MCK: 2020 Results Announcement

Results announcement
(for Equity Security issuer/Equity and Debt Security
issuer)


Results for announcement to the market
Name of issuer Millennium & Copthorne Hotels New Zealand Limited
Reporting Period 12 months to 31 December 2020
Previous Reporting Period 12 months to 31 December 2019
Currency NZD

Amount (000s) Percentage change
Revenue from continuing
operations
$171,982 -25.1%
Total Revenue $171,982 -25.1%
Net profit/(loss) from
continuing operations
$45,963 -7.4%
Total net profit/(loss) $45,963 -7.4%
Final Dividend
Amount per Quoted Equity
Security
Nil
Imputed amount per Quoted
Equity Security
N/A
Record Date
N/A
Dividend Payment Date
N/A
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$4.70 $4.52
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Refer to Chairman’s Statement and Media Release
Authority for this announcement
Name of person

authorised
to make this announcement
Takeshi Ito – Company Secretary

Contact person for this
announcement
Takeshi Ito – Company Secretary

Contact phone number +64 9 353 5005
Contact email address takeshi.ito@millenniumhotels.com
Date of release through MAP

17 February 2021

Audited financial statements accompany this announcement.

---

CHAIRMAN’S REVIEW

A few words on the year just past

As we embark on the next twelve months ahead of us, we are taking this opportunity to reflect on the year just past.
When we reported our 2019 results, we knew that the effects of COVID-19 would be severe on tourism and our
business. The fact that MCK as a group, has been able to record a positive set of results for its hotel and property
development operations during 2020 is a testament to the extraordinary efforts of its staff during what can only be
described as an abominable year.
The MCK Board sincerely thanks each and every one of our team whether they work at our hotels or corporate
offices for their diligence and can-do attitude at all times.
We would also like to thank our shareholders, suppliers and business partners once again for their continuing
support and loyalty for MCK and our hotels during the year. Many of you have provided our staff with some
wonderfully heartfelt and positive comments and we greatly appreciate this.
The devastating impact of COVID-19 on the tourism and accommodation sectors in 2020 has been well
documented and will continue during this year. With the international borders to New Zealand likely to be closed
for the majority of, if not all of, 2021 to limit the spread of COVID-19 coming in from overseas, all of us will need to
accept the major impact that continued closure will have on our business and our employees.
Most of our hotels across New Zealand were able to resume trading by the end of last year but not all. Copthorne
Hotel Rotorua, Kingsgate Hotel Greymouth and Kingsgate Hotel Te Anau were closed for the majority of 2020 and
these hotels will likely remain closed for a further period of time. During 2020, we were continuously reviewing how
we can optimize our operations at all of our properties. This may mean that some of our hotels will be partially or
entirely closed during periods where we do not have any bookings during 2021.
If we had to take any positives out of 2020, it was that the crisis made us think hard about our entire business, our
customer and marketing strategies, how we manage our people and what the overall future will look like. All of us
have learned a lot over the past year. Putting those learnings into practice to rebuild and reshape MCK’s future
will determine how successful we will be in 2021 and beyond.

Financial Performance & Financial Position

MCK reports that, for the year ended 31 December 2020, the company recorded a profit attributable to owners of
the parent of $46.0 million (2019: $49.7 million).
Our 2020 results are almost entirely due to the performance of our property development operations through our
majority-owned subsidiary CDL Investments New Zealand Limited which had a very positive year despite the
difficulties caused by COVID-19 and sales of our apartment units in Sydney, Australia. Our hotel operations did
perform better than anticipated and recorded a small profit before tax of $1.9 million (2019: $33.5 million). All of
this was reflected in our earnings per share which decreased to 29.05 cents per share (2019: 31.39 cents per
share).
Our 2020 revenue totaled $172.00 million (2019: $229.7 million) which was driven by CDL Investments and our
Australian subsidiaries. As detailed in the 2020 Interim Report, we also recognized a one-off, non-cash tax credit
of $20.06 million from the Government’s COVID-19 Business Continuity Package. Our shareholders’ funds
excluding non-controlling interests was $743.6 million (2019: $715.3 million). We saw a decrease in our total assets
of $987.9 million (2019: $1,008.2 million) with net asset backing (with land and building revaluations and before
distributions) increasing slightly to 469.70 cents per share (2019: 451.78 cents per share).

New Zealand Hotel Operations
Typically, we would report on the total revenue, RevPAR (Revenue Per Available Room) and occupancy statistics
as well as Gross Operating Performance and provide comparatives to the previous year. Given the lockdowns and
ongoing border closure during the past 12 months and the resulting impact on business, direct comparisons
between 2020 and 2019 are not helpful for shareholders as it was clear and obvious that the impact of COVID-19
on our business was severe.

In 2020, we were able to achieve an average occupancy of 39.2 % which was not unexpected given the lack of
international visitors alone. To achieve even this level of occupancy required carefully targeted marketing and
promotions and this targeting will continue into 2021. With only the New Zealand domestic market to rely on, the
average RevPAR (Revenue Per Available Room) achieved across all of MCK’s hotels was $66.17 which we
consider to be a positive achievement given the inability to hold conferences, meetings and other large gatherings
for a substantial part of the year as well as the difference in what the domestic market is prepared to pay over what
we lost from the international markets. Unsurprisingly, our hotels’ revenue in 2020 was less than half of what we
earned in 2019 and included what we received for the Auckland managed isolation hotels.

Only the hotel operations applied for and received the Government’s Wage Subsidy from March through to June
as well as the June extension and a final resurgence payment in September. In all, a total of $9.5 million was
received and all of it was paid out to our employees. We met the criteria to receive the subsidy and we have been
audited by the Ministry of Social Development on our use of the wage subsidy and they have found no issues.

Our two hotels in the Managed Isolation programme, Grand Millennium Auckland and M Social Auckland, will
continue to assist the Government with returning New Zealanders for much of 2021. Both hotels recorded positive
performance metrics given the required length of stay for those returning to New Zealand but like the rest of the
accommodation industry, we are conscious that with significant sporting events scheduled for 2022 and 2023, we
are keen to ensure that we are able to position ourselves to be able to assist with the hosting of visiting teams,
officials, media and possibly spectators should these events proceed as planned and border controls allow.

Kingsgate Hotel Greymouth will undergo major refurbishment works over 2021 which will see the demolition of part
of the existing hotel with operations being shifted to the main tower block. Kingsgate Hotel Te Anau will be open
over Summer 2021 after which time we will review whether there is sufficient demand for it to remain open over
the winter season.

Refurbishment work was completed at Copthorne Hotel & Resort Queenstown Lakefront and the hotel reopened
in Q4 2020. This has allowed us to proceed on planned room refurbishment works at Millennium Hotel Queenstown
which closed on 31 January ahead of those works commencing in the next few weeks. A similar refurbishment
project is also being scoped for Millennium Hotel Rotorua and is planned to commence in the second half of this
year.


CDL Investments New Zealand Limited (“CDLI”)

2020 has seen CDLI trade remarkably well in market conditions that we could not have foreseen. Reflecting that
positivity, CDLI has announced an operating profit after tax for the year ended 31 December 2020 of $30.1 million
(2019: $34.1 million). MCK is encouraged by CDLI’s confidence in its recent land purchases and development
plan for the next few years.
CDLI will continue to be a critical element in bolstering MCK’s profitability for the foreseeable future and MCK is
committed to providing CDLI with support as required to ensure that it is able to continue to acquire and develop
land over the medium term.
CDLI maintained its ordinary dividend to 3.5 cents per share. MCK will take CDI shares instead of cash for this
dividend to allow CDLI to optimize its cash resources to progress its development plans.

Australia Update

In 2020, a total of four apartments including the penthouse floor at the Zenith Residences were sold. The market
dynamics in Sydney have been different to New Zealand and our sales strategy is being reviewed. Leasing of the
remaining units is ongoing.
MCK is still committed to selling down its interest in the Zenith Residences but in a way that will ensure best
possible returns and margins.

Dividend Announcement

While the company has made a profit, MCK’s Board has resolved not to declare a dividend for the 2020 year and
will instead deploy the funds for refurbishment and reinvestment in its hotels. This will also allow the company to
ensure it has sufficient capital reserves to continue to trade as well as optimize its financial resources in its recovery
runway objectives.

Outlook

This summer, some of our hotels are seeing significantly less occupancy compared to this time a year ago. That
difference will be very significant to our 2021 results as the trading results in the first three months of 2020 were
similar to 2019 and was reflected in the small profit that we announced in our 2020 interim results. Our property
development activities are expected to perform positively and will again be the main driver for group profit this year.

MCK continues to have the benefit of a strong balance sheet and capital reserves which it will look to use and
manage carefully to preserve and improve its assets. During 2021, the Board will work with Management to review
our core operations to see how our business units and our operations generally can scale up when we need to and
ensure our product remains attractive and competitive to Kiwis and future international visitors alike.

As I said earlier, having survived 2020, our thoughts now turn to how best to position the business to ensure that
we are well-placed for the post-COVID recovery when it comes. Much depends on circumstances outside of our
control. International travel to New Zealand will not be returning to volumes which will allow significant overseas
tourism until COVID-19 is well under control globally.

While New Zealanders will hopefully continue to enjoy a level of freedom of movement which is better than other
parts of the world, we do not expect to see a sustained domestic travel market developing over the short to medium
term which will replace or eclipse what international visitors have brought in the past. Until such time as we can
welcome international visitors back to New Zealand, our revenue and our results will reflect this.




Colin Sim
Chairman
17 February 2021

---

MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND
LOOKS TO THE FUTURE AFTER “HORRID” 2020.

Millennium & Copthorne Hotels New Zealand Limited (NZX: MCK) today reported its preliminary results for the year ended
31 December 2020 and announced a profit after tax and attributable to owners of the parent of $46.0 million on total
revenue of $172.0 million.

“Our results are not from our hotel operations, rather they reflect the contribution from our property development
operations such as our majority-owned subsidiary CDL Investments and a significant tax credit which was recorded during
the year”, said MCK’s Chair Colin Sim. “The headline numbers mask the fact that 2020 has been a horrid year overall for
our hotel business and its impact will continue to be felt well into 2021 and beyond”, he said.

MCK’s hotel operations made a small profit before tax of $1.9 million in 2020, a decline of 94% on the previous year.

“It has been like owning a shop where over 70 percent of our customers were stopped from entering it”, said MCK’s
Managing Director Mr. B K Chiu. “Of course we are fully supportive of the health response over the course of 2020 but
the fact is that our business was devastated. Our 2021 occupancy so far, especially in key tourist destinations, is
significantly less than what we saw twelve months ago”, he said. “Nevertheless, our strong balance sheet and an agile
organization sets us up to manage the new demands for recovery and to make future investment decisions” he added.

By comparison, MCK’s property development activities in 2020 were “remarkable” and as well as CDL Investments’ strong
result, contributions also came from the sale of apartment units at the Zenith Residences in Sydney.

“Our property development activities will continue to be the critical element in bolstering MCK’s profitability for the
foreseeable future and we’re committed to providing support as required to allow them to do well”, said Mr. Sim.

MCK also signaled that it was continuing to refurbish and reinvest in its properties and announced that major refurbishment
works has been completed at Copthorne Hotel & Resort Queenstown Lakefront in Q4 last year and that works would
shortly commence at Kingsgate Hotel Greymouth and Millennium Hotel Queenstown. Other hotels such as Millennium
Hotel Rotorua would also be looked at for refurbishment during the course of 2021.

While MCK was profitable in 2020, the Board resolved not to declare a dividend for the 2020 year and will instead deploy
the funds for refurbishment and reinvestment in its hotels. This will also allow MCK to ensure it has sufficient capital
reserves to continue to trade as well as optimize its financial resources in its recovery runway objectives.
Speaking to the year ahead, Mr. Sim noted that trading conditions would continue to be difficult for MCK’s core business.

“While we don’t expect 2021 to be as bad operationally, things will remain difficult. Kiwis do have freedom of movement
within New Zealand that is the envy of many other countries and they are travelling but a return to pre-COVID revenue
levels and profitability within our hotel operations may be many Matariki away and will depend on factors that are
completely outside our control”, he said.

“MCK has shown its resilience and its ability to survive during the toughest circumstances. We are cautiously optimistic
about the future as we work towards a successful recovery.”


Summary of results:
• Group revenue $172.0 million (2019: $229.7m)
• Profit before tax and non-controlling interests $50.9 million (2019: $85.4m)
• Profit after tax and non-controlling interests $46.0 million (2019: $49.7m)
• Shareholders’ funds excluding non-controlling interests $743.6 million (2019: $715.3m)
• Total assets $987.9 million (2019: $1,008.2m)
• Earnings per share (cents per share) 29.05 cents (2019: 31.39 cents)


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

---

FIN 1

Millennium & Copthorne
Millennium & CopthorneMillennium & Copthorne
Millennium & Copthorne

Hotels New Zealand Limited
Hotels New Zealand Limited Hotels New Zealand Limited
Hotels New Zealand Limited



Consolidated Income Statement

For the year ended 31 December
For the year ended 31 December For the year ended 31 December
For the year ended 31 December 2020
20202020
2020









Group
GroupGroup
Group





Group
GroupGroup
Group





DOLLARS IN THOUSANDS
DOLLARS IN THOUSANDSDOLLARS IN THOUSANDS
DOLLARS IN THOUSANDS

Note
NoteNote
Note



2020
20202020
2020



2019
20192019
2019





Hotel revenue 64,078 126,618
Rental income 2,180 2,698
Property sales 105,724 100,353
Revenue
RevenueRevenue
Revenue



171
171171
171,
,,
,982
982982
982



229
229229
229,
,,
,669
669669
669

















Cost of sales 3,10 (79,815) (97,628)
Gross profit
Gross profitGross profit
Gross profit

92
9292
92,
,,
,167
167167
167



132
132132
132,
,,
,041
041041
041





Administration expenses 2,3 (22,368) (24,558)
Other operating expenses 2,3 (20,280) (23,246)
Operating profit
Operating profit Operating profit
Operating profit

49
4949
49,
,,
,519
519519
519



84
8484
84,
,,
,237
237237
237





Finance income 4 3,401 3,900
Finance costs 4 (2,029) (2,735)
Net finance income
Net finance incomeNet finance income
Net finance income

1,
1,1,
1,372
372372
372

1,165
1,1651,165
1,165



Profit before income tax
Profit before income taxProfit before income tax
Profit before income tax

50
5050
50,
,,
,891
891891
891



85
8585
85,
,,
,402
402402
402





Income tax expense 5 5,394 (23,134)















Profit for the year
Profit for the yearProfit for the year
Profit for the year





56
5656
56,
,,
,285
285285
285



62
6262
62,
,,
,268
268268
268





Attributable to:
Attributable to:Attributable to:
Attributable to:
Owners of the parent 45,963 49,662
Non-controlling interests 10,322 12,606
Profit for the year
Profit for the yearProfit for the year
Profit for the year



56
5656
56,
,,
,285
285285
285



62
6262
62,
,,
,268
268268
268





Basic earnings per share (cents) 8 29.05 31.39
Diluted earnings per share (cents) 8 29.05 31.39

Consolidated Statement of Comprehensive Income

For the year ended 31 December
For the year ended 31 December For the year ended 31 December
For the year ended 31 December 2020
20202020
2020







Group
GroupGroup
Group





Group
GroupGroup
Group





DOLLARS IN THOUSANDS
DOLLARS IN THOUSANDSDOLLARS IN THOUSANDS
DOLLARS IN THOUSANDS

Note
NoteNote
Note



2020
20202020
2020





2019
20192019
2019





Profit for the year
Profit for the yearProfit for the year
Profit for the year

56
5656
56,
,,
,2
22
285
8585
85



62
6262
62,
,,
,268
268268
268





Other
Other Other
Other comprehensive income
comprehensive incomecomprehensive income
comprehensive income












Items that will not be reclassified to profit or loss
Items that will not be reclassified to profit or lossItems that will not be reclassified to profit or loss
Items that will not be reclassified to profit or loss


Revaluation/impairment of property, plant and equipment 9 (11,223) 45,700
- Tax expense on revaluation/impairment of property, plant
and equipment 5, 16 3,718 (8,886)
(
((
(7
77
7,
,,
,505
505505
505)
))
)

36
3636
36,
,,
,814
814814
814


Items that are or may be reclassified to profit or loss
Items that are or may be reclassified to profit or lossItems that are or may be reclassified to profit or loss
Items that are or may be reclassified to profit or loss
Foreign exchange translation movements 4 1,620 (298)
- Tax credit on foreign exchange translation movements 4, 5 - 1
1,620
1,6201,620
1,620

(297)
(297)(297)
(297)


Total comprehensive
Total comprehensive Total comprehensive
Total comprehensive income for the year
income for the yearincome for the year
income for the year

50
5050
50,
,,
,400
400400
400

98,785
98,78598,785
98,785



Total comprehensive income for the year attributable to :
Total comprehensive income for the year attributable to :Total comprehensive income for the year attributable to :
Total comprehensive income for the year attributable to :












Owners of the parent 40,310

86,861


Non-controlling interests

10,090

11,924


Total comprehensive income for the year
Total comprehensive income for the yearTotal comprehensive income for the year
Total comprehensive income for the year




50
5050
50,
,,
,400
400400
400



98
9898
98,
,,
,785
785785
785







The accompanying notes form part of, and should be read in conjunction with, these financial statements

FIN 2

Millennium & Copthorne Hotels New Zealand Limited
Millennium & Copthorne Hotels New Zealand Limited Millennium & Copthorne Hotels New Zealand Limited Millennium & Copthorne Hotels New Zealand Limited

Consolidated Statement of Changes in Equity
For the year ended 31 December
For the year ended 31 December For the year ended 31 December For the year ended 31 December 2020
202020202020


Group
GroupGroupGroup

Attributable to equity holders of the Group
Attributable to equity holders of the GroupAttributable to equity holders of the GroupAttributable to equity holders of the Group

DOLLARS IN THOUSANDS
DOLLARS IN THOUSANDSDOLLARS IN THOUSANDSDOLLARS IN THOUSANDS



Share
Share Share Share
Capital
CapitalCapitalCapital

Revaluation
Revaluation Revaluation Revaluation
Reserve
ReserveReserveReserve

Exchange
Exchange Exchange Exchange
Reserve
ReserveReserveReserve

Retained
Retained Retained Retained
Earnings
EarningsEarningsEarnings

Treasury
Treasury Treasury Treasury
Stock
StockStockStock



Total
TotalTotalTotal

Non
NonNonNon-
---
controlling
controllingcontrollingcontrolling

Interests
InterestsInterestsInterests

Total
Total Total Total
Equity
EquityEquityEquity




















Balance at 1 January 2020

383,266
274,495
(3,319)
60,837
(26) 715,253
91,747 807,000










Movement in exchange translation reserve, net of tax
-
-
1,620
-
-
1,620
-
1,620
Revaluation/impairment of property, plant & equipment, net of tax
-
(7,273)
-
-
-
(7,273)
(232)
(7,505)









Total other comprehensive income/(loss)
-
(7,273)
1,620
-
-
(5,653)
(232)
(5,885)
Profit for the year

-
-
-
45,963
-
45,963
10,322
56,285
Total comprehensive income for the year

-
(7,273)
1,620
45,963
-
40,310
10,090
50,400
Transactions with owners, recorded directly in equity:









Dividends paid to:









Owners of the parent

-
-
-
(11,866)
- (11,866)
- (11,866)
Non-controlling interests

-
-
-
-
-
-
(3,815)
(3,815)
Supplementary dividends

-
-
-
(256)
-
(256)
-
(256)
Foreign investment tax credits

-
-
-
256
-
256
-
256
Movement in non-controlling interests without a change in control

-
-
-
(50)
-
(50)
1,330
1,280










Balance at
Balance at Balance at Balance at 31 December
31 December 31 December 31 December 2020
202020202020


383,266
383,266383,266383,266

2
2226
6667
777,
,,,222
222222222

(
(((1
111,
,,,699
699699699)
)))

94
949494,
,,,884
884884884

(26)
(26)(26)(26)
7
77743
434343,
,,,647
647647647

9
9999
999,
,,,352
352352352
8
88842
424242,
,,,999
999999999

The accompanying notes form part of, and should be read in conjunction with, these financial statements

FIN 3

Millennium & Copthorne Hotels New Zealand Limited
Millennium & Copthorne Hotels New Zealand Limited Millennium & Copthorne Hotels New Zealand Limited Millennium & Copthorne Hotels New Zealand Limited

Consolidated Statement of Changes in Equity
For the year ended 31 December 201
For the year ended 31 December 201For the year ended 31 December 201For the year ended 31 December 2019
999


Group
GroupGroupGroup

Attributable to equity holders of the Group
Attributable to equity holders of the GroupAttributable to equity holders of the GroupAttributable to equity holders of the Group

DOLLARS IN THOUSANDS
DOLLARS IN THOUSANDSDOLLARS IN THOUSANDSDOLLARS IN THOUSANDS



Share
Share Share Share
Capital
CapitalCapitalCapital

Revaluation
Revaluation Revaluation Revaluation
Reserve
ReserveReserveReserve

Exchange
Exchange Exchange Exchange
Reserve
ReserveReserveReserve

Retained
Retained Retained Retained
Earnings
EarningsEarningsEarnings

Treasury
Treasury Treasury Treasury
Stock
StockStockStock



Total
TotalTotalTotal

Non
NonNonNon-
---
controlling
controlling controlling controlling
Interests
InterestsInterestsInterests

Total
Total Total Total
Equity
EquityEquityEquity




















Balance at 1 January 2019

383,266
236,999
(3,022)
23,042
(26) 640,259
83,614 723,873










Movement in exchange translation reserve, net of tax
-
-
(297)
-
-
(297)
-
(297)
Revaluation/impairment of property, plant & equipment, net of tax
-
37,496
-
-
-
37,496
(682)
36,814









Total other comprehensive income/(loss)
-
37,496
(297)
-
-
37,199
(682)
36,517
Profit for the year

-
-
-
49,662
-
49,662
12,606
62,268
Total comprehensive income for the year

-
37,496
(297)
49,662
-
86,861
11,924
98,785
Transactions with owners, recorded directly in equity:









Dividends paid to:









Owners of the parent

-
-
-
(11,866)
- (11,866)
- (11,866)
Non-controlling interests

-
-
-
-
-
-
(4,302)
(4,302)
Supplementary dividends

-
-
-
(311)
-
(311)
-
(311)
Foreign investment tax credits

-
-
-
311
-
311
-
311
Movement in non-controlling interests without a change in control

-
-
-
(1)
-
(1)
511
510










Balance at
Balance at Balance at Balance at 31 December 2019
31 December 201931 December 201931 December 2019


383,266
383,266383,266383,266

274
274274274,
,,,495
495495495

(3,319)
(3,319)(3,319)(3,319)

60
606060,
,,,837
837837837

(26)
(26)(26)(26)
715
715715715,
,,,253
253253253

91
919191,
,,,747
747747747
807
807807807,
,,,000
000000000

The accompanying notes form part of, and should be read in conjunction with, these financial statements

FIN 4

Millennium &
Millennium &Millennium &
Millennium &

Copthorne
CopthorneCopthorne
Copthorne

Hotels New Zealand Limited
Hotels New Zealand Limited Hotels New Zealand Limited
Hotels New Zealand Limited



Consolidated Statement of Financial Position

As at 31 December
As at 31 December As at 31 December
As at 31 December 2020
20202020
2020









Group
GroupGroup
Group



Group
GroupGroup
Group





DOLLARS IN THOUSANDS
DOLLARS IN THOUSANDSDOLLARS IN THOUSANDS
DOLLARS IN THOUSANDS





Note
NoteNote
Note







2020
20202020
2020





201
201201
2019
99
9







SHAREHOLDERS’ EQUITY
SHAREHOLDERS’ EQUITYSHAREHOLDERS’ EQUITY
SHAREHOLDERS’ EQUITY
Issued capital 7 383,266 383,266
Reserves 360,407 332,013
Treasury stock 7 (26) (26)
Equity attributable to owners of the parent
Equity attributable to owners of the parentEquity attributable to owners of the parent
Equity attributable to owners of the parent

7
77
743
4343
43,
,,
,647
647647
647

715
715715
715,
,,
,253
253253
253


Non-controlling interests 99,352 91,747
Total equity
Total equity Total equity
Total equity



8
88
842
4242
42,
,,
,999
999999
999



807
807807
807,
,,
,000
000000
000







Represented by:
Represented by:Represented by:
Represented by:


NON CURRENT ASSETS
NON CURRENT ASSETSNON CURRENT ASSETS
NON CURRENT ASSETS


Property, plant and equipment 9 566,090 591,749
Development properties 10 156,880 176,579
Investment properties 11 3,325 -
Investment in associates 12 2 2
Total non
Total nonTotal non
Total non-
--
-current assets
current assetscurrent assets
current assets

7
77
726
2626
26,
,,
,297
297297
297



768
768768
768,
,,
,330
330330
330

















CURRENT ASSETS
CURRENT ASSETSCURRENT ASSETS
CURRENT ASSETS


Cash and cash equivalents 13 20,766 43,182
Short term bank deposits 177,274 122,049
Trade and other receivables 14 12,170 21,138
Inventories 1,352 1,615
Assets Classified as Held for Sale 25 7,708 -
Development properties 10 42,342 51,887
Total current assets
Total current assetsTotal current assets
Total current assets



2
22
261
6161
61,
,,
,612
612612
612



239
239239
239,
,,
,871
871871
871







Total assets
Total assetsTotal assets
Total assets



987
987987
987,
,,
,909
909909
909



1,008
1,0081,008
1,008,
,,
,201
201201
201





NON CURRENT LIABILITIES
NON CURRENT LIABILITIESNON CURRENT LIABILITIES
NON CURRENT LIABILITIES


Interest-bearing loans and borrowings 15 38,000 67,000
Lease liability 23 14,005 14,370
Provision for deferred taxation 16 60,077 84,968
Total non
Total nonTotal non
Total non-
--
-current liabilities
current liabilitiescurrent liabilities
current liabilities

1
11
11
11
12
22
2,
,,
,08
0808
082
22
2



1
11
166
6666
66,
,,
,338
338338
338

















CURRENT LIABILITIES
CURRENT LIABILITIESCURRENT LIABILITIES
CURRENT LIABILITIES
Trade and other payables 17 24,068 24,562
Trade payables due to related parties 21 4,490 4,054
Lease liability 23 478 429
Income tax payable 3,792 5,818
Total current liabilities
Total current liabilitiesTotal current liabilities
Total current liabilities



3
33
32
22
2,
,,
,82
8282
828
88
8



34
3434
34,
,,
,863
863863
863

















Total liabilities
Total liabilitiesTotal liabilities
Total liabilities



14
1414
144
44
4,
,,
,910
910910
910



201
201201
201,
,,
,201
201201
201

















NET ASSETS
NET ASSETSNET ASSETS
NET ASSETS



8
88
842
4242
42,
,,
,999
999999
999



807
807807
807,
,,
,000
000000
000



















For and on behalf of the Board
For and on behalf of the BoardFor and on behalf of the Board
For and on behalf of the Board


















R BOBB
R BOBBR BOBB
R BOBB,
, ,
, DIRECTOR
DIRECTORDIRECTOR
DIRECTOR,
, ,
, 1
11
17
77
7

February
February February
February 2021
20212021
2021

BK CHIU, MANAGING
BK CHIU, MANAGINGBK CHIU, MANAGING
BK CHIU, MANAGING

DIRECTOR
DIRECTORDIRECTOR
DIRECTOR,
, ,
, 1
11
17
77
7

February
February February
February 2021
20212021
2021







The accompanying notes form part of, and should be read in conjunction with, these financial statements

FIN 5
Millennium & Copthorne
Millennium & CopthorneMillennium & Copthorne
Millennium & Copthorne

Hotels New Zealand Limited
Hotels New Zealand Limited Hotels New Zealand Limited
Hotels New Zealand Limited



Consolidated Statement of Cash Flows

For the year ended 31 December
For the year ended 31 December For the year ended 31 December
For the year ended 31 December 2020
20202020
2020












Group
GroupGroup
Group





Group
GroupGroup
Group





DOLLARS IN THOUSANDS
DOLLARS IN THOUSANDSDOLLARS IN THOUSANDS
DOLLARS IN THOUSANDS

Note
NoteNote
Note







2020
20202020
2020








2019
20192019
2019





CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from:
Cash was provided from:Cash was provided from:
Cash was provided from:


Receipts from customers 180,659 228,282
Interest received 3,604 4,002
Dividends received 4 1 2

Cash was applied to:
Cash was applied to:Cash was applied to:
Cash was applied to:
Payments to suppliers and employees
(77,908) (134,003)
Purchases of development land 1 (1,260) (9,138)
Interest paid (1,173) (1,569)
Income tax paid (17,826) (24,040)

Net cash inflow from operating activities
Net cash inflow from operating activitiesNet cash inflow from operating activities
Net cash inflow from operating activities





86
8686
86,
,,
,09
0909
097
77
7



63,536
63,53663,536
63,536






CASH FLOWS FROM INVESTING ACTIVITIES
Cash was (applied to)/provided from:
Cash was (applied to)/provided from:Cash was (applied to)/provided from:
Cash was (applied to)/provided from:


Proceeds from the sale of property, plant and equipment 108 113
Purchases of property, plant and equipment 9 (5,956) (6,917)
Purchases of investment property (3,325) -
Investments in short term bank deposits (55,225) (13,760)

Net cash outflow from investing activities
Net cash outflow from investing activitiesNet cash outflow from investing activities
Net cash outflow from investing activities



(
((
(6
66
64
44
4,
,,
,39
3939
398
88
8)
))
)



(
((
(20,564
20,56420,564
20,564)
))
)


































CASH FLOWS FROM FINANCING ACTIVITIES
Cash was (applied to)/provided from:
Cash was (applied to)/provided from:Cash was (applied to)/provided from:
Cash was (applied to)/provided from:


Drawdown/(Repayment) of borrowings 15 (29,000) 3,000
Principal repayment of lease liability 23(c) (1,430) (1,385)
Dividends paid to shareholders of Millennium & Copthorne
Hotels New Zealand Ltd 7 (11,866) (11,866)
Dividends paid to non-controlling shareholders (3,815) (4,302)

Net cash
Net cash Net cash
Net cash inflow/(outflow)
inflow/(outflow)inflow/(outflow)
inflow/(outflow)

from financing activities
from financing activitiesfrom financing activities
from financing activities





(
((
(46
4646
46,
,,
,111
111111
111)
))
)



(14,553)
(14,553)(14,553)
(14,553)



















Net
Net Net
Net increase/(decrease)
increase/(decrease)increase/(decrease)
increase/(decrease)

in cash and cash equivalents
in cash and cash equivalentsin cash and cash equivalents
in cash and cash equivalents

(
((
(2
22
24
44
4,
,,
,41
4141
412
22
2)
))
)

28
2828
28,
,,
,419
419419
419


Add opening cash and cash equivalents 43,182 14,437
Exchange rate adjustment 1,996 326

Closing cash and cash equivalents
Closing cash and cash equivalents Closing cash and cash equivalents
Closing cash and cash equivalents 13



2
22
20
00
0,
,,
,766
766766
766



43,182
43,18243,182
43,182










































The accompanying notes form part of, and should be read in conjunction with, these financial statements

FIN 6
Millennium & Copthorne
Millennium & CopthorneMillennium & Copthorne
Millennium & Copthorne

Hotels New Zealand Limited
Hotels New Zealand Limited Hotels New Zealand Limited
Hotels New Zealand Limited



Consolidated Statement of Cash Flows – continued

For the year ended 31 December
For the year ended 31 December For the year ended 31 December
For the year ended 31 December 2020
20202020
2020












Group
GroupGroup
Group





Group
GroupGroup
Group





DOLLARS IN THOUSANDS
DOLLARS IN THOUSANDSDOLLARS IN THOUSANDS
DOLLARS IN THOUSANDS

Note
NoteNote
Note



2020
20202020
2020





2019
20192019
2019





RECONCILIATION OF NET PROFIT FOR THE YEAR TO CASH FLOWS
FROM OPERATING ACTIVITIES


Profit for the year
Profit for the yearProfit for the year
Profit for the year





56,285 62,268
Adjusted for non
Adjusted for nonAdjusted for non
Adjusted for non-
--
-cash items:
cash items:cash items:
cash items:


Gain on sale of property, plant and equipment 2 (19) (26)
Depreciation of property, plant and equipment 9 9,267 8,420
Impairment loss 1,747 -
Depreciation of Right-Of-Use assets 9 1,647 1,300
Unrealised foreign exchange (gain)/losses (74) 74
Income tax expense 5 (5,394) 23,134


63
6363
63,
,,
,4
44
459
5959
59



95
9595
95,
,,
,170
170170
170





Adjustments for movements in working capital:
Adjustments for movements in working capital:Adjustments for movements in working capital:
Adjustments for movements in working capital:



(Increase)/Decrease in trade & other receivables 8,970 (1,271)
(Increase)/Decrease in inventories 263 69
(Increase)/Decrease in development properties 30,299 (8,529)
Increase/(Decrease) in trade & other payables 1,669 2,016
Increase/(Decrease) in related parties 436 1,690

Cash generated from operations
Cash generated from operationsCash generated from operations
Cash generated from operations





105
105105
105,
,,
,09
0909
096
66
6



89
8989
89,
,,
,145
145145
145





Interest paid (1,173) (1,569)
Income tax paid (17,826) (24,040)

Cash inflows from operating activities
Cash inflows from operating activities Cash inflows from operating activities
Cash inflows from operating activities

86
8686
86,
,,
,09
0909
097
77
7



63
6363
63,
,,
,536
536536
536








Reconciliation of movement of liabilities to cash flows arising from financing
Reconciliation of movement of liabilities to cash flows arising from financing Reconciliation of movement of liabilities to cash flows arising from financing
Reconciliation of movement of liabilities to cash flows arising from financing
activities
activitiesactivities
activities





As at 01 January 67,000 64,000

Proceeds from borrowings

-

3,000

Repayment of term loans (29,000) -
Financing cash flows
Financing cash flowsFinancing cash flows
Financing cash flows

(29,000)
(29,000)(29,000)
(29,000)

3,000
3,0003,000
3,000



As at 31 December 38
3838
38,000
,000,000
,000



67,000
67,00067,000
67,000



















The accompanying notes form part of, and should be read in conjunction with, these financial statements

FIN 7



Millennium & Copthorne Hotels New Zealand Limited
Millennium & Copthorne Hotels New Zealand Limited Millennium & Copthorne Hotels New Zealand Limited
Millennium & Copthorne Hotels New Zealand Limited


Notes to the Consolidated Financial Statements for the year ended 31 December 2020

Significant accounting policies
Significant accounting policiesSignificant accounting policies
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 2019 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; development and sale of residential land
in New Zealand; and development and sale of residential units in Australia.

(a) Statement of compliance
(a) Statement of compliance(a) Statement of compliance
(a) Statement of compliance



The financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice
(NZ GAAP). They comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRSs) as
appropriate for Tier 1 profit-oriented entities. The financial statements also comply with International Financial Reporting
Standards (IFRSs).

The financial statements were authorised for issuance on 17 February 2021.

(b) Basis of preparation
(b) Basis of preparation(b) Basis of preparation
(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 9).

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 22
– Accounting Estimates and Judgements.

(c)
(c) (c)
(c) Change in accounting policies
Change in accounting policiesChange in accounting policies
Change in accounting policies

and new standards adopted in the year
and new standards adopted in the yearand new standards adopted in the year
and new standards adopted in the year



The accounting policies have been applied consistently to all periods presented in these consolidation financial statements,
except as mentioned below:

NZ IAS 1 Amendment. The Group has early adopted Amendments to NZ IAS 1 Classification of liabilities as current or
non-current in the current year to ensure the classification of debt continues to reflect the maturity of the facility
agreement.

The accounting policies are now included within the relevant notes to the consolidated financial statements.




(
((
(d
dd
d) Foreign currency
) Foreign currency) Foreign currency
) Foreign currency



Foreign currency transactions
Foreign currency transactionsForeign currency transactions
Foreign currency transactions


Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the balance date are translated to New Zealand dollars at the
foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income
statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign
currencies that are stated at fair value are translated to New Zealand dollars at foreign exchange rates ruling at the dates
the fair value was determined.



(
((
(e
ee
e)
) )
) Insurance proceeds
Insurance proceedsInsurance proceeds
Insurance proceeds



Compensation from third parties for items of property, plant and equipment that were damaged, impaired, lost or given up
is included in the profit or loss when the compensation becomes virtually certain. Any subsequent purchase or construction
of replacement assets are separate economic events and are accounted for separately.

(
((
(f
ff
f) Revenue
) Revenue) Revenue
) Revenue





Revenue from sale of goods and services in the ordinary course of business is recognised when the Group satisfies a
performance obligation by transferring control of a promised good or service to the customer. The amount of revenue
recognised is the amount of the transaction price allocated to the satisfied performance obligation.

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 when the customer obtains control of the property and is
able to direct and obtain the benefits from the property.

FIN 8



M
MM
Mi
ii
illennium & Copthorne
llennium & Copthornellennium & Copthorne
llennium & Copthorne

Hotels New Zealand Limited
Hotels New Zealand Limited Hotels New Zealand Limited
Hotels New Zealand Limited


Notes to the Consolidated Financial Statements for the year ended 31 December 2020

Index

1.


Segment reporting







2.

Administration and other operating expenses






3.

Personnel expenses






4.

Net finance income






5.

Income tax expense






6.

Imputation credits






7.

Capital and reserves






8.

Earnings per share






9.

Property, plant and equipment






10.

Development properties






11.

Investment properties






12.

Investment in associates






13.

Cash and cash equivalents






14.

Trade and other receivables






15.

Interest-bearing loans and borrowings






16.

Deferred tax assets and liabilities






17.

Trade and other payables






18.

Financial instruments






19.

Capital commitments






20.

Related parties






21.

Group entities






22.

Accounting estimates and judgements






23.

Lease




24.

New standard and interpretations not yet adopted



25.


Investment properties

FIN 9

Millennium & Copthorne
Millennium & CopthorneMillennium & Copthorne
Millennium & Copthorne

Hotels New Zealand Limited
Hotels New Zealand Limited Hotels New Zealand Limited
Hotels New Zealand Limited


Notes to the Consolidated Financial Statements for the year ended 31 December 2020



1.
1.1.
1. Segment reporting
Segment reportingSegment reporting
Segment reporting





Operating
OperatingOperating
Operating

segments
segmentssegments
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 residential land sections.
• 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
Operating segmentsOperating segments
Operating segments





Hotel Operations
Hotel OperationsHotel Operations
Hotel Operations


Residential Land
Residential Land Residential Land
Residential Land
Development
DevelopmentDevelopment
Development


Residential
Residential Residential
Residential Property
Property Property
Property
Development
DevelopmentDevelopment
Development

Group
GroupGroup
Group


Dollars In Thousands 2020
20202020
2020

2019
20192019
2019

2020
20202020
2020

2019
20192019
2019

2020
20202020
2020

2019
20192019
2019

2020
20202020
2020

2019
20192019
2019


External revenue 64,067 126,618 88,779 91,794 19,136 11,257 171,982

229,669

Earnings before interest, depreciation
& amortisation 12,836 43,404 40,790 46,416 6,807 4,137 60,433 93,957
xxxx
Finance income 1.995 2,520 1,038 1,029 368 351 3,401

3,900

Finance expense (2,025) (2,728) (2) (4) (2) (3) (2,029)

(2,735)

Depreciation and amortisation (9,257) (8,410) (1) (1) (9) (9) (9,267)

(8,420)

Depreciation of Right-Of-Use Assets (1,624) (1,277) (14) (14) (9) (9) (1,647)

(1,300)

Profit before income tax 1,925 33,509 41,811 47,426 7,155 4,467 50,891

85,402

Income tax (expense)/credit 19,252 (8,507) (11,712) (13,286) (2,146) (1,341) 5,394

(23,134)

Profit after income tax 21,177 25,002 30,099 34,140 5,009 3,126 56,285

62,268




Segment assets 650,125 700,509 260,080 240,697 74,377 66,993 984,582

1,008,199

Investment properties - - 3,325 - - - 3,325

-

Investment in associates - - 2 2 - - 2

2

Total assets 650,125 700,509 263,407 240,699 74,377 66,993 987,909

1,008,201



Segment liabilities (76,766) (108,131) (2,397) (1,046) (1,878) (1,238) (81,041)

(110,415)

Tax liabilities (59,447) (86,215) (3,880) (4,143) (542) (428) (63,869)

(90,786)

Total liabilities (136,213) (194,346) (6,277) (5,189) (2,420) (1,666) (144,910)

(201,201)



Material additions to segment
assets:



Property, plant and equipment
expenditure
5,922 6,896 6 6 28 15 5,956

6,917

Residential land development
expenditure
- - 20,788 44,677 - - 20,788

44,677

Purchase of land for residential land
development
- - 1,260 9,138 - - 1,260

9,138

FIN 10
Millennium & Copthorne Hotels New Zealand Limited
Millennium & Copthorne Hotels New Zealand Limited Millennium & Copthorne Hotels New Zealand Limited
Millennium & Copthorne Hotels New Zealand Limited


Notes to the Consolidated Financial Statements for the year ended 31 December 2020

1.
1.1.
1.

Segment reporting
Segment reporting Segment reporting
Segment reporting -
--
-

continued


Geographical
Geographical Geographical
Geographical areas
areasareas
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
New ZealandNew Zealand
New Zealand

Australia
AustraliaAustralia
Australia

Group
GroupGroup
Group


Dollars In Thousands 2020
20202020
2020

2019
20192019
2019

2020
20202020
2020

2019
20192019
2019

2020
20202020
2020

2019
20192019
2019


External revenue 152,846 218,412 19,136 11,257 171,982 229,669
Earnings before interest, depreciation &
amortisation 53,651 89,842 6,782 4,115 60,433 93,957
Finance income 3,033 3,549 368 351 3,401 3,900
Finance expense (2,027) (2,732) (2) (3) (2,029) (2,735)
Depreciation and amortisation (9,258) (8,411) (9) (9) (9,267) (8,420)
Depreciation of Right-Of-Use Assets (1,638) (1,291) (9) (9) (1,647) (1,300)
Profit before income tax 43,761 80,957 7,130 4,445 50,891 85,402
Income tax (expense)/credit 7,533 (21,801) (2,139) (1,333) 5,394 (23,134)
Profit after income tax 51,294 59,156 4,991 3,112 56,285 62,268

Segment assets 910,673 941,656 73,909 66,543 984,582 1,008,199
Investment properties 3,325 - - - 3,325 -
Investment in associates 2 2 - - 2 2
Total assets 914,000 941,658 73,909 66,543 987,909 1,008,201

Segment liabilities (79,205) (109,218) (1,836) (1,197) (81,041) (110,415)
Tax liabilities (63,329) (90,362) (540) (424) (63,869) (90,786)
Total liabilities (142,534) (199,580) (2,376) (1,621) (144,910) (201,201)

Material additions to segment assets:



Property, plant and equipment expenditure 5,928 6,902 28 15 5,956 6,917
Residential land development expenditure 20,788 44,677 - - 20,788 44,677
Purchase of land for residential land
development
1,260 9,138 - - 1,260 9,138


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. Operating segments are the primary basis of
segment reporting. The Group has determined that its chief operating decision maker is the Board of Directors on the basis that it
is this group which determines the allocation of resources to segments and assesses their performance.

Inter-segment pricing is determined on an arm’s length basis. Segment results include items directly attributable to a segment as
well as those that can be allocated on a reasonable basis.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for
more than one period.

FIN 11
Millennium & Copthorne Hotels New Zealand Limited
Millennium & Copthorne Hotels New Zealand Limited Millennium & Copthorne Hotels New Zealand Limited
Millennium & Copthorne Hotels New Zealand Limited


Notes to the Consolidated Financial Statements for the year ended 31 December 2020






2
22
2.
..
.

Administration and other operating expenses
Administration and other operating expensesAdministration and other operating expenses
Administration and other operating expenses





Group
GroupGroup
Group


Dollars In Thousands Note
NoteNote
Note 2020
20202020
2020

2019
20192019
2019


Depreciation 9 10,914 9,720
Auditors remuneration
Audit fees 319 327
Tax compliance and tax advisory fees 34 52
Directors fees 20 296 322
Rental expenses 163 182
Provision for bad debts
Debts written off 81 29
Movement in doubtful debt provision (27) 44
Net gain on disposal of property, plant and equipment 19 26
Impairment loss on property, plant and equipment 9 1,747 -
Other 29,102 37,102
4
44
42
22
2,
,,
,648
648648
648

47
4747
47,
,,
,804
804804
804





3
33
3.
..
.

Personnel expenses
Personnel expensesPersonnel expenses
Personnel expenses




Group
GroupGroup
Group


Dollars In Thousands 2020
20202020
2020

2019
20192019
2019


Wages and salaries 32,451 44,531
Wage subsidies (7,377) -
Employee related expenses and benefits 1,005 1,337
Contributions to defined contribution plans 587 803
Increase/(decrease) in liability for long-service leave (89) 99
26
2626
26,
,,
,577
577577
577

46,770
46,77046,770
46,770



Wage subsidy scheme
Wage subsidy schemeWage subsidy scheme
Wage subsidy scheme


The Group applied for the Government Wage Subsidy Scheme on 27 March 2020 and received a net sum of $6.70 million. The
Group’s owned and managed hotels were eligible to apply as the hotels suffered a decline of 41.9% in total revenues in March 2020
against the comparative period in 2019. This amount covered a 12-week period ended 21 June 2020. The Group subsequently
applied for the Wage Subsidy Extension and received a total of $2.34 million, which covered the period from 22 June to 16 August
2020. The Group’s owned and managed hotels were eligible to apply for the Government’s Wage Subsidy Extension Scheme as
the hotels suffered a decline of 58.7% in total revenues in the 30 day period from 24 May to 23 June 2020 against the comparative
period in 2019. Finally, the Group applied and received $0.47 million for the two week Resurgence Wage Subsidy as the Group
suffered a 49.6% decline in revenues in the period from 12 August to 25 August 2020 against the comparative period in 2019.

The total wage subsidy received was $9.51 million of which $7.38 million was received by the Group’s owned hotels and $2.13
million was received by the Group’s managed hotels.

The wage subsidies were applied as a deduction against payroll costs in personnel expenses in accordance with NZ IAS 20. The
personnel expenses are included in cost of sales, administration expenses and other expenses in the income statement
.

Employee long
Employee longEmployee long
Employee long-
--
-term service benefits
term service benefitsterm service benefits
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.

4
44
4.
..
.

Net finance income
Net finance incomeNet finance income
Net finance income





Recognised in the income st
Recognised in the income stRecognised in the income st
Recognised in the income statement
atementatement
atement
Group
GroupGroup
Group


Dollars In Thousands 2020
20202020
2020

2019
20192019
2019


Interest income 3,311 3,886
Dividend income 1 2
Foreign exchange gain 89 12
Finance income 3,401 3,900

Interest expense (2,014) (2,649)
Foreign exchange loss (15) (86)
Finance costs (2,029) (2,735)
Net finance income recognised in the income statement
Net finance income recognised in the income statementNet finance income recognised in the income statement
Net finance income recognised in the income statement

1
11
1,
,,
,372
372372
372

1,165
1,1651,165
1,165

FIN 12
Millennium & Copthorne Hotels New Zealand Limited
Millennium & Copthorne Hotels New Zealand Limited Millennium & Copthorne Hotels New Zealand Limited
Millennium & Copthorne Hotels New Zealand Limited


Notes to the Consolidated Financial Statements for the year ended 31 December 2020



4
44
4.
..
.

Net finance income
Net finance incomeNet finance income
Net finance income

- continued





Finance income and
Finance income andFinance income and
Finance income and

expenses
expensesexpenses
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, interest costs on lease
liability and foreign exchange losses that are recognised in the income statement.



Recognised in other comprehensive income
Recognised in other comprehensive incomeRecognised in other comprehensive income
Recognised in other comprehensive income

Group
GroupGroup
Group


Dollars In Thousands 2020
20202020
2020

2019
20192019
2019


Foreign exchange translation movements 1,620 (297)
Net finance income recognised in other comprehensive income
Net finance income recognised in other comprehensive incomeNet finance income recognised in other comprehensive income
Net finance income recognised in other comprehensive income

1,620
1,6201,620
1,620

(297)
(297)(297)
(297)



Exchange translation of f
Exchange translation of fExchange translation of f
Exchange translation of financial statements of foreign operations
inancial statements of foreign operationsinancial statements of foreign operations
inancial 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.



5
55
5.
..
.

Income tax expense
Income tax expenseIncome tax expense
Income tax expense





Recognised in the income statement
Recognised in the income statementRecognised in the income statement
Recognised in the income statement




Group
GroupGroup
Group


Dollars In Thousands



2020
20202020
2020

2019
20192019
2019


Current tax
Current tax Current tax
Current tax expense
expenseexpense
expense
Current year 15,485 23,457
Adjustments for prior years 294 (562)
15,779 22,895

Deferred tax expense
Deferred tax expenseDeferred tax expense
Deferred tax expense



Origination and reversal of temporary difference (1,116) 232
Changes in treatment of building depreciation (20,058) -
Adjustments for prior years 1 7
(21,173) 239
Total income tax expense in the income statement
Total income tax expense in the income statementTotal income tax expense in the income statement
Total income tax expense in the income statement

(5,394)
(5,394)(5,394)
(5,394)

23
2323
23,
,,
,134
134134
134








Reconciliation of tax
Reconciliation of tax Reconciliation of tax
Reconciliation of tax expense
expenseexpense
expense


Group
GroupGroup
Group


Dollars In Thousands 2020
20202020
2020

2019
20192019
2019


Profit before income tax 50,891 85,402
Income tax at the company tax rate of 28% (2019: 28%) 14,249 23,913
Adjusted for:
Non-deductible expenses - 1
Tax rate difference (if different from 28% above) 143 88
Tax exempt income (23) (313)
Changes in treatment of building depreciation (20,058) -
Under/(Over) - provided in prior years 295 (555)
Total income tax expense
Total income tax expenseTotal income tax expense
Total income tax expense


(5,394)
(5,394)(5,394)
(5,394)

23
2323
23,
,,
,134
134134
134
Effective tax rate (11)% 27%

FIN 13
Millennium & Copthorne Hotels New Zealand Limited
Millennium & Copthorne Hotels New Zealand Limited Millennium & Copthorne Hotels New Zealand Limited
Millennium & Copthorne Hotels New Zealand Limited


Notes to the Consolidated Financial Statements for the year ended 31 December 2020

5
55
5.
..
.

Income tax expense
Income tax expense Income tax expense
Income tax expense - continued





Deferred tax expense/(credit) recognised in other comprehensive income
Deferred tax expense/(credit) recognised in other comprehensive incomeDeferred tax expense/(credit) recognised in other comprehensive income
Deferred tax expense/(credit) recognised in other comprehensive income


Group
GroupGroup
Group


Dollars In Thousands 2020
20202020
2020

2019
20192019
2019


Relating to revaluation of property, plant and equipment (3,718) 8,886
Relating to foreign currency translation of foreign subsidiaries - (1)
(3,718) 8,885



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.

Included in the Government’s Business Continuity Package (COVID-19 Response (Taxation and Social Assistance Urgent
Measure) Act 2020) was the reintroduction of tax depreciation on commercial and industrial buildings. With effect from 1 January
2020, the Group is now able to depreciate, at 2.0% diminishing value method, the core components of the hotel buildings
previously depreciated at 0.0% for tax purposes. As a result, the deferred tax liability is reduced by $20.06 million with a deferred
tax credit of the same amount booked into the profit and loss.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the
balance date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised in respect of the temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill
not deductible for tax purposes; the initial recognition of assets or liabilities that neither affect accounting nor taxable profit; and
differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The
amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at the balance date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the
asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be
realised.

Deferred tax assets and deferred tax liabilities are offset only if the Group has a legally enforceable right to set off current tax assets
against current tax liabilities; the Group intends to settle net; and the deferred tax assets and the deferred tax liabilities relate to
income taxes levied by the same taxation authority.


6
66
6.
..
.

Imputation credits
Imputation creditsImputation credits
Imputation credits





The KIN Holdings Group has A$8.22 million (2019: A$6.30 million) franking credits available as at 31 December 2020.






7
77
7.
..
.

Capital and reserves
Capital and reserves Capital and reserves
Capital and reserves



Share capital
Share capital Share capital
Share capital







Group
GroupGroup
Group

Group
GroupGroup
Group




2020
20202020
2020

2
22
2020
020020
020

2019
20192019
2019

2019
20192019
2019


Shares
SharesShares
Shares

$000’s
$000’s$000’s
$000’s

Shares
SharesShares
Shares

$000’s
$000’s$000’s
$000’s


Ordinary shares issued 1 January 105,578,290 350,048 105,578,290 350,048
Ordinary shares issued at 31 December
Ordinary shares issued at 31 December Ordinary shares issued at 31 December
Ordinary shares issued at 31 December –
––
–

fully paid
fully paidfully paid
fully paid

105,578,290
105,578,290105,578,290
105,578,290

350,048
350,048350,048
350,048

105,578,290
105,578,290105,578,290
105,578,290

350,048
350,048350,048
350,048



Redeemable preference shares 1 January 52,739,543 33,218 52,739,543 33,218
Redeemable preference shares issued at 31
Redeemable preference shares issued at 31 Redeemable preference shares issued at 31
Redeemable preference shares issued at 31 December
December December
December –
––
–

fully
fully fully
fully
paid
paidpaid
paid


52,739,543
52,739,54352,739,543
52,739,543

33,218
33,21833,218
33,218

52,739,543
52,739,54352,739,543
52,739,543

33,218
33,21833,218
33,218



Ordinary shares repurchased and held as treasury stock 1
January
(99,547) (26) (99,547) (26)
Ordinary shares repurchased and held as treasury stock 31
Ordinary shares repurchased and held as treasury stock 31 Ordinary shares repurchased and held as treasury stock 31
Ordinary shares repurchased and held as treasury stock 31
December
DecemberDecember
December


(99,547)
(99,547)(99,547)
(99,547)

(26
(26(26
(26)
))
)

(99,547)
(99,547)(99,547)
(99,547)

(26
(26(26
(26)
))
)


Total shares issued and outstanding
Total shares issued and outstandingTotal shares issued and outstanding
Total shares issued and outstanding

158,218,286
158,218,286158,218,286
158,218,286

383,240
383,240383,240
383,240

158,218,286
158,218,286158,218,286
158,218,286

383,240
383,240383,240
383,240





At 31 December 2020, the authorised share capital consisted of 105,578,290 ordinary shares (2019: 105,578,290 ordinary shares)
with no par value and 52,739,543 redeemable preference shares (2019: 52,739,543 redeemable preference shares) with no par
value.





Group
GroupGroup
Group


Dollars In Thousands

2020
20202020
2020

2019
20192019
2019


Imputation credits available for use in subsequent reporting periods 112,639 106,337