Annual report and summary financial statements 2006 

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Parent company financial statements

Notes to the parent company financial statements

1 Accounting policies

Basis of accounting

The financial statements are prepared under the historical cost convention. They have been drawn up to comply with applicable accounting standards in the United Kingdom (UK GAAP). These accounts are for the Company and are not consolidated financial statements.

Fixed asset investments

Fixed asset investments are stated at cost less any provision for impairment.

Bank and other borrowings

Bank and other borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. Finance costs are charged to the profit and loss account using the effective interest rate method.

Borrowings are classified as due after more than one year when the repayment date is more than 12 months from the balance sheet date or where they are drawn on a facility with more than 12 months to expiry.

 

2 Employees and Directors

  2006 2005
Average number of employees (Non-Executive Directors) 8 8
  2006
m
2005
m
Staff costs 1

Detailed information on the emoluments, pensions, option holdings and shareholdings for each Director is shown in the Remuneration Report.

 

3 Investments

  m
At 1 January 2006 and 31 December 2006 2,767

The Company is the beneficial owner of all of the equity share capital of InterContinental Hotels Limited. The principal operating subsidiary undertakings of that company are listed in note 35 of the Group financial statements.

 

4 Debtors

  2006
m
2005
m
Amounts due from subsidiary undertakings 8 131
Corporate taxation 21 6
  29 137

 

5 Creditors: amounts falling due within one year

  2006
m
2005
m
Amounts due to subsidiary undertakings 1,624 1,086

 

6 Creditors: amounts falling due after more than one year

  2006
m
2005
m
Unsecured bank loan 102

The unsecured bank borrowings are under a 2009 £1.1bn Syndicated Facility. Covenants exist on this facility and as at the balance sheet date the Group and the Company were not in breach of these covenants.

 

7 Share capital

  Note Number of shares millions m
  1. On 1 June 2006, shareholders approved a share capital consolidation on the basis of seven new ordinary shares for every eight existing ordinary shares. This provided for all the authorised ordinary shares of 10p each (whether issued or unissued) to be consolidated into new ordinary shares of 11 3/7p each. The share capital consolidation became effective on 12 June 2006.
Authorised (ordinary shares):      
At 31 December 2005 (1,600,000,000 shares of 10p each)   1,600 160
Share capital consolidation a (200)
At 31 December 2006 (1,400,000,000 shares of 11 3/7p each)   1,400 160
Authorised (preference shares):      
One redeemable preference share (50,000)  
Allotted, called up and fully paid (ordinary shares):      
At 31 December 2005 (10p each)   433 43
Share capital consolidation a (53)
Issued under option schemes   4 1
Repurchase of shares   (28) (3)
At 31 December 2006 (11 3/7p each)   356 41

The aggregate consideration in respect of ordinary shares issued under option schemes during the year was £20m (2005 £6m).

Options to subscribe for ordinary shares thousands
At 31 December 2005 23,483
Exercised (8,754)
Lapsed or cancelled (485)
At 31 December 2006 14,244
Option exercise price per ordinary share (pence) 308.5–619.8
Final exercise date 4 April 2015

The authority given to the Company at the Annual General Meeting on 1 June 2006 to purchase its own shares was still valid at
31 December 2006. A resolution to renew the authority will be put to shareholders at the Annual General Meeting on 1 June 2007.

 

8 Movements in reserves

  Share premium account
m
Capital redemption reserve
m
Profit and loss account
m
At 31 December 2005 6 1 1,768
Premium on allotment of ordinary shares 19
Repurchase of shares (257)
Transfer to capital redemption reserve 3 (3)
Profit after tax 53
Dividends (561)
At 31 December 2006 25 4 1,000

 

9 Profit and dividends

Profit on ordinary activities after tax amounts to £53m (2005 loss of £851m).

A final dividend, declared in the previous year, of 10.7p per share was paid during the year, amounting to £46m (2005 £nil).

A special interim dividend of 118.0p per share was paid during the year, amounting to £497m.

An interim dividend of 5.1p (2005 4.6p) per share was paid during the year, amounting to £18m (2005 £20m).

A final dividend of 13.3p (2005 10.7p) per share, amounting to £47m (2005 £46m), is proposed for approval at the Annual General Meeting. The proposed final dividend is payable on shares in issue at 23 March 2007.

The audit fee for both years was borne by a subsidiary undertaking.

 

10 Contingencies

Contingent liabilities of £169m (2005 £446m) in respect of guarantees of the liabilities of subsidiaries have not been provided for in the financial statements.

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