Registered number: 03004377
MILLENNIUM & COPTHORNE HOTELS LIMITED
ANNUAL REPORT & ACCOUNTS
For the Year Ended 31 December 2022
MILLENNIUM & COPTHORNE HOTELS LIMITED
CONTENTS
2 - 4
5 - 8
9
Strategic Report
Directors’ Report
Statement of Directors' Responsibilities in Respect of the Annual Report and Financial Statements
10 - 12
Independent Auditor’s Report to the Member of Millennium & Copthorne Hotels Limited
13
14
15
16
17
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
18 - 73
Notes to the Consolidated Financial Statements
74
75
Company Statement of Financial Position
Company Statement of Changes in Equity
76 - 77
Notes to the Company Financial Statements
1
MILLENNIUM & COPTHORNE HOTELS LIMITED
STRATEGIC REPORT
The Directors present the Strategic Report for Millennium & Copthorne Hotels Limited (the "Company") and its subsidiaries (together the
"Group") for the year ended 31 December 2022.
Business Review
Total revenue generated, in reported currency, for the year, was £844m (2021: £540m). This improvement has been the continued
recovery from the COVID-19 pandemic and the continued relaxation of remaining travel restrictions in different jurisdictions. This has
been reflected in the increase in total hotel revenue in the reported currency of £753m (2021: £418m), which has been driven by the
increase in average room rates to £126 (2021: £80) and occupancy increase to 65% (2021: 52%).
Pre-tax profit for the year increased by £790m, to £840m (2021: £50m). This has been driven by the gain on disposal of Millennium
Hilton Seoul and the on going recovery from COVID 19 and resultant increased appetite for travel.
The net asset value (NAV) for the Group increased to £3,845m (2021: £3,275m). This has been driven by the gain on the disposal of
Millennium Hilton Seoul and the deconsolidation of CDLHT.
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:
n Growth
n Financial Leverage
n Cost Control
To achieve profitable growth and improved asset returns for our hospitality business.
To ensure a sound financial base in order to provide a solid platform for the development and growth of the
Group.
To ensure costs remain in line with revenue movements through a decentralised model, technological
enhancements to drive efficiencies and rigorous monitoring of spending.
Measure
Revenue per available
room
Occupancy
2022
£81
65%
Hotel revenue
£753m
£418m
Average room rate
Gearing
£126
(1%)
2021
Basis for calculation
£42
52%
£80
Average room rate x Annual occupancy percentage.
Percentage of rooms available for sale that were
actually sold to our guests for the year.
Includes room,
events for the year.
Revenue for sales divided by the number of room
nights sold for the year.
food & beverage and meetings &
25%
Net cash/(debt) over total equity for the year.
Net Cash/(Debt)
£50m
£(824)m
Total cash and cash equivalents less the interest-
bearing loans, bonds and borrowings. Refer to note
19 for further details.
Operating Profit
£788m
£56m
Operating profit for the year.
Profit before tax
£840m
£50m
Profit before tax for the year.
Principal risks and uncertainties
The Group recognises that risk management is crucial in order for management to make well informed business decisions, minimising
impact of various risks and optimising opportunities. The Group is committed to maintaining risk management practices as an integral
part of the business and operations. The Group will continue to proactively monitor developments, the prevailing risk, exposure and
adapt accordingly.
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 directors 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.
Market risk – Competition and sector evolution
Competition in the hotel industry is increasing as the sector continues to consolidate and the growth of alternative business models, such
as sharing economy platforms like Airbnb, also are impacting supply and demand dynamics within the industry. Online travel agencies,
such as Booking.com and Expedia.com, which compete against direct booking channels, are taking market share and influence
consumer preference.
2
MILLENNIUM & COPTHORNE HOTELS LIMITED
STRATEGIC REPORT (continued)
To mitigate these risks, 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 minimise commission costs.
This is coupled with the diverse nature of the portfolio, both geographically and in respect of its breadth of brands. The Group maintains
a flexible operating structure that allows it to align its sales and marketing activities and adapt to changing hospitality trends.
Finance risk – Foreign currency and borrowing
The Group operates in numerous jurisdictions and trades in various international currencies and the reporting currency is pound 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.
Hotels generally require significant capital expenditure at regular intervals in order to remain competitive and real estate assets, labour
and other operating expenses can be significant. 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.
Foreign exchange risk is mitigated as the exposure is primarily managed through the funding of purchases and repayment of borrowings
from income generated in the same currency creating a natural hedge. 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 and
conducts business with a diversified set of lenders. The Group generally does not borrow on a secured basis, its real estate assets could
serve as significant collateral should secured borrowings be required in the future.
Health and safety risk – Non-compliance and risk of injury
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, as well as reputational damage.
To ensure the health and safety of our key stakeholders, the Group has a health, safety and environmental management system in
place, which include policies, procedures, testing, self and third-party audits, training and reporting. Management proactively seeks to
identify emerging risks at the earliest opportunity to ensure clear roles and responsibilities are defined and internal controls function to
mitigate risk. The well-being of the Group’s guests, colleagues and other stakeholders is one of its top priorities. Robust precautionary
measures, including an enhanced cleaning and sanitisation programme, help ensure that Group’s hotels and corporate offices remain
safe places to visit.
IT infrastructure risk – infrastructure, process and data
Increasing reliance on transactions over the internet and mobile applications, and the aggregation and storage of guest and other
information electronically present heightened risks of attacks affecting the operation of our systems and a potential loss or misuse of
for
confidential, personal and/or proprietary information. The hospitality sector in particular is becoming a more frequent
cyberattacks as hotel companies often handle large volumes of customer’s personal data. The occurrence of a cyber attack or loss of
customers personal data could result in litigation, reputational damage, monetary damages and disruption to the normal course of
business.
target
The Group’s regional IT teams conduct periodic security and penetration testing. The Group’s software systems are regularly updated
with the latest security updates and patches to be installed. In the event of an IT security event, regional IT teams have developed
disaster recovery plans for their high-priority systems and tests are conducted on select mission-critical systems annually to verify their
recoverability offsite. Where the Group outsources critical information technology systems, it is ensured that suppliers exceed industrial
standards to ensure maximum effectiveness and safety is maintained.
Statement under section 172(1) of the Companies Act 2006
In accordance with 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 Group for the benefit of its members as a
whole. This is defined under Section 172 of the Companies Act 2006 by the following areas which have been reviewed individually:
(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.
3
MILLENNIUM & COPTHORNE HOTELS LIMITED
STRATEGIC REPORT (continued)
Consequences of any decision in the long term
The Directors are committed to the significance of the views and opinions of the key stakeholders of the Group when making decisions
for the long-term strategy and success of the Group. This is shown through the value and engagement placed on the key stakeholders of
the Company and Group to ensure synergy between the Group and the key stakeholders.
Interests of the Group's employees
The Directors recognise that the company’s employees are a valued asset of the Group as they serve as key brand ambassadors, are
critical to front-line service delivery and have the ability to create a unique and memorable experience of customers. To ensure good
employee engagement and build a collaborative and supportive environment, the company ensures that good training and development
is provided, good internal communications are maintained through periodic newsletters and employee intranet and good recruitment and
induction. This is at the forefront of the Group’s ethos.
The Group’s business relationships with suppliers, customers and others
The Directors understand that nurturing and maintaining good relationships with key stakeholders, customers, and suppliers is a key
driver to sustainable growth and long-term success. Customers are the lifeblood of the business and are valued very highly and the
Group endeavours to provide the customer with a unique experience in a friendly, clean and accommodating environment. By doing this
it is recognised that maintaining good relations with suppliers is critical so that quality products and services provided to customers are
maintained. This is done by engaging with suppliers and ensuring the development of good business relationships, meeting sustainable
sourcing requirements and fair price and payment terms.
Impact of the Group's operations on the community and the environment
The Directors recognise the role of the Group in the community and the surrounding environment by ensuring that there is a continued
and concerted effort to ensure processes are efficient, sustainable and with the least impact on the environment as possible. The Group
participates in support for charitable organisations, and participation in local outreach programs to ensure that the Group acts as a good
corporate citizen.
Desirability of the Group to maintain a reputation for high standards of business conduct
The Directors value the reputation and high standards that are required to operate in this business sector. It is recognised that
maintaining the Group’s reputation for high standards and corporate responsibility. This is done through ensuring complete compliance
with legal requirements, developing a respectful culture and leading by example through good corporate governance.
To act fairly as between members of the Group
The directors are committed to ensuring a fair, transparent, and accountable relationship with the members of the Group, This is
achieved through clear investor communication, general meeting and clear financial data in the form or audited financial statements.
The Strategic Report was approved by the Board of Directors of the Group on 02 August 2023 and signed on its behalf by
Kwek Eik Sheng
Director
4
MILLENNIUM & COPTHORNE HOTELS LIMITED
DIRECTORS’ REPORT
The Directors present their annual report and financial statements for the Group and Company for the year ended 31 December 2022.
Strategic report
The Strategic Report is found on pages 2 to 4. Pursuant to the Companies Act 2006, that report must provide a fair review of the Group's
business, together with a description of the principal risks and uncertainties facing the Group. It includes an analysis of the development
and performance of the Group's business during the year and the position of its business at the end of the year, as well as description of
the Group'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 2022 financial year, up to the date of this report,
include:
Kwek Leng Beng
Kwek Eik Sheng
Jonathon Grech
Jonathan David Ashcroft
Catherine Wu
Ali Hamad Ali Lakhraim Alzaabi
David Kien Hassan
Alexander Richard Jason Wade
Anthony Grahame Potter
(resigned 23 June 2023)
(appointed 11 July 2022)
(appointed 11 July 2022)
(appointed 11 July 2022)
(appointed 11 July 2022)
(appointed 12 July 2023)
Going Concern
The measures adopted by the Directors in 2022 in order to further reduce costs and optimise the Group’s cash flow and liquidity have
enabled the Group to offset the impact of rising inflation.
Despite the uncertainty caused by high levels of inflation and associated risks, the Group continues to prepare its accounts on a going
concern basis given that trading has improved significantly in recent months across the global estates with many hotels returning to pre-
pandemic levels.
Having reviewed cash 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 2024. Accordingly, they continue to adopt the going concern basis in preparing the financial statements of the Group and the
Company. Please refer to note 2.1 for further information.
Dividends
The directors do not recommend the payment of a dividend in respect of the year ended 31 December 2022 (2021: £Nil).
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 (2021:
£Nil). The Group operates a politically neutral policy with regard to any political donations and expenditures it may elect to make.
Financial instruments
An indication of the Group’s financial risk management objectives and policies in respect of the use of financial
exposure of the Group to price risk, credit risk, liquidity risk and cash flow risk are set out below.
instruments and
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
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 ensure it remains consistent with the client’s current creditworthiness
and appropriate to the anticipated volume of business.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the
Group’s income or the value of its holdings of financial instruments. The 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.
5
MILLENNIUM & COPTHORNE HOTELS LIMITED
DIRECTORS’ REPORT (continued)
Foreign currency risk
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 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.
Interest rate risk and interest rate swaps
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.
Employment of disabled persons
We highly value the rich diversity of our colleagues around the world. As of the end of 2022, the Group operated in over 25 countries and
employed approximately 6,441 employees worldwide. The Group 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.
Engagement with suppliers, customers and others in a business relationship with the Group
As a Group 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 Group 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.
Employee involvement and engagement with employees
As a Group, we highly value our employees as the driving force behind every aspect of our business, including guest-facing roles,
ancillary and supporting roles, and administration roles. Our employees play a crucial role in delivering exceptional services to our
guests, guaranteeing a memorable and consistently high standard of service. Moreover, they contribute to cultivating a professional,
efficient, inclusive, and friendly environment for guests and colleagues alike.
The Group’s aims to maximise employee engagement by keeping employees informed about matters of concern to them, through
management presentations, updates from regional and functional heads, regional
intranet sites and other communication. 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.
We are fully committed to supporting our employees by providing them with the necessary resources, continuous training, and benefits
to ensure their satisfaction and well-being. Through our employee benefit schemes and tailored training programs, the Group strives to
enhance their skills and knowledge, allowing them to excel
in their specific roles within our organisation and the broader Group
community.
Central to our approach is the instillation of our core values, shown below, into every employee, guiding their actions and decision-
making. By upholding these values, we foster a sense of unity, purpose, and integrity throughout our workforce, promoting a positive and
productive work culture.
• Will to win - The will to be successful both personally and as a Group as a whole in the pursuit of targets and objectives.
• Guest focus - Unparalleled service and guest experience provided by our employees and services.
• Openness in communication - Clear and supportive communication between all levels of the Group.
• Teamwork - Collaborative and coherent working between all teams within the group.
• Innovation and creativity - Tailor made solutions and the ability to introduce new ideas, processes and methods into practice.
• Think blue ocean behaviour - Innovative, anticipative and divergent thinking approach to targets, performance, growth
and teamwork.
6
MILLENNIUM & COPTHORNE HOTELS LIMITED
DIRECTORS’ REPORT (continued)
Streamlined energy and carbon reporting
This section discloses our UK operational energy consumption, carbon footprint, and energy efficiency initiatives for the year ended 31
December 2022 in line with the UK Government’s Streamlined Energy and Carbon Reporting (‘SECR’) legislation.
GHG Emissions and
Energy Use
2022
2021
Energy consumption used to
calculate emissions in
Kilowatt-hours (kWh)
Gas: 54,488,636 kWh
Diesel: Nil kWh
Electricity: 36,561,390 kWh
District Heating: 751,589 kWh
Company-Owned Transport: Nil kWh
Employee-Owned Transport: 114,925 kWh
Gas: 36,214,810 kWh
Diesel: 3,946 kWh
Electricity: 21,072,238 kWh
District Heating: Nil kWh
Company-Owned Transport: 6,394 kWh
Employee-Owned Transport: 13,132 kWh
Total: 91,916,541 kWh
Total: 57,310,520 kWh
Emissions from combustion
of gas in tCO2e
(Scope 1)
Emission from combustion of
diesel in tCO2e
(Scope 1)
Emissions from business
travel in company owned
vehicles in tCO2e
(Scope 1)
Emissions from purchased
electricity in tCO2e
(Scope 2, location-based)
Emissions from purchased
district heating in tCO2e
(Scope 2, location-based)
Emissions from business
travel in rental cars or
employee-owned vehicles
where company is
responsible for purchasing
the fuel in tCO2e
(Scope 3)
9,946.4 tCO2e
6,633 tCO2e
N/A
N/A
0.9 tCO2e
1.5 tCO2e
7,070.2 tCO2e
4,474 tCO2e
128.3 tCO2e
N/A
26.9 tCO2e
3.2 tCO2e
Total gross tCO2e based on
above
Intensity ratio: gross tCO2e /
room
17,171.8 tCO2e
4.2 tCO2e
11,113 tCO2e
2.6 tCO2e
Methodology
The methodology used to calculate our GHG emissions and energy use is the GHG Protocol Corporate Accounting and Reporting
Standard, using the operational control approach on reporting boundaries. The data has been calculated using v2.0 DEFRA conversion
factors for each reporting year.
As the data was collected in December 2022, data for quarter 4 of 2022 was based on actual data for quarter 4 of 2021, it has been
assumed that there were similar emissions in each quarter as there were no significant changes to hotel operation between quarter 4
2021 and quarter 4 2022. This enabled us to report verifiable data for the 2022 calendar year in advance of our reporting deadlines.
For any estimates included in our totals, we have used the emissions per room average for the UK region.
Energy efficient actions
This year we have continued efforts to reduce energy consumption across our UK estate. Progress in 2022 included:
n Installation of new boilers
n Ongoing LED installation
n Upgrading of Air Handling Units
n Upgrading of belt driven pumps to direct drive pumps
n Upgrading of pumps to more efficient models
The Group’s greenhouse gas emissions and energy consumption will continue to be reported in its Corporate Responsibility Report,
located at https://investors.millenniumhotels.com/corporate-responsibility.
7
MILLENNIUM & COPTHORNE HOTELS LIMITED
DIRECTORS’ REPORT (continued)
Future developments
The Group will build upon its performance by increasing the efficiency of the internal processes and functions.
Research and development
Whilst the management team continues to review ways to improve the Group’s service, brand and product offerings, and regularly invest
in our people and assets, the Group did not conduct significant research and development activities during the year.
Statement of corporate governance
The Group is 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.
As at 31 December 2022, the Board comprised of 8 directors, consisting of 3 executive directors and five non-executive directors. Mr
Kwek Leng Beng has served as the Chairman of the Group since it was initially listed in 1996, and as an executive director since 2020.
Mr Kwek Eik Sheng served as an executive director, while Mr Jonathon Grech and Mr David Ashcroft served as non-executive directors
in 2022. On 11 July 2022, Mr Alexander Wade, Dr Catherine Wu and Mr Ali Alzaabi were appointed as non-executive directors, while Mr
David Hassan was appointed as an executive director.
Mr. David Ashcroft resigned from the Board on 23 June 2023. Following a vetting process, Dr. Anthony Potter was appointed to the
Board on 12 July 2023.
The vision of the Directors 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 recognize 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.
In 2023, 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 continue to examine the culture of the Group and will seek to reinforce a culture of accountability where
employees take into account the views of, and are responsible to, the Group’s stakeholders, including our guests and customer, other
employees, suppliers, the communities in which we operate.
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 Group and industry more generally, the directors also
are keenly aware that the Group must operate in a sustainable manner in order to be successful.
Company Branches
The Company did not have any branches operating outside of the UK during the year.
Statement of the directors as to disclosure of information to the auditor
In accordance with Section 418 of the Companies Act 2006, each Director who held office at the date of approval of this Directors’
Report confirms that:
· So far as they are aware, there is no relevant audit information of which the Company’s auditor is unaware; and
· They have taken all the steps that they ought to have taken as a director in order to make himself or herself aware of any
relevant audit information and to establish that the Group’s auditor is aware of that information.
Auditor
Pursuant to Section 487 of the Companies Act 2006, the auditor will be deemed to be reappointed and KPMG LLP will therefore continue
in office.
The Directors’ Report was approved by the Board of Directors of the Company on 02 August 2023.
On behalf of the Board
Kwek Eik Sheng
Director
Corporate Headquarters
Scarsdale Place
Kensington
London
W8 5SY
8
MILLENNIUM & COPTHORNE HOTELS LIMITED
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND
FINANCIAL STATEMENTS
The directors are responsible for preparing the strategic report, the director’s report and the group and parent company financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and parent Company financial statements for each financial year. Under that law
they have elected to prepare the Group financial statements in accordance with UK-adopted international accounting standards and
applicable law and have elected to prepare the parent Company financial statements in accordance with UK accounting standards and
applicable law (UK Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosure Framework.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and parent Company and of the Group’s profit or loss for that period. In preparing each of the Group and
parent Company financial statements, the directors are required to:
· Select suitable accounting policies and then apply them consistently;
· Make judgements and estimates that are reasonable, relevant, reliable and prudent;
· For the Group financial statements, state whether they have been prepared in accordance with UK-adopted international
accounting standards;
· For the parent company financial statements, state whether applicable UK accounting standards have been followed,
subject to any material departures disclosed and explained in the financial statements;
· Assess the group and parent company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern; and
· Use the going concern basis of accounting unless they either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company’s
transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure
that its financial statements comply with the Companies Act 2006. They are responsible for such internal controls as they determine are
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and
have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and
detect fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s
website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
On behalf of the Board
Kwek Eik Sheng
Director
9
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
2022 which comprise the Consolidated Income Statement, the Consolidated Statement of 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 31
December 2022 and of the Group’s profit for the year then ended;
• The Group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards;
• 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.
Fraud and breaches of laws and regulations – ability to detect
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.
10
MILLENNIUM & COPTHORNE HOTELS LIMITED
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MILLENNIUM & COPTHORNE
HOTELS LIMITED (continued)
As required by auditing standards, we perform procedures to address the risk of management override of controls. We performed
procedures including:
• Testing 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.
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
the information therein is materially misstated or inconsistent with the financial statements or our audit
statements audit work,
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.
11
MILLENNIUM & COPTHORNE HOTELS LIMITED
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MILLENNIUM & COPTHORNE
HOTELS LIMITED (continued)
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; or
We have nothing to report in these respects.
Directors’ responsibilities
As explained more fully in their statement set out on page 5, 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 responsibility
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.
Andrew Simpson (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
02 August 2023
12
MILLENNIUM & COPTHORNE HOTELS LIMITED
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2022
Revenue
Cost of sales
Gross profit
Administrative expenses
Other operating income
Other operating expense
Operating profit
Share of profit of joint ventures and associates
Finance income
Finance expense
Net finance expense
Profit before tax
Income tax (charge)/credit
Profit for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
The financial results above derive from continuing activities.
The notes on pages 18 - 73 are an integral part of these consolidated financial statements.
Notes
5
6
7
7
13
9
5
10
2022
£m
844
(365)
479
(406)
712
3
788
53
58
(59)
(1)
840
(286)
554
533
21
554
2021
£m
540
(255)
285
(308)
65
14
56
17
15
(38)
(23)
50
39
89
73
16
89
13
MILLENNIUM & COPTHORNE HOTELS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2022
Profit for the year
Other comprehensive income:
Items that are not reclassified subsequently to income statement:
Remeasurement of defined benefit plan actuarial net gains, net of tax
21
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 income/(expense) for the year, net of tax
Total comprehensive income for the year, net of tax
Total comprehensive income attributable to:
Equity holders of the parent
Non-controlling interests
Total comprehensive income for the year, net of tax
The notes on pages 18 - 73 are an integral part of these consolidated financial statements.
2022
£m
554
8
8
166
34
(6)
90
284
292
846
804
42
846
2021
£m
89
2
2
(44)
12
(1)
-
(33)
(31)
58
31
27
58
14
MILLENNIUM & COPTHORNE HOTELS LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
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
Equity
Issued share capital
Share premium
Translation reserve
Treasury share reserve
Fair value reserve
Retained earnings
Total equity attributable to equity holders of the parent
Non-controlling interests
Total equity
NOTES
11, 36
12, 36
13
14
24
15
16
17
18
35
19
21
22
23
36
24
19
25
22
36
27
28
28
28
2022
£m
2021
£m
2,624
3,287
551
797
477
-
700
465
26
5
4,449
4,483
4
119
176
561
860
9
869
5
109
83
390
587
17
604
5,318
5,087
(227)
(674)
(4)
(10)
(15)
(410)
(190)
(856)
(284)
(217)
(51)
(12)
(53)
(13)
(9)
(38)
(131)
(77)
(942)
(540)
(262)
(43)
(4)
(21)
(617)
(1,473)
3,845
(870)
(1,812)
3,275
97
843
655
(4)
-
2,029
3,620
225
3,845
97
843
392
(4)
-
1,364
2,692
583
3,275
The notes on pages 18 - 73 are an integral part of these consolidated financial statements.
These financial statements were approved by the Board of Directors on 02 August 2023 and were signed on its behalf by:
Kwek Eik Sheng
Director
Registered No: 03004377
15
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022
MILLENNIUM & COPTHORNE HOTELS LIMITED
Balance at 1 January 2022
Profit
Other comprehensive income
Total comprehensive income
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Dividends – non-controlling interests
Revaluation gain on property, plant and equipment
Changes in ownership interests
Change in interests in subsidiaries without loss of control
Disposal of interest in subsidiary
Return of capital to non-controlling interests
Total transactions with owners
Balance at 31 December 2022
Balance at 1 January 2021
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
Balance at 31 December 2021
SHARE CAPITAL
SHARE PREMIUM
TRANSLATION
RESERVE
TREASURY SHARE
RESERVE
RETAINED EARNINGS
TOTAL EXCLUDING
NON- CONTROLLING
INTERESTS
NON- CONTROLLING
INTERESTS
TOTAL EQUITY
£m
97
-
-
-
-
-
-
-
-
£m
843
-
-
-
-
-
-
-
-
-
£m
392
-
263
263
-
-
-
-
-
-
£m
(4)
-
-
-
-
-
-
-
-
-
97
843
655
(4)
£m
1,364
533
8
541
-
123
1
-
-
124
2,029
£m
2,692
533
271
804
-
123
1
-
-
124
3,620
£m
583
21
21
42
(10)
-
(1)
(384)
(5)
(400)
225
£m
3,275
554
292
846
(10)
123
-
(384)
(5)
(276)
3,845
SHARE CAPITAL
SHARE PREMIUM
TRANSLATION
RESERVE
TREASURY SHARE
RESERVE
RETAINED EARNINGS
TOTAL EXCLUDING
NON- CONTROLLING
INTERESTS
NON- CONTROLLING
INTERESTS
TOTAL EQUITY
£m
97
-
-
-
-
-
-
-
-
£m
843
-
-
-
-
-
-
-
-
£m
436
-
(44)
(44)
-
-
-
-
-
£m
(4)
-
-
-
-
-
-
-
-
£m
1,287
73
2
75
-
-
2
-
2
£m
2,659
73
(42)
31
-
-
2
-
2
97
843
392
(4)
1,364
2,692
£m
579
16
11
27
-
(14)
(2)
(7)
(23)
583
The notes on pages 18 - 73 are an integral part of these consolidated financial statements.
£m
3,238
89
(31)
58
-
(14)
–
(7)
(21)
3,275
16
MILLENNIUM & COPTHORNE HOTELS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2022
Cash flows from operating activities
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 charge/(credit)
Operating 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 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)
Proceeds from disposal of subsidiary (net of expenses)
Acquisition of subsidiaries
Acquisition and additions of property, plant and equipment and investment properties
Net cash generated from/(used in) investing activities
Cash flows from financing activities
Loan to intermediate holding company
Repayment of borrowings
Drawdown of borrowings
Payment of lease liabilities
Dividends paid to non-controlling interests
Return of capital to non-controlling interests
Net (used in)/generated from financing activities
Net 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
The notes on pages 18 - 73 are an integral part of these consolidated financial statements.
NOTES
11
13
7
7
9
9
10
15,17
16
25
13
11, 12
14
36
18
18
18
2022
£m
554
69
(53)
(712)
(3)
(58)
59
286
142
(50)
(8)
58
142
(18)
14
(148)
(10)
10
762
53
(22)
(41)
762
(486)
(375)
250
(20)
(10)
(5)
(646)
106
390
65
561
561
-
561
2021
£m
89
75
(17)
(65)
(14)
(15)
38
(39)
52
(21)
(7)
102
126
(19)
2
(16)
93
2
30
-
-
(88)
(56)
-
(467)
501
(10)
(15)
(7)
2
39
350
1
390
390
-
390
17
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Reporting entity
1
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, United Kingdom.
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 2022 were authorised for issue in accordance with a resolution of
the Directors on 02 August 2023.
Basis of preparation
2.1
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’s financial statements in accordance with Financial Reporting Standard 101
‘Reduced Disclosure Framework’.
Basis of accounting
The Group's financial statements have been prepared and approved by the directors in accordance with international accounting
standards and in accordance with UK-adopted international accounting standards (“UK-adopted IFRS”). The Company has elected to
prepare its financial statements in accordance with FRS 101; these are presented on pages 74 to 77.
Adoption of new and revised standards
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.
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 2 to 4. Note 20 of the financial statements includes the Group’s objectives, policies and processes for
instruments and hedging activities and its
managing its capital; its financial risk management objectives; details of its financial
exposures to credit risk and liquidity risk.
18
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
The measures adopted by the directors in 2022 in order to further reduce costs and optimise the group’s cash flow and liquidity have
enabled the group to offset the impact of rising inflation. These mitigating actions 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. These initiatives will continue to support the Group’s
recovery.
It is noted that the Group has a limited fixed cost based due to owning the majority of its hotel properties which is a major advantage in
this industry.
Despite the uncertainty caused by high levels of inflation and associated risks, the Group continues to prepare its accounts on a going
concern basis given that trading has improved significantly in recent months across the global estates with many hotels returning to pre-
pandemic levels.
Cashflow forecasts have been prepared for a period of eighteen months from the date of approval of the financial statements. The
directors continue to review and adapt these cashflow forecasts in the light of the changing circumstances associated with the high
levels of inflation and other business risks. These forecasts include downside scenario assumptions such as restrictions on the renewal
of loan facilities during the period or failure to dispose of assets held for sale whilst still incurring significant capital improvement costs.
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 2024. 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.
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.
B
Foreign currency
The financial statements of each of the Group’s businesses are prepared in the functional currency applicable to that business.
19
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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.
(ii)
Financial statements of foreign operations
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.
(iii)
Net investment in foreign operations
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
Derivative financial instruments
The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. 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.
D
(i)
Hedges
Cash flow hedges
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 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.
(ii)
Hedge of monetary assets and liabilities
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.
20
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
E
(i)
Property, plant and equipment and depreciation
Recognition and measurement
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
Building surface, finishes and services
Plant and machinery
Furniture and equipment
Soft furnishings
Computer equipment
Software
Motor vehicles
50 years or lease term if shorter
30 years or lease term if shorter
10 – 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.
(iii)
Subsequent costs
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.
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 36.
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.
(i)
At the commencement of a lease, the Group recognises a right-of-use asset along with a corresponding lease liability.
the Group as a lessee
21
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 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.
(ii)
the Group as a lessor
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.
22
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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.
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.
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.
23
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
H
Investment properties
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 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.
N
(i)
Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement.
Employee benefits
Defined contribution plans
24
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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.
(iii)
Long-term service benefits
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).
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.
25
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
O
Provisions
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.
Revenue and its recognition
P
Revenue comprises:
• Income from the ownership and operation of hotels – recognised at the point at which the accommodation and
related services are provided;
• Measurement and recognition of refunds and other obligations - This is recognised at the point at which a complaint is
made. The obligation is measured based on the severity of the complaint received and the discretion of management
to determine the amount. This can be up to the full amount of the accommodation and/or services 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.
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.
S
Non-current assets held-for-sale
A non-current asset or a group of assets containing a non-current asset (a disposal group) is classified as held for sale if it’s 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.
26
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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.
V
Government grants
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.
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 right to variable return 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. During the financial year 2022, the Group sold part of the CDLHT units that it held to the
holding company, thereby reducing its interest in CDLHT to 27% (2021: 39%). The Group has assessed that the reduction in interest in
CDLHT has resulted in the Group no longer having control of CDLHT. Accordingly, CDLHT was deconsolidated and accounted for as
an associate thereafter, this is detailed in note 34.
27
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 judgmental. There were no acquisitions undertaken by the Group during 2022.
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.
3.2
The key estimates are:
Estimates
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).
New standards and interpretations not yet adopted
4
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 2023).
The Group is in the process of assessing the impact of these new standards, amendments and interpretations on the financial
statements.
5
Disclosure of segmental information is principally presented in respect of the Group’s geographical segments.
Operating segment information
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 UK/EU
• 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 were incorporated within the existing geographical regions and CDLHT operations are reviewed separately by its
board on a monthly basis. During the financial year, CDLHT was deconsolidated and accounted for as an associate thereafter, see note
34 for more details.
28
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Segment results
NEW YORK REGIONAL US
LONDON
£m
£m
157
-
-
157
31
(49)
(18)
-
-
-
-
6
(12)
Revenue
Hotel
Property operations
REIT4
Total revenue
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
Operating profit/(loss)
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
105
10
-
115
26
(19)
7
4
-
-
-
(3)
8
(4)
(1)
13
11
9
-
-
-
£m
141
-
-
141
65
(22)
43
-
-
-
-
-
43
-
9
(6)
46
REST OF
UK/EU
£m
76
-
11
87
23
(7)
16
-
3
-
-
5
24
8
5
2
39
2022
SINGAPORE REST OF ASIA
AUSTRALASIA
£m
126
2
11
139
58
(28)
30
1
(4)
-
156
(7)
176
29
14
(12)
207
£m
107
4
9
120
14
(35)
(21)
2
2
-
543
6
532
15
16
(9)
554
£m
41
41
3
85
14
(5)
9
25
(1)
-
13
(4)
42
1
3
(9)
37
Net finance expense
Profit before tax
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.
Segment results
NEW YORK REGIONAL US
LONDON
£m
£m
68
-
-
68
(18)
(30)
(48)
-
-
-
-
26
-
-
(22)
Revenue
Hotel
Property operations
REIT4
Total revenue
Hotel gross operating profit/(loss)
Hotel fixed charges1
Hotel operating profit/(loss)
Property operating profit
REIT operating (loss)
Central costs
Other operating income2
Other operating expense2
Other operating income – REIT2
Other operating expense – REIT2
Operating profit/(loss)
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
70
4
-
74
19
(17)
2
1
-
-
46
15
-
-
64
(11)
(4)
69
11
9
-
-
-
£m
59
-
-
59
22
(12)
10
-
-
-
-
-
-
-
10
-
9
(26)
(7)
REST OF
UK/EU
£m
36
-
19
55
7
(6)
1
-
5
-
4
5
-
(2)
13
4
6
(61)
(38)
2021
SINGAPORE REST OF ASIA
AUSTRALASIA
£m
54
2
19
75
22
(5)
17
(1)
(11)
-
1
(2)
1
3
8
-
15
(2)
21
£m
83
4
13
100
10
(27)
(17)
3
1
-
4
(28)
1
4
(32)
13
18
(22)
(23)
£m
48
56
5
109
23
(6)
17
26
(1)
-
8
(5)
-
(2)
43
-
4
7
54
Net finance expense
Profit before tax
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 operated the REIT business.
CENTRAL
COSTS
£m
-
-
-
-
-
-
-
-
-
(25)
-
-
(25)
-
2
-
(23)
CENTRAL
COSTS
£m
-
-
-
-
-
-
-
-
-
(28)
-
-
-
-
(28)
-
3
-
(25)
TOTAL GROUP
£m
753
57
34
844
231
(165)
66
32
-
(25)
712
3
788
53
69
(38)
872
(31)
(1)
840
TOTAL GROUP
£m
418
66
56
540
85
(103)
(18)
29
(6)
(28)
63
11
2
3
56
17
75
(108)
40
33
(23)
50
29
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
segmental assets and liabilities
2022
Hotel operating assets
Hotel operating liabilities
Investment in joint ventures and
associates
Total hotel operating net assets
Property operating assets
Property operating liabilities
Investment in joint ventures and
associates
Total property operating net assets
Deferred tax liabilities
Income taxes payable
Net debt
Net assets
Segmental assets and liabilities
Hotel operating assets
REIT operating assets
Hotel operating liabilities
REIT operating liabilities
Investment in joint ventures and
associates
Total hotel operating net assets
Property operating assets
Property operating liabilities
Investment in joint ventures and
associates
Total property operating net assets
Deferred tax liabilities
Income taxes payable
Net debt
Net assets
Geographic information
Revenue from external customers
United States
United Kingdom
Singapore
New Zealand
Taiwan
South Korea
France
Australia
China
Malaysia
Maldives
Italy
Philippines
Indonesia
Other
Total revenue per consolidated income statement
NEW YORK REGIONAL US
LONDON
£m
640
(67)
-
573
-
-
-
-
£m
313
(48)
-
265
188
(1)
-
187
£m
546
(37)
-
509
-
-
-
-
REST OF
UK/EU
£m
211
(36)
70
245
-
-
123
123
SINGAPORE
REST OF ASIA
AUSTRALASIA TOTAL GROUP
£m
379
(361)
39
57
168
(13)
115
270
£m
1,003
(125)
135
1,013
174
(3)
267
438
£m
185
(26)
12
171
153
(2)
36
187
£m
3,277
(700)
256
2,833
683
(19)
541
1,205
(190)
(53)
50
3,845
2021
NEW YORK REGIONAL US
LONDON
£m
568
-
(55)
-
-
513
-
-
-
-
£m
269
-
(38)
-
-
231
179
(1)
-
178
£m
559
-
(35)
-
-
524
-
-
-
-
REST OF
UK/EU
£m
200
256
(44)
(15)
13
410
-
-
101
101
SINGAPORE
REST OF ASIA
AUSTRALASIA TOTAL GROUP
£m
36
705
(42)
(43)
-
656
92
(1)
-
91
£m
669
121
(182)
(15)
122
715
172
(3)
228
397
£m
177
100
(19)
(3)
-
255
124
(4)
1
121
2022
£m
272
208
139
76
48
31
12
9
9
9
8
6
4
4
9
844
£m
2,478
1,182
(415)
(76)
135
3,304
567
(9)
330
888
(72)
(21)
(824)
3,275
2021
£m
142
105
76
95
29
26
1
14
14
4
11
3
5
2
13
540
The revenue information above is based on the location of the business. The £844m (2021: £540m) revenue is constituted of £753m (2021: £418m) of hotel revenue,
£57m (2021: £66m) of property operations revenue and £34m (2021: £56m) of REIT revenue. The property operations revenue comprises £41m (2021: £56m) from
Australasia, £2m (2021: £2m) from Singapore, £10m (2021: £4m) from the regional US and £4m (2021: £4m) from Japan.
30
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Non-current assets
United States
United Kingdom
Singapore
South Korea
China
Taiwan
New Zealand
Japan
Netherlands
Hong Kong
Malaysia
Italy
Germany
France
Maldives
Philippines
Australia
Indonesia
Total non-current assets per consolidated statement of financial position
2022
£m
1,094
714
664
458
344
301
245
179
112
107
62
52
27
23
23
18
14
12
4,449
2021
£m
988
804
822
174
331
311
241
217
101
102
50
71
101
22
79
10
42
12
4,478
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.
31
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
6
The following items are included within administrative expenses:
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
Repairs and maintenance
Depreciation
– property, plant and equipment
– right-of-use assets
Rental paid/payable under operating leases*
– land and buildings
– plant and machinery
2022
£m
2021
£m
1
2
3
-
3
2022
£m
57
55
14
15
1
1
2
3
-
3
2021
£m
45
67
8
-
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
– Biltmore Court & Tower
– Sunnyvale
– CDL Land New Zealand Limited
– Millennium Mitsui Garden Hotel Tokyo
– Reversionary interest on freehold land
Reversal of property, plant & equipment
Gain on disposal of property, plant and equipment
Gain on disposal of investment property
Gain on disposal of subsidiary
Fair value loss from FSGL's warrant
Other operating income / (expense) relating to disposal
Other operating income
Notes
(A)
(B)
(C)
(D)
(E)
(F)
(G)
(H)
2022
£m
-
(7)
(7)
13
1
12
26
38
501
59
84
(8)
41
-
715
2021
£m
(2)
19
27
-
-
-
64
108
12
-
-
-
(44)
3
79
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.
Reversal of impairment losses 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 reversal of impairment for the year was £26m
consisting of £6m in New York, £11m in the regional US, £5m in the rest of UK/EU and £8m in the rest of Asia. A net impairment
charge of £(4)m was recognised in Australasia.
For 2021, a total impairment reversal of £64m consisting of £26m in New York, £15m in regional US, £7m in Rest of UK/EU, £3m in
Singapore and £21m in the rest of Asia. This was offset by charge of £7m in Australasia and £1m in Singapore.
32
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Gain on disposal of property, plant & equipment
(C)
The disposal of Millennium Hilton Seoul was completed in February 2022 and was included in the 'Rest of Asia' segment and
recognised a gain on disposal of £501m and net proceeds of £611m.
For the year ended 31 December 2021, there were two disposals of property plant and equipment resulting in a gain on disposal. The
Copthorne Hotel Birmingham was sold on 19 August 2021 for £17m with a gain on disposal of £4m.
Christchurch Land was disposed in May 2021 by New Zealand Group with sales proceeds of NZD18m (£9m) realising a gain of
NZD16m (£8m).
Gain on disposal of investment property
(D)
For the year ended 31 December 2022, there was a gain of £59m (2021: £nil) and net proceeds of £152m on the disposal of the
investment property relating to the collective sale of Tanglin Shopping Centre.
Gain on disposal of subsidiary
(E)
On 24 May 2022, the Group disposed of part of the CDLHT units that it held to the holding company, which reduced the Group's interest
in CDLHT from 38.89% to 27.30% resulting in the Group losing control over CDLHT. CDLHT was deconsolidated to become an
associate of the Group. The Group recognised a gain on disposal of £84m.
(F)
For the year ended 31 December 2022, a fair value loss of £8m (2021:£ nil) was recorded by the Group from the holding of warrants.
Fair value loss from FSGL's warrant
(G)
Other operating income/(expense) relating to disposal
The Group had entered into the Sales & Purchase Agreement (SPA) with YD427 PFV Co. Ltd. on 10 December 2021. In this regard, it
is expected that the management agreement with Hilton International Co. (HIC) entered on 1 September 2019 were no longer continue.
As it is highly probable that the Group will pay a penalty from the early termination on this agreement, and the amount can be reliably
estimated, the Group recognised KRW 16b (£10m) of provision for the year ended 31 December 2021.
The Group had entered into the Master Lease Agreement (MLA) with YD427 PFV Co. Ltd. on 10 December 2021. The hotel operation
continued until 31 December 2022 and succession and compensation of the employment (the compensation) will be preceded
accordingly. As it is highly probable that the Company will pay the compensation and the amount can be reliably estimated, the Group
recognised KRW 46b (£29m) of provision for the year ended 31 December 2021. Due to the expiration of the building permit scheduled
in January 2022 and the SPA with YD427 PFV Co. Ltd., the construction-in-progress amounting to KRW 7b (£5m) that has been
accounted for incurred costs relating to building design and government licences for a new hotel extension project was written off during
the year.
The sale of Millennium Hilton Seoul was completed during the current financial year. As at 31 December 2022, further provisions were
provided as the amount was finalised. The Group would receive from the buyer of Millennium Hilton Seoul the amounts incurred in
respect of its obligations under the relevant contracts. The Group has recognised the reimbursement amount of KRW 61b (£39m) and
compensated losses of KRW 4b (£2m) as other operating income.
Other operating income
(H)
The agreement entered for the sale of Copthorne Orchid Penang was terminated in December 2021. The deposit and the deferment fee
of MYR18m (£3m) was recognised as other operating income.
8
Personnel expenses
Wages and salaries
Compulsory social security contributions
Contributions to defined contribution schemes
Defined benefit pension (gain) – recorded in the statement of comprehensive income
Defined benefit pension cost – recorded in the income statement
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
2022
£m
258
42
15
(9)
4
310
2021
£m
171
25
11
(2)
1
206
2022
NUMBER
4,823
952
231
435
6,441
2021
NUMBER
4,744
962
211
441
6,358
33
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
2022
2021
£m
-
-
-
-
£m
-
-
-
-
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 £ nil (2021:
£ nil), and Company pension contributions of £ nil (2021: £nil) 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 (2021: £ nil), and their accrued lump
sum was £nil (2021: £nil).
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
10
Income tax
Current tax
Corporation tax charge for the year
Adjustment in respect of prior years
Total current tax charge
Deferred tax (Note 24)
Origination and reversal of timing differences
Benefits of tax (profits)/losses recognised
Over provision in respect of prior years
Total deferred tax charge/(credit)
Total income tax charge/(credit) in the consolidated income statement
UK
Overseas
Total income tax charge/(credit) in the consolidated income statement
2022
£m
-
-
-
2021
£m
-
-
-
2022
2021
£m
18
40
58
(24)
(12)
(23)
(59)
(1)
2022
£m
181
(3)
178
93
15
-
108
286
28
258
286
£m
2
13
15
(24)
(5)
(9)
(38)
(23)
2021
£m
16
1
17
25
(31)
(50)
(56)
(39)
-
(39)
(39)
The effective tax rate relating to the tax charge of £286m is 34.0% (2021:tax credit of £39m, -52.2%). The effective tax rate has been
affected primarily by the mix of Group's regional profits and tax adjustments in respect of previous years.
For the year ended 31 December 2022, a charge of £10m (2021: £12m) relating to joint ventures and associates is included in the profit
before tax.
34
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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.
Income tax reconciliation
Profit before income tax in consolidated income statement
Less share of profits of joint ventures and associates
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% (2021: 19.00%)
Tax exempt income
Non-deductible expenses
Unrecognised tax losses arising during the year
Origination of temporary differences
Other effect of tax rates in foreign jurisdictions
Other adjustments to tax charge in respect of prior years
Income tax charge/(credit) per consolidated income statement
2022
£m
840
(53)
787
150
(32)
12
13
88
41
14
286
2021
£m
50
(17)
33
6
(33)
27
2
-
7
(48)
(39)
35
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
11
Property, plant and equipment
LAND AND
BUILDINGS
CAPITAL
WORK IN
PROGRESS
PLANT AND
MACHINERY
£m
£m
£m
FIXTURES,
FITTINGS,
EQUIPMENT
AND VEHICLES
£m
RIGHT OF USE
ASSETS
TOTAL
£m
£m
Cost
Balance at 1 January 2021
Additions – Others
Reclassification between asset categories
Transfer to assets from investment property
Disposals
Written off
Foreign exchange adjustments
Balance at 31 December 2021
Balance at 1 January 2022
Additions
Reclassification between asset categories
Transfer to investment property
Transfer from assets held for sale
Disposal of subsidiary
Disposals
Revaluation recognised through other
comprehensive income
Written off
Foreign exchange adjustments
Balance at 31 December 2022
Accumulated depreciation and impairment
Balance at 1 January 2021
Charge for the year
Impairment
Disposals
Reclassification between asset categories
Written off
Foreign exchange adjustments
Balance at 31 December 2021
Balance at 1 January 2022
Charge for the year
Impairment
Disposal of subsidiary
Disposals
Transfer from assets held for sale during the year
Written off
Foreign exchange adjustments
Balance at 31 December 2022
Carrying amounts
3,384
3
1
34
-
(8)
(24)
3,390
3,390
3
4
(126)
6
(817)
(178)
123
(12)
152
2,545
676
22
(62)
–
21
(8)
(3)
646
646
19
(26)
(82)
(16)
1
(12)
38
568
32
12
(4)
-
-
(5)
-
35
35
13
(4)
-
-
(1)
-
-
-
2
45
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
At 31 December 2022
At 31 December 2021
1,977
2,744
45
35
364
6
-
7
-
-
(1)
376
376
3
(3)
-
3
(197)
(9)
-
(2)
19
190
149
14
(2)
-
-
-
(1)
160
160
11
-
(101)
(2)
-
(1)
9
76
114
216
432
7
3
-
(2)
(2)
(2)
436
436
7
3
-
2
(153)
(43)
-
(10)
20
262
356
31
-
(2)
(21)
(2)
(3)
359
359
25
-
(129)
(41)
2
(10)
16
222
40
77
237
4
-
-
(5)
-
1
237
237
327
-
-
-
(112)
(1)
-
(2)
27
476
16
8
-
(2)
-
-
-
22
22
14
-
(7)
(1)
-
(1)
1
28
448
215
4,449
32
-
41
(7)
(15)
(26)
4,474
4,474
353
-
(126)
11
(1,280)
(231)
123
(26)
220
3,518
1,197
75
(64)
(4)
-
(10)
(7)
1,187
1,187
69
(26)
(319)
(60)
3
(24)
64
894
2,624
3,287
The carrying value of property, plant and equipment held under finance leases at 31 December 2022 was £nil (2021: £nil).
a
Impairment
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 2022,
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.
36
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
On the basis of external valuations in 2022, the Group recorded an impairment charge of £6m (2021: £8m) and an impairment reversal
of £32m (2021: £72m), resulting in a net impairment reversal of £26m (2021: £64m) on individual hotels across all operating regions.
This consists of an impairment reversal of £11m in the regional US, £7m in the rest of the UK/EU, £8m in the rest of Asia and £6m in
New York. This was offset by impairment charges of £4m in New Zealand and £2m in the rest of UK/EU.
Circumstances and events that led to impairment are largely due to the performance of the hotels as a result of the recovery from the
COVID 19 pandemic and current macro economic conditions. 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.
Key assumptions used by the external appraisers
b
The key assumptions used were as follows:
Pre-tax discount rate – The discount rate used is based on the country in which the hotel is located and is adjusted for risks associated
with the hotel. Discount rates ranged from 8.25% to 10.50% in the US (2021: 7.50% - 11.75%), 7.50% to 12.19% in the rest of Asia
(2021: 6.10% to 11.82%), 7.25% to 11.38% in the rest of UK/EU (2021: 6.60% to 12.5%) and 8.25% to 10.25% in New Zealand (2021:
6.50% to 7.75%).
The forecasts cover a five to ten year period, and cash flows beyond this period are extrapolated using a growth rate ranging between
1.98% and 3.00% (2021: 1.70% to 3.12%), 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 the key assumptions used. An increase in occupancy rate and/or average
room rate growth in isolation would result in a higher recoverable amount. An increase in discount rate, terminal rate or capitalisation
rate in isolation would result in a lower recoverable amount.
d
The interest of £nil (2021: £nil) was capitalised within land and buildings during the year.
Land and buildings
Pledged assets
e
At year-end, the net book value of assets pledged as collateral for secured loans was £254m (2021: £662m). The security for the loans
is by way of charges on the properties of the Group companies concerned.
37
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
12
Investment properties
During 2022, the Group disposed of certain investment properties arising from the deconsolidation of CDLHT. Completed investment
properties comprise Biltmore Court & Tower, Millennium Mitsui Garden Hotel Tokyo, retail shops at Stonebrook, retail shops at
Prestons Park, commercial warehouse at Roscommon Road and Lakeside Apartments, Sunnyvale.
Movements in the year analysed as:
Balance at 1 January 2021
Additions
Reclassification
Transfer to property, plant and equipment
Transfer from development properties
Net revaluation gain
Written off
Foreign exchange adjustment
Balance at 31 December 2021
Balance at 1 January 2022
Additions
Reclassification
Acquisition of subsidiary
Transfer from property, plant and equipment during the year
Disposal
Disposal of subsidiary
Net revaluation gain
Foreign exchange adjustments
Balance at 31 December 2022
COMPLETED
INVESTMENT
PROPERTIES
£m
589
16
103
(41)
2
44
(2)
(28)
683
683
8
17
25
126
(98)
(257)
12
34
550
INVESTMENT
PROPERTIES
UNDER
CONSTRUCTION
£m
68
43
(103)
-
-
-
-
2
10
10
7
(17)
-
-
-
-
-
-
-
RIGHT OF USE
ASSETS
£m
7
-
-
-
-
-
-
-
7
7
1
-
20
-
-
(27)
-
-
1
TOTAL
£m
664
59
-
(41)
2
44
(2)
(26)
700
700
16
-
45
126
(98)
(284)
12
34
551
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.
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
Biltmore Court & Tower, Los Angeles
Lakeside Apartments, Sunnyvale, California
Millennium Mitsui Garden Hotel, Tokyo
Rollerston, New Zealand
Prestons road, New Zealand
Roscommon Road, New Zealand
M Hotel reversionary interest, Singapore
Orchard Hotel reversionary interest, Singapore
VALUERS 2022
Colliers International Valuation & Advisory Services
Colliers International Valuation & Advisory Services
JLL Morii Valuation & Advisory K.K
Extensor Advisory Limited
Extensor Advisory Limited
Extensor Advisory Limited
CBRE PTE Limited
CBRE PTE Limited
Claymore Connect reversionary interest, Singapore
CBRE PTE Limited
REVALUATION
DEFICIT
SURPLUS
£m
£m
(7)
(7)
-
-
-
-
-
-
-
(14)
-
-
1
-
1
12
3
8
1
26
Based on these valuations together with such considerations as the Directors consider appropriate, there was a recorded revaluation
surplus of £26m and a revaluation deficit of £14m, resulting in a net revaluation surplus of £12m during 2022 (2021: net revaluation
surplus of £44m).
38
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Fair value hierarchy
The fair value measurement for investment properties not under construction of £551m (2021: £683m) has been categorised as a Level
3 fair value based on inputs to the valuation technique used.
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 TECHNIQUES
SIGNIFICANT UNOBSERVABLE INPUTS
Biltmore Court & Tower, Los Angeles
Discount rate of 7.25% and capitalisation rate of
6.25%.
INTER-RELATIONSHIP BETWEEN KEY
UNOBSERVABLES INPUTS AND FAIR VALUE
MEASUREMENT
The estimated fair value would increase/(decrease) if:
Biltmore Court & Tower, Los Angeles
The property was valued using the income approach which is
based on the potential
income a property can produce. The
methods used by the valuers was the discounted cash flow
method which analyses a property's performance over an
investment horizon. Net cash flows from property operations are
discounted at a rate reflective of the property’s economic and
physical risk profile.
Lakeside Apartments, Sunnyvale, California
The property was valued using the income approach which is
based on the potential
income a property can produce. The
methods used by the valuers was the Direct capitalisation method
This estimates the value of a property by analysing the
relationship between its stabilised net operating income and total
property value. The net operating income is capitalised at a rate
that considers expected growth in cash flow and property value
over the investor's investment horizon.
Millennium Mitsui Garden Hotel, Tokyo
The property was 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 technique, capitalisation or comparison
techniques.
Lakeside Apartments, Sunnyvale, California
Capitalisation rate of 4.00%
Expected market rental growth were higher/(lower); and
Millennium Mitsui Garden Hotel, Tokyo
Discount rate of 3.7% and capitalisation rate of
3.9%.
Risk adjusted discount
(higher),
capitalisation rate was higher/ (lower) and terminal yield
was lower/ (higher).
rate was lower/
13
Investments in joint ventures and associates
The Group has the following investments in joint ventures and associates:
Joint ventures
New Unity Holdings Limited (“New Unity”)
Fergurson Hotel Management Limited
New York Sign LLC
Associate
First Sponsor Group Limited (“First Sponsor”)
Prestons Road Limited
CDL Hospitality Trust ("CDLHT")
CDL Hotels Japan Pte. Ltd.
PRINCIPAL
PLACE OF
BUSINESS
FAIR VALUE OF
OWNERSHIP
INTEREST
£m
Hong Kong
Hong Kong
New York
People’s
Republic of
China
New
Zealand
Singapore
Singapore
-
-
-
257
-
260
-
EFFECTIVE GROUP INTEREST
2022
2021
50%
50%
50%
50%
50%
50%
35%
35%
17%
27%
40%
17%
39%
40%
On 24 May 2022, the Group disposed of part of the CDLHT units that it held to the holding company, which reduced the Group's interest
in CDLHT from 38.89% to 27.30% resulting in the Group losing control over CDLHT. CDLHT was deconsolidated to become an
associate of the Group.
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, Italy and Australia. It is also involved in the
Chinese property financing business which carries additional risk of recoverability of certain assets.
39
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Share of net assets/cost
Balance at 1 January 2021
Share of (loss)/profit for the year
Disposals
Dividends received
Foreign exchange adjustments
Balance at 31 December 2021
Balance at 1 January 2022
Additions
Share of (loss)/profit for the year
Disposals
Dividends received
Foreign exchange adjustments
Balance at 31 December 2022
JOINT VENTURES
ASSOCIATES
TOTAL
£m
106
(7)
-
-
1
100
100
-
(6)
-
-
11
105
£m
334
24
(1)
(2)
10
365
365
257
59
(1)
(10)
22
692
£m
440
17
(1)
(2)
11
465
465
257
53
(1)
(10)
33
797
The following is summarised financial information for CDL Hospitality Trust, 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 (expense)
Income tax (expense)/credit
Profit/(Loss) for the year
Non-controlling interests
Profit/(loss) for the year after non-controlling
interests
Other comprehensive income
Profit/(loss) and total comprehensive
income/(expense) (100%)
Group’s share of profit/(loss) and total
comprehensive income/(expense)
Dividends received by the Group
CDL HOSPITALITY TRUST
2022
£m
1,811
78
(614)
(188)
1,087
(4)
1,083
296
87
102
(3)
(1)
98
-
98
2
100
27
4
2021
£m
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
FIRST SPONSOR
2022
£m
1,568
1,099
(659)
(824)
1,184
(71)
1,113
396
2021
£m
1,256
1,109
(579)
(698)
1,088
(64)
1,024
365
NEW UNITY
2022
£m
400
36
(118)
(37)
281
(70)
211
105
250
121
(7)
(34)
80
(4)
76
(95)
(19)
(7)
6
319
140
(30)
(39)
71
(5)
66
46
112
40
2
68
(17)
(2)
4
(15)
4
(11)
-
(11)
(6)
-
2021
£m
372
36
(113)
(29)
266
(67)
199
100
50
(23)
(1)
5
(19)
5
(14)
-
(14)
(7)
-
At 31 December 2022, the Group’s share of the total capital commitments of joint ventures and associates amounted to £124m (2021:
£73m) and the Group's share of the non-cancellable operating leases receivable was £112m (2021: £35m). The Group’s joint ventures
and associates had no contingent liabilities (2021: £Nil).
40
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
14
Other financial assets
Equity investments
Derivative financial assets
Deposits receivable
Amounts due from intermediate holding company
2022
£m
12
-
7
458
477
The amounts due from the intermediate holding company are non-trade in nature, unsecured and bear interest at 2.8% per annum.
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
Amounts due from holding and associate companies
2022
£m
4
2022
£m
107
12
119
2022
£m
64
65
39
8
176
2021
£m
21
3
2
-
26
2021
£m
5
2021
£m
95
14
109
2021
£m
39
25
19
-
83
Trade receivables are shown net of an impairment allowance of £6m (2021: £8m) 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.
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
2022
£m
353
401
(193)
561
-
561
2021
£m
325
157
(92)
390
-
390
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets are disclosed in Note 20. As at 31 December
2022, £3m (2021: £72m) of the cash balance was restricted.
41
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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
2022
£m
165
62
227
284
-
284
2021
£m
590
84
674
540
-
540
Net cash of £50m (2021: net debt of £(824)m) is the total of the cash and cash equivalents of £561m (2021: £390m) less the interest-bearing
loans, bonds and borrowings of £511m (2021: £1,214m). 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
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 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:
Amounts due from holding and associate companies (see Note 14 and Note 17)
Short-term deposits (see Note 18)
Cash at bank and in hand (see Note 18)
Other current receivables (see Note 17)
Trade receivables (see Note 17)
Equity investments (see Note 14)
Deposits receivable (see Note 14)
Derivative financial assets (see Note 14)
Cash pool overdrafts (see Note 18)
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
Singapore
New York
Rest of UK/EU
Rest of Asia
Regional US
Australasia
CARRYING VALUE
2022
£m
466
401
353
65
64
12
7
-
(193)
1,175
CARRYING VALUE
2022
£m
27
16
6
6
5
4
64
2021
£m
-
157
325
25
39
21
2
3
(92)
480
2021
£m
4
5
14
9
3
4
39
42
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
2022
£m
28
15
7
9
11
70
2021
£m
17
8
1
1
20
47
2022
£m
(4)
-
-
-
(2)
(6)
2021
£m
-
-
-
-
(8)
(8)
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
IMPAIRMENT ALLOWANCE
CARRYING VALUE
2022
£m
24
15
7
9
9
64
2022
£m
8
(1)
(1)
6
2021
£m
17
8
1
1
12
39
2021
£m
12
(1)
(3)
8
Balance at 1 January
Impairment losses(reversal)/recognised
Bad debts written off
Balance at 31 December
Financial Assets
Fixed Rate
US dollar
Korean won
Singapore dollar
Australian dollar
New Zealand dollar
Malaysian Ringgit
Chinese Renminbi
Philippine Peso
Taiwan Dollar
Non-Interest Bearing
US dollar
Sterling
Korean won
Singapore dollar
Chinese Renminbi
New Zealand Dollar
Malaysian Ringgit
Euro
Japanese Yen
Philippine Peso
Indonesian Rupiah
Taiwan Dollar
Others
Interest Bearing Cash Pool deposits
Sterling
Japanese Yen
Singapore dollar
Total cash and other financial assets
Interest Bearing Cash Pool Overdrafts
Euro
Hong Kong Dollar
US dollar
Sterling
Total overdrafts (Note 18)
Represented by:
Cash and cash equivalents (Note 18)
Financial assets (Note 14)
CONTRACTUAL MATURITIES OF FINANCIAL ASSETS 2022
TOTAL
6 MONTHS OR
LESS
6 MONTHS - 1
YEAR
1 - 5 YEARS
MORE THAN 5
YEARS
£m
£m
£m
£m
£m
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
463
-
-
-
-
-
-
-
-
-
12
-
-
-
-
-
-
-
2
-
-
-
-
477
-
-
-
-
-
477
4
58
220
29
58
4
1
2
25
62
5
3
35
3
6
3
9
8
3
3
-
1
35
1
176
754
(40)
(16)
(116)
(21)
(193)
561
4
58
683
29
58
4
1
2
25
62
5
3
47
3
6
3
9
8
3
3
2
1
35
1
176
1,231
(40)
(16)
(116)
(21)
(193)
1,038
561
477
1,038
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
43
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
CONTRACTUAL MATURITIES OF FINANCIAL ASSETS 2021
Financial Assets
Fixed Rate
US dollar
Korean Won
Singapore dollar
New Taiwan dollar
Australian dollar
New Zealand dollar
Malaysian Ringgit
Euro
Other
Non-Interest Bearing
US dollar
Sterling
Korean won
Singapore dollar
Australian dollar
New Zealand dollar
Malaysian Ringgit
Chinese Renminbi
Euro
Japanese Yen
Others
Interest Bearing Cash Pool deposits
Singapore dollar
Non-Interest Bearing Cash Pool deposits
Sterling
US dollar
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)
TOTAL
£m
6 MONTHS OR
LESS
£m
6 MONTHS - 1
YEAR
£m
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4
-
31
21
23
74
2
-
2
33
17
71
31
25
11
3
5
10
10
5
97
7
-
482
(41)
(37)
(14)
-
(92)
390
4
-
55
21
23
74
2
2
2
33
17
71
31
25
11
3
5
10
10
5
97
7
-
508
(41)
(37)
(14)
-
(92)
416
390
26
416
1 - 5 YEARS
£m
-
-
24
-
-
-
-
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
26
-
-
-
-
-
26
MORE THAN 5
YEARS
£m
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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.
44
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
CONTRACTUAL MATURITIES OF FINANCIAL LIABILITIES
CARRYING
AMOUNT
CONTRACTUAL
CASH FLOWS
6 MONTHS OR
LESS
6 -12 MONTHS
1 - 2 YEARS
2 - 5 YEARS
£m
4
445
17
-
-
-
45
-
35
58
15
619
£m
4
459
17
-
-
-
46
-
35
58
15
634
£m
4
98
-
-
-
-
-
-
30
57
-
189
£m
-
192
-
-
-
-
-
-
5
1
£m
-
169
-
-
-
-
-
-
-
-
-
198
-
169
£m
-
-
17
-
-
-
46
-
-
-
1
64
MORE THAN 5
YEARS
£m
-
-
-
-
-
-
-
-
-
-
14
14
CONTRACTUAL MATURITIES OF FINANCIAL LIABILITIES
CARRYING
AMOUNT
CONTRACTUAL
CASH FLOWS
6 MONTHS OR
LESS
6 -12 MONTHS
1 - 2 YEARS
2 - 5 YEARS
£m
38
740
17
-
314
38
67
37
49
£m
38
759
18
-
327
40
68
37
49
38
1,338
39
1,375
£m
38
119
-
-
3
1
-
37
49
-
247
£m
-
314
-
-
114
-
-
-
-
-
428
£m
-
60
-
-
70
1
-
-
-
2
133
£m
-
266
18
-
140
38
68
-
-
26
556
MORE THAN 5
YEARS
£m
-
-
-
-
-
-
-
-
-
11
11
31 DECEMBER 2022
Floating rate financial liabilities
Secured loans
Unsecured loans
Secured bonds
Unsecured bonds
Fixed rate financial liabilities
Secured loans
Unsecured loans
Secured bonds
Unsecured bonds
Trade and other payables
Trade payables
Other creditors
Non-current liabilities
Other non-current liabilities
31 DECEMBER 2021
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
Undrawn committed borrowing facilities
At 31 December 2022,
credit facilities which provide the Group with financial flexibility.
the Group had £23m (2021: £258m) of undrawn and committed facilities available, comprising committed revolving
Maturity 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
Security
2022
£m
23
-
-
-
23
276
299
2021
£m
119
45
94
-
258
365
623
Included within the Group’s total bank loans and overdrafts of £449m (2021: £1,130m) are £4m (2021: £76m) of secured loans and
overdrafts. Total bonds and notes payable of £62m (2021: £84m) consist of £Nil unsecured (2021: £Nil).
Loans, bonds and notes are secured on land and buildings with a carrying value of £254m (2021: £662m) and an assignment of insurance
proceeds in respect of insurances over the mortgaged properties.
45
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Of the Group’s total facilities of £811m, £573m matures within 12 months comprising of £149m committed revolving credit facilities, £309m
uncommitted facilities and overdrafts subject to annual renewal, £108m unsecured term loans and £7m secured term loans.
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, 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$210m (2021: US$283m) US dollar loans and €45m (2021: €45m) 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 2022 was £213m (2021: £231m).
An analysis of borrowings by currency and their fair values as at 31 December 2022 is given below:
Sterling
Singapore dollar
US dollar
New Zealand dollar
Chinese renminbi
Japanese yen
Korean Won
Euro
31 DECEMBER 2022
31 DECEMBER 2021
BOOK
VALUE
£m
50
-
395
-
4
62
-
-
511
FAIR VALUE
£m
50
-
395
-
4
62
-
-
511
BOOK
VALUE
£m
240
221
570
1
6
105
31
40
1,214
FAIR VALUE
£m
240
221
570
1
6
105
31
40
1,214
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
(2021: immaterial) was 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.
46
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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
2022
1.242
1.709
36.823
1.944
5.452
1590.875
8.347
1.173
161.189
2021
1.375
1.847
38.389
1.946
5.696
1570.153
8.882
1.162
150.122
2022
1.209
1.627
37.135
1.918
5.346
1538.789
8.423
1.136
160.721
2021
1.344
1.820
37.139
1.973
5.617
1596.316
8.560
1.187
154.351
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 2022 (31 December 2021: 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
Philippine Peso
31 DECEMBER 2022
31 DECEMBER 2021
EQUITY
£m
43
-
(38)
-
-
4
(4)
-
-
-
-
5
PROFIT
BEFORE
TAX
£m
(2)
-
18
-
3
-
(6)
50
(1)
-
1
63
EQUITY
£m
35
(4)
6
-
(1)
(3)
(4)
-
-
4
-
33
PROFIT
BEFORE
TAX
£m
(3)
-
-
1
(3)
-
(2)
4
-
-
-
(3)
A 10% weakening of sterling against the above currencies at 31 December 2022 (31 December 2021: 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.
(ii)
Interest rate risk and interest rate swaps
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 2021 are provided hereafter.
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.
47
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Financial assets
Cash and cash equivalents
Cash at bank and in hand
Short-term deposits
Cash pool overdrafts
Loans and receivables
Trade receivables
Amounts due from holding and associate companies
Other receivables
Other financial assets
Equity investments
Derivative financial assets
Deposits receivable
Financial liabilities
Overdrafts and borrowings
Trade payables
Other creditors
Other non-current liabilities
2022
2022
2021
2021
BOOK VALUE
FAIR VALUE
BOOK VALUE
FAIR VALUE
£m
£m
£m
£m
353
401
(193)
64
466
65
12
-
7
1,175
(511)
(35)
(58)
(15)
(619)
353
401
(193)
64
466
65
12
-
7
1,175
(511)
(35)
(58)
(15)
(619)
325
157
(92)
39
-
25
21
3
2
480
325
157
(92)
39
-
25
21
3
2
480
(1,214)
(37)
(49)
(38)
(1,338)
(1,214)
(37)
(49)
(38)
(1,338)
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 2022, 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
Level 3
Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or
indirectly.
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:
48
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
2022
LEVEL 1
£m
LEVEL 2
£m
LEVEL 3
£m
TOTAL
£m
LEVEL 1
£m
2021
LEVEL 2
£m
LEVEL 3
£m
TOTAL
£m
Equity investment at
FVOCI
Equity investment at
FVTPL
Cross-currency interest
rate swaps
Assets
Cross-currency interest
rate swaps
Interest rate swap
Liabilities
-
-
-
-
-
-
-
-
12
12
-
-
-
-
-
-
-
-
-
-
-
12
-
12
-
-
-
-
-
-
-
-
-
-
-
18
2
20
-
-
-
-
-
-
-
-
-
-
-
18
2
20
-
-
-
During the year ended 31 December 2022 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.
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.
49
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 2020 and this has been updated on an approximate
basis to 31 December 2022. The contributions of the Group during the year were about 36.30% (2021: 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.
The total pension obligation for the UK pension plan has decreased from the prior year to £50m (2021: £76m). This has been driven by the rise in bond
yields in the UK and as a result of this, the value of the bonds and liability-driven investment instruments held, £48m (2021: £67m), has decreased. This is
due to the increased bond yield/cost of borrowing, resulting in a lack of willingness among investors to own debt. Due to the current period of high inflation
experience across the global economy, this could be a significant actuarial assumption when computing financial data for the plan. Despite the high level
of inflation as at 31 December 2022 it is assumed as that future impacts of the high inflation environment are currently minimal as it is assumed that
Inflation will return to a rate closer to the Bank of England target of approximately 2% per annum in future periods.
During the current year there has been significant events in the UK and global economy which have had an adverse effect on pension funds liquidity as a
whole . The plan was not significantly affected by these events and liquidity is not envisioned to be a significant area of risk because of the sufficient
liquidity of assets held by the plan and the sufficient liquidity of the group if required.
The plan’s assets are mainly composed of bonds and liability driven Investments (LDI). This forms a natural hedge between the plan’s assets and
obligations against interest rates and bond market movements similar to events seen in 2022. The plan does not employ any more complex forms of
hedging arrangements of specific instruments.
South Korea
The group sold its South Korean Hotel resulting in the closure of its defined benefit pension scheme and payment being made to the new owners of the
scheme.
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 2022. The contributions of the Group were no less than
6% (2021: 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
2022
2022
2022
2021
2021
2021
UK SOUTH KOREA
TAIWAN
UK SOUTH KOREA
TAIWAN
3.30%
4.90%
3.80%
3.10%
2.75%
-
-
-
-
-
-
1.50%
3.00%
-
-
3.50%
1.70%
4.00%
3.30%
2.95%
-
2.75%
0.00%
-
-
-
0.50%
3.00%
-
-
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:
50
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Discount rate (25 bps movement)
Rate of salary increase (25 bps movement)
Price inflation rate (25 bps movement)
Post retirement mortality assumption (25 bps movement)
DEFINED BENEFIT OBLIGATIONS
2022
2022
2021
2021
INCREASE
DECREASE
INCREASE
DECREASE
£m
2
-
(1)
2
£m
(1)
-
1
(2)
£m
3
-
(1)
4
£m
(3)
-
1
(4)
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.
Amounts recognised on the balance sheet are as follows:
2022
2022
2022
2022
2022
2021
2021
2021
2021
2021
UK SOUTH KOREA
TAIWAN
OTHER
TOTAL
UK SOUTH KOREA
TAIWAN
OTHER
TOTAL
Present value of
funded obligations
Fair value of plan
assets
Plan deficit
£m
50
(48)
2
£m
-
-
-
£m
5
(4)
1
£m
1
-
1
£m
56
(52)
4
£m
77
(67)
10
£m
3
(3)
-
£m
5
(3)
2
£m
1
–
1
Changes in the present value of defined benefit obligations are as follows:
2022
2022
2022
2022
2022
2021
2021
2021
2021
UK SOUTH KOREA
TAIWAN
OTHER
TOTAL
UK SOUTH KOREA
TAIWAN
OTHER
Balance at 1
January
Current service cost
Past service cost
Interest cost
Benefits paid, death
in service insurance
premiums and
expenses
£m
77
-
-
1
(2)
£m
3
-
-
-
(1)
Remeasurement losses/ (gains) arising from:
– Financial
assumptions
– Experience
adjustment
(30)
4
-
-
– Demographic
assumptions
Balance at 31
December
-
50
(2)
-
Changes in the fair value of plan assets are as follows:
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
Quoted equities
Bonds
Liability driven investment
Cash and cash equivalents
£m
5
£m
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5
1
2022
UK
£m
67
1
2
(2)
(20)
48
(19)
2022
UK
£m
24
6
12
6
48
2022
SOUTH
KOREA
£m
3
-
-
(3)
-
-
-
2022
SOUTH
KOREA
£m
-
-
-
-
-
£m
86
(73)
13
2021
TOTAL
£m
91
-
(1)
1
(3)
(3)
-
1
86
2021
TOTAL
£m
75
1
-
(3)
-
73
1
£m
86
-
-
1
(3)
(30)
4
(2)
56
£m
79
-
-
1
£m
4
-
-
-
£m
6
-
-
-
(1)
(1)
(1)
(3)
-
1
77
-
-
-
3
-
-
-
5
£m
2
-
(1)
-
-
-
-
-
1
2022
2022
2021
2021
2021
TAIWAN
TOTAL
UK SOUTH KOREA
TAIWAN
£m
3
-
-
-
1
4
1
£m
73
1
2
(5)
(19)
52
(18)
£m
67
1
-
(1)
-
67
1
£m
4
-
-
(1)
-
3
–
£m
4
-
-
(1)
-
3
–
2022
2022
2021
2021
2021
2021
TAIWAN
TOTAL
UK SOUTH KOREA
TAIWAN
TOTAL
£m
-
-
-
4
4
£m
24
6
12
10
52
£m
9
11
-
47
67
£m
-
3
-
-
3
£m
-
-
-
3
3
£m
9
14
-
50
73
51
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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;
• Properties are valued on the basis of the open market value; and
• Liability driven investments are measured based on the present value of the fixed liability.
The expense recognised in the income statement is as follows:
2022
2022
2022
2022
2022
2021
2021
2021
2021
2021
UK SOUTH KOREA
TAIWAN
OTHER
TOTAL
UK SOUTH KOREA
TAIWAN
OTHER
TOTAL
Current service cost
Interest cost
Interest income
£m
-
1
(1)
-
£m
£m
£m
-
-
-
-
-
-
-
-
-
-
-
-
£m
-
1
(1)
-
£m
-
1
(1)
-
Total cost is recognised within the following items in the income statement:
Administrative expenses
The gains or losses recognised in the consolidated statement of comprehensive income are as follows:
£m
£m
£m
-
-
-
-
-
-
-
-
-
-
-
-
2022
£m
-
£m
-
1
(1)
-
2021
£m
-
2022
2022
2022
2022
2022
2021
2021
2021
2021
2021
UK SOUTH KOREA
TAIWAN
OTHER
TOTAL
UK SOUTH KOREA
TAIWAN
OTHER
TOTAL
£m
£m
£m
£m
£m
£m
£m
£m
£m
Actual return less
expected return on
plan assets
Remeasurement (losses)/ gains arising from:
(20)
-
– Financial
assumptions
– Experience
adjustment
– Demographic
assumptions
Defined benefit plan
remeasurement
gains
30
(4)
-
6
-
-
2
2
-
-
-
-
-
£m
1
-
-
-
1
(19)
30
(4)
2
9
-
3
-
(1)
2
-
-
-
-
-
-
-
-
-
-
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
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
-
-
-
-
-
2022
£m
19
(9)
10
2022
Years
22
24
-
3
-
(1)
2
2021
£m
21
(2)
19
2021
Years
22
24
The weighted-average duration of the defined benefit obligations as at 31 December 2022 was 12 years (2021: 17 years). The Group expects about
£5.2m in contributions to be paid to the defined benefit plans in 2023. The decreased weighted-average duration has reduced over in comparison to the
prior year due to market conditions, higher bond yields and the ageing of the members and has resulted in the movement in discount, 4.90% (2021:
1.70%), and inflation rate, 3.30% (2021: 3.50%) assumptions.
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 (2021: £nil).
52
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 2021 in line with the Final Offer made by CDL in 2019 and any outstanding options are to close out per the final
vesting dates.
Millennium & Copthorne Hotels Limited 2006 Long-Term Incentive Plan (“LTIP”)
(i)
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)
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.
MILLENNIUM & COPTHORNE HOTEL LIMITED 2006 and 2016 SHARESAVE SCHEMES
ANNUAL BONUS PLAN (“ABP”)
(iii)
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
14.12.2018
13.08.2019
13.06.2022
AWARDS
OUTSTANDING
AS AT 01-JAN-22
AWARDS
AWARDED
DURING THE
YEAR
AWARDS
VESTED
DURING THE
YEAR
AWARDS
FORFEITED/
EXPIRED
DURING THE
YEAR
AWARDS
OUTSTANDING
AS AT 31- DEC-
2022
CREDITED TO
SHARE CAPITAL
£m
CREDITED TO
SHARE PREMIUM
£m
VESTING DATES
196
12,990
17,551
10,040
30,737
-
-
-
-
-
-
(12,599)
(6,816)
(9,171)
(196)
(391)
(695)
(869)
(28,586)
(2,151)
-
-
10,040
-
-
-
-
-
-
-
-
-
-
-
-
13.05.2017/18/19
14.12.2019/20/21
13.08.2020/21/22
13.08.2022
(iv)
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.
Executive Share Plan (“ESP”)
DATE OF AWARDS
04.12.2018
09.08.2019
09.08.2022
AWARDS
OUTSTANDING
AS AT 01-JAN-
2022
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-
2022
CREDITED TO
SHARE CAPITAL
£m
CREDITED TO
SHARE PREMIUM
£m
VESTING DATES
7,341
9,367
2,080
18,788
-
-
-
-
(7,341)
(7,287)
(2,080)
(2,080)
-
-
-
-
-
-
-
-
-
2,080
-
16,708
-
-
-
-
- 14.12.2019/20/21
- 09.08.2020/21/22
09/08/2022
-
–
At the year end, options of 10,040 and 2,080 ordinary shares were settled with cash under the ABP and ESP respectively. Holders of these options
received a cash payment for a fixed price of £6.85 in line with the Final Offer executed by CDL on the date of exercise, as such no shares were awarded
in year.
Awards/options granted
The following awards/options were granted in the year ended 31 December 2022:
2019 AWARDS
Executive Share Plan
Executive Share Plan
Executive Share Plan
Sharesave Scheme
(3 year)
Sharesave Scheme
(5 year)
Deferred Share Awards
Deferred Share Awards
Deferred Share Awards
09.08.2019
09.08.2019
09.08.2019
09.04.2019
09.04.2019
13.08.2019
13.08.2019
13.08.2019
AWARD/OPTIONS GRANTED
DIRECTOR
NON-
DIRECTOR
SHARE PRICE
PREVAILING
ON DATE OF
GRANT
£
EXERCISE
PRICE
£
FAIR VALUE
£
EXPECTED TERM
(YEARS)
EXPECTED
VOLATILITY
EXPECTED
DIVIDEND YEILD
REISK FREE
INTEREST RATES
–
–
–
–
–
–
–
–
7,538
7,538
15,075
93,436
1,040
8,931
8,931
17,862
6.8
6.8
6.8
4.44
4.44
6.8
6.8
6.8
–
–
–
3.75
3.75
–
–
–
6.85
6.85
6.85
1.11
1.28
6.85
6.85
6.85
1
2
3
–
–
–
–
–
–
–
–
–
3.31
26.00%
0.95%
0.72%
5.31
26.00%
0.95%
0.82%
1
2
3
–
–
–
–
–
–
–
–
–
Measurement of fair value
The Sharesave awards in 2019 were valued using the Black-Scholes valuation method.
53
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
22
Provisions
Balance at 1 January 2022
Provisions made
Provisions utilised
Disposal of subsidiary
Foreign exchange adjustments
Balance at 31 December 2022
Analysed as:
Non-current provision
Current provision
Total provision
LEGAL
BEIJING
INDEMNITY
KOREA
PROVISION
CAPITAL
EXPENDITURE
TOTAL
£m
5
8
-
-
1
14
-
14
14
£m
9
-
-
-
1
10
10
-
10
£m
38
7
(11)
-
2
36
-
36
36
£m
-
9
(3)
(5)
-
1
-
1
1
£m
52
24
(14)
(5)
4
61
10
51
61
Provision for legal fees as at 31 December 2022 of £14m (2021: £5m) relates to disputes in several hotels. The Beijing indemnity of
£10m (2021: £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.
The Korea provision relates to the Group’s obligations under certain contracts in respect of Millennium Hilton Seoul and represents the
estimated costs to be incurred arising from the proposed sale of Millennium Hilton Seoul. As at 31 December 2021, the provision was
based on management’s best estimate of the expenditure required to settle its obligations under the relevant contracts based on its
negotiations with the counterparties to-date. The estimated amount might be revised upon the finalisation of negotiations. The sale of
Millennium Hilton Seoul was completed during the current financial year. As at 31 December 2022, further provision was provided as
the amount was finalised. The Group has settled part of the costs in 2022 and has settled the remaining amount subsequent to the
reporting date. The Group would be fully reimbursed by the buyer of Millennium Hilton Seoul for the amount incurred in respect of its
obligations under the relevant contracts. The estimated additional costs recognised during the year of £7m (2021: £39m) has been
netted against the corresponding reimbursement from the buyer of £41m in the consolidated income statement.
The provision for capital expenditure relates to the Group’s obligations to incur capital expenditures under the terms of the certain hotel
operating agreements.
23
Other non-current liabilities
Amount owing to intermediate holding company
Other liabilities
Total non-current liabilities
2022
£m
-
15
15
2021
£m
25
13
38
24
Movements in deferred tax liabilities and assets (prior to offsetting balances) during the year are as follows:
Deferred taxation
Deferred tax liabilities
Property assets1
Unremitted earnings
Deferred tax assets
Tax losses
Others
Net deferred tax liabilities
CHARGED/(CREDITED) TO
INCOME STATEMENT
AT 1 JANUARY
2022
CHANGE IN
TAX RATE
ACQUISITION
/DISPOSAL OF
SUBSIDIARIES
CURRENT YEAR
MOVEMENT
EXCHANGE ON
TRANSLATION
AT 31
DECEMBER 2022
£m
220
-
220
(142)
(6)
(148)
72
£m
-
-
-
-
-
-
-
£m
(10)
-
(10)
5
3
8
(2)
£m
(3)
87
84
24
-
24
108
£m
18
-
18
(6)
-
(6)
12
£m
225
87
312
(119)
(3)
(122)
190
1
Property assets comprise plant, property and equipment and investment properties.
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:
54
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Deferred tax assets
Deferred tax liabilities
2022
£m
-
(190)
(190)
2021
£m
5
(77)
(72)
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
2022
£m
74
14
-
88
2021
£m
(32)
-
62
30
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
2022
£m
20
7
221
248
2021
£m
42
3
100
145
At 31 December 2022, a deferred tax liability of £13m (2021: £4m) relating to undistributed reserves of overseas subsidiaries and joint
ventures of £1,370m (2021: £888m) 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
Amounts owing to holding and associates companies
2022
£m
35
15
24
11
104
5
15
3
5
217
2021
£m
37
16
5
24
85
7
84
4
-
262
The Group’s exposure to currency and liquidity risks related to trade and other payables are disclosed in Note 20.
26
Dividends
No dividend was paid during 2022 (2021: Nil). Subsequent to 31 December 2022, the Directors have not declared any dividends that
have been provided for previous periods.
27
Share capital
Balance at 1 January 2022
Issue of ordinary shares on exercise of share options
Balance at 31 December 2022
Number of 30p shares allotted,
called up and fully paid
324,950,812
–
324,950,812
55
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 of 10,040 and 2,080 ordinary shares were settled with cash under the ABP and ESP respectively. Holders of
these options received a cash payment on the date of exercise, as such no shares were awarded in year.
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).
Treasury share reserve
No shares were held by the employee benefit trust at 31 December 2022 (2021: 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
2022
£m
38
2021
£m
97
(b) 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
2022
£m
9
9
8
7
6
12
51
2021
£m
17
13
12
12
11
68
133
The Group’s share of capital commitments and non cancellable lease commitments of joint ventures and associates is shown in Note
13.
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.
income in the income statement and
During the year ended 31 December 2022, £24m (2021: £22m) was recognised as rental
£2m (2021: £2m) in respect of repairs and maintenance was recognised as an expense in the income statement relating to investment
properties.
Contingencies and subsequent events
30
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.
56
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
in Brisbane, Australia,
On 22 March 2023, the Group entered into a property sale agreement and business asset sale agreement with a third party to acquire a
hotel
together with its existing business assets for a combined consideration of approximately £99.4m
(A$177.7m). The completion of the acquisition, which is subject to the fulfilment of several conditions precedents as stipulated in the
agreement, is expected in the second half of 2023. This acquisition will be funded through internal cash resources and credit facilities.
On 28 June 2023, the Group entered into a real property sale and purchase agreement with a third party to acquire the freehold interest
in a hotel in Seoul, South Korea for a consideration of approximately £84.1m (KRW140billion). The acquisition was funded by internal
cash resources and completed on 3 July 2023.
On 30 June 2023, the Group entered into a real property purchase and sale agreement with a third party to acquire the freehold interest
in a hotel in Osaka, Japan for a consideration of approximately £46.6m (JPY8.5billion). The completion of the acquisition is expected in
the third quarter of 2023. This acquisition will be funded through internal cash resources and credit facility.
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% (2021: 100%) of the
Company’s shares via CDL, the intermediate holding company of the Group .
Transactions with related companies of shared directorship.
A related party relationship exists between Millennium & Copthorne International Limited (“MCIL”), a subsidiary company, and
Millennium & Copthorne Middle East Holdings Limited (“MCMEHL”), a related party. This relationship is defined by the shared
directorship of the Company's director, Mr. Ali Alzaabi. During the current financial year, fees have been payable under a License and
Services Agreement between MCIL and MCMEHL, this agreement has existed since 31 December 2016 and was renewed on 20 April
2021. During the year ended 31 December 2022, the Group had the following transactions with those subsidiaries and related
companies.
Interest income received and receivable from:
- Intermediate holding company
Management services fee received and receivable from:
- fellow subsidiaries
- associates
Maintenance services fees paid and payable to:
- fellow subsidiaries
Rental expenses paid and payable to:
- associates
Surplus cash deposited to:
- fellow subsidiaries
Cash repayment for licence fees from:
- companies of shared directorship
Outstanding licence fees from:
- companies of shared directorship
2022
£m
(9)
(1)
(5)
(6)
2
2021
£m
-
-
-
-
1
26 -
- 4
1
-
8
9
57
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
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
2022
2021
£m
1
-
1
1
£m
2
-
2
2
58
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 2022 are set out below:
Full Name
Aircoa Equity Interests Inc.
Aircoa GP Corporation
Aircoa, LLC
All Seasons Hotels & Resorts Limited
Anchorage-Lakefront Limited Partnership
Archyield Limited
ATOS Holding GmbH
Aurora Inn Operating Partnership L.P.
Avon Wynfield Inn, Ltd.
Avon Wynfield LLC
Beijing Fortune Hotel Co. Ltd.
Biltmore Place Operations Corp.
Bostonian Hotel Limited Partnership
Buffalo Operating Partnership L.P.
Buffalo RHM Operating LLC
CDL (New York) LLC
CDL (NYL) Limited
CDL Entertainment & Leisure Pte Ltd
CDL Hospitality Trusts1
Shareholding
percentage
Type
Country of
incorporation
Registered office
address
Principal Activities
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
USA
USA
USA
76%
Indirect
subsidiary
New Zealand
100%
Indirect
subsidiary
USA
100%
Indirect
subsidiary
United
Kingdom
100%
100%
Direct
subsidiary
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
Austria
USA
USA
USA
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
Level 13, 280 Queen
Street, Auckland
1010, New Zealand
7900 East Union
Avenue, Suite 500,
Denver, Colorado,
80237
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Schulhof 6/1st fl ,
1010 Vienna, Austria
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
Holding Company
Hotel ownership
Holding Company
Dormant
Hotel owner
Hotel owner and
operator
Investment holding
Hotel ownership
Hotel ownership
Hotel owner
70%
Indirect
subsidiary
People’s
Republic of
China
Building No. 5, 7
DongSanHuan Middle
Road, Chaoyang
District, Beijing,
P.R.China 100020
Hotel owner and
operator
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
USA
USA
USA
USA
USA
USA
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
7900 East Union
Avenue, Suite 500,
Denver, Colorado,
80237
Liquor licence holder
Hotel owner
Previously hotel owner
Hotel owner
Hotel owner
Investment holding
100%
27%
Indirect
subsidiary
Republic of
Singapore
Associated
undertakings
Republic of
Singapore
9 Raffles Place #12-
01 Republic Plaza
Singapore 048619
Provision of
management services
and investment holding
See note below1
See note below1
59
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Full Name
CDL Hotels (Chelsea) Limited
CDL Hotels (Korea) Ltd.
CDL Hotels (Labuan) Limited
Shareholding
percentage
Type
Country of
incorporation
Registered office
address
Principal Activities
100%
Indirect
subsidiary
United
Kingdom
100%
Indirect
subsidiary
Republic of
Korea
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
3F, Seoul Finance
Centre, 136
Sejongdae-ro, Jung-
gu, Seoul, Korea
04520.
Hotel owner and
operator
Hotel owner and
operator
100%
Indirect
subsidiary
Malaysia
Tiara Labuan, Jalan
Tanjung Batu, 87000
F.T. Labuan, Malaysia
Hotel owner and
operator
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
CDL Hotels Japan Pte. Ltd.
CDL Hotels USA, Inc.
CDL Investments New Zealand Limited
CDL Land New Zealand Limited
CDL West 45th Street LLC
Chicago Hotel Holdings, Inc.
Cincinnati S.I. Co.
City Century Pte. Ltd.
City Elite Pte Ltd
City Hotels Pte Ltd.
Context Securities Limited
Copthorne (Nominees) Limited
100%
Indirect
subsidiary
Hong Kong
100%
40%
Indirect
subsidiary
New Zealand
Associated
undertakings
Republic of
Singapore
100%
Indirect
subsidiary
USA
50%
50%
Indirect
subsidiary
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
New Zealand
New Zealand
USA
USA
USA
100%
100%
100%
76%
Indirect
subsidiary
Republic of
Singapore
Indirect
subsidiary
Republic of
Singapore
Indirect
subsidiary
Republic of
Singapore
Indirect
subsidiary
New Zealand
100%
Indirect
subsidiary
United
Kingdom
12th Floor, Menara
Symphony, No.5,
Jalan Prof. Khoo Kay
Kim, Seksyen 13,
46200 Petaling Jaya,
Selangor Darul Ehsan,
Malaysia
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
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
7900 East Union
Avenue, Suite 500,
Denver, Colorado,
80237
Level 13, 280 Queen
Street, Auckland
1010, New Zealand
Level 13, 280 Queen
Street, Auckland
1010, New Zealand
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
9 Raffles Place #12-
01 Republic Plaza
Singapore 048619
9 Raffles Place #12-
01 Republic Plaza
Singapore 048619
Level 13, 280 Queen
Street, Auckland
1010, New Zealand
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Hotel owner and
operator
Hotel owner and
operator
Investment holding
Investment holding
Investment holding
Hotel investment
holding Company
Investment and property
management company
Property investment and
Development
Hotel owner
Hotel ownership
Previously hotel owner
Restaurateur
Restaurateur
Hotel operator and
investment holding
Investment holding
Investment holding
60
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Full Name
Copthorne Aberdeen Limited
Shareholding
percentage
Type
Country of
incorporation
Registered office
address
Principal Activities
83%
Indirect
subsidiary
United
Kingdom
Copthorne Hotel (Birmingham) Limited
100%
Indirect
subsidiary
United
Kingdom
Copthorne Hotel (Cardiff) Limited
100%
Indirect
subsidiary
United
Kingdom
Copthorne Hotel (Effingham Park) Limited
100%
Indirect
subsidiary
United
Kingdom
Copthorne Hotel (Gatwick) Limited
100%
Indirect
subsidiary
United
Kingdom
Copthorne Hotel (Manchester) Limited
100%
Indirect
subsidiary
United
Kingdom
Copthorne Hotel (Merry Hill) Construction Limited
100%
Indirect
subsidiary
United
Kingdom
Copthorne Hotel (Merry Hill) Limited
100%
Indirect
subsidiary
United
Kingdom
Copthorne Hotel (Newcastle) Limited
96%
Indirect
subsidiary
United
Kingdom
Copthorne Hotel (Plymouth) Limited
100%
Indirect
subsidiary
United
Kingdom
Copthorne Hotel (Slough) Limited
100%
Indirect
subsidiary
United
Kingdom
Copthorne Hotel Holdings Limited
100%
Direct
subsidiary
United
Kingdom
Copthorne Hotels Limited
Copthorne Orchid Hotel Singapore Pte. Ltd.
100%
Indirect
subsidiary
United
Kingdom
100%
Indirect
subsidiary
Republic of
Singapore
Copthorne Orchid Penang Sdn. Bhd.
100%
Indirect
subsidiary
Malaysia
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
9 Raffles Place #12-
01 Republic Plaza
Singapore 048619
Hotel management
Hotel owner and
operator
Hotel owner and
operator
Hotel owner and
operator
Hotel owner and
operator
Hotel owner and
operator
Hotel owner and
operator
Hotel owner and
operator
Hotel owner and
operator
Hotel owner and
operator
Hotel owner and
operator
Investment holding
Hotel investment holding
Property owner and
Developer
12th Floor , Menara
Symphony , No. 5,
Jalan Prof. Khoo Kay
Kim, Seksyen 13,
46200 Petaling Jaya,
Selangor Darul Ehsan,
Malaysia
Hotel owner
61
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Shareholding
percentage
Type
Country of
incorporation
Registered office
address
Principal Activities
Full Name
Diplomat Hotel Holding Limited
Durham Operating Partnership L.P.
Elite Hotel Management Services Pte. Ltd.
Fergurson Hotel Management Limited
First 2000 Limited
100%
Indirect
subsidiary
United
Kingdom
100%
Indirect
subsidiary
USA
100%
Indirect
subsidiary
Republic of
Singapore
50%
Associated
undertakings
Hong Kong
100%
Indirect
subsidiary
Hong Kong
First Sponsor Group Limited
35%
Associated
undertakings
Cayman
Islands
Five Star Assurance, Inc.
Four Peaks Management Company
Gateway Holdings Corporation I
Gateway Hotel Holdings, Inc.
Gateway Regal Holdings LLC
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
USA
USA
USA
USA
USA
Grand Plaza Hotel Corporation
66%
Indirect
subsidiary
Philippines
Harbour Land Corporation
Harbour View Hotel Pte. Ltd.
Harrow Entertainment Pte Ltd
Hong Leong Ginza TMK
Hong Leong Hotel Development Limited
Hong Leong Hotels Pte Ltd.
Hong Leong International Hotel (Singapore) Pte. Ltd.
Hospitality Group Limited
41%
Associated
undertakings
Philippines
100%
100%
70%
84%
Indirect
subsidiary
Republic of
Singapore
Indirect
subsidiary
Republic of
Singapore
Indirect
subsidiary
Indirect
subsidiary
Japan
Taiwan
100%
Indirect
subsidiary
Cayman
Islands
97%
76%
Indirect
subsidiary
Republic of
Singapore
Indirect
subsidiary
New Zealand
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
7900 East Union
Avenue, Suite 500,
Denver, Colorado,
80237
9 Raffles Place #12-
01 Republic Plaza
Singapore 048619
Unit 606, 6th Floor,
Alliance Building,133
Connaught Road
Central, Hong Kong
2803 Great Eagle
Centre, 23 Harbour
Road, Wanchai, Hong
Kong
P.O.Box 31119,
Grand Pavilion,
Hibiscus Way, 802
West Bay Road,
Grand Cayman, KY1-
1205 Cayman Islands.
Investment holding
Hotel ownership
Hotel management
consultancy services
Investment holding
Investment holding
Investment Holding
1401 Eye St., NW,
Suite 600, Washington
D.C. 20005
Captive insurance
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
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
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.
Arizona condominium
Management
Holding company
Hotel ownership
Hotel owner and
operator
Hotel owner and
operator and investment
holding company
Land owner
Hotel operator
Investment holding
Property owner
Hotel owner and
operator
Investment holding
Investment holding
Holding company and
property owner
62
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Shareholding
percentage
Type
Country of
incorporation
Registered office
address
Principal Activities
Full Name
Hospitality Holdings Pte. Ltd.
Hospitality Leases Limited
Hospitality Services Limited
Hospitality Ventures Pte. Ltd.
Hotel Liverpool Limited
100%
Indirect
subsidiary
Republic of
Singapore
76%
76%
Indirect
subsidiary
Indirect
subsidiary
New Zealand
New Zealand
100%
Indirect
subsidiary
Republic of
Singapore
100%
Indirect
subsidiary
United
Kingdom
Hotel Liverpool Management Limited
100%
Indirect
subsidiary
United
Kingdom
Hotelcorp New Zealand Pty. Ltd.
KIN Holdings Limited
King’s Tanglin Shopping Pte. Ltd.
Kingsgate Holdings Pty. Ltd.
Kingsgate Hotel Pty. Ltd.
Kingsgate Hotels and Resorts Limited
Kingsgate Hotels Limited
Kingsgate International Corporation Limited
Kingsgate Investments Pty. Ltd.
76%
Indirect
subsidiary
Australia
76%
100%
Indirect
subsidiary
New Zealand
Indirect
subsidiary
Republic of
Singapore
76%
Indirect
subsidiary
Australia
76%
76%
76%
76%
76%
Indirect
subsidiary
Australia
Indirect
subsidiary
Indirect
subsidiary
Indirect
subsidiary
New Zealand
New Zealand
New Zealand
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
9 Raffles Place #12-
01 Republic Plaza
Singapore 048619
Level 13, 280 Queen
Street, Auckland
1010, New Zealand.
Investment holding
Lessee company
Level 13, 280 Queen
Street, Auckland
1010, New Zealand.
Hotel operation/
Management
Investment holding
9 Raffles Place #12-
01 Republic Plaza
Singapore 048619
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
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
7900 East Union
Avenue, Suite 500,
Denver, Colorado,
80237
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Investment holding
Property letting
Operating company
Holding company
Holding company
Property owner
Holding company
Dormant
Franchise holder
(Kingsgate)
Dormant
Investment holding
Investment company
Hotel ownership
Hotel owner
Hotel owner and
operator
Finance company
63
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Full Name
M&C Asia Holdings (UK) Limited
M & C (CB) Limited
M & C (CD) Limited
Shareholding
percentage
Type
Country of
incorporation
100%
Direct
subsidiary
United
Kingdom
100%
Indirect
subsidiary
United
Kingdom
100%
Indirect
subsidiary
United
Kingdom
M & C Management Services (USA) Inc.
100%
Indirect
subsidiary
USA
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
M&C Capital Pte. Ltd.
M&C Colorado Hotel Corporation
M&C Crescent Corporation
M&C Crescent Interests, LLC
M&C Finance (1) Limited
100%
100%
Indirect
subsidiary
Republic of
Singapore
Indirect
subsidiary
Republic of
Singapore
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
USA
USA
USA
100%
Indirect
subsidiary
United
Kingdom
M&C Holdings (Thailand) Ltd.
100%
Indirect
subsidiary
Thailand
M&C Holdings Delaware Partnership
M&C Holdings, LLC
M&C Hotel Enterprises (Asia) Limited
M&C Hotel Interests, Inc.
M&C Hotel Investments Pte. Ltd.
100%
Indirect
subsidiary
100%
Indirect
subsidiary
USA
USA
100%
Indirect
subsidiary
Hong Kong
100%
Indirect
subsidiary
USA
100%
Indirect
subsidiary
Republic of
Singapore
Registered office
address
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
7900 East Union
Avenue, Suite 500,
Denver, Colorado,
80237
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
9 Raffles Place #12-
01 Republic Plaza
Singapore 048619
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
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
99/1, 11th Floor, BJC
Tower, Soi Saeng
Chan-Rubia,
Phrakanong
Klongtoey, Bangkok,
Thailand
7900 East Union
Avenue, Suite 500,
Denver, Colorado,
80237
7900 East Union
Avenue, Suite 500,
Denver, Colorado,
80237
2803 Great Eagle
Centre, 23 Harbour
Road, Wanchai, Hong
Kong
7900 East Union
Avenue, Suite 500,
Denver, Colorado,
80237
9 Raffles Place #12-
01 Republic Plaza
Singapore 048619
Principal Activities
Investment holding
Investment company
Investment holding
Management services
company
Holding company
Provider of reservation
services to hotel owners
and operators
Provision of property
fund management
services
Investment holding
Holding company
Investment holding
Property owner
Finance company
Hotel Management
Services
Property investment
Holding company
Investment holding
Hotel management
services company Inve
Investment holding
64
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Shareholding
percentage
Type
Country of
incorporation
Registered office
address
Principal Activities
Full Name
M&C Hotels France Management SARL
M&C Hotels France SAS
M&C Hotels Holdings Japan Pte. Ltd.
M&C Hotels Holdings Limited
M&C Hotels Holdings USA Limited
M&C Hotels Partnership France SNC
M&C Hospitality Holdings (Asia) Limited
M&C Hospitality International Limited
M&C REIT Management Limited
M&C New York (Times Square), LLC
100%
100%
100%
Indirect
subsidiary
Indirect
subsidiary
France
France
Indirect
subsidiary
Republic of
Singapore
100%
Direct
subsidiary
United
Kingdom
100%
Direct
subsidiary
Cayman
Islands
100%
Indirect
subsidiary
France
100%
Indirect
subsidiary
Hong Kong
100%
Indirect
subsidiary
Hong Kong
100%
Indirect
subsidiary
Republic of
Singapore
100%
Indirect
subsidiary
USA
M&C New York Finance (UK) Limited
100%
Indirect
subsidiary
United
Kingdom
M&C New York (Times Square) EAT II LLC
100%
Indirect
subsidiary
USA
M&C Singapore Finance (UK) Limited
100%
Direct
subsidiary
United
Kingdom
M&C Singapore Holdings (UK) Limited
100%
Direct
subsidiary
United
Kingdom
M&C Sponsorship Limited
100%
Indirect
subsidiary
United
Kingdom
McCormick Ranch Operating Partnership L.P.
MHM, Inc.
Millennium Bostonian, Inc.
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
USA
USA
USA
Millennium & Copthorne (Austrian Holdings) Limited
100%
Direct
subsidiary
United
Kingdom
12 Boulevard
Haussmann, 75009
Paris, France
12 Boulevard
Haussmann, 75009
Paris, France
9 Raffles Place, #12-
01 Republic Plaza,
Singapore 048619
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
PO Box 309 Ugland
House,
Grand Cayman, KY1-
1104 Cayman Islands
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
9 Raffles Place #12-
01 Republic Plaza
Singapore 048619
7900 East Union
Avenue, Suite 500,
Denver, Colorado,
80237
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
7900 East Union
Avenue, Suite 500,
Denver, Colorado,
80237
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
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
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Management company
Hotel owner
Investment holding
Investment holding
Investment holding
Investment holding
Investment holding
Investment holding
REIT investment
management services
Investment holding
Finance company
Hotel owner
Finance company
Investment holding
Other service activities
Hotel ownership
Hotel management
Holding company
Investment holding
65
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Full Name
Shareholding
percentage
Type
Country of
incorporation
Registered office
address
Principal Activities
Millennium & Copthorne (Jersey Holdings) Limited
100%
Indirect
subsidiary
United
Kingdom
Millennium & Copthorne Hotel Holdings (Hong Kong) Limited
100%
Indirect
subsidiary
Hong Kong
Millennium & Copthorne Hotels (Hong Kong) Limited
Millennium & Copthorne NZ Limited
Millennium & Copthorne Hotels Management (Shanghai) Limited
Millennium & Copthorne Hotels New Zealand Limited
Millennium & Copthorne Hotels Pty. Ltd.
Millennium & Copthorne International Limited
Millennium & Copthorne Pension Trustee Limited
100%
Indirect
subsidiary
Hong Kong
76%
100%
76%
Indirect
subsidiary
Indirect
subsidiary
Indirect
subsidiary
New Zealand
People’s
Republic of
China
New Zealand
76%
Indirect
subsidiary
Australia
100%
Indirect
subsidiary
Republic of
Singapore
100%
Direct
subsidiary
United
Kingdom
Millennium & Copthorne Share Trustees Limited
100%
Direct
subsidiary
United
Kingdom
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
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
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
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Holding company
Investment and
development of hotels
and hotel management
Provision of hotel
management and
consultancy services
Name-holding
Hotel management
Hotel investment
holding Company
Name holding
Hotels and resorts
Management
Pension trust acting on
behalf of company
trustees
Share trustee company
Millennium CDG Paris SAS
100%
Indirect
subsidiary
France
2 Allée du Verger,
95700 Roissy, France
Hotel operator
Millennium Hotel Holdings EMEA Limited
100%
Direct
subsidiary
United
Kingdom
Millennium Hotels & Resorts Services Limited
100%
Indirect
subsidiary
United
Kingdom
Millennium Hotels Europe Holdings Limited
100%
Direct
subsidiary
United
Kingdom
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Investment holding
Management contract
holding company
Investment holding
Millennium Hotels Italy Holdings S.r.l.
100%
Indirect
subsidiary
Italy
Via Vittorio Veneto, n.
70, Roma 00187, Italy
Holding company
Millennium Hotels Limited
100%
Indirect
subsidiary
United
Kingdom
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Investment holding
Millennium Hotels Palace Management S.r.l.
Millennium Hotels Property S.r.l.
100%
100%
Indirect
subsidiary
Indirect
subsidiary
Italy
Italy
Via Vittorio Veneto, n.
70, Roma 00187, Italy
Hotel operator
Via Vittorio Veneto, n.
70, Roma 00187, Italy
Property owner
Millennium Hotels (West London) Limited
100%
Indirect
subsidiary
United
Kingdom
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Property letting
66
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Full Name
Shareholding
percentage
Type
Country of
incorporation
Registered office
address
Principal Activities
Millennium Hotels (West London) Management Limited
100%
Indirect
subsidiary
United
Kingdom
Millennium Hotels London Limited
Millennium Opera Paris SAS
New Unity Holdings Ltd
New York Sign LLC
Newbury Investments Pte Ltd
Park Plaza Hotel Corporation
Prestons Road Limited
PT. Millennium Sirih Jakarta Hotel
QINZ (Anzac Avenue) Limited
QINZ Holdings (New Zealand) Limited
Quantum Limited
Regal Grand Holdings Corporation I
Regal Harvest House LP
Regal Hotel Management Inc.
Republic Hotels & Resorts Limited
Republic Iconic Hotel Pte. Ltd.
RHH Operating LLC
RHI Boston Holdings Corporation I
RHI Boston Holdings Corporation II
RHM Aurora LLC
100%
Direct
subsidiary
United
Kingdom
100%
Indirect
subsidiary
France
50%
Associated
undertakings
BVI
50%
Associated
undertakings
USA
100%
Indirect
subsidiary
Republic of
Singapore
100%
Indirect
subsidiary
USA
17%
100%
76%
76%
76%
Indirect
Associate
Indirect
subsidiary
Indirect
subsidiary
Indirect
subsidiary
Indirect
subsidiary
New Zealand
Indonesia
New Zealand
New Zealand
New Zealand
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
USA
USA
USA
100%
100%
Indirect
subsidiary
Republic of
Singapore
Indirect
subsidiary
Republic of
Singapore
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
USA
USA
USA
USA
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
Corporate
Headquarters,
Scarsdale Place,
Kensington, London
W8 5SY
12 Boulevard
Haussmann, 75009
Paris, France
Vistra Corporate
Service Centre,
Wickhams Cay II,
Road Town, Tortola,
VG1110, British Virgin
Islands
7900 East Union
Avenue, Suite 500,
Denver, Colorado,
80237
9 Raffles Place #12-
01 Republic Plaza
Singapore 048619
7900 East Union
Avenue, Suite 500,
Denver, Colorado,
80237
167 Main North Road,
Christchurch 8140,
New Zealand
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
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
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
Hotel operator
Investment holding
Hotel operator
Investment holding
To lease, manage, and
otherwise deal with
certain advertising
signage space at the
Novotel hotel
Investment holding
Holding company
Service provider
Hotel owner
Hotel owner
Holding company
Holding company
Holding company
Hotel ownership
Holding company
Hotel operator and
investment holding
company
Hotel operator
Hotel owner
Holding company
Holding company
Hotel ownership
67
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Shareholding
percentage
Type
Country of
incorporation
Registered office
address
Principal Activities
Full Name
RHM Holdings Corporation I
RHM Management LLC
RHM Ranch LLC
RHM Wynfield LLC
RHM-88, LLC
Richfield Holdings Corporation I
Richfield Holdings Corporation II
Richfield Holdings, Inc
Rogo Investments Pte. Ltd.
Rogo Realty Corporation
S.S. Restaurant Corporation
St. Louis Operating, Inc.
Sunnyvale Partners, Ltd.
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
USA
USA
USA
USA
USA
USA
USA
USA
100%
Indirect
subsidiary
Republic of
Singapore
24%
Associated
undertakings
Philippines
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
USA
USA
USA
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
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
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
Holding company
Hotel ownership
Hotel owner
Hotel ownership
Hotel owner and
operator
Holding company
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
68
Tara Hotels Deutschland GmbH
100%
Indirect
subsidiary
Germany
The Philippine Fund Limited
60%
Indirect
subsidiary
Bermuda
TOSCAP Limited
Trimark Hotel Corporation
WHB Biltmore LLC
100%
Indirect
subsidiary
Republic of
Singapore
100%
Indirect
subsidiary
100%
Indirect
subsidiary
USA
USA
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Full Name
WHB Corporation
Wynfield GP Corporation
Wynfield One, Ltd.
Zatrio Pte Ltd
Zillion Holdings Limited
Shareholding
percentage
Type
Country of
incorporation
Registered office
address
Principal Activities
100%
Indirect
subsidiary
100%
Indirect
subsidiary
100%
Indirect
subsidiary
USA
USA
USA
100%
Indirect
subsidiary
Republic of
Singapore
100%
Indirect
subsidiary
Barbados
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
Suite 1, Ground Floor,
The Financial
Services Centre,
Bishops Court Hill, St
Michael, Barbados,
BB14004
Holding company
Hotel ownership
Holding company
Investment holding
Investment holding
1
2
CDL Hospitality Trusts (CDLHT) 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, hospitality-related and other accommodation and/or lodging purposes, whether wholly or partially,
and real-estate related assets in relation to the foregoing.
HBT is a business trust which currently acts as master lessee, asset owner and hotel operator. HBT may also undertake certain hospitality, hospitality related
and other accommodation and/or lodging development projects, acquisition and investments which may not be suitable for H-REIT.
Prior to 24 May 2022, although the Group owned less than half of the ownership interest and voting power in CDLHT, management had determined that the
Group had control over CDLHT. The activities of H-REIT and HBT are managed by the Group’s subsidiaries, M&C REIT Management Limited (the “H-REIT
Manager”) and M&C Business Trust Management Limited (the “HBT Trustee-Manager”), respectively. The H-REIT Manager has decision-making authority over
H-REIT, subject to oversight by the trustee of H-REIT. The HBT Trustee-Manager has dual responsibility of safeguarding the interests of the HBT unitholders
and decision-making authority over HBT. The Group’s overall exposure to variable returns, both from H-REIT Manager’s and HBT Trustee-Manager’s
remuneration from H-REIT and HBT, respectively, together with its interest in CDLHT, was significant and any decisions made by H-REIT Manager and HBT
Trustee-Manager affect the Group’s overall exposure.
On 24 May 2022, the Group sold part of the CDLHT units that it held, to the holding company, thereby reducing its interest in CDLHT to 27%. The Group has
assessed that the reduction in interest in CDLHT has resulted in the Group no longer having control of CDLHT. Accordingly, CDLHT was deconsolidated and
accounted for as an associate thereafter.
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.
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.
69
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
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 2022. 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 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 (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 F(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.
70
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
33
Non-controlling interests (“NCI”)
The following subsidiaries have material NCI.
NAME
Millennium & Copthorne Hotels New Zealand
Limited (“MCHNZ”)
PRINCIPAL PLACE OF
BUSINESS/ COUNTRY OF
INCORPORATION
New Zealand
CDL Hospitality Trusts (“CDLHT”)
Singapore
OWNERSHIP INTERESTS HELD
BY NCI
PRINCIPAL ACTIVITY
2022
2021
Hotel investment holding
company
Real estate investment
trust
24%
73%
24%
62%
CDLHT was deconsolidated and became an associate of the Group during the year.
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.
Revenue
Profit after tax
Profit attributable to NCI
Other comprehensive income/(expense)
Total comprehensive income
Total comprehensive income 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 increase in cash and cash equivalents
Dividends paid to NCI during the year1
1
34
Included in cash flows from financing activities.
Loss of control and deconsolidation of CDLHT
MCHNZ Subgroup
CDLHT Subgroup
2022
2021
£m
74
17
4
-
17
4
111
259
(16)
(18)
336
80
14
(58)
(7)
1
2
£m
85
26
6
-
26
6
113
232
(19)
(13)
313
75
15
26
(22)
19
(2)
2022
£m
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2021
£m
85
37
23
(2)
35
21
94
1,511
(262)
(441)
902
555
34
(24)
(4)
6
-
The control over CDLHT was reviewed and considered it has de facto control over its investees when it owned less than 50% of the
voting rights. During the financial year 2022, the Group sold part of the CDLHT units that it held to the holding company, thereby
reducing its interest in CDLHT to 27.3% (2021: 38.89%). The Group has assessed that the reduction in interest in CDLHT has resulted
in the Group no longer having control of CDLHT. Accordingly, CDLHT was deconsolidated from 24 May 2022 and accounted for as an
associate thereafter, resulting in a gain of £84m.
Gain on disposal of units in CDLHT
Proceed
NCI, based on their proportionate interest in the net assets distributed
Fair value of retained equity interest
Total consideration
Carrying amount of net assets distributed
Realisation of translation reserve
Gain on disposal of subsidiary
£m
108
384
252
744
(570)
(90)
84
As a result of deconsolidation of CDLHT, the Group has lost control over net assets of £570m attributable to CDLHT, this is measured
at the carrying value as at 24 May 2022 when the entity was been deconsolidated.
71
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Net assets as at 24 May 2022
Non Current Assets
Current Assets
Current Liabilities
Non Current Liabilities
Net assets
35
Assets held for sale
£m
1,265
70
(225)
(540)
570
The following were classified as assets held for sale in the statement of financial position as at 31 December 2022:
Assets held for sale relates to the proposed disposal of Millennium Harvest House Boulder. The property has a total carrying value of
US$ 10m (£9m) and is held under the "Regional US" Segment as disclosed in the note 5.
The following were classified as assets held for sale in the statement of financial position as at 31 December 2021:
· The above mentioned proposed disposal of Millennium Harvest House Boulder.
· The disposal of Copthorne Orchid Penang was 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. However, the
agreement entered into for the sale of Copthorne Orchid Penang was terminated in December 2021 and the Group
continues to explore the sale of the property with other prospective buyers. During 2022, the Group ceased to explore
further sale opportunities and the property has been reclassified to property, plant and equipment.
36
The Group adopted IFRS 16 with an initial application date of 1 January 2019
Adoption of IFRS 16 ‘leases’
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
Right-of-use assets
Carrying amount on 1 January 2021
Additions
Depreciation
Disposals
Foreign exchange adjustments
Carrying amount at 31 December 2021
Additions
Acquisition of subsidiary
Depreciation
Disposal of subsidiary
Written off
Foreign exchange adjustments
Carrying amount at 31 December 2022
NOTES
6, 11
9
FIXTURES,
FITTINGS,
EQUIPMENT
AND VEHICLES
£m
-
-
-
-
-
-
-
-
-
-
-
-
-
NOTES
LAND AND
BUILDINGS
PLANT AND
MACHINERY
£m
220
4
(7)
(3)
1
215
327
-
(14)
(105)
(1)
26
448
£m
1
-
(1)
-
-
-
-
-
-
-
-
-
-
11, 12
2022
£m
2021
£m
13
1
12
26
INVESTMENT
PROPERTIES
£m
7
-
-
-
-
7
1
20
-
(27)
-
-
1
7
1
5
13
TOTAL
£m
228
4
(8)
(3)
1
222
328
20
(14)
(132)
(1)
26
449
72
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Lease liabilities
Current
Non-current
Total
2022
£m
12
410
422
2021
£m
4
131
135
The total cash outflow for leases during the current year was £20m (2021: £10m).
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 UK/EU and 3.0% to 5.5% in the US.
73
MILLENNIUM & COPTHORNE HOTELS LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
Non-current assets
Investments and other financial assets
Deferred tax asset
Current assets
Amounts owed by subsidiary undertakings falling due within one year
Other receivables
Cash and cash equivalents
Other current liabilities
Net current liabilities
Other non-current liabilities
Net assets
Equity
Called up share capital
Share premium
Retained earnings
Treasury share reserve
Total equity
Notes
(E)
(F)
(G)
(H)
2022
£m
2,378
2
2,380
126
15
9
150
(530)
(380)
(572)
1,428
97
843
492
(4)
1,428
2021
£m
2,281
2
2,283
144
16
7
167
(353)
(186)
(685)
1,412
97
843
476
(4)
1,412
The notes on pages 75 to 77 are an integral part of these Company’s financial statements.
These financial statements were approved by the Board of Directors on 02 August 2023 and were signed on its behalf by:
Kwek Eik Sheng
Director
Registered No: 03004377
74
MILLENNIUM & COPTHORNE HOTELS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022
Balance at 1 January 2021
Profit
Other comprehensive income
Total comprehensive income
Dividends
Balance at 31 December 2021
Balance at 1 January 2022
Profit
Other comprehensive Income
Total comprehensive income
Dividends
Balance at 31 December 2022
SHARE
CAPITAL
SHARE PREMIUM
TREASURY
SHARE RESERVE
RETAINED EARNINGS
TOTAL EQUITY
£m
97
-
-
-
-
97
97
-
-
-
-
97
£m
843
-
-
-
-
843
843
-
-
-
-
843
£m
(4)
-
-
-
-
(4)
(4)
-
-
-
-
(4)
£m
467
7
2
9
-
476
476
10
6
16
-
492
£m
1,403
7
2
9
-
1,412
1,412
10
6
16
-
1,428
The notes on pages 75 - 76 are an integral part of these Company’s financial statements.
75
MILLENNIUM & COPTHORNE HOTELS LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS
Authorisation of financial statements and statement of compliance with FRS 101
A.
The parent company financial statements of Millennium and Copthorne Hotels Limited (“the Company”) for the year ended 31 December 2022
were authorised for issue by the board of Directors and signed on its behalf on 02 August 2023. 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
2022. The financial statements are prepared in Sterling and are rounded to the nearest million except when otherwise indicated.
B.
Accounting policies
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 accordance with UK-adopted international
accounting standards (“UK-adopted IFRS”). Making 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.
C.
Details of dividends paid and proposed in the current and prior year are given in Note 26 to the consolidated financial statements.
Dividends
D.
The profit dealt with in the financial statements of the Company is £10m (2021: profit of £7m) .
Profit attributable to members of the parent company
E
Investments and other Financial Assets
Cost and net book value at 1 January 2022
Additions
Foreign exchange adjustments
Cost and net book value at 31 December 2022
F.
Other current liabilities
Bank loans and overdrafts
Amounts owed to subsidiary undertakings
Other payables
Accruals and deferred income
SHARES IN
SUBSIDIARY
UNDERTAKINGS
LOANS TO
SUBSIDIARY
UNDERTAKINGS
GROUP SETTLED
ARRANGEMENTS
£m
£m
£m
£m
1,887
-
14
1,901
387
8
75
470
7
-
-
7
2022
£m
443
79
7
1
530
TOTAL
2,281
8
89
2,378
2021
£m
270
73
9
1
353
76
MILLENNIUM & COPTHORNE HOTELS LIMITED
Millennium & Copthorne Hotels Limited
As at 31 December 2022
G.
Other non-current liabilities
Bank loans
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
2022
£m
165
397
10
572
2022
£m
165
407
572
2021
£m
317
360
8
685
2021
£m
60
646
706
H.
Details of the Company’s share capital are given in Note 27 to the consolidated financial statements.
Share capital
I.
Related parties
For the year ended 31 December 2022, fees paid/payable by the Company to Hong Leong Management Services, a subsidiary of Hong Leong
Investment Holdings Pte. Ltd. amounted to £nil (2021: £nil) . At 31 December 2022, £nil (2021: £nil) of fees payable was outstanding.
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