Registered number: 03004377
MILLENNIUM & COPTHORNE HOTELS LIMITED
ANNUAL REPORT & ACCOUNTS
For the Year Ended 31 December 2020
MILLENNIUM & COPTHORNE HOTELS LIMITED
CONTENTS
STRATEGIC REPORT
03
Statement under section 172(1) of the Companies Act 2006
06
08
10
Business review
Key performance indicators
Our risks
GOVERNANCE
17
Statement of Governance Arrangements for Directors’ report
20
Directors’ report
23
24
Statement of Directors’ responsibilities in respect of the annual report and accounts
Independent auditor’s report to the Members of Millennium & Copthorne Hotels Limited
FINANCIAL STATEMENTS
29
30
31
33
34
36
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
104 Company statement of financial position
105 Company statement of changes in equity
106 Notes to the Company financial statements
FURTHER INFORMATION
109 Group financial record
110
Key operating statistics
112 Major Group properties
119 Millennium & Copthorne hotels worldwide
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MILLENNIUM & COPTHORNE HOTELS LIMITED
STRATEGIC REPORT
03
Statement under section 172(1) of the Companies Act 2006
06
08
10
Business review
Key performance indicators
Our risks
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MILLENNIUM & COPTHORNE HOTELS LIMITED
STATEMENT UNDER SECTION 172(1) OF THE COMPANIES ACT 2006
In accordance with The Companies (Miscellaneous Reporting) Regulations 2018 and the Financial Reporting
Council’s Guidance on the Strategic Report issued in July 2018, the directors must now include a statement within
the Strategic Report describing how the directors have had regard to the matters set out in Section 172(1)(a) to (f)
of the Companies Act 2006 (“Section 172(1) Statement”). The directors set out their Section 172(1) Statement
below.
The directors understand their duties under Section 172 of the Companies Act 2006 and more specifically, their
duty to “act in the way each director considers, in good faith, would be most likely to promote the success of the
company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to -
(a) the likely consequences of any decision in the long term,
(b) the interests of the company's employees,
(c) the need to foster the company's business relationships with suppliers, customers and others,
(d) the impact of the company's operations on the community and the environment,
(e) the desirability of the company maintaining a reputation for high standards of business conduct, and
(f) the need to act fairly as between members of the company.”
During the course of 2020, the Board and management team largely were focused on addressing two main events
that impacted the Group. The first was the delisting of the Company in October 2019 and the subsequent
organisational change and integration of the Group within the wider City Developments Limited (“CDL”) umbrella
of companies. The second was the global spread of the novel coronavirus, COVID-19 and the serious and
significant challenges brought about by the pandemic.
When reviewing these matters, the Board had due regard for the Group’s relationships with its primary
stakeholders, including its employees, customers, suppliers, shareholders, regulators and the communities in
which we operate. Set out below is a chart summarising these relationships, including how the Company engages
with each stakeholder, what they care about and why they are important. Secondary stakeholders for the Group
include trade associations, the media, non-governmental organisations and charitable organisations.
Key
stakeholder
Touch points / Methods of
engagement
What do they care about?
Why are they important?
Employees
Customers
Recruitment and induction
Internal communications
(intranet sites, newsletters,
email, meetings, etc.)
Training and development
Performance management
Relations with trade unions
Job security
Reputable employer
Safe working environment
Skills training and career
development
Operational excellence
Fair wages
Direct sales and marketing
(website, advertising
campaigns, etc.)
Indirect sales and marketing
(public relations, agencies,
corporate groups,
partnerships/sponsorships,
etc.)
Booking process
Pre-stay communications
Meeting and event
management
Stay or meetings and
events (on-site use of
facilities)
Post-stay communications
(e.g., quality survey)
Loyalty programme
Value for money
Clean and safe environment
Friendly and
accommodating service that
anticipates customer needs
and wants
Location and proximity to
relevant destinations (work
and leisure)
Unique experiences
Useful facilities and
technologies (gym, business
centre, restaurants, WiFi
access, etc.)
Sustainable operations
Serve as key brand
ambassadors
Front-line service delivery
Critical to service/hospitality
culture
Ability to create unique and
memorable experiences for
customers
Lifeblood of the business
and driver of business
growth
Serve as key brand
ambassadors
Help to foster improvement
and innovation through
feedback regarding product
and service quality
Support for sustainable
operations
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MILLENNIUM & COPTHORNE HOTELS LIMITED
Key
stakeholder
Touch points / Methods of
engagement
What do they care about?
Why are they important?
Bidding/tender process with
operations and procurement
teams
Provision and receipt of
goods and services on-site
(hotel and corporate office)
Account management
Development and growth of a
business relationship
Safe working environment
Fair price and payment terms
Meeting sustainable sourcing
requirements
Suppliers
Financial communications
(annual report, results
announcements and
regulatory announcements)
Investor presentations
Investor road shows,
meetings and conference
calls
Annual and Extraordinary
General Meetings
Shareholders
Licensing and compliance
activities
Regulatory reporting
Voluntary and mandatory
surveys and consultations
Engagement through trade
Regulators
associations
Assistance with economic
development initiatives
Good governance
Transparency and
accountability
Sustainable operations,
strategy and business
model underpinning long-
term value creation
Profitability and growth
Access to management and
relevant and accurate
information
Alignment of remuneration
with the interests of
shareholder
development (through tax
revenue, creation of jobs,
etc.)
Transparency and
accountability
Regulatory compliance
Environmentally friendly and
sustainable operations
Minimise use of state
resources
Meetings and events at the
Environmental impact of the
hotel
business
Participation in local
outreach programmes
Good corporate citizen
Economic development
Communities
Support of charitable
organisations
(creation and maintenance
of good jobs, local sourcing,
etc.)
Minimising disruption (noise,
traffic, etc.)
Looking at each topic in turn:
Organisational change
Key part of responsible
sourcing efforts and ethical
business practices
Potential business
opportunities
A component of service and
product quality
Help to support health and
safety regime and
operational excellence
Funding for business
expansion
Promote management
accountability as the owners
of the company
Provide for enhanced
governance
Support sustainable
operations
Help to drive economic
development and societal
change
governance leads to greater
investor and customer
confidence
Develop policies to help
foster growth (economic
incentives, such as tax
credits, subsidies, trade
policies, etc)
Support sustainability
through legislation
Help to ensure safety of
employees and customers
Source of talent and other
resources
Provide potential business
opportunities and word-of-
mouth marketing channels
Assist with and support the
Group’s sustainability efforts
Social and economic
Promotion of good
Following the delisting of the Company in October 2019, the Group commenced the process of integrating within
the wider CDL group and rationalising and streamlining its management structure.
In addition, the outbreak of the novel coronavirus, COVID-19, in early 2020, accelerated the need of the Company
to change its organisational structure in order to adapt to a rapidly changing business climate and help to reduce
operating losses incurred as a result of hotel closures, lockdown measures, travel restrictions and reduced demand
brought about by the pandemic. By May 2020, nearly 35 of the Group’s hotels had been closed for pandemic-
related reasons. As of the end of 2020, approximately 20 hotels remained closed. Unfortunately, this has meant
that the Board and executive team of the Company has needed to implement furlough and redundancy
programmes across the Group’s regions that were unprecedented in the Company’s history. The Group’s senior
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MILLENNIUM & COPTHORNE HOTELS LIMITED
management team underwent significant changes as well following the departures of the Group’s Chief Executive
Officer, Chief Operating Officer and other Senior Vice President and Vice President positions. In some cases,
responsibilities were down-weighted, subsumed into other roles or were taken on, in part, by functions within the
wider CDL group.
The restructuring of the Group’s workforce has involved the clustering of functions such as administration, finance,
marketing and communications to handle multiple properties and the doubling-up of roles, such as a hotel General
Manager overseeing multiple properties or a global role also taking on regional responsibilities. The Group has
sought to utilise coronavirus relief measures, where appropriate, such as the Coronavirus Job Retention Scheme
in the UK, Paycheck Protection Program in the US and other similar programmes, to help mitigate the impact of
the pandemic on the Group’s workforce. However, since the Board and management team anticipate that the
pandemic will impact the performance of the Group for the near and medium term—with the industry not expected
to recover to pre-pandemic levels until 2023 or even 2024 according to some leading industry research reports—
the structural changes were made as a last resort. As at the end of 2020, the Group’s total global headcount had
been reduced by more than 45% compared to the end of 2019. These actions often involved many rounds of
consultation with staff and/or trade unions and were not taken lightly, but the Board and executive management
team believes that they were necessary for the long-term sustainability of the business.
Addressing the challenges brought about by the novel coronavirus, COVID-19
The Board and management team acted swiftly to develop and take measures to address the impact of the
coronavirus pandemic. These included the implementation of health and safety measures, to better protect our
guests employees and other stakeholders, cost control measures to reduce the Group’s cost base as well as
creating marketing campaigns and accepting alternative business to help sustain the Group’s operations as much
as possible. Some of these measures are outlined below:
The “We Clean, We Care, We Welcome” campaign was launched in February 2020. This campaign included the
introduction of 10 key hallmarks of cleanliness and hygiene to further enhance the Group’s health and safety
measures
at
on
world.
https://www.millenniumhotels.com/en/offers/global/wecleancarewelcome/.
information
Further
around
found
these
can
the
be
Further cost reductions—including salary reductions, termination of non-necessary services and other similar
measures—were enacted to right-size the Group’s cost base and make it more competitive in such a challenging
landscape.
New digital marketing campaigns were launched, focusing on domestic retail business in particular. During 2020,
the Group booked 243,637 “staycation” nights (excluding the Middle East and North African region) and at least
65% of these types of bookings were made by the Group’s My Millennium loyalty programme members. As an
accommodation to My Millennium members in light of the coronavirus pandemic, loyalty points that were set to
expire in 2020 were extended until the end of 2021, benefitting over 163,000 active members of the programme.
Reflecting the success of the Group’s digital strategy, online channels accounted for 80% of bookings as at the
end of 2020, up from 56% in 2019.
The Group better segmented its customer base and brand offering. As an international hotel operator, it will focus
on key gateway cities globally including Singapore, London and New York. M&C will also focus on the four-star
category under three brand collections – M Collection, Millennium Collection and Copthorne Collection – while
maintaining several prized assets in the five-star and luxury categories under Leng’s Collection.
The regional management teams worked with local government agencies and other third parties, such as
universities and hospitals, to accept alternative forms of business, such as turning hotels into quarantine centres
for the homeless or for travellers, hospital and student housing overflow, and other similar business.
The Group adopted a financial prudent course to conserve cash and increase headroom, by cancelling the 2019
final dividend that had been approved by the Board in February 2020 and refinancing or renewing over US$450m
worth of credit facilities during the year.
Having received numerous expressions of interest for various assets globally, the Board and executive
management team have assessed several offers. Some of those offers are subject to re-zoning and other
regulatory approvals. These follow-on from the sale of the Millennium Hotel Cincinnati in February 2020 for the
equivalent of £27.6m. In August 2020, the Group decided to exercise its put option to sell its interest in the
Copthorne Hotel Birmingham to Paradise Circus Limited Partnership, the master developer of the Paradise
Birmingham mixed-use development scheme, for a sale price of £17.2 million that was agreed at the end of 2013
as part of the compulsory acquisition process. Completion is set for August 2021, and it is expected that a further
sale will be completed in 2021. Whilst the outcome of these initiatives may reduce the Group’s global room
inventory, which stood at over 40,000 at the end of 2019, the revised footprint and inventory will sharpen the focus
of the Group and conserve human and financial resources to better position the Group for recovery in 2021 and
beyond.
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MILLENNIUM & COPTHORNE HOTELS LIMITED
BUSINESS REVIEW
GROUP RESULTS
In constant currency, hotel revenue decreased by £563m or 63.7%. Reported hotel revenue in 2020 decreased by
£567m from £888m to £321m or 63.9%. Group RevPAR decreased by 65.4% in constant currency.
In constant currency, total revenue for the year decreased by £595m or 58.3%. Reported total revenue for 2020
decreased by £600m or 58.5% to £425m (2019: £1,025m).
Pre-tax loss for 2020 was £70m (down from a pre-tax profit of £102m in 2019) and included net valuation and
impairment charges of £74m (2019: £34m). After removing the effects of impairment losses and net revaluation
gains, the Group’s adjusted profit before tax was £4m (2019: £136m).
DEVELOPMENTS
The Sunnyvale California project comprises the construction of a 263-room hotel and a 250-unit residential
apartment block on 35,717m2 mixed use freehold landsite. The ground-breaking ceremony was held on 16 October
2018 and the project which was originally scheduled to complete in Q1 2021 has been pushed back to 2023 due
to the restrictions imposed as a result of the pandemic. The revised construction cost is estimated at US$216m
(£160m). The residential apartment block commenced construction in July 2019. The hotel is currently planned to
be branded as a M Social to fit with the expected guest profile. The Group hopes to capitalise from the location of
this project as Sunnyvale is the headquarters of many technology companies and is part of California’s high-tech
area of Silicon Valley.
ACQUISITIONS
On 16 July 2020, CDL Hospitality Trust (“CDLHT”) acquired W Hotel in Singapore for a purchase consideration of
S$344m (£191m).
DISPOSALS
Copthorne Hotel Birmingham
In December 2013 the Group entered into various commercial arrangements with Birmingham City Council and
Paradise Circus Limited Partnership, the developer of Birmingham’s Paradise Circus redevelopment scheme
(“PCLP”), now known as Paradise Birmingham, as a result of a compulsory purchase order by Birmingham City
Council that covered the Copthorne Hotel Birmingham and other properties in its vicinity. Those arrangements
included put and call options that provided for the sale of the existing hotel to PCLP for £17.2m. The arrangements
also included a call option for the Group to acquire an alternate site in the scheme for the development of a new
250-room hotel. In December 2018, the Group exercised that option, subject to the parties agreeing to the
preliminary design and costing for the new hotel and the execution of a development agreement by the parties. As
the parties had not entered into the development agreement by the required deadline, on 2 April 2020 the Group
terminated its option to acquire the alternative site, and on 24 August 2020, the Group exercised its put option to
sell the property to PCLP. Completion of the sale is expected to take place in August 2021 for £17m. Until that
time, the Group will continue to operate the hotel. Refer to Note 34 for further detail.
Millennium Hotel Glasgow
In March 2017 Scottish Ministers approved a compulsory purchase order impacting the Millennium Hotel Glasgow
pursuant to which Network Rail Infrastructure Limited ("Network Rail") subsequently acquired and demolished the
1970s-built, 51-room extension of the hotel as part of the redevelopment of Queen Street Station. In November
2018, Network Rail paid to the Group, on a without prejudice basis, an interim compensation payment of £2.52m.
Negotiations are ongoing with Network Rail regarding the full level of compensation payable to the Group in
connection with the taking. If the parties are unable to agree a value, the matter will be settled at the Lands
Tribunal. Meanwhile, the Group continues to consider its options with respect to the refurbishment and
repositioning of the existing hotel.
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MILLENNIUM & COPTHORNE HOTELS LIMITED
Millennium Cincinnati
A previously announced by the Company, the sale of the Millennium Cincinnati hotel was completed on 14 February
2020 for a total consideration of US$36m (£28m). The property was classified as an asset held for sale in the
statement of financial position as at 31 December 2019 with a total carrying value of £12m. Refer to Note 7 of the
financial statements for further detail.
CDLHT
On 21 November 2019, CDLHT announced its proposed disposal of Novotel Singapore Clarke Quay. Accordingly,
the property with a total carrying value of S$160m (£91m) was classified as asset held for sale in the statement of
financial position as at 31 December 2019. The disposal was completed on 15 July 2020 for a total consideration
of S$376m (£211m).
On 30 October 2020, CDLHT completed the sale of the Novotel Brisbane for a consideration of A$67m (£37m).
Refer to Note 7 of the financial statements for further detail.
COVID-19
The pandemic continues to have a material impact on the Group’s operations and, in particular, its hospitality
operations. The extended lockdowns and social distancing guidelines and requirements in Europe, the US, Asia
and Australasia, as well as the travel restrictions in various jurisdictions, have resulted in hotel closures and, where
hotels remain open, lower occupancy levels. This has resulted in significantly lower revenue and profit during 2020
which will continue to affect the Group’s performance in 2021.
Whilst the financial impact of the pandemic on the current financial year ending 31 December 2021 is still difficult
to predict with a high degree of certainty, 2021 is likely to be the first year of a multi-year recovery to pre-COVID-
19 levels with momentum expected in the second half of the year through to the first half of 2022. Similar scenarios,
although not as severe, to that of 2020 have been considered to further understand the extended impact on our
business and continue to implement the appropriate mitigation measures.
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MILLENNIUM & COPTHORNE HOTELS LIMITED
KEY PERFORMANCE INDICATORS
We use a set of carefully selected key performance indicators (“KPIs”) to monitor our success. These KPIs are
used to measure the Group’s progress year-on-year against those strategic priorities, and are set out below:
GROWTH
To achieve profitable growth and improved asset returns for our hospitality business.
Revenue per Available Room -
Average room rate multiplied by
occupancy percentage.
Occupancy – Percentage of
rooms available for sale that
were actually sold to our guests.
Hotel revenue – Includes room,
food & beverage and meetings &
events.
Average room rate – Revenue
from sales, divided by number of
room nights sold.
*These are shown at constant rate of exchange.
FINANCIAL LEVERAGE
To ensure a sound financial base in order to provide a solid platform for the development and growth of the
Group.
Gearing – Net debt over total
equity attributable
to equity
holders of the parent.
Net Debt – Total borrowings less
total cash. Refer to Note 19 for
further details.
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MILLENNIUM & COPTHORNE HOTELS LIMITED
COST CONTROL
To ensure costs remain in line with revenue movements through a decentralised model, technological
enhancements to drive efficiencies and rigorous monitoring of spending.
The Group believes that the KPIs provide useful and necessary information on the underlying trends and are used
by the Group for internal performance analysis. Given the decentralised model of the Group, regional management
focuses on operational KPIs. These include customer feedback, hotel gross operating profit and staff retention.
General Managers report their operating KPIs to Regional Managers on a regular basis with the comparison
numbers for the local competitive set of each hotel. The hotel performance numbers are then consolidated into
regional and Group-wide figures.
The Group has a flexible and robust business model that generates profit predominately through its portfolio of
owned and managed hospitality assets. These assets are diversified by brand, market, geography and customer
offering according to what we judge to be the most appropriate means of optimising their earnings. We aim to hold
our assets for the long term, especially those in key gateway cities. We employ complementary business models
in certain circumstances. For example, we may engage third party operators on a selective basis to manage our
brand assets that we own. We also may operate through a licensing model, through joint ventures or through
arrangements where we manage hotels on behalf of other third party owners. We regard the flexibility of our
business models as an essential strength in a varied and rapidly changing global hospitality market.
Our strategy is to maximise returns on shareholder’s capital through the ownership and operation of hospitality
assets in key gateway cities and other prime locations across the world that naturally attract large numbers of
business and leisure travellers. Underpinning this strategy are the twin aims of operational excellence and prudent
asset management. We seek to increase returns through quality service and efficient operations—by developing
our people, processes and technology—as well as through investment in the material fabric of our hotel estate. We
also look to grow the business through asset acquisition in strategic locations.
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MILLENNIUM & COPTHORNE HOTELS LIMITED
OUR RISKS
Given the volatility and uncertainty of the pandemic on top of the already inherently volatile markets, the Group
recognises that risk management is even more crucial now, in terms of helping management make well informed
business decisions, minimising impact of various risks and optimising opportunities, and as such the Group is
committed to maintaining risk management practices as an integral part of the business and operations of the
Group. The Group will continue to proactively monitor developments related to the impact of the virus and adjust
our measures accordingly.
Enterprise Risk Management Framework
The Group’s Enterprise Risk Management (“ERM”) framework has been developed by reference to and alignment
with global best practices including International Organisation for Standardisation (ISO) 31000:2018, ISO 27001
Information Security Management System, Payment Card Industry Data Security Standard (PCI DSS), OSHA
standards, the EU General Data Protection Regulation, the UK Bribery Act 2010 and other similar guidelines. The
framework consists of four key pillars that serve as the foundation of the Group’s execution and implementation of
its ERM programme. These pillars include: Risk Strategy, Risk Culture, Risk Governance and Risk Appetite, all of
which are further supported by systematic risk processes. The Board and management team look to adopt a
proactive risk management approach that aims to safeguard the interests of the business and our stakeholders
through the early identification and management of risks to minimise their impact and reduce uncertainties.
Risk Strategy
The Directors follow a review process which is consistent with the principles set out in the “Guidance on Risk
Management, Internal Control and Related Financial and Business Reporting 2014” published by the Financial
Reporting Council. The Group has adopted a risk management strategy that is aligned with CDL’s risk management
framework. It is based on the conviction that risk management is the responsibility of everyone and that it must be
integrated into strategy formulation, capital allocation, decision making, and day-to-day operations. With a focus
on cultivating a strong and sustainable ‘self-driven’ risk culture, the defined guiding principles are to be adopted by
everyone within the Group:
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MILLENNIUM & COPTHORNE HOTELS LIMITED
Risk Culture
Having a ‘risk aware’ culture within an organisation is key for effective risk management, in order to promote and
reinforce the right ERM practices. The Board is committed to building a strong ‘risk aware’ culture through setting
the appropriate tone-at-the-top and demonstrating strong support for risk management. These are supported by
risk management principles, which are then embedded within business decision making, as well as operational
and governance structures to ensure appropriate oversight and accountability throughout the Group.
Risk Governance
With the successful delisting of the Company in October 2019, the Company is now a wholly-owned subsidiary of
CDL. As part of the integration process, the Board and management team members have embarked on aligning
the Group’s risk management framework and practices with those of CDL, ensuring that material risks are identified
and duly considered at the appropriate level.
The risk governance structure details the processes and escalation procedures for making decisions about key
risks and how those decisions are to be implemented and monitored – at the operational and functional levels, at
the management level, by CDL’s Audit & Risk Committee and ultimately by CDL’s Board of Directors.
The risk governance structure focuses on three lines of defence. The first line of defence involves functional and
regional risk Owners who identify, mitigate, monitor and report hotel-level and function-level risks upwards. The
second line of defence oversees the internal controls and risk management framework, ensuring that a sound
system is maintained. Supported by the Group’s ERM resources, principal risks are identified, assessed, and
discussed during quarterly Management Risk Committee meetings, or more frequently when required, and they
are then reported to the Company’s Board of Directors as well as CDL’s Audit Risk Committee and its Board of
Directors, which is referred to as the third line of defence. The Board of Directors of the Company retains overall
responsibility and accountability for the effectiveness of the risk management framework and internal control
systems of the Group, with the support of the management team, while CDL’s Board of Directors oversees the risk
management framework and internal control systems of the wider CDL group, including the Company.
Risk Governance Structure
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MILLENNIUM & COPTHORNE HOTELS LIMITED
Principal Risks
The following table identifies the principal risks that are regarded as the most relevant and material to the Group.
The table includes a description of each risk and how it could impact the business, a summary of controls and
mitigating activities being undertaken and the ‘trend’ for the risk. This trend represents the forward-looking view of
the net risk exposure for each risk, taking into account changes in the external risk environment and the Group’s
internal mitigation activities. The risks have been loosely categorised as being strategic, tactical or operational in
nature.
The order in which risks are presented below is not indicative of the relative potential impact to the Group. The
risks may, to varying degrees, impact the Group’s revenues, profits, net assets, operations, guests, employees,
partners and/or reputation.
Not all potential risks are listed below; some risks have been excluded because the Board does not consider them
to be material to the Group’s long-term strategy, performance or viability. In general, the diversity and geographical
spread of the Group’s assets provide natural hedges against many of the principal risks identified below and our
processes aim to provide reasonable, not absolute, assurance that the principal risks that are significant to our
business have been identified and addressed. Additionally, there may be risks that are not reasonably foreseeable
as at the date of this report.
The principal risks in the table below were reviewed and revised over the course of 2020 as part of the Group’s
alignment with CDL’s risk management framework.
Risk
Hotel
demand
Trend
Potential Impact
Mitigation Activities
Competition in the hotel industry is
increasing. Continued sector
consolidation and the growth of
alternative business models, such as
sharing economy platforms like
Airbnb, also are impacting supply
and demand dynamics within the
industry, while online travel agencies,
such as Booking.com and
Expedia.com, which compete
against direct booking channels, are
taking market share and are
influencing consumer preference. All
of these trends could impact demand
for the Group’s products, the cost of
customer acquisition and the supply
of product within the market, all of
which could negatively impact the
performance and profitability of the
Group.
In addition, trading can be directly
affected by localised or regional
events—such as natural
catastrophes, country or regional
geo-political matters and
pandemics—as well as global,
macro-economic trends impacting
travel and hotel stays. In 2020, for
instance, the coronavirus pandemic
greatly impacted the demand for
hotel accommodation globally.
The diverse nature of the Group’s
portfolio, both geographically and in
respect of its breadth of brands, provides
a natural hedge against various external
risks.
The Group maintains a flexible operating
structure that allows it to align its sales
and marketing activities and spend to
target relevant customer segments and
adapt to changing hospitality trends.
The Group continues to refresh its
digital marketing strategy and invest in
its e-commerce, customer relationship
management, revenue management,
loyalty programme and reservations
systems in order to help increase
market share and revenue and retain
existing customers.
The Group is aggressively managing
its portfolio of distribution channel
partners, including established online
travel agencies and new, niche or local
players, to optimise revenue, gain
access to new customers and
minimize commission costs.
The Group selectively affiliates with
international hotel chains with respect
to certain properties where it has been
determined that doing so would help to
optimize management and/or
distribution capabilities.
Credit
liquidity risk
Since the Group operates in
numerous jurisdictions and trades in
various international currencies, but
reports its financial results in pounds
sterling, fluctuations in currency
exchange rates and interest rates may
be either accretive or dilutive to the
Group’s reported trading results and
net asset value.
Colleagues in the Group’s Treasury
team monitor and address treasury
matters, including the Group’s borrowing
headroom and borrowing requirements,
in accordance with the Group’s treasury
policy.
The Group conducts business with a
diversified set of lenders so that it is not
overly reliant on a particular lender.
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MILLENNIUM & COPTHORNE HOTELS LIMITED
Risk
Operational
efficiency
risk
Potential Impact
Also, hotels generally require
significant capital expenditure at
regular intervals in order to remain
competitive and as real estate assets,
labour and other operating expenses
can be significant. As such, the
Group may need to borrow funds from
time to time to cover these capital
expenditures and working capital
requirements, where unhedged or
rising interest rates may result in
increased borrowing costs and impact
the Group’s profits.
Hotels are “people” businesses. The
Group’s brands and ability to deliver
consistent service quality in an
efficient manner are dependent on its
ability to attract, develop and retain
employees with the appropriate
skills, experience and aptitude.
Failure of the Group to do so may
impact service quality, consistency
and/or delay the execution of the
Group’s strategies.
Health and
safety risk
The health, safety and security of
guests, visitors and employees is a
fundamental expectation and there is
a breadth of regulatory requirements
across different jurisdictions relating to
health and safety matters. Failure to
implement and maintain sufficient
controls regarding health and safety
issues could result in serious injury or
loss of life, lead to regulatory
investigations and expose the Group
to significant claims, sanctions or
fines, both civil and criminal, as well
as reputational damage.
The outbreak of the novel
coronavirus, COVID-19, in late 2019
and its continued spread throughout
2020, including new strains in certain
jurisdictions, have given rise to a
serious global health crisis and this
has impacted the travel and
hospitality sectors and the Group in
particular.
Mitigation Activities
Foreign exchange exposure primarily is
Trend
managed through the funding of
purchases and repayment of borrowings
from income generated in the same
currency.
Interest rate hedges and fixed-rate
lending facilities are used from time to
time to help manage the risk of interest
rate fluctuations.
The Group generally does not borrow on
a secured basis, and as such, its real
estate assets could serve as significant
collateral should secured borrowings be
required in the future.
The Group has strong regional and local
management structures underpinned by
a common commitment to ensuring a
rewarding and empowering work
environment. These structures are
supported by lean corporate offices in
Singapore, China, New Zealand, the US
and Europe to help drive operational
efficiencies.
The Group’s brand and operational
standards are designed to maintain a
level of product and service consistency
whilst allowing flexibility in order to
maintain the personality of each
property.
Although bonus schemes were
suspended in some cases as a result of
how the Group had been impacted by
the coronavirus pandemic in 2020, the
Group historically has utilised incentive
mechanisms, often with personal and
financial key performance objectives, to
help ensure that employees interests are
aligned with the objectives of promoting
efficient and effective operations and
growing the top and bottom lines.
The Group has health, safety and
environmental management systems in
place, which include policies,
procedures, testing, self and third-party
audits, training and reporting.
Management proactively monitors
geopolitical developments and seeks to
identify emerging risks at the earliest
opportunity to ensure clear roles and
responsibilities are defined and internal
controls and other steps are taken to
minimize these exposures to the
greatest extent possible.
To help mitigate the risks associated
with the coronavirus outbreak, the
Group’s regionalised crisis response
plans were updated in line with
guidance issued by health authorities,
such as the World Health Organization
and local governmental authorities, and
new hygiene protocols were developed
and tailored to address the pandemic.
As the well-being of the Group’s guests,
colleagues and other stakeholders is
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MILLENNIUM & COPTHORNE HOTELS LIMITED
Risk
Potential Impact
IT
infrastructure
risk
Increasing reliance on online distribution
channels and transactions over the
internet and mobile applications, and
the aggregation and storage of guest
and other information electronically,
both on company-controlled servers
and networks and in cloud-based
environments, present heightened risks
of attacks affecting the operation of
those systems and networks and a
potential loss or misuse of confidential,
personal and/or proprietary information.
The hospitality sector in particular is
becoming a more frequent target for
cyberattacks as hotel companies often
handle large volumes of customer and
credit card information. The occurrence
of a cyber security event or loss of data
could disrupt business, the ability of the
Group to take or fulfil bookings or lead
to reputational and monetary damages,
litigation or regulatory fines.
Employees working from home during
coronavirus lockdowns has given rise to
an increased threat of cyber attacks
against those employees.
In addition, various aspects of the
Group’s operations are required to
achieve compliance with the
payment card industry security
standards (“PCI-DSS”), and failure to
do so could result in penalties and/or
withdrawal of credit card payment
facilities.
Litigation risk
The Group has contractual
relationships in place with various
counterparties, including customers,
suppliers, employees and other
parties, and provides goods and
services to customers. As such, a
breakdown in any of these
relationships could lead to disputes
and ultimately litigation, which in turn
could give rise to reputational
damages, management distraction
and/or the Company having to incur
significant costs or damages,
particularly where claims are not
insured or are not fully insured.
Trend
Mitigation Activities
one of its top priorities, the Group’s
management team has implemented
robust precautionary measures,
including an enhanced cleaning and
sanitization programme, to help ensure
that Group’s hotels and corporate offices
remain safe places to visit.
The Group’s regional IT teams conduct
periodic security and penetration testing,
often using external consultants, and
any recommendations or
enhancements are implemented where
necessary.
Software systems are regularly updated
to allow for the latest security updates
and patches to be installed.
Where the Group outsources critical
information technology systems,
including its point of sale and property
management systems, the Group
utilises reputable suppliers that have
industry-standard or best-in-class data
security protocols.
The regional IT teams have developed
disaster recovery plans and guides with
regard to their high-priority systems that
need to be up-and-running, and tests are
conducted on select mission-critical
systems annually to verify their
recoverability offsite.
A global information security policy was
rolled out in 2019 and other IT policies
and procedures were updated over the
course of 2020 to reflect the latest
standards and requirements.
Reinforcing IT security awareness
training, phishing test simulations, and
implementation of robust monitoring
tools, such as Microsoft’s “Cloud App
Security,” data lost mitigation measures,
and other utilities to mitigate against
potential attacks.
The Group’s critical CRM system was
migrated from an on-premises data
centre to a cloud-based service with
enhanced monitoring to enable rapid
detection and response.
The Group continues to deploy credit
card tokenization when available.
The Group has controls in place to
manage and help mitigate the risks
associated with its various contractual
relationships, from execution through to
termination, insured and uninsured
litigation and other disputes.
The Group General Counsel oversees
significant disputes globally, with input
from external counsel and other experts
when required, and regular litigation
reports are provided to the MRC and
other Board members as appropriate.
14
MILLENNIUM & COPTHORNE HOTELS LIMITED
GOVERNANCE
17
Statement of Governance Arrangements for Directors’ report
20
Directors’ report
23
Statement of Directors’ responsibilities in respect of the annual report and accounts
24
Independent auditor’s report to the Members of Millennium & Copthorne Hotels Limited
16
MILLENNIUM & COPTHORNE HOTELS LIMITED
STATEMENT OF GOVERNANCE ARRANGEMENTS FOR DIRECTORS’ REPORT
Following the Company's delisting from the main market of the London Stock Exchange in October 2019, the
Company become indirectly wholly owned and controlled by CDL, through various CDL subsidiary companies.
CDL, which is listed on the Singapore Exchange, is, in turn, considered to be controlled by Hong Leong Investment
Holdings Pte. Ltd.
Similar to last year, the Board once again has decided to report on its governance arrangements following the
Wates Corporate Governance Principles for Large Private Companies (December 2018 edition).
Purpose and Leadership
The strategy and business model for the Company are outlined in the Strategic Report on page 10. Our vision is
to be the leading global hospitality real estate ownership group for gateway cities, with effective, in-built and unique
asset management skills. Our commitment is to hospitality and creating memorable experiences in distinctive
environments. We strive to recognise not only the faces of our guests, but also their individual needs and desires.
To do this, we will need to deliver outstanding service, quality, originality and value to our customers by employing
and developing the best people and by having a challenging and forward thinking business culture. Fundamentally,
we treat our guests, employees and other stakeholders with respect and integrity.
As part of the Group’s integration with CDL following the delisting of the Company in October 2019, the Board
decided to adopt CDL’s values, set out below, as they are consistent with the ethos of the organization and the
adoption of them within the Company will help to ensure alignment of values across the wider CDL group.
Innovation
– Because this is crucial to our success
Collaboration – Because this is the best way to achieve exponential results
Integrity
– Because this is at the core of everything that we do
In 2021, the Board intends to review the ways in which the purpose and values are embedded throughout the
organisation. As part of this review, the Board will examine the culture of the Company and will seek to reinforce
a culture of accountability where employees take into account the views of, and are responsible to, the Company’s
stakeholders, including our guests and customer, other employees, suppliers, the communities in which we
operate.
Whilst the Company engages with its employees and other stakeholders, as outlined further in this Directors’ Report
and elsewhere, the Board also will look for ways to improve its stakeholder engagement going forward. This may
involve the implementation of a global intranet, for instance, and more frequent communications from the
management team.
The Group has elected to participate in CDL’s group-wide whistleblowing programme. This allows employees to
raise serious matters of concern—via email or a dedicated whistleblowing hotline—through an independent
channel, being CDL’s Internal Audit function. This programme is, in turn, overseen by the Audit & Risk Committee
of CDL. In addition, the Group’s Slavery and Human Trafficking statement, which is updated annually, includes a
method
the Company (via email to
supplychain@millenniumhotels.co.uk).
to raise matters of concern
for investigation by
for suppliers
Board Composition
At the end of 2020, the Board was comprised of four directors, including Mr Kwek Leng Beng, who has served as
the Chairman of the Company since it initially listed in 1996 and, during 2020, as an executive director, Mr Kwek
Eik Sheng, who served as an executive director, Ms Tanya Chiaranussati, who served as a non-executive director
and Mr Jonathon Grech, who served as a non-executive director after relinquishing his executive duties effective
as of 11 December 2020. During the course of the year, Mr Kwek Leng Peck resigned as a director effective as of
19 October 2020 while Ms Chwee Peng Ong stepped down as a director effective as of 26 October 2020.
The Board continues to recognise the importance of gender and ethnic diversity, and in light of the departures of
Mr Kwek and Ms Ong in October 2020, in particular, the directors are considering whether any further appointments
or changes to the composition of the Board, including the addition of any independent directors, would help to
further enhance the effectiveness of the Board. However, for the time being, the Board believes that the current
mix of executive and non-executive roles and the characteristics of the current directors, including their varied
backgrounds and skillsets, help to promote constructive dialogue and decision-making.
17
MILLENNIUM & COPTHORNE HOTELS LIMITED
The remit of the Board is to oversee the running of the Group as stewards for the Company’s stakeholders. The
Board must ensure that there are adequate resources in place to ensure effective and efficient operations,
underpinned by good governance, strong values and an ethical, safety-driven culture.
The Board held two formal meetings in 2020 and various informal meetings followed by written resolutions. It is
anticipated that the Board will meet approximately three or four times per year, including, at a minimum, one
meeting to approve the annual financial statements of the Group and one to approve the annual budget and
strategy or plan for the ensuing financial year, with other meetings to be called on an ad-hoc basis as required.
As noted in the Section 172(1) Statement, despite the delisting of the Company, the Board continues to support
the aspirations set out in the Hampton-Alexander Review, conducted by Sir Philip Hampton and the late Dame
Helen Alexander, which challenges FTSE 350 companies to achieve a target of one-third of Board positions to be
held by women by 2020. Whilst only a quarter of the Board members are female as at the date of this Directors’
Report, these factors will be taken into account when making future appointments or changes to the composition
of the Board.
The day-to-day operation of the Group has been delegated to an Executive Committee, which includes Kwek Leng
Beng, Kwek Eik Sheng and John Chang, who rejoined the Group in July 2020 as the Group Chief Financial Officer.
The regional and functional heads report into the Executive Committee members. The Executive Committee
members, together with other members of the senior management team, provide regular reports to the Board as
well as updates on other significant matters from time to time, including material transactions, significant litigation,
proposals to enter into new business lines or markets, strategic alliances and so forth.
A set of reserved matters, approved by the Board, governs what matters require approval by the Board versus
those that are delegated to the Executive Committee. The Executive Committee operates pursuant to formal terms
of reference. These reserved matters and the terms of reference for the Executive Committee were updated and
reviewed by the directors in February 2020.
Director Responsibilities
All directors have access to the advice of the Company Secretary, who is responsible for ensuring that proper
Board procedures and applicable corporate governance rules and regulations are observed. The Company
Secretary of the Company changed in December 2020, when David Hassan, the Deputy General Counsel for the
Group, assumed the role following Jonathon Grech, the former Group General Counsel and Company Secretary,
relinquishing his executive role at that time. In addition to access to the Company Secretary, the directors are able,
if necessary, to take independent professional advice at the Company’s expense.
The Chairman, in conjunction with the Company Secretary, is responsible for ensuring that directors receive
appropriate training at the Company’s expense where specific expertise is required in the course of the exercise of
their duties. All directors receive a Board compendium detailing matters relating to Board procedures and their
duties as directors. A bespoke induction programme is established for any new director who is appointed, based
on his or her needs and experience.
The Board has established agreed procedures for managing conflicts of interest or potential conflicts of interest.
These procedures and any potential conflicts authorised in accordance with section 175 of the Companies Act
2006, as permitted by the Company’s Articles of Association, are reviewed by the Board at least annually and other
potential conflicts are reviewed as they may arise from time to time. The Board is satisfied that the procedures for
managing potential conflicts remain effective.
As the Company has integrated within the wider CDL group during 2020, the Board has sought to ensure that the
Group maintains a level of operational independence.
Opportunity and Risk
When assessing a potential business opportunity, in addition to assessing whether it is aligned with the strategic
priorities of the Group and its impact on the Group’s stakeholders, the Board members and executive management
team also consider the risks associated with the opportunity and whether it is likely to create and preserve value
over the long term. The directors understand that whilst the Group must remain nimble and entrepreneurial to
tackle the challenges facing the Company and industry more generally, the directors also are keenly aware that
the Group must operate in a sustainable manner in order to be successful.
The areas over which the members of the Executive Committee have responsibility have been clearly defined. As
at the end of 2020, Kwek Eik Sheng, who is an Executive Director and also serves as Group Chief Strategy Officer
for CDL, is tasked with overseeing global marketing efforts, regional operations and the Group’s asset management
function. John Chang, the Group Chief Financial Officer, on the other hand, is responsible for managing the global
information technology, capital projects and the technical services functions, in addition to his leadership of the
finance department.
18
MILLENNIUM & COPTHORNE HOTELS LIMITED
In terms of oversight, each year management prepares an annual strategic plan and budget for the Group for the
ensuing year. These are submitted first to the Executive Committee, for its review and approval, and then to the
Board for its consideration. Subsequently, the Executive Committee and Board review management’s progress in
executing against the strategic plan and budget. This process includes a periodic assessment of the Group’s
performance and how it tracks against the plan and budget.
Additionally, a delegation of authority policy applies to the regional and functional heads and their reporting lines.
This policy includes different layers of approval for transactions and capital investments, such as the purchase or
sale of a hotel or a major refurbishment project, for instance, and other matters. In the case of capital investments,
the most material ones, involving an expenditure of S$10m or more, must be escalated to the Executive Committee
of the Company. Above this level, approval is required to be obtained at the shareholder level.
As noted above, decisions are not made in a vacuum. The Board is working on developing “risk appetite”
parameters to help guide its decision making and the decision making of the Executive Committee. A Management
Risk Committee, chaired by the Group Chief Financial Officer, sits below the Executive Committee and helps to
ensure that the Group has appropriate internal control and risk management systems in place to allow the
management team, and ultimately the Board, to monitor and assess the Group’s principal risks and uncertainties
on a continual basis, to be informed about emerging risks, as and when appropriate, and to develop and institute
proportionate measures and controls to mitigate these risks to acceptable levels. A Group Enterprise Risk
Management & Compliance Manager supports the enterprise risk management and global compliance programme
of the Group and the Group’s Internal Audit function, which has been merged into CDL’s Internal Audit function
and reports to CDL’s Audit & Risk Committee, regularly reviews the effectiveness of the Group’s internal control
environment, particularly in respect of the Group’s financial controls.
The operation of the Management Risk Committee is described further on page 11 of the Strategic Report.
Remuneration
The Group utilizes clear remuneration structures for its employees and directors. Positions are banded to provide
for consistency across similar-level positions whilst giving the management team sufficient flexibility to vary
remuneration arrangements in certain contexts in order attract or retain talent for key positions. To the extent
possible, the Company’s incentive structures are aligned among the regions to provide for uniformity in the Group’s
performance management processes.
Remuneration is based on personal performance and the performance of the Company, region, hotel and/or
business unit, depending on the role. Generally, personal objectives and key financial performance targets are
agreed with an employee at the beginning of each year and are assessed by the employee’s supervisor at the end
of each year. Objectives relating to achievement of satisfactory Internal Audit assessment scores have been added
to General Manager and Financial Controller bonus plans to incentivize the maintenance of adequate controls and
the management team is reviewing the addition of risk management and sustainability metrics to further strengthen
accountability to the Group’s stakeholders. The Company’s bonus plans and share scheme rules include malus
and clawback provisions that can be utilized as necessary, in an effort to align employee interests with the long-
term interests of the Company.
Stakeholder Relationships and Engagement
The following sections of this Annual Report and Accounts and the Group’s 2020 Corporate Responsibility Report,
published on its website (at https://investors.millenniumhotels.com/corporate-responsibility) describe how the
Company has engaged with its stakeholders over the course of the year and how it plans to continue to engage
with them in the future.
Section
Section 172(1) Statement
Employee Involvement and Engagement with Employees
Engagement with Suppliers, Customers and Others in a
Business Relationship with the Company
Our Employees
Location
Pages 3 to 6 in the Strategic Report
Page 20 of this Directors’ Report
Page 21 of this Directors’ Report
Corporate Responsibility Report
19
MILLENNIUM & COPTHORNE HOTELS LIMITED
DIRECTORS’ REPORT
The directors present their annual report and the audited financial statements for the Company, as well as the
independent auditor’s report, for the year ended 31 December 2020.
Registered name and corporate status
Millennium & Copthorne Hotels Limited is registered in England and Wales as a private limited company, under
Company Number 03004377.
Strategic report
The Strategic Report is found on pages 3 to 15. Pursuant to the Companies Act 2006, that report must provide a
fair review of the Company’s business, together with a description of the principal risks and uncertainties facing the
Company. It includes an analysis of the development and performance of the Company’s business during the year
and the position of its business at the end of the year, as well as a description of the Company’s strategy and
business model.
Board of Directors
The names of those who served as a Director of the Company during the course of the 2020 financial year include:
Name
Role
Service Dates
Kwek Leng Beng
Executive Chairman
1 January 2020 through 22 April 2021
Kwek Leng Peck
Non-executive director
1 January 2020 through 19 October 2020
Kwek Eik Sheng
Executive director
1 January 2020 through 22 April 2021
Tanya Chiaranussati
Non-executive director
1 January 2020 through 22 April 2021
Jonathon Grech
Executive director
1 January 2020 through 11 December 2020
Non-executive director
12 December 2020 through 22 April 2021
Angela Chwee Peng Ong Executive Director
11 October 2019 through 26 October 2020
Dividends
The directors do not recommend the payment of a dividend in respect of the year ended 31 December 2020.
Political donations and expenditure
No donations were made by the Group for political purposes and the Group did not incur any political expenditure
during the year (2019: £nil). The Company operates a politically neutral policy with regard to any political donations
and expenditure it may elect to make. See the Group’s Corporate Responsibility Report, located at
https://investors.millenniumhotels.com/corporate-responsibility,
the Company’s non-political
charitable activities.
for details of
Financial instruments
An indication of the Group’s financial risk management objectives and policies in respect of the use of financial
instruments and exposure of the Company to price risk, credit risk, liquidity risk and cash flow risk are set out in
Note 20 to the Company’s consolidated financial statements.
Employment of disabled persons
We value highly the rich diversity of our colleagues around the world. As of the end of 2020, the Group operated
in over 25 countries and employed approximately 5,986 employees worldwide. The Company is an equal
opportunity employer and has an objective to ensure that no employee or other worker or job applicant receives
less favourable treatment, directly or indirectly, on the grounds of age, disability, gender reassignment, marital or
civil partner status, pregnancy or maternity, race, colour, nationality, ethnic or national origin, religion or belief, sex
or sexual orientation.
The Group’s diversity and inclusion policy acknowledges the importance of fostering an environment where
colleagues are free to share different perspectives and the view that greater diversity allows the Group to better
understand and serve the communities in which we operate. Regional policies that address local requirements
also are in place in various jurisdictions. Together these policies encourage the employment, training and
advancement of disabled persons, having regard to their particular aptitudes and abilities, provided that they can
be employed in a safe working environment. Suitable employment would, if possible, be found for any employee
who becomes disabled during the course of employment.
Employee involvement and engagement with employees
The Board considers employee engagement to be critical to the Company’s success. As such, the Group’s
management team endeavours to keep employees informed about matters of concern to them, whether through
management presentations, updates from regional and functional heads, regional intranet sites and other
20
MILLENNIUM & COPTHORNE HOTELS LIMITED
communications. Likewise, the Group seeks to consult with employees through various means and on a regular
basis so that their views can be taken into account. Over the course of the year, these efforts included regular
meetings at the regional, functional and hotel levels, as well as exit interviews with departing colleagues. These
meetings allowed the management team to communicate important updates throughout the workforce, provide
training on existing and new policies and procedures and hear from colleagues around the world.
Communications with employees was particularly important in 2020 in light of the challenges brought about by the
coronavirus pandemic and its long-term impact on the business. Regrettably, the Group has had to implement
unprecedented organisational change, including a reduction of the Group’s workforce by more than 45%,
oftentimes after lengthy consultation processes and engagement with trade unions and even government
regulators in certain jurisdictions. During this process, the Board and management team heard and considered
feedback from employees at all levels of the organisation.
Prior to the delisting, the Company operated different share schemes for the benefit of the Group’s eligible
employees, including a Long Term Incentive Plan, an Executive Share Plan an Annual Bonus Plan and a
Sharesave scheme. Participants remain in two of the schemes, the Executive Share Plan and the Annual Bonus
Plan, since the participants held unvested shares in those schemes when the Company delisted. Further
information on those two schemes is provided below. However, no further grants have been or will be made under
those schemes and they will be wound down once all existing awards have vested or lapsed.
Executive Share Plan – Under this plan, conditional share awards were granted each year to members
of the Group’s executive management team based on the historical performance of the Group. These
awards vested in tranches over a period of three years, subject to the participant’s continued employment
within the Group.
Annual Bonus Plan – Under this plan, which applied to eligible senior managers globally (except for
certain jurisdictions), including hotel General Managers as well as Director-level and Vice President-level
employees, a portion of each participant’s annual cash bonus was converted into a deferred conditional
share award that would vest in tranches over a period of three years, subject to the participant’s continued
employment within the Group.
The objectives of these plans differed, but in general they served to award strong performance—both at an
employee and Group level—over a reasonable period of time, retain talent and better align the interests of
employees with the interests of shareholders.
Engagement with suppliers, customers and others in a business relationship with the Company
As a company operating in the hospitality industry, the directors are aware of the need for the Group to remain
competitive and for our hotels to address the wants and needs of our customers. To this end, the Company is
continually looking for ways to engage with and better understand our guests. Indeed, several of the Group’s
principal risks—including the risks pertaining to hotel demand, operational efficiency and health and safety—focus
in part on the relationship of the Group with its customers and other stakeholders.
With the coronavirus pandemic raging around the world, the Group adopted many measures for the benefit of its
stakeholders. These are outlined in the Section 172(1) Statement and include, among other initiatives, the “We
Clean, We Care, We Welcome” campaign that was launched in February 2020 and introduced the 10 key hallmarks
of cleanliness and hygiene to further enhance the Group’s health and safety measures around the world. In
addition, with local and regional travel restrictions and other lockdown measures impacting international travel,
many of the Group’s hotels engaged with their local communities in an effort to attract local business or alternative
forms of business. Some hotels, such as the Millennium Minneapolis hotel in the United States, for instance, took
on homeless customers as part of the community’s efforts to battle the spread of the virus, while other hotels took
on student housing or hospital overflow business, remained open to cater to healthcare and other critical workers
or served as quarantine hotels for travellers.
Similar to last year, in 2020 the Group utilised a third-party agency to send post-stay service quality emails to over
15% of the guests who stayed at Millennium Hotels & Resorts branded hotels globally. This agency also regularly
reviewed popular online hotel review sites to collect guest feedback submitted through those forums. The regional
management and hotel teams used the feedback received to improve the Group’s service, brand and product
offerings.
Turning to the Group’s suppliers, the management team engaged with its procurement partners and suppliers to
ensure the safety of its supply chain during the coronavirus pandemic. The regions, meanwhile, continued to look
for ways to use local food suppliers and reduce the amount of packaging and single-use plastics used by the Group.
For details on how the Group engaged with its communities, please refer to the Corporate Responsibility Report,
which can be found at https://investors.millenniumhotels.com/corporate-responsibility.
Share capital
As at the date of this Directors’ Report the Company’s share capital consists of 324,950,812 ordinary shares of 30
pence each. As noted above, all of these shares are owned by direct or indirect subsidiaries of CDL. The Company
21
MILLENNIUM & COPTHORNE HOTELS LIMITED
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MILLENNIUM &
COPTHORNE HOTELS LIMITED
Opinion
We have audited the financial statements of Millennium & Copthorne Hotels Limited (“the company”) for the
year ended 31st December 2020 which comprise the Consolidated Statement of Profit or Loss, the Consolidated
statement of Other Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of Cash Flows, the Company Statement of Financial
Position, the Company Statement of Changes in Equity and related notes, including the accounting policies in
note 2.2 of the Group Financial Statements and note B of the Company Financial Statements.
In our opinion:
the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 31st December 2020 and of the group’s profit 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 parent company financial statements have been properly prepared in accordance with UK accounting
standards, including FRS 101 Reduced Disclosure Framework; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and
applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and
are independent of the group in accordance with, UK ethical requirements including the FRC Ethical Standard.
We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.
Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate
the group or the company or to cease their operations, and as they have concluded that the group and the
company’s financial position means that this is realistic. They have also concluded that there are no material
uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a
year from the date of approval of the financial statements (“the going concern period”).
In our evaluation of the directors’ conclusions, we considered the inherent risks to the group’s business model and
analysed how those risks might affect the group and company’s financial resources or ability to continue
operations over the going concern period.
Our conclusions based on this work:
we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial
statements is appropriate;
we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty
related to events or conditions that, individually or collectively, may cast significant doubt on the group or
the company's ability to continue as a going concern for the going concern period.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes
that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are
not a guarantee that the group or the company will continue in operation.
24
MILLENNIUM & COPTHORNE HOTELS LIMITED
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MILLENNIUM &
COPTHORNE HOTELS LIMITED (continued)
Fraud and breaches of laws and regulations – ability to detect, identify and respond to risks of material
misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or
conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit
fraud. Our risk assessment procedures included:
Inquiry of directors, management and key personnel along with inspection of policy documentation in
relation to the Group’s entity-level policies and procedures to prevent and detect fraud. This included
inspection of the Group’s Whistleblowing report, as well as direct inquiry whether they have knowledge of
any actual, suspected or alleged fraud.
Review of the internal audit reports
Review of Board minutes.
Performing walkthroughs and obtaining understanding of key processes.
Consideration of remuneration incentive schemes and performance targets for directors.
Using analytical procedures to identify any usual movements or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of
fraud throughout the audit. This included communication of the relevant fraud risks identified at the Group level
to all in-scope audit teams, and a request to these teams to report back to the Group audit team should any
instances of fraud that could give rise to a material misstatement at group.
As required by auditing standards, we perform procedures to address the risk of management override of
controls. We performed procedures including:
Testing the the design and implementation of controls relating to manual journal entry postings.
Test high risk journal entries (as determined by the engagement team), including select entries made
throughout the period.
On this audit we do not believe there is a fraud risk related to revenue recognition because Revenue transactions
are typically not complex and revenue recognition, which in most cases is linked directly to bookings through
various channels, requires minimal judgement.
Identifying and responding to risks of material misstatement due to non-compliance with laws and
regulations
The Group is subject to laws and regulations that directly affect the financial statements including financial
reporting legislation and taxation legislation and we assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial statement items.
In addition, the Group is subject to many other laws and regulations where the consequences of non-compliance
could have a material effect on amounts or disclosures in the financial statements, for instance through the
imposition of fines or litigation.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the
financial statements from our general and sector experience, and through discussion with the directors and other
management (as required by auditing standards), and discussed with the directors and other management the
policies and procedures regarding compliance with laws and regulations. We identified the following areas where
non-compliance could have a more material effect: health and safety regulations, employment law and anti-bribery
and corruption legislation acknowledging the Group’s business activities.
25
MILLENNIUM & COPTHORNE HOTELS LIMITED
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MILLENNIUM &
COPTHORNE HOTELS LIMITED (continued)
We communicated identified laws and regulations throughout our team and remained alert to any indications of
non-compliance throughout the audit. This included communication from the group to full-scope component audit
teams of relevant laws and regulations identified at the Group level, and a request for full scope component
auditors to report to the group team any instances of noncompliance with laws and regulations that could give rise
to a material misstatement at group.
The potential effect of these laws and regulations on the financial statements varies considerably.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations
to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any.
Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence,
an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some
material misstatements in the financial statements, even though we have properly planned and performed our audit
in accordance with auditing standards. For example, the further removed non-compliance with laws and
regulations is from the events and transactions reflected in the financial statements, the less likely the inherently
limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit
procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance
or fraud and cannot be expected to detect non-compliance with all laws and regulations.
Strategic report and directors’ report
The directors are responsible for the strategic report and the directors’ report. Our opinion on the financial
statements does not cover those reports and we do not express an audit opinion thereon.
Our responsibility is to read the strategic report and the directors’ report and, in doing so, consider whether, based
on our financial statements audit work, the information therein is materially misstated or inconsistent with the
financial statements or our audit knowledge. Based solely on that work:
we have not identified material misstatements in the strategic report and the directors’ report;
in our opinion the information given in those reports for the financial year is consistent with the financial
statements; and
in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Matters on which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
26
MILLENNIUM & COPTHORNE HOTELS LIMITED
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MILLENNIUM &
COPTHORNE HOTELS LIMITED (continued)
Directors’ responsibilities
As explained more fully in their statement set out on page 23, the directors are responsible for: the preparation of
the financial statements and for being satisfied that they give a true and fair view; 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; assessing the group and parent 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
they either intend to liquidate the group or the parent company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities
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 our opinion in an auditor’s report. Reasonable
assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the
company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Jonathan Downer (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
22 April, 2021
27
MILLENNIUM & COPTHORNE HOTELS LIMITED
FINANCIAL STATEMENTS
29
30
31
33
34
36
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
104 Company statement of financial position
105 Company statement of changes in equity
106 Notes to the Company financial statements
28
MILLENNIUM & COPTHORNE HOTELS LIMITED
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2020
Revenue
Cost of sales
Gross profit
Administrative expenses
Other operating income
Other operating expense
Operating (loss)/profit
Share of profit of joint ventures and associates
Finance income
Finance expense
Net finance expense
(Loss)/Profit before tax
Income tax expense
(Loss)/Profit for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
NOTES
5
6
7
7
13
9
5
10
2020
£M
425
(236)
189
(316)
162
(91)
(56)
12
19
(45)
(26)
(70)
–
(70)
(116)
46
(70)
2019
£m
1,025
(457)
568
(439)
10
(41)
98
36
7
(39)
(32)
102
(8)
94
62
32
94
The financial results above derive from continuing activities.
The notes on pages 36 to 103 are an integral part of these consolidated financial statements.
29
MILLENNIUM & COPTHORNE HOTELS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2020
(Loss)/Profit for the year
Other comprehensive (expense)/income:
Items that are not reclassified subsequently to income statement:
Remeasurement of defined benefit plan actuarial net gains, net of tax
21
Net change in fair value of equity investment
NOTE
Items that may be reclassified subsequently to income statement:
Foreign currency translation differences – foreign operations
Foreign currency translation differences – equity accounted investees
Net gain on hedge of net investments in foreign operations
Exchange differences reclassified to profit or loss on disposal of business of
foreign operations
Other comprehensive expense for the year, net of tax
Total comprehensive (expense)/income for the year, net of tax
Total comprehensive (expense)/income attributable to:
Equity holders of the parent
Non-controlling interests
Total comprehensive (expense)/income for the year, net of tax
2020
£M
(70)
(1)
(1)
(2)
(10)
(5)
7
4
(4)
(6)
(76)
(125)
49
(76)
2019
£M
94
(1)
1
–
(61)
(2)
4
–
(59)
(59)
35
13
22
35
The notes on pages 36 to 103 are an integral part of these consolidated financial statements.
30
MILLENNIUM & COPTHORNE HOTELS LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2020
Non-current assets
Property, plant and equipment
Investment properties
Investment in joint ventures and associates
Other financial assets
Deferred tax assets
Current assets
Inventories
Development properties
Trade and other receivables
Cash and cash equivalents
Assets held for sale
Total assets
Non-current liabilities
Interest-bearing loans, bonds and borrowings
Employee benefits
Provisions
Other non-current liabilities
Lease liabilities
Deferred tax liabilities
Current liabilities
Interest-bearing loans, bonds and borrowings
Trade and other payables
Provisions
Lease liabilities
Income taxes payable
Total liabilities
Net assets
NOTES
2020
£M
2019
£M
11, 35
3,252
3,194
12
13
14
24
15
16
17
18
34
19
21
22
23
35
24
19
25
22
35
664
440
21
6
680
414
40
5
4,383
4,333
4
104
64
350
522
31
553
7
115
91
409
622
103
725
4,936
5,058
(802)
(16)
(9)
(24)
(133)
(130)
(853)
(15)
(9)
(17)
(108)
(152)
(1,114)
(1,154)
(385)
(172)
(3)
(5)
(19)
(584)
(315)
(220)
(3)
(5)
(13)
(556)
(1,692)
(1,705)
3,238
3,348
The notes on pages 36 to 103 are an integral part of these consolidated financial statements
31
MILLENNIUM & COPTHORNE HOTELS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020
SHARE
CAPITAL
£M
SHARE
PREMIUM
£M
TRANSLATION
RESERVE
£M
TREASURY
SHARE
RESERVE
£M
FAIR
VALUE
RESERVE
£M
RETAINED
EARNINGS
£M
TOTAL
EXCLUDING
NON-
CONTROLLING
INTERESTS
£M
NON-
CONTROLLING
INTERESTS
£M
Balance at 1 January 2020
97
843
(Loss)/Profit
Other comprehensive
(expense)/income
Total comprehensive
(expense)/income
Transactions with owners,
recorded directly in equity
Contributions by and
distributions to owners
Dividends – equity holders
Dividends – non-controlling
interests
Changes in ownership interests
Change in interests in subsidiaries
without loss of control
Return of capital to non-controlling
interests
Total transactions with owners
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
443
–
(7)
(7)
–
–
–
–
–
(4)
–
–
–
–
–
–
–
–
Balance at 31 December 2020
97
843
436
(4)
1
–
1,402
(116)
2,782
(116)
(1)
(1)
(9)
(1)
(117)
(125)
566
46
3
49
TOTAL
EQUITY
£M
3,348
(70)
(6)
(76)
–
–
–
–
–
–
–
–
2
–
2
–
–
2
–
2
1,287
2,659
–
–
(30)
(30)
(2)
(4)
(36)
579
–
(4)
(34)
3,238
SHARE
CAPITAL
£M
SHARE
PREMIUM
£M
TRANSLATION
RESERVE
£M
TREASURY
SHARE
RESERVE
£M
FAIR
VALUE
RESERVE
£M
RETAINED
EARNINGS
£M
TOTAL
EXCLUDING
NON-
CONTROLLING
INTERESTS
£M
NON-
CONTROLLING
INTERESTS
£M
TOTAL
EQUITY
£M
Balance at 1 January 2019
IFRIC 23 adjustment
Restated balance at 1 January
2019
Profit
Other comprehensive income
Total comprehensive income
Transactions with owners,
recorded directly in equity
Contributions by and
distributions to owners
Dividends – equity holders
Dividends – non-controlling
interests
Changes in ownership interests
Change in interests in subsidiaries
without loss of control
Return of capital to non-controlling
interests
Total transactions with owners
97
–
97
–
–
–
–
–
–
–
–
843
–
843
–
–
–
–
–
–
–
–
491
–
491
–
(48)
(48)
–
–
–
–
–
(4)
–
(4)
–
–
–
–
–
–
–
–
Balance at 31 December 2019
97
843
443
(4)
5
–
5
–
(4)
(4)
–
–
–
–
–
1
1,338
4
2,770
4
1,342
2,774
62
3
65
62
(49)
13
(7)
(7)
–
2
–
–
2
–
(5)
(5)
1,402
2,782
The notes on pages 36 to 103 are an integral part of these consolidated financial statements.
593
–
593
32
(10)
22
–
(41)
(2)
(6)
(49)
566
3,363
4
3,367
94
(59)
35
(7)
(41)
–
(6)
(54)
3,348
33
MILLENNIUM & COPTHORNE HOTELS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2020
Cash flows from operating activities
(Loss)/Profit for the year
Adjustments for:
Depreciation
Share of profit of joint ventures and associates
Other operating income
Other operating expense
Finance income
Finance expense
Income tax expense
Operating (loss)/profit before changes in working capital and provisions
Movement in inventories, trade and other receivables
Movement in development properties
Movement in trade and other payables
Cash (used in)/generated from operations
Interest paid
Interest received
Income tax paid
Net cash (used in)/generated from operating activities
Cash flows from investing activities
Dividends received from joint ventures and associates
Proceeds from sale of property, plant and equipment and investment
properties (net of expenses)
Acquisition and additions of property, plant and equipment and investment
properties
Subscription of Perpetual Convertible Capital Securities of associate
Net cash generated from/(used in) investing activities
Balance carried forward
NOTES
2020
£M
2019
£M
(70)
94
11
13
7
7
9
9
10
80
(12)
(162)
91
(19)
45
–
(47)
29
15
(43)
(46)
(22)
4
(18)
(82)
9
276
80
(36)
(10)
41
(7)
39
8
209
9
(5)
9
222
(27)
6
(38)
163
5
–
(262)
–
23
(120)
(30)
(145)
(59)
18
The notes on pages 36 to 103 are an integral part of these consolidated financial statements.
34
MILLENNIUM & COPTHORNE HOTELS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
Balance brought forward
Cash flows from financing activities
Repayment of borrowings
Drawdown of borrowings
Payment of lease liabilities
Dividends paid to non-controlling interests
Return of capital to non-controlling interests
Dividends paid to equity holders of the parent
Net cash (used in)/generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at end of the year
Reconciliation of cash and cash equivalents
Cash and cash equivalents shown in the consolidated statement of financial
position
Bank overdrafts included in borrowings
Cash and cash equivalents for consolidated statement of cash flows
18
The notes on pages 36 to 103 are an integral part of these consolidated financial statements.
NOTES
2020
£M
(59)
2019
£M
18
(505)
(304)
26
545
(10)
(30)
(4)
–
(4)
(63)
409
4
350
350
–
350
391
(9)
(41)
(6)
(7)
24
42
375
(8)
409
409
–
409
35
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. REPORTING ENTITY
Millennium & Copthorne Hotels Limited (the “Company”) is a private company incorporated in England and Wales.
The registered office is located at Corporate Headquarters, Scarsdale Place, Kensington, London W8 5SY. These
consolidated financial statements comprise the Company and its subsidiaries (collectively the “Group”). The
consolidated financial statements of the Group for the year ended 31 December 2020 were authorised for issue
in accordance with a resolution of the Directors on 22 April 2021.
2.1 BASIS OF PREPARATION
The consolidated financial statements are prepared on the historical cost basis except for investment properties,
derivative financial instruments, equity investments at fair value through other comprehensive income (“FVOCI”)
and equity investments at fair value through profit and loss (“FVTPL”) which are stated at their fair values. Hotel
properties are stated at cost or deemed cost. Deemed cost is calculated based on the hotel’s frozen valuation as
at 1 January 2004. Non-current assets held for sale are stated at the lower of carrying amount and fair value less
costs to sell. The Group’s income statement and segmental analysis separately identifies operating profit and
other operating income and expense. This is in accordance with IAS 1 ‘Presentation of Financial Statements’ and
is consistent with the way that financial performance is measured by management and assists in providing a
meaningful analysis of the trading results of the Group. The financial statements are presented in the Company’s
functional currency of sterling, rounded to the nearest million.
The Company has elected to prepare its parent company financial statements in accordance with Financial
Reporting Standard 101 ‘Reduced Disclosure Framework’.
BASIS OF ACCOUNTING
These consolidated financial statements have been prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006. The Company has elected to prepare
its parent company financial statements in accordance with FRS 101. Details of the Group’s accounting policies,
including changes during the year, are included below.
ADOPTION OF NEW AND REVISED STANDARDS
The Group has applied the following amendments issued by the International Accounting Standards Board (IASB)
that are relevant to its operations for the first time in the year commencing 1 January 2020:
• Amendments to References to the Conceptual Framework in IFRS Standards (effective date 1 January 2020);
• Amendments to IFRS 3: Definition of a Business (effective date 1 January 2020);
• Amendments to IAS 1 and IAS 8: Definition of Material (effective date 1 January 2020); and
• Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform (effective date 1 January 2020).
There were no new accounting standards issued and adopted by the Group during the current year.
SUBSIDIARIES
BASIS OF CONSOLIDATION
(I)
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 that control commences until the date that control ceases.
(II)
The Group’s interests in equity-accounted investees comprise interests in joint ventures and associates.
INTERESTS IN EQUITY-ACCOUNTED INVESTEES
An associate is an entity in which the Group has significant influence but not control or joint control, over the
financial and operating policies. A joint venture is an arrangement in which the Group has joint control, and where
the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its
liabilities.
Interests in joint ventures and associates are accounted for using the equity method. They are initially recognised
at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements
include the Group’s share of the profit or loss and other comprehensive income of equity-accounted investees,
until the date on which significant influence or joint control ceases.
36
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
TRANSACTIONS ELIMINATED ON CONSOLIDATION
(III)
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.
GOING CONCERN
The Group’s business activities, together with the factors likely to affect its future development, performance and
position are set out in the Strategic Report on page 6 to 7. Note 20 of 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.
Uncertainty due to the COVID-19 outbreak continues to be the primary factor considered as part of the Group’s
adoption of the going concern basis. Trading has improved slightly in recent months especially in Singapore,
however a few hotels are still temporarily closed and are located primarily in Europe and New Zealand. As
previously discussed in the 2019 report, the Directors took immediate and significant actions in response to the
outbreak and continue to drive such responses in order to further reduce costs and optimise the Group’s cash flow
and liquidity. These mitigating actions still include: reducing capital expenditure through postponing or pausing
refurbishment and property development activities, tight monitoring of manpower planning, monitoring of
controllable variable expenses and negotiation of discounts with suppliers, and maximising of government
assistance and relief programs. It is noted the Group has a limited fixed cost base due to owning the majority of its
hotel properties.
Cash flow forecasts have been prepared for at least a year from the date of approval of the financial statements.
The directors continue to review and adapt these cash flow forecasts in light of the changing circumstances
associated with COVID-19 pandemic, including various scenarios that include hotels remaining temporarily closed
or operating at reduced capacities, and the non-renewal of maturing debt instruments throughout the review period.
These forecasts include reasonably possible downside scenarios as a result of COVID-19, in which trading levels
of revenue and cashflow will be depressed compared to normal levels throughout the period; however they show
that the Group will be able to operate within the current committed debt facilities with continued financial covenant
compliance and supported by liquidity raised through the normal course of management of the Group’s portfolio.
Having reviewed the forecasts and the available committed debt facilities, the Directors have a reasonable
expectation that the Group and Company have adequate resources including external credit facilities to continue
in operational existence up to at least 31 December 2022. Accordingly, they continue to adopt the going concern
basis in preparing the financial statements of the Group and the Company.
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Group has consistently applied the following accounting policies to all periods presented in these consolidated
financial statements.
BUSINESS COMBINATIONS AND GOODWILL
A
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured
as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any
non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling
interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets.
Acquisition costs incurred are expensed and identifiable net assets acquired are measured at the acquisition date
fair value.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date.
37
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value as at that date through the income statement.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent
consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured
and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair
value at each reporting date and subsequent changes in the fair value of the contingent consideration are
recognised in profit or loss.
Goodwill is initially measured at cost, being the excess of the consideration transferred over the fair value of the
Group’s net identifiable assets acquired and liabilities assumed, and is allocated to each of the Group’s cash-
generating units that are expected to benefit from the combination. If the consideration is lower than the fair value
of the net assets of the subsidiary acquired, the difference is recognised in the income statement.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of
the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other
assets or liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed
of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when
determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the
relative values of the disposed operation and the portion of the cash-generating unit retained.
FOREIGN CURRENCY
B
The financial statements of each of the Group’s businesses are prepared in the functional currency applicable to
that business.
FOREIGN CURRENCY TRANSLATION
(I)
Transactions in foreign currencies other than the functional currency are translated at the foreign exchange rate
ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into
sterling at the foreign exchange rate at that date. Foreign exchange differences arising on translation are
recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical
cost in a foreign currency are translated at the date of the transaction. Non‑monetary assets and liabilities
denominated in foreign currencies that are stated at fair value are translated into sterling at foreign exchange rates
ruling at the date the fair value was determined.
FINANCIAL STATEMENTS OF FOREIGN OPERATIONS
(II)
On consolidation, the assets and liabilities of foreign operations, including fair value adjustments arising on
consolidation, are translated to sterling at foreign exchange rates ruling at the balance sheet date. The revenues
and expenses of foreign operations are translated to sterling at rates approximating to the foreign exchange rates
ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised
directly in equity in the foreign currency translation reserve. When a foreign operation is disposed of, in part or in
full, the relevant amount in the translation reserve is transferred to the income statement.
NET INVESTMENT IN FOREIGN OPERATIONS
(III)
Exchange differences arising from the translation of the net investment in foreign operations, and of related
hedges are taken to translation reserve. They are released into the income statement upon disposal or partial
disposal of the foreign operation.
C
The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures.
DERIVATIVE FINANCIAL INSTRUMENTS
Derivatives are initially measured at fair value; any directly attributable transaction costs are recognised in profit
or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein
are generally recognised in profit or loss.
HEDGES
CASH FLOW HEDGES
D
(I)
When a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised
asset or liability, or a highly probable transaction, the effective part of any gain or loss on the derivative financial
38
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
instrument is recognised directly in equity. When the forecast transaction subsequently results in the recognition
of a non-financial asset or non-financial liability, the associated cumulative gain or loss is removed from equity
and included in the initial cost or other carrying amount of the non-financial asset or liability. If a hedge of a forecast
transaction subsequently results in the recognition of a financial asset or a financial liability, then the associated
gains and losses that were recognised directly in equity are reclassified to the income statement in the same
period or periods during which the asset acquired or liability assumed affects the income statement (i.e. when
interest income or expense is recognised).
For cash flow hedges, other than those covered by the above policy, the associated cumulative gain or loss is
removed from equity and recognised in profit or loss in the same period or periods during which the hedged
forecast transaction affects profit or loss. The ineffective part of any gain or loss is recognised immediately in the
income statement.
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, then the cumulative unrealised gain or loss
recognised in equity is recognised immediately in the income statement.
HEDGE OF MONETARY ASSETS AND LIABILITIES
(II)
When a derivative financial instrument is used as an economic hedge of the foreign exchange exposure of a
recognised monetary asset or liability, hedge accounting is not applied and any gain or loss on the hedging
instrument is recognised in the income statement.
HEDGE OF NET INVESTMENT IN FOREIGN OPERATIONS
(III)
The portion of the gain or loss on an instrument used to hedge a net investment in a foreign operation that is
determined to be an effective hedge is recognised directly in equity within the translation reserve. The ineffective
portion is recognised immediately in the income statement.
PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION
RECOGNITION AND MEASUREMENT
E
(I)
Land and buildings (other than investment properties) are stated at cost, except as allowed under IFRS 1 transition
rules, less depreciation and any provision for impairment. All other property, plant and equipment is stated at cost
less depreciation and any provision for impairment. Any impairment of such properties below depreciated historical
cost is charged to the income statement.
Under the transition provisions of IFRS 1, land and buildings which were previously revalued under UK GAAP
were measured on the basis of their deemed cost, being their UK GAAP carrying value, including revaluations,
as at 1 January 2004 being the effective date of the Group’s conversion to IFRS.
DEPRECIATION
(II)
Freehold land is not depreciated. All other assets are depreciated to their residual values on a straight-line basis
over their estimated useful lives as follows:
Building core
50 years or lease term if shorter
Building surface, finishes and services
30 years or lease term if shorter
Plant and machinery
Furniture and equipment
Soft furnishings
Computer equipment
Software
Motor vehicles
15 – 20 years
10 years
5 – 7 years
5 years
up to 8 years
4 years
No residual values are ascribed to building surface finishes and services. Residual values ascribed to building
core depend on the nature, location and tenure of each property.
SUBSEQUENT COSTS
(III)
Capital expenditure on major projects is recorded separately within property, plant and equipment as capital work
in progress. Once the project is complete the balance is transferred to the appropriate fixed asset categories.
Capital work in progress is not depreciated.
39
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Interest attributable to funds used to finance the construction or acquisition of new hotels or major extensions to
existing hotels is capitalised net of tax relief and added to the cost of the hotel core.
Operating supplies, which include china, linen, glass and silverware, were stated at their deemed costs as at 1
January 2008 and subsumed into the costs of the hotel buildings. Subsequent renewals and replacements of such
stocks and new supplies upon initial hotel opening are written off as incurred to the income statement.
LEASES
F
Effective 1 January 2019, the Group adopted IFRS 16 ‘Leases’ using the modified retrospective approach allowed
under which the cumulative effect of initial application is recognised in accumulated profits as at 1 January 2019.
The details of the current and prior years accounting policies are disclosed separately below. Further information
on the adoption and initial application of IFRS 16 can be found in Note 35.
Policy applicable prior to 1 January 2019
Rentals payable under operating leases were charged to the income statement on a straight-line basis over the
term of the relevant lease. Benefits received and receivable (and costs paid and payable) as an incentive to enter
into an operating lease were also spread on a straight-line basis over the lease term.
Policy applicable from 1 January 2019
For contracts entered into on or after 1 January 2019, the Group assesses at inception whether the contract is,
or contains, a lease. A lease exists if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. The Group assessment includes whether:
– the contract involves the use of an identified asset;
– the Group has the right to obtain substantially all of the economic benefits from the use of the asset throughout
the contract period; and
– the Group has the right to direct the use of the asset.
THE GROUP AS A LESSEE
(I)
At the commencement of a lease, the Group recognises a right-of-use asset along with a corresponding lease
liability.
The lease liability is initially measured at the present value of the remaining lease payments, discounted using the
applicable incremental borrowing rate (single discount rate applied to a portfolio of leases with similar
characteristics). The lease term comprises the non-cancellable period of the contract, together with periods
covered by an option to extend the lease where the Group is reasonably certain to exercise that option based on
operational needs and contractual terms. Subsequently, the lease liability is measured at amortised cost by
increasing the carrying amount to reflect interest on the lease liability, and reducing it by the lease payments
made. The lease liability is remeasured either when the Group changes its assessment of whether it will exercise
an extension or termination option (if expected to be terminated early then any applicable penalties due will also
be factored in the remeasurement) or if there is a change in the Group’s estimate of the amount expected to be
payable under the residual value guarantee.
Right-of-use assets are initially measured at cost, comprising the initial measurement of the lease liability adjusted
for any lease payments made at or before the commencement date, estimated asset retirement obligations, lease
incentives received and initial direct costs. Subsequently, right-of-use assets are measured at cost, less any
accumulated depreciation and any accumulated impairment losses, and are adjusted for certain remeasurements
of the lease liability. Depreciation is calculated on a straight-line basis over the length of the lease.
The Group has elected to apply exemptions for short-term leases (less than 12 months) and leases for which the
underlying asset is of low value (£5,000 or less). For these leases, payments are charged to the income statement
on a straight-line basis over the term of the relevant lease.
Right-of-use assets are presented within non-current assets on the face of the balance sheet, and lease liabilities
are shown separately on the balance sheet in current liabilities and non-current liabilities depending on the length
of the lease term.
Leases where the Group assumes substantially all the risks and rewards of ownership are classified as finance
leases. The leased asset is initially recorded at the lower of fair value and the present value of minimum lease
40
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
payments. The equivalent liability, categorised as appropriate, is included within current or non-current liabilities.
Assets are depreciated over the shorter of the lease term and their useful economic lives. Finance charges are
allocated to accounting periods over the period of the lease to produce constant rates of return on the outstanding
balance.
THE GROUP AS A LESSOR
(II)
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or
operating lease. Rents receivable by the Group as lessor under operating leases, including the sub-letting of retail
outlets within hotel properties, are credited to the income statement on a straight-line basis over the lease term
even if the receipts are not made on such basis. Costs, including depreciation incurred in earning the lease
income, are recognised as an expense. Rents receivable under a finance lease are recognised on the statement
of financial position as a finance lease receivable and the corresponding asset is subsequently disposed of with
a profit or loss if applicable recognised in the income statement.
IMPAIRMENT
G
The carrying amounts of the Group’s assets, other than investment properties, inventories, employee benefit
assets and deferred tax assets are reviewed at each reporting date to determine whether there is any indication
of impairment. If any such indication exists, the asset’s recoverable amount is estimated.
The recoverable amount of assets is the greater of their net selling price 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.
Impairment is recognised in the income statement whenever the carrying amount of an asset or its cash-
generating unit exceeds its recoverable amount. Impairment losses are reversed if there has been a change in
the estimates used to determine the recoverable amount. Where permissible under IFRS, 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 had been recognised.
In the case of equity investments, a significant or prolonged decline in fair value of the asset below its cost is
considered in determining whether the asset is impaired. If any such evidence exists for these assets, the
cumulative loss – measured as the difference between acquisition cost and the current fair value, less any
impairment loss on that financial asset previously recognised in the income statement – is removed from equity
and recognised in the income statement.
The Group recognises loss allowances for expected credit losses (ECL) on:
financial assets measured at amortised cost;
debt investments measured at FVOCI or FVTPL; and
contract assets.
Loss allowances of the Group are measured on either of the following bases:
12-month ECL: these are ECL that result from default events that are possible within the 12 months after
the reporting date (or for a shorter period if the expected life of the instrument is less than 12 months);
or
Lifetime ECL: these are ECL that result from all possible default events over the expected life of a
financial instrument or contract asset.
Simplified approach
The Group applies the simplified approach to provide for ECL for all trade receivables and contract assets. The
simplified approach requires the loss allowance to be measured at an amount equal to lifetime ECL.
41
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
General approach
The Group applies the general approach to provide for ECL on all other financial instruments. Under the general
approach, the loss allowance is measured at an amount equal to 12-month ECL at initial recognition. At each
reporting date, the Group assesses whether the credit risk of a financial instrument has increased significantly
since initial recognition. When credit risk has increased significantly since initial recognition, loss allowance is
measured at an amount equal to lifetime ECL.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition
and when estimating ECL, the Group considers reasonable and supportable information that is relevant and
available without undue cost or effort. This includes both quantitative and qualitative information and analysis,
based on the Group’s historical experience and informed credit assessment and includes forward-looking
information.
If credit risk has not increased significantly since initial recognition or if the credit quality of the financial instruments
improves such that there is no longer a significant increase in credit risk since initial recognition, loss allowance
is measured at an amount equal to 12-month ECL.
The Group considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to
the Group in full, without recourse by the Group to actions such as realising security (if any is held). The Group
considers a contract asset to be in default when the customer is unlikely to pay its contractual obligations to the
Group in full, without recourse by the Group to actions such as realising security (if any is held).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group
is exposed to credit risk.
Measurement of ECLs
ECLs are probability-weighted estimates of credit losses. Credit losses are measured at the present value of all
cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and
the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial
asset.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt
investments at FVOCI or FVTPL are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events
that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
significant financial difficulty of the borrower or issuer;
a breach of contract such as a default;
the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;
it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
the disappearance of an active market for a security because of financial difficulties.
Presentation of ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost and contract assets are deducted from the gross
carrying amount of these assets.
42
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no
realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have
assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-
off. However, financial assets that are written off could still be subject to enforcement activities in order to comply
with the Group’s procedures for recovery of amounts due.
INVESTMENT PROPERTIES
H
Investment properties held by the Group are properties which are held either to earn rental income or for capital
appreciation or both. Investment properties are stated at fair value. Any gain or loss in the fair value on annual
revaluation is recognised in the income statement in accordance with IAS 40 Investment Property. In limited
circumstances, the determination of fair value is uncertain, and these properties are carried at cost. Impairment
analysis over these properties is carried out annually.
An external independent valuer, having an appropriate recognised professional qualification and recent
experience in the location and category of the property being valued, values the portfolio annually. The fair values
are based on market values, being the estimated amount for which a property could be exchanged on the date of
valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein
the parties had each acted knowledgeably, prudently and without compulsion.
INVENTORIES
I
Inventories are recorded at the lower of cost and net realisable value. Net realisable value is the estimated selling
price in the ordinary course of business, less the estimated costs of completion and selling expenses.
DEVELOPMENT PROPERTIES
J
Development properties are stated at the lower of cost and net realisable value. They are held for sale in the short
term and are therefore classified as current assets. The cost of development properties includes interest and other
related expenditure incurred in order to get the asset ready for its intended use. Borrowing costs payable on loans
funding a development property are also capitalised, on a specific identification basis, as part of the cost of the
development property until the completion of development. Payments received from purchasers arising from pre-
sales of the property units prior to the completion are included as deferred income under other financial liabilities
in the statement of financial position.
CASH AND CASH EQUIVALENTS
K
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or
less.
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.
BORROWINGS
L
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
stated at amortised cost: any difference between proceeds (net of transaction costs) and the redemption value is
recognised in the income statement over the period of the borrowings using the effective interest method.
TAXATION
M
Income tax on profit or loss comprises current and deferred tax. Income tax is recognised in the income statement
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date and any adjustment to tax payable in respect of previous years.
Deferred tax is provided for using the balance sheet method, providing for 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: (i) the initial recognition of assets or liabilities
that affect neither accounting nor taxable profit; and (ii) differences relating to investments in subsidiaries to the
43
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 balance sheet 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. Deferred tax assets are reduced to the extent that it is no longer probable
that the benefit will be realised.
Deferred tax assets and liabilities are offset only to the extent that: (i) the Group has a legally enforceable right to
offset current tax assets against current tax liabilities; (ii) the Group intends to settle net; and (iii) the deferred tax
assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.
EMPLOYEE BENEFITS
DEFINED CONTRIBUTION PLANS
N
(I)
Obligations for contributions to defined contribution pension plans are recognised as an expense in the income
statement.
DEFINED BENEFIT PLANS
(II)
The Group operates a number of defined benefit pension plans. As set out in Note 21, the calculation of the
present value of the Group’s defined benefit obligations at each period end is subject to significant estimation. An
appropriately qualified, independent actuary is used to undertake this calculation. The assumptions made by the
actuary are the best estimates chosen from a range of possible actuarial assumptions, which due to the timescale
covered may not necessarily be borne out in practice. The valuation of scheme assets is based on their fair value
at the balance sheet date. As these assets are not intended to be sold in the short term, their values may be
subject to significant change before they are realised. In reviewing the work of the independent actuary,
management is required to exercise judgement to satisfy themselves that appropriate weight has been afforded
to macro-economic factors. Details of the assumptions used are set out in Note 21.
The Group’s net obligation in respect of defined benefit post-employment plans, including pension plans, is
calculated separately for each plan by estimating the amount of future benefit that employees have earned in
return for their service in the current and prior periods. That benefit is discounted to determine its present value,
and the fair value of any plan assets is deducted. The calculation is performed by a qualified actuary using the
projected unit credit method.
When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees
is recognised immediately as an expense in the income statement.
The Group recognises remeasurement gains and losses within the consolidated statement of comprehensive
income in the period in which they occur.
The Group determines the net interest expense (income) on the net defined benefit liabilities (asset) for the period
by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period
to the net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset)
during the period as a result of contributions and benefit payments. Net interest expense and other expenses
related to defined benefit plans are recognised in the income statement.
LONG-TERM SERVICE BENEFITS
(III)
The Group’s net obligation in respect of long-term service benefits, other than post-employment plans, is the
amount of future benefit that employees have earned in return for their service in the current and prior periods.
The obligation is calculated using the projected unit credit method and is discounted to its present value and the
fair value of any plan assets is deducted.
SHARE-BASED PAYMENT TRANSACTIONS
(IV)
The share-based incentive schemes previously allowed the Group’s employees to acquire shares of Millennium
& Copthorne Hotels plc (now Millennium & Copthorne Hotels Limited).
44
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
The cost of equity-settled transactions with employees for awards granted after 7 November 2002 is measured
by reference to the fair value at the date on which they are granted. The fair value is determined by using an
appropriate pricing model, further details of which are given in Note 21.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled. The cumulative expense recognised for
equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting
period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The
income statement expense or credit for a period represents the movement in cumulative expense recognised as
at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions where
vesting is conditional upon a market or non-vesting condition, which are treated as vesting irrespective of whether
or not the market or non-vesting condition is satisfied, provided that all other performance and/or service
conditions are satisfied.
Where the terms of an equity-settled transaction award are modified, the minimum expense recognised is the
expense as if the terms had not been modified, if the original terms of the award are met. An additional expense
is recognised for any modification that increases the total fair value of the share-based payment transaction, or is
otherwise beneficial to the employee as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. This includes any award where non-vesting conditions
within the control of either the entity or the employee are not met. However, if a new award is substituted for the
cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new
awards are treated as if they were a modification of the original award, as described in the previous paragraph.
All cancellations of equity-settled transaction awards are treated equally.
PROVISIONS
O
A provision is recognised on the balance sheet 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. If the effect is material, provisions are determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time value of money and, when appropriate, the risks
specific to the liability. Further details on provisions are given in Note 22.
P
Revenue comprises:
REVENUE AND ITS RECOGNITION
• Income from the ownership and operation of hotels – recognised at the point at which the accommodation and
related services are provided;
• Management fees – earned from hotels managed by the Group, usually under long-term contracts with the hotel
owner. Management fees include a base fee, which is generally a percentage of hotel revenue, and/or an
incentive fee, which is generally based on the hotel’s profitability; recognised when earned on an accrual basis
under the terms of the contract;
• Franchise fees – received in connection with licensing of the Group’s brand names, usually under long-term
contracts with the hotel owner. The Group charges franchise royalty fees as a percentage of room revenue;
recognised when earned on an accrual basis under the terms of the agreement;
• Income from property rental – recognised on a straight-line basis over the lease term, lease incentives granted
are recognised as an integral part of the total rental income; and
• Development property sales – recognised when the transfer of control of the property has passed to the buyer,
which is usually when legal title transfers depending on jurisdictions. The trigger for revenue recognition depends
on the laws within each jurisdiction.
DIVIDEND DISTRIBUTION
Q
Dividend distribution to the shareholders is recognised as a liability in the Group’s financial statements in the
period in which the dividends are appropriately authorised and approved for payment and are no longer at the
discretion of the Company. Unpaid dividends that do not meet these criteria are disclosed in the notes to the
financial statements.
45
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
OPERATING SEGMENT INFORMATION
R
Disclosure of segmental information is principally presented in respect of the Group’s geographical segments.
The segments reported reflect the operating information included in internal reports that the Chief Operating
Decision Maker (“CODM”), which is the Board, regularly reviews. Further details are given in Note 5.
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. Discrete financial information is reported to and is reviewed by the CODM on a geographical
basis. Operating segments have Chief Operating Officers (“COOs”) or equivalent who are directly accountable for
the functioning of their segments and maintain regular contact with the Group Chief Executive Officer and
Chairman of the CODM to discuss the operational and financial performance. The CODM makes decisions about
allocation of resources to the regions managed by the COOs. No operating segments have been aggregated to
form the reportable operating segments.
Segment results that are reported to the CODM include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Unallocated items principally comprise interest-bearing loans,
borrowings, cash and cash equivalents, net finance expense, taxation balances and corporate expenses.
NON-CURRENT ASSETS HELD-FOR-SALE
S
A non-current asset or a group of assets containing a non-current asset (a disposal group) is 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,
non-current 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 profit or loss. Any impairment loss on a disposal group is first allocated
to property, plant and equipment and lease premium prepayment, 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. Impairment losses on initial classification as held-for-sale and subsequent gains or losses on
remeasurement are recognised in the income statement. Gains are not recognised in excess of any cumulative
impairment loss.
OTHER FINANCIAL ASSETS AND LIABILITIES
T
Trade investments are classified as either equity instruments at FVOCI or fair value through profit and loss
(“FVTPL”) and are included under non-current assets within ‘other financial assets’. They are recorded at market
value with movements in value taken to equity. Any impairment to value is recorded in the income statement.
Trade and other receivables are stated at their nominal amount (discounted if material) less any impairment. Trade
and other payables are stated at their nominal amount (discounted if material).
RELATED PARTIES
U
For the purpose of these financial statements, parties are considered to be related to the Group if the Group has
the ability, directly or indirectly, to control the party or exercise significant influence over the party making financial
and operating decisions, or vice versa, or where the Group and the party are subject to common control or
common significant influence. Related parties may be individuals or other entities.
GOVERNMENT GRANTS
V
The Group recognises an unconditional government grant related to an asset in profit or loss as other income
when the grant becomes receivable. Other government grants related to assets are initially recognised as deferred
income at fair value if there is reasonable assurance that they will be received and the Group will comply with the
conditions associated with the grant; they are then recognised in profit or loss as other income on a systematic
basis over the useful life of the asset.
Grants that compensate the Group for expenses incurred are offset against the particular expense in profit or loss
on a systematic basis in the periods in which the expenses are recognised, unless the conditions for receiving the
grant are met after the related expenses have been recognised. In this case, the grant is recognised when it
becomes receivable.
46
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
3. ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements under IFRS requires the Group to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of contingencies and the reported amount
of revenue and expenses during the year. The Group evaluates its estimates and assumptions on an ongoing
basis. Such estimates and judgements are based upon historical experience and other factors it believes to be
reasonable under the circumstances, which form the basis for making judgements about the carrying value of
assets and liabilities that are not readily apparent from other sources.
Certain critical accounting policies, among others, affect the Group’s more significant estimates and assumptions
used in preparing the consolidated financial statements. Actual results could differ from the Group’s estimates
and assumptions.
3.1 JUDGEMENTS
The key judgements are:
CLASSIFICATION OF INVESTMENT PROPERTIES
The Group holds a number of investment properties and accounts for such properties in accordance with the
accounting policy set out in Note 2.2H. The Group owns assets which are leased to external third parties with
lease rentals and related charges varying according to the agreement involved. The Group accounts for such
assets in its financial statements in accordance with the accounting policy set out in Note 2.2H.
Where the indicators are such that on balance the Group is shown to be a passive investor, the relevant property
is accounted for in accordance with IAS 40 and the Group accounts for the fair value change through the income
statement as other operating income or expense. Indicators considered include (1) party that has the power to
make the significant operating and financing decisions regarding the operations of the property in a management
contract, (2) calculation of the lessor’s return, (3) lessor’s power of intervention under the management contract,
and (4) duration of the contract.
CONSOLIDATION OF ENTITIES IN WHICH THE GROUP HOLDS LESS THAN A MAJORITY OF VOTING
RIGHTS (DE FACTO CONTROL)
In 2014, the new consolidation accounting standard, IFRS 10 introduced a new control model that focuses on
whether the Group has power over an investee, exposure or rights to variable returns from its involvement with
the investee and ability to use its power to affect those returns.
This required the Group to consider whether it has de facto control over its investees, particularly when it owned
less than 50% of the voting rights. In 2014, in accordance with the transitional provisions of IFRS 10, the Group
reassessed the control conclusion for its investees and changed its control conclusion in respect of its investment
in CDLHT, which was previously accounted for as an associate using the equity method. Although the Group
owns less than half of the voting power of the investee, management determined that, under IFRS 10, the Group
has had control over the investee since its inception. This is because a 100% owned subsidiary of the Group,
M&C REIT Management Limited acts as REIT Manager with its fees having a performance-based element and
therefore the Group has exposure to variable returns from its involvement with the investee. Accordingly, in 2014,
the Group applied acquisition accounting to the investment from the year it was first established in 2006, and
restated the relevant amounts as if the investee had been consolidated from that year. This judgement was
reconsidered this year and continues to be appropriate.
BUSINESS COMBINATION
For each acquisition, the Group has to make a judgement whether to account the transaction as an asset purchase
or a business combination, which results in a different accounting treatment. In particular, under business
combination accounting, goodwill and additional intangible assets may arise and the valuation of acquired assets
is complex. In addition, transaction costs can be capitalised in an asset acquisition, but have to be charged through
the income statement for a business combination. The classification of each acquisition and related accounting is
highly judgemental. There were no acquisitions undertaken by the Group during 2020.
LAND LEASES CLASSIFICATION
The Group holds a number of hotels with leases of land that are determined to have an indefinite economic life.
The judgement prior to 1 January 2019 was that these were classified as a finance lease even if at the end of the
lease term title does not pass to the lessee. Subsequent to 1 January 2019 and the adoption of IFRS 16 ‘Leases’,
these assets have been reclassified as right-of-use assets.
47
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
3.2 ESTIMATES
The key estimates are:
IMPAIRMENT OF TANGIBLE ASSETS
The Group determines whether tangible fixed assets are impaired when indicators of impairments exist or based
on the annual impairment assessment. The annual assessment requires an estimate of the recoverable value of
the cash generating units to which the tangible fixed assets are allocated, which is predominantly at the individual
hotel site level. Where appropriate, external valuations are also undertaken. Estimation of the recoverable value
of the hotel assets is done with the reference to fair value less cost to sell, using income approach, which requires
estimation of future cash flows of a third-party efficient operator, the time period over which they will occur, an
appropriate discount rates, terminal capitalization rates and growth rates. The Directors consider that the
assumptions made represent their best estimate, and that the discount rate and terminal capitalisation rate used
are appropriate given the risks associated with the specific cash flows. A sensitivity analysis has been performed
over the estimates (see Note 11).
4. NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
The following standards and interpretations, which have been issued by the IASB, become effective after the
current year end and have not been early adopted by the Group:
• IFRS 17 Insurance Contracts (effective date 1 January 2021).
The Group is in the process of assessing the impact of these new standards, amendments and interpretations on
the financial statements.
5. OPERATING SEGMENT INFORMATION
Disclosure of segmental information is principally presented in respect of the Group’s geographical segments.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items principally comprise: interest-bearing loans, borrowings, cash
and cash equivalents, net financial expense, taxation balances and corporate expenses.
GEOGRAPHICAL SEGMENTS
The hotel and property operations are managed on a worldwide basis and operate in seven principal geographical
areas as follows:
• New York
• Regional US
• London
• Rest of Europe
• Singapore
• Rest of Asia
• Australasia
The segments reported reflect the operating segment information included in the internal reports that the Chief
Operating Decision Maker (“CODM”), which is the Board, regularly reviews.
The reportable segments are aligned with the structure of the Group’s internal organisation which is based
according to geographical region. Discrete financial information is reported to and is reviewed by the CODM on a
geographical basis. Operating segments have Chief Operating Officers (“COOs”) or equivalent who are directly
accountable for the functioning of their segments and who maintain regular contact with the Group Chief Executive
Officer and Chairman of the CODM to discuss the operational and financial performance. The CODM makes
decisions about allocation of resources to the regions managed by the COOs.
The results of CDLHT have been incorporated within the existing geographical regions. In addition, CDLHT
operations are reviewed separately by its board on a monthly basis.
48
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
SEGMENT RESULTS
2020
NEW
YORK
£M
REGIONAL
US
£M
LONDON
£M
REST OF
EUROPE
£M
SINGAPORE
£M
REST OF
ASIA
£M
AUSTRALASIA
£M
CENTRAL
COSTS
£M
TOTAL
GROUP
£M
Revenue
Hotel
Property operations
REIT4
Total revenue
39
–
–
39
Hotel gross operating
profit/(loss)
Hotel fixed charges1
(43)
(31)
49
4
–
53
–
(20)
25
–
–
25
(5)
(17)
Hotel operating
profit/(loss)
Property operating profit
REIT operating
profit/(loss)
Central costs
Other operating income2
Other operating
expense2
(74)
(20)
(22)
–
–
–
–
–
–
–
15
–
–
–
–
(29)
(15)
(2)
Other operating income
– REIT2
Other operating expense
– REIT2
–
–
–
–
–
–
Operating profit/(loss)
(103)
(20)
(24)
–
11
29
(63)
–
11
14
5
–
10
2
(12)
Share of joint ventures
and associates profit
Add: Depreciation and
amortisation
Add: Net revaluation
gain/deficit & impairment
EBITDA3
Less: Depreciation,
amortisation, net
revaluation gain/deficit &
impairment
Net finance expense
Loss before tax
18
–
14
32
(7)
(4)
(11)
–
(1)
–
–
(4)
–
(20)
(36)
4
6
24
(2)
61
2
15
78
25
(7)
18
1
(7)
–
22
–
124
(22)
136
–
14
9
159
80
4
5
89
3
(31)
(28)
3
(5)
–
2
18
–
(12)
(22)
8
21
(7)
–
49
55
5
109
24
(6)
18
25
–
–
–
(1)
–
(5)
37
–
4
2
–
–
–
–
–
–
–
–
–
(24)
–
–
–
–
321
65
39
425
(3)
(116)
(119)
29
(13)
(24)
39
(33)
124
(59)
(24)
(56)
–
3
1
12
80
74
43
(20)
110
1 Hotel fixed charges include depreciation, property rent, taxes and insurance, and management fees.
2 See Note 7 for details of other operating income and expense.
3 EBITDA is earnings before interest, tax, depreciation and amortisation.
4 CDLHT operates the REIT business.
(154)
(26)
(70)
49
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NEW
YORK
£M
REGIONAL
US
£M
LONDON
£M
REST OF
EUROPE
£M
SINGAPORE
£M
REST OF
ASIA
£M
AUSTRALASIA
£M
CENTRAL
COSTS
£M
TOTAL
GROUP
£M
2019
Revenue
Hotel
Property operations
REIT4
166
146
109
–
–
5
–
–
–
Total revenue
166
151
109
42
(23)
19
–
–
–
–
–
–
19
–
7
–
26
Hotel gross operating
profit
Hotel fixed charges1
Hotel operating
profit/(loss)
Property operating profit
REIT operating
profit/(loss)
Central costs
Other operating income2
Other operating
expense2
18
(32)
(14)
–
–
–
–
27
(20)
7
1
–
–
–
(17)
(3)
–
5
–
13
3
21
Other operating expense
– REIT2
–
Operating profit/(loss)
(31)
–
11
17
(3)
Share of joint ventures
and associates profit
Add: Depreciation and
amortisation
Add: Net revaluation
gain/deficit & impairment
EBITDA3
Less: Depreciation,
amortisation, net
revaluation gain/deficit &
impairment
Net finance expense
Profit before tax
66
–
33
99
11
(11)
–
–
11
–
–
(1)
(2)
8
19
6
3
36
134
3
17
154
53
(6)
47
3
(4)
–
3
–
(1)
48
–
15
1
64
182
10
11
203
61
(29)
32
9
(3)
–
7
(5)
(11)
29
17
21
9
76
85
53
5
143
41
(6)
35
26
4
–
–
–
(1)
64
–
4
1
–
–
–
–
–
–
–
–
–
(44)
–
–
–
(44)
–
3
–
888
71
66
1,025
253
(127)
126
39
8
(44)
10
(26)
(15)
98
36
80
34
69
(41)
248
1 Hotel fixed charges include depreciation, property rent, taxes and insurance, and management fees.
2 See Note 7 for details of other operating income and expense.
3 EBITDA is earnings before interest, tax, depreciation and amortisation.
4 CDLHT operates the REIT business.
(114)
(32)
102
50
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
SEGMENTAL ASSETS AND LIABILITIES
2020
NEW
YORK
£M
REGIONAL
US
£M
LONDON
£M
REST OF
EUROPE
£M
SINGAPORE
£M
REST
OF ASIA
£M
AUSTRALASIA
£M
TOTAL
GROUP
£M
Hotel operating assets
REIT operating assets
Hotel operating liabilities
REIT operating liabilities
Investment in joint ventures and
associates
531
–
(52)
–
–
261
–
(42)
–
–
546
–
(23)
–
–
217
245
(38)
(13)
20
Total hotel operating net assets
479
219
523
431
Property operating assets
Property operating liabilities
Investment in joint ventures and
associates
Total property operating net assets
–
–
–
–
95
(1)
–
94
–
–
–
–
–
–
98
98
45
718
(20)
(51)
–
692
95
(1)
–
94
667
120
(78)
(17)
127
819
198
(4)
196
390
Deferred tax liabilities
Income taxes payable
Net debt
Net assets
190
106
(18)
(2)
2,457
1,189
(271)
(83)
–
147
276
3,439
106
(2)
(1)
103
494
(8)
293
779
(124)
(19)
(837)
3,238
2019
NEW
YORK
£M
REGIONAL
US
£M
LONDON
£M
REST OF
EUROPE
£M
SINGAPORE
£M
REST
OF ASIA
£M
AUSTRALASIA
£M
TOTAL
GROUP
£M
Hotel operating assets
REIT operating assets
Hotel operating liabilities
REIT operating liabilities
Investment in joint ventures and
associates
601
–
(58)
–
–
310
–
(58)
–
–
559
–
(37)
–
–
227
258
(41)
(14)
9
Total hotel operating net assets
543
252
522
439
Property operating assets
Property operating liabilities
Investment in joint ventures and
associates
Total property operating net assets
–
–
–
–
61
(2)
–
59
–
–
–
–
–
–
95
95
62
625
(30)
(12)
–
645
89
(1)
–
88
653
136
(80)
(18)
141
832
200
(3)
169
366
Deferred tax liabilities
Income taxes payable
Net debt
Net assets
189
144
(19)
(3)
2,601
1,163
(323)
(47)
–
150
311
3,544
116
(1)
–
115
466
(7)
264
723
(147)
(13)
(759)
3,348
51
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
GEOGRAPHIC INFORMATION
Revenue from external customers
New Zealand
United States
Singapore
United Kingdom
Taiwan
South Korea
Australia
China
Malaysia
Philippines
Maldives
Italy
France
Indonesia
Other
2020
£M
2019
£M
95
92
78
48
36
20
15
10
6
5
3
2
1
1
13
133
317
154
183
77
49
11
25
14
7
6
7
11
5
26
Total revenue per consolidated income statement
425
1,025
The revenue information above is based on the location of the business. The £425m (2019: £1,025m) revenue is constituted of
£321m (2019: £888m) of hotel revenue, £65m (2019: £71m) of property operations revenue and £39m (2019: £66m) of REIT
revenue. The property operations revenue comprises £55m (2019: £53m) from Australasia, £2m (2019: £3m) from Singapore
and £8m (2019: £15m) from other countries.
52
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Non-current assets
United States
Singapore
United Kingdom
Taiwan
China
New Zealand
Japan
South Korea
Netherlands
Hong Kong
Germany
Maldives
Italy
Malaysia
Australia
France
Indonesia
Philippines
2020
£M
2019
£M
868
842
771
313
299
244
238
179
117
108
96
76
75
52
41
39
12
7
930
673
808
291
274
239
239
176
103
124
100
91
78
65
81
36
13
7
Total non-current assets per consolidated statement of financial position
4,377
4,328
Non-current assets for this purpose consist of property, plant and equipment, investment properties, investment in joint
ventures and associates and other non-current financial assets.
6. ADMINISTRATIVE EXPENSES
The following items are included within administrative expenses:
Included in administrative expenses is the auditor’s remuneration, for audit and non-audit
services as follows:
Auditor’s remuneration
Statutory audit services:
– Annual audit of the Company and consolidated financial statements
– Audit of subsidiary companies
Non-audit related services:
– Tax advisory
Total
2020
£M
2019
£M
1
2
3
–
3
1
2
3
1
4
53
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Repairs and maintenance
Depreciation
– property, plant and equipment
–
right-of-use assets
Rental paid/payable under operating leases*
–
land and buildings
– plant and machinery
2020
£M
43
71
9
–
1
2019
£M
60
72
8
1
1
* Under IFRS 16 ‘Leases’, which the Group adopted in 2019, payments under operating leases are not charged to the income statement except for those
where a recognition exemption has been applied.
7. OTHER OPERATING INCOME AND EXPENSE
Revaluation gain/(deficit) of investment properties
– REIT properties
– Millennium Mitsui Garden Hotel Tokyo
– Biltmore Court & Tower
– Tanglin Shopping Centre
Impairment of property, plant & equipment
Gain on disposal of property, plant and equipment
Loss on disposal of investment property
Fair value gain from FSGL’s warrant
Net property grant income
2020
£M
2019
£M
NOTES
(A)
(26)
(4)
1
8
(53)
(74)
135
(8)
15
3
71
(4)
6
(3)
1
(34)
(34)
–
–
3
–
(31)
(B)
(C)
(D)
(E)
(F)
REVALUATION GAIN/(DEFICIT) OF INVESTMENT PROPERTIES
(A)
At the end of the financial year, in accordance with the Group’s policy its investment properties were subject to
external professional valuation on an open-market existing use basis. Based on these valuations, the revaluation
gain or deficit was recorded as considered appropriate by the Directors. Further details on these valuations are
provided in Note 12.
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT
(B)
The Directors undertook their annual review of the carrying value of hotels and property assets for indication of
impairment and where appropriate, external valuations were also obtained. As a result of this review, the total
impairment charge for the year ended 31 December 2020 was £53m consisting of £29m in New York, £17m in
Rest of US, £2m in London, £12m in Rest of Europe, £1m in Australasia, £13m in Singapore and £14m in the rest
of Asia. This was offset by reversals of £3m in US, £7m in UK and £25m in Asia. For 2019, a total impairment
charge of £34m was recognised in relation to £17m in New York, £3m in Rest of Europe and £14m in Rest of
Asia. Further information is given in Note 11.
GAIN ON DISPOSAL OF PROPERTY, PLANT & EQUIPMENT
(C)
The 872-room Millennium Cincinnati Hotel was closed on 31 December 2019 and subsequently sold on 14
February 2020 for US$36m (£28m) with a gain on disposal of £14m.
54
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
CDLHT completed its divestment of Novotel Singapore Clarke Quay on 15 July 2020 and recorded a gain on
disposal of £121m.
LOSS ON DISPOSAL OF INVESTMENT PROPERTY
(D)
CDLHT completed its divestment of Novotel Brisbane on 30 October 2020 and has recorded a loss on disposal of
£8m.
FAIR VALUE GAIN FROM FSGL’S WARRANT
(E)
For the year ended 31 December 2020, a fair value gain of £15m was recorded by the Group from the holding of
warrants.
NET PROPERTY GRANT INCOME
(F)
The Singapore Government has given remission of property tax (“property tax rebates”) under section 6(8) of the
Property Tax Act (Cap. 254) to qualifying non-residential properties for the period from 1 January 2020 to 31
December 2020 in response to the COVID-19 pandemic. For the portion of a non-residential property leased out
to a lessee (“tenant”), the owner of the property (“landlord”) must transfer the benefit from the property tax rebate
under section 29 of the COVID-19 (Temporary Measures) Act 2020. For the vacant portion of the property, the
landlord itself will benefit from the property tax rebate. The Group recognised £3m of net grant income during the
year.
8. PERSONNEL EXPENSES
Wages and salaries*
Compulsory social security contributions
Contributions to defined contribution schemes
Defined benefit pension (gain)/cost – recorded in the statement of comprehensive income
Defined benefit pension cost – recorded in the income statement
2020
£M
157
31
13
1
2
2019
£M
322
50
22
1
2
204
397
*In response to the COVID-19 pandemic, in March 2020 the government of the United Kingdom introduced the
Job Retention Scheme for companies that had to shut their operations and furlough staff. Under the scheme, an
eligible company could apply for the government grant in an amount of up to 80% of each employee’s salary,
subject to a maximum of £2,500 per employee, to continue paying monthly salaries to its furloughed employees.
Subsequent to the approval of the application, the UK based operations received a total of £13m subsidised by
the scheme during 2020 which has been offset against existing wages and salaries per the Group’s policy set out
in Note 2.2(V). The scheme has been extended to 30 September 2021 and the decision has been made by
management to continue benefitting from the scheme during this period.
The number of employees employed by the Group as at year end analysed by category was as follows:
Hotel operating staff
Management/administration
Sales and marketing
Repairs and maintenance
2020
NUMBER
2019
NUMBER
4,308
1,004
248
426
9,023
1,497
519
648
5,986
11,687
55
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
DIRECTORS’ REMUNERATION
Directors’ remuneration
Amounts receivable under long term incentive plans
Company contributions to money purchase pension plans
2020
£M
2019
£M
–
–
–
–
1
–
–
1
The above table shows directors’ remuneration for directors remunerated by the Group. No allocation has been
made for directors remunerated through a related company, not part of the Group, as it is impractical to allocate
their time for services to the Group.
The aggregate of remuneration and amounts receivable under long term incentive schemes of the highest paid
director was £0.2 million (2019: £0.4m), and Company pension contributions of £0.02 million (2019: £0.02m) were
made to a money purchase scheme on his/her behalf. They are a member of a defined benefit scheme, under
which their accrued pension at the year end was £nil (2019: £nil), and their accrued lump sum was £nil (2019:
£nil).
2020
£M
2019
£M
Retirement benefits are accruing to the following number of directors under:
– Money purchase schemes
The number of directors who exercised share options was
The number of directors in respect of whose qualifying services shares were received or
receivable under long term incentive schemes was
9. NET FINANCE EXPENSE
Interest income
Foreign exchange gain
Finance income
Interest expense
– Overdrafts, bank and other loans
– Recognised under IFRS 16 ‘Leases’
Foreign exchange loss
Finance expense
Net finance expense
–
2
1
2020
£M
3
16
19
(24)
(5)
(16)
(45)
(26)
–
2
2
2019
£M
5
2
7
(25)
(5)
(9)
(39)
(32)
56
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
10. INCOME TAX EXPENSE
Current tax
Corporation tax charge for the year
Adjustment in respect of prior years
Total current tax expense
Deferred tax (Note 24)
Origination and reversal of timing differences
Benefits of tax losses recognised
(Over)/under provision in respect of prior years
Total deferred tax credit
Total income tax charge in the consolidated income statement
UK
Overseas
Total income tax charge in the consolidated income statement
2020
£M
2019
£M
23
2
25
6
(21)
(10)
(25)
–
(11)
11
–
30
(2)
28
(10)
(11)
1
(20)
8
1
7
8
For the year ended 31 December 2020, the Group has a tax credit of £0m (2019: tax charge of £8m) excluding
the tax relating to joint ventures and associates. The effective tax rate relating to the tax credit of £0m is 0.1%
(2019: 12.4%). The Group’s underlying effective tax rate is 0.07% (2019: 17.5%). The effective tax rate has been
affected primarily by the mix of Group regional profits and tax adjustments in respect of previous years and change
in tax legislations (re-introduction of tax depreciation on building core in New Zealand). For the year ended 31
December 2020, a charge of £4m (2019: £7m) relating to joint ventures and associates is included in the profit
before tax.
ADJUSTMENTS IN RESPECT OF SETTLEMENT OF PRIOR YEARS’ TAX LIABILITIES
The Group’s tax charge on ordinary activities is the sum of the total current and deferred tax charges. The
calculation of the Group’s total tax charge necessarily involves a degree of estimation and judgement in respect
of certain items whose tax treatment cannot be finally determined until resolution has been reached with the
relevant tax authority or, as appropriate, through a formal legal process. The final resolution of some of these
items may give rise to material profit and loss and/or cash flow variances. The geographical complexity of the
Group’s structure makes the degree of estimation and judgement more challenging. The resolution of issues is
not always within the control of the Group and it is often dependent on the efficacy of the legal processes in the
relevant tax jurisdictions in which the Group operates.
ADJUSTMENT IN RESPECT OF CHANGE IN TAX LEGISLATION
For the year ended 31 December 2020, a deferred tax credit of £10m is recognised as a result of the re-introduction
of tax depreciation on building core in New Zealand as part of the tax reform measures introduced by the New
Zealand government in 2020.
57
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
INCOME TAX RECONCILIATION
(Loss)/Profit before income tax in consolidated income statement
Less share of profits of joint ventures and associates
(Loss)/Profit on ordinary activities excluding share of joint ventures and associates
Income tax on ordinary activities at the standard rate of UK tax of 19.00% (2019: 19.00%)
Tax exempt income
Non-deductible expenses
Unrecognised tax losses arising during the year
Other effect of tax rates in foreign jurisdictions
Other adjustments to tax charge in respect of prior years
Income tax expense per consolidated income statement
2020
£M
(70)
(12)
(82)
(16)
(16)
3
36
–
(7)
–
2019
£M
102
(36)
66
13
(29)
17
3
4
–
8
58
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
11. PROPERTY, PLANT AND EQUIPMENT
LAND AND
BUILDINGS
£M
CAPITAL WORK
IN PROGRESS
£M
PLANT AND
MACHINERY
£M
FIXTURES,
FITTINGS AND
EQUIPMENT
AND VEHICLES
£M
RIGHT-
OF-USE
ASSETS
£M
TOTAL
£M
Cost
Balance at 1 January 2019
Adoption of IFRS 16 on 1 January 2019
Additions – Others
Reclassification between asset categories
Transfer to assets held for sale
Disposals
Written off
Foreign exchange adjustments
Balance at 31 December 2019
Balance at 1 January 2020
Acquisitions
Additions – Others
Reclassification between asset categories
Transfer to assets held for sale
Disposals
Written off
Foreign exchange adjustments
Balance at 31 December 2020
Accumulated depreciation and impairment losses
Balance at 1 January 2019
Charge for the year
Impairment
Disposals
Reclassification between asset categories
Transfer to assets held for sale
Written off
Foreign exchange adjustments
Balance at 31 December 2019
Balance at 1 January 2020
Charge for the year
Impairment
Disposals
Transfer to assets held for sale
Written off
Foreign exchange adjustments
Balance at 31 December 2020
Carrying amounts
At 31 December 2020
At 31 December 2019
3,388
–
11
35
(97)
–
–
(55)
3,282
3,282
179
–
6
(46)
–
(1)
(36)
3,384
613
21
29
–
–
(13)
–
(10)
640
640
22
49
–
(21)
(1)
(13)
676
2,708
2,642
72
–
45
(61)
(7)
–
(1)
(1)
47
47
–
2
(16)
(1)
–
–
–
32
1
–
–
–
–
–
(1)
–
–
–
–
–
–
–
–
–
–
32
47
368
–
14
12
(38)
–
(8)
(5)
343
343
9
13
10
(5)
–
–
(6)
364
153
15
5
–
(1)
(27)
(7)
(2)
136
136
14
4
–
(1)
–
(4)
406
–
29
14
(6)
(1)
(10)
(8)
424
424
5
13
–
(6)
(1)
–
(3)
–
207
8
–
(2)
–
–
(4)
209
209
–
32
–
–
(1)
–
(3)
432
237
314
36
–
(1)
1
(6)
(9)
(7)
328
328
35
–
(1)
(5)
–
(1)
–
8
–
–
–
–
–
(1)
7
7
9
–
–
–
–
–
4,234
207
107
–
(150)
(1)
(19)
(73)
4,305
4,305
193
60
–
(58)
(2)
(1)
(48)
4,449
1,081
80
34
(1)
–
(46)
(17)
(20)
1,111
1,111
80
53
(1)
(27)
(1)
(18)
149
356
16
1,197
215
207
76
96
221
202
3,252
3,194
The carrying value of property, plant and equipment held under finance leases at 31 December 2020 was £nil (2019: £nil).
59
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
IMPAIRMENT
A
Property, plant and equipment are reviewed for impairment based on each cash generating unit (“CGU”). The
CGUs are individual hotels. The carrying value of individual hotels was compared to the recoverable amount of
the hotels, which was derived with the reference to fair value through creation of discount cash flow models. Under
this methodology, the fair value measurement reflects current market expectations about the third-party efficient
operator’s is future cash flows, discounted to their present value. The underlying basis for the impairment model
involves each hotel’s projected cash flow for the financial year ending 31 December 2021, extrapolated to
incorporate individual assumptions in respect of revenue growth (principally factoring in room rate and occupancy
growth) and major expense lines. The future cash flows are based on assumptions about competitive growth rates
for hotels in that area, as well as internal business plans. These plans and forecasts include management’s most
recent view of trading prospects for the hotel in the relevant market. Where appropriate, the Directors sought
guidance on value from a registered independent appraiser with an appropriately recognised professional
qualification and recent experience in the location and category of the hotel being valued.
On the basis of external valuations in 2020, the Group recorded a net impairment charge of £53m consisting of
£29m in New York, £17m in Rest of US, £2m in London, £12m in Rest of Europe, £1m in Australasia, £13m in
Singapore and £14m in the rest of Asia. This was offset by reversals of £3m in US, £7m in UK and £25m in Asia.
For 2019, a total impairment charge of £34m was recognised in relation to £17m in New York, £3m in Rest of
Europe and £14m in Rest of Asia.
Circumstances and events that led to impairment are largely due to the performance of the hotels as a result of
COVID-19. The fair values assumed through the impairment assessment are considered to fall within level 3 of
the fair value hierarchy. Refer to Note 20(D) for more detail.
B
The key assumptions used were as follows:
KEY ASSUMPTIONS USED BY THE EXTERNAL APPRAISERS
Pre-tax discount rate – The discount rate is based on the country in which the hotel is located and is adjusted for
risks associated with the hotel. Discount rates ranged from 7.50% to 12.75% in the US, 7.00% to 11.30% in
Europe, 6.10% to 7.50% in Asia and 7.25% to 12.25% in New Zealand.
Revenue per available room (RevPAR) – The average long term growth assumed was 3.02% in the US, 1.67%
in Europe, 2.06% in Asia and 34.57% in New Zealand
Terminal rate – These rates ranged from 5.50% to 11.00% in the US, 4.00% to 6.50% in Europe, 4.10% to 5.50%
in Asia and 6.25% to 11.25% in New Zealand.
The forecasts cover a five to ten year period, and cash flows beyond this period are extrapolated using a growth
rate ranging between 1.10% and 5.00%, which is based upon the expected trading growth for each hotel and
inflation in the country.
SENSITIVITIES
C
The Group’s impairment review is sensitive to changes in key assumptions used, most notably the discount and
terminal rates. Based on the Group’s sensitivity analysis performed on the properties in New York (which represent
over 50% of the total impairment recognised), assuming that all other variables were to remain constant, the
increase/(decrease) in the Group’s total impairment recognised would be as follows:
Terminal rate decreased by 0.25%
Terminal rate increased by 0.25%
Discount rate decreased by 0.25%
Discount rate increased by 0.25%
£M
(6)
6
(4)
4
60
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
LAND AND BUILDINGS
D
Interest of £0m (2019: £2m) was capitalised within land and buildings during the year. The cumulative capitalised
interest within land and buildings is £7m (2019: £7m).
PLEDGED ASSETS
E
At year-end, the net book value of assets pledged as collateral for secured loans was £707m (2019: £529m). The
security for the loans is by way of charges on the properties of the Group companies concerned.
12. INVESTMENT PROPERTIES
Completed investment properties comprise Tanglin Shopping Centre, Biltmore Court & Tower, CDLHT properties
and Millennium Mitsui Garden Hotel Tokyo. Investment properties under construction represents the site at
Sunnyvale.
Movements in the year analysed as:
Balance at 1 January 2019
Adoption of IFRS 16 on 1 January 2019
Additions
Foreign exchange adjustment
Balance at 31 December 2019
Balance at 1 January 2020
Disposals
Net revaluation deficit
Additions
Foreign exchange adjustment
Balance at 31 December 2020
COMPLETED
INVESTMENT
PROPERTIES
£M
INVESTMENT
PROPERTIES
UNDER
CONSTRUCTION
£M
RIGHT-
OF-USE
ASSETS
£M
650
–
5
(15)
640
640
(39)
(21)
2
7
589
18
–
16
(1)
33
33
–
–
39
(4)
68
–
7
–
–
7
7
–
–
–
–
7
TOTAL
£M
668
7
21
(16)
680
680
(39)
(21)
41
3
664
In general, the carrying amount of investment property other than those under construction is the fair value of the
property as determined by a registered independent appraiser having an appropriate recognised professional
qualification and recent experience in the location and category of the property being valued. Fair values were
determined having regard to recent market transactions for similar properties in the same location as the Group’s
investment property.
Consistent with the prior year, only the land site at Sunnyvale, California, is classified as investment properties
under construction as the project of building a hotel and an apartment complex is still in progress. This asset is
carried at cost on the balance sheet.
61
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
The Group’s investment properties were subject to external professional valuation on an open market existing
use basis by the following accredited independent valuers:
PROPERTIES
Tanglin Shopping Centre, Singapore
Biltmore Court & Tower, Los Angeles
Millennium Mitsui Garden Hotel Tokyo
CDLHT – Singapore
CDLHT – Australia
CDLHT – Maldives
CDLHT – Germany
CDLHT – Italy
VALUERS
Knight Frank Pte Ltd
JLL Valuation & Advisory Services, LLC
JLL Morii Valuation & Advisory K.K.
Knight Frank Pte Ltd
CIVAS (NSW) Pty Limited (trading as Colliers International)
Jones Lang LaSalle Property Consultants Pte Ltd
Cushman & Wakefield (U.K.) LLP – German Branch
Cushman & Wakefield (U.K.) LLP – Italian Branch
Based on these valuations together with such considerations as the Directors consider appropriate, Millennium
Mitsui Garden Hotel Tokyo, Biltmore Court & Tower and Tanglin Shopping Centre recorded a revaluation deficit
of £4m (2019: revaluation gain £6m), a revaluation gain of £1m (2019: revaluation deficit £3m) and a revaluation
gain of £8m (2019: revaluation gain £1m) respectively. In addition, the REIT properties recorded a net revaluation
deficit of £26m (2019: net revaluation deficit of £4m). All the other investment properties recorded no change and
no impairment was identified.
FAIR VALUE HIERARCHY
The fair value measurement for investment properties not under construction of £589m (2019: £640m) has been
categorised as a Level 3 fair value based on inputs to the valuation technique used.
62
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
VALUATION TECHNIQUE AND SIGNIFICANT UNOBSERVABLE INPUTS
The following table shows the valuation technique used in measuring the fair value of investment property, as
well as significant unobservable inputs used.
VALUATION TECHNIQUE
SIGNIFICANT UNOBSERVABLE INPUTS
INTER-RELATIONSHIP BETWEEN KEY
UNOBSERVABLE INPUTS AND FAIR VALUE
MEASUREMENT
The technique applied in the valuation of the
Tanglin Shopping Centre is based on market
comparison of sales of similar properties in
the vicinity. Further adjustments are made to
this value to account for differences in
location, size, tenure, view, accessibility,
condition and other factors.
Biltmore Court & Tower and Millennium Mitsui
Garden Hotel Tokyo were valued using a
discounted cash flow technique based on
expected rental income and discount rate
appropriate for the property.
Investment properties held by the REIT were
valued using the discounted cash flow,
capitalisation or comparison techniques.
Tanglin Shopping Centre
Open market values for other properties.
The estimated fair value would increase/
(decrease) if:
Biltmore Court & Tower
Discount rate of between 8.5% to 12.0% and
capitalisation rate of 7.0%.
Expected market rental growth were
higher/(lower); and
Risk adjusted discount rate was lower/ (higher),
capitalisation rate was higher/ (lower) and
terminal yield was lower/ (higher).
Millennium Mitsui Garden Hotel Tokyo
Discount rate of 3.7% and capitalisation rate of
4.1%.
CDLHT investment properties Discount rate
of between 5.00% and 12.00%, capitalisation
rate of 4.25% to 5.25% and terminal yield of
4.50% to 9.00%.
Further details in respect of investment property rentals are given in Note 35.
13. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES
The Group has the following investments in joint ventures and associates:
FAIR VALUE
OF
OWNERSHIP
INTEREST
£M
EFFECTIVE GROUP
INTEREST
2020
2019
PRINCIPAL PLACE
OF BUSINESS
Joint ventures
New Unity Holdings Limited (“New Unity”)
Fergurson Hotel Management Limited
New York Sign LLC
Hong Kong
Hong Kong
New York
Associate
First Sponsor Group Limited (“First Sponsor”)
People’s Republic of
China
Prestons Road Limited
CDL Hotels Japan Pte. Ltd.
New Zealand
Singapore
–
–
–
237
–
–
50%
50%
50%
36%
17%
40%
50%
50%
50%
36%
17%
40%
The Group has 50% in New Unity which operates the Group’s hotel business in Hong Kong. First Sponsor is a property company
which is listed on the Singapore Exchange and has interests in China, the Netherlands, Germany and Australia. It is also involved
in the Chinese property financing business which carries additional risk of recoverability of certain assets.
63
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Share of net assets/cost
Balance at 1 January 2019
Share of profit for the year
Additions
Dividends received
Foreign exchange adjustments
Balance at 31 December 2019
Balance at 1 January 2020
Share of (loss)/profit for the year
Additions
Dividends received
Foreign exchange adjustments
Balance at 31 December 2020
JOINT
VENTURES
£M
ASSOCIATES
£M
TOTAL
£M
121
3
–
–
(3)
121
121
(9)
–
–
(6)
106
237
33
37
(5)
(9)
293
293
21
28
(9)
1
358
36
37
(5)
(12)
414
414
12
28
(9)
(5)
334
440
The following is summarised financial information for First Sponsor and New Unity based on their respective financial statements
prepared in accordance with IFRS. These are considered to be the most significant investments in joint ventures and associates.
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Total assets less total liabilities
Less: Non-controlling interest
Net assets (100%)
Group’s share
Revenue
Operating profit/(loss)
Interest income/(expense)
Income tax (expense)/credit
Profit/(Loss) for the year
Non-controlling interests
Profit for the year after non-controlling interests
Other comprehensive income
Profit and total comprehensive income (100%)
Group’s share of profit and total comprehensive income
Dividends received by the Group
FIRST SPONSOR
NEW UNITY
2020
£M
1,044
857
(434)
(497)
970
(42)
928
334
115
31
40
(14)
57
1
58
21
79
29
9
2019
£M
951
618
(367)
(377)
825
(17)
808
291
183
108
–
(16)
92
1
93
(19)
74
27
4
2020
£M
382
55
(131)
(24)
282
(71)
211
106
36
(28)
(1)
2
(27)
8
(19)
–
(19)
(10)
–
2019
£M
349
91
(84)
(34)
322
(82)
240
120
118
13
(1)
(2)
10
(5)
5
–
5
2
–
At 31 December 2020, the Group’s share of the total capital commitments of joint ventures and associates amounted to £54m
(2019: £58m). At 31 December 2020, the Group’s joint ventures and associates had no contingent liabilities (2019: £nil).
64
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
14. OTHER FINANCIAL ASSETS
Equity investments
Derivative financial assets
Deposits receivable
15. INVENTORIES
Consumables
16. DEVELOPMENT PROPERTIES
Development properties comprise:
Development land for resale
– New Zealand residential sections
Development properties
– Zenith Residences
17. TRADE AND OTHER RECEIVABLES
Trade receivables
Other receivables
Prepayments and accrued income
Trade receivables due from holding and associate companies
2020
£M
2019
£M
19
–
2
21
2020
£M
4
34
4
2
40
2019
£M
7
2020
£M
2019
£M
85
93
19
104
22
115
2020
£M
2019
£M
23
20
17
4
64
40
24
26
1
91
Trade receivables are shown net of an impairment allowance of £12m (2019: £7m) relating to the likely
insolvencies of certain customers and non-recoverability of debts.
The Group’s exposure to credit and currency risks and impairment losses related to trade and other receivables
are disclosed in Note 20.
65
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
18. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Short-term deposits
Cash pool overdrafts
Cash and cash equivalents on the statement of financial position
Overdrafts included in borrowings
Cash and cash equivalents shown in the cash flow statement
2020
£M
246
191
(87)
350
–
350
2019
£M
254
240
(85)
409
–
409
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets are disclosed in Note 20.
As at 31 December 2020, £3m (2019: £3m) of the cash balance was restricted.
19. INTEREST-BEARING LOANS, BONDS AND BORROWINGS
Included within non-current liabilities:
Bank loans
Bonds payable
Included within current liabilities:
Bank loans and overdrafts
Bonds payable
2020
£M
2019
£M
710
92
802
311
74
385
776
77
853
219
96
315
Net debt of £837m (2019: £759m) is the total of the interest-bearing loans, bonds and borrowings of £1,187m
(2019: £1,168m) less cash and cash equivalents of £350m (2019: £409m). Further details in respect of financial
liabilities are given in Note 20.
20. FINANCIAL INSTRUMENTS
OVERVIEW
The Group has exposure to the following risks from its use of financial instruments:
• credit risk;
• liquidity risk; and
• market risk.
This note presents information about the Group’s exposure to each of the above risks, and the Group’s policies
and processes for measuring and managing risk.
CREDIT RISK
(A)
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 obligations, and arises principally from the Group’s receivables from customers and
investment securities.
Exposure to credit risk is monitored on an ongoing basis, with credit checks performed on all clients requiring
credit over certain amounts. Credit is not extended beyond authorised limits, established where appropriate
through consultation with a professional credit vetting organisation. Credit granted is subject to regular review, to
66
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
ensure it remains consistent with the client’s current creditworthiness and appropriate to the anticipated volume
of business.
Investments are allowed only in liquid short-term instruments within approved limits, with investment
counterparties approved by the Board, such that the exposure to a single counterparty is minimised.
The maximum exposure to credit risk is represented by the carrying value of each financial asset on the balance
sheet, these being spread across the various currencies and jurisdictions in which the Group operates.
The maximum exposure to credit risk at the reporting date was:
Cash at bank and in hand (see Note 18)
Short-term deposits (see Note 18)
Cash pool overdrafts (see Note 18)
Trade receivables (see Note 17)
Other current receivables (see Note 17)
Equity investments (see Note 14)
Deposits receivable (see Note 14)
Trade receivables due from holding and associate companies (see Note 17)
CARRYING VALUE
2020
£M
246
191
(87)
23
20
19
2
4
2019
£M
254
240
(85)
40
24
34
2
1
418
510
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
New York
Regional US
Rest of Europe
Singapore
Rest of Asia
Australasia
CARRYING VALUE
2020
£M
2019
£M
–
3
3
6
6
5
7
5
5
8
9
6
23
40
67
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
The ageing of trade receivables at the reporting date was:
Not past due
Past due 0 – 30 days
Past due 31 – 60 days
Past due 61 – 90 days
More than 90 days
GROSS RECEIVABLE
2020
£M
15
4
2
1
13
35
2019
£M
24
9
3
2
9
47
IMPAIRMENT
ALLOWANCE
2020
£M
2019
£M
–
–
–
–
(12)
(12)
–
–
–
–
(7)
(7)
CARRYING VALUE
2020
£M
15
4
2
1
1
2019
£M
24
9
3
2
2
23
40
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
Balance at 1 January
Impairment losses recognised
Bad debts written off
Balance at 31 December
2020
£M
2019
£M
7
5
–
12
4
4
(1)
7
68
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
CONTRACTUAL MATURITIES OF FINANCIAL ASSETS
2020
TOTAL
£M
6 MONTHS
OR LESS
£M
6 MONTHS
- 1 YEAR
£M
1 - 5
YEARS
£M
MORE
THAN
5 YEARS
£M
Financial Assets
Fixed Rate
US dollar
Korean Won
Singapore dollar
New Taiwan dollar
Australian dollar
New Zealand dollar
Malaysian Ringgit
Euro
Chinese Renminbi
Non-Interest Bearing
Sterling
US dollar
Korean won
Singapore dollar
Australian dollar
New Zealand dollar
Malaysian Ringgit
Euro
Chinese Renminbi
Japanese Yen
Others
Interest Bearing Cash Pool deposits
Singapore dollar
Non-Interest Bearing Cash Pool deposits
Sterling
Total cash and other financial assets
Interest Bearing Cash Pool Overdrafts
US dollar
Euro
Hong Kong dollar
Non-Interest Bearing Cash Pool Overdrafts
Sterling
Total overdrafts (Note 18)
Represented by:
Cash and cash equivalents (Note 18)
Financial assets (Note 14)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
20
–
–
–
–
2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
22
–
–
–
–
–
22
3
17
35
24
18
86
10
–
5
2
33
3
36
33
9
2
10
1
11
3
90
6
437
(31)
(41)
(14)
(1)
(87)
350
3
17
55
24
18
86
10
2
5
2
33
3
36
33
9
2
10
1
11
3
90
6
459
(31)
(41)
(14)
(1)
(87)
372
350
22
372
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
69
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
CONTRACTUAL MATURITIES OF FINANCIAL ASSETS
2019
TOTAL
£M
6 MONTHS
OR LESS
£M
6 MONTHS
- 1 YEAR
£M
1 - 5
YEARS
£M
MORE
THAN
5 YEARS
£M
Financial Assets
Fixed Rate
US dollar
Korean Won
Singapore dollar
New Taiwan dollar
Australian dollar
New Zealand dollar
Malaysian Ringgit
Euro
Chinese Renminbi
Others
Non-Interest Bearing
Sterling
US dollar
Singapore dollar
Australian dollar
New Zealand dollar
Malaysian Ringgit
Euro
Japanese Yen
Others
Interest Bearing Cash Pool deposits
Singapore dollar
Non-Interest Bearing Cash Pool deposits
Sterling
Total cash and other financial assets
Interest Bearing Cash Pool Overdrafts
Sterling
Hong Kong dollar
Non-Interest Bearing Cash Pool Overdrafts
Sterling
Euro
Total overdrafts (Note 18)
Represented by:
Cash and cash equivalents (Note 18)
Financial assets (Note 14)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
34
–
–
–
–
2
–
–
–
–
–
–
–
–
–
–
–
–
–
36
–
–
–
–
–
36
5
8
26
31
41
77
22
–
7
1
50
48
75
6
4
1
17
18
7
49
1
494
(24)
(17)
(38)
(6)
(85)
409
5
8
60
35
41
77
22
2
7
1
50
48
75
6
4
1
17
18
7
49
1
534
(24)
(17)
(38)
(6)
(85)
449
409
40
449
–
–
–
4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4
–
–
–
–
–
4
70
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
LIQUIDITY RISK
(B)
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 estimated interest payments using the
interest rates prevailing as at the reporting date.
31 DECEMBER 2020
Floating rate financial
liabilities
Secured loans
Unsecured loans
Secured bonds
Unsecured bonds
Fixed rate financial
liabilities
Unsecured loans
Secured loans
Secured bonds
Trade and other payables
Trade payables
Other creditors
Non-current liabilities
Other non-current liabilities
CONTRACTUAL MATURITIES OF 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
41
605
19
74
315
60
73
19
48
24
44
611
19
76
336
63
76
19
48
24
1
53
–
2
3
–
–
19
48
–
1
262
–
74
4
–
–
–
–
–
42
167
–
–
117
21
–
–
–
2
1,278
1,316
126
341
349
–
129
19
–
212
42
76
–
–
10
488
–
–
–
–
–
–
–
–
–
12
12
71
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
31 DECEMBER 2019
Floating rate financial
liabilities
Secured loans
Unsecured loans
Secured bonds
Fixed rate financial
liabilities
Unsecured loans
Secured loans
Secured bonds
Unsecured bonds
Trade and other payables
Trade payables
Other creditors
Non-current liabilities
Other non-current liabilities
CONTRACTUAL MATURITIES OF 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
44
602
20
47
636
20
311
340
38
76
77
32
55
17
41
76
81
32
55
17
1
58
20
4
–
54
1
32
55
–
5
109
–
1
259
–
66
–
22
1
–
–
–
7
1
–
79
–
–
2
40
210
–
263
2
–
–
–
–
3
1,272
1,345
225
203
349
518
–
–
–
–
38
–
–
–
–
12
50
Undrawn committed borrowing facilities
At 31 December 2020, the Group had £283m (2019: £595m) of undrawn and committed facilities available,
comprising committed revolving credit facilities which provide the Group with financial flexibility. Maturities of these
facilities are set out in the following table.
The conditions precedent to the availability of these facilities are all satisfied at the balance sheet date.
Expiring in one year or less
Expiring after more than one year but not more than two years
Expiring after more than two years but not more than five years
Expiring after more than five years
Total undrawn committed borrowing facilities
Total undrawn uncommitted borrowing facilities
Total undrawn borrowing facilities
2020
£M
39
169
75
–
283
137
420
2019
£M
423
95
77
–
595
112
707
SECURITY
Included within the Group’s total bank loans and overdrafts of £1,021m (2019: £996m) are £101m (2019: £82m)
of secured loans and overdrafts. Total bonds and notes payable of £166m (2019: £173m) consist of £74m
unsecured.
Loans, bonds and notes are secured on land and buildings with a carrying value of £707m (2019: £529m) and an
assignment of insurance proceeds in respect of insurances over the mortgaged properties.
72
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Of the Group’s total facilities of £1,612m, £561m matures within 12 months comprising £74m unsecured bonds
and notes, £224m committed revolving credit facilities, £150m uncommitted facilities and overdrafts subject to
annual renewal, £113m unsecured term loans and no secured term loans. Plans for refinancing the facilities are
underway.
MARKET RISK
(C)
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 primary objectives of the treasury function are to provide secure and competitively priced funding for the
activities of the Group and to identify and manage financial risks, including exposure to movements in interest and
foreign exchange rates arising from those activities. If appropriate, the Group uses financial instruments and
derivatives to manage these risks, as set out below.
FOREIGN CURRENCY RISK
(I)
The Group is exposed to foreign currency risk on revenue, purchases, borrowings and cash deposits denominated
in currencies other than the functional currencies of the respective Group entities. The currencies giving rise to
this risk are primarily US dollars, Singapore dollars, New Zealand dollars, New Taiwan dollars, Korean won,
Chinese renminbi, Japanese yen and Euro.
The Group’s principal policy, wherever possible, is to maintain a natural hedge whereby liabilities are matched
with assets denominated in the same currency. Foreign currency investment exposure is also minimised by
borrowing in the currency of the investment.
To mitigate foreign currency translation exposure, an appropriate proportion of net assets are designated as
hedged against corresponding financial liabilities in the same currency.
NET INVESTMENT HEDGING
The Group has US$259m (2019: US$302m) US dollar loans and €45m (2019: €7m) Euro loans designated as
hedges of corresponding respective proportions of its net investment in foreign operations whose functional
currencies are US dollars and Euros. The risk being hedged is the foreign currency exposure on the carrying
amount of the net assets of the foreign operation upon consolidation. The fair value of the hedging instruments
as at 31 December 2020 was £231m (2019: £292m).
An analysis of borrowings by currency and their fair values as at 31 December is given below:
Sterling
Singapore dollar
US dollar
New Zealand dollar
Chinese renminbi
Japanese yen
Korean Won
Euro
31 DECEMBER 2020
31 DECEMBER 2019
BOOK
VALUE
£M
FAIR
VALUE
£M
BOOK
VALUE
£M
FAIR VALUE
£M
245
205
518
20
7
116
34
42
245
205
518
20
7
116
34
42
166
237
549
34
10
119
13
40
166
237
549
34
10
119
13
40
1,187
1,187
1,168
1,168
Exchange differences arising on foreign currency loans during each accounting period are recognised as a
component of equity, to the extent that the hedge is effective. The foreign exchange exposure arising on the
Group’s net investment in its subsidiaries is expected to be highly effective in offsetting the exposure arising on
the Group’s foreign currency borrowings. However during the year an immaterial amount (2019: immaterial) was
73
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
recognised in the consolidated income statement that arose from hedges of net investments in foreign operations
that were considered to be ineffective.
Foreign currency transaction exposure is primarily managed through funding of purchases from operating income
streams arising in the same currency.
Hedging of transaction exposure is undertaken with approved counterparties and within designated limits, using
spot or short-term forward contracts to buy or sell the currency concerned, once the timing and the underlying
amount of exposure have been determined. Foreign exchange derivatives may also be used to hedge specific
transaction exposure where appropriate.
The following significant exchange rates applied during the year:
US dollar
Singapore dollar
New Taiwan dollar
New Zealand dollar
Malaysian ringgit
Korean won
Chinese renminbi
Euro
Japanese yen
AVERAGE RATE
CLOSING RATE
2020
1.282
1.769
2019
1.276
1.743
2020
1.357
1.801
2019
1.299
1.759
37.801
39.432
38.139
39.070
1.973
5.390
1.932
5.296
1.901
5.495
1.953
5.367
1,510.76
1,482.06
1,486.22
1,507.54
8.863
1.126
8.820
1.141
8.865
1.109
9.092
1.171
137.140
139.432
140.398
142.223
74
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
SENSITIVITY ANALYSIS
With respect to the Group’s foreign currency exposure, and assuming that all other variables, in particular interest
rates, remain constant, it is estimated that a 10% strengthening of sterling against the following currencies at 31
December 2020 (31 December 2019: 10%) would have increased/(decreased) equity and profit before tax by the
amounts shown below:
US dollar
Australian dollar
Singapore dollar
New Taiwan dollar
New Zealand dollar
Euro
Chinese renminbi
Korean won
Hong Kong dollar
Japanese yen
31 DECEMBER 2020
31 DECEMBER 2019
PROFIT
BEFORE
TAX
£M
EQUITY
£M
PROFIT
BEFORE
TAX
£M
EQUITY
£M
18
(5)
6
–
(1)
(4)
(4)
–
–
2
12
14
–
(12)
(1)
(3)
2
(1)
1
1
–
1
31
(8)
7
–
–
4
(3)
–
–
2
33
6
(1)
(4)
(1)
(5)
(2)
(2)
–
–
(1)
(10)
A 10% weakening of sterling against the above currencies at 31 December 2020 (31 December 2019: 10%) would
have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that
all other variables remain constant.
INTEREST RATE RISK AND INTEREST RATE SWAPS
(II)
The Group adopts a policy of ongoing review of its exposure to changes in interest rates on its borrowings, taking
into account market expectations with regard to the perceived level of risk associated with each currency, the
maturity profile and cash flows of the underlying debt, and the extent to which debt may potentially be either
prepaid prior to its maturity or refinanced at reduced cost.
The Group’s policy is to maintain a mixture of its financial liabilities on a fixed and floating-rate basis with a greater
emphasis on floating rates presently as this flexibility is considered to be appropriate in the context of the Group’s
overall geographical diversity, investment and business cycle and the stability of the income streams, cash
balances and loan covenants.
Interest rate derivatives are used to manage interest rate risk, to the extent that the perceived cost is considered
to outweigh the benefit from the flexibility of variable rate borrowings, and the Group actively monitors the need
and timing for such derivatives. Where used, interest rate derivatives are classified as cash flow hedges and
stated at fair value within the Group’s consolidated statement of financial position. Further details of interest rate
derivatives in place at 31 December 2020 are provided hereafter.
75
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
CASH FLOW SENSITIVITY ANALYSIS FOR VARIABLE RATE INSTRUMENTS
Assuming that all other variables, in particular foreign currency rates, remain constant, a change of one
percentage point in the average interest rates applicable to variable rate instruments for the year would have
increased/(decreased) the Group’s profit before tax for the year as shown below:
Variable rate financial assets
Variable rate financial liabilities
Cash flow sensitivity (net)
31 DECEMBER 2020
31 DECEMBER 2019
1%
INCREASE
£M
1%
DECREASE
£M
1%
INCREASE
£M
1%
DECREASE
£M
2
(13)
(11)
(2)
13
11
2
(13)
(11)
(2)
13
11
FAIR VALUE
(D)
Set out below is a comparison of the fair and book values of all the Group’s financial instruments by category. Fair
values are determined by reference to market values, where available, or calculated by discounting cash flows at
prevailing interest rates.
Financial assets
Cash and cash equivalents
Cash at bank and in hand
Short-term deposits
Cash pool overdrafts
Loans and receivables
Trade receivables
Trade receivables due from holding and associate companies
Other receivables
Other financial assets
Equity investments
Deposits receivable
Financial liabilities
Overdrafts and borrowings
Trade payables
Other creditors
Other non-current liabilities
2020
BOOK
VALUE
£M
2020
FAIR
VALUE
£M
2019
BOOK
VALUE
£M
2019
FAIR
VALUE
£M
246
191
(87)
23
4
20
19
2
246
191
(87)
23
4
20
19
2
254
240
(85)
40
1
24
34
2
254
240
(85)
40
1
24
34
2
418
418
510
510
(1,187)
(1,187)
(1,168)
(1,168)
(19)
(48)
(24)
(19)
(48)
(24)
(32)
(55)
(17)
(32)
(55)
(17)
(1,278)
(1,278)
(1,272)
(1,272)
76
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
ESTIMATION OF FAIR VALUES
The following summarises the major methods and assumptions used in estimating the fair values of financial
instruments reflected in the table.
DERIVATIVES
Forward exchange contracts are either marked to market using listed market prices or by discounting the
contractual forward price and deducting the current spot rate. For interest rate swaps, bank valuations are used.
INTEREST-BEARING LOANS AND BORROWINGS
Fair value is calculated based on discounted expected future principal and interest cash flows.
FINANCE LEASE LIABILITIES
The fair value is estimated as the present value of future cash flows, discounted at market interest rates for similar
lease agreements. The estimated fair values reflect changes in interest rates.
TRADE AND OTHER RECEIVABLES/PAYABLES
For receivables/payables with a remaining life of less than one year, the notional amount is deemed to reflect the
fair value. All other receivables/payables are discounted to determine the fair value.
INTEREST RATES USED FOR DETERMINING FAIR VALUE
Prevailing market interest rates are used to discount cash flows to determine the fair value of financial assets and
liabilities.
FAIR VALUE HIERARCHY
As at 31 December 2020, the Group held certain financial instruments measured at fair value.
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by
valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are
observable, either directly or indirectly
Level 3: techniques that use inputs which have a significant effect on the recorded fair value that are not based
on observable market data
The table below provides a hierarchy analysis of financial instruments carried at fair value:
2020
2019
LEVEL 1
£M
LEVEL 2
£M
LEVEL 3
£M
TOTAL
£M
LEVEL 1
£M
LEVEL 2
£M
LEVEL 3
£M
TOTAL
£M
Equity investment at FVOCI
Equity investment at FVTPL
Currency derivative assets
Assets
Cross-currency interest rate
swaps
Interest rate swap
Liabilities
–
–
–
–
–
–
–
–
19
–
19
6
2
8
–
–
–
–
–
–
–
–
19
–
19
6
2
8
–
–
–
–
–
–
–
30
4
4
38
–
–
–
–
–
–
–
–
–
–
30
4
4
38
–
–
–
During the year ended 31 December 2020 there were no transfers between Level 1 and Level 2 fair value
measurements, and no transfers into and out of Level 3 fair value measures.
77
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
CAPITAL MANAGEMENT
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. The Company’s objective for managing its capital is to ensure
that Group entities will be able to continue as a going concern while maximising the return to shareholders, as
well as sustaining the future development of its business. In order to maintain or adjust the capital structure, the
Group may alter the total amount of dividends paid to shareholders, return capital to shareholders, issue new
shares, draw down additional debt or reduce debt.
The Group’s capital structure consists of debt, which includes the loans and borrowings disclosed in Note 19,
cash and cash equivalents disclosed in Note 18 and the equity attributable to the parent, comprising share capital,
reserves and retained earnings, as disclosed in the consolidated statement of changes in equity. The Group seeks
to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the
advantages and security afforded by a sound capital position.
One of the Group’s subsidiaries, CDLHT which is a stapled group comprising CDL Hospitality Real Estate
Investment Trust (“H-REIT”) and CDL Hospitality Business Trust (“HBT”), a business trust, is required to maintain
certain minimum base capital and financial resources.
H-REIT is subject to the aggregate leverage limit as defined in the Property Fund Appendix of the Code on
Collective Investment Schemes (“CIS Code”) issued by Monetary Authority of Singapore. The CIS Code stipulates
that the total borrowings and deferred payments (together the “Aggregate Leverage”) of a property fund should
not exceed 50.0% under a single-tier leverage limit.
For this financial year, H-REIT has a credit rating of BB+ (2019: BBB-) from Fitch Ratings. The Aggregate
Leverage of H-REIT as at 31 December 2020 was 36.2% (2019: 34.3%) of H-REIT’s Deposited Property. This
complied with the aggregate leverage limit as described above.
HBT, H-REIT and CDLHT have complied with the borrowing limit requirements imposed by the relevant Trust
Deeds and all externally imposed capital requirements for the financial years ended 31 December 2020 and 2019.
Except for the above, neither the Company nor any of its subsidiaries are subject to externally imposed capital
requirements.
21. EMPLOYEE BENEFITS
PENSION ARRANGEMENTS
The Group operates various funded pension schemes which are established in accordance with local conditions
and practices within the countries concerned. The most significant funds are described below.
UNITED KINGDOM
The pension arrangements in the United Kingdom operate under the ’Millennium & Copthorne Pension Plan’,
which was set up in 1993. The plan operates a funded defined benefit arrangement together with a defined
contribution plan, both with different categories of membership. The defined benefit section of the plan was closed
to new entrants in 2001 and at the same time rights to a Guaranteed Minimum Pension (”GMPs“) under the
defined contribution scheme also ceased. The plan entitles a retired employee to receive an annual pension
payment.
The contributions required are determined by a qualified actuary on the basis of triennial valuations using the
projected unit credit method. The last full actuarial valuation of this scheme was carried out by a qualified
independent actuary as at 5 April 2017 and this has been updated on an approximate basis to 31 December 2020.
The contributions of the Group during the year were about 11% (2019: 11%) of pensionable salary.
As the defined benefit section is closed to new entrants, the current service cost, as a percentage of pensionable
payroll is likely to increase as the membership ages, although it will be applied to a decreasing pensionable payroll.
The assumptions which have the most significant effect on the results of the valuation are those relating to the
discount rate and the rates of increase in salaries and pensions.
SOUTH KOREA
The Group operates a defined benefit pension plan for its employees in South Korea. The contributions required
are determined by an external qualified actuary using the projected unit credit method. The most recent
78
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
valuation was carried out on 31 December 2020. The assumptions which have the most significant effect on the
results of the valuations are those relating to the discount rate and rate of increase in salaries.
TAIWAN
The Group operates a defined benefit pension plan for its employees in Taiwan. The contributions required are
determined by an external qualified actuary using the projected unit credit method. The most recent valuation was
carried out on 31 December 2020. The contributions of the Group were no less than 6% (2019: 6%) of the
employees’ earnings. The assumptions which have the most significant effect on the results of the valuations are
those relating to the discount rate and rate of increase in salaries.
The defined benefit plans are administered by pension funds that are legally separated from the Group. The
boards of the pension funds are required by law to act in the best interests of the plan participants.
These defined benefit plans expose the Group to actuarial risks, such as longevity risk, currency risk, interest rate
risk and market investment risk.
The above plans are substantially funded by the Group’s subsidiaries. The funding requirements are based on
the pension funds’ actuarial measurement framework set out in the funding policies of the plans.
The assets of each scheme have been taken at market value and the liabilities have been calculated using the
following principal assumptions:
Inflation rate
Discount rate
Rate of salary increase
Rate of pension increases
Rate of revaluation
2020
UK
3.0%
1.3%
3.5%
2.9%
2.45%
2020
SOUTH
KOREA
2.0%
2.0%
0.0%
–
–
2020
TAIWAN
–
0.5%
3.0%
–
–
2019
UK
3.0%
1.9%
3.5%
2.9%
2.2%
2019
SOUTH
KOREA
2.0%
2.0%
3.0%
–
–
2019
TAIWAN
–
0.75%
3.0%
–
–
The methodology for computing the discount rate is the yield range method.
The assumptions used by the actuaries are the best estimates chosen from a range of possible actuarial
assumptions, which due to the timescale covered, may not necessarily be borne out in practice. The present
values of the schemes’ liabilities are derived from cash flow projections over long periods and are inherently
uncertain.
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other
assumptions consistent, would have altered the defined benefit obligation by the amounts shown below:
Discount rate (1% movement)
Rate of salary increase (1% movement)
DEFINED BENEFIT OBLIGATION
2020
INCREASE
£M
2020
DECREASE
£M
2019
INCREASE
£M
2019
DECREASE
£M
(13)
1
16
(1)
(13)
1
13
(1)
Although the analysis does not take account of the full distribution of cash flows expected under the plans, it does
provide an approximation of the sensitivity of the assumptions shown.
79
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts recognised on the balance sheet are as follows:
2020
UK
£M
2020
SOUTH
KOREA
£M
2020
TAIWAN
£M
2020
OTHER
£M
2020
TOTAL
£M
2019
UK
£M
2019
SOUTH
KOREA
£M
2019
TAIWAN
£M
2019
OTHER
£M
2019
TOTAL
£M
Present value of funded
obligations
79
Fair value of plan assets
(67)
Plan deficit
12
4
(4)
–
6
(4)
2
2
–
2
91
74
(75)
(64)
16
10
4
(4)
–
9
(6)
3
2
–
2
89
(74)
15
Changes in the present value of defined benefit obligations are as follows:
2020
UK
£M
2020
SOUTH
KOREA
£M
2020
TAIWAN
£M
2020
OTHER
£M
2020
TOTAL
£M
2019
UK
£M
2019
SOUTH
KOREA
£M
2019
TAIWAN
£M
2019
OTHER
£M
2019
TOTAL
£M
Balance at 1 January
Current service cost
Interest cost
Benefits paid, death in
service insurance
premiums and expenses
Remeasurement losses/
(gains) arising from:
– Financial assumptions
– Experience adjustment
– Demographic
assumptions
Balance at 31 December
74
–
1
(2)
8
(2)
–
79
4
–
–
–
–
–
–
4
9
–
–
2
–
–
89
66
–
1
–
2
4
1
–
10
–
–
2
–
–
82
1
2
(2)
–
(4)
(2)
(1)
(1)
–
(4)
–
(1)
–
6
–
–
–
2
8
(3)
–
91
10
–
(2)
74
–
–
–
4
–
–
–
9
–
–
–
2
10
–
(2)
89
Changes in the fair value of plan assets are as follows:
2020
UK
£M
2020
SOUTH
KOREA
£M
2020
TAIWAN
£M
2020
TOTAL
£M
2019
UK
£M
2019
SOUTH
KOREA
£M
2019
TAIWAN
£M
2019
TOTAL
£M
Balance at 1 January
Interest income
Group contributions
Benefits paid
Remeasurement gains arising from:
– Return/(loss) on plan assets excluding
interest income
Balance at 31 December
Actual return/(loss) on plan assets
64
1
–
(2)
4
67
5
4
–
–
–
–
4
–
6
–
–
74
1
–
58
2
–
4
–
–
6
–
1
(2)
(4)
(2)
(1)
(1)
–
4
–
4
75
5
6
64
8
1
4
1
–
6
–
68
2
1
(4)
7
74
9
80
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
The fair values of plan assets in each category are as follows:
Quoted equities
Bonds
Property
Cash and cash equivalents
2020
UK
£M
2020
SOUTH
KOREA
£M
2020
TAIWAN
£M
2020
TOTAL
£M
2019
UK
£M
2019
SOUTH
KOREA
£M
2019
TAIWAN
£M
2019
TOTAL
£M
15
5
–
47
67
–
4
–
–
4
–
–
–
4
4
15
9
–
51
75
24
5
1
34
64
–
4
–
–
4
–
–
–
6
6
24
9
1
40
74
The Group values plan assets in accordance with IAS 19 as follows:
• Quoted equities listed on recognised stock exchanges are valued at closing bid prices;
• Bonds are measured using pricing models making assumptions for credit risk, market risk and market yield
curves; and
• Properties are valued on the basis of the open market value.
The expense recognised in the income statement is as follows:
2020
UK
£M
2020
SOUTH
KOREA
£M
2020
TAIWAN
£M
2020
OTHER
£M
2020
TOTAL
£M
2019
UK
£M
2019
SOUTH
KOREA
£M
2019
TAIWAN
£M
2019
OTHER
£M
2019
TOTAL
£M
Current service cost
Interest cost
Interest income
–
1
(1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1
–
2
(1)
(2)
–
–
1
–
–
1
–
–
–
–
–
–
–
–
1
2
(2)
1
Total cost is recognised within the following items in the income statement:
Administrative expenses
2020
£M
–
2019
£M
1
81
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
The gains or losses recognised in the consolidated statement of comprehensive income are as follows:
2020
UK
£M
2020
SOUTH
KOREA
£M
2020
TAIWAN
£M
2019
OTHER
£M
2020
TOTAL
£M
2019
UK
£M
2019
SOUTH
KOREA
£M
2019
TAIWAN
£M
2019
OTHER
£M
2019
TOTAL
£M
Actual return less expected
return on plan assets
4
Remeasurement (losses)/
gains arising from
– Financial assumptions
(8)
– Experience adjustment
– Demographic
assumptions
Defined benefit plan
remeasurement
gains/(losses)
2
–
(2)
–
–
–
–
–
–
–
1
–
1
–
–
–
–
4
6
(8)
(10)
3
–
–
2
–
(1)
(2)
1
–
–
–
1
–
–
–
–
–
–
–
–
–
7
(10)
–
2
–
(1)
Actuarial losses recognised directly in equity are as follows:
Cumulative as at 1 January
Remeasurement gains recognised during the year
Cumulative as at 31 December
2020
£M
20
1
21
2019
£M
19
1
20
The life expectancies underlying the value of the accrued liabilities for the UK Plan, based on retirement age of
65, are as follows:
Males
Females
2020
YEARS
2019
YEARS
22
24
22
24
The weighted-average duration of the defined benefit obligations as at 31 December 2020 was 17 years (2019:
18). The Group expects about £1m in contributions to be paid to the defined benefit plans in 2021.
The Group monitors the deficit of the fund and believes any risk associated with the deficit is mitigated by the
Group’s strong balance sheet position.
SHARE-BASED PAYMENTS
The Group used to operate a number of share option schemes, a majority being designed to link remuneration to
the future performance of the Group. In accordance with the Group’s accounting policy 2.2N(iv) on share-based
payment transactions, the fair value of share options and long-term incentive awards is recognised as an
employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread
over the period during which the employees become unconditionally entitled to the share options and long-term
incentive awards. The charge to the income statement for the year was £nil (2019: £nil).
The Group has applied IFRS 2 to its active employee share-based payment arrangements from 1 January 2005
except for arrangements granted before 7 November 2002.
There were no options granted during 2020 in line with the Final Offer made by CDL in 2019 and any outstanding
options are to close out per the final vesting dates.
82
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
(I)
MILLENNIUM & COPTHORNE HOTELS LIMITED 2006 LONG-TERM INCENTIVE PLAN (“LTIP”)
There were no options outstanding at the end of the current or previous year in line with the Final Offer executed
by CDL in 2019.
(ii)
Millennium & Copthorne Hotels Limited 2006 and 2016 Sharesave Schemes
There were no options outstanding at the end of the current or previous year in line with the Final Offer executed
by CDL in 2019.
(iii)
ANNUAL BONUS PLAN (“ABP”)
Under the ABP, deferred share awards were granted annually to selected employees of the Group. Shares in
Millennium & Copthorne Hotels plc (now a cash settlement made by Millennium & Copthorne Hotels Limited
subsequent to delisting) are transferred to participants as follows if they continue to be employed by the Group:
• 25% after years one and two; and
• 50% after three years.
DATE OF
AWARDS
13.05.2016
14.06.2017
14.12.2018
13.08.2019
AWARDS
OUTSTANDING
AS AT
1 JAN 2020
AWARDS
AWARDED
DURING THE
YEAR
AWARDS
VESTED
DURING THE
YEAR
AWARDS
FORFEITED
DURING THE
YEAR
AWARDS
EXPIRED
DURING
THE
YEAR
AWARDS
OUTSTANDING
AS AT 31 DEC
2020
CREDITED
TO
SHARE
CAPITAL
£M
CREDITED
TO
SHARE
PREMIUM
£M
VESTING DATES
196
3,337
23,901
31,814
59,248
–
–
–
–
–
–
(2,909)
(8,306)
(10,392)
–
(428)
(2,605)
(3,871)
(21,607)
(6,904)
–
–
–
–
196
–
12,990
17,551
30,737
–
–
–
–
–
–
–
13.05.2017/8/9
14.06.2018/9/20
– 14.12.2019/20/21
13.08.2020/1/2
–
–
(IV)
EXECUTIVE SHARE PLAN (“ESP”)
The ESP was approved by the Company on 18 February 2016 to replace participation in the LTIP by senior
executive management. These awards will vest over a three-year period (25% after years one and two, 50% after
three years), subject to the rules of the ESP.
DATE OF
AWARDS
15.08.2017
04.12.2018
09.08.2019
AWARDS
OUTSTANDING
AS AT
1 JAN 2020
AWARDS
AWARDED
DURING
THE YEAR
3,363
11,672
15,784
30,819
–
–
–
–
AWARDS
VESTED
DURING
THE
YEAR
(3,363)
(1,526)
(3,764)
AWARDS
FORFEITED
DURING
THE YEAR
AWARDS
EXPIRED
DURING
THE
YEAR
AWARDS
OUTSTANDING
AS AT
31 DEC 2020
CREDITED
TO SHARE
CAPITAL
£M
CREDITED
TO SHARE
PREMIUM
£M
–
(2,805)
(2,653)
–
–
–
–
–
7,341
9,367
16,708
–
–
–
–
–
–
–
–
(8,653)
(5,458)
VESTING DATES
15.08.2018/9/20
04.12.2019/20/21
09.08.2020/1/2
83
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
AWARDS/OPTIONS GRANTED
The following awards/options were granted in the comparative year:
AWARDS/OPTIONS
GRANTED
DATE OF
GRANT
DIRECTOR
NON-
DIRECTOR
SHARE
PRICE
PREVAILING
ON DATE OF
GRANT
£
EXERCISE
PRICE
£
FAIR
VALUE
£
EXPECTED
TERM
(YEARS)
EXPECTED
VOLATILITY
EXPECTED
DIVIDEND
YIELD
RISK-
FREE
INTEREST
RATES
2019 AWARDS
Executive Share
Plan
Executive Share
Plan
Executive Share
Plan
09.08.2019
09.08.2019
09.08.2019
Sharesave
Scheme (3 year) 09.04.2019
Sharesave
Scheme (5 year) 09.04.2019
Deferred Share
Awards
Deferred Share
Awards
Deferred Share
Awards
13.08.2019
13.08.2019
13.08.2019
–
–
–
–
–
–
–
–
7,538
7,538
15,075
6.80
6.80
6.80
–
–
–
6.85
1.00
6.85
2.00
6.85
3.00
–
–
–
–
–
–
–
–
–
93,436
4.44
3.75
1.11
3.31
26.0%
0.95%
0.72%
1,040
4.44
3.75
1.28
5.31
26.0%
0.95%
0.82%
8,931
8,931
17,862
6.80
6.80
6.80
–
–
–
6.85
1.00
6.85
2.00
6.85
3.00
–
–
–
–
–
–
–
–
–
MEASUREMENT OF FAIR VALUE
The Sharesave awards in 2019 were valued using the Black-Scholes valuation method.
The ESP and ABP will be cash settled for a fixed price of £6.85 in line with the Final Offer executed by CDL in
2019. The fair values of these awards are therefore equal to the offer price.
22. PROVISIONS
Balance at 1 January 2020
Foreign exchange adjustments
Balance at 31 December 2020
Analysed as:
Non-current provision
Current provision
Total provision
LEGAL
£M
BEIJING
INDEMNITY
£M
TOTAL
£M
3
–
3
–
3
3
9
–
9
9
–
9
12
–
12
9
3
12
Provision for legal fees as at 31 December 2020 of £3m (2019: £3m) relates to disputes in several hotels. The
Beijing indemnity of £9m (2019: £9m) relates to the tax indemnity to the former shareholders of Grand Millennium
Hotel Beijing in which the Group acquired an additional 40% interest in 2010. A decision in relation to the Bejing
indemnity is expected by 2022 being 15 years from date of the acquisition, the Group will continue to assess the
case until then.
84
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
23. OTHER NON-CURRENT LIABILITIES
Other liabilities
2020
£M
24
2019
£M
17
24. DEFERRED TAXATION
Movements in deferred tax liabilities and assets (prior to offsetting balances) during the year are as follows:
Charged/(credited) to income statement
AT
1 JANUARY
2020
£M
CHANGE IN
TAX RATE
£M
CURRENT YEAR
MOVEMENT
£M
EXCHANGE ON
TRANSLATION
£M
AT
31 DECEMBER
2020
£M
Deferred tax liabilities
Property assets1
Deferred tax assets
Tax losses
Others
Net deferred tax liabilities
222
222
(70)
(5)
(75)
147
–
–
–
–
–
–
1 Property assets comprise plant, property and equipment and investment properties.
(4)
(4)
(19)
–
(19)
(23)
(2)
(2)
2
–
2
–
216
216
(87)
(5)
(92)
124
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when deferred taxes relate to the same taxation authority. The amounts
determined after appropriate offsetting, are as follows:
Deferred tax assets
Deferred tax liabilities
2020
£M
6
2019
£M
5
(130)
(152)
(124)
(147)
85
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Deferred tax assets have not been recognised in respect of the following items because it is not probable that
future taxable profit will be available against which the Group can utilise the benefits.
Tax losses
Adjustments due to:
– Deductible temporary differences in respect of prior year
– Tax losses in respect of prior year
2020
£M
36
(1)
25
60
2019
£M
4
(1)
21
24
The deductible temporary differences do not expire under current tax legislation. The tax losses are subject to
agreement by the tax authorities and compliance with tax regulations in the respective countries in which certain
subsidiaries operate.
The gross tax losses with expiry dates are as follows:
Expiry dates:
– within 1 to 5 years
– after 5 years
– no expiry date
2020
£M
2019
£M
37
27
182
246
27
14
84
125
At 31 December 2020, a deferred tax liability of £4m (2019: £8m) relating to undistributed reserves of overseas
subsidiaries and joint ventures of £1,000m (2019: £1,000m) has not been recognised because the Group
determined that the distributions will not be made and the liability will not be incurred in the foreseeable future.
25. TRADE AND OTHER PAYABLES
Trade payables
Other creditors including taxation and social security:
– Social security and other taxes
– Value added tax and similar sales taxes
– Other creditors
Accruals
Deferred income
Contract liabilities
Rental and other deposits
2020
£M
19
16
6
23
81
8
16
3
2019
£M
32
13
11
29
104
5
24
2
172
220
The Group’s exposure to currency and liquidity risks related to trade and other payables are disclosed in Note 20.
86
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
26. DIVIDENDS
Final ordinary dividend paid
Interim ordinary dividend paid
Total dividends paid
2020
PENCE
2019
PENCE
2020
£M
2019
£M
–
–
–
2.15
–
2.15
–
–
–
7
–
7
All dividends paid during 2019 were in cash.
Subsequent to 31 December 2020, the Directors declared the following final dividends, which have not been
provided for:
Final ordinary dividend
2020
PENCE
2019
PENCE
–
–*
2020
£M
–
2019
£M
–*
* The Board of Directors of the Company, after initially approving in principle the payment by the Company of a final dividend in the amount of six
pence per ordinary share in respect of the 2019 financial year, subject to the results for the year being finalised and signed, subsequently approved
the cancellation of that dividend payment in order to conserve cash following the impact on the Company’s business of the global health crisis
brought about by the novel coronavirus, COVID-19 in early 2020.
27. SHARE CAPITAL
Balance at 1 January 2020
Issue of ordinary shares on exercise of share options
Balance at 31 December 2020
NUMBER OF
30P SHARES
ALLOTTED,
CALLED UP
AND FULLY
PAID
324,950,812
–
324,950,812
All of the share capital is equity share capital. Holders of these shares are entitled to dividends as declared from
time to time and are entitled to one vote per share at general meetings of the Company. All rights attached to the
Company’s shares held by the Group are suspended until those shares are reissued.
At the year end, options over 30,737 and 16,708 ordinary shares remain outstanding under the ABP and ESP
respectively. Holders of these options will receive a cash payment on the date of exercise, as such no shares will
be awarded.
28. RESERVES
CASH FLOW HEDGE RESERVE
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow
instruments related to the hedged transactions that have not yet occurred (net of tax).
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 Group’s net investment
in foreign operations (net of tax).
87
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
TREASURY SHARE RESERVE
No shares were held by the employee benefit trust at 31 December 2020 (2019: Nil).
FAIR VALUE RESERVE
The fair value reserve includes the cumulative change in the fair value of equity investments at FVOCI.
29. FINANCIAL COMMITMENTS
(a) Capital commitments at the end of the financial year which are contracted but not
provided for
2020
£M
2019
£M
62
53
The Group’s share of the capital commitments of joint ventures and associates is shown in Note 13.
(b) Total commitments under non-cancellable operating lease rentals are payable by the Group as follows (from
1 January 2019, the Group has recognised right-of-use assets for these leases, except for short term and low-
value leases - refer to Note 35 for further detail):
– less than one year
– between one and five years
– more than five years
2020
£M
2019
£M
–
–
–
–
3
–
–
3
(c) The Group leases out certain of its properties under operating leases. The future minimum lease rentals
receivable by the Group under non-cancellable leases are as follows:
– less than one year
– one to two years
– two to three years
– three to four years
– four to five years
– more than five years
2020
£M
2019
£M
26
24
14
12
11
87
34
15
9
10
37
77
174
182
Future minimum lease rentals receivable under non-cancellable leases includes all future rentals receivable up to
the period when those leases expire or become cancellable.
During the year ended 31 December 2020, £28m (2019: £53m) was recognised as rental income in the income
statement and £2m (2019: £2m) in respect of repairs and maintenance was recognised as an expense in the
income statement relating to investment properties.
88
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
30. CONTINGENCIES AND SUBSEQUENT EVENTS
In the course of its operations the Group is routinely exposed to potential liabilities for claims made by employees
and contractual or tortious claims made by third parties. No material losses are anticipated from such exposures.
There were no contingent liabilities or guarantees other than those arising in the ordinary course of business and
on these no material losses are anticipated. The Group has insurance cover up to certain limits for major risks on
property and major claims in connection with legal liabilities arising in the course of its operations. Otherwise the
Group generally carries its own risk. The Group believes that the accruals and provisions carried on the balance
sheet are sufficient to cover these risks.
Other than the above transactions, there are no events subsequent to the balance sheet date which require
adjustments to or disclosure within these consolidated financial statements.
31. RELATED PARTIES
IDENTITY OF RELATED PARTIES
Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not
disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.
All transactions with related parties were entered into in the normal course of business and at arm’s length.
The Group has a related party relationship with its joint ventures, associates and with its Directors and executive
officers.
TRANSACTIONS WITH ULTIMATE HOLDING COMPANY AND OTHER RELATED COMPANIES
The Group has a related party relationship with certain subsidiaries of Hong Leong Investment Holdings Pte. Ltd
(“Hong Leong”) which is the ultimate holding and controlling company of Millennium & Copthorne Hotels Limited
and holds 100.0% (2019: 100%) of the Company’s shares via CDL, the intermediate holding company of the
Group. During the year ended 31 December 2020, the Group had the following transactions with those
subsidiaries.
The Group deposited certain surplus cash with Hong Leong Finance Limited, a subsidiary of Hong Leong, on
normal commercial terms. As at 31 December 2020, £2m (2019: £2m) of cash was deposited with Hong Leong
Finance Limited.
Fees paid/payable by the Group to CDL and its other subsidiaries were £1m (2019: £1m) which included rentals
paid for the Grand Shanghai restaurant and King’s Centre; property management fees for Tanglin Shopping
Centre; charges for car parking, leasing commission and professional services.
TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
In addition to their salaries, the Group also provides non-cash benefits to Directors and executive officers and
contributes to a post-employment defined contribution plan depending on the date of commencement of
employment. The defined contribution plan does not have a specified pension payable on retirement and benefits
are determined by the extent to which the individual’s fund can buy an annuity in the market at retirement.
The key management personnel compensation is as follows:
Short-term employee benefits
Directors
Executives
2020
£M
2019
£M
3
–
3
3
5
1
4
5
89
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
32. RELATED UNDERTAKINGS
The full list of the Company’s related undertakings as at 31 December 2020 are set out below:
FULL NAME
SHAREHOLDING
PERCENTAGE
TYPE
COUNTRY OF
INCORPORATION
REGISTERED OFFICE
ADDRESS
PRINCIPAL
ACTIVITIES
Aircoa Equity Interests Inc.
100%
Indirect subsidiary USA
Aircoa GP Corporation
100%
Indirect subsidiary USA
Aircoa, LLC
100%
Indirect subsidiary USA
All Seasons Hotels & Resorts
Limited
Anchorage-Lakefront Limited
Partnership
76%
Indirect subsidiary New Zealand
100%
Indirect subsidiary USA
Archyield Limited
100%
Indirect subsidiary United Kingdom
ATOS Holding GmbH
100%
Direct subsidiary
Austria
Aurora Inn Operating
Partnership L.P.
100%
Indirect subsidiary USA
Avon Wynfield Inn, Ltd.
100%
Indirect subsidiary USA
Avon Wynfield LLC
100%
Indirect subsidiary USA
Beijing Fortune Hotel Co. Ltd.
70%
Indirect subsidiary
People’s Republic
of China
Biltmore Place Operations
Corp.
100%
Indirect subsidiary USA
Birkenhead Holdings Pty. Ltd.
76%
Indirect subsidiary
Australia
Birkenhead Investments Pty.
Ltd.
76%
Indirect subsidiary
Australia
Bostonian Hotel Limited
Partnership
Buffalo Operating Partnership
L.P.
100%
Indirect subsidiary USA
100%
Indirect subsidiary USA
Buffalo RHM Operating LLC
100%
Indirect subsidiary USA
CDL (New York) LLC
100%
Indirect subsidiary USA
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Holding Company
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel ownership
Holding Company
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Level 13, 280 Queen Street,
Auckland 1010,
New Zealand
Dormant
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel owner
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner and
operator
Schulhof 6/1st fl , 1010
Vienna,
Austria
Investment holding
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel ownership
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel ownership
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel owner
Building No. 5, 7
DongSanHuan
Middle Road, Chaoyang
District,
Bejing, P.R.China 100020
Hotel owner and
operator
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Liquor licence
holder
Suite 7B, Zenith Residences,
82-94 Darlinghurst Road,
Potts Point,
Sydney 2011, Australia
Suite 7B, Zenith Residences,
82-94 Darlinghurst Road,
Potts Point,
Sydney 2011, Australia
Holding company
Property Investment
&
Management
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel owner
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel ownership
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel owner
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel owner
90
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FULL NAME
SHAREHOLDING
PERCENTAGE
TYPE
COUNTRY OF
INCORPORATION
REGISTERED OFFICE
ADDRESS
PRINCIPAL
ACTIVITIES
CDL (NYL) Limited
100%
Indirect subsidiary USA
CDL Entertainment & Leisure
Pte Ltd
100%
Indirect subsidiary Republic of
Singapore
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Investment holding
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
See note below1
Provision of
management
services and
investment
holding
See note below1
CDL Hospitality Trusts1
38%
CDL Hotels (Chelsea) Limited
100%
CDL Hotels (Korea) Ltd.
100%
Associated
undertakings
Indirect subsidiary United Kingdom
Republic of
Singapore
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Indirect subsidiary Republic of Korea Jung-gu Sowolro 50, Seoul,
South Korea 04637
Hotel owner and
operator
Hotel owner and
operator
CDL Hotels (Labuan) Limited
100%
Indirect subsidiary Malaysia
CDL Hotels (Malaysia) Sdn.
Bhd.
100%
Indirect subsidiary Malaysia
CDL Hotels (U.K.) Limited
100%
Indirect subsidiary United Kingdom
CDL Hotels Holdings Japan
Limited
CDL Hotels Holdings New
Zealand Limited
100%
Indirect subsidiary Hong Kong
100%
Indirect subsidiary New Zealand
CDL Hotels Japan Pte. Ltd.
40%
Associated
undertakings
Republic of
Singapore
CDL Hotels USA, Inc.
100%
Indirect subsidiary USA
CDL Investments New Zealand
Limited
50%
Indirect subsidiary New Zealand
Tiara Labuan, Jalan Tanjung
Batu,
87000 F.T. Labuan,
Malaysia
Hotel owner and
operator
Level 8, Symphony House,
Pusat Dagangan Dana 1,
Jalan PJU 1A/46,
47301 Petaling Jaya,
Selangor Darul Ehsan
Hotel owner and
operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner and
operator
2803 Great Eagle Centre,
23 Harbour Road, Wanchai,
Hong Kong
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Investment holding
Investment holding
Investment holding
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
Hotel investment
holding
company
Investment and
property
management
company
CDL Land New Zealand Limited
50%
Indirect subsidiary New Zealand
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
CDL West 45th Street LLC
100%
Indirect subsidiary USA
Chicago Hotel Holdings, Inc.
100%
Indirect subsidiary USA
Cincinnati S.I. Co.
100%
Indirect subsidiary USA
City Century Pte. Ltd.
City Elite Pte Ltd
City Hotels Pte Ltd.
100%
100%
100%
Indirect subsidiary Republic of
Singapore
Indirect subsidiary Republic of
Singapore
Indirect subsidiary Republic of
Singapore
Property investment
and
development
Hotel owner
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel ownership
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Previously hotel
owner
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Restaurateur
Restaurateur
Hotel operator
91
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FULL NAME
SHAREHOLDING
PERCENTAGE
TYPE
COUNTRY OF
INCORPORATION
REGISTERED OFFICE
ADDRESS
PRINCIPAL
ACTIVITIES
Context Securities Limited
76%
Indirect subsidiary New Zealand
Copthorne (Nominees) Limited
100%
Indirect subsidiary United Kingdom
Copthorne Aberdeen Limited
83%
Indirect subsidiary United Kingdom
Copthorne Hotel (Birmingham)
Limited
Copthorne Hotel (Cardiff)
Limited
Copthorne Hotel (Effingham
Park) Limited
Copthorne Hotel (Gatwick)
Limited
Copthorne Hotel (Manchester)
Limited
Copthorne Hotel (Merry Hill)
Construction Limited
Copthorne Hotel (Merry Hill)
Limited
Copthorne Hotel (Newcastle)
Limited
Copthorne Hotel (Plymouth)
Limited
Copthorne Hotel (Slough)
Limited
Copthorne Hotel Holdings
Limited
100%
Indirect subsidiary United Kingdom
100%
Indirect subsidiary United Kingdom
100%
Indirect subsidiary United Kingdom
100%
Indirect subsidiary United Kingdom
100%
Indirect subsidiary United Kingdom
100%
Indirect subsidiary United Kingdom
100%
Indirect subsidiary United Kingdom
96%
Indirect subsidiary United Kingdom
100%
Indirect subsidiary United Kingdom
100%
Indirect subsidiary United Kingdom
100%
Direct subsidiary
United Kingdom
Copthorne Hotels Limited
100%
Indirect subsidiary United Kingdom
Copthorne Orchid Hotel
Singapore Pte. Ltd.
100%
Indirect subsidiary Republic of
Singapore
Copthorne Orchid Penang Sdn.
Bhd.
100%
Indirect subsidiary Malaysia
Diplomat Hotel Holding Limited
100%
Indirect subsidiary United Kingdom
Durham Operating Partnership
L.P.
Elite Hotel Management
Services Pte. Ltd.
Fergurson Hotel Management
Limited
100%
Indirect subsidiary USA
100%
50%
Indirect subsidiary Republic of
Singapore
Associated
undertakings
Hong Kong
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
Investment holding
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Investment holding
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel management
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner and
operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner and
operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner and
operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner and
operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner and
operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner and
operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner and
operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner and
operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner and
operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner and
operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Investment holding
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel investment
holding
Property owner and
developer
Hotel owner
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Level 8, Symphony House,
Pusat Dagangan Dana 1,
Jalan PJU 1A/46,
47301 Petaling Jaya,
Selangor Darul Ehsan
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Investment holding
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel ownership
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Unit 606, 6th Floor, Alliance
Building,
133 Connaught Road
Central, Hong Kong
Hotel management
consultancy
services
Investment holding
92
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FULL NAME
First 2000 Limited
100%
Indirect subsidiary Hong Kong
SHAREHOLDING
PERCENTAGE
TYPE
COUNTRY OF
INCORPORATION
REGISTERED OFFICE
ADDRESS
PRINCIPAL
ACTIVITIES
First Sponsor Group Limited
36%
Associated
undertakings
Cayman Islands
Five Star Assurance, Inc.
100%
Indirect subsidiary USA
Four Peaks Management
Company
100%
Indirect subsidiary USA
Gateway Holdings Corporation I
100%
Indirect subsidiary USA
Gateway Hotel Holdings, Inc.
100%
Indirect subsidiary USA
Gateway Regal Holdings LLC
100%
Indirect subsidiary USA
Grand Plaza Hotel Corporation
66%
Indirect subsidiary
Philippines
Harbour Land Corporation
41%
Associated
undertakings
Philippines
2803 Great Eagle Centre,
23 Harbour Road, Wanchai,
Hong Kong
190 Elgin Avenue, George
Town,
KY1-9005 Grand Cayman,
Cayman Islands
1401 Eye St., NW, Suite
600,
Washington D.C. 20005
Investment holding
Investment Holding
Captive insurance
company
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Arizona
condominium
management
Holding company
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel ownership
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel owner and
operator
Hotel owner and
operator
and investment
holding
company
Land owner
10 Floor, Heritage Hotel
Manila,
EDSA corner Roxas
Boulevard,
Pasay City, Philippines 1300
10 Floor, Heritage Hotel
Manila,
EDSA corner Roxas
Boulevard,
Pasay City, Philippines 1300
Harbour View Hotel Pte. Ltd.
100%
Harrow Entertainment Pte Ltd
100%
Indirect subsidiary Republic of
Singapore
Indirect subsidiary Republic of
Singapore
Hong Leong Ginza TMK
70%
Indirect subsidiary
Japan
Hong Leong Hotel
Development Limited
84%
Indirect subsidiary
Taiwan
Hong Leong Hotels Pte Ltd.
100%
Indirect subsidiary Cayman Islands
Hong Leong International Hotel
(Singapore) Pte. Ltd.
97%
Indirect subsidiary Republic of
Singapore
Hospitality Group Limited
76%
Indirect subsidiary New Zealand
Hospitality Holdings Pte. Ltd.
100%
Indirect subsidiary Republic of
Singapore
Hospitality Leases Limited
76%
Indirect subsidiary New Zealand
Hospitality Services Limited
76%
Indirect subsidiary New Zealand
Hospitality Ventures Pte. Ltd.
100%
Indirect subsidiary Republic of
Singapore
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
4-1 Nihonbashi 1-chome,
Chuo-ku,
Tokyo, Japan
2 Song Shou Road, Xinyi
District,
Taipei 11051, Taiwan
PO Box 309 Ugland House,
Grand Cayman, KY1-1104
Cayman Islands
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Hotel operator
Investment holding
Property owner
Hotel owner and
operator
Investment holding
company
Investment holding
Holding company
and property owner
Investment holding
company
Lessee company
Hotel operation/
management
Investment holding
93
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FULL NAME
SHAREHOLDING
PERCENTAGE
TYPE
COUNTRY OF
INCORPORATION
REGISTERED OFFICE
ADDRESS
PRINCIPAL
ACTIVITIES
Hotel Liverpool Limited
100%
Indirect subsidiary
United Kingdom
Hotel Liverpool Management Limited 100%
Indirect subsidiary
United Kingdom
Hotelcorp New Zealand Pty.
Ltd.
76%
Indirect subsidiary
Australia
KIN Holdings Limited
76%
Indirect subsidiary New Zealand
King’s Tanglin Shopping Pte.
Ltd.
100%
Indirect subsidiary Republic of
Singapore
Kingsgate Holdings Pty. Ltd.
76%
Indirect subsidiary
Australia
Kingsgate Hotel Pty. Ltd.
76%
Indirect subsidiary
Australia
Kingsgate Hotels and Resorts
Limited
76%
Indirect subsidiary New Zealand
Kingsgate Hotels Limited
76%
Indirect subsidiary New Zealand
Kingsgate International
Corporation Limited
76%
Indirect subsidiary New Zealand
Kingsgate Investments Pty. Ltd.
76%
Indirect subsidiary
Australia
Lakeside Operating Partnership
L.P.
100%
Indirect subsidiary USA
London Britannia Hotel Limited
100%
Indirect subsidiary United Kingdom
London Tara Hotel Limited
100%
Indirect subsidiary United Kingdom
M&C Asia Finance (UK) Limited
100%
Direct subsidiary
United Kingdom
M&C Asia Holdings (UK)
Limited
100%
Direct subsidiary
United Kingdom
M & C (CB) Limited
100%
Indirect subsidiary United Kingdom
M & C (CD) Limited
100%
Indirect subsidiary United Kingdom
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8
5SY
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8
5SY
Property letting
Operating company
Suite 7B, Zenith Residences,
82-94 Darlinghurst Road,
Potts Point,
Sydney 2011, Australia
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Suite 7B, Zenith Residences,
82-94 Darlinghurst Road,
Potts Point,
Sydney 2011, Australia
Suite 7B, Zenith Residences,
82-94 Darlinghurst Road,
Potts Point,
Sydney 2011, Australia
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
Suite 7B, Zenith Residences,
82-94 Darlinghurst Road,
Potts Point,
Sydney 2011, Australia
Holding company
Holding company
Property owner
Holding company
Dormant
Franchise holder
(Kingsgate)
Dormant
Investment holding
Investment
company
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel ownership
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel owner and
operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Finance company
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Investment holding
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Investment
company
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Investment holding
94
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FULL NAME
M & C Management Services
(USA) Inc.
100%
Indirect subsidiary USA
SHAREHOLDING
PERCENTAGE
TYPE
COUNTRY OF
INCORPORATION
REGISTERED OFFICE
ADDRESS
PRINCIPAL
ACTIVITIES
M & C NZ Limited
100%
Indirect subsidiary United Kingdom
M & C Reservations Services
Limited
100%
Indirect subsidiary United Kingdom
M&C Business Trust
Management Limited
100%
Indirect subsidiary Republic of
Singapore
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
M&C Colorado Hotel
Corporation
100%
Indirect subsidiary USA
M&C Crescent Corporation
100%
Indirect subsidiary USA
M&C Crescent Interests, LLC
100%
Indirect subsidiary USA
M&C Finance (1) Limited
100%
Indirect subsidiary United Kingdom
M&C Holdings (Thailand) Ltd.
100%
Indirect subsidiary
Thailand
M&C Holdings Delaware
Partnership
100%
Indirect subsidiary USA
M&C Holdings, LLC
100%
Indirect subsidiary USA
M&C Hotel Enterprises (Asia)
Limited
100%
Indirect subsidiary Hong Kong
M&C Hotel Interests, Inc.
100%
Indirect subsidiary USA
M&C Hotel Investments Pte.
Ltd.
100%
Indirect subsidiary Republic of
Singapore
M&C Hotels France
Management SARL
M&C Hotels France SAS
100%
Indirect subsidiary
France
100%
Indirect subsidiary
France
M&C Hotels Holdings Japan
Pte. Ltd.
100%
Indirect subsidiary Republic of
Singapore
M&C Hotels Holdings Limited
100%
Direct subsidiary
United Kingdom
M&C Hotels Holdings USA
Limited
100%
Direct subsidiary
Cayman Islands
M&C Hotels Japan Pte. Ltd.
100%
Indirect subsidiary Republic of
Singapore
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Management
services
company
Holding company
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Provider of
reservation
services to hotel
owners
and operators
Provision of
property fund
management
services
Holding company
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Investment holding
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Property owner
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Finance company
75 White Group Tower II,
11th Floor, Soi Rubia,
Sukhumvit 42 Road, Kwaeng
Phrakanong Khet
Klongtoey, Bangkok 10110
Thailand
Investment holding
and
hotel management
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Property investment
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Holding company
2803 Great Eagle Centre,
23 Harbour Road, Wanchai,
Hong Kong
Investment holding
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel management
services company
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Investment holding
12 Boulevard Haussmann,
75009 Paris, France
12 Boulevard Haussmann,
75009 Paris, France
Management
company
Hotel owner
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Investment holding
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Investment holding
PO Box 309 Ugland House,
Grand Cayman,
KY1-1104 Cayman Islands
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Investment holding
Investment holding
95
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FULL NAME
SHAREHOLDING
PERCENTAGE
TYPE
COUNTRY OF
INCORPORATION
REGISTERED OFFICE
ADDRESS
PRINCIPAL
ACTIVITIES
M&C Hotels Partnership France
SNC
M&C Hospitality Holdings (Asia)
Limited
M&C Hospitality International
Limited
M&C Management Holdings
Limited
100%
Indirect subsidiary
France
100%
Indirect subsidiary Hong Kong
100%
Indirect subsidiary Hong Kong
100%
Direct subsidiary
United Kingdom
12 Boulevard Haussmann,
75009 Paris, France
2803 Great Eagle Centre,
23 Harbour Road, Wanchai,
Hong Kong
2803 Great Eagle Centre,
23 Harbour Road, Wanchai,
Hong Kong
Investment holding
Investment holding
Investment holding
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Investment holding
M&C REIT Management
Limited
100%
Indirect subsidiary Republic of
Singapore
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
M&C New York (Times
Square), LLC
M&C New York Finance (UK)
Limited
M&C New York (Times Square)
EAT II LLC
M&C Singapore Finance (UK)
Limited
M&C Singapore Holdings (UK)
Limited
100%
Indirect subsidiary USA
100%
Indirect subsidiary United Kingdom
100%
Indirect subsidiary USA
100%
Direct subsidiary
United Kingdom
100%
Direct subsidiary
United Kingdom
M&C Sponsorship Limited
100%
Indirect subsidiary United Kingdom
McCormick Ranch Operating
Partnership L.P.
100%
Indirect subsidiary USA
MHM, Inc.
100%
Indirect subsidiary USA
Millennium Bostonian, Inc.
100%
Indirect subsidiary USA
Millennium & Copthorne
(Austrian Holdings) Limited
Millennium & Copthorne
(Jersey Holdings) Limited
Millennium & Copthorne Hotel
Holdings
(Hong Kong) Limited
Millennium & Copthorne Hotels
(Hong Kong) Limited
Millennium & Copthorne NZ
Limited
Millennium & Copthorne Hotels
Management (Shanghai)
Limited
100%
Direct subsidiary
United Kingdom
100%
Indirect subsidiary United Kingdom
100%
Indirect subsidiary Hong Kong
100%
Indirect subsidiary Hong Kong
76%
Indirect subsidiary New Zealand
100%
Indirect subsidiary
People’s Republic
of China
REIT investment
management
services
Investment holding
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Finance company
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel owner
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Finance company
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Investment holding
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Other service
activities
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel ownership
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel management
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Holding company
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Investment holding
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Holding company
2803 Great Eagle Centre,
23 Harbour Road, Wanchai,
Hong Kong
2803 Great Eagle Centre,
23 Harbour Road, Wanchai,
Hong Kong
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
#1205, No. 511 Wei Hoi
Road, Shanghai 200041,
P.R. China
Investment and
development of
hotels and hotel
management
Provision of hotel
management and
consultancy
services
Name-holding
Hotel management
96
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
SHAREHOLDING
PERCENTAGE
TYPE
COUNTRY OF
INCORPORATION
REGISTERED OFFICE
ADDRESS
PRINCIPAL
ACTIVITIES
FULL NAME
Millennium & Copthorne Hotels
New Zealand Limited
Millennium & Copthorne Hotels
Pty. Ltd.
76%
Indirect subsidiary New Zealand
76%
Indirect subsidiary
Australia
Millennium & Copthorne
International Limited
100%
Indirect subsidiary Republic of
Singapore
Millennium & Copthorne
Pension Trustee Limited
100%
Direct subsidiary
United Kingdom
Millennium & Copthorne Share
Trustees Limited
100%
Direct subsidiary
United Kingdom
Millennium CDG Paris SAS
100%
Indirect subsidiary
France
Millennium Hotel Holdings
EMEA Limited
Millennium Hotels & Resorts
Services Limited
Millennium Hotels Europe
Holdings Limited
Millennium Hotels Italy Holdings
S.r.l.
Millennium Hotels Limited
Millennium Hotels Palace
Management S.r.l.
Millennium Hotels Property
S.r.l.
Millennium Hotels (West
London) Limited
Millennium Hotels (West
London)
Management Limited
Millennium Hotels London
Limited
100%
Direct subsidiary
United Kingdom
100%
Indirect subsidiary United Kingdom
100%
Direct subsidiary
United Kingdom
100%
Indirect subsidiary
Italy
100%
Indirect subsidiary United Kingdom
100%
Indirect subsidiary
Italy
100%
Indirect subsidiary
Italy
100%
Indirect subsidiary United Kingdom
100%
Indirect subsidiary United Kingdom
100%
Direct subsidiary
United Kingdom
Millennium Opera Paris SAS
100%
Indirect subsidiary
France
New Unity Holdings Ltd
New York Sign LLC
50%
50%
Associated
undertakings
Associated
undertakings
BVI
USA
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
Suite 7B, Zenith Residences,
82-94 Darlinghurst Road,
Potts Point,
Sydney 2011, Australia
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Hotel investment
holding
company
Name holding
Hotels and resorts
management
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Pension trust acting
on behalf of
company
trustees
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Share trustee
company
2 Allée du Verger, 95700
Roissy, France
Hotel operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Investment holding
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Management
contract
holding company
Investment holding
Via Vittorio Veneto, n. 70,
Roma 00187, Italy
Holding company
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Investment holding
Via Vittorio Veneto, n. 70,
Roma 00187, Italy
Via Vittorio Veneto, n. 70,
Roma 00187, Italy
Hotel operator
Property owner
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Property letting
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Hotel operator
Corporate Headquarters,
Scarsdale Place,
Kensington, London W8 5SY
Investment holding
12 Boulevard Haussmann,
75009 Paris, France
Hotel operator
PO Box 146 Road Town,
Tortola, British Virgin Islands
Investment holding
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
To lease, manage,
and otherwise deal
with certain
advertising signage
space at the Novotel
hotel
Investment holding
Newbury Investments Pte Ltd
100%
Indirect subsidiary Republic of
Singapore
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Park Plaza Hotel Corporation
100%
Indirect subsidiary USA
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Holding company
97
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FULL NAME
SHAREHOLDING
PERCENTAGE
TYPE
COUNTRY OF
INCORPORATION
REGISTERED OFFICE
ADDRESS
PRINCIPAL
ACTIVITIES
Prestons Road Limited
17%
Indirect Associate
New Zealand
PT Millennium Hotels & Resorts
100%
Indirect subsidiary
Indonesia
PT. Millennium Sirih Jakarta
Hotel
100%
Indirect subsidiary
Indonesia
QINZ (Anzac Avenue) Limited
76%
Indirect subsidiary New Zealand
QINZ Holdings (New Zealand)
Limited
76%
Indirect subsidiary New Zealand
Quantum Limited
76%
Indirect subsidiary New Zealand
Regal Grand Holdings
Corporation I
100%
Indirect subsidiary USA
Regal Harvest House LP
100%
Indirect subsidiary USA
Regal Hotel Management Inc.
100%
Indirect subsidiary USA
Republic Hotels & Resorts
Limited
100%
Indirect subsidiary Republic of
Singapore
Republic Iconic Hotel Pte. Ltd.
100%
Indirect subsidiary Republic of
Singapore
RHH Operating LLC
100%
Indirect subsidiary USA
RHI Boston Holdings
Corporation I
RHI Boston Holdings
Corporation II
100%
Indirect subsidiary USA
100%
Indirect subsidiary USA
RHM Aurora LLC
100%
Indirect subsidiary USA
RHM Holdings Corporation I
100%
Indirect subsidiary USA
RHM Management LLC
100%
Indirect subsidiary USA
RHM Ranch LLC
100%
Indirect subsidiary USA
RHM Wynfield LLC
100%
Indirect subsidiary USA
RHM-88, LLC
100%
Indirect subsidiary USA
Richfield Holdings Corporation I
100%
Indirect subsidiary USA
167 Main North Road,
Christchurch 8140, New
Zealand
Service provider
Jalan Fachrudin 3, Jakarta
10250,
Indonesia
Management
services
Jalan Fachrudin 3, Jakarta
10250,
Indonesia
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
Level 13, 280 Queen Street,
Auckland 1010, New
Zealand
Hotel owner
Hotel owner
Holding company
Holding company
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Holding company
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel ownership
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Holding company
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
Hotel operator and
investment holding
company
Hotel operator
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel owner
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Holding company
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Holding company
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel ownership
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Holding company
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Hotel ownership
Hotel owner
Hotel ownership
Hotel owner and
operator
Holding company
98
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
FULL NAME
SHAREHOLDING
PERCENTAGE
TYPE
COUNTRY OF
INCORPORATION
REGISTERED OFFICE
ADDRESS
PRINCIPAL
ACTIVITIES
Richfield Holdings Corporation
II
100%
Indirect subsidiary USA
Richfield Holdings, Inc
100%
Indirect subsidiary USA
Rogo Investments Pte. Ltd.
100%
Rogo Realty Corporation
24%
Indirect subsidiary Republic of
Singapore
Associated
undertakings
Philippines
S.S. Restaurant Corporation
100%
Indirect subsidiary USA
St. Louis Operating, Inc.
100%
Indirect subsidiary USA
Sunnyvale Partners, Ltd.
100%
Indirect subsidiary USA
Tara Hotels Deutschland GmbH100%
Indirect subsidiary Germany
The Philippine Fund Limited
60%
Indirect subsidiary
Bermuda
TOSCAP Limited
100%
Indirect subsidiary Republic of
Singapore
Trimark Hotel Corporation
100%
Indirect subsidiary USA
WHB Biltmore LLC
100%
Indirect subsidiary USA
WHB Corporation
100%
Indirect subsidiary USA
Wynfield GP Corporation
100%
Indirect subsidiary USA
Wynfield One, Ltd.
100%
Indirect subsidiary USA
Zatrio Pte Ltd
100%
Indirect subsidiary Republic of
Singapore
Zillion Holdings Limited
100%
Indirect subsidiary
Barbados
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
10 Floor, Heritage Hotel
Manila,
EDSA corner Roxas
Boulevard,
Pasay City, Philippines 1300
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
Registered at the Trade
register at
the local court of Hannover
with the
legal form of Private limited
company (number HRB
209133).
C/o Coson Corporate
Services
Limited, Cumberland House
9th Floor, 1 Victoria Street
Hamilton HM 11, Bermuda
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
7900 East Union Avenue,
Suite 500, Denver, Colorado,
80237
9 Raffles Place
#12-01 Republic Plaza
Singapore 048619
The Phoenix Centre, George
Street,
Belleville, St. Michael,
Barbados
Holding company
Holding company
Investment holding
Real estate owner
Liquor license
holder
Dormant
Hotel ownership
Hotel investment
holding
company
Investment holding
Investment holding
Hotel owner and
operator
Hotel owner and
operator
Holding company
Hotel ownership
Holding company
Investment holding
Investment holding
1 CDL Hospitality Trusts is a stapled group comprising CDL Hospitality Real Estate Investment Trust (“H-REIT”), a real estate investment trust, and CDL
Hospitality Business Trust (“HBT”), a business trust. H-REIT has an investment strategy of investing, directly or indirectly, in a diversified portfolio of income-
producing real estate which is primarily used for hospitality and/or hospitality-related purposes, whether wholly or partially, and real-estate related assets in
relation to the foregoing. HBT is a business trust which was activated in December 2013. In addition to its function as a master lessee, HBT may also undertake
certain hospitality and hospitality-related development projects, acquisitions and investments which may not be suitable for H-REIT. The registered office
address of M&C REIT Management Limited, Manager of H-REIT and M&C Business Trust Management Limited, Trustee-Manager of HBT is 9 Raffles Place
#12-01 Republic Plaza Singapore 048619. As disclosed in Note 3 to the consolidated financial statements, the Group has concluded that under IFRS10, it has
de facto control over CDL Hospitality Trusts.
2 The Group has assessed the classification of its investments in First Sponsor Group Limited and New Unity Holdings Limited in accordance with IFRS10
and concluded that it does not have control.
99
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
EXEMPTION FROM STATUTORY AUDIT
Certain subsidiaries of the Group can take an exemption from having an audit completed. Strict criteria must be
met for this exemption to apply, and it must be agreed to by the Directors of each subsidiary entity.
Listed below are subsidiaries controlled and consolidated by the Group, where the Directors have elected to take
the exemption from having an audit of their financial statements for the year ended 31 December 2020. This
exemption is taken in accordance with Companies Act s479A.
Archyield Limited (1747079)
CDL Hotels (Chelsea) Limited (2845022)
CDL Hotels (U.K.) Limited (2729520)
Copthorne Aberdeen Limited (1986197)
Copthorne Hotel (Birmingham) Limited (1816493)
Copthorne Hotel (Cardiff) Limited (2411296)
Copthorne Hotel (Effingham Park) Limited (1423861)
Copthorne Hotel (Gatwick) Limited (994968)
Copthorne Hotel Holdings Limited (627049)
Copthorne Hotels Limited (759611)
Copthorne Hotel (Manchester) Limited (1855800)
Copthorne Hotel (Merry Hill) Construction Limited (2649367)
Copthorne Hotel (Merry Hill) Limited (2590620)
Copthorne Hotel (Newcastle) Limited (2111218)
Copthorne Hotel (Plymouth) Limited (3253120)
Copthorne Hotel (Slough) Limited (2300992)
Copthorne (Nominees) Limited (2574042)
Diplomat Hotel Holding Limited (1927463)
Hotel Liverpool Limited (9636541)
Hotel Liverpool Management Limited (9638688)
London Britannia Hotel Limited (0744379)
London Tara Hotel Limited (1005559)
M&C Asia Finance (UK) Limited (8391037)
M&C Asia Holdings (UK) Limited (8382946)
M&C (CB) Limited (3846711)
M&C (CD) Limited (3846704)
M&C Finance (1) Limited (6783896)
M&C Hotels Holdings Limited (4407581)
M&C Management Holdings Limited (5832248)
M&C New York Finance (UK) Limited (9060415)
M&C NZ Limited (5159722)
M&C Reservation Services Limited (6754684)
M&C Singapore Finance (UK) Limited (8391052)
M&C Singapore Holdings (UK) Limited (8382985)
M&C Sponsorship Limited (11349185)
Millennium & Copthorne (Austrian Holdings) Limited (3757378)
Millennium & Copthorne (Jersey Holdings) Limited (5846574)
Millennium & Copthorne Pension Trustee Limited (6662791)
Millennium & Copthorne Share Trustees Limited (3320990)
Millennium Hotel Holdings EMEA Limited (4592877)
Millennium Hotels Limited (3141048)
Millennium Hotels Europe Holdings Limited (8844747)
Millennium Hotels London Limited (3691885)
Millennium Hotels (West London) Limited (8599282)
Millennium Hotels (West London) Management Limited (8891908)
Millennium Hotels & Resorts Services Limited (4601112)
Each company’s registered number is shown in brackets after its name.
100
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
33. NON-CONTROLLING INTERESTS (“NCI”)
The following subsidiaries have material NCI.
NAME
PRINCIPAL PLACE OF
BUSINESS/ COUNTRY OF
INCORPORATION
Millennium & Copthorne Hotels
New Zealand Limited (“MCHNZ”) New Zealand
CDL Hospitality Trusts (“CDLHT”) Singapore
PRINCIPAL ACTIVITY
2020
2019
Hotel investment holding
company
Real estate investment
trust
24%
24%
62%
62%
OWNERSHIP INTERESTS
HELD BY NCI
The following is summarised financial information for MCHNZ and CDLHT, prepared in accordance with local
accounting standards. The information is before inter-company eliminations with other companies in the Group.
NAME
Revenue
Profit/(Loss) after tax
Profit/(Loss) attributable to NCI
Other comprehensive income/(expense)
Total comprehensive income/(expense)
Total comprehensive income/(expense) attributable to NCI
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Net assets attributable to NCI
Cash inflow from operating activities
Cash inflow/(outflow) from investing activities
Cash outflow from financing activities
Net (decrease)/increase in cash and cash equivalents
Dividends paid to NCI during the year1
1 Included in cash flows from financing activities.
MCHNZ SUBGROUP
CDLHT SUBGROUP
2020
£M
87
28
11
(3)
25
10
138
382
(17)
(59)
444
147
44
(33)
(23)
(12)
(2)
2019
£M
119
32
7
19
51
6
123
393
(18)
(85)
413
136
33
(11)
(8)
14
(2)
2020
£M
66
(107)
(66)
1
(106)
(66)
90
1,495
(194)
(488)
903
562
28
46
(82)
(8)
27
2019
£M
113
65
41
2
67
42
305
1,435
(75)
(607)
1,058
658
69
(26)
(44)
(1)
40
101
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
34. ASSETS HELD FOR SALE
The following were classified as assets held for sale in the statement of financial position as at 31 December
2020:
The purchase and sale agreement for Millennium Harvest House Boulder was signed on 19 January
2021. The property has a total carrying value of US$10m (£7m) and is held under the “Regional US”
segment as disclosed in Note 5.
The disposal of Copthorne Hotel Birmingham is expected to be completed in August 2021. The property
has a total carrying value of £14m and is held under the “Rest of Europe” segment as disclosed in Note
5.
The disposal of Copthorne Orchid Penang is expected to be completed during Q2 2021. The property
has a total carrying value of MYR48m (£9m) and is held under the “Rest of Asia” segment as disclosed
in Note 5.
The land held at the property of Copthorne Hotel Christchurch is expected to be disposed of during 2021.
The land has a total carrying value of NZ$2m (£1m) and is held under the “Australasia” segment as
disclosed in Note 5.
35. ADOPTION OF IFRS 16 ‘LEASES’
The Group adopted IFRS 16 with an initial application date of 1 January 2019. The Group applied the modified
retrospective approach and comparative information has not been presented.
The Group as a lessee
The Group’s leases consist primarily of land & buildings and plant & machinery. Information about leases for which
the Group is a lessee is presented below.
Amounts recognised in the income statement
Depreciation
– Land and buildings
– Plant and machinery
Interest on lease liabilities
Total
NOTES
2020
£M
2019
£M
6, 11
9
8
1
5
7
1
5
14
13
102
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
LAND AND
BUILDINGS
£M
PLANT AND
MACHINERY
£M
NOTES
FIXTURES,
FITTINGS AND
EQUIPMENTAND
VEHICLES
£M
INVESTMENT
PROPERTIES
£M
TOTAL
£M
Right-of-use assets
Initial recognition on 1 January 2019
Additions
Transfer to asset held for sale
Depreciation
Foreign exchange adjustments
Carrying amount at 31 December 2019
Additions
Depreciation
Disposals
Foreign exchange adjustments
203
8
(2)
(7)
(3)
199
32
(8)
(1)
(2)
Carrying amount at 31 December 2020
11, 12
220
3
–
–
(1)
–
2
–
(1)
–
–
1
1
–
–
–
–
1
–
–
–
(1)
–
Lease liabilities
Current
Non-current
Total
7
–
–
–
–
7
–
–
–
–
7
214
8
(2)
(8)
(3)
209
32
(9)
(1)
(3)
228
2020
£M
2019
£M
5
133
138
5
108
113
The total cash outflow for leases during the current year was £10m (2019: £9m).
As part of the adoption in 2019, lease liabilities were determined by discounting the relevant lease payments at
the Group’s incremental borrowing rate of between 0.9% and 14.6% in Asia, 1.9% to 3.5% in Europe and 3.0% to
5.2% in the US.
103
MILLENNIUM & COPTHORNE HOTELS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020
Balance at 1 January 2019
97
843
(4)
464
1,400
SHARE
CAPITAL
£M
SHARE
PREMIUM
£M
TREASURY
SHARE
RESERVE
£M
RETAINED
EARNINGS
£M
TOTAL
EQUITY
£M
Profit
Other comprehensive income
Total comprehensive income
Dividends
Balance at 31 December 2019
Balance at 1 January 2020
Profit
Other comprehensive expense
Total comprehensive expense
Dividends
–
–
–
–
97
97
–
–
–
–
–
–
–
–
843
843
–
–
–
–
–
–
–
–
(4)
(4)
–
–
–
–
11
–
11
(7)
11
–
11
(7)
468
1,404
468
1,404
2
(3)
(1)
–
2
(3)
(1)
–
Balance at 31 December 2020
97
843
(4)
467
1,403
The notes on pages 106 to 108 are an integral part of these Company’s financial statements.
105
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS
AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE WITH FRS
A.
101
The parent company financial statements of Millennium and Copthorne Hotels Limited (“the Company”) for the
year ended 31 December 2020 were authorised for issue by the board of Directors and signed on its behalf on 22
June 2020. The Company is incorporated and domiciled in England and Wales.
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced
Disclosure Framework (FRS 101). The financial statements are prepared under the historical cost convention.
As permitted by Section 408 of the Companies Act 2006, the income statement of the Company is not presented
as part of the financial statements.
The Company’s results are included in the consolidated financial statements of Millennium and Copthorne Hotels
Limited which are available from the Group’s website www.millenniumhotels.com.
The accounting policies which follow set out those policies which apply in preparing the financial statements for
the year ended 31 December 2020. The financial statements are prepared in Sterling and are rounded to the
nearest million except when otherwise indicated.
ACCOUNTING POLICIES
B.
In preparing these financial statements of the parent company financial statements of Millennium and Copthorne
Limited, the Company applies the recognition, measurement and disclosure requirements of international
accounting standards in conformity with the requirements of the Companies Act 2006 (“Adopted IFRSs”), but
makes amendments where necessary in order to comply with Companies Act 2006 and has set out below where
advantage of the FRS 101 disclosure exemptions has been taken
In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of
the following disclosures
• Cash Flow Statement and related notes;
• Disclosures in respect of the compensation of Key Management Personnel;
• Equity settled share-based payments
• Financial instruments
The Company early adopted FRS 101 amendments before the effective date of 1 January 2016 regarding the
presentation of financial statements in compliance with the IAS 1 format.
The accounting policies adopted for the parent company been applied consistently to all periods presented and
with those used for the Group which are set out on pages 36 to 46
DIVIDENDS
C.
Details of dividends paid and proposed in the current and prior year are given in Note 26 to the consolidated
financial statements.
PROFIT ATTRIBUTABLE TO MEMBERS OF THE PARENT COMPANY
D.
The profit dealt with in the financial statements of the Company is £2m (2019: profit of £11m).
E.
PROPERTY, PLANT AND EQUIPMENT
Cost at 1 January 2020
Depreciation
Cost at 31 December 2020
CAPITAL
WORK
IN
PROGRESS
£M
SOFTWARE
£M
1
(1)
–
–
–
–
TOTAL
£M
1
(1)
–
106
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS (continued)
F.
INVESTMENTS AND OTHER FINANCIAL ASSETS
SHARES IN
SUBSIDIARY
UNDERTAKINGS
£M
LOANS TO
SUBSIDIARY
UNDERTAKINGS
£M
GROUP SETTLED
ARRANGEMENTS
£M
Cost and net book value at 1 January 2020
Additions
Foreign exchange adjustments
Cost and net book value at 31 December 2020
1,894
–
(5)
1,889
148
169
(17)
300
7
–
–
7
TOTAL
£M
2,049
169
(22)
2,196
There were no provisions made against investments in subsidiary undertakings. Reductions and additions relate
to internal restructuring transactions.
The Company’s subsidiary undertakings at 31 December 2020 are listed in Note 32 to the consolidated financial
statements.
G.
OTHER CURRENT LIABILITIES
Bank loans and overdrafts
Bonds payable
Amounts owed to subsidiary undertakings
Other payables
Accruals and deferred income
H.
OTHER NON-CURRENT LIABILITIES
Bank loans
Bonds payable
Amounts owed to subsidiary undertakings
Net employee defined benefit liabilities
Other non-current liabilities are repayable as follows:-
Between one and two years
Between two and five years
2020
£M
222
74
43
7
–
2019
£M
132
–
38
9
1
346
180
2020
£M
263
–
335
12
610
2020
£M
132
478
610
2019
£M
177
77
335
10
599
2019
£M
129
470
599
107
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS (continued)
I.
Details of the Company’s share capital are given in Note 27 to the consolidated financial statements.
SHARE CAPITAL
RELATED PARTIES
J.
For the year ended 31 December 2020, fees paid/payable by the Company to Hong Leong Management
Services, a subsidiary of Hong Leong Investment Holdings Pte. Ltd. amounted to £0m (2019: £1m). At 31
December 2020, £nil (2019: £nil) of fees payable was outstanding.
108
MILLENNIUM & COPTHORNE HOTELS LIMITED
GROUP FINANCIAL RECORD (Unaudited Supplementary Information)
For the year ended 31 December 2020
Income statement
Revenue
Operating (loss)/profit
Net finance expense
Income tax (expense)/credit
(Loss)/Profit for the year
Cash flow
2020
£M
425
(56)
(26)
–
(70)
2019
£M
1,025
98
(32)
(8)
94
2018
£M
997
105
(28)
(13)
93
2017
£M
1,008
145
(20)
12
159
2016
£M
926
107
(25)
(10)
98
Cash (used in)/generated from operations
(46)
222
177
230
220
Statement of financial position
Property, plant, equipment and lease premium
prepayment
Investment properties
Investment and loans in joint ventures and
associates
Other financial assets
Non-current assets
Current assets excluding cash
Net debt
Deferred tax liabilities
Provisions and other liabilities
3,252
664
440
21
3,194
680
3,256
668
3,232
3,345
577
534
414
40
358
43
324
–
320
–
4,377
4,328
4,325
4,133
4,199
203
(837)
(124)
(381)
316
(759)
(147)
(390)
224
(727)
(172)
(287)
228
(650)
(188)
(274)
195
(707)
(220)
(297)
Net assets
3,238
3,348
3,363
3,249
3,170
Share capital and share premium
Reserves
Total equity attributable to equity holders
Non-controlling interests
Total equity
Key operating statistics
Gearing
Earnings per share
Dividends per share1
Hotel gross operating (loss)/profit margin
Occupancy
Average room rate (£)
RevPAR (£)
1 Dividends per share includes ordinary dividends and special dividends.
940
1,719
2,659
579
940
1,842
2,782
566
940
1,830
2,770
593
940
940
1,736
1,728
2,676
2,668
573
502
3,238
3,348
3,363
3,249
3,170
32%
27%
–
–
–
–
(0.9)%
38.8%
28.5%
73.3%
26%
13.1p
4.23p
30.5%
73.3%
24%
38.1p
6.50p
32.2%
73.5%
26%
24.0p
7.74p
31.6%
71.8%
£74.52
£114.52
£111.31
£112.68
£106.78
£28.92
£83.94
£81.57
£82.78
£76.71
109
MILLENNIUM & COPTHORNE HOTELS LIMITED
KEY OPERATING STATISTICS (Unaudited Supplementary Information)
For the year ended 31 December 2020
OWNED OR LEASED HOTELS*
Occupancy (%)
New York
Regional US
Total US
London
Rest of Europe
Total Europe
Singapore
Rest of Asia
Total Asia
Australasia
Total Group
Average Room Rate (£)
New York
Regional US
Total US
London
Rest of Europe
Total Europe
Singapore
Rest of Asia
Total Asia
Australasia
Total Group
YEAR ENDED
2020
REPORTED
CURRENCY
YEAR ENDED
2019
CONSTANT
CURRENCY
YEAR ENDED
2019
REPORTED
CURRENCY
44.2
34.7
38.1
17.6
23.0
20.2
83.1
31.8
51.5
45.7
38.8
86.6
58.0
67.5
79.1
69.6
74.2
86.8
68.5
75.6
82.4
73.3
104.79
74.87
196.63
106.35
197.45
106.79
87.14
144.66
145.26
109.78
63.67
137.87
75.73
137.87
75.44
84.12
107.90
107.76
49.70
68.31
56.76
90.12
99.96
98.70
99.26
86.89
101.47
97.81
99.43
88.74
74.52
114.05
114.52
110
MILLENNIUM & COPTHORNE HOTELS LIMITED
KEY OPERATING STATISTICS (continued) (Unaudited Supplementary Information)
OWNED OR LEASED HOTELS*
YEAR ENDED
2020
REPORTED
CURRENCY
YEAR ENDED
2019
CONSTANT
CURRENCY
YEAR ENDED
2019
REPORTED
CURRENCY
RevPAR (£)
New York
Regional US
Total US
London
Rest of Europe
Total Europe
Singapore
Rest of Asia
Total Asia
Australasia
Total Group
Gross Operating Profit/(Loss) Margin (%)
New York
Regional US
Total US
London
Rest of Europe
Total Europe
Singapore
Rest of Asia
Total Asia
Australasia
Total Group
46.35
25.97
33.17
19.34
14.62
17.02
41.31
21.72
29.25
41.20
28.92
(107.5)
(0.4)
(48.3)
(20.4)
(39.8)
(28.6)
40.5
3.7
19.6
48.8
(0.9)
170.38
61.73
171.09
61.99
97.65
98.05
108.99
52.69
108.99
52.49
80.04
86.74
67.66
75.05
71.60
83.59
79.94
88.04
67.04
75.17
73.12
83.94
10.9
18.5
14.5
39.0
16.6
30.6
39.2
33.6
36.0
47.7
28.5
For comparability, the 31 December 2019 Average Room Rate and RevPAR have been translated at average
exchange rates for the period ended 31 December 2020.
*excluding managed, franchised and investment hotels.
111
EFFECTIVE
GROUP
INTEREST
(%)
70
50
26
MILLENNIUM & COPTHORNE HOTELS LIMITED
MAJOR GROUP PROPERTIES (Unaudited Supplementary Information)
For the year ended 31 December 2020
Asia
HOTELS
TENURE
Grand Millennium Beijing
Fortune Plaza, 7 Dongsanhuan Middle Road
Chaoyang District, Beijing 100020 PRC
Leasehold to year 2046 (hotel),
leasehold to year 2056
(underground car park)
APPROXIMATE
SITE AREA
(SQ. METRES)
NUMBER
OF ROOMS
9,268
517
New World Millennium Hong Kong Hotel
(Owned by New Unity Holdings Limited)
72 Mody Road, Tsimshatsui East
Kowloon, Hong Kong
JW Marriott Hotel Hong Kong
(Owned by New Unity Holdings Limited)
Pacific Place, 88 Queensway,
Hong Kong
Millennium Hotel Sirih Jakarta
Jalan Fachrudin 3,
Jakarta 10250, Indonesia
Hotel MyStays Asakusabashi
1-5-5, Asakusabashi, Taito-ku,
Tokyo 111-0053, Japan
Hotel MyStays Kamata
5-46-5, Kamata, Ota-ku,
Tokyo 144-0052, Japan
Grand Millennium Kuala Lumpur
160 Jalan Bukit Bintang,
55100 Kuala Lumpur, Malaysia
Angsana Velavaru
South Nilandhe Atoll,
Republic of Maldives
Raffles Maldives Meradhoo
Meradhoo Island,
Gaafu Alifu Atoll,
Republic of Maldives
75-year term from 28.11.1984 and may be
renewable for a further 75 years
2,850
463
75-year term from 18.04.1985 and may be
renewable for a further 75 years
10,690
(Part)
608
The title is held under a Hak Guna Bangunan
(i.e. Right to Build) and a 40-year lease
wef 14.04.1984 and 22.01.1986 for
approximate site area of 7,084 sq. metres and
212 sq. metres, respectively
Freehold
Freehold
Freehold
7,296
401
100
564
139
497
116
38
38
7,670
468
100
50-year leasehold interest commencing from
26. 08.1997
67,717
113
50-year leasehold interest commencing from
15.06.2006
53,576
38
The Heritage Hotel Manila
Roxas Boulevard at corner of EDSA Pasay City,
Metropolitan Manila, Philippines
Fee simple
9,888
450
Copthorne King’s Hotel Singapore
403 Havelock Road, Singapore
99-year lease commencing from 01.02.1968
5,637
Grand Copthorne Waterfront Hotel Singapore
392 Havelock Road, Singapore
75-year lease commencing from 19.07.2006
10,860
M Hotel Singapore
81 Anson Road, Singapore
Orchard Hotel Singapore
442 Orchard Road, Singapore
Studio M Hotel
3 Nanson Road, Singapore
W Singapore – Sentosa Cove
21 Ocean Way, Singapore
Freehold
Freehold
99-year lease commencing from
26.02.2007
Leasehold
99 years from 31.10.2006
311
574
415
656
360
2,134
8,588*
2,932
17,016
240
38
38
66
38
38
38
38
38
38
112
MILLENNIUM & COPTHORNE HOTELS LIMITED
MAJOR GROUP PROPERTIES (continued) (Unaudited Supplementary Information)
HOTELS
Millennium Hilton Seoul
50 Sowol-ro, Jung-gu,
Seoul, South Korea 100-802
TENURE
Freehold
Land Site in Seoul
Located at Chung-gu, Namdaeumro 5 Ga 652-1
Freehold
Grand Hyatt Taipei
2, SongShou Road
Taipei, Taiwan, 11051
* Includes Claymore Connect
Europe
HOTELS
Copthorne Hotel Aberdeen
122 Huntly Street,
Aberdeen AB10 1SU, Scotland
Copthorne Hotel Birmingham
Paradise Circus,
Birmingham B3 3HJ, England
Copthorne Hotel Cardiff-Caerdydd
Copthorne Way, Culverhouse Cross,
Cardiff CF5 6DH, Wales
Copthorne Hotel Effingham Gatwick
West Park Road, Copthorne,
West Sussex RH10 3EU, England
Copthorne Hotel London Gatwick
Copthorne Way, Copthorne, West Sussex
RH10 3PG, England
Copthorne Hotel Manchester
Clippers Quay, Salford Quays,
Manchester M50 3SN, England
50 years starting from 7 March 1990
The lease agreement is extendable for
another 30 years.
TENURE
Freehold
Freehold
Freehold
Freehold
Freehold
APPROXIMATE
SITE AREA
(SQ. METRES)
NUMBER
OF ROOMS
EFFECTIVE
GROUP
INTEREST
(%)
18,787
680
100
1,564
14,193
–
850
100
84
APPROXIMATE
SITE AREA
(SQ. METRES)
NUMBER
OF ROOMS
EFFECTIVE
GROUP
INTEREST
(%)
1,302
87
83
2,188
211
100
26,305
135
100
161,878
122
100
404,694
227
100
Leasehold to year 2135
9,800
166
100
Copthorne Hotel Merry Hill-Dudley
The Waterfront, Level Street, Brierley Hill,
Dudley, West Midlands DY5 1UR, England
Copthorne Hotel Newcastle
The Close, Quayside, Newcastle upon Tyne
NE1 3RT, England
Freehold
Freehold
Copthorne Hotel Plymouth
Armada Way, Plymouth PL1 1AR, England
Leasehold to year 2110
Copthorne Hotel Slough-Windsor
Cippenham Lane, Slough, Berkshire
SL1 2YE, England
Copthorne Tara Hotel London Kensington
Scarsdale Place, Kensington, London
W8 5SY, England
Freehold
Freehold
13,734
138
100
9,200
156
96
1,853
6,880
135
219
100
100
7,535
833
100
Hard Days Night Hotel Liverpool
Central Buildings North John Street
Liverpool, L2 6RR, England
Leasehold to year 2129
5,275
110
100
Hilton Cambridge City Centre Hotel
Grand Arcade 20, Downing St,
Cambridge CB2 3DT, England
125-year lease commencing
from 25.12.1990 and extendable
for a further 50 years
The Lowry Hotel
50 Dearmans Place,
Salford, Manchester
M3 5LH, United Kingdom
150-year lease commencing
from 18.03.1997
3,600
198
2,200
165
38
38
113
MILLENNIUM & COPTHORNE HOTELS LIMITED
MAJOR GROUP PROPERTIES (continued) (Unaudited Supplementary Information)
HOTELS
The Bailey’s Hotel London
140 Gloucester Road,
London SW7 4QH, England
Millennium Gloucester Hotel London
Kensington
Harrington Gardens
London SW7 4LH, England
TENURE
Freehold
Freehold
Millennium Hotel Glasgow
George Square, Glasgow G2 1DS, Scotland
Leasehold to year 2109
Leasehold to year 2091
Millennium Hotel London Knightsbridge
17 Sloane Street, Knightsbridge,
London SW1X 9NU, England
The Biltmore, Mayfair – LXR Hotels & Resorts
44 Grosvenor Square, Mayfair,
London W1K 2HP, England
APPROXIMATE
SITE AREA
(SQ. METRES)
NUMBER
OF ROOMS
EFFECTIVE
GROUP
INTEREST
(%)
1,923
212
100
6,348
610
100
5,926
809
61
222
100
100
Leasehold to year 2096
4,260
307
100
Millennium Hotel Paris Opéra
12 Boulevard Haussmann,
75009 Paris, France
Millennium Hotel Paris Charles de Gaulle
Zone Hoteliere, Allée du Verger, 95700
Roissy-en-France, France
Pullman Hotel Munich
Theodor-Dombart-Strasse 4,
Munich 80805, Germany
Grand Hotel Palace Rome
Via Veneto, 70, Rome, 00187, Italy
Freehold
Freehold
Freehold
Freehold
The Chelsea Harbour Hotel
Chelsea Harbour, London, SW10 0XG, England
Leasehold to year 2112
Hotel Cerretani Florence, MGallery
bySofitel
Via de’ Cerretani, 68, 50123 Florence, Italy
Freehold
1,093
163
100
11,657
239
100
8,189
337
36
801
2,561
1,350
86
158
86
100
100
36
North America
HOTELS
The Bostonian Boston
26 North Street
At Faneuil Hall Marketplace, Boston
MA 02109, USA
The Lakefront Anchorage
4800 Spenard Road, Anchorage,
AK 99517, USA
TENURE
Freehold
APPROXIMATE
SITE AREA
(SQ. METRES)
NUMBER
OF ROOMS
EFFECTIVE
GROUP
INTEREST
(%)
2,769
204
100
Hotel: Freehold
Dock: Leasehold to 2040
14,159
248
100
Millennium Biltmore Los Angeles
506 South Grand Avenue, Los Angeles,
CA 90071, USA
Freehold
11,305
683
100
Millennium Buffalo
2040 Walden Avenue
Buffalo, NY 14225, USA
Leasehold to year 2022
(with one 10-year option)
31,726
301
100
114
MILLENNIUM & COPTHORNE HOTELS LIMITED
MAJOR GROUP PROPERTIES (continued) (Unaudited Supplementary Information)
HOTELS
Millennium Harvest House Boulder
1345 28th Street
Boulder, CO 80302, USA
Millennium Knickerbocker Hotel Chicago
163 East Walton Place, Chicago,
IL 60611, USA
Millennium Durham
2800 Campus Walk Avenue, Durham,
NC 27705, USA
Millennium Minneapolis
1313 Nicollet Mall, Minneapolis,
MN 55403, USA
TENURE
Freehold
Freehold
Freehold
APPROXIMATE
SITE AREA
(SQ. METRES)
NUMBER
OF ROOMS
EFFECTIVE
GROUP
INTEREST
(%)
64,019
269
100
2,007
306
100
42,814
324*
100
Leasehold to year 2030
4,537
321
100
Millennium Maxwell House Nashville
2025 Rosa L. Parks Boulevard, Nashville
TN 37228, USA
Leasehold to year 2030
(with two 10-year options)
17,140
287
100
Millennium Broadway New York Times
Square
145 West 44th Street, New York,
NY 10036, USA
Freehold
1,762
626
100
Millennium Premier New York Times Square
133 West 44th Street, New York,
NY 10036, USA
Freehold
Millennium Hilton New York ONE UN Plaza
1 UN Plaza, 44th Street at 1st Avenue,
New York, NY 10017, USA
East tower freehold/
West tower leasehold to
year 2079
The McCormick Scottsdale
7421 North Scottsdale Road,
Scottsdale, AZ 85208, USA
Leasehold to year 2033
(with two 10-year options)
Millennium Hilton New York Downtown
55 Church Street, New York, NY 10007, USA
Freehold
Novotel New York Times Square
226 W 52nd Street, New York, NY 10019, USA
Fee simple estate, a leasehold interest,
and a leased fee interest
Maingate Lakeside Resort
7769 W Irlo Bronson Memorial Highway,
Kissimmee, FL 34747, USA
Freehold
360
124
100
4,554
439
100
32,819
125
100
1,680
1,977
93,796
569
480
475
100
100
100
Novotel Penthouse
1651-65 Broadway,
New York, NY 10019, USA
Leasehold to year 2080
307
–
100
Comfort Inn Near Vail Beaver Creek
161 West Beaver Creek Boulevard, Avon,
CO 81620, USA
Pine Lake Trout Club
17021 Chillicothe Road, Chagrin Falls
OH 44023, USA
Freehold
Freehold
*Currently only 290 rooms are available for sale.
11,209
146
100
331,074
6
100
115
MILLENNIUM & COPTHORNE HOTELS LIMITED
MAJOR GROUP PROPERTIES (continued) (Unaudited Supplementary Information)
Australasia
HOTELS
Copthorne Hotel & Apartments
Queenstown Lakeview
88 Frankton Road,
Queenstown, New Zealand
TENURE
Freehold/Strata title
APPROXIMATE
SITE AREA
(SQ. METRES)
NUMBER
OF ROOMS
EFFECTIVE
GROUP
INTEREST
(%)
4,713
85
76
Copthorne Hotel & Resort Bay of Islands
Tau Henare Drive, Paihia,
New Zealand
Leasehold land to year
2021 (renewal option to May 2087)
62,834
180
Freehold
18,709
240
Perpetual leasehold land
2,495
110
Copthorne Hotel & Resort Queenstown
Lakefront
Corner Adelaide Street & Frankton Road,
Queenstown, New Zealand
Copthorne Hotel Auckland City
150 Anzac Avenue
Auckland, New Zealand
M Social Auckland
196-200 Quay Street
Auckland, New Zealand
Copthorne Hotel Palmerston North
110 Fitzherbert Avenue,
Palmerston North, New Zealand
Copthorne Hotel Rotorua
Fenton Street,
Rotorua, New Zealand
Freehold
Freehold
Freehold
Copthorne Hotel Wellington Oriental Bay
100 Oriental Parade,
Wellington, New Zealand
Freehold
Ibis Perth
334 Murray Street
Perth, Western Australia, Australia
Kingsgate Hotel Dunedin
10 Smith Street,
Dunedin, New Zealand
Kingsgate Hotel Greymouth
32 Mawhera Quay,
Greymouth, New Zealand
Kingsgate Hotel Te Anau
20 Lakefront Drive,
Te Anau, New Zealand
Mercure Perth
10 Irwin Street
Perth, Western Australia, Australia
Freehold
Freehold
Freehold/Perpetual
leasehold land
Freehold
Strata freehold
757
239
2,407
190
15,514
89
35,935
136
3,904
118
1,480
192
2,193
2,807
8,819
55
64
94
37
76
76
76
76
76
76
38
76
76
76
38
116
MILLENNIUM & COPTHORNE HOTELS LIMITED
MAJOR GROUP PROPERTIES (continued) (Unaudited Supplementary Information)
HOTELS
Millennium Hotel Queenstown
Corner Frankton Road & Stanley Street
Queenstown, New Zealand
TENURE
Freehold
Millennium Hotel Rotorua
Corner Eruera & Hinemaru Streets,
Rotorua, New Zealand
Freehold/Perpetual
leasehold land
Millennium Hotel New Plymouth,
Waterfront
1 Egmont St, New Plymouth, New Zealand
Freehold
Grand Millennium Auckland
71-87 Mayoral Drive, Auckland, New Zealand
Freehold
INVESTMENT PROPERTIES
Tanglin Shopping Centre
A shopping-cum-office complex situated at
Tanglin Road, Singapore, within the Orchard
Road tourist district. The Group owns 83 out
of 362 strata-titled units and 325 car park lots.
TENURE
Freehold
APPROXIMATE
SITE AREA
(SQ. METRES)
NUMBER
OF ROOMS
EFFECTIVE
GROUP
INTEREST
(%)
7,453
220
10,109
227
1,149
42
5,910
452
76
76
76
38
APPROXIMATE
LETTABLE
STRATA AREA
(SQ. METRES)
EFFECTIVE
GROUP
INTEREST
(%)
6,029
100
Freehold/
Leasehold – 30 years from 25 March 2009
1,040/130
(site area)
70
Freehold
34,249
100
Millennium Mitsui Garden Hotel Tokyo
5-11-1 Ginza, Chuo-Ku,
Tokyo 104-0061
329 bedroom hotel.
Biltmore Court & Tower
Situated at 500/520 South Grand Avenue, Los
Angeles, CA 90071.
Comprising the Court which has 22,133
square metres Class “B” lettable office space
within the Biltmore hotel structure and the
Tower which has 12,116 square metres of
Class “A” office space.
Land site in Sunnyvale
City of Sunnyvale, California, USA
Freehold
35,717
100
117
MILLENNIUM & COPTHORNE HOTELS LIMITED
MAJOR GROUP PROPERTIES (continued) (Unaudited Supplementary Information)
OWNED BY FIRST SPONSOR GROUP LIMITED,
AN ASSOCIATE OF THE COMPANY:
TENURE
APPROXIMATE
LETTABLE
STRATA AREA
(SQ. METRES)
EFFECTIVE
GROUP
INTEREST
(%)
Poortgebouw Property
3rd floor up to and including the 9th floor of the
Poortgebouw
Hoog Catharijne,
Catharijne Esplanade 13,
3511WK, Utrecht, the Netherlands
Expected to comprise two hotels with 320 hotel rooms
in total on completion.
Arena Towers
(Holiday Inn Amsterdam/Holiday Inn Express
Amsterdam Hotels)
Hoogoorddreef 66 and 68, Amsterdam, the
Netherlands, Comprising 443 hotel rooms and 509 car
park lots.
Crowne Plaza Chengdu Wenjiang Hotel & Holiday
Inn Express Chengdu Wenjiang Hotspring Hotel
No 619 A/B North Phoenix Street,
Wenjiang District, Chengdu, Sichuan Province, the
PRC.
Comprising 608 hotel rooms and suites, and a hot
spring facility.
Leasehold to year 2069
11,604
36
Perpetual leasehold
Ground rent paid until 2053
17,396
36
Leasehold to year 2051
81,041
(Gross fl area)
36
118
MILLENNIUM & COPTHORNE HOTELS LIMITED
MILLENNIUM & COPTHORNE HOTELS WORLDWIDE (Unaudited Supplementary
Information)
For the year ended 31 December 2020
ASIA
China
Crowne Plaza Chengdu Wenjiang Hotel & Holiday Inn Express Chengdu Wenjiang Hotspring Hotel
Grand Millennium Beijing
Grand Millennium Shanghai Hongqiao
Millennium Harbourview Hotel Xiamen
Millennium Hotel Chengdu
Millennium Hotel Fuqing
Millennium Hotel Wuxi
Millennium Residences @ Beijing Fortune Plaza
Millennium Resort Hangzhou
Millennium Hotel Zunyi
Millennium Resort Wuyishan
Hong Kong
JW Marriott Hotel Hong Kong
New World Millennium Hong Kong Hotel
Indonesia
Millennium Hotel Sirih Jakarta
Japan
Hotel MyStays Asakusabashi
Hotel MyStays Kamata
Millennium Mitsui Garden Hotel Tokyo
Malaysia
Copthorne Hotel Cameron Highlands
Copthorne Orchid Penang (classified as an asset held for sale at year end)
Grand Millennium Kuala Lumpur
Maldives
Angsana Velavaru
Raffles Maldives Meradhoo
Philippines
The Heritage Hotel Manila
Singapore
Copthorne King’s Hotel Singapore
Grand Copthorne Waterfront Hotel Singapore
M Hotel Singapore
M Social Singapore
Orchard Hotel Singapore
Studio M Hotel
W Singapore Sentosa Cove
South Korea
Millennium Hilton Seoul
Taiwan
Grand Hyatt Taipei
Millennium Hotel Taichung
Thailand
Millennium Resort Patong Phuket
119
MILLENNIUM & COPTHORNE HOTELS LIMITED
MILLENNIUM & COPTHORNE HOTELS WORLDWIDE (continued) (Unaudited
Supplementary Information)
AUSTRALASIA
Australia
Ibis Perth
Mercure Perth
New Zealand
Copthorne Hotel Auckland City
Copthorne Hotel & Apartments Queenstown Lakeview
Copthorne Hotel Palmerston North
Copthorne Hotel & Resort Bay of Islands
Copthorne Hotel & Resort Queenstown Lakefront
Copthorne Hotel & Resort Solway Park Wairarapa
Copthorne Hotel Rotorua
Copthorne Hotel Wellington Oriental Bay
Grand Millennium Auckland
Kingsgate Hotel Autolodge Paihia
Kingsgate Hotel Dunedin
Kingsgate Hotel Greymouth
Kingsgate Hotel Te Anau
Kingsgate Hotel The Avenue Wanganui
Millennium Hotel New Plymouth, Waterfront
Millennium Hotel Queenstown
Millennium Hotel Rotorua
Millennium Hotel & Resort Manuels Taupo
M Social Auckland
MIDDLE EAST*
Iraq
Copthorne Hotel Baranan
Grand Millennium Hotel Sulaimani
Millennium Kurdistan Hotel and Spa
Jordan
Grand Millennium Amman
Kuwait
Copthorne Al-Jahra Hotel & Resort
Copthorne Kuwait City
Millennium Hotel and Convention Centre Kuwait
Oman
Grand Millennium Muscat
Millennium Executive Apartments Muscat
Millennium Resort Salalah
Millennium Resort Mussanah
Palestine
Millennium Palestine Ramallah
*As a result of the sale of M&C’s joint venture interest in the Group’s Middle East operating entity, Millennium & Copthorne Middle East Holdings
Limited (“MCMEHL”), to the other shareholder in December 2016, properties that were previously shown as being managed by the Group are now
shown as franchised, although as of the date hereof the properties continue to be managed or franchised by MCMEHL, with support from the Group,
under a master license and services arrangement.
120
MILLENNIUM & COPTHORNE HOTELS LIMITED
MILLENNIUM & COPTHORNE HOTELS WORLDWIDE (continued) (Unaudited
Supplementary Information)
Qatar
Copthorne Hotel Doha
Kingsgate Hotel Doha
Millennium Hotel Doha
Millennium Plaza Doha
Saudi Arabia
Copthorne Al Naseem
M Hotel Makkah by Millennium
M Hotel Makkah Al Aziziyah
Millennium Al Aqeeq Hotel
Millennium Makkah Al Naseem
Millennium Medina Airport
Millennium Hail Hotel Saudi Arabia
Millennium Tabouk
Millennium Taiba Hotel
United Arab Emirates
Bab Al Qasr Hotel
Copthorne Hotel Dubai
Copthorne Hotel Sharjah
Grand Millennium Al Wahda
Grand Millennium Business Bay
Grand Millennium Dubai
Kingsgate Hotel Abu Dhabi by Millennium
M Hotel Downtown by Millennium
Millennium Airport Hotel Dubai
Millennium Atria Business Bay
Millennium Deyaar Atria Residences
Millennium Deyaar Hotel & Apartments
Millennium Mont Rose Apartments
Millennium Place Dubai Marina
Millennium Place Hotel & Apartments Barsha Heights
Millennium Plaza Hotel Dubai
Studio M Arabia Plaza
EUROPE
France
Millennium Hotel Paris Charles de Gaulle
Millennium Hotel Paris Opéra
Germany
Pullman Hotel Munich
Georgia
The Biltmore Hotel Tbilisi
Italy
Grand Hotel Palace Rome
Hotel Cerretani Firenze, MGallery
Netherlands
Crowne Plaza Hotel
Hampton by Hilton Hotel
121
MILLENNIUM & COPTHORNE HOTELS LIMITED
MILLENNIUM & COPTHORNE HOTELS WORLDWIDE (continued) (Unaudited
Supplementary Information)
Turkey
Millennium Istanbul Golden Horn
United Kingdom
Copthorne Hotel Aberdeen
Copthorne Hotel Birmingham (classified as an asset held for sale at year end)
Copthorne Hotel Cardiff-Caerdydd
Copthorne Hotel at Chelsea Football Club
Copthorne Hotel Effingham Gatwick
Copthorne Hotel London Gatwick
Copthorne Hotel Manchester
Copthorne Hotel Merry Hill-Dudley
Copthorne Hotel Newcastle
Copthorne Hotel Plymouth
Copthorne Hotel Slough-Windsor
Copthorne Tara Hotel London Kensington
Hard Days Night Hotel Liverpool
Hilton Cambridge City Centre Hotel
Millennium Hotel at Chelsea Football Club
Millennium Gloucester Hotel London Kensington
Millennium Hotel Glasgow
Millennium Hotel London Knightsbridge
The Bailey’s Hotel London
The Biltmore, Mayfair – LXR Hotels & Resorts
The Chelsea Harbour Hotel
The Lowry Hotel
THE AMERICAS
USA
Comfort Inn Near Vail Beaver Creek
Maingate Lakeside Resort
Millennium Biltmore Los Angeles
Millennium Broadway New York Times Square
Millennium Buffalo
Millennium Durham
Millennium Harvest House Boulder (classified as an asset held for sale at year end)
Millennium Hilton New York Downtown
Millennium Hilton New York ONE UN Plaza
Millennium Knickerbocker Hotel Chicago
Millennium Maxwell House Nashville
Millennium Minneapolis
Millennium Premier New York Times Square
Novotel New York Times Square
Pine Lake Trout Club
The Bostonian Boston
The Lakefront Anchorage
The McCormick Scottsdale
END
122