Holiday Inn 2012 Annual Report Download - page 82

80 IHG Annual Report and Financial Statements 2012
Substantial shareholdings
As at 31 December 2012 and 18 February 2013, the Company had been
notified of the following significant holdings in its ordinary shares:
As at
Shareholder 18 February 2013
Cedar Rock Capital Limited 5.07%
BlackRock, Inc. 5.02%
Legal & General Group plc 3.96%
Director share interests
Details of the beneficial interests in shares of the Company, held by
Directors who were on the Board as at 31 December 2012 (unless
otherwise indicated), are shown below. No changes to these interests
occurred between the year end and the date of this Annual Report.
As at As at
31 December 2012 31 December 2011
ordinary shares1 ordinary shares1
Executive Directors
Kirk Kinsell 155,6282 109,547
Tracy Robbins 85,703 4 3,108
Tom Singer 20,846 –
Richard Solomons 322,379 252,166
Non-Executive Directors
Patrick Cescau3 – –
David Kappler 1,308 1,400
Jennifer Laing 3,148 3,373
Jonathan Linen 6,8534 7,34 3
Luke Mayhew 1,866 2,000
Dale Morrison 4,2334 –
David Webster3 33,438 35,828
Ying Yeh – –
1 These shareholdings include all beneficial interests and those held by Directors’
spouses and other connected persons. None of the Directors have a beneficial
interest in the shares of any subsidiary. These shareholdings do not include
Executive Directors’ entitlements to share awards under the Company’s share
plans, which are set out separately in the Directors’ Remuneration Report on
pages 59 to 78.
2 155,034 ordinary shares and 594 American Depositary Receipts.
3 Patrick Cescau was appointed as a Non-Executive Chairman on 1 January 2013
following the retirement of David Webster on 31 December 2012.
4 Held in the form of American Depositary Receipts.
Finance
Charitable and political donations
In 2012, the Group donated $760,000 (2011 $1,540,000) in support of
community initiatives and charitable causes. In addition, IHG employees
and guests made contributions during 2012 to a variety of causes through
IHG facilitated channels. Taking all these contributions into account,
total donations in 2012 are estimated at $1,015,000 (2011 $2,040,000).
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 29 and in notes
21 to 23 to the Group Financial Statements on pages 111 to 117.
Significant agreements and change of control provisions
The Group is a party to the following arrangements which could be
terminated upon a change of control of the Company and which are
considered significant in terms of their potential impact on the
business of the Group as a whole:
• the Group’s five-year $1.07bn syndicated loan facility agreement
dated 7 November 2011, under which a change of control of the
Company would entitle each lender to cancel its commitment and
declare all amounts due to it payable;
• the terms of the £250m seven-year bond issued by the Company
on 9 December 2009, under which, if the bond’s credit rating was
downgraded in connection with a change of control, the bond
holders would have the option to require the Company to redeem
or, at the Company’s option repurchase the outstanding notes
together with interest accrued; and
• the terms of the £400m 10-year bond issued by the Company on
28 November 2012, under which, if the bond’s credit rating was
downgraded in connection with a change of control, the bond
holders would have the option to require the Company to redeem
or, at the Company’s option, repurchase the outstanding notes
together with interest accrued.
Business relationships
During 2012, the Group entered into a five-year technology
outsourcing agreement with International Business Machines
Corporation (IBM), pursuant to which IBM operates and maintains
the infrastructure of the Group’s reservations system. Otherwise,
there are no specific individual contracts or arrangements
considered to be essential to the business of the Group as a whole.
Policy on payment of suppliers
The Company 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.
Going concern
An overview of the business activities of IHG, including a review of the key
business risks that the Group faces, is given in the Business Review on
pages 9 to 44. Information on the Group’s treasury management policies
can be found in note 21 to the Group Financial Statements on pages
111 to 115. The Group refinanced its bank debt in November 2011 and
put in place a five-year $1.07bn facility. In December 2009 the Group
issued a seven-year £250m sterling bond and, in November 2012,
a 10-year £400m sterling bond. At the end of 2012 the Group was
trading significantly within its banking covenants and debt facilities.
The Group’s fee based model and wide geographic spread means
that it is well placed to manage through uncertain times 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 facilities.
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.
Events after the reporting period
As explained in note 34 to the Group Financial Statements on page 128,
the Group is expected to receive a liquidated damages payment of
$31m in February 2013.
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 are aware of any
relevant audit information which has not been disclosed to the auditors.
Auditor reappointment
Ernst & Young LLP have expressed their willingness to continue
in office as auditors of the Company and their reappointment will
be put to shareholders at the 2013 AGM.
By order of the Board
George Turner
General Counsel and Company Secretary
18 February 2013
Governance: Other statutory information continued