1、P A R K P L A Z A H O T E L SAnnual Report 2007P A R K P L A Z A H O T E L Sroom for growthContents and introductionContentsStrategy statement and financial highlights 1Park Plaza Hotels at a glance 2Chairmans statement 6President and CEOs statement and operational review 8Strategic plan and develop
2、ment 12Market review 16Board of Directors 20Corporate governance 21Major shareholders 24Corporate social responsibility 25Showcase 07 28Financial statements 38Auditors report 87Notice of AGM 88Useful contacts 89Welcome to Park Plaza Hotels.This is our first Annual Report as a listed company but our
3、experience and success in every aspect of hotel ownership and management dates back to 1989.Today Park Plaza Hotels&Resorts,and our distinctive artotels,are recognised centres of stylish and affordable luxury accommodation.Strategy statement and financial highlightsOur objective is to become the lea
4、ding hotel owner/operator in the four-star deluxe and boutique hotel markets in Europe,the Middle East and North Africa.In 2007 we made considerable progress in achieving that goal.Highlights of the year included:24.4%growth in EBITDA1 to 28.4 million An increase in Group revenues1 by 10%to 97 milli
5、on Floatation on the London Stock Exchanges Alternative Investment Market(AIM),which raised 85 million before costs through a placing with new institutional investors Expansion of the Groups portfolio,including acquisition of a hotel in Nuremberg and signing of a franchise agreement for a hotel in M
6、arrakech Product improvement with refurbishments in Berlin,Eindhoven and Amsterdam A year-end cash and cash equivalent balance of 120 million,providing the flexibility to expand our hotel portfolio Development of a Group-wide training programme,Connect!,designed to help employees internalise the eth
7、os that makes our hotels uniquely appealing to existing and prospective guestsPost balance sheet progress in 2008 has been notable for:Opening of the Park Plaza County Hall London Acquiring full ownership of the Park Plaza Westminster Bridge London project,destined to become one of Europes largest a
8、nd best conference hotels Joint venture to develop an artotel in Hoxton,London Ownership stake in,and management of,Arenaturist one of Croatias leading hospitality companies with 2,800+rooms Joint venture to develop 15 to 20 Park Plaza Hotels in Russia within the next four years1 Like for like,un-au
9、dited proforma results.Park Plaza Hotels Annual Report 2007 1 2007200697.0m88.2mPark Plaza Hotels at a glanceKey figuresA dramatic and exciting year for the Group has resulted in some impressive financial figures.The highlights are as follows:The GroupThe Group owns,operates and franchises hotels in
10、 major cities and regional centres in Europe,the Middle East and North Africa.The majority of our hotels are branded Park Plaza Hotels&Resorts or artotel.Each brand attracts a different segment of the growing number of travellers in both the business and leisure sectors who seek high standards of st
11、yle and service at attractive rates.39 hotels in operation with a total of more than 7,300 rooms Access to one of the industrys most powerful reservation,distribution and marketing systems through our strategic partnership with Carlson Hotels Worldwide,the worlds ninth largest hotel company*Strong d
12、evelopment pipeline with 5,700+rooms under development in exciting destinations such as London,Cologne,Nuremberg,Marrakech and leading Russian locations*Source:HOTELS Magazine Corporate 300 Ranking July 2007.Revenue generated Like for like,un-audited proforma results97.0mIPO funds generated 85m12345
13、67812345672007200628.4m22.8mEBITDA Like for like,un-audited proforma results+24.4%Rooms in operation,by country 2008 2007 First quarter1 Germany 1,250 1,2502 United Kingdom 1,478 1,8763 The Netherlands 666 6664 Hungary 165 1655 Israel 180 1806 Ireland 155 1557 Belgium 229 2298 Croatia 2,810Total 4,1
14、23 7,33120072008First quarter2 Park Plaza Hotels Annual Report 2007Our hotelsA dynamic,successful and developing hotel owner/operator with breadth and depth.GermanyPark Plaza Prenzlauer Berg BerlinPark Plaza Wallstreet Berlinartotel berlin mitteartotel berlin city center westartotel berlin kudammart
15、otel potsdamPark Plaza Dresdenartotel dresdenPark Plaza TrierUnited KingdomPark Plaza Victoria LondonPark Plaza Riverbank LondonPark Plaza Sherlock Holmes LondonPark Plaza NottinghamPark Plaza LeedsPark Plaza CardiffPark Plaza BelfastThe NetherlandsPark Plaza Victoria AmsterdamPark Plaza Vondelpark
16、AmsterdamPark Plaza UtrechtPark Plaza Mandarin EindhovenHungaryartotel budapestIsraelPark Plaza Orchid Tel AvivIrelandPark Plaza Tyrrelstown DublinBelgiumPark Plaza Astrid AntwerpNew developmentsOur goal is to double the number of rooms to over 8,000 by 2010 and we are well on target to achieving th
17、is.2008 first quarter developmentsNew openingsPark Plaza County Hall London,U.K.Management of,ownership stake in,Arenaturists eight hotels and five aparthotels in Croatia2009 2012 developmentsFranchise agreementsPark Plaza Marrakech,Morocco(due to open mid-2009)artotel marrakech,Morocco(due to open
18、mid-2009)Development projectsRedevelop former hotel in Nuremberg,Germanyartotel cologne,GermanyMonumental office building in Amsterdam,The NetherlandsPark Plaza Westminster Bridge London,U.K.artotel hoxton,London,U.K.Joint venture with Ferens Management Ltd to develop 15 to 20 Park Plaza Hotels in R
19、ussiaAcquisition programmeRebranding hotels in key locations:Paris,Rome,Milan and Barcelona as well as Scandinavia and central and eastern Europe.12345689107Projected rooms in operation,by country 2012 1 Germany 1,6352 United Kingdom 3,0633 The Netherlands 7664 Hungary 1655 Israel 1806 Ireland 1557
20、Belgium 2478 Croatia 2,8109 Morocco 18410 Russia 4,000Total 13,205Park Plaza Hotels Annual Report 2007 3 Park Plaza Hotels at a glanceThe brandsThree brands with unique appealThe Park Plaza Hotels&Resorts brand(part of Carlson Hotels Worldwide)to which we have exclusive rights in 56 countries,consis
21、ts of full service hotels.Each is ideally located at the heart of its citys business and cultural life.Thanks to a design-led approach,guests first impressions of stylish and welcoming lobbies are confirmed by guestrooms notable for space,distinctive dcor and state-of-the-art facilities.Park Plaza H
22、otels&Resorts average 150 to 500 rooms and suites.Carlson is further strengthening the Park Plaza Hotels&Resorts brand by developing contemporary hotels in key travel destinations such as Bangkok,Beijing and Shanghai.Our artotels a brand which we acquired in July 2007 are unique.Each showcases the w
23、ork of a single contemporary artist,such as Andy Warhol,Georg Baselitz and Donald Sultan.artotels are destination lifestyle hotels where modern interiors blend with contemporary art.They are carefully sited in the best neighbourhoods for shopping and culture.The Groups three Chino Latino bars and re
24、staurants offer a refreshing fusion of exotic cocktails and contemporary pan-Asian cuisine all in lively and glamorous settings.Adjuncts to our hotels in London,Leeds and Nottingham,they have become highly popular local destinations in themselves.4 Park Plaza Hotels Annual Report 2007Recent awards a
25、nd recognition include:Finalist Best Business Accommodation 50 hotels 2008 Business Travel Awards Park Plaza HotelsUnited Kingdom and Ireland AA Hotel of the Year 2006/2007,Wales Park Plaza Cardiff U.K.s Number 1 Conference Hotel BDRC Venue Verdict Awards 2007 Park Plaza Cardiff Best New Hotel Hospi
26、tality Ireland Awards 2007 Park Plaza Tyrrelstown Dublin Rosettes recognition of quality of restaurant awarded at:Park Plaza Victoria London Park Plaza Cardiff Park Plaza Sherlock Holmes London Best London Conference Venue 2007 Conference and Incentive Travel Magazine Park Plaza Riverbank London Bes
27、t Large U.K.Hotel Bronze Award 2007 Visit London Park Plaza Riverbank London Official 5-star AA Rating Plaza on the River Club and Residence,London Best Oriental Restaurant 2007 Nottingham Restaurant Awards Park Plaza Nottinghams Chino Latino Restaurant and Bar Winner of Best Restaurant Award 2007 E
28、at Japan Chino Latino Restaurant and BarGermany and Hungary Best Bookings Expedia award artotel berlin city center west 3rd Best Hotel Expedia Insiders Select List artotel budapest Top 100 Best Value Hotels 2008 TripAdvisor artotel budapestPark Plaza Hotels Annual Report 2007 5 Impressive performanc
29、e provides a platform for growthChairmans statementEli Papouchado6 Park Plaza Hotels Annual Report 2007Even as an international hotelier of long-standing,I am impressed and pleased by the performance of Park Plaza Hotels in 2007.As the success of the Groups mid-year IPO on AIM indicated,my confidenc
30、e in the future of Park Plaza Hotels is widely shared.In this brief message I would like to focus on the strengths that enabled us to have such a good year and allude to the strategies that will result in the Groups continuing success in the years ahead.Having two distinct hotel brands within our Gr
31、oup has certainly been in our favour.During 2007 both brands benefited from the continuing growth in European travel among business people and holiday-makers alike.Hotels within our full service Park Plaza Hotels&Resorts brand,with their extensive range of meeting rooms and conference facilities as
32、well as recreational facilities,bars and restaurants have continued to attract new guests and retain previous visitors across both the executive and leisure sectors.At the same time,our Groups artotels,targeted at a sophisticated audience who appreciate staying in places in tune with local culture,h
33、ave gained from the increase in short-haul European travel,including weekend city breaks.Operation of two distinct yet complementary brands provides us with maximum market flexibility.Guests who stay at our hotels once tend to revisit.But there is always the challenge of getting them across our thre
34、sholds in the first place.One major advantage is our close link with the global operations of Carlson Hotels Worldwide and its popular goldpointsplussm loyalty scheme.Thanks in part to this,combined with involvement in carefully-selected airline and travel agent loyalty programmes,we have increased
35、our 2007 occupancy rate to 82.4%considerably higher than the average for the regions in which we operate.Historically,our integrated approach to hotel and brand ownership has proven to be beneficial.Thanks to seamless hotel management and franchise services,we have availed ourselves of a number of m
36、arket opportunities.For example,the Groups acquisition,development and operation of flagship hotels such as the Park Plaza Victoria Amsterdam and the Park Plaza Riverbank London have led to important joint venture developments.These have included the Park Plaza Westminster Bridge London project,whic
37、h will be one of Europes largest conference hotels on completion in 2010.Park Plaza Westminster Bridge London,in turn,gave rise to other opportunities for the Group,such as management of what became the Park Plaza County Hall London nearby.Further afield,the Group has also expanded Park Plaza Hotels
38、&Resorts and artotel franchise opportunities into new areas such as Morocco and the Gulf States.Such arrangements are particularly attractive,since they generate revenues and increase brand awareness without significant capital expenditure.Looking ahead,my fellow Directors and I are confident in the
39、 scope for growth.Expanding our two primary brands will cater for the growing demand for affordable luxury.We are doing this by increasing target customer awareness in Europe,the United States and in the emerging economies.At the same time,we are continuing to drive topline growth through further af
40、filiation programmes with airlines and other partners.Operational efficiencies,such as the new management structure we initiated in 2007,are helping us to service the larger portfolio of properties we plan.We are also growing through carefully targeted acquisitions and new joint ventures in western
41、European cities.Scrutiny of other markets in Eastern Europe and the Middle East could suggest other cities for expansion.Of course,central to the Groups success are the efforts of the 2,000 employees who make our hotel guests feel so consistently welcome and appreciated.Though our senior managers an
42、d staff supply the framework with superbly designed and equipped facilities,it is our employees who make our offering come alive through their dedication,enthusiasm and thorough understanding of what makes our hotels different.Everyone who works for Park Plaza Hotels has our admiration and our thank
43、s.Our thanks,too,go to Park Plaza Hotels shareholders many of whom joined us via our AIM listing in 2007.Through their investments,they have expressed tangible confidence in the Groups unique vision and our ability to inspire our guests through individuality and passion.Our aim is to repay that conf
44、idence in kind through outstanding performance.Sincerely,Eli Papouchado Looking ahead,my fellow Directors and I are confident in the scope for growth.Park Plaza Hotels Annual Report 2007 7 Making the most of great potentialPresident and CEOs statement and operational reviewBoris Ivesha8 Park Plaza H
45、otels Annual Report 2007In our first year as a publicly traded company on AIM,it is best to begin by letting our financial indicators speak for themselves:Total revenue1 for the year increased by 10%to 97 million.This reflected good performance throughout the Group,including a RevPAR rise of 6.1%fro
46、m the previous year to 97.10.This increase is mostly due to improvements in average room rates in our two most important markets:the United Kingdom and the Netherlands.In the United Kingdom we achieved a RevPAR of 144.60 for the full year,up 13.7%.In the Netherlands,our RevPAR was 112.50,an increase
47、 of 8.4%a result attributable to an average room rate increase of 6.8%while maintaining an occupancy rate of 90%.Group EBITDA1 increased by 24.4%to 28.4 million thanks to strong performance in particular from our hotels in the United Kingdom and the Groups hotel management operations.These successes
48、 more than offset challenging conditions in Germany and Hungary.As we stated when the Group applied for admission to AIM,we intend to retain our earnings and make the most of a strong balance sheet to grow our portfolio.Therefore,we do not anticipate paying any dividends during the 18-month period t
49、hat began with our AIM listing on 17 July,2007.Instead,our priority is to concentrate investing our time and efforts on expanding our portfolio of hotels,making the most of the Groups exciting brands and improving operations in terms of guest experience and efficiency.We are doing this from a positi
50、on of strength,as our 2007 results demonstrate.The Groups structure,with its two distinct hotel brands,allows for complete flexibility.Park Plaza Hotels&Resorts,which is a part of Carlson Hotels Worldwide,allows us exclusive rights in 56 countries in Europe,the Middle East and North Africa.In additi
51、on,are those properties that are part of our own brand,artotel.Both operate in the mid-to upscale market segment but attract their own styles of business and leisure travellers.The Groups link with Carlson Hotels Worldwide adds another dimension to our business model.It provides access to Carlsons l
52、arge-scale and highly effective reservation,distribution and marketing system.This partnership grants Park Plaza Hotels several benefits usually confined to much larger organisations:economies of scale,operating experience,enhanced negotiating power and global reach.To maximise these benefits and ca
53、pture others,in 2007 we devised and successfully implemented a new yield management system throughout key portfolio properties.As a result,we can now make better use of historic data,analyse trends and optimise our pricing.This improves management forecasting ability and drives top line growth.Our h
54、otels are also fully engaged in the new global Carlson goldpointsplusSM guest reward programme,which covers 965 locations in 71 countries.With its newly centralised and enlarged database,the system provides improved benefits to cardholders and to us.To widen our client-base even more,in 2007 we nego
55、tiated agreements with 14 frequent flyer programmes,a welcome addition to the five agreements already in place.We now have partnerships with the worlds main carriers such as KLM/Air France,Lufthansa,British Airways,American Airlines,United Airlines,JAL and Cathay Pacific.Again,these relationships ha
56、ve substantially increased our reach to potential guests the world over.Sincerely,Boris Ivesha The Groups structure,with its two distinct hotel brands,allows for complete flexibility.1 Like for like,un-audited proforma results.Park Plaza Hotels Annual Report 2007 9 10 Park Plaza Hotels Annual Report
57、 2007the bigger pictureAt all Park Plaza Hotels&Resorts and at our artotels in particular style is substance.Its not just about creating exciting environments that intrigue and amuse our guests.Equally important is the attention paid to every detail to ensure that our properties provide a total expe
58、rience that bears repeating.Off the walland on.We have specialists dedicated to acquiring sculptures and paintings for our hotels.Art for arts sake?No.Their efforts are part of building our distinctive brand.Park Plaza Hotels Annual Report 2007 11 Strategic plan and developmentAs a Group,Park Plaza
59、Hotels objective is straightforward:to become the leading hotel owner/operator in the four-star deluxe and boutique hotel markets in Europe,the Middle East and North Africa.We are achieving this aim by building on our key strengths through the implementation of a two-pronged strategy focusing on int
60、ernal and external growth.Enabling internal growthWithin our existing portfolio,we are pursuing several main paths to achieve our growth objectives.Driving top growth:We are driving top growth by making the most of our existing assets.This means maximising occupancy and average room rates in all our
61、 hotels.Again,our links with affiliation programmes associated with airlines and other partners play an important part in this process.So will further use of and implementation of our new yield management system,Optims,which allows us to use historic data for forecasting and establishing pricing.Wit
62、h this knowledge,we can set room rates to our best advantage.At the same time we are expanding our sales,marketing and public relations efforts.In particular,our growing team of 100 sales representatives will improve existing relationships,develop new links with major corporate customers and establi
63、sh new preferred status arrangements with referral partners.We are also making better use of our brand websites with their user-friendly reservation systems.Top growth and increased profitability will also come from our food and beverage revenues particularly in our full service Park Plaza Hotels&Re
64、sorts.These exert a strong attraction for business travellers and corporate event planners.To that end,we will renew our focus on conference trade and banqueting and continue the rollout of our own branded outlets such as Chino Latino restaurants and Mix Espresso Gourmet cafs.Maintaining operational
65、 efficiency:We are confident that the Groups current corporate structure can service a considerably larger portfolio.This will provide us with the flexibility to take advantage of opportunities as they arise whether to expand our operations or to increase returns from our existing portfolio of prope
66、rties.Raising brand awareness:Our aim is to further raise brand awareness among existing and potential guests in Europe,the U.S.and the emerging economies.We will do this by leveraging our relationship with third parties foremost among them Carlson,with its highly sophisticated Central Reservations
67、System,the goldpointsplussm guest reward scheme and the Our strategy for growthLook To Book travel agent loyalty programme.Our newer links with the frequent flyer schemes of 19 leading airlines such as KLM/Air France,Lufthansa,British Airways and their partners will also raise our brand profiles.On
68、top of these efforts,we will make judicious use of our own carefully targeted advertising campaigns,online marketing initiatives and customer relations and database management tools.Continuously differentiating our product and improving qualityEqually important are our efforts to make employees awar
69、e of what sets our hotels apart.The newly launched Connect!training programme,rolled out in early 2008,is an important part of that effort.Based on a reverse thinking model,these one-day interactive workshops focus on the primacy of guest experience rather than the traditional hotel model of creatin
70、g a product and hoping it attracts custom.By mid-year,all 2,000 staff and contractors at every level will have benefited from attending workshops with each individual fully committed to anticipating guest needs and exceeding guest expectations.Expanding through external growthEqually exciting are th
71、e prospects to expand our business model through carefully considered external deals.These can take a variety of forms:acquisitions,joint ventures and developments;operating leases;management contracts;and franchising arrangements.Each has its benefits and each can be compatible with our brand philo
72、sophy.Filling the pipeline:Acquisitions,joint ventures and developmentsIn keeping with our stated goal of doubling the number of Park Plaza Hotels&Resorts and artotel rooms by 2010,we have embarked on a vigorous acquisition programme.This means looking for properties of the right calibre in the righ
73、t locations at the right price.Specifically,this will involve re-branding hotels in European gateway cities that include Paris,Rome,Milan and Barcelona,sites in Scandinavia and in certain central and eastern European cities including Vienna,Prague and Moscow.Development projects are also a way forwa
74、rd.For example,we gained valuable experience through the Groups involvement in the Park Plaza Riverbank and Plaza on the River Club and Residence London development.For this project,we jointly acquired a prime Thames-side city-centre site and succeeded in getting planning permission for a 460-room/s
75、uite hotel with spacious conference facilities.Since opening in 2005,the hotel has benefited from the demand we anticipated and earned several important awards in the process.In 2007 an independent valuation put the hotels worth at 218 million,of which our share is worth 120 million.Our total invest
76、ment in the project had been 78.6 million.12 Park Plaza Hotels Annual Report 2007Our plan is to embark on future ventures of this kind either independently or as part of a consortium with existing or new partners.Our projected artotel in Hoxton,London illustrates this approach.Other recent acquisiti
77、ons include a former hotel in Nuremberg,a monumental office building in Amsterdam and an ownership stake in Arenaturist in Croatia.Operating leases:Another way to increase our portfolio of Park Plaza Hotels&Resorts and artotel branded properties is through operating leases.These require less up-fron
78、t capital investment than straightforward acquisition or development.However,they can expose the Group to possible rent increases and exclude participation in any future increase in property value.Therefore,we will only enter into operating leases on a selective basis that limits any liabilities.Man
79、agement contracts:Managing hotels for others can be an attractive and profitable way of expanding our brands.However,since competition for such contracts is often fierce,there is a temptation for owners to negotiate fee deferral arrangements or guaranteed returns.Fortunately,the strength of our bran
80、ds gives us a negotiating advantage in such arrangements.Moreover,those owners for whom we currently provide management services are so pleased with the result that they are often inclined to come straight to us for work on other properties as well.That is how we were awarded the management contract
81、 for the Park Plaza County Hall London.Franchising arrangements:These relationships enable us to expand our brands with minimal capital investment or risk.That is why our aim is to expand the roster of franchising arrangements currently in place in Cardiff,Berlin,Trier,Belfast,Dublin and Tel Aviv.To
82、 that end,we have entered into territorial franchise arrangements in Northern Ireland,the Republic of Ireland,Morocco,Egypt and the Gulf States.Our latest franchise agreements for hotels in Marrakech and the Gulf States are early results of this strategy.Delivering on our promise The Groups AIM appl
83、ication was absolutely clear about our intention to more than double the number of rooms in the portfolio to over 8,000 by 2010.In 2007 and the early part of 2008 we laid the groundwork for not just meeting our development targets,but exceeding them.In Germany,for example,two projects are underway.I
84、n the ancient university city of Nuremberg,we have applied for planning permission to refurbish a newly acquired hotel.This property perfectly fits our location criteria.It is in the heart of a bustling shopping and business centre within easy reach of public transport.Our plan there is to create a
85、175-room Park Plaza Hotel.In Cologne,one of Germanys great commercial cities,construction has started on an artotel.Leased and managed by the Group,this will form a key part of the citys midtown Reinau Port development in the historic old town alongside the Rhine.We acquired with a partner a monumen
86、tal office building in 2006,next to Park Plaza Victoria Amsterdam.In 2007 we applied for planning permission to convert this into a 100-bedroom hotel.Beyond Europe,in December 2007 we announced the signing of a franchise agreement with Global V Hospitality Inc.This will lead to the opening of North
87、Africas first Park Plaza Hotel in Marrakech,one of Moroccos most-visited cities.This hotel will add 114 rooms to our portfolio.In 2007 we also laid the groundwork for a number of further developments.We announced early 2008 that we would increase our ownership share to 100%of the prestigious new Par
88、k Plaza Westminster Bridge London project.Due to open in 2010 with management provided by Park Plaza Hotels,this apart-hotel will have 1037 apartments and is destined to become one of Europes largest and most contemporary conference hotels.The Park Plaza County Hall London added 398 rooms to our por
89、tfolio when it opened on 01 February 2008.Both occupancy rates and guest feedback have since been encouraging.Park Plaza Hotels manages this outstanding development.Having had such success with the Park Plaza Hotels&Resorts brand in London,we are now embarking on the citys first artotel.In March,we
90、announced a joint venture agreement with Aldersgate Investments Limited,the property vehicle of the Reuben Brothers,to develop and manage a property in Hoxton,which has become one of the citys most creative quarters.In keeping with the ambience of the neighbourhood,we have plans for an art gallery,t
91、wo showing rooms for cult films,a range of restaurants and bars as well as several hundred rooms.In Croatia,we acquired an ownership stake in and management of Arenaturist,one of the countrys leading hospitality companies with more than 2,800 rooms.The investment in Arenaturist is in partnership wit
92、h Goldman Sachs.In Russia,which is emerging as one of the worlds most exciting markets for quality hotels,we embarked on a joint venture with Ferens Management Limited(part of the leading developer the Renova Stroygroup)to develop between 15 and 20 Park Plaza Hotels in key locations over the next fo
93、ur years.Overall,the Groups progress in 2007 and our achievements to date in 2008 are encouraging.Although it is early in the year and there are uncertainties in the economic environment,we are confident that our current portfolio of hotels and pipeline of opportunities leave us well-positioned for
94、further growth in the near future and beyond.Park Plaza Hotels Annual Report 2007 13 14 Park Plaza Hotels Annual Report 2007well connectedOther connections,such as with Carlsons award-winning Look To Book travel agent reward scheme and airline frequent flyer partnerships,provide us with considerable
95、 marketing advantages at minimal costs.Our guests certainly are,with high speed internet access and all they need to keep in touch with home or office.And so are we,thanks to links with the Carlson network and its global Central Reservation System and guest reward schemes such as goldpointsplussm.Pa
96、rk Plaza Hotels Annual Report 2007 15 Market reviewPark Plaza Hotels has the exclusive license from Carlson Hotels Worldwide to operate Park Plaza Hotels&Resorts in 56 countries.The potential of our artotels is global.But for now,our primary focus is on four of the most dynamic economies of the Euro
97、pean Union:the United Kingdom,Germany,the Netherlands and Hungary.The Groups business model,with its built-in flexibility,will allow us to shift our emphasis over time to emerging markets as well as key European gateway cities.Meanwhile we are well positioned to benefit from the existing situation.I
98、n our first year as an AIM-listed company,we made considerable progress in our objective to become the leading hotel owner/operator in the four-star deluxe and boutique hotel markets in Europe,the Middle East and North Africa.The Groups EBITDA1 increased by 24.4%in 2007 to 28.4 million,reflecting ro
99、bust activity from our existing hotel portfolio.At the same time we had a number of development projects underway several signed in the past six months that will help us surpass our stated goal of doubling the number of rooms in our portfolio to 8,000 by 2010.These new developments include propertie
100、s in London,Nuremberg and Cologne,franchise agreements in Marrakech,and most recently expansion in Croatia and Russia.Total revenue1 for the year increased by 10%to 97 million from 88.2 million in 2006 the result of good performance throughout the Group.Overall RevPAR increased by 6.1%to 97.10 from
101、RevPAR 91.60 the previous year.Putting our performance in contextA growing market in the United KingdomThe London market,which accounts for about half of the Groups revenues,was strong in 2007,though there was a slight slowdown in business during the second half.Throughout,we benefited from increase
102、d market share and higher room rates,which had a positive impact on our United Kingdom RevPAR which increased by 13.7%to 144.60 for the full year.In contrast,our RevPAR in 2006 was 127.30.Thanks to improvements to our London central reservations office,we also increased the level of direct,non-commi
103、ssionable business.Strategic use of third-party websites resulted in significant growth in weekend occupancy rates.The only area in which performance fell below expectations was in conferencing and banqueting in the United Kingdom,which accounts for over a quarter of our revenues in this country.To
104、improve this situation,we appointed a new management team whose objective is to concentrate on all-important corporate bookings and the period leading up to Christmas.We are already on track to deliver stronger conferencing and banqueting results this year.Rising to challenges in Germany and Hungary
105、Early 21st century Berlin has become one of the most exciting cities in Europe.This has led to an oversupply of hotel rooms,with over 2,000 rooms opened in our price sectors during the course of the year.The result has been increased competition which has had an impact on both room rates and occupan
106、cy levels,particularly in West Berlin.We are dealing with this by determinedly growing our corporate business and limiting our exposure to discounted pricing in the leisure market.This strategy is working and so overall performance during 2007 was broadly in line with the previous years.A small decl
107、ine in average room rates was offset by a small increase in occupancy.RevPAR for the period did,however,reflect the highly competitive environment,with a slight reduction to 51.70 from the previous years 52.40.1 Like for like,un-audited proforma results.16 Park Plaza Hotels Annual Report 2007We aim
108、to improve the Groups performance in Germany through tighter cost controls,management improvements and refurbishments as appropriate to make our hotels the most appealing in the market.This process has already begun.In August 2007 we completed modernisation of 133 rooms and all the public areas at o
109、ur artotel berlin kudamm.Three months later we started work on refurbishing the artotel berlin mitte in the historic city centre.This project,which involves renovation of 109 rooms and suites as well as banqueting facilities and meeting rooms is due for completion by the middle of 2008.In Hungary,th
110、e Budapest market has proved to be equally competitive.Nevertheless,our artotel budapest showed further signs of recovery in the second half of the year.A capital benefit in the NetherlandsThe Dutch hotel market remains one of Europes most vigorous and our performance there more than kept pace.We ac
111、hieved RevPAR growth of 8.4%,largely attributable to a climate healthy enough to absorb a 6.8%increase in average room rates to 126.80.Building on occupancy rates already in excess of the market average,we managed to achieve an overall rate for the year of 88.9%thanks to the high quality of our gues
112、t offering.Our local team deserves full credit for this achievement.One of our key properties in the Netherlands is the Park Plaza Victoria Amsterdam.It gained market share and benefited from both increased occupancy and higher room rates.At our Park Plaza Vondelpark,also in Amsterdam,we achieved go
113、od progress on a major refurbishment programme.The first phase was completed in September.Inevitably,the closure of one third of the hotels rooms during the summer had an impact on profitability.However,the high standards we are bringing to the hotel have already become apparent and we are confident
114、 that it will become a guest favourite.Another refurbishment began in November 2007 at the Park Plaza Mandarin in Eindhoven,where 60 rooms and all the public areas have since been transformed.The hotel became fully operational again in February 2008.Poised for further growth Group profit before tax1
115、 was 22.1 million,in contrast to a loss the previous year of 4.7 million.This figure includes profit of 9.2 million from the sale of our 50%shareholding in Andrssy 25 Kft.,a joint venture owning one property in Hungary.It also includes a negative goodwill adjustment of 13 million that resulted from
116、the difference in the sale and purchase price of the Park Plaza Group before the July AIM IPO and the value of the Group at floatation.Without these items,the Group would have reported a marginal pre-tax loss in 2007.Completion of the Groups IPO provides Park Plaza Hotels with a strong platform from
117、 which to grow our portfolio.As of December 31,2007,net debt was 86.5 million,with cash and cash equivalents of 120 million.We indicated at the time of the IPO that we intend to retain earnings for use in the business and to help it grow for 18 months following our AIM listing.That still holds true,
118、though the Board will keep this policy under review in light of growth opportunities that may become available during that period.1 Like for like,un-audited proforma results.Park Plaza Hotels Annual Report 2007 17 rest easyAnyone can provide guests with basic bed and breakfast.But giving them an exp
119、erience thats simultaneously stimulating and restful is a more complicated proposition altogether.It demands wit,attention to detail and,above all,a commitment to quality.But Park Plaza Hotels carries it off consistently,competitively and profitably.And we are doing it more widely than ever before.R
120、ecent deals have more than doubled the number of rooms well be operating by 2010,expanding our operations beyond existing hotels in Europe,the Middle East and North Africa to take in new properties in Croatia and Russia as well.18 Park Plaza Hotels Annual Report 2007Park Plaza Hotels Annual Report 2
121、007 19 12534Board of DirectorsEli Papouchado 05 December 1937Non-Executive Chairman of the BoardDate of appointment 26 June 2007Eli Papouchado is the founder of the Red Sea Group and was Chairman of its Board for ten years.He has been involved in the construction,design,development,financing,acquisi
122、tion and management of leading hotels,including the Park Plaza Riverbank London,Park Plaza Victoria London,Park Plaza Leeds,Park Plaza Nottingham,Park Plaza Victoria Amsterdam and the milestone Taba Hotel.Mr.Papouchado was involved in the development of hundreds of thousands of square metres of reta
123、il space in shopping malls and large residential projects in the United States,Eastern Europe and the Middle East.He also served as Chairman of the Israeli Hotel Association.Mr.Papouchado is Chairman of the Investment and Operational Committees.Boris Ivesha 08 October 1945President and Chief Executi
124、ve OfficerDate of appointment 14 June 2007Boris Ivesha has been the President of Park Plaza Hotels Europe since 1991.In 1972 he was appointed General Manager of the Royal Horseguards Hotel in London,a position he held until 1979,when he became a Managing Director for the Carlton Hotel in Israel.Mr.I
125、vesha established the Yamit Hotel in 1984,served as the hotels President and brought the Park Plaza Hotels&Resorts brand to the Group in 1994 in collaboration with the Red Sea Group.Mr.Ivesha has been one of the major drivers behind the expansion of the Groups portfolio.He sits on the Investment and
126、 Operational Committees.Chen Moravsky 11 November 1970Chief Financial OfficerDate of appointment 14 June 2007Chen Moravsky was Financial Director of the Red Sea Group before joining Park Plaza Hotels Europe in 2005.Mr.Moravsky worked as an Audit Manager at Deloitte.He joined the Red Sea Group in 200
127、1,where he gained his expertise in the hotel/leisure business and real estate investment market.Mr.Moravsky is a Certified Public Accountant(ISR)and holds an MBA from The University of Manchester as well as a Bachelor of Business from the Tel Aviv College of Management.He sits on the Investment and
128、Operational committees.Kevin McAuliffe 12 June 1957Non-Executive DirectorDate of appointment 15 June 2007Kevin McAuliffe has been the Chief Executive of Carey Group since 1999,prior to which he was Head of Advisory Services for Paribas International Private Banking operations.In 1994 he was appointe
129、d Chief Executive of Ansbacher,a Guernsey bank and trust company,having worked for the Ansbacher Group since 1980 during which he held the position of Finance Director as well as being a director of other banks held by the Ansbacher Group.From 1973-1980,he held posts in three different departments i
130、n the State of Guernsey.He is a Member of the Society of Trust and Estate Practitioners and a director of various companies,including U.K.Care No.1 Limited.Nigel Jones 04 December 1961Non-Executive DirectorDate of appointment 26 June 2007Nigel Jones was the Chief Executive Officer of ComProp Limited
131、,an AIM listed property company.Mr.Joness directorships include U.K.Care No.1 Limited,Matrix Property Fund Management(Guernsey)Limited and Threadgreen Industrial Limited.In 1995,Mr.Jones founded Jones&Partners Limited.Mr.Jones has been a member of the Royal Institution of Chartered Surveyors since 1
132、989.Elisha Flax 18 February 1962 not picturedNon-Executive DirectorDate of appointment 26 June 2007Elisha Flax is a real estate entrepreneur engaged in various property activities in Eastern Europe.Mr.Flax is currently a Non-Executive Director of Delek Global Real Estate plc,an AIM-listed company.Mr
133、.Flax was previously employed as a solicitor at the London offices of U.S.law firms Chadbourne&Parke and Akin,Gump,Strauss,Hauer&Feld and general counsel at PlaneStation Limited.Mr.Flax holds an LLB degree from Keio University in Tokyo,Japan and is a qualified solicitor in England and Wales.Board of
134、 Directors1 Eli Papouchado Non-Executive Chairman of the Board2 Boris Ivesha President and Chief Executive Officer3 Chen Moravsky Chief Financial Officer4 Kevin McAuliffe Non-Executive Director5 Nigel Jones Non-Executive Director20 Park Plaza Hotels Annual Report 2007Corporate governancePark Plaza H
135、otels pursuit of excellence extends to corporate governance as well as hospitality.For example,as a closed-ended investment company registered in Guernsey,the Company is eligible for exemption from the requirements of the Combined Code(the“Code”)issued by the United Kingdom Listing Authority.Neverth
136、eless,we voluntarily comply with the main requirements of Code,which sets out principles of good governance and a code of best practice.We do this through a framework for corporate governance which the Directors believe is suitable for an investment company of our size and business activities.Conseq
137、uently,the Board considers that the Company has complied with the provisions contained in Section 1 of the Code throughout this accounting period.The Code recommends that the Board of Directors of a listed company should include a balance of Executive and Non-Executive Directors(and in particular No
138、n-Executive Directors)such that no individual or group of individuals can dominate the Boards decision making.The Combined Code also recommends that the Chairman should,on appointment,be independent.The BoardThe Company currently has six Directors,four of whom are Non-Executives(including the Chairm
139、an Eli Papouchado).As recommended by the Combined Code,three of the Directors Elisha Flax,Kevin McAuliffe and Nigel Jones are regarded by the Company as being independent of management and free from any business or other relationship that could materially interfere with the exercise of their indepen
140、dent judgement.The Companys Chairman,Eli Papouchado,is the founder of the Red Sea Group,the Companys largest shareholder and is not therefore independent of the Company.High standards,rigorously appliedThe Board has responsibility for the Groups strategic and financial policies and meets regularly.A
141、ll the Directors have access to the advice and services of the Company Secretary and are able to gain access to external independent advice,should they wish to do so.The Board maintains an appropriate balance of Executive and Non-Executive members,all of whom receive regular and timely information c
142、oncerning the activities of the Group.This information enables the Board to exercise its responsibilities and control functions in a proper and effective manner.The Board has a breadth of experience relevant to the Company.The Directors believe that any changes to the Boards composition can be manag
143、ed without undue disruption.With any new Director appointed to the Board,consideration will be given as to whether an induction process is appropriate.The Board considers agenda items laid out in the Notice and Agenda which are formally circulated to the Board in advance of the Meeting as part of th
144、e Board Papers.Directors may request any agenda items to be added that they consider appropriate for Board discussion.Additionally,each Director is required to inform the Board of any potential or actual conflicts of interest prior to Board discussion.To date,the Board has not considered it necessar
145、y to have formal strategy sessions.This is because the investment strategy,which is set out in the Companys prospectus,is reviewed regularly.The primary focus at Board Meetings is a review of investment performance and associated matters.These include gearing and asset allocation as well as marketin
146、g,investor relations,risk management,general administration and compliance,peer group information and industry issues.The Board evaluates its performance and considers the tenure of each Director on an annual basis.The Board believes that the current mix of skills,experience,ages and length of servi
147、ce are appropriate to the requirements of the Company.Park Plaza Hotels Annual Report 2007 21 Directors duties The Directors have adopted a set of reserved powers,which establish the key purpose of the Board and detail its major duties.These duties cover the following areas of responsibility:statuto
148、ry obligations and public disclosure strategic matters and financial reporting risk assessment and management,including reporting,monitoring,governance and control other matters having material effects on the CompanyThe Directors have adopted these reserved powers of the Board to demonstrate the ser
149、iousness with which the Board takes its fiduciary responsibilities.These powers also enable ongoing means of measuring and monitoring the effectiveness of Board actions.Directors responsibilitiesThe Directors are required to prepare the Directors Report and the financial statements for each financia
150、l year.These must give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit or loss for that year.In preparing annual financial statements,the Directors are required to:select suitable accounting policies and apply them consistently make j
151、udgements and estimates that are reasonable and prudent state whether applicable accounting standards have been followed,subject to any material departures disclosed and explained in the financial statements prepare the financial statements on the going-concern basis,unless it is inappropriate to pr
152、esume that the Company will continue in businessThe Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements have been properly prepared in acco
153、rdance with The Companies(Guernsey)Law,1994.They are also responsible for safeguarding the assets of the Company.This involves taking reasonable steps for the prevention and detection of fraud and other irregularities.Board CommitteesIn accordance with best practice for corporate governance,the Grou
154、p has established Committees to act on its behalf in overseeing and dealing with audit,remuneration,nominations,investment and operations.The Audit Committee comprises Kevin McAuliffe(Chairman),Elisha Flax and Nigel Jones and meets at least three times a year.The Committee assists the Board in obser
155、ving its responsibility for ensuring that the Groups financial systems provide accurate and up-to-date information on its financial position and that the published financial statements represent a true and fair reflection of this position.The Committee also assists the Board in ensuring that appropr
156、iate accounting policies,internal financial controls and compliance procedures are in place.The Audit Committee receives information from the Company Secretary and from the external auditors.The Remuneration Committee comprises Kevin McAuliffe(Chairman)and Elisha Flax.The Committee advises the Board
157、 on an overall remuneration policy and meets at least twice a year.It also determines,on behalf of the Board,and with the benefit of advice from external consultants,the remuneration packages of the Executive Directors.The Board determines the remuneration of the Non-Executive Directors.The Nominati
158、ons Committee comprises Elisha Flax(Chairman),Nigel Jones and Kevin McAuliffe.Whenever possible,all Non-Executive Directors attend its meetings as well.The Committee carries out the selection process for the appointment of candidates to the Board and propose names for approval by the full Board.The
159、Investment Committee comprises Eli Papouchado(Chairman),Boris Ivesha,Chen Moravsky and Elisha Flax.The Committee assesses and approves new projects in accordance with an agreed approval process.It is also responsible for carrying out post-investment appraisals.The Operational Committee comprises Eli
160、 Papouchado(Chairman),Boris Ivesha,Chen Moravsky and Elisha Flax.It develops and implements the overall operations strategy.The Committee also determines the framework of the Operational Board and monitors its activities.Corporate governancecontinued22 Park Plaza Hotels Annual Report 2007Internal co
161、ntrolsThe Board is ultimately responsible for the Companys system of internal control and for reviewing its effectiveness.The Board confirms that there is an ongoing process for identifying,evaluating and managing the significant risks faced by the Company.This process has been in place for the peri
162、od under review and up to the date of approval of this Annual Report and Accounts.The Board reviews this process,ensuring it accords with appropriate corporate governance codes.On at least an annual basis,the Directors conduct a review of the Companys system of internal control.This covers all contr
163、ols,including financial,operational,compliance and risk management.The Board has reviewed the effectiveness of the system of internal control.In particular,it has reviewed and updated the process for identifying and evaluating the significant risks affecting the Company and the policies by which the
164、se risks are managed.Corporate responsibilityThe Company keeps abreast of regulatory and statutory changes and takes appropriate action.On an annual basis,the Chairman assesses the performance of each Director.This assessment includes a review of Board and Committee meeting attendance.Going ConcernA
165、fter making enquiries,and given the nature of the Company and its investments,the Directors are satisfied that it is appropriate to continue to adopt the going-concern basis in preparing the Financial Statements.After due consideration,the Directors consider that the Company is able to continue in t
166、he foreseeable future.Relations with shareholdersBoard members will be available to respond to shareholders questions at the Annual General Meeting.Major shareholders are contacted directly on a regular basis.The Company formally reports once a year to shareholders,who receive a proxy voting card wi
167、th the Annual Report and Financial Statements.Additionally,current information is provided to shareholders on an ongoing basis through the Company website.The Registrar monitors the voting of the shareholders and proxy voting is taken into consideration when votes are cast at the Annual General Meet
168、ing.Shareholders may contact the Directors via the Company Secretary.Park Plaza Hotels Annual Report 2007 23 Major shareholdersMajor shareholdersShareholder enquiriesFor information about the management of shareholdings please contact our registrarShareholder Services Capita Registrars 34 Beckenham
169、RoadBeckenhamKent BR3 4TUUnited KingdomEmail:Tel:U.K.0871 664 0300Calls cost 10p per minute plus network extras.Tel:Overseas+44 208 639 3399Investor relations enquiriesChen Moravsky Chief Financial Officer Hasselaerssteeg 111012 MB AmsterdamThe NetherlandsTel:+31(0)20 713 8200Fax:+31(0)20 524 0651Em
170、ail:WebsiteAnnual Reports,half year reports and share information are all available on our website Financial calendarFinancial year:1 January to 31 DecemberEarnings releases:30 June,31 DecemberAnnual General Meeting held on 30 June,2008London Stock Exchange trading code:PPH.LOwnership of Group share
171、s No.of Percentage of issued Name shares share capital1 Red Sea Group 17,376,900 42.44%2 Molteno Limited 7,500,000 18.32%3 Goldman Sachs Group 4,751,364 11.61%4 Nortrust Nominees Limited 3,767,184 9.20%5 Chase Nominees Limited 2,931,500 7.16%6 Vidacos Nominees Limited 2,737,663 6.69%12345624 Park Pl
172、aza Hotels Annual Report 2007Corporate social responsibilityA shared journeyPeople will always need to travel.That is the basis and future of our business.But there is a price to pay for travel that includes environmental and social costs as well as the bill on check out.Increasingly,our guests unde
173、rstand this and we are responding by working to principles set out in a Corporate Social Responsibility(CSR)programme that demonstrates an enthusiastic commitment to the environment and society.In real terms,this means making a positive contribution to local communities(which includes being a good e
174、mployer)and minimising our own impact on the environment as well as our guests while they are with us.TREE takes rootFor Park Plaza Hotels,CSR is an essential business process.And like every business process it needs management.To do that,we have devised TREE.Inspired by the Park Plaza Hotels&Resort
175、s logo,TREE stands for Total Responsibility for Everyones Environment.TREEs objective is to research,develop,produce,implement and communicate our CSR aims.Starting in 2006 and during the course of 2007,the TREE team looked into individual hotel CSR initiatives and helped to determine which best pra
176、ctices could effectively be applied more widely.At the same time,the TREE team worked to identify and correct any irresponsible activities or behaviours.Working closely with the United Kingdom Government-sponsored Carbon Trust and Envirowise,TREE developed an aims grid to establish objectives,define
177、 responsibilities,devise measurement criteria and determine results.To ensure that TREE was developing an appropriate CSR policy that encompassed all Park Plaza Hotels best practices,a multi-national,multi-disciplinary team of senior people from throughout the Group formed a project team to review a
178、ll CSR initiatives.Commitment to the power of 10The TREE team has done its work well and the Group now has commitments(mandatory)and initiatives(optional)in place that cover ten operating areas.Individual hotels and Park Plaza Hotels as a whole can make a real difference through these commitments.By
179、 having some policies that are mandatory and others that are optional,we recognise the individual nature of our hotels,yet ensure a consistent minimum level of commitment throughout the Group.Though TREEs accomplishment is considerable,its task is far from over.Since CSR is a dynamic discipline,we r
180、ecognise that our policies will constantly evolve,develop and intensify to reflect changes in our environment and the industry in which we operate.Meanwhile,our efforts are already being recognised with a Considerate Hoteliers Association Award in the highly recommended class for energy conservation
181、 and a Green Tourism Award.Future indicativeThe Groups newest hotel in London,the Park Plaza Westminster Bridge London,is due for completion in 2010.It provides an excellent indication of what other Park Plaza Hotels projects may be like in future.Our biggest development to date,Park Plaza Westminst
182、er Bridge London is specifically designed to limit any negative impacts on the environment,contribute to urban regeneration and make a positive impact on the surrounding community.Park Plaza Hotels Annual Report 2007 25 For example,the project got off to an environmentally sound start by recycling s
183、ome of the concrete salvaged from the demolished building on site(which had the dubious distinction of being voted Londons ugliest structure).When complete,the building will benefit from an on-site water bottling plant based on a carbon filter process that will eliminate the need to transport and di
184、spose of an estimated one million bottles of water per year.Park Plaza Westminster Bridge London is also using the latest building insulation technology with triple-glazed,energy retaining cladding for heat and cold retention to ensure maximum energy efficiency year-round.On top of this,the hotel is
185、 projected to meet a substantial proportion of its own energy needs by producing power using a biomass electric generator.A key part of the overall regeneration programme for Londons South Bank,the Park Plaza Westminster Bridge London is dedicating several million pounds to local projects for public
186、 transport,employment and training.Considerable funds have also been allocated to develop a landscaped public space around the hotel;helping to create a spacious piazza that is set to become a local attraction in itself.Partners for goodOf course,Park Plaza Hotels also realises the benefits of worki
187、ng with others to achieve CSR objectives.To that end,the Group is an active supporter of a number of organisations.The Willow Foundation,for example,organises and funds special days for young adults who are living with serious diseases such as cancer,cystic fibrosis and the later stages of multiple
188、sclerosis.The Groups President and Chief Executive Officer,Boris Ivesha,sits on the Foundations Board.Through the Groups links with Carlson,Park Plaza Hotels also supports the World Childhood Foundation,which addresses the social,emotional and material needs of children the world over.On the environ
189、mental front,the Group is helping guests to reduce their carbon footprints through an arrangement with Carbon Neutral.Through this initiative,members of the goldpointsplussm reward programme can redeem their Gold Points to benefit community-based carbon reduction products that balance out the equiva
190、lent CO2 emissions associated with their travel.Corporate social responsibilitycontinuedAIMS tableWhoPurposeEnd ResultSuccess Criteria Employees of Park Plaza Hotels Customers Guests Bookers Owners/Stakeholders Suppliers Franchisees Reduce utility consumption Increase environmental responsibility Im
191、prove waste management Support the brand promise Support local community Meet legal requirements Produce a clear environmental statement/policy Communicate policy internally Communicate policy externally Policy adhered to throughout company Deliver end result within agreed timeframe Reduction in uti
192、lity consumption Reduce hotel utilities cost Ensure project is recognised company wide Kite mark/accreditations Stakeholder feedback26 Park Plaza Hotels Annual Report 2007Corporate Social Responsibility tableMandatoryOptionalWater Sub-metering of all kitchen areas and fitness suites to better monito
193、r use Inform guests of responsible water usage whilst in the hotel,e.g.,towel change policy,running taps Preventative maintenance of all water systems to avoid leakages,dripping taps etc Ensure enforcement of water minimisation policy(defrosting,running water,water-efficient appliances etc)Passive i
194、nfrared WC flush in public areas (all new builds)6 litre cisterns used in all WCs(restricted use)Dual flush considerationElectricity Each hotel to adopt the SEASON(Save Energy And Switch Off Now)policy and posters to be printed in all back of house areas Energy-saving light bulbs in all areas where
195、appropriate and physically possible E-cubes to be fitted,where appropriate,in all refrigeration appliances to regulate temperature and reduce energy usage Energy saver key-card switch in all guest rooms(power activated by key card only)in all new and renovated hotels Sub-metering to better monitor u
196、se and application of SEASON for all new build hotels and refurbishments Building Management System(BMS)for all new build hotels or refurbishments to maximise efficiency of equipment Movement sensors in all public areas where appropriate(automated on/off switch)including fire exits Solar/wind turbin
197、e for provision of electricityHeating Review of energy efficiency by certified organisation such as MK Energy Service in the U.K.All service pipes to be insulated Energy efficient boilers for all new build hotels Sub-metering to better monitor use Ensure enforcement of gas water minimisation policy
198、Consideration of SCOTMAS product with water temperature regulator and purificationPurchasing The CSR credentials of all suppliers to be reviewed(including utilities)Work with suppliers to minimise transport miles,e.g.,use local suppliers Work with organic food suppliers where possible Reduce packagi
199、ng on supplied goods Reduce number of deliveries to the hotel by suppliers on a weekly basisWaste Management Glass,paper and general waste from offices,restaurants and public areas to be separated and effectively recycled All toners and batteries to be recycled and offered back to the supplier or do
200、nated to a charitable organisation for recycling Ensure all hazardous waste is disposed of in terms of local and national regulations,including all appropriate licences/register(ensuring compliance with legal standards)Soap dispensers to be installed in all public areas Waste reduction-Recycling of
201、paper-E-mail signatures(dont print unless you have to!)Installation of soap dispensers in guest rooms Cardboard bailing facility in order to reduce general waste Dual bins for recycling in guest roomsLearning&Development Ensure CSR policy is fundamental part of all employee inductions Ensure SEASON
202、is fully implemented across the business and with every member of staff Minimum twice-yearly review and audit of CSR policy and/or as legislation changes Each hotel to establish a CSR review team to ensure implementation and review of the policyCommunity Each hotel to give 10 working days(either one
203、 day per 10 staff or 10 staff working one day together)to a local charity or community organisation of choice Each hotel to sponsor a local community project Encourage car sharing,use of public transport and cycling to work External partners to present to staff about general CSR policyCharity Each h
204、otel to support the Carlson charity of choice World Childhood Foundation.Facility exists for guests to donate Gold Points (loyalty reward programme)to charity Each hotel to support one local charity of their choice Donate unclaimed lost property to charity Choose one dish on the restaurant menu to d
205、onate 1 or 1 with every orderCorporate Travel Use public transport wherever possible(considering financial and time constraints)Guest Communications Distribute CSR messages throughout the hotel where possible,such as TV,tent cards,lifts Include information about the CSR in the Guest Services Directo
206、ry Publish CSR policy online for download Ability to reduce Carbon Footprint by redeeming Gold Points Any other communication to assist guests with conservation and environmental responsibility whilst in the hotel Card that gives guests tips on how to conserve whilst in the hotel Consider environmen
207、tal impact of written communicationPark Plaza Hotels Annual Report 2007 27 In an increasingly competitive market,the most successful hotels are those that consistently and positively distinguish themselves from the rest and then constantly re-invent themselves.At Park Plaza Hotels we understand this
208、 imperative and put it into practice with a design-led,service-oriented approach to hospitality wherever we do business.But such consistency doesnt preclude individuality.Park Plaza Hotels&Resorts and artotels are noted for their distinctive interiors and strong sense of place.Each is different and
209、constantly evolving.Yet each remains distinctly us.P A R K P L A Z A H O T E L SPark Plaza County Hall LondonSHOWCASE 0728 Park Plaza Hotels Annual Report 2007Light fantasticInspired by the magic of the Thames at night,the designers of the Park Plaza County Hall London on the south bank of the River
210、 Thames have made dramatic use of light throughout the 398-room hotel.One of the most striking examples is the appropriately-named Spectrum Bar and Caf,which provides a spectacular atrium setting for drinks or dinner.Park Plaza County Hall London1 Addington StreetLondon SE1 7RY+44(0)20 7021 1800 Spe
211、ctrum Bar&Caf by nightContemporary studio roomsPark Plaza Hotels Annual Report 2007 29 artotel berlin kudamm30 Park Plaza Hotels Annual Report 2007State of FluxusBerlin artist Wolf Vostell was a proponent of the Fluxus School of the 1960s,noted for its revolutionary blending of different media and d
212、isciplines.With an amusingly eclectic feel and signed Vostell lithographs in each of its 133 guest rooms,the artotel berlin kudamm is a contemporary homage to the artist and his period.artotel berlin kudammJoachimstaler Strasse 28-2910719 Berlin+49(0)30 88 4470Neutral dcor complements dramatic artwo
213、rksMinimalist design,effective resultsPark Plaza Hotels Annual Report 2007 31 Eastern appealOrange might be the national colour of the Netherlands,but at the Park Plaza Mandarin Eindhoven,the favoured fruit is of the eastern variety.Thats because in addition to 102 guest rooms,the hotel features thr
214、ee fine oriental restaurants with a contemporary twist echoed in Mandarins zen-like dcor.Park Plaza Mandarin EindhovenGeldropseweg 175611 SC Eindhoven+31(0)40 214 6500Modern zen interiorPark Plaza Mandarin Eindhoven32 Park Plaza Hotels Annual Report 2007Refreshing new spacePark Plaza Hotels Annual R
215、eport 2007 33 Park Plaza Victoria London34 Park Plaza Hotels Annual Report 2007First class arrivals and departuresJust steps away from one of Londons busiest mainline stations,the Park Plaza Victoria London has been designed to be a destination in its own right.The impressive contemporary foyer sets
216、 the scene for a restaurant serving modern European cuisine,a speciality coffee bar and 299 deluxe rooms,suites and apartments.Park Plaza Victoria London239 Vauxhall Bridge RoadLondon SW1V 1 EQ+44(0)20 7769 9999Clean modern linesUnique artworkPark Plaza Hotels Annual Report 2007 35 Park Plaza Wallst
217、reet Berlin36 Park Plaza Hotels Annual Report 2007Capitalist coolWhere better to celebrate the spirit of free enterprise than in the city where communism crumbled so dramatically?The Park Plaza Wallstreet Berlin does just that.The 167-room hotel,in the historic centre of the capital,is suitably well
218、 equipped for serious executive gatherings as well as more playful occasions.Park Plaza Wallstreet BerlinWallstrasse 23-2410179 Berlin+49(0)30 847 1170Bespoke designBrighter meetingsPark Plaza Hotels Annual Report 2007 37 Consolidated financial statementsConsolidated balance sheet 39Consolidated inc
219、ome statement 41Consolidated statement of changes in equity 42Consolidated statement of cash flow 43Notes to the consolidated financial statements 46Company financial statements Company balance sheet 78Company income statement 79Company statement of changes in equity 80Company statement of cash flow
220、 81Notes to the Company financial statements 83Appendices to the financial statements List of Group Companies,investments and joint ventures 85Auditors report 87Park Plaza Hotels LimitedYear Ended 31 December 2007Euro in thousandsFinancial statements 38 Park Plaza Hotels Annual Report 2007Park Plaza
221、 Hotels Annual Report 2007 39 Consolidated balance sheet As at 31 December 2007 2006 Note 000 000AssetsNon-current assetsIntangible assets 4 56,993 Property,plant and equipment 5 170,848 134,443Prepaid leasehold payments 6 20,621 18,678Investment in an associate 7 9,109 10,028Other financial assets
222、8 3,707 4,346 261,278 167,495Current assetsInventories 578 276Trade receivables 9 10,634 3,273Other receivables and prepayments 10 4,161 1,574Short-term deposits 1,564Restricted cash 646 1,021Cash and cash equivalents 11 119,376 6,212 135,395 13,920Total assets 396,673 181,415The accompanying notes
223、are an integral part of the consolidated financial statements.Adopted on:15 May 2008.Chen Moravsky,Chief Financial Officer.Boris Ivesha,President and Chief Executive Officer.40 Park Plaza Hotels Annual Report 2007 As at 31 December 2007 2006 Note 000 000Equity and liabilitiesEquityIssued capital 12
224、Share premium 195,894 14,401Foreign currency translation reserve (11,009)(3,332)Hedging reserve 1,759 4,349Accumulated deficit (21,377)(28,675)Total equity 165,267(13,257)Non-current liabilitiesBank borrowings 15 177,912 169,020Other financial liabilities 16 2,607 618Deferred income taxes 23 2,061 1
225、,192 182,580 170,830Current liabilities Trade payables 4,502 4,903Other payables and accruals 17 15,668 9,825Bank borrowings 15 28,656 9,114 48,826 23,842Total liabilities 231,406 194,672Total equity and liabilities 396,673 181,415The accompanying notes are an integral part of the consolidated finan
226、cial statements.Consolidated balance sheet Park Plaza Hotels Annual Report 2007 41 Year ended 31 December 2007 2006 Note 0001 0001Revenues 18 75,039 48,852Operating expenses 19 (44,503)(35,770)EBITDAR 30,536 13,082Rental expenses (6,102)(1,165)EBITDA 24,434 11,917Depreciation and amortisation (7,252
227、)(5,180)EBIT 17,182 6,737Financial expenses 20 (20,831)(14,491)Financial income 21 3,782 1,321Share in profit/(loss)of an associate (40)85Other income 22 22,184 Profit/(loss)before tax 22,277(6,348)Income tax expense(benefit)23 (21)1,555Profit/(loss)for the year 22,298(7,903)Basic and diluted earnin
228、gs/(loss)per share(in Euro)0.78(0.45)1(except earnings per share).The accompanying notes are an integral part of the consolidated financial statements.Consolidated income statement 42 Park Plaza Hotels Annual Report 2007 Foreign Total currency recognised Issued Share translation Hedging Accumulated
229、income capital premium reserve reserve deficit Total(expense)Balance as at 1 January 2006 14,401(3,007)(606)(20,772)(9,984)Change in fair value of hedging derivatives 4,955 4,955 4,955Foreign currency translation adjustments (325)(325)(325)Loss for the year (7,903)(7,903)(7,903)Balance as at 31 Dece
230、mber 2006 14,401(3,332)4,349(28,675)(13,257)(3,273)Cash dividend prior to IPO (15,000)(15,000)Issue of shares upon acquisition of the Park Plaza Group 60,935 60,935 Issue of shares upon IPO on AIM 125,508 125,508 IPO expenses (9,018)(9,018)Issue of shares to acquire artotel rights 4,000 4,000 Change
231、 in fair value of hedging derivatives (2,590)(2,590)(2,590)Foreign currency translation adjustments (7,677)(7,677)(7,677)Share-based payments 68 68 Profit for the year 22,298 22,298 22,298Balance as at 31 December 2007 195,894(11,009)1,759(21,377)165,267 12,031The accompanying notes are an integral
232、part of the consolidated financial statements.Consolidated statement of changes in equityPark Plaza Hotels Annual Report 2007 43 Year ended 31 December 2007 2006 000 000Cash flows from operating activitiesProfit/(loss)for the year 22,298(7,903)Adjustment to reconcile profit/(loss)to cash provided by
233、 operating activities(a)(17,466)5,407Net cash provided by operating activities 4,832(2,496)Cash flows from investing activitiesPurchase of property,plant and equipment (8,637)(11,797)Net change in cash upon acquisition of the Park Plaza Group(b)6,735 Net change in cash upon disposal of joint venture
234、(c)14,930(1,628)Decrease/(increase)in short-term deposits,net 3,459(989)Increase/(decrease)in restricted cash 375(117)Repayments of loans from jointly controlled entities 4,501Loans to related parties (8,686)Net cash provided by/(used in)investing activities 16,862(18,716)Cash flows from financing a
235、ctivities Proceeds from issuance of new shares 116,490 Dividend distribution (15,000)Proceeds from long-term loans 720 134,997Repayment of long-term loans (3,068)(116,251)Increase/(decrease)in short-term credit,net 67(807)Repayment of loans from related parties 687(247)Net cash provided by financing
236、 activities 99,896 17,692Increase/(decrease)in cash and cash equivalents 121,590(3,520)Net foreign exchange differences (8,426)379Cash and cash equivalents at beginning of year 6,212 9,353Cash and cash equivalents at end of year 119,376 6,212The accompanying notes are an integral part of the consoli
237、dated financial statements.Consolidated statement of cash flow44 Park Plaza Hotels Annual Report 2007 Year ended 31 December 2007 2006 000 000(a)Adjustment to reconcile profit/(loss)to net cash provided by operating activities Gain on sale of investments (9,148)Negative goodwill on acquisition of Pa
238、rk Plaza Group (13,036)Share in loss/(profit)of an associate 40(85)Provision for impairment 1,404 Deferred income taxes 682(29)Depreciation and amortisation 9,360 5,820 Sharebased payments 68 Changes in operating assets and liabilities Decrease in other assets 676 Increase in inventories (65)(6)Decr
239、ease/(increase)in trade and other receivables 199(466)Increase/(decrease)in trade and other payables (5,566)(1,907)(17,466)5,407(b)Net change in cash upon acquisition of the Park Plaza Group Current assets(except cash)(12,922)Current liabilities 29,889 Long-term assets (112,734)Long-term liabilities
240、 28,531 Fair value of the shares issued as consideration for acquisition 60,935 Negative goodwill 13,036 6,735 The accompanying notes are an integral part of the consolidated financial statements.Consolidated statement of cash flowcontinuedPark Plaza Hotels Annual Report 2007 45 Year ended 31 Decemb
241、er 2007 2006 000 000(c)Net change in cash upon disposal of joint venture Current assets(except cash)307 11 Current liabilities (104)(1,096)Property 5,579 Long-term liabilities (543)Gain on sale 9,148 14,930(1,628)(d)Supplemental disclosure of cash flows Cash paid during the year Income taxes 294 259
242、 Interest 13,009 10,816 Cash received during the year Interest 2,996(e)Significant non-cash transactions Shares issued to acquire the Park Plaza Group 60,935 Shares issued to acquire intangibles 4,000 The accompanying notes are an integral part of the consolidated financial statements.46 Park Plaza
243、Hotels Annual Report 2007Note 1 Generala.The consolidated financial statements of Park Plaza Hotels Limited(“the Company”)for the year ended 31 December 2007 were authorised for issuance in accordance with a resolution of the Directors on 15 May 2008.b.Description of business and formation of the Co
244、mpany:The Company was incorporated and registered in Guernsey on 14 June 2007.The Company through its subsidiaries owns,operates,manages,and franchises hotels in Europe,the Middle East and North Africa under two primary brands:Park Plaza Hotels&Resorts and artotel.On 14 July 2007,the Company entered
245、 into an agreement to acquire the Euro Sea Group.For periods prior to the legal formation of the Company,the assets,liabilities,revenues and expenses of Euro Sea Group were consolidated in preparing the financial statements(see Note 2.a).Also on 14 July 2007,as part of the IPO described in Note 1c,t
246、he Euro Sea Group acquired 100%of the voting shares of Park Plaza Hotels Europe Holding B.V.,its subsidiaries and other investments(“Park Plaza Group”see Appendix B).As of this date the assets,liabilities,revenues and expenses of the Park Plaza Group were included in the consolidated financial state
247、ments(see also Note 3).c.On 17 July 2007,all of the Companys Ordinary shares were admitted for trading on AIM of the London Stock Exchange.In addition,the Company completed an initial public offering(“IPO”)of 15,450,000 Ordinary shares,at a price of 5.50 per share(8.125 at the exchange rate on the d
248、ate of acquisition).The net proceeds received from the IPO amounted to 116.5 million(net of expenses of 9 million).Note 2 Summary of Significant Accounting Policiesa.Basis of preparation:The consolidated financial statements of Park Plaza Hotels Limited and all its subsidiaries(“the Group”)have been
249、 prepared in accordance with International Financial Reporting Standards(“IFRS”).On 14 July 2007,the Company entered into an agreement to acquire the Euro Sea Group.The Euro Sea Group represents a group of companies under common control of the former controlling shareholder of the Company.These comp
250、anies are principally engaged in the development,construction,management and operation of hotels in Europe.In consideration for the acquisition of the Euro Sea Group,the Company issued 17,499,999 shares to the former shareholders of the Euro Sea Group.As this transaction involved the combination of
251、businesses under common control,it is not a business combination in the scope of IFRS3,and the pooling of interests method of accounting has been applied in the presentation of the consolidated financial statements for the years ended 31 December 2007 and 2006.Accordingly,the assets and liabilities
252、of the Euro Sea Group transferred to the Company have been recognised at historical amounts.For periods prior to the legal formation of the Company,the assets,liabilities,revenues and expenses of the Euro Sea Group were consolidated in preparing the financial statements.The consolidated financial st
253、atements present the results and changes in equity of the Company and its subsidiaries as if the Group had been in existence throughout the years presented and as if the Euro Sea Group operations were transferred to the Company as of 1 January 2006.The accounting policies used in preparing the conso
254、lidated financial statements for the years ended 31 December 2007 and 2006 are set out below.These accounting policies have been consistently applied to the periods presented unless otherwise stated.The financial statements have been prepared on a historical cost basis,except for derivatives which h
255、ave been measured at fair value.b.Presentation currency:The financial statements are presented in Euro.Notes to the consolidated financial statementsPark Plaza Hotels Annual Report 2007 47 c.Basis of consolidation:The consolidated financial statements comprise the financial statements of the Group a
256、s at 31 December each year.The financial statements of the subsidiaries are prepared for the same reporting year as the parent company,using consistent accounting policies.All inter-company balances and transactions,income and expenses,and profits and losses resulting from intra-Group transactions t
257、hat are recognised in assets,are eliminated in full.Subsidiaries are fully consolidated from the date of acquisition,being the date on which the Group obtains control,and continue to be consolidated until the date that such control ceases.The Group has interests in hotels in the Netherlands,the Unit
258、ed Kingdom,Germany and Hungary,through subsidiaries and jointly controlled entities.For details of the Groups wholly-owned subsidiaries as at 31 December 2007,see Appendix C.For details of the Groups interests in jointly controlled entities(proportionally consolidated as at 31 December 2007),see App
259、endix D.d.Changes in accounting policy and disclosures:The Group has adopted the following relevant new and amended IFRS and IFRIC interpretations during the year.Adoption of these revised standards and interpretations did not have any effect on the financial performance or position of the Group.The
260、y did however give rise to additional disclosures.IFRS 7 Financial Instruments:DisclosuresIAS 1 Amendment Presentation of Financial StatementsIFRIC 8 Scope of IFRS 2The principal effects of these changes are as follows:IFRS 7 Financial Instruments:DisclosuresThis standard requires disclosures that e
261、nable users of the financial statements to evaluate the significance of the Groups financial instruments and the nature and extent of risks arising from those financial instruments.The new disclosures are included throughout the financial statements.While there has been no effect on the financial po
262、sition or results,comparative information has been revised where needed.IAS 1 Presentation of Financial StatementsThis amendment requires the Group to make new disclosures to enable users of the financial statements to evaluate the Groups objectives,policies and processes for managing capital.These
263、new disclosures are shown in Note 31.IFRIC 8 Scope of IFRS 2This interpretation requires IFRS 2 to be applied to any arrangements in which the entity cannot identify specifically some or all of the goods received,in particular where equity instruments are issued for consideration which appears to be
264、 less than fair value.As equity instruments are only issued to employees in accordance with the employee share scheme,the interpretation had no impact on the financial position or performance of the Group.e.Use of estimates:IFRS require management to use estimates or assumptions regarding transactio
265、ns or matters whose ultimate effect on the financial statements cannot be accurately determined at the time the financial statements are being prepared.Although the estimates and assumptions are made using the best judgment available,the final effect of these transactions or matters may differ from
266、the relevant estimates or assumptions.f.Business combinations:Business combinations,other than the Euro Sea Group transaction,are accounted for using the purchase method.Goodwill is initially measured at cost being the excess of the cost of the business combination over the Groups share in the net f
267、air value of the acquirers identifiable assets,liabilities and contingent liabilities.In the situation that the net fair value of the acquirers identifiable assets exceeds the cost of the business combination(negative goodwill),this excess is recorded in profit and loss as other income.48 Park Plaza
268、 Hotels Annual Report 2007g.Investment in an associate:An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture.Investments in associates are accounted for by the equity method.Under the equity method,the investments in associate
269、s are carried in the balance sheet at cost as adjusted by post-acquisition changes in the Groups share of the net assets of the associate,less any impairment in the value of individual investments.The statement of operations reflects the share of the results of operations of the associates.The accou
270、nting policies of the associates conform to those used by the Group.As of 31 December 2007,the Company has an investment in one associate,as follows:Place of Proportion of Principal Name of company incorporation ownership interest activityMarlbray Limited U.K.33.3%Hotel companyh.Jointly controlled e
271、ntities:The Group reports its interests in jointly controlled entities using proportionate consolidation.The Groups share of the assets,liabilities,income and expenses of jointly controlled entities are combined with the equivalent items in the consolidated financial statements on a line-by-line bas
272、is.Where the Group transacts with its jointly controlled entities,unrealised profits and losses are eliminated to the extent of the Groups interest in the joint venture,except to the extent that unrealised losses provide evidence of an impairment of the asset transferred.i.Foreign currency translati
273、on:The consolidated financial statements are presented in Euro which is the Groups presentation currency.The functional currency of the Company is Great Britain Pounds.Each entity of the Group determines its own functional currency and items included in the financial statements of each entity are me
274、asured using that functional currency.Transactions in foreign currencies are initially recorded at the rates of exchange prevailing on the dates of the transactions.Monetary assets and liabilities denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date.Pr
275、ofits and losses arising from exchange differences are included in the income statement.The assets and liabilities of the entities whose functional currency is other than the Euro are translated at exchange rates prevailing on the balance sheet date.Income and expense items are translated at the ave
276、rage exchange rates for the period.Exchange differences arising on the translation are classified as a separate component of equity(currency translation reserve).Such translation differences are recognised as income or as expenses in the period in which the entity is disposed of.Goodwill and fair va
277、lue adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.The following exchange rates in relation to the Euro have been used at balance-sheet date:As at 31 December 2007 2006 In EuroGreat Brita
278、in Pound 1.363 1.490Hungarian Forint 0.004 0.004 Percentage of increase/(decrease)in exchange rates during the year:31 December 2007 2006%Great Britain Pound (8.5)2.2Hungarian Forint Notes to the consolidated financial statementscontinuedPark Plaza Hotels Annual Report 2007 49 j.Intangible assets:In
279、tangible assets acquired separately are measured on initial recognition at cost.The cost of intangible assets acquired in a business combination is fair value at date of acquisition.Following initial recognition,intangible assets are carried at cost less any accumulated amortisation and any accumula
280、ted impairment losses.Intangible assets are amortised using the straight-line method over their estimated useful life and assessed for impairment whenever there is an indication that the intangibles may be impaired.The amortisation period and the amortisation method is reviewed at least at each fina
281、ncial year end.Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the assets is accounted for by changing the amortisation period or method,as appropriate,and are treated as changes in accounting estimates.The amortisation expense for i
282、ntangible assets is recognised in the income statement in the expense category consistent with the function of the intangible asset.Gains or losses arising from derecognition of an intangible asset are measured at the difference between the net disposal proceeds and the carrying amount of the asset
283、and recognised in profit and loss when the asset is derecognised.k.Property,plant and equipment:Property,plant and equipment are stated at cost,less accumulated depreciation and impairment losses.Depreciation is calculated using the straight-line method,over the estimated useful life of the assets a
284、s follows:YearsHotel buildings 50 95Furniture and equipment 2 15The costs of maintaining property,plant and equipment are recognised in the income statement as they are incurred.Costs incurred that significantly increase the recoverable amount of the asset concerned are added to the assets cost as a
285、n improvement and depreciated over the expected useful life of the improvement.l.Impairment of non-financial assets:At each reporting date,the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets may be impaired.If any such ind
286、ication exists,the recoverable amount of the asset is estimated.Where it is not possible to estimate the recoverable amount of an individual asset,the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.Recoverable amount is the higher of an assets fair valu
287、e less costs to sell and its value in use.In assessing value in use,the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.If the recoverable amount of
288、 an asset(or cash-generating unit)is estimated to be less than its carrying amount,the asset is considered impaired and carrying amount of the asset(cash-generating unit)is reduced to its recoverable amount.Impairment losses are recognised as an expense immediately.Where an impairment loss subsequen
289、tly reverses,the carrying amount of the asset(cash-generating unit)is increased to the revised estimate of its recoverable amount,but not in excess of the carrying amount that would have been determined had no impairment loss been previously recognised for the asset(cash-generating unit).A reversal
290、of an impairment loss is recognised as income immediately.m.Investments and other financial assets:Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss,loans and receivables,held-to-maturity investments,or available-for-sale financial as
291、sets,as appropriate.When financial assets are recognised initially,they are measured at fair value,plus,in the case of investments not at fair value through profit or loss,directly attributable transaction costs.The Group determines the classification of its financial assets on initial recognition a
292、nd,where allowed and appropriate,re-evaluates this designation at each financial year end.50 Park Plaza Hotels Annual Report 2007m.Investments and other financial assets:continuedAll regular way purchases and sales of financial assets are recognised on the trade date,which is the date that the Group
293、 commits to purchase the asset.Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.Loans and receivables are non-derivative financial assets with fixed or dete
294、rminable payments that are not quoted in an active market.Such assets are carried at amortised cost using the effective interest method.Gains and losses are recognised in income when the loans and receivables are derecognised or impaired,as well as through the amortisation process.n.Inventories:Inve
295、ntories include food and beverages and are valued at the lower of cost and net realisable value.Cost includes purchase cost on a first in-first out method.Net realisable value is the estimated selling price in the ordinary course of business and the estimated costs necessary to make the sale.o.Cash
296、and cash equivalents:Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.p.Derivative financial instruments:The Group uses derivative financial instruments such as interest rate swaps to hedge its risks associated with
297、 interest rate fluctuations.Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value.Derivatives are carried as assets when the fair value is positive and as liabilities when
298、the fair value is negative.Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken directly to profit or loss.The fair value of interest rate swap contracts is determined by reference to market values for similar instruments.For the pu
299、rpose of hedge accounting,hedges are classified as cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability or a forecast transaction.At the inception of a hedge relationship,the Group formall
300、y designates and documents the hedge relationship to which the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.The documentation includes identification of the hedging instrument,the hedged item or transaction,the nature of the risk bei
301、ng hedged and how the entity will assess the hedging instruments effectiveness in offsetting the exposure to changes in the cash flows attributable to the hedged risk.Such hedges are expected to be highly effective in achieving offsetting changes in cash flows and are assessed on an ongoing basis to
302、 determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.The effective portion of the gain or loss on the hedging instrument is recognised directly in equity,while the ineffective portion is recognised in profit or loss.Amount
303、s taken to equity are transferred to the income statement when the hedged transaction affects profit or loss,such as when hedged financial income or financial expense is recognised.q.Trade receivables:Trade receivables recognised under current assets are stated at their nominal value as reduced by a
304、ppropriate allowances for estimated uncollectible amounts.r.Bank borrowings:Interest-bearing bank loans are recorded at the proceeds received,net of direct transaction costs.After initial recognition these borrowings are subsequently measured at amortised cost using the effective interest method.Not
305、es to the consolidated financial statementscontinuedPark Plaza Hotels Annual Report 2007 51 s.Revenue recognition:In accordance with IAS 18,revenue corresponds to the value of goods and services sold in the ordinary course of business by fully and proportionally consolidated companies.It includes:Fo
306、r directly owned and leased hotels,all revenue received from customers for accommodation,catering and other services,and for managed and franchised hotels,all management and franchise fees.For the service businesses,royalties for the use of Group trademarks.In accordance with IAS 18,revenue is measu
307、red at the fair value of the consideration received or receivable,net of all discounts and rebates,VAT and other sales taxes.Rental revenue is recognised over the lease term on a straight-line basis.Other revenues,from rendering of services(consulting)are recognised as the services are provided.EBIT
308、DAREarnings before interest,tax,depreciation,amortisation and rental expenses and share of associate and tax(EBITDAR)corresponds to revenue less operating expenses.EBITDAR,together with EBITDA is used as a key management indicator.EBITDAEarnings before interest,tax,depreciation and amortisation(EBIT
309、DA)corresponds to gross profit after the operating costs of holding leased hotels.EBIT Earnings before interest and tax(EBIT)corresponds to gross operating profit after the operating costs of holding both leased and owned assets.t.Leases:Leases are classified as finance leases whenever the terms of
310、the lease transfer substantially all the risks and rewards of ownership to the lessee.All other leases are classified as operating leases.The Group as lessorRental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.The Group as lesseeOperating lea
311、se payments are recognised as an expense in the income statement on a straight-line basis over the term of the lease.Prepaid leasehold paymentsPrepaid leasehold payments are up-front payments to acquire long-term leasehold interest in land and building.These payments are stated at cost and are amort
312、ised on a straight-line basis over the respective period of the leases(between 95 and 125 years).u.Employee benefits:Share based paymentsThe Board has adopted a Share Option Plan,under which employees and directors of the Company,its subsidiaries and jointly owned companies receive remuneration in t
313、he form of share-based payment transactions,whereby employees render services as consideration for equity instruments(equity settled transactions).The costs of equity-settled transactions is recognised,together with a corresponding increase in equity,over the period in which the performance and/or s
314、ervice conditions are fulfilled,ending on the date on which the relevant employees become fully entitled to the award(vesting period).The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has ex
315、pired and the Groups best estimate on the number of equity instruments that will ultimately vest.The income statement charge or credit for a period represents the movement in the cumulative expenses recognised as at the beginning and end of that period.PensionThe Group has defined contribution pensi
316、on plans where the employer is liable only for the employers part of the contribution towards the individuals pension plans.52 Park Plaza Hotels Annual Report 2007v.Borrowing costs:Borrowing costs directly attributable to the acquisition,construction or production of qualifying assets,are added to t
317、he cost of those assets,until such time as the assets are substantially ready for their intended use or sale.Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.All
318、 other borrowing costs are recognised in the income statement in the period in which they are incurred.w.Taxation:Current income taxCurrent income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities
319、.The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.Deferred income taxDeferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and li
320、abilities and their carrying amounts for financial reporting purposes.Deferred tax liabilities are recognised for all taxable temporary differences,except:where the deferred tax liability arises from the initial recognition of goodwill or from an asset or liability in a transaction that is not a bus
321、iness combination and,at the time of the transaction,affects neither the accounting profit nor taxable profit or loss;in respect of taxable temporary differences associated with investments in subsidiaries,associates and jointly controlled entities,where the timing of the reversal of the temporary d
322、ifferences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.Deferred income tax assets are recognised for all deductible temporary differences,carry-forward of unused tax credits and unused tax losses,to the extent that it is probable tha
323、t taxable profit will be available against which the deductible temporary differences;and the carry-forward of unused tax credits and unused tax losses can be utilised except:where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an
324、 asset or liability in a transaction that is not a business combination and,at the time of the transaction,affects neither the accounting profit nor taxable profit or loss;and in respect of deductible temporary differences associated with investments in subsidiaries,associates and jointly controlled
325、 entities,deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.The carrying amount of deferred income tax assets is
326、reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.Unrecognised deferred income tax assets are reassessed at each balance sheet date and are
327、recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled,bas
328、ed on tax rates(and tax laws)that have been enacted or substantively enacted at the balance sheet date.Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the income statement.Deferred income tax assets and deferred tax liabilities are offset,if a l
329、egally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.x.Earnings per share:Basic earnings per share amounts are calculated by dividing net profit for the year by the weigh
330、ted average number of Ordinary shares outstanding during the year.Notes to the consolidated financial statementscontinuedPark Plaza Hotels Annual Report 2007 53 x.Earnings per share:continuedDiluted earnings per share amounts are calculated by dividing the net profit for the year by the weighted ave
331、rage number of Ordinary shares outstanding during the year plus the weighted average number of Ordinary shares that would be issued on the conversion of all the dilutive potential Ordinary shares into Ordinary shares.y.Future changes in accounting standards:Standards issued but not yet effectiveIAS
332、23 Borrowing CostsA revised IAS 23 Borrowing Costs was issued in March 2007,and becomes effective for financial years beginning on or after 1 January 2009.The Standard has been revised to require capitalisation of borrowing costs when such costs relate to a qualifying asset.A qualifying asset is an
333、asset that necessarily takes a substantial period of time to get ready for its intended use or sale.As the Company already has a policy of capitalising borrowing costs,the Company believes this Standard will have no material impact on the financial statements.IAS 1(Revised)Presentation of Financial StatementsThe revised IAS 1 Presentation of Financial Statements was issued in September 2007 and be
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