Holiday Inn 2006 Annual Report Download - page 82

Notes to the Group financial statements
26 Deferred tax payable (continued)
2006 2005
£m £m
Analysed as:
Deferred tax payable 79 210
Liabilities classified as held for sale 234
At 31 December 81 244
The deferred tax asset of £89m (2005 £123m) recognised in respect of losses includes £64m (2005 £89m) of capital losses available to be
utilised against the realisation of capital gains which are recognised as a deferred tax liability and £25m (2005 £34m) in respect of revenue
tax losses. Revenue losses include £1m (2005 £nil) in respect of losses which arose during a period of hotel refurbishment and which are
expected to be utilised against future operating profit.
Tax losses with a value of £192m (2005 £282m), including capital losses with a value of £87m (2005 £93m), have not been recognised
as their use is uncertain or not currently anticipated. These losses may be carried forward indefinitely with the exception of £1m (2005 £nil)
which expires after seven years and £1m (2005 £nil) which expires after 15 years.
Deferred tax assets of £6m (2005 £19m) in respect of share-based payments, £7m (2005 £7m) in respect of employee benefits and £17m
(2005 £11m) in respect of other items have not been recognised as the timing of their realisation and consequent use is uncertain or not
currently anticipated and, in part, is dependent upon the outcome of EU case law. Other items include £7m (2005 £nil) which expire after
nine years.
At 31 December 2006, the Group has not provided deferred tax in relation to temporary differences associated with undistributed earnings of
subsidiaries. Quantifying the temporary differences is not practical. However, based on current enacted law and on the basis that the Group
is in a position to control the timing and realisation of these temporary differences, no material tax consequences are expected to arise.
27 Authorised and issued share capital
Authorised (ordinary shares and redeemable preference share)
At 31 December 2006, the authorised share capital was £160,050,000, comprising 1,400,000,000 ordinary shares of 113⁄7p each and one
redeemable preference share of £50,000.
Number of
shares
Allotted, called up and fully paid (ordinary shares) note millions £m
At 1 January 2005 622 697
Issued under option schemes 11
Repurchased and cancelled under repurchase programmes a(19) (22)
Capital reorganisation b(161) (632)
Issued under option schemes 1–
Repurchased and cancelled under repurchase programmes a(11) (1)
At 31 December 2005 433 43
Share capital consolidation c(53) –
Issued under option schemes 41
Repurchased and cancelled under repurchase programmes a(28) (3)
At 31 December 2006 356 41
a During 2004 and 2005, the Company undertook to return funds of up to £750m to shareholders by way of three consecutive £250m share repurchase programmes,
the third of which is expected to be completed in the first half of 2007. During the year, 28,409,753 (2005 30,600,010) ordinary shares were repurchased and cancelled
under the authorities granted by shareholders at general meetings held during 2003, 2004, 2005 and 2006. Of these, 11,122,753 were 10p shares in the capital of
InterContinental Hotels Group PLC and 17,287,000 were 113⁄7p shares in the capital of InterContinental Hotels Group PLC.
b On 27 June 2005, the capital reorganisation (by means of a scheme of arrangement under Section 425 of the Companies Act 1985) was completed. Under the
arrangement, shareholders received 11 new ordinary shares and £24.75 cash in exchange for every 15 existing ordinary shares held on 24 June 2005. The entire
issued share capital of InterContinental Hotels Group PLC was transferred to New InterContinental Hotels Group PLC at fair market value, in exchange for the
issue of 443 million fully paid ordinary shares of 10p each, which were admitted to the Official List of the UK Listing Authority and admitted to trading on the
London Stock Exchange on that date. In accordance with the merger relief provisions of Sections 131 and 133 of the Companies Act 1985, the 443 million shares
are recorded only at nominal value.
c On 1 June 2006, shareholders approved a share capital consolidation on the basis of seven new ordinary shares for every eight existing ordinary shares. This
provided for all the authorised ordinary shares of 10p each (whether issued or unissued) to be consolidated into new ordinary shares of 113⁄7p each. The share
capital consolidation became effective on 12 June 2006.
d Whilst the authorised share capital comprises one redeemable preference share of £50,000, following its redemption in September 2005, this redeemable
preference share has not been re-issued.
The authority given to the Company at the Annual General Meeting on 1 June 2006 to purchase its own shares was still valid at
31 December 2006. A resolution to renew the authority will be put to shareholders at the Annual General Meeting on 1 June 2007.
80 IHG Annual report and financial statements 2006