MCK: 2016 Annual Report
ANNUAL REPORT 2016
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED
ANNU
AL REPORT 2016
HEAD OFFICE
Head Office Tel: (09) 353 5010
Level 13, 280 Queen Street
PO Box 5640, Wellesley St, Auckland
NATIONAL CONFERENCE OFFICE
Ph: 0800 4 MEETINGS (0800 4 633 846)
Email: meetings@millenniumhotels.co.nz
www.meetingsnz.co.nz
SALES
Email: sales.marketing@millenniumhotels.co.nz
International Sales Tel: (09) 353 5085
Corporate Sales Auckland Tel: (09) 353 5010
Corporate Sales Wellington Tel: (04) 382 0770
CENTRAL RESERVATIONS
Ph: 0800 808 228
Email: central.res@millenniumhotels.co.nz
www.millenniumhotels.com
Draw bridge at Auckland Viaduct
BOARD OF DIRECTORS
Wong Hong Ren (Chairman)
BK Chiu (Managing Director)
Aloysius Lee (Non-Executive Director)
Kevin Hangchi (Non-Executive Director)
Richard Bobb (Independent Director)
Graham McKenzie (Independent Director)
SENIOR MANAGEMENT
Greg Borrageiro (Director, Information Technology)
Troy Dandy (Group Company Secretary & Legal Counsel)
Brendan Davies (Director, International Sales & Marketing)
Craig Fletcher (Director, Property Management)
Karl Luxon (Vice President Operations)
Boon Pua (Vice President Finance)
Kim-Marie Rixson (Director, Human Resources)
Alison Smith (National Director of Sales, Conferences
and Incentives)
Josie Wilson (National Distribution & Revenue Manager)
REGISTERED OFFICE & CONTACT DETAILS
Level 13, 280 Queen Street, Auckland, New Zealand
PO Box 5640, Wellesley Street, Auckland 1141
Telephone: (09) 353 5010
Facsimile: (09) 309 3244
Website: www.millenniumhotels.com
Email: sales.marketing@millenniumhotels.co.nz
AUDITORS
KPMG, Auckland
BANKERS
ANZ Bank New Zealand Limited
Hong Kong & Shanghai Banking Corporation Limited
SOLICITORS
Bell Gully
SHARE REGISTRAR
Computershare Investor Services Limited,
Level 2, 159 Hurstmere Road, Takapuna,
Private Bag 92119, Auckland 1020, New Zealand
Telephone: +64 9 488 8700
Facsimile: +64 9 488 8787
email: enquiry@computershare.co.nz
STOCK EXCHANGE LISTING:
New Zealand Exchange (NZX)
Company Code: MCK
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | 3
FINANCIAL SUMMARY (2012 - 2016)
CALENDAR
Annual Report Issued 29 March 2017
Dividend Paid 19 May 2017
Annual Meeting Late May 2017
Half Year End 30 June 2017
Interim Results July/August 2017
Financial Year End 31 December 2017
This report is dated 29 March 2017 and is signed on behalf of the Board of Millennium & Copthorne Hotels
New Zealand by:
BK Chiu
Managing Director
HR Wong
Chairman
CONTENTS
04 Chairman’s Review
06 Showcasing NZ Internationally
07 - 08 Managing Director’s Review
10 Directors’ Profiles
11 Hotel Ownership
12 - 15 Corporate Governance
FIN 01 - 31 Financial Statements
FIN 32 - 35 Regulatory Disclosures and
Statutory Information
20122013201420152016
Revenue$105.2m$119.2m$130.1m$136.5m$172.0m
Profit after tax
and NCI
$46.1m$27.1m$30.2m$21.7m$40.4m
Dividend2.4c1.2c2.4c2.8c5.0c
Total Assets$686.1m$719.2m$585.4m$590.0m$713.9m
Group Equity$443.3m$466.4m$371.4m$389.3m$489.1m
Net Asset
Backing
per share
126.8cps133.4cps234.6cps245.9cps308.9cps
4 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
Financial Performance & Financial
Position
The Directors of Millennium & Copthorne
Hotels New Zealand Limited (“MCK”)
are pleased to report a profit attributable
to owners of the parent of $40.4 million
(2015: $21.7 million) for the year ended
31 December 2016.
MCK’s revenue for the year increased
to $172.0 million (2015: $136.5 million)
and profit before tax and non-controlling
interests totalled $70.5 million (2015:
$40.0 million). The increases in revenue
and profit from 2015 reflects both
positive trading conditions in the tourism
industry in New Zealand and ongoing
positive sales activity from majority-
owned CDL Investments New Zealand
Limited.
Shareholders’ funds excluding non-
controlling interests as at 31 December
2016 totalled $489.1 million (2015:
$389.3 million). Total assets at 31
December 2016 were $713.9 million
(2015: $590.0 million). Net asset backing
(with land and building revaluations and
before distributions) as at 31 December
2016 has increased to 308.91 cents per
share (2015: 245.9 cents per share).
Earnings per share increased to 25.56
cents per share (2015: 13.70 cents per
share).
New Zealand Hotel Operations
Reflecting the current trading
environment, revenue for the hotels
increased by 9.9% to $94.6 million
(2015: $86.1 million) and revenue per
available room (RevPAR) increased
by 14.8% over 2015. Occupancy also
increased to 80.7% in 2016 (2015:
77.1%). These increases reflect better
sales and marketing initiatives, profit
conversions and continued productivity
improvements across all business units.
Of the owned / operated hotels,
Copthorne Hotel & Resort Queenstown
Lakefront and Millennium Queenstown
were notable for their performance in
2016. The management lease for Grand
Millennium Auckland commenced in
September 2016 and is proceeding in line
with expectations.
As announced in July 2015, Copthorne
Hotel Auckland Harbourcity was closed
for a refurbishment programme and
is expected to be completed by the
second quarter of 2017. The hotel will be
extensively refurbished and its operations
will be appropriately repositioned as the
M Social Auckland.
Canterbury Update
MCK’s remaining insurance claims for
its chattels and property relating to
Millennium Hotel Christchurch were
settled during the year. MCK is actively
considering development and rebuild
options for its former Copthorne Hotel
Christchurch Central site on Colombo
Street with a view to commencing works
in the medium term.
CDL Investments New Zealand Limited
(“CDLI”)
CDLI continued to perform strongly and
announced a record operating profit after
tax for the year ended 31 December 2016
of $27.0 million (2015: $17.5 million).
CDLI’s sections continue to be in high
demand particularly in Auckland and
Canterbury.
As a result CDLI increased its ordinary
dividend to 3.0 cents per share (2015: 2.2
cents per share). MCK’s stake in CDLI
reduced slightly to 66.70% as a result of
MCK taking its dividend in cash and not
shares.
Australia Update
In Australia, the occupancy at the Zenith
residences was high at 98% while the
litigation affecting a wholly-owned
subsidiary was settled out of court during
the year.
Dividend Announcement
Reflecting its positive results in 2016,
MCK has resolved to declare and pay all
shareholders a fully imputed dividend
of 5.0 cents per share (2015: 2.8 cents
per share) which represents a 78.6%
increase over the 2015 dividend. The
Board has chosen to increase MCK’s
dividend once more as it remains
confident as to MCK’s ability to deliver
consistent results and returns from its
business units.
The dividend, payable to all shareholders,
will be paid on 19 May 2017. The record
date will be 12 May 2017.
Outlook
2017 will be another exciting year for
MCK as it will mark the opening of M
Social Auckland in the second half after
extensive refurbishment. The financial
impact of having Grand Millennium
Auckland for a full year will also be
reflected in our results.
We expect to benefit from the growing
tourism interest in New Zealand and
the Lions Rugby Tour. We also expect
strong sales activity at CDL Investments
to continue which will also assist our
profitability.
Given all of these factors, we aim to
exceed our 2016 trading results in 2017.
Management and staff
On behalf of the Board, I wish to thank
the Company’s management and staff for
their hard work and commitment to the
Company during the last twelve months
and for delivering another exceptional
result.
Wong Hong Ren
Chairman
CHAIRMAN’S REVIEW
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | 5
Grand Millennium BallroomKatsura Japanese Restaurant
A GRAND WELCOME
2016 was the year we welcomed a new hotel to the Millennium, Copthorne
and Kingsgate group of hotels. The Grand Millennium Auckland is the first
Grand Millennium hotel in New Zealand and the largest hotel in the country.
The hotel contains 452 rooms and suites, as well as the 830 square metre
Grand Ballroom. It is also home to some of Auckland’s finest Japanese cuisine
at Katsura Restaurant, located inside the hotel.
6 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
SHOWCASING NEW ZEALAND INTERNATIONALLY
Alison Smith (pictured back row, second from the left), Director of
Conferences & Incentives at IMEX America 2016, Las Vegas.
Alison Smith (pictured left), Director of Conferences & Incentives at
AIME, Melbourne.
MCK’s Mat Shaw, Account Manager showcasing New Zealand at
‘Les journées du tourisme de la NZ’ in Tahiti, French Polynesia.
Brendan Davies – Director Of International Sales & Marketing with
wholesale travel agents attending Kiwilink South America, Buenos
Aries, Argentina, September 2016.
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | 7
MANAGING DIRECTOR’S REVIEW
Two words describe how our overseas
visitors see and experience New
Zealand - natural beauty. Many of our
visitors come from busy and densely
populated cities and they marvel at New
Zealand’s clean air and our pastoral
heritage, from open green farmland to
iconic walking trails in both North and
South Islands. Then top it off with the
relaxed hospitality of New Zealanders.
Interestingly most visitors do not know
that 80% of our electricity comes from
renewable resources.
Every year, MCK goes to overseas
countries promoting New Zealand,
reinforcing the country’s “100% Pure”
reputation. Our sales teams visit
countries in Europe, Asia, Canada, USA,
Australia and recently Tahiti. Together
with industry stakeholders we are
developing newer markets in South
America and lesser known market
segments in Asia. Tourism has its
cycles. This market development will
eventually help diversify New Zealand’s
dependence on traditional countries and
between peak seasons. Naturally in our
promotions overseas, we showcase New
Zealand’s natural beauty, the people,
the lifestyle and culture. Just as we bring
New Zealand to the countries we visit,
what better way to also showcase New
Zealand when they stay with us. This
could be in the food and beverage that
we serve. New Zealand is renowned
for its agriculture, horticulture and the
R&D in these fields. In this year’s annual
report, we feature two less well known
horticultural produce that New Zealand
exports besides apples and kiwifruit.
These are persimmons and feijoas.
We plan to promote these two fruits in
our hotels similar to our promotion of
green-lipped mussels with Aquaculture
New Zealand. This is part and parcel of
the whole unique New Zealand visitor
experience. What an opportunity to
showcase to many visitors coming from
the other side of the world and for them
then to be ambassadors be it by word of
mouth or on modern instant social media.
In time it can become a self-generating
model for Tourism New Zealand.
The benefits and economic linkages
from increased visitor numbers and their
expenditure flow through many sectors of
the economy as they affect employment
and the lives of many. The list of sectors
benefiting from this tourism uplift is a
long one including air transport, retail,
vehicle rental, taxis, sales of diesel and
petrol, accommodation, entertainment,
recreation, food and beverage to name
a few. A cruise ship docking in Auckland
may not significantly contribute to
increased accommodation there but can
have many direct and indirect benefits
accruing to local businesses such as
provedoring, scenic tours, taxis, F&B and
even air travel as cruise passengers fly
to Auckland to join the cruise and vice
versa. The Tourism Satellite Account
produced by Statistics New Zealand
is an invaluable tool in measuring
the tourism contributions to the New
Zealand economy both with respect to
GDP, employment and income. Policy
makers at local council and central levels
will be well served with this report. The
New Zealand 2016 Tourism Satellite
Account reported that 188,000 people
or 7.5% of the work force were directly in
tourism. From the same report on tourist
expenditure of $35 billion, 8% ($2.6
billion) was spent on accommodation,
35% ($11.1 billion) was related to retail
sales, 29% spent on passenger transport
and central government collected $2.8
billion in GST. This pattern of tourist
expenditure is similar in Auckland.
The Auckland Council’s recent 2017
proposal to hike rates to accommodation
providers by two and a half times
is disconcerting. It is a zero-sum
mentality. We urge local council and
central government policy makers to
adhere to the principle of equitable
treatment, rather than discriminating
against accommodation providers to pay
disproportionately to the benefits they
might receive.
Millennium & Copthorne Hotels New Zealand Limited is a proud supporter of
NZ growers - green-lipped mussels (far left), persimmons (middle) and feijoas (right)
8 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
CBD harbour front location with north
facing views to the Waitemata harbour
is unique. The Auckland CBD urban
landscape is also changing as more
choose to live in apartments. While
a comfortable good night’s sleep is a
must, we want to fit into the lifestyle
of those who live, work and play in our
neighbourhood and wider community.
Above all, M Social’s personality will
demonstrate the human and personal
touches to service as well as guest
experience.
Last September MCK successfully
transitioned the largest hotel in New
Zealand at 71 Mayoral Drive renaming
it the Grand Millennium Auckland.
With 452 rooms, the 830 square metre
Grand Ballroom and MCK’s network
across business and leisure markets,
Grand Millennium Auckland will further
contribute to incremental growth.
2016 was an eventful year for MCK.
I would like to commend all our staff
at MCK for delivering these results.
We have a purposeful team where
the process is as important as the
results, where shared values, diversity
and accountability add to the intrinsic
satisfaction of achievement. Thank you
all and I look forward to another year of
achievements together.
MCK team photo at the opening of Grand Millennium Auckland.
B K Chiu
Managing Director
Tourism numbers in 2016 have seen
an uplift which is most welcome news
for an industry which has seen the ups
and downs for the past 20 years. The
impact of the 2008 Global Financial
Crisis is not far from industry players’
memories, neither are recent events of
natural disasters and global epidemic
warnings. It was only in the past two
years that the uplift was evident in the
tourism locations of Auckland, Rotorua
and Queenstown. How does the industry
minimise the effects of an eight to
ten year up and down tourism cycle?
What then is New Zealand’s model for
tourism and sustainable growth? How
do we manage levels of growth that
we can live with as tourism also makes
demands on local infrastructure and the
environment? How are public funds
allocated, how well are they utilised and
how is accountability demonstrated?
Are there measures and checks on goals
achieved notably with public funds?
Smaller nations like New Zealand must
expect the wise use of limited public
funds and disciplined analysis to avoid
waste and duplication. Who calls time
out when ratepayer funds are used to buy
tickets to a free show? There must be
transparency and accountability to these
funding initiatives.
As the demographics and diversity
of our employees change so do their
expectations. Tourism growth and the
increasing costs of living notably in
Auckland and Queenstown have both
added challenges to the training and
retention of staff. One change is that
E-learning is now an effective way of
training at MCK. We remain committed
to the development, coaching and
mentoring of our employees.
An integral part of hotel ownership is the
ongoing maintenance and improvement
of assets with capital expenditure
investments. Over the past ten years,
MCK has undertaken a consistent plan
of refurbishments. This includes the
conversion of the Kingsgate hotels in
Wellington, Queenstown, Palmerston
North and Rotorua to the four star
Copthorne brand. This programme of
improvements to our hotels has seen the
group rewarded with better products,
occupancy and RevPAR. These have
been timely in the past two years with
the uplift in tourism numbers. The latest
investment is the conversion of the
former Copthorne Hotel, Harbour City
on Quay Street in Auckland to the new
M Social Auckland. It is the largest single
refurbishment we have undertaken.
M Social Auckland is planned to reopen
in the second half of 2017. It is designed
as a contemporary hotel with friendly
technology for those who choose to use
it and not be befuddled by it either. Its
Smaller nations like New Zealand must expect the wise use of limited
public funds, disciplined analysis, avoiding waste and duplication. Who
calls time out when ratepayer funds are used to buy tickets to a free show?
There must be transparency and accountability to these funding initiatives.
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | 9
New Zealand beef and lamb is renowned throughout the world for its quality
and taste. The Excellence Awards are designed to acknowledge a consistently
high standard of beef and lamb cuisine. Whenever you see the Beef and Lamb
Excellence Award, you can expect tasty, skilfully composed and superbly
presented beef and lamb dishes.
We are delighted that 5 of our restaurants at various locations around New
Zealand have been selected as ambassadors for this prestigious award. Our
proud ambassadors are as below:
JIMMY COOK’S KIWI KITCHEN
Copthorne Hotel & Resort
Bay of Islands, Paihia
ONE80 RESTAURANT
Copthorne Hotel
Oriental Bay, Wellington
EDGEWATER RESTAURANT
Millennium Hotel & Resort
Manuels, Taupo
THE GRILL
Copthorne Hotel & Resort
Solway Park, Wairarapa
AMBASSADORS OF EXCELLENCE
Chetan Pangam, executive chef at One80 Restaurant
(inside Copthorne Wellington, Oriental Bay)
was named the NZ Ora King Ambassador for 2016.
Johnny Coulter, head chef at Jimmy Cook’s Kiwi Kitchen
(inside Copthorne Bay of Islands, Paihia) is an ambassador
of the 2016 Beef & Lamb Excellence Awards.
JIMMY COOK’S KIWI KITCHEN
Copthorne Hotel
Palmerston North
10 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
WONG HONG REN (Chairman & Non-Executive Director)
Mr. Wong is currently the Chief Executive of City e-Solutions Limited and was Executive Director and Chief Executive
Officer of Millennium & Copthorne Hotels plc until February 2015. He is widely experienced in investment analysis,
international capital markets and mergers and acquisitions transactions as well as post-acquisition management
re-organisation matters. He is also Chairman of CDL Investments New Zealand Limited and M&C REIT Management Limited.
Mr. Wong was last re-elected to the Board at the 2016 annual meeting of shareholders.
B K CHIU (Managing Director & Member of Audit Committee)
Mr. Chiu is also the Managing Director of CDL Investments New Zealand Limited. Prior to joining the company, Mr. Chiu was
Regional Vice - President and Managing Director, Asia of Merisant Company. He holds a Masters degree in agricultural economics
and marketing from Massey University, Palmerston North.
Mr. Chiu was last re-elected to the Board at the 2012 annual meeting of shareholders.
ALOYSIUS LEE (Non-Executive Director)
Mr. Lee is currently Executive Director and Group Chief Executive Officer of Millennium & Copthorne Hotels plc. Mr Lee was
previously the Chief Executive Officer of South Beach Consortium Pte Ltd., a joint venture established by City Developments
Limited and other parties to create a mixed use real estate development in Singapore. Prior to that, Mr Lee held senior leadership
positions at Shui On Land, Hong Kong Telecom, Star Cruises and Singapore Airlines. He is a fellow of both the Chartered
Management Institute and the Chartered Institute of Marketing, and holds a Masters degree in Business Administration from
the University of Hong Kong. He also has management qualifications from Harvard University and the University of Hawaii.
Mr. Lee retired from the Board on 28 February 2017.
KEVIN HANGCHI (Non-Executive Director – appointed with effect 1 January 2016)
Mr. Hangchi is currently Senior Vice President, Hong Leong Management Services Pte. Limited. He has global
transactional experience across many of the Hong Leong Group’s entities including listings and public offerings, mergers
and acquisitions as well as capital markets issuances and banking facilities. Mr. Hangchi has been called to the English
and Singaporean bars and holds an honours degree in Accountancy and Law from the University of Southampton.
Mr. Hangchi was elected to the Board at the 2016 annual meeting of shareholders.
RICHARD BOBB (Independent Director, Chair of the Audit Committee)
Mr. Bobb is a Chartered Accountant and Chartered Tax Advisor with over thirty five years’ experience. He is currently a member of
the Professional Conduct Appeals Tribunal Chartered Accountants in Australia and New Zealand (formerly known as the Institute of
Chartered Accountants in Australia) and was a member of New South Wales Joint State Taxes Committee of Chartered Accountants
ANZ and CPA Australia. He was also a member and past Chairman of the Joint Legislation Review Committee and a member and past
Chairman the Legislation Review Board of Chartered Accountants ANZ and CPA Australia. He is admitted as a Barrister in New South
Wales and holds a Bachelor Commerce degree from the University of NSW, a Diploma in Law from the Barristers Admission Board
(NSW) and a Master of Laws from the University of Sydney. He also holds a Graduate Diploma in Applied Finance and Investment from
the Securities Institute of Australia (now known as the Financial Services Institute of Australasia (“FINSIA”)) and is a Fellow of FINSIA.
Mr. Bobb was last re-elected to the Board at the 2016 annual meeting of shareholders.
GRAHAM MCKENZIE (Independent Director, Member of the Audit Committee)
Mr. McKenzie is a Barrister and Solicitor with over thirty years experience in corporate and commercial law and is a former
Partner and Consultant to Bell Gully, a leading New Zealand law firm. He is currently a member of the New Zealand Law
Society Disciplinary Tribunal. Mr. McKenzie is a member of the New Zealand Law Society and the Queensland Law Society,
Australia and holds a Bachelor of Laws degree from Victoria University, Wellington and a Master of Laws degree from
Warwick University, England. Mr. McKenzie was a Director of CDL Investments New Zealand Limited from 2005 to 2006.
Mr. McKenzie was last re-elected to the Board at the 2015 annual meeting of shareholders.
DIRECTORS’ PROFILES
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | 11
QUANTUM LIMITED
MILLENNIUM &
COPTHORNE HOTELS
NEW ZEALAND LIMITED
OWNED
Millennium Hotel Queenstown
Copthorne Hotel Auckland City
Copthorne Hotel Rotorua
Copthorne Hotel Palmerston
North
Copthorne Hotel Wellington
Oriental Bay
Copthorne Hotel & Apartments
Queenstown Lakeview
Kingsgate Hotel Dunedin
FRANCHISED
Millennium Hotel & Resort
Manuels Taupo
Copthorne Hotel & Resort
Hokianga
Copthorne Hotel Grand Central
New Plymouth
Copthorne Hotel & Resort Solway
Park Wairarapa
Kingsgate Hotel The Avenue
Wanganui
OWNED
Millennium Hotel Rotorua
M Social Auckland
(scheduled to open in 2017)
Copthorne Hotel & Resort Bay of
Islands (49%)
Copthorne Hotel & Resort
Queenstown Lakefront
Kingsgate Hotel Greymouth
Kingsgate Hotel Te Anau
HOTEL OWNERSHIP
MANAGED/FRANCHISED
Grand Millennium Auckland
Kingsgate Hotel Autolodge Paihia
HOSPITALITY
SERVICES LIMITED
Aerial View of Oriental Bay, Wellington
12 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
As an NZX Main Board listed company,
Millennium & Copthorne Hotels New Zealand
Limited (MCK) is committed to maintaining
high standards of corporate governance in
line with best practice. MCK has adopted the
corporate governance practices prescribed in
the NZX Corporate Governance Best Practice
Code (NZX Code) in Appendix 16 to the NZX
Main Board and Debt Market Listing Rules
(the Listing Rules), except where specifically
noted otherwise below, and has had regard
to the Corporate Governance Principles
and Guidelines from the Financial Markets
Authority.
Our Corporate Governance policies and
processes are as follows:
ROLE AND FUNCTION OF THE BOARD
OF DIRECTORS
The Board has overall control and oversight
of the business activities, the strategic
direction and the governance of MCK and its
subsidiaries. The Board looks at control and
oversight of the company’s businesses, risk
management and compliance, management
performance, approving and monitoring
financial and other reports, and capital
expenditure and shareholder reporting. The
Board approves MCK’s budgets, business
plans as well as significant projects and has
statutory obligations for certain other matters,
such as the payments of distributions and the
issue of shares.
Attendances of Directors
Board meetings are generally held quarterly
with additional meetings convened when
required. Decisions are made by consensus
Director Meetings Attended
H R Wong (Chair) ............................................ 2/3
B K Chiu ............................................................. 3/3
K Hangchi ......................................................... 3/3
ATS Lee .............................................................. 2/3
R Bobb ................................................................ 3/3
G A McKenzie ................................................. 2/3
Certain powers are delegated to Board
Committees. Day-to-day management is
delegated to the Managing Director and senior
management. The levels of authority are
approved by the Board.
BOARD COMPOSITION
During 2016, MCK’s Board consisted of
Messrs H R Wong (Chairman / Non-Executive
Director), B K Chiu (Managing Director),
A T S Lee (Non-Executive Director), V W
E Yeo (Non-Executive Director), R Bobb
(Independent Director) and G A McKenzie
(Independent Director). Mr Kevin Hangchi
was appointed with effect from 1 January 2016
replacing Mr Vincent Yeo. MCK’s Constitution
and the Listing Rules require a minimum
number of 3 directors with a requirement
that at least 2 be ordinarily resident in New
Zealand.
All Directors must act in the best interests
of the company and exercise independent
and unfettered judgement. All Directors
must carry out their duties with integrity
and honesty and participate in open and
constructive discussions.
The Board does not impose a restriction on the
tenure of any Director as it considers that such
a restriction may lead to the loss of experience
and expertise from the Board.
In line with the Listing Rules, MCK is required
to have at least two Independent Directors and
the Board is also required to determine who
the Independent Directors are (Listing Rules
3.3.1 and 3.3.2). The Board has determined
that Messrs Bobb and McKenzie are both
Independent Directors as neither has a
Disqualifying Relationship (as that term is
defined in the Listing Rules). Messrs Wong,
Chiu, Lee, Yeo and Hangchi are not considered
by the Board to be Independent Directors.
BOARD COMMITTEES
MCK currently has an Audit Committee, a
Continuous Disclosure Committee and a
Due Diligence Committee. Other ad-hoc
committees as constituted as required.
Audit Committee
Pursuant to Listing Rule 3.6, MCK maintains
an Audit Committee. Its responsibilities
include monitoring accounting policies and
financial reporting, internal controls, risk
management and corporate governance. The
Committee also engages MCK’s external
auditors and monitors their independence.
The Committee has a written charter outlining
its role and responsibilities.
During 2016, the members of this Committee
were Messrs Bobb (Chair), McKenzie and
Chiu. As Mr Chiu is MCK’s Managing
Director, MCK does not comply with the
requirement under the NZX Code which states
that the Audit Committee should comprise
solely of non-executive directors of the
company.
Attendance at Audit Committee
Director Meetings Attended
R Bobb (Chair) ............................................... 2/2
B K Chiu ........................................................... 2/2
GA McKenzie ................................................. 2/2
CORPORATE GOVERNANCE
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | 13
Nomination Committee
MCK does not have a Nominations
Committee. All nominations for the Board
are considered by the Board as a whole. All
Directors are involved in the selection and
appointment process for any new Board
members. The Board reviews its composition
from time to time to ensure that it is equipped
with appropriate experience and skills.
Remuneration Committee
The Board does not have a Remuneration
Committee. The Board considers its current
level of remuneration sufficient to meet
its current requirements. The Board last
recommended to shareholders an increase in
the total amount available for Directors fees
in 1996.
The remuneration of the Managing Director
and senior management is reviewed annually
by the Board. The Group has a performance-
based approach to remuneration and
remuneration reviews are linked to and carried
out after performance reviews.
Continuous Disclosure Committee
MCK is committed to its obligations to inform
shareholders and market participants of all
material information that might affect the
price of its listed securities in accordance with
the Listing Rules and the Financial Markets
Conduct Act 2013.
MCK’s Board has adopted a continuous
disclosure policy (the Policy) which applies
to MCK, its subsidiaries (“Group”), and all
their respective directors and employees.
The Board has appointed the Chairman,
the Chairman of the Audit Committee, the
Managing Director, the Group Company
Secretary and the Vice President Finance to
act as MCK’s continuous disclosure committee
(the Disclosure Committee). A quorum of the
Disclosure Committee shall consist of no less
than three (3) of these persons.
The Disclosure Committee is responsible for:
• Determining what information amounts
to material information and must be
disclosed;
• Determining the timing of disclosure of
any information in accordance with the
Policy;
• Approving the content of any disclosure
to NZX (including matters not directly
covered by the Policy);
• Ensuring that all employees and directors
within the Group whom the Committee
considers appropriate receive a copy of
the Policy and appropriate training with
respect to it;
• Developing mechanisms designed to
identify potential material information
(e.g. agenda item on management
meetings); and
• Liaising with legal advisers in respect of
MCK’s compliance with its continuous
disclosure obligations.
The key points from the Policy are:
• No person may release material
information concerning MCK to any
person who is not authorised to receive
it without the approval of the Disclosure
Committee.
• The Board will consider at each
Board meeting whether there is any
information that may require disclosure
in accordance with the Policy, and will
note any disclosures made subsequent
to the prior meeting. Any employee or
director of MCK must inform a member
of the Disclosure Committee as soon as
practicable after that person becomes
aware of any material information.
• The Policy includes a list of incidents
which should be disclosed to a member
of the Disclosure Committee. The
Disclosure Committee must confer,
decide whether disclosure is required,
and coordinate disclosure of any material
information in a form specified by the
Listing Rules as soon as practicable
after it becomes aware of the existence
of material information, unless it
determines:
a a reasonable person would not
expect the information to be
disclosed; and
b the information is confidential and
its confidentiality is maintained;
and
c one or more of the following
applies:
i it would breach the law to
disclose the information; or
ii the information concerns
an incomplete proposal or
negotiation; or
iii the information comprises
matters of supposition or
is insufficiently definite to
warrant disclosure; or
iv the information is generated
for internal management
purposes of MCK or its
subsidiaries; or
v the information is a trade
secret.
The Disclosure Committee will ensure that
all Board members, not already aware of the
information, are promptly provided with it.
CORPORATE GOVERNANCE
Lake Waikaremoana, “Sea of Rippling Waters” - a spectacular treasure of New Zealand with great walks.
Image credit: www.themissingyear.com
14 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
• The Disclosure Committee is responsible
for MCK’s obligations under the Listing
Rules to release material information to
NZX to the extent necessary to prevent
development or subsistence of a market
for its listed securities which is materially
influenced by false or misleading
information emanating from the issuer
or any associated person of the issuer; or
other persons in circumstances in each
case which would give such information
substantial credibility.
• All employees of MCK, as soon as
practicable after becoming aware
of a rumour or speculation that is
“generally available to the market”, must
disclose the existence of that rumour
or speculation to a member of the
Disclosure Committee.
• The Disclosure Committee is also
responsible for co-ordinating MCK’s
responses to leaks and inadvertent
disclosures. Even in the event that leaked
or inadvertently disclosed information
is not price sensitive, the Disclosure
Committee should consider whether the
information should be released to NZX
via its market announcement platform
in order to provide investors with equal
access.
• All external communications by MCK
must comply with this Policy, any media
policy and the Company’s rules with
respect to confidential information. No
material information is to be disclosed
to such persons before it is released to
NZX.
• Slides and presentations used in briefings
should be released to NZX for immediate
release to the market.
MCK requires all of its Directors and
employees to comply with the Policy. The
Disclosure Committee is responsible for
ensuring that the Policy is complied with and
for investigating any breach of the Policy. A
deliberate or reckless breach of the Policy
may result in the summary dismissal of the
employee who deliberately or recklessly
breaches the Policy, and a breach of the Policy
or any relevant law may also attract civil or
criminal legal penalties.
CODE OF ETHICS
MCK is committed to conducting its business
in accordance with the highest standards of
ethical behaviour and the board has a Code of
Ethics. This states that:
• All Directors shall undertake their duties
with due care and diligence at all times
and will conduct themselves honestly
and with integrity. All Directors shall
not do anything, or cause anything to
be done, which may or does bring the
Company or the Board into disrepute.
• To the best of their ability, all Directors
will use reasonable endeavours to
ensure that the Company’s records
and documents (including its financial
reports) are true and complete and
comply with the requisite reporting
standards and controls.
• So that the Board may determine a
Director’s independence and to ensure
that there are no conflicts of interest,
all Directors shall disclose all relevant
business and / or personal interests they
may have to the Board as well as any
relationships they may have with the
Company.
• All Directors shall ensure that they do
not support any organisation other than
in a personal capacity without the prior
approval of the Chairman.
• Directors shall not accept gifts or
personal benefits from external parties
if it could be perceived that this could
compromise or influence any decision by
the Board or by the Company.
• All Directors shall maintain and protect
the confidentiality of all information
about MCK at all times except where
disclosure is permitted or required by
law.
• All Directors shall ensure that they
do not use Company information and
property for personal gain or profit.
All Directors shall use and / or retain
Company information and property only
for business purposes in their capacity
as Directors of the Company or to meet
legal obligations.
• All Directors shall comply with the
laws and regulations that apply to MCK
including any disclosure requirements.
• All Directors shall report any illegal
or unethical behaviour of which they
become aware to the Chairman of the
Board and to the Chairman of the Audit
Committee.
All of our employees are expected to act in the
best interests of the Company and to enhance
the reputation of the Company. Guidance is
provided to management and employees by
way of code of conduct policies. The Company
believes in fair dealing with its customers and
suppliers, shareholders, employees and other
stakeholders and external third parties.
MCK has a current Insider Trading Policy
which applies to Directors and Officers and
a Whistleblowing Policy which extends
to all management and employees. The
Whistleblowing Policy facilitates the
disclosure and impartial investigation of any
serious wrongdoing. This policy advises
employees of their right to disclose serious
wrongdoing, and sets out the Company’s
internal procedures for receiving and dealing
with such disclosures. The policy is consistent
with, and facilitates, the Protected Disclosures
Act 2000 and is supported by the Board.
EXTERNAL AUDITORS AND AUDITOR
INDEPENDENCE
MCK has a policy regarding auditor
independence which covers:
• provision of services by MCK’s external
auditors;
• external auditor rotation;
• the hiring of staff from the external audit
firm; and
• relationships between the external
auditor and MCK.
The policy states that:
The Audit Committee shall only recommend
to the Board a firm to be external auditor if
that firm:
• would be regarded by a reasonable
investor, with full knowledge of all
relevant facts and circumstances,
as capable of exercising objective
and impartial judgment on all issues
encompassed within the auditor’s
engagement;
• audit partner’s are members of Chartered
Accountants Australia New Zealand
(CAANZ);
• has not, within two years prior to the
commencement of the audit, had as a
member of its audit engagement team
MCK’s Managing Director, Vice President
Finance, Financial Controller, or any
member of the Company’s management
who act in a financial oversight role.
• does not allow the direct compensation
of its audit partners for selling non-audit
services to MCK.
The general principles to be applied in
assessing non-audit services are as follows:
a) the external auditor should not have
any involvement in the production of
financial information or preparation
of financial statements such that they
might be perceived as auditing their
own work. This includes the provision
of bookkeeping and payroll services as
well as valuation services where such
valuation forms an input into audited
financial information;
b) the external auditor should not perform
any function of management, or be
responsible for making management
decisions;
c) the external auditor should not
be responsible for the design or
implementation of financial information
systems; and
d) the separation between internal audit
and external audit should be maintained.
MCK’s Audit Committee shall pre-approve
all audit and related services that are to be
provided by the auditor. Aside from core
external audit services, it is appropriate for
the MCK’s auditors to provide the following
services:
• due diligence (but not valuations) on
proposed transactions;
• review of financial information where
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | 15
third party verification is required or
deemed necessary (outside the normal
audit process);
• completion audits / reviews;
• financial model preparation or review;
• accounting policy advice (including
opinions on compliance with New
Zealand and international Generally
Accepted Accounting Practice);
• listing advice;
• accounting/technical training; and
• taxation services of an assurance nature
(e.g. review of tax computations and
returns prior to filing and advice on
interpretation and application of Inland
Revenue’s rulings and policies).
It is not considered appropriate for MCK’s
external auditors to provide:
• book keeping services related to
accounting records or financial
statements;
• tax planning and strategy services
unless specifically approved by the Audit
Committee;
• appraisal / valuation services including
opinions as to fairness;
• provision of payroll services;
• the design or implementation of financial
information systems;
• outsourced internal audit and risk
management services;
• legal services (these are services that
could only be provided by a person who
is qualified in law);
• management functions;
• broker / dealer / investment adviser /
investment banking services;
• advocacy for the Company;
• actuarial services; and
• assistance in the recruitment of senior
management.
These prohibitions apply to all offices of the
audit firm, including overseas offices and
affiliates.
The billing arrangements for services provided
by MCK’s external auditors should not include
any contingent fees.
It is expected that the MCK’s external auditors
will rigorously comply with their own internal
policies on independence and all relevant
professional guidance, including independence
rules and guidance issued by CAANZ.
While this policy does not prescribe any
particular ratio of non-audit service fees to
audit fees, this ratio will be monitored by the
Audit Committee. Accordingly, the nature
of services provided by MCK’s auditors
and the level of fees incurred should be
reported to the Audit Committee Chairman
semi-annually (or sooner where requested)
to enable the Committee to perform its
oversight role and report back to the Board.
Development of local and overseas practice
with regard to auditor independence shall be
monitored by the Audit Committee to ensure
that this policy remains consistent with best
practice and meets the Company’s needs.
The continued appointment of MCK’s
external auditors is to be confirmed annually
by the Board on recommendation from the
Audit Committee.
Rotation of the lead audit partner or firm
will be required every five years. Lead audit
partners who are rotated will be subject
to a 2 year cooling off period (i.e. 2 years
must expire between the rotation of an audit
partner and that partner’s next engagement
with the Company). Accordingly it is
expected that such a policy will be adopted
by MCK’s auditors.
The hiring by MCK of any former lead
audit partner or audit manager must first
be approved by the Chairman of the Audit
Committee. There are no other restrictions on
the hiring of other staff from the audit firm.
KPMG were appointed as external auditors
to MCK in 1985. The lead external audit
engagement partner was rotated in 2013. The
role of the external auditor is to plan and carry
out an audit of MCK’s annual financial reports
and review the half-yearly reports. The Audit
Committee reviews the performance and
independence of the external auditors.
MCK’s external auditors attend the Company’s
Annual Meeting to answer any questions from
shareholders as to the audit and the content of
the report.
DIVERSITY POLICY
MCK is committed to pursuing a culture of
diversity within the Company. As a hospitality
company hosting guests from around
New Zealand and the world, we recognise
the importance of supporting and valuing
every employee as well as the promotion of
acceptance and inclusion in the workplace.
MCK is proud to have a workforce of diverse
cultures, nationalities and talented and
motivated people.
Pursuant to NZX Main Board Listing Rule
10.4.5(j), set out below is a quantitative
breakdown of the gender composition of the
Company’s directors, officers, hotel managers
and other permanent employees as at 31
December 2016:
OCCUPATIONAL HEALTH AND SAFETY
We are tertiary accredited under the
Workplace Safety Management Programme
(WSMP) with ACC (Accident Compensation
Corporation) and have been since 2001.
Tertiary accreditation recognises best practice
across all aspects of workplace health
and safety.
Gender composition by number and
percentage
Position20162015
MaleFemaleMaleFemale
Directors6
(100%)
0
(0%)
6
(100%)
0
(0%)
Officers*8
(73%)
3
(27%)
6
(67%)
3
(33%)
Hotel
managers
11
(73%)
4
(27%)
10
(83%)
2
(17%)
Permanent
employees
496
(42%)
691
(58%)
366
(39%)
582
(61%)
* Officers comprise the Company’s Managing
Director / CEO and his direct reports.
INTERNAL CONTROLS AND RISK
MANAGEMENT
MCK has a series of internal controls in place
covering such areas as financial monitoring
and reporting, human resources and risk
management. The primary responsibility for
monitoring and reporting against internal
controls and remedying any deficiencies lies
with Management. MCK has an internal audit
function to conduct audits and reviews of
the Company’s operations. MCK also keeps
current insurances appropriate to its business
with global insurers with a high prudential
rating.
SHAREHOLDER COMMUNICATIONS
MCK is committed to providing shareholders
and stakeholders with information on its
activities and performance. MCK does this
through a number of channels including:
• announcements in accordance with
continuous disclosure as required under
the Listing Rules;
• publication of the company’s annual
and interim reports which are sent to all
shareholders and also made available
through the company’s website www.
millenniumhotels.co.nz; and
• encouraging shareholders to attend the
Annual Meeting to hear the Chairman
and the Managing Director provide
updates on the company’s performance,
ask questions of the Board and vote on
the resolutions to be determined at the
meeting.
16 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
SAME VIEW, EVERYTHING ELSE IS NEW.
ABOUT THE HOTEL
Formerly Copthorne Harbour City, the hotel is nearing completion
of a total refurbishment and rebuild programme. Upon opening in
the second half of 2017, this first lifestyle hotel in Auckland will be
under the M Social brand.
M Social is a “lifestyle” hotel, built around the design experience;
it offers contemporary form and function with custom-made areas
that provide a seamless transition from business to pleasure.
M Social Auckland is located on one of Auckland’s prime CBD
waterfront locations.
All of the hotel’s 190 accommodation rooms have harbour
views. Guests can be socially connected online and offline with
complimentary Wi-Fi and the latest on property technology.
Flexible and adaptable are the many areas of M Social Auckland,
from the fitness centre, electric car charging posts, keyless entry
and a dedicated guest zone. A garden of indigenous plants to the
region has been replicated. On the first level are the meeting rooms
and “think tanks” with the latest communication and presentation
interfaces.
With an outdoor patio extending directly to vibrant Quay Street,
guests will be relaxed and feel part of the local community. Guests
can socialise and have fun at “Beast & Butterflies” the hotel’s
Restaurant and Bar. Designed to evolve in the course of a typical
day, the gastronomic repertoire offers outstanding cuisine including
a signature continental breakfast, in-house delicatessen, Asian
inspired street food menu and A la Carte dining featuring unique
New Zealand flavours of locally sourced fresh produce and seafood.
M Social Auckland will constantly evolve, embracing its
neighbourhood and local culture. A meeting place where people
who “live, work and play” in the area will be able to gather and
share new experiences.
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | 17
MILLENNIUM HOTELS & RESORTS IN NEW ZEALAND
1. Grand Millennium Auckland
71 Mayoral Drive, Auckland
Phone +64 6 366 3000
grandmillennium.auckland@millenniumhotels.co.nz
2. Millennium Hotel Rotorua
Cnr Eruera & Hinemaru Streets, Rotorua
Phone +64 7 347 1234
Fax +64 7 348 1234
millennium.rotorua@millenniumhotels.co.nz
3. Millennium Hotel & Resort Manuels Taupo
243 Lake Terrace, Taupo
Phone +64 7 378 5110
Fax +64 7 378 5341
millennium.taupo@millenniumhotels.co.nz
4. Millennium Hotel Queenstown
Cnr Frankton Road & Stanley Street, Queenstown
Phone +64 3 450 0150
Fax +64 3 441 8889
millennium.queenstown@millenniumhotels.co.nz
1. M Social Auckland
196 - 200 Quay Street, Auckland 1010
1. Copthorne Hotel & Resort Bay of Islands
Tau Henare Drive, Paihia
Phone +64 9 402 7411
Fax +64 9 402 8200
copthorne.bayofislands@millenniumhotels.co.nz
2. Copthorne Hotel & Resort Hokianga
S.H 12 Omapere, Hokianga
Phone +64 9 405 8737
Fax +64 9 405 8801
copthorne.hokianga@millenniumhotels.co.nz
3. Copthorne Hotel Auckland City
150 Anzac Avenue, Auckland
Phone +64 9 379 8509
Fax +64 9 379 8582
copthorne.aucklandcity@millenniumhotels.co.nz
4. Copthorne Hotel Rotorua
Fenton Street, Rotorua
Phone +64 7 348 0199
Fax +64 7 346 1973
copthorne.rotorua@millenniumhotels.co.nz
5. Copthorne Hotel Grand Central
New Plymouth
42 Powderham Street, New Plymouth
Phone +64 6 758 7495
Fax +64 6 758 7496
copthorne.newplymouth@millenniumhotels.co.nz
6. Copthorne Hotel Palmerston North
110 Fitzherbert Avenue, Palmerston North
Phone +64 6 356 8059
Fax +64 6 356 8604
copthorne.palmerston@millenniumhotels.co.nz
7. Copthorne Hotel & Resort Solway Park
Wairarapa
High Street, South Masterton
Phone +64 6 370 0500
Fax +64 6 370 0501
reservations@solway.co.nz
8. Copthorne Hotel Wellington Oriental Bay
100 Oriental Parade, Wellington
Phone +64 4 385 0279
Fax +64 4 384 5324
copthorne.orientalbay@millenniumhotels.co.nz
9. Copthorne Hotel & Resort Queenstown
Lakefront
Cnr Adelaide Street and Frankton Road, Queenstown
Phone +64 3 450 0260
Fax +64 3 442 7472
copthorne.lakefront@millenniumhotels.co.nz
10. Copthorne Hotel & Apartments
Queenstown Lakeview
88 Frankton Road, Queenstown
Phone +64 3 442 7950
Fax +64 3 442 8066
copthorne.lakeview@millenniumhotels.co.nz
11. Kingsgate Hotel Autolodge Paihia
Marsden Road, Paihia
Phone +64 9 402 7416
Fax +64 9 402 8348
kingsgate.paihia@millenniumhotels.co.nz
12. Kingsgate Hotel The Avenue Wanganui
379 Victoria Avenue, Wanganui
Phone +64 6 349 0044
Fax +64 6 345 3250
kingsgate.wanganui@millenniumhotels.co.nz
13. Kingsgate Hotel Greymouth
32 Mawhera Quay, Greymouth
Phone +64 3 768 5085
Fax +64 3 768 5844
kingsgate.greymouth@millenniumhotels.co.nz
14. Kingsgate Hotel Te Anau
20 Lakefront Drive, Te Anau
Phone +64 3 249 7421
Fax +64 3 249 8037
kingsgate.teanau@millenniumhotels.co.nz
15. Kingsgate Hotel Dunedin
10 Smith Street, Dunedin
Phone +64 3 477 6784
Fax +64 3 474 0115
kingsgate.dunedin@millenniumhotels.co.nz
Millennium Hotels & Resorts
Copthorne Hotels & Resorts
Kingsgate Hotels & Resorts
Leng’s Collection Hotels
LENG’S COLLECTION
18 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
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MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | 19
Financial Statements – Contents
Consolidated Income Statement FIN 1
Consolidated Statement of Comprehensive Income FIN 1
Consolidated Statement of Changes in Equity FIN 2-3
Consolidated Statement of Financial Position FIN 4
Consolidated Statement of Cash Flows FIN 5-6
Notes to the Financial Statements FIN 7-27
Audit Report FIN 28-31
Regulatory Disclosures and Statutory Information –
Contents
Shareholder Information FIN 32-33
Waivers from NZX Limited FIN 33
Statutory Information FIN 34-35
Central Reservations Team at the Auckland Corporate Office.
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HOTELS
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Moments
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Copthorne
Hotel & Resort
Bay of Islands
Friends
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Gifting made easy.
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Millennium, Copthorne and Kingsgate hotel locations -
from accommodation packages to dining and spa treatment,
you can even add your own personal message!
AwaytoGo.co.nz Gifting made easy.
FIN 1 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
Millennium & Copthorne Hotels New Zealand Limited
Consolidated Income Statement
For the year ended 31 December 2016
FIN 1
Millennium & Copthorne Hotels New Zealand Limited
Consolidated Income Statement
For the year ended 31 December 2016
Group Group
DOLLARS IN THOUSANDS Note 2016 2015
Hotel revenue 94,607 86,094
Rental income 2,993 2,848
Property sales 74,435 47,599
Revenue 172,035 136,541
Cost of sales 4,11 (72,702) (58,465)
Gross profit 99,333 78,076
Other income 2 4,311 -
Administration expenses 3,4 (17,246) (2 0,602)
Other operating expenses 3,4 (1 6,737) (1 7,592)
Operating profit 69,661 39,882
Finance income 5 3,027 3,406
Finance costs 5 (2,151) (3,271)
Net finance income 876 135
Profit before income tax 70,537 40,017
Income tax expense 6 (20,117) (11,645)
Profit for the year 50,420 28,372
Attributable to:
Owners of the parent 40,447 21,670
Non-controlling interests 9,973 6,702
Profit for the year 50,420 28,372
Basic earnings per share (cents) 9 25.56 13.70
Diluted earnings per share (cents) 9 25.56 13.70
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2016
Group Group
DOLLARS IN THOUSANDS Note 2016 2015
Profit for the year 50,420 28,372
Other comprehensive income
Items that will not be reclassified to profit or loss
Revaluation/impairment of property, plant and equipment 10 79,424 3,255
- Tax expense on revaluation/impairment of property, plant
and equipment
6, 19 (14,602) (817)
64,822 2,438
Items that are or may be reclassified to profit or loss
Foreign exchange translation movements 5 (1,024) 1,532
- Tax credit on foreign exchange translation movements5, 6 67 25
(957)1,557
Total comprehensive income for the year 114,285 32,367
Total comprehensive income for the year attributable to :
Owners of the parent 104,312 25,858
Non-controlling interests 9,973 6,509
Total comprehensive income for the year 114,285 32,367
The accompanying notes form part of, and should be read in conjunction with, these financial statements
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 2
FIN
2
Millennium & Copthorne Hotels New Zealand Limited Consolidated
S
tatement of Changes in Equity
For the year ended 31 December 20
16
Group
Attributable to equity holders of the Group
DOLLARS IN THOUSANDS
Share
Capital
Revaluation
Reserve
Exchange
Reserve
Accumulated
Losses
Treasury
Stock
Total
Non-
controllin
g
Interests
Total
Equity
Balance at 1 January 201
6
383,266
96,548
(2,366)
(88,
129)
(26)
389,
293
55,
552
444
,845
Movement in exchange
translation reserve, net of
tax
-
-
(957)
-
-
(957)
-
(957)
Revaluation/impairment of property, plant & equipment, net of tax
-
64,822
-
-
-
64,822
-
64,822
Total other comprehensive income/(loss)
-
64,
822
(957)
-
-
63,
865
-
63,
865
Profit for
the year
-
-
-
40,
447
-
40,
447
9,973
50,
420
Total comprehensive income for the year
-
64,
822
(957)
40,
447
-
104,
312
9,973
114,
285
Transactions with owners, recorded directly in equity:
Movement in fair value on assets held for sale
-
-
-
(1)
-
(1)
-
(1)
Dividends paid to:
Owners of the parent
-
-
-
(4,430)
-
(4,430)
-
(4,430)
Non-
controlling interests
-
-
-
-
-
-
(2,787)
(2,787)
Supplementary dividends
-
-
-
(124)
-
(124)
-
(124)
Foreign investment tax credits
-
-
-
124
-
124
-
124
Movement in non
-controlling interests
without a change in control
-
-
-
(111)
-
(111)
480
369
Balance at
31 December 2016
383,266
161,
370
(3,323)
(52,
224)
(26)
489,
063
63,
218
552,
281
The
accompanying notes form part of, and should be read in conjunction with, these financial statements
FIN 3 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
FIN
3
Millennium & Copthorne Hotels New Zealand Limited Consolidated
Statement of Changes in Equity
For the year ended 31 December 201
6
Group
Attributable to
equity holders of the Group
DOLLARS IN THOUSANDS
Share
Capital
Revaluation
Reserve
Exchange
Reserve
Accumulated
Losses
Treasury
Stock
Total
Total
Equity
Balance at 1 January 201
5
383,266
94,110
(4,116)
(101,874)
(26)
371,360
78,347
449,707
Movement in exchange translation reserve, net of tax
-
-
1,750
-
-
1,750
(193)
1,557
Revaluation/impairment of property, plant & equipment, net of tax
-
2,438
-
-
-
2,438
-
2,438
Total other comprehensive
income/(loss)
-
2,438
1,750
-
-
4,188
(193)
3,995
Profit for the year
-
-
-
21,
670
-
21,
670
6,702
28,
372
Total comprehensive income for the year
-
2,438
1,750
21,
670
-
25,
858
6,509
32,
367
Transactions with owners, recorded directly in equity:
Movement in fair value on assets held for sale
-
-
-
1
-
1
-
1
Dividends paid to:
Owners of the parent
-
-
-
(3,797)
-
(3,
797)
-
(3,
797)
Non-
controlling interests
-
-
-
-
-
-
(2,820)
(2,820)
Supplementary dividends
-
-
-
(109)
-
(109)
-
(109)
Foreign investment tax credits
-
-
-
109
-
109
-
109
Movement in non
-controlling interests
without a change in control
-
-
-
(4,129)
-
(4,129)
(26,484)
(30,
613)
Balance at
31 December 2015
383,266
96,
548
(2,
366)
(88,
129)
(26)
389,
293
55,
552
444,
845
The accompanying notes form part of, and should be read in conjunction with, these financial statements
Non-
cont
rol
lin
g
Interests
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 4
FIN 4
Millennium & Copthorne Hotels New Zealand Limited
Consolidated Statement of Financial Position
As at 31 December 2016
Group Group
DOLLARS IN THOUSANDS
Note
2016
2015
SHAREHOLDERS’ EQUITY
Issued capital 8 383,266 383,266
Reserves 105,823 6,053
Treasury stock 8 (26) (26)
Equity attributable to owners of the parent 489,063 389,293
Non-controlling interests 63,218 55,552
Total equity 552,281 444,845
Represented by:
NON CURRENT ASSETS
Property, plant and equipment 10 422,603 316,634
Development properties 11 135,136 140,637
Intangible assets 12 - 2,823
Investment in associates 13 2 2
Total non-current assets 557,741 460,096
CURRENT ASSETS
Cash and cash equivalents 14 15,520 14,021
Short term bank deposits 85,598 59,955
Trade and other receivables 15 18,693 16,131
Trade receivables due from related parties 25 - 27
Inventories 1,508 1,252
Development properties 11 34,845 38,247
Assets held for sale 16 - 319
Total current assets 156,164 129,952
Total assets 713,905 590,048
NON CURRENT LIABILITIES
Interest-bearing loans and borrowings 17 66,000 72,500
Provision for deferred taxation 19 59,183 42,881
Total non-current liabilities 125,183 115,381
CURRENT LIABILITIES
Interest-bearing loans and borrowings 17 4 27
Trade and other payables 20 24,957 20,571
Trade payables due to related parties 25 2,137 667
Loans due to related parties 25 5,800 3,800
Provisions 18 - 3,000
Income tax payable 3,543 1,757
Total current liabilities 36,441 29,822
Total liabilities 161,624 145,203
NET ASSETS 552,281 444,845
For and on behalf of the Board
R BOBB, DIRECTOR, 17 February 2017 BK CHIU, MANAGING DIRECTOR, 17 February 2017
The accompanying notes form part of, and should be read in conjunction with, these financial statements
Millennium & Copthorne Hotels New Zealand Limited
Consolidated Statement of Financial Position
For the year ended 31 December 2016
FIN 5 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
FIN 5
Millennium & Copthorne Hotels New Zealand Limited
Consolidated Statement of Cash Flows
For the year ended 31 December 2016
Group Group
DOLLARS IN THOUSANDS Note
2016
2015
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from:
Receipts from customers 169,208 137,611
Receipts from insurers 2 4,500 -
Interest received 3,370 3,100
Dividends received 5 7 3
Cash was applied to:
Payments to suppliers and employees (87,371) (112,372)
Purchase of development land - (8,697)
Interest paid (2,134) (3,353)
Income tax paid (16,571) (10,563)
Net cash inflow from operating activities 71,009 5,729
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was (applied to)/provided from:
Proceeds from the sale of property, plant and equipment 10 20
Proceeds from the sale of assets held for sale 16 314 -
Purchase of property, plant and equipment 10 (32,565) (10,926)
Purchase of investments in subsidiaries - (31,000)
Investments in short term bank deposits (25,643) 23,617
Net cash outflow from investing activities (57,884) (18,289)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was (applied to)/provided from:
Repayment of borrowings 17 (6,523) (1 1,894)
Drawdown of borrowings 17 - 16,000
Loans advanced from parent company 25 2,000 3,800
Dividends paid to shareholders of Millennium & Copthorne Hotels New
Zealand Ltd
8 (4,430) (3,797)
Dividends paid to non-controlling shareholders (2,786) (2,820)
Net cash inflow/(outflow) from financing activities (11,739) 1,289
Net increase/(decrease) in cash and cash equivalents 1,386 (11,271)
Add opening cash and cash equivalents 14,021 24,022
Exchange rate adjustment 113 1,270
Closing cash and cash equivalents 14 15,520 14,021
The accompanying notes form part of, and should be read in conjunction with, these financial statements
Millennium & Copthorne Hotels New Zealand Limited
Consolidated Statement of Cash Flows
For the year ended 31 December 2016
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 6
FIN 6
Millennium & Copthorne Hotels New Zealand Limited
Consolidated Statement of Cash Flows – continued
For the year ended 31 December 2016
Group
Group
DOLLARS IN THOUSANDS Note 2016
2015
RECONCILIATION OF NET PROFIT FOR THE YEAR TO CASH FLOWS
FROM OPERATING ACTIVITIES
Profit for the year
50,420 28,372
Adjusted for non-cash items:
Goodwill written off 12 2,823 -
Gain on sale of property, plant and equipment 3 (9) (58)
Depreciation 10 5,837 6,662
Unrealised foreign exchange (gain)/losses (74) 71
Income tax expense 6 20,117 11,645
Gain on insurance claim 2 (4,311) -
74,803 46,692
Adjustments for movements in working capital:
Increase in trade & other receivables 2,120 789
(Increase)/Decrease in inventories (256) 4
Decrease/(Increase) in development properties 8,030 (30,933)
Increase in trade & other payables 3,514 2,791
Increase in related parties 1,497 127
Cash generated from operations 89,708 19,470
Interest expense 5 (2,128) (3,178)
Income tax paid (16,571) (10,563)
Cash inflows from operating activities 71,009 5,729
The accompanying notes form part of, and should be read in conjunction with, these financial statements
Millennium & Copthorne Hotels New Zealand Limited
Consolidated Statement of Cash Flows –
continued
For the year ended 31 December 2016
FIN 6
Millennium & Copthorne Hotels New Zealand Limited
Consolidated Statement of Cash Flows – continued
For the year ended 31 December 2016
Group
Group
DOLLARS IN THOUSANDS Note 2016
2015
RECONCILIATION OF NET PROFIT FOR THE YEAR TO CASH FLOWS
FROM OPERATING ACTIVITIES
Profit for the year
50,420 28,372
Adjusted for non-cash items:
Goodwill written off 12 2,823 -
Gain on sale of property, plant and equipment 3 (9) (58)
Depreciation 10 5,837 6,662
Unrealised foreign exchange (gain)/losses (74) 71
Income tax expense 6 20,117 11,645
Gain on insurance claim 2 (4,311) -
74,803 46,692
Adjustments for movements in working capital:
Increase in trade & other receivables 2,120 789
(Increase)/Decrease in inventories (256) 4
Decrease/(Increase) in development properties 8,030 (30,933)
Increase in trade & other payables 3,514 2,791
Increase in related parties 1,497 127
Cash generated from operations 89,708 19,470
Interest expense 5 (2,128) (3,178)
Income tax paid (16,571) (10,563)
Cash inflows from operating activities 71,009 5,729
The accompanying notes form part of, and should be read in conjunction with, these financial statements
FIN 7 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
Significant accounting policies
Millennium & Copthorne Hotels New Zealand Limited is a company domiciled in New Zealand registered under the Companies Act
1993 and listed on the New Zealand Stock Exchange. Millennium & Copthorne Hotels New Zealand Limited (the “Company”) is a
Financial Markets Conduct Reporting Entity in terms of the Financial Markets Conduct Act 2013 and the Financial Reporting Act 2013.
The financial statements of the Company for the year ended 31 December 2016 comprise the Company and its subsidiaries (together
referred to as the “Group”). The registered office is located at Level 13, 280 Centre, 280 Queen Street, Auckland, New Zealand.
The principal activities of the Group are ownership and operation of hotels in New Zealand; residential development and sale of land
in New Zealand; and development and sale of residential units in Australia.
(a) Statement of compliance
The financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice
(NZ GAAP). They comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRSs) as
appropriate for Tier 1 profit-oriented entities. The financial statements also comply with International Financial Reporting
Standards (IFRSs).
The financial statements were authorised for issuance on 17 February 2017.
(b) Basis of preparation
The financial statements are presented in New Zealand Dollars, rounded to the nearest thousand. They are prepared on
the historical cost basis except that hotel land and buildings are stated at their fair value.
The preparation of financial statements in conformity with NZ IFRSs requires management to make judgments, estimates
and assumptions that affect the application of the Group’s policies and reported amounts of assets and liabilities, income
and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised and in any future period affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting
policies that have the most significant effect on the amount recognised in the financial statements are described in Note
26 – Accounting Estimates and Judgements.
(c) Change in accounting policies
The accounting policies have been applied consistently to all periods presented in these financial statements.
(d) Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Company. The Company 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 financial statements from the date that control
commences until the date that control ceases.
Transactions eliminated on consolidation
Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-group transactions,
are eliminated in preparing the financial statements. Unrealised gains arising from transactions with jointly controlled
entities are eliminated to the extent of the Group’s interest in the entity. Unrealised losses are eliminated in the same way
as unrealised gains, but only to the extent that there is no evidence of impairment.
Investments in associates
Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial
and operating policies. Interests in associates are accounted for using the equity method. They are initially recognised at
cost. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss
and other comprehensive income (OCI) of equity-accounted investees, until the date on which significant influence ceases.
When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest
(including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the
extent that the Group has an obligation or has made payments on behalf of the associate.
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 8
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
Significant accounting policies – continued
(e) Foreign currency
Foreign currency transactions
Transactions in foreign currencies 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 date are translated to New Zealand dollars at the
foreign exchange rate ruling 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
using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies
that are stated at fair value are translated to New Zealand dollars at foreign exchange rates ruling at the dates the fair value
was determined.
Financial statements of foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are
translated to New Zealand dollars at foreign exchange rates ruling at the balance date. The revenues and expenses of foreign
operations are translated to New Zealand dollars at rates approximating the foreign exchange rates ruling at the dates of
the transactions. Foreign exchange differences arising on re-translation are recognised directly as a separate component of
equity. When a foreign operation is disposed of, in part or in full, the relevant amount in the exchange reserve is released into
the income statement.
(f) Financial instruments
Non-derivative financial instruments
Non-derivative financial instruments comprise related party advances, trade and other receivables, cash and cash equivalents,
loans and borrowings, and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through the
income statement, any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial
instruments are measured as described in accounting policies below.
Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the
Group transfer the financial asset to another party without retaining control or substantially all risks and rewards of the asset.
Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.
Accounting for finance income and expense is discussed in accounting policy (u).
(g) Insurance proceeds
Compensation from third parties for items of property, plant and equipment that were damaged, impaired, lost or given up is
included in the profit or loss when the compensation becomes virtually certain. Any subsequent purchase or construction of
replacement assets are separate economic events and are accounted for separately.
Compensation from third parties to cover business interruption is determined with the agreed formula in the insurance policy
and recognised in the profit and loss for the applicable period. Installment payments from third parties are not recognised in
the profit and loss until full settlement is agreed with the third parties.
(h) Property, plant and equipment
Initial recording
Items of property, plant and equipment are initially stated at cost. The cost of purchased property, plant and equipment is
the value of the consideration given to acquire the assets and the value of other directly attributable costs, which have been
incurred in bringing the assets to the location and condition necessary for their intended service. Where parts of an item of
property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and
equipment.
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 property, plant and equipment categories. Capital
work in progress is not depreciated.
Subsequent measurement
Property, plant and equipment is subsequently measured at cost less accumulated depreciation and impairment losses,
except for land and buildings which are re-valued. The Group recognises the cost of replacing part of such an item of property,
plant and equipment when that cost is incurred if it is probable that the future economic benefits embodied within the item will
flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in the income statement
as an expense as incurred.
Disposal or retirement
Gains or losses arising from the disposal or retirement of property, plant and equipment are determined as the difference
between the actual net disposal proceeds and the carrying amount of the asset and are recognised in the income statement
on the date of retirement or disposal.
Revaluation
Land and buildings are shown at fair value less subsequent depreciation for buildings. Fair value is determined by management
using valuation models and confirmed by independent registered valuers on a triennial basis. Any accumulated depreciation
at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the
re-valued amount of the asset. Any decreases in value that offset a previous increase in value of the same asset is charged
against reserves in equity, any other decrease in value is charged to the income statement.
FIN 9 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
Significant accounting policies – continued
(h) Property, plant and equipment - continued
Depreciation
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or
re-valued amounts to their residual values over their estimated useful lives, as follows:
Building core 50 years or lease term if shorter
Building surfaces and finishes 30 years or lease term if shorter
Plant and machinery 15 - 20 years
Furniture and equipment 10 years
Soft furnishings 5 - 7 years
Computer equipment 5 years
Motor vehicles 4 years
No residual values are ascribed to building surfaces and finishes. Residual values ascribed to building core depend on the
nature, location and tenure of each property.
(i) Development properties
Property held for future development and development property completed and held for sale are stated at the lower of
cost and net realisable value. The net realisable value is determined by independent valuers. Cost includes the cost of
acquisition, development, and holding costs. All holding costs incurred after completion of development are expensed as
incurred. Revenue and profit are not recognised on development properties until the legal title passes to the buyer when the
full settlement of the purchase consideration of the properties occurs.
(j) Intangible assets
Goodwill
Goodwill represents amounts arising on acquisition of subsidiaries in a business combination. Goodwill is measured at the
acquisition date as:
• The fair value of the consideration transferred; plus
• The recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved
in stages, the fair value of the existing equity interest in the acquiree; less
• The fair value of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not
amortised but is tested annually for impairment (see accounting policy (n)).
Other intangible assets
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation (see below) and
impairment losses (see accounting policy (n)).
Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.
Amortisation
Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of other intangible
assets.
(k) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an 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 for the purpose of the statement of cash flows.
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 10
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
Significant accounting policies – continued
(l) Trade and other receivables
Trade and other receivables are stated at their cost less impairment losses (see accounting policy (n)).
(m) Inventories
Inventories are stated 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.
The cost of inventories is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories
and bringing them to their existing location and condition.
(n) Impairment
The carrying amounts of the Group’s assets other than development properties (see accounting policy (i)), inventories (see
accounting policy (m)) and deferred tax assets (see accounting policy (v)), are reviewed at each balance date to determine
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.
In relation to properties that have been damaged by earthquakes, the land and building are separately reviewed for impairment.
The carrying value of land is compared to its fair value based on comparable market sales. The carrying value of building is
compared to the indemnified sum insured for material damage.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its estimated
recoverable amount. Impairment losses are recognised in the income statement unless the asset is recorded at a re-valued
amount in which case it is treated as a revaluation decrease through the statement of comprehensive income.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any
goodwill allocated to cash-generating units (groups of units) and then, to reduce the carrying amount of the other assets in the
unit (group of units) on a pro rata basis.
(i) Calculation of recoverable amount
The recoverable amount of the Group’s receivables carried at amortised cost is calculated as the present value
of estimated future cash flows, discounted at the original effective interest rate (i.e. the effective interest rate
computed at initial recognition of these financial assets). Receivables with a short duration are not discounted.
The recoverable amount of other assets is the greater of their fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined
for the cash-generating unit to which the asset belongs.
(ii) Reversals of impairment
An impairment loss in respect of a receivable carried at amortised cost is reversed if the subsequent increase in
recoverable amount can be related objectively to an event occurring after the impairment loss was recognised.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed
if there has been a change in the estimates used to determine the recoverable amount.
(o) Interest-bearing loans and borrowings
Interest-bearing loans and borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to
initial recognition, interest-bearing loans and borrowings are stated at amortised cost with any difference between cost and
redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis.
(p) Employee long-term service benefits
The Group’s net obligation in respect of long-term service benefits, 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 their expected remuneration and
an assessment of likelihood the liability will arise.
(q) Provisions
A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation
as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. 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, where appropriate, the risks specific to the liability.
(r) Trade and other payables
Trade and other payables are stated at cost.
FIN 11 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
Significant accounting policies – continued
(s) Share capital
Repurchase of share capital
When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributed
costs, is recognised as a change in equity. Repurchased shares are classified as treasury stock and presented as a deduction
from total equity.
Dividends
Dividends are recognised as a liability in the period in which they are declared.
(t) Revenue
Revenue represents amounts derived from:
• The ownership, management and operation of hotels: recognised on an accruals basis to match the provision of the
related goods and services.
• Income from property rental: recognised on an accruals basis, straight line over the lease period. Lease incentives
granted are recognised as an integral part of the total rental income.
• Income from development property sales: recognised on the transfer of the related significant risk and rewards of
ownership, which is not until legal title passes to the buyer when the full settlement of the purchase consideration of
the properties occurs.
(u) Expenses
Operating lease payments
Payments made under operating leases are recognised in the income statement on a straight line basis over the term of the
lease. Lease incentives received are recognised in the income statement as an integral part of the total lease expense.
Finance lease payments
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The
finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the
remaining balance of the liability.
Finance income and expenses
Finance income comprises interest income on funds invested, dividend income and foreign currency gains that are recognised
in profit or loss. Interest income is recognised as it accrues, using the effective interest method. Dividend income is recognised
in the income statement on the date the entity’s right to receive payments is established which in the case of quoted securities
is the ex-dividend date.
Finance expenses comprise interest payable on borrowings calculated using the effective interest rate method and foreign
exchange losses that are recognised in the income statement.
Interest attributable to funds used to finance the development or construction of new hotels, major extensions to existing hotels
or development properties is capitalised gross of tax relief and added to the cost of the hotel core buildings or development
property.
(v) Income tax
Income tax on the profit or loss for the year 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 other comprehensive income or equity, in which
case it is recognised in other comprehensive income or 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 date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of the 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: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that neither affect
accounting nor taxable profit; and differences relating to investments in subsidiaries to the extent that they will probably not
reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance
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 related tax benefit
will be realised.
Deferred tax assets and deferred tax liabilities are offset only if the Group has a legally enforceable right to set off current tax
assets against current tax liabilities; the Group intends to settle net; and the deferred tax assets and the deferred tax liabilities
relate to income taxes levied by the same taxation authority.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the
related dividend.
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 12
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
Significant accounting policies – continued
(w) Segment reporting
An operating segment is a distinguishable component of the Group:
• that is engaged in business activities from which it earns revenues and incurs expenses,
• whose operating results are regularly reviewed by the Group’s chief operating decision maker to make decisions on
resource allocation to the segment and assess its performance, and
• for which discrete financial information is available.
(x) New standards and interpretations not yet adopted
The following new standards and amendments to standards are not yet effective for the year ended 31 December 2016, and
have not been applied in preparing these financial statements.
• NZ IFRS 9 – Financial Instruments (effective after 1 January 2018)
• NZ IFRS 15 – Revenue from Contracts with Customers (effective 1 January 2018)
• NZ IFRS 16 – Leases (effective 1 January 2019)
• Disclosure Initiative (Amendments to IAS 7: Cash Flow Statements (effective after 1 January 2017)
The adoption of these standards is not expected to have a material impact on the Group’s financial statements.
FIN 13 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 16
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
Index
1. Segment re porting
2. Other income
3. Administration and other operating expenses
4. Personnel expenses
5. Net finance income
6. Income tax expense
7. Imputation credits
8. Capital and reserves
9. Earnings per share
10. Property, plant and equipment
11. Development properties
12. Intangible assets
13. Investment in associates
14. Cash and cash equivalents
15. Trade and other receivables
16. Assets held for sale
17. Interest-bearing loans and borrowings
18. Provisions
19. Deferred tax assets and liabilities
20. Trade and other payables
21. Financial instruments
22. Operating leases
23. Capital commitments
24. Related parties
25. Group entities
26. Accounting estimates and judgements
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 14
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 17
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
1.Segment reporting
Segment information is presented in respect of the Group’s reporting segments. Operating segments are the primary
basis of segment reporting. The Group has determined that its chief operating decision maker is the Board of Directors
on the basis that it is this group which determines the allocation of resources to segments and assesses their
performance.
Inter-segment pricing is determined on an arm’s length basis. Segment results include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to
be used for more than one period.
Operating segments
The Group consisted of the following main operating segments:
•Hotel operations, comprising income from the ownership and management of hotels.
•Residential land development, comprising the development and sale of land.
•Residential and commercial property development, comprising the development and sale of residential
apartments.
Geographical areas
The Group operates in the following main geographical areas:
•New Zealand.
•Australia.
Segment revenue is based on the geographical location of the asset. The Group has no major customer representing
greater than 10% of the Group’s total revenue.
Operating segments
Hotel Operations
Residential Land
Development
Residential
Property
Development
Group
Dollars In Thousands 2016 2015 2016 2015 2016 2015 2016 2015
External revenue 94,576 86,094 74,471 47,599 2,988 2,848 172,035 136,541
Finance income 1,916 2,105 956 852 155 449 3,027 3,406
Finance expense (2,151) (3,266) - - -(5)(2,151) (3,271)
Depreciation and amortisation (5,829) (6,649) (2)(2)(6)(11)(5,837) (6,662)
Segment profit/(loss) before income
tax
27,684 14,766 37,538 24,159 5,315 1,092 70,537 40,017
Profit before income tax 27,684 14,766 37,538 24,159 5,315 1,092 70,537 40,017
Income tax (expense)/credit (8,301) (4,604) (10,510) (6,686) (1,306) (355) (20,117) (11,645)
Other material/non-cash items:
Gain on insurance claim 4,311 - - - - - 4,311 -
Goodwill written-off (2,823) - - - - - (2,823) -
Release of earthquake and FF&E
provisions
3,000 - - - - 3,000 -
Release of excess remedial costs
provided for Zenith Residences
- - - - 4,393 - 4,393 -
Segment assets 486,137 385,370 168,276 142,678 59,490 61,998 713,903 590,046
Tax assets - - - - - - - -
Investment in associates - - 2 2 - - 2 2
Total assets 486,137 385,370 168,278 142,680 59,490 61,998 713,905 590,048
Segment liabilities (93,426) (92,853) (4,335) (234) (1,137) (7,478) (98,898) (100,565)
Tax liabilities (61,660) (44,691) (2,149) (2,157) 1,083 2,210 (62,726) (44,638)
Total liabilities (155,086) (137,544) (6,484) (2,391) (54)(5,268)(161,624) (145,203)
Capital expenditure 32,551 10,917 5 1 9 8 32,565 10,926
-
FIN 15 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 18
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
1.Segment reporting - continued
Geographical areas
New Zealand Australia Group
Dollars In Thousands 2016 2015 2016 2015 2016 2015
External revenue 169,047 133,693 2,988 2,848 172,035 136,541
Finance income 2,873 3,000 154 406 3,027 3,406
Finance expense (2,151) (3,266) -(5)(2,151) (3,271)
Depreciation and amortisation (5,831) (6,651) (6)(11)(5,837) (6,662)
Segment profit/(loss) before income
tax
66,263 40,173 4,274 (156) 70,537 40,017
Profit before income tax 66,263 40,173 4,274 (156) 70,537 40,017
Income tax (expense)/credit (18,828) (11,402) (1,289) (242) (20,117) (11,645)
Other material/non-cash items:
Gain on insurance claim 4,311 - - - 4,311 -
Goodwill written-off (2,823) - - - (2,823) -
Release of earthquake and FF&E
provisions
3,000 - - - 3,000 -
Release of excess remedial costs
provided for Zenith Residences
- - 4,393 - 4,393 -
Segment assets 654,415 528,377 59,488 61,667 713,903 590,046
Tax assets - - - - - -
Investment in associates 2 2 - - 2 2
Total assets 654,417 528,379 59,488 61,667 713,905 590,048
Segment liabilities (98,868) (93,121) (30)(7,444)(98,898) (100,565)
Tax liabilities (63,814) (46,881) 1,088 2,243(62,726) (44,638)
Total liabilities (162,682) (140,002) 1,058 (5,201) (161,624) (145,203)
Capital expenditure 32,556 10,918 9 8 32,565 10,926
2.Other income
Group
Dollars In Thousands 2016 2015
Gain on insurance claim 4,311 -
4,311 -
In May 2016, the insurers settled the Group’s material damage claim in respect of the fixture, fittings and equipment
at the Millennium Hotel Christchurch. This settlement of $4.50 million resulted in a gain on disposal of property plant
and equipment of $4.31 million.
3.Administration and other operating expenses
Group
Dollars In Thousands Note 2016 2015
Depreciation 10 5,837 6,662
Auditors remuneration
Audit fees 294 322
Tax compliance and advisory 132 122
Directors fees 24 231 260
Lease and rental expenses 22 2,235 2,171
Provision for bad debts
Debts written off 1 22
Movement in doubtful debt provision 34 (12)
Goodwill written-off 12 2,823 -
Net gain on disposal of property, plant and equipment (9) (58)
Release of earthquake and FF&E provisions for Millennium Hotel
Christchurch
18 (3,000) -
Release of excess remedial costs provided for Zenith Residences 11 (4,393) -
Other 29,798 28,705
33,983 38,194
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 16
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 19
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
4. Personnel expenses
Group
Dollars In Thousands 2016 2015
Wages and salaries 34,345 32,628
Employee related expenses and benefits 5,165 4,994
Contributions to defined contribution plans 586 581
Increase in liability for long-service leave 56 28
40,152 38,231
The personnel expenses are included in cost of sales, administration expenses and other operating expenses in the income
statement.
5. Net finance income
Recognised in the income statement
Group
Dollars In Thousands 2016 2015
Interest income 2,923 3,381
Dividend income 7 3
Foreign exchange gain 97 22
Finance income 3,027 3,406
Interest expense (2,128) (3,178)
Foreign exchange loss (23) (93)
Finance costs (2,151) (3,271)
Net finance income recognised in the income statement 876 135
Recognised in other comprehensive income
Group
Dollars In Thousands 2016 2015
Foreign exchange translation movements (957) 1,557
Net finance income recognised in other comprehensive income (957) 1,557
6. Income tax expense
Recognised in the income statement
Group
Dollars In Thousands 2016 2015
Current tax expense
Current year 18,373 10,757
Adjustments for prior years (23) 664
18,350 11,421
Deferred tax expense
Origination and reversal of temporary difference 1,687 224
Adjustments for prior years 80 -
1,767 224
Total income tax expense in the income statement 20,117 11,645
FIN 17 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 20
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
6. Income tax expense – continued
Reconciliation of tax expense
Group
Dollars In Thousands 2016 2015
Profit before income tax 70,537 40,017
Income tax at the company tax rate of 28% (2015: 28%) 19,750 11,205
Adjusted for:
Non-deductible expenses 790 505
Tax rate difference (if different from 28% above) 75 10
Tax exempt income (555) (739)
Under-provided in prior years 57 664
Total income tax expense
20,117 11,645
Effective tax rate 29% 29%
Deferred tax expense/(credit) recognised in other comprehensive income
Group
Dollars In Thousands 2016 2015
Relating to revaluation of property, plant and equipment 14,602 817
Relating to foreign currency translation of foreign subsidiaries (67) (25)
14,535 792
7. Imputation credits
The KIN Holdings Group has A$5.6 million (2015: A$5.7 million) franking credits available as at 31 December 2016.
8. Capital and reserves
Share capital
Group Group
2016 2016 2015 2015
Shares $000’s Shares $000’s
Ordinary shares issued 1 January 105,578,290 350,048 105,578,290 350,048
Ordinary shares issued at 31 December – fully paid 105,578,290 350,048 105,578,290 350,048
Redeemable preference shares 1 January 52,739,543 33,218 52,739,543 33,218
Redeemable preference shares issued at 31 December –
fully paid
52,739,543 33,218 52,739,543 33,218
Ordinary shares repurchased and held as treasury stock 1
January
(99,547) (26) (99,547) (26)
Ordinary shares repurchased and held as treasury stock 31
December
(99,547) (26) (99,547) (26)
Total shares issued and outstanding 158,218,286 383,240 158,218,286 383,240
At 31 December 2016, the authorised share capital consisted of 105,578,290 ordinary shares (2015: 105,578,290 ordinary shares)
with no par value and 52,739,543 redeemable preference shares (2015: 52,739,543 redeemable preference shares) with no par
value.
Group
Dollars In Thousands 2016 2015
Imputation credits available for use in subsequent reporting periods 65,620 58,614
FIN
20
Millennium & Copthorne Hotels New Zealand Limited
Notes to the
Consolidated
Fina
ncial Statements for
the year ended 31 December 201
6
6.
Income tax expense
–
continued
Reconciliation of tax
expense
Group
Dollars In Thousands
2016
2015
Profit before income tax
70,
537
40,017
Income tax at t
he company tax rate of 28% (2015
: 28%)
19,750
11,205
Adjusted for:
Non-
deductible expenses
790
505
Tax rate difference (if different from 28% above)
75
10
Tax exempt income
(555)
(739)
Under
-provided in prior years
57
664
Total income tax expense
20,
117
11,
645
Effective tax rate
29%
29%
Deferred tax
expense/(credit)
recognised in other comprehensive income
Group
Dollars In Thousands
2016
2015
Relating to revaluation of property, plant and equipment
14,602
817
Relating to foreign currency translation of foreign subsidiaries
(67)
(25)
14,535
792
7
.
Imputation credits
T
he KIN
Holdings
Group has
A$
5.6
million (20
1
5
: A$
5.7
million) franking credits available as
at 31 December 201
6
.
8
.
Capital and reserves
Share capital
Group
Group
2016
2016
2015
2015
Shares
$000’s
Shares
$000’s
Ordinary shares issued 1 January
105,
578,
290
350,048
105,
578,
290
350,048
Ordinary shares issued at 31 December
– fully paid
105,578,290
350,048
105,578,290
350,048
Redeemable preference shares
1 January
52,
739,
543
33,218
52,
739,
543
33,218
Redeemable preference shares issued at 31 December
–
fully paid
52,739,543
33,218
52,739,543
33,218
Ordinary shares repurchased
and held as treasury stock 1
January
(99,
547)
(26
)
(99,
547)
(26
)
Ordinary shares repurchased and held as treasury stock 31 December
(99,547)
(26
)
(99,547)
(26
)
Total shares issued and outstanding
158,218,286
383,240
158,218,286
383,240
At 31 December
201
6
, the authorised share capital consisted of 1
05,578,290 ordinary shares (201
5
: 105,578,290 ordinary shares)
with no par value and 52,739,543 re
deemable preference shares (201
5
:
52,739,543
redeemable preference shares) with no par
value.
Group
Dollars In Thousands
2016
2015
Imputation credits available for use in subsequent reporting periods
65,
620
58,614
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 18
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 21
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
8. Capital and reserves – continued
Revaluation reserve
The revaluation reserve relates to property, plant and equipment. Movements in the revaluation reserve arise from the revaluation
surpluses and deficits of property, plant and equipment.
Exchange reserve
The exchange reserve comprises the foreign exchange differences arising from the translation of the financial statements of
foreign operations.
Dividends
The following dividends were declared and paid during the year ended 31 December:
Parent
Dollars In Thousands 2016 2015
Ordinary Dividend – 2.8 cents per qualifying ordinary share (2015: 2.4 cents) 4,430 3,797
Supplementary Dividend – 0.49412 cents per qualifying ordinary share (2015: 0.4235 cents) 124 109
4,554 3,906
After 31 December 2016 the following dividends were declared by the directors. The dividends have not been provided for and
there are no income tax consequences.
Dollars In Thousands Parent
Ordinary Dividend – 5.0 cents per qualifying share (2015: 2.8 cents) 7,911
Supplementary Dividend – 0.8824 cents per qualifying share (2015: 0.4941 cents) 227
Total Dividends 8,138
9. Earnings per share
Basic earnings per share
The calculation of basic earnings per share at 31 December 2016 was based on the profit attributable to ordinary and redeemable
preference shareholders of $40,447,000 (2015: $21,670,000) and weighted average number of shares outstanding during the
year ended 31 December 2016 of 158,218,286 (2015: 158,218,286), calculated as follows:
Profit attributable to shareholders
Group
Dollars In Thousands 2016 2015
Profit for the year 50,420 28,372
Profit attributable to non-controlling interests (9,973) (6,702)
Profit attributable to shareholders 40,447 21,670
Weighted average number of shares
Group
2016 2015
Weighted average number of shares (ordinary and redeemable preference shares) 158,317,833 158,317,833
Effect of own shares held (ordinary shares) (99,547) (99,547)
Weighted average number of shares for earnings per share calculation 158,218,286 158,218,286
Diluted earnings per share
The calculation of diluted earnings per share is the same as basic earnings per share.
FIN 19 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 22
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
10. Property, plant and equipment
Group
Dollars In Thousands
Freehold
Land
Freehold
Buildings
Leasehold
Land and
Buildings
Plant,
Equipment,
Fixtures
and
Fittings
Motor
Vehicles
Work
In
Progress Total
Cost
Balance at 1 January 2015 102,750 175,426 27,768 92,447 104 1,248 399,743
Acquisitions - - - 71 - 10,855 10,926
Disposals - (4,218) - (4,562) (39) - (8,819)
Transfers between categories - (2,134) 91 2,436 - (393) -
Transfer from accumulated
depreciation following revaluation - (126) - - - - (126)
Movements in foreign exchange - - - 6 - - 6
Revaluation surplus/(deficit) 336 2,919 - - - - 3,255
Balance at 31 December 2015 103,086 171,867 27,859 90,398 65 11,710 404,985
Balance at 1 January 2016 103,086 171,867 27,859 90,398 65 11,710 404,985
Acquisitions - - - 14 - 32,551 32,565
Disposals - - - (5,017) - - (5,017)
Transfers between categories - 508 (21) 2,237 - (2,724) -
Transfer from accumulated
depreciation following revaluation - (957) (41) - - - (998)
Movements in foreign exchange - - - (9) - - (9)
Revaluation surplus/(deficit) 25,775 43,889 9,760 - - - 79,424
Balance at 31 December 2016 128,861 215,307 37,557 87,623 65 41,537 510,950
Depreciation and impairment
losses
Balance at 1 January 2015 - (14,937) (2,500) (73,072) (86) - (90,595)
Depreciation charge for the year - (2,180) (369) (4,109) (4) - (6,662)
Disposals - 4,218 - 4,528 39 - 8,785
Transfer accumulated depreciation
against cost following revaluation - 126 - - - - 126
Movements in foreign exchange - - - (5) - - (5)
Balance at 31 December 2015 - (12,773) (2,869) (72,658) (51) - (88,351)
Balance at 1 January 2016 - (12,773) (2,869) (72,658) (51) - (88,351)
Depreciation charge for the year - (2,047) (370) (3,416) (4) - (5,837)
Disposals - - - 4,835 - - 4,835
Transfer accumulated depreciation
against cost following revaluation - 957 41 - - - 998
Movements in foreign exchange - - - 8 - - 8
Balance at 31 December 2016 - (13,863) (3,198) (71,231) (55) - (88,347)
Carrying amounts
At 1 January 2015 102,750 160,489 25,268 19,375 18 1,248 309,148
At 31 December 2015 103,086 159,094 24,990 17,740 14 11,710 316,634
At 1 January 2016 103,086 159,094 24,990 17,740 14 11,710 316,634
At 31 December 2016 128,861 201,444 34,359 16,392 10 41,537 422,603
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 20
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 23
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
10.Property, plant and equipment – continued
The Directors consider the value of the hotel assets with a net book value of $422.6 million (2015: $316.6 million) to be within a range
of $422.00 to $436.00 million (2015: $316.00 to $325.00 million). This is substantiated by valuations completed by Bower Valuations
Limited, registered valuers, on: 3 hotel assets valued in total at $127.65 million in December 2014; 3 hotel assets valued in total at
$28.00 million in December 2015; and 7 hotel assets valued in total at $245.69 million in December 2016.
During 2016 seven (2015: three) of the Group’s freehold and leasehold hotel properties were subject to an external professional
valuation by Bower Valuations Limited, registered valuers, on a highest and best use basis. Based on these valuations and in
accordance with the Group’s accounting policies the respective properties’ land and buildings were revalued to their fair value. A total
of $79.42 million (2015: $3.26 million) was added to the carrying values of land and buildings.
The Group's fair value of hotel properties as determined by independent valuers is categorised as Level 3 based on the inputs to the
valuation methodology. The basis of the valuation is the net present value of the future earnings of the assets. The major
unobservable inputs and assumptions that are used in the valuation model that require judgement include forecasts of the future
earnings, projected operational and maintenance expenditure profiles and discount rates (internal rate of return). The estimated fair
value would increase or (decrease) if: forecast future earnings were higher / (lower); projected operational and maintenance
expenditures were (higher) / lower; and the discount rates were (higher) / lower.
The Directors consider the net book value of the hotels not valued by independent valuers in 2016 to approximate their fair value as at
31 December 2016. This is on the basis that the Group’s hotels which were not subject to external professional valuations were tested
for impairment by management. Based on these tests no value (2015: $nil) has been deducted from the carrying value of freehold
land and buildings. The testing for impairment requires management to estimate future cash flows to be generated by the cash
generating units and is categorised as Level 3 based on the inputs to the impairment models. The major unobservable inputs that
management use that require judgement in estimating future cash flows include expected rate of growth in revenue and costs, market
segment mix, occupancy, average room rates expected to be achieved and the appropriate discount rate to apply when discounting
future cash flows. Average annual growth rates appropriate to the hotels range from 0.39% to 8.23% (2015: 1.14% to 4.04%) over the
five years projection. Pre-tax discount rates ranging between 8.25% and 14.50% (2015: 7.50% and 10.75%) were applied to the future
cash flows of the individual hotels based on the specific circumstances of the property.
Had the property, plant and equipment been carried under the cost model, the following carrying values would have been recognised:
Group
Copthorne Hotel Auckland Harbourcity
The Copthorne Hotel Auckland Harbourcity closed down on 24 July 2015 for a major refurbishment project valued at over $40.00
million. This project involves a complete replacement of the building services, seismic strengthening, new guest rooms and public
areas. The obsolete assets were fully depreciated with the cost and accumulated depreciation, both totaling $8.61 million, removed
from the asset registers in 2015. The remaining building assets of $5.65 million were transferred to work in progress for the
construction phase in 2015. The capital committed at balance date is included in the total capital commitments in Note 23. The
project is expected to complete in early second quarter of 2017. The Group has tested the hotel assets for impairment at 31
December 2016. Based on this test no amount has been deducted from the carrying value of the assets.
Canterbury Earthquake
The Canterbury region and Christchurch city suffered two earthquakes on 4 September 2010 and 22 February 2011. At that time
the Group operated three hotels in the Christchurch CBD; Millennium Hotel Christchurch (leased); Copthorne Hotel Christchurch
Central (owned); and Copthorne Hotel Christchurch City (leased).
The Millennium Hotel Christchurch suffered minor damage from the 4 September 2010 earthquake and remained open for
business. The 22 February 2011 earthquake further damaged the hotel and was closed down for the required engineering
assessment and repair. The lease expired in November 2015 and a settlement was reached with the insurers in regards to the
Group’s fixture, fittings and equipment in May 2016.
The Copthorne Hotel Christchurch Central suffered minor damage from the 4 September 2010 earthquake and remained open for
business. The 22 February 2011 earthquake severely damaged the hotel after which the insurers assessed that the hotel was
uneconomic to repair. The material damage claim for Copthorne Hotel Central Christchurch was settled with the insurers on 22
November 2012. The hotel was demolished in October 2013. In relation to the land at Copthorne Hotel Central Christchurch, the
Canterbury Earthquake Recovery Authority (CERA) had earmarked the land as part of a performing arts precinct in its Christchurch
rebuilding blueprint. CERA has lifted the designation and there is no encumbrance on the land.
The Copthorne Hotel Christchurch City was demolished, the lease terminated and a settlement was reached with the landlord and
insurers in regards to the property in November 2011.
Dollars In Thousands
Freehold
Land
Freehold
Buildings
Leasehold
Land and
Buildings
Plant,
Equipment,
Fixtures
and
Fittings
Motor
Vehicles
Work In
Progress
Total
Cost less accumulated
depreciation
At 1 January 2015 38,659 79,268 19,567 19,375 18 1,248 158,135
At 31 December 2015 38,659 74,954 19,289 17,743 14 11,710 162,369
At 1 January 2016 38,659 74,954 19,289 17,743 14 11,710 162,369
At 31 December 2016 38,659 73,415 18,898 16,395 10 41,537 188,914
FIN 21 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 24
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
11.Development properties
Group
Dollars In Thousands 2016 2015
Development land 117,763 126,551
Residential development 52,218 52,333
169,981 178,884
Less expected to settle within one year (34,845) (38,247)
135,136 140,637
Development land recognised in cost of sales 33,747 20,908
Development land is carried at the lower of cost and net realisable value. No interest (2015: $nil) has been capitalised during the
year. The fair value of development land held at 31 December 2016 was determined by an independent registered valuer, DM
Koomen SPINZ, of Extensor Advisory Limited as $297.03 million (2015: $265.01 million).
The fair value of development property as determined by the independent valuer is categorised as Level 3 based on the inputs to
the valuation methodology. The basis of the valuation is the hypothetical subdivision approach and/or block land sales
comparisons to derive the residual block land values. The major unobservable inputs that are used in the valuation model that
require judgement include the individual section prices, allowances for profit and risk, projected completion and sell down periods
and interest rates during the holding period. The estimated fair value would increase or (decrease) if: the individual section prices
were higher / (lower); the allowances for profit were higher / (lower); the allowances for risk were lower / (higher); the projected
completion and sell down periods were shorter / (longer); and the interest rate during the holding period was lower / (higher).
Residential development at balance date consists of the residential development known as Zenith Residences in Sydney, Australia.
The value of Zenith Residences held at 31 December 2016 was determined by R Laoulach AAPI of Laoulach & Company Pty Ltd,
registered valuers as $78.09 million (A$75.05 million) (2015: $76.58 million (A$72.40 million)).
The fair value of the residential development as determined by the independent valuer is categorised as Level 3 based on the
inputs to the valuation methodology. The basis of the valuation is gross realisations ‘as is’ assuming individual sales of unsold
units. The major unobservable inputs and assumptions that are used in the valuation model that require judgement include the
interest rates, consumer confidence, unemployment rate and residential unit demand. The estimated fair value would increase or
(decrease) if: the interest rates were lower / (higher); the consumer confidence was optimistic / (pessimistic); the unemployment
rate was lower / (higher); the residential unit demand was stronger / (weaker).
In July 2016, a settlement was reached between Kingsgate Investment Pty Ltd (100% owned subsidiary within the Group) and the
Owners Corporation with respect to the remedial costs of building defects at Zenith Residences, Sydney Australia. The excess
consultancy, legal, and remedial costs of $4.39m were then released into the profit & loss.
12. Intangible assets
Since 2005, the Group carried a goodwill balance of $2.82 million in respect of Copthorne Hotel Auckland Harbourcity. The
property is currently closed down for an extensive rebuild and renovation programme. On reopening in early second quarter of
2017, the property will operate under a new brand and a new trading name. The Directors have considered the changes in relation
to the goodwill and have decided it is
timely and appropriate to write-off fully the goodwill of $2.82 million.
13. Investment in associates
Prestons Road Limited has no revenue or expenses, therefore the Group’s share of profit of its associate was nil (2015: nil).
During the year, the Group maintained its 33.33% economic interest in Prestons Road Limited. The principal activity of Prestons
Road Limited is as service provider to the Group’s subsidiary, CDL Land New Zealand Limited, and in this regard, it is charged
with engaging suitably qualified consultants in fields such as geotechnical engineering, resource management compliance,
subdivision of land, legal and regulatory compliance and related issues to enable the Group to develop its land at Prestons Road
in Christchurch.
The net assets of Prestons Road Limited not adjusted for the percentage ownership held by the Group is $6,000, with the
Group’s share equal to $2,000.
14. Cash and cash equivalents
Group
Dollars In Thousands 2016 2015
Cash 5,467 6,514
Term deposits 10,053 7,507
15,520 14,021
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 22
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 25
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
15. Trade and other receivables
Group
Dollars In Thousands 2016 2015
Trade receivables 10,024 6,078
Less provision for doubtful debts (42) (7)
Other trade receivables and prepayments 8,711 10,060
18,693 16,131
16. Assets held for sale
Group
Dollars In Thousands 2016 2015
First Sponsor Group Limited shares
- 317
Add/(Less): Movement in fair value - 2
Carrying value - 319
On 2 November 2016, all 245,470 First Sponsor Group Limited shares were sold to Republic Hotels & Resorts Limited, Singapore,
a related company to the Group, for a total cash consideration of $314,000 at a price of SG$1.30 per share.
17. Interest-bearing loans and borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings. For more
information about the Group’s exposure to interest rate and foreign currency risk, see Note 21.
Group
Dollars in
Thousands Currency
Interest
Rate
Facility
Total
31 December 2016 31 December 2015
Face
Value
Carrying
Amount
Face
Value
Carrying
Amount
Revolving credit NZD 2.525% 53,000 35,000 35,000 12,500 12,500
Revolving credit NZD 2.525% 46,000 31,000 31,000 12,500 12,500
Revolving credit NZD - - - 10,000 10,000
Revolving credit NZD - - - 37,500 37,500
Overdraft NZD 2.525% 6,000 4 4 27 27
TOTAL 105,000 66,004 66,004 72,527 72,527
Current 4 4 27 27
Non-current 66,000 66,000 72,500 72,500
Terms and debt repayment schedule
The bank loans are secured over hotel properties with a carrying amount of $389.81 million (2015: $283.28 million) – refer to Note
10. The bank loans have no fixed term of repayment before maturity. The Group facilities were renewed on 30 December 2016 with
a new maturity of 31 July 2019.
18. Provisions
Group
Dollars In Thousands
Earthquake
provisions
FF&E and Site
Restoration
Total
Balance at 1 January 2015 2,243 757 3,000
Provisions made during the year - - -
Balance at 31 December 2015 2,243 757 3,000
Non-current - - -
Current 2,243 757 3,000
Balance at 1 January 2016 2,243 757 3,000
Provisions reversed during the year (2,243) (757) (3,000)
Balance at 31 December 2016 - - -
Non-current - - -
Current - - -
As a result of the settlement of the Group’s material damage claim with the insurers in May 2016, the earthquake provisions of
$2.24 million and FF&E provision of $0.76 million relating to the Millennium Hotel Christchurch was released to other operating
expenses in the income statement.
FIN 23 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 26
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
19. Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Group
Assets Liabilities Net
Dollars In Thousands 2016 2015 2016 2015 2016 2015
Property, plant and equipment - - 61,175 46,594 61,175 46,594
Development properties (1,139) (1,149) - - (1,139) (1,149)
Provisions (81) (2,109) - - (81) (2,109)
Employee benefits (978) (768) - - (978) (768)
Trade and other payables (576) (545) - - (576) (545)
Net investment in foreign operations - - 782 858 782 858
Net tax (assets) / liabilities (2,774) (4,571) 61,957 47,452 59,183 42,881
Movement in deferred tax balances during the year
Group
Dollars In Thousands
Balance
1 Jan 15
Recognised in
income
Recognised in
equity
Balance
31 Dec 15
Property, plant and equipment 45,573 204 817 46,594
Development properties (1,103) (33) (13) (1,149)
Provisions (2,250) 161 (20) (2,109)
Employee benefits (735) (33) - (768)
Trade and other payables (471) (75) 1 (545)
Net investment in foreign operations 851 - 7 858
41,865 224 792 42,881
Group
Dollars In Thousands
Balance
1 Jan 16
Recognised in
income
Recognised in
equity
Balance
31 Dec 16
Property, plant and equipment 46,594 (21) 14,602 61,175
Development properties (1,149) (10) 20 (1,139)
Provisions (2,109) 2,040 (12) (81)
Employee benefits (768) (210) - (978)
Trade and other payables (545) (32) 1 (576)
Net investment in foreign operations 858 - (76) 782
42,881 1,767 14,535 59,183
20. Trade and other payables
Group
Dollars In Thousands 2016 2015
Trade payables 1,952 1,351
Employee entitlements 3,344 2,632
Non-trade payables and accrued expenses 19,661 16,588
24,957 20,571
21. Financial instruments
The Group only holds non-derivative financial instruments which comprise cash and cash equivalents, trade and other receivables,
trade receivables due from related parties, related party advances, secured bank loans, trade and other payables and trade
payables due to related parties.
Exposure to credit, liquidity and market risks arises in the normal course of the Group’s business.
Liquidity risk
Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group evaluates its liquidity requirements on an
ongoing basis. In general, the Group generates sufficient cash flows from its operating activities to meet its obligations arising from
its financial liabilities. 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.
Credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are
performed on all customers requiring credit over a certain amount. The Group does not require collateral in respect of financial
assets. There are no significant aged debtors which have not been fully provided for.
Investments are allowed only in short-term financial instruments and only with counterparties approved by the Board, such that the
exposure to a single counterparty is minimised.
At balance date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the
carrying amount of each financial asset in the statement of financial position.
The maximum exposure to credit risk in Australia is $41,000 (2015: $1.84 million). All other credit risk exposure relates to New
Zealand.
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 24
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 27
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
21. Financial instruments – continued
Market risk
(i) Interest rate risk
In managing interest rate risks the Group aims to reduce the impact of short-term fluctuations on the Group’s earnings with an
ongoing review of its exposure to changes in interest rates on its borrowings, the maturity profile of the debt, and the cash flows of
the underlying debt. The Group maintains its borrowings at fixed rates on short term which gives the Group flexibility in the context
of the economic climate, business cycle, loan covenants, cash flows, and cash balances.
An increase of 1.0% in interest rates would have increased profit before tax for the Group in the current period by $0.12 million
(2015: $0.01 million decrease), assuming all other variables remained constant.
Effective interest and re-pricing analysis
In respect of income-earning financial assets and interest-bearing financial liabilities the following table indicates their effective
interest rates at the balance date and the periods in which they re-price.
* These assets / (liabilities) bear interest at a fixed rate
(ii) Foreign currency risk
The Group owns 100.00% (2015: 100.00%) of KIN Holdings Limited. Substantially all the operations of these subsidiary groups are
denominated in foreign currencies. The foreign currencies giving rise to this risk are Australian Dollars. The Group has determined
that the primary risk affects the carrying values of the net investments in its foreign operations with the currency movements being
recognised in the foreign currency translation reserves. The Group has not taken any measurements to manage this risk.
The Group is not exposed to any other foreign currency risks.
Capital management
The Group’s capital includes share capital and retained earnings.
The Group’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 impact of the level of capital on shareholders’ return is also recognised and the Group
recognises the need to maintain a balance between the higher returns that might be possible with greater gearing and the
advantages and security afforded by a sound capital position.
The Group is not subject to any external imposed capital requirements.
The allocation of capital is, to a large extent, driven by optimisation of the return achieved on the capital allocated.
The Group’s policies in respect of capital management and allocation are reviewed regularly by the Board of Directors. There were
no changes in the Group’s capital management policies during the year.
Group 2016 2015
Dollars In Thousands
Effective
interest
rate
Total
6
months
or less
6 to 12
months
Effective
interest
rate
Total
6
months
or less
6 to 12
months
Note
Interest bearing cash &
cash equivalents * 14
0.25% to
3.10% 15,380 15,380 -
0.10% to
3.22% 13,961 13,961 -
Short term bank
deposits *
1.90% to
3.60% 85,598 34,858 50,740
2.35% to
4.70% 59,955 18,755 41,200
Secured bank loans * 17 2.525% (66,000) (66,000) - 3.275% (72,500) (72,500) -
Bank overdrafts * 17 2.525% (4) (4) - 3.10% (27) (27) -
FIN 25 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 28
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
21. Financial instruments – continued
Fair values
The fair values together with the carrying amounts shown in the statement of financial position are as follows:
Group Carrying
amount
Fair value
Carrying
amount
Fair value
Dollars In Thousands Note 2016 2016 2015 2015
LOANS AND RECEIVABLES
Cash and cash equivalents 14 15,520 15,520 14,021 14,021
Short term bank deposits 85,598 85,598 59,955 59,955
Trade and other receivables 15 18,693 18,693 16,131 16,131
Trade payables due from related parties 25 - - 27 27
OTHER LIABILITIES
Secured bank loans and overdrafts 17 (66,004) (66,004) (72,527) (72,527)
Trade and other payables 20 (24,957) (24,957) (20,571) (20,571)
Trade payables due to related parties 25 (2,137) (2,137) (667) (667)
Loans due to related parties 25 (5,800) (5,800) (3,800) (3,800)
20,913 20,913 (7,431) (7,431)
Unrecognised (losses) / gains - - - -
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:
(a) Cash, accounts receivable, accounts payable and related party balances. The carrying amounts for these balances
approximate their fair value because of the short maturities of these items.
(b) Borrowings. The carrying amounts for the borrowings represent their fair values because the interest rates are reset to market
periodically, every 1 to 2 months.
22. Operating leases
Leases as lessee
The minimum amount payable under non-cancellable operating lease rentals are as follows:
Group
Dollars In Thousands 2016 2015
Less than one year 956 961
Between one and five years 3,029 3,450
More than five years 447 965
4,432 5,376
The Group leases a number of hotels and motor vehicles under operating leases. The hotel leases typically run for a period of
years, with an option to renew the lease after that date. Lease payments are increased regularly to reflect market rentals. Typically
these leases include a base rent plus a performance related element which becomes payable if revenue exceeds a specified level.
During the year ended 31 December 2016, $2.24 million was recognised as an expense in the income statement in respect of
operating leases (2015: $2.17 million).
23. Capital commitments
As at 31 December 2016, the Group had entered into contractual commitments for capital expenditure ($13.58 million) and
development expenditure ($13.59 million) totalling $27.17 million (2015: $38.58 million capital expenditure and $12.51 million
development expenditure). The majority of the capital committed relates to the refurbishment of Copthorne Hotel Auckland
Harbourcity (refer to Note 10).
24. Related parties
Identity of related parties
The Group has a related party relationship with its parent, subsidiaries (see Note 25), associates and with its directors and
executive officers.
Transactions with key management personnel
Directors of the Company and their immediate relatives control 0.57% (2015: 0.71%) of the voting shares of the Company. There
were no loans (2015: $nil) advanced to directors for the year ended 31 December 2016. Key management personnel include the
Board and the Executive Team.
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 26
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
FIN 29
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
24. Related parties – continued
Total remuneration for key management personnel
Group
Dollars In Thousands 2016 2015
Non-executive directors 231 260
Executive director 518 604
Executive officers 751 684
1,500 1,548
Non-executive directors receive director’s fees only. Executive director and executive officers receive short-term employee benefits
which include a base salary and an incentive plan. They do not receive remuneration or any other benefits as a director of the
Parent Company or its subsidiaries. Directors’ fees are included in “administration expenses” (see Note 3) and remuneration for
executive director and executive officers are included in “personnel expenses” (see Note 4).
25. Group entities
Control of the Group
Millennium & Copthorne Hotels New Zealand Limited is a 75.20% (2015: 75.20%) owned subsidiary of CDL Hotels Holdings New
Zealand Limited which is a wholly owned subsidiary of Millennium & Copthorne Hotels plc in the United Kingdom. The ultimate
parent company is Hong Leong Investment Holdings Pte Ltd in Singapore.
At balance date there were related party advances owing from/(owing to) the following related companies:
Group
Dollars In Thousands Nature of balance 2016 2015
Trade payables and receivables due to related
parties
Millennium & Copthorne Hotels plc Recharge of expenses (558) (667)
Millennium & Copthorne International Limited Recharge of expenses (31) 2
CDL Hotels Holdings New Zealand Limited Recharge of expenses (7) 25
CDLHT (BVI) One Ltd Rent payment (1,541) -
(2,137) (640)
Loans due to related parties
CDL Hotels Holdings New Zealand Limited Inter-company loan (5,800) (3,800)
(5,800) (3,800)
No debts with related parties were written off or forgiven during the year. No interest was charged on these payables during 2016
and 2015. There are no set repayment terms. During this period costs amounting to $250,000 (2015: $250,000) have been
recorded in the income statement in respect of fees payable to Millennium & Copthorne International Limited for the provision of
management and marketing support.
On 7 September 2016, the Group commenced operations of the Grand Millennium Auckland under a management lease
agreement with CDLHT (BVI) One Ltd, a subsidiary of CDL Hospitality Trusts Singapore. Under the accounting standards, the
Group accounts for the results of the Grand Millennium Auckland on a net basis. The Group records the management, franchise
and incentive incomes derived from the management of the hotel in the profit and loss. At the balance sheet date, there was an
amount owing to CDLHT (BVI) One Ltd of $1.54 million being rent payable with respect to the leasing of the property. During the 4
months’ operation of the hotel, the Group received $496,000 (2015: nil) in management, franchise, and incentive fees.
The loan due to CDL Hotels Holdings New Zealand Limited is interest bearing. The interest rates were fixed and range between
2.22% and 2.47% (2015: 2.47 to 3.06%).
During the year consulting fees of $41,000 (2015: $78,000) were paid to Bobb Management Pty Ltd of which Mr. R Bobb (Director)
is a shareholder and director.
Associate companies
The associate companies included in the financial statements of Millennium & Copthorne Hotels New Zealand Limited as at 31
December 2016 are:
Principal Activity
Principal
Place of
Business
Holding % by CDL Land
New Zealand Limited
2016
Holding % by CDL Land New
Zealand Limited
2015
Prestons Road Limited Service provider NZ 33.33 33.33
Prestons Road Limited has a 31 March balance date. No adjustment is made for the difference in balance date of Prestons Road
Limited, because it has no revenue or profits to report.
FIN 27 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2016
25.Group entities - continued
Subsidiary companies
The principal subsidiary companies of Millennium & Copthorne Hotels New Zealand Limited included in the consolidation as at 31
December 2016 are:
Principal Activity
Principal
Place of
Business
Group
Holding %
2016
Group
Holding %
2015
Context Securities Limited Investment Holding NZ 100.00 100.00
Copthorne Hotel & Resort Bay of Islands Joint
Venture
Hotel Operations NZ 49.00 49.00
Quantum Limited Holding Company NZ 100.00 100.00
100% owned subsidiaries of Quantum Limited are:
Hospitality Group Limited Holding Company NZ
100% owned subsidiaries of Hospitality Group
Limited are:
Hospitality Leases Limited Lessee Company/Hotel
Operations
NZ
QINZ Anzac Avenue Limited Hotel Owner NZ
Hospitality Services Limited Hotel Operations/Franchise
Holder
NZ
CDL Investments New Zealand Limited Holding Company NZ 66.70 66.91
100% owned subsidiaries of CDL Investments New
Zealand Limited are:
CDL Land New Zealand Limited Property Investment and
Development
NZ
KIN Holdings Limited Holding Company NZ 100.00 100.00
100% owned subsidiaries of KIN Holdings Limited
are:
Kingsgate Investments Pty Limited Residential Apartment
Developer
Australia
All of the above subsidiaries have a 31 December balance date.
Although the Group owns less than half of the voting power of the Copthorne Hotel & Resort Bay of Islands Joint Venture, it is able
to control the financial and operating policies of the Copthorne Hotel & Resort Bay of Islands Joint Venture so as to obtain benefits
from its activities by virtue of an agreement with the other parties of the Joint Venture. Therefore, the results of the Joint Venture
are consolidated from the date control commenced until the date control ceases.
26. Accounting estimates and judgements
Management discussed with the Audit Committee the development, selection and disclosure of the Group’s critical accounting
policies and estimates and the application of these policies and estimates.
Critical accounting judgements in applying the Group’s accounting policies
Certain critical accounting judgements in applying the G roup’s accounting policies are described below.
Property, plant and equipment
The Group adopted a revaluation model of valuing land and buildings rather than the cost model. This results in any future
decreases in asset values being charged in the income statement unless there is a surplus for that asset in the revaluation account
in which case the decrease can be charged to equity.
Assessing whether individual properties are impaired may involve estimating the future cash flows expected to be generated by
those properties. This will in turn involve assumptions, including expected rate of growth in revenue and costs, occupancy and
average room rates and an appropriate discount rate, to apply when discounting future cash flows. With respect to the carrying
value of the Harbour City work in progress assets which are held at cost, the Group have performed an impairment assessment in
the current year to assess the recoverable amount. The methods used are in line with those described above.
The Group has one remaining property affected by the Christchurch earthquakes. In assessing the property for impairment the
following assumption was made: th e land underlying the property is not affected by liquefaction or other geological issues which
prevent the reinstatement of the property.
Development
property
The Group is also exposed to market fluctuations in the value of development properties. The carrying value of development
properties is $169.98 million (2015: $178.88 million) while the fair value determined by independent valuers is $375.12 million
(2015: $341.59 million).
In determining fair values, the valuers will also make assumptions relating to section prices, sell down periods, consumer
confidence, unemployment rates, interest rates and external economic factors.
FIN 30
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 28
FIN 28
Independent Auditor’s Report
To the shareholders of Millennium and Copthorne Hotels New Zealand Limited
Report on the consolidated financial statements
Opinion
In our opinion, the accompanying consolidated
financial statements of Millennium and Copthorne
Hotels New Zealand Limited (the company) and its
subsidiaries (the Group) on pages FIN 1 to FIN 27:
i. present fairly in all material respects the Group’s
financial position as at 31 December 2016 and
its financial performance and cash flows for the
year ended on that date; and
ii. comply with New Zealand Equivalents to
International Financial Reporting Standards and
International Financial Reporting Standards.
We have audited the accompanying
consolidated financial statements which
comprise:
— the consolidated statement of financial position
as at 31 December 2016;
— the consolidated income statement, statement
of other comprehensive income, statement of
changes in equity and statement of cash flows
for the year then ended; and
— notes, including a summary of significant
accounting policies and other explanatory
information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (“ISAs (NZ)”). We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the group in accordance with Professional and Ethical Standard 1 (Revised) Code of
Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board and the
International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the
IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the Auditor’s Responsibilities for the Audit of the
consolidated financial statements section of our report.
Our firm has also provided other services to the group in relation to taxation compliance and tax advisory
services. Subject to certain restrictions, partners and employees of our firm may also deal with the group on
normal terms within the ordinary course of trading activities of the business of the group. These matters have
not impaired our independence as auditor of the group. The firm has no other relationship with, or interest in, the
group.
Materiality
The scope of our audit was influenced by our application of materiality. Materiality helped us to determine the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually
FIN 28
Independent Auditor’s Report
To the shareholders of Millennium and Copthorne Hotels New Zealand Limited
Report on the consolidated financial statements
Opinion
In our opinion, the accompanying consolidated
financial statements of Millennium and Copthorne
Hotels New Zealand Limited (the company) and its
subsidiaries (the Group) on pages FIN 1 to FIN 27:
i. present fairly in all material respects the Group’s
financial position as at 31 December 2016 and
its financial performance and cash flows for the
year ended on that date; and
ii. comply with New Zealand Equivalents to
International Financial Reporting Standards and
International Financial Reporting Standards.
We have audited the accompanying
consolidated financial statements which
comprise:
— the consolidated statement of financial position
as at 31 December 2016;
— the consolidated income statement, statement
of other comprehensive income, statement of
changes in equity and statement of cash flows
for the year then ended; and
— notes, including a summary of significant
accounting policies and other explanatory
information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (“ISAs (NZ)”). We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the group in accordance with Professional and Ethical Standard 1 (Revised) Code of
Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board and the
International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the
IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the Auditor’s Responsibilities for the Audit of the
consolidated financial statements section of our report.
Our firm has also provided other services to the group in relation to taxation compliance and tax advisory
services. Subject to certain restrictions, partners and employees of our firm may also deal with the group on
normal terms within the ordinary course of trading activities of the business of the group. These matters have
not impaired our independence as auditor of the group. The firm has no other relationship with, or interest in, the
group.
Materiality
The scope of our audit was influenced by our application of materiality. Materiality helped us to determine the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually
FIN 28
Independent Auditor’s Report
To the shareholders of Millennium and Copthorne Hotels New Zealand Limited
Report on the consolidated financial statements
Opinion
In our opinion, the accompanying consolidated
financial statements of Millennium and Copthorne
Hotels New Zealand Limited (the company) and its
subsidiaries (the Group) on pages FIN 1 to FIN 27:
i. present fairly in all material respects the Group’s
financial position as at 31 December 2016 and
its financial performance and cash flows for the
year ended on that date; and
ii. comply with New Zealand Equivalents to
International Financial Reporting Standards and
International Financial Reporting Standards.
We have audited the accompanying
consolidated financial statements which
comprise:
— the consolidated statement of financial position
as at 31 December 2016;
— the consolidated income statement, statement
of other comprehensive income, statement of
changes in equity and statement of cash flows
for the year then ended; and
— notes, including a summary of significant
accounting policies and other explanatory
information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (“ISAs (NZ)”). We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the group in accordance with Professional and Ethical Standard 1 (Revised) Code of
Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board and the
International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the
IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the Auditor’s Responsibilities for the Audit of the
consolidated financial statements section of our report.
Our firm has also provided other services to the group in relation to taxation compliance and tax advisory
services. Subject to certain restrictions, partners and employees of our firm may also deal with the group on
normal terms within the ordinary course of trading activities of the business of the group. These matters have
not impaired our independence as auditor of the group. The firm has no other relationship with, or interest in, the
group.
Materiality
The scope of our audit was influenced by our application of materiality. Materiality helped us to determine the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually
FIN 29 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
FIN 29
and on the consolidated financial statements as a whole. The materiality for the consolidated financial
statements as a whole was set at $2.8 million determined with reference to a benchmark of group profit before
tax. We chose the benchmark because, in our view, this is a key measure of the group’s performance.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the consolidated financial statements in the current period. We summarise below those matters and our key
audit procedures to address those matters in order that the shareholders as a body may better understand the
process by which we arrived at our audit opinion. Our procedures were undertaken in the context of and solely
for the purpose of our statutory audit opinion on the consolidated financial statements as a whole and we do not
express discrete opinions on separate elements of the consolidated financial statements.
The key audit matter How the matter was addressed in our audit
1. Harbour City Hotel redevelopment
Refer to note 10 of the consolidated
financial statements.
During the current financial year the
Harbour City Hotel has been closed
while it undergoes a full
redevelopment. The redevelopment
is a multi-year project to be
completed by a third party
contractor. The redevelopment
project has a budgeted cost of
$42m.
There is significant judgement
required to determine the current
value of the hotel while under
redevelopment, as well as the
expected fair value at completion.
This is due to potential unbudgeted
costs and the possibility of the total
redevelopment costs exceeding fair
value.
Our procedures focused on obtaining evidence to support the
recoverable value at both balance date and upon completion of the
redeveloped hotel.
Management prepared an internal “upon completion” valuation for the
Harbour City Hotel. In addition, they engaged an external valuer to
prepare an “upon completion” and an “as at 31 December 2016”
valuation for the Hotel. This exercise resulted in a range of valuations
for the recoverable value of the hotel. We challenged these valuations
by comparing projected post redevelopment revenue and profits to
historical trends and market data achieved by similar quality rated hotels
in the Auckland region. We also compared key valuation assumptions
including discount rates and terminal multipliers to historical rates and
those used by the independent valuer for other hotels in the portfolio.
We then performed sensitivity analyses, considering a range of possible
outcomes based on various scenarios. We used our own valuation
specialist to assess the appropriateness of the external valuation.
In addition to the above procedures, we specifically assessed the
recoverable value at balance date by understanding the stage of
completion and costs to complete. We did this by examining the
construction contract and budgeted costs of the redevelopment and
completing a site inspection of the redevelopment including
discussions with the project manager and reviewing the latest progress
claims verified by the quantity surveyor. We compared costs incurred to
date to the original redevelopment budget to identify the extent of any
unbudgeted costs incurred.
We consider the approach taken by the group was reasonable and the
estimates and assumptions used were supported by the available
evidence.
We found the valuations were sensitive to changes in projected cash
flows, primarily occupancy rates, room rates and food and beverage.
There are scenarios that could arise that would result in a potential
impairment in the future, however given the status of redevelopment
we did not identify sufficient evidence for an impairment to be required
FIN 30
The key audit matter How the matter was addressed in our audit
as at 31 December 2016. We consider there to be some risk going
forward if the hotel does not generate the results anticipated.
2. Valuation of Hotel Land and Building assets
Refer to note 10 of the consolidated
financial statements.
Land and buildings of $365m
(representing 51% of assets) are
recognised at fair value in the
financial statements. To establish fair
value, each hotel is required to
undergo an independent valuation on
a tri-annual basis. In the intervening
years, management complete an
impairment assessment.
The valuations and impairment
assessments are based on future
cashflow forecast models and
available market data which have a
number of assumptions built into the
models. The key assumptions
(including forecast growth,
occupancy rates and revenue per
available room) are inherently
judgemental and consequently a
change in the assumptions could
have a material impact on the
valuations.
Our procedures on the independently valued hotels involved using our
own valuation specialist to assist us in assessing the appropriateness of
the valuation model used, including compliance with relevant
accounting standards and alignment to market practice. Our valuation
specialists also assisted us to assess the scope of work performed,
competency, professional qualifications and experience of the external
expert engaged by the group. We challenged the key assumptions used
within each valuation in determining the fair value of these hotel assets.
This included a comparison of occupancy rates, revenue per available
room, market growth and expected inflation with externally derived
data including external hotel industry reports. We also performed our
own assessment of other key inputs such as estimated future costs,
discount rates and terminal multipliers, and considered the external
expert’s estimates with historical hotel performance. We performed
sensitivities and break-even analysis on the key assumptions. Our
testing indicated that the estimates and assumptions used were
justified in the context of the group’s property portfolio.
The hotels not within the tri-annual valuation cycle were assessed for
impairment by management. We considered management’s
impairment assessment of each hotel’s recoverable amount. This
included comparing actual hotel performance to previous forecasts.
Based on this analysis one hotel warranted a detailed impairment
review. For this hotel we challenged the key assumptions used in
determining the recoverable amount of the hotel asset. We also
considered future forecasts, comparing these to internal plans and
external market information. Our testing indicated that the estimates
and assumptions used were justified in the context of the group’s
property portfolio.
Other Information
The Directors, on behalf of the group, are responsible for the other information included in the entity’s Annual
Report. Other information may include the Chairman’s review, Managing Director’s review, and disclosures
relating to corporate governance, sustainability and hotel ownership. Our opinion on the consolidated financial
statements does not cover any other information and we do not express any form of assurance conclusion
thereon.
The Annual Report is expected to be made available to us after the date of this audit report. Our responsibility is
to read the Annual Report when it becomes available and consider whether the other information it contains is
materially inconsistent with the consolidated financial statements, or our knowledge obtained in the audit, or
otherwise appear misstated. If so, we are required to report such matters to the Directors.
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 30
FIN 30
The key audit matter How the matter was addressed in our audit
as at 31 December 2016. We consider there to be some risk going
forward if the hotel does not generate the results anticipated.
2. Valuation of Hotel Land and Building assets
Refer to note 10 of the consolidated
financial statements.
Land and buildings of $365m
(representing 51% of assets) are
recognised at fair value in the
financial statements. To establish fair
value, each hotel is required to
undergo an independent valuation on
a tri-annual basis. In the intervening
years, management complete an
impairment assessment.
The valuations and impairment
assessments are based on future
cashflow forecast models and
available market data which have a
number of assumptions built into the
models. The key assumptions
(including forecast growth,
occupancy rates and revenue per
available room) are inherently
judgemental and consequently a
change in the assumptions could
have a material impact on the
valuations.
Our procedures on the independently valued hotels involved using our
own valuation specialist to assist us in assessing the appropriateness of
the valuation model used, including compliance with relevant
accounting standards and alignment to market practice. Our valuation
specialists also assisted us to assess the scope of work performed,
competency, professional qualifications and experience of the external
expert engaged by the group. We challenged the key assumptions used
within each valuation in determining the fair value of these hotel assets.
This included a comparison of occupancy rates, revenue per available
room, market growth and expected inflation with externally derived
data including external hotel industry reports. We also performed our
own assessment of other key inputs such as estimated future costs,
discount rates and terminal multipliers, and considered the external
expert’s estimates with historical hotel performance. We performed
sensitivities and break-even analysis on the key assumptions. Our
testing indicated that the estimates and assumptions used were
justified in the context of the group’s property portfolio.
The hotels not within the tri-annual valuation cycle were assessed for
impairment by management. We considered management’s
impairment assessment of each hotel’s recoverable amount. This
included comparing actual hotel performance to previous forecasts.
Based on this analysis one hotel warranted a detailed impairment
review. For this hotel we challenged the key assumptions used in
determining the recoverable amount of the hotel asset. We also
considered future forecasts, comparing these to internal plans and
external market information. Our testing indicated that the estimates
and assumptions used were justified in the context of the group’s
property portfolio.
Other Information
The Directors, on behalf of the group, are responsible for the other information included in the entity’s Annual
Report. Other information may include the Chairman’s review, Managing Director’s review, and disclosures
relating to corporate governance, sustainability and hotel ownership. Our opinion on the consolidated financial
statements does not cover any other information and we do not express any form of assurance conclusion
thereon.
The Annual Report is expected to be made available to us after the date of this audit report. Our responsibility is
to read the Annual Report when it becomes available and consider whether the other information it contains is
materially inconsistent with the consolidated financial statements, or our knowledge obtained in the audit, or
otherwise appear misstated. If so, we are required to report such matters to the Directors.
FIN 31 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
FIN 31
Use of this Independent Auditor’s Report
This report is made solely to the shareholders as a body. Our audit work has been undertaken so that we might
state to the shareholders those matters we are required to state to them in the Independent 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 shareholders as a body for our audit work, this report, or any of the opinions we have
formed.
Responsibilities of Directors for the consolidated financial statements
The Directors, on behalf of the group, are responsible for:
— the preparation and fair presentation of the consolidated financial statements in accordance with generally
accepted accounting practice in New Zealand (being New Zealand Equivalents to International Financial
Reporting Standards) and International Financial Reporting Standards;
— implementing necessary internal control to enable the preparation of a consolidated set of financial
statements that is fairly presented and free from material misstatement, whether due to fraud or error; and
— assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless they either intend to liquidate or to
cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the consolidated financial
statements
Our objective is:
— to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error; and
— to issue an Independent Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs NZ will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
A further description of our responsibilities for the audit of these consolidated financial statements is located at
the External Reporting Board (XRB) website at:
https://www.xrb.govt.nz/Site/Auditing_Assurance_Standards/Current_Standards/Page1.aspx
This description forms part of our Independent Auditor’s Report.
Jason Doherty
For and on behalf of
KPMG
Auckland
17 February 2017
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 32
I
REGULATORY DISCLOSURES
20 LARGEST ORDINARY SHAREHOLDERS (as at 28 February 2017) (Listing Rule 10.4.5(b)
Rank Name Units %
1. CDL HOTELS HOLDINGS NEW ZEALAND LIMITED 74,139,077 70.22
2. BNP PARIBAS NOMINEES (NZ) LIMITED - NZCSD 5,962,409 5.65
3.
HSBC NOMINEES (NEW ZEALAND) LIMITED A/C STATE
STREET -NZCSD <HKBN45>
5,390,326 5.11
4. ZETA BETA LIMITED 2,796,157 2.65
5.
NATIONAL NOMINEES NEW ZEALAND LIMITED - NZCSD
<NNLZ90>
2,033,737 1.93
6. SKY HILL LIMITED 1,648,494 1.56
7.
ACCIDENT COMPENSATION CORPORATION - NZCSD
<ACCI40>
1,612,067 1.53
8.
GUARDIAN NOMINEES NO 2 A/C WESTPAC W/S ENHANCED
CASH TRUST - NZCSD <W09340>
1,432,897 1.36
9.
CITIBANK NOMINEES (NEW ZEALAND) LIMITED - NZCSD
<CNOM90>
1,261,768 1.20
10. LENG BENG KWEK 906,000 0.86
11. AMALGAMATED DAIRIES LIMITED 684,980 0.65
12. HONG REN WONG 604,000 0.57
13. KAY HONG CHIAM 475,251 0.45
14. MFL MUTUAL FUND LIMITED - NZCSD <MFLA90> 363,297 0.34
15. CUSTODIAL SERVICES LIMITED <A/C 6> 272,227 0.26
16. JALAER INVESTMENTS LIMITED 264,977 0.25
17. STEPHEN JOHN LOBB + NICOLETTA MARIA BARTOLI 179,447 0.17
18. ASB NOMINEES LIMITED <707112 A/C ML> 169,653 0.16
19. CASTLE POINT FUNDS - NZCSD 169,275 0.16
20. GEOK LOO GOH 168,002 0.16
NZCSD is the New Zealand Central Securities Depository and provides a custodial depositary service to its clients and does not have
a beneficial interest in the shares held in its name.
20 LARGEST REDEEMABLE PREFERENCE SHAREHOLDERS (as at 28 February 2017) (Listing Rule 10.4.5(b)
Rank Name Units %
1. CDL HOTELS HOLDINGS NEW ZEALAND LIMITED 44,922,095 85.18
2. BNP PARIBAS NOMINEES (NZ) LIMITED - NZCSD 2,945,671 5.59
3.
ACCIDENT COMPENSATION CORPORATION - NZCSD
<ACCI40>
1,141,441 2.16
4.
GUARDIAN NOMINEES NO 2 A/C WESTPAC W/S ENHANCED
CASH TRUST - NZCSD <W09340>
1,028,474 1.95
5. LENG BENG KWEK 453,000 0.86
6.
HSBC NOMINEES (NEW ZEALAND) LIMITED A/C STATE
STREET -NZCSD <HKBN45>
438,332 0.83
7. HONG REN WONG 302,000 0.57
8. KAY HONG CHIAM 211,324 0.40
9.
NATIONAL NOMINEES NEW ZEALAND LIMITED - NZCSD
<NNLZ90>
200,226 0.38
10. ZETA BETA LIMITED 144,427 0.27
11. ASB NOMINEES LIMITED <707112 A/C ML> 136,425 0.26
12. MFL MUTUAL FUND LIMITED - NZCSD <MFLA90> 100,000 0.19
13. VINCENT WEE ENG YEO 75,500 0.14
14.
THEODORE JOHN VAN GELDERMALSEN + MARGARET GAY
FREEMANTLE <GOLDEN DOWNS S/F A/C>
35,000 0.07
15. HOWARD CEDRIC ZINGEL 31,592 0.06
16. JIAHUAN FU 30,400 0.06
17. FIRST NZ CAPITAL SECURITIES LIMITED 30,302 0.06
18. MARGARET LEILA GEORGE 30,300 0.06
19. STEPHEN JOHN LOBB + NICOLETTA MARIA BARTOLI 30,200 0.06
20. JOAN LESLEY THOMPSON 30,200 0.06
NZCSD is the New Zealand Central Securities Depository and provides a custodial depositary service to its clients and does not have
a beneficial interest in the shares held in its name.
HOLDINGS SIZE – ORDINARY SHARES (as at 28 February 2017)
Range Total Holders Number of shares Percentage of Issued Capital
1 - 99 4 207 0.00
100 – 199 24 3,740 0.00
200 – 499 493 170,667 0.16
500 – 999 346 246,504 0.23
1,000 – 1,999 215 308,317 0.29
2,000 – 4,999 210 634,867 0.60
5,000 – 9,999 85 604,965 0.57
10,000 – 49,999 71 1,450,860 1.37
50,000 – 99,999 10 689,386 0.65
100,000 – 499,999 12 2,312,972 2.19
500,000 – 999,999 3 2,194,980 2.08
1,000,000+ 4 96,960,825 91.84
Rounding - - 0.02
Total 1,477 105,578,290 100.00
FIN 33 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
III
DOMICILE OF ORDINARY SHAREHOLDERS (as at 28 February 2017)
Number Number of shares Percentage of Issued Capital
New Zealand 1,370 98,255,139 93.06
Overseas holders 107 7,323,151 6.94
Total 1,477 105,578,290 100.00
DOMICILE OF REDEEMABLE PREFERENCE SHAREHOLDERS (as at 28 February 2017)
Number Number of shares Percentage of Issued Capital
New Zealand 171 51,451,626 97.56
Overseas holders 18 1,287,917 2.44
Total 189 52,739,543 100.00
WAIVERS FROM NZX LIMITED
On 24 March 2016, NZX Limited (NZX) granted the Company a waiver from NZX Main Board Listing Rule (Listing Rule) 5.2.3 in respect of its preference
shares for a period of twelve months from 25 March 2016 (the Preference Shares Waiver). Listing Rule 5.2.3 provides that a class of securities will
generally not be considered for quotation unless those securities are held by at least 500 members of the public, holding at least 25% of the number of
securities of the class issued, with each member holding at least a minimum holding.
NZX granted the Preference Shares Waiver on the following conditions:
(a) that the Directors of the Company certify to NZXR, in a form acceptable to NZXR, that allowing the Preference Shares to remain quoted is in the best
interests of holders of the Preference Shares;
(b) that the Company clearly and prominently discloses the waiver, its conditions, and the implications in its half-year and annual reports;
(c) that the Company consistently monitors the total number of Members of the Public holding Preference Shares and the percentage of Preference
Shares held by Members of the Public holding at least a Minimum Holding and provides NZXR with quarterly updates from the date the waiver is
granted during the period of the waiver, such updates to be provided to NZXR within ten business days of the end of each quarter; and
(d) that the Company notifies NZXR as soon as practicable if there are any material changes to the total number of Members of the Public holding
Preference Shares, and/or the percentage of Preference Shares held by Members of the Public.
On 15 April 2016, NZX also granted the Company a waiver from Listing Rule 5.2.3 in respect of its ordinary shares for a period of twelve months from 15
April 2016 (the Ordinary Shares Waiver).
NZX granted the Ordinary Shares Waiver on the following conditions:
(a) that the Company clearly and prominently discloses the waiver, its conditions and the implications in its half-year and annual reports and in any
offering documents relating to any offer of securities undertaken by the Company during the period of the waiver;
(b) that the Company notifies NZX Regulation of any material change to the spread of its ordinary shares; and
(c) that the Company consistently monitors the spread of its ordinary shares and provides NZX Regulation with quarterly updates during the period of the
waiver.
The implication of these waivers is that the Company’s preference and ordinary shares may not be widely held and there may be reduced liquidity in both
classes of shares.
SUBSTANTIAL PRODUCT HOLDERS
As at 31 December 2016, the substantial product holders in the Company are noted below:
Securities Class %
CDL Hotels Holdings New Zealand Limited 74,139,077 Ordinary Shares 70.22%
Aberdeen Asset Management Asia Limited 5,962,409 Ordinary Shares 5.65%
Aberdeen Asset Management Limited 5,376,012 Ordinary Shares 5.09%
CDL Hotels Holdings New Zealand Limited is a wholly owned subsidiary of Millennium & Copthorne Hotels plc. As at 1 March 2017, the total number of issued
voting securities of Millennium & Copthorne Hotels New Zealand Limited (all of which are ordinary shares) was 105,578,290. The Company holds 99,547
repurchased ordinary shares as treasury stock. The total number of non-voting redeemable preference shares was 52,739,543. As these securities are non-
voting securities, there is no requirement to provide substantial product holder notices.
STATUTORY INFORMATION
DIRECTORS (section 211 (1)(i) Companies Act 1993)
As at 31 December 2016, the Company’s Directors were Messrs HR Wong, BK Chiu, ATS Lee, K Hangchi, R Bobb and GA McKenzie. Mr K Hangchi was
appointed to the Board effective 1 January 2016 replacing Mr VWE Yeo who retired on 31 December 2015.
INTERESTS REGISTER (sections 189 (1) (c) and 211(1)(e) Companies Act 1993)
The Company maintains an Interests Register as required under the Companies Act 1993. For the period under review, the following entries were recorded:
USE OF COMPANY INFORMATION (section 145 Companies Act 1993)
During 2016, the Board did not receive any notices from any Directors of the Company requesting the use of company information which they would have received
in their capacity as Directors which would not otherwise have been available to them.
SHARE DEALING (section 148, Companies Act 1993)
No share dealings by Directors occurred during 2016.
DIRECTORS’ AND ASSOCIATED PERSONS SHAREHOLDINGS (as at 31 December 2016)
Director 2015 2016
HR Wong 604,000 604,000
B K Chiu Nil Nil
ATS Lee Nil Nil
K Hangchi Ni Nil Nil
R Bobb Nil Nil
GA McKenzie Nil Nil
II
HOLDINGS SIZE – REDEEMABLE PREFERENCE SHARES (as at 28 February 2017)
Range Total Holders Number of shares Percentage of Issued Capital
100 - 199 43 6,679 0.01
200 - 499 43 13,101 0.02
500 - 999 29 20,031 0.04
1,000 - 1,999 22 30,940 0.06
2,000 - 4,999 13 47,330 0.09
5,000 - 9,999 12 84,791 0.16
10,000 - 49,999 19 425,676 0.81
50,000 - 99,999 1 75,500 0.14
100,000 - 499,999 5 1,247,176 2.36
1,000,000+ 2 50,788,319 96.30
Rounding - - 0.01
Total 189 52,739,543 100.00
I
BK CHIU
Chairman / Director of: Quantum Ltd Waitangi Resort Joint Venture Committee
Director of: All Seasons Hotels & Resorts Ltd CDL Land New Zealand Ltd
CDL Investments New Zealand Ltd Context Securities Ltd Hospitality Group Ltd
Hospitality Leases Ltd Hospitality Services Ltd Kingsgate Hotels & Resorts Ltd
Millennium & Copthorne Hotels Ltd QINZ Holdings (New Zealand) Ltd QINZ (Anzac Avenue) Ltd
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016 | FIN 34
IV
REMUNERATION (section 161 and 211(1)(f), Companies Act 1993)
The total remuneration and value of other benefits earned received by each of the Directors of the Company for the year ending 31 December 2016 was:
Director Remuneration
HR Wong Nil
B K Chiu (*) 518,336
ATS Lee (*) Nil
K Hangchi 35,000
R Bobb 42,000
GA McKenzie 38,500
(*) Mr ATS Lee was Chief Executive and Executive Director of Millennium & Copthorne Hotels plc during this period and Mr BK Chiu an employee of the Company.
None of these persons received remuneration as a director of the Company or of any of the Company’s subsidiaries.
INDEMNITY AND INSURANCE (section 162, Companies Act 1993)
In accordance with the Company’s constitution, the Company has insured all its Directors and the Directors of its subsidiaries against liabilities to other parties
(except the Company or a related party of the Company) that may arise from their positions as Directors. The insurance does not cover liabilities arising from
criminal actions.
GENERAL DISCLOSURES OF INTEREST (section 140(2), Companies Act 1993)
As at 31 December 2016, the Directors of the Company have made general disclosures of interest in the following companies:
HR WONG
Chairman / Director of: Beijing Fortune Hotel Co. Ltd. CDL Investments New Zealand Limited
M&C Business Trust Management Limited M&C REIT Management Limited
Director of: Alpha Chance Holdings Limited CDL Hotels (Singapore) Pte Ltd
Chancery Ltd RSF Carolina Partners, LLC RSF Syracuse Partners, LLC
Sceptre Hospitality Resources, LLC Sceptre Hospitality Resources Pte. Ltd SWAN Holdings Limited
Commissioner of: PT. Millennium Sirih Jakarta Hotel
ATS LEE
Chairman / President/ Director of: Grand Plaza Hotel Corporation
Director / President of: The Philippine Fund Limited
Director / Representative Director of: CDL Hotels (Korea) Ltd
Executive Director / Chief Executive Officer of: Millennium & Copthorne Hotels plc
Director of: CDL Investments New Zealand Limited
CDL Entertainment & Leisure Pte Ltd CDL Hotels (Labuan) Limited CDL Hotels Japan Pte. Ltd
City Elite Pte Ltd City Century Pte Ltd Fena Estate Company Limited
First Sponsor Group Limited Harbour Land Corporation Harrow Entertainment Pte Ltd
Hospitality Holdings Pte Ltd Hong Leong Hotel Development Limited M&C Hotel Investments Pte. Ltd
M&C Hotels Holdings Japan Pte. Ltd M&C Hotels Japan Pte. Ltd Millennium & Copthorne International Limited
Republic Iconic Hotel Pte Ltd Rogo Realty Corporation Tomorrow City (Singapore) Pte Ltd
President / Commissioner of: PT. Millennium Hotels & Resorts
K HANGCHI
Director of: Hong Leong Nominees (Private) Limited Millennium Securities Nominees Pte Ltd
Millennium Securities Pte Ltd Sun Yuan Holdings Pte Ltd Sun Yuan Overseas Pte Ltd
KIN Holdings Limited CDL Hotels Holdings New Zealand Limited Hong Leong Finance Nominees Pte Ltd
Singapore Nominees Private Limited Hong Leong Finance Limited
BK CHIU
Chairman / Director of: Quantum Ltd Waitangi Resort Joint Venture Committee
Director of: All Seasons Hotels & Resorts Ltd CDL Land New Zealand Ltd
CDL Land New Zealand Ltd Context Securities Ltd Hospitality Group Ltd
Hospitality Leases Ltd Hospitality Services Ltd Kingsgate Hotels & Resorts Ltd
Millennium & Copthorne Hotels Ltd QINZ Holdings (New Zealand) Ltd QINZ (Anzac Avenue) Ltd
R BOBB
Director of: Bobb Management Pty Ltd Birkenhead Holdings Pty Ltd
Birkenhead Investments Pty Ltd Bobb Nominees Pty Ltd Continental Investments Pty Ltd
Elysium Capital Limited EquiOptions Pty Ltd Furscarbo Pty Ltd
Hotelcorp New Zealand Pty Ltd Kingsgate Hotel Pty Ltd Kingsgate Holdings Pty Ltd
Kingsgate Investments Pty Ltd Melmark Securities Pty Ltd. Millennium & Copthorne Hotels Pty Ltd.
RAB Capital Pty Ltd Star Securities Australia Pty Ltd Trans National Properties Ltd
Consultant to: Richard A Bobb Chartered Accountants
G A MCKENZIE
Director of: CMO Energy NZ GMACK Consulting Ltd
Luxottica Retail New Zealand Ltd McHarry Holdings Ltd Redbank Energy (NZ) Limited
III
DOMICILE OF ORDINARY SHAREHOLDERS (as at 28 February 2017)
Number Number of shares Percentage of Issued Capital
New Zealand 1,370 98,255,139 93.06
Overseas holders 107 7,323,151 6.94
Total 1,477 105,578,290 100.00
DOMICILE OF REDEEMABLE PREFERENCE SHAREHOLDERS (as at 28 February 2017)
Number Number of shares Percentage of Issued Capital
New Zealand 171 51,451,626 97.56
Overseas holders 18 1,287,917 2.44
Total 189 52,739,543 100.00
WAIVERS FROM NZX LIMITED
On 24 March 2016, NZX Limited (NZX) granted the Company a waiver from NZX Main Board Listing Rule (Listing Rule) 5.2.3 in respect of its preference
shares for a period of twelve months from 25 March 2016 (the Preference Shares Waiver). Listing Rule 5.2.3 provides that a class of securities will
generally not be considered for quotation unless those securities are held by at least 500 members of the public, holding at least 25% of the number of
securities of the class issued, with each member holding at least a minimum holding.
NZX granted the Preference Shares Waiver on the following conditions:
(a) that the Directors of the Company certify to NZXR, in a form acceptable to NZXR, that allowing the Preference Shares to remain quoted is in the best
interests of holders of the Preference Shares;
(b) that the Company clearly and prominently discloses the waiver, its conditions, and the implications in its half-year and annual reports;
(c) that the Company consistently monitors the total number of Members of the Public holding Preference Shares and the percentage of Preference
Shares held by Members of the Public holding at least a Minimum Holding and provides NZXR with quarterly updates from the date the waiver is
granted during the period of the waiver, such updates to be provided to NZXR within ten business days of the end of each quarter; and
(d) that the Company notifies NZXR as soon as practicable if there are any material changes to the total number of Members of the Public holding
Preference Shares, and/or the percentage of Preference Shares held by Members of the Public.
On 15 April 2016, NZX also granted the Company a waiver from Listing Rule 5.2.3 in respect of its ordinary shares for a period of twelve months from 15
April 2016 (the Ordinary Shares Waiver).
NZX granted the Ordinary Shares Waiver on the following conditions:
(a) that the Company clearly and prominently discloses the waiver, its conditions and the implications in its half-year and annual reports and in any
offering documents relating to any offer of securities undertaken by the Company during the period of the waiver;
(b) that the Company notifies NZX Regulation of any material change to the spread of its ordinary shares; and
(c) that the Company consistently monitors the spread of its ordinary shares and provides NZX Regulation with quarterly updates during the period of the
waiver.
The implication of these waivers is that the Company’s preference and ordinary shares may not be widely held and there may be reduced liquidity in both
classes of shares.
SUBSTANTIAL PRODUCT HOLDERS
As at 31 December 2016, the substantial product holders in the Company are noted below:
Securities Class %
CDL Hotels Holdings New Zealand Limited 74,139,077 Ordinary Shares 70.22%
Aberdeen Asset Management Asia Limited 5,962,409 Ordinary Shares 5.65%
Aberdeen Asset Management Limited 5,376,012 Ordinary Shares 5.09%
CDL Hotels Holdings New Zealand Limited is a wholly owned subsidiary of Millennium & Copthorne Hotels plc. As at 1 March 2017, the total number of issued
voting securities of Millennium & Copthorne Hotels New Zealand Limited (all of which are ordinary shares) was 105,578,290. The Company holds 99,547
repurchased ordinary shares as treasury stock. The total number of non-voting redeemable preference shares was 52,739,543. As these securities are non-
voting securities, there is no requirement to provide substantial product holder notices.
STATUTORY INFORMATION
DIRECTORS (section 211 (1)(i) Companies Act 1993)
As at 31 December 2016, the Company’s Directors were Messrs HR Wong, BK Chiu, ATS Lee, K Hangchi, R Bobb and GA McKenzie. Mr K Hangchi was
appointed to the Board effective 1 January 2016 replacing Mr VWE Yeo who retired on 31 December 2015.
INTERESTS REGISTER (sections 189 (1) (c) and 211(1)(e) Companies Act 1993)
The Company maintains an Interests Register as required under the Companies Act 1993. For the period under review, the following entries were recorded:
USE OF COMPANY INFORMATION (section 145 Companies Act 1993)
During 2016, the Board did not receive any notices from any Directors of the Company requesting the use of company information which they would have received
in their capacity as Directors which would not otherwise have been available to them.
SHARE DEALING (section 148, Companies Act 1993)
No share dealings by Directors occurred during 2016.
DIRECTORS’ AND ASSOCIATED PERSONS SHAREHOLDINGS (as at 31 December 2016)
Director 2015 2016
HR Wong 604,000 604,000
B K Chiu Nil Nil
ATS Lee Nil Nil
K Hangchi Ni Nil Nil
R Bobb Nil Nil
GA McKenzie Nil Nil
III
DOMICILE OF ORDINARY SHAREHOLDERS (as at 28 February 2017)
Number Number of shares Percentage of Issued Capital
New Zealand 1,370 98,255,139 93.06
Overseas holders 107 7,323,151 6.94
Total 1,477 105,578,290 100.00
DOMICILE OF REDEEMABLE PREFERENCE SHAREHOLDERS (as at 28 February 2017)
Number Number of shares Percentage of Issued Capital
New Zealand 171 51,451,626 97.56
Overseas holders 18 1,287,917 2.44
Total 189 52,739,543 100.00
WAIVERS FROM NZX LIMITED
On 24 March 2016, NZX Limited (NZX) granted the Company a waiver from NZX Main Board Listing Rule (Listing Rule) 5.2.3 in respect of its preference
shares for a period of twelve months from 25 March 2016 (the Preference Shares Waiver). Listing Rule 5.2.3 provides that a class of securities will
generally not be considered for quotation unless those securities are held by at least 500 members of the public, holding at least 25% of the number of
securities of the class issued, with each member holding at least a minimum holding.
NZX granted the Preference Shares Waiver on the following conditions:
(a) that the Directors of the Company certify to NZXR, in a form acceptable to NZXR, that allowing the Preference Shares to remain quoted is in the best
interests of holders of the Preference Shares;
(b) that the Company clearly and prominently discloses the waiver, its conditions, and the implications in its half-year and annual reports;
(c) that the Company consistently monitors the total number of Members of the Public holding Preference Shares and the percentage of Preference
Shares held by Members of the Public holding at least a Minimum Holding and provides NZXR with quarterly updates from the date the waiver is
granted during the period of the waiver, such updates to be provided to NZXR within ten business days of the end of each quarter; and
(d) that the Company notifies NZXR as soon as practicable if there are any material changes to the total number of Members of the Public holding
Preference Shares, and/or the percentage of Preference Shares held by Members of the Public.
On 15 April 2016, NZX also granted the Company a waiver from Listing Rule 5.2.3 in respect of its ordinary shares for a period of twelve months from 15
April 2016 (the Ordinary Shares Waiver).
NZX granted the Ordinary Shares Waiver on the following conditions:
(a) that the Company clearly and prominently discloses the waiver, its conditions and the implications in its half-year and annual reports and in any
offering documents relating to any offer of securities undertaken by the Company during the period of the waiver;
(b) that the Company notifies NZX Regulation of any material change to the spread of its ordinary shares; and
(c) that the Company consistently monitors the spread of its ordinary shares and provides NZX Regulation with quarterly updates during the period of the
waiver.
The implication of these waivers is that the Company’s preference and ordinary shares may not be widely held and there may be reduced liquidity in both
classes of shares.
SUBSTANTIAL PRODUCT HOLDERS
As at 31 December 2016, the substantial product holders in the Company are noted below:
Securities Class %
CDL Hotels Holdings New Zealand Limited 74,139,077 Ordinary Shares 70.22%
Aberdeen Asset Management Asia Limited 5,962,409 Ordinary Shares 5.65%
Aberdeen Asset Management Limited 5,376,012 Ordinary Shares 5.09%
CDL Hotels Holdings New Zealand Limited is a wholly owned subsidiary of Millennium & Copthorne Hotels plc. As at 1 March 2017, the total number of issued
voting securities of Millennium & Copthorne Hotels New Zealand Limited (all of which are ordinary shares) was 105,578,290. The Company holds 99,547
repurchased ordinary shares as treasury stock. The total number of non-voting redeemable preference shares was 52,739,543. As these securities are non-
voting securities, there is no requirement to provide substantial product holder notices.
STATUTORY INFORMATION
DIRECTORS (section 211 (1)(i) Companies Act 1993)
As at 31 December 2016, the Company’s Directors were Messrs HR Wong, BK Chiu, ATS Lee, K Hangchi, R Bobb and GA McKenzie. Mr K Hangchi was
appointed to the Board effective 1 January 2016 replacing Mr VWE Yeo who retired on 31 December 2015.
INTERESTS REGISTER (sections 189 (1) (c) and 211(1)(e) Companies Act 1993)
The Company maintains an Interests Register as required under the Companies Act 1993. For the period under review, the following entries were recorded:
USE OF COMPANY INFORMATION (section 145 Companies Act 1993)
During 2016, the Board did not receive any notices from any Directors of the Company requesting the use of company information which they would have received
in their capacity as Directors which would not otherwise have been available to them.
SHARE DEALING (section 148, Companies Act 1993)
No share dealings by Directors occurred during 2016.
DIRECTORS’ AND ASSOCIATED PERSONS SHAREHOLDINGS (as at 31 December 2016)
Director 2015 2016
HR Wong 604,000 604,000
B K Chiu Nil Nil
ATS Lee Nil Nil
K Hangchi Ni Nil Nil
R Bobb Nil Nil
GA McKenzie Nil Nil
DIRECTORS’ AND ASSOCIATED PERSONS SHAREHOLDINGS (as at 31 December 2016)
Director 2015 2016
HR Wong 604,000 604,000
B K Chiu Nil Nil
ATS Lee Nil Nil
K Hangchi NiNil Nil
R Bobb Nil Nil
GA McKenzie Nil Nil
VWE Yeo (*) 151,000
151,000
(*) Mr VWE Yeo retired from the Company on 31 December 2015.
IV
REMUNERATION (section 161 and 211(1)(f), Companies Act 1993)
The total remuneration and value of other benefits earned received by each of the Directors of the Company for the year ending 31 December 2016 was:
Director Remuneration
HR Wong Nil
B K Chiu (*) 518,336
ATS Lee (*) Nil
K Hangchi 35,000
R Bobb 42,000
GA McKenzie 38,500
(*) Mr ATS Lee was Chief Executive and Executive Director of Millennium & Copthorne Hotels plc during this period and Mr BK Chiu an employee of the Company.
None of these persons received remuneration as a director of the Company or of any of the Company’s subsidiaries.
INDEMNITY AND INSURANCE (section 162, Companies Act 1993)
In accordance with the Company’s constitution, the Company has insured all its Directors and the Directors of its subsidiaries against liabilities to other parties
(except the Company or a related party of the Company) that may arise from their positions as Directors. The insurance does not cover liabilities arising from
criminal actions.
GENERAL DISCLOSURES OF INTEREST (section 140(2), Companies Act 1993)
As at 31 December 2016, the Directors of the Company have made general disclosures of interest in the following companies:
HR WONG
Chairman / Director of: Beijing Fortune Hotel Co. Ltd. CDL Investments New Zealand Limited
M&C Business Trust Management Limited M&C REIT Management Limited
Director of: Alpha Chance Holdings Limited CDL Hotels (Singapore) Pte Ltd
Chancery Ltd RSF Carolina Partners, LLC RSF Syracuse Partners, LLC
Sceptre Hospitality Resources, LLC Sceptre Hospitality Resources Pte. Ltd SWAN Holdings Limited
Commissioner of: PT. Millennium Sirih Jakarta Hotel
ATS LEE
Chairman / President/ Director of: Grand Plaza Hotel Corporation
Director / President of: The Philippine Fund Limited
Director / Representative Director of: CDL Hotels (Korea) Ltd
Executive Director / Chief Executive Officer of: Millennium & Copthorne Hotels plc
Director of: CDL Investments New Zealand Limited
CDL Entertainment & Leisure Pte Ltd CDL Hotels (Labuan) Limited CDL Hotels Japan Pte. Ltd
City Elite Pte Ltd City Century Pte Ltd Fena Estate Company Limited
First Sponsor Group Limited Harbour Land Corporation Harrow Entertainment Pte Ltd
Hospitality Holdings Pte Ltd Hong Leong Hotel Development Limited M&C Hotel Investments Pte. Ltd
M&C Hotels Holdings Japan Pte. Ltd M&C Hotels Japan Pte. Ltd Millennium & Copthorne International Limited
Republic Iconic Hotel Pte Ltd Rogo Realty Corporation Tomorrow City (Singapore) Pte Ltd
President / Commissioner of: PT. Millennium Hotels & Resorts
K HANGCHI
Director of: Hong Leong Nominees (Private) Limited Millennium Securities Nominees Pte Ltd
Millennium Securities Pte Ltd Sun Yuan Holdings Pte Ltd Sun Yuan Overseas Pte Ltd
KIN Holdings Limited CDL Hotels Holdings New Zealand Limited Hong Leong Finance Nominees Pte Ltd
Singapore Nominees Private Limited Hong Leong Finance Limited
BK CHIU
Chairman / Director of: Quantum Ltd Waitangi Resort Joint Venture Committee
Director of: All Seasons Hotels & Resorts Ltd CDL Land New Zealand Ltd
CDL Land New Zealand Ltd Context Securities Ltd Hospitality Group Ltd
Hospitality Leases Ltd Hospitality Services Ltd Kingsgate Hotels & Resorts Ltd
Millennium & Copthorne Hotels Ltd QINZ Holdings (New Zealand) Ltd QINZ (Anzac Avenue) Ltd
R BOBB
Director of: Bobb Management Pty Ltd Birkenhead Holdings Pty Ltd
Birkenhead Investments Pty Ltd Bobb Nominees Pty Ltd Continental Investments Pty Ltd
Elysium Capital Limited EquiOptions Pty Ltd Furscarbo Pty Ltd
Hotelcorp New Zealand Pty Ltd Kingsgate Hotel Pty Ltd Kingsgate Holdings Pty Ltd
Kingsgate Investments Pty Ltd Melmark Securities Pty Ltd. Millennium & Copthorne Hotels Pty Ltd.
RAB Capital Pty Ltd Star Securities Australia Pty Ltd Trans National Properties Ltd
Consultant to: Richard A Bobb Chartered Accountants
G A MCKENZIE
Director of: CMO Energy NZ GMACK Consulting Ltd
Luxottica Retail New Zealand Ltd McHarry Holdings Ltd Redbank Energy (NZ) Limited
I
BK CHIU
Chairman / Director of: Quantum Ltd Waitangi Resort Joint Venture Committee
Director of: All Seasons Hotels & Resorts Ltd CDL Land New Zealand Ltd
CDL Investments New Zealand Ltd Context Securities Ltd Hospitality Group Ltd
Hospitality Leases Ltd Hospitality Services Ltd Kingsgate Hotels & Resorts Ltd
Millennium & Copthorne Hotels Ltd QINZ Holdings (New Zealand) Ltd QINZ (Anzac Avenue) Ltd
FIN 35 | MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED ANNUAL REPORT 2016
V
EMPLOYEE REMUNERATION (section 211(1) (g) Companies Act 1993)
The number of employees or former employees of the Company and its subsidiaries (excluding publicly listed subsidiaries) who received remuneration and any
other benefits in their capacity as employees, the value of which was or exceeded $100,000 per annum in 2016 are as follows:
Remuneration and value
of other benefits
Number. of
employees
100,001 – 110,000 2
110,001 – 120,000 5
140,001 – 150,000 3
160,001 – 170,000 2
170,001 – 180,000 3
180,001 – 190,000 1
190,001 – 200,000 3
210,001 – 220,000 1
320,001 – 330,000 1
510,001 – 520,000 1
DONATIONS (section 211(1)(h) and (2)
The Company and its subsidiaries made donations to charity totalling $508.69 during the year.
AUDIT FEES (section 211(1)(j) and (2)
During the period under review, the following amounts were payable to the external auditors KPMG:
2015 ($’000) 2016 ($’000)
New Zealand Australia New Zealand Australia
Annual Audit 297 25 271 23
KPMG Other Services 122 Nil 132 Nil
SUBSIDIARY COMPANIES AND DIRECTORS (section 211(2) of the Companies Act 1993)
The Company’s subsidiaries and their directors as at 31 December 2016 are listed below:
OWNERSHIP ACTIVITY
100% Non-trading
100% Holding Company (Australia)
100% Holding Company (Australia)
66.70% Holding Company
66.70% Property Investment & Development Company
100% Investment Holding Company
100% Holding Company
100% Lessee Company
100% Hotel Management Company
100% Holding Company (Australia)
100% Holding company
100% Holding Company
100% Franchise Holder
100% Non-trading
100% Non-trading (Australia)
100% Residential Apartment Owner (Australia)
DIRECTORS
BK Chiu, JB Pua
R Bobb, JB Pua
R Bobb, JB Pua
HR Wong, RJ Austin, BK Chiu,
J Henderson, ATS Lee, VWE Yeo
BK Chiu, DJ Lindsay, JB Pua
BK Chiu, JB Pua
BK Chiu, N Hood^, KF Luxon
BK Chiu
BK Chiu, KF Luxon, JB Pua
R Bobb, JB Pua
JB Pua, K Hangchi*
R Bobb, JB Pua
BK Chiu, JB Pua
JB Pua
R Bobb, JB Pua
R Bobb, JB Pua
JB Pua
100% Holding Company
BK Chiu, JB Pua 100% Non-trading
R Bobb, JB Pua 100% Non-trading (Australia)
BK Chiu, JB Pua 100% Hotel Owner
BK Chiu, JB Pua 100% Holding Company
NAME
All Seasons Hotels and Resorts Ltd
Birkenhead Holdings Pty Ltd
Birkenhead Investments Pty Ltd
CDL Investments New Zealand Ltd (
#
)
CDL Land New Zealand Ltd
Context Securities Ltd
Hospitality Group Ltd
Hospitality Leases Ltd
Hospitality Services Ltd
Hotelcorp New Zealand Ltd
KIN Holdings Ltd
Kingsgate Holdings Pty Ltd
Kingsgate Hotels And Resorts Ltd
Kingsgate Hotels Ltd
Kingsgate Hotel Pty Ltd
Kingsgate Investments Pty Ltd
Kingsgate International Corporation Ltd
Millennium & Copthorne Hotels Ltd
Millennium & Copthorne Hotels Pty Ltd
QINZ (Anzac Avenue) Ltd
QINZ Holdings (New Zealand) Ltd
Quantum Ltd
BK Chiu, KF Luxon, JB Pua
100% Holding company
(
#
) Listed on the New Zealand Stock Exchange
-- Where the directors of the Company’s subsidiaries are employees of the Company, they do not receive any remuneration or other benefits as a director. Their
remuneration and other benefits are received as employees and are included in the relevant banding under Employee Remuneration.
^ Mr T Ito retired as director of Hospitality Group Limited on 2 September 2016 and was replaced by Ms N Hood on the same date.
* Mr K Hangchi was appointed as director to KIN Holdings Limited on 1 January 2016 replacing Mr VWE Yeo who retired as a director of KIN Holdings Limited on
31 December 2015 and Kingsgate International Corporation Limited on 1 January 2016.
--The following persons received remuneration as Directors of the Company’s subsidiaries during 2016: VWE Yeo ($30,000), RJ Austin ($35,000), J Henderson
($30,000).
Draw bridge at Auckland Viaduct
BOARD OF DIRECTORS
Wong Hong Ren (Chairman)
BK Chiu (Managing Director)
Aloysius Lee (Non-Executive Director)
Kevin Hangchi (Non-Executive Director)
Richard Bobb (Independent Director)
Graham McKenzie (Independent Director)
SENIOR MANAGEMENT
Greg Borrageiro (Director, Information Technology)
Troy Dandy (Group Company Secretary & Legal Counsel)
Brendan Davies (Director, International Sales & Marketing)
Craig Fletcher (Director, Property Management)
Karl Luxon (Vice President Operations)
Boon Pua (Vice President Finance)
Kim-Marie Rixson (Director, Human Resources)
Alison Smith (National Director of Sales, Conferences
and Incentives)
Josie Wilson (National Distribution & Revenue Manager)
REGISTERED OFFICE & CONTACT DETAILS
Level 13, 280 Queen Street, Auckland, New Zealand
PO Box 5640, Wellesley Street, Auckland 1141
Telephone: (09) 353 5010
Facsimile: (09) 309 3244
Website: www.millenniumhotels.com
Email: sales.marketing@millenniumhotels.co.nz
AUDITORS
KPMG, Auckland
BANKERS
ANZ Bank New Zealand Limited
Hong Kong & Shanghai Banking Corporation Limited
SOLICITORS
Bell Gully
SHARE REGISTRAR
Computershare Investor Services Limited,
Level 2, 159 Hurstmere Road, Takapuna,
Private Bag 92119, Auckland 1020, New Zealand
Telephone: +64 9 488 8700
Facsimile: +64 9 488 8787
email: enquiry@computershare.co.nz
STOCK EXCHANGE LISTING:
New Zealand Exchange (NZX)
Company Code: MCK
ANNUAL REPORT 2016
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED
ANNU
AL REPORT 2016
HEAD OFFICE
Head Office Tel: (09) 353 5010
Level 13, 280 Queen Street
PO Box 5640, Wellesley St, Auckland
NATIONAL CONFERENCE OFFICE
Ph: 0800 4 MEETINGS (0800 4 633 846)
Email: meetings@millenniumhotels.co.nz
www.meetingsnz.co.nz
SALES
Email: sales.marketing@millenniumhotels.co.nz
International Sales Tel: (09) 353 5085
Corporate Sales Auckland Tel: (09) 353 5010
Corporate Sales Wellington Tel: (04) 382 0770
CENTRAL RESERVATIONS
Ph: 0800 808 228
Email: central.res@millenniumhotels.co.nz
www.millenniumhotels.com
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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“Annual Report 2016 | 33 CDL INVESTMENTS NEW ZEALAND LIMITED STATUTORY INFORMATION DIRECTORS (section 211(1)(I) Companies Act 1993) As at 31 December 2016, the Company’s Directors were Messrs. HR Wong, BK Chiu, ATS Lee, VWE Yeo, RJ Austin and J Henderson. Mr ATS Lee resig…”