment, right-of-use assets
and investments

Operating (loss)/profit

Adjusted EBITDA as defined in Note 2

Finance income
Finance expenses
Net finance costs
Share of (loss)/profit from jointly controlled entities using equity accounting
method net of tax
(Loss)/profit before tax
Tax benefit/(charge) on profit

(Loss)/profit for the year attributable to equity holders of the Group

Basic (Deficit)/Earnings Per Share
Diluted (Deficit)/Earnings Per Share

9
9

7
7

The Notes on pages 102 to 162 are an integral part of these Consolidated Financial Statements.

852.3
(888.1)

(35.8)
2.3
(879.7)
(1,344.5)

4,369.7
(2,749.1)

1,620.6
5.7
(854.7)
(46.9)

(2,257.7)

724.7

(115.1)

69.6
(786.8)
(717.2)
(33.0)

(3,007.9)
356.4

(2,651.5)

(193.2)
(193.2)

1,580.3

26.3
(568.0)
(541.7)
29.3

212.3
(32.0)

180.3

13.1
13.1

Cineworld Group plc Annual Report and Accounts 2020CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020

(Loss)/profit for the year attributable to equity holders of the Group

Items that will not subsequently be reclassified to profit or loss
Net change in fair value of equity investments
Items that will subsequently be reclassified to profit or loss
Retranslation gain of foreign currency denominated operations
De-designation of net investment hedge
Movement of net investment hedge
Income tax (charge) recognised within other comprehensive income

Comprehensive (loss)/income for the year, net of income tax

Total comprehensive (loss)/income for the year attributable to equity holders
of the Group

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

(2,651.5)

180.3

–

3.5
9.8
(19.8)
(0.1)

(6.6)

(2,658.1)

(7.5)

12.6
–
22.2
(0.7)

26.6

206.9

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsCONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2020

Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
Other intangible assets
Investment in equity-accounted investees
Financial assets at FVOCI
Deferred tax assets
Fair value of financial derivatives
Other receivables

Total non-current assets

Current assets
Assets classified as held for sale

Inventories
Current taxes receivables
Trade and other receivables
Fair value of financial derivatives
Cash and cash equivalents

Total current assets

Total assets

Current liabilities
Loans and borrowings
Fair value of financial derivatives
Fair value of warrants
Lease liabilities
Trade and other payables
Deferred revenue
Current taxes payable
Provisions

Total current liabilities

Non-current liabilities
Loans and borrowings
Fair value of financial derivatives
Lease liabilities
Other payables
Deferred revenue
Provisions
Employee benefits
Total non-current liabilities

Total liabilities

Net assets

Equity attributable to equity holders of the Group
Share capital
Share premium
Foreign currency translation reserve
Hedging reserve
Fair value reserve
Retained earnings

Total equity

Note

31 December
2020
$m

31 December
2019
$m

11
20
12
12
13
15
16
26
18

18
26

19
26
26
20
21
22

19
26
20
21
22
24
23

25
25
25
25
25

1,788.2
2,306.4
4,868.3
489.5
215.1
10.0
278.1
7.8
48.7

10,012.1

2.9

13.2
206.6
53.7
–
336.7

613.1

10,625.2

(54.2)
–
(97.2)
(596.6)
(596.3)
(270.9)
(40.6)
(8.0)

2,039.5
3,441.2
5,492.1
515.6
300.2
10.0
138.8
–
64.6

12,002.0

0.9

33.2
1.6
261.8
10.4
140.6

448.5

12,450.5

(133.9)
(4.5)
–
(321.6)
(712.1)
(263.1)
(48.8)
(6.4)

(1,663.8)

(1,490.4)

(4,608.5)
(130.1)
(3,375.1)
(9.2)
(607.0)
(1.1)
(4.1)
(8,735.1)

(10,398.9)

226.3

20.1
513.8
(247.3)
11.6
(14.4)
(57.5)

226.3

(3,485.4)
(9.7)
(3,875.9)
(12.4)
(635.0)
(0.5)
(3.5)
(8,022.4)

(9,512.8)

2,937.7

20.1
516.0
(250.8)
21.6
(14.4)
2,645.2

2,937.7

These Financial Statements on pages 89 to 167 were approved by the Board of Directors on 25 March 2021 and were signed
on its behalf by:

Nisan Cohen
Director

100

Cineworld Group plc Annual Report and Accounts 2020CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020

1 January 2019
Profit for the year
Comprehensive income
Items that will not subsequently be
reclassified to profit or loss
Net change in fair value of equity
investments
Items that will subsequently be
reclassified to profit or loss
Movement on net investment hedge
Tax that will subsequently be reclassified
to profit or loss
Retranslation of foreign currency
denominated operations
Total comprehensive income
Contributions by and distributions
to owners
Dividends
Movements due to share-based
compensation
Transfer of shares

Share
capital
$m

Share
premium
$m

Foreign currency
translation reserve
$m

Hedging
reserve
$m

Fair value
reserve
$m

20.1
–

513.8
–

(263.4)
–

(0.6)
–

(6.9)
–

Retained
earnings
$m

2,984.0
180.3

Total
$m

3,247.0
180.3

–

–
–

–

–
–

–

–
–

–

–
–

–

2.2

–

–
–

12.6

–

(7.5)

–

(7.5)

22.2
–

–

–
–

–

–
(0.7)

22.2
(0.7)

–

12.6

22.2

(7.5)

179.6

206.9

–
–

–

–
–

–

–
–

–

(520.2)
1.8

–

2.2

31 December 2019

20.1

516.0

(250.8)

21.6

(14.4)

2,645.2

2,937.7

Loss for the year
Comprehensive income
Items that will not subsequently be
reclassified to profit or loss
Net change in fair value of equity
investments
Items that will subsequently be
reclassified to profit or loss
De-designation of net investment hedge
Movement on net investment hedge
Tax that will subsequently be reclassified
to profit or loss
Retranslation of foreign currency
denominated operations

Total comprehensive loss
Contributions by and distributions
to owners
Dividends
Movements due to share-based
compensation
Transfer of shares

–

–
–
–

–

–
–

–

–
–
–

–

–
–

(2.2)

–

–
–
–

–

9.8
(19.8)
–

3.5

–

3.5

(10.0)

–
–

–

–
–

–

–
–
–

–

–
–

–

(2,651.5)

–

–
–
(0.1)

9.8
(19.8)
(0.1)

–

3.5

(2,651.6)

(2,658.1)

(51.4)
(1.9)

2.2

–

31 December 2020

20.1

513.8

(247.3)

11.6

(14.4)

(57.5)

226.3

101

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsCONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020

Cash flow from operating activities
(Loss)/profit for the year
Adjustments for:

Finance income
Finance expense
Taxation
Share of loss/(profit) of equity accounted investee

Operating (loss)/profit
Depreciation and amortisation
Share-based payments charge
Impairment and reversal of impairment of property, plant and
equipment, right-of-use assets and goodwill
Impairment of investment
Decrease in trade and other receivables
Decrease in inventories
Decrease in trade, other payables and deferred income
Increase/(Decrease) in provisions and employee benefit obligations
Loss/(Gain) on sale of assets
Cash (used)/generated from operations

Tax received/(paid)

Net cash flows from operating activities

Cash flows from investing activities
Interest received
Income from net investment in sub-lease
Acquisition of property, plant and equipment
Investment in joint ventures

Investment in financial asset at FVOCI
Acquisition of distribution rights and other intangibles
Distributions received from equity accounted investees
Proceeds from sale and leaseback
Proceeds from sale of property, plant and equipment

Net cash flows from investing activities

Cash flows from financing activities
Dividends paid to shareholders
Interest paid
Repayment of bank loans
Repayment of loans from equity accounted investees
Draw down of bank loans
Debt issuance costs paid
Repayment on termination of financial derivatives
Landlord contributions
Payment of lease liabilities*

Net cash flows from financing activities

Cash and cash equivalents at the start of the period
Net movements in cash and cash equivalents
Exchange gain/(loss) on cash and cash equivalents

Cash and cash equivalents at the end of the year

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

Note

9
9
10

6
2
6

(2,651.5)

(69.6)
786.8
(356.4)
33.0

(2,257.7)
643.3
(2.3)
1,307.4

37.1
214.4
20.0
(204.5)
2.1
6.4
(233.8)

6.2

(227.6)

6.5
1.0
(290.0)
(0.3)

–
(2.5)
17.8
–
3.2

(264.3)

(51.4)
(158.3)
(54.2)
–
1,207.8
(73.2)
(10.2)
13.5
(198.6)

675.4

140.6
183.5
12.6

336.7

180.3

(26.3)
568.0
32.0
(29.3)

724.7
729.8
4.9
46.9

–
37.9
2.3
(97.5)
(35.0)
(12.2)
1,401.8

(108.1)

1,293.7

3.6
1.2
(455.6)
–

(10.0)
(5.2)
42.6
542.4
22.0

141.0

(520.2)
(165.5)
(1,458.5)
(3.0)
1,130.3
–
–
28.4
(613.3)

(1,601.8)

316.3
(167.1)
(8.6)

140.6

* Payment of lease liabilities includes $115.7m (2019: $304.2m) of interest payments and $82.9ml (2019: $309.1m) of principal lease payments.

During the financial year $47.8m (2019: $nil) of government grants was received in cash.

102

Cineworld Group plc Annual Report and Accounts 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(FORMING PART OF THE FINANCIAL STATEMENTS)

1. Accounting Policies
Basis of preparation
Cineworld Group plc (the “Company”) is a company limited by shares, incorporated and domiciled in the UK. The Company’s
registered address is 8th Floor, Vantage London, Great West Road, Brentford TW8 9AG.

The Group financial statements have been prepared and approved by the Directors in accordance with both “international
accounting standards in conformity with the requirements of the Companies Act 2006” and “international financial reporting
standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union”. The Company has elected
to prepare its parent Company financial statements in accordance with FRS 101 Reduced Disclosure Framework and the
Companies Act 2006; these are presented on pages 163 to 176.

The accounting policies set out below have been applied consistently to all years presented in these Group financial statements.

Information regarding the Group’s business activities, together with the factors likely to affect its future development,
performance and position is set out in the Chief Executive Officer’s Review on pages 4 to 5 and the Principal Risks and
Uncertainties section on pages 14 to 19. The financial position of the Group, its cash flows, liquidity position and borrowing
facilities are described in the Chief Financial Officer’s Review on pages 26 to 31. In addition, Note 25 to the financial statements
includes the Group’s objectives, policies and processes for managing its capital; its financial risk management objectives; details
of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

Presentational currency
The financial results of the Group are presented in US dollars.

Going concern
In assessing the appropriateness of applying the going concern basis in preparation of the consolidated and company financial
statements the directors have considered the Group’s liquidity and forecast cash flows under a range of potential scenarios,
taking into account reasonably possible outcomes over a 15-month period from the date of approval of these financial
statements. Given the global political and economic uncertainty driven by the continuing COVID-19 pandemic, and its specific
impact on the cinema exhibition industry, the directors consider some volatility in performance and a certain amount of
disruption to business likely over the coming months. Although the recent roll out of vaccination programs, and the positive
announcements from both the US and UK on cinema openings, suggest significant potential for recovery over the coming
15 months, the directors consider the performance to be sensitive to the ability to reopen, the availability of film content
available and the recovery profile of admissions.

The scenarios modelled consider the potential impact of lifting and continuation of COVID-19 restrictions affecting the
cinema exhibition industry, the availability and timing of film content, consumer behaviour driven by COVID-19, the impact on
contractual cash flows specific to the Group and its liquidity position, as well as future access to liquidity. These scenarios cover
a range of potential outcomes primarily based on the speed of recovery of the cinema exhibition industry from the COVID-19
pandemic, as well as the potential for further impact in the future. Each of the scenarios are sensitive to forecast admissions
levels and certain material cash flows.

For the forthcoming re-openings, in line with the re-openings from the first outbreak of COVID-19 in 2020, the Group will re-
implement safety measures across all territories to ensure the safety of customers and employees. These include staggered
film start times, social distancing measures in auditoriums and foyers, additional cleaning procedures, temperature checks
and the wearing of face coverings in certain territories. Restrictions in place, and additional measures taken in order to ensure
appropriate social distancing is maintained in all cinemas, constrain the potential capacity for attendance. However, the level
of unused capacity available in theatres, operational changes made regarding film times and the choice of films shown should
ensure that forecast revenues are still achievable despite such restrictions.

In May 2020, in order to provide additional liquidity, the Group agreed the terms for an extension of $110.8m on the revolving
credit facility (RCF) and in June of 2020, a new $250.0m secured loan. In November 2020, the Group agreed the terms of a
further facility of $450.0m and the amendment of the previously agreed incremental RCF of $110.8m to a term loan with a
maturity of May 2024. The Group also successfully agreed the waiver of all existing financial covenants until the June 2022
testing point.

The new $450m facility includes certain new financial and operating covenants, which remain in place until the Group achieves
admission levels consistent with 80% of comparable periods in 2019 for a period of three consecutive months. These covenants
include minimum liquidity requirements, restrictions on cash disbursements for operations and capital expenditure and the
prohibition of settlement of certain specific material liabilities. The Directors are confident that the Group can continue to
operate and recover fully from the impact of the pandemic whilst complying with all obligations under its lending agreements.

The Group’s currently available facilities and indebtedness are set out in note 19.

103

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements1. Accounting Policies continued
Going concern continued
Weighted base case scenario
The Group’s base case scenario assumes a gradual recovery from the current shutdown, with cinemas across all territories
opening in May 2021 at 60% of comparable levels to 2019, returning to admissions levels of 90% of comparable periods in 2019
by the end of the year. Admissions are then forecast to remain on average 10% below 2019 levels throughout 2022 and 5%
below through 2023. In addition to cinema performance, the Group’s cash flows and liquidity are sensitive to the timing and
level of rent payments. The Group has been successful in agreeing the waiver and deferral of significant rent payable under
lease agreements through the current shutdown period, and beyond with the support of landlords. Rent payments have been
modelled in line with actual modifications and the expectations of achievable deferrals over the coming 12-month period based
on on-going discussions with the landlords. The Group has also taken into consideration mitigating actions available to it, these
include stopping all non-essential capital expenditure for the coming nine months which has been modelled under the weighted
base case scenario. In addition, the Group has taken steps to reduce operational and administrative costs, in order to further
preserve liquidity. Further steps would be taken to operate at a minimal costs basis should the directors consider it necessary.
No further lockdowns or operating restrictions in winter 2021 are considered within this forecast.

Under the weighted base case scenario, the Group maintains headroom against available cash and debt facilities throughout
the going concern assessment period, including in May 2021 and the early months of reopening. Restrictions on operating and
capital expenditure cash flows are complied with at all times. Financial covenants on the RCF, of 5.0x net leverage at the June
2022 testing point, would not be breached.

In addition, two significant matters arise in this period being a large one off tax cash receipt under the US CARES act which
allows losses for 2020 to be offset against tax paid in earlier periods creating a cash tax refund of $202m, and the expected
judgement on the Regal Dissenting Shareholders claim where the Dissenting Shareholders are claiming more than $202 million
(excluding any interest payable).

The Group accelerated its tax year closure in order to bring forward the expected cash refund. Following professional advice
and in line with government guidelines, the Directors are satisfied that the receipt in respect of the claim will occur by the end
of April 2021.

The Group is currently prohibited from making payments in respect of the Dissenting Shareholder liability by the terms of
$450 million loan, except for any payments made from the proceeds of an equity raise or from permitted subordinated debt
in accordance with the $450 loan agreement. A judgment in respect of the Dissenting Shareholder liability is expected to be
received no later than 30 June 2021, and the Directors anticipate that judgment will be in line with the fair value of the original
transaction plus interest. The Directors are satisfied, based on external legal advice, that the restriction on paying the dissenting
shareholders under the $450 million loan is enforceable and that no payments in respect thereof are likely to arise in the going
concern period that are in violation of the terms of the $450 million loan.

Severe but plausible downside scenarios
Given the current uncertainty around the potential impact of disruption caused by COVID-19 in the forthcoming period and
the challenges around forecasting the impact on the cinema industry, the Directors have considered the following severe but
plausible downside scenarios to stress test the Group’s financial forecasts.

1. In the event that the US CARES Act tax cash receipt of $202 million is not received before the end of April 2021 there would
be a breach in the minimum liquidity covenant in April 2021 which would require a waiver from the lenders. Further, if both
the tax receipt was not received, and cinemas were not to open, before the end of May 2021, then additional liquidity would
be required in May 2021. As a mitigating action management has engaged advisors around the potential for raising additional
unsecured liquidity. In parallel the Group is requesting consent of its shareholders to amend its articles of association to
release it from its current borrowing limits.

2. Modelling the same cash flow positions as the weighted base case but with; a) a slower recovery from the current wave

of COVID-19 affecting all of the Group’s territories to the extent that the forecast reopening of its cinemas is delayed until
August 2021 and, b) that no rent abatements are achieved on leases yet to be renegotiated. The scenario forecasts no
revenue until August 2021, at which point, admissions are forecast to be 60% of 2019 levels in August and increase to an
average of 75% of 2019 levels for the remainder of 2021. Admissions are then forecast to remain at 80% of 2019 levels until
2023, 90% in 2024 and fully recover from 2025 onward. The modelling for this scenario indicates that the Group, in addition
to breaching the covenants under its lending agreements in May 2021 and the leverage covenant in June 2022, would need
additional liquidity in order to continue to operate from September 2021.

3. There remains uncertainty in the market around consumer confidence, the ability to visit cinemas in the short term and the
scheduling of movies. This has been reflected in recent announcements by certain studios and the vaccination challenges
being faced across Central Europe. If forecast admissions on films were to decline by a further 10% in 2021 this would result
in a breach of the Rest of World covenant in December 2021 and the Group leverage covenant in June 2022. Further, if
cinema openings were delayed until June 2021, or if admissions were only at 19% of 2019 levels in May 2021, then this would
result in a breach of the minimum liquidity covenant in May 2021 and June 2021 respectively.

4. In addition, should an agreement not be reached with the Dissenting Shareholders there is a risk that they may wish to

challenge any failure not to pay them in accordance with a judgement.

104

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 20201. Accounting Policies continued
Going concern continued
Conclusion
The Directors recognise the challenges facing the business and the uncertainty around the recovery of the cinema industry
following the impact of COVID-19, and the potential risks that remain, which represent material uncertainties with respect to the
Group’s and company’s ability to continue as a going concern. Having considered all known factors the Directors are comfortable
that the weighted base case supports the going concern assumption.

However, whilst sufficient liquidity is considered to exist in the weighted base case, and waivers have been obtained in respect of
covenants which are forecast to be breached, the uncertainty around the recovery profile and the availability of film content, the
timing of the US CARES Act tax cash receipt, the payment restriction on the Dissenting Shareholder liability, as well as the lack of
headroom in the severe but plausible scenario, indicate the existence of material uncertainties that may cast significant doubt upon
the Group’s and company’s ability to continue to operate as a Going Concern. The Consolidated and company Financial Statements
do not include the adjustments that would result if the Group or company were unable to continue as a going concern.

Measurement convention
The financial statements are prepared on the historic cost basis except for the following assets and liabilities stated at
their fair value: derivative financial instruments and financial instruments classified as fair value through the Statement of
Comprehensive Income.

Basis of Consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial
statements of subsidiaries are included in the Consolidated Financial Statements from the date on which control commences until
the date on which control ceases.

Joint arrangements
Under IFRS 11 “Joint Arrangements” investments in joint arrangements are classified as either joint operations or joint ventures.
The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint
arrangement. The Group holds both joint operations and joint ventures.

Joint operations
The Group recognises its share of any jointly held or incurred assets, liabilities, revenues and expenses of the joint operation.
These have been incorporated in the Consolidated Financial Statements under the appropriate headings. Details of the joint
operation are set out in Note 14.

Joint ventures
Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement and
requiring the venturers’ unanimous consent for strategic financial and operating decisions. joint ventures are accounted for using
the equity method and are initially recognised at cost. The Consolidated Financial Statements include the Group’s share of the total
recognised income and expense and equity movements of equity accounted investees, from the date that joint control commences
until the date that joint control ceases. When the Group’s share of losses exceeds its interest in an equity accounted investee, the
Group’s carrying amount is reduced to $Nil and recognition of further losses is discontinued except to the extent that the Group
has incurred legal or constructive obligations or made payments on behalf of an investee.

Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are
eliminated. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the
extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment.

Equity investments
Equity investments are held in entities which have not been classified as a subsidiary, associate or joint arrangement are accounted
for at fair value. These equity investments are not held for trading purposes and represent strategic investments.

The Group has elected at initial recognition to present value changes through the Statement of Comprehensive Income within the
revaluation reserve. Any dividends received from these equity investments will be recognised within the Consolidated Statement
of Profit or Loss.

On disposal of these equity investments, any related balance previously recognised within the fair value through other
comprehensive income (“FVOCI”) reserve is reclassified to retained earnings.

105

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements1. Accounting Policies continued
Foreign currency continued Business combinations
For acquisitions on or after 1 January 2010, the Group measures goodwill as the fair value of the consideration transferred (including
the fair value of any previously held equity interest in the acquiree) and the recognised amount of any non-controlling interests
in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed,
all measured as of the acquisition date. When the excess is negative, a bargain purchase gain is recognised immediately in the
Consolidated Statement of Profit or Loss. Transactions costs, other than those associated with the issue of debt or equity securities
that the Group incurs in connection with business combinations are expensed as incurred.

Foreign currency
Transactions in foreign currencies are translated at the foreign exchange rate relevant at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the Consolidated Statement of Financial Position date are
translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised
in the Consolidated Statement of Profit or Loss. Non-monetary assets and liabilities that are measured in terms of historical cost
in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities
denominated in foreign currencies that are stated at fair value are translated at foreign exchange rates ruling at the dates the
fair value was determined.

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are
translated at foreign exchange rates ruling at the Consolidated Statement of Financial Position date. The revenues and expenses
of foreign operations are translated at an average rate for the year where this rate approximates to the foreign exchange
rates ruling at the dates of the transactions. Translation movements are recognised within the Statement of Comprehensive
Income and in the foreign currency translation reserve. As share capital, share premium are denominated in sterling, these are
translated into presentational currency at the historic rate prevailing on the date of each transaction.

Financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the
financial instrument. Financial assets are de-recognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

Financial liabilities are de-recognised when the contractual obligations are discharged, cancelled or expire.

Financial assets and financial liabilities are offset and the net amount is reported in the Consolidated Statement of Financial
Position, when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net
basis, or realise the financial asset and settle the financial liability simultaneously. IFRS 9 contains three classification categories
for financial assets and liabilities: measured at amortised cost, fair value through profit or loss (“FVPL”) and fair value through
other comprehensive income (“FVOCI”).

At initial recognition, the Group classifies its financial instruments in the following categories depending on the purpose for
which the financial instruments were acquired:

i. Financial assets and financial liabilities at FVPL:
Financial instruments in this category are recognised initially and subsequently at fair value. Transaction costs are expensed
in the Consolidated Statement of Profit or Loss. Gains and losses arising from changes in fair value are presented in the
Consolidated Statement of Profit or Loss. Financial assets and financial liabilities at fair value through profit or loss are classified
as current, except for the portion expected to be realised or paid beyond 12 months of the Consolidated Statement of Financial
Position date, which is classified as non-current.

Embedded derivative features identified within contractual arrangements are separately recognised where it is assessed
that they are not closely related to the terms of the contract, where such features are considered closely related they are not
separately recognised.

ii. Financial assets and liabilities at amortised cost:
The Group’s financial assets at amortised cost comprise trade receivables and cash and cash equivalents, and are included in
current assets due to their short-term nature. financial assets are initially recognised at the amount expected to be received,
less, when material, a discount to reduce the financial assets to fair value. Subsequently, financial assets are measured at
amortised cost using the effective interest method, less an loss allowance.

Financial liabilities at amortised cost include trade payables, bank indebtedness and long-term debt. Trade payables are initially
recognised at the amount required to be paid, less, when material, a discount to reduce the payables to fair value. Subsequently,
trade payables are measured at amortised cost using the effective interest method. Bank indebtedness and long term debt, are
recognised initially at fair value, net of any transaction costs incurred and, subsequently, at amortised cost using the effective
interest method.

Financial liabilities are classified as current liabilities if payment is due within 12 months. Otherwise, they are presented as
non-current liabilities.

106

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 20201. Accounting Policies continued
Financial instruments continued
iii. Financial instruments at FVOCI:
At initial recognition, the Group can make an irrevocable election to classify equity instruments at FVOCI, with all subsequent
changes in fair value being recognised in OCI. The Group has classified certain equity instruments as FVOCI as outlined in
Note 15.

In addition, the Group uses the following derivatives:

Net investment hedge
The Group uses net investment hedges to mitigate foreign currency translation exposure on certain net investments in
subsidiary companies. Changes in the fair values of hedging instruments are taken directly to the Statement of Comprehensive
Income together with gains or losses on the foreign currency translation of the hedged investments. Until the investment is
disposed of, all gains and losses are recognised in equity, within the hedging reserve. Any ineffective portion of the hedging
relationship is recognised immediately in the Consolidated Statement of Profit or Loss, within Other Income/(Expenses).

Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised
in the cash flow hedge reserve within equity. The gain or loss relating to the ineffective portion is recognised immediately in the
Consolidated Statement of Profit or Loss, within Other Income/(Expenses). Amounts accumulated in equity are reclassified to
finance costs within the Statement of Profit or Loss at the same time as the relating interest expense on hedged borrowings.

When a hedging instrument expires or is sold, terminated or exercised, or the entity revokes designation of the hedge relationship
but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity and is
recognised in accordance with the above policy when the transaction occurs. If the hedged transaction is no longer expected to
take place, the cumulative unrealised gain or loss recognised in equity is recognised in the Statement of Other Comprehensive
Income immediately.

Impairment of financial assets
The Group measures expected credit losses using a lifetime expected loss allowance for all current trade and other receivables.

Loss allowances will be measured on either of the following bases:

i. 12-month expected credit losses (“ECLs”) are the ECLs that result from possible default events within 12 months after the

reporting date; and

ii. lifetime ECLs which are ECLs that result from all possible default events over the expected life of a financial instruments.

The expected loss rates are based on current and forward-looking information on macroeconomic factors affecting the ability
of the customers to settle the receivables.

Cash and cash equivalents
Cash and cash equivalents comprise cash balances, call deposits and cash amounts in transit due from credit cards which are
settled within seven days from the date of the reporting period. Bank overdrafts that are repayable on demand and form an
integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose only
of the Statement of Cash Flows.

Leases
The Group’s leases predominantly relate to property leases for each cinema site, however the Group’s lease portfolio also includes
other assets such as motor vehicles. Rental contracts are typically made for fixed periods of on average 15 years but may have
extension options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.

From 1 January 2019, on adoption of IFRS 16 “Leases” leases are recognised as a right-of-use asset and a corresponding
liability at the date at which the leased asset is available for use by the Group in the Consolidated Statement of Financials
Position. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the
Consolidated Statement of Profit or Loss over the lease period so as to produce a constant periodic rate of interest
on the remaining balance of the liability for each period. Both principal and finance cost elements of lease payments
are recognised within financing cash flows within the Consolidated Statement of Cash Flows. The depreciation charge
recognised on the right-of-use assets is being charged to administration expenses in the Group’s Statement of Profit
and Loss, in-line with where depreciation has previously been recorded.

107

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements1. Accounting Policies continued
Leases continued
Liabilities arising from leases are initially measured on a present value basis. Lease liabilities include the net present value of the
following lease payments:

− fixed payments (including in-substance fixed payments), less any lease incentives receivable;

− variable lease payments that are based on an index or a rate;

− the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and

− payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.t

The lease payments are discounted using the lessee’s incremental borrowing rate being the rate that the lessee would have
to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms
and conditions.

To determine the incremental borrowing rate, the Group:

− uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Group, which does

not have recent third party financing, and

− makes adjustments specific to the lease conditions.

Right-of-use assets are measured at cost comprising the following:

− the amount of the initial measurement of lease liability;

− any lease payments made at or before the commencement date less any lease incentives received; and

− any initial direct costs.

Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s
useful life.

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense
in the Consolidated Statement of Profit or Loss. Short-term leases are leases with a lease term of 12 months or less or leases on
adoption date which has a lease term of 12 months or less. Low-value assets comprise IT-equipment and small items of office and
cinema equipment.

The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in
the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability
is reassessed and adjusted against the right-of-use asset.

Lease modifications
Where lease contracts are amended resulting in extensions to the minimum lease term or increases to the overall consideration
under the lease, they are treated as modifications under IFRS 16.

Landlord contributions
Where the Group receives contributions and incentives from landlords at the start of the lease, these are recorded against the
right-of-use asset.

Sub-leases
The Group applies IFRS 16 to all leases of right-of-use assets in sub-leases. The Group classifies the sub-lease as a finance lease or
an operating lease with reference to the right-of-use asset arising from the head lease. The Group treats the right-of-use asset as
the underlying asset in the sub-lease, not the item of property, plant and equipment that it leases from the head lessor.

For sub-leases classified as operating leases, rental income will continue to be recognised in the Consolidated Statement of Profit or
Loss in the period to which it relates.

For sub-leases classified as finance leases, the Group will recognise an asset classified as net investment in a sub-lease. The Group
uses the discount rate it uses for the head lease, adjusted for any initial direct costs associated with the sub-lease to account for the
sub-lease.

During the term of the sub-lease, the Group recognises both interest income on the sub-lease and interest expense on the head lease.

Variable lease payments
Some property leases contain variable payment terms that are linked to sales generated from a particular cinema site. For individual
sites, up to 4% of lease payments are on the basis of variable payment terms with percentages ranging from 4% to 18% of sales.
Variable payment terms are used for a variety of reasons, including minimising the fixed costs base for newly established sites.
Variable lease payments that depend on sales are recognised in cost of sales within the Consolidated Statement of Profit or Loss
in the period in which the condition that triggers those payments occurs.

108

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 20201. Accounting Policies continued
Leases continued
Extension and termination options
Extension and termination options are included in a number of property and equipment leases across the Group. These
are used to maximise operational flexibility in terms of managing the assets used in the Group’s operations. The majority of
extension and termination options held are exercisable only by the Group and not by the respective lessor. We have identified
the inclusion of extensions and termination options within the lease term as a significant judgement. Refer to significant
accounting estimates and uncertainties section of the accounting policies for further details.

Sale and leaseback
In a sale-and-leaseback transaction the Group transfers an underlying asset to another entity and leases that asset back from
the buyer-lessor. If a sale is deemed to have taken place, the Group de-recognises the underlying asset and applies the lessee
accounting model to the leaseback arrangement. A right-of-use asset is recognised based on the retained portion of the
previous carrying amount of the asset and only the gain or loss is recognised related to the rights which are transferred to the
lessor. If a sale has not been deemed to have taken place, the Group continues to recognise the underlying asset and recognise
a financial liability.

Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses.

Depreciation is charged to the Consolidated Statement of Profit or Loss to write assets down to their residual values on a
straight-line basis within operating expenses over the estimated useful lives of each part of an item of property, plant and
equipment. The estimated useful lives are as follows:

− Land and buildings: freehold properties
− Land and buildings: long leasehold properties including leasehold improvements
− Land and buildings: short leasehold properties including leasehold improvements
− Plant and machinery
− Fixtures and fittings

20 to 50 years
Life of lease
30 years or life of lease if shorter
3 to 20 years
3 to 20 years

No depreciation is provided on land, assets held for sale or assets in the course of construction.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of
property, plant and equipment. Depreciation methods, residual values and the useful lives of all assets are reassessed annually.

Goodwill and other intangible assets
Identifiable intangibles are those which can be sold separately or which arise from legal rights regardless of whether those
rights are separable.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units (“CGUs”) and
is not amortised but is tested annually for impairment.

Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses.

Distribution rights that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses.

Amortisation is charged to the Consolidated Statement of Profit or Loss on a straight-line basis over the estimated useful lives
of intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life and goodwill are systematically
tested for impairment at each Statement of Financial Position date.

Other intangible assets are amortised from the date they are available for use. Distribution rights are amortised by film title from
the date of release of the film, at 50% in the first year of release and 25% in each of the two subsequent years. The estimated
useful lives are as follows:

− Brands
− Distribution rights
− Other intangibles

10 years to indefinite life
3 years
4 to 10 years

Assets held for sale
Non-current assets, or disposal groups are classified as held for sale if its carrying amount will be recovered principally through
sale rather than through continuing use, it is available for immediate sale and sale is highly probable within one year.

On initial classification as held for sale, assets and disposal groups are measured at the lower of previous carrying amount and
fair value less costs to sell with any adjustments taken to the Consolidated Statement of Profit or Loss. The same applies to
gains and losses on subsequent remeasurement although gains are not recognised in excess of any cumulative impairment
loss. Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on a
pro-rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets and
investment property, which continue to be measured in accordance with the Group’s accounting policies. Intangible assets and
property, plant and equipment once classified as held for sale or distribution are not amortised or depreciated.

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Inventories
Inventories are stated at the lower of cost and net realisable value. The cost of inventories is based on the First-In, First-Out
(“FIFO”) principle. Cost comprises expenditure incurred in acquiring the inventories and bringing them to their existing location
and condition, and net realisable value is the estimated selling price in the ordinary course of business, less the estimated
selling costs.

Impairment
The carrying amounts of the Group’s assets are reviewed at each Statement of Financial Position date to determine whether
there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For goodwill
assets that have an indefinite useful economic life, the recoverable amount is estimated at each Statement of Financial
Position date.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit (‘CGU’) exceeds its
recoverable amount. Impairment losses are recognised in the Consolidated Statement of Profit or Loss.

Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated
to CGUs and then to reduce the carrying amount of the other intangible assets in the unit on a pro-rata basis. A CGU is the
smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other
assets or groups of assets.

Where individual sites’ cash inflows are determined not to operate independently from one another, mainly due to strategic or
managerial decisions being made across more than one site, they may be combined into a single CGU.

Calculation of recoverable amount
The recoverable amount is the greater of the asset’s fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely
independent cash inflows, the recoverable amount is determined for the CGU to which the asset belongs.

Reversals of impairment
An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment is reversed when there
is an indication that the impairment loss may no longer exist as a result of a change in the estimates used to determine the
recoverable amount, including a change in fair value less costs to sell. An impairment loss is reversed only to the extent that
the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised. Where leases have been modified, resulting in a reduction in the
carrying value of the right-of-use asset, the impairment loss reversal will not exceed the modified carrying amount.

Employee benefits
Defined contribution pension plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the Consolidated Statement
of Profit or Loss in the periods which services are rendered by employees.

Defined benefit pension plans
The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of
future benefit that employees have earned in the current and prior years, discounting that amount and deducting the fair value
of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit
method. When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value of
economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan.
To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in the Statement
of Other Comprehensive Income. The Group determines the net interest expense/(income) on the net defined benefit liability/
(asset) for the year by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual
year to the then-net defined benefit liability/(asset), taking into account any changes in the net defined benefit liability/(asset)
during the year as a result of contributions and benefit payments. Net interest expense and other expenses related to defined
benefit plans are recognised in the Consolidated Statement of Profit or Loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service
or the gain or loss on curtailment is recognised immediately in the Consolidated Statement of Profit or Loss. The Group
recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 20201. Accounting Policies continued
Employee Benefits continued
Share-based payment transactions
The share option programme allows Group employees to acquire shares of the Company. The fair value of options granted
is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date using
the Black-Scholes model and spread over the period during which the employees become unconditionally entitled to the
options. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest except
where forfeiture is due only to share prices not achieving the threshold for vesting.

Share appreciation rights are also granted by the Group to employees. The fair value of the amount payable to the employee
is recognised as an expense with a corresponding increase in liabilities. The fair value is initially measured at grant date and
spread over the period during which the employees become unconditionally entitled to payment. The fair value of the share
appreciation rights is measured taking into account the terms and conditions upon which the instruments were granted.

The liability is remeasured at each Statement of Financial Position date and at settlement date and any changes in fair value
are recognised in the Consolidated Statement of Profit or Loss.

Provisions
A provision is recognised in the Consolidated Statement of Financial Position when the Group has a present legal or
constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to
settle the obligation, and the amount can be reliably estimated. Provisions are measured at the present value of management’s
best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate
used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money.
The increase in the provision due to the passage of time is recognised as an interest expense.

Revenue
Revenue represents the total amount receivable for goods sold and services provided, excluding sales-related taxes and
intra-group transactions. All the Group’s revenue is received from the sale of goods and services. The Group disaggregates
revenue into three material revenue streams which are made up of the following:

Box office revenue
− Box office revenue is recognised on the date of the showing of the film the ticket sold relates to.

− Unlimited card revenue is received annually or monthly in advance. When revenue from the Unlimited card is received

annually in advance it is initially recognised within deferred revenue and subsequently recognised on a straight-line basis
over the year. Monthly Unlimited card revenue is recognised in the period to which it relates.

Retail revenue
− Concessions revenue includes the sale of food and drink in the cinemas, in our VIP offerings, Starbucks sites and bars and
restaurants. All concession revenue is recognised at the point of sale. The Group operates a licence arrangement with
Starbucks in the UK&I operating segment. As part of the licence arrangement, the Group is required to pay to the licensor
a licence and royalty fee which is recognised in cost of sales.

− The Group records proceeds from the sale of gift cards and other advanced bulk tickets in deferred revenue and recognises
admissions or retail revenue when redeemed. Dependent on the revenue stream the gift card is redeemed against, revenue
will either be recorded within box office revenue or retail revenue. Additionally, the Group recognises unredeemed gift cards
and bulk tickets as other revenues based on a proportion of redemptions, which is estimated primarily based on the Group’s
historical experience.

− The Group operates loyalty schemes which allow members to earn rewards. The most significant of these is the Regal Crown
Club. Members earn credits for each dollar spent at the Regal theatres and can redeem such credits for tickets, concession
items and other rewards. To determine the amount of revenue to defer upon issuance of credits to customers, an estimate is
made of the value expected to be redeemed by customers for those credits. The estimates are based on rewards that have
historically been offered under the loyalty programme which are considered to be representative of rewards offered in future.
Upon redemption, deferred rewards are recognised as revenues in line with the revenue stream they are redeemed under.
Dependent on the revenue stream the loyalty scheme credits are redeemed against, revenue will either be recorded within
box office or retail.

Other revenue
Other revenue includes the following:

− Fees are charged for advanced bookings of tickets classified as booking fee revenue. This revenue is recognised at the point

when the tickets are purchased.

− Advertising revenue is recognised at the point the advertisement is shown in cinemas or the related impressions are delivered.

− An element of advertising revenue relates to the Exhibitor Services Agreement (“ESA”) with National CineMedia (“NCM”).

This advanced payment was recognised within deferred revenue and is being released over the life of the agreement.

− Distribution revenue is recognised on the date of the showing of the film it relates to for cinema distribution, for other media

the revenue is recognised over the life of the distribution contract.

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Revenue continued
− Rebates – the Group receives rebates primarily from concession vendors. The rebates are either a fixed amount or a

specified percentage based on the total purchases made from the vendor. The rebates are subject to some estimation
uncertainty but the arrangements are not complex. Rebates are calculated and accrued monthly based on the volume of
purchases. These rebates are either recognised as other revenues, a reduction of cost of goods sold, or a combination of the
two, dependent on the nature of the services provided. For arrangements where the Group is providing various forms of
in-theatre, lobby or website advertising in exchange for the rebate, such rebates are accounted for as a component of other
revenues. For arrangements under which the Group provides no material form of advertising such rebates are accounted for
as a reduction of cost of goods sold. Total rebates recognised in the Consolidated Statement of Profit or Loss during 2020
were $nil (2019: $47.8m).

Deferred revenue
Deferred revenue primarily consists of the following:

− NCM Exhibitor Services Agreement (‘ESA’): Revenue generated from the NCM ESA in the United States is recognised over
time as rights to advertising services are provided. The original agreement was due to end in 2037, but was extended until
2041 as part of the amendments made to the ESA in 2019. As part of the business combination accounting for Regal, a fair
value assessment of the ESA assumed contract liability was undertaken, being the Group’s obligation to perform under the
acquired NCM advertising arrangement. This valuation was recognised within deferred revenue and the revenue is recognised
on a straight-line basis over the remaining term of the ESA. The valuation of the ESA includes a significant financing
component due to the significant length of time between receiving the non-cash consideration and fulfilling the performance
obligation. The interest expense is calculated using discount rates implicit within the acquisition of the Regal business.
Annually, pursuant to the Common Unit Adjustment Agreement (the “CUA”) the Group receives the non-cash consideration
in the form of newly issued common units in NCM, in exchange for rights to exclusive access to the Group’s theatre screens
and attendees through to February 2041. Any adjustments to the number of common units held goes to deferred revenue
and this is recognised as advertising revenue on a straight-line basis over the remaining term of the ESA. Refer to revenue
accounting policy for details on how this revenue is recognised.

− Revenue received from the Unlimited scheme. Refer to revenue accounting policy for details on how this revenue is recognised.

− Unredeemed gift cards and bulk tickets: Revenue is initially recognised in deferred revenue and subsequently recognised in

revenue in proportion to the pattern exercised by the customer.

− Revenue received in advance for advertising contracts.

− Unredeemed credits on customer loyalty schemes. The deferred revenue for credits earned through the loyalty scheme is

calculated based on the fair value of the credits earned multiplied by an expected redemption rate. The deferred revenue is
recognised as box office or concession revenue when the credits are redeemed.

Government grants
Government grants are recognised initially as deferred income at fair value when there is reasonable assurance that they will
be received and the Group will comply with the conditions associated with the grant. Government grants relating to costs are
deferred and recognised in the Consolidated Statement of Profit or Loss over the period necessary to match them with the
costs that they are intended to compensate. During the year, the Group received support from governments in connection with
its response to the COVID-19 pandemic. This support included furlough and job retention scheme reliefs, direct tax payment
deferrals, business rate relief and beneficial loans, details are provided in Notes 2, 4, 8 and 19.

Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred
revenue and they are credited to the Consolidated Statement of Profit or Loss on a straight-line basis over the expected lives
of the related assets.

Other operating income
Other income represents rent receivable from sub-leases classified as operating leases (as described in the leases accounting
policy). Rental income is recognised on a straight-line basis over the life of the lease.

Net financing costs
Net financing costs comprise finance income and expenses as detailed in the note 9.

Exceptional items
Exceptional items are charges and credits which are a non-recurring item that is outside the Group’s normal course of business
and material by size or nature. Adjustments have been made for specific costs associated with the impact of COVID-19, as
detailed in note 2.

Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of
Profit or Loss and Comprehensive Income except to the extent that it relates to items recognised directly in equity, in which
case it is recognised in equity.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 20201. Accounting Policies continued
Taxation continued
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted
at the Statement of Financial Position date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the Statement of Financial Position method, providing temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets
or liabilities that affect neither accounting nor taxable profit other than in a business combination; and differences relating to
investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred
tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities,
using tax rates enacted or substantively enacted at the Consolidated Statement of Financial Position date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which
the asset can be utilised.

Operating segments
An operating segment is a component of the Group that engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components.
An operating segment’s operating results are reviewed regularly by the Board of Directors to make decisions about resources
to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Reporting segments
Reportable segments are the Group’s operating segments or aggregations of operating segments.

Significant accounting judgements and estimates
Climate Change Impact
The Group considered the potential impact of climate change, and concluded that, while it is an emerging risk the Group does
not expect it to have a material financial impact and is sufficiently far into the future not to warrant any amendment to the
assumptions used in the impairment testing of goodwill, property, plant and equipment and right-of-use-assets.

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates.

Judgements and estimates made by the Directors in the application of these accounting policies that have significant effect
on the Consolidated Financial Statements and estimates with a significant risk of material adjustment in the next financial year
are set out below.

Judgements
The key judgements are:

Lease term
IFRS 16 “Leases” defines the lease term as the non-cancellable period of a lease together with the options to extend or terminate
a lease, if the lessee were reasonably certain to exercise that option. Where a lease includes the option for the Group to extend
the lease term, beyond the non-cancellable period, the Group makes a judgement as to whether it is reasonably certain that the
option will be taken. This will take into account the length of time remaining before the option is exercisable; current and future
trading forecast as to the ongoing profitability of the site; and the level and type of planned future capital investment.

Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to
be extended (or not terminated). Therefore potential future cash outflows have not been included in the lease liability where
it is not reasonably certain the extension periods will be taken or that the leases will be extended on similar terms (or not
terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this
assessment and that is within the control of the lessee. Refer to Note 20 which quantifies the impact on lease liability should the
lease term include extension or termination options.

Lease discount rate
IFRS 16 requires that the discount rate applied in calculating the lease asset and liability represents the incremental borrowing
rate at the date the lease is signed or modified. Leases are signed and amended over the course of each year; the Group elects
to apply an average discount rate over periods for which its cost of borrowing and credit rating are consistent. Given the
judgement required around the date of amendment and the uncertainty affecting incremental borrowing rates, using a rate
covering the three-month period is considered to be appropriate. Refer to Note 20 which sets out the details of the discount
rate applied during the year.

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Judgements continued
Lease modifications
Judgement is required to determine when the terms of an amendment to an existing lease is formally agreed, which in some
cases is considered to have occurred prior to the date of signing the agreement. The timing of the modification can affect the
discount rate and the period in which it is reported. Management consider a modification to have been completed when it
is reasonably certain to occur without any further changes to agreed terms.

Management have determined that all renegotiated leases are treated as modifications under IFRS 16, and management have
taken the judgement that all renegotiated leases met the criteria for amendment based on the changes to the cash flows, length
and conditions of the original leases.

The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment
and that is within the control of the lessee. Refer to Note 20 which quantifies the impact on the judgements relating to
lease modifications.

Embedded Derivatives
Judgement is required in assessing whether certain elements of debt contracts entered into during the year were closely
related to the terms of the overall contract itself. Management consider that a LIBOR floor applied to existing US dollar term
loans, a LIBOR floor applied in a new debt facility entered into during the year and a prepayment feature in that loan (all of
which are disclosed in detail in note 26) were not closely related to the terms of the underlying contracts in which they were
identified and therefore required to be separately recognised.

Estimates
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the year in which the estimate is revised and in any future years affected.

In applying the Group’s accounting policies described above the Directors have identified that the following areas are the key
estimates that could have a significant impact on the amounts recognised in the Consolidated Financial Statements in the
next financial year.

Impairment of goodwill
The Group determines whether goodwill is impaired on at least an annual basis. This requires an estimate of the value in use
of the cash-generating unit “CGU” to which the goodwill is allocated. To estimate the value in use, the Group estimates the
expected future cash flows from the CGU and discounts them to their present value at a determined discount rate, which
is appropriate for the country where the goodwill is allocated to.

Impairment of property, plant and equipment and right-of-use assets
The Group determines whether property, plant and equipment and right-of-use assets are impaired when indicators of
impairments exist or based on the annual impairment assessment. The annual assessment requires an estimate of the value
in use of the CGUs to which the tangible fixed assets are allocated, which is predominantly at the individual cinema site
level. Where individual site’s cash flows are not determined to be independent from one another, mainly due to strategic
or managerial decisions being made across more than one site, they may be combined into a single CGU.

Estimating the value in use requires the Group to make an estimate of the expected future cash flows from each cinema
and discount these to their net present value at a discount rate which is appropriate for the territory where the assets are
held. The resulting calculation is sensitive to the assumptions in respect of future cash flows and the discount rate applied.
The Directors consider that the assumptions made represent their best estimate of the future cash flows generated by the
CGUs and that the discount rates used are appropriate given the risks associated with the specific cash flows. A sensitivity
analysis has been performed over the estimates (see Note 11).

Forecasting expected cash flows and selecting an appropriate discount rate inherently requires estimation. A sensitivity
analysis has been performed over the estimates (see Note 11). The resulting calculation is sensitive to the assumptions in
respect of future cash flows and the discount rate applied. The Directors consider that the key assumptions made within
the cash flow forecasts include admissions levels, average ticket price, concession spend per person,and discount rates.
The Directors consider that the assumptions made represent their best estimate of the future cash flows generated by the
CGUs, and that the discount rate used is appropriate given the risks associated with the specific cash flows. Based on the
sensitivity analysis performed, there would be additional impairment, refer to Note 11 for full details. Therefore it is considered
appropriate to disclose this as an area of significant estimation due to the size of the balance and the fact that it could
change as a result of future events.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 20201. Accounting Policies continued
Estimates continued
Impairment of investments in joint ventures
The Group determines whether investments in joint ventures are impaired when indicators of impairments exist or based
on the annual impairment assessment. The annual assessment requires an estimate of the fair value and value in use of each
investment held at amortised cost. Impairment charges recognised are assessed by reference to the higher of fair value less
cost to sell and value in use.

Estimating the fair value of joint ventures with a comparable observable market price involves multiplying the Group’s
shareholding by the current market price. Estimating the value in use requires the Group to make an estimate of the expected
future cash flows from the joint venture and discount these to their net present value at a discount rate which is appropriate for
the asset. The resulting calculation is sensitive to the assumptions in respect of future cash flows and the discount rate applied.

The Directors consider that the assumptions made represent their best estimate of the future cash flows generated by the joint
venture and that the discount rates used are appropriate given the risks associated with the specific cash flows. A sensitivity
analysis has been performed over the estimates (see Note 13).

Fair value of financing arrangements
The complex nature of additional financing entered into during the year resulted in estimation being required in the assessment
of the fair value to the instruments included. The new B2 loan (disclosed in note 26) was recognised at a discount to the face
value of the principal amount of the loan, the fair value applied resulted in a gain on extinguishment which is recognised within
finance income. Estimating the fair value involved consideration around the fair value of the Groups debt prior to the new
instrument being issued, comparable effective interest rates of another loan entered into on the same date, the Groups credit
rating and incremental borrowing rates at the date of issuance.

Valuation of warrants
The Group values warrants using the Black-Scholes model, applying a risk-free interest rate, expected term of five years and
an estimated share price and volatility. The Directors consider that the assumptions made represent their best estimate.

Deferred tax asset recognition
The Group recognises deferred tax assets and liabilities for the future tax consequences attributable to temporary differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, unused tax
losses and unused tax credits. Deferred tax assets are recognised only to the extent that it is probable that sufficient taxable
profit will be available against which those unused tax losses, unused tax credits or deductible temporary differences can be
utilised. This assessment requires estimation.

Estimates are required in assessing whether sufficient future taxable profits will be made in order to recognise the benefit
of deferred tax assets accumulated at the Balance Sheet date. In assessing recognised and unrecognised deferred tax assets,
the Group has considered its forecast performance in line with the scenarios set out in its going concern analysis, as set out
in Note 1. Details of the deferred tax assets, recognised and unrecognised, are set out in Note 16.

Forthcoming requirements
There were no new standards adopted by the Group in the year but the following amendments became applicable during
the year:

Definition of Material – amendments to IAS 1 and IAS 8

Definition of a Business – amendments to IFRS 3

Revised Conceptual Framework for Financial Reporting

Interest Rate Benchmark Reform – amendments to IFRS 9, IAS 39 and IFRS 7

These amendments did not have a material impact on the Group’s accounting policies and have therefore not resulted
in any changes.

In response to COVID-19, the IASB announced, considered and issued a COVID-19 specific amendment to IFRS 16 on
28 May 2020. The amendment exempts lessees from having to consider individual lease contracts to determine whether
rent concessions occurring as a direct consequence of the COVID-19 pandemic are lease modifications and allows lessees to
account for such rent concessions as if they were not lease modifications. The exemption applies to COVID-19-related rent
concessions that reduce lease payments due on or before 30 June 2021. The Group elected not to apply the exemption.

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Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements1. Accounting Policies continued
Forthcoming requirements continued
The following new accounting standards and interpretations have been published that are not mandatory for 31 December
2020 reporting periods and have not been early adopted by the Group:

Effective date

1 January 2021

Title

Key requirements

Interest rate
benchmark reform
– Amendments to
IFRS 9, IFRS 7 and
IFRS 16

The IASB has made amendments to IFRS 9 “Financial Instruments”, IFRS 7 “Financial
Instruments: Disclosures” and IFRS 16 “Leases” which are impacted by the interest rate
benchmark reform.

For instruments to which the amortised cost measurement applies, the amendments
require entities, as a practical expedient, to account for a change in the basis for
determining the contractual cash flows as a result of IBOR reform by updating the
effective interest rate using the guidance in paragraph B5.4.5 of IFRS 9. As a result, no
immediate gain or loss is recognised. This practical expedient applies only to such a
change and only to the extent it is necessary as a direct consequence of IBOR reform,
and the new basis is economically equivalent to the previous basis.

IFRS 16 was also amended to require lessees to use a similar practical expedient when
accounting for lease modifications that change the basis for determining future lease
payments as a result of IBOR reform.

The amendments also require disclosure of: i) how the entity is managing the transition
to alternative benchmark rates, its progress and the risks arising from the transition;
ii) quantitative information about derivatives and non-derivatives that have yet to
transition, disaggregated by significant interest rate benchmark; and iii) a description
of any changes to the risk management strategy as a result of IBOR reform.

These standards and others not yet effective are not expected to have a material impact on the Group in the current or future
reporting periods or on foreseeable future transactions.

2. Alternative Performance Measures
The Group uses a number of Alternative Performance Measures (“APMs”) in addition to those measures reported in accordance
with IFRS. Such APMs are not defined terms under IFRS and are not intended to be a substitute for any IFRS measure.
The Directors believe that the APMs are important when assessing the underlying financial and operating performance of
the Group. The APMs improve the comparability of information between reporting periods by adjusting for factors such as
fluctuations in foreign exchange rates, one-off items and the timing of acquisitions.

The APMs are used internally in the management of the Group’s business performance, budgeting and forecasting, and for
determining Executive Directors’ remuneration and that of other management throughout the business. The APMs are also
presented externally to meet investors’ requirements for further clarity and transparency of the Group’s financial performance.
Where items of profits or costs are being excluded in an APM, these are included elsewhere in our reported financial
information as they represent actual income or costs of the Group.

Other commentary within the Annual Report and Accounts (such as the Chief Financial Officer’s Review on pages 26 to 31),
should be referred to in order to fully appreciate all the factors that affect the business.

The Group’s Alternative Performance Measures are set out below. Additional adjustments have been made in the current period
to reflect exceptional items incurred due to the impact of the COVID-19 pandemic:

Adjusted EBITDA
Adjusted EBITDA is defined as operating (loss)/profit adjusted for (losses)/profits of jointly controlled entities using the equity
accounting method net of tax and excess cash distributions, depreciation and amortisation, impairments of goodwill, property,
plant and equipment, right-of-use assets and investments in the ordinary course of business, property-related charges and
releases, business interruption costs, share-based payment charges and operating exceptional items. Exceptional items are
charges and credits which are a non-recurring item that is outside the Group’s normal course of business and material by size
or nature. Adjustments have been made for specific costs associated with the impact of COVID-19 including stock write offs,
additional cleaning costs, legal costs associated with employee furlough schemes, redundancy and refinancing.

The following items are adjusted for within the Group’s Adjusted EBITDA APM as they are non-cash items: depreciation and
amortisation, impairment of property, plant and equipment, right-of-use assets and investments in the ordinary course of
business, property-related charges and releases, and share-based payment charges.

The net impact of share of profit of jointly controlled entities and the associated excess cash distributions from joint controlled
entities are included within Adjusted EBITDA as these items are cash items outside of operating profit.

116

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 20202. Alternative Performance Measures continued
Adjusted (Loss)/Profit
Adjusted (loss)/profit before tax is defined as (loss)/profit before tax adjusted for amortisation of intangible asset created on
acquisition, excess cash distributions from jointly controlled entities, impairments of goodwill, property, plant and equipment,
right-of-use assets and investments in the ordinary course of business, property-related charges and releases, business
interruption costs, share-based payment charges,movements on financial derivatives, exceptional operating items, foreign
exchange translation gains and losses, de-designation of net investment hedge, exceptional financing items and exceptional tax
items. Adjustments have been made for exceptional items associated with the impact of COVID-19 including stock write offs,
additional cleaning costs, legal costs associated with employee furlough schemes, redundancy and refinancing.

Adjusted (loss)/profit after tax is arrived by applying an effective tax rate to the taxable adjustments and deducting the total
from adjusted (loss)/profit.

The Adjusted EBITDA and Adjusted (Loss)/Profit after tax reconciliation to statutory operating profit are presented as follows:

Operating (loss)/profit

Depreciation and amortisation
Share of (loss)/profit of jointly controlled entity using equity accounting method net of tax
Excess cash distributions from jointly controlled entities
Impairment of property, plant and equipment, right-of-use assets and investments in the
ordinary course of business
Business interruption
Property-related charges and releases
Share-based payment charges
Operating exceptional items:
– Net impairment of property, plant and equipment, right-of-use assets and investments

– Transaction and reorganisation costs

– COVID-19 costs

– Cost of refinancing

– One-time write off of other current assets

– Gain on sale and leaseback transaction

Adjusted EBITDA

Depreciation and amortisation

Amortisation of intangibles created on acquisition

Net finance costs

Movement on financial derivatives

Foreign exchange translation gains and losses

De-designation of net investment hedge

Financing exceptional items:

– Accelerated amortisation of capitalised finance fees
– Gain on extinguishment of debt
– Remeasurement loss on financial instrument

– Remeasurement of financial asset amortised cost

Adjusted (Loss)/Profit before Tax

Tax benefit/(charge)

Tax impact of adjustments

De-recognition of deferred tax assets due to impact of COVID-19

Tax credit arising on capitalised foreign exchange loss

Adjusted (Loss)/Profit after Tax

Year ended
31 December
2020
$m

(2,257.7)

643.3
(33.0)
56.4
–

–
6.4
(2.3)

1,344.5

60.8

19.9

46.6

–

(115.1)

(643.3)

25.7

(717.2)

46.4

(9.3)

9.8

–
(33.2)
98.0

11.3

(1,326.9)

356.4

(225.4)

319.7

(37.0)

(913.2)

Year ended
31 December
2019
$m

724.7

729.8
29.3
20.3
46.9

6.3
5.3
4.9

–

17.1

–

13.2

(17.5)

1,580.3

(729.8)

27.8

(541.7)

(2.2)

5.9

–

15.1
–
–

–

355.4

(32.0)

(30.4)

–

293.0

117

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements2. Alternative Performance Measures continued
Adjusted (Loss)/Profit continued
Excess cash distributions from jointly controlled entities
The Group receives cash distributions over and above the level of profit recognised in equity accounting for its joint ventures.
This is a recurring cash amount. Joint venture earnings recognised and distributions received are disclosed in Note 13.

Net impairment of goodwill, property, plant and equipment, right-of-use assets and investments
Disclosure in respect of these impairment charges can be found in Notes 11, 12, 13 and 20.

Business interruption
In 2019 the Group incurred expenses of $6.3m in relation to sites which were closed or partially closed during the year for
refurbishment or were under construction.

Property-related charges and releases
The loss of $6.4m (2019: $5.3m) is composed of the following:

− $12.3m gain as a result of remeasurement of right-of-use assets which were modified and due to the modification the asset

was decreased by an amount in excess of its carrying value. The excess above carrying value was therefore recognised in the
income statement.

− Disposal of 18 sites in US has resulted in $1.0m gain due to the de-recognition of the lease liabilities and right-of-use assets.

Losses of $13.6m were incurred on property, plant and equipment disposed of at these sites.

− During the year, 6,416 digital projectors were transferred to the Group from its joint operation DCIP. At the date of transfer
the assets had a net with a net book value of $117.6m. Following the transfer, the Group disposed of projector assets with a
net book value of $5.8m. In addition, a $4.7m gain incurred connected to the termination of the master lease with DCIP.

− $5.0m in losses assets disposed at on sites under construction in the UK, which are no longer expected to go ahead, were

also incurred.

− The loss of $5.3m during 2019 related to the closure of 16 theatres in the US and one in ROW.

Operating exceptional items
The following operating exceptional items were recognised during the year:

− The impact of the COVID-19 pandemic on the Group’s forecasts cash flows. In addition to increased uncertainty in the market,
a higher discount rate driven by the higher cost of debt, and changes to forecast cash flows have resulted in the impairment
of property, plant and equipment, right-of-use assets and investments at cinema CGUs, as well as goodwill in country level
CGUs amounting to a net total charge of $1,344.5m. These impairments are considered to be driven by the impact of the
pandemic and are therefore considered to be exceptional charges.

− Transaction and reorganisation costs of $60.8m were incurred in 2020 of which $2.2m relates to reorganisation costs, $12.8m
to costs incurred with the Cineplex transaction and receipt of a VAT refund of ($1.6m). Costs in connection with the dissenting
shareholder liability which arose on the acquisition of Regal of $47.4m were incurred, which includes $41.6m in respect
of interest on the outstanding liability. Transaction costs of $17.1m were recognised in 2019 of which $4.3m relates to the
proposed Cineplex acquisition, $6.4m reorganisation costs and $6.4m in other legal costs.

− One-off costs of $19.9m associated with the impact of COVID-19 including stock write offs of $16.0m, additional cleaning

expenses, redundancy and write offs of $3.9m.

− Legal and adviser costs, in addition to those capitalised as directly attributable to new debt instruments, $46.6m were

incurred in connection with the new debt facilities entered into during the year.

− In the year ended 31 December 2019 a one-off charge of $13.2m in respect of plastic cards acquired for resale as gift cards,
that were no longer considered recoverable and should have been adjusted at the time of the purchase price allocation but
was not material to restate the prior period.

− In the year ended 31 December 2019 a gain of $17.5m in relation to the two sale and leaseback transactions was recognised.

Accelerated amortisation of capitalised finance fees
These costs represent the accelerated amortisation of capitalised finance fees following the partial settlement of the Group’s
term loans during 2019.

Gain on extinguishment of debt
The Group amended a previously agreed incremental revolving credit facility of $110.8m to a term loan. The amendment to this
facility was considered to represent a discount to the face value of the debt at the time of the agreement and therefore resulted
in a gain on extinguishment of $33.2m, please refer to note 19 for further information.

118

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 20202. Alternative Performance Measures continued
Adjusted (Loss)/Profit continued
Remeasurement loss on financial asset
During the year the Group reassessed the time frame over which its tax receivable asset from National Cinemedia LLC would
be received, which resulted in a longer timeframe and the asset was remeasured. As such the Group wrote off $11.3m of the tax
receivable asset during the year.

Movement on financial derivatives
In 2019 the Group entered a contingent forward contract and a contingent swap contracts in order to hedge certain cash flows
expected to take place on completion of the proposed Cineplex combination. Due to the termination of the deal, the contingent
elements of the derivatives were not met. The Group terminated the swap resulting in a gain of $4.5m and a loss of $10.4m
on the deal contingent forward in line with the fair values reported at 31 December 2019. In addition, the forward contract
was modified on termination, resulting in additional losses of $10.2m recognised within movement on financial derivatives
and $16.8m which was assessed to be in respect of debt issuance costs which were capitalised and fully amortised over the
remainder of the year elsewhere within finance expenses.

During the year the Group recognised three derivative financial instruments in respect to its new financing arrangements.
On term loan B1, the Group recognised detachable equity warrants, and the fair value movement for the year was a loss of
$15.2m. Additionally, linked to term loan B1 is a call option, and the fair value movement during the year amounts to a gain of
$4.5m. Term loan B2 includes an embedded derivative linked to the USD-LIBOR and the fair value movement for the year
amounts to a loss of $0.1m.

In addition to the charge arising due to the termination of a hedge relationship set out below, there was a further movement
on the fair value of the Group’s cross currency swaps during the year. This movement totalled $13.9m and was recognised in
the movement on financial derivatives. The movement was driven by interest rate and currency fluctuations, as well as being
significantly affected by reductions in the Group’s credit rating. Upon modifications being made to existing debt agreements
during the year, which implemented a 1% floor in LIBOR-linked interest rates applied to US dollar-denominated term loans,
embedded derivative liabilities with a total value of $103.6m were identified, of which $98.0m is recognised as a remeasurement
loss on financial instrument and $5.6m as a fair value movement on derivative. These derivatives were recognised as a cost
within movement on financial derivatives during the year. Subsequent to the year end, it is expected that the underlying
contracts relating to these derivatives will be further modified, resulting in their de-recognition.

In 2019 the Group has recognised gains or losses on three financial derivatives during the year. A gain of $10.4m and a loss of
$4.5m have been recognised respectively on a contingent forward contract and contingent cross currency swap entered into to
hedge certain expected transaction flows linked to the proposed acquisition of Cineplex. A further loss $3.7m was incurred on a
short term forward contract entered into as part of the minor financing restructure.

Unwind of net investment hedge
The Group had previously designated the Euro leg of three cross currency swaps held as a net investment hedge against the
assets of certain Euro denominated subsidiaries. During the period the hedge relationship became ineffective and the hedge
relationship ended. This resulted in a $9.8m credit to the hedge reserve and charge to the income statement.

Foreign exchange translation gains and losses
Gains and losses arise due to movements on foreign exchange in respect of the Group’s unhedged Euro denominated term
loan. These gains and losses are excluded from Adjusted Profit Before Tax. During the year the Group’s Euro denominated term
loan was designated as a net investment hedge.

Tax exceptional items
During the year the Group recognised a one-off tax credit under the CARES Act in the United States of $37.0m due to the carry
back of losses against profits of earlier years with higher tax rates. In addition, the Group has de-recognised $319.7m in deferred
tax assets due to reduction in the Group’s forecast cash flows.

Net debt
Net Debt is defined as total liabilities from financing, excluding embedded derivatives, net of cash at bank and in hand.
A reconciliation of movements in Net Debt is provided in Note 19.

119

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements3. Operating Segments
The Group has determined that it has three reporting operating segments: the US; the UK&I and the ROW. The ROW operating
segment includes the cinema chain brands Cinema City in Central and Eastern Europe territories and Yes Planet and Rav-Chen
in Israel. The ROW reporting segment includes Poland, Romania, Hungary, the Czech Republic, Bulgaria, Slovakia and Israel.
The results for the United States include the three cinema chain brands Regal, United Artists and Edwards Theatres. UK&I
includes two cinema chain brands, Cineworld and Picturehouse, which operate in the same territory with the same external
regulatory environment and ultimately provide the same services and products. On this basis it is deemed appropriate that
these two segments can be aggregated and reported as one reporting segment for the UK&I.

Year ended 31 December 2020
Total revenues
Adjusted EBITDA as defined in Note 2
Operating loss
Finance income
Finance expense
Depreciation and amortisation
Net impairment of property, plant and equipment and right-of-use assets,
goodwill and investments
Share of loss from jointly controlled entities using equity accounting
method net of tax

Loss before tax

Non-current asset additions – property, plant and equipment (Note 11)
Non-current asset additions – intangible assets (Note 12)
Investment in equity accounted investee (Note 13)

Total assets

Total liabilities

Year ended 31 December 2019
Total revenues
Adjusted EBITDA as defined in Note 2
Operating profit
Finance income
Finance expense
Depreciation and amortisation
Impairment of property, plant and equipment and right-of-use assets
Share of profit/(loss) from jointly controlled entities using equity accounting
method net of tax

Profit/(loss) before tax

Non-current asset additions – property, plant and equipment (Note 11)
Non-current asset additions – intangible assets (Note 12)
Investment in equity accounted investee (Note 13)

Total assets

Total liabilities

US
$m

UK&I
$m

ROW
$m

Total
$m

575.9
(87.2)
(1,500.3)
8.4
(462.1)
481.6
761.5

153.9
(35.0)
(585.9)
49.7
(269.4)
90.7
493.8

122.5
7.1
(171.5)
11.5
(55.3)
71.0
89.2

852.3
(115.1)
(2,257.7)
69.6
(786.8)
643.3
1,344.5

(32.7)

–

(0.3)

(33.0)

(1,986.7)

(805.6)

(215.6)

(3,007.9)

231.8
–
213.3

41.1
0.3
1.0

9.8
2.2
0.8

282.7
2.5
215.1

8,552.8

1,163.9

908.5

10,625.2

8,403.9

1,377.2

617.8

10,398.9

3,209.6
1,197.1
535.5
(6.0)
448.7
558.2
40.5
29.6

122.6

328.8
–
298.8

648.4
192.2
65.0
(11.5)
96.5
92.5
5.3
–

(5.0)

120.4
1.7
0.9

511.7
191.0
124.2
(8.8)
22.8
79.1
1.1
(0.3)

94.7

34.4
3.6
0.5

4,369.7
1,580.3
724.7
(26.3)
568.0
729.8
46.9
29.3

212.3

483.6
5.3
300.2

9,801.0

1,381.0

1,268.5

12,450.5

7,999.4

1,134.1

379.3

9,512.8

There were no revenues from transactions with other operating segments. All revenue is generated from external customers.

120

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 20204. Revenue
The Group derives revenue from the transfer of goods at a point in time and services over time in the following territories:

Revenue by country

United States
United Kingdom & Ireland
Poland
Israel
Hungary
Romania
Czech Republic
Bulgaria
Slovakia

Total revenue

Revenue per operating segment can be broken down by product and service provided as follows:

United States

Revenue by product and service provided

Box office
Retail
Other

Total revenue

Timing of revenue recognition
At a point in time
Over time

UK and Ireland

Revenue by product and service provided

Box office
Retail
Other

Total revenue

Timing of revenue recognition
At a point in time
Over time

ROW

Revenue by product and service provided

Box office
Retail
Other

Total revenue

Timing of revenue recognition
At a point in time
Over time

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

575.9
153.9
42.7
15.9
22.0
16.0
17.1
4.8
4.0

852.3

3,209.6
648.4
153.8
113.2
77.3
73.4
58.4
21.5
14.1

4,369.7

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

280.3
161.1
134.5

575.9

474.0
101.9

1,859.6
953.9
396.1

3,209.6

3,016.0
193.6

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

99.4
37.2
17.3

153.9

152.6
1.3

405.7
156.7
86.0

648.4

646.0
2.4

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

68.9
33.9
19.7

122.5

116.5
6.0

270.8
129.7
111.2

511.7

463.7
48.0

All revenue is generated from external customers except for the funding received from government support schemes in ROW
for an amount of $1.0m in 2020 (2019: nil).

Refer to Note 22 for a breakdown of contract liabilities recognised during the year.

121

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements5. Other Operating Income

Rental income

Total other operating income

6. Operating Profit
Included in operating profit for the year are the following:

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

2.3

5.7

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

Depreciation
Amortisation of intangibles
Impairment of property, plant and equipment, right-of-use assets and investments assets
in the ordinary course of business
Property–related charges and releases
Net exceptional impairment of property, plant and equipment, right-of-use assets and
investments assets
Other operating exceptional items
Short-term and turnover rent leases

613.5
29.8
–

6.4
1,344.5

127.3
4.8

697.2
32.6
46.9

5.3
–

12.8
30.9

Details of these items are presented in Note 2.

The total remuneration of the Group Auditor, PricewaterhouseCoopers LLP, and its affiliates for the services to the Group in
2019 and 2020 is analysed below:

Auditor’s remuneration:

Group – audit
Amounts received by Auditors and their associates in respect of:
– Audit of financial statements pursuant to legislation
– Audit-related assurance services
– All other services

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

2.3

0.5
0.3
0.6

2.0

0.5
0.1
0.4

122

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 20207. Earnings Per Share
Basic Earnings Per Share is calculated by dividing the profit for the year attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the year, after excluding the weighted average number of non-vested
ordinary shares.

Diluted Earnings Per Share is calculated by dividing the profit for the year attributable to ordinary shareholders by the weighted
average number of ordinary shares plus any dilutive non-vested/non-exercised ordinary shares. Where dilutive options are not
considered likely to vest, no dilution is applied.

Adjusted Earnings Per Share is calculated dividing the adjusted profit after tax for the year attributable to ordinary shareholders
by the weighted average number of ordinary shares outstanding during the year, after excluding the weighted average number
of non-vested ordinary shares.

Earnings attributable to ordinary shareholders
Adjustments:
Amortisation of intangible assets(1)
Excess cash distributions from jointly controlled entities
Impairment of property, plant and equipment, right-of-use assets and investments in the
ordinary course of business
Business interruption
Property-related charges and releases
Share-based payment charges
Operating exceptional items:
– Net impairment of property, plant and equipment, right-of-use assets and investments

– Transaction and reorganisation costs

– COVID-19 costs

– Refinancing costs

– One time write off of other current assets

– Gain on sale and leaseback transaction

Financing exceptional items:

– Accelerated amortisation of capitalised finance fees

– Gain on extinguishment of debt

– Remeasurement of financial asset amortised cost

– Remeasurement loss on financial instrument

Movement on financial derivatives

Foreign exchange translation gains and losses(2)

Recycle of net investment hedge

Adjusted earnings

Tax effect of above items

Tax exceptional items
De-recognition of deferred tax assets due to impact of COVID-19
Tax credit arising on capitalised foreign exchange loss

Adjusted (loss)/profit after tax

Year ended
31 December
2020
$m

(2,651.5)

25.7
56.4
–

–
6.4
(2.3)

1,344.5

60.8

19.9

46.6

–

(33.2)

11.3

98.0

46.4

(9.3)

9.8

(970.5)

(225.4)

319.7
(37.0)

(913.2)

Year ended
31 December
2019
$m

180.3

27.8
20.3
46.9

6.3
5.3
4.9

–

17.1

–

13.2

(17.5)

15.1

–

(2.2)

5.9

–

323.4

(30.4)

–
–

293.0

123

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements7. Earnings Per Share continued

Weighted average number of shares in issue
Basic Earnings Per Share denominator
Dilutive options
Diluted Earnings Per Share denominator
Shares in issue at year end

Basic (Deficit)/Earnings Per Share
Diluted (Deficit)/Earnings Per Share
Adjusted basic (Deficit)/Earnings Per Share
Adjusted diluted (Deficit)/Earnings Per Share

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

1,372.4
1,372.4
–
1,372.4
1,372.8

Cents

(193.2)
(193.2)
(66.5)
(66.5)

1,371.6
1,371.6
3.6
1,375.2
1,372.0

Cents

13.1
13.1
21.4
21.3

(1)

Amortisation of intangible assets includes amortisation of the fair value placed on brands, customer lists, distribution relationships, and advertising
relationships as a result of the Cinema City and Regal business combination which totalled $25.7m (2019: $27.8m)). It does not include amortisation of
purchased distribution rights.

(2) Net foreign exchange gains and losses included within earnings comprises $9.3m (2019: $5.9m) foreign exchange loss recognised on translation of

the loans.

124

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 20208. Staff Numbers and Costs
The monthly average number of persons employed by the Group (including Directors) during the year, analysed by category,
was as follows:

Head office
Cinemas

Number of staff

2020

1,161
29,270

30,431

2019

1,255
36,227

37,482

Included in the monthly average number of persons employed by the Group are part-time employees. No distinction is made
between full-time and part-time employees in the analysis above.

The aggregate payroll costs of these persons were as follows:

Wages and salaries
Social security costs
Other pension costs – defined contribution
Share-based payments

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

206.7
38.1
1.6
(2.3)

244.1

490.1
56.9
3.1
4.9

555.0

Payroll costs for the year ended 31 December 2020 are net of funding received during the year from government support
schemes which amounted to $44.5m and $2.3m in the UK and RoW respectively.

See page 70 for details of Directors’ remuneration.

9. Finance Income and Expense

Interest income
Foreign exchange gain
Unwind of discount on sub-lease assets
Gain on movement in the fair value of financial derivatives
Gain on extinguishment of debt
Unwind of discount on non-current receivables

Finance income

Interest expense on bank loans and overdrafts
Amortisation of financing costs
Lease liability interest
Unwind of discount of deferred revenue
Remeasurement of financial asset amortised cost
Remeasurement of net investment in sub-lease assets
Loss on movement in the fair value of financial derivatives
Remeasurement loss on financial instrument
Foreign exchange loss
De-designation of net investment hedge

Finance expense

Net finance costs

Recognised within other comprehensive income

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

7.4
10.9
0.7
9.0
33.2
8.4

69.6

166.3
33.1
349.0
49.4
11.3
2.7
55.4
98.0
11.8
9.8

786.8

(717.2)

4.5
7.3
0.7
10.4
–
3.4

26.3

167.3
27.2
304.2
51.3
–
–
8.1
–
9.9
–

568.0

541.7

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

Movement on net investment hedge
De-designation of net investment hedge
Retranslation gain/(loss) of foreign currency denominated operations

(19.8)
9.8
3.5

22.2
–
12.6

125

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements10. Taxation
Recognised in the Consolidated Statement of Profit or Loss

Current tax expense
Current year
Adjustments in respect of prior years

Total current tax (credit)/expense

Deferred tax expense
Current year
Adjustments in respect of prior years
Adjustments from change in tax rates

Total tax (credit)/charge in the Statement of Profit or Loss

Reconciliation of effective tax rate

(Loss)/profit before tax
Tax using the UK corporation tax rate of 19.0% (2019: 19.0%)
Differences in overseas tax rates
Permanently disallowed depreciation
Permanently disallowed exceptional costs
Impact of higher prior year US tax rate applied to loss carry backs
Impairment of goodwill on which no deferred tax asset is recognised
De-recognition of deferred tax assets
Tax effect of Fair Value adjustments
Other permanent differences
Adjustment in respect of prior years
Effect of change in statutory rate of deferred tax

Total tax (credit)/charge in the Statement of Profit or Loss

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

(220.9)
(3.1)

(224.0)

(138.0)
8.9
(3.3)

(356.4)

102.1
2.5

104.6

(66.7)
(6.8)
0.9

32.0

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

(3,007.9)
(571.5)
(100.3)
9.2
2.4
(37.0)
124.7
319.7
(85.5)
(20.7)
5.8
(3.2)

(356.4)

212.3
40.3
(10.6)
2.0
2.4
–
–
–
–
1.3
(4.3)
0.9

32.0

During the year there was a tax charge of $0.1m, recognised directly in the Statement of Comprehensive Income (2019: credit of
$1.3m). This related to share remuneration schemes.

126

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 2020Factors that may affect future tax charges
The Group expects that the tax rate in the future will be affected by the geographical split of profits and the different tax rates
that will apply to those profits.

The UK Budget on 3 March 2021 announced an increase in the UK corporation tax rate from 19% to 25% with effect from
1 April 2023. The effect of the rate increase is not reflected in the financial statements as it was not substantively enacted at
the balance sheet date. If the rate increase had been substantively enacted at the balance sheet date an additional $19.4m UK
deferred tax asset would be recognised, resulting in an increase of $19.4m in the tax credit for the period.

No deferred tax liability has been recognised on $236.8m of taxable temporary differences related to investments, as the Group
can control the timing of the reversal and it is probable that no reversal will happen in the foreseeable future.

At 31 December 2020 the Group had unrecognised deferred tax assets relating to the following temporary differences:

− US tax losses of $797.7m with no expiry date (2019: $44.6m in 2019 with expiry dates between 2020 and 2032);

− US deferred revenue of $239.4m (2019: nil);

− UK tax losses of $137.6m with no expiry date (2019: nil);

− UK deferred rent deductions of $67.2m (2019: nil);

− Israeli tax losses of $20.0m with no expiry date (2019: nil);

− Israeli deferred rent deductions of $16.4m (2019: nil);

− Bulgarian tax losses of $3.1m with no expiry date (2019: nil);

− Bulgarian deferred rent deductions of $2.8m (2019: nil);

− Slovakian deferred rent deductions of $5.1m (2019: nil);

− Hungarian tax losses of $143.9m with no expiry date (2019: nil); and

− UK capital losses of $9.8m with no expiry date (2019: $9.5m).

On 25 April 2019 the European Commission released its decision which concluded that for years to 31 December 2018 the UK
Controlled Foreign Company legislation represents recoverable State Aid in some circumstances. There remains uncertainty
surrounding the quantum of any additional tax exposure which is subject to ongoing discussion with HM Revenue & Customs.
Following a review of the potential application of the decision to Controlled Foreign Company claims to 31 December 2018 the
Group has recognised a provision of $0.9m against potential exposures. The maximum potential exposure is $11.1m.

127

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements11. Property, Plant and Equipment

Cost
Balance at 1 January 2019
Additions
Disposals
Transfers
Effects of movement in foreign exchange

Balance at 31 December 2019

Additions
Disposals
Transfers
Effects of movement in foreign exchange

Land and
buildings
$m

Plant and
machinery
$m

Fixtures and
fittings
$m

Assets in the
course of
construction
$m

1,002.4
49.3
(474.0)
52.0
14.0

643.7

41.9
(58.8)
38.9
18.0

1,203.1
168.7
(58.4)
50.2
2.2

1,365.8

47.8
(19.5)
4.9
14.6

644.5
62.4
(11.0)
13.8
8.8

718.5

24.3
(20.8)
10.9
23.3

35.0
203.2
(2.0)
(116.0)
0.2

120.4

168.7
(6.1)
(54.7)
0.1

Total
$m

2,885.0
483.6
(545.4)
–
25.2

2,848.4

282.7
(105.2)
–
56.0

Balance at 31 December 2020

683.7

1,413.6

756.2

228.4

3,081.9

Accumulated depreciation and impairment
Balance at 1 January 2019
Charge for the year
Disposals
Effects of movement in foreign exchange
Impairments

Balance at 31 December 2019

Charge for the year
Disposals
Effects of movement in foreign exchange
Impairments
Impairment reversals

Balance at 31 December 2020

Net book value
At 31 December 2019

At 31 December 2020

85.5
20.1
(13.7)
2.9
24.3

119.1

130.9
(48.1)
8.3
148.1
(17.2)

341.1

524.6

342.6

258.7
201.1
(33.3)
0.9
3.4

189.9
77.8
(13.7)
4.6
0.4

430.8

259.0

64.0
(18.4)
12.7
71.1
(6.0)

69.9
(16.5)
15.7
55.8
(7.4)

554.2

376.5

–
–
–
–
–

–

–
–
–
23.7
(1.8)

21.9

935.0

859.4

459.5

379.7

120.4

206.5

534.1
299.0
(60.7)
8.4
28.1

808.9

264.8
(83.0)
36.7
298.7
(32.4)

1,293.7

2,039.5

1,788.2

Interest of $5.2m (2019: $1.2m) and payroll costs of $9.0m (2019: $11.1m) has been capitalised during the year which relates to
the construction of new sites.

Contractual commitments in relation to future capital expenditure is outlined within Note 27.

Property, plant and equipment at specific sites has been pledged as security against the borrowing facilities as outlined in
Note 19.

Impairment
The Group determines whether these assets are impaired when indicators of impairment exist or based on the annual
impairment assessment. The annual assessment requires an estimate of the value in use of the CGUs to which the property,
plant and equipment and right-of-use-assets are allocated, which is predominantly at the individual cinema site level.
Where individual sites’ cash inflows are determined not to operate independently from one another, mainly due to strategic or
managerial decisions being made across more than one site, they may be combined into a single CGU. Where the recoverable
amount is less than the carrying amount, an impairment charge to reduce the assets down to recoverable amount is recognised.

The recoverable amount of a CGU is the higher of value in use or fair value less cost of disposal. The Group determines the
recoverable amount with reference to its value in use.

As disclosed within the Group’s interim financial statements, the impact of the COVID-19 pandemic on the Group during the
period was considered a triggering event and an impairment assessment was performed at 30 June 2020.

Total impairments recognised across property, plant and equipment and right-of-use-assets during the period to 30 June 2020
was $612.6m. This was in relation to 225 sites in the US, 42 sites in the UK and 21 sites in the ROW, whose recoverable amount
was less than the carrying amount.

The recoverable amount of these sites subsequent to impairment at 30 June 2020 was $1,499.7m.

128

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202011. Property, Plant and Equipment continued
Impairment continued
In performing the impairment review at 31 December 2020 management compared the carrying value of each CGU for which
included the impairment recognised at 30 June 2020.

Subsequent to 30 June 2020 a number of leases held by CGUs were amended, which resulted in a revised right-of-use asset
being calculated, in turn reducing the carrying value of the right-of-use asset. As a result management identified a number
of CGUs which were impaired at 30 June 2020 whose recoverable amount was now greater than that of its carrying amount.
Where this was the case, management have recognised a reversal of the impairment charge booked at 30 June 2020 for these
CGUs. The impairment reversal is the lower of the estimated recoverable amount at 31 December 2020 or impairment booked
at 30 June 2020, less depreciation since the date of the original impairment.

Total impairments recognised, across property, plant and equipment and right-of-use assets during the six month period to
31 December 2020 was a net charge of $36.6m. The total net impairment charge for the year ended 31 December 2020 was
$649.2m (2019: $46.9m). Of this impairment charge $382.9m (2019: $18.8m) related to ROU assets (30 June 2020 charge
$385.3m; 31 December 2020 $2.4m reversal) and $266.3m (2019: $28.1m) related to property, plant and equipment (30 June
2020 charge $227.3m; 31 December 2020 $39.0m charge). This charge was split between the reporting segments as follows:

Impairment recognised across each reporting segment

United States
United Kingdom and Ireland
Rest of world

Total

Period ended
30 June
2020
$m

Period ended
31 December
2020
$m

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

465.8
111.6
35.2

612.6

16.2
11.4
9.0

36.6

482.0
123.0
43.2

649.2

40.5
5.3
1.1

46.9

Impairments recognised during 2020 were in relation to 239 sites in the US (2019: 49), 53 sites in the UK (2019: five) and 28 sites
in the ROW (2019: one), whose recoverable amount (calculated by reference to its value in use) was less than carrying amount.
The most significant factors causing impairment were the forecast continued impact of COVID-19 on operations and a higher
discount rate, driven by the Group’s higher cost of debt. The recoverable amount of these CGUs subsequent to impairment was
$1,362.4m (2019: $198.6m).

Estimating the value in use requires the Group to make an estimate of the expected future cash flows from each CGU and
discount these to their net present value at a pre-tax discount rate which is appropriate for the territory where the assets are
held. A table summarising the rates used, which are derived from externally benchmarked data, is set out below:

United States
United Kingdom
Poland
Israel(1)
Hungary
Romania
Czech Republic
Bulgaria
Slovakia

Year ended
31 December
2020
%

Period ended
30 June
2020
%

Year ended
31 December
2019
%

14.2
14.5
14.9
14.2
14.9
15.6
14.4
14.5
14.9

11.3
11.1
11.1
11.1
12.0
12.0
11.5
11.1
11.2

9.0
8.1
9.8
9.4
9.3
10.1
8.9
9.3
9.3

(1 ) For sites which generate significant rental cash flows in addition to cinema cash flows a separate discount rate of 12.8% (30 June 2020: 9.68%;

2019: 8.0%) was applied to rental cash flows to reflect the specific risks related to them.

The higher cost of financing facilities entered into during the year have caused cost of debt components of the weighted
average cost of capital (“WACC”) to increase materially. This has had the effect of increasing overall WACC, reflecting increased
volatility in forecast cash flows.

The value in use is calculated using forecast cash flows (defined as the Adjusted EBITDA generated by each CGU), which are
based on management’s anticipated performance of the CGU’s over the term remaining on its respective lease.

Management have prepared individual cash flow forecasts for each CGU. These cash flow forecasts apply specific growth
assumptions to the key drivers within the cash flow such as attendance, average ticket price (“ATP”), spend per patron (“SPP”)
and long-term growth rates of other revenue and cost streams. COVID-19 has had a significant impact on the operations of the
business and the territories in which it operates. The impact of COVID-19 has impacted each CGU’s ability to generate future
cash flows in the short term and management have factored this into each CGU’s cash flow forecast.

129

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements11. Property, Plant and Equipment continued
Impairment continued
During these uncertain times, there are significant challenges in preparing forecasts necessary to estimate the recoverable
amount of a CGU. Management determined that using an expected cash flow approach is the most effective means of
reflecting the uncertainties of the COVID-19 pandemic in its estimates of recoverable amount. This approach reflects all
expectations about possible cash flows instead of the single expected outcome.

The key assumptions applied within these models are as follows:

− Adjusted EBITDA for the year ended 31 December 2019 is deemed to represent a standard year of cash flows generated

under normal operating conditions. Management have therefore used 31 December 2019 actuals as the base assumptions
within the cash flow forecast.

− These assumptions, however, have been adjusted to reflect management’s assessment of the short-term impact of COVID-19

and longer-term growth over the life of each CGU.

− As part of the Group’s assessment of long-term viability a five-year forecast reflecting the impact of COVID-19 has been

prepared. Management have compared the assumptions used within this model to that of the actuals at 31 December 2019.
The differential between 31 December 2019 and the COVID-19 five-year forecast has been deemed to represent a reduction
as a result of the virus.

− Within this five-year forecast management believe monthly cash flows will return to pre-COVID-19 levels (31 December 2019

actual Adjusted EBITDA) by the year ended 31 December 2023.

− For the 2021–2023 forecast period, management have applied the respective financial year’s hair-cut to the 31 December

2019 actuals to generate the forecast Adjusted EBITDA for each financial year on a like for like basis. In turn, this will result in
the Adjusted EBITDA for the year ended 31 December 2023 to represent the 31 December 2019 actuals.

− From 31 December 2023 onwards management have forecast attendance will remain at 31 December 2019 levels. However,

all other assumptions will grow at a long-term growth rate of 1%, with the exception of specific sites within the US CGU which
have had specific upside assumptions applied to them.

Similar assumptions were applied as part of the impairment assessment performed at 30 June 2020. The discount rates applied
at the date of 30 June 2020 testing differ from those used at 31 December 2020 as outlined in the above table. The hair-cuts
applied as part of the 30 June 2020 testing reflected the 2021–2023 forecast used as part of the 30 June 2020 going concern
assessment, as disclosed in the 30 June 2020 interim report. This forecast differed to that used as part of the 31 December
2020 testing and therefore different hair-cut assumptions were applied between the two models.

For CGU’s which have either opened within the 31 December 2018 or 2019 financial years, or refurbishments occurring during
the 2019 financial year management acknowledge that 31 December 2019 actuals do not represent a full year of standard
trading. Therefore, specific assumptions have been applied to the key drivers over the 2021–2023 forecast period, in order for
the forecast 2023 adjusted EBITDA to represent management’s expectations of a standard year of operations (pre COVID-19)
for that CGU.

For specific CGUs which have had negative decline in EBITDA over the 2017–2019 financial years, management have assumed
this historical decline will continue to at least 31 December 2023. Further declines have been applied for those CGUs for which
forecast admissions per screen at 31 December 2023 were above the territories average admissions per screen, until the
financial year the admissions per screen is below the territory’s average.

The recoverable amount of any CGU is determined as the greater of value-in-use or fair value less cost to sell. Consideration was
given to whether the fair value less cost to sell of each CGU is higher than the calculated value in use. In all cases the fair value less
cost to sell was found to be lower than the value in use.

Sensitivity to changes in assumptions
Impairment reviews are sensitive to changes in key assumptions, especially given that the full extent of COVID-19 on the
operations and future cash flows of the Group is not fully known at this stage. Management have determined that the following
assumptions used within the cash flow forecast are most sensitive to further changes as a result of COVID-19.Sensitivity analysis
has been performed on all CGU’s calculated recoverable amounts giving consideration to incremental changes in the key
assumptions of the following:

In calculating the CGU recoverable amount, management have applied specific growth rates in admissions which are deemed
to be highly sensitive to the short-term impact of COVID-19 and in the recovery of the operations of the business. The growth
rate of admissions has been reduced by 1% per annum over the forecast period. This has therefore reflected the assumption that
attendance for each CGU would decline by 1% per annum over the forecast period.

130

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202011. Property, Plant and Equipment continued
Sensitivity to changes in assumptions continued
Growth rates of 1% have been applied to various assumptions within the model such as ATP, SPP and other revenue and costs.
Management believe the most sensitive of these assumptions is ATP and SPP and have factored in a decrease in these growth
rates by 1% to 0% within the sensitised scenarios.

Discount rates are largely derived from market data, and these rates are intended to be long term in nature. However, the
models are sensitive to changes in these rates. An increase by a factor of 1% has been applied in the sensitised scenarios.

The implied hair-cuts applied to the model over the 2021–2023 forecast period is sensitive to the outcomes of various scenarios
used within the Group’s assessment of going concern and long-term viability as set out in Note 1. We have recalculated
the implied hair-cuts based on a severe but plausible scenario over a 2021–2025 forecast period and applied this as a
sensitised scenario.

The sensitivities applied reflect realistic scenarios which management believe would have the most significant impact on the
cash flows described above.

The sensitivity analysis has been prepared on the basis that the reasonably possible change in each key assumption would not
have a consequential impact on other assumptions used in the impairment review.

The impact on the total impairment charge allocated between both property, plant and equipment and right-of-use asset of
applying different assumptions to the growth rates used over the forecast period and the discount rates would be as follows:

Growth in admissions reduced by 1%
Growth in average ticket price and spend per person reduced by 1%
1 percentage point increase to the discount rates

Severe but plausible scenario

Additional
impairment
$m

108.3
119.0
45.4

317.1

Management also performed a sensitivity analysis to assess the potential upside as a result of a 1 percentage point decrease to
the discount rates. This would result in a reduction to the December 2020 impairment of $53.8m.

Assets held for sale
The values in the table below represent the net book value of the property, plant and equipment held for sale. As the fair value
less costs to sell is expected to be in excess of the net book value no impairment is considered necessary.

Property, plant and equipment

31 December
2020
$m

31 December
2019
$m

2.9

0.9

Assets held for sale of $2.9m at 31 December 2020 related to one theatre in the US, and two remaining buildings of the old US
head office facilities. The majority of these office facilities were sold in 2019, with the balance of $0.9m at 31 December 2019
representing two remaining buildings.

131

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsDistribution
rights
$m

Other
intangibles
$m

12. Intangible Assets

Cost
Balance at 1 January 2019
Additions
Disposals
Effects of movement in foreign exchange

Balance at 31 December 2019

Additions
Disposals
Effects of movement in foreign exchange

Goodwill
$m

5,493.1
–
–
10.1

5,503.2

–
–
33.6

Brand
$m

420.0
–
–
1.2

421.2

–
–
3.8

Balance at 31 December 2020

5,536.8

425.0

Accumulated amortisation and impairment
Balance at 1 January 2019
Amortisation
Disposals
Effects of movement in foreign exchange

Balance at 31 December 2019

Amortisation
Disposals
Impairments
Effects of movement in foreign exchange

Balance at 31 December 2020

Net book value
At 31 December 2019

At 31 December 2020

10.7
–
–
0.4

11.1

–
–
657.4
–

668.5

21.3
3.7
–
0.8

25.8

3.7
–
–
2.8

32.3

52.9

5,492.1

4,868.3

395.4

392.7

7.4

4.2

48.3
3.9
–
0.9

53.1

1.0
–
3.0

57.1

39.4
5.7
–
0.6

45.7

4.4
–
–
2.8

Total
$m

6,126.9
5.3
–
12.2

165.5
1.4
–
–

166.9

6,144.4

1.5
(3.4)
1.10

2.5
(3.4)
41.5

166.1

6,185.0

30.8
23.2
–
0.1

54.1

21.7
–
–
(2.3)

73.5

112.9

92.6

102.2
32.6
–
1.9

136.7

29.8
–
657.4
3.3

827.2

6,007.8

5,357.8

Included within the brand intangible asset is $365.0m in relation to Regal, $24.0m in relation to Cinema City B.V and $3.7m in
relation to Picturehouse. The Regal brand has been determined as having an indefinite useful life. The remaining amortisation
period of the Cinema City B.V and Picturehouse brands is 13 years and two years respectively.

Included within other intangible assets is customer relationships and distribution rights. The remaining amortisation period
of these intangible are between three and nine years.

Additions during the current year of $2.5m (2019: $5.3m) were all acquired separately.

No amounts included within capital commitments as outlined in Note 27 are in relation to intangible assets (2019: $Nil).

Impairment testing
Each individual cinema, or collection of cinemas which are strategically or operationally co-dependent, is considered to be
one CGU. However, for the purpose of testing goodwill for impairment, it is acceptable under IAS 36 to group CGUs, in order
to reflect the level at which goodwill is monitored by management.

The Group has the following CGUs for the purpose of testing goodwill for impairment:

Goodwill for the US operating segment was acquired as a part of the acquisition of Regal in 2018 and is assessed as one CGU.

The ex-Cine-UK, ex-UGC (including Dublin) businesses are now fully integrated, meaning that goodwill is now monitored
on a Cineworld level. The Picturehouse business is monitored as a separate UK CGU. Cinema City CGUs are considered as
separate groups in each territory and have been tested for goodwill impairment on this basis, the territories being Poland,
Israel, Hungary, Romania, Bulgaria, Czech and Slovakia.

132

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202012. Intangible Assets (continued)
The value of goodwill allocated to each CGU is as follows:

United States
United Kingdom – Cineworld
United Kingdom – Picturehouse
Poland
Israel
Hungary
Romania
Czech Republic
Bulgaria
Slovakia

Total

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

4,060.5
354.8
9.9
133.3
77.8
58.5
107.2
39.3
21.6
5.4

4,868.3

4,302.8
700.2
25.2
130.7
88.0
59.0
124.1
37.2
20.1
4.8

5,492.1

In testing goodwill for impairment, the value of each CGU’s other intangible assets, investments and other long-term assets,
right-of-use assets and property, plant and equipment is included within the carrying value of the CGU. Included within the
United States CGU is the Regal brand which has an indefinite useful life.

The recoverable amounts of US, Cineworld, Picturehouse and Cinema City CGU Groups have been determined based on a
value-in-use calculation. That calculation uses cash flow projections based on financial forecasts approved by management
covering a five-year period. The five-year forecast annual Adjusted EBITDA, as defined in Note 2, was used as the basis of the
future cash flow calculation. Cash flows beyond the first five year period have been extrapolated using the below assumptions,
with cash flows adjusted for rent at a CGU level applied beyond the period covered by each current lease. This growth rate does
not exceed the long-term average growth rate for the market in which the CGU Groups operate.

The pre-tax discount rates applied are detailed in Note 11. This is considered to reflect the risks associated with the relevant cash
flows for each CGU Group.

At 30 June 2020, the impact of COVID-19 on the operations of the Group was deemed as a triggering event and an impairment
assessment was performed. As a result of this test, the Group impaired $342.1m in respect of the United Kingdom goodwill.
Of this impairment $14.5m was in relation to the Picturehouse CGU.

A further impairment test was performed at 31 December 2020, which resulted in an additional impairment charge of $315.3m
in respect of the United States goodwill ($242.3m), United Kingdom goodwill ($29.9m), Israel goodwill ($16.8m), Romania
goodwill ($25.9m) and Bulgaria goodwill ($0.4m).

The most significant factors causing impairment were the forecast of the continuous impact of COVID-19 on operations and a
higher discount rate, driven by the Group’s higher cost of debt.

Management have sensitised the key assumptions in the goodwill impairment tests and under both the base case and severe
but plausible case. The key assumptions used and sensitised were the drivers for the cash flows forecast (as set out in Note 1)
and the relevant discount rate, as they are the key variable elements of the value in use.

133

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements12. Intangible Assets (continued)
Sensitivities have been applied to the forecast cash flows to assess the potential impairment under different scenarios.
The scenarios applied are the severe but plausible scenario (as set out in Note 1), a 1% reduction in long-term growth rates and a
1% increase in discount rate. The additional impairment as a result of these scenarios by CGU would be as follows. These values
are after considering the property, plant and equipment sensitivities:

CGU

US
UK – Cineworld
Bulgaria
Romania
Israel

Severe but
plausible case
$m

Long-term
growth rates
reduced by 1%
$m

1 percentage point
increase in the
discount rates
$m

870.8
152.0
4.4
21.0
14.1

254.7
28.2
1.0
4.5
3.7

445.4
57.4
2.2
8.1
8.5

No additional impairment under the above sensitivity scenarios would be recognised for Poland, Hungary, Czech and
Slovakia CGU’s.

Indefinite life intangible assets
The Regal brand is instrumental in driving revenues and therefore we valued this at $365.0m. We have determined that this
brand has an indefinite useful life. The factors that played a significant role in determining that this asset has an indefinite useful
life are the historical term over which it has been used and management’s intention to continue to invest in its value.

Amortisation charge
The amortisation of intangible assets is recognised in the following line items in the Consolidated Statement of Profit or Loss:

Administrative expenses

Year ended
31 December
2020
$m

29.8

Year ended
31 December
2019
$m

32.6

134

National CineMedia, LLC
AC JV, LLC
Digital Cinema Distribution Coalition
Digital Cinema Media Limited
Black Shrauber Limited

Country of
incorporation

United States
United States
United States
England and Wales
Israel

Class of
shares held

Ordinary
Ordinary
Ordinary
Ordinary
Ordinary

Ownership

26.1%
32.0%
14.6%
50.0%
50.0%

Carrying value
31 December
2020
$m

Carrying value
31 December
2019
$m

208.0
4.1
1.4
0.9
0.7

289.9
5.7
3.0
0.9
0.5

National CineMedia, LLC
In March 2005, Regal and AMC announced the combination of the operations of RCM Regal and AMC’s subsidiary, National
Cinema Network, into a joint venture company known as National CineMedia (‘NCM’). In July 2005, Cinemark joined the NCM
joint venture. NCM operates the largest digital in-theatre advertising network in North America.

Regal entered into an Exhibitor Services Agreement (‘ESA’) with NCM, pursuant to which NCM primarily provides advertising
to our cinemas. National CineMedia, Inc. (‘NCMI’) is an entity that serves as the sole manager of NCM, and has no business
operations or material assets other than its cash and ownership interest in NCM. NCMI completed an IPO of its common stock
and as a result Regal amended its operating agreement and the ESA. At the time of the NCM IPO and as a result of amending
the ESA, Regal received approximately $281.0m in cash consideration from NCM. The proceeds were recorded as deferred
revenue and were being amortised over the term of the ESA, until February 2037. During 2019, the Group amended the ESA
under which the Group will provide incremental advertising time to NCM and has extended the term of the ESA through
February 2041.

Also in connection with the IPO, the joint venture partners entered into a Common Unit Adjustment Agreement with NCM.
Pursuant to the Common Unit Adjustment Agreement, from time to time, shares of NCM held by the joint venture partners
will be adjusted up or down through a formula primarily based on increases or decreases in the number of theatre screens
operated and theatre attendance generated by each joint venture partner. The common unit adjustment is computed annually,
except that an earlier common unit adjustment will occur for a joint venture partner if its acquisition or disposition of theatres,
in a single transaction or cumulatively since the most recent common unit adjustment, will cause a change of 2% or more in the
total annual attendance of all of the joint venture partners.

On 12 March 2020 as a result of the annual adjustment provisions of the Common Unit Adjustment Agreement, the Group
received 520,025 newly issued common units in NCM, each of which is convertible into one share of NCMI. The Group records
additional common units received at estimated fair value using the available closing stock prices of NCMI as of the date on
which the units were issued. During 2020, the Group recorded an increase to its investment in NCM (along with a corresponding
increase to deferred revenue) of approximately $1.8m related to the common unit adjustment. The deferred revenue will be
recognised as advertising revenue on a straight-line basis over the remaining term of the ESA.

The Group receives a monthly theatre access fee for participation in the NCM network and also earn screen advertising revenue
on a per patron basis. The theatre access fee revenues are based on a combination of both fixed and variable factors which
include the total number of theatre screens, attendance and actual revenues generated by NCM. The ESA does not require the
Group to maintain a minimum number of screens and does not provide a fixed amount of access fee revenue to be earned by
the Group in any period. In addition, we receive mandatory quarterly distributions of any excess cash from NCM.

The NCMI IPO and related transactions have the effect of reducing the amounts NCMI would otherwise pay in the future to
various tax authorities. On the IPO date, NCMI, the Company, AMC and Cinemark entered into a tax receivable agreement.
Under the terms of this agreement, NCMI will make cash payments to us, AMC and Cinemark in amounts equal to 90% of
NCMI’s actual tax benefit realised from the tax amortisation of certain intangible assets.

As of December 31 2020, the Group owned a total of 42,290,694 common units of NCM, representing an ownership interest
of approximately 26%. Each of the Group’s common units in NCM is convertible into one share of NCMI common stock.
As of 31 December 2020, the estimated fair value of the Group’s investment in NCM was approximately $157.3m based on
NCMI’s stock price as of December 31 2020 of $3.72 per share. The market value of NCMI’s stock price may vary due to the
performance of the business, industry trends, general and economic conditions and other factors, including those resulting
from the impact of COVID-19.

Management however recognise the carrying value of investment in NCM at its recoverable amount. The recoverable amount
is the higher of fair value or value in use. As outlined within the impairment testing section, the recoverable amount of NCM
with reference to its value-in-use is $208.0m.

135

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements13. Equity-Accounted Investees continued
National CineMedia, LLC continued

Balance as of 1 January 2020
Receipt of additional common units(1)
Dividends received(2)
Receipt under tax receivable agreement(2)
Discount unwind on tax receivable
agreement(2)
Remeasurement of tax receivable agreement(2)
Revenues earned under ESA(3)
Amortisation of deferred revenue(4)
Discount unwind on deferred revenue(4)
Share of loss(5)

Impairment of investments

As of and for the year ended

31 December 2020

For the year ended
31 December 2020

Investment in
NCM
$m

Tax receivable
agreement
$m

289.9
1.8
(16.5)
–
–

–
–
–
–
(30.1)

(37.1)

50.2
–
–
(5.8)
4.0

(11.3)
–
–
–
–

–

Deferred
revenue
$m

(653.8)
(1.8)
–
–
–

–
–
77.6
(49.4)
–

–

Share of
profit
$m

Other
revenue
$m

Cash
distributions
$m

–
–
–
–
–

–
–
–
–
(30.1)

–

–
–
–
–
–

–
6.1
77.6
–
–

–

–
–
16.5
5.8
–

–
–
–
–
–

–

Balance as of 31 December 2020

208.0

37.1

(627.4)

(30.1)

83.7

22.3

(1)

During the year the Group received from NCM approximately 0.5 million newly issued common units in NCM in accordance with the annual adjustment
provisions of the Common Unit Adjustment Agreement.

(2) During the year the Group received cash distributions of $22.3m from NCM, including payments of $5.8m received under the tax receivable agreement.
During the year the Group reassessed the time frame over which the asset would be received which resulted in a longer timeframe and the asset was
remeasured. As such the Group wrote off $11.3m of the tax receivable agreement asset during the year ended 31 December 2020.

(3) Amounts include the per patron and per digital screen theatre access fees, net of amounts due to NCM for on-screen advertising time provided to the

Group’s concession supplier.

(4) Amounts represent the amortisation of the ESA to advertising revenue and the associated unwind of discount. The revenue is recognised on a straight-

line basis over the remaining term of the ESA, the unwind of discount is recognised as finance cost.

(5) Amounts represent the Group’s share in the net profit/(losses) of NCM.

Impairment testing
Each investment is tested for impairment individually. The impact of COVID-19 was considered a triggering event for the
investment in NCM, with the share price of NCMI, whose shares represent a comparable for shares in NCM, falling significantly
below the level at which NCM is valued in the Group’s statement of financial position.

The recoverable amount of each investment is considered by assessing the higher of the value in use and fair value less cost to
sell. Fair value less cost to sell is determined with reference to the value of shares in NCMI. As outlined above the fair value of
these shares at 31 December 2020 was $157.3m, however, NCMI’s stock price may vary due to the performance of the business,
industry trends, general and economic conditions and other factors, including those resulting from the impact of COVID-19.
Value in use is determined by applying the Group’s WACC (see Note 11) to forecast dividend cash flows to discount them to
present value generated by the joint venture over the term of the ESA. A reduction in forecast dividends has been applied for
the years 2021 to 2023, while NCM recovers from the impact of the COVID-19 pandemic.

Based on forecast cashflows, consistent with the Group’s own weighted scenario analysis set out in note 1 and underpinned by
contractual arrangements, the Group determined that the value in use, in excess of the fair value indicated by the NCMI share
price, represents the recoverable amount of the NCM asset.

The Group therefore determined that the carrying amount exceeded the recoverable amount and, as such, recorded an
impairment charge of $37.1m to the investment in NCM for the year ended 31 December 2020.

Management performed additional analysis as to how sensitive the impairment charge was to changes in key variables within
the forecast used to determine the recoverable amount. If the discount rate was to increase by 1% an additional impairment of
$13.1m would be recognised. If no long-term growth was applied an additional impairment of $9.4m would be recognised.

Under the terms of the shareholder agreement between the Group and other NCM shareholders, key business decisions in
respect of NCM require the unanimous approval of the shareholders. As a consequence, the Directors of the Group do not have
total management control of NCM, therefore the Group’s investment is accounted for as a joint venture.

136

Current assets
Non-current assets
Current liabilities
Non-current liabilities

Net liabilities

Income
Expenses

Net profit

Reconciliation to carrying amounts:

Opening net liabilities 1 January
(Loss)/profit for the period
Dividends paid
Common unit adjustment
Other comprehensive income

Retained earnings adjustment due to change in accounting policy

Closing net liabilities

Group’s share of closing liabilities
Value of share of liabilities prior to adjustments
Fair value adjustment on acquisition
Purchase of additional shares at fair value
Receipt of additional common units since acquisition
Group share of earnings since acquisition

Impairment of investments

Carrying amount

31 December
2020
$m

31 December
2019
$m

142.6
685.6
(46.9)
(1,072.2)

(290.9)

89.9
(205.7)

(115.8)

185.4
706.6
(125.4)
(947.9)

(181.3)

444.8
(346.1)

98.7

31 December
2020
$m

31 December
2019
$m

(181.3)
(115.8)
(8.5)
10.5
1.1

3.1

(290.9)

26.1%
–
200.0
78.4
22.2
(55.5)

(37.1)

208.0

(140.6)
98.7
(148.9)
7.6
1.9

–

(181.3)

26.1%
–
200.0
78.4
20.4
(9.0)

–

289.9

The opening fair value adjustment on acquisition related to fair value uplift to the NCM investment as part of the Regal purchase
price acquisition accounting.

The current year fair value adjustments at 31 December 2019 and 31 December 2020 represent additional units issued to the
Group as part of the Common Unit Adjustment Agreement. These are recognised at prevailing share price on date of issuance.

AC JV LLC
The Group maintains an investment in AC JV LLC (“AC JV”), a Delaware limited liability company owned 32.0%, by each of the
Group, AMC and Cinemark and 4.0% by NCM. AC JV acquired the Fathom Events business from NCM on 26 December 2013.
AC JV owns and manages the Fathom Events business, which markets and distributes live and pre-recorded entertainment
programming to various theatre operators (including Regal, AMC and Cinemark) to provide additional programme to augment
their feature film schedule and includes events such as live and pre-recorded concerts, opera and symphony, marketing events,
theatrical premiers, Broadway plays, live sporting events and other special events.

In consideration for the sale, NCM received a total of $25.0m in promissory notes from the Group, Cinemark and AMC (one
third or approximately $8.3m from each). The notes bear interest at 5.0% per annum. Interest and principal payments are due
annually in six equal instalments commencing on the first anniversary of the closing. NCM recorded a gain of approximately
$25.4m in connection with the sale. The Group’s proportionate share of such gain (approximately $1.9m) was excluded
from equity earnings in NCM and recorded as a reduction in the Group’s investment in AC JV. The $3.0m loan note payable
outstanding at 31 December 2018 was repaid in full during 2019. Since the Group does not have a controlling financial interest
in AC JV, its investment in AC JV is accounted for as a joint venture.

137

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements13. Equity-Accounted Investees continued
AC JV LLC continued
Summary aggregated financial information of AC JV LLC:

Current assets
Non-current assets
Current liabilities

Net assets

Income
Expenses

Net (loss)/profit

Reconciliation to carrying amounts:

Opening net liabilities 1 January
(Loss)/profit for period
Dividends paid

Closing net assets

Group share in %
Group share
Fair value adjustment

Carrying amount

31 December
2020
$m

31 December
2019
$m

7.7
14.2
(5.0)

16.9

16.0
(21.0)

(5.0)

14.0
16.1
(8.1)

22.0

80.1
(71.8)

8.3

31 December
2020
$m

31 December
2019
$m

22.0
(5.0)
(0.1)

16.9

32.0%
5.4
(1.3)

4.1

24.5
8.3
(10.8)

22.0

32.0%
7.0
(1.3)

5.7

Digital Cinema Distribution Coalition
The Group is a party to a joint venture with certain exhibitors and distributors called Digital Cinema Distribution Coalition
(“DCDC”). DCDC has established a satellite distribution network that distributes digital content to theatres via satellite.

Under the terms of the shareholder agreement between the Group and other DCDC shareholders, key business decisions in
respect of DCDC require the unanimous approval of the shareholders. As a consequence, the Directors of the Group do not
have total management control of DCDC, therefore the Group’s investment is accounted for as a joint venture.

Summary aggregated financial information of DCDC:

Current assets
Non-current assets
Current liabilities

Net assets

Income
Expenses

Net (loss)/profit

Reconciliation to carrying amounts:

Opening net liabilities 1 January
(Loss)/profit for period
Dividends paid

Closing net assets

Group share in %
Group share

Carrying amount

138

31 December
2020
$m

31 December
2019
$m

6.7
8.0
(4.8)

9.9

6.6
(13.7)

(7.1)

14.9
10.0
(2.8)

22.1

28.6
(19.6)

9.0

31 December
2020
$m

31 December
2019
$m

22.1
(7.1)
(5.1)

9.9

14.6%
1.4

1.4

14.9
9.0
(1.8)

22.1

14.6%
3.0

3.0

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202013. Equity-Accounted Investees continued
Digital Cinema Media Limited
On 8 February 2008 the Group jointly formed Digital Cinema Media Limited (“DCM”) with Odeon Cinemas Holdings Limited
(“Odeon”). On 10 July 2008 DCM acquired certain trade and assets (substantially employees, computer systems, leasehold
office and existing contracts) from Carlton Screen Advertising Limited, the Group’s former advertising supplier.

Under the terms of the shareholder agreement between the Group and Odeon, key business decisions in respect of DCM
require the unanimous approval of the shareholders. As a consequence, the Directors of the Group do not have total
management control of DCM, therefore the Group’s investment is accounted for as a joint venture.

As at 31 December 2020 and 31 December 2019 the assets, liabilities and net profit of DCM were not material to the Group.

Black Shrauber Limited
On 24 June 2015 the Group jointly formed a partnership for running a restaurant in the new complex in Jerusalem.

Under the terms of the partnership agreement, key business decisions in respect of Black Shrauber Limited require the
unanimous approval of the partners. As a consequence, the Directors of the Group do not have total management control
of Black Shrauber Limited, therefore the Group’s investment is accounted for as a joint venture.

As at 31 December 2020 and 31 December 2019 the assets, liabilities and net profit of Black Shrauber Limited were not material
to the Group.

14. Jointly Controlled Operation
Digital Cinema Implementation Partners (“DCIP”) is a joint arrangement with other United States exhibitors set up to collect
and administrate Virtual Print Fee (“VPF”) income received from studios to compensate exhibitors for their investment in digital
projection equipment. Through long term leasing arrangements with DCIP, the exhibitors retain control over the projection
equipment it has acquired. In addition, it was determined that under the terms of the leasing arrangements and the associated
minimum rental charges expected to be made, it has a joint obligation for the debt taken out by DCIP to finance the acquisition
of the projection equipment. It was concluded that, with joint control over these, the material assets and liabilities of DCIP, it
should classified as a joint operation.

The Group holds a 46.7% interest in a joint arrangement DCIP and recognises its direct right to the assets, liabilities, revenues
and expenses of DCIP under the appropriate headings. The impact on the Group’s financial statements is as follows:

Consolidated Statement of Profit or Loss
Gross profit
Operating profit
Profit before tax
Net profit

Consolidated Statement of Financial Position
Property, plant and equipment
Total assets
Total liabilities

31 December
2020
$m

31 December
2019
$m

6.3
(9.7)
40.8
40.4

–
14.1
10.5

80.1
47.1
1.9
1.6

171.1
311.8
26.8

On 1 November 2020, DCIP terminated the master lease agreement it held with the Group and distributed and transferred
all of its right, title and interest in the digital projectors the Group leased to the Group. The Group, however, is required to
continue to make lease payments as if this agreement had remained in place until DCIP recoups its cost of the property, plant
and equipment.

On 1 November 2020, 6,416 digital projectors were transferred to the Group with a carrying value of $116.1m. In total projectors
with a carrying value of $5.8m were disposed of following the transfer, having been taken out of active use. In addition, the
Group recognised an impairment charge of $35.2m in respect of assets transferred. The assets impaired are held as property,
plant and equipment at cinema CGUs. Details of the impairment analysis is set out in Note 11.

The Group recognised a termination of the master lease fee of $6.6m. This represents the monthly lease obligation from the
date of transfer to the revised cost recoupment date in October 2021.

139

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements15. Financial Assets at FVOCI
Financial assets at FVOCI comprise equity securities which are not held for trading. The Group has irrevocably elected at
initial recognition to recognise the investments in this category. These are strategic investments and the Group considers this
classification to be more relevant, than financial assets at fair value through profit or loss.

Equity investments at FVOCI comprise the following individual investments:

Non-current assets
Listed securities
iPic Entertainment, Inc.

Unlisted securities
Spyglass Media Group, LLC
Atom Tickets, LLC

Total

31 December
2020
$m

31 December
2019
$m

–

10.0
–

10.0

–

10.0
–

10.0

During the year ended 31 December 2019, the Group deemed the fair value of the iPic Entertainment, Inc. and Atom
Tickets, LLC investments to be $Nil. The $7.5m revaluation of these investments in 2019 was recognised within other
comprehensive income.

During the year ended 31 December 2019, the Group made an investment in Spyglass Media Group, LLC for $10.0m.
Management believe that the cost of this investment is approximate to its fair value at both 31 December 2020 and
31 December 2019. Given the proximity of purchase to each year end and no significant events impacting the operations and
valuation of Spyglass Media Group, LLC from acquisition, management deem that the cost which represents the purchase price
is approximate to its fair value.

Amounts recognised in the Statement of Comprehensive Income during the financial year in relation to equity investments were
as follows:

Losses recognised in comprehensive income as a result of the revaluation of equity
investments

Refer to Note 26 as to how the fair value of these equity instruments has been determined.

31 December
2020
$m

31 December
2019
$m

–

(7.5)

140

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202016. Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are attributable to the following:

Property, plant and equipment
Deferred rent
Deferred revenue
Intangible assets
Investments
Employee benefits
Tax losses

Other
Tax assets/(liabilities)
Set off tax

Net tax assets/(liabilities)

Assets

Liabilities

Net

31 December
2020
$m

31 December
2019
$m

31 December
2020
$m

31 December
2019
$m

31 December
2020
$m

31 December
2019
$m

200.5
26.6
143.5
–
–
2.4
91.1

2.7
466.8
(188.7)

278.1

147.3
7.7
188.3
–
–
1.5
36.0

–
380.8
(242.0)

138.8

(6.3)
–
–
(121.7)
(53.5)
–
–

(7.2)
(188.7)
188.7

–

–
–
–
(114.0)
(112.2)
–
–

(15.8)
(242.0)
242.0

–

194.2
26.6
143.5
(121.7)
(53.5)
2.4
91.1

(4.5)
278.1
–

278.1

147.3
7.7
188.3
(114.0)
(112.2)
1.5
36.0

(15.8)
138.8
–

138.8

See Note 10 for details of unrecognised tax assets.

Deferred taxation provided for in the Consolidated Financial Statements at the year end represents provision at the local tax
rates on the above items.

A review of the deferred tax is performed at each Balance Sheet date and adjustments made in the event of a change in any
key assumptions.

Deferred tax assets and liabilities are attributable to the following:

Property, plant and equipment
Deferred rent
Deferred revenue
Intangible assets
Investment
Employee benefits
Tax losses
Other

Tax (liabilities)/assets

1 January
2020
$m

Recognised
in income
$m

Recognised
in equity
$m

Foreign
exchange
$m

31 December
2020
$m

147.3
7.7
188.3
(114.0)
(112.2)
1.5
36.0
(15.8)

138.8

46.9
16.8
(44.8)
(7.5)
58.7
0.9
50.0
11.4

132.3

–
–
–
–
–
(0.1)
–
–

(0.1)

–
2.1
–
(0.2)
–
0.1
5.1
–

7.1

194.2
26.6
143.5
(121.7)
(53.5)
2.4
91.1
(4.4)

278.1

Deferred tax assets have been recognised to the extent that it is probable that future taxable profits will be available against
which deductible temporary differences can be utilised. In estimating future taxable profits the Group has considered its
forecast performance in line with its going concern analysis.

17. Inventories

Goods for resale
Equipment and spare parts

Total inventories

31 December
2020
$m

31 December
2019
$m

10.5
2.7

13.2

30.5
2.7

33.2

Inventory recognised in cost of sales in the year amounted to $43.1m (2019: $203.6m).

While goods for resale are perishable they typically have a long shelf-life of up to 12 months. Given the current closure of the
cinemas, management performed an assessment at 31 December 2020 to write off any perishable stock which could not be
resold. In total $16.0m (2019: $Nil) of stock was written off during the current financial year due to the closure of cinemas and
was recognised in COVID-19 exceptional costs. All remaining goods for resale held at 31 December 2020 are expected to be
resold upon reopening of cinemas in 2021.

No stock written off during the current and prior financial year has been reversed.

141

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements18. Trade and Other Receivables

Current

Trade receivables
Loss allowance
Other receivables
Prepayments
Accrued income
Net investment in sub-lease

Trade and other receivables

31 December
2020
$m

Represented
31 December
2019
$m

12.6
(2.2)
21.7
20.9
0.2
0.5

53.7

184.5
(1.1)
42.5
31.5
3.9
0.5

261.8

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business.
They are generally due for settlement within 30 days and therefore are all classified as current. Trade receivables are recognised
initially at the amount of consideration that is unconditional. The Group holds the trade receivables with the objective to collect
the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.

Other receivables represents any other amount due to the Group at Balance Sheet date which has not been classified as a
trade receivable.

Due to the short-term nature of the current receivables, their carrying amount is not considered to be materially different to
their fair value.

Net investment in sub-lease represents the future cash flows expected to be received from the sub-leasing of specific sites,
discounted at the rate used for the head lease, adjusted for any initial direct costs associated with the sub-lease.

Included within the 31 December 2019 other receivables balance was $1.6m in relation to a tax receivable. In the current year this
has been separately disclosed on the face of the statement of financial position, with the prior year comparative represented.

Non-current

Other long-term receivables
Loan to jointly controlled entity
Net investment in sub-lease

Other receivables

31 December
2020
$m

31 December
2019
$m

41.6
0.7
6.4

48.7

54.5
0.7
9.4

64.6

Included within other long-term receivables is the NCM tax receivable as detailed in Note 13.

Further information relating to loans to jointly controlled entities is set out in Note 14.

19. Loans and Borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings.

Non-current liabilities
Secured bank and private placement loans, less issue costs of debt to be amortised

Total non-current liabilities

Current liabilities
Secured bank and private placement loans, less issue costs of debt to be amortised
Overdraft

Total current liabilities

31 December
2020
$m

31 December
2019
$m

4,608.5

32.4
21.8

54.2

3,485.4

131.4
2.5

133.9

142

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202019. Loans and Borrowings continued
The terms and conditions of outstanding loans were as follows:

Currency

Nominal interest rate

Initial US Dollar term loan

Initial Euro term loan

Incremental US Dollar term loan

B1 term loan
B2 term loan

Private placement loan
Revolving credit facility

Secured bank loan – DCIP
Israeli government loan

Total interest-bearing liabilities

USD Eurocurrency Base Rate
plus applicable margin
EUR Eurocurrency Base Rate
plus applicable margin
USD Eurocurrency Base Rate
plus applicable margin
7.0% plus 8.25% PIK
USD
USD Eurocurrency Base Rate
plus 5.0% margin
11.0%
USD Eurocurrency Base Rate
plus applicable margin
4.17%
Base rate plus 2%

USD
NIS

(1)

(2)

(1)

(2)

(1)

(2)

(1)

(2)

USD and EUR

31 December 2020

31 December 2019

Year of
maturity

Face value
$m

Carrying
amount
$m

Face value
$m

Carrying
amount
$m

2025

2,692.7

2,658.2

2,716.8

2,672.1

2025

233.8

230.9

215.4

212.2

2026

643.5

635.2

648.4

642.3

2024
2024

2023
2023

2021
2026

480.8
110.8

263.3
456.8

0.4
6.6

342.4
69.4

246.2
451.6

0.4
6.6

–
–

–
95.0

–
90.2

–
–

4,888.7 4,640.9

3,675.6

3,616.8

(1)

The rate of interest in the case of any Eurocurrency Rate Loan denominated in Dollars is the rate per annum equal to the London interbank offered rate
administered by ICE Benchmark Administration Limited, subject to a 1% floor (2019: zero floor). The rate of interest in the case of any Eurocurrency
Rate Loan denominated in Euro is the rate per annum equal to the Euro interbank offered rate administered by the European Money Markets Institute,
subject to a zero floor. B2 term loan is subject to a LIBOR floor of 1.00%.

(2) The margin applicable to each tranche of term loans and to drawings under the revolving credit facility is calculated according to the first lien net

leverage ratio of Crown UK Holdco Limited and its subsidiaries. The applicable margin on Eurocurrency Rate Loans is as follows:

Initial US Dollar term loan – 2.50% per annum where the first lien net leverage ratio is greater than or equal to 3.50:1.00 and otherwise 2.25%.
per annum;

Initial Euro term loan – 2.625% per annum where the first lien net leverage ratio is greater than or equal to 3.50:1.00 and otherwise 2.375%. per annum;

Incremental US Dollar term loan – 2.75% per annum where the first lien net leverage ratio is greater than or equal to 3.50:1.00, 2.25% per annum where
the first lien net leverage ratio is less than or equal to 3.00:1.00 and otherwise 2.50% per annum; and

Revolving credit facility drawings – 3.00% per annum where the first lien net leverage ratio is greater than or equal to 3.50:1.00, 2.50%. per annum
where the first lien net leverage ratio is less than 3.00:1.00 and otherwise 2.75%. per annum.

On 30 June 2020 the Group secured a $250.0m private placement debt facility with a maturity of 30 June 2023. The $250.0m
debt facility consisted of a €122.9m and $112.5m loan. An original issue discount of €4.9m and $4.5m was incurred on draw
down respectively alongside borrowing costs of $9.3m which were capitalised against this facility.

On 28 May 2020 the Group further increased its RCF limit by $110.8m to $573.3m. On 23 November 2020, the Group converted
the incremental RCF of $110.8m into a term loan facility (B2 term loan) with a maturity of May 2024. The amendment to this
facility was considered to represent a discount to the face value of the debt at the time of the agreement and therefore resulted
in a gain on extinguishment of debt of $33.2m, which has been recognised within finance income. The new amended facility has
been secured with the same collateral as the new debt facility, bringing lenders in second line on these assets. The remaining
RCF of $462.5m was fully utilised as of December 2020.

On 23 November 2020, the Group secured a new debt facility of $450.0m with majority group of existing term loan lenders
with a maturity of 24 May 2024. Alongside the new debt facility, the Group issued to participating TLB lenders 153,539,786
equity warrants representing in aggregate 9.99% of the fully diluted ordinary share capital of the Company assuming full
exercise of the warrants. Each of the equity warrants that were issued alongside the new debt facility are exercisable into one
ordinary share of the Company at an exercise price of 41.49 pence per share with the proceeds of such exercise being retained
by the Company. The warrants are exercisable at any time over the next five years. The exercise price represents a 10% discount
to the closing share price on 20 November 2020. The detachable equity warrants include an antidilution provision, meaning
that the number of shares to be issued on exercise of the warrants is not fixed.

The separate initial recognition of the equity warrants issued in connection with the new facility as a derivative liability of
$80.2m, the recognition of a derivative asset in respect of a prepayment option within the new agreement of $3.3m and fees
directly incurred in connection with obtaining the facility of $36.0m resulted in an initial carrying value of $337.1. The Group also
incurred upfront fees of $27.0m on issuance of this debt on draw down, which were capitalised against this facility. The new
debt facility has been secured with specific assets in the US as collateral. At year end the separate recognition of the equity
warrants are valued at $97.2m and the embedded derivative asset in respect of a prepayment option within the new agreement
valued at $7.8m.

During the year the Israeli government granted a loan of NIS 24.0m ($6.9m) with a maturity of 2026. There are no conditions
attached to the loan.

During the year the Group drew $0.4m on the DCIP secured bank loan.

143

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements

19. Loans and Borrowings continued
Loans and Borrowings covenants
Revolving credit facility
The RCF is subject to a springing covenant when utilisation is above 35.0%. The covenant requires the Company to maintain
a leverage ratio below 5.0x. In 2020, the Company secured a covenant waiver on the RCF until June 2022 testing date.

Private placement loan
The following financial covenants are attached to the private placement debt facility raised in June 2020. These financial
covenants are calculated only on those entities within the ROW operating segment:

− Springing liquidity covenant: Minimum liquidity of $30.0m, tested monthly from closing provided that if on a test date falling
after 30 June 2021, net leverage is less than 2.0x, the minimum liquidity covenant shall not be required to be tested on that
test date.

− Net leverage: 5.0x, tested semi-annually from 31 December 2021, on a 12 month rolling basis.

B1/B2 term loan
The B1 and B2 term loan facilities are subject to financial and liquidity covenants. Until the group reaches 80% of admission
levels for a 3 month comparable period in 2019, it is subject to a minimum liquidity covenant and restrictions on operating and
capital cash disbursements. The minimum liquidity covenant ranges between $66.9 and $297.1m during 2021. The agreement
also entitles the lenders to appoint a board observer.

Analysis of Net Debt

Bank loans
$m

Loan note
$m

1 January 2019
Cash flows
Non-cash movement
Effect of movement in foreign
exchange rates

At 31 December 2019

Cash flows

Non-cash movement
Effect of movement in foreign
exchange rates

(3,946.2)
330.7
(27.2)
25.9

(3,616.8)

(1,062.1)

71.3
(33.3)

Derivatives
$m

Bank
overdraft
$m

Lease
liabilities
$m

(3,496.8)
613.3
(1,285.3)
(28.7)

(3.0)
3.0
–
–

–

–
–

(4,197.5)

198.6

67.4
(40.2)

0.2
–
(4.0)
–

(3.8)

10.2

(24.9)
–

Total
financing
activity
liabilities
$m

(7,445.8)
944.5
(1,316.5)
(2.8)

Cash at
bank and
in hand
$m

316.3
(167.1)
–
(8.6)

Net Debt
$m

(7,129.5)
777.4
(1,316.5)
(11.4)

–
(2.5)
–
–

(2.5)

(7,820.6)

140.6

(7,680.0)

(18.3)

(871.6)

–
(1.0)

113.8
(74.5)

183.5

–
12.6

(688.1)

113.8
(61.9)

At 31 December 2020

(4,640.9)

–

(3,971.7)

(18.5)

(21.8)

(8,652.9)

336.7

(8,316.2)

Net debt as defined in note 2, excludes an embedded derivative of $103.6m (2019: $nil) which was a non cash movement in the
year and equity warrants of $97.2m (2019: $nil) explained further below.

Cash flows from bank loans, loan notes and bank overdraft in the current year of $1,080.4m (2019: $331.2m) are made up of
the following:

Repayment of bank loans and overdrafts
Repayment of loans from equity accounted investees
Draw down of bank loans
Debt issuance costs paid

Total cash flows

31 December
2020
$m

31 December
2019
$m

54.2
–
(1,207.8)
73.2

(1,080.4)

1,458.5
3.0
(1,130.3)
–

331.2

In the Analysis of Net Debt table above, cash flows from bank loans includes the full cash proceeds of the new financing
arranged in the year. In accordance with IFRS 9, $80.2m of the transaction price was allocated to the equity warrants, which has
been recognised within non cash movements in bank loans above. A non-cash fair value movement of $17.0m was recognised
on the equity warrants between initial recognition and year end.

Non-cash movements on bank loans also includes $0.6m attributed to the initial fair value of embedded derivatives with an
equal and opposite non-cash movement in the derivatives column.

In addition, the non-cash movements of $71.3m (2019: $27.2m) within bank loans includes the amortisation of debt issuance
costs, accrued interest, accrued debt issuance costs and discounting on draw down of term and Israeli government loan.

The non-cash movement of $67.4m (2019: $1,285.3m) within lease liabilities relates to the following: the interest expense related
to lease liabilities of $349.0m (2019: $304.2m), the impact of entering into new leases $52.8m (2019: $982.4m), modifications of
existing leases of $447.5m (2019: $nil), and disposal of leases during the year of $21.7m (2019: $1.3m).

144

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202020. Leases
The Consolidated Statement of Financial Position shows the following amounts relating to leases:

Right-of-use assets
Balance at 1 January 2019
Additions
Depreciation of right-of-use assets
Disposals
Impairments
Effects of movement in foreign exchange

31 December 2019

Additions
Modifications
Depreciation of right-of-use assets
Disposals
Impairments
Reversal of Impairments
Effects of movement in foreign exchange

31 December 2020

Lease liabilities
Balance at 1 January 2019
Additions
Interest expense related to lease liabilities
Disposals
Effects of movement in foreign exchange
Repayment of lease liabilities (including interest)

31 December 2019

Additions
Modifications
Interest expense related to lease liabilities
Disposals
Effects of movements in foreign exchange
Repayment of lease liabilities (including interest)

31 December 2020

Current
Non-current

Land and
buildings
$m

2,937.4
897.1
(396.5)
(0.8)
(18.8)
20.7

3,439.1

44.6
(435.3)
(347.2)
(20.7)
(519.1)
136.2
8.2

2,305.8

3,494.1
982.3
304.0
(1.3)
28.7
(611.9)

4,195.9

52.8
(447.5)
348.9
(21.7)
40.2
(197.3)

3,971.3

596.2
3,375.1

Plant and
machinery
$m

Other
$m

Total
$m

1.5
–
(0.5)
–
–
–

1.0

–
–
(0.5)
–
–
–
(0.1)

0.4

0.5
–
0.1
–
–
(0.2)

0.4

–
–
0.1
–
–
(0.2)

0.3

0.3
–

2.2
0.1
(1.2)
–
–
–

1.1

–
–
(1.0)
–
–
–
0.1

0.2

2.2
0.1
0.1
–
–
(1.2)

1.2

–
–
–
–
–
(1.1)

0.1

0.1
–

2,941.1
897.2
(398.2)
(0.8)
(18.8)
20.7

3,441.2

44.6
(435.3)
(348.7)
(20.7)
(519.1)
136.2
8.2

2,306.4

3,496.8
982.4
304.2
(1.3)
28.7
(613.3)

4,197.5

52.8
(447.5)
349.0
(21.7)
40.2
(198.6)

3,971.7

596.6
3,375.1

In response to COVID-19, the IASB announced, considered and issued a COVID-19 specific amendment to IFRS 16 on
28 May 2020.

The amendment exempts lessees from having to consider individual lease contracts to determine whether rent concessions
occurring as a direct consequence of the COVID-19 pandemic are lease modifications and allows lessees to account for such
rent concessions as if they were not lease modifications. The exemption applies to COVID-19-related rent concessions that
reduce lease payments due on or before 30 June 2021. The Group elected not to apply the exemption.

Modification and discount rates
Due to the negotiations held with landlords, the amended leases have changed in substance either from a consideration or term
perspective. Thus, the modification treatment per IFRS 16 has been followed.

In line with the approach on transition to IFRS 16, the Group has used an incremental borrowing rate and made a corresponding
adjustment to the right-of-use asset. The amendments did not result in the identification of a separate lease.

On transition, the incremental borrowing rates applied to property leases ranged between 2.6% and 11.7%. The asset specific
incremental borrowing rate applied to each lease was determined by taking into account the risk-free rate, adjusted for factors
such as the credit rating linked to the life of the underlying lease agreement. These rates are intended to be long term in nature
and calculated on inception of each lease. The incremental borrowing rates applied to property leases for the COVID-19
amendments ranged between 5.9% and 16.8% for modifications between March and September and ranged between 17.9%
and 26.4% for modifications between October and December.

145

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements20. Leases continued
Modification and discount rates continued
Due to the number of renegotiated lease agreements in the period, the Group has recognised a large number of lease
modifications and expects further modifications in 2021.

During the year, there were lease modifications that would have required a reduction to the right of use asset in excess of the
carrying amount at the date of modification. For these leases, the asset carrying values were reduced to $nil with the excess
gain credited to the consolidated statement of profit or loss. Where these leases were previously impaired, this is first presented
as an impairment reversal (up to the amount of impairment reversal permitted by IFRSs) with any remaining gain presented as
a lease modification gain within property related releases and charges as part of administrative expenses.

The consolidated statement of profit or loss includes within administrative expenses a lease modification gain of $12.3m.
The impairment reversal is part of net impairments of goodwill, property, plant and equipment, right-of-use assets and
investments in the consolidated statement of profit or loss.

The number and size of amendments made are such that judgements taken were significant. These judgements included
the following:

− Where a lease includes the option for the Group to extend the lease term, beyond the non-cancellable period, the Group

makes a judgement as to whether it is reasonably certain that the option will be taken. This will take into account the length
of time remaining before the option is exercisable; the current and future trading forecast as to the ongoing profitability of
the site; and the level and type of planned future capital investment. Extension options (or periods after termination options)
are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). Therefore, potential
future cash outflows have not been included in the lease liability where it is not reasonably certain the extension periods will
be taken or that the leases will be extended on similar terms (or not terminated).

− The discount rate applied. The Group elected to apply an average discount rate over periods with consistent relevant

characteristics rather than applying the rate at the specific date of the amendment. Given the judgement required around
the date of amendment and the uncertainty affecting incremental borrowing rates, using such a rate is considered to
be appropriate.

− The date of the amendment. Judgement was required to determine when the terms of each amendment were formally

agreed, which in some cases was considered to have occurred prior to the date of signing the agreement.

− All renegotiated leases were treated as modification under IFRS 16. Management has taken the judgement that all

renegotiated leases met the criteria for amendment based on the changes to the cash flows, and length and conditions
of the original leases.

Impairments and disposals
The Group recognised impairment charges of $519.1m on right-of-use assets. Note 11 summarises the assumptions applied
in assessing impairments, including the accounting for reversals of impairments.

The Group also recognised $136.2m reversal of impairments. The reversals relate to 102 cinema CGUs.

The disposals relate to 18 sites in the US segment that were closed, resulting in a $1.0m gain.

Consolidated Statement of Profit or Loss
The Consolidated Statement of Profit or Loss shows the following amounts relating to leases:

Depreciation charge of right-of-use assets
– Land and buildings
– Other
Sub-lease income
Impairment of right-of-use assets
Reversal of Impairment of right-of-use assets
Expenses relating to short-term leases
(included in cost of goods sold and administrative expenses)
Expenses relating to variable lease payments not included in lease liabilities
(included in cost of sales)

Charge to operating profit

Interest expense (included in finance costs)

Charge to profit before taxation for leases

The total cash outflow for leases in 2020 was $198.6m (2019: $613.3m).

Commitments for short-term leases at 31 December 2020 was $Nil (2019: $1.2m).

146

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

348.7
347.2
1.5
(2.3)
519.1
(136.2)
1.3

3.5

734.1

349.0

1,083.1

398.2
396.5
1.7
(5.7)
18.8
–
13.2

19.9

444.4

304.2

748.6

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202020. Leases continued
Sensitivity
In 2020, for sites which are subject to variable lease payments, a 10% increase in sales across all sites in the Group with such
variable lease contracts would increase total lease payments by approximately $0.4m (2019: $1.9m).

As outlined in Note 1 extension options (or periods after termination options) are only included in the lease term if the lease is
reasonably certain to be extended (or not terminated). Should the next available option for all leases be taken the impact on the
lease liability and right-of-use asset would be an increase of $249.6m (2019: 524.2m) increasing future cash flows by $1,703.9m
(2019: $1,014.4m).

No leases contain a residual value guarantee clause.

Some cinema sites are sub-leased to tenants under operating leases with rentals payable monthly. Lease payments for
some contracts include CPI increases, but there are no other variable lease payments that depend on an index or rate.
Where considered necessary to reduce credit risk, the Group may obtain bank guarantees for the term of the lease.

Sub-lease income of $2.3m was recognised during the current financial year (2019: $5.7m).

Minimum lease payments receivable on sub-leases are as follows:

Within 1 year
Between 1 and 2 years
Between 2 and 3 years

Between 3 and 4 years
Between 4 and 5 years
Later than 5 years

31 December
2020
$m

31 December
2019
$m

5.5
4.1
2.9

2.4
1.8
11.9

5.0
4.7
3.9

2.7
2.4
10.5

Sale and leaseback
On 15 May 2019 the Group announced the signing and completion of a sale and leaseback transaction relating to 18 US-based
multiscreen cinemas totalling 255 screens. On 13 June 2019, the Group announced the signing and completion of the second
sale and leaseback transaction relating to a further 17 US-based multiscreen cinemas totalling 251 screens. The transactions are
consistent with the Group’s existing business model of operating a predominantly leasehold estate and long-term strategy of
crystallising value for its shareholders. The properties had a book value of $462.0m at the sale date and the total sales proceeds
from the two transactions were $556.3m. This resulted in a gain of $17.5m recognised within the Consolidated Statement of
Profit or Loss as per the table below:

Sales proceeds
Assets disposed of
Cost to sell
Gain prior to right-of-use assets adjustment
Adjustment for right-of-use asset retained under IFRS 16
Gain on disposal

The Group has not been involved in any sale and leaseback transaction during 2020.

31 December
2019
$m

556.3
(462.0)
(13.9)
80.4
(62.9)
17.5

147

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements21. Trade and Other Payables

Current
Trade payables
Other payables
Accruals

Trade and other payables

Non–current
Accruals
Other payables

Other payables

31 December
2020
$m

Represented
31 December
2019
$m

169.0
290.2
137.1

596.3

127.4
275.2
309.5

712.1

31 December
2020
$m

31 December
2019
$m

–
9.2

9.2

2.6
9.8

12.4

Included within other payables is $244.2m which represents consideration payable to a group of Regal’s previous shareholders
who challenged whether they received a fair market price for their shares. The $202.6m was part of the total consideration due
for the acquisition of Regal and the value represented the number of shares held by these shareholders multiplied by the $23.0
per share due to be paid to them under the terms of the acquisition. The additional $41.6m represents further costs including
interest due on outstanding payment. The existence of the legal dispute meant that the cash consideration in respect of these
shareholdings is retained by the Group until such time as the dispute is settled.

In the Company’s view, there has been no reasonable evidence presented to date to the court by the dissenting shareholders
that the consideration should have been in excess of the $23.00 per share paid, thus providing the basis for conclusion that the
claim is without merit and therefore we have only recognised an amount contractually payable to them.

Included within other payables is $3.7m (2019: $NIL) accrued interest in relation to the Libor floors.

22. Deferred Revenue

Government grants
Customer advances
Customer loyalty schemes
Advertising contracts

Deferred revenue

Current
Non–current

Total

31 December
2020
$m

Represented
31 December
2019
$m

8.9
192.5
34.2
642.3

877.9

270.9
607.0

877.9

9.3
213.8
15.3
659.7

898.1

263.1
635.0

898.1

Refer to Note 1 for further details of the items classified within deferred revenue and the timing of recognition of these items.

The following table shows how much revenue has been recognised in relation to carried-forward contract liabilities:

Revenue recognised which was included within the opening contract liability balance:
Contract liabilities – customer loyalty programme
Contract liabilities – advertising income
Contract liabilities – other deferred income

Year ended
31 December
2020
$m

Year ended
31 December
2019
$m

9.9
83.1
73.3

25.7
78.1
153.0

Movements on customer advances and customer loyalty schemes is due to the timing of receipt of cash and recognition
of revenue in relation to the redemption of advanced tickets and vouchers sold and loyalty points redeemed. COVID-19
has impacted the sale of advanced tickets and vouchers and redemption of customer loyalty points which has caused the
movement between the two financial years.

Movements on contract liabilities in connection with advertising contracts is predominantly due to the exhibitor service
agreement with NCM, details of which are disclosed further within Note 13.

148

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202023. Employee Benefits
Defined benefit pension plans
The Group operates one externally funded defined benefit pension scheme in Ireland, the Adelphi-Carlton Limited Contributory
Pension Plan.

The Adelphi-Carlton Limited Contributory Pension Plan is closed to new entrants and therefore the current service cost is $Nil.
The trustees of the Adelphi-Carlton Contributory Pension Plan have not agreed that any surplus on the plan can be refunded
to the Group. Accordingly the surplus has not been recognised. The scheme has a surplus of $1.1m as at 31 December 2020
(2019: $0.8m).

Actuaries for Adelphi-Carlton Limited carried out the last actuarial valuation of the Scheme as at 1 April 2019. Based on this
assessment, the actuarial value of the assets is $2.9m which is more than sufficient to cover 100% of the benefits that had
accrued to members. In view of this, a suspension of Group contributions was in force from 1 April 2001 to 31 December 2020.
Total contributions for the years ended 31 December 2020 were $Nil (2019: $Nil). No contributions are expected for the year
ending 31 December 2021.

Accrued employee retirement rights
Local applicable labour laws and agreements in the ROW require certain Group companies to pay severance pay to dismissed
or retiring employees (including those leaving their employment under certain other circumstances). The calculation of the
severance pay liability has been made in accordance with labour agreements in force and based on salary components that,
in management’s opinion, create entitlement to severance pay.

Group companies’ severance pay liabilities to their employees are funded partially by regular deposits with recognised pension
and severance pay funds in the employees’ names and by purchase of insurance policies. They are accounted for as if they
were a defined benefit plan. The amounts funded as above are netted against the related liabilities and are not reflected in
the Consolidated Statement of Financial Position since they are not under the control and management of the companies.

The amounts of the liability for severance pay presented in the Consolidated Statement of Financial Position reflect that part
of the liability not covered by the funds and the insurance policies mentioned above, as well as the liability that is funded by
deposits with recognised central severance pay funds held under the name of the Company’s subsidiaries.

The cost of severance provision is determined according to the projected unit credit method. It has been calculated using
a discounted cash flow approach. The calculations are based on the following assumptions:

− Average discount rate at 31 December 2020 0.79% (2019: 2.08%)

− Expected returns on plan assets at 31 December 2020 0.81% (2019: 2.0%)

The net provision for accrued employee rights upon retirement comprises:

Present value of unfunded obligation
Less: Fair value of plan assets

Total obligation

Movements in the provision for accrued employee rights upon retirement:

At start of period
Payments made upon retirement
Net movement in provision – charged to net profit
Foreign exchange movements

Total obligation

Defined contribution pension plans
The Group operates a number of defined contribution pension plans.

31 December
2020
$m

31 December
2019
$m

7.1
(3.0)

4.1

Amount
deposited
$m

(3.3)
(0.6)
1.1
(0.2)

(3.0)

6.9
(3.4)

3.5

Net
amount
$m

3.5
(1.0)
1.3
0.3

4.1

Gross
amount
$m

6.8
(0.4)
0.2
0.5

7.1

The total expense relating to these plans in the current year was $1.6m (2019: $1.8m). There was $Nil accruing to these pension
schemes as at 31 December 2019 (2019: $Nil).

149

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements23. Employee Benefits continued
Share-based payments
As at 31 December 2020 there were three types of share option and share schemes: the Cineworld Group 2007 Performance
Share Plan, the Cineworld Group plc Company Share Option Plan and the Cineworld Group 2017 Long-Term Incentive Plan.
Details of each of the schemes are set out in the Directors’ Remuneration Report on pages 78 to 79.

The Cineworld Group Performance Share Plan (“PSP”)
Assumptions relating to grants of share options outstanding are as follows:

Date of grant

22 November 2016
12 April 2017

Exercise period

6 months from 22 November 2019
6 months from 12 April 2020

2020
Number of
options
’000

–
–

2019
Number of
options
’000

19
834

Under the PSP, awards of conditional shares or nil cost options can be made that vest or become exercisable after three years
subject to continued employment and generally the achievement of specified performance conditions as follows:

18 April 2016 and 22 November 2016
Under these grants, awards of 866,567 options were made in total. Awards of 598,715 options were made with the performance
conditions set out below:

− 30% of the options under the Award will vest if the average annual growth in EPS (calculated by comparing the EPS for the
financial year ended 31 December 2016 and the EPS for the financial year ended 31 December 2018) is not less than 6.0%;

− 100% of the options under the Award will vest if the average annual growth in EPS (calculated by comparing the EPS for the
financial year ended 31 December 2016 and the EPS for the financial year ended 31 December 2018) is at least 12.0%; and

− Where the average annual growth in EPS (calculated by comparing the EPS for the financial year ended 31 December 2016

and the EPS for the financial year ended 31 December 2018) is between the two limits above, the Award shall vest on a
straight-line basis between 30% and 100%.

EPS means adjusted Earnings Per Share calculated by dividing the profits for the period attributable to ordinary shareholders
(adjusted by adding back the amortisation of intangible assets and other one-off income or expenses and applying a tax effect
on all adjustments) by the number of ordinary shares outstanding at the end of the period.

Awards over 267,852 options were made which will vest after three years subject to continued employment only, with no
specified performance conditions attached.

12 April 2017
Under these grants, awards of 854,332 options were made in total. Awards of 670,343 options were made with the
performance conditions set out below:

− 25% of the options under the Award will vest if the average annual growth in EPS (calculated by comparing the EPS for the
financial year ended 31 December 2017 and the EPS for the financial year ended 31 December 2019) is not less than 5.0%.

− 100% of the options under the Award will vest if the average annual growth in EPS (calculated by comparing the EPS for the

financial year ended 31 December 2017 and the EPS for the financial year ended 31 December 2019) is at least 11.0%.

− Where the average annual growth in EPS (calculated by comparing the EPS for the financial year ended 31 December 2017
and the EPS for the financial year ended 31 December 2019) is between the two limits above, the Award shall vest on a
straight-line basis between 25% and 100%.

Awards over 183,989 options were made which will vest after three years subject to continued employment only, with no
specified performance conditions attached.

Assumptions relating to grants of share options outstanding are as follows:

Date of grant

22 November 2016
12 April 2017

Share price
at grant
$

Exercise
price
$

Expected
volatility
%

Expected life
years

Dividend
yield
%

Risk-free rate
%

Fair value
$

6.83
8.39

–
–

38
37

3
3

2.9
3.6

0.37
0.30

6.26
7.52

Expected volatility has been calculated as the annualised volatility of the natural logarithm of the daily stock price observation.

150

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202023. Employee Benefits continued
The Cineworld Group Performance Share Plan (“PSP”) continued
On 2 February 2018, the Group performed a rights issue, resulting in four additional shares being granted for one share.
An indicative bonus factor was applied to the fair value of the PSP options. This resulted in a revised fair value of the 2016
and 2017 PSP options to $2.79 and $3.34 respectively.

A reconciliation of option movements over the year to 31 December is shown below:

Outstanding at the beginning of the year
Exercised in shares during the year
Lapsed during the year

Outstanding at the end of the year

Number of
options 2020
Equity-settled
’000

Number of
options 2019
Equity-settled
’000

854
(847)
(7)

–

1,651
(785)
(12)

854

A charge of $0.3m was recorded in the Consolidated Statement of Profit or Loss for the four PSP schemes (2019: $1.4m).

The Company Long-Term Incentive Plan (“LTIP”)
The following share options have been granted under the LTIP and were outstanding at 31 December 2020:

Date of grant

23 April 2018
21 May 2019
18 September 2019

14 April 2020

1 June 2020

Exercise period

6 months from 23 April 2021
6 months from 21 May 2022
6 months from 21 May 2022

6 months from 14 April 2023

6 months from 1 June 2023

2020
Number of
options
’000

2019
Number of
options
’000

1,560
1,752
6

7,015

1,604
1,770
6

–

23 April 2018
Under these grants, awards of 1,617,997 options were made in total. Awards of 1,399,843 options were made with the
performance conditions set out below:

− 25% of the options under the Award will vest if the average annual growth in EPS (calculated by comparing the EPS for the
financial year ended 31 December 2018 and the EPS for the financial year ended 31 December 2020) is not less than 8%;

− 100% of the options under the Award will vest if the average annual growth in EPS (calculated by comparing the EPS for the

financial year ended 31 December 2018 and the EPS for the financial year ended 31 December 2020) is at least 15%; and

− Where the average annual growth in EPS (calculated by comparing the EPS for the financial year ended 31 December 2018
and the EPS for the financial year ended 31 December 2020) is between the two limits above, the Award shall vest on a
straight-line basis between 25% and 100%.

Awards of 218,154 options were made which will vest after three years subject to continued employment only, with no specified
performance conditions attached.

21 May 2019 and 18 September 2019
Under these grants, awards of 1,805,489 options were made in total. Awards of 1,242,908 options were made with the
performance conditions set out below:

− 25% of the options under the Award will vest if the average annual growth in EPS (calculated by comparing the EPS for the
financial year ended 31 December 2019 and the EPS for the financial year ended 31 December 2021) is not less than 8%;

− 100% of the options under the Award will vest if the average annual growth in EPS (calculated by comparing the EPS for the

financial year ended 31 December 2019 and the EPS for the financial year ended 31 December 2021) is at least 15%; and

− Where the average annual growth in EPS (calculated by comparing the EPS for the financial year ended 31 December 2019

and the EPS for the financial year ended 31 December 2021) is between the two limits above, the Award shall vest on a
straight-line basis between 25% and 100%.

Further awards over 562,581 options were made which will vest after three years subject to continued employment only, with
no specified performance conditions attached.

151

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements23. Employee Benefits continued
The Company Long-Term Incentive Plan (“LTIP”) continued
14 April 2020 and 1 June 2020
Under these grants, awards of 7,129,676 options were made in total. Awards of 4,942,540 options were made with the
performance conditions set out below:

− 25% of the options under the Award will vest if the average annual growth in EPS (calculated by comparing the EPS for the
financial year ended 31 December 2020 and the EPS for the financial year ended 31 December 2022) is not less than 8%;

− 100% of the options under the Award will vest if the average annual growth in EPS (calculated by comparing the EPS for the

financial year ended 31 December 2020 and the EPS for the financial year ended 31 December 2022) is at least 15%; and

− Where the average annual growth in EPS (calculated by comparing the EPS for the financial year ended 31 December 2020

and the EPS for the financial year ended 31 December 2022) is between the two limits above, the Award shall vest on a
straight-line basis between 25% and 100%.

EPS means Adjusted Earnings Per Share calculated by dividing the profits for the period attributable to ordinary shareholders
(adjusted by adding back the amortisation of intangible assets and other one-off income or expenses and applying a tax effect
on all adjustments) by the number of ordinary shares outstanding at the end of the period.

Further awards over 2,187,136 options were made which will vest after three years subject to continued employment only, with
no specified performance conditions attached.

Assumptions relating to grants of share options outstanding are as follows:

Date of grant

23 April 2018
21 May 2019
18 September 2019

14 April 2020

1 June 2020

Share price
at grant
$

Exercise
price
$

Expected
volatility
%

Expected life
years

Dividend
yield
%

Risk-free rate
%

Fair value
$

3.6
4.0
3.9

0.63

0.80

–
–
–

38.1
38.0
38.0

60.8

63.4

3
3
2.8

2.5
7.9
8.4

24.0

28.9

0.91
0.83
0.78

0.70

0.20

3.3
3.0
2.9

0.31

0.34

Expected volatility has been calculated as the annualised volatility of the natural logarithm of the historical daily stock price
observation from the date of initial listing through to the date of grant.

A reconciliation of option movements over the year to 31 December is shown below:

Outstanding at the beginning of the year
Granted during the year
Lapsed during the year

Outstanding at the end of the year

Number of
options 2020
Equity-settled
’000

Number of
options 2019
Equity-settled
’000

3,380
7,129
(121)

10,388

1,618
1,805
(43)

3,380

A credit of $2.6m was recorded in the Consolidated Statement of Profit or Loss for the LTIP scheme (2019: charge $3.5m).

The Company Share Option Plan (“CSOP”)
The following share options have been granted under the CSOP and were outstanding at 31 December 2020:

Date of grant

Exercise period

6 June 2014

6 June 2017 – 5 June 2024

23 April 2015

23 April 2018 – 22 April 2025

18 April 2016

18 April 2019 – 17 April 2026

2020
Number of
options
’000

2019
Number of
options
’000

Performance conditions

Awards of 2,891 options were made with
the same conditions as the 2014 PSP grant.
Awards of 14,455 were made with no
performance conditions attached.
All awards were made with no
performance conditions attached.
All awards were made with no
performance conditions attached.

152

Date of grant

6 June 2014
23 April 2015
18 April 2016

Share price
at grant
$

Exercise
price
$

Expected
volatility
%

5.82
7.23
7.79

5.82
7.23
7.78

41
39
38

Expected life
years

3–10 years
3–10 years
3–10 years

Dividend
yield
%

Risk-free rate
%

Fair value
$

4.3
4.3
2.9

0.56
0.59
0.37

1.23
1.41
1.65

A reconciliation of option movements over the year to 31 December is shown below:

Outstanding at the beginning of the year

Outstanding at the end of the year

Number of
options 2020
Equity-settled

Number of
options 2019
Equity-settled

A charge of $Nil was recorded in the Consolidated Statement of Profit or Loss for the three CSOP schemes (2019: $Nil).

The fair value is measured at the grant date and spread over the period during which the employees become unconditionally
entitled to the options.

Sharesave Scheme
The following share options have been granted under the Sharesave Scheme and were outstanding at 31 December 2020:

Exercise period

8 May 2014
12 May 2015

3 years from 23 April 2015
3 years from 30 June 2015

A reconciliation of option movement over the year to 31 December is shown below:

Outstanding at the beginning of the year
Exercised during the year

Outstanding at the end of the year

2020
Number of
options
’000

–
–

2019
Number of
options
’000

–
–

Number of
options 2020
Equity-settled
’000

Number of
options 2019
Equity-settled
’000

–
–

–

2
(2)

–

A charge of $Nil was recorded in the Consolidated Statement of Profit or Loss for the two Sharesave Schemes (2019: $Nil).

Total share-based payments
At 31 December 2020, management have assumed based on latest forecast that the performance conditions attached to the
2018 and 2019 LTIP would not be met and these options would not vest. As a result management have updated their share-
based payment calculations to take into account the revised shares expected to vest. This resulted in a reversal of prior year
share-based payment charges attached to the 2018 and 2019 LTIP with performance conditions to the current year profit and
loss. A total credit recognised for the year arising from share-based payments is $2.3m (2019: charge $4.9m).

The share-based payment expense recognised in creditors relates to dividends accrued by the option holders over the
vesting period.

153

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements23. Employee Benefits continued
Total share-based payments continued
The number and weighted average exercise prices of share options in equity-settled schemes are as follows:

Outstanding at the beginning of the year
Adjustments due to rights issue
Exercised during the year
Granted during the year
Lapsed during the year

Outstanding at the end of the year

Exercisable at the end of the year

Weighted average
exercise price
2020
Equity-settled
$

Number of
options
2020
Equity-settled
’000

Weighted average
exercise price
2019
Equity-settled
$

Number of
options
2019
Equity-settled
’000

0.1
–
(0.1)
–
–

–

4,328
–
(847)
7,130
(128)

10,483

0.2
–
(0.1)
–
–

0.1

3,367
–
(788)
1,805
(56)

4,328

115

The weighted average remaining contractual life of the share options is 1.8 years (2019: 1.5 years).

2021 LTIP
On 25 January 2021 resolutions were proposed to approve the new Group 2021 LTIP. Details of this have been outlined within
the Directors’ Remuneration Report on page 63.

Single Total Figure Table
The table below gives a single figure for the total remuneration and breakdown for each Executive and Non-Executive Director
in respect of the 2020 financial year. Comparative figures for the 2019 financial year have also been provided.

Year ended 31 December 2020
Total compensation for Directors

Year ended 31 December 2019
Total compensation for Directors

Salary and fees
including bonus
$000

Pension
contributions
$000

Total
$000

2,747.0

281.1

3,028.1

Salary and fees
including bonus
$000

Pension
contributions
$000

Total
$000

7,451.1

363.4

7,814.5

Full details of Directors’ Remuneration including aggregate emoluments, contributions made in respect of money purchase
schemes and details on the highest paid Director, including if they exercised any share options and participated in a defined
benefit pension scheme can be found in the Directors’ Remuneration Report. Refer to pages 70 to 73 for this information.

24. Provisions

Balance at 31 December 2019

Provisions made
Provisions utilised
Provisions released to profit or loss during the year

Balance at 31 December 2020

Current
Non-current

Total

Provisions for
contracts with
suppliers $m

Other
provisions
$m

Total
provisions
$m

2.4

–
–
–

2.4

2.4
–

2.4

4.5

2.7
(0.5)
–

6.7

5.6
1.1

6.7

6.9

2.7
(0.5)
–

9.1

8.0
1.1

9.1

Provisions for contracts with suppliers relate to claims from suppliers against contractual obligations. These provisions were
assessed by applying the expected payments based on settlement of historic claims, and legal claims which have been
assessed based on legal advice received.

Other provisions relate to legal, sales tax and unclaimed property amounts. A provision in respect of royalty claims in the ROW
segment was made during the year and, based on legal advice, is not expected to be used within the next two years.

154

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202025. Capital and Reserves
Share capital

Allotted, called up and fully paid
1,372,797,489 (2019: 1,371,950,293) ordinary shares of £0.01 each.

31 December
2020
$m

20.1

31 December
2019
$m

20.1

847,196 shares were issued during the year on vesting of the 2017 PSP plan as outlined within Note 23.

The Company has no limits to the number of shares which can be issued, however does seek authority at each AGM to
allot shares.

Foreign currency translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of
foreign operations, as well as from the translation of liabilities that hedge the Company’s net investment in a foreign subsidiary.

Fair value reserve
The fair value reserve comprises the net change in the fair value of equity securities designated as held at fair value.

Hedging reserve
The hedging reserve at 31 December 2019 comprised the foreign exchange movements on the Euro loan which had been
designated in a hedge relationship with the net investment in the foreign operations denominated in Euro. On 30 September
2019 this loan was substantially repaid with the hedging relationship ending. A gain of $31.4m was recognised in the reserve up
to this point. As the Group still holds the investment in the hedged item, the cumulative gain within the reserve in relation to this
net investment hedge will remain until the point this investment is sold.

On 30 September 2019 the Group entered into three Euro:US dollar cross currency interest rate swap and designated the swaps
as a hedge of the net investment in the Group’s Euro investments. A movement of $9.7m was recognised in the reserve in 2019
in relation to changes in fair value on the swaps.

During the year 2020 the hedge relationship became ineffective and the hedge relationship ended. This resulted in $9.8m credit
to the hedge reserve and charge to the income statement.

On 30 June 2020 the Group designated the Euro denominated term loan and the assets of a Euro trading subsidiary as a
net investment hedge. A loss of $19.8m was recognised in the reserve for the year ended 31 December 2020. The total loss
recognised within the reserve at 31 December 2020 in relation to net investment hedges was $10.0m.

Dividends
The following dividends were recognised during the year:

Special
Q1 Interim
Q2 Interim
Q3 Interim
Interim
Final (for the preceding year)

Total dividends

2020
$m

–
–
–
–
–
51.4

51.4

2019
$m

278.1
51.4
51.4
–
–
139.3

520.2

On 7 April 2020 the Board announced the suspension of the 2019 fourth quarter dividend of 4.25 cents per share to conserve
cash for the Group.

Prior to the impact of the COVID-19 pandemic, the Board paid four interim dividends for each financial year. Payments in
relation to the first three quarters of the year are equal to 25% of the full year dividend of the prior year, with the final payment
reflective of the Group’s full year earnings performance and resulting in a full year dividend payment aligned with the Group’s
pay-out ratio.

In 2020, only the interim dividend of 3.75 US cents per ordinary share in respect of the third quarter of 2019 was paid to
shareholders on 10 January 2020. The total cash consideration was $51.4m.

155

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements26. Financial Instruments
Overview
The Group has exposure to the following risks from its use of financial instruments:

− Credit risk
− Liquidity risk
− Market risk

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and
processes for measuring and managing risk, and the Group’s management of capital.

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s Risk Management
Framework. The Group has in place a risk management programme and regular reports are made to the Audit Committee,
which is tasked with general oversight. The Group’s risk management policies are established to identify and analyse the risks
faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group,
through its training and management standards and procedures, aims to develop a disciplined and constructive control
environment in which all employees understand their roles and obligations.

The Group’s Audit Committee oversees how management monitors compliance with the Group’s risk management policies
and procedures and reviews the adequacy of the Risk Management Framework in relation to the risks by the Group. The Group’s
Audit Committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews
of certain risk management controls and procedures, the results of which are reported to the Audit Committee.

Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligation. Management believe the credit risk on cash and cash equivalents is low because the counterparties
are banks with high credit ratings.

Accounts receivable include trade and other receivables. Trade receivables are amounts billed to customers for the sale
of services, and represent the maximum exposure to credit risk of those financial assets, exclusive of the allowance for
doubtful accounts. Normal credit terms for amounts due from customers call for payment within 30 days. Other receivables
include amounts due from suppliers and landlords and other miscellaneous amounts. The Group’s credit risk is primarily
related to its trade receivables, as other receivables generally are recoverable through ongoing business relationships with
the counterparties. Due to the nature of its receivables, the Group defines default with regard to the specific nature of each
contractual arrangement, given the nature and number of transactions involving credit risk, events of default are not considered
to be high risk and are assessed on specific basis for each asset held at the reporting date.

The Group grants credit to customers in the normal course of business. The Group typically does not require collateral or other
security from customers; however, credit evaluations are performed prior to the initial granting of credit when warranted and
periodically thereafter. The Group records a reserve for estimated uncollectable amounts, which management believes reduces
credit risk. See Note 1, for policy on Impairment of financial assets.

The ageing profile of the Group’s trade receivables is as follows:

Within 30 days
Between 30 and 60 days
Between 60 and 90 days
Over 90 days

Total trade receivables

31 December
2020
$m

31 December
2019
$m

5.1
0.4
0.7
4.2

10.4

161.3
11.9
3.9
7.4

184.5

Standard credit terms granted to customers is between 30 to 60 days. The percentage of trade receivables past due date is
52% (2019: 20.6%). The percentage of trade receivables outstanding more than 90 days is 40.8% (2019: 5.6%).

The following schedule reflects the changes in the allowance for trade receivables during the year:

Opening loss allowance
Additional allowance
Amounts written off

Closing loss allowance

31 December
2020
$m

31 December
2019
$m

1.1
2.1
(1.0)

2.2

1.1
0.4
(0.4)

1.1

There are no material expected credit losses against contract assets, cash or other receivables. Due to the Group’s diversified
client base, management believes the Group does not have a significant concentration of credit risk.

156

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202026. Financial Instruments continued
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The following are the contractual maturities of financial liabilities, including interest payments and excluding the impact of
netting agreements. The amounts disclosed in the table are contractual undiscounted cash flows, including interest payments
calculated using interest rates in force at each reporting date, so will not always reconcile with the amounts disclosed on the
Consolidated Statement of Financial Position.

31 December 2020

Non-derivative financial
liabilities
Secured bank and private
placement loans (1) (2)
Bank overdraft
Lease liabilities
Trade payables

Total non-derivative financial
liabilities

Derivative financial liabilities
Cross currency swaps
Inflow
(Outflow)

Embedded derivative

Total derivative financial
liabilities

31 December 2019

Non-derivative financial
liabilities
Secured bank and private
placement loans
Bank overdraft
Lease liabilities
Trade payables

Total non-derivative financial
liabilities

Derivative financial liabilities
Hedged cross currency swaps
(Inflow)
Outflow

Total derivative financial
liabilities

Carrying
amount
$m

Contractual cash
flows
$m

6 months
or less
$m

6–12 months
$m

1–2 years
$m

2–5 years
$m

More than
5 years
$m

4,640.9

(5,806.7)

(114.1)

(113.5)

(229.0)

(4,725.6)

(624.6)

21.8
3,971.7
169.0

(21.8)
(6,824.9)
(169.0)

(21.8)
(644.0)
(169.0)

–
(332.6)
–

–
(688.3)
–

–
(1,815.2)
–

–
(3,344.8)
–

8,803.4

(12,822.4)

(948.9)

(446.1)

(917.3)

(6,540.8)

(3,969.4)

23.6
–

106.5

130.1

346.3
(364.5)

(136.7)

(154.9)

4.0
(2.6)

(13.2)

(11.8)

4.0
(2.6)

(13.2)

(11.8)

7.9
(5.2)

(26.5)

(23.8)

23.8
(15.7)

(79.5)

(71.4)

306.6
(338.4)

(4.3)

(36.1)

Carrying
amount
$m

Contractual cash
flows
$m

6 months
or less
$m

6–12 months
$m

1–2 years
$m

2–5 years
$m

More than
5 years
$m

3,616.8

(3,675.6)

(23.2)

(118.3)

(46.6)

(146.2)

(3,341.3)

2.5
4,197.5
127.4

(2.5)
(6,355.2)
(127.4)

(2.5)
(344.5)
(127.4)

–
(325.7)
–

–
(639.2)
–

–
(1,193.5)
–

–
(3,852.3)
–

7,944.2

(10,160.7)

(497.6)

(444.0)

(685.8)

(1,339.7)

(7,193.6)

9.7
–

9.7

582.2
(509.3)

72.9

9.6
(3.7)

5.9

9.6
(3.7)

5.9

19.2
(7.4)

11.8

76.7
(29.7)

47.0

467.1
(464.8)

2.3

Refer to Note 19 for details on the Group’s borrowing facilities, including covenants attached to these.

(1) The B1 term loan contains a prepayment option allowing the company to repay up to 30% of the principal in certain circumstances at a premium
anytime up to maturity. The cashflows presented above do not factor in early repayments. The prepayment option is separated as an embedded
derivative as disclosed in note 19.

(2) The warrant instruments will be settled by issue of equity and therefore there are no fixed contractual cash flows.

At 31 December 2019 the Group had three cross currency swaps. These were designated as a net investment hedge, with
changes in fair value of these derivatives recognised in equity to match translation adjustments on foreign currency equity
instruments which they are hedged against. During the year, $9.8m was credited to the hedge reserve and charge to the
income statement.

157

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements26. Financial Instruments continued
Net Investment Hedging
On 30 June 2020 the Group designated the Euro denominated term loan and the assets of a Euro trading subsidiary as a net
investment hedge.

Items held in net investment hedge:

Initial Euro term loan

Cross currency swaps

Year of
maturity

2025

2026

Change in value of
hedging instrument
$m

(19.8)

–

31 December 2020

Change in value of
hedged item
$m

19.8

–

Change in value of
hedging instrument
$m

–

(9.7)

31 December 2019

Change in value of
hedged item
$m

–

9.7

At 31 December 2020 the nominal amount of the hedging instruments held in net investment hedge was $233.8m (2019: $Nil)
and the nominal amounts of the hedged risk were €230.9m (2019 €Nil). The hedge ratio is 1:1. The items held in a net investment
hedge mitigate the net asset translation exposure arising from movements in non-functional currencies. Potential sources of
hedge ineffectiveness are credit risk and cross currency basis.

The hedging reserve contains a balance of ($19.8m) in relation to continuing net investment hedges and a balance of $31.4m in
relation to net investment hedge relationships for which hedge accounting is no longer applied.

Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect
the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters, while optimising the return on risk.

Foreign currency risk
Operating across ten territories increase the Group’s exposure to currency risk. Wherever possible, overseas operations will
fund their day-to-day working capital requirements in local currency with cash generated from operations, naturally hedging
the currency risk exposure to the Group. Management will continually monitor the level of currency risk exposure, and consider
hedging where appropriate. Currently the Group considers the currency risk on consolidation of the assets and liabilities of its
foreign entities to be of low materiality, no hedging has been undertaken.

In 2019 the Group entered a contingent forward contract and a contingent swap contracts in order to hedge certain cash flows
expected to take place on completion of the proposed Cineplex combination. Due to the termination of the deal, the contingent
elements of the derivatives were not met. The Group terminated the swap resulting in a gain of $4.5m and a loss of $10.4m on
the deal contingent forward in line with the fair values reported at 31 December 2019. In addition, the forward contract was
modified on termination, resulting in an additional loss of $10.2m.

Interest rate risk
Interest rate risk arises from the Group’s borrowing facilities in which a variable rate of interest is charged. The Group has
historically managed this risk by securing fixed interest rates on a portion of its term loans.

While fixed-rate interest-bearing debt is not exposed to cash flow interest rate risk, there is no opportunity for the Group to
enjoy a reduction in borrowing costs in markets where rates are falling.

In addition, the fair value risk inherent in fixed-rate borrowing means that the Group is exposed to unplanned costs should debt
be restructured or repaid early as part of the liquidity management process.

Exposure to interest rate risk is monitored through several measures including sensitivity and scenario testing and a cost benefit
analysis of entering into interest rate swaps to mitigate this risk.

The Group believes it is more cost effective for the US term loan to remain unhedged. The Group however uses interest rate
swaps agreed with other parties to hedge a portion of the interest charged on the Euro term loan. Interest rate swaps are
measured at fair value, which have been calculated by discounting the expected future cash flows at prevailing interest rates.

At 31 December 2020 the Group had two (2019: three) cross currency interest rate swaps. During 2019 an incremental USD
term loan was taken out for $650.0m and this was used in part to enter three Euro to USD cross currency interest rate swaps.
Under the arrangements of these swaps the Group received €408.7m. One of these swaps was settled during the current
financial year.

These proceeds in the prior year were used to settle €408.0m of the Group’s outstanding Euro term loan and the Group now
pays a Euro coupon on the notional outstanding balance of the Euro legs of the swaps and receives a coupon on the notional
outstanding balance of the USD legs of the swaps. The USD coupon is then used to pay the coupon on the $650.0m new term
loan. On maturity of the swaps and the incremental USD term loan, the Group will receive $300.0m on the US dollar legs of the
swaps and pay €272.5m on the Euro leg.

158

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202026. Financial Instruments continued
Cash flow sensitivity analysis
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:

Fixed rate instruments
Financial liabilities (loans and borrowings – unhedged portion)

Lease liabilities

Total Fixed rate instruments

Variable rate instruments
Financial liability/(assets) (interest rate swap)
Financial liabilities (loans and borrowings – unhedged portion)

Total Variable rate instruments

31 December
2020
$m

Carrying amount

31 December
2019
$m

617.3

3,971.7

4,589.0

23.6
4,045.4

4,069.0

–

4,197.5

14.2
3,616.8

3,631.0

The Group accounts for derivative financial instruments (interest rate swaps) at fair value. The gain or loss on remeasurement to
fair value is recognised immediately in the Consolidated Statement of Profit or Loss except where derivatives qualify for hedge
accounting when recognition of any resultant gain or loss depends on the nature of the item being hedged.

A change of 100 basis points in interest rates would have increased equity by $6.5m (2019: $6.5m) or decreased equity by
$6.5m (2019: $6.5m) for the swaps.

A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or
loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain
constant. The analysis is performed on the same basis for 2019.

Effect in dollars thousands

31 December 2020

Variable rate instruments
Interest rate swap

Cash flow sensitivity (net)

31 December 2019
Variable rate instruments
Interest rate swap

Cash flow sensitivity (net)

100 bp
increase

(33.6)
6.5

(27.1)

(37.8)
6.5

(31.3)

Profit or loss

100 bp
decrease

33.6
(6.5)

27.1

37.8
(6.5)

31.3

100 bp
increase

(33.6)
6.5

(27.1)

(37.8)
6.5

(31.3)

Equity

100 bp
decrease

33.6
(6.5)

27.1

37.8
(6.5)

31.3

Fair values
Set out below is a comparison by category of carrying amounts and fair values of the Group’s financial instruments that are
carried in the financial statements.

Carrying amount
31 December
2020
$m

Fair value
31 December
2020
$m

Carrying amount
31 December
2019
$m

Fair value
31 December
2019
$m

Secured bank and private placement loans (1)
Bank overdraft
Equity investments
Forward contract
Unhedged interest rate swap
Hedged Interest rate swap
Warrant
Embedded derivatives liability
Embedded derivatives asset

Total

4,640.9
21.8
(10.0)
–
23.6
–
97.2
106.5
(7.8)

4,872.2

3,734.9
21.8
(10.0)
–
23.6
–
97.2
106.5
(7.8)

3,966.2

3,616.8
2.5
(10.0)
(10.4)
4.5
9.7
–
–
–

3,613.1

(1 ) The fair value of the secured bank and private placement loans stated include the Fair value of embedded derivatives.

3,675.6
2.5
(10.0)
(10.4)
4.5
9.7
–
–
–

3,671.9

159

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements26. Financial Instruments continued
Fair values continued
Cash and cash equivalents, trade and other receivables, accounts payable and accrued liabilities are reflected in the
Consolidated Financial Statements at carrying values that approximate fair values because of the short-term maturities of these
financial instruments. Short-term debtors, creditors and cash and cash equivalents have been excluded from the above table on
the basis that their carrying amount is a reasonable approximation to fair value.

Finance lease liabilities are recorded at amortised cost, as derived from expected cash outflows and the estimated incremental
borrowing rate attached to the lease. Finance lease liabilities are separately disclosed within the Consolidated Statement of
Financial Position.

Fair value hierarchy
Under the provisions of IFRS 9, the interest rate swap agreements are recorded on the Consolidated Statement of Financial
Position at their fair values, with subsequent changes in fair value recorded in the Consolidated Statement of Profit and Loss.
See Note 19 Long-term debt for the Group’s current swap agreements.

Equity investments relate to investments designated as fair value through OCI. Any movement in fair value has been recognised
within fair value reserve. The Group holds unquoted equity investments and concluded that these cost of investments represent
their fair value at 31 December 2020.

The difference between net carrying amount and estimated fair value reflects unrealised gains or losses inherent in the
instruments based on valuations at 31 December 2020 and 31 December 2019. The volatile nature of the markets means
that values at any subsequent date could be significantly different from the values reported above.

The fair value of derivatives and borrowings has been calculated by discounting the expected future cash flows at prevailing
interest rates, except where the borrowings are traded in secondary markets and traded prices are available. The carrying
amount of unsecured bank loans is stated net of debt issuance costs and the fair value is stated gross of debt issuance costs
and is calculated using the market interest rates.

The table below analyses financial instruments carried at fair value by valuation method. The different levels have been defined
as follows:

− In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical financial assets or

financial liabilities that the Group has the ability to access.

− Fair values determined by Level 2 inputs use inputs other than the quoted prices included in Level 1 that are observable for
the financial asset or financial liability, either directly or indirectly. Level 2 inputs include quoted prices for similar financial
assets and financial liabilities in active markets, and inputs other than quoted prices that are observable for the financial
assets or financial liabilities. The Group uses market interest rates and yield curves that are observable at commonly quoted
intervals in the valuation of its interest rate swap agreements. The derivative positions are valued using models developed
internally by the respective counterparty that uses as its basis readily observable market parameters (such as forward yield
curves) and are classified within Level 2 of the valuation hierarchy. The Group considers its own credit risk as well as the
credit risk of its counterparties when evaluating the fair value of its derivatives. Any adjustments resulting from credit risk
are recorded as a change in fair value of the derivatives and reflected in the Statement of Comprehensive Income.

− Level 3 inputs are unobservable inputs for the financial asset or financial liability, and include situations where there is little,
if any, market activity for the financial asset or financial liability. The Group’s assessment of the significance of a particular
input to the fair value measurement in its entirety requires judgement, and considers factors specific to the financial asset
or financial liability.

31 December 2020
Derivative financial instruments

Equity investments

31 December 2019
Derivative financial instruments
Equity investments

Level 1
$m

–

–
–

Level 2
$m

219.5

–

3.8
–

Level 3
$m

–

(10.0)

–
(10.0)

Total
$m

219.5

(10.0)

3.8
(10.0)

There have been no transfers between levels in 2020. No other financial instruments are held at fair value.

160

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 202026. Financial Instruments continued
Valuation techniques used to determine fair values
Specific valuation techniques used to value financial instruments include:

− The fair value of derivatives and borrowings has been calculated by discounting the expected future cash flows at prevailing

interest rates.

− The carrying amount of bank loans is stated net of debt issuance costs and the fair value is stated gross of debt issuance

costs and is calculated using the market interest rates.

− The fair value of investments has been calculated by reference to quoted market values. The Group holds two unquoted
equity investment and have concluded that the cost of these investments represents its fair value at 31 December 2020.

All of the resulting fair value estimates are included in Level 2 except for unlisted equity investments (Level 3).

Capital Management
The capital structure of the Group consists of the following items:

Cash and cash equivalents
Bank and private placement loans and overdrafts
Lease liabilities
Equity attributable to equity holders of the parent

Total

2020
$m

336.7
4,662.7
3,971.7
1,328.9

10,300.0

2019
$m

140.6
3,619.3
4,197.5
3,775.2

11,732.6

The year 2020 were significantly impacted by the COVID-19 pandemic with all our cinemas being temporarily closed for
extensive periods from mid-March. In response to this extraordinary situation, the Board of Director adapted their monitoring as
described in the chair’s section on page 32.

Alongside the above crisis monitoring, the Board of Directors constantly monitors the ongoing capital requirements of the
business and has reviewed the current gearing ratio, being the ratio of bank debt to equity and considers it appropriate for the
Group’s current circumstances. Ratios used in the monitoring of debt capital include the ratio of Adjusted EBITDA to net debt.

The Group’s objective when managing capital is to maintain a strong capital base so as to maintain investor, creditor and
market confidence and to sustain future development of the business, to provide returns for shareholders and to optimise
the capital structure to reduce the cost of capital. The Board of Directors monitors both the demographic spread of
shareholders, as well as the return on capital, which the Group defines as total shareholders’ equity and the level of dividends
to ordinary shareholders.

27. Capital Commitments
Capital commitments at the end of the financial year for which no provision has been made:

Contracted

31 December
2020
$m

47.8

31 December
2019
$m

294.5

Capital commitments at the end of the current and preceding financial year relate to new sites and refurbishment projects
which have commenced or have been committed to through an executed lease agreement or lease amendment.

28. Contingent Liabilities
Following Cineworld’s termination on 12 June 2020 of the Arrangement Agreement relating to its proposed acquisition
of Cineplex Inc. (“Cineplex”), Cineplex initiated proceedings against Cineworld. The proceedings allege that Cineworld
breached its obligations under the Arrangement Agreement and/or duty of good faith and honest contractual performance.
Cineworld is defending its position and has made a counter claim against Cineplex.

The proceedings allege that Cineworld breached its obligations under the Arrangement Agreement and/or duty of good faith
and honest contractual performance and claim damages of up to C$2.18 billion less the value of Cineplex shares retained by
Cineplex shareholders. As previously announced, the directors are of the view that Cineworld did not breach these (or any)
obligations or duties and the Group is vigorously defending this claim. In any event, Cineworld believes that Cineplex’s claim,
if successful, would be limited to its costs and expenses incurred in relation to the Acquisition and would not be assessed by
reference to the consideration that was payable under the Acquisition.

161

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements28. Contingent Liabilities continued
The Group terminated the Arrangement Agreement because Cineplex breached a number of its covenants under the
Arrangement Agreement and could not meet certain conditions necessary for closing. Cineplex did not remedy its breaches
when given the opportunity to do so. As of the date of these financial statements, the Directors are of the view that no material
liability will arise in respect of this claim.

29. Related Parties
Transactions between the Group and its subsidiaries, which are related parties, have been eliminated on consolidation and are
not disclosed in this note. The transactions between the Group and its joint ventures and associates are disclosed below.

For the purposes of IAS 24 “Related Party Disclosures”, executives below the level of the Company’s Board are not regarded as
related parties.

The remuneration of the Directors at the year end, who are the key management personnel of the Group, is set out in aggregate
in the audited part of the Directors’ Remuneration report on pages 70 to 73.

The compensation of the Directors is as follows:

Year ended 31 December 2020
Total compensation for Directors

Year ended 31 December 2019
Total compensation for Directors

Salary and fees
including bonus
$’000

Pension
contributions
$’000

Total
$’000

2,747.0

281.1

3,028.1

Salary and fees
including bonus
$’000

Pension
contributions
$’000

Total
$’000

7,451.1

363.4

7,814.5

Other related party transactions
Digital Cinema Media Limited (“DCM”) is a joint venture between the Group and Odeon Cinemas Holdings Limited set up
on 10 July 2008. Revenue receivable from DCM in the year ended 31 December 2020 totalled $5.3m (2019: $24.9m) and as
at 31 December 2020 no amounts were due from DCM in respect of receivables (2019: $3.8m). In addition, the Group has a
working capital loan outstanding from DCM of $0.7m (2019: $0.6m).

NCM is a joint venture between AMC Entertainment Holdings Inc, Cinemark Holdings Inc and the Group. As at 31 December
2020 $0.2m (2019: $1.4m) was due to NCM in respect of trade payables and $1.0m (2019: $6.3m) was due from NCM in respect
of trade receivables. Refer to Note 13 for details of transactions with NCM.

Revenue receivable from NCM in the year ended 31 December 2020 totalled $83.7m (2019: $97.8m).

AC JV is a joint venture between AMC Entertainment Holdings Inc, Cinemark Holdings Inc and NCM. There were no transactions
during the year. As at 31 December 2020 $0.2m (2019: $0.9m) was due to Fathom AC in respect of trade payables.

Revenue receivable from Black Shrauber Limited in the year ended 31 December 2020 totalled $0.1m (2019: $0.1m). There were
no amounts due to or from Black Shrauber Limited at 31 December 2020.

DCIP is a joint venture between Regal, AMC and Cinemark. On November 1 2020, the master lease agreement was terminated
and all digital projectors were distributed to the founding members. In connection with the termination of the master lease
agreement, Regal is required to pay a termination fee which is effectively the monthly obligation (i.e. rent payments) until the
revised cost recoupment date in October 2021. The termination fee payable at 31 December 2020 was $4.9m. Refer to Note 14
for further information.

Global City Holdings N.V. (“GCH”), is a company in which Moshe Greidinger and Israel Greidinger, Directors of the Group, have
a controlling interest. During the year, the Group made lease payments of $6.1m (2019: $10.4m) to companies under the control
of GCH. At 31 December 2020 $59.6m (2019: $57.5m) in lease liabilities were included within the Group’s Statement of Financial
Position. The Group had amounts payable of $0.2m (2019: $1.7m) by companies under the control of GCH.

No related party transactions other than compensation have occurred during both the current or prior financial years with key
management personnel.

All related party transactions were made on terms equivalent to those that prevail in an arm’s length transaction.

Details of subsidiaries held by the Group can be found in Note 32.

162

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDCineworld Group plc Annual Report and Accounts 2020COMPANY STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2020

Non-current assets
Investments

Total non-current assets

Current assets
Debtors
Cash at bank
Total current assets

Total assets

Current liabilities
Trade and other payables
Fair value of financial derivatives

Total current liabilities

Net current assets

Total assets less current liabilities

Net assets

Capital and reserves
Called up share capital
Share premium account
Translation reserve
Profit and loss account

Shareholders’ funds – equity

Note

34
35

31 December
2020
$m

31 December
2019
$m

1,135.4

531.8
0.3
532.1

1,667.5

(241.4)
(97.2)

(338.6)

193.5

1,328.9

20.1
513.8
(218.8)
1,013.8

1,328.9

3,446.0

896.6
15.7
912.3

4,358.3

(583.1)
–

(583.1)

329.2

3,775.2

20.1
516.0
(345.3)
3,584.4

3,775.2

The Company generated a loss of $2,519.5m (2019: profit $528.8m) during the current financial year.

These Financial Statements on pages 163 to 176 were approved by the Board of Directors on 25 March 2021 and were signed
on its behalf by:

Nisan Cohen
Director

163

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial StatementsCOMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020

Balance at 1 January 2019
Profit for the financial year
Other comprehensive income
Items that will subsequently be reclassified to profit or loss
Movement on translation reserve
Total comprehensive income

Contributions by and distributions to owners
Dividends
Movements due to share-based compensation
Issue of shares

Balance at 31 December 2019

Loss for the financial year

Other comprehensive income
Items that will subsequently be reclassified to profit or loss
Movement on translation reserve

Total comprehensive income

Contributions by and distributions to owners
Dividends

Movements due to share-based compensation

Transfer

Issued
capital
$m

Share
premium
$m

Translation
reserve
$m

Note

20.1
–

513.8
–

(462.0)
–

Retained
earnings
$m

3,574.0
528.8

Total
$m

3,645.9
528.8

–
–

–
–
–

–
–

–
–
2.2

116.7
116.7

–
528.8

116.7
645.5

–
–
–

(520.2)
1.8
–

(520.2)
1.8
2.2

20.1

516.0

(345.3)

3,584.4

3,775.2

–

(2.2)

–

(2,519.5)

126.5

–

126.5

(2,519.5)

(2,393.0)

–

(51.4)

(1.9)

2.2

(51.4)

(1.9)

–

37
36

Balance at 31 December 2020

20.1

513.8

(218.8)

1,013.8

1,328.9

164

Cineworld Group plc Annual Report and Accounts 2020NOTES TO THE COMPANY FINANCIAL STATEMENTS

30. Accounting Policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation
to the Company’s financial statements.

General information
Cineworld PLC is a public company, limited by shares, incorporated and domiciled in the UK. Its registered address is 8th Floor,
Vantage London, Great West Road, Brentford, TW8 9AG.

Basis of Preparation
These financial statements present information about the Company as an individual undertaking and not about its Group.

These financial statements were prepared in accordance with the Companies Act 2006 as applicable to companies using
Financial Reporting Standard 101 Reduced Disclosure Framework (“FRS 101”). These financial statements have been prepared
under the historic cost convention.

In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements
of “international accounting standards in conformity with the requirements of the Companies Act 2006”.Amendments are
made where necessary in order to comply with Companies Act 2006 and has set out below where advantage of the FRS 101
disclosure exemptions have been taken.

In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the
following disclosures:

− a Cash Flow Statement and related notes;

− disclosures in respect of transactions with wholly owned subsidiaries;

− disclosures in respect of capital management;

− the effects of new but not yet effective IFRSs;

− the requirements of paragraphs 17 and 18A of IAS 24 “Related Party Disclosures”, including disclosures in respect of the

compensation of key management personnel; and

− a separate Statement of Profit or Loss in line with the section 408 exemption.

Presentational currency
The functional currency of the Company is sterling. To aid the users of the Company accounts with consistency of the
consolidated Group accounts, the Company’s presentational currency is in US dollars.

Investments
In the Company’s financial statements, investments in subsidiary undertakings are stated at cost less provision for any
impairment in value.

Impairment
The Company evaluates its investments for financial impairment where events or circumstances indicate that the carrying
amount of such assets may not be fully recoverable. When such evaluations indicate that the carrying value of an asset exceeds
its recoverable value, an impairment in value is recorded.

Deferred taxation
Deferred tax is recognised using the Statement of Financial Position method, providing temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax is recognised, without discounting, in respect of all temporary differences except as otherwise required by IAS 12.

Share-based payment transactions
The share options programme allows Group employees to acquire shares of the Company. The fair value of options are
measured at grant date and spread over the period during which the employees become unconditionally entitled to the options.
The fair value of the options granted is measured using an evaluation model, taking into account the terms and conditions upon
which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options
that vest except where forfeiture is due only to share prices not achieving the threshold for vesting.

Where the Company grants options over its own shares to the employees of its subsidiaries it recognises an increase in the
cost of investment in its subsidiaries equivalent to the equity-settled share-based payment charge recognised in its subsidiary’s
financial statements with the corresponding credit being recognised directly in equity. Amounts recharged to or reimbursed by
the subsidiary are recognised as a reduction in the cost of investment in the subsidiary.

165

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements30. Accounting Policies continued
Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the
financial instrument. Financial assets are de-recognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

Financial liabilities are de-recognised when the contractual obligations are discharged, cancelled or expire.

Financial assets and financial liabilities are offset and the net amount is reported in the Statement of Financial Position, when
there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise
the financial asset and settle the financial liability simultaneously.

IFRS 9 contains three classification categories for financial assets and liabilities: measured at amortised cost, fair value through
profit or loss (“FVPL”) and fair value through other comprehensive income (“FVOCI”).

At initial recognition, the Company classifies its financial instruments in the following categories depending on the purpose for
which the financial instruments were acquired:

Financial assets at amortised cost:
The Company’s financial assets at amortised cost comprise cash and cash equivalents and loans receivable from other legal
entities within the Cineworld Group. Loans and receivables are initially recognised at the amount expected to be received, less,
when material, a discount to reduce the loans and receivables to fair value. Subsequently, loans and receivables are measured at
amortised cost using the effective interest method, less a loss allowance.

The Company fixed asset investment is held at amortised cost.

Financial assets and financial liabilities at FVPL:
Financial instruments in this category are recognised initially and subsequently at fair value. Transaction costs are expensed in
the Company’s Statement of Profit or Loss. Gains and losses arising from changes in fair value are presented in the Company’s
Statement of Profit or Loss. Financial assets and financial liabilities at fair value through profit or loss are classified as current,
except for the portion expected to be realised or paid beyond 12 months of the Consolidated Statement of Financial Position
date, which is classified as non-current.

Impairment of financial assets
The company applies the IFRS 9 expected credit losses approach, assessing lifetime expected loss allowances for all trade
receivables and contract asset.

Loss allowances will be measured on either of the following bases:

i. 12-month ECLs which are ECLs that result from possible default events within 12 months after the reporting date; and

ii. lifetime ECLs which are ECLs that result from all possible default events over the expected life of a financial instruments.

The Company measures expected credit losses using a lifetime expected loss allowance for all intercompany receivables.
Impairment losses on financial assets carried at amortised cost or FVOCI are reversed in subsequent years if the amount of the
loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised.

The carrying amount of the Company’s fixed asset investment is reviewed at each Statement of Financial Position date
to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount
is estimated.

An impairment loss is recognised whenever the carrying amount of these fixed asset investments exceeds their recoverable
amount. Impairment losses are recognised in the Company’s Statement of Profit or Loss.

The recoverable amount is the greater of the asset’s fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.

Significant accounting judgements and estimates
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates.

Judgements and estimates made by the Directors in the application of these accounting policies that have significant effect
on these financial statements and estimates with a significant risk of material adjustment in the next financial year are set
out below.

166

NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUEDCineworld Group plc Annual Report and Accounts 202030. Accounting Policies continued
Judgements
There are no significant accounting judgements that impact the Company financial statements, other than those related to
estimates shown below.

Estimates
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the year in which the estimate is revised and in any future years affected.

In applying the Company’s accounting policies described above the Directors have identified that the following area as key
estimates that have a significant impact on the amounts recognised in the financial statements.

Impairment of fixed asset investments
The Company determines whether its investment in subsidiary Crown UK Holdco Limited is impaired when indicators of
impairment exist or based on the annual impairment assessment. The annual assessment requires an estimate of the value in
use of the underlying investment. This investment holds subsequent investments in all Group companies.

Estimating the value in use requires the Company to make an estimate of the expected future cash flows from the investment
and discount this to net present value at the Group’s weighted average discount rate. The resulting calculation is sensitive to the
assumptions in respect of future cash flows and the discount rate applied.

The Directors consider that the assumptions made represent their best estimate of the future cash flows generated by the
investment and that the discount rate used is appropriate given the risks associated with the specific cash flows. A sensitivity
analysis has been performed over the estimates (see Note 32).

Forecasting expected cash flows and selecting an appropriate discount rate inherently requires estimation. A sensitivity analysis
has been performed over the estimates (see Note 32). The resulting calculation is sensitive to the assumptions in respect of
future cash flows and the discount rate applied. The Directors consider that the key assumptions made within the cash flow
forecasts include long-term growth, the impact of the Company’s recovery from COVID-19 as outlined in Note 1, and discount
rates. The Directors consider that the assumptions made represent their best estimate of the future cash flows generated by the
investment, and that the discount rate used is appropriate given the risks associated with the specific cash flows. Based on the
sensitivity analysis performed, there would be additional impairment. Refer to Note 32 for full details. Therefore it is considered
appropriate to disclose this as an area of significant estimation due to the size of the balance and the fact that it could change
as a result of future events.

Expected credit losses
The company applies the IFRS 9 expected credit losses approach, assessing lifetime expected loss allowances for all trade
receivables and contract assets.

Management currently calculate this loss allowance based on the weighted average of two recoverability scenarios.
Scenario one is based on the fact that additional funds could be drawn down to repay these intercompany receivables should
the counterparty call on these. Based on historical evidence should this occur subsidiary companies have in the past drawn
down on additional funding to repay these loans. Therefore management estimate that the probability of this scenario occurring
is high and have applied an apportionment of 95% of this occurring. Under Scenario two, a loss allowance is calculated based
on a 100% probability of default, less available assets and cash which could be sold at a discount to repay these intercompany
loans. Management estimate that the probability of this scenario occurring is low and have applied an apportionment of 5%.

The expected credit loss is therefore sensitive to the apportionment applied. A sensitivity analysis has been performed over this
estimate (see Note 32).

167

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements31. Staff Numbers and Costs
The Company pays no employees. Salaries of the Directors of the Company, including Non-Executive Directors, as well as
the Company Secretary are recharged to the Company from its subsidiary Cineworld Cinemas Ltd. Total salaries paid to
Non-Executive Directors were $0.9m (2019: $0.9m).

32. Investments

Company

Balance at 31 December 2018
Additions

Disposal
Share for share exchange
Effects of movement in foreign exchange

Balance at 31 December 2019
Additions

Disposal
Impairment
Effects of movement in foreign exchange

Balance at 31 December 2020

Net book value
At 31 December 2019

At 31 December 2020

Shares in
Group
undertakings
$m

3,339.1
–

–
2.4
104.5

3,446.0
80.5

–
(2,509.9)
118.8

1,135.4

3,446.0

1,135.4

Additions of $80.5m during the financial year relate to a capital contribution in Crown UK Holdco Limited as a result of the issue
of equity warrants as outlined in note 35. The $80.5m represents the fair value of these warrants on date of issuance.

Fixed asset investments

Registered office

Principal activity

Class

% of shares
held

Subsidiary undertakings

Directly held

Crown UK Holdco Limited

Indirectly held

Cinema City Holding B.V.

Augustus 1 Limited

Cinema Finco 1 Limited

Cinema Finco 2 Limited

Cinema Finco 3 Limited

Cinema Finco 4 Limited

Cinema Finco 5 Limited

Cinema Finco 6 Limited

Cinema City Holdco
(Hungary) K.F.T

Crown Intermediate
Holdco. Inc

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Holding company

Ordinary

100

PO Box 1370 NL-3000 BJ Rotterdam
The Netherlands

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

8th Floor, Block E, Iveagh Court,
Harcourt Road, Dublin 2, Ireland

Holding company

Ordinary

Holding company

Ordinary

Financing company

Ordinary

Financing company

Ordinary

Financing company

Ordinary

Financing company

Ordinary

Financing company

Ordinary

Financing company

Ordinary

1132 Budapest, Váci út 22-44

Financing company

Ordinary

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Holding company

Ordinary

100

Cineworld Hunco. Kft

1132 Budapest, Váci út 22-44

Holding company

Ordinary

168

NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUEDCineworld Group plc Annual Report and Accounts 202032. Investments continued
Fixed asset investments continued

Registered office

Principal activity

Class

% of shares
held

Crown Finance US. Inc

Augustus 2 Limited

Cineworld Holdings Limited

Cine-UK Limited

101 E. Blount Avenue, Knoxville,
TN 37920, United States

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Holding company

Ordinary

Holding company

Ordinary

Holding company

Ordinary

Cinema operations

Ordinary

Cineworld Cinemas
Holdings Limited

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Holding company

Ordinary

Picturehouse Cinemas Limited

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Cinema operations

Ordinary

Cineworld Cinemas Limited

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Holding company and
Cinema operations

Ordinary

Classic Cinemas Limited

Gallery Holdings Limited

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Retail services
company

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Dormant holding
company

Cineworld Estates Limited

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Cinema property
leasing

Ordinary

Adelphi Carlton Limited

8th Floor, Block E, Iveagh Court,
Harcourt Road, Dublin 2, Ireland

Cinema operations

Ordinary

Basildon Cinema 2 Limited

2nd Floor, The Le Gallais Building, 54 Bath
Street, St Helier, Channel Islands, JE2 1FW

Cinema property
leasing

Ordinary

Basildon Cinema
Number Two 2 Limited

2nd Floor, The Le Gallais Building, 54 Bath
Street, St Helier, Channel Islands, JE2 1FW

Cinema operations

Bromley Cinema 2 Limited

2nd Floor, The Le Gallais Building, 54 Bath
Street, St Helier, Channel Islands, JE2 1FW

Cinema operations

Empire Cinema 2 Limited

2nd Floor, The Le Gallais Building, 54 Bath
Street, St Helier, Channel Islands, JE2 1FW

Cinema operations

Ordinary and
preference

Hemel Hempstead
Two Cinema 2 Limited

Poole Cinema 2 Limited

2nd Floor, The Le Gallais Building, 54 Bath
Street, St Helier, Channel Islands, JE2 1FW

Cinema operations

Ordinary

2nd Floor, The Le Gallais Building, 54 Bath
Street, St Helier, Channel Islands, JE2 1FW

Cinema operations

Ordinary and
preference

Newcastle Cinema 2 Limited

2nd Floor, The Le Gallais Building, 54 Bath
Street, St Helier, Channel Islands, JE2 1FW

Cinema operations

Ordinary

Cineworld South East
Cinemas Limited

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Dormant holding
company

Ordinary

Cineworld Elite Picture Theatre
(Nottingham) Limited

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Dormant

Ordinary

Gallery Cinemas Limited

Cineworld Cinema
Properties Limited

Newman Online Limited

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Dormant

Ordinary

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Dormant property
company

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Dormant software
development and
provider

Ordinary

Picturehouse Bookings Limited

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Ticket booking
operations

Ordinary

Picturehouse Entertainment
Limited

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Film distribution

Ordinary

City Screen (SOA) Limited

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

Cinema operations

Ordinary

100

169

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements32. Investments continued
Fixed asset investments continued

Registered office

Principal activity

Class

% of shares
held

CS (Exeter) Limited

City Screen (Stratford) Limited

City Screen (York) Limited

City Screen (Liverpool) Limited

CS (Brixton) Limited

CS (Norwich) Limited

City Screen (Brighton) Limited

Cinema City Finance (2017) B.V

Seracus Limited

8th Floor, Vantage London,
Great West Road, Brentford, TW8 9AG

PO Box 1370 NL-3000 BJ Rotterdam
The Netherlands

75 Prodromou Avenue, 1st Floor, Office
101 Strovolos, Nicosia 2063 Cyprus

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Financing company

Ordinary

Holding company

Ordinary

I.T. Planet Advertising Ltd

91 Medinat Hayehudim, Herzelia, Israel

Dormant

Ordinary

Norma Film Limited

91 Medinat Hayehudim, Herzelia, Israel

Cinema operations

Ordinary

Cinema Theatres Limited

91 Medinat Hayehudim, Herzelia, Israel

Cinema operations

Ordinary

Cinema-Phone Limited

18 Haneviim, Haifa, Israel

Cinema operations

Ordinary

Forum Film Limited

91 Medinat Hayehudim, Herzelia, Israel

Cinema operations

Ordinary

IT Magyar Cinema Moziüzemeltető
és Filmforgalmazó K.F.T.

1132 Budapest, Váci út 22-24

Cinema operations

Ordinary

Palace Cinemas Hungary K.F.T.

1132 Budapest, Váci út 22-24

Cinema operations

Ordinary

Forum Hungary K.F.T.

1132 Budapest, Váci út 22-24

Cinema operations

Ordinary

New Age Cinema K.F.T.

1132 Budapest, Váci út 22-24

Advertising

Ordinary

Cinema City Romania SRL

Forum Film Romania SRL

New Age Media Romania SRL

Cinema City Bulgaria EOOD

Forum Film Bulgaria EOOD

Cinema City Czech s.r.o.

Forum Film Czech s.r.o.

13 Ana Davila street, Sector 5,
Bucharest 050491, Romania

13 Ana Davila street, sector 5,
Bucharest 050491, Romania

45 Bregalnitza Str, 5 floor
Vazrajdane Region Sofia 1303, Bulgaria

45 Bregalnitza Str, 4 floor
Vazrajdane Region Sofia 1303, Bulgaria

Arkalycká 951/3, 149 00 Praha 4,
Czech Republic

Cinema operations

Ordinary

Film distribution

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Film distribution

Ordinary

Cinema operations

Ordinary

Film distribution

Ordinary

Cinema City Cinemas sp.Zoo

UL. Fosa 37 02-768 Warszawa Poland

Group services

Ordinary

All Job Poland sp.Zoo

Woloska 12 02-675 Warszawa, Poland

Cinema operations

Ordinary

I.T. Poland Development
2003 sp. Zoo

New Age Media sp. Zoo

Cinema City Poland sp. Zoo
CC spolka komandytowa.

UL.Fosa 37 02-768 Warszawa Poland

Cinema operations

Ordinary

UL. Powsińska 31 02-903
Warszawa Poland

Advertising

Ordinary

UL. Fosa 37 02-768 Warszawa Poland

Cinema operations

Ordinary

Northfleet sp. Zoo

UL. Fosa 37 02-768 Warszawa Poland

General partner

Ordinary

170

100

NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUEDCineworld Group plc Annual Report and Accounts 202032. Investments continued
Fixed asset investments continued

Registered office

Principal activity

Class

% of shares
held

Cinema City Poland CC sp. Zoo

UL. Fosa 37 02-768 Warszawa Poland

Cinema operations

Ordinary

Forum Film Poland CC Sp. Zoo

Woloska 12 02-675 Warszawa, Poland

Film distribution

Ordinary

Job & Services sp. Zoo

UL. Fosa 37 02-768 Warszawa Poland

Cinema operations

Ordinary

New Cinemas Sp. Zoo

UL. Fosa 37 02-768 Warszawa Poland

Cinema operations

Ordinary

Cinema City Slovakia s.r.o.

Einsteinova 20, 851 01 Bratislava, Slovakia

Cinema operations

Ordinary

Forum Film Slovakia s.r.o.

Einsteinova 20, 851 01 Bratislava, Slovakia

Film distribution

Ordinary

A 3 Theatres of San Antonio, Ltd

A 3 Theatres of Texas, Inc.

Cinebarre, LLC

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Consolidated Theatres
Management, L.L.C.

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Crown Theatre Corporation

Eastgate Theatre, Inc.

Edwards Theatres, Inc.

Frederick Plaza Cinemas, Inc.

Great Escape LLC

Great Escape of Nitro, LLC

Great Escape of O’Fallon, LLC

Great Escape Theatres, LLC

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Great Escape Theatres of
Bowling Green, LLC

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Great Escape Theatres of
Harrisburg, LLC

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Great Escape LaGrange LLC

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Great Escape Theatres of
Lebanon, LLC

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Great Escape Theatres of
New Albany, LLC

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Hollywood Theatres, Inc.

Hollywood Theatres III, Inc.

Hoyts Cinemas Corporation

Interstate Theatres Corporation

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Lois Business Development
Corporation

101 E. Blount Avenue, Knoxville,
TN 37920, United States

McIntosh Properties LLC

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Dormant

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Dormant

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

100

171

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements32. Investments continued
Fixed asset investments continued

Registered office

Principal activity

Class

% of shares
held

Next Generation Network, Inc.

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Pacific Rim Business
Development Corporation

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Palace Suite, Inc.

R and S Theatres, Inc.

Ragains Enterprises LLC

RAM/UA-KOP, LLC

R.C.Cobb, Inc.

R.C.Cobb II, LLC

RCI/FSSC, LLC

RCI/RMS, LLC

Regal/Cinebarre Holdings, LLC

Regal Cinemas Corporation

Regal Cinemas Holdings, Inc

Regal Cinemas, Inc.

Regal Cinemas II, LLC

Regal CineMedia Corporation

Regal CineMedia Holdings, LLC

Regal/DCIP Holdings, LLC

Regal Distribution, LLC

Regal Distribution Holdings, LLC

Regal Entertainment Group

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Dormant

Ordinary

Cinema operations

Ordinary

Dormant

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Dormant

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Holding company

Ordinary

Holding company

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Gift promotions

Ordinary

Holding company

Ordinary

Holding company

Ordinary

Film Distribution

Ordinary

Holding company

Ordinary

Holding company

Ordinary

Regal Entertainment Holdings, Inc. 101 E. Blount Avenue, Knoxville,

Holding company

Ordinary

TN 37920, United States

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Holding company

Ordinary

Cinema operations

Ordinary

Holding company

Ordinary

Cinema operations

Ordinary

Regal Entertainment
Holdings II, LLC

Regal Gallery Place, LLC

Regal Investment Company

Regal Licensing, LLC

172

100

NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUEDCineworld Group plc Annual Report and Accounts 202032. Investments continued
Fixed asset investments continued

Registered office

Principal activity

Class

% of shares
held

Regal Paramus Park, LLC

Regal Stratford, Inc.

Richmond I Cinema, L.L.C.

San Francisco Theatres, Inc.

United Artists Theatre Company

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Holding company

Ordinary

United Artists Theatre Circuit, Inc. 101 E. Blount Avenue, Knoxville,

Cinema operations

Ordinary

United Artists Theatre
Circuit II, Inc.

101 E. Blount Avenue, Knoxville,
TN 37920, United States

TN 37920, United States

United Artists Realty Company

United Artists Properties I Corp.

Vogue Realty Company

United Stonestown Corporation

UA Shore LLC

UA Swansea. LLC

Valeene Cinemas LLC

Wallace Theatre Holdings, Inc.

Wallace Theatres – Guam.

Wallace Theatres – Saipan, Inc.

13th Avenue Partners, LLC

Cinemas Associates, LLC

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Cinema operations

Ordinary

Cinema property
leasing

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Holding company

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Oklahoma Warren Theatres II, LLC 101 E. Blount Avenue, Knoxville,

Cinema operations

Ordinary

TN 37920, United States

Oklahoma Warren Theatres, LLC 101 E. Blount Avenue, Knoxville,

Cinema operations

Ordinary

Regal/Atom Holdings, LLC

The Movie Machine, LLC

Warren Oklahoma Theatres, Inc.

TN 37920, United States

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Restaurant Row Business
Development Corp

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Regal – 18 LLC

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Holding company

Ordinary

Cinema operations

Ordinary

Cinema operations

Ordinary

Dormant

Ordinary

Cinema operations

Ordinary

100

173

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements32. Investments continued
Fixed asset investments continued

Registered office

Principal activity

Class

Regal Realty 17 LLC

1232743 B.C.LTD.

Bruno Funding Limited

CDD Borrower, LLC

CDD Parent, LLC

CDD UK Borrower Limited

CDD UK Parent Limited

Crown NL Holdco B.V.

Jointly controlled entities

101 E. Blount Avenue, Knoxville,
TN 37920, United States

Suite 2400, 745 Thurlow Street,
Vancouver BC V6E 0C5, Canada

22 Grenville Street, St Helier, Jersey,
Channel Islands, JE4 8PX

1206 Orange Street, The Corporation
Trust Centre, City of Wilmington, County
of New Castle DE 19801, United States

8th Floor, Vantage London, Great West
Road, Brentford, TW8 9AG

Coolsingel 63, 7th floor, 3012 AB
Rotterdam, Netherlands

Cinema operations

Ordinary

Holding company

Ordinary

Holding company

Ordinary

Cinema operations

Ordinary

% of shares
held

100

Holding company

Ordinary

100

Cinema operations

Ordinary

Holding company

Ordinary

Cinema operations

Ordinary

Digital Cinema Distribution
Coalition, LLC

840 Century Park East Suite 550 Los
Angeles, CA 90067, United States

Film distribution

Ordinary

Digital Cinema Implementation
Partners, LLC

100 Enterprise Drive, Suite 505
Rockaway, New Jersey 07866

Leasing company

Ordinary

Digital Cinema Media Limited

350 Euston Road, London, NW1 3AX

Screen Advertising

Ordinary

Siam UATC Company Limited

101 E. Blount Avenue, Knoxville, TN 37920,
United States

Cinema operations

Ordinary

United Artist Singapore
Theaters Pte. Ltd

101 E. Blount Avenue, Knoxville, TN 37920,
United States

Cinema operations

Ordinary

AC JV, LLC

National CineMedia, LLC

Black Shrauber Limited

5990 Greenwood Plaza Blvd, Greenwood
Village, CO, United States

Events organisation Ordinary

6300 South Syracuse Way, Suite 300,
Centennial, CO 80111, United States

Cinema complex, Neomi 4, Jerusalem,
Israel

Screen Advertising

Ordinary

Restaurant company Ordinary

100

14.6

33.3

26.1

Cinema City Poland Sp. z.o.o, I.T. Poland Development 2003 Sp. z.o.o, Forum Film Poland Sp. z.o.o, New Age Media Sp. z.o.o
and All Job Poland Sp. z.o.o have a statutory year end that is different to that of the Group, being 30 November 2020.

For all group fixed asset investments listed above the % of shares held is also equal to the group’s % of voting rights.

No subsidiary company is exempt from audit by virtue of s479A of Companies Act 2006.

No dormant subsidiary company is exempt from preparing individual accounts by virtue of s394A of Companies Act 2006.
No dormant subsidiary company is exempt from filing with the registrar individual accounts by virtue of s448A of Companies
Act 2006.

174

NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUEDCineworld Group plc Annual Report and Accounts 202032. Investments continued
Impairment
The Company holds a direct investment in Crown UK Holdco Limited. The Company determines whether these assets are
impaired when indicators of impairment exist or based on the annual impairment assessment. The annual assessment requires
an estimate of the recoverable amount by reference to the value in use of the Crown UK Holdco Limited.

Where the recoverable amount is less than the carrying value, an impairment charge to reduce the investment to recoverable
amount is recognised.

Estimating the value in use requires the Company to make an estimate of the expected future cash flows from its investment
and discount these to net present value at a pre-tax discount rate.

Crown UK Holdco Limited holds investments within all Group companies either directly or indirectly and therefore the value
in use is based on forecast future cash flows generated by the Group. These forecast cash flows are defined as the Adjusted
EBITDA (see Note 2) and are based on the five-year cash flow forecast of the Group per the Group’s going concern assessment
outlined in Note 1. These cash flows have been extrapolated into perpetuity from 2025 applying a long-term growth rate
of 1%. This growth rate does not exceed the long-term average growth rate for the markets in which Crown UK Holdco
investments operate.

These cash flows are adjusted to take into account the repayment of the Group’s borrowings at 31 December 2020 and future
rental payments beyond the period covered by each current lease.

These cash flows have been discounted at the Group’s weighted average cost of capital of 14.4%.

Based on management’s assessment, the recoverable amount of the Company’s investment was less than its carrying value and
an impairment of $2,509.9m (2019: $Nil) was recognised.

In calculating the recoverable amount of the Company’s investment, reference was also made to the fair value less cost of disposal.
It was concluded that the calculated value in use was greater than fair value less cost of disposal and therefore the recoverable
amount was deemed to represent the value in use.

Impairment sensitivities
Sensitivities have been applied to the forecast cash flows to assess the potential impairment under different scenarios.
The scenarios applied are the severe but plausible scenario set out in Note 1, a 1% reduction in long-term growth rates and
a 1% increase in discount rate. The results would be as follows:

Severe but plausible case
Long-term growth rates reduced by 1%
1 percentage point increase in the discount rates

Additional
impairment $m

1,135.4
381.2
562.5

Under the severe but plausible case scenario, the investment would be fully impaired.

Management also performed an additional sensitivity to understand the impact should there be a 1 percentage point fall in the
discount rates. under this scenario, the December 20 impairment charge would be reduced by $644.5m.

33. Debtors

Amounts owed by Group undertakings
Expected credit loss

Total financial assets at amortised cost

31 December
2020
$m

31 December
2019
$m

552.3
(20.5)

531.8

896.6
–

896.6

The amounts owed by Group undertakings are interest free and repayable on demand. The Company has considered if these
loan receivables are impaired and has recognised an expected credit loss of $20.5m against amounts due from subsidiary
undertakings during the current financial year (2019: $Nil).

Management applies estimates in calculating this expected credit loss as outlined within Note 30. Should management adjust
the weighted average scenario proportion from 95% Scenario 1/5% Scenario 2 to 90% Scenario 1/10% Scenario 2 an additional
expected credit loss charge of $20.5m would be recognised.

175

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements34. Trade and other payables

Amounts owed to Group undertakings
Accruals

Total creditors falling due within one year

31 December
2020
$m

31 December
2019
$m

240.9
0.5

241.4

582.3
0.8

583.1

Fair values
Fair value disclosures for debtors and creditors have not been prepared on the basis that their carrying amount is a reasonable
approximation to fair value.

35. Fair value of financial derivatives

Derivative financial liabilities

Total fair value of financial derivatives

31 December
2020
$m

31 December
2019
$m

97.2

–

Derivative financial liabilities held by the Company at 31 December 2020 relate to the equity warrants issued in the year, as set
out in note 19 of the Group Consolidated Financial Statements.

Fair value disclosures in relation to these equity warrants have been prepared in note 26 of the Group Consolidated
Financial Statements.

36. Share-Based Payments
A share-based payment credit of $2.3m (2019: charge of $4.9m) was recognised within the Company during the year in relation
to the Group share options and share plans. Further details of these share options and plans are outlined in Note 23 of the
Consolidated Financial Statements.

37. Capital and Reserves
Share capital

Allotted, called up and fully paid
1,372,797,489 (2019: 1,371,950,293) ordinary shares of £0.01 each.

31 December
2020
$m

20.1

31 December
2019
$m

20.1

847,196 shares were issued during the year on vesting of the 2017 PSP plan as outlined within Note 23.

Foreign currency translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of the
Company from its functional currency of GBP to its presentational currency of USD.

Dividends
The Directors have not approved or proposed a dividend for the year ended 31 December 2020. On 7 April 2020 the Board
announced the suspension of the 2019 fourth quarter dividend of 4.25 cents per share to conserve cash for the Group.

Further information on dividends paid for the current financial year are outlined within Note 25 of the Group Consolidated
Financial Statements.

38. Capital management
Details of the Company’s and Group’s capital management is outlined within Note 26 of the Group Consolidated
Financial Statements.

39. Commitments, Pension Commitments, Guarantees And Contingencies
The Company had no contractual commitments, pension commitments, guarantees or contingencies at 31 December 2020
(2019: $Nil).

176

NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUEDCineworld Group plc Annual Report and Accounts 2020SHAREHOLDER INFORMATION
AS AT 31 DECEMBER 2020

Directors
A Kornasiewicz
M Greidinger
I Greidinger
N Cohen
R Teperberg
R Senat
C Galano
D Moore
S Rosenblum
A Samuelsson
D Sanders

(Non-Executive Director and Chair)
(Chief Executive Officer)
(Deputy Chief Executive Officer)
(Chief Financial Officer)
(Chief Commercial Officer)
(Non-Executive Director and Senior Independent Director)
(Non-Executive Director)
(Non-Executive Director)
(Non-Executive Director)
(Non-Executive Director)
(Non-Executive Director)

Head Office
8th Floor
Vantage London
Great West Road
Brentford TW8 9AG

Telephone Number
020 8987 5000

Website
www.cineworldplc.com

Place of Incorporation
England and Wales

Company Number
Registered Number: 5212407

Registered Office
8th Floor
Vantage London
Great West Road
Brentford TW8 9AG

Independent Auditor
PricewaterhouseCoopers LLP
1 Embankment Place
Charing Cross
London
WC2N 6RH

Joint Brokers
Barclays Bank Plc
1 Churchill Place
London
E14 5HP

Investec Bank plc
2 Gresham Street
London
EC2V 7QP

Goldman Sachs International
Plumtree Court, 25 Shoe Lane
London
EC4A 4AU

Legal Advisers to the Company
Slaughter and May
1 Bunhill Row
London EC1Y 8YY

177

Cineworld Group plc Annual Report and Accounts 2020Strategic ReportCorporate GovernanceFinancial Statements

Cineworld Group plc
8th Floor
Vantage London
Great West Road
Brentford TW8 9AG
020 8987 5000