MCK: 2017 Results Announcement

CHAIRMAN’S REVIEW


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 $43.1 million (2016: $40.4 million) for the year ended 31
December 2017.
MCK’s revenue for the year increased to $187.3 million (2016: $172.0 million) and profit before tax and
non-controlling interests totalled $74.9 million (2016: $70.5 million). The increases in revenue and profit
from 2016 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.
On a like for like basis, comparing operating hotels in 2016 and 2017 (excluding Grand Millennium
Auckland and M Social Auckland), MCK’s revenue growth was 7% and NPBT increased by 22%,
reflecting the outstanding profit conversion efficiencies from both operating hotels and CDL Investments.
Shareholders’ funds excluding non-controlling interests as at 31 December 2017 totalled $588.9 million
(2016: $489.1 million). Total assets at 31 December 2017 were $828.2 million (2016: $713.9 million).
Net asset backing (with land and building revaluations and before distributions) as at 31 December
2017 increased to 371.96 cents per share (2016: 308.91 cents per share).
Earnings per share increased to 27.25 cents per share (2016: 25.56 cents per share).

New Zealand Hotel Operations
2017 saw the first full year of operations of Grand Millennium Auckland and, after an extensive
refurbishment and rebuild of the former Copthorne Hotel on Quay Street, the opening of M Social
Auckland in Q4 of 2017. Together with other hotels in the MCK network, we achieved growth in guests
from all major geographical segments. Hotel revenues increased by 11.6% to $105.6 million (2016:
$94.6 million) and revenue per available room (RevPAR) increased by 8.2%. This increase in yield was
assisted by the company’s domestic customer campaigns and ongoing initiatives to capitalize on the
changing dynamics of visitors from China and South-east Asia.

With an increase in occupancy rates, a resolution to the shortage of labour in the hospitality sector was
crucial. To overcome this hurdle and retain talent in our hotels, we are pleased to report that MCK
established a ground-breaking partnership and collaboration with the government and various
institutions. Proactive management drove further gains as we adapted our systems to achieve better
cost management, while improving the company’s customer preference ratings.

In July 2017, Auckland Council narrowly voted to introduce a controversial targeted rate on a selection
of accommodation providers. This discriminatory form of tax by the Auckland Council, now implemented,
has garnered strong opposition from the accommodation industry in Auckland who intend to initiate a
judicial review of the Council’s targeted rate in 2018.


M Social Update

October 2017 saw the opening of the 190 room M Social Auckland. Since its opening, it has benefitted
from keen demand owing to the hotel’s innovative design, social spaces and service ethos. Appeal from
key markets, including International and New Zealand business and leisure travellers has been

extremely positive, as the hotel’s fresh thinking supports the coming of age of Auckland City. With its
own entrance on Quay Street, the Beast and Butterflies Restaurant and Bar has been embraced and
well-patronised by locals and the growing population of downtown CBD residents. MCK considered it
important to complement the hotel’s 100% NBS seismic rating with creative design and décor and we
are very proud of the end result. Customer self-service technologies have been under trial at M Social
Auckland, and we will continue to ensure that we provide the appropriate balance between convenience
and service in a meaningful way, both for our customers, and to maximise the efficiency in the operation
of the hotel.


CDL Investments New Zealand Limited (“CDLI”)

CDLI continued to perform strongly announcing another record operating profit after tax for the year
ended 31 December 2017 of $32.2 million (2016: $27.0 million). The Overseas Investment Amendment
Bill proposed by the Government in December 2017 will have some but minimal impact on CDLI’s
business model of acquiring land for residential development. The proposed legislation was designed
to curb the demand from a segment of buyers but not to “impede the broader objective of increasing
the supply of residential housing”.
CDLI increased its ordinary dividend to 3.5 cents per share (2016: 3.0 cents per share). The Dividend
Reinvestment Plan will apply to this dividend.

Australia Update

In Australia, occupancy at the Zenith residences was high at 98% and balcony remediation work fully
completed in October 2017. We have initiated a marketing campaign for the sale of a selection of our
units in 2018.

Dividend Announcement

Reflecting its positive results in 2017, MCK has resolved to declare and pay all shareholders a fully
imputed dividend of 6.0 cents per share (2016: 5.0 cents per share) which represents a 20% increase
over the 2016 dividend. The Board has chosen to increase MCK’s dividend as it remains confident of
MCK’s ability to deliver consistent results and returns from its business units.
The dividend, payable to all shareholders, will be paid on 18 May 2018. The record date will be 11 May
2018.

Outlook

We expect 2018 to be another positive and exciting year for MCK. With the addition of Grand Millennium
Auckland and M Social Auckland in particular, we expect to benefit from the growing number of tourist
and business visitors. Being different hotels that appeal to different market segments, Grand Millennium
Auckland and M Social Auckland will assist MCK in attracting a diverse variety of visitors.
In February the company acquired the Waterfront Hotel New Plymouth, an iconic 42 room hotel
featuring the award-winning Salt Restaurant. This earnings accretive acquisition will further facilitate
new opportunities for our global MCK customers from both leisure and business travel sectors. The
Waterfront Hotel, which will be branded a Millennium Hotel, sits in a different market to the Copthorne
Grand Central New Plymouth. The acquisition will boost our supplier, customer and national networks,
in turn benefitting both hotels.

In light of these developments, CDLI’s developments and the planned sale of a selection of Zenith
apartment units, we look forward to another successful year in 2018.

Management and staff

The Board and I sincerely thank the Company’s management and staff for their diligent work during
2017 to deliver these excellent results.



Colin Sim
Chairman
8 February 2018

---

MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND
REPORTS INCREASED 2017 REVENUES AND PROFIT

Millennium & Copthorne Hotels New Zealand Limited (NZX: MCK) today reported its preliminary results
for the year ended 31 December 2017 and announced a profit after tax attributable to owners of the
parent of $43.1 million (2016: $40.4 million) on total revenue of $187.3 million (2016: $ 172.0 million).
On a like for like basis between operating hotels in 2016 and 2017 (excluding Grand Millennium
Auckland and M Social Auckland), MCK’s revenue growth was 7% while NPBT increased by 22%,
reflecting the outstanding profit conversion efficiencies of the revenue growth from both operating hotels
and CDL Investments. Growth in hotel revenue came from all major geographical segments with
significant yield increases resulting from initiatives focused on the changing dynamics of visitors from
China and South-east Asian countries.
Grand Millennium Auckland had its first full year of trading and it delivered an outstanding set of results.
In October 2017, M Social Auckland on Quay Street was opened after undergoing an extensive rebuild
and refurbishment to the former Copthorne Hotel, Auckland Harbour City. The new hotel has a 100%
NBS seismic rating but it is the creative design, décor and its service ethos that had guests and bloggers
complimenting it. The Beast and Butterflies Restaurant and Bar has its own entrance directly from Quay
Street. Operating like a standalone restaurant, the menu is Pacific Asian style with street food
influences, and the service prompted one food writer to comment “style with substance” and that “the
bar for hotel restaurants has been raised”.
M Social Auckland’s appeal to both international and New Zealand business and leisure travelers has
been encouraging as the hotel’s fresh thinking supports the coming of age of Auckland City.
MCK Chairman Mr. Colin Sim was pleased with the Company’s results, ongoing efficiency gains and
newly re-opened hotel M Social Auckland on Auckland’s waterfront.
“Shareholders and guests alike will be pleased with this exceptional hotel with its lifestyle orientation
and service ethos. We are looking forward to improving our results again in 2018”, he said.
MCK has resolved to declare an increased and fully imputed dividend of 6.0 cents per share for 2017
to all shareholders (2016: 5.0 cents per share). The dividend reflects the continued positive operational
profitability of the Company. With the reopening of M Social Auckland and the newly acquired
Waterfront Hotel New Plymouth, the Board is confident in exceeding its 2017 trading results in 2018.
The dividend will be paid to shareholders on 18 May 2018. The record date will be 11 May 2018.

Summary of results:
• Profit after tax and non-controlling interests $43.1 million (2016: $40.4m)
• Profit before tax and non-controlling interests $74.9 million (2016: $70.5m)
• Group revenue $187.3 million (2016: $172.0m)
• Shareholders’ funds excluding non-controlling interests $588.9 million (2016: $489.1m)
• Total assets $828.2 million (2016: $713.9m)
• Earnings per share (cents per share) 27.25 cents (2016: 25.56 cents)

ENDS
Issued by Millennium & Copthorne Hotels New Zealand Limited
Enquiries to:
B K Chiu
Managing Director
(09) 353 5058

---

Millennium & Copthorne Hotels New Zealand Limitedl
Consolidated Income Statement
For the year ended 31 December 2017
Group
Group
DOLLARS IN THOUSANDS Note
2017 2016
Hotel revenue
105,567 94,607
Rental income
3,070 2,993
Property sales
78,630
74,435
Revenue
187,267
172,035
Cost of sales
4,11 (74,847) (72,702)
Gross profit
112,420
99,333
Other income
2
4,311
Administration expenses 3,4 (20,504)
(17,246)
Other operating expenses 3,4
(19,148) (16,737)
Operating profit
72,768
69,661
Finance income 5
4,072 3,027
Finance costs
5 (1,897)
(2,151)
Net finance income 2,175 876
Profit before income tax
74,943
70,537
Income tax expense 6
(19,847)
(20, 117)
Profit for the year
55,096 50,420
Attributable to:
Owners of the parent
43, 116 40,447
Non-controlling interests
11,980 9,973
Profit for the year
55,096
50,420
Basic earnings per share (cents) 9
27.25 25.56
Diluted earnings per share (cents) 9 27.25
25.56
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2017
Group Group
DOLLARS IN THOUSANDS
Note 2017 2016
Profit for the year
55,096 50,420
Other comprehensive income
Items that will not be reclassified to profit or loss
Revaluation/impairment of property, plant and equipment 10 75,326
79,424
- Tax expense on revaluation/impairment of property, plant
and equipment
6, 17 (11,342) (14,602)
63,984
64,822
Items that are or may be reclassified to profit or loss
Foreign exchange translation movements
5 3,426
(1,024)
- Tax credit on foreign exchange translation movements
5,6 11 67
3,437
(957)
Total comprehensive income for the year
122,517 114,285
Total comprehensive income for the year attributable to :
Owners of the parent
107,648 104,312
Non-controlling interests
14,869 9,973
Total comprehensive income for the year 122,517
114,285
The accompanying notes form part of, and should be read in conjunction with, these financial statements
FIN 1
8

Millennium & Copthorne Hotels New Zealand Limited
Consolidated Statement of Changes in Equity
For the year ended 31 December 2017
Group
Attributable to equity holders of the Group
Share Revaluation
Exchange Accumulated
Treasury
DOLLARS IN THOUSANDS
Capital Reserve
Reserve Losses Stock
Balance at 1 January 2017 383,266 161,370
(3,323) (52,224) (26)
Movement in exchange translation reserve, net of
tax --
3,437
--
Revaluation/impairment of property, plant &
equipment, net of tax
-
61,095 --
-
Total other comprehensive income/ (loss)
-
61,095
3,437
-
-
Profit for the year ---
43,116
-
Total comprehensive income for the year
-
61,095 3,437
43,116
-
Transactions with owners, recorded
directly in equity:
Dividends paid to:
Owners of the parent
-
--
(7,911) -
Non-controlling interests
-
---
-
Supplementary dividends ---
(221) -
Foreign investment tax credits
-
--
221
-
Movement in non-controlling interests
without a change in control
-
--
80 -
Balance at 31 December 2017 383,266
222,465 114
(16,939)
(26)
Non-
controlling
Total
Interests
489,063
63,218
3,437 -
61,095
2,889
64,532 2,889
43,116
11,980
107,648 14,869
(7,911)
-
-
(3,662)
(221)
-
221
-
80 385
588,880 74,810
The accompanying notes form part of, and should be read in conjunction with, these financial statements
CD
FIN2
Total
Equity
552,281
3,437
63,984
67,421
55,096
122,517
(7,911)
(3,662)
(221)
221
465
663,690

Millennium & Copthorne Hotels New Zealand Limited
Consolidated Statement of Changes in Equity
For the year ended 31 December 2017
Group
Attributable to equity holders of the Group
Share Revaluation Exchange
Accumulated Treasury
DOLLARS IN THOUSANDS
Capital Reserve
Reserve Losses Stock
Balance at 1 January 2016
383,266 96,548
(2,366)
(88,129)
(26)
Movement in exchange translation reserve, net of
tax
-
-
(957)
-
-
Revaluation/impairment of property, plant &
equipment, net of tax
-
64,822
---
Total other comprehensive income/(loss)
-
64,822 (957)
--
Profit for the year
-
-
-
40,447
-
Total comprehensive income for the year
-
64,822
(957) 40,447
-
Transactions with owners, recorded
directly in equity:
Movement in fair value on assets held for
sale
---
(1)
-
Dividends paid to:
Owners of the parent
---
(4,430)
-
Non-controlling interests
-----
Supplementary dividends
---
(124)
-
Foreign investment tax credits
---
i24
-
Movement in non-controlling interests
without a change in control
---
(111)
-
Balance at 31 December 2016 383,266 161,370 (3,323) (52,224)
(26)
Non-
controlling
Total
Interests
389,293 55,552
(957)
-
64,822
-
63,865
-
40,447 9,973
104,312 9,973
(1)
-
(4,430)
-
-
(2,787)
(124)
-
i24
-
(111)
480
489,063
63,218
The accompanying notes form part of, and should be read in conjunction with, these financial statements
CD
FIN3
Total
Equity
444,845
(957)
64,822
63,865
50,420
114,285
(1)
(4,430)
(2,787)
(124)
124
369
552,281

Millennium & Copthorne Hotels New Zealand Limited
Consolidated Statement of Financial Position
As at 31 December 2017
DOLLARS IN THOUSANDS
SHAREHOLDERS' EQUITY
Issued capital
Reserves
Treasury stock
Equity attributable to owners of the parent
Non-controlling interests
Total equity
Represented by:
NON CURRENT ASSETS
Property, plant and equipment
Development properties
Investment in associates
Total non-current assets
CURRENT ASSETS
Cash and cash equivalents
Short term bank deposits
Trade and other receivables
Inventories
Development properties
Total current assets
Total assets
NON CURRENT LIABILITIES
Interest-bearing loans and borrowings
Provision for deferred taxation
Total non-current liabilities
CURRENT LIABILITIES
Interest-bearing loans and borrowings
Trade and other payables
Trade payables due to related parties
Loans due to related parties
Income tax payable
Total current liabilities
Total liabilities
NET ASSETS
For and on behalf of the Board
Note
8
8
10
11
12
13
14
11
15
17
15
18
23
23
Group
2017
383,266
205,640
(26)
!588,880
74,810
663,690
505,908
145,751
2
651,661
34,195
88,890
17,729
1,646
34,104
176,564
828,225
66,000
70,245
136,245
22,442
1,981
3,867
28,290
164,535
663,690
Group
2016
383,266
105,823
(26)
489,063
63,218
552,281
422,603
135,136
2
557,741
15,520
85,598
18,693
1,508
34,845
156, 164
713,905
66,000
59,183
125,183
4
24,957
2,137
5,800
3,543
36,441
161,624
552,281
R BOBB, DIRECTOR, 08 February 2018
BK CHIU, MANAGING DIRECTOR, 08 February 2018
The accompanying notes form part of, and should be read in conjunction with, these financial statements
FIN 4
e

Millennium & Copthorne Hotels New Zealand Limited_
Consolidated Statement of Cash Flows
For the year ended 31 December 2017
Group Group
DOLLARS IN THOUSANDS
Note 2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from:
Receipts from customers
188,776 169,208
Receipts from insurers
2 4,500
Interest received
3,428 3,370
Dividends received
5 2 7
Cash was applied to:
Payments to suppliers and employees (102,504)
(87,371)
Purchases of development land (15,139)
Interest paid (1,859) (2, 134)
Income tax paid (19,782) (16,571)
Net cash inflow from operating activities 52,922 71,009
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was (applied to)/provided from:
Proceeds from the sale of property, plant and equipment 12 10
Proceeds from the sale of assets held for sale 314
Purchases of property, plant and equipment
10 (14,466) (32,565)
Investments in short term bank deposits (3,292) (25,643)
Net cash outflow from investing activities (17,746)
(57,884)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was (applied to)/provided from:
Repayment of borrowings 15 (4) (6,523)
Loans advanced from parent company
2,000
Repayment of loan from parent company 23 (5,800)
Dividends paid to shareholders of Millennium & Copthorne Hotels New
Zealand Ltd
8
(7,911)
(4,430)
Dividends paid to non-controlling shareholders (3,662) (2,786)
Net cash inflow/(outflow) from financing activities (17,377) (11,739)
Net increase/(decrease) in cash and cash equivalents
17,799 1,386
Add opening cash and cash equivalents 15,520
14,021
Exchange rate adjustment
876 113
Closing cash and cash equivalents
13 34,195 15,520
The accompanying notes form part of, and should be read in conjunction with, these financial statements
FIN 5
e

Millennium & Copthorne Hotels New Zealand Limiteal
Consolidated Statement of Cash Flows -continued
For the year ended 31 December 2017
DOLLARS IN THOUSANDS
RECONCILIATION OF NET PROFIT FOR THE YEAR TO CASH FLOWS
FROM OPERATING ACTIVITIES
Profit for the year
Adjusted for non-cash items:
Goodwill written off
Gain on sale of property, plant and equipment
Depreciation
Unrealised foreign exchange (gain)/losses
Income tax expense
Gain on insurance claim
Adjustments for movements in working capital:
(lncrease)/Decrease in trade & other receivables
(lncrease)/Decrease in inventories
(lncrease)/Decrease in development properties
lncrease/(Decrease) in trade & other payables
lncrease/(Decrease) in related parties
Cash generated from operations
Interest expense
Income tax paid
Cash inflows from operating activities
Note
3
10
6
2
5
Group
2017
55,096
(5)
6,482
65
19,847
81,485
964
(138)
(6,936)
(760)
(156)
74,459
(1,755)
(19,782)
52,922
Group
2016
50,420
2,823
(9)
5,837
(74)
20, 117
(4,311)
74,803
2,120
(256)
8,030
3,514
1,497
89,708
(2, 128)
(16,571)
71,009
The accompanying notes form part of, and should be read in conjunction with, these financial statements
FIN 6
8

Millennium & Copthorne Hotels New Zealand Limited!
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
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 2017 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 08 February 2018.
(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 (refer to Note 10).
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 24
- Accounting Estimates and Judgements.
(c) Change in accounting policies
The accounting policies have been applied consistently to all periods presented in these financial statements. The
accounting policies are now included within the relevant notes to the consolidated financial statements.
(d) 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 t1istorical 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.
(e) 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. Piny subsequent purchase or construction
of replacement assets are separate economic events and are accounted for separately.
(f) 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.
FIN 7
8

Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
Index
1. Segment reporting
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. Investment in associates
13. Cash and cash equivalents
14. Trade and other receivables
15. Interest-bearing loans and borrowings
16. Provisions
17. Deferred tax assets and liabilities
18. Trade and other payables
19. Financial instruments
20. Operating leases
21. Capital commitments
22. Related parties
23. Group entities
24. Accounting estimates and judgements
25. New standards and interpretations not yet adopted
26. Subsequent events
27. Contingent Liability
FIN 8
8

Millennium & Copthorne Hotels New Zealand Limitedl
Notes to the Consolidated Financial Statements for the year enided 31 December 2017
1. Segment reporting
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.
The Group has no major customer representing greater than 10% of the Group's total revenue.
Operating segments
Residential Land Residential Property
Hotel Operations
Development Development Group
Dollars In Thousands
2017
I
2016 2017
I
2016 2017
I
2016 2017
I
2016
External revenue
105,567 94,576 78,667 74,471
3,033
2,988 187,267
172,035
Earnings before interest, depreciation
& amortisation 35,925 33,748 42,526
36,584 799 5,166 79,250 75,498
Finance income
1,778 1,9 16 2,144
956 150 155 4,072
3,027
Finance expense
(1,897)
(2,151)
----
(1,897) (2,151)
Depreciation and amortisation
(6,476) (5,829)
(1) (2) (5) (6)
(6,482)
(5,837)
Profit before income tax
29,330 27,684 44,669 37,538 944 5,315 74,943
70,537
Income tax (expense)/credit
(6,725) (8,301) (12,5 07) (10,510) (615) (1,306)
(19,847)
(20, 117)
Profit after income tax
22,605 19,3 83 32,162 27,028 329 4,009
55,096 50,420
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 572,697
486, 137 191,703 168,276 63,823 59,490 828,223
713,903
Tax assets
----
---
-
Investment in associates
-
-2 2 --2
2
Total assets
572,697 486,137 191,705 168,278 63,823 59,490 828,225
713,905
Segment liabilities (87,154)
(93,426) (2, 160) (4,335) (1, 109) (1, 137) (90,423) (98,898)
Tax liabilities 171,235)
(61,660) (3,433) (2, 149)
556 1,083 (74,112) (62,726)
Total liabilities (158,389) (155,086) (5,593) (6,484) (553) (54)
(164,535) (161,624)
Capital exoenditure
14,463 32,551 -s 3
9 14,466
32,565
FIN9
8

Millennium & Copthorne Hotels New Zealand Limited!
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
1. Segment reporting - continued
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.
New Zealand
Australia
Group
Dollars In Thousands 2017
I
2016 2017
I
2016 2017
I
2016
External revenue
184,234 169,047 3,033 2 ,988 187,267 172,035
Earnings before interest, depreciation &
amortisation
78,505 71,372 745 4,126 79,250
75,498
Finance income
3,922 2,873
150 154 4,072 3,027
Finance expense
(1,897) (2 , 151)
--
(1,897) (2,151)
Depreciation and amortisation (6,477) (5,831)
(5) (6)
(6,482) (5,837)
Profit before income tax 74,053
66,263 890 4 ,274 74,943 70,537
Income tax (expense)lcredit
(19,248) (18,828) (599) (1,289) (19,847) (20,117)
Profit after income tax
54,805 47,435 291 :2,985
55,096 50,420
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
764,400 654,415 63,823
59 ,488
828,223
713,903
Tax assets -
-
--
--
Investment in associates 2
2
--
2 2
Total assets 764,402
654,417 63,823 59,488 828,225 713,905
Segment liabilities (90,384) (98,868)
(39) (30) (90,423) (98,898)
Tax liabilities
(74,673) (63,814)
561 1,088
(74,112)
(62,726)
Total liabilities
(165,057)
(162,682)
522 1,058
(164,535) (161,624)
Capital expenditure
14,463 32,556 3 9 14,466 32,565
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.
Segment information is presented in respect of the Group's reporting segments. Operat ing 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 e xpenditure is the total cost incurred during the period to acquire segment assets that are ex pected to be used for
more than one period.
2. Other income
Group
Dollars In Thousands
20"17
I
2016
I 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.
FIN 10
8

Millennium & Copthorne Hotels New Zealand Limited[
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
3. Administration and other operating expenses
Group
Dollars In Thousands Note 2017
I
2016
Depreciation 10
6,482 5,837
Auditors remuneration
Audit fees 306 294
Tax compliance and advisory fees 52 132
Directors fees 22 321 231
Lease and rental expenses 20 2,247 2,235
Provision for bad debts
Debts written off
1
1
Movement in doubtful debt provision 46 34
Goodwill written-off
-
2,823
Net gain on disposal of property, plant and equipment (5) (9)
Release of earthquake and FF&E provisions for Millennium Hotel
Christchurch 16
-
(3,000)
Release of excess remedial costs provided for Zenith Residences 11 -(4,393)
Other
30,202 29,798
39,652 33,983
4. Personnel expenses
Group
Dollars In Thousands
2017
I
2016
Wages and salaries
36,517 34,345
Employee related expenses and benefits
1,382
1,079
Contributions to defined contribution plans 677 586
Increase in liability for long-service leave 88 56
38,664 36,066
The personnel expenses are included in cost of sales, administration expenses and other operating expenses in the income
statement.
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.
5. Net finance income
Recognised in the income statement
Group
Dollars In Thousands
2017
I
2016
Interest income
3,992 2,923
Dividend income
2 7
Foreign exchange gain 78
97
Finance income
4,072 3,027
Interest expense (1,755)
(2,128)
Foreign exchange loss
(142) (23)
Finance costs
(1,897) (2,151)
Net finance income reconnised in the income statement 2,175 876
FIN 11
e

Millennium & Copthorne Hotels New Zealand Limited!
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
5. Net finance income - continued
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.
Recognised in other comprehensive income
Group
Dollars In Thousands 2017
I
2016
I
Foreign exchange translation movements
3,437
(957)
Net finance income recoonised in other comprehensive income
3,437
(957)
Exchange translation of 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.
6. Income tax expense
Recognised in the income statement
Group
Dollars In Thousands 2017
I
2016
Current tax expense
Current year
20,790 18,373
Adjustments for prior years
(674)
(23)
20, 116 18,350
Deferred tax expense
Origination and reversal of temporary difference
(157)
1,687
Changes in Tax Rates 103
-
Adjustments for prior years
(215)
80
(269)
1,767
Total income tax eXPense in the income statement
19,847 20,117
Reconciliation of tax expense
Grouo
Dollars In Thousands 2017
I
2016
Profit before income tax
74,943 70,537
Income tax at the company ta x rate of 28% (2016: 28%) 20,984 19,750
Adjusted for:
Non-deductible expenses
-
790
Tax rate difference (if different from 28% above)
103
75
Tax exempt income (351) (555)
Underl(Over) - provided in prior years
(889)
57
Total income tax expense
19,847 20, 117
Effective tax rate 26% 29%
FIN 12
8

I
Millennium & Copthorne Hotels New Zealand LimiteoI
Notes to the Consolidated Financial Statements for the year enided 31 December 2017
6. Income tax expense - continued
Deferred tax expense/( credit) recognised in other comprehensive income
Group
Dollars In Thousands
2017
I
2017
Relating to revaluation of property, plant and equipment
11,342 14,602
Relating to foreign currency translation of foreign subsidiaries
(11) (67)
11,331 14,535
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 ta xable profit; and
differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. T he
amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and
liabilities, using ta x 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 ta xable 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 ta x liabilities are offset only if the Group has a legally enforceable right to set off current tax assets
against current ta x 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.
7. Imputation credits
Group
Dollars In Thousands 2017
I
2017
Imputation credits available for use in subsequent reportina periods
79,680 65,620
The KIN Holdings Group has A$5.5 million (2016: A$5.6 million) franking credits available as at 31 December 2017.
8. Capital and reserves
Share capital
Group
Group
2017 2017 2016
2016
Shares
$OOIO'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 52,739,543 :33,218 52,739,543 33,218
paid
Ordinary shares repurchased and held as treasury stock 1
(99,547) (26) (99,547) (26)
January
Ordinary shares repurchased and held as treasury stock 31 (99,547) (26) (99,547) (26)
December
Total shares issued and outstanding
158,218,286 3lB3,240 158,218,286 383,240
At 31 December 2017, the authorised share capital consisted of 105,578,290 ordinary shares (2016: 105,578,290 ordinary shares)
with no par value and 52,739,543 redeemable preference shares (2016: 52,739,543 redeemable preference shares) with no par
value.
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.
FIN 13
e

Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
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 2017
I
2016
I Ordinary Dividend - 5.0 cents per qualifying ordinary share (2016: 2.8 cents)
7,911
4,430
Supplementary Dividend - 0.8824 cents per qualifying ordinary share (2016: 0.49412 cents) 221 124
8,132 4,554
After 31 December 2017, 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
I Ordinary Dividend - 6.0 cents per qualifying share (2016: 5.0 cents)
9,493
Supplementary Dividend - 1.0588 cents per qualifying share (2016: 0.8824 cents)
273
Total Dividends
9.766
Dividends and tax
Dividends are recognised as a liability in the period in which they are declared. Additional income taxes that arise from the
distribution of dividends are recognised at the same time as the liability to pay the related dividend.
9. Earnings per share
Basic earnings per share
The calculation of basic earnings per share at 31 December 2017 was based on the profit attributable to ordinary and redeemable
preference shareholders of $43, 116,000 (2016: $40,44 7,000) and weighted average number of shares outstanding during the year
ended 31 December 2017 of 158,218,286 (2016: 158,218,286), calculated as follows:
Profit attributable to shareholders
Dollars In Thousands
I Profit for the year
Profit attributable to non-controlling interests
Profit attributable to shareholders
Weighted average number of shares
Weighted average number of shares (ordinary and redeemable preference shares)
Effect of own shares held (ordinary shares)
Wei hted avera e number of shares for earnin s er share calculation
Diluted earnings per share
The calculation of diluted earnings per share is the same as basic earnings per share.
FIN 14
Group
2017
55,096
(11,980)
43,116
Grau
2017
158,317,833
99,547
158,218,286
I
2016
50,420
(9,973)
40,447
2016
158,317,833
99,547
158,218,286

Millennium & Copthorne Hotels New Zealand Limitec.1
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
10. Property, plant and equipment
Plant,
Equipment,
Leasehold
Fixtures; Work
Freehold Freehold Land and and Motor
In
Dollars In Thousands
Land
Buildings
Buildings Fittings
Vehicles Proaress
Total
Cost
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
Balance at 1 January 2017 128,861 215,307 37,557
87,623
65
41,537 510,950
Acquisitions --
-
3
-14,463 14,466
Disposals ---(2 56)
--(256)
Transfers between categories -45,489 24 8,888 1 (54,402)
-
Transfer from accumulated
depreciation following revaluation
-
(136) (149) --
-
(285)
Movements in foreign exchange
-
--25 --25
Revaluation surplus/(deficit) 31,214 37,047 7,065
---75,326
Balance at 31 December 2017
160,075
297,707 44,497 96,283 66 1,598
600,226
Depreciation and impairment losses
Balance at 1 January 2016 -(12,773) (2,869)
(72,6~i8)
(51)
-
(88,351)
Depreciation charge for the year
-
(2 ,047) (370) (3,4 16) (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) (71,2:31)
(55)
-
(88,347)
Balance at 1 January 2017 -(13,863) (3,198)
(71,231)
(55)
-
(88,347)
Depreciation charge for the year -(2,451) (399) (3,628) (4)
-
(6,482)
Disposals ---250
--
250
Transfer accumulated depreciation
against cost following revaluation -
136
149 --
-
285
Movements in foreign exchange ---
(:24)
-
-
(24)
Balance at 31 December 2017
-
(16,178) (3,448) (74,633)
(59)
-
(94,318)
Carrying amounts
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
At 1 January 2017 128,861 201,444 34,359 16,392 10 41,537
422,603
At 31 December 2017 160,075 281,529 41,049 21,Ei50 7 1,598
505,908
FIN 15
e

Millennium & Copthorne Hotels New Zealand Limitedl
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
10. Property, plant and equipment - continued
The Directors consider the value of the hotel assets with a net book value of $505.9 million (2016: $422.6 million) to be within a range
of $505.91 to $529.72 million (2016: $422.00 to $436.00 million). This is substantiated by valuations completed by Bower Valuations
Limited, registered valuers, on: 3 hotel assets valued in total at $28.0 million in December 2015; 7 hotel assets valued in total at
$245.69 million in December 2016; and 3 hotel assets valued in total at $251.48 million in December 2017.
During 2017, three (2016: seven) 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 $75.33 million (2016: $79.42 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 I (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 2017 to approximate their fair value
as at 31 December 2017. This is on the basis that the Group's hotels which were not subject to external professional valuations, 10
hotels in total, were tested for impairment by management. Based on these tests none of the 1 O hotels was assessed to be impaired.
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 1.25% to 3.74% (2016: 0.39% to 8.23%) over the five years
projection. Pre-tax discount rates ranging between 8.50% and 14.50% (2016: 8.25% and 14.50%) were applied to the future cash
flows of the individual hotels based on the specific circumstances of the property.
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.
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.
FIN 16
8

Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
10. Property, plant and equipment - continued
Had the property, plant and equipment been carried under the cost model, the following carrying values would have been recognised:
Plant,
Leasehold Equipment, Work
Freehold Freehold Land and Fixtures Motor In
Dollars In Thousands
Land
Buildings Buildings and Fittings
Vehicles
Progress
Total
Cost less accumulated depreciation
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
At 1 January 2017
38,659 73,415 18,898 16,395 10
41,537
188,914
At 31 December 2017
38,659 116,453 18,523
21,6!)3
7 1,598 196,893
M Social Auckland (Copthome 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 included a complete replacement of the building services, seismic strengthening, new guest rooms and public
areas. The hotel had a soft opening in early October 2017 under a new brand and a trading name i.e. M Social Auckland. The hotel
was included in the triennial external valuation exercise at 31 December 2017. Based on thi s valuation the carrying value of the land
was increased by $11.36 million. The Group determined the carrying value of the buildings to approximate fair value and therefore
did not adjust its carrying value.
Canterbury Earthquake
With the insurance settlement of the Millennium Hotel Christchurch in May 2016, the Group presently has one property left in
Christchurch City. This property is the land upon which the Copthorne Hotel Central Christchurch was sited before its demolition in
2013. The Group has commenced predesign work on a new hotel.
11. Development properties
Group
Dollars In Thousands
2017
I
2016
Development land
124,699 117,763
Residential development
55,156 52,218
179,855 169,981
Less expected to settle within one year (34, 104) (34,845)
145,751 135,136
Development land recoonised in cost of sales
32,144 33,747
Development land is carried at the lower of cost and net realisable value. No interest (2016: $nil) has been capitalised during the
year. The fair value of development land held at 31 December 2017 was determined by an independent registered valuer, DM
Koomen SPINZ, of Extensor Advisory Limited as $276.32 million (2016: $297.03 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 th e 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 I (lower);
the allowances for profit were higher I (lower); the allowances for risk were lower I (higher); the projected completion and sell down
periods were shorter I (longer); and the interest rate during the holding period was lower I (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 2017 was determined by R Laoulach AAPI of Laoulach & Company Ply Ltd,
registered valuers as $93.97 million (A$85.50 million) (2016: $78.09 million (A$75.50 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 I (higher); the consumer confidence was optimistic I (pessimistic); the unemployment rate was lower I
(higher); the residential unit demand was stronger I (weaker).
FIN 17
8

Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
11. Development properties - continued
In July 2016, Kingsgate Investment Ply Ltd (100% owned subsidiary within the Group) settled with the Owners Corporation in
respect of 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.
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. Development properties also include deposits paid on unconditional contracts on land purchases. 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 and the
development property is derecognised.
12. Investment in associates
The associate companies included in the financial statements of Millennium & Copthorne Hotels New Zealand Limited as at 31
December 2017 are:
Principal Activity
Prestons Road Limited Service provider
Principal Place of
Business
NZ
Holding % by COL
Land New Zealand
Limited
2017
33.33
Holding % by COL Land
New Zealand Limited
2016
33.33
Prestons Road Limited has no revenue or expenses, therefore the Group's share of profit of its associate was nil (2016: 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, COL 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. 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.
Investment 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 th e 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.
13. Cash and cash equivalents
Group
Dollars In Thousands 2017
I
2016
I Cash
15,707 5,467
Call deposits 18,488 10,053
34,195
15,520
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.
14. Trade and other receivables
Group
Dollars In Thousands 2017
I
2016
Trade receivables 10,370
10,024
Less provision for doubtful debts (89)
(42)
Other trade receivables and prepayments 7,448
8,711
17,729 18,693
Trade and other receivables are stated at their cost less impairment losses. The carrying amounts of the trade receivables, other
trade receivables, and prepayments 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 and provided for. 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.
FIN 18

Millennium & Copthorne Hotels New Zealand Limited[
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
15. 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 19.
Group
Interest Facility
31 December2017
31 December 2016
Dollars in Thousands Currencv Rate Total Face Value
Carrvina Amount Face Value Carrvina Amount
Revolving credit NZD 2.44% 53,000 35,000
35,000 35,000 35,000
Revolving credit NZD 2.44% 46,000 31,000 31,000
31,000 31,000
Overdraft NZD 2.44% 6,000
--4 4
TOTAL 105,000 66,000
66,000 66,004
66,004
Current
--4
4
Non-current
66,000 66,000 66,000 66,000
Terms and debt repayment schedule
The bank loans are secured over hotel properties with a carrying amount of $467.67 million (2016: $389.81 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 31July2019.
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.
16. Provisions
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 were released to other operating expenses
in the income statement.
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.
17. Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the followinq:
Grouo
Assets
Liabilities Net
Dollars In Thousands 2017
I 2016 2017
I
2016 2017
I
2016
Property, plant and equipment
--
72,132 61, 175 72,132 61, 175
Development properties
(1,103) (1,139) -
-(1,103) (1, 139)
Provisions (75)
(81) -
-
(75)
(81)
Employee benefits (1, 135) (978)
--(1,135) (978)
Trade and other payables
(411) (576)
-
-
(411)
(576)
Net investment in foreign operations
--837
782
837
782
Net tax (assets)/ liabilities
(2,724)
(2,774)
72,969 61,957
70,245 59,183
Movement in deferred tax balances during the year
Grouo
Balance
Recognised in Recognised in Balance
Dollars In Thousands
1Jan16 income
eouitv 31Dec16
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
-
176\ 782
42,881 1,767
14,535 59,183
FIN 19
8

Millennium & Copthorne Hotels New Zealand Limite~
Notes to the Consolidated Financial Statements for the year enided 31 December 2017
17. Deferred tax assets and liabilities - continued
Group
Balance
Recognised in Recognised in Balance
Dollars In Thousands 1 Jan 17 income
eauitv 31Dec17
Property, plant and equipment 61, 175 (385)
11,342 72,132
Development properties (1,139)
103 (67) (1, 103)
Provisions (81) 6
-(75)
Employee benefits (978)
(157) -(1,135)
Trade and other payables (576)
164 1 (411)
Net investment in foreign operations 782 -55 837
59,183
(269)
11,331 70,245
18. Trade and other payables
Grouo
Dollars In Thousands
2017 2016
Trade payables
1,787 1,952
Employee entitlements 3,905 3,344
Non-trade payables and accrued expenses
16,750 19,661
22,442
24,957
Trade and other payables are stated at cost.
19. 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.
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.
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 $23,000 (2016: $41,000). All other credit risk exposure re lates to New Zealand.
Market risk
(i) Interest rate ri s k
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 $0.48 million (2016:
$0.12 million increase), assuming all other variables remained constant.
FIN 20
8

Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
19. Financial instruments - continued
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.
Group
2017 2016
Effective
6 6 to 12
Effectiive
6 6 to 12
interest
Total months months interest Total months months
Dollars In Thousands Note rate
or less rate or less
Interest bearing cash
0.25% to 0.25% to
& cash equivalents *
13 2.67% 34,195 34,195
-
3.10%
15,380
15,380 -
Short term bank
2.14% to
1.90% to
deposits* 3.68%
88,890 34,649 54,241 3.60% 85,598 34,858 50,740
Secured bank loans * 15 2.44%
(66,000) (66,000) -2.52~i% (66,000)
(66,000) -
Bank overdrafts *
15 2.44% --
-
2.525%
(4) (4) -
*These assets I (liabilities) bear interest at a fixed rate
(ii) Foreign currency risk
The Group owns 100.00% (2016: 100.00%) of KIN Holdings Limited. Substantially all the operations of this subsidiary is 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.
Fair values
The fair values together with the carrying amounts shown in the statement of financial position are as follows:
Group
Carrying Carrying
amount Fair value amount
Fair value
Dollars In Thousands
Note 2017 2017 2016
2016
LOANS AND RECEIVABLES
Cash and cash equivalents
13 34,195 34,195 15,520 15,520
Short term bank deposits
88,890 88,890 85,598 85,598
Trade and other receivables
14 17,729
17,729 18,693 18,693
OTHER LIABILITIES
Secured bank loans and overdrafts
15 (66,000)
(66,000) (66,004) (66,004)
Trade and other payables
18 (22,442) (22,442) (24,957)
(24,957)
Trade payables due to related parties
23 (1,981) (1,981) (2, 137) (2 ,137)
Loans due to related parties
23 --
(5,800) (5,800)
50,391
50,391 20,913 20,913
Unrecognised (losses) I gains
----
FIN 21
e

Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
19. Financial instruments - continued
Estimation of fair values
The following summarises the major methods and assumptions used in estimating the fair values of financial instruments reflected in
the table:
(a) Cash, accounts receivable, accounts payable and related party balances. The carrying amounts for these balances approximate
th eir 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.
20. Operating leases
Leases as lessee
The minimum amount payable under non-cancellable operating lease rentals are as follows:
Group
Dollars In Thousands
2017
I
2016
Less than one year
992 956
Between one and five years
2,562
3,029
More than five years
89
447
3,643
4,432
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 2017, $2.25 million was recognised as an expense in the income statement in respect of
operating leases (2016: $2.24 million).
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.
21. Capital commitments
As at 31 December 2017, the Group had entered into contractual commitments for capital expenditure, development expenditure,
and purchase of an existing business and assets. The majority of the capital committed in 2016 is related to the refurbishment of
Copthorne Hotel Auck land Harbourcity (refer to Note 10)
Grouo
Dollars In Thousands
2017
I 2016
Capital expenditure 3,746
13,579
Purchase of business and assets
10,988
-
Development expenditure
68,621 13,589
83,355
27,168
22. Related parties
Identity of related parties
The Group has a related party relationship with its parent, subsidiaries (see Note 23), associates and with its directors and executive
officers.
Transactions with key management personnel
On 11 September 2017, a director of the Company sold 906,000 company's shares to CDL Hotels Holdings New Zealand Limited,
As a result of the sale, there was no control (2016: 0.57%) of the voting shares of the Company by directors of the company and their
immediate relatives. There were no loans (2016: $nil) advanced to directors for the year ended 31 December 2017. Key management
personnel include the Board and the Executive Team.
Total remuneration for key management personnel
Group
Dollars In Thousands
W17
I
2016
Non-executive directors
321 231
Executive director
532 518
Executive officers
756 751
1,609 1,500
Non-executive directors receive director's fees only. Executive director and executive officers re ceive 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) .
FIN 22
8

Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
23. Group entities
Control of the Group
Millennium & Copthorne Hotels New Zealand Limited is a 75.78% (2016: 75.20%) owned (economic interests from both ordinary and
preference shares) subsidiary of COL Hotels Holdings New Zealand Limited which is a wholly owned subsidiary of Millennium &
Copthorne Hotels pie 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:
Grouo
Dollars In Thousands
Nature of balance 2017
I
2016
Trade payables and receivables due to related
parties
Millennium & Copthorne Hotels pie
Recharge of expenses (654) (558)
Millennium & Copthorne International Limited Recharge of expenses
-
(31)
COL Hotels Holdings New Zealand Limited
Recharge of expenses -(7)
CDLHT (BVI) One Ltd
Rent payment (1,327) (1,541)
(1,981) (2, 137)
Loans due to related parties
COL Hotels Holdings New Zealand Limited Inter-company loan
-
(5 ,800)
-
(5,800)
No debts with related parties were written off or forgiven during the year. No interest was charged on these payables during 2017 and
2016. There are no set repayment terms. During this period costs amounting to $250,000 (2016: $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 COL 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 $1.33 million being rent payable with respect to the leasing of the property. During the year ended 31 December
2017, the Group received $1.62 million (2016: $496,000) in management, franchise, and incentive fees.
At the balance sheet date, the company has fully repaid the loan due to COL Hotels Holdings New Zealand Limited which was interest
bearing. The interest rates were fixed and ranged between 2.00% and 2.37% (2016: 2.22% to 2.47%).
During the year consulting fees of $12,000 (2016: $41,000) were paid to Bobb Management Pty Ltd of which Mr. R Bobb (Director)
is a shareholder and director.
Subsidiary companies
The principal subsidiary companies of Millennium & Copthorne Hotels New Zealand Limited included in the consolidation as at 31
December 2017 are:
Principal Group Group
Principal Activity Place of Holding%
Holding%
Business 2017
2016
Context Securities Limited Investment Holding
NZ 100.00 100.00
Copthorne Hotel & Resort Bay of Islands Joint Hotel Operations
NZ 49.00 49.00
Venture
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
NZ
Operations
QINZ Anzac Avenue Limited Hotel Owner
NZ
Hospitality Services Limited
Hotel Operations/Franchise NZ
Holder
COL Investments New Zealand Limited Holding Company
NZ 66.56 66.70
100% owned subsidiaries of COL Investments New
Zealand Limited are:
COL Land New Zealand Limited
Property Investment and NZ
Development
KIN Holdings Limited Holding Company
NZ 100.00 100.00
100% owned subsidiaries of KIN Holdings Limited
are:
Kingsgate Investments Pty Limited Residential Apartment
Australia
Developer
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.
FIN 23
e

Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
23. Group entities - continued
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.
24. Accounting estimates and judgements
Management discussed with th e 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 Group'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 land for impairment the following
assumption was made: the land is not affected by liquefaction or other geological issues which prevent the rebuild of a replacement
building upon it.
Development property
The Group is also exposed to market fluctuations in the value of development properties. The carrying value of development
properties is $179.86 million (2016: $169.98 million) while the fair value determined by independent valuers is $370.29 million (2016:
$375.12 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.
25. 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 2017, and have
not been applied in preparing these financial statements.
NZ IFRS 9 - Financial Instruments (effective after 1 January 2018). Based on assessments, this standard has no
impact on the Group's financial statements.
• NZ IFRS 15 - Revenue from Contracts with Customers (effective 1 January 2018). Based on assessments of the
impact of this standard on each class of revenue recognised within the group, this standard is not expected to have
a material impact on the Group's financial statements.
IFRS 16-Leases (effective 1 January 2019). The Group leases a number of hotels under operating leases. This
standard requires a right of use asset and a corresponding lease liability to be recognised on the balance sheet in
respect of the leased assets. The current lease expenses will be replaced with an interest expense and an
amortisation expense in the income statement. Based on preliminary assessments, this standard is expected to
have a material impact on the financial statements.
The Group intends to adopt these standards on the effective dates.
26. Subsequent event
The Group executed a sale and purchase agreement on 1 December 2017 to purchase the business, land, buildings, chattels and
other assets which comprise The Waterfront Hotel in New Plymouth. The agreement became unconditional on 11 January 2018.
The deposit of 10% was paid on 11 January 2018 and the settlement of the balance of the purchase price and full possession
occurred on 1 February 2018. The full purchase consideration is disclosed in Note 21.
FIN 24
8

Millennium & Copthorne Hotels New Zealand Limited
Notes to the Consolidated Financial Statements for the year ended 31 December 2017
27. Contingent liability
The Group has an outstanding claim from the main contractor of the Copthorne Hotel Harbourcity City project. The Group received
the notice for an arbitration but no date has been set. The total of the claim is unknown and the outcome of the arbitration is
indeterminate at present, hence no liability has been recognised in the financial statements at balance date.
FIN 25
8

---

ndeoendent Auditor's Reoort
To the shareholders of Millennium & Copthorne Hotels New Zealand Limited
Report on the consolidated financial statements
Opinion
In our opinion, the accompanying consolidated
financial statements of Millennium & Copthorne
Hotels New Zealand Limited (the company) and its
subsidiaries (the group) on pages FIN1 to FIN25:
1. present fairly in all material respects the group's
financial position as at 31 December 2017 and its
financial performance and cash flows for the year
ended on that date; and
11. comply with New Zealand Equivalents to
International Financial Reporting Standards and
International Financial Reporting Standards.
Basis for opinion
We have audit d the accompanying consolidated
financial state ents which comprise:
the consolidated statement of financial position
as at 31 D cember 2017;
the consolidated statements of comprehensive
income. c anges in equity and cash flows for the
year then nded; and
notes, incl ding a summary of significant
accounting policies and other explanatory
informatio
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.
i~ 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 and
on the consolidated financial statements as a whole. The materiality for the consolidated financial statements as a
whole was set at $3.7 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.
© 2018 KPMG. a New Zealand partnership and a m ember firm of the KPMG network of independent
member firms affiliated with KPMG Int ernational Cooperative l "KPMG International"), a Swiss entity.
FIN26

Iii 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. Valuation of M Social Redevelopment
Refer to note 1 O of the consolidated
financial statements.
The redeveloped hotel was
substantially operating by December
2017. The hotel land and buildings are
therefore part of the portfolio of
assets recognised at fair value. To
establish fair value, management
obtained an independent valuation
and prepared their own assessment
of fair value.
Management revalued the land based
on an external valuation however did
not revalue the building on the basis
that it would be premature until there
is an established pattern of trading
results and in their judgement the
carrying value of the redeveloped
building is a fair reflection of fair value
at 31 December 2017.
There is significant judgement to
determine the fair value of the
redevelopment. The valuation relies
on assumptions and trading
performance which is largely
unproven. There is also potential for
additional costs to complete as
negotiations with the third party
contractor occur with respect to final
costs and the project has not yet
received final sign off.
Our procedures focused on obtaining evidence to support the carrying
value of the M Social Hotel land and building at 31 December 2017.
-We met with the project manager and legal counsel to understand
progress of project completion and assessed the likelihood for
additional costs to complete.
-We attended a site visit of the hotel in September 2017.
-We challenged the external valuation by comparing projected post
redevelopment revenue and profits to historical trends and market
data achieved by similar quality rated hotels in the Auckland region
as well as to management's budgets and achieved results to date
since opening.
-We reviewed the methodology for the land valuation and
benchmarked against publically available comparable data.
-We 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 met with the valuer to understand and challenge key
assumptions used in the report.
-We used our own valuation specialist to assess the appropriateness
of the external valuation methodology and key assumptions including
discount rates and terminal multipliers.
-We reviewed management's own assessment of the valuation of
the hotel assets and challenged the assumptions used.
We consider the approach taken by the group on the valuation of the M
Social Hotel land and building is reasonable.
FIN27

2. Valuation of Hotel Land and Building assets
Refer to note 10 of the consolidated
financial statements.
Land and buildings of $483m
(representing 58% 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 co uld have a material
impact on the valuations.
·--
t Other information
Our procedures on the independently valued hotels involved the
following:
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.
-We assessed 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
reasonable 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, two hotels warranted a detailed impairment
review. For these hotels we challenged the key assumptions used in
determining the recoverable amount of the hotel assets.
-We also considered future forecasts, comparing these to internal
plans and external market information.
Our testing indicated that the estimates and assumptions used were
reasonable in the context of the group's property portfolio.
The Directors, on behalf of the group, are responsible for the other information included in th e entity's Annual
Report. Other information includes the Chairman's Review, Managing Director's Review, disclosures relating to
corporate governance and the financial summary included in the Annual Report. Our opinion on the consolidated
financial statements does not cover any other information and we do not express any form of assurance
conclusion thereon.
FIN28

In connection with our audit of the consolidated financial statements our responsibility is to read the other information
and, in doing so , consider whether the other information is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit or otherwise appears materially misstated. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have received the Chairman's Review and have nothing to report in regards to it. The Annual
Report is expected to be made available to us after the date of this Independent Auditor's Report and we will report
the matters identified, if any, to those charged with governance.
$
m Use of this independent auditor's report
This independent auditor's 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 independent
auditor's report, or any of the opinions we have formed.
A Responsibilities of the Directors for the consolidated financial
statements
The Directors, on behalf of the company, 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 .
x/l,.. 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.
FIN29

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:
http://www. xrb. govt. nz/sta nda rds-for-assu ranee-practitioners/a ud itors-responsi bi I ities/a udit-report-1 I
This description forms part of our independent auditor's report.
The engagement partner on the audit resulting in this independent auditor's report is Jason Doherty.
For and on behalf of
/q!1fr{
Jason Doherty
KPMG Auckland
8 February 2018
FIN30

---

Full Year Preliminary Announcements and Full Year Results
Reporting Period 12 months to 31 December 2017
Previous Reporting Period 12 months to 31 December 2016
187,267NZ$ Up8.85%
43,116NZ$ Up6.60%
43,116NZ$ Up6.60%
27.25cUp6.60%
27.25cUp6.60%
371.96cUp20.41%
Final Dividend
Record Date11 May 2018
Dividend Payment Date18 May 2018
Comments:
Results for announcement to the market
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED
Profit (loss) from ordinary activities after tax
attributable to security holders
Revenue from ordinary activities
Please refer to the attached Chairman's Review.
Net tangible assets per share (cents per share)
Interim/Final Dividend
Amount (000s)Percentage change
Amount per security Imputed amount per security
Fully imputed
Dividend of 6.0 cents per
share
Net profit (loss) attributable to security holders
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Page 1 of 3

Details of the reporting period and the previous corresponding reporting period:
This report is for the full year ended 31 December 2017 and should be read in conjunction with the most recent
annual financial report. Comparatives are in respect of the full year ended 31 December 2016.
Information prescribed by NZX:
Please refer to “Results for announcement to the market” and below.
--Statement of Financial Performance
Refer to the Annual Financial Statements.
--Statement of Financial Position
Refer to the Annual Financial Statements.
--Statement of Cash Flows
Refer to the Annual Financial Statements.
--Details of individual and total dividends or distributions and dividend or distribution payments
On 1 February 2018, the Directors declared a final dividend of 6.0 cents per ordinary and redeemable preference
share payable on 18 May 2018. The total dividend payable will be $9.49 million. The dividend will be fully imputed
and supplementary dividends will be paid to non-resident shareholders. The dividend has not been recognised in
the 31 December 2017 financial statements.
Distributions declared
9.49NZ$ 6.00c
Last distribution paid
7.91NZ$ 5.00c
--Details of Dividend Reinvestment Plans in operation
MCK does not have a Dividend Reinvestment Plan in operation.
--Net Tangible Assets per security (with comparatives for the previous corresponding period)
Ordinary shares371.96c308.91c
Redeemable Preference shares371.96c308.91c
--Details of entities over which control has been gained or lost during the period
Nil.
--Details of associates and joint ventures
% Held
Current Full
Year
% Held
Previous
Correspondin
g Full Year
Contributions
to Net Profit
Current Full
Year
Contributions
to Net Profit
Previous Full
Year
Prestons Road Limited33.33%33.33%-$ -$
Name
Final dividend for the 2017 Financial Year (ordinary
and redeemable preference shares)
Final dividend for the 2016 Financial Year (ordinary
and redeemable preference shares)
NZ cents per shareCurrent full yearPrevious full year
NZ$ (million)NZ cents per share
Page 2 of 3

Basis of preparation of financial statements:
The financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting
Practice (NZ GAAP). They comply with the 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).
Accounting Policies:
Refer to the Annual Financial Statements.
Changes in accounting policies:
There are no changes to accounting policies during the period.
Audit Report:
The Independent Auditor’s report is at pages FIN26 to FIN30 of the Annual Financial Statements.
Additional Information:
None.
DATE:8 February 2018
Page 3 of 3

---

APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumber
Date
Nature of event
BonusIf ticked,
Rights Issue
Tick as appropriate
Issue
state whether:Taxable
/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change
X
whether:
InterimYear
X
SpecialDRP Applies
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISIN
class of securities
If unknown, contact NZX
Details of securities issued pursuant to this eventIf more than one class of security is to be issued, use a separate form for each class.
Description of theISIN
class of securities
If unknown, contact NZX
Number of Securities toMinimum
Ratio, e.g
be issued following eventEntitlement
1 for 2 for
Conversion, Maturity, Call
Treatment of Fractions
Payable or Exercise Date
Tick if
provide an
pari passu
ORexplanation
Strike price per security for any issue in lieu or date
of the
Strike Price available.
ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Amount per securityPayment
(does not include any excluded income)
Excluded income per security
(only applicable to listed PIEs)
SupplementaryAmount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
Imputation Credits
issue state strike priceWithholding Tax(Give details)
Foreign
FDP Credits
Withholding Tax(Give details)
Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date.
Notice DateAllotment Date
Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:Security Code:
Cease Quoting Old Security 5pm:
EMAIL: announce@nzx.com
Notice of event affecting securities
1
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED
TROY DANDY, GROUP COMPANY SECRETARYBOARD RESOLUTION
09 353 500509 309 3244
08022018
OrdinaryNZMCKE0004S9
In dollars and cents
Cashflow
$0.060
N/A
Enter N/A if not
applicable
N/A
$0.004167$0.023333
N/A
NZD$0.010588
$6,328,725
Date Payable
18/05/18
18/05/18
N/AN/A
11/05/18

---

APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumber
Date
Nature of event
BonusIf ticked,
Rights Issue
Tick as appropriate
Issue
state whether:Taxable
/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change
X
whether:
InterimYear
X
SpecialDRP Applies
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISIN
class of securities
If unknown, contact NZX
Details of securities issued pursuant to this eventIf more than one class of security is to be issued, use a separate form for each class.
Description of theISIN
class of securities
If unknown, contact NZX
Number of Securities toMinimum
Ratio, e.g
be issued following eventEntitlement
1 for 2 for
Conversion, Maturity, Call
Treatment of Fractions
Payable or Exercise Date
Tick if
provide an
pari passu
ORexplanation
Strike price per security for any issue in lieu or date
of the
Strike Price available.
ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Amount per securityPayment
(does not include any excluded income)
Excluded income per security
(only applicable to listed PIEs)
SupplementaryAmount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
Imputation Credits
issue state strike priceWithholding Tax(Give details)
Foreign
FDP Credits
Withholding Tax(Give details)
Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date.
Notice DateAllotment Date
Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:Security Code:
Cease Quoting Old Security 5pm:
EMAIL: announce@nzx.com
Notice of event affecting securities
1
MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED
TROY DANDY, GROUP COMPANY SECRETARYBOARD RESOLUTION
09 353 500509 309 3244
08022018
Redeemable Preference SharesNZMCKE0005S6
In dollars and cents
Cashflow
$0.060
N/A
Enter N/A if not
applicable
N/A
$0.004167$0.023333
N/A
NZD$0.010588
$3,164,373
Date Payable
18/05/18
18/05/18
N/AN/A
11/05/18