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OVERVIEW BUSINESS REVIEW
THE BOARD,
SENIOR MANAGEMENT AND
THEIR RESPONSIBILITIES
GROUP FINANCIAL
STATEMENTS
PARENT COMPANY
FINANCIAL STATEMENTS USEFUL INFORMATION
15. Other financial assets
2010 2009
$m $m
Non-current
Equity securities available-for-sale 87 66
Other 48 64
135 130
Current
Equity securities available-for-sale – 5
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 2010, $3m (2009 $2m) were listed
securities and $84m (2009 $69m) unlisted; $41m (2009 $39m) were denominated in US dollars, $17m (2009 $14m) in Hong Kong dollars
and $29m (2009 $18m) 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 valuation guidelines issued by the British Venture Capital
Association and is based on assumptions regarding expected future earnings. Listed equity share valuation is based on observable market
prices. Dividend income from available-for-sale equity securities of $8m (2009 $7m) is reported as other operating income and expenses
in the Group income statement.
Other financial assets consist of trade deposits and restricted cash. These amounts have been designated as ‘loans and receivables’ and
are held at amortised cost. Restricted cash of $42m (2009 $47m) 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:
2010 2009
$m $m
At 1 January (25) (11)
Provided – exceptional items (note 5) (1) (14)
At 31 December (26) (25)
The amounts provided as exceptional items relate to available-for-sale equity investments and have arisen as a result of significant and
prolonged declines in their fair value below cost. In 2009, a deposit of $26m was also written off directly to the income statement as an
exceptional item (see note 5) as it is no longer considered recoverable under the terms of the related management contracts which are
deemed onerous.
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.
16. Inventories
2010 2009
$m $m
Finished goods 2 2
Consumable stores 2 2
4 4
Notes to the Group financial statements 89