Holiday Inn 2012 Annual Report Download - page 111

OVERVIEW BUSINESS REVIEW GOVERNANCE
GROUP FINANCIAL
STATEMENTS
PARENT COMPANY FINANCIAL STATEMENTS OTHER INFORMATION
Notes to the Group Financial Statements 109
14. Investment in associates and joint ventures continued
The following table summarises the financial information of the Group’s associates and joint ventures:
Associates Joint ventures Total
2012 2011 2012 2011 2012 2011
$m $m $m $m $m $m
Share of statement of financial position
Current assets 22 9 1 3 23 12
Non-current assets 59 70 27 27 86 97
Current liabilities (6) (7) – – (6) (7)
Non-current liabilities (11) (15) – – (11) (15)
Non-controlling interests (8) – – – (8) –
Net assets 56 57 28 30 84 87
Share of revenue and profit
Revenue 30 28 – – 30 28
Profit/(loss) 3 2 – (1) 3
1
Related party transactions
Revenue from related parties 5 5 – – 5 5
Amounts owed by related parties 2 1 – – 2 1
Loans from related parties – (2) – – – (2)
The most significant investments are a 30% associate holding in President Hotel and Tower Co Ltd, the owner of the InterContinental Hotel
Bangkok and the Holiday Inn Bangkok, and a 49% holding in BCRE IHG 180 Orchard Holdings LLC, a joint venture established to develop and
build a multi-use property in Manhattan, New York, including a Hotel Indigo.
15. Other financial assets
2012 2011
$m $m
Current
Loans and receivables 6
–
Non-current
Equity securities available-for-sale 112 112
Loans and receivables 43 44
155 156
Available-for-sale financial assets, which are included in the Group statement of financial position at fair value, consist of equity investments in listed
and unlisted shares. Of the total amount of equity investments at 31 December 2012, $18m (2011 $15m) were listed securities and $94m (2011 $97m)
unlisted; $59m (2011 $61m) were denominated in US dollars, $24m (2011 $23m) in Hong Kong dollars and $29m (2011 $28m) 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 the International Private Equity and Venture Capital Valuation Guidelines, using either the earnings multiple or net assets
methodology as appropriate. Listed equity share valuations are based on observable market prices. Dividend income from available-for-sale
equity securities of $5m (2011 $11m) is reported as other operating income and expenses in the Group income statement.
Loans and receivables consist of trade deposits and restricted cash which are held at amortised cost. A deposit of $37m was made in 2011 to
a hotel owner in connection with the renegotiation of a management contract. The deposit is non-interest-bearing and repayable at the end of
the management contract, and is therefore held at its discounted value of $11m (2011 $10m); the discount will unwind to the income statement
within financial income over the period to repayment. Restricted cash of $29m (2011 $27m) relates to cash held in bank accounts which is
pledged as collateral to insurance companies for risks retained by the Group.
The movement in the provision for impairment of other financial assets during the year is as follows:
2012 2011
$m $m
At 1 January (25) (26)
Provided – exceptional items – (3)
Reclassification (1) 3
Amounts written off – 1
At 31 December (26) (25)
The amount provided as an exceptional item in 2011 related to an available-for-sale equity investment and arose as a result of a significant
and prolonged decline in its fair value below cost.
The provision is used to record impairment losses unless the Group is satisfied that no recovery of the amount is possible; at that point the
amount considered irrecoverable is either written off directly to the income statement or, if previously provided, against the financial asset
with no impact on the income statement.