Holiday Inn 2015 Annual Report Download - page 140

Notes to the Group Financial Statements continued
29. Capital and other commitments
2015
$m
2014
$m
Contracts placed for expenditure not provided for in the Group Financial Statements:
Property, plant and equipment 29 70
Intangible assets 47 47
76 117
The Group has also committed to invest in a number of its associates, with an estimated outstanding commitment of $45m at 31 December 2015
(2014: $89m) based on current forecasts.
30. Contingencies and guarantees
At 31 December 2015, the Group had no contingent liabilities (2014: $nil).
In limited cases, the Group may provide performance guarantees to third-party hotel owners to secure management contracts. At 31 December
2015, the amount provided in the Financial Statements was $1m (2014: $2m) and the maximum unprovided exposure under such guarantees was
$13m (2014: $29m).
At 31 December 2015, the Group had outstanding letters of credit of $37m (2014: $40m) mainly relating to self insurance programmes.
The Group may guarantee loans made to facilitate third-party ownership of hotels in which the Group has an equity interest. At 31 December
2015, there were guarantees of $30m in place (2014: $20m).
In connection with the Barclay associate (see note 14), the Group has provided an indemnity to its joint venture partner for 100% of the obligations
related to a $43m supplemental bank loan made to the Barclay associate on 31 December 2015.
From time to time, the Group is subject to legal proceedings the ultimate outcome of each being always subject to many uncertainties inherent
in litigation. In particular, the Group is currently subject to a claim by Pan American Life Insurance Company and a class action lawsuit in the
US (see ‘Legal proceedings’ on page 164). The Group has also given warranties in respect of the disposal of certain of its former subsidiaries.
It is the view of the Directors that, other than to the extent that liabilities have been provided for in these Financial Statements, it is not possible
to quantify any loss to which these proceedings or claims under these warranties may give rise, however, as at the date of reporting, the Group
does not believe that the outcome of these matters will have a material effect on the Group’s financial position.
31. Related party disclosures
2015
$m
2014
$m
2013
$m
Total compensation of key management personnela
Short-term employment benefits 19.5 21.5 20.7
Contributions to defined contribution pension plans 0.7 0.7 0.8
Equity compensation benefits 6.2 7.9 8.1
26.4 30.1 29.6
a In 2014, excludes ICETUS cash-out payment of £9.4m.
There were no other transactions with key management personnel during the years ended 31 December 2015, 2014 or 2013.
Key management personnel comprises the Board and Executive Committee.
Related party disclosures for associates and joint ventures are as follows:
Associates Joint ventures Total
2015
$m
2014
$m
2013
$m
2015
$m
2014
$m
2013
$m
2015
$m
2014
$m
2013
$m
Revenue from associates and joint ventures 344 ––– 344
Loans to associates 73– ––– 73–
Other amounts owed by associates
and joint ventures 211 2 ––– 211 2
During the year, short-term advances of $22m were made to the Barclay associate which were repaid on 31 December 2015.
In addition, loans both to and from the Barclay associate of $237m (2014: $237m) are offset in accordance with the provisions of IAS 32 and
presented net in the Group statement of financial position. Interest payable and receivable under the loans is equivalent (average interest rate
of 1.7% in 2015 (2014: 1.8%)) and presented net in the Group income statement.
138 IHG Annual Report and Form 20-F 2015