Annual Report 2022

Mandarin Oriental Hotel Group is an international hotel investment and management groupwith luxury hotels, resorts and residences in sought-after destinations around the world. Havinggrown from its Asian roots 60 years ago into a global brand, the Group now operates 36 hotels andnine residences in 24 countries and territories, with each property reflecting the Group’s oriental
heritage, local culture and unique design. Mandarin Oriental regularly receives international recognition
and awards for outstanding service and quality management, and has a strong pipeline of hotels andresidences under development. The Group has equity interests in a number of its properties andadjusted net assets worth approximately US$4.9 billion as at 31st December 2022.
Mandarin Oriental continues to drive its reputation as an innovative leader in luxury hospitality,
seeking selective opportunities to expand the reach of the brand, with the aim to maximise
profitability and long-term shareholder value.
The parent company, Mandarin Oriental International Limited, is incorporated in Bermuda andhas a primary listing in the standard segment of the London Stock Exchange, with secondary listingsin Bermuda and Singapore. Mandarin Oriental Hotel Group International Limited, which operates
from Hong Kong, manages the activities of the Group’s hotels. Mandarin Oriental is a memberof the Jardine Matheson Group.

Contents

1

Corporate Overview

3

Corporate Information

4

Highlights

6

Chairman’s Statement

8Group Chief Executive’s Review

14

Operating Summary

16

Development Portfolio

18

International Brand Recognition

20

Sustainability

29

Financial Review

34

Directors’ Profiles

36

Financial Statements

98

Independent Auditors’ Report

107

Report of the Valuers

108

Five Year Summary

109

Responsibility Statements

110

Corporate Governance137

Shareholder Information

138

Mandarin Oriental Hotel Group Contact Addresses

2 Mandarin Oriental International Limited

Corporate Information

Directors
Ben Keswick Chairman
John Witt Managing Director
James Riley Group Chief Executive
Matthew Bishop
Jinqing Cai
Adam Keswick
Archie Keswick
Y.K. Pang
Richard Solomons

Mandarin Oriental Hotel GroupInternational Limited
Directors
John Witt Chairman
James Riley Group Chief Executive
Matthew Bishop Chief Financial Officer
Graham Baker
Kieren Barry
Matthew Bland(joined the board on 1st April 2022)

Company Secretary
Jonathan Lloyd
Registered Office
Jardine House
33-35 Reid Street
Hamilton
BermudaFrancesco Cefalu(will join the board on 1st April 2023)

Paul Clark
Joanna Flint
Christoph Mares
Vincent MarotPaul Massot(will retire on 31st March 2023)

Anne O’Riordan
Y.K. Pang
Jeremy Parr(stepped down on 31st March 2022)

Company Secretary
Jonathan Lloyd

Annual Report 2022

3

Highlights

Mandarin Oriental International Limited
Combined revenue exceeded 2019 levels
Group returns to underlying profit
Strong performance from management business, particularly resort hotels
Good recovery by owned hotels, although results impacted by Hong Kong and Tokyo
Two new hotels and two new residences opened and seven new projects announced

Results
Year ended 31st December
2022
2021
US$m
US$m

Change%1,568.1

1,053.5

49

454.1

316.9

43

111.4

40.7

174

7.6

(68.1)

n/a(104.1)(73.9)(41)

Gain on asset disposals

47.0

–

n/a

Loss attributable to shareholders(49.5)(141.4)

65

US¢

US¢

%

Underlying earnings/(loss) per share3

0.60(5.39)

n/a

Loss per share(3.92)(11.19)

65

US$

US$

%

Net asset value per share

2.61

2.62

–

Adjusted net asset value per share 4

3.87

3.93

(2)

Net debt/shareholders’ funds

11%

16%

Net debt/adjusted shareholders’ funds 4

8%

10%

Combined total revenue of hotels under management1
Revenue
Underlying EBITDA (Earnings before interest, tax,
depreciation and amortisation)2
Underlying profit/(loss) attributable to shareholders3
Revaluation loss on investment property under development

1

Combined revenue includes turnover of the Group’s subsidiary hotels in addition to 100% of revenue from associate,joint venture and managed hotels.

2

EBITDA of subsidiaries plus the Group’s share of EBITDA of associates and joint ventures.

3

The Group uses ‘underlying profit/loss’ in its internal financial reporting to distinguish between ongoing business performanceand non-trading items, as more fully described in note 33 to the financial statements. Management considers this to be a key
measure which provides additional information to enhance understanding of the Group’s underlying business performance.

4

The Group’s investment properties are carried at fair value on the basis of valuations carried out by independent valuers at
31st December 2022. The other freehold and leasehold interests are carried at amortised cost in the consolidated balance sheet.
Both the adjusted net asset value per share and net debt/adjusted shareholders’ funds at 31st December 2022 have included themarket value of the Group’s freehold and leasehold interests.

4 Mandarin Oriental International Limited

Combined total revenue

Combined total revenue

by geographical areaby type of business

US$m

US$m
1,568.1

1,568.1
900.0

462.1
1,397.6
758.7

1,397.6
763.1

1,325.1
636.1
1,053.5354.0

1,325.1
718.1
1,053.5
565.3

275.0

831.0
348.6

358.0

340.4

280.9

2018

2019

593.0
278.6

170.4
514.8

491.8

529.1

239.0

2022

2021

119.7

115.2

78.5

2018

2019

2020

America

Asia

533.8
360.0

76.2
238.2

2020

593.0
275.5

134.3

2021

2022

Food and beverage

Rooms

Europe, Middle East and Africa (EMEA)

128.2

OthersUnderlying EBITDA and net interest expense

Net debt/adjusted shareholders’ funds

US$m

US$m
5,936.1

5,826.6

5,170.9187.9

4,965.7

4,896.7

8.8
179.1

154.5
10.5
144.0

111.4
8.8
102.6

40.7
18.0
1.6
16.4

2018

18.9

15.9

2.7

16.2

2019

1.7

11.2

14.2

(85.4)

10.0
30.7

17.2

20.1

2.6

2.1

14.6

18.0

2021

2022

4.9%

5.1%

284.7

300.4

2018

2019

9.8%

10.4%

506.2

517.5

2020

2021

7.7%
375.8

2022

(74.2)

2020

Underlying earnings before interest, tax, depreciation
and amortisation (EBITDA)
Net interest expense

Adjusted shareholders’ funds
Net debt

IFRS 16 ‘Leases’ impact on EBITDA andinterest on lease liabilities

Annual Report 2022

5

Chairman’s Statement

Overview
2022 has been a year of transition, after two years in which the global hospitality industry was badly hit by the
pandemic. Travel restrictions in Europe, the Middle East and America fell away during the first quarter, but East
Asia continued to be hampered by constraints on movement well into the fourth quarter. The performance of theGroup recovered strongly in the year, with combined total revenue of hotels under management of US$1.6 billion
in 2022, a significant increase from 2021 and 18% above 2019.

2022 Financial performance
Underlying earnings before interest, tax, depreciation, and amortisation (‘EBITDA’) were US$111 million, compared
to US$41 million in 2021. The Group achieved an underlying profit of US$8 million for the full year, its firstprofit since 2019. Although profitability remained significantly below pre-pandemic levels, this is a substantial
improvement compared with 2021, when the Group recorded an underlying loss of US$68 million.
Non-trading losses of US$57 million (US$73 million in 2021) comprised a US$104 million (3%) non-cash decreasein the valuation of the Causeway Bay site under development, offset by a US$47 million realised gain from the saleof Mandarin Oriental, Washington D.C. in September 2022, leading to a loss attributable to shareholders of
US$49 million.
At 31st December 2022, the adjusted net asset value per share, which reflects the independent valuation of both theGroup’s owned hotel properties and of the Causeway Bay site, was US$3.87, a 2% decrease compared with 2021.
Net debt fell to US$376 million from US$517 million at the end of 2021. Gearing as a percentage of adjusted
shareholders’ funds was 8%, compared to 10% at the end of 2021.
The Group remains well funded, and its liquidity position remained robust, with US$226 million of cash reserves
and US$471 million in available, committed debt facilities.
No dividend will be paid in respect of 2022.

Year in review
The Group’s performance benefitted from the resumption of normal travel conditions as 2022 progressed. Most of
the Group’s owned or partially owned properties reported better earnings in 2022. Performance from owned hotels,
however, continued to be adversely affected by lower contributions from the Hong Kong and Tokyo hotels, whose
performance was heavily impacted by COVID restrictions throughout most of the year. Results were notably betterin London, Paris, Singapore, and Bangkok, driven by improvements in occupancy and high rates. Overall EBITDA
from the Group’s owned hotel business was US$77 million, compared to US$24 million in 2021. After depreciationand interest charges, there was an underlying loss from the Group’s property interests of US$7 million in 2022,
compared to a loss of US$71 million in the prior year.
The Group’s management business recorded a stronger performance, with an EBITDA of US$34 million, compared
to US$17 million in 2021. Management fees increased in particular in resort destinations such as Bodrum, Lake
Como, and Dubai. The Group’s management business reported an underlying profit of US$17 million in 2022,
compared to US$5 million in 2021.

6 Mandarin Oriental International Limited

Development
In 2022, the Group announced seven new management contracts, in Greece, Italy, Egypt, Kuwait, the Maldives,
China and Vietnam. The Group’s robust development pipeline includes 26 projects expected to be completed in thenext five years.
The Group opened two new hotels in the year, in Shenzhen, China and Lucerne, Switzerland, and two standalone
residences in Barcelona, Spain and Beverly Hills, USA. Five projects are scheduled for opening in 2023: Mayfair in
London, Costa Navarino in Greece, Muscat in Oman, Zurich in Switzerland, and residences in New York.
The Causeway Bay site in Hong Kong, which is being redeveloped as a mixed-use office and retail complex, remains
on track to complete in 2025.

Sustainability
We continued to make progress against our various sustainability goals and commitments in 2022, and have set
long-term environmental targets for each of our hotels. We have largely achieved our goal to eliminate single-use
plastics in our hotels and we remain committed to improving this. Our ambitious goals for the future include
actively reducing food waste, expanding our responsible procurement practices, and empowering our colleagues
further in carrying out volunteering activity.

PeopleOn behalf of the Board, I would like to express my sincere appreciation to all our colleagues for their dedication andcommitment throughout the year. Our colleagues are central to the legendary guest experience for which the Groupis renowned, and we remain focussed on being an employer of choice.

Outlook
The Group expects to see a strong improvement in its results in 2023, particularly as restrictions in East Asia
continue to ease. With a robust pipeline of new developments and a globally recognised brand, the Board also
remains confident in the long-term success of the Group.

Ben Keswick
Chairman
2nd March 2023

Annual Report 2022

7

Group Chief Executive’s Review

Mandarin Oriental is widely recognised as one of the world’s leading luxury hotel groups, and the heritage of ourbrand is a thread that runs through each of our properties. 2022 has been an important year of transition for theGroup, as we have moved from a difficult pandemic environment to the return of more normal travel conditions
and hence recovered our ability to operate. We remain focussed on building on and leveraging the strength of ourbrand – oriental mastery of luxury and service excellence underpinned by our people. We are committed to our
vision – A World of Fans – as well as our strategy to grow our development pipeline and our management business.
We aspire for the Fan to grow in relevance and stature outside of the boundaries of our properties, paving the way
for Mandarin Oriental to evolve from a luxury hotel group to a luxury brand.
In 2022, it was pleasing to see the Group make a robust recovery and deliver increasingly improved performance,as travel conditions around the world gradually returned to normal. As we emerge from the pandemic, we havepositioned the Group for long-term growth, maintained our service standards and continued to create momentsof delight for our guests.
Our hotels performed strongly in regions without travel restrictions and were able to sustain their market-leading
position. In Asia, the operations of our hotels were hampered by travel restrictions. In Southeast Asia these began
to be relaxed in the middle of the year but those in China and Japan continued into the fourth quarter. However,with the full relaxation of these restrictions at the end of 2022, we are confident of a strong rebound in performancein 2023. Financially, while performance remained below pre-pandemic levels in the year, the Group reported asignificant improvement in EBITDA to US$111 million, compared to US$41 million in 2021. For the first timesince the outbreak of the pandemic in 2020, the Group was able to record an underlying profit for the year.
In addition to delivering improved operational and financial performance, we are encouraged that the Group has
made great strides across our strategic priorities.
In 2022, the Group opened two new hotels in Shenzhen and Lucerne, and two residences in Barcelona and Beverly
Hills. We expect to open several new properties across Europe, the Middle East, and Asia in 2023 and to complete
a comprehensive renovation of Mandarin Oriental, Singapore. In addition, seven new management contracts wereannounced in 2022, further strengthening our development pipeline. We are focussed on delivering this pipelineand bringing our new properties to market.
2023 also marks the 60th anniversary of the opening of the Group’s first hotel – Mandarin Oriental, Hong Kong.
The Group is delighted to commemorate this historic occasion with several celebratory events planned throughout
the year.
We relaunched mandarinoriental.com in 2022, following a comprehensive overhaul resulting in enhancements toelevate the guest digital experience and drive higher revenue through our digital sales channels. Our guest recognition
programme – Fans of M.O. – continues to grow, and we now have over 1.4 million members, representing an increaseof 32% since 2021. We extended our footprint with the launch of Mandarin Oriental Exclusive Homes, a hand-pickedcollection of the most luxurious private homes. We are also proud to be able to announce that we have achieved theelimination of 99% of single-use plastics across our portfolio of hotels. As we look ahead, we are optimistic about
the future.

8 Mandarin Oriental International Limited

2022 Performance
Overall, the Group’s financial performance improved significantly in 2022. Following the removal of travel
restrictions in most parts of the world, the Group experienced strong demand, and occupancy increased
considerably compared to 2021. Our hotels also achieved high rates, with many setting new records, as guests
sought luxury and superior service. In China and Japan, however, travel restrictions that were in place until late2022 limited the recovery of our hotels compared to 2021 and other regions.
Combined total revenue from hotels under management was US$1,568 million, a 49% increase compared to 2021,
supporting the Group’s return to profitability. EBITDA was US$111 million and underlying profit was US$8 million.
This performance represents a marked improvement compared to our 2021 financial performance, when we reported
an EBITDA of US$41 million and an underlying loss of US$68 million.
The improved performance was primarily driven by higher occupancy and strong rates in Europe, the Middle East,
and Africa (‘EMEA’) and America. While occupancy generally remained slightly below pre-pandemic levels in key
gateway cities and leisure destinations, our hotels achieved record rates, resulting in strong Revenue Per Available
Room (‘RevPAR’). In EMEA, RevPAR was US$564, 45% above 2021, driven by improved occupancy and average
daily rate (‘ADR’). RevPAR also exceeded 2019 by 22%. Similarly, in America, the Group recorded RevPAR of
US$397, 50% above 2021.
In Asia, the Group achieved occupancy of 39% in 2022, compared to 35% in 2021. Travel restrictions in Southeast
Asia were relaxed gradually throughout the year, and the Group’s hotels saw quarter-on-quarter improvements in
occupancy, which led to steadily improving financial performance. In China and Japan, however, travel restrictions
remained in place for almost all of 2022, and demand was suppressed, impacting the performance of our hotels in
those markets.

Owned hotel performance
The Group’s owned hotels, which contribute a major proportion of the Group’s results, recorded an EBITDA of
US$77 million in 2022, considerably higher than the US$24 million result in 2021. These hotels, however, made anunderlying loss of US$7 million in 2022, predominantly due to depreciation charges attributable to the properties.
Of the Group’s 14 owned or partially owned hotels, operations in the Group’s two key profit-generating hotels in
Hong Kong and Tokyo were seriously hampered by stringent travel restrictions for the majority of the year. These
restrictions were removed in the fourth quarter, but not in time to allow much of an improvement in their financial
performance. Prior to the pandemic, Hong Kong was the Group’s most profitable hotel. In 2022, it delivereda marginally positive EBITDA, supported by food and beverage performance, but remained well below peak
performance levels. Tokyo incurred a significant EBITDA loss, due to the rental charges arising from it being aleased property. The Group’s owned hotels in Southeast Asia benefitted from the gradual relaxation of restrictions
earlier in 2022. Popular destinations such as Bangkok and Singapore delivered robust profitability, with these hotels
both achieving EBITDA of US$5 million in the fourth quarter, a significant improvement from the third quarter.
In EMEA and America, where trading conditions substantially improved compared to last year, all hotels achieved
positive EBITDA. Of note were contributions made by the Group’s hotels in London and Paris, both of which
delivered profitability at or above pre-COVID levels driven by strong rates. Madrid, which reopened in 2021 following
a three-year restoration, also delivered solid performance. In America, the Group’s hotel in Miami delivered anothergood result, and hotels in key cities such as New York and Boston were able to achieve record rates.

Annual Report 2022

9

Group Chief Executive’s Review Continued

Management business performance
The Group’s management business delivered a higher proportion of the Group’s overall result than it did
historically. As a result of the improved trading conditions and Mandarin Oriental’s expanded portfolio of hotels
and residences, total hotel management fees were US$60 million, 57% higher than 2021. In 2022, the managementbusiness reported a positive EBITDA of US$34 million and an underlying profit of US$17 million, a significant
improvement compared to US$17 million EBITDA and US$5 million underlying profit in 2021.
Most hotels delivered higher management fees than last year, and leisure destinations such as Dubai, Bodrum,and Lake Como, continued to achieve high rates and occupancy due to strong demand, and produced anotherrecord year of management fees. Whilst the Group has remained agile in adapting to changes in restrictions andgovernment policies, results in China were inevitably impacted. Only now are normal travel restrictions returning
to the region, and the Group is confident in a fast recovery in travel and improved trading conditions in 2023.

Strategy – A World of Fans
Through the pandemic, we were focussed on near-term priorities to rebuild business levels and win new business,
uphold the brand’s reputation for quality, and maintain our agile approach to operations to improve profitability.
As we emerge from the pandemic, our vision – A World of Fans – is advancing both the value of the brand and the
profitability of the Group. We see every interaction, both internally and externally, as an opportunity to build
meaningful and long-lasting relationships with a global community of Fans. We are focussed on continuing toprogress our strategic priorities, outlined below, to create the right foundation to drive sustainable long-term growth.
1) Elevating our brand
Mandarin Oriental is a globally recognised brand and the Group’s most powerful asset. The foundation lies inour portfolio of unique properties delivering 21st century luxury and legendary, personalised, and empathetic
service reflecting the Group’s oriental heritage. We continue to develop the brand’s presence by expanding ourglobal footprint through new hotels and residences. Partnerships with other luxury brands continue to enhance
the brand beyond the four walls of our hotels. We remain focussed on growing the Group’s existing ventures,
including the continual expansion of Mandarin Oriental Exclusive Homes, our online retail store Shop M.O.,
and our strategic alliance with The Oberoi Group. Our long-term objective is to evolve from a luxury hospitality
brand to a luxury brand. We will continue to review and evaluate strategic opportunities with the goal of
unleashing the full potential of the brand and reaching a wider audience in new sectors.

10 Mandarin Oriental International Limited

2) Powering our coreAs our business grows, we increasingly need to leverage our data to gain deeper insight into our properties anddetermine new strategies for improved performance and growth. The data we gather and analyse today provides
additional feedback on the strengths and weaknesses in the proposition of each of our hotels. Our colleagues areactively using this to drive better services, an enhanced guest experience, improved revenue management andmore effective marketing. There is still more, however, that we can do with our data, and we have reorganised
our internal teams to drive excellence in this area, as well as enhancing visibility across all digital andtransformation initiatives.
We are also focussed on driving operational efficiencies by enhancing the effectiveness of our systems andprocesses to ensure our internal functions are modernised to enable scalability.
3) Lifting our people
Evolving and protecting our unique cultural DNA remains critical to securing the consistent delivery of service
excellence, a crucial differentiator of Mandarin Oriental. The Group’s focus on acquiring and retaining the righttalent, providing an engaging colleague experience, and preparing the organisation for growth remains central
to our people strategy and is increasingly relevant as the hospitality industry faces talent shortages. We areembarking on a human resources (‘HR’) transformation to support the needs of a changing workforce. We
recently launched a digital, interactive learning and development platform. In addition, we will be implementing
a HR operating model that simplifies our technology platform landscape and will be redesigning our processes
to enhance our understanding of our talent to support organisational agility.
4) Exceptional quality
The Group firmly believes that its competitive advantage lies in its portfolio of unique properties and consistentdelivery of service excellence, characterised by the warm, engaging, personal interactions we have with ourguests. As we plan for the opening of 26 new hotels and residences in the next few years, we are constantly
evolving our guidelines across design and technology to curate a portfolio of distinct, highly appealing
properties. We are also focussed on leveraging new technologies such as Hello MO, our on-property live guest
communication channel, to provide a customer-centric, personalised experience for guests. In addition, we arecommitted to maintaining our high service levels, striving to exceed our guests’ expectations, and evolving ourstandards for future guests.

Annual Report 2022

11

Group Chief Executive’s Review Continued

Business development strategy
The Group’s long-term strategic priority is to grow its management business significantly by securing management
contracts in key destinations, leveraging the strength of our brand. We will retain ownership of iconic properties
in brand-defining locations, in order to benefit from operational profitability and capital appreciation over the
long-term, while conducting regular reviews of the Group’s asset portfolio.
Today, we operate 36 hotels and nine residences. In 2022, we opened two new hotels in Shenzhen and Lucerne, andtwo standalone residences in Barcelona and Beverly Hills. We also announced seven new management contracts in
Costa Navarino (Greece), the Maldives, Cairo, Cortina (Italy), Tianfu (China), Kuwait, and Bai Nom (Vietnam).
These new properties are all management contracts, expanding the Group’s presence into new countries and new
propositions, including the Group’s first alpine resort.
Over the past few years, we have diligently built a robust pipeline, which now comprises over 26 projects expected
to open in the next five years. We are confident that our development strategy will enable a healthy growth rate.
We remain focussed on maintaining the momentum of delivery of new hotel and residences openings andcontinued replenishment of our development pipeline. While we are somewhat reliant on developers, we areworking closely with our property owners to ensure the smooth delivery of projects and meet our target of opening
four to five new properties each year. In 2023, we expect to open four new hotels in London, Muscat, Zurich andCosta Navarino, and residences in New York.
As part of the regular review of our asset portfolio, we completed the sale of Mandarin Oriental, Washington D.C.,
in September 2022.
Looking ahead, the redevelopment of the site in Causeway Bay, Hong Kong is on track to complete in 2025.

Sustainability
Corporate responsibility values are deeply ingrained in Mandarin Oriental’s culture, and sustainability implications
are carefully considered in every decision across the Group. One of our guiding principles is ‘Acting with responsibility’,
and we have established a Naturally Better programme to direct our efforts towards the well-being of the planet,
communities and individuals. As the Group grows, its responsibility to drive sustainability in the way its hotels
operate becomes even more impactful.
We aim to achieve the best possible environmental performance across all of our hotels. We have developed 10-year
environmental targets for each of our hotels, differentiated by reference to the circumstances, priorities and locationof each property and made good progress against these.
In the past year, we have continued to push ahead across our various sustainability goals and commitments, andwe are proud to have achieved considerable success through collective action. This includes broadly achieving ourtarget to eliminate single-use plastics in our hotels, by reaching 99% elimination in 2022.
Going forward, we will continue to focus on advancing our key sustainability priorities. Our ambitious goals
include actively reducing food waste and expanding our responsible procurement practices. We will also be
providing additional paid leave for volunteering, to empower colleagues to interact with their communities andcontribute to causes that are close to their hearts.

12 Mandarin Oriental International Limited

Culture and colleagues
At the heart of Mandarin Oriental’s reputation as a luxury hotel group is its culture, derived from its oriental
heritage and an unwavering focus on delivering exceptional, personalised, and empathetic service. We continue
to foster a culture of inclusivity and innovation, that encourages new and different behaviours and ideas, to stay
relevant with the pace of change in today’s world. We empower colleagues to feel comfortable in being themselves
and in voicing their ideas. We encourage our colleagues to believe in and deliver our core values of doing the rightthing for customers, communities, and the planet. We must continue to actively support and reward thesebehaviours to sustain this culture and mindset.
Our vision – A World of Fans – can only be achieved through our people. I would like to personally thank eachand every one of my colleagues for their commitment, dedication, and hard work in the past year. Their continuingdesire to deliver unique and memorable experiences for our guests and the pride with which they carry the
Mandarin Oriental brand is central to the success of the business.

The year ahead
2023 will be a very busy year for the Group with multiple new openings of hotels and residences, and improvements
to our existing portfolio. We expect the Group’s financial performance in 2023 will benefit from the return ofdemand in Hong Kong and Tokyo, two of the Group’s key profit-contributing hotels. We are confident that, with
our globally recognised brand, expanding Fan base, robust pipeline of projects, and our people, we are well-placed
to benefit from improving market conditions and to achieve long-term growth.

James Riley
Group Chief Executive
2nd March 2023

Annual Report 2022

13

Operating Summary

Total portfolio RevPAR
US dollar

Constant currency
2022
US$

2021
US$

% Change

123

86

43

609

400

52

America

397

265

50

Total

306

203

51

Asia
Europe, Middle East
and Africa

2022
US$

2021
US$

% Change

130

86

51

709

400

77

America

401

265

51

Total

340

203

68

Asia
Europe, Middle East
and Africa

Occupancy is calculated based on the number of occupied rooms out of the total number of available rooms in which
the hotel is in operation during the period. The like-for-like RevPAR presented in the table above includes all hotels
that were in the Group’s portfolio and operating for the entire year of both 2021 and 2022. Any new openings,
closures or disposals during the period are excluded.

Group’s subsidiary hotels RevPAR
ASIA
Mandarin Oriental, Hong Kong 100% ownership

Mandarin Oriental, Tokyo 100% leasehold

2022

2021

% Change

2022

2021

% Change

Available rooms

494

494

–

Available rooms

179

179

–

Average occupancy (%)

29.8

30.2

(1)

Average occupancy (%)

50.5

28.9

75

Average room rate (US$)

339

315

8

Average room rate (US$)

485

504

(4)

RevPAR (US$)

101

95

6

RevPAR (US$)

245

145

69

2022

2021

% Change

Available rooms

272

272

–

Average occupancy (%)

52.2

49.1

6

Average room rate (US$)

121

92

32

RevPAR (US$)

63

45

40

Mandarin Oriental, Jakarta 96.9% ownership

14 Mandarin Oriental International Limited

EUROPE, MIDDLE EAST AND AFRICAAMERICA

Mandarin Oriental Hyde Park, London 100% ownership

Mandarin Oriental, Boston 100% ownership

2022

2021

% Change

Available rooms

181

181

–

Average occupancy (%)

60.3

30.7

Average room rate (US$)

1,445
871

RevPAR (US$)

2022

2021

% Change

Available rooms

148

148

–

97

Average occupancy (%)

56.6

38.3

48

1,281

13

Average room rate (US$)

702

666

5

393

122

RevPAR (US$)

397

255

56

Mandarin Oriental, Munich 100% ownership
2022

2021

% Change

73

73

–

Average occupancy (%)

65.8

40.1

64

Average room rate (US$)

1,041

906

15

685

363

89

2022

2021

% Change

Available rooms

135

135

–

Average occupancy (%)

60.2

34.0

77

Average room rate (US$)

1,284

1,094

17

773

372

108

2022

2021

% Change

Available rooms

178

178

–

Average occupancy (%)

59.1

40.2

47

Average room rate (US$)

666

647

3

RevPAR (US$)

394

260

52

Available rooms

RevPAR (US$)

Mandarin Oriental, Paris 100% ownership

RevPAR (US$)

Mandarin Oriental, Geneva 100% ownership

Annual Report 202215

Development Portfolio

The following 25 hotels and 13 Residences at Mandarin Oriental are expected to open in the next five years.
Asia
Mandarin Oriental, Bai Nom
A new resort with branded residences in Phu Yen province, Vietnam offering 72 suites and villas, including 25 Residences. The property will spread out
across a 29-hectare site with guest accommodation located directly on the beach and dotted through the hills.

Mandarin Oriental Qianmen, Beijing
72 courtyard suites located in a traditional hutong quarter, providing a rare opportunity to experience living in an authentic Beijing residential district,close to Tiananmen Square.

Mandarin Oriental Tianfu, Chengdu
A 267-room hotel located in Tianfu, a modern business district south of Chengdu, the capital city of Szechuan province in China.

Mandarin Oriental, Da Nang
A luxury waterfront resort comprising 69 villas and 18 Residences at Mandarin Oriental, ideally located on a spectacular beach in one of Vietnam’s mostpopular leisure destinations.

Mandarin Oriental, Hangzhou
A 194-room hotel in the new Westlake 66 luxury commercial and retail complex, located close to the West Lake, a UNESCO World Heritage Site andone of China’s primary leisure destinations, with easy access to the city’s principal business hubs.

Mandarin Oriental, Makati
A 275-room hotel located within the Ayala Triangle in Manila’s central business district of Makati.

Mandarin Oriental, Maldives
A picturesque private island resort comprising 120 stand-alone villas, including 10 branded Residences at Mandarin Oriental, with panoramic views of
the Indian Ocean.

Mandarin Oriental, Nanjing
A 106-room hotel located in a premier mixed-use development on the Qinhuai River, in close proximity to historic landmarks including the Gate of China,
which forms part of one of the longest ancient city walls in the world.

Mandarin Oriental, Phuket
A 105-room beachfront resort located on the island’s west coast in picturesque Laem Singh Bay on Millionaire’s Mile, with panoramic views of
the Andaman Sea.

Mandarin Oriental, Saigon
A 228-room hotel located in a mixed-use development in the heart of Ho Chi Minh City, close to key landmarks.

Europe, Middle East and Africa
Mandarin Oriental Shepheard, Cairo
A re-branding of the celebrated Shepheard Hotel in Downtown Cairo, currently closed for renovation. This 188-room and 88-suite property is a heritage
landmark in the city, with stunning views of the Nile and Gezira island.

Mandarin Oriental Cristallo, Cortina
A re-branding of the historic Hotel Cristallo in Cortina d’Ampezzo, Italy, which will re-open as Mandarin Oriental Cristallo, Cortina, in the summer of 2025
after a comprehensive renovation. This 83-room historic hotel enjoys impressive views of the Dolomites and will be the Group’s first alpine resort.

Mandarin Oriental, Costa Navarino
A stunning 99-villa beachfront resort in Greece, located on the southwest coast of the Peloponnese, one of the most breath-taking landscapes in
the Mediterranean.

Mandarin Oriental Downtown, Dubai
A 259-room hotel and 266 Residences at Mandarin Oriental, located on Sheikh Zayed Road, with views over downtown Dubai and direct access to the area’s
business and leisure attractions.

Mandarin Oriental Etiler, Istanbul
A 158-room hotel and 251 luxurious Residences at Mandarin Oriental, located within three standalone towers in the prestigious Etiler district of Istanbul.

Mandarin Oriental, Kuwait
A new 159-room hotel in the heart of the financial district of Kuwait City. Located in an iconic 80-storey tower, the property is designed by the award-winningarchitects, Foster + Partners.

Mandarin Oriental Mayfair, London
A 50-room boutique hotel and 77 Residences at Mandarin Oriental, located on Hanover Square in the heart of London’s Mayfair district.

16 Mandarin Oriental International Limited

Europe, Middle East and Africa continued
Mandarin Oriental Punta Negra, Mallorca
A new beach resort in one of the most sought-after locations on the island of Mallorca, occupying an iconic peninsula. Surrounded by natural beauty,
the resort spreads over 3 hectares and offers 131 guestrooms, suites and bungalows just steps from the waterfront.

Mandarin Oriental, Muscat
A 150-room resort and 150 Residences at Mandarin Oriental, located on the beach in a prime city location, with views over the Arabian Sea.

Mandarin Oriental, Tel Aviv
A 225-room hotel and 231 Residences at Mandarin Oriental, in an unrivalled waterfront location overlooking one of the city’s pristine beaches.

Mandarin Oriental, Vienna
A 151-room hotel and 17 Residences at Mandarin Oriental, housed in a heritage building within the Ringstrasse in District One of Vienna, within easy
walking distance of the city’s major attractions.

Mandarin Oriental Savoy, Zurich
A re-branding of the historic Savoy Baur en Ville, currently closed for renovation. This 80-room hotel is situated within the main business centre, close to thecity’s leisure attractions and a short walk from Lake Zurich.

America
Mandarin Oriental, Boca Raton
A 163-room hotel and 88 Residences at Mandarin Oriental, part of a mixed-use complex, surrounded by Boca Raton’s most affluent, residential
neighbourhoods and a short walk from miles of pristine beaches.

Mandarin Oriental, Grand Cayman
A 100-room beachfront resort and 89 branded Residences at Mandarin Oriental, situated on 67 acres at St James Point, on the southern shore of the island.

Mandarin Oriental, Honolulu
A luxury 125-room hotel and 99 Residences at Mandarin Oriental, located on the Hawaiian island of Oahu, in the heart of the Ala Moana District.

Mandarin Oriental Residences, Fifth Avenue
69 luxurious residences located on Fifth Avenue New York, housed in an elegant 1920’s building on the corner of Fifth Avenue and 54th Street.

Opening dates are determined by each project’s owner/developer. All of the above projects will be managed by Mandarin Oriental Hotel Group with no equity
investment from the Group.
Room numbers reflect the latest estimate from each project’s owner/developer, and may therefore differ from the original announcements and the final
number once the project is completed.

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17

International Brand Recognition

Mandarin Oriental continues to be recognised as one of
the world’s most esteemed luxury hotel brands. In 2022,
the Group received numerous international awards andaccolades from leading publications, travel associations
and related platforms. Key achievements included theGroup’s recognition as one of the ‘Best Hotel Brands’
by Travel + Leisure and 13 properties featured in
Condé Nast Traveller’s ‘Readers’ Choice Awards’.

Mandarin Oriental, Hong Kong

In 2022, the innovation of 17 restaurants across theGroup were honoured in the Michelin guides, with27 stars granted, eight of which received the highly
coveted two-star rating. The Group’s continued
commitment to excellence in wellness was also
highlighted, including Forbes awarding 15 hotels
with ‘Five Star Spa’ status.

Condé Nast Traveller, UK

Mandarin Oriental Hotel Group
Mandarin Oriental was always a solid bet for attention
to detail and exemplary service. The smiling, attentive
staff, are a reminder of what hospitality is all about;they make you feel welcome as soon as you walkthrough the door, and the overall impression is thatno request is too much.
Financial Times, UK

Mandarin Oriental, Bangkok
The world’s best hotels aren’t just beautifully designed,
meticulously staffed and flush with facilities –the 146-year old Mandarin Oriental, Bangkok is
all of these things – they are also places infused witha sense of fun, an anything-might-happen frisson.
I simply don’t feel like I’ve been to Bangkok unlessI’ve had at least one night soaking up the good life
at Mandarin Oriental.
Condé Nast Traveller, UK

This hotel has always been fun – a celebration ofHong Kong’s unique identity. Or the first time inits history, the hotel now also has a club lounge withcocktail hours and afternoon tea. But it’s not the new
attractions that really matter. What counts is that
Mandarin Oriental remains a much-loved symbol of
the city’s cosmopolitan history.

Mandarin Oriental, Barcelona
There’s no need to sacrifice luxury for location at
Mandarin Oriental, Barcelona. Its tranquil spa,
high-end restaurants and sumptuous rooms mean
this hotel is not just the ultimate city break crash pad
but a must-visit destination in its own right. So no one
will judge you if you check in then never actually
venture beyond the front door…
Country & Town House, UK

Mandarin Oriental, Doha
Mandarin Oriental, Doha opened its doors in 2019 as
the anchor for the new art, culture and sustainability
neighbourhood Msheireb Downtown Doha andfast became one of the most tasteful retreats in the
Qatari capital. While Mandarin Oriental’s signature
hospitality and traditional white-gloved luxury prevail,this is a hotel with Qatari heritage and soul at its core.
Condé Nast Traveller, UK

Mandarin Oriental Jumeira, Dubai
Five gorgeous pools, a breath-taking private beach,and a fabulous spa make Mandarin Oriental Jumeira aprime choice for honeymooners looking for a glamorous
yet relaxing stay in Dubai. With a beachfront locationright in front of Mercato Beach, Mandarin Oriental
Jumeira, Dubai is a great base for discovering all
downtown Dubai’s main attraction. The hotel is
Mandarin Oriental at its finest, as guests are greetedwith a stunning signature scent the moment you enter.
There’s certainly plenty to fall in love with there.
Glamour, UK

18 Mandarin Oriental International Limited

Mandarin Oriental Bosphorus, Istanbul

Mandarin Oriental, Milan

Launched in September 2021, Mandarin Oriental
Bosphorus, Istanbul was one of the most highly
anticipated hotel openings last year and it is certainly
impressive from its super chic interior to its gorgeous
location, right on the shoreline of the Bosphorus.

Mandarin Oriental, Milan set within four breathtaking 18th century buildings that would make anyarchitecture-lover swoon, this former Manor houseis the epitome of chic retreat with a mix of Oriental
opulence and modern Milanese swank. Seriously,
you couldn’t design a more glamorous retreat befitting
this fashion capital.

Forbes, US

Mandarin Oriental Hyde Park, London
Mandarin Oriental Hyde Park, London has everything
you could want from a romantic hotel stay, from an
indulgent spa with couples treatment options to a broad
selection of stylish food and drink options. The guest
rooms are elegant and contemporary, with the option
to book a view of Hyde Park’s lush greenery, and thesignature suites are worth the splurge.
Brides, US

Mandarin Oriental Palace, Luzern
There is no better base camp than the Palace hotel –lately reborn as Mandarin Oriental Palace, Luzern –and in particular its Panoramic Rooftop Terrace Suite,whose elevated corner position gives 360-degree viewsof the astonishing panorama. The Palace opened
in 1906, but I doubt it ever has ever looked so goodor felt so fresh as it does today – luminous, airy,
delicately scented with bergamot and pine needles.
The characterful belle époque elements have been
meticulously preserved. The more time you spend in it,
the more likely you are to appreciate the attention todetail that has gone into its restoration.
The Telegraph, UK

Mandarin Oriental Ritz, Madrid
Madrid’s grande dame, the Ritz, opened by César Ritz
himself in 1910, has never looked so good. Dazzlingly
fresh from an impressive makeover by French design
studio Gilles & Boissier it is now part of Mandarin
Oriental group, which has spared no expense in
re-opening this Belle Époque jewel for the glamorous
Madrileños who have long frequented it.

Forbes, US

Mandarin Oriental, Paris
One of the most luxurious hotels in Paris is undoubtedly
Mandarin Oriental, Paris, among the boutiques of rue
Saint-Honoré, and just a 10-minute walk away from theworld-famous Louvre. This vibrant city hotel, built
around a central, leafy courtyard, brings in the fashion
and creativity of Paris and blends it seamlessly with theflair and hospitality that Mandarin Oriental group are
so well known for. It is a hotel full of nods to Paris’
history while simultaneously ushering in the future.
Condé Nast Traveller, UK

Mandarin Oriental, Canouan
Privacy and exclusivity are key words at Mandarin
Oriental, Canouan. With just 26 suites and 13 villas,
guests can expect impeccable service and a highattention to detail – not to mention unmatchedocean views at every turn.
Forbes, US

Mandarin Oriental, New YorkA cornerstone of the city’s five-star hotel scene,
Mandarin Oriental’s New York City outpost is
known (for) elite service, fantastic spa, and impressive
vistas. The rooms feel equal parts timeless in theirdefinition of luxury and contemporary.
Condé Nast Traveler, US

Country & Town House, UK

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19

Sustainability

Sustainability Update‘Acting with responsibility’ is central to Mandarin Oriental’s culture, and hence, sustainability implications arecarefully considered with every decision across the Group. We are guided by our desire to ‘do the right thing’,
and this is reflected in our approach to sustainability and our pursuit to seamlessly integrate it into our operations
and processes, from daily procurement decisions to Group-wide commitments. Our sustainability framework
is designed to support Mandarin Oriental in doing the right thing for our Planet, Guests, Colleagues andCommunities with alignment to the United Nations Sustainable Development Goals, which serve as an importantreference as we grow our brand around the world.
Our strong governance structure is well established with an Executive Advisory Panel and Group Sustainability
Office supporting Sustainability Champions at every property, ensuring that sustainability is managed at every levelof the organisation including at the grassroots. Our Champions are empowered to advance our focus on reducing
our environmental impact, procuring responsibly, increasing social impact, and embedding inclusion deeper into
our culture. Our sustainability achievements in 2022 are the result of hard work on the part of our colleagues, all ofwhom continue to demonstrate exceptional dedication and professionalism towards positively impacting their local
communities. Across our portfolio, we endeavour to operate responsibly and sustainably over the long term, thereby
fostering a culture that embraces diversity and promotes inclusion, which supports our colleagues and our communities.
In 2022, we appointed Lloyd’s Register Quality Assurance (‘LRQA’) as our third-party auditor to verify each hotel’s
compliance against some of our key sustainability commitments. We relentlessly continued to pursue our ambitious
goal of eliminating single-use plastics where possible 1 and verified this status for 30 out of 35 hotels by year-end –we are confident the remaining hotels will fully comply in 2023. We estimate that our efforts to-date equate toeliminating over 99% of single-use plastics in our operations and approximately 930 tonnes of plastic waste perannum. While our relatively small footprint limits our contribution to global plastic reduction, we are in a strong
position to inspire important changes in the industry such as normalising plastic free supplier packaging. We havealso advanced our responsible sourcing commitments and achieved Group-wide LRQA-verified status for 100%
responsibly procured coffee, tea, cocoa, vanilla, paper and avoidance of endangered seafood types. Keeping in viewthe global concern for climate change, we continue to monitor decarbonisation opportunities and that steadyprogress is being made towards our 2030 environmental targets with property-led initiatives to reduce energy,
switch to renewables, conserve water and reduce waste.
In the face of mounting global societal, economic and environmental risk, we believe sustainability is essential toenduring success and resilience. We have thus been actively expanding our sustainability programme to encompass
a good balance of environmental, social and governance (‘ESG’) components and deepening our commitments andgoals. This year, we published our Environmental Policy, Human Rights Policy, and Supplier Code of Conduct toactively communicate our ESG commitments on our Company website.

1

Excluding supplier packaging, although we continue to work closely with our suppliers to eliminate single-use plastics.

20 Mandarin Oriental International Limited

Mandarin Oriental’s annual sustainability progress, initiatives, achievements, and best practices are covered in
more detail in the Group’s annual Sustainability Report. The 2022 report will be published in Q2 2023.
The following table shares some of the Group’s sustainability highlights as well as the corresponding United Nations
Sustainable Development Goals.

FOR THE PLANET
We place great importance on operating sustainably
over the long term as we grow our portfolio of hotels,
residences, and homes around the world. We have madecommitments towards ‘eliminating single-use plastics’and established a programme for responsible procurementthat we intend to steadily grow. Our respect for nature andfor the people who work in the supply chain has been an
important factor in driving these initiatives. Environmental
targets for 2030 have been determined for each hotel
through a Group-wide inventory management plan withconsideration of unique locations, utility types used, andon-site renewable sources.

a) Energy audits, in our hotels at three-year intervals,
provide insights to hotel operations, which inform
recommended strategies and efficiency projects.
Eight energy audits were performed in 2022 in linewith guidance from the American Society of Heating,
Refrigerating and Air-conditioning Engineers (‘ASHRAE’)
Procedures for Commercial Energy Audits withestimated future savings of US$1.2 million per annumb) Actively eliminated single-use plastics where possible
across our hotels with LRQA verificationc) Achieved 100% LRQA-verified responsibly sourced
coffee, tea, cocoa, vanilla and paperd) Avoided serving 19 types of endangered seafood species
which are listed on MOHG’s Endangered Seafood
Avoid List, aligned with the latest WWF Endangered
Seafood Guidee) Innovative digital processes continued to significantly
reduce paper usage across operations

FOR GUESTS AND COLLEAGUESWe are well known for our health and wellness philosophy
and the holistic care of the body, mind and spirit. We offer
sustainably sourced in-room and spa amenities across ourportfolio, complimentary fitness classes, in-room wellness
videos and signature spa treatments for strong healthy
bodies and to promote mindfulness.
We foster a culture of inclusion and empowerment, wherecolleagues feel comfortable to be themselves and voice
their ideas. Our Diversity and Inclusion principles areincorporated across our business and HR practice.

a) Ongoing implementation of WeCare programmeof enhanced health and safety protocols across
our portfoliob) Rolled out sustainability eLearning, which was completedby all colleaguesc) Organised a series of ‘Inner Strength-Outer Strength’
activities on Global Wellness Day to boost colleagues’
physical health and mental resilienced) Continued raising awareness on Diversity and Inclusion,
with ongoing Group-wide training on ‘Leading a safe,
respectful and inclusive Mandarin Oriental’

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Sustainability Continued

FOR COMMUNITIESWe contribute positively to the local communities
we belong to. That means supporting on-the-groundinitiatives that enhance and benefit our immediatesociety. Each one of our colleagues are committed
to identifying impactful ways to support their local
communities and actively engage in initiatives.

a) US-based FANtastic Match donated over US$65,000 to
US colleague charitiesb) 17 years of support for Asian Cultural Council’s Mandarin
Oriental Fellowship for Cultural Heritage Preservationc) The Group has collectively clocked more than 20,000
volunteer hours and donated over US$1.5 million in
support of diverse social segments in various communitiesd) Seven hotels have participated in an ‘MOgiving’ pilot
program launched in April involving one paid day ofvolunteering offered to all colleagues within 2022.
MOgiving engagement must be with charities ororganisations that are relevant and genuinely support
the local community, and the paid hours are captured
in the normal payroll with no additional costs incurred.
Pilot hotels have logged on average over 250% morevolunteer hours compared to hotels who do not havethe paid volunteering program in placee) Over 400 initiatives conducted by colleagues in supportof local causes chosen by our colleagues. Initiatives
include blood donation drives, mental health awareness,environment clean-ups, food and other in-kind donation,and training opportunities for people with disabilities andspecial needs
Some highlights:i)

Mandarin Oriental, Prague, provided accommodation
to three Ukrainian women refugees for three months.
Two out of the three women were employed by
the hotel while living there. The three women
were able to utilise the many services at the hotel
including laundryii) Mandarin Oriental, Doha, donated 10% of revenue
sales generated from Afternoon High Tea during
October 2022 to the Qatar Cancer Society.
They donated US$2,500 to support breast
cancer research and treatments in Qatariii) Mandarin Oriental, Miami hosted an event for
28 foster families of 62 adults and 66 foster children.
Lunch was served with different games and Santa
photo booths. Hotel Culinary and Banquet teams
spent 240 hours to make the event a successiv) Mandarin Oriental, Taipei donated US$10,000
from the ‘Love Share’ Christmas Charity Sales
and contributed a total of 3,000 volunteer hours
to Taiwan Pawprint K9 Rescue and Taipei Stray
Cats Protection Association, with the aim ofoffering sheltered stray animals better medicalcare and resources

22 Mandarin Oriental International Limited

Task Force on Climate-Related Financial Disclosures (‘TCFD’)
Mandarin Oriental is aligning our climate-related disclosures with the Task Force on Climate-related Financial
Disclosures (‘TCFD’) framework. We embarked on our sustainability journey in 2007, the same year that global
warming was deemed unequivocal by the Intergovernmental Panel on Climate Change (‘IPCC’). Climate action isa key area of our sustainability programme, Naturally Better, and the Company actively monitors and pursues action
to reduce greenhouse gas emissions associated with our business operations and beyond. In 2022, we conducteda property-level sustainability risk assessment to further enhance our understanding of the physical and transition
risks of climate change on our portfolio and take action to safeguard our business against these risks.
Our disclosure is consistent with TCFD’s core recommendations with two areas pending further advancement –scenario analysis and Scope 3 assessment. These areas are being taken into consideration for next steps and we aim
to incorporate these into our disclosure over the medium term. We also plan to consider the TCFD’s All Sector
Guidance for other disclosure areas in our subsequent reporting.

Governance
Board’s oversight of climate-related risks and opportunities
The Board has overall responsibility for overseeing climate-related risks and opportunities.
Progress updates on the Company’s sustainability performance, including key initiatives and progress against
relevant targets, are provided to the Board on a regular basis.
The Board delegates to the Audit Committee responsibility for overseeing risk management activities.
The Audit Committee reviews the operation and effectiveness of the Group’s internal control systems andprocedures by which risks, including climate-related risks, are monitored and managed.
Management’s role in assessing and managing climate-related risks and opportunities
The Company has a multi-tiered sustainability governance structure and a sustainability framework to assess
and manage climate and other sustainability-related issues holistically.
The Executive Advisory Panel (‘EAP’), led by the Group Chief Executive, defines key sustainability priorities
for the Company and provides both resources and mechanisms for accountability. The EAP facilitates theintegration of climate-related issues into operations. It meets at least once every quarter.
The Group Director of Sustainability, supported by the Sustainability Office, is responsible for mobilising andcoordinating the sustainability programme across the Company. This includes monitoring of sustainability
progress and verification of compliance toward commitments.
The Sustainability Leadership Council filters thematic priorities into workstreams and focussed action points tobe implemented by the Working Groups.
Working Groups and Task Forces, comprising Group and property-level colleagues, address specificsustainability topics and challenges that are transversal across multiple departments respectively.
At every property, there is a Sustainability Champion supported by a Sustainability Committee that leverages
on Company-wide resources and tools to implement location-specific mitigation measures and initiatives.
A budget is reviewed and allocated for the execution of the Company’s sustainability strategy on an annual basis.
Performance against Company-wide sustainability targets, including greenhouse gas (‘GHG’) emission
reduction and renewable energy use, is reviewed by the EAP on a regular basis and disclosed in our annual
sustainability reports.
Sustainability performance is a component factored into the performance bonus of top management personnel,
including all hotel General Managers, to support and reinforce the successful execution of the Company’ssustainability strategy.

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Sustainability Continued

Strategy
Climate-related risks and opportunities identified over the short, medium and long-term
The tables below indicate a summary of key climate-related risks and opportunities identified. We use the following
time horizons:
Short term: Less than 3 years
Medium term: 3-7 years
Long term: More than 7 years
Summary of key climate-related risks
Category

Risks

Timeframe

ImpactTransition

Increased pricing of
GHG emissions

Short andmedium term•

Increased operational costs due to higher compliance costs
and increased insurance premiums

Physical – acute

Increased severity of
extreme weather events
such as cyclones and floods

Short, medium
and long term•

Increased capital costs from damaged properties•

Reduced revenue from property closures and reduced
travel demand•

Increased insurance premiums•

Reduced revenue and higher costs from negative impacts
on workforce (e.g., health, safety, absenteeism)•

Increased insurance premiums•

Reduced availability of insurance in locations with highphysical climate risks•

Increased operational costs due to increased heating andcooling needs, as well as increased water prices in locations
with high water scarcity•

Increased capital costs due to damage to facilities•

Reduced revenue from reduced travel demand

Physical – chronic

Changes in precipitation
patterns and extreme
variability in weather patterns

Long term

Summary of key climate-related opportunities
Category

Opportunities

ImpactEnergy source / resilience

Use of renewable energy andadoption of efficiency measures•

Reduced exposure to future fossil fuel price increases•

Reduced exposure and sensitivity to changes in pricingof GHG emissions•

Reduced operational costs from increased efficiencyof energy and water use•

Increased operational resilience under changing
climate conditions

Products and services

Shift in consumer preferences
toward sustainable options•

Increased revenue through leadership position in sustainable
luxury hospitality

Resource efficiency

Move towards highly efficient andclimate resilient buildings•

Reduced operating costs through efficiency gains•

Reduced costs from implementation of mitigation measuresagainst extreme weather events•

Increased market value of properties that are highly rated asenergy efficient and/or climate resilient

24 Mandarin Oriental International LimitedIn 2022, we engaged a third-party consultant to conduct a sustainability risk assessment for our portfolio.
The assessment highlighted individual properties’ exposure to climate, water, biodiversity, socioeconomic andsustainability-related regulatory risks. The climate risk assessment analysed acute (floods, droughts and cyclones)
and chronic (change in long term precipitation, temperature and sea level rise) physical climate risks, as well astransition climate risks. The climate risks indicators evaluated were sea level rise, precipitation change, temperaturechange, drought risk, flood risk, cyclone risk and relative market carbon intensity. Detailed results of thisassessment offer guidance toward taking targeted, location-specific actions to mitigate climate risks and capitaliseon related opportunities.
One significant climate-related risk for Mandarin Oriental is long-term temperature and precipitation change.
Nearly half of the portfolio (by floor area) is expected to face very high temperature increases by 2050, as compared
to 2010-2020 levels. For the same time horizon, 62% of the portfolio (by floor area) are vulnerable to very highprecipitation changes, typically reductions but some face increments. The impacts of these changes on properties,buildings, operations and working conditions, as well as guest experience will be further researched and understood,
so that adaptive plans may be formulated and implemented if necessary.
In addition, six properties located in the Middle East and North Africa region were found to be at high water risk.
This is based on an analysis of various indicators including baseline water stress and 2030 projections for water
stress, demand and supply (per business-as-usual scenario). Understanding property-specific water risk levels allows
us to better prioritise investments and water stewardship initiatives to improve water efficiency, reuse and recycling.
We also explore the feasibility of decentralised water harvesting solutions such as installing desalination plants tominimise our dependence on public water utilities and improve self-sufficiency.

Impact on businesses, strategy and financial planningImpact on business and strategy
Mandarin Oriental seeks to be an innovative leader in luxury hospitality with the aim to maximise profitability andlong-term shareholder value. To deliver enduring value, it is important that we adapt our strategy in line with theworld’s shift toward carbon neutrality. Key actions that we are taking include:
Developing with sustainability in mind by implementing our Product Standards & Guidelines for
Responsible Hotel Development – a set of mandatory and recommended requirements to address sustainability
in design and construction.
Considering the use of Environmental Impact Assessments in the due diligence process prior to potential
developments.
Piloting energy modelling in the design phase to better gauge energy use and identify energy efficiency
opportunities.
Aligning with industry accreditation for sustainability and pursuing sustainable certificates in building(e.g., Leadership in Energy and Environmental Design (‘LEED’)) and hotel operations (e.g., Global
Sustainable Tourism Council (‘GSTC’)).
Aiming to achieve the best possible environmental performance by pursuing differentiated 2030
Environmental Targets for energy, GHG emissions, water and waste based on the unique circumstancesand priorities of every property and its location.

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Sustainability Continued

Impact on business and strategy continued
Increasing renewable energy use through onsite renewable energy plants and procurement from certified
sources such as Renewable Energy Certificates (‘REC’s’) and Power Purchase Agreements (‘PPA’).
Performing sustainability risk assessments and adaptation action plans across the Company.
Testing and auditing Business Continuity Plans periodically.
Expanding investments in mitigation measures, including a robust insurance coverage.
Engaging staff and guests for feedback to improve sustainability program and sustainable offerings.
Promoting green transportation modes, including the use of Electric Vehicles (‘EV’) in transport fleets
and the provision of EV charging stations.
Procuring goods and services sustainably, such as using only sustainably certified paper products.
Identifying and harnessing opportunities to tap on sustainable finance in the implementation of
our sustainability strategy, such as efficiency projects.
Assessing emerging ESG reporting standards and requirements and aligning disclosures to best market practice.
Impact on financial planning
Operating Cost: Mandarin Oriental incorporates climate-related needs and other sustainability objectives into its
financial planning. In support of progress towards our 2030 Environmental Targets, a budget is allocated toward
the implementation of at least one efficiency initiative per hotel each year. These efficiency initiatives will need tocontribute to measurable improvements toward each hotel’s identified area of priority, which is informed by the
portfolio sustainability risk assessment conducted. Improving operational efficiencies will bring about reduced
operating costs and reduced exposure and sensitivity to changes in carbon tax rates.
Indirect Cost: We also invest in robust insurance plans and preventive maintenance to mitigate against climate
physical risks, especially in regions with higher risk of increased frequency and severity of extreme weather events.
Revenues: As the market shifts toward greater consumer preference for sustainability, we seek to maintain astrong competitive position by continually improving our sustainability performance through our Naturally
Better programme. We also refine our sustainable offerings by conducting market research and incorporating
guest feedback.

Resilience of strategy, taking into account different scenarios, including a 2 degree celsius or lower scenario
We recognise that a significant shift is taking place as the world speeds up action toward carbon neutrality against
the backdrop of increasing climate change impacts. To stay on track with a Paris-aligned future where warming islimited to well below 2 °C, transition risks are likely to be more significant in the near term while physical risks in
the long term will be less severe, as compared to a business-as-usual scenario.
In line with the policy ambition of the Paris Agreement, we expect to see increasingly stringent climate-related
regulations and carbon taxes, faster phase-out of fossil fuels and transition to clean renewable energy, a rise in rateof adoption of electric vehicles and transition to net zero buildings, among others. To efficiently respond to climatechange, we will continue to review our risk assessments and Business Continuity Plans to ensure future resilienceof our business and strategy.

26 Mandarin Oriental International Limited

Risk management
Process for identifying and assessing climate-related risks
Hotels perform overall risk assessment at the property-level annually. As part of this assessment, the physical climate
risk of Mandarin Oriental’s key assets is evaluated based on the likelihood, financial and reputational impact, andthe speed at which the risk materialises, to then determine the inherent risk exposure in a scale. Transition risks arealso monitored by keeping abreast of key sustainability related policy changes for the locations that we operate in
mitigation measures have been in place to reduce the risk exposure for further monitoring at the residual level.
We will continue to refine our process to improve identification and assessment of climate-related risks.

Processes for managing climate-related risks
Mandarin Oriental aligns with the Risk Management Framework based on ISO 31000 and COSO principles to
identify, assess and define the strategies to monitor risks. The four steps in the framework are: risk identification,risk assessment, risk treatment, and risk reporting and monitoring.
Risks are tolerated if within the Company’s risk appetite, and terminated such as through property disposal if
found to exceed risk appetite. Risks may be accepted if mitigated to an appropriate level. Mitigation measures forclimate-related risks include robust insurance plans that cover natural disasters, increased use of clean renewableenergy and implementation of energy and water efficiency initiatives, among others mentioned under the section‘Impact on business and strategy’.

Integration into overall risk management
The Audit Committee requires that Mandarin Oriental’s business is conducted in accordance with the Group Risk
Management Policy. To supervise compliance and consolidate enforcement of this policy, we have a Group Risk
Management Committee (‘GRMC’) with the authority to ensure the Company’s risk management objectives are
met. Key committee members include the executive management from different functions, including Finance,
Operations, IT, Legal, Engineering, and the committee meets at least twice a year.
The Audit Committee considers the Company’s principal risks and uncertainties and potential changes to the risk
profile, reviews the operation and effectiveness of the Company’s internal control systems (financial, operationaland compliance) and the procedures by which these risks are monitored and mitigated. Regular risk identification
and analysis and the review of risk management processes are conducted through the Audit Committee. Climatechange has been included as one of the Company’s principal risks in the risk register and the Audit Committee
reports principal risks and uncertainties to the Board semi-annually.

Annual Report 2022

27

Sustainability Continued

Metrics and targets
Metrics used
Mandarin Oriental uses the metric categories below as proxies for measuring climate-related risks and opportunities:
1. Total GHG Emissions
2. GHG Emissions Intensity
3. Percentage of Renewable Energy Use 2
4. Percentage of Portfolio in Regions with High/Very High Baseline Water Stress

GHG emissions
Mandarin Oriental’s GHG reporting scope covers all 34 * hotels that were fully operational in 2022. More details
and further historical data can be found in our Sustainability Report online.
Greenhouse Gas Emissions†2022 Performance

Total GHG Emissions (metric tons CO2e)

191,605

Scope 1 Emissions (metric tons CO2e)21,461

Scope 2 Emissions (metric tons CO2e)

170,144

GHG Emissions per square foot (kg CO2e)

146* Properties excluded: Mandarin Oriental, Shenzhen and Mandarin Oriental Palace, Luzern (opened within 2022); Mandarin Oriental,†

Washington D.C. (closed).
GHG emissions are based on market-based calculations. Currently we do not track Scope 3 emissions in line with current industry practices
for owned and managed properties.

Targets used and performance against targets
To assess and manage relevant climate-related risks and opportunities, Mandarin Oriental set the following 2030
Environmental Targets:
2030 Targets

50% carbon intensity reduction

2022 Achievement
3

15% renewable energy use

23

Either produced onsite or procured
Baseline year 2012

28 Mandarin Oriental International Limited

30% reduction
6%

Financial Review

Results
Overall
Travel conditions improved progressively through theyear in most parts of the world, which drove somerecovery in the Group’s financial performance. The
Group achieved an underlying profit for the first timesince 2019. In EMEA and America, travel restrictions
were relaxed from the first quarter onwards, and theGroup’s hotels benefitted from the resurgence indemand for travel, particularly in the leisure segment.
In Asia, performance was varied across the region due
to differences in the timing of removal of pandemic
restrictions. Southeast Asian markets began lifting
restrictions from the second quarter onwards which
drove a robust recovery in performance. Greater
China’s performance was negatively impacted byextensive border controls and government restrictions
which continued well into the fourth quarter.
Combined total revenue from all hotels undermanagement in 2022 was US$1,568 million,
49% higher than 2021, driven by recovery in demandin regions which were no longer impacted by travel
restrictions. Combined total revenue was 18% higher
than 2019, as a result of strong demand and theGroup’s expanded portfolio of hotels and residences.
The Group’s consolidated revenue was US$454 million,
an improvement of 43% from 2021. All owned andmanaged hotels, except those in Greater China,delivered higher revenues. The Group uses underlying1
earnings before interest, tax, depreciation, andamortisation (‘EBITDA’) to analyse operating
performance. In 2022, the Group achieved underlying
EBITDA of US$111 million. Underlying EBITDA,
by business activity, including the Group’s share ofunderlying EBITDA from associates and joint ventures
is shown below:

Owned hotels– Subsidiary hotels
2

2022
US$m

2021
US$m

45

26

32

(2)

Management business

34

17

Underlying EBITDA

111

41

– Associates and joint ventures

Owned hotels
Following the sale of Mandarin Oriental, Washington
D.C., the Group has an equity interest in 14 hotel
properties, which contribute a major proportion of theGroup’s results. In 2022, the owned hotels reported
EBITDA of US$77 million, much improved from thereported EBITDA of US$24 million in 2021, driven
by robust recovery particularly in London, Bangkok
and Singapore.
EBITDA in 2022 included US$5 million of
government financial support and US$3 million ofother income primarily from insurance proceeds,
reduced from the US$41 million of government
financial support and US$9 million of other income
recognised in 2021.

1

The Group uses ‘underlying profit/loss’ in its internal financial reporting to distinguish between ongoing business performance andnon-trading items, as more fully described in note 33 to the financial statements. Management considers this to be a key measure which
provides additional information to enhance understanding of the Group’s underlying business performance.

2

Associates and joint ventures include contributions from Stay One Degree Limited, an online booking service platform for luxury homes
and Chaophaya Development Corporation Limited, part of the River City Shopping Complex in Bangkok.
Annual Report 2022

29

Financial Review Continued

Subsidiary hotels
The Group’s results from its subsidiary hotels wereas follows:
Revenue

Associates and joint ventures
The Group’s share of results from associates and joint
ventures was as follows:

2022
US$m

2021
US$m

401

279

2022
US$m

2021
US$m

Underlying EBITDA from associates
and joint ventures

32

(2)

Underlying EBITDA fromsubsidiary hotels

45

26

Less: depreciation and amortisation

(16)

(15)

Less: depreciation and amortisation

(49)

(60)

Underlying operating profit/(loss)

16

(17)

(5)

(5)

Underlying operating loss

(4)

(34)

Less: net financing charges

Less: net financing charges

(12)

(11)

   tax

(1)

–

(5)

Share of results of associates
and joint ventures

10

(22)

   taxUnderlying loss attributable
to shareholders

(1)
(17)

(50)

In 2022, subsidiary hotels reported revenue of
US$401 million and EBITDA of US$45 million,
compared to revenue of US$279 million and EBITDA
of US$26 million in 2021.
The Group’s European hotels contributed the majorityof the subsidiary hotels’ revenue and EBITDA, driven
by the strong demand for travel to the region. Key cities
such as London and Paris delivered robust performancewith higher revenues than 2021 and exceeded prepandemic business levels in 2019. In Asia, Hong Kong
and Tokyo remained subject to travel restrictions for thevast majority of the year which hampered any recovery
in performance from these hotels.
Owned hotels’ depreciation and amortisation, which
is a non-cash item, was lower than 2021. Net financing
charges were slightly higher than 2021 due to changes
in interest rates in the period. Tax for 2022 was
US$1 million, compared to US$5 million in 2021.
Overall, the subsidiary hotels delivered a US$17 million
underlying loss, predominantly driven by Hong Kong
and Tokyo with subdued operating profitability.
Collectively, other subsidiary hotels recorded anunderlying profit, resulting in a significant improvementfrom the US$50 million underlying loss in 2021.

30 Mandarin Oriental International Limited

All associate and joint venture hotels achieved higher
revenue and EBITDA in 2022 compared to 2021.
Singapore and Bangkok achieved robust EBITDA
performance in the fourth quarter once travel
restrictions had been removed and the hotels enteredpeak season. Hotels in New York and Miami alsoachieved a strong recovery in performance, delivering
EBITDA in excess of pre-pandemic levels in 2019.
The Group’s share of results of associates and joint
ventures was US$10 million, compared to a loss of
US$22 million in 2021, driven by the improved
operating performance of those hotels.

Management business
2022
US$m

2021
US$m

Revenue*

68

48

Underlying EBITDA frommanagement business

34

17

Less: depreciation and amortisation

(9)

(9)

Underlying operating profit

25

8

Less: net financing charges–(1)   tax(8)(2)

Underlying profit attributable
to shareholders

175* Include management fees from subsidiary hotels.

Revenue in the management business consists ofhotel and residences management fees, and residences
branding fees. The long-term growth of managementbusiness remains a strategic focus for the Group, and it
achieved a robust improvement in profitability in 2022
compared to 2021.

Total hotel management fees of US$60 million in 2022
were increased by 57% from 2021, as the revenues of
the hotels within the portfolio improved. In Greater
China, operating and financial performance waschallenged by the suppressed domestic travel demand
and restrictions on international travel, hence
contributing lower management fees.
Residences branding fees are generally earned when
individual residences are sold, or certain development
milestones are achieved. This year the Group opened
two new residences in Beverly Hills and Barcelona,
however total fees were lower than 2021 due to thetiming of sales of new projects.
Included in the management business is the cost of
the Group’s central sales and marketing and brandactivities, which are funded by marketing andadvertising contributions from hotels based on apercentage of hotel revenues.
In 2022, the management business, including two
new managed hotels in Shenzhen and Lucerne,
reported underlying EBITDA of US$34 million,
doubled the US$17 million reported in 2021.

Non-trading items

Changes in fair value of investment
property under development
Gain on asset disposals
Changes in fair value ofother investments
Total

2022
US$m

2021
US$m

(104)

(74)

47

–

–

1

(57)

(73)

A net non-trading loss of US$57 million was recorded
in 2022, mainly due to a 3% decrease (US$104 million)in the fair market value of the Causeway Bay site underdevelopment, valued at US$2.4 billion at the end of2022. This loss was partially offset by the net gainof US$47 million after tax on the sale of the hotel inWashington D.C., completed in September 2022.
In 2021, a non-trading loss of US$73 million wasrecognised also primarily in relation to the Causeway
Bay site under development, which represented
a 3% decrease in the valuation of the site from
US$2.5 billion at the end of 2020.

Cash flow
The Group’s consolidated cash flows are summarised
as follows:

Underlying earnings attributable to shareholders
The underlying profit attributable to shareholders is
as follows:
2022
US$m

2021
US$m

Subsidiary hotels

(17)

(50)

Share of results of associates andjoint ventures

10

(22)

Management business

17

5

Property development

(2)

(1)

Total underlying profit/(loss)
attributable to shareholders

8

(68)

In 2022, the Group achieved an underlying profit of
US$8 million, a strong improvement from 2021 andthe first profit since 2019.

2022
US$m

2021
US$m

Operating activities

56

26

Investing activities
Capital expenditure on
existing properties

(13)

(15)

Redevelopment of the Causeway
Bay site

(30)

(20)

Net proceeds from asset disposals

131

–

(1)

3

OthersFinancing activities
Net (repayment)/drawdown
of borrowings

(116)

64

Other

(6)

(3)

Net increase in cash

21

55

Cash and cash equivalents
at 1st January

213

165

(8)

(7)

Cash and cash equivalents
at 31st December

226

213

Gross debt at 31st December

(602)

(730)

Closing net debt at 31st December

(376)

(517)

Effect of exchange rate changes

Annual Report 2022

31

Financial Review Continued

The Group’s cash inflows from operating activities were
US$56 million in 2022, better than the US$26 million
in 2021, driven by the improved profitability from
owned hotels and higher fee income received by the
management business.
In investing activities, the Group generated net cash
inflows due to the sale of Washington D.C. for
US$131 million. This was partially offset by
US$30 million invested into the Causeway Bay site
under development. The Group is committed toinvesting another US$500 million to the projectfrom 2023 to 2025, which will be funded througha mix of external debt and existing cash reserves.
Capital expenditure on existing hotel properties was
US$13 million, the majority of which was for therenovation in the Geneva hotel.

In respect of specific hotel financing, borrowings
are normally taken in local currency to hedge
partially the investment and the projected income.
At 31st December 2022, the Group’s net assets weredenominated in the following currencies:

US$m

%

US$m

%

2,208

67

3,118

63

Euro

502

15

704

16

United States dollar

227

7

293

5

United Kingdom Sterling

184

6

349

8

Singapore dollar

70

2

240

4

Thai baht

12

–

77

1

Swiss franc

58

2

58

1

Indonesian rupiah

6

–

25

1

Hong Kong dollar

Others
Total

Dividends
While trading conditions gradually improved in 2022,
the Group’s overall performance remained significantly
below pre-pandemic levels and the Group returned
only to modest profitability. As such, no dividends
in respect of 2022 have been proposed or declared by
the Board.

Treasury activities
The Group manages its exposure to financial risk using
a variety of techniques and instruments. The main
objective is to manage foreign exchange and interest
rate risks and to provide a degree of certainty in respectof costs. At the end of 2022, the Group had fixed or
capped interest rates on 45% of its gross borrowings.

32 Mandarin Oriental International Limited

Adjusted
shareholders’ funds/
net assets*

Shareholders’ funds/
net assets

27

1

33

1

3,294

100

4,897

100

* See supplementary information section below.

The Group, excluding associates and joint ventures,
had committed borrowing facilities totalling
US$1,073 million, of which US$602 million was
drawn at 31st December 2022. The principal amounts
due for repayment are as follows:
Facilities
committed
US$m

Facilities
drawn
US$m

Unusedfacilities
US$m

2

2

–

Between one and two years

750

600

150

Between two and three years

321

–

321

Between three and four years

–

–

–

Between four and five years

–

–

–

Within one year

Beyond five years
Total

–

–

–

1,073

602

471

At 31st December 2022, consolidated net debt was
US$376 million, and gearing was 11%, lower thanconsolidated net debt of US$517 million and gearingof 16% at 31st December 2021. Reduced net debt was
primarily driven by the proceeds from the sale ofMandarin Oriental, Washington D.C. (US$131 million)
and improved operating cash inflows, partially offset byinvestment in the Causeway Bay site under development
as well as ongoing hotel capital expenditure. Taking
into account the fair market value of the Group’s
freehold and leasehold interests (which are accounted
for at historical cost less depreciation) gearing was 8%of adjusted shareholders’ funds at 31st December 2022,
lower than the prior year at 10%.

The decrease in 2022 adjusted shareholders’ funds
was primarily due to the total loss attributable toshareholders of US$49 million, mainly due to the 3%
decrease in valuation of the Causeway Bay site underdevelopment, partially offset by the net gain on sale ofthe hotel in Washington D.C.
2022

2021

Per share
US$m
US$

US$m

Per share
US$

Shareholders’ funds/
net assets

3,294

2.61

3,309

2.62

Add: surplus for fairmarket value offreehold and leasehold
land and buildings

1,603

1.26

1,657

1.31

Adjusted shareholders’funds/net assets

4,897

3.87

4,966

3.93

The Group’s liquidity remains robust with
US$471 million of committed, undrawn facilities
in addition to its cash balances of US$226 million.
The average tenor of the Group’s borrowings was
1.8 years compared to 2.1 years in 2021.

Principal risks and uncertainties

Interest cover

Accounting policies

EBITDA is used as an indicator of the Group’s
ability to service debt and finance its future capital
expenditure, although there are no cash-based
covenants in the Group’s debt facilities. Interest cover3
in 2022 was 4.9 times, higher than 2.0 times in 2021.

The Directors continue to review the developments
in International Financial Reporting Standards andtheir impact on the Group’s accounting policies.
The accounting policies adopted are consistent withthose of the previous year, except that the Group
has adopted the Amendments to IAS 37 – Onerous
Contracts – Cost of fulfilling a Contract. This is
more fully detailed in the note 1 ‘Basis of preparation’in the financial statements. The adoption of theamendments does not have a material effect on thefinancial statements.

Supplementary information
Although the Group’s accounting policy in respectof its freehold land and buildings and the building
component of owner-occupied leasehold properties
is based on the cost model, the Directors continue
to review on an annual basis the fair market values
in conjunction with independent appraisers. The fairmarket value of both freehold and leasehold land andbuildings is used by the Group to calculate adjusted
net assets, which the Directors believe gives important
supplementary information regarding net asset value
per share and gearing as shown in the table below.

3

A review of the principal risks and uncertainties facing
the Group is set out on pages 130 to 136.

Matthew Bishop
Chief Financial Officer
2nd March 2023

Interest cover is calculated as underlying EBITDA (including the Group’s share of underlying EBITDA from associates and joint ventures)
before the deduction of amortisation/depreciation of right-of-use assets and net of actual lease payments, divided by net financing charges(including the Group’s share of net financing charges from associates and joint ventures) before the deduction of capitalised interest andexcluding interest on lease liabilities.
Annual Report 2022

33

Directors’ Profiles

Ben Keswick Chairman
Ben Keswick joined the Board as Managing Director
in April 2012 and held the position until June 2020.
He has been Chairman since 2013. He was also
managing director of Jardine Matheson from 2012
to 2020. He has held a number of executive positions
since joining the Jardine Matheson group in 1998,
including finance director and then chief executive
officer of Jardine Pacific between 2003 and 2007,
and group managing director of Jardine Cycle &Carriage until March 2012. He is executive chairmanof Jardine Matheson and chairman of DFI RetailGroup, Hongkong Land. He is also chairman of
Jardine Cycle & Carriage and a commissioner of
Astra. He is a director of Yonghui Superstores andheld the position of chairman between 2018 and 2020.
He has an MBA from INSEAD.
John Witt* Managing Director
John Witt rejoined the Board as Managing Director
in June 2020, having previously served as the Chief
Financial Officer between 2000 and 2010. He has beenwith the Jardine Matheson group since 1993 and has
held a number of senior finance positions, includinggroup finance director of Jardine Matheson from 2016
to 2020 and the chief financial officer of Hongkong
Land. John is chairman of Jardine Matheson Limited,group managing director of Jardine Matheson andmanaging director of DFI Retail Group and Hongkong
Land. He is also a director of Jardine Pacific andJardine Motors, as well as a commissioner andchairman of the executive committee of Astra.
John is a Chartered Accountant and has an MBAfrom INSEAD.

* Executive Director
34 Mandarin Oriental International Limited

James Riley * Group Chief Executive
James Riley joined the Board as Group Chief Executive
in 2016. He has previously held a number of senior
executive positions in the Jardine Matheson groupsince joining from Kleinwort Benson in 1993.
A Chartered Accountant, he was group financedirector of Jardine Matheson from 2005 to 2016.
He has been a director of Mandarin Oriental HotelGroup International Limited since 2005. He wasa non-executive director of the Hongkong andShanghai Banking Corporation from 2012 to 2016.
Matthew Bishop* Chief Financial Officer
Matthew Bishop joined the Board as Chief Financial
Officer in 2021. A Chartered Accountant, he joined
the Jardine Matheson group in 2009 and held anumber of senior finance positions across the group,
including most recently group treasurer of Jardine
Matheson since January 2019. He was previously adiplomat with the Foreign & Commonwealth Officein Beijing and London.
Jinqing Cai
Jinqing Cai joined the Board in 2021. She is thepresident, Greater China at Kering, a member ofinternational advisory board of the New York
Philharmonic Orchestra and a board member of
Teach for China. Jinqing was former president andchairman of Christie’s China.

Adam Keswick
Adam Keswick joined the Board in 2012. Having
joined Jardine Matheson in 2001, he was appointed to
the Jardine Matheson board in 2007 and was deputy
managing director from 2012 to 2016. Adam is adirector of DFI Retail Group and Hongkong Land.
He is also a director of Ferrari NV, Schindler andYabuli China Entrepreneurs Forum and vice chairmanof the supervisory board of Rothschild & Co.

Richard Solomons
Richard Solomons joined the Board in 2021. He is the
Chairman of the Audit Committee of the Company.
He is the non-executive chairman of Rentokil Initialplc and Hotelbeds Group S.L.U, as well as a memberof the advisory committee of Hotelbeds Group S.L.U.
Richard was previously the chief executive officer ofInterContinental Hotels Group plc and a non-executive
director of Aston Martin Lagonda Global Holdings plc
and Marks and Spencer Group plc.

Archie Keswick
Archie Keswick joined the Board in 2019. Having
joined the Jardine Matheson group in 2007, he held anumber of senior executive positions within the group,
including most recently CEO, Pizza Hut Vietnam andthe general manager of The Landmark Mandarin
Oriental, Hong Kong.
Y.K. Pang
Y.K. Pang joined the Board in 2016. He is deputy
managing director and chairman of Hong Kong ofJardine Matheson, and chairman of Jardine Pacific.
He has held a number of senior executive positions in
the Jardine Matheson group, which he joined in 1984,
including chief executive of Hongkong Land between
2007 and 2016. Y.K. is also deputy chairman of
Jardine Matheson Limited, and a director of Gammon,
Hongkong Land, Jardine Matheson (China) andGreatview. He is chairman of the Hong Kong Tourism
Board and the Hong Kong Management Association,
and a member of the Council and General Committeeof the Hong Kong General Chamber of Commerce
and the Employers’ Federation of Hong Kong.

Annual Report 202235

Consolidated Profit and Loss Accountfor the year ended 31st December 2022

2022

2021

Note

Underlying
business
performance
US$m

Total
US$m

Underlying
business
performance
US$m

Non-trading
items
US$m

Non-trading
items
US$m

Total
US$m

2

454.1

–

454.1

316.9

–

316.9

Cost of sales(302.7)–(302.7)(261.3)–(261.3)Gross profit

151.4

–

151.4

55.6

–

55.6

Selling and distribution costs(27.0)–(27.0)(20.7)–(20.7)

Administration expenses(109.2)–(109.2)(104.1)–(104.1)Other operating income

5.7

–

5.7

43.2

0.6

43.8

Revenue

Change in fair value of investment
property under development

12–(104.1)(104.1)–(73.9)(73.9)

Gain on asset disposals

8

–

40.6

40.6

–

–

–

Operating (loss)/profit

3

20.9

(63.5)(42.6)(26.0)(73.3)(99.3)

Financing charges(16.7)–(16.7)(13.8)–(13.8)

Interest income

2.3

–

2.3

1.1

–

1.1

Net financing charges

4(14.4)–(14.4)(12.7)–(12.7)

Share of results of associates
and joint ventures

5

9.7

–

9.7

(21.8)–(21.8)

16.2(63.5)(47.3)(60.5)(73.3)(133.8)

(8.5)

6.4

(2.1)

(7.6)

–

(7.6)

7.7

(57.1)(49.4)(68.1)(73.3)(141.4)

7.6(57.1)(49.5)(68.1)(73.3)(141.4)

0.1

–

0.1

–

–

–

7.7

(57.1)(49.4)(68.1)(73.3)(141.4)

US¢

US¢

US¢

US¢

– basic

0.60(3.92)(5.39)(11.19)– diluted

0.60(3.92)(5.39)(11.19)(Loss)/profit before tax
Tax

6(Loss)/profit after tax
Attributable to:Shareholders of the Company

7&8

Non-controlling interests(Loss)/earnings per share

36 Mandarin Oriental International Limited

7

Consolidated Statement of Comprehensive Income
for the year ended 31st December 2022

Note

Loss for the year

2022
US$m

2021
US$m

(49.4)(141.4)

Other comprehensive (expense)/income
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans

16

(2.1)

3.5

Revaluation surplus of right-of-use assets before transfer to investment properties

11

79.8

–

Tax on items that will not be reclassified

6

0.3

(0.6)

78.0

2.9

(58.2)(70.7)

16.6

11.6

(2.4)

(1.3)

0.7

(2.0)

(43.3)(62.4)

Other comprehensive income/(expense) for the year, net of tax

34.7(59.5)

Total comprehensive expense for the year

(14.7)(200.9)(14.7)(200.7)–(0.2)(14.7)(200.9)Items that may be reclassified subsequently to profit or loss:
Net exchange translation differences– net losses arising during the year
Cash flow hedges– net gains arising during the year
Tax relating to items that may be reclassified
Share of other comprehensive income/(expense) of associates and joint ventures

6

Attributable to:Shareholders of the Company
Non-controlling interests

Annual Report 202237

Consolidated Balance Sheetat 31st December 2022

Note

2022
US$m

2021
US$m

Intangible assets

9

45.7

46.7

Tangible assets

10

916.3

1,098.2

Right-of-use assets

11

242.4

273.3

Investment properties

12

2,472.6

2,462.0

Associates and joint ventures

13

203.8

201.5

Other investments

14

14.0

16.5

Deferred tax assets

15

14.2

13.7

Pension assets

16

3.0

7.1

Non-current debtors

17

12.2

8.9

3,924.2

4,127.9

5.0

5.3

90.5

68.8

6.8

2.2

226.2

212.8

328.5

289.1

Net assets

Non-current assets
StocksCurrent debtors

17

Current tax assets
Bank and cash balances

18

Current assets
Current creditors

19(159.1)(157.2)Current borrowings

20

(2.2)

(2.5)

Current lease liabilities

21

(5.9)

(6.3)

Current tax liabilities(18.4)(9.9)

Current liabilities(185.6)(175.9)Net current assets

142.9

113.2

Long-term borrowings

20(599.8)(727.8)Non-current lease liabilities

21(123.5)(147.4)

Deferred tax liabilities

15(41.6)(50.1)

Pension liabilities

16

(0.1)

(0.3)

Non-current creditors

19

(4.5)

(3.2)

(769.5)(928.8)3,297.6

3,312.3

Non-current liabilities

Total equity
Share capital

23

63.2

63.2

Share premium

24

500.7

500.5

Revenue and other reserves

2,730.2

2,745.1

Shareholders’ funds

3,294.1

3,308.8

3.5

3.5

3,297.6

3,312.3

Non-controlling interests

Approved by the Board of Directors
James Riley
Matthew Bishop
Directors
2nd March 2023
38 Mandarin Oriental International Limited

Consolidated Statement of Changes in Equity
for the year ended 31st December 2022

SharecapitalUS$m

Sharepremium
US$m

Capitalreserves
US$m

Revenue
reserves
US$m

Asset
revaluation
reserves
US$m

Hedging
reserves
US$m

Attributable to Attributable to
Exchange shareholders of non-controlling
reserves the Company
interests
US$m
US$m
US$m

63.2

500.5

259.1

(377.7)2,943.4

0.9(80.6)

3,308.8

3.5

3,312.3

Total comprehensive
income–––(51.1)

79.8

14.5(57.9)(14.7)–(14.7)

Transfer

–

0.2

(0.2)

–

–

–

–

–

–

–

63.2

500.7

258.9

(428.8)3,023.2

15.4(138.5)

3,294.1

3.5

3,297.6

63.2

499.7

260.3

(240.3)

2,943.4

(9.7)

(7.1)

3,509.5

3.7

3,513.2

Total comprehensive
income–––(137.8)–

10.6(73.5)(200.7)(0.2)(200.9)Transfer

–

0.8

(1.2)

0.4

–

–

–

–

–

–

63.2

500.5

259.1

(377.7)2,943.4

0.9(80.6)

3,308.8

3.5

3,312.3

Total
equityUS$m2022
At 1st January

At 31st December
2021
At 1st January

At 31st December

Revenue reserves as at 31st December 2022 included cumulative fair value losses on the investment property underdevelopment of US$720.2 million (2021: US$616.1 million).

Annual Report 202239

Consolidated Cash Flow Statement
for the year ended 31st December 2022

Note

2022
US$m

2021
US$m

3

(42.6)(99.3)

58.2

68.5

Operating activities
Operating loss
Depreciation, amortisation and impairment
Other non-cash items

27a

63.5

71.2

Movements in working capital

27b

(1.1)

0.9

2.1

0.4

Interest and other financing charges paid

(15.6)(13.5)Tax paid

(8.0)

(1.8)

Cash flows from operating activities

56.5

26.4

Purchase of tangible assets(12.8)(15.3)

Additions to investment property under development(30.2)(19.7)

Purchase of intangible assets

(6.1)

(6.1)

Additions to right-of-use assets

(0.2)

–

4.0

13.0

(0.2)

(0.3)

Interest received

Investing activities

Refund on Munich expansion

27c

Purchase of other investments
Purchase of an associate

27d

(1.0)

–

Advance to associates and joint ventures

27e

(2.4)

(7.1)

Repayment of loans to associates and joint ventures

27f

4.2

3.0

8

131.4

–

86.7

(32.5)Net proceeds from asset disposals
Cash flows from investing activities
Financing activities
Drawdown of borrowings

20

23.0

130.6

Repayment of borrowings

20(139.5)(66.4)

Principal elements of lease payments

27g

(5.7)

(3.3)

(122.2)60.9

Net increase in cash and cash equivalents

21.0

54.8

Cash and cash equivalents at 1st January

212.8

164.6

(7.6)

(6.6)

226.2

212.8

Cash flows from financing activities

Effect of exchange rate changes
Cash and cash equivalents at 31st December

40 Mandarin Oriental International Limited

27h

Notes to the Financial Statements

1 Basis of preparation
General information
Mandarin Oriental International Limited (the ‘Company’) is incorporated in Bermuda and has a primary listing in thestandard segment of the London Stock Exchange, with secondary listings in Bermuda and Singapore.

Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards (‘IFRS’),
including International Accounting Standards (‘IAS’) and Interpretations adopted by the International AccountingStandards Board. The financial statements have been prepared on a going concern basis and under the historical costconvention except as disclosed in the accounting policies.
Details of the Group’s principal accounting policies are included in note 33.
The Group has adopted the following amendments for the annual reporting period commencing 1st January 2022.
Amendments to IAS 37 – Onerous Contracts – Cost of Fulfilling a Contract (effective from 1st January 2022)
The amendments clarify that for the purpose of assessing whether a contract is onerous, the cost of fulfilling the contract
includes both the incremental costs of fulfilling that contract and an allocation of other costs that relate directly tofulfilling contracts. The Group applied the amendment from 1st January 2022 and there was no material impact on theGroup’s consolidated financial statements.
Apart from the above, there are no other amendments which are effective in 2022 and relevant to the Group’s operations,that have a significant impact on the Group’s results, financial position and accounting policies.
The Group has not early adopted any standard, interpretation or amendments that have been issued but not yet effective(refer note 34).
The principal operating subsidiaries, associates and joint ventures have different functional currencies in line with theeconomic environments of the locations in which they operate. The functional currency of the Company is United States
dollars. The consolidated financial statements are presented in United States dollars.
The Group’s reportable segments are set out in note 2.

Annual Report 2022

41

Notes to the Financial Statements Continued

2 Segmental information and revenue
Operating segments are identified on the basis of internal reports about components of the Group that are regularly
reviewed by the Executive Directors of the Company for the purpose of resource allocation and performance assessment.
The Group has three (2021: three) distinct business activities: Hotel ownership, Hotel & Residences branding andmanagement, and Property development which form the basis of its operating and reportable segments. The Property
development segment represents the redevelopment of The Excelsior site as a commercial building following the closureof The Excelsior, Hong Kong on 31st March 2019 (the ‘Causeway Bay site under development’). The redevelopment is
expected to complete in 2025.
In addition, The Group is operated on a worldwide basis in three (2021: three) regions: Asia, Europe, Middle East andAfrica (‘EMEA’), and America. The Group’s segmental information for non-current assets is set out in note 22.
2022
US$m

2021
US$m

400.9

278.9

Analysis by business activity– Hotel ownership– Hotel & Residences branding and management

68.5

48.5

– Less: intra-segment revenue(15.3)(10.5)

454.1

316.9

– Asia

141.4

132.4

– EMEA

239.7

137.8

– America

73.0

46.7

454.1

316.9

– Recognised at a point in time

140.8

111.5

– Recognised over time

295.2

185.6

436.0

297.1

18.1

19.8

454.1

316.9

Analysis by geographical area

From contracts with customers

From other sources– Rental income

42 Mandarin Oriental International Limited

2 Segmental information and revenue continued
Contract balances
Setup costs in order to secure long-term hotel management contracts are capitalised under intangible assets and amortised
in profit and loss when the related revenue is recognised. Management reviews the capitalised costs on a regular basis andexpects the setup costs to be recoverable.
Contract liabilities primarily relate to the advance consideration received from customers relating to gift cards andadvance customer deposits for hotel services, for which revenue is recognised when the goods and services are provided
to the customers.
Contract liabilities are further analysed as follows:
2022
US$m

2021
US$m

– Gift cards

10.9

11.2

– Advance customer deposits and other

7.7

12.1

18.6

23.3

2022
US$m

2021
US$m

Gift cards

10.8

10.0

Advance customer deposits and other

9.6

11.8

20.4

21.8

Gift
cards
US$m

Advancecustomer
deposits
and other
US$m

Total
US$m

Within one year

4.2

9.6

13.8

Between one and two years

4.5

–

4.5

Between two and three years

1.4

–

1.4

Between three and four years

0.6

–

0.6

Between four and five years

0.2

–

0.2

10.9

9.6

20.5

Within one year

4.3

16.4

20.7

Between one and two years

4.6

1.7

6.3

Between two and three years

1.4

–

1.4

Between three and four years

0.6

–

0.6

Between four and five years

0.3

–

0.3

11.2

18.1

29.3

Contract liabilities (refer note 19)

Revenue recognised in relation to contract liabilities
Revenue recognised in the current year relating to carried-forward contract liabilities:

Revenue expected to be recognised on unsatisfied contracts with customers
Timing of revenue to be recognised on unsatisfied performance obligations:

2022

2021

Annual Report 2022

43

Notes to the Financial Statements Continued

3 EBITDA (earnings before interest, tax, depreciation and amortisation)
	  and operating loss from subsidiaries
2022
US$m

2021
US$m

– Hotel ownership

45.3

25.9

– Hotel & Residences branding and management

33.8

16.6

Underlying EBITDA from subsidiaries

79.1

42.5

(104.1)(73.9)–

0.6

Analysis by business activity

Non-trading items (refer note 8)
Change in fair value of investment property under development
Change in fair value of other investments

40.6

–

(63.5)(73.3)EBITDA from subsidiaries

15.6(30.8)

Underlying depreciation and amortisation from subsidiaries(58.2)(68.5)

Operating loss

(42.6)(99.3)– Hotel ownership

85.9

26.5

– Hotel & Residences branding and management

33.8

16.6

– Property development(104.1)(73.9)EBITDA from subsidiaries

15.6(30.8)– Hotel ownership

36.7(34.0)– Hotel & Residences branding and management

24.8

8.6

– Property development(104.1)(73.9)

Operating loss

(42.6)(99.3)– Asia

(8.7)

(8.6)

– EMEA

82.8

59.7

Gain on asset disposals

Analysis by business activity

Analysis by geographical area

– America

5.0

(8.6)

Underlying EBITDA from subsidiaries

79.1

42.5

44 Mandarin Oriental International Limited

3 EBITDA (earnings before interest, tax, depreciation and amortisation)
	  and operating loss from subsidiaries continued
2022
US$m

2021
US$m

Rental income (refer note 10)

18.1

19.8

Amortisation and impairment of intangible assets (refer note 9)

(6.0)

(5.8)

Depreciation of tangible assets (refer note 10)(45.3)(55.0)

Amortisation/depreciation of right-of-use assets (refer note 11)

(6.9)

(7.7)

(216.9)(192.2)– defined benefit pension plans (refer note 16)

(3.2)

(3.4)

– defined contribution pension plans

(1.8)

(1.4)

(221.9)(197.0)Net foreign exchange gains/(losses)

0.3

(1.3)

Expenses relating to low value leases

(0.4)

(0.5)

Expenses relating to short-term leases

(1.0)

(0.9)

Expenses relating to variable lease payments not included in lease liabilities

(3.4)

(2.4)

– audit

(1.9)

(1.6)

– non-audit services

(0.2)

(0.7)

(2.1)

(2.3)

The following items have been credited/(charged) in arriving at operating loss:

Employee benefit expense– salaries and benefits in kind

Auditors’ remuneration

The Group had received government grants of US$4.3 million (2021: US$35.8 million) and rent concessions of
US$0.4 million (2021: US$3.4 million) for the year ended 31st December 2022, respectively. These amounts werein relation to the COVID-19 pandemic and were accounted for as other operating income.

Annual Report 2022

45

Notes to the Financial Statements Continued

4 Net financing charges
2022
US$m

2021
US$m

– bank loans(13.3)(9.8)– interest on lease liabilities

(1.9)

(2.2)

Commitment and other fees

(1.5)

(1.8)

Financing charges(16.7)(13.8)

Interest income

2.3

1.1

(14.4)(12.7)

Interest expense

Net financing charges

5 Share of results of associates and joint ventures
EBITDA
US$m

Depreciation
andamortisation
US$m

Operatingprofit/(loss)
US$m

Net
financingcharges
US$m

Tax
US$m

Net
profit/(loss)
US$m

32.3(15.4)

16.9

(5.6)

(1.0)

10.3

2022
Analysis by business activity– Hotel ownership

–

(0.5)

(0.5)

(0.1)

–

(0.6)

32.3

(15.9)

16.4

(5.7)

(1.0)

9.7

– Asia19.2(10.4)

8.8

(2.4)

(1.1)

5.3

– EMEA

4.0

(3.4)

0.6

(1.1)

0.1

(0.4)

– America

9.1

(2.1)

7.0

(2.2)

–

4.8

32.3

(15.9)

16.4

(5.7)

(1.0)

9.7

– Hotel ownership(1.7)(14.5)(16.2)

(4.5)

(0.4)

(21.1)– Other

(0.1)

(0.6)

(0.7)

–

–

(0.7)

(1.8)

(15.1)(16.9)

(4.5)

(0.4)

(21.8)– Asia(2.2)(10.0)(12.2)(2.3)

1.5(13.0)– EMEA

(2.5)

(2.8)

(5.3)

(0.7)

(1.9)

(7.9)

– America

2.9

(2.3)

0.6

(1.5)

–

(0.9)

(1.8)

(15.1)(16.9)

(4.5)

(0.4)

(21.8)– Other

Analysis by geographical area

2021
Analysis by business activity

Analysis by geographical area

The results of associates and joint ventures included the Group’s share of government grants of US$0.2 million(2021: US$1.4 million) and rent concessions of US$0.1 million (2021: US$0.1 million) for the year ended
31st December 2022, respectively. These amounts were in relation to the COVID-19 pandemic.

46 Mandarin Oriental International Limited

6 Tax
2022
US$m

2021
US$m

(12.0)

(2.5)

9.9

(5.1)

(2.1)

(7.6)

– Hotel ownership

5.3

(5.8)

– Hotel & Residences branding and management

(7.4)

(1.8)

(2.1)

(7.6)

– Asia

(0.2)

(2.0)

– EMEA

(5.2)

(4.8)

– America

3.3

(0.8)

(2.1)

(7.6)

9.0

27.3

–

0.1

1.8

3.3

(17.1)(12.2)Tax (charged)/credited to profit and loss is analysed as follows:– current tax– deferred tax (refer note 15)

Analysis by business activity

Analysis by geographical area

Reconciliation between tax expense and tax at the applicable tax rate*:
Tax at applicable tax rate
Income not subject to tax– change in fair value of other investments– other items
Expenses not deductible for tax purposes– change in fair value of investment property under development– other items

(3.5)

(3.5)

Tax losses and temporary differences not recognised(11.9)(18.9)

Utilisation of previously unrecognised tax losses and temporary differences

14.3

1.3

Recognition of previously unrecognised tax losses and temporary differences

(0.4)

1.4

–

(2.9)

10.7

–

Deferred tax assets written off
Deferred tax liabilities written back– disposal of Mandarin Oriental, Washington D.C.
– other items

0.1

1.4

Withholding tax

(3.8)

(2.9)

(Under)/over-provision in prior years

(1.3)

0.5

–

(2.5)

(2.1)

(7.6)

Remeasurements of defined benefit plans

0.3

(0.6)

Cash flow hedges

(2.4)

(1.3)

(2.1)

(1.9)

Change in tax rates

Tax relating to components of other comprehensive income is analysed as follows:

Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates.
In 2022, current tax included a capital gain tax charge of US$4.3 million and deferred tax included a credit of
US$10.7 million in relation to the sale of Mandarin Oriental, Washington D.C. (refer note 8).
Share of tax charges of associates and joint ventures of US$1.0 million (2021: US$0.4 million) is included in share of
results associates and joint ventures (refer note 5).
* The applicable tax rate for the year was 16% (2021: 24%) and represents the weighted average of the rates of taxation prevailing in the

territories in which the Group operates.

Annual Report 2022

47

Notes to the Financial Statements Continued

7 (Loss)/earnings per share
Basic loss per share is calculated using loss attributable to shareholders of US$49.5 million (2021: US$141.4 million) andthe weighted average number of 1,263.7 million (2021: 1,263.4 million) shares in issue during the year.
Diluted loss per share is calculated using loss attributable to shareholders of US$49.5 million (2021: US$141.4 million)
and the weighted average number of 1,263.8 million (2021: 1,263.8 million) shares in issue after adjusting for thenumber of shares which are deemed to be issued for no consideration under the share-based long-term incentive plans
based on the average share price during the year.
The weighted average number of shares is arrived at as follows:
Ordinary shares in millions
2022
2021

Weighted average number of shares for basic loss per share calculation

1,263.7

1,263.4

0.1

0.4

1,263.8

1,263.8

Adjustment for shares deemed to be issued for no consideration
under the share-based long-term incentive plans
Weighted average number of shares for diluted loss per share calculation

Additional basic and diluted loss/earnings per share are also calculated based on underlying profit/loss attributable toshareholders. A reconciliation of loss/earnings is set out below:
2022
Basic
Diluted(loss)/earnings (loss)/earnings
per shareper share
US$m
US¢
US¢

Loss attributable to shareholders(49.5)

Non-trading items (refer note 8)

57.1

Underlying profit/(loss) attributable
to shareholders

7.6(3.92)(3.92)

US$m

2021
Basic
loss
per share
US¢

Dilutedloss
per shareUS¢(141.4)(11.19)(11.19)(5.39)(5.39)

73.3
0.60

0.60

(68.1)

8 Non-trading items
An analysis of non-trading items after interest, tax and non-controlling interests is set out below:

Change in fair value of investment property under development
Change in fair value of other investments
Gain on asset disposals

2022
US$m

2021
US$m

(104.1)(73.9)

–

0.6

47.0

–

(57.1)(73.3)

On 8th September 2022, the Group completed the sale of Mandarin Oriental, Washington D.C., including tangible
assets and stocks of US$90.8 million, for gross proceeds of US$139.0 million. After taking into account the selling
expenses and sales related taxes of US$ 7.6 million, the net proceeds were US$131.4 million. As a result, the Group hasrecognised a post-tax, non-trading gain of US$47.0 million.

48 Mandarin Oriental International Limited

9 Intangible assets
Goodwill
US$m

Computersoftware
US$m

Development
project
contract costs
US$m

Total
US$m

2022
23.9

29.2

28.2

81.3

Amortisation and impairment–(19.2)(15.4)(34.6)Net book value at 1st January

23.9

10.0

12.8

46.7

Exchange differences

–

(0.1)

–

(0.1)

Additions

–

3.4

1.7

5.1

Amortisation and impairment charge

–

(4.4)

(1.6)

(6.0)

Net book value at 31st December

23.9

8.9

12.9

45.7

Cost

23.9

30.2

28.0

82.1

–

(21.3)(15.1)(36.4)

23.9

8.9

12.9

45.7

23.9

32.7

25.3

81.9

Amortisation and impairment–(23.7)(12.8)(36.5)Net book value at 1st January

23.9

9.0

12.5

45.4

Exchange differences

–

0.1

(0.1)

–

Additions

–

4.4

2.7

7.1

Amortisation and impairment charge

–

(3.5)

(2.3)

(5.8)

Net book value at 31st December

23.9

10.0

12.8

46.7

Cost

23.9

29.2

28.2

81.3

–

(19.2)(15.4)(34.6)

23.9

10.0

12.8

46.7

Cost

Amortisation and impairment

2021
Cost

Amortisation and impairment

Management has performed an impairment review of the carrying amount of goodwill at 31st December 2022.
For the purpose of impairment review, goodwill acquired has been allocated to the respective hotels and is reviewed
for impairment based on individual hotel forecast operating performance and cash flows. Cash flow projections forthe impairment reviews are based on value-in-use calculations using updated individual hotel forecasts (including
the following year’s individual hotel budgets) with assumptions updated for the prevailing market conditions, and are
discounted appropriately. Key assumptions used for value-in-use calculations include average annual growth rates of
4% to 7% to forecast cash flows over a five-year period with an assumed recovery of business following the COVID-19
pandemic, after which the growth rate is assumed to be up to 4% in perpetuity. Individual growth assumptions varyacross the Group’s geographical locations, and are based on management expectations for each market’s development.
Pre-tax discount rates of 7% to 13% are applied to the cash flow projections. The discount rates used reflect businessspecific risks relating to the business life-cycle and geographical location. On the basis of these reviews, management
concluded that no impairment exists.
The amortisation charges are all recognised in arriving at operating profit and are included in cost of sales, selling anddistribution costs, administration expenses and other operating expense.
The amortisation periods for intangible assets are as follows:
Computer software
Development project contract costs

3 to 5 years
20 to 40 years

Annual Report 2022

49

Notes to the Financial Statements Continued

10 Tangible assets

Freeholdproperties
US$m

Properties onleaseholdland &
leaseholdimprovements
US$m

Plant &
machinery
US$m

Furniture,equipment &motor vehicles
US$m

Total
US$m

Cost

915.4

370.7

131.2

300.0

1,717.3

Depreciation and impairment(121.8)(191.8)(88.5)(217.0)(619.1)

Net book value at 1st January

793.6

178.9

42.7

83.0

1,098.2

Exchange differences(48.6)

(3.7)

(2.8)

(3.4)

(58.5)

3.4

1.0

0.3

8.1

12.8

(84.1)

–

(0.2)

(6.0)

(90.3)

2022

Additions
Disposals (refer note 8)

–

(0.6)

–

–

(0.6)

(9.7)

(11.4)(5.1)(19.1)(45.3)Net book value at 31st December

654.6

164.2

34.9

62.6

916.3

Cost

736.3

353.4

116.4

218.0

1,424.1

Depreciation and impairment(81.7)(189.2)(81.5)(155.4)(507.8)

654.6

164.2

34.9

62.6

916.3

Cost

950.6

428.2

135.7

317.0

1,831.5

Depreciation and impairment(112.5)(232.8)(84.8)(219.9)(650.0)Net book value at 1st January

838.1

195.4

50.9

97.1

1,181.5

Exchange differences

Transfer to investment properties
Depreciation charge

2021(32.7)

(4.2)

(2.5)

(2.9)

(42.3)

Additions

–

1.3

0.2

12.5

14.0

Reclassification

–

(0.7)

(0.3)

1.0

–

Depreciation charge(11.8)(12.9)(5.6)(24.7)(55.0)Net book value at 31st December

793.6

178.9

42.7

83.0

1,098.2

Cost

915.4

370.7

131.2

300.0

1,717.3

Depreciation and impairment(121.8)(191.8)(88.5)(217.0)(619.1)

793.6

178.9

42.7

83.0

1,098.2

Rental income from properties and other tangible assets amounted to US$18.1 million (2021: US$19.8 million)(refer note 3).
The maturity analysis of the undiscounted lease payments to be received after the balance sheet date are as follows:
2022
US$m

2021
US$m

Within one year

14.5

19.4

Between one and two years

10.1

18.7

Between two and five years

26.2

42.3

Beyond five years

20.8

27.1

71.6

107.5

At 31st December 2022, the carrying amount of hotel properties pledged as security for bank borrowings amounted to
US$342.6 million (2021: US$449.0 million) (refer note 20).

50 Mandarin Oriental International Limited

11 Right-of-use assets
Leasehold
land
US$m

Properties
US$m

Total
US$m

Cost

143.6

228.2

371.8

Amortisation/depreciation and impairment(12.4)(86.1)(98.5)Net book value at 1st January

131.2

142.1

273.3

–

(17.5)(17.5)

Additions

0.2

0.6

0.8

Revaluation surplus before transfer to investment properties

79.8

–

79.8

Transfer to investment properties(87.1)–(87.1)

2022

Exchange differences

Amortisation/depreciation charge

(0.4)

(6.5)

(6.9)

Net book value at 31st December

123.7

118.7

242.4

Cost

133.3

199.9

333.2

(9.6)

(81.2)(90.8)

123.7

118.7

242.4

Cost

144.6

253.1

397.7

Amortisation/depreciation and impairment(12.2)(88.1)(100.3)

Net book value at 1st January

132.4

165.0

297.4

(0.8)

(15.6)(16.4)

Amortisation/depreciation and impairment

2021

Exchange differences
Additions

–

0.2

0.2

Disposals

–

(0.2)

(0.2)

Amortisation/depreciation charge

(0.4)

(7.3)

(7.7)

Net book value at 31st December

131.2

142.1

273.3

Cost

143.6

228.2

371.8

Amortisation/depreciation and impairment(12.4)(86.1)(98.5)

131.2

142.1

273.3

At 31st December 2022, the carrying amount of leasehold land pledged as security for bank borrowings amounted to
US$122.2 million (2021: US$122.3 million) (refer note 20). None of the other right-of-use assets have been pledged at
31st December 2022 and 2021.
The typical lease term associated with the right-of-use assets are as follows:
Leasehold land
Properties

20 to 895 years
2 to 30 years

Annual Report 2022

51

Notes to the Financial Statements Continued

12 Investment properties
Under
development
leaseholdcommercial
property
US$m

Completedleaseholdresidential
property
US$m

Total
US$m

2,462.0–

2,462.0

Exchange differences

0.6

–

0.6

Additions

26.4

–

26.4

Transfer from tangible assets

–

0.6

0.6

Transfer from right-of-use assets

–

87.1

87.1

Decrease in fair value(104.1)–(104.1)

At 31st December

2,384.9

87.7

2,472.6

2,528.3–

2,528.3(15.0)–(15.0)

Additions

22.6

–

22.6

Decrease in fair value(73.9)–(73.9)

2,462.0–

2,462.02022
At 1st January2021
At 1st January
Exchange differences

At 31st December

In 2022, an own-use property, including tangible assets of US$0.6 million and right-of-use assets of US$87.1 million, wastransferred to a completed residential investment property following a change of its future use determined by the Directors.
The Group measures its investment properties at fair value. The fair values of the Group’s investment properties have been
determined on the basis of valuations carried out by independent valuers who hold a recognised relevant professional
qualification and have recent experience in the location and segment of the investment properties valued.
The Group employed Jones Lang LaSalle to value its under development commercial property in Hong Kong which isheld under leases with unexpired lease terms of more than 20 years. The valuation, which conforms to the International
Valuation Standards issued by the International Valuation Standards Council and the HKIS Valuation Standards issued
by the Hong Kong Institute of Surveyors, was derived using the direct comparison and the residual method. The Reportof the Valuers is set out on page 107.
The valuations are comprehensively reviewed by the Group.

Fair value measurements of completed residential property using no significant unobservable inputs
Fair value of the completed residential property is generally derived using the direct comparison method. This valuation
method is based on comparing the property to be valued directly with other comparable properties, which have recently
transacted. However, given the heterogeneous nature of real estate properties, appropriate adjustments are usually required
to allow for any qualitative differences that may affect the price likely to be achieved by the property under consideration.

52 Mandarin Oriental International Limited

12 Investment properties continued
Fair value measurements of under development leasehold commercial property using significant
unobservable inputs
Fair value of the under development commercial property is derived using the direct comparison method and the residual
method with equal weighting. The direct comparison method is based on comparing the property to be valued directlywith other comparable properties, which have recently sold. The residual method is essentially a means of valuing theland by reference to its development potential by deducting development costs together with developer’s profit and risk
from the estimated capital value of the proposed development assuming completion as at the date of valuation. For the
direct comparison method and the estimated capital value of the residual method, given the heterogeneous nature of realestate properties, appropriate adjustments are usually required to allow for any qualitative differences that may affect theprice likely to be achieved by the property under consideration.
Information about fair value measurements of the Group’s under development leasehold commercial property using
significant unobservable inputs at 31st December:Hong Kong

Hong Kong

Range of significant unobservable inputs

Fair value
2022
US$m

Valuation method

Average unit priceUS$

Capitalisation rate%

2,384.9

Direct comparison

3,951.6
per square footn/aResidual*

3,178.2 to 4,071.7
per square foot2.45 to 3.85

Fair value
2021
US$m

Valuation method

Average unit priceUS$

Capitalisation rate%

2,462.0

Direct comparison

4,066.0
per square footn/aResidual*

3,480.2 to 4,156.8
per square foot

2.4 to 3.8

Range of significant unobservable inputs

Average unit prices are estimated based on independent valuers’ view of recent transactions of comparable properties.
The higher the unit prices, the higher the fair value.
Capitalisation rates are estimated by independent valuers based on the risk profile of the property being valued. The lower
the rates, the higher the fair value.
* In using the residual method to make fair value measurements of the under development leasehold commercial property, unobservable

inputs relating to the estimated costs to complete the development and the developer’s estimated profit and margin for risk have also
been used.

The maturity analysis of the undiscounted lease payments to be received in respect of the completed residential property
after the balance sheet date are as follows:
2022
US$m

Within one year

0.6

Between one and two years

0.6

Between two and five years

0.5
1.7

The Group’s operating lease in respect of the completed residential property is for a term of three years.

Annual Report 2022

53

Notes to the Financial Statements Continued

13 Associates and joint ventures
2022
US$m

2021
US$m

2.2

–

Associates
Listed associate – OHTL PLC (‘OHTL’)
Unlisted associates

49.7

44.8

Share of attributable net assets

51.9

44.8

Notional goodwill

5.5

5.5

Goodwill on acquisition

2.1

1.5

59.5

51.8

38.4

36.5

97.9

88.3

(25.7)(25.6)

5.9

6.3(19.8)(19.3)

125.7

132.5

105.9

113.2

203.8

201.5

Amounts due from associates

Joint ventures
Share of attributable net assets of unlisted joint ventures
Goodwill on acquisition

Amounts due from joint ventures

Amounts due from associates are interest free, unsecured and have no fixed terms of repayment, except for a
US$2.0 million (2021: nil) convertible loan which bears interest at 4% per annum and will mature on 15th June 2024.
Amounts due from joint ventures bear interest at rates ranging from approximately 1.15% to 5.00% (2021: 1.15% to5.00%) per annum and are repayable within one to four years.
The Group’s share of the carrying value of hotel properties (including properties, plant and equipment, and leaseholdland) owned by the Group’s associates and joint ventures amounted to US$186.0 million (2021: US$198.1 million) andUS$106.5 million (2021: US$117.0 million) respectively.
Associates

Joint ventures

2022
US$m

2021
US$m

2022
US$m

2021
US$m

88.3

105.0

113.2

126.6

–

–

(7.3)

(10.4)

Share of results after tax andnon-controlling interests

10.1(13.9)

(0.4)

(7.9)

Share of other comprehensive income
after tax and non-controlling interests

0.3

(2.5)

0.4

0.5

Acquisition of an associate (refer note 27d)

1.0

–

–

–

Advance to associates and joint ventures(refer note 27e)

2.0

2.3

0.4

4.8

Repayment of loans to associates andjoint ventures (refer note 27f)

(3.8)

(2.6)

(0.4)

(0.4)

At 31st December

97.9

88.3

105.9

113.2

Fair value of listed associate

186.7

190.3

n/a

n/a

Movements of associates andjoint ventures during the year:
At 1st January
Exchange differences

54 Mandarin Oriental International Limited

13 Associates and joint ventures continueda) Investment in associates
The material associates of the Group are listed below. These associates have share capital consisting solely of ordinary
shares, which are held directly by the Group.
Nature of investments in material associates in 2022 and 2021:
Country of incorporation andprincipal place of business/place of listing% of ownership interest
2022
2021

Name of entity

Nature of business

OHTL

Owner of Mandarin Oriental,
BangkokThailand/Thailand

47.6%

47.6%

Marina Bay Hotel Private Ltd.
(‘Marina Bay Hotel’)Owner of Mandarin Oriental,
Singapore

Singapore/Unlisted

50.0%

50.0%

At 31st December 2022, the fair value of the Group’s interest in OHTL, which is listed on the Thailand Stock Exchange,
was US$186.7 million (2021: US$190.3 million) and the carrying amount of the Group’s interest was US$7.7 million(2021: US$5.5 million).
Summarised financial information for material associates
Summarised balance sheet at 31st December
2022
US$m

OHTL
2021
US$m

Marina Bay Hotel
2022
2021
US$m
US$m

2022
US$m

2021
US$m

113.2

126.6

105.1

109.4

218.3

236.0

8.0

3.1

48.1

23.7

56.1

26.8

Other current assets

3.9

4.1

4.8

5.8

8.7

9.9

Total current assets

11.9

7.2

52.9

29.5

64.8

36.7

Financial liabilities*(57.8)(69.4)––(57.8)(69.4)

Other non-current liabilities*(21.2)(23.5)

(1.8)

(2.6)

(23.0)(26.1)

Total non-current liabilities(79.0)(92.9)

(1.8)

(2.6)

(80.8)(95.5)

Financial liabilities*(37.9)(38.1)(12.5)(7.5)(50.4)(45.6)

Other current liabilities*

(3.7)

(2.7)

(6.5)

(2.8)

(10.2)(5.5)

Total current liabilities(41.6)(40.8)(19.0)(10.3)(60.6)(51.1)

4.5

0.1

137.2

126.0

141.7

126.1

Non-current assets

Total

Current assets
Cash and cash equivalents

Non-current liabilities

Current liabilities

Net assets* Financial liabilities excluding trade and other payables and provisions, which are presented under other current and non-current liabilities.

Annual Report 2022

55

Notes to the Financial Statements Continued

13 Associates and joint ventures continueda) Investment in associates continued
Summarised financial information for material associates continued
Summarised statement of comprehensive income for the year ended 31st December
2022
US$m

OHTL
2021
US$m

Marina Bay Hotel
2022
2021
US$m
US$m

2022
US$m

Total

Revenue

54.8

17.5

73.8

29.3

128.6

46.8

Depreciation and amortisation

(9.4)

(9.9)

(7.6)

(5.8)

(17.0)(15.7)

Interest (expense)/income

(3.3)

(2.9)

0.4

–

(2.9)

(2.9)

Profit/(loss) from underlying
business performance

4.2(18.7)

12.5

(1.9)

16.7

(20.6)

Income tax (charge)/credit

–

2.3

(2.4)

0.2

(2.4)

2.5

Profit/(loss) after tax

4.2(16.4)

10.1

(1.7)

14.3

(18.1)

Other comprehensive income/(expense)

0.2

(0.2)

1.1

(3.5)

1.3

(3.7)

Total comprehensive income/(expense)

4.4(16.6)

11.2

(5.2)

15.6

(21.8)

2021
US$m

The information contained in the summarised balance sheet and statement of comprehensive income reflects theamounts presented in the financial statements of the associates adjusted for differences in accounting policies between
the Group and the associates, and fair value of the associates at the time of acquisition.
Reconciliation of the summarised financial information
Reconciliation of the summarised financial information presented to the carrying amount of the Group’s interests
in its material associates for the year ended 31st December:
2022
US$m

OHTL
2021
US$m

Marina Bay Hotel
2022
2021
US$m
US$m

2022
US$m

2021
US$m

Net assets at 1st January

0.1

16.7

126.0

131.2

126.1

147.9

Profit/(loss) for the year

4.2

(16.4)

10.1

(1.7)

14.3

(18.1)

Other comprehensive income/(expense)

0.2

(0.2)

1.1

(3.5)

1.3

(3.7)

Net assets at 31st December

4.5

0.1

137.2

126.0

141.7

126.1

Effective interest in associates (%)

47.6

47.6

50.0

50.0

Group’s share of net assets in associates

2.2

–

68.6

63.0

70.8

63.0

Notional goodwill*

5.5

5.5

–

–

5.5

5.5

Carrying value

7.7

5.5

68.6

63.0

76.3

68.5

186.7

190.3

n/a

n/a

186.7

190.3

Fair value

Total

The Group has interests in a number of individually immaterial associates. The following table analyses, in aggregate,
the share of profit and other comprehensive expense and carrying amount of these associates.
2022
US$m

2021
US$m

Share of profit/(loss)

3.0

(5.3)

Share of other comprehensive expense

(0.4)

(0.6)

Share of total comprehensive income/(expense)

2.6

(5.9)

Carrying amount of interests in these associates

21.6

19.8

* OHTL repurchased some of its own shares in 2013 which were subsequently cancelled in 2016. The number of OHTL shares held by

the Group remained unchanged. As a result of the share repurchase, notional goodwill of US$5.5 million was recognised and the Group’s
effective interest increased to 47.6%.

56 Mandarin Oriental International Limited

13 Associates and joint ventures continueda) Investment in associates continued
Contingent liabilities relating to the Group’s interest in associates

Financial guarantee in respect of facilities made available to an associate

2022
US$m

2021
US$m

20.3

20.3

The guarantee in respect of facilities made available to an associate is stated at its contracted amount. The Directors areof the opinion that it is not probable that this guarantee will be called upon.

b) Investment in joint ventures
The material joint venture of the Group is listed below. This joint venture has share capital consisting solely of ordinary
shares, which are held directly by the Group.
Nature of investment in material joint venture in 2022 and 2021:
Name of entity

Nature of business

Ritz Madrid, S.A.
(‘Ritz Madrid’)

Owner of Mandarin Oriental
Ritz, MadridCountry of incorporation andprincipal place of businessSpain% of ownership interest
2022
2021

50.0%

50.0%

Summarised financial information for material joint venture
Summarised balance sheet at 31st December
Ritz Madrid
2022
US$m

2021
US$m

243.1

265.9

Cash and cash equivalents

8.0

10.7

Other current assets

3.9

3.2

Total current assets

11.9

13.9

Financial liabilities*†(251.4)(265.0)

Other non-current liabilities*(36.4)(40.0)

Total non-current liabilities(287.8)(305.0)

Other current liabilities*(18.5)(26.0)Net liabilities(51.3)(51.2)

Non-current assets
Current assets

Non-current liabilities

Current liabilities* Financial liabilities excluding trade and other payables and provisions, which are presented under other current and non-current liabilities.
†

Including shareholders’ loans from joint venture partners of US$251.4 million (2021: US$265.0 million).

Annual Report 2022

57

Notes to the Financial Statements Continued

13 Associates and joint ventures continuedb) Investment in joint ventures continued
Summarised statement of comprehensive income for the year ended 31st December
Ritz Madrid
2022
US$m

2021
US$m

Revenue

41.5

26.0

Depreciation and amortisation

(6.8)

(5.6)

Interest expense

(2.3)

(1.4)

Loss after tax(0.9)(15.7)

Other comprehensive income

0.8

1.0

Total comprehensive expense(0.1)(14.7)The information contained in the summarised balance sheet and statement of comprehensive income reflects theamounts presented in the financial statements of the joint venture adjusted for differences in accounting policies
between the Group and the joint venture, fair value of the joint venture at the time of acquisition, and eliminationof interest on shareholders’ loan.
Reconciliation of the summarised financial information
Reconciliation of the summarised financial information presented to the carrying amount of the Group’s interests
in its material joint venture for the year ended 31st December:
Ritz Madrid
2022
US$m

2021
US$m

Net liabilities at 1st January(51.2)(36.5)

Loss for the year

(0.9)

(15.7)

Other comprehensive income

0.8

1.0

Net liabilities at 31st December(51.3)(51.2)

Effective interest in joint venture (%)

50.0

50.0

Group’s share of net liabilities in joint venture(25.7)(25.6)

5.9

6.3

Shareholders’ loans

125.7

132.5

Carrying value

105.9

113.2

Goodwill on acquisition

The Group has no other joint ventures other than Ritz Madrid.
Commitments and contingent liabilities in respect of joint venture
There were no commitments and contingent liabilities relating to the Group’s interest in its joint venture at 31st December
2022 and 2021.

14 Other investments
2022
US$m

2021
US$m

14.0

16.5

Investment measured at fair value through profit and loss
– unlisted investments

Movements of these investments which were valued based on unobservable inputs during the year are disclosed innote 35.

58 Mandarin Oriental International Limited

15 Deferred tax assets/(liabilities)
Accelerated tax
depreciation
US$m

Fair value
gains/(losses)
US$m

Losses
US$m

Employeebenefits
US$m

Unremitted
earnings inassociates/
joint ventures
US$m

Provisions
and other
temporarydifferences
US$m

Total
US$m

2022
(46.1)

0.6

12.0

(1.9)

–

(1.0)

(36.4)

Exchange differences

2.0

0.1

(0.9)

0.1

–

(0.1)

1.2

Credited to profit and loss

7.9

–

1.8

0.2

–

–

9.9

(Charged)/credited to othercomprehensive income

–

(2.4)

–

0.3

–

–

(2.1)

(36.2)

(1.7)

12.9

(1.3)

–

(1.1)

(27.4)

At 1st January

At 31st December
Deferred tax assets

1.1

–

12.9

0.2

–

–

14.2

Deferred tax liabilities(37.3)

(1.7)

–

(1.5)

–

(1.1)

(41.6)(36.2)

(1.7)

12.9

(1.3)

–

(1.1)

(27.4)

2021
At 1st January(43.5)

1.8

15.5

(1.3)

(0.9)

(0.9)

(29.3)

Exchange differences

0.3

0.1

(0.6)

–

0.1

–

(0.1)

(Charged)/credited to
profit and loss

(2.9)

–

(2.9)

–

0.8

(0.1)

(5.1)

–

(1.3)

–

(0.6)

–

–

(1.9)

At 31st December(46.1)

0.6

12.0

(1.9)

–

(1.0)

(36.4)

Deferred tax assets

1.0

0.6

12.0

–

–

0.1

13.7

Deferred tax liabilities(47.1)

–

–

(1.9)

–

(1.1)

(50.1)(46.1)

0.6

12.0

(1.9)

–

(1.0)

(36.4)

Charged to othercomprehensive income

Deferred tax balances predominantly comprise non-current items. Deferred tax assets and liabilities are netted when
the taxes relate to the same taxation authority and where offsetting is allowed.
The recognition of deferred tax assets on tax losses of US$12.9 million (2021: US$12.0 million) is based on the
management’s review of future taxable profit that will be available against which the tax losses can be utilised,referencing to individual hotel forecast operating performance.
Deferred tax assets of US$76.8 million (2021: US$85.0 million) arising from unused tax losses of US$338.0 million(2021: US$385.5 million) have not been recognised in the financial statements. Included in the unused tax losses,
US$284.9 million have no expiry date and the balance will expire at various dates up to and including 2037. Following
a recoverability review performed in 2021, deferred tax assets of US$2.9 million were derecognised due to hotel losses
following the COVID-19 pandemic. No deferred tax assets were derecognised in 2022.
Deferred tax assets of US$3.2 million (2021: US$3.3 million) have not been recognised in relation to temporary
differences in subsidiaries.
The Group has no unrecognised deferred tax liabilities arising on temporary differences associated with investments
in subsidiaries at 31st December 2022 and 2021.

Annual Report 2022

59

Notes to the Financial Statements Continued

16 Pension plans
The Group operates defined benefit pension plans in the main territories in which it operates, with the majority ofthe plans in Hong Kong. Most of the pension plans are final salary defined benefit plans calculated based on members’length of service and their salaries in the final years leading up to retirement. In Hong Kong, the pension benefits arepaid in one lump sum. With the exception of certain plans in Hong Kong, all the defined benefit plans are closed to
new members. In addition, although all plans are impacted by the discount rate, liabilities are driven by salary growth.
The Group’s defined benefit plans are either funded or unfunded, with the assets of the funded plans held independentlyof the Group’s assets in separate trustee administered funds. Plan assets held in trusts are governed by local regulations
and practice in each country. Responsibility for governance of the plans, including investment decisions and contribution
schedules, lies jointly with the Company and the boards of trustees. The Group’s major plans are valued by independentactuaries annually using the projected unit credit method.
The amounts recognised in the consolidated balance sheet are as follows:
2022
US$m

2021
US$m

Fair value of plan assets

46.7

53.5

Present value of funded obligations(43.7)(46.4)

3.0

7.1

Present value of unfunded obligations

(0.1)

(0.3)

Net pension assets

2.9

6.8

Pension assets

3.0

7.1

Pension liabilities

(0.1)

(0.3)

2.9

6.8

Analysis of net pension assets

60 Mandarin Oriental International Limited

16 Pension plans continued
The movement in the net pension assets is as follows:
Fair valueof planassets
US$m

Present
value ofobligation
US$m

Total
US$m

53.5

(46.7)

6.8

–

(3.0)

(3.0)

Interest income/(expense)

1.2

(1.0)

0.2

Administration expenses

(0.4)

–

(0.4)

0.8

(4.0)

(3.2)

54.3

(50.7)

3.6

2022
At 1st January
Current service costRemeasurements– return on plan assets, excluding amounts   included in interest income

(7.0)

–

(7.0)

– change in financial assumptions

–

5.5

5.5

– experience losses

–

(0.9)

(0.9)

–

0.3

0.3

(7.0)

4.9

(2.1)

Contributions from employers

1.4

–

1.4

Contributions from plan participants

0.6

(0.6)

–

Benefit payments

(2.5)

2.5

–

Transfer to other plans

(0.1)

0.1

–

At 31st December

46.7(43.8)

2.9

52.4(47.2)

5.2

–

(3.2)

(3.2)

Interest income/(expense)

1.0

(0.9)

0.1

Administration expenses

(0.3)

–

(0.3)

0.7

(4.1)

(3.4)

53.1

(51.3)

1.8

(0.3)

0.3

–

2.5

–

2.5

– change in financial assumptions

–

1.3

1.3

– experience losses

–

(0.3)

(0.3)

– demographic assumption changes

2021
At 1st January
Current service cost

Exchange differences
Remeasurements– return on plan assets, excluding amounts   included in interest income

2.5

1.0

3.5

Contributions from employers

1.5

–

1.5

Contributions from plan participants

0.5

(0.5)

–

Benefit payments

(3.4)

3.4

–

Transfer from other plans

(0.4)

0.4

–

At 31st December

53.5(46.7)

6.8

Annual Report 2022

61

Notes to the Financial Statements Continued

16 Pension plans continued
The weighted average duration of the defined benefit obligation at 31st December 2022 is 4.4 years (2021: 5.2 years).
Expected maturity analysis of undiscounted pension benefits at 31st December is as follows:
2022
US$m

2021
US$m

Within one year

14.8

11.6

Between one and two years

4.7

5.1

Between two and five years

15.2

15.5

Between five and ten years

22.5

20.9

Between ten and fifteen years

15.0

16.1

Between fifteen and twenty years

9.0

8.9

6.3

5.6

87.5

83.7

Beyond twenty years

The principal actuarial assumptions used for accounting purposes at 31st December are as follows:
Hong Kong
2022
%

2021
%

Discount rate

5.20

2.40

Salary growth rate

4.00

3.80

As participants of the plans relating to Hong Kong usually take lump sum amounts upon retirement, mortality is nota principal assumption for these plans.
The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:Change inassumption%(Increase)/decrease on
defined benefit obligation
Increase in
Decrease inassumption
assumption
US$m
US$m

Discount rate

1

2.0

(2.3)

Salary growth rate

1

(2.0)

1.9

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating thesensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of thedefined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been
applied as when calculating the pension liability recognised within the balance sheet.

62 Mandarin Oriental International Limited

16 Pension plans continued
The analysis of the fair value of plan assets at 31st December is as follows:
2022
US$m

2021
US$m

– Asia-Pacific

8.9

4.4

– Europe

9.2

4.3– North America

21.0

10.7

– Global

4.8

0.6

43.9

20.0

– Asia-Pacific

0.4

7.4

– Europe

0.5

6.9– North America

1.7

15.7

– Global

0.2

3.0

2.8

33.0

Total investments

46.7

53.0

Cash and cash equivalents

2.5

2.7

Benefits payable and other

(2.5)

(2.2)

46.7

53.5

Equity investments

Investment funds

As at 31st December 2022, 89.6% of equity investments and 96.6% of investment funds were quoted on active markets(2021: 91.2% and 97.5% respectively).
The strategic asset allocation is derived from the asset-liability modelling (‘ALM’) review, done triennially to ensure
the plans can meet future funding and solvency requirements. The last ALM review was completed in 2021. The next
ALM review is scheduled for 2024.
As at 31st December 2022, the Hong Kong plans had assets of US$46.7 million (2021: US$53.5 million).
The Group maintains an active and regular contribution schedule across all the plans. The contribution to all its plans
in 2022 were US$1.5 million and the estimated amount of contributions expected to be paid to all its plans in 2023
is US$1.4 million.

Annual Report 2022

63

Notes to the Financial Statements Continued

17 Debtors
2022
US$m

2021
US$m

37.6

28.6

Trade debtors– third parties

4.2

2.1

41.8

30.7

(2.3)

(3.5)

39.5

27.2

– third parties

62.4

49.6

– associates and joint ventures

3.1

2.7

65.5

52.3

– associates and joint ventures– provision for impairment

Other debtors

(2.3)

(1.8)

63.2

50.5

102.7

77.7

12.2

8.9

– trade debtors

39.5

27.2

– other debtors

51.0

41.6

– provision for impairment

Non-current– other debtors
Current

90.5

68.8

102.7

77.7

– Asia54.0

34.4– EMEA

34.4

30.6– America

14.3

12.7

102.7

77.7

Analysis by geographical area

Derivative financial instruments are stated at fair value. Other debtors are stated at amortised cost. The fair values ofshort-term debtors approximate their carrying amounts.
2022
US$m

2021
US$m

– trade debtors

39.5

27.2

– other debtors*

47.7

35.2

87.2

62.4

Analysis by fair value* Excluding prepayments.

64 Mandarin Oriental International Limited

17 Debtors continued
Trade and other debtors
The average credit period on provision of services varies among Group businesses and is generally not more than 30 days.
Other debtors are further analysed as follows:
2022
US$m

2021
US$m

Derivatives financial instruments (refer note 28)

17.4

4.4

Other amounts due from third parties

14.5

9.7

Other amounts due from associates and joint ventures

3.1

2.7

VAT recoverable

6.0

6.0

Rental and other deposits

3.6

7.7

Other receivables

3.1

4.7

Financial assets

47.7

35.2

Prepayments

15.5

15.3

63.2

50.5

No debtors and prepayments have been pledged as security.

Impairment of trade debtors
Before accepting any new customer, the individual Group business assesses the potential customer’s credit quality andsets credit limits by customer using internal credit scoring systems. These limits and scoring are reviewed periodically.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation,and default or delinquency in payment are considered indicators that the debtor is impaired. An allowance for impairmentof trade debtors is made based on the estimated irrecoverable amount determined by reference to past default experience.
The Group applied the simplified approach to measure expected credit loss, that is a lifetime expected loss allowancefor trade debtors. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk
characteristics and the days past due. Changes in certain macroeconomic information such as GDP and inflation rate,
are relevant for determining expected credit loss rates.
The expected loss rates are based on the historical payment profiles of sales and the corresponding historical credit losses.
The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors andindustry trends affecting the ability of the customers to settle the receivables.
The loss allowances for trade debtors at 31st December 2022 and 2021 were determined as follows:
Below
30 days

Between
31 and60 days

Between
61 and120 daysMore than
120 days

Total

–

–

–

38%

6%

31.4

3.1

1.2

6.1

41.8

–

–

–

2.3

2.3

–

–

45%

57%

11%

Gross carrying amount – trade debtors (US$m)

21.1

3.4

1.1

5.1

30.7

Loss allowance (US$m)

0.1

–

0.5

2.9

3.5

2022
Weighted average expected loss rate
Gross carrying amount – trade debtors (US$m)
Loss allowance (US$m)
2021
Weighted average expected loss rate

Annual Report 2022

65

Notes to the Financial Statements Continued

17 Debtors continued
Impairment of trade debtors continued
Movements in the provisions for impairment are as follows:
Trade debtors

Other debtors

2022
US$m

2021
US$m

2022
US$m

2021
US$m

At 1st January

(3.5)

(3.1)

(1.8)

(2.0)

Exchange difference

0.2

–

–

–

Additional provisions

(0.3)

(1.0)

(1.0)

(0.6)

Unused amounts reversed

0.9

0.3

0.2

0.6

Amounts written off

0.4

0.3

0.3

0.2

At 31st December

(2.3)

(3.5)

(2.3)

(1.8)

Trade debtors and other debtors are written off when there is no reasonable expectation of recovery. Indicators that there
is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment planwith the Group.

18 Bank and cash balances
2022
US$m

2021
US$m

Deposits with banks and financial institutions

104.9

64.9

Bank balances

120.6

147.1

Cash balances

0.7

0.8

226.2

212.8

– Euro44.9

72.1– Hong Kong dollar

11.0

14.2

– Indonesian rupiah

4.8

5.6

– Japanese yen

6.8

5.7

– Swiss franc

4.9

9.3

– United Kingdom sterling

39.8

23.7

– United States dollar

103.5

74.2

Analysis by currency– Other

10.5

8.0

226.2

212.8

The weighted average interest rate on deposits with banks and financial institutions at 31st December 2022 was 1.2%
(2021: 0.2%) per annum.

66 Mandarin Oriental International Limited

19 Creditors
2022
US$m

2021
US$m

Trade creditors

21.2

16.8

Accruals

82.3

80.6

Rental and other refundable deposits

4.6

4.4

–

3.6

Derivative financial instruments (refer note 28)
Other creditors

33.5

28.1

Financial liabilities

141.6

133.5

Contract liabilities (refer note 2)

18.6

23.3

Rental income received in advance

3.4

3.6

163.6

160.4

4.5

3.2

159.1

157.2

163.6

160.4

64.8

66.1

Non-current
Current

Analysis by geographical area
– Asia– EMEA

59.5

45.5– America

39.3

48.8

163.6

160.4

Derivative financial instruments are stated at fair value. Other creditors are stated at amortised cost. The fair values ofthese creditors approximate their carrying amounts.
At 31st December 2022, non-current creditors included an amount of US$4.5 million (2021: nil) due to a service provider
of a joint outlet. The amount is repayable to the service provider according to the terms of the joint outlet agreement.
Provision for reinstatement and restoration costs comprised the estimated costs, to be incurred by the Group as lessees, indismantling and removing the underlying assets, restoring the sites on which they are located or restoring the underlying
assets to the condition required by the terms and conditions of the leases. The expected costs of US$0.8 million(2021: US$0.8 million) were included in accruals at 31st December 2022.

Annual Report 2022

67

Notes to the Financial Statements Continued

20 Borrowings
2022

2021

Carrying
amount
US$m

Fair
value
US$m

Carrying
amount
US$m

Fair
value
US$m

2.2

2.2

2.4

2.4

–

–

0.1

0.1

2.2

2.2

2.5

2.5

599.8

599.8

726.5

726.5

–

–

1.3

1.3

599.8

599.8

727.8

727.8

602.0

602.0

730.3

730.3

Short-term borrowings– other borrowings
Current portion of long-term borrowings– other borrowings
Total current borrowings
Long-term borrowings– bank loans– other borrowings
Long-term borrowings

The fair values are estimated using the expected future payments discounted at market interest rate from 1.2% to 5.7%(2021: 0.3% to 3.5%) per annum. This is in line with the definition of ‘observable current market transactions’ under
the fair value measurement hierarchy. The fair value of current borrowings approximates their carrying amount, as theimpact of discounting is not significant.
2022
US$m

2021
US$m

Secured

599.8

640.9

Unsecured

2.2

89.4

602.0

730.3

Borrowings of US$599.8 million (2021: US$640.9 million) were secured against the tangible fixed assets and right-of-use
assets of certain subsidiaries at 31st December 2022. The book value of these tangible fixed assets and right-of-use assets
at 31st December 2022 was US$464.8 million (2021: US$571.3 million).

68 Mandarin Oriental International Limited

20 Borrowings continued
The borrowings at 31st December are further summarised as follows:
Fixed rate borrowings
Weighted
averageinterest rates%

Weighted
average period
outstanding
Years

Hong Kong dollar

4.0

Swiss franc
United Kingdom sterling

US$m

Floating rateborrowings
US$m

Total
US$m

1.1

224.5

278.3

502.8

1.5

–

–

2.2

2.2

3.0

1.3

2022

48.2

48.8

97.0

272.7

329.3

602.0

214.8

316.1

530.9

2021
Hong Kong dollar

1.6

1.7

Swiss franc

2.2

10.0

1.4

2.3

3.7

United Kingdom sterling

1.6

2.4

54.0

54.7

108.7

United States dollar

1.0

–

–

87.0

87.0

270.2

460.1

730.3

The weighted average interest rates and period of fixed rate borrowings are stated after taking into account hedging
transactions (refer note 28).
The exposure of the Group’s borrowings to interest rate changes and the contractual repricing dates at 31st December
after taking into account hedging transactions are as follows:
2022
US$m

2021
US$m

329.3

460.1

– Within one year

64.1

54.5

– Between one and two years

208.6

–

– Between two and three years

–

214.3

– Between three and four years––– Between four and five years––– Beyond five years

–

1.4

272.7

270.2

602.0

730.3

Floating rate borrowings
Fixed rate borrowings

Annual Report 2022

69

Notes to the Financial Statements Continued

20 Borrowings continued
The movements in borrowings are as follows:
Long-term
borrowings
US$m

Short-termborrowings
US$m

Total
US$m

At 1st January

727.8

2.5

730.3

Exchange differences(11.7)(0.1)(11.8)

Drawdown of borrowings

23.0

–

23.0

Repayment of borrowings(139.3)(0.2)(139.5)

At 31st December

599.8

2.2

602.0

606.6

64.2

670.8

(4.3)

(0.4)

(4.7)

2022

2021
At 1st January
Exchange differences
Transfer

(0.1)

0.1

–

Drawdown of borrowings

130.6

–

130.6

Repayment of borrowings(5.0)(61.4)(66.4)

727.8

2.5

730.3

2022
US$m

2021
US$m

At 1st January

153.7

177.1

Exchange differences(18.8)(16.7)

Additions

0.6

0.2

Termination

–

(0.2)

Lease payments

(7.6)

(5.5)

Interest expense

1.9

2.2

Modification of lease terms and other

(0.4)

(3.4)

At 31st December

129.4

153.7

Non-current

123.5

147.4

5.9

6.3

129.4

153.7

At 31st December

21 Lease liabilities

Current

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The leaseagreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
The Group is not exposed to any residual guarantees in respect of the leases entered into at 31st December 2022 and 2021.
There is no lease contract entered but not commenced at 31st December 2022 and 2021.

70 Mandarin Oriental International Limited

22 Segmental information for non-current assets
Set out below is an analysis of the Group’s non-current assets, excluding amounts due from associates and joint ventures,deferred tax assets, pension assets and derivative financial instruments, by reportable segment.
2022
US$m

2021
US$m

– Asia2,928.3

2,946.4– EMEA

696.7

770.5

– America

109.0

208.7

3,734.0

3,925.6

Analysis by geographical area

23 Share capital
Ordinary shares in millions
2022

2021

2022
US$m

2021
US$m

1,500.0

1,500.0

75.0

75.0

1,263.6

1,263.2

63.2

63.2

0.1

0.4

–

–

1,263.7

1,263.6

63.2

63.2

2022
US$m

2021
US$m

500.5

499.7

0.2

0.8

500.7

500.5

Authorised
Shares of US¢5.00 eachIssued and fully paid
At 1st January
Issued under share-based long-term
incentive plans
At 31st December

24 Share premium
At 1st January
Transfer from capital reserves
At 31st December

Annual Report 2022

71

Notes to the Financial Statements Continued

25 Share-based long-term incentive plans
Share-based long-term incentive plans have been set up to provide incentives for selected executives. Awards can takethe form of share options with an exercise price based on the then prevailing market prices or such other price set by
the Directors or share awards which will vest free of payment. Awards normally vest on or after the third anniversaryof the date of grant and may be subject to the achievement of performance conditions.
i) The Mandarin Oriental Share-based Long-term Incentive Plan (the ‘2014 Plan’) was adopted by the Company on
6th March 2014. Under these awards, the free shares are received by the participants to the extent the award vests.
Conditions, if any, are at the discretion of the Directors. No conditional share awards were granted in 2022 and 2021
under the 2014 Plan.
ii) Prior to the adoption of the 2014 Plan, The Mandarin Oriental International Share Option Plan 2005 provided
selected executives with options to purchase ordinary shares in the Company. The exercise price of the granted
options was based on the average market price for the five trading days immediately preceding the date of grantof the options. Options are vested over a period of up to three years and are exercisable for up to ten years following
the date of grant.
Movements of the outstanding options during the year:
2022
Weighted average
exercise price
US$

Optionsin millions

2021
Weighted average
exercise price
US$

Optionsin millions

At 1st January

1.59

1.0

1.72

4.2

Exercised

1.61

(0.5)

1.68

(2.1)

–

–

1.91

(1.1)

1.57

0.5

1.59

1.0

Cancelled
At 31st December

The average share price during the year was US$1.92 (2021: US$2.00) per share.
Outstanding options at 31st December:
Ordinary shares in millions
Exercise price
US$

2022

2021

2022

1.61

–

0.5

2023

1.57

0.5

0.5

Total outstanding

0.5

1.0

of which exercisable

0.5

1.0

Expiry date

26 Dividends
No interim and final dividends in respect of the 2022 and 2021 financial years have been declared or proposed by
the Board.

72 Mandarin Oriental International Limited

27 Notes to consolidated cash flow statementa) Other non-cash items
2022
US$m

2021
US$m

104.1

73.9

Fair value gain on other investments

–

(0.6)

Gain on modification of lease terms

(0.4)

(3.4)

Gain on asset disposals(40.6)

–

0.4

1.3

63.5

71.2

2022
US$m

2021
US$m

(Increase)/decrease in stocks

(0.2)

0.4

Increase in debtors(21.2)(13.9)

Increase in creditors

18.5

12.6

Increase in pension obligations

1.8

1.8

(1.1)

0.9

Fair value loss on investment property under development

Otherb) Movements in working capitalc) The Group withdrew from the expansion project of Mandarin Oriental, Munich in 2021 and received cash refund
on deposits of land and related costs of US$4.0 million in 2022 (2021: US$13.0 million).
d) In January 2022, the Group acquired an additional interest in Stay One Degree Limited (‘S1D’) which increased
shareholding from 16.7% to 22.4% for a consideration of US$1.0 million (2021: nil).
e) During 2022, the Group provided convertible loan to S1D of US$2.0 million (2021: nil) and shareholder loan to
Mandarin Oriental Ritz, Madrid of US$0.4 million (2021: US$4.8 million). No shareholder loans were provided toRiver City Shopping Complex (2021: US$0.1 million) and Mandarin Oriental, New York (2021: US$2.2 million)
in 2022.
f) During 2022, the Group received repayments on its shareholder loans previously provided to Mandarin Oriental
Ritz, Madrid of US$0.4 million (2021: US$0.4 million) and Mandarin Oriental, Miami of US$3.8 million(2021: US$2.6 million).
g) Cash outflows for leases
2022
US$m

2021
US$m

(12.4)(9.3)– operating activities

(6.7)

(6.0)

– financing activities

(5.7)

(3.3)

(12.4)

(9.3)

2022
US$m

2021
US$m

226.2

212.8

Lease rentals paid
The above cash outflows are included inh) Analysis of balances of cash and cash equivalents

Bank and cash balances (refer note 18)

Annual Report 2022

73

Notes to the Financial Statements Continued

28 Derivative financial instruments
The fair values of derivative financial instruments at 31st December are as follows:
2022

2021

Positive
fair value
US$m

Negative
fair value
US$m

Positive
fair value
US$m

Negative
fair value
US$m

8.0

–

4.4

–

9.4

–

–

(3.6)

17.4

–

4.4

(3.6)

Designated as cash flow hedges– forward foreign exchange contracts– interest rate swaps

Forward foreign exchange contracts
The contract amounts of the outstanding forward foreign exchange contracts at 31st December 2022 were
US$53.3 million (2021: US$56.6 million).

Interest rate swaps
The notional principal amounts of the outstanding interest rate swap contracts at 31st December 2022 were
US$272.7 million (2021: US$268.8 million).
At 31st December 2022, the fixed interest rates relating to interest rate swaps varied from 1.2% to 2.1%
(2021: 1.2% to 1.8%) per annum.
The fair values of interest rate swaps at 31st December 2022 were based on the estimated cash flows discounted atmarket rates ranging from 0.9% to 1.0% (2021: 0.9% to 1.0%) per annum.

29 Commitments
2022
US$m

2021
US$m

148.3

506.7

363.9

43.6

512.2

550.3

Capital commitments
Authorised not contracted– other
Contracted not provided– otherThis primarily related to capital commitments for the Causeway Bay site under development, which is expected tocomplete in 2025.

74 Mandarin Oriental International Limited

30 Related party transactions
The parent company of the Group is Jardine Strategic Limited (‘JSL’) and the ultimate holding company of the Group is
Jardine Matheson Holdings Limited (‘JMH’). Both JMH and JSL are incorporated in Bermuda.
In the normal course of business, the Group undertakes a variety of transactions with its associates and joint ventures
and with JMH’s subsidiaries, associates and joint ventures. The more significant of these transactions are described below:
The Group managed six (2021: six) associate and joint venture hotels and received management fees of US$14.7 million(2021: US$6.6 million) based on long-term management agreements on normal commercial terms.
The Group provided hotel management services to Hongkong Land group (‘HKL’), a subsidiary of JMH. Total
management fees received from HKL in 2022 amounted to US$1.4 million (2021: US$2.3 million), based on long-term
management agreements on normal commercial terms.
The Group pays a management fee to Jardine Matheson Limited, a subsidiary of JMH, in consideration for certain
management consultancy services. The fee is calculated as 0.5% of the Group’s net profit. No fee was paid in 2022
and 2021 (due to net losses).
The Group rented a property to DFI Retail Group, a subsidiary of JMH, and received rental income of US$0.7 million(2021: US$0.7 million), based on lease agreements on normal commercial terms.
In respect of the Causeway Bay site under development, the Group paid consultancy fees of US$3.2 million(2021: US$1.2 million) to HKL in consideration for project management consultancy services. In addition,
Gammon Construction Limited (‘GCL’), a joint venture of JMH, completed value of works of US$13.6 million(2021: US$17.9 million). The HKL agreement and GCL contract were arranged on normal commercial terms.
The outstanding balances with associates and joint ventures are set out in debtors in note 17.
Details of Directors’ emoluments (being the key management personnel compensation) are shown on page 124 under
the heading of ‘Remuneration outcomes in 2022’.

31 Summarised balance sheet of the Company
Included below is certain summarised balance sheet information of the Company disclosed in accordance with
Bermuda Law.
2022
US$m

2021
US$m

1,344.3

1,347.2

(2.0)

(1.8)

1,342.3

1,345.4

Share capital (refer note 23)

63.2

63.2

Share premium (refer note 24)

500.7

500.5

Revenue and other reserves

778.4

781.7

1,342.3

1,345.4

Subsidiaries
Net current liabilities
Net assets

Shareholders’ funds

Subsidiaries are shown at cost less amount provided, and include amounts due from and due to subsidiaries.

Annual Report 2022

75

Notes to the Financial Statements Continued

32 Principal subsidiaries, associates, joint ventures and managed hotels
The principal subsidiaries, associates, joint ventures and managed hotels of the Group at 31st December 2022 are set out below.
Proportion of ordinary sharesand voting powers
at 31st December 2022 held by

2021

the Group%

non-controllinginterests
%

100

100

100

–

–

100

100

100

–

–

Owner: Mandarin Oriental, Hong Kong

100

100

100

–

494 rooms. Lease expiry 2895

Excelsior Hotel (BVI) Limited

The Causeway Bay site under development

100

100

100

–

–

Japan

Mandarin Oriental Tokyo KK

Owner: Mandarin Oriental, Tokyo

100

100

100

–

179 rooms. Lease expiry 2050

Indonesia

P.T. Jaya Mandarin Agung

Owner: Mandarin Oriental, Jakarta

96.9

96.9

96.9

3.1

272 rooms. Lease expiry 2053

United Kingdom

Mandarin Oriental Hyde Park Limited

Owner: Mandarin Oriental Hyde Park, London

100

100

100

–

Switzerland

Société Immobilière de Mandarin Oriental (Genèva) SA

Owner: Mandarin Oriental, Geneva

85.3

85.3

85.3

14.7

Switzerland

Société pour l’ Exploitation de Mandarin Oriental (Genèva) SA

100

100

100

–

178 rooms

Germany

Dinavest International Holdings B.V.

Owner: Mandarin Oriental, Munich

100

100

100

–

73 rooms. Freehold

FranceMOHG Hotel (Paris) Sarl

Owner: Mandarin Oriental, Paris

100

100

100

–

135 rooms. Freehold

United States

Boylston Street Hotel LLC

Owner: Mandarin Oriental, Boston

100

100

100

–

148 rooms. Freehold

Associates and joint ventures
Singapore
Marina Bay Hotel Private Limited

Owner: Mandarin Oriental, Singapore

50

50

50

50

ThailandOHTL PCL

Owner: Mandarin Oriental, Bangkok

47.6

47.6

47.6

52.4

Malaysia

Asas Klasik Sdn Bhd

Owner: Mandarin Oriental, Kuala Lumpur

25

25

25

75

629 rooms. Freehold

Thailand

Chaophaya Development Corporation Limited

Owner: River City Shopping Complex

49

49

49

51

–

Spain

Ritz Madrid, S.A.

Owner: Mandarin Oriental Ritz, Madrid

50

50

50

50

153 rooms. Freehold

United States

ICD Columbus Centre Hotel LLC

Owner: Mandarin Oriental, New York

25.1

25.1

25.1

74.9

244 rooms. Freehold

United States

Swire Brickell Key Hotel Limited

Owner: Mandarin Oriental, Miami

326 rooms. Freehold

Hong Kong

Stay One Degree Limited

Online booking service platform for luxury homes

Managed hotels
Hong Kong
Macau

Principal placeof business

Name of entity

Nature of businessSubsidiaries
Hong Kong

Mandarin Oriental Hotel Group International Limited

Management

Hong Kong

Mandarin Oriental Hotel Group Limited

Management

Hong Kong

Mandarin Oriental, Hong Kong Limited

Hong Kong

Attributable interest %2022

Hotel profile

181 rooms. Freehold
Lease expiry 2040

527 rooms. Lease expiry 2079
331 rooms. Various freehold/leasehold

25

25

25

75

22.4

16.7

22.4

77.6

The Landmark Mandarin Oriental, Hong Kong

–

–

–

–

111 rooms

Mandarin Oriental, Macau

–

–

–

–

213 rooms

China

Mandarin Oriental, Sanya

–

–

–

–

278 rooms

China

Mandarin Oriental, Guangzhou

–

–

–

–

263 rooms

China

Mandarin Oriental Pudong, Shanghai

–

–

–

–

362 rooms

China

Mandarin Oriental Wangfujing, Beijing

–

–

–

–

73 rooms

China

Mandarin Oriental, Shenzhen

–

–

–

–

178 rooms

TaiwanMandarin Oriental, Taipei

–

–

–

–

295 rooms

Czech Republic

Mandarin Oriental, Prague

–

–

–

–

99 rooms

Spain

Mandarin Oriental, Barcelona

–

–

–

–

120 rooms

TurkeyMandarin Oriental, Bodrum

–

–

–

–

132 rooms

TurkeyMandarin Oriental Bosphorus, Istanbul

–

–

–

–

86 rooms

Switzerland

Mandarin Oriental Palace, Luzern

–

–

–

–

136 rooms

Italy

Mandarin Oriental, Milan

–

–

–

–

104 rooms

Italy

Mandarin Oriental, Lago di Como

–

–

–

–

75 rooms

MoroccoMandarin Oriental, Marrakech

–

–

–

–

63 rooms

Qatar

Mandarin Oriental, Doha

–

–

–

–

249 rooms

United Arab Emirates Mandarin Oriental Jumeira, Dubai

–

–

–

–

251 rooms

United Arab Emirates Emirates Palace Mandarin Oriental, Abu Dhabi

–

–

–

–

390 rooms

Saudi Arabia

Al Faisaliah Hotel, Riyadh

–

–

–

–

325 rooms

Chile

Mandarin Oriental, Santiago

–

–

–

–

310 rooms

Saint Vincent and
the Grenadines

Mandarin Oriental, Canouan

–

–

–

–

35 rooms

76 Mandarin Oriental International Limited–

Annual Report 2022

77

Notes to the Financial Statements Continued

33 Principal accounting policies
Basis of consolidationi) The consolidated financial statements include the financial statements of the Company, its subsidiaries, and theGroup’s interests in associates and joint ventures.
ii) A subsidiary is an entity over which the Group has control. The Group controls an entity when the Group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost ofan acquisition includes the fair value at the acquisition date of any contingent consideration. The Group recognises
the non-controlling interest’s proportionate share of the recognised identifiable net assets of the acquired subsidiary.
In a business combination achieved in stages, the Group remeasures its previously held interest in the acquiree at its
acquisition-date fair value and recognises the resulting gain or loss in profit and loss. Changes in a parent’s ownershipinterest in a subsidiary that do not result in the loss of control are accounted for as equity transactions. When control
over a previous subsidiary is lost, any remaining interest in the entity is remeasured at fair value and the resulting gainor loss is recognised in profit and loss.
All material intercompany transactions, balances and unrealised surpluses and deficits on transactions between
Group companies have been eliminated. The cost of and related income arising from shares held in the Company
by subsidiaries are eliminated from shareholders’ funds and non-controlling interests, and profit, respectively.
iii) An associate is an entity, not being a subsidiary or joint venture, over which the Group exercises significant influence.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights
to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
Associates and joint ventures are included on the equity basis of accounting.
Profits and losses resulting from upstream and downstream transactions between the Group and its associates andjoint ventures are recognised in the consolidated financial statements only to the extent of unrelated investor’sinterests in the associates and joint ventures.
iv) Non-controlling interests represent the proportion of the results and net assets of subsidiaries and their associates
and joint ventures not attributable to the Group.
v) The results of subsidiaries, associates and joint ventures are included or excluded from their effective dates ofacquisition or disposal, respectively. The results of entities other than subsidiaries, associates and joint ventures
are included to the extent of dividends received when the right to receive such dividend is established.

Foreign currencies
Transactions in foreign currencies are accounted for at the exchange rates ruling at the transaction dates.
Assets and liabilities of subsidiaries, associates and joint ventures, together with all other monetary assets and liabilities
expressed in foreign currencies, are translated into United States dollars at the rates of exchange ruling at the year end.
Results expressed in foreign currencies are translated into United States dollars at the average rates of exchange ruling
during the year, which approximate the exchange rates at the dates of the transactions.

78 Mandarin Oriental International Limited

33 Principal accounting policies continued
Foreign currencies continued
Exchange differences arising from the retranslation of the net investment in foreign subsidiaries, associates and joint
ventures, and of financial instruments which are designated as hedges of such investments, are recognised in othercomprehensive income and accumulated in equity under exchange reserves. On the disposal of these investments,
such exchange differences are recognised in profit and loss. Exchange differences on other investments measured at fairvalue through profit and loss are recognised in profit and loss as part of the gains and losses arising from changes in theirfair value. Exchange differences on other investments measured at fair value through other comprehensive income arerecognised in other comprehensive income as part of the gains and losses arising from changes in their fair value. Allother exchange differences are recognised in profit and loss.
Goodwill and fair value adjustments arising on acquisition of a foreign entity after 1st January 2003 are treated as assets
and liabilities of the foreign entity and translated into United States dollars at the rate of exchange ruling at the year end.

Impairment of non-financial assets
Assets that have indefinite useful lives are not subject to amortisation and are tested for impairment annually andwhenever there is an indication that the assets may be impaired. Assets that are subject to amortisation are reviewed
for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
For the purpose of assessing impairment, assets are grouped at the lowest level for which there is separately identifiable
cash flows. Cash-generating units or groups of cash-generating units to which goodwill has been allocated are tested
for impairment annually and whenever there is an indication that the units may be impaired. An impairment loss
is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount, which is thehigher of an asset’s fair value less costs to sell and value in use. Non-financial assets other than goodwill that sufferedan impairment are reviewed for possible reversal of the impairment annually.

Intangible assetsi) Goodwill represents the excess of the sum of the consideration transferred, the amount of any non-controllinginterests in the acquiree, and the acquisition-date fair value of any previously held equity interest in the acquiree over
the acquisition-date fair value of the Group’s share of the net identifiable assets acquired. Non-controlling interests
are measured at their proportionate share of the net identifiable assets at the acquisition date. If the cost of acquisitionis less than the fair value of the net assets acquired, the difference is recognised directly in profit and loss. Goodwill on
acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates and joint ventures is
included in investment in associates and joint ventures. Goodwill is allocated to cash-generating units or groups ofcash-generating units for the purpose of impairment testing and is carried at cost less accumulated impairment loss.
The profit or loss on disposal of subsidiaries, associates and joint ventures is stated after deducting the carrying
amount of goodwill relating to the entity sold.
ii) Computer software represents acquired computer software licences which are capitalised on the basis of the costs
incurred to acquire and bring to use the specific software and are stated at cost less accumulated amortisation.
Amortisation is calculated on the straight-line basis to allocate the cost over their estimated useful lives.
iii) Development project contract costs are setup costs in order to secure long-term hotel management contracts anddirectly attributable to hotel projects under development, which are capitalised to the extent that such expenditure is
expected to generate future economic benefits and upon completion of the project. Capitalised development projectcontract costs are amortised over the term of the management contracts when the related revenue is recognised.
Where the carrying amount of a development project contract cost is greater than its estimated recoverable amount,
it is written down immediately to its recoverable amount.

Annual Report 2022

79

Notes to the Financial Statements Continued

33 Principal accounting policies continued
Tangible fixed assets and depreciation
Freehold properties comprised land and buildings. Freehold land is stated at cost less any impairment. No depreciation
is provided on freehold land as it is deemed to have an indefinite life. Properties on freehold and leasehold land are statedat cost less any accumulated depreciation and impairment. Grants related to tangible assets are deducted in arriving at
the carrying amount of the assets. Other tangible fixed assets are stated at cost less amounts provided for depreciation.
Depreciation of tangible fixed assets is calculated on the straight-line basis to allocate the cost or valuation of each asset to
its residual value over its estimated useful life. The residual values and useful lives are reviewed at each balance sheet date.
The estimated useful lives are as follows:
Properties on freehold land and under leases more than 20 years
21 years to 150 years
Properties under leases less than 20 years
over unexpired period of lease
Surfaces, finishes and services of hotel properties
20 years to 30 years
Leasehold improvements
shorter of unexpired period of the lease	  or useful life
Plant and machinery
5 years to 15 years
Furniture, equipment and motor vehicles
3 years to 10 years
Where the carrying amount of a tangible fixed asset is greater than its estimated recoverable amount, it is written down
immediately to its recoverable amount.
The profit or loss on disposal of tangible fixed assets is recognised by reference to their carrying amount.

LeasesAt inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease
if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Lease contracts may contain lease and non-lease components. The Group allocates the consideration in the contract
to lease and non-lease component based on their relative stand-alone prices. For property leases where the Group is
a lessee, it has elected not to separate lease and immaterial non-lease components and accounts for these items as a single
lease component.
i) As a lessee
The Group enters into property leases for use as hotels or offices.
The Group recognises right-of-use assets and lease liabilities at the lease commencement dates, that is the dates theunderlying assets are available for use. Right-of-use assets are measured at cost, less any accumulated depreciation andimpairment, and adjusted for any remeasurement of lease liabilities. The cost of the right-of-use assets includes amountsof the initial measurement of lease liabilities recognised, lease payments made at or before the commencement dates
less any lease incentives received, initial direct costs incurred and restoration costs. Right-of-use assets are depreciatedusing the straight-line method over the shorter of their estimated useful lives and the lease terms.
When right-of-use assets meet the definition of investment properties, they are presented in investment properties,
and are initially measured at cost and subsequently measured at fair value, in accordance with the Group’s
accounting policy.

80 Mandarin Oriental International Limited

33 Principal accounting policies continued
Leases continuedi) As a lessee continued
The Group also has interests in leasehold land for use in its operations. Lump sum payments were made upfront toacquire these land interests from their previous registered owners or governments in the jurisdictions where the land
is located. There are no ongoing payments to be made under the term of the land leases, other than insignificant leaserenewal costs or payments based on rateable value set by the relevant government authorities. These payments arestated at cost and are amortised over the term of the lease which includes the renewal period if the lease can be
renewed by the Group without significant cost.
Lease liabilities are measured at the present value of lease payments to be made over the lease terms. Lease payments
include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees.
The lease payments also include the exercise price of a purchase option reasonably certain to be exercised andpayments of penalties for terminating a lease, if the lease term reflects the Group exercising that option. The variable
lease payments that do not depend on an index or a rate are recognised as expense in the period on which the eventor condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the leasecommencement date if the interest rate implicit in the lease is not readily determinable. Lease liabilities are measured
at amortised cost using the effective interest method. After the commencement date, the amount of lease liabilities
is increased by the interest costs on the lease liabilities and decreased by lease payments made.
The carrying amount of lease liabilities is remeasured when there is a change in the lease term, or there is a change
in future lease payments arising from a change in an index or rate, or there is a change in the Group’s estimate of
the amount expected to be payable under a residual guarantee, or there is a change arising from the reassessmentof whether the Group will be reasonably certain to exercise an extension or a termination option. When the leaseliability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or isrecorded in profit or loss if the carrying amount of right-of-use asset has been reduced to zero.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low value assets(i.e. US$5,000 or less) and short-term leases. Low value assets comprised office equipment. Short-term leases
are leases with a lease term of 12 months or less. Lease payments associated with these leases are recognised ona straight-line basis as an expense in profit and loss over the lease term.
Lease liabilities are classified as non-current liabilities unless payments are within 12 months from the balance
sheet date.
ii) As a lessor
The Group enters into contracts with lease components as a lessor primarily on its properties. These leases areoperating leases as they do not transfer the risk and rewards incidental to the underlying properties. The Group
recognises the lease payments received under these operating leases on a straight-line basis over the lease term aspart of revenue in the profit and loss.

Annual Report 2022

81

Notes to the Financial Statements Continued

33 Principal accounting policies continued
Investment properties
Properties including those under operating leases which are held for long-term rental yields or capital gains are classified
and accounted for as investment properties, but the business model does not necessarily envisage that the properties will
be held for their entire useful life. Investment properties are carried at fair value, representing estimated open market
value determined annually by independent qualified valuers who have recent experience in the location and segment of
the investment property being valued.
The market value of the under development commercial property is derived using the direct comparison method and theresidual method. The direct comparison method is based on market evidence of transaction prices for similar properties
which recently transacted. The residual method is based on the estimated capital value of the proposed development
assuming completion as at the date of valuation, after deducting development costs together with developer’s profit andrisk. The direct comparison method and the estimated capital value of the residual method are adjusted to reflect theconditions of the subject property including property site and location. The market value of the residential property isarrived at by reference to market evidence of transaction prices for similar properties. Changes in fair value are recognised
in profit and loss.

Investments
The Group classifies its investments into the following measurement categories:i) Those to be measured subsequently at fair value, either through other comprehensive income or through profit
and loss; andii) Those to be measured at amortised cost.
The classification is based on the management’s business model and their contractual cash flows characteristics.
Investments are measured at fair value with fair value gains and losses recognised in profit and loss, unless management
has elected to recognise the fair value gains and losses through other comprehensive income. For investments measured
at fair value through other comprehensive income, gains or losses realised upon disposal are not reclassified to profit
and loss.
At initial recognition, the Group measures an investment at its fair value plus, in the case of the investment not atfair value through profit or loss, transaction costs that are directly attributable to the acquisition of the investment.
Transaction costs of investments carried at fair value through profit and loss are expensed in profit and loss.
All purchases and sales of investments are recognised on the trade date, which is the date that the Group commits topurchase or sell the investments.
Investments are classified as non-current assets.

82 Mandarin Oriental International Limited

33 Principal accounting policies continued
StocksStocks, which principally comprise beverages and consumables, are stated at the lower of cost and net realisable value.
Cost is determined by the first-in, first-out method.

Debtors
Trade debtors are recognised initially at the amount of consideration that is unconditional and measured subsequently
at amortised cost using effective interest method. All other debtors, excluding derivative financial instruments, aremeasured at amortised cost except where the effect of discounting would be immaterial. The impairment measurement issubject to whether there has been a significant increase in credit risk. For trade debtors, the Group applied the simplified
approach as permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the
debtors. Provision for impairment is established by considering potential financial difficulties of the debtor, probability
that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments. The carrying
amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised inarriving at operating profit. When a debtor is uncollectible, it is written off against the allowance account. Subsequent
recoveries of amount previously written off are credited to profit and loss.
Debtors with maturities greater than 12 months after the balance sheet date are classified under non-current assets.

Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise deposits with banks and financial
institutions and bank and cash balances, net of bank overdrafts. In the balance sheet, bank overdrafts are includedin current borrowings.

Provisions
Provisions are recognised when the Group has present legal or constructive obligations as a result of past events,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations,and a reliable estimate of the amount of the obligations can be made.

Borrowings and borrowing costs
Borrowings are initially recognised at fair value, net of transaction costs incurred. In subsequent periods, borrowings
are stated at amortised cost using the effective interest method.
Borrowing costs relating to major development projects are capitalised until the asset is substantially completed.
Capitalised borrowing costs are included as part of the cost of the asset. All other borrowing costs are expensed as incurred.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of theliability for at least 12 months after the balance sheet date.

Annual Report 2022

83

Notes to the Financial Statements Continued

33 Principal accounting policies continued
Government grants
Grants from governments are recognised at their fair value when there is reasonable assurance that the grants will bereceived, and the Group will comply with the conditions associated with the grants.
Grants that compensate the Group for expenses incurred are recognised in the profit and loss as other operating income
on a systematic basis in the period in which the expenses are recognised. Unconditional grants are recognised in the profit
and loss as other income on a systematic basis in the period in which the expenses are recognised. Unconditional grants
are recognised in the profit and loss as other operating income when they become receivable.
Grants related to assets are deducted in arriving at the carrying value of the related assets.

Current and deferred tax
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit and loss, except to the extent
that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance
sheet date in the countries where the Group operates and generates taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax is provided, using the liability method, for all temporary differences arising between the tax bases of assets
and liabilities and their carrying values. Deferred tax is determined using tax rates and laws that have been enacted or
substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realisedor the deferred tax liability is settled.
Provision for deferred tax is made on the revaluation of certain non-current assets and, in relation to acquisitions, on
the difference between the fair value of the net assets acquired and their tax base. Deferred tax is provided on temporary
differences associated with investments in subsidiaries, associates and joint ventures, except where the Group is able tocontrol the reversal of the temporary difference and it is probable that the temporary difference will not reverse in theforeseeable future. Deferred tax assets relating to the carry forward of unused tax losses are recognised to the extent that
it is probable that future taxable profit will be available against which the unused tax losses can be utilised.

Employee benefits
The Group operates a number of defined benefit and defined contribution plans, the assets of which are held in trustee
administered funds.
Pension accounting costs for defined benefit plans are assessed using the projected unit credit method. Under thismethod, the costs of providing pensions are charged to profit and loss spreading the regular cost over the service livesof employees in accordance with the advice of qualified actuaries, who carry out a full valuation of major plans every
year. The pension obligations are measured as the present value of the estimated future cash outflows by reference tomarket yields on high quality corporate bonds which have terms to maturity approximating the terms of the related
liability. Plan assets are measured at fair value.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognisedin other comprehensive income in the year in which they occur.
Past service costs are recognised immediately in profit and loss.
The Group’ total contributions relating to the defined contribution plans are charged to profit and loss in the year towhich they relate.

84 Mandarin Oriental International Limited

33 Principal accounting policies continued
Derivative financial instruments
The Group only enters into derivative financial instruments in order to hedge underlying exposures and not as
speculative investments. Derivative financial instruments are initially recognised at fair value on the date a derivative
contract is entered into and are subsequently remeasured at their fair value. The method of recognising the resulting
gain or loss is dependent on the nature of the item being hedged. The Group designates certain derivatives as a hedge
of a forecasted transaction or of the foreign currency risk on a firm commitment (‘cash flow hedge’), or a hedge of a net
investment in a foreign entity.
At inception of the hedge relationship, the Group documents the economic relationship between hedging instruments
and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes
in the cash flows of hedged items. The Group documents its risk management objective and strategy for undertaking its
hedge transactions.
Changes in the fair value of derivatives that are designated and qualify as cash flow hedges and that are highly effective,
are recognised in other comprehensive income and accumulated in equity under hedging reserves. Changes in the fairvalue relating to the ineffective portion is recognised immediately in profit and loss. Where the hedged item results in therecognition of a non-financial asset or of a non-financial liability, the deferred gains and losses and included in the initial
measurement of the cost of the asset or liability. The deferred amounts are ultimately recognised in profit and loss as thehedged item affects profit and loss. Otherwise, amounts deferred in hedging reserves are transferred to profit and loss inthe same periods during which the hedged firm commitment or forecasted transaction affects profit and loss. The gain orloss relating to the effective portion of the interest rate swaps hedging variable rate borrowings is recognised in profit andloss within finance cost at the same time as the interest expense on the hedged borrowings. When a hedging instrument
expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existingin hedging reserves at that time remains in the hedging reserves and is recognised when the committed or forecasted
transaction ultimately is recognised in profit and loss. When a committed or forecasted transaction is no longer expected
to occur, the cumulative gain or loss that was reported in hedging reserves is immediately transferred to profit and loss.
Certain derivative transactions, while providing effective economic hedges under the Group’s risk management policies,
do not qualify for hedge accounting under the specific rules in IFRS 9. Changes in the fair value of any derivative
instruments that do not qualify for hedge accounting under IFRS 9 are recognised immediately in profit and loss.
Hedges of net investments in foreign entities are accounted for on a similar basis to that used for cash flow hedges.
Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in othercomprehensive income and accumulated in exchange reserves; the gain or loss relating to the ineffective portionis recognised immediately in profit and loss.
The fair value of derivatives which are designated and qualify as effective hedges are classified as non-current assets
or liabilities if the remaining maturities of the hedged assets or liabilities are greater than 12 months after the balance
sheet date.

Financial guarantee contracts
Financial guarantee contracts under which the Group accepts significant risk from a third party by agreeing tocompensate that party on the occurrence of a specified uncertain future event are accounted for in a manner similar toinsurance contracts. Provisions are recognised when it is probable that the Group has obligations under such guarantees
and an outflow of resources embodying economic benefits will be required to settle the obligations.

Annual Report 2022

85

Notes to the Financial Statements Continued

33 Principal accounting policies continued
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset
and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must
be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company
or the counterparty.

Non-trading items
Non-trading items are separately identified to provide greater understanding of the Group’s underlying businessperformance. Items classified as non-trading items include fair value gains or losses on revaluation of investment
properties and investments which are measured at fair value through profit and loss; gains and losses arising fromthe sale of businesses, investments and properties; impairment of non-depreciable intangible assets, associates
and joint ventures and other investments; provisions for the closure of businesses; acquisition-related costs in businesscombinations; and other credits and charges of a non-recurring nature that require inclusion in order to provide
additional insight into underlying business performance.

Earning per share
Basic earnings per share are calculated on profit attributable to shareholders and on the weighted average number ofshares in issue during the year. For the purpose of calculating diluted earnings per share, the weighted average numberof shares is adjusted for the number of shares which are deemed to be issued for no consideration under the share-based
long-term incentive plans based on the average share price during the year.

Dividends
Dividends proposed or declared after the balance sheet date are not recognised as a liability at the balance sheet date.

Revenue recognitioni) Revenue from hotel ownership comprises amounts earned in respect of rental of rooms, food and beverage sales,
and other ancillary services and goods supplied by the subsidiary hotels.
Revenue is recognised over the period when rooms are occupied or services are performed.
Revenue from the sale of food and beverages and goods is recognised at the point of sale when the food and beverages
and goods are delivered to customers.
Payment is due immediately when the hotel guest occupies the room and receives the services and goods.
ii) Revenue from hotel and residences branding and management comprises gross fees earned from the branding andmanagement of all the hotels and residences operated by the Group.
Branding and management fees are recognised over time as determined by the relevant contract, taking into accountthe performance of the hotels, and the sales and operating expenses of the residences. Fees charged to the subsidiary
hotels are eliminated upon consolidation.
Hotels and residences are invoiced in accordance with the terms of contract and fees are payable when invoiced.
iii) Rental income from properties and other tangible assets are accounted for on an accrual basis over the lease terms.

Pre-operating costs
Pre-operating costs are expensed as they are incurred.

86 Mandarin Oriental International Limited

34 Standards and amendments issued but not yet effective
A number of new standards and amendments effective for accounting periods beginning after 2022 have been publishedand will be adopted by the Group from their effective dates. The Group is currently assessing the potential impact ofthese standards and amendments but expects their adoption will not have a significant impact on the Group’s consolidated
financial statements. The relevant standard and amendments are set out below.
i) IFRS 17 ‘Insurance Contracts’ (effective from 1st January 2023) will mainly have effect on the Group’s insurancecompanies in Indonesia. The Group is assessing the potential impact on the Group’s consolidated financial statements.
ii) Amendment to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective
1st January 2023) requires companies to recognise deferred tax on transactions that, on initial recognition, give riseto equal amounts of taxable and deductible temporary differences. They typically apply to transactions such as leasesof lessees and decommissioning obligations and will require the recognition of additional deferred tax assets andliabilities. The Group is assessing the potential impact on the Group’s consolidated financial statements.

35 Financial risk management
Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest raterisk and price risk), credit risk and liquidity risk.
The Group’s treasury function co-ordinates, under the directions of the board of Mandarin Oriental Hotel GroupInternational Limited, financial risk management policies and their implementation on a Group-wide basis. The Group’s
treasury policies are designed to manage the financial impact of fluctuations in interest rates and foreign exchange rates
and to minimise the Group’s financial risks. The Group uses derivative financial instruments, principally interest rate
swaps and caps, and forward foreign exchange contracts as appropriate for hedging transactions and managing theGroup’s assets and liabilities in accordance with the Group’s financial risk management policies. Financial derivative
contracts are executed between third party banks and the Group entity that is directly exposed to the risk being hedged.
Hedge accounting is applied to remove the accounting mismatch between the hedging instrument and the hedged item.
The effective portion of the change in the fair value of the hedging instrument is deferred into the cash flow hedge reservethrough other comprehensive income and will be recognised in profit and loss when the hedged item affects profit andloss. In general, the volatility in profit or loss can be reduced by applying hedge accounting.
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectivenessassessments to ensure that an economic relationship exists between the hedged item and hedging instrument.
The Group enters into interest rate swaps and caps that have similar critical terms as the hedged item, such as reference
rate, reset dates, payment dates, maturities and notional amount. The Group does not hedge 100% of its loans, therefore
the hedged item is identified as a proportion of the outstanding loans up to the notional amount of the swaps. As all
critical terms matched during the year, effective economic relationship existed between the swaps and the loans.

Annual Report 2022

87

Notes to the Financial Statements Continued

35 Financial risk management
Financial risk factors continued
The Group performs a qualitative assessment of effectiveness. If changes in circumstances affect the terms of the hedged
item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the Group
uses the hypothetical derivative method to assess effectiveness.
Hedge ineffectiveness for interest rate swaps may occur due to:i) The credit value/debit value adjustment on the interest rate swaps which is not matched by the loan;ii) Differences in critical terms between the interest rate swaps and loans; andiii) The effects of the forthcoming reforms to interbank offered rates (‘IBORs’), because these might take effect at
a different time and have a different impact on the hedged item (the floating-rate debt) and the hedging instrument(the interest rate swap used to hedge the debt).
The ineffectiveness during 2022 or 2021 in relation to the interest rate swaps was not material.
i) Market risk
Foreign exchange risk
Entities within the Group are exposed to foreign exchange risk from future commercial transactions, net investments
in foreign operations and net monetary assets and liabilities that are denominated in a currency that is not the entity’sfunctional currency.
Group entities are required to manage their foreign exchange risk against their functional currency. To manage
their foreign exchange risk arising from future commercial transactions, entities in the Group use forward foreignexchange contracts in a consistent manner to hedge firm and anticipated foreign exchange commitments. The Group
does not usually hedge its net investments in foreign operations except in circumstances where there is a material
exposure arising from a currency that is anticipated to be volatile and the hedging is cost effective.
Currency risks as defined by IFRS 7 arise on account of monetary assets and liabilities being denominated in a currency
that is not the functional currency. In 2022 and 2021, the Group’s principal foreign exchange exposure was with
the Euro. At 31st December 2022, if the United States dollar had strengthened/weakened by 10% against Eurowith all other variables unchanged, the Group’s loss after tax would have been US$0.1 million (2021: US$4.2 million)
higher/lower, arising from foreign exchange losses/gains taken on translation. The impact on amounts attributable
to the shareholders of the Company would be US$0.1 million (2021: US$4.2 million) lower/higher. This sensitivity
analysis ignores any offsetting foreign exchange factors and has been determined assuming that the change in foreignexchange rates had occurred at the balance sheet date. The stated change represents management’s assessment of
reasonably possible changes in foreign exchange rates over the period until the next annual balance sheet date. There
are no other significant monetary balances held by Group companies at 31st December 2022 that are denominatedin a non-functional currency. Differences resulting from the translation of financial statements into the Group’s
presentation currency are not taken into consideration.

88 Mandarin Oriental International Limited

35 Financial risk management continued
Financial risk factors continuedi) Market risk continued
Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities and assets.
These exposures are managed partly by using natural hedges that arise from offsetting interest rate sensitive assets
and liabilities, and partly through fixed rate borrowings and the use of derivative financial instruments such as
interest rate swaps and caps. The Group monitors interest rate exposure on a monthly basis by currency and business
unit, taking into consideration proposed financing and hedging arrangements. The Group’s guideline is to maintain
40% to 60% of its gross borrowings, in fixed rate instruments. At 31st December 2022, the Group’s interest rate
hedge was 45% (2021: 37%), with an average tenor of 1.1 years (2021: 1.9 years). The interest rate profile of theGroup’s borrowings after taking into account hedging transactions are set out in note 20.
Cash flow interest rate risk is the risk that changes in market interest rates will impact cash flows arising from variable
rate financial instruments. Borrowings at floating rates therefore expose the Group to cash flow interest rate risk. The
Group manages this risk by using forward rate agreements to a maturity of one year, and by entering into interest rate
swaps and caps for a maturity of up to seven years. Forward rate agreements and interest rate swaps have the economic
effect of converting borrowings from floating rate to fixed rate, caps provide protection against a rise in floating rates
above a pre-determined rate. Details of interest rate swaps are set out in note 28.
At 31st December 2022, if interest rates had been 100 basis points higher/lower with all other variables held constant,
the Group’s loss after tax would have been US$1.7 million (2021: US$3.3 million) higher/lower, and hedging reserves
would have been US$2.7 million (2021: US$4.2 million) higher/lower, as a result of fair value changes to cash flow
hedges. The sensitivity analysis has been determined assuming that the change in interest rates had occurred at thebalance sheet date and had been applied to the exposure to interest rate risk for both derivative and non-derivative
financial instruments in existence at that date. There is no significant sensitivity resulting from interest rate caps.
The 100 basis point increase or decrease represents management’s assessment of a reasonably possible change in thoseinterest rates which have the most impact on the Group, specifically the United States, Hong Kong, United Kingdom
and European rates, over the period until the next annual balance sheet date. Changes in market interest rates affectthe interest income or expense of non-derivative variable-interest financial instruments, the interest payments ofwhich are not designated as hedged items of cash flow hedges against interest rate risks. As a consequence, they areincluded in the calculation of loss after tax sensitivities. Changes in the market interest rate of financial instrumentsthat were designated as hedging instruments in a cash flow hedge to hedge payment fluctuations resulting frominterest rate movements affect the hedging reserves and are therefore taken into consideration in the equity-relatedsensitivity calculations.

Annual Report 2022

89

Notes to the Financial Statements Continued

35 Financial risk management continued
Financial risk factors continuedi) Market risk continued
Price risk
The Group is exposed to price risk from its investments which are measured at fair value through profit and loss.
Gains and losses arising from changes in the fair value of these investments are recognised in profit and loss orother comprehensive income according to their classification. The performance of these investments are monitored
regularly, together with an assessment of their relevance to the Group’s long-term strategic plans. Details of theseinvestments are contained in note 14.
The Group’s interest in these investments are unhedged. At 31st December 2022, if the price of these investments had
been 25% higher/lower with all other variables held constant, non-trading operating profit and total equity would
have been US$3.5 million (2021: US$4.1 million) higher/lower. The sensitivity analysis has been determined basedon a reasonable expectation of possible valuation volatility over the next 12 months.
ii) Credit risk
The Group’s credit risk is primarily attributable to deposits with banks, credit exposures to customers and derivative
financial instruments with a positive fair value. The Group has credit policies in place and the exposures to these
credit risks are monitored on an ongoing basis.
The Group manages its deposits with banks and financial institutions and transactions involving derivative financial
instruments by monitoring credit ratings and capital adequacy ratios of counterparties, and limiting the aggregate
risk to any individual counterparty. The utilisation of credit limits is regularly monitored. At 31st December 2022,
91% (2021: 90%) of deposits and balances with banks and financial institutions were made to institutions withcredit ratings of no less than A- (Fitch). Similarly transactions involving derivative financial instruments are withbanks with sound credit ratings and capital adequacy ratios. In developing countries it may be necessary to deposit
money with banks that have a lower credit rating, however the Group only enters into derivative transactions withcounterparties which have credit rating of at least investment grade. Management does not expect any counterparty
to fail to meet its obligations.
In respect of credit exposures to customers, the Group has policies in place to ensure that sales on credit without
collateral are made principally to travel agents and corporate companies with an appropriate credit history. Sales toother customers are made in cash or by major credit cards.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance
sheet after deducting any impairment allowance.

90 Mandarin Oriental International Limited

35 Financial risk management continued
Financial risk factors continuediii) Liquidity risk
Prudent liquidity risk management includes managing the profile of debt maturities and funding sources,
maintaining sufficient cash and marketable securities, and ensuring the availability of funding from an adequate
amount of committed credit facilities and the ability to close out market positions. The Group’s ability to fund its
existing and prospective debt requirements is managed by maintaining diversified funding sources with adequate
committed funding lines from high quality lenders, and by monitoring rolling short-term forecasts of the Group’s
cash and gross debt on the basis of expected cash flows. In addition, long-term cash flows are projected to assist with
the Group’s long-term debt financing plans.
At 31st December 2022, total available borrowing facilities amounted to US$1,073 million (2021: US$1,024 million)of which US$602 million (2021: US$730 million) was drawn down. Undrawn committed facilities, in the form of
revolving credit and term loan facilities totalled US$471 million (2021: US$294 million), in addition to cash balancesof US$226 million (2021: US$213 million).
Included in the total available borrowing facilities of US$1,073 million, the Group has borrowing facilities of
US$750 million due to mature within 2024. Based on the Group’s consistent track record of securing externalfinancing in a timely manner, its operating performance and strong balance sheet, the Group is confident that
it will complete the refinancing of these bank facilities if necessary before their expiry.
The table below analyses the Group’s non-derivative financial liabilities and net settled derivative financial liabilities
into relevant maturity groupings based on the remaining period at 31st December 2022 and 2021 to the contractual
maturity date. Derivative financial liabilities are included in the analysis if their contractual maturities are essential
for an understanding of the timing of the cash flows. The amounts disclosed in the table are the contractual
undiscounted cash flows.
Within
one
year
US$m

Betweenone and
two years
US$m

Betweentwo andthree years
US$m

Betweenthree andfour years
US$m

Betweenfour andfive years
US$m

Beyond
five
years
US$m

Total
undiscounted
cash flows
US$m

Borrowings

27.3

611.9

–

–

–

–

639.2

Lease liabilities

7.7

8.0

7.8

7.4

5.4

114.5

150.8

141.6

–

–

–

–

–

141.6

Borrowings

13.3

96.8

642.9

0.2

0.2

1.0

754.4

Lease liabilities

8.9

9.1

8.8

8.8

7.2

136.6

179.4

129.9

–

–

–

–

–

129.9

2.8

0.8

0.1

–

–

–

3.7

2022

Creditors
2021

Creditors
Net settled derivative
financial instruments

Annual Report 2022

91

Notes to the Financial Statements Continued

35 Financial risk management continued
Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern whilst
seeking to maximise benefits to shareholders and other stakeholders. Capital is equity as shown in the consolidatedbalance sheet plus net debt.
The Group actively and regularly reviews and manages its capital structure to ensure optimal capital structure andshareholder returns, taking into consideration the future capital requirements of the Group and capital efficiency,
prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projectedstrategic investment opportunities. In order to maintain or adjust the capital structure, the Group may adjust the amountof dividends paid to shareholders, purchase Group shares, return capital to shareholders, issue new shares or sell assets
to reduce debt.
The Group monitors capital on the basis of the Group’s consolidated gearing ratio and consolidated interest cover before
taking into account the impact of IFRS 16 ‘Leases’. The gearing ratio is calculated as net debt divided by shareholders’funds on an IFRS basis, where the Group’s freehold and leasehold interests are carried in the consolidated balance sheet
at amortised cost, or alternatively on an adjusted shareholders’ funds basis which takes into account the fair market valueof the Group’s freehold and leasehold interests. Net debt is calculated as total borrowings less bank and cash balances.
Interest cover is calculated as underlying operating profit before the deduction of amortisation/depreciation of right-of-use
assets, net of actual lease payments, and the Group’s share of underlying results of associates and joint ventures, divided
by net financing charges before the deduction of capitalised interest and excluding interest on lease liabilities. The Group
does not have a defined gearing or interest cover benchmark or range.
The ratios at 31st December 2022 and 2021 are as follows:
2022

2021

– based on shareholders’ funds

11%

16%

– based on adjusted shareholders’ funds

8%

10%

Interest cover

1.9

n/a

Gearing ratio

Fair value estimationi) Financial instruments that are measured at fair value
For financial instruments that are measured at fair value in the balance sheet, the corresponding fair value
measurements are disclosed by level of the following fair value measurement hierarchy:a) Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly(‘observable current market transactions’)
The fair values of derivative financial instruments are determined using rates quoted by the Group’s bankers
at the balance sheet date. The rates for interest rate swaps and caps and forward foreign exchange contracts arecalculated by reference to market interest rates and foreign exchange rates.
The fair values of unlisted investments, mainly include club and school debentures, are determined using prices
quoted by brokers at the balance sheet date.
b) Inputs for assets or liabilities that are not based on observable market data (‘unobservable inputs’)
The fair values of other unlisted investments, are determined using valuation techniques by reference toobservable current market transactions (including price-to earnings and price-to book ratios of listed securities
of entities engaged in similar industries) or the market prices of the underlying investments with certain degreeof entity specific estimates or discounted cash flow by projecting the cash inflows from these investments.
There were no changes in valuation techniques during the year.
92 Mandarin Oriental International Limited

35 Financial risk management continued
Fair value estimation continuedi) Financial instruments that are measured at fair value continued
The table below analyses financial instruments carried at fair value at 31st December 2022 and 2021, by the levels in
the fair value measurement hierarchy.
Observablecurrent market
transactions
US$m

Unobservable
inputs
US$m

Total
US$m

6.0

8.0

14.0

17.4

–

17.4

23.4

8.0

31.4

6.0

10.5

16.5

2022
AssetsOther investments
Derivative financial instruments at fair value– through other comprehensive income

2021
AssetsOther investments
Derivative financial instruments at fair value– through other comprehensive income

4.4

–

4.4

10.4

10.5

20.9

(3.6)

–

(3.6)

Liabilities
Derivative financial instruments at fair value– through other comprehensive income

There were no transfers among the two categories during the year ended 31st December 2022 and 2021.
Movements of financial instruments which are valued based on unobservable inputs during the year ended
31st December are as follows:
Unlisted investments
2022
2021
US$m
US$m

At 1st January

10.5

10.7

Additions

0.2

0.3

Disposals

(2.7)

(0.5)

At 31st December

8.0

10.5

ii) Financial instruments that are not measured at fair value
The fair values of current debtors, bank and cash balances, current creditors, current borrowings and current leaseliabilities are assumed to approximate their carrying amounts due to the short-term maturities of these assets
and liabilities.
The fair values of long-term borrowings are based on market prices or are estimated using the expected future
payments discounted at market interest rates. The fair values of non-current lease liabilities are estimated using
the expected future payments discounted at market interest rates.

Annual Report 2022

93

Notes to the Financial Statements Continued

35 Financial risk management continued
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts at 31st December 2022 and2021 are as follows:
Fair value ofFair value
Financialhedging
throughassets at
instruments profit and loss amortised cost
US$m
US$m
US$m

Other
financialliabilities
US$m

Total
carrying
amount
US$m

Fair
value
US$m

2022
Financial assets measured at fair value
–

14.0

–

–

14.0

14.0

17.4

–

–

–

17.4

17.4

17.4

14.0

–

–

31.4

31.4

Debtors

–

–

69.8

–

69.8

69.8

Bank and cash balances

–

–

226.2

–

226.2

226.2

–

–

296.0

–

296.0

296.0

Borrowings

–

–

–

(602.0)(602.0)(602.0)

Lease liabilities

–

–

–

(129.4)(129.4)(129.4)

Trade and other payables excluding
non-financial liabilities

–

–

–

(141.6)(141.6)(141.6)–––(873.0)(873.0)(873.0)

Other investments
Derivative financial instruments

Financial assets not measured at fair value

Financial liabilities not measured
at fair value

2021
Financial assets measured at fair value
Other investments

–

16.5

–

–

16.5

16.5

4.4

–

–

–

4.4

4.4

4.4

16.5

–

–

20.9

20.9

Debtors

–

–

58.0

–

58.0

58.0

Bank and cash balances

–

–

212.8

–

212.8

212.8

–

–

270.8

–

270.8

270.8

(3.6)

–

–

–

(3.6)

(3.6)

Borrowings

–

–

–

(730.3)(730.3)(730.3)

Lease liabilities

–

–

–

(153.7)(153.7)(153.7)

Trade and other payables excluding
non-financial liabilities

–

–

–

(129.9)(129.9)(129.9)–––(1,013.9)(1,013.9)(1,013.9)

Derivative financial instruments

Financial assets not measured at fair value

Financial liabilities measured at fair value
Derivative financial instruments
Financial liabilities not measured
at fair value

94 Mandarin Oriental International Limited

36 Critical accounting estimates and judgements
Estimates and judgements used in preparing the financial statements are continually evaluated and are based on
historical experience and other factors, including expectations of future events that are believed to be reasonableaccording to circumstances and conditions available. The existing and potential impacts arising from climate change
and the COVID-19 pandemic have been considered when applying estimates and assumptions in the preparation of thefinancial statements, including the Group’s assessment of impairment of assets and the independent valuers’ valuation of
the Group’s investment properties. Given the uncertainty of the impact of COVID-19 pandemic, the actual results may
differ from these accounting estimates.
The estimates and assumptions that have a significant effect on the reported amounts of assets and liabilities, and income
and expenses are discussed below.

Investment properties
The fair value of the under development commercial property is determined by independent valuers on an open market
basis using the direct comparison method and the residual method with equal weighting. The direct comparison method
and the estimated capital value of the residual method are made by reference to comparable market transactions andadjusted for property-specific qualitative factors. The residual method is also based on assumptions about the estimatedcosts to complete the development, the developer’s estimated profit and margin for risk and capitalisation rates.
Consideration has been given to assumptions that are mainly based on market conditions existing at the balance sheet date.
The independent valuers have considered climate change, sustainability, resilience and environmental, social andgovernance (‘ESG’) within their valuations. Properties held by the Group are considered to currently display ESG
characteristics that would be expected in the market, and therefore there were no direct and tangible pricing adjustments
required to the valuation of the investment properties. The Group will monitor these considerations for each reporting
period.

Impairment of assets
The Group tests annually whether goodwill that has indefinite useful life suffered any impairment. Other assets such as
tangible fixed assets and development project contract costs are reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount of the asset exceeds its recoverable amount. The recoverable amount ofan asset or a cash generating unit is determined based on the higher of its fair value less costs to sell and its value in use,
calculated on the basis of management’s assumptions and estimates. Changing the key assumptions, including thediscount rates or the growth rate assumptions in the cash flow projections, could materially affect the value-in-use
calculations.
The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Group
uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s
past history, existing market conditions as well as forward looking estimates at the balance sheet date (refer note 17).

Tangible fixed asses and depreciation
Management determines the estimated useful lives and related depreciation charges for the Group’s tangible fixed assets.
Management will revise the depreciation charge where useful lives are different to those previously estimated, or it will
write off or write down technically obsolete or non-strategic assets that have been abandoned.

Annual Report 2022

95

Notes to the Financial Statements Continued

36 Critical accounting estimates and judgements continued
Income taxes
The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining
the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax
determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters isdifferent from the amounts that were initially recorded, such differences will impact the income tax and deferred tax
provisions in the period in which such determination is made.
Provision of deferred tax follows the way management expects to recover or settle the carrying amount of the related
assets or liabilities, which the management may expect to recover through use, sale or combination of both. Accordingly,
deferred tax will be calculated at income tax rate, capital gains tax rate or combination of both. There is a rebuttablepresumption in International Financial Reporting Standards that investment properties measured at fair value arerecovered through sale. Thus deferred tax on revaluation of investment property under development held by the Group
is calculated at the capital gain tax rate.
Recognition of deferred tax assets, which principally relate to tax losses, depends on the management’s expectationof future taxable profit that will be available against which the tax losses can be utilised. The outcome of their actual
utilisation may be different.

Pension obligations
The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis
using a number of assumptions. The assumptions used in determining the net cost/income for pensions include thediscount rate. Any changes in these assumptions will impact the carrying amount of pension obligations.
The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used
to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations.
In determining the appropriate discount rate, the Group considers the interest rates of high-quality corporate bonds thatare denominated in the currency in which the benefits will be paid and that have terms to maturity approximating theterms of the related pension obligation.
Other key assumptions for pension obligations are based in part on current market conditions.

LeasesLiabilities and the corresponding right-of-use assets arising from leases are initially measured at the present value of thelease payments at the commencement date, discounted using the interest rates implicit in the leases, or if that rate cannot
be readily determinable, the Group uses the incremental borrowing rate. The Group generally uses the incremental
borrowing rate as the discount rate.
The Group applies the incremental borrowing rate with reference to the rate of interest that the Group would haveto pay to borrow, over a similar term as that of the lease, the funds necessary to obtain an asset of a similar value tothe right-of-use asset in the country where it is located.
Lease payments to be made during the lease term will be included in the measurement of a lease liability. The Group
determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option toextend the lease if it is reasonably certain to be exercised, or any period covered by an option to terminate the lease,
if it is reasonably certain not to be exercised.

96 Mandarin Oriental International Limited

36 Critical accounting estimates and judgements continued
Non-trading items
The Group uses underlying business performance in its internal financial reporting to distinguish between theunderlying profits and non-trading items. The identification of non-trading items requires judgement by management,
but follows the consistent methodology as set out in the Group’s accounting policies.

Interest rate benchmark reform
Following the financial crisis, the reform and replacement of benchmark interest rates such as US$ LIBOR and other
IBORs has become a priority for global regulators. There is currently uncertainty around the timing and precise natureof these changes on some IBORs.
To transition existing contracts and agreements that reference IBORs (including US$ LIBOR) to risk free rates (‘RFRs’)such as US$ LIBOR to Secured Overnight Financing Rate, adjustments for term differences and credit differences mightneed to be applied to RFRs, to enable the two benchmark rates to be economically equivalent on transition. The greatest
change will be amendments to the contractual terms of the IBORs-referenced floating-rate debt and the associated swap
and the corresponding update of the hedge designation. However, the changed reference rate might also affect othersystems, processes, risk and valuation models, as well as having tax and accounting implications.
Group Treasury is managing the IBORs transition plan, which has progressed throughout 2022. US$ LIBOR
is expected to cease on 30th June 2023, and the Group’s transition plan is on track to ensure conversion of existing
US$ LIBOR contracts by the date of cessation.
Relief applied
The Group has applied the following reliefs that were introduced by the amendments made to IFRS 9 ‘Financial
Instruments’ in September 2019 and August 2020:i) When considering the ‘highly probable’ requirement, the Group has assumed that the IBORs interest rate on which
the Group’s hedged debt is based does not change as a result of IBORs reform.
ii) In assessing whether the hedge is expected to be highly effective on a forward-looking basis, the Group has assumed
that the IBORs interest rate on which the cash flows of the hedged debt and the interest rate swap that hedges
it is not altered by IBORs reform.
iii) The Group has not recycled the cash flow hedge reserve relating to the period after the reforms are expected totake effect.
iv) For financial instruments measured using amortised cost measurement, changes to the basis for determining thecontractual cash flows required by interest rate benchmark reform are reflected by adjusting their effective interest
rate. No immediate gain or loss is recognised.
v) For lease liabilities where there is a change to the basis for determining the contractual cash flows, the lease liability isremeasured by discounting the revised lease payments using a discount rate that reflects the change in the interest rate
where the change is required by IBORs reform.
Assumptions madeIn calculating the change in fair value attributable to the hedged risk of floating-rate debt, the Group has made thefollowing assumptions that reflect its current expectations:i) The IBORs-referenced floating-rate debt will move to RFRs during 2023 and the spread will be similar to the spread
included in the interest rate swap used as the hedging instrument.
ii) No other changes to the terms of the floating-rate debt are anticipated.

Annual Report 2022

97Independent Auditors’ Report

To the members of Mandarin Oriental International Limited
Report on the audit of the Group financial statements
OpinionIn our opinion, Mandarin Oriental International Limited’s Group (the ‘Group’) financial statements(the ‘financial statements’):give a true and fair view of the state of the Group’s affairs as at 31st December 2022 and of its loss and cash flows
for the year then ended;have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by
the International Accounting Standards Board (IASB); andhave been prepared in accordance with the requirements of the Companies Act 1981 (Bermuda).
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated
Balance Sheet as at 31st December 2022; the Consolidated Profit and Loss Account, the Consolidated Statementof Comprehensive Income, the Consolidated Cash Flow Statement, the Consolidated Statement of Changes in
Equity for the year then ended; and the Notes to the financial statements, which include a description of the significant
accounting policies (the ‘Principal Accounting Policies’).
Certain required disclosures have been presented in the Corporate Governance section, rather than in the Notes to thefinancial statements. These disclosures are cross-referenced from the financial statements and are identified as audited.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law.
Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, which includes the Financial Reporting Council’s (‘FRC’s’) Ethical Standard, asapplicable to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Our audit approach
Overview
Materiality
Overall Group materiality: US$32.9 million (2021: US$3.0 million), based on 1% of the net assets of the Group(2021: based on 5% of underlying loss before tax).
Specific Group materiality, applied to balances and transactions not related to the investment properties:
US$3.4 million, based on 0.75% of the Group’s consolidated revenue (2021: no specific Group materiality
was applied).
Audit scope
A full scope audit of seven of the Group’s hotels and two entities engaged in hotel management services and holding
the investment property under development was performed. These hotels and entities, together with procedures
performed over specific balances and transactions for one further hotel, one further entity engaged in hotelmanagement services and on central functions and at the Group level, accounted for 89% of the Group’s revenue,
93% of the Group’s loss before tax, 84% of the Group’s underlying profit before tax and 89% of the Group’s
total assets.

98 Mandarin Oriental International Limited

Key audit matters
Valuation of investment properties
Recoverability of the carrying amounts of hotel properties
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the Directors made subjective judgements, for example in respect ofsignificant accounting estimates that involved making assumptions and considering future events that are inherently
uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including
evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due tofraud.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the auditof the financial statements of the current period and include the most significant assessed risks of material misstatement(whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any
comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The Impact of COVID-19, which was a key audit matter last year, is no longer included because the impact, where
relevant, is now included within the other individual key audit matters as appropriate. The key audit matter last year inrespect of the valuation of investment property under development has been revised to include both the investment
property under development and the completed residential property which is now accounted for as an investment
property. The key audit matter in respect of the recoverability of the carrying amounts of hotel properties is consistent
with last year.
Key audit matter

How our audit addressed the key audit matter

Valuation of investment properties
Refer to note 33 (Principal accounting policies),
note 36 (Critical accounting estimates andjudgements) and note 12 (Investment properties)
to the financial statements.
The fair value of the Group’s investment properties
amounted to US$2,472.6 million at 31st December 2022,with a revaluation loss of US$104.1 million recognised
as a non-trading item in the Consolidated Profit and Loss
Account for the year. The Group’s investment properties
consist of an under development leasehold commercial
property and a completed leasehold residential property.
The valuation of the Group’s investment properties
is inherently subjective due to, among other factors,
the individual nature of each property, its location,
prevailing market returns and expected future rentals,
where relevant.

We understood management’s controls and processes fordetermining the valuation of investment properties andassessed the inherent risk of material misstatement byconsidering the degree of estimation uncertainty andthe judgement involved in determining assumptions tobe applied.
We assessed the qualification and expertise of the valuer,
considering whether there were any matters that might
have affected their objectivity or may have imposed
scope limitations upon its work. We found no evidence
to suggest that the objectivity of the valuers in theirperformance of the valuations was compromised.
We read the valuation reports to consider whether thevaluation methodology used was appropriate and suitablefor use in determining the fair values.

Annual Report 2022

99

Independent Auditors’ Report Continued

Key audit matter

How our audit addressed the key audit matter

Valuation of investment properties continued
The valuations were carried out by a third-party valuer(the ‘valuer’).
There is inherent estimation uncertainty and judgement
in determining a property’s valuation as the valuer makes
assumptions in key areas.
The valuation for the under development leaseholdcommercial property was derived using the directcomparison method and residual method. Judgement
is required in selecting appropriate land sale comparable
transactions for the direct comparison method valuation;and the determination of the gross development value,estimated costs to complete and expected developer’s
profit margin in the residual method valuation.
The valuation for the completed leasehold residential
property was derived using the direct comparison method.
We focused on the valuation of investment properties
due to the size of the balance and the significant
judgements and estimates involved in determining
the valuations.

The audit team, including our valuation experts,
discussed with the valuer the methodology, key
assumptions and climate change risk considerations
applied in the valuations, including:for the direct comparison method valuations, we
assessed the appropriateness of the comparable
transactions adopted in the valuations;for the residual method valuation:– we assessed the appropriateness of the key
assumptions adopted in the assessment of the grossdevelopment value by comparing them withavailable market data on yields and unit rentals;– for developer’s profit and other ancillary fees,
compared the adopted parameters with the market
norm; and– for the construction costs to complete, examined
the approved project budget, and evaluated pastbudget to actual variance to assess the reliability ofthe project budget.
We concluded that the methodology used in preparing
the valuations was acceptable and that the key
assumptions applied in the valuations were supportablein light of available evidence.
With the support of our internal valuation experts,
we also questioned the external valuer as to the extent
that valuations took into account climate change andrelated ESG considerations.

100 Mandarin Oriental International Limited

Key audit matter

How our audit addressed the key audit matter

Recoverability of the carrying amounts of hotel properties
Refer to note 33 (Principal accounting policies),
note 36 (Critical accounting estimates and judgements),
note 10 (Tangible assets), note 11 (Right-of-use assets)
and note 13 (Associates and joint ventures) to thefinancial statements.
The Group’s hotel properties are stated at cost lessdepreciation and impairment, and represent a significant
proportion of tangible assets and right-of-use assets
and associates and joint ventures.
Management considers each hotel to be a separate
cash-generating unit (‘CGU’) and performs an
impairment assessment, where impairment indicators
exist, to determine the recoverable amount of the hotel
properties. The recoverable amount is determined as
the higher of the CGU’s value-in-use and fair value lesscosts to sell. In determining the fair value less costs tosell, a third-party valuer (the ‘valuer’) is engaged by theGroup to perform the valuation of the hotel property.
Management concluded that no impairment provision
was required for the hotel properties.
We focused on this area as the impairment assessment
involves significant judgements and estimation
uncertainty in respect of future business performanceand key assumptions including discount rates, occupancyrate, sales growth rate and capital expenditure necessary
to maintain the service standard.

We assessed the inherent risk of material misstatementby considering the degree of estimation uncertainty andthe judgement involved in determining assumptions tobe applied.
We understood management’s impairment assessment
process and related controls, including the identificationof indicators of impairment and appropriateness ofthe valuation models used, including the assessmentof the future recovery of markets from the impact of
COVID-19 and inspection of the operating resultsof the respective hotels.
Where there were indicators of impairment, we assessed
the assumptions used by the valuer and management in
the calculation of the recoverable amounts. This included
the involvement of our valuation experts to assess thecountry specific discount rate applied. We assessed thereasonableness of the forecast occupancy rates, sales
growth rate and capital expenditure by comparing
them with historical results and latest economic andindustry forecasts.
We evaluated management’s future cash flow forecasts
and the process by which they were prepared, including
testing the mathematical accuracy of the underlying
calculations and compared the future cash flow forecastswith the Board approved budgets.
We performed sensitivity analyses by making
adjustments to the key assumptions in management’s
impairment assessments and considered whether, in
isolation or as a combination, any reasonably possible
adjustments would result in a material impairment.
We found that the methodologies were applied consistently
and appropriately, and the significant assumptions
adopted by management were appropriate.

Annual Report 2022

101

Independent Auditors’ Report Continued

How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and theindustry in which it operates.
The Group’s accounting processes are structured around finance functions, which are responsible for their own
accounting records and controls, which in turn, report financial information to the Group’s finance function in
Hong Kong to enable them to prepare consolidated financial statements.
In establishing the overall approach to the Group audit, we determined the type of work that needed to be performedby members of the Group engagement team or by component auditors from member firms within the PwC Network
operating under our instruction. Where the work was performed by component auditors, we determined the level ofinvolvement necessary for us to have in the audit work at those components to be able to conclude whether sufficient,appropriate audit evidence had been obtained as a basis for our opinion on the financial statements as a whole. The Group
engagement team was involved in the significant reporting entities in scope for Group reporting during the audit cycle
through a combination of meetings, visits and conference calls. The Group audit partner and other senior team members
undertook two visits to Hong Kong and were involved throughout the year in regular conference calls and other formsof communication to direct and oversee the audit, including the remote review of the work of component teams. Seniorteam members visited the component team in the UK during the audit to discuss the work of that team. There wasregular communication throughout the year with the component teams.
A full scope audit on seven of the Group’s hotels and two entities engaged in the hotel management services and holding
the investment property under development was performed. These hotels and entities, together with procedures performed
over specific balances and transactions for one further hotel, one further entity engaged in hotel management services
and on central functions and at the Group level, accounted for 89% of the Group’s revenue, 93% of the Group’s loss
before tax, 84% of the Group’s underlying profit before tax and 89% of the Group’s total assets.
The impact of climate risk on our audit
In planning and executing our audit, we have considered the potential impact of climate change on the Group’s businessand it’s financial statements. We also considered the Group’s governance framework and preliminary risk assessment
process as outlined in the Task Force on Climate-related Financial Disclosures (‘TCFD’) section within this Annual Report.
Climate change could have a significant impact on the Group’s business as the operations and strategy of the Groupare adopted to address the potential financial and non-financial risks which could arise from both the physical andtransitional risks associated with climate change. Management has evaluated these as disclosed in the TCFD sectionof this Annual Report.
We considered the following areas could potentially be materially impacted by climate risk and consequently we focused
our audit work in these areas:
Valuation of investment properties; andRecoverability of the carrying amounts of hotel properties.
To respond to the audit risks identified in these areas we tailored our audit approach to address these, in particular, we:Gained an understanding and evaluated whether the impact of both physical and transition risks arising due toclimate risk had been appropriately included in the valuation model of investment properties or recoverable value
assessments of the Group’s other assets;
Reviewed and challenged management and the external valuers (where applicable) on how climate related risks had
been incoporated into the valuation models and recoverable value assessments; andWhere climate risk relates to a key audit matter, our audit response is given in the key audit matters section of ouraudit report.

102 Mandarin Oriental International LimitedWe also considered the consistency of the disclosures in relation to climate change (including the TCFD section) within
the Annual Report with the financial statements and our knowledge obtained from our audit. This included:
Reading and challenging the disclosures given in the narrative reporting within the other information to the impact
disclosed within the financial statements.
Our procedures did not identify any material impact in the context of our audit of the financial statements as a whole,or our key audit matters for the year ended 31st December 2022.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds formateriality. These, together with qualitative considerations, helped us to determine the scope of our audit and thenature, timing and extent of our audit procedures on the individual financial statement line items and disclosures andin evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall Group materiality

US$32.9 million (2021: US$3.0 million)

How we determined it

Based on 1% of net assets (2021: Based on 5% of underlying loss before tax)

Rationale for benchmark applied

Net assets is a primary measure used by the shareholders in assessing
the performance of the Group, together with consolidated revenue,
which we have used as the basis for our specific materiality as detailed below.

We set a specific Group materiality level of US$3.4 million (2021: no specific Group materiality was applied), which wasapplied to balances and transactions not related to investment properties. This was based upon 0.75% of the Group’s
consolidated revenue. In arriving at this judgement, we had regard to the fact that revenue is an important financial
indicator of the Group.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Groupmateriality. The overall materiality allocated to components with investment properties was US$32.0 million. The rangeof specific materiality allocated across component was US$0.9 million to US$2.0 million.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining
the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures,for example in determining sample sizes. Our performance materiality was 75% (2021: 75%) of specific materiality(2021: overall materiality), amounting to US$2.5 million (2021: US$2.3 million) for the Group financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls – and concluded that an amount in the middle of ournormal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
US$0.3 million (2021: US$0.3 million) other than classifications within the Consolidated Profit and Loss Account or
Consolidated Balance Sheet, which were only reported above US$0.9 million (2021: US$2.3 million). We also report
misstatements below this amount that, in our view, warranted reporting for qualitative reasons.

Annual Report 2022

103

Independent Auditors’ Report Continued

Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s ability to continue to adopt the going concern basis ofaccounting included:
Evaluating the inherent risks to the Group’s and its businesses’ business models and analysed how those risks might
affect the Group’s financial resources or ability to continue operations over the going concern period;
Assessing management’s models supporting the Board’s going concern assessment, evaluating the process by which
the assessments have been drawn up, ensuring that the calculations in the model were mathematically accurate andthat the overall methodology used was appropriate;
Considering sensitivities over the level of available financial resources indicated by the Group’s financial forecasts
taking account of reasonably possible, but not unrealistic, adverse effects that could arise from adverse trading
conditions and impact the Group’s liquidity position over the going concern period;
Evaluating the committed financing facilities currently available to the Group and ensuring that the models
appropriately included all contractual debt repayments and committed capital expenditures;
Agreeing to debt agreements and associated amendments secured, the covenants attached to each facility andconsidering the Group’s forecast compliance at the measurement dates included in the going concern assessment
period; andAgreeing the cash on hand and available facilities included in the going concern assessment to our year end audit work.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group’s ability to continue as a going concern fora period of at least 12 months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
As not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s ability tocontinue as a going concern.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements andour auditors’ report thereon. The Directors are responsible for the other information. Our opinion on the financial
statements does not cover the other information and, accordingly, we do not express an audit opinion or any form ofassurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doingso, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency
or material misstatement, we are required to perform procedures to conclude whether there is a material misstatementof the financial statements or a material misstatement of the other information. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report that fact. We havenothing to report based on these responsibilities.

104 Mandarin Oriental International Limited

Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Responsibility Statements and the Corporate Governance sections, the Directors are
responsible for the preparation of the financial statements in accordance with the applicable framework and for being
satisfied that they give a true and fair view. The Directors are also responsible for such internal control as they determine
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due tofraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to continue as a going
concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unlessthe Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonableassurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK)will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in linewith our responsibilities, outlined in the Auditors’ responsibilities for the audit of the financial statements section, todetect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capableof detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance withlaws and regulations related to, but were not limited to, the Companies Act 1981 (Bermuda), the Listing Rules, tax
regulations, employment regulations, health and safety regulation and equivalent local laws and regulations applicableto significant reporting component teams, and we considered the extent to which non-compliance might have a material
effect on the financial statements. We also considered those laws and regulations that have a direct impact on thefinancial statements such as the Companies Act 1981 (Bermuda).
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements(including the risk of override of controls), and determined that the principal risks were related to posting of inappropriate
journal entries and management bias in accounting estimates and judgements. The Group engagement team shared thisrisk assessment with the component auditors so that they could include appropriate audit procedures in response to suchrisks in their work. Audit procedures performed by the Group engagement team and/or component auditors included:
Gaining an understanding of the legal and regulatory framework applicable to the Group and considering the riskof any acts by the Group which may be contrary to applicable laws and regulations, including fraud;
Discussions with management, internal audit and Group legal counsel, including consideration of known orsuspected instances of non-compliance with laws and regulation and fraud;
Review of reporting component auditors’ work, including any matters reported by component auditors’ relating to
non-compliance with laws and regulations or fraud;
Challenging assumptions and judgements made by management in their significant accounting estimates thatinvolved making assumptions and considering future events that are inherently uncertain, particularly in relation
to the valuation of investment properties and the impairment assessments related to the carrying value of hotel
properties (see related key audit matters above);
Incorporating elements of unpredictability in the audit procedures we performed; andWe did not identify any key audit matters relating to irregularities, including fraud. As in all of our audits we also
addressed the risk of management override of internal controls, including testing journals, and evaluated whether
there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
Annual Report 2022

105

Independent Auditors’ Report Continued

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instancesof non-compliance with laws and regulations that are not closely related to events and transactions reflected in thefinancial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of notdetecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentionalmisrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics.
In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample
is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinion, has been prepared for and only for the Group’s members as a body in accordance with
Section 90 of the Companies Act 1981 (Bermuda) and for no other purpose. We do not, in giving this opinion, accept orassume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it
may come, including without limitation under any contractual obligations of the Group, save where expressly agreed byour prior consent in writing.
Partner responsible for the audit
The engagement partner on the audit resulting in this independent auditors’ report is John Waters.
Other matter
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R,
these financial statements will form part of the ESEF-prepared annual financial report filed on the National Storage
Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory Technical Standard(‘ESEF RTS’). This auditors’ report provides no assurance over whether the annual financial report will be preparedusing the single electronic format specified in the ESEF RTS.

PricewaterhouseCoopers LLP
Chartered Accountants
London
2nd March 2023

106 Mandarin Oriental International Limited

Report of the Valuers

To Mandarin Oriental International Limited
Dear Sirs

Revaluation of Under Development Leasehold Commercial Investment Property
Further to your instruction, we have valued in our capacity as external valuers of the Causeway Bay site underdevelopment at No. 281 Gloucester Road, Causeway Bay, Hong Kong, being a commercial investment property
held on lease as described in the consolidated financial statements of Mandarin Oriental International Limited.
We are of the opinion that the market value of the commercial investment property as at 31st December 2022 was
US$2,384,900,000 (United States Dollar Two Billion Three Hundred Eighty-Four Million and Nine Hundred Thousand).
Our valuation was prepared in accordance with the International Valuation Standards by the International Valuation
Standards Council and The HKIS Valuation Standards by The Hong Kong Institute of Surveyors. We have inspected
the property without either conducting site nor structural surveys or testing of the services.
We have been provided with details of tenure, proposed development scheme and other relevant information. The property
has been valued by the direct comparison method and the residual method with equal weighting. The direct comparison
method is based on comparing the property to be valued directly with other comparable properties. The residual method
is based on an assessment of the completed gross development value and the deduction of development costs and thedeveloper’s return to arrive at the residual value of a development property. For the direct comparison method andthe assessment of the completed gross development value, given the heterogeneous nature of real estate properties,
appropriate adjustments are usually required to allow for any qualitative differences that may affect the price likely
to be achieved by the property under consideration.

Yours faithfully

Jones Lang LaSalle Limited
Hong Kong
16 February 2023

Annual Report 2022

107

Five Year Summary

Consolidated Profit and Loss Account
2018
US$m

2019
US$m

2020
US$m

2021
US$m

2022
US$m

613.7

566.5

183.7

316.9

454.1

Operating profit/(loss)

70.7(29.0)(660.0)(99.3)(42.6)Net financing charges(14.2)(14.7)(12.6)(12.7)(14.4)

Revenue

Share of results of associates and joint ventures

5.7

(1.7)

(26.8)(21.8)

9.7

Profit/(loss) before tax

62.2(45.4)(699.4)(133.8)(47.3)

Tax(19.0)(10.2)

19.4

(7.6)

(2.1)

Profit/(loss) after tax

43.2(55.6)(680.0)(141.4)(49.4)

Profit/(loss) attributable to shareholders

43.4(55.5)(680.1)(141.4)(49.5)

Underlying profit/(loss) attributable to shareholders

64.9

41.2

(205.9)(68.1)

7.6

Earnings/(loss) per share (US¢)

3.44(4.39)(53.84)(11.19)(3.92)

Underlying earnings/(loss) per share (US¢)

5.15

3.26

(16.30)(5.39)

0.60

Dividends per share (US¢)

3.00

1.50

–

–

–

2018
US$m

2019
US$m

2020
US$m

2021
US$m

2022
US$m

Intangible assets

49.3

53.0

45.4

46.7

45.7

Tangible assets

1,205.9

1,174.6

1,181.5

1,098.2

916.3

342.9

300.3

297.4

273.3

242.4

Consolidated Balance Sheet

Right-of-use assets–

2,967.7

2,528.3

2,462.0

2,472.6

Associates and joint ventures

196.1

203.1

231.6

201.5

203.8

Other investments

15.2

15.9

16.1

16.5

14.0

Deferred tax assets

11.5

10.6

17.8

13.7

14.2

Pension assets

0.2

1.3

5.5

7.1

3.0

Non-current debtors

5.1

6.2

5.1

8.9

12.2

Investment properties(359.4)

181.4

19.5

113.2

142.9

(7.3)

(568.6)(606.6)(727.8)(599.8)Non-current lease liabilities(161.3)(168.4)(170.1)(147.4)(123.5)

Deferred tax liabilities(61.6)(59.4)(47.1)(50.1)(41.6)

Pension liabilities

(0.4)

(0.2)

(0.3)

(0.3)

(0.1)

–

(0.9)

(10.9)

(3.2)

(4.5)

Net assets

1,236.2

4,116.6

3,513.2

3,312.3

3,297.6

Share capital

63.1

63.2

63.2

63.2

63.2

Share premium

497.8

499.7

499.7

500.5

500.7

Revenue and other reserves

671.5

3,550.1

2,946.6

2,745.1

2,730.2

1,232.4

4,113.0

3,509.5

3,308.8

3,294.1

3.8

3.6

3.7

3.5

3.5

1,236.2

4,116.6

3,513.2

3,312.3

3,297.6

0.98

3.26

2.78

2.62

2.61

2018
US$m

2019
US$m

2020
US$m

2021
US$m

2022
US$m

Cash flows from operating activities

152.6

112.9

(83.5)

26.4

56.5

Cash flows from investing activities(69.0)(80.4)(108.5)(32.5)

86.7

Net cash flow before financing activities

83.6

32.5

(192.0)

(6.1)

143.2

Cash flow per share from operating activities (US¢)

12.11

8.94

(6.61)

2.09

4.47

Net current (liabilities)/assets
Long-term borrowings

Non-current creditors

Shareholders’ funds
Non-controlling interests
Total equity
Net asset value per share (US$)

Consolidated Cash Flow Statement

108 Mandarin Oriental International Limited

Responsibility Statements

The Directors of the Company confirm to the best of their knowledge that:a) the consolidated financial statements prepared in accordance with International Financial Reporting Standards,
including International Accounting Standards and Interpretations adopted by the International AccountingStandards Board, give a true and fair view of the assets, liabilities, financial position and profit and losses of
the Group; andb) the Chairman’s Statement, Group Chief Executive’s Review, Financial Review and the Principal Risks andUncertainties of this Annual Report, which constitute the management report required by the Disclosure Guidance
and Transparency Rule 4.1.8, include a fair review of all information required to be disclosed under Rules 4.1.8
to 4.1.11 of the Disclosure Guidance and Transparency Rules issued by the Financial Conduct Authority in the
United Kingdom.

For and on behalf of the Board

James Riley
Matthew Bishop
Directors
2nd March 2023

Annual Report 2022

109

Corporate Governance

Overview of the Group’s governance approach
The Mandarin Oriental Hotel Group (Mandarin Oriental International Limited (the ‘Company’) and its subsidiaries
together known as the ‘Group’) understands the value of good corporate governance in driving the long-term sustainablesuccess of business. It attaches importance to the corporate stability that strong governance brings, and the opportunities
that result from it being part of the Jardine Matheson Holdings Limited (‘Jardine Matheson’) group.
The Group is committed to high standards of governance. The system of governance it has adopted has been developed,
over many years, by the members of the Jardine Matheson group, and both the Group and its stakeholders regard it
as appropriate to the nature of its business and the long-term strategy it pursues in its Asian markets. The Group’s
governance framework is tailored to its size, ownership structure, complexity and breadth of business. It enables theGroup to benefit from Jardine Matheson’s strategic guidance and professional expertise while at the same time ensuringthat the independence of the Board is respected and clear operational accountability rests with the Company’s executive
management teams.
The Company also ensures that the Group retains and promotes those characteristics and values of a family-owned
business that have enabled the Group to prosper over the long-term:
A long-term perspective – the Group takes a long-term view in its decision-making and investments and draws
on the many years’ experience of our Directors, as opposed to focussing on short-term profitability. This leads tolong-term growth generation for our shareholders and the communities where we operate.
Credibility and trust – the credibility and trust that family ownership brings to the business are highly valued byour partners and other stakeholders, especially in developing markets.
Deep knowledge of the business and our markets – the involvement of many generations of the family in therunning of the Group has led to a deep understanding of how to drive successful growth by the business across its
markets, giving the Group a competitive advantage.
The Group believes that its stakeholders gain significant value from the historical governance approach the Group hastaken as a family-owned business and that it is therefore important to retain the key elements of this approach. It is also
important, without losing these benefits, to adapt to changing circumstances in our markets and, where appropriate, tothe developing expectations of stakeholders and changes in best practice and the approach taken by our peers.
Accordingly, the Company continues to focus on enhancing the Group’s approach to corporate governance moregenerally, focussing on changes which benefit the Group. The Company has focussed in years 2021 and 2022 onchanging the Group’s approach to corporate governance more generally and has led a series of changes to the governanceof the Group, including the composition of the Company’s Board. These changes, which were made to the Board in
December 2021, have increased the diversity and brought greater sector expertise to the Board through the appointmentof new Independent Non-Executive Directors. The size of the Board has also generally reduced as a result of theretirement of a number of Directors. In addition, the Company has established formal Audit, Remuneration and
Nominations Committees at the listed company level.
Independent Non-Executive Directors with a broad and diverse range of backgrounds are a valuable source of external
perspectives and are a key element of good governance and decision-making. The Company and the Group can benefit
from the expertise and experience they bring, and the Company is taking steps to increase the independence and diversityof its Board.
Having an effective corporate governance framework supports the Board in delivering the Group’s strategy and supports
long-term sustainable growth, and ensuring it operates transparently and in accordance with the best practice.

110 Mandarin Oriental International Limited

Group structure
Jardine Matheson is the ultimate holding company of the Group. The structural relationship between the Jardine
Matheson group and the Group is considered a key element of the Group’s success. By coordinating objectives,
establishing common values and standards, and sharing experience, contacts and business relationships, the Jardine
Matheson group companies, including the Mandarin Oriental Hotel Group, aim to optimise their opportunities acrossthe countries in which they operate.

Governance and legal framework
The Company is incorporated in Bermuda and was established as an Asian-based hotel group, and has since extended its
operations to numerous destinations around the world. The primary listing of the Company’s equity shares is a standard
listing on the Main Market of the London Stock Exchange (the ‘LSE’). The Company also has secondary listings in
Singapore and Bermuda. As the Company has only secondary listings on these exchanges, many of the listing rules ofsuch exchanges are not applicable. Instead, the Company must release the same information in Singapore and Bermuda
as it is required to release under the rules which apply to it as a standard-listed company on the LSE.
As a company incorporated in Bermuda, the Company is governed by:
The Bermuda Companies Act 1981 (the ‘Companies Act’);
The Bermuda Mandarin Oriental International Limited Consolidation and Amendment Act 1988 (as amended),pursuant to which the Company was incorporated and the Bermuda Mandarin Oriental International Limited
Regulations 1993 (as amended) was implemented; andThe Company’s Memorandum of Association and Bye-laws.
The shareholders can amend the Company’s Bye-laws by way of a special resolution at a general meeting of the Company.
The Company’s standard listing on the LSE means that it is bound by many of the same rules as premium-listedcompanies under the UK Listing Rules, the Disclosure Guidance and Transparency Rules (the ‘DTRs’) issued by the
Financial Conduct Authority in the United Kingdom (the ‘FCA’), the UK Market Abuse Regulation (the ‘MAR’) and
the Prospectus Regulation Rules, including in relation to continuous disclosure, periodic financial reporting, disclosureof interests in shares, market abuse and the publication and content of prospectuses in connection with admission to
trading or the offering of securities to the public. The Company is also subject to regulatory oversight from the FCA,
as the Company’s principal securities regulator, and is required to comply with the Admission and Disclosure Standardsof the Main Market of the LSE. In addition, the Company and its Directors are subject to legislation and regulations in
Singapore relating, among other things, to insider dealing.
Some of the rules applicable to premium-listed companies do not apply to the Company. When the shareholders approved
the Company’s move to a standard listing from a premium listing in 2014, however, the Company stated that it intended
to maintain certain governance principles which were then-applicable to the Company’s premium listing. As a result, theCompany adopted several governance principles (the ‘Governance Principles’) based on the then-applicable requirements
for a premium listing, which go further than the standard listing requirements.

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Corporate Governance Continued

Governance and legal framework continued
The key elements of the Governance Principles are as follows:
When assessing a significant transaction (a larger transaction which would be classified as a class 1 transaction
under the provisions of the UK Listing Rules), the Company will engage an independent financial adviser to provide
a fairness opinion on the terms of the transaction.
If the Company carries out a related party transaction which would require a sponsor to provide a fair and reasonable
opinion under the provisions of the UK Listing Rules, it will engage an independent financial adviser to confirm
that the terms of the transaction are fair and reasonable as far as the shareholders of the Company are concerned.
In addition, the Company shall observe the mandatory related party transaction rules under the DTRs, including
assessment, approval and disclosure requirements for material related party transactions, that apply to UK standardlisted companies.
Further, as soon as the terms of a significant transaction or a related party transaction are agreed, an announcement
will be issued by the Company, providing such details of the transaction as are necessary for investors to evaluate theeffect of the transaction on the Company.
At each annual general meeting (‘AGM’), the Company will seek shareholders’ approval to issue new shares ona non-pre-emptive basis for up to 33% of the Company’s issued share capital, of which up to 5% can be issued for
cash consideration.
The Company adheres to a set of Securities Dealing Rules, which follow the provisions of MAR with respect tomarket abuse and disclosure of interests in shares.
The Company is not required to comply with the UK Corporate Governance Code (the ‘Code’), which applies to all
premium-listed companies and sets out the governance principles and provisions expected to be followed by companies
subject to the Code. However, the Company does have regard to the Code in developing and implementing its approachto corporate governance and disclosure.

The management of the Group
The Board
The Board is responsible for ensuring that the Group is appropriately managed and achieves the strategic objectives it sets
in a way that is supported by the right culture, values and behaviours throughout the Group.
The Directors have the full power to manage the business affairs of the Company, other than matters reserved to be
exercised by the Company in general meeting under Bermuda legislation or the Company’s Bye-laws. Key matters forwhich the Directors are responsible include:
Responsibility for the overall strategic aims and objectives of the Group;
Establishing the Company’s purpose and values;
Approval of the Group’s strategy and risk appetite to align with the Group’s purpose and values;
Approval and oversight of the Group policy framework and approval of appropriate Group policies;
Approval of the annual budget and monitoring of performance against it;Oversight of the Group’s operations;

112 Mandarin Oriental International Limited

The Board continued
Approval of major changes to Group’s corporate or capital structure;
Approval of major capital expenditure and significant transactions in terms of size or reputational impact;
Approval of interim and annual financial statements upon recommendation from the Audit Committee, as well asinterim management statements;
Approval of the annual report and accounts;
Approval of dividend policy and the amount and form of interim and final dividend payments for approval byshareholders as required;
Any significant changes to the Company’s accounting policies or practices, upon recommendation from the Audit Committee;
Appointment, re-appointment or removal of the external auditor, subject to shareholders’ approval, uponrecommendation from the Audit Committee;
Approval of matters relating to AGM resolutions and shareholder documentation;
Approval of all shareholder circulars, prospectuses and listing particulars issued by the Company; andApproval of material public announcements concerning matters decided by the Board.
Responsibility for certain matters, including the approval of borrowing facilities and of capital expenditures (otherthan significant capital expenditure which is required to be approved by the Board), has been delegated to the financecommittee established within the Hong Kong-based Group management company, Mandarin Oriental Hotel GroupInternational Limited (‘MOHG’), with specific written terms of reference outlining its role and authorities.
The Company sees the value of regularly reviewing the effectiveness of its processes, and making improvements whereappropriate.

Board composition and operational management
The Board’s composition and how it operates provide stability, allowing the Company to take a long-term view as it seeks
to grow its business and pursue investment opportunities.
The Chairman has been appointed in accordance with the provisions of the Bye-laws of the Company, which provide thatthe chairman of Jardine Matheson, or any Director nominated by him, shall be the Chairman of the Company.
The Company has a dedicated executive management team led by the Group Chief Executive. The Memorandum of
Association of the Company, however, provides for the chairman of Jardine Matheson to be, or to appoint, the Managing
Director of the Company. The chairman of Jardine Matheson has appointed the Jardines Group Managing Director as
Managing Director of the Company. Reflecting this, and the Jardine Matheson group’s 79% interest in the Company’s
share capital, the Group Chief Executive and the Managing Director meet regularly. Similarly, the board of MOHG and
its finance committee are chaired by the Managing Director and include Mandarin Oriental Hotel Group executives andJardine Matheson’s deputy managing director, group finance director and group general counsel.
The presence of Jardine Matheson representatives on the Board and Audit Committee of the Company, as well as on theboard and finance committee of MOHG, provides an added element of stability to the Company’s financial planningand supervision, enhancing its ability to raise finance and take a long-term view of business development. In addition,
the presence of Jardine Matheson representatives on the Company’s Board, Audit, Nominations and Remuneration
Committees, as well as MOHG’s finance committee, also strengthens the ability of management to work effectively
together in exploiting the full range of the Jardine Matheson group’s commercial strengths.

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Corporate Governance Continued

Board composition and operational management continued
As at 2nd March 2023, the Company comprises nine Directors, three of whom (33%) – Jinqing Cai, Archie Keswick
and Richard Solomons – are Independent Non-Executive Directors as defined by the Code. The names of all the
Directors and brief biographies appear on pages 34 and 35 of this Annual Report.
Ben Keswick has been Chairman of the Board since 16th May 2013. John Witt has held the role of Managing Director
Ageof Director
from
15th June 2020. James Riley has been Group Chief Executive since 1st April 2016. Ben Keswick previously held theroles of Chairman and Managing Director on a combined basis from 16th May 2013 until the separation of these roles
from 15th June 2020.
The Board considers that there is a clear division of responsibilities among the Chairman, the Managing Director and
the Group Chief Executive to ensure an appropriate balance of power and authority is maintained at all times.

Age of Directors

Capacity of Directors
Number of
Directors

2
3

0

50-59

3

Non-Executive Directors

4

60-69

Executive Directors

Nationality of Directors

Tenure of Directors
6

12

Independent Non-Executive Directors

40-49

0

1

2

3

4

5

1
6

2
7

8

5
9

0

1

2

3

British5 years or below

Canadian

6-10 years

ChineseOver 10 years

2

2

4

5

6

7

8

9

4

5

6

7

8

9

Directors’ experience
Luxury retail
Food and beverage
Property management
Corporate governance, risk management and/or sustainability
Financial acumen
Strategy & business acumen
Executive leadership
International business
Hotel sector-related industry knowledge/experience012

Number of Directors

114 Mandarin Oriental International Limited

3

Chairman
The Chairman’s role is to lead the Board, ensure its effectiveness while taking into account the Group’s various
stakeholders’ interests, and promote high standards of corporate governance.
The Chairman’s principal responsibilities are in the areas of strategy, external relationships, governance and people. In
addition, he leads the Board in overseeing the long-term strategic direction of the Group and approving its key businesspriorities. His key responsibilities include:
Leading, with the Managing Director and the Group Chief Executive, the development of the culture and values of
the Group;
Supporting the development and maintenance of relationships with existing and new key business partners,
governments and shareholders;
Ensuring, together with the Managing Director and Group Chief Executive, an appropriate focus on attracting andretaining the right people and carrying out succession planning for senior management positions;
Creating a culture of openness and transparency at Board meetings;
Building an effective Board supported by a robust governance framework;
Ensuring all Directors effectively contribute to discussions and feel comfortable in engaging in healthy debate andconstructive challenge;
Leading, with the Managing Director, the succession planning for the Group Chief Executive;
Ensuring all Directors receive accurate, timely and clear information; andPromoting effective communication between Executive and Non-Executive Directors (including the Independent
Non-Executive Directors).

Managing Director
The Managing Director acts as chairman of MOHG and of its finance committee and is a member of the Company’s
Nominations and Remuneration Committees. He has responsibility for representing Jardine Matheson, as the major
shareholder of the Company, including:
Providing oversight of the day to-day management by the Group Chief Executive and his leadership team ofthe business;
Carrying out ongoing reviews of the business, financial and operational performance against agreed objectives;
Providing regular feedback to the Group Chief Executive on his/her performance and conducting an annual
performance review;
Leading the Group Chief Executive succession planning;
Ensuring that there is appropriate discussion of future competencies required of the management team to executethe strategy;
Ensuring that the information submitted to the Board is of high quality and provided on a timely basis;
Ensuring the Board conducts reviews on past significant capex decisions; andCommunicating with shareholders as appropriate.

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Corporate Governance Continued

Group Chief Executive
The responsibility for running the Group’s business and all the executive matters affecting the Group rest with the Group
Chief Executive. The implementation of the Group’s strategy is delegated to the Company’s executive management, withdecision-making authority within designated financial parameters delegated to the MOHG finance committee. The
Group Chief Executive has day-to-day operational responsibility for:
The effective management of the Group’s business;
Leading the development of the Company’s strategic direction and implementing the agreed strategy;
Identifying and executing new business opportunities;
Managing the Group’s risk profile and implementing and maintaining an effective framework of internal controls;
Developing targets and goals for his executive team;
Ensuring effective communication with shareholders and key stakeholders and regularly updating institutional
investors on the business strategy and performance;
Providing regular operational updates to the Board on all matters of significance relating to the Group’s businessor reputation;
Overseeing the Group’s capital allocation, business planning and performance;
Ensuring (together with the Chairman and the Managing Director) an appropriate focus on attracting and retaining
the right people and carrying out succession planning for senior management positions; andFostering innovation and entrepreneurialism to drive the Group’s business forward.

Non-Executive Directors
The Non-Executive Directors bring insight and relevant experience to the Board. They have responsibility forconstructively challenging the strategies proposed by the Executive Directors, and scrutinising the performance ofmanagement in achieving agreed goals and objectives. In addition, Non-Executive Directors work on individual
initiatives as appropriate.

Board meetings
The Board usually holds four scheduled meetings each year, and ad hoc procedures are adopted to deal with urgent
matters between scheduled meetings. Board meetings are usually held in different locations around the Group’s markets.
In March 2022, as border restrictions began to ease, a hybrid meeting was held in Singapore. The May 2022 Board meeting
was held virtually. In-person Board meetings were held in Singapore in July 2022 and Bangkok in December 2022.
The Board receives high quality, up to date information for each of its meetings, which is provided to Directors via asecure online board information portal. The Company reviews the information provided to the Board regularly, to ensurethat it remains relevant to the needs of the Board in carrying out its duties.
The Directors of the Company who do not serve on the board of MOHG and who are based outside Asia will usually visit
Asia and Bermuda to discuss the Group’s business and participate in the four strategic reviews that precede regular Board
meetings. These Directors are not directly involved in the operational management of the Group’s business activities, but
their knowledge of the Group’s affairs, as well as their experience of the wider Jardine Matheson group, provide significant
value to the ongoing review by the Company of the Group’s business and reinforces the Board oversight process.

116 Mandarin Oriental International Limited

Board attendanceDirectors are expected to attend all Board meetings. The table below shows the attendance at the scheduled 2022 Board
meetings:
Meetings eligible
to attend

Attendance

Ben Keswick

4/4

100%

Jinqing Cai

4/4

100%

Adam Keswick

4/4

100%

Archie Keswick

4/4

100%

Y.K. Pang

4/4

100%

Richard Solomons

4/4

100%

John Witt

4/4

100%

James Riley

4/4

100%

Matthew Bishop

4/4

100%

Directors
Non-Executive Directors

Executive Directors

Appointment and retirement of Directors
The Board appoints each new Director, and the Nominations Committee has been established to assist the Board insuch matters. In accordance with the Company’s Bye-laws, each new Director is subject to retirement and re-election
at the first AGM after the appointment. After that, Directors are subject to retirement by rotation requirements underthe Bye-laws, whereby one-third of the Directors retire at the AGM each year. These provisions apply to both Executive
and Non-Executive Directors, but the requirement to retire by rotation does not extend to the Chairman or Managing
Director of the Company. John Witt, being the Managing Director, has a service contract with the Company that has a
notice period of six months.
In accordance with Bye-law 85, James Riley and Archie Keswick will retire by rotation at this year’s AGM and, being
eligible, offer themselves for re-election. James Riley has a service contract with a subsidiary of the Company that has
a notice period of six months. Archie Keswick does not have a service contract with the Company or its subsidiaries.
Directors need to obtain the Chairman’s approval before accepting additional appointments that might affect their time
to devote to the role as a Director of the Company.

Company Secretary
All Directors have access to the advice of the Company Secretary, who is responsible for advising the Board on all
governance matters.

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Corporate Governance Continued

Committees
The Board is supported by the activities of its Committees (the Nominations, Remuneration and Audit Committees),
which ensure the right level of attention and consideration are given to specific matters. Matters considered by each of
the Committees are set out in their respective terms of reference. Copies of these documents can be obtained from theCompany’s website at www.mandarinoriental.com.
Nominations Committee
The Board established a Nominations Committee (the ‘Nominations Committee’) in March 2021. The key
responsibilities of the Nominations Committee are to:
Review the structure, size and composition of the Board and its committees and make recommendations to the Boardon any appointments to maintain a right balance of skills, knowledge and experience and independence, as well as
a diversity of perspectives;
Support the Chairman to lead the process for Board appointments and nominate suitable candidates to the Board;
Assess suitable candidates based on merit and objective criteria (considering the promotion of the diversity of socialand ethnic backgrounds, knowledge, experience and skills), taking into account their ability to meet the required
time commitments;
Oversee the development of succession pipelines for both the Board and senior management positions to ensure talent
is identified and nurtured to meet the challenges and opportunities facing the Group; andSatisfy itself that any skill gaps are addressed in the reviews of Board composition and that appropriate development
opportunities are in place for Directors to keep abreast of market knowledge and industry trends to perform theirrole effectively.
The Nominations Committee consists of a minimum of three members, selected by the Chairman of the Board. The
Chairman of the Board is the chairman of the Nominations Committee. The current members of the Nominations
Committee are Ben Keswick, Adam Keswick and John Witt. The Nominations Committee meets as circumstances
require, or by the circulation of Committee circulars to make recommendations to the Board for approval as it deems
appropriate. It plays a key role in the process of recruiting senior executives. Candidates for appointment as Executive
Directors of the Company or other senior management positions may be sourced internally or externally, including byusing the services of specialist executive search or recruitment firms. The aim is to appoint individuals who combine
international business knowledge and experience, industry knowledge and experience if possible, and familiarity with,or adaptability to, Asian markets. When appointing Non-Executive Directors, the Committee pays particular attention
to the Asian business experience and relationships that they can bring.

Insurance and indemnification
The Company purchases insurance to cover its Directors against their costs in defending themselves in civil proceedings
taken against them in that capacity and in respect of damages resulting from the unsuccessful defence of any proceedings.
To the extent permitted by applicable law, every Director shall be indemnified and secured harmless out of the assets of
the Company against all liability and loss suffered and expenses reasonably incurred. However, neither insurance nor
indemnity provides cover where the Director has acted fraudulently or dishonestly.

118 Mandarin Oriental International Limited

Delegations of authority
The Group has in place an organisational structure with defined lines of responsibility and delegation of authority.
There are established policies and procedures for financial planning and budgeting, information and reporting systems,
assessment of risk; and monitoring of the Group’s operations and performance. The information systems in place aredesigned to ensure that the financial information reported is reliable and up to date.

Directors’ responsibilities in respect of the financial statements
Under the Companies Act, the Directors are required to prepare financial statements for each financial year and present
them annually to the Company’s shareholders at the AGM. The financial statements are required to present fairly, in
accordance with the International Financial Reporting Standards (‘IFRS’), the financial position of the Group at theend of the year, and the results of its operations and its cash flows for the year then ended. The Directors consider thatapplicable accounting policies under IFRS, applied consistently and supported by prudent and reasonable judgements
and estimates, have been followed in preparing the financial statements. The financial statements have been prepared ona going concern basis.

Substantial shareholders
As classified as a non-UK issuer, the Company is subject to the provisions of the DTRs, which require that a person must,in certain circumstances, notify the Company of the percentage of voting rights attaching to the share capital of theCompany that person holds. The obligation to notify arises if that person acquires or disposes of shares in the Company
and that results in the percentage of voting rights which the person holds reaching, exceeding, or falling below, 5%, 10%,15%, 20%, 25%, 30%, 50% and 75%.
The Company has been informed of the holding of voting rights of 5% or more attaching to the Company’s issued
ordinary share capital by Jardine Strategic Limited (‘Jardine Strategic’), which is directly interested in 1,004,193,209
ordinary shares carrying 79.46% of the voting rights. By virtue of its interest in Jardine Strategic, Jardine Matheson is
also interested in the same ordinary shares. Apart from this shareholding, the Company is not aware of any holders ofvoting rights of 5% or more attaching to the Company’s issued ordinary share capital as of 2nd March 2023.
There were no contracts of significance with substantial corporate shareholders during the year under review.

Related party transactions
Details of transactions with related parties entered into by the Company during the course of the year are included innote 30 to the financial statements on page 75.

Engagement with shareholders and stakeholders
The Group regularly engages with its shareholders and other stakeholders to provide an opportunity to ask questionsof senior management. Since the beginning of 2022, the Group have held two results briefings and three analyst andinstitutional shareholder meetings to answer those questions, discuss concerns, and hear feedback on areas where
improvements could be made.
The Group has also engaged with thought leaders to listen, learn and understand how we can improve. They include
global and regional non-profit associations at the forefront of driving sustainable travel and tourism, an independent
think tank and the world’s leading conservation non-governmental organisation. The engagements provide an
opportunity for us to explore and discuss key social, environmental and economic issues facing society and where ourbusinesses operate. They also provide an important touch point to sense-check the issues that matter most to society
and help us better understand evolving expectations. The meetings with key thought leaders are attended by senior
management including the Group’s Chief Executive.

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119

Corporate Governance Continued

Securities purchase arrangements
The Directors have the power under the Companies Act and the Company’s Memorandum of Association to purchase
the Company’s shares. Any shares so purchased shall be treated as cancelled and, therefore, reduce the Company’s issued
share capital. When the Board reviews the possibility of share repurchases, it will consider the potential for enhancing
earnings or asset values per share. When purchasing such shares, the Company is subject to the provisions of MAR.

Colleague engagement
The Group is working hard to support the growth of the next generation of leaders within our businesses, ensuring ourcolleagues can develop the skills they need and further their careers with the Group.
We also aim to create an owner mindset among our colleagues and support this by enhancing our incentive structures
to focus less on current profits and more on value creation over a longer time horizon. This longer-term view also
incentivises experimentation and innovation.
The Group also conducted a colleague experience survey with a global completion rate of 98%. Results from the survey
led to a global sustainable engagement score of 88%, the same as in 2021, and a global colleague retention score of 61%
which was a 4% improvement on 2021. Action plans have been developed by each hotel and departments to address thesurvey outcomes.

Annual General Meeting
The 2023 AGM will be held on 4th May 2023. The full text of the resolutions and explanatory notes regarding themeeting are contained in the Notice of AGM, despatched at the same time with this Annual Report.

Corporate website
A corporate website is maintained containing a wide range of information of interest to investors at
www.mandarinoriental.com.

Group policies
Code of Conduct
The Group conducts business in a professional, ethical and even-handed manner. Its ethical standards are set out in its
Code of Conduct, a set of guidelines to which every employee must adhere. It is reinforced and monitored by an annualcompliance certification process and modelled on the Jardine Matheson group’s code of conduct. The Code of Conduct
requires that all Group companies comply with all laws of general application, all rules and regulations that are industry
specific and proper standards of business conduct. In addition, the Code of Conduct prohibits the giving or receiving ofillicit payments. It requires that all Directors and employees must be fully aware of their obligations under the Code of
Conduct and establish procedures to ensure compliance at all levels within their businesses.
The Company’s policy on commercial conduct underpins the Group’s internal control process, particularly in the area ofcompliance. The policy is also set out in the Group’s Code of Conduct.

Data privacy
The Group is committed to being a responsible custodian of the data entrusted to it by customers, employees, business
partners and other stakeholders. In addition, it is subject to multiple data privacy and security laws and regulationsin the global jurisdictions in which it operates. Accordingly, the Group is dedicated to complying with such laws andregulations, regularly monitoring for legislative changes and adjusting its policies and procedures when appropriate.
Appropriate protections are in place to prevent misuse and unauthorised disclosure of personal data.
The Group’s Privacy Policy, and internal guidelines and procedures, underline the Group’s commitment to being a
responsible data custodian and ensuring compliance with applicable law.

120 Mandarin Oriental International Limited

Whistleblowing policy
The Group has a whistleblowing policy covering how employees can report matters of serious concern. The Audit
Committee has responsibility for overseeing the effectiveness of the formal procedures for colleagues to raise suchmatters and is required to review any reports made under those procedures referred to it by the internal audit function.
In addition, the Group has a whistleblowing service managed by an independent third-party service provider tosupplement existing whistleblowing channels to assist employees in reporting suspected illegal or unethical behaviouror other matters of serious concern and is intended to help foster an inclusive, safe and respectful workplace. The service,
which is available 24 hours in multiple local languages, and is accessible through phone hotline or online, and asanonymous submissions, may be used by colleagues to report a matter of concern to a manager supervisor, Human
Resources or Legal representative.
Reports may be lodged by one of three channels: email, website and telephone hotline. Each report is allocated a uniquecase number which enables follow-up with the reporter. Once a report is lodged, it is sent to certain authorised persons at
the relevant business units. These include senior representatives from legal, compliance and Human Resource teams who
have experience in dealing with such matters. The authorised persons will follow up on the report and investigate where
necessary. The reporter will be notified of the outcome.
All reports are treated confidentially and any retaliation against a person reporting a potential breach of the Code of
Conduct is a cause for disciplinary action under the Group’s whistleblowing policy.

Diversity and Inclusion
The Group will continue to foster a culture of inclusivity and empowerment, where colleagues with different backgrounds
feel comfortable in being themselves, in voicing their ideas and have equal opportunities to thrive. The Group applies theprinciple that colleagues should always treat others in a way they would expect others to treat them. No form of bullying,
intimidation, discrimination, and harassment of others has a place in the Group and would not be tolerated.
As a global hospitality employer, the Group believes in promoting equal opportunities in recruiting and developing all
employees, regardless of ethnicity, gender, age, sexual orientation, disability, background or religion, should be treatedfairly and with respect, and be valued for the contributions they make in their role. The high service expectations andoverall quality of the Mandarin Oriental brand necessitate that the Group seeks the best people from the communities
in which it operates most suited to its needs.
All colleagues are encouraged and supported to develop their full potential and contribute to the sustainable growthof the Group. Colleagues’ views and ideas are essential, and they are encouraged to express them respectfully withcolleagues at all levels within the organisation.
To build an inclusive workplace, we incorporate the Diversity and Inclusion principles across our business and HR
practices. This includes:
Ensuring a set of inclusive working arrangements and policies to support Diversity and Inclusion;
Keeping our recruitment, promotion and retention systems fair, based on aptitude, merit and ability;
Providing active talent management and career support for the Group’s colleagues to open up opportunities thatwill facilitate a future pipeline of excellent leaders; andCultivating leadership behaviour through learning campaigns to ensure colleagues behave in accordance with
the Group’s value.
The Company keeps the composition of its Board and senior management positions under review, to ensure thatit adapts to the changing business landscape. The Company is actively focussed on increasing gender diversity.

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Corporate Governance Continued

Remuneration Report
Message from the Board/Remuneration Committee
The Board is pleased to present shareholders with the 2022 Remuneration Report. This report sets out the Group’s
approach to remuneration for its executives and Directors, particularly the link between the Group’s values, strategy
and its remuneration framework, the link between performance and reward, and remuneration outcomes forsenior executives.

The Group’s remuneration philosophy and framework for rewarding staff
The remuneration outcomes in 2022 reflect the intended operation of the remuneration framework.
At the heart of the Group’s remuneration framework is our commitment to deliver competitive remuneration for
excellent performance to attract the best and motivate and retain talented individuals, while aligning the interests ofexecutives and shareholders. The Company aims to ensure all remuneration is delivered in a manner that is aligned withthe values of the Company.
The Group achieves this through:Performance-based variable compensation;
Incentives based on financial measures and strategic objectives that reflect key goals critical to sustainedorganisational success;Consideration of business and operational risk as well as a sustainability development goal through the design ofperformance objectives;
Providing incentives and policies which align the interests of executives to those of shareholders;Best-practice governance and ensuring remuneration outcomes are reasonable, taking into account community andstakeholder expectations; andTargeting remuneration levels and outcomes appropriately reflect the challenge and complexity of being a
multinational Asian-based hotel group with diverse hospitality businesses.
The Company’s policy is to offer competitive remuneration packages to its senior executives. The Company relies
on a reward framework that provides varying levels of remuneration and benefits depending on employee level. It is
recognised that, given the nature of the Group and its diverse geographic base, a number of its senior executives are
required to be offered international terms, and the nature of the remuneration packages is designed to reflect this. This
structure of remuneration varies from senior executive to more junior level employees, but the link of remuneration to
strategic goals is consistent. The nature of goals used for remuneration varies depending on employee level, but theCompany ensures goals are relevant and measurable while aligned with company values. In addition, Executive Directors
joining from outside the Group may be offered an initial fixed-term service contract to reflect any requirement for themto relocate.
Accordingly, the remuneration mix for employees varies depending on level. At senior executive levels, more
remuneration is ‘at risk’, depending on performance levels against goals. At more junior levels, more remuneration is
directed toward fixed remuneration. The Company strives to provide an appropriate amount of remuneration ‘at risk’for the achievement of goals – whether those are short- or long-term in nature.

Directors’ Remuneration
Shareholders decide in general meetings the Directors’ fees which are payable to all Directors other than the Group Chief
Executive and the Chief Financial Officer, as provided for by the Company’s Bye-laws.

122 Mandarin Oriental International Limited

Directors’ Remuneration continued
The remuneration of the Company’s Non-Executive Directors is not linked to performance. This is consistent with
Non-Executive Directors being responsible for objective and independent oversight of the Group. The total amountprovided to all Directors (including the Managing Director but exclusive of salaried Executive Directors who are notentitled to such fees) must not exceed the sum agreed by shareholders at a general meeting. The maximum aggregate
remuneration of US$1.0 million per annum was approved by shareholders at the 2022 AGM. Executive Directors(excluding the Managing Director, who is also the Jardines Group Managing Director) are paid a basic fixed salary as
well as discretionary annual incentive bonuses by and receive certain employee benefits from the Group. Non-Executive
Directors do not receive bonuses or any other incentive payments or retirement benefits. The Non-Executive Directors
are reimbursed for expenses properly incurred in performing their duties as a Director of the Company. The scheduleof fees paid to Directors in respect of the financial year 2022 is set out in the table below. Fees are annual fees, unlessotherwise stated:
USD (per annum)
Chairman/Managing Director fee:
Base Director fee:
Audit Committee fee:
Nominations Committee fee:
Director

100,000
90,00035,00015,000
Director Fee
US$

Audit
Committee Fee
US$

Nominations
Committee Fee
US$

Total Fees
US$

1

Ben Keswick (Chairman)

100,000–

15,000115,000*

2

John Witt (Managing Director)

100,000–

15,000115,000*

3

James Riley

–

–

–

–

4

Matthew Bishop

–

–

–

–

5

Jinqing Cai

90,000––90,0006Adam Keswick

90,000–15,000105,000*

7

Archie Keswick

90,000––90,0008

Y.K. Pang

90,00035,000–125,000*

9

Richard Solomons

90,00035,000–125,000

650,000

70,00045,000765,000

Total* Fees surrendered to Jardine Matheson

Remuneration Committee
The Board has overall responsibility for setting remuneration across the Group, ensuring it is appropriate and supports
the Group’s strategy, creating value for stakeholders. The Remuneration Committee has been established to assist theBoard in these remuneration matters.
The Board established a Remuneration Committee (the ‘Remuneration Committee’) at the Company level in December
2021. The key responsibilities of the Remuneration Committee are to:Oversee the formulation of a Group-wide reward strategy and ensure the business implements the reward strategy
in alignment with its industry-specific needs;
Review and approve the compensation of the Group Chief Executive and leadership team of the business;
Review the terms of and design of performance-related incentives (both short- and long-term), including the review
and approval of any changes to plan design, targets and metrics;
Review and approve the overall compensation costs, including salary and bonus budgets, of the business; andRemain abreast of trends and developments in executive compensation and corporate governance related to theGroup’s industry and countries of operation.

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123

Corporate Governance Continued

Remuneration Committee continued
The Remuneration Committee consists of a minimum of three members, selected by the Chairman of the Board. The
Chairman of the Board is the chairman of the Remuneration Committee. The current members of the Remuneration
Committee are Ben Keswick, John Witt and Graham Baker. In addition, the Group Chief Executive, the Chief
Human Resources Officer and Jardine Matheson group head of human resources will generally attend meetings of
the Remuneration Committee. The Remuneration Committee meets as circumstances require, or by the circulationof Committee circulars which make recommendations to the Board for approval as it deems appropriate.

How remuneration framework is linked to the business strategy
The Group’s remuneration strategy is designed to support and reinforce its business and sustainability strategies. The
at-risk components of remuneration are tied to measures that reflect the successful execution of these strategies in boththe short and long terms. Our strategic drivers of ‘Elevating our brand, Lifting our people, Powering our core andExceptional quality’ are reflected in bonus performance measures. So, the Group’s actual performance directly affects
what executives are paid.

Remuneration outcomes in 2022
For the year ended 31st December 2022, the Directors received from the Group US$5.7 million (2021: US$4.6 million) in
Directors’ fees and employee benefits, being:
US$0.8 million (2021: US$0.7 million) in Directors’ fees;
US$4.7 million (2021: US$3.7 million) in short-term employee benefits, including salary, bonuses, accommodationand deemed benefits in kind;
US$0.1 million (2021: US$0.1 million) in post-employment benefits; andUS$0.1 million (2021: US$0.1 million) in long-term incentive benefits.
The information set out in the section above headed ‘Remuneration outcomes in 2022’ forms part of the audited
financial statements.

Share schemes
Share-based long-term incentive plans have also been established to provide incentives for Executive Directors and senior
managers. The scheme trustee grants share options and share awards after consultation between the Chairman and theGroup Chief Executive and other Directors as they consider appropriate. Share options are granted at prevailing market
prices, while share awards will vest free of payment. The share options and share awards normally vest on or after thethird anniversary of the grant date. Grants may be made in several instalments. Share options and share awards are notgranted to Non-Executive Directors.

Directors’ share interests
The Directors of the Company in office on 2nd March 2023 had interests* as set out below in the Company’s ordinary
share capital. These interests include those notified to the Company regarding the Directors’ closely associated persons*.
John Witt

4,894,068

James Riley

180,450* Within the meaning of MAR

124 Mandarin Oriental International Limited

Audit Committee Report
Audit Committee
The Board had established an Audit Committee (the ‘Audit Committee’) at the Company level in December 2021.
The Audit Committee consists of four members, the current members of which are:Richard Solomons (Chairman of the Audit Committee and Independent Non-Executive Director);
Graham Baker (Financial Expert);
Jinqing Cai (Independent Non-Executive Director); andY.K. Pang.
None of them is directly involved in the operational management of the Company. On 2nd March 2023, Richard
Solomons was appointed as Chairman of the Audit Committee in place of Y.K. Pang, who remains as a member of the
Audit Committee. As a result the Audit Committee is chaired by an Independent Non-Executive Director. Jinqing Cai,an Independent Non-Executive Director, was also appointed as a member of the Audit Committee on 2nd March 2023.
With the appointment of Richard Solomons and Jinqing Cai, both Independent Non-Executive Directors, in December
2021 and March 2023 to the Audit Committee, the Company is moving towards a majority of independent members
in its Audit Committee. Graham Baker is also a member of the Audit Committee with recent financial experience andexpertise, as well as a deep understanding of risk management.
The Managing Director, Group Chief Executive and Chief Financial Officer, and representatives of the internal andexternal auditors, also attend the Audit Committee meetings by invitation. In addition, other individuals may attend
part of a meeting for specific agenda items as appropriate. The Audit Committee meets twice a year and reports to theBoard after each meeting.
Its terms of reference govern the role of the Audit Committee. The Audit Committee’s remit includes:
Independent oversight and assessment of financial reporting processes, including related internal controls;
Independent oversight of risk management and compliance;
Monitoring and reviewing the effectiveness of the internal and external audit functions;
Considering the independence and objectivity of the external auditors; andReviewing and approving the level and nature of non-audit work performed by the external auditors.
Before completion and announcement of the half-year and year-end results, a review of the financial information andany issues raised in connection with the preparation of the results, including the adoption of new accounting policies,
is undertaken by the Audit Committee with the executive management and a report is received from the external auditors.
The external auditors also have access to the entire Board when necessary, in addition to the Group Chief Executive,
Chief Financial Officer and other senior executives.

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125

Corporate Governance Continued

The matters considered by the Audit Committee during 2022 included:
Reviewing the 2021 annual financial statements and 2022 half-year financial statements, with particular focus on
the impact of COVID-19, provisioning and impairment assessments, assumptions that underpinned key valuation
models and effectiveness of financial controls;
Reviewing the actions and judgments of management in relation to changes in accounting policies and practices toensure clarity of disclosures and compliance with new accounting standards;
Receiving reports from the internal audit function on the status of the control environment of the Group and its
business divisions and progress made in resolving matters identified in the reports;
Reviewing the principal risks, evolving trends and emerging risks that affect the Group, and monitoring changes tothe risk profile, as well as the effectiveness of risk management measures and crisis management arrangements;
Receiving updates on the cybersecurity threat landscape and the Group’s cybersecurity environment, risk
management approach, training, priorities and control effectiveness;
Receiving reports from risk management and legal functions on key legal matters and compliance and code of
conduct issues, and the actions taken in addressing those issues and strengthening controls;
Reviewing the annual internal audit plan and status updates;
Reviewing the Group’s governance approach to cybersecurity management, data security and privacy management
across its businesses;
Reviewing the biennial assessment of the effectiveness of PwC;
Reviewing the independence, audit scope and fees of PwC, and recommending their re-appointment as the external
auditor at general meeting; andConducting a review of the terms of reference of the Audit Committee.

Audit Committee attendance
The table below shows the attendance at the scheduled 2022 Audit Committee meetings:
Meetings eligible
to attend

Attendance

Y.K. Pang

2/2

100%

Richard Solomons

2/2

100%

2/2

100%

Members of the Audit Committee
Directors of the Company

Director of MOHG
Graham Baker

126 Mandarin Oriental International Limited

Auditor independence and effectiveness
The Group auditor’s independence and objectivity are safeguarded by control measures including:
Limiting the nature of non-audit services (including the adoption by the Company of a non-audit services policy);
The external auditor’s own internal processes to approve requests for non-audit work to the external audit work;
Monitoring changes in legislation related to auditor independence and objectivity;
The rotation of the lead auditor partner after five years;
Independent reporting lines from the external auditor to the Audit Committee and providing an opportunity forthe external auditor to have in-camera sessions with the Audit Committee;
Restrictions on the employment by the Group of certain employees of the external auditor;
Providing a confidential helpline that employees can use to report any concerns; andAn annual review by the Audit Committee of the policy to ensure the objectivity and independence of theexternal auditor.
The Board’s annual review in 2022 of the Auditor’s Independence and Effectiveness found that PwC performed theirduties effectively. The Board found the level of professional scepticism, the number and regularity of meetings with the
Audit Committee, feedback from Audit Committee members and internal stakeholders and the levels of technical skills
and experience to be effective.

Risk management and internal control
The Board has overall responsibility for the Group’s risk management systems and internal control. The Board hasdelegated responsibility to the Audit Committee for providing oversight regarding risk management activities. The Audit
Committee considers the Group’s principal risks and uncertainties and potential changes to the risk profile. It reviews
the operation and effectiveness of the Group’s internal control systems (financial, operational and compliance) and theprocedures by which these risks are monitored and mitigated.
The Audit Committee considers the systems and procedures regularly and reports to the Board semi-annually. The
Jardine Matheson Group Audit and Risk Management (‘JM GARM’) is appointed to assist the Audit Committee infulfilling its assurance and reporting roles. JM GARM adheres to international standards for the professional practice ofinternal audit. To safeguard its independence and objectivity, JM GARM reports functionally to the Audit Committeeof the Company and has full and unrestricted access to all business functions, records, properties and personnel.
The internal control systems are designed to manage, rather than eliminate, business risk; to help safeguard the Group’s
assets against fraud and other irregularities; and give reasonable, but not absolute, assurance against material financial
misstatement or loss. Executive management is responsible for implementing the systems of internal control throughout
the Group.
The Group has an established risk management process that is reviewed regularly and covers all business units within theGroup. This includes the maintenance of risk registers that detail the emerging and existing risks to the future success of thebusiness and the relevant key controls and mitigating factors that address those risks. These are reviewed on a regular basis.
The internal audit function also monitors the approach taken by the business units to risk. The internal audit function is
independent of the operating businesses and reports its findings and recommendations for any corrective action required
to the Audit Committee.
The Company’s principal risks and uncertainties are set out on pages 130 to 136.

Annual Report 2022

127

Corporate Governance Continued

Risk governance structure
External Audit(‘PwC’)

Internal Audit(‘JM GARM’)

MO Board of Directors

MO Audit Committee

MO Management

MO Risk Management

Delegate/
Oversee

ReportMonitor/
Review

The Group’s Management is responsible for:Identifying and assessing principal risks and uncertainties to which it is exposed;
Implementing the most appropriate actions to mitigate and control those risks to an acceptable level;
Providing adequate resources to minimise, offset or transfer the effects of any loss that may occur while managing
acceptable risk/benefit relationships;
Monitoring the effectiveness of the systems of risk management and internal control;
Reporting periodically to its Board of Directors via the Audit Committee and JM GARM on the principal risks anduncertainties; andWorking with external and internal auditors to monitor and improve its control environment.

128 Mandarin Oriental International Limited

Risk Management Framework
Risk management is integrated into each business unit’s strategic planning, budgeting, decision-making and operations.
Central to this is the continuous and systematic application of:

Risk Identification

Risk Reporting& Monitoring

Risk
Assessment

Risk
Treatment

Risk Management Framework based on ISO 31000 and COSO principles is embedded in the Group to identify, assessand define the strategies to monitor risks. The risk registers prepared by each business unit provide the basis for theaggregation process, which summarises the principal risks and uncertainties facing the Group as a whole.
Risk Identification

Identify and document the Group’s exposure to uncertainty with existing
strategic objectives.
Adopt structured and methodical techniques to identify critical risks.

Risk Assessment

Evaluate risks by estimating likelihood, financial and reputational damage, and the
speed at which the risk materialises, based on its inherent and residual level.
Determine risk rating using the risk heatmap, with four levels of residual risk status.

Risk Treatment

Tolerate – accept if within the Group’s risk appetite.
Terminate – dispose or avoid risks were no appetite.
Risks may be accepted if mitigated to an appropriate level via:
– Transfer – take out insurance or share risk through contractual arrangements withbusiness partners; and– Treat – redesign or monitor existing controls or introduce new controls.

Risk Reporting& Monitoring

Periodic review of principal risks and uncertainties.
Setting key risk indicators to enhance monitoring and mitigation of risks.
Regular reporting of principal risks and uncertainties from the Group’s business units to
the Board of Directors via Audit Committee and JM GARM.

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129

Corporate Governance Continued

Principal risks and uncertainties
The following are the principal risks and uncertainties facing the Company as required to be disclosed pursuant to the
DTRs issued by the FCA and are in addition to the matters referred to in the Chairman’s Statement, Group Chief
Executive’s Review, and other parts of this Annual Report.
Reputational risk andvalue of the brandDescription
The Group’s brand equity and global reputation is fundamental in supporting its ability
to offer premium products and services and to achieving acceptable revenues and profit
margins. Accordingly, any damage to the Group’s brand equity or reputation, including asa result of adverse effects relating to health and safety, acts or omissions by Group personnel,
and any allegations of socially irresponsible policies and practices, might adversely impact
the attractiveness of the Group’s properties or the loyalty of the Group’s guests.
Mitigation
Engage external consultants and experts where necessary.
Perform regular cybersecurity and data vulnerability assessment at least annually and/or
penetration testing to identify weaknesses.
Active monitoring and use of social media.

Concentration risk

Description
Certain locations in Asia contribute a significant portion of the Group’s underlying profit.
Adverse conditions such as social upheaval, erosion of the rule of law or travel restrictions
could reduce a location’s competitiveness and impact the Group’s businesses which haveconcentrated operations in that jurisdiction.
Mitigation
Geographical diversification of the business through organic growth.
Maintaining financial strength under challenging scenarios.
Further strengthening the Group’s brand to sustain competitiveness and resilience.

Commercial risk

Description
The Group operates within the highly competitive global hotel industry. Failure to compete
effectively in terms of product quality, service levels, or price can adversely affect earnings.
This may also include failure to adapt to rapidly evolving customer preferences andexpectations. Significant competitive pressure or the oversupply of hotel rooms in a specificmarket can reduce margins. Advances in technology creating new or disruptive competitive
pressures might also negatively affect the trading environment.
The Group competes with other luxury hotel operators for new opportunities in the areasof hotel management, residences management and residences branding. Failure to establish
and maintain relationships with hotel owners or developers could adversely affect theGroup’s business.
The Group also makes investment decisions regarding acquiring new hotel properties andundertaking significant renovations or redevelopments in its owned properties, exposing
it to construction risks. The success of these investments is measured over the longer termand, as a result, is subject to market risk.
Mandarin Oriental’s continued growth depends on opening of new hotels and branded
residences. Most of the Group’s new developments are controlled by third-party owners anddevelopers. As a result, they can be subject to delays due to issues attributable to planningand construction, sourcing of finance, and the sale of residential units. In extreme
circumstances, such factors might lead to the cancellation of a project.

130 Mandarin Oriental International Limited

Principal risks and uncertainties continued
Commercial risk
continued

Mitigation
Utilise market intelligence and deploy strategies for business-to-consumer business.
Establish customer relationship management and digital commerce capabilities.
Engage in longer-term contracts and proactively approach suppliers for contract renewals.
Re-engineer existing business processes to take advantage of new technological capabilities.
Invest in and partner with companies that can provide the Group access to different
capabilities and technologies.

Environmental
and climate risk

Description
Environmental disasters such as earthquakes, floods and typhoons can damage the Group’s
assets and disrupt operations. Global warming-induced climate change has increased
the frequency and intensity of storms, leading to higher insurance premiums or reduced
coverage for such natural disasters.
With governments also taking a more proactive approach towards carbon taxes, renewableenergies and electric vehicles, additional investments, and efforts to address physical andtransition risks of climate change are anticipated from businesses.
With interest in sustainability surging in recent years from investors, governments and thegeneral public, expectations by regulators and other stakeholders for accurate corporate
sustainability reporting and commitments towards carbon neutrality to address climatechange are also growing. This brings increasing challenges to the Group to meet key
stakeholders’ expectations.
There is potential for negative publicity and operational disruption arising from conflict
between activists and the Group’s business that is perceived to be engaged in trade andactivities that are environmentally unfriendly.
Mitigation
Executive Advisory Panel, Sustainability Leadership Council and Hotel Sustainability
Committees have been in place to mobilise and coordinate sustainability efforts acrossthe Group.
A sustainability strategy framework, including a pillar for the planet, drives the Group’s
sustainability agenda.
Renewed environmental targets for 2025 and 2030 have been determined per property
through a Group-wide inventory management plan.
Identify environmental impact opportunities that address multiple problems and risks andgaps that are generally relevant to all properties and society in general.
Assess emerging Environmental, Social and Governance (‘ESG’) reporting standards andrequirements, to align Group disclosures to best market practice.
Conduct climate risk assessments and adaptation action plans based on recommendationsof Task Force on Climate-Related Financial Disclosures (‘TCFD’), including implementing
measures to address physical risks posed by climate change and identifying opportunities
in global transition to a low carbon economy.

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131

Corporate Governance Continued

Principal risks and uncertainties continued
Financial strengthand funding

Description
The Group’s activities expose it to a variety of risks to its financial strength and funding,including market risk, credit risk and liquidity risk.
The market risk the Group faces includes i) foreign exchange risk from future commercial
transactions, net investments in foreign operations and net monetary assets and liabilities
that are denominated in a currency that is not the entity’s functional currency; ii) interest
rate risk through the impact of rate changes on interest bearing assets and liabilities;
and iii) securities price risk as a result of its equity investments and limited partnershipinvestment funds which are measured at fair value through profit and loss, and debt
investments which are measured at fair value through other comprehensive income.
The Group’s credit risk is primarily attributable to deposits with banks, contractual cash flows
of debt investments carried at amortised cost and those measured at fair value throughother comprehensive income, credit exposures to customers and derivative financial
instruments with a positive fair value.
The Group may face liquidity risk if its credit rating deteriorates or if it is unable to meet its
financing commitments.
Mitigation
Set clear policies and limits on market, credit, and liquidity risks, including in relation
to foreign exchange exposure, interest rate risks, cash management and prohibition onderivatives not used in hedging.
Regular internal audits of compliance with treasury policies.
Adopt appropriate credit guidelines to manage counterparty risk.
When economically feasible, take borrowings in local currency to hedge foreignexchange exposures on investments.
Fix a portion of borrowings in fixed rates.
Maintain adequate headroom in committed facilities to facilitate the Group’s capacity
to pursue new investment opportunities and to provide some protection against
market uncertainties.
Keep an appropriate funding balance between equity and debt from banks and capital
markets, both short and long term in tenor, to give flexibility to develop the business.
Maintain sufficient cash and marketable securities, and availability of funding
from an adequate amount of committed credit facilities and the ability to close out
market positions.
The Group’s treasury operations are managed as cost centres and are not permitted toundertake speculative transactions unrelated to underlying financial exposures.
The detailed steps taken by the Group to manage its exposure to financial risk are set out in
the Financial Review on pages 29 to 33 and note 35 to the financial statements on pages 87
to 94.

132 Mandarin Oriental International Limited

Principal risks and uncertainties continued
Governance andmisconduct

Description
Effective management of the Group’s risks depends on the existence of an appropriate
governance structure, tone from top leadership, and functioning system of internal
controls. Ethical breaches, management override of controls, employee fraud andmisconduct, or other deficiencies in governance and three lines of internal controls
may result in financial loss and reputational damage for the Group.
Inadequate capability and diversity in management or the Board may also lead to
sub-optimal deliberations and decisions.
Mitigation
Established Group-wide mandatory code of conduct.
Maintain a robust Corporate Governance Framework which includes
a whistleblowing channel.
Maintain functionally independent internal audit function that reports to the Group
Audit Committee on risk management, the control environment and significant
non-compliance matters.
Maintain Professional Indemnity, Crime and General Liability insurance policies withadequate coverage.

Health, safety, andproduct quality

Description
The Group’s colleagues engage in physical activities that may lead to serious injury or
fatal incidents if work conditions are unsafe or workers do not take due care to observe
safety procedures.
The safety and quality of food products and other items provided by the Group are
fundamental to its reputation with customers. Any actual or perceived deficiency in productsafety or quality may damage consumer confidence and the brand’s reputation, leading tofinancial loss.
Mitigation
Establish safe working environments and regular safety training for all employees
and subcontractors.
Establish contractual requirements for contractors to comply with high expected levelsof safety standards.
Conduct occupational health and safety awareness campaigns.
Establishing product quality and safety standards, guidelines.
Ensure suppliers follow the Group’s guidelines, principals’ requirements, andlocal regulations.

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133

Corporate Governance Continued

Principal risks and uncertainties continued
IT and cybersecurity

Description
The Group’s business is ever more reliant on technology in their operations andfaces increasing cyber-attacks from groups targeting both individuals and businesses.
As a result, the privacy and security of customer and corporate information are at
risk of being compromised through a breach of our or our suppliers’ IT systems or theunauthorised or inadvertent release of information, resulting in brand damage, impaired
customer trust, loss of competitiveness or regulatory action.
Cyber-attacks stemming from inadequate cybersecurity or lack of employee cybersecurity
awareness may also adversely affect the Group’s ability to manage daily business operations,
resulting in business interruption, reputational damage, regulatory penalties, lost revenues,
repair or other costs.
Mitigation
Engage external consultants to perform assessments on the business withindustry benchmarks.
Define cybersecurity programme and centralised function to provide oversight,
promote cybersecurity hygiene, strengthen cybersecurity defences and manage
cybersecurity incidents.
Perform regular vulnerability assessment and penetration testing to identify weaknesses.
Maintain disaster recovery plans and backup for data restoration.
Arrange regular security awareness training at least annually and phishing testing toraise users’ cybersecurity awareness.
Conduct regular internal audits of IT general controls and cybersecurity.

Pandemic

Description
COVID-19 has demonstrated the wide-ranging and long-lasting impacts and disruptions
for businesses, communities and employees that may result from the spread of a pandemic.
While the governments and businesses have gained experience from COVID-19 in
preparing for and responding to future pandemic scenarios, nevertheless significant
disruptions and uncertainties would likely result from global or regional pandemics
of a similar nature if they raise the prospect of lockdowns, restrictions on cross-bordermobility, interruptions to supply chains, and dampened consumer sentiment while
vaccines are unavailable.
Mitigation
Increase flexibility and resilience of work arrangements, including tools that enable
employees to effectively work from home, where possible.
Test business continuity plans periodically for various scenarios including loss ofpremises, systems, people, and extended periods of split teams.
Increase resilience of supply chain with sourcing alternative suppliers for key inputs andclose coordination with logistics partners.

134 Mandarin Oriental International Limited

Principal risks and uncertainties continued
Political andeconomic risk

Description
Changes and uncertainties in the political landscape pose risks for business activity andsentiment in the territories where the Group operates and consequently for the current
investments and future growth of the Group. In recent years, sources of uncertainty include
geopolitical tensions between China and the United States, terrorism, and government
instability in parts of Southeast Asia. Rising costs of fuel and staple foods are particularly
sensitive for developing markets where the Group operates, heightening the risk of civil
discontent and political instability. The imposition of export bans by some governments onfood and raw materials adds further uncertainties in the availability and cost of supplies for
the Group’s hotels and residences that import these items.
The Group’s business is exposed to the risk of adverse developments in global and regional
economies and financial markets, either directly, or through the impact such developments
might have on the Group’s joint venture partners, associates, bankers, suppliers, or
customers. These developments could include recession, inflation, deflation, currency
fluctuations, restrictions in the availability of credit, business failures, or increases infinancing costs, oil prices or the cost of raw materials. Such developments might increase
operating costs, reduce revenues, lower asset values or result in some or all of the Group’s
hotels and residences being unable to meet their strategic objectives.
Mitigation
Maintain the Group’s financial strength and funding sources under scenarios of
economic downturn and other stresses.
Monitor the volatile macroeconomic environment and consider economic factors instrategic and financial planning processes.
Make agile adjustments to existing business plans and explore new business streams andnew markets.
Review pricing strategies and keep conservative assumptions on global commodity prices.
Insurance programme covering business interruption due to civil unrest.

People and talent

Description
The competitiveness of the Group depends on the quality of the people that it attracts andretains. The unavailability of needed human resources may impact the ability of the Group
to operate at capacity, implement initiatives and pursue opportunities.
The pandemic has accelerated corporate investments in digital projects and stimulated
global consumer demand for e-commerce. This has created heightened demand andcompetition across industries for various skillsets. Pandemic-related travel restrictions anda more stringent approach to issuing work visas to non-locals in some of the key markets
have also disrupted the availability of labour across borders, exacerbating labour shortages
as economies rebound.
Recent and future workforce rationalisation may raise the potential for organisational gaps
in capabilities, succession and controls.
With worker preferences shifting towards greater importance attached to mental healthand well-being, the Group faces heightened risk for talent attraction and retention if theycannot adapt their propositions for workers.

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135

Corporate Governance Continued

Principal risks and uncertainties continued
People and talentcontinued

Mitigation
Support workforce practices that promote well-being and flexible work arrangementsthat are competitive with the market.
Ensure proactive manpower planning and succession planning are in place.
Enhance modern employer branding, training for staff members, compensation, andbenefits, including retention incentives.
Implement strategy to promote diversity and inclusion across the Group.
Establish employee assistance and counselling programmes.
Enhance talent development plans to increase employees’ visibility on future career
paths, including identifying strategic talent pools.
Delivering new learning programmes to equip staff with finance, procurement, HR,digital, IT and innovation technical capabilities for business transformation.

Compliance withand changes to laws
and regulations

Description
The Group’s business is subject to several regulatory regimes in the territories they
operate in. New or changing laws and regulations in a wide range of areas such as foreign
ownership of assets and businesses, exchange controls, building and environmental
standards, competition, tax, employment, and data privacy could potentially impact
the operations and profitability of the Group’s business. Non-compliance may lead to
reputational damage from media exposure and financial loss due to litigation or penalties
by government authorities.
Mitigation
Engage legal experts at early stage to assess implications of new rules.
Stay connected and informed of relevant new and draft regulations.
Engage external consultants where necessary.
Raise awareness via principals’ brand conference with an annual update on new
regulations that may have been implemented in other markets.
Lobby relevant associations and authorities through appropriate channels.
Perform early scenario planning to assess implications of new rules and prepare
for contingencies.

Effectiveness review of risk management and internal control systems
The effectiveness of the Company’s risk management and internal control systems is monitored by the internal audit
function, which reports functionally to the Audit Committee of the Group. The findings of the internal audit function
and recommendations for any corrective action required are reported to the Audit Committee and, if appropriate, to
the Jardine Matheson Audit Committee.

136 Mandarin Oriental International Limited

Shareholder Information

Financial calendar
2022 full-year results announced
Annual General Meeting to be held
2023 half-year results to be announced
Shares quoted ex-dividend
Share registers to be closed
2023 interim dividend payable

2nd March 2023
4th May 2023
28th July 2023 *17th August 2023 *21st to 25th August 2023 *11th October 2023** Subject to change

Dividends
In light of the modest level of underlying profit, no final dividend in respect of the 2022 financial year will be paid.

Registrars and transfer agent
Shareholders should address all correspondence with regard to their shareholdings or dividends to the appropriate
registrar or transfer agent.

Principal Registrar
Jardine Matheson International Services Limited, P.O. Box HM 1068, Hamilton HM EX, Bermuda

Jersey Branch Registrar
Link Market Services (Jersey) Limited, 12 Castle Street, St Helier, Jersey JE2 3RT, Channel Islands

Singapore Branch Registrar
M & C Services Private Limited, 112 Robinson Road #05-01, Singapore 068902

United Kingdom Transfer Agent
Link Group, 10th Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL, United Kingdom

Press releases and other financial information can be accessed through the internet at www.mandarinoriental.com.

Annual Report 2022

137

Mandarin Oriental Hotel Group Contact Addresses

Hong Kong Corporate Office
8th floor One Island East
Taikoo Place
18 Westlands Road
Quarry Bay, Hong Kong
Telephone +852 2895 9288
mandarinoriental.com

Asia
Mandarin Oriental, Bangkok
48 Oriental Avenue
Bangkok 10500
Thailand
Telephone +66 (0) 2 659 9000
Emailmobkk-reservations@mohg.com
Mandarin Oriental Wangfujing, Beijing
No. 269 Wangfujing Street, Dongcheng District
Beijing 100006, China
Telephone +86 (10) 8509 8888
Emailmowfj-reservations@mohg.com
Mandarin Oriental, Guangzhou
389 Tianhe Road, Tianhe District
Guangzhou 510620, China
Telephone +86 (20) 3808 8888
Emailmogzh-reservations@mohg.com
Mandarin Oriental, Hong Kong
5 Connaught Road Central
Hong Kong
Telephone +852 2522 0111
Emailmohkg-reservations@mohg.com
The Landmark Mandarin Oriental, Hong Kong
The Landmark
15 Queen’s Road Central
Hong Kong
Telephone +852 2132 0188
Emaillmhkg-reservations@mohg.com

138 Mandarin Oriental International Limited

Mandarin Oriental, Jakarta
Jalan M H Thamrin
Jakarta 10310
Indonesia
Telephone +62 (21) 2993 8888
Emailmojkt-reservations@mohg.com
Mandarin Oriental, Kuala Lumpur
Kuala Lumpur City Centre
50088 Kuala Lumpur
Malaysia
Telephone +60 (3) 2380 8888
Emailmokul-reservations@mohg.com
Mandarin Oriental, Macau
N.945, Avenida Dr Sun Yat Sen
NAPE, Macau, China
Telephone +853 8805 8888
Emailmomac-reservations@mohg.com
Mandarin Oriental, Sanya
12 Yuhai Road
Sanya 572000
Hainan, China
Telephone +86 (898) 8820 9999
Emailmosan-reservations@mohg.com
Mandarin Oriental Pudong, Shanghai
111 Pudong Road (S), Pudong
Shanghai 200120, China
Telephone +86 (21) 2082 9888
Emailmopud-reservations@mohg.com
Mandarin Oriental, Shenzhen
No. 5001 Huanggang Road
Futian District, Shenzhen
Guangdong 518036, China
Telephone +86 (755) 8802 6888
Emailmoszn-reservations@mohg.com

Mandarin Oriental, Singapore
5 Raffles Avenue, Marina Square
Singapore 039797
Telephone +65 6338 0066
Emailmosin-reservations@mohg.com
Mandarin Oriental, Taipei
No. 158 Dunhua North Road
Taipei 10548, Taiwan
Telephone +886 2 2715 6888
Emailmotpe-reservations@mohg.com
Mandarin Oriental, Tokyo
2-1-1 Nihonbashi Muromachi, Chuo-ku
Tokyo 103-8328, Japan
Telephone +81 (0) 3 3270 8800
Emailmotyo-reservations@mohg.com

E U ROPE , M I DDL E E A ST A N D A F R IC A
Emirates Palace Mandarin Oriental, Abu Dhabi
West Corniche Road
Abu Dhabi, United Arab Emirates
Telephone +971 2 690 8888
Emailepauh-reservations@mohg.com
Mandarin Oriental, Barcelona
Passeig de Gràcia, 38-40
08007 Barcelona, Spain
Telephone +34 93 151 88 88
Emailmobcn-reservations@mohg.com
Mandarin Oriental, Bodrum
Gölköy Mahallesi 314
Sokak No. 10, 48483,
Bodrum, Muğla, Turkey
Telephone +90 (252) 311 18 88
Emailmobod-reservations@mohg.com

Mandarin Oriental, Doha
Barahat Msheireb Street
Msheireb Downtown Doha
PO Box 23643
Doha, Qatar
Telephone +974 4008 8888
Emailmodoh-reservations@mohg.com
Mandarin Oriental Jumeira, Dubai
Jumeirah Beach Road, Jumeira 1
PO Box 62092
Dubai, United Arab Emirates
Telephone +971 4 777 2222
Emailmodub-reservations@mohg.com
Mandarin Oriental, Geneva
Quai Turrettini 1
1201 Geneva, Switzerland
Telephone +41 (22) 909 0000
Emailmogva-reservations@mohg.com
Mandarin Oriental Bosphorus, Istanbul
Kuruçeşme, Muallim Naci Caddesi No: 6234345 Beşiktaş, İstanbul, Turkey
Telephone +90 212 349 8888
Emailmoist-reservations@mohg.com
Mandarin Oriental, Lago di Como
Via Caronti, 69
22020 Blevio (Co)
Italy
Telephone +39 031 32 511
Emailmocmo-reservations@mohg.com
Mandarin Oriental Hyde Park, London
66 Knightsbridge
London, SW1X 7LA
United Kingdom
Telephone +44 (0) 20 7235 2000
Emailmolon-reservations@mohg.com

Annual Report 2022

139

Mandarin Oriental Hotel Group Contact Addresses Continued

Mandarin Oriental Palace, Luzern
Haldenstrasse 106002 Lucerne, Switzerland
Telephone +41 41 588 1888
Emailmolzn-reservations@mohg.com
Mandarin Oriental Ritz, Madrid
Plaza de la Lealtad 528014 Madrid, Spain
Telephone +34 91 701 67 67
Emailmrmad-reservations@mohg.com
Mandarin Oriental, Marrakech
Route du Golf Royal40 000 Marrakech, Morocco
Telephone +212 5 24 29 88 88
Emailmomrk-reservations@mohg.com
Mandarin Oriental, Milan
Via Andegari 920121 Milan, Italy
Telephone +39 02 8731 8888
Emailmomln-reservations@mohg.com
Mandarin Oriental, Munich
Neuturmstrasse 180331 Munich, Germany
Telephone +49 (89) 290 980
Emailmomuc-reservations@mohg.com
Mandarin Oriental, Paris251 rue Saint-Honoré
75001 Paris, France
Telephone +33 (0)1 70 98 78 88
Emailmopar-reservations@mohg.com
Mandarin Oriental, Prague
Nebovidská 459/1, Malá Strana
118 00 Prague, Czech Republic
Telephone +420 233 088 888
Emailmoprg-reservations@mohg.com

140 Mandarin Oriental International Limited

Al Faisaliah Hotel, Riyadh
PO Box 4148
King Fahad Road, Al Olaya
Riyadh 12212
Saudi Arabia
Telephone +966 11 273 2000
Emailmoryd-reservations@mohg.com

America
Mandarin Oriental, Boston
776 Boylston Street
Boston, Massachusetts 02199, USA
Telephone +1 (617) 535 8888
Emailmobos-reservations@mohg.com
Mandarin Oriental, Canouan
Carenage Bay, Canouan Island VC0450
Saint Vincent and the Grenadines
Telephone +1 (212) 461 8068
Emailmocan-reservations@mohg.com
Mandarin Oriental, Miami
500 Brickell Key Drive
Miami, Florida 33131, USA
Telephone +1 (305) 913 8288
Emailmomia-reservations@mohg.com
Mandarin Oriental, New York80 Columbus Circle
New York, New York 10023, USA
Telephone +1 (212) 805 8800
Emailmonyc-reservations@mohg.com
Mandarin Oriental, Santiago
Avenida Presidente Kennedy 4601
7560994 Las Condes, Santiago, Chile
Telephone +56 2 2950 3088
Emailmostg-reservations@mohg.com

Mandarin Oriental International Limited
mandarinoriental.com