Holiday Inn 2007 Annual Report Download - page 72

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70 IHG Annual Report and Financial Statements 2007
Notes to the Group financial statements continued
14 INVESTMENTS IN ASSOCIATES
The Group holds seven investments (2006 six) accounted for as associates. The following table summarises the financial information
of the associates.
2007 2006
£m £m
Share of associates’ balance sheet
Current assets 32
Non-current assets 52 50
Current liabilities (8) (5)
Non-current liabilities (14) (15)
Net assets 33 32
Share of associates’ revenue and profit
Revenue 16 22
Net profit 12
Related party transactions
Revenue from related parties 34
Amounts owed by related parties 11
15 OTHER FINANCIAL ASSETS
2007 2006
£m £m
Non-current
Equity securities available-for-sale 46 48
Other 47 48
93 96
Current
Equity securities available-for-sale –9
Derivatives –4
Other 9–
913
Available-for-sale financial assets, which are held on the balance sheet at fair value, consist of equity investments in listed and unlisted
shares. Of the total amount of equity investments at 31 December 2007, £2m (2006 £nil) were listed securities and £44m (2006 £57m)
unlisted; £28m (2006 £27m) were denominated in US dollars, £8m (2006 £11m) in Hong Kong dollars and £10m (2006 £19m) in other
currencies. Unlisted equity shares are mainly investments in entities that own hotels which the Group manages. The fair value of
unlisted equity shares has been estimated using valuation guidelines issued by the British Venture Capital Association and is based
on assumptions regarding expected future earnings. Listed equity share valuation is based on observable market prices. Dividend
income from available-for-sale equity securities of £8m (2006 £4m) is reported as other operating income and expenses in the Group
income statement.
Other financial assets consist of trade deposits, restricted cash and deferred consideration on asset disposals. These amounts have
been designated as ‘loans and receivables’ and are held at amortised cost. Restricted cash of £27m (2006 £25m) relates to cash held
in bank accounts which is pledged as collateral to insurance companies for risks retained by the Group.
Derivatives, including those within trade and other payables, are held on the balance sheet at fair value. Fair value is estimated using
discounted future cash flows taking into consideration interest and exchange rates prevailing at the balance sheet date.