Holiday Inn 2009 Annual Report Download - page 41

Directors’ report 39
Subject to the Company’s Articles of Association, any relevant
legislation and to any directions given by special resolution, the
business is managed by the Board which may exercise all the
powers of the Company. These include the power to allot and
to purchase shares.
During the year, IHG has maintained cover for its Directors and
officers, and those of its subsidiary companies, under a directors’
and officers’ liability insurance policy, as permitted by the
Companies Act 2006.
The Group has provided to all of its Directors, indemnities in
respect of costs of defending claims against them and third-party
liabilities. These are all qualifying third-party indemnity provisions
for the purposes of the Companies Act 2006 and are all currently
in force.
There were no indemnity provisions relating to the UK pension
plan, for the benefit of the Directors of the Company, in place
during the period.
Employees
IHG directly employed an average of 7,556 people worldwide
during 2009, whose costs are borne by the Group. When the whole
IHG estate is taken into account (including staff working in the
franchised and managed hotels) approximately 335,000 people
are employed globally across IHG’s brands.
Further information regarding the Group’s employment policies,
including its obligations under equal opportunities legislation,
its commitment to employee communications and its approach
towards staff development, can be found on pages 22 to 25 of the
Business Review.
Charitable donations
During the year, the Group donated $813,900 in support of
community initiatives and charitable causes. In addition to this
contribution IHG employees are encouraged to give their time
and skills to a variety of causes and they, as well as IHG guests,
also made donations both in cash and in kind during 2009. Taking
all these contributions into account, total donations in 2009 are
estimated at $1,675,000.
Political donations
The Group made no political donations during the year and
proposes to maintain its policy of not making such payments.
Financial risk management
The Group’s financial risk management objectives and policies,
including its use of financial instruments, are set out on page 21 of
the Business Review and in notes 22 and 23 to the Group financial
statements on pages 89 to 92.
A number of IHG’s financing arrangements are terminable upon
a change of control of the Company.
Policy on payment of suppliers
InterContinental Hotels Group PLC is a holding company and has
no trade creditors. Group companies apply standard payment
terms which are considered reasonable, transparent and
consistent with prevailing commercial practices. These are agreed
with suppliers and payments are contingent on goods or services
being supplied to the required standard.
Auditors
The Directors who held office as at the date of approval of this
report confirm that they have taken steps to make themselves
aware of relevant audit information. None of the Directors is aware
of any relevant audit information which has not been disclosed to
the auditors.
Ernst & Young LLP have expressed their willingness to continue in
office as auditors of the Company and their reappointment will be
put to members at the Annual General Meeting.
Annual General Meeting
The Notice convening the Annual General Meeting to be held at
11.00am on Friday, 28 May 2010 is contained in a circular sent
to shareholders at the same time as this Report.
Going concern
The wider economic climate currently creates trading uncertainty
for the hotel industry and IHG. The key business risks for IHG are
outlined on pages 32 to 34 in the Business Review but, in particular
over the relatively short term, the main risks are falling consumer
demand, restrictions on the availability of finance for hotel owners
and a fall in the pace of new room openings. As highlighted in note
21 to the Group financial statements on pages 88 and 89, the Group
refinanced its debt in May 2008 and issued a £250m seven-year
bond in December 2009 which was used to replace most of the
$500m bank facility that expires in November 2010. At the end
of 2009, the Group was trading significantly within its banking
covenants and debt facility.
The Group’s fee-based model and wide geographic spread means
that it is well placed to manage through the current downturn
and our forecasts and sensitivity projections, based on a range
of reasonably possible changes in trading performance, show
that the Group should be able to operate within the level of its
current facility.
After making enquiries, the Directors have a reasonable
expectation that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable
future and, accordingly, they continue to adopt the going concern
basis in preparing the financial statements.
By order of the Board
George Turner
Company Secretary
15 February 2010
THE BOARD,
SENIOR MANAGEMENT AND
THEIR RESPONSIBILITIES