Holiday Inn 2013 Annual Report Download - page 113

General information
This document constitutes the Annual Report and Financial
Statements in accordance with UK Listing Rules requirements
and the Annual Report on Form 20-F in accordance with the US
Securities Exchange Act of 1934. In previous years the Group
issued separate documents.
The Consolidated Financial Statements of InterContinental Hotels
Group PLC (the Group or IHG) for the year ended 31 December 2013
were authorised for issue in accordance with a resolution of the
Directors on 17 February 2014. InterContinental Hotels Group PLC
(the Company) is incorporated and domiciled in Great Britain and
registered in England and Wales.
Comparatives for 2011
The comparative information presented for the year ended
31 December 2011 is that previously issued on Form 20-F for that
year which differs from the Consolidated Financial Statements
issued to the UK listing authorities for 2011. The difference arose
in respect of a litigation provision of $22m ($13m net of tax) which
was recorded on Form 20-F in the year ended 31 December 2010
but not in the UK Consolidated Financial Statements until the
following year. An unfavourable court judgement on 23 February
2011, between the authorisation of the respective documents
(UK Consolidated Financial Statements on 14 February 2011 and
Form 20-F on 11 April 2011), resulted in the litigation provision
being recorded as an adjusting post balance sheet event in the
Financial Statements for the year ended 31 December 2010 issued
on Form 20-F.
The respective numbers reported were as follows:
2011 Financial Statements2
Form 20-F1UK filing
Profit before tax ($m) 554 532
Profit for the year ($m) 473 460
Net assets ($m) 555 555
Basic earnings per ordinary
share (cents) 163.7 159.2
Diluted earnings per ordinary
share (cents) 159.8 155.4
1
These numbers form the basis of the comparatives included in this
document and exclude the litigation provision described above.
2
Before restatement for the adoption of IAS 19R ‘Employee Benefits’
(seebelow).
Changes in accounting policies
With effect from 1 January 2013, the Group has adopted IAS 19
(Revised) ‘Employee Benefits’ which introduces a number of
changes to accounting for defined benefit plans. The key change
that impacts the Group is the removal of expected returns on plan
assets from the income statement and its replacement with a
requirement to recognise interest on the net defined benefit asset/
liability (after any asset restrictions), calculated using the discount
rate used to measure the defined benefit obligation.
The impact of this change in accounting policy on the current
andprior year Financial Statements, which have been restated,
isas follows:
Group income statement
2013
$m
2012
$m
2011
$m
Administrative expenses (6) (9) (11)
Operating profit and profit before tax (6) (9) (11)
Tax 223
Profit for the year (4) (7) (8)
Group statement of comprehensive income
2013
$m
2012
$m
2011
$m
Profit for the year (4) (7) (8)
Re-measurement gains, net of related tax
charge of $2m (2012 $1m, 2011 $1m) 4 8 10
Tax related to pension contributions –(1) (2)
Total comprehensive income for
the year – – –
Earnings per share
2013
cents
2012
cents
2011
cents
Basic (1.5) (2.4) (2.8)
Diluted (1.5) (2.4) (2.7)
There has been no change to previously reported retained
earnings, balance sheet amounts or cash flows, other than
consequential adjustments to the analysis of operating cash flows.
The Group has also adopted IAS 1 (Amendment) ‘Presentation
of Items of Other Comprehensive Income’, which changes
the grouping of items presented in the Group statement of
comprehensive income so that items which may be reclassified
to profit or loss in the future are presented separately from
items that will never be reclassified. The amendment affects
presentation only and has had no impact on the Group’s financial
position or performance.
In addition, with effect from 1 January 2013, the Group has
implemented IAS 28 (Amendment) ‘Investments in Associates
and Joint Ventures’, IFRS 10 ‘Consolidated Financial Statements’,
IFRS 11 ‘Joint Arrangements’, IFRS 12 ‘Disclosure of Interests in
Other Entities’ and IFRS 13 ‘Fair Value Measurement’. The adoption
of these standards has had no material impact on the Group’s
financial performance or position and there has been no
requirement to restate prior year comparatives. IFRS 13 has
resulted in new disclosures which are provided in note 24.
In accordance with IFRS 7 ‘Financial Instruments: Disclosures –
Offsetting Financial Assets and Financial Liabilities’ (Amendments
to IFRS 7) additional disclosures have been made in note 18
regarding the Group’s cash pooling arrangements.
Summary of significant accounting policies
Basis of preparation
The Consolidated Financial Statements of IHG have been prepared
in accordance with International Financial Reporting Standards
(IFRSs) as issued by the IASB and in accordance with IFRS
asadopted by the European Union (EU) and as applied in
accordance with the provisions of the Companies Act 2006.
IFRS as adopted by the EU differs in certain respects from IFRS
as issued by the IASB. However, the differences have no impact
on the Group’s Consolidated Financial Statements for the
years presented.
Presentational currency
The Consolidated Financial Statements are presented in millions
ofUS dollars following a management decision to change the
reporting currency from sterling during 2008. The change was made
to reflect the profile of the Group’s revenue and operating profit which
are primarily generated in US dollars or US dollar-linked currencies.
The currency translation reserve was set to nil at 1 January 2004
ontransition to IFRS and this reserve is presented on the basis
that the Group has reported in US dollars since this date.
Equity share capital, the capital redemption reserve and shares
held by employee share trusts are translated into US dollars at
the rates of exchange on the last day of the period; the resultant
exchange differences are recorded in other reserves.
Accounting policies
Group Financial Statements 111
OVERVIEW STRATEGIC REPORT GOVERNANCE
GROUP FINANCIAL STATEMENTS
PARENT COMPANY FINANCIAL STATEMENTS ADDITIONAL INFORMATION