Consolidated Financial Statements and Consolidated Management ...

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In 2011 and 2010, the fees for auditing of accounts and other services provided by the Group’s auditors, Deloitte, S.L. and other companies linked to the auditor through controlling interests, common ownership or management, as well as by the auditing firms of the different companies that comprise NH Hoteles Group are booked in this item, were as follows: 2011 Thousand euros Services billed Principal Auditor Others Total Auditing services 1,461 43 1,504 Other verification services 66 - 66 Total auditing and related services 1,527 43 1,570 Tax consulting services 143 - 143 Other services 620 - 620 Total services billed 2,290 43 2,333 2010 Thousand euros Services billed Principal Auditor Others Total Auditing services 1,040 496 1,536 Other verification services 111 - 111 Total auditing and related services 1,151 496 1,647 Tax consulting services 356 61 417 Other services 484 52 536 Total services billed 1,991 609 2,600 26.5. Operating leases At 31 December 2011 and 2010, the Group had made undertakings concerning future minimal rental instalments by virtue of operating non-cancellable lease agreements, which expire as set out in the table below. The current value of the rental instalments has been calculated by applying a discount rate in keeping with the Group’s weighted average cost of capital and includes the undertakings which NH Hoteles Group estimates will have to be covered in the future to guarantee a minimum return from hotels operated under a management agreement. Thousand euros 2011 2010 Less than one year 275,012 274,023 Between two and five years 1,067,708 1,018,604 More than five years 892,727 725,182 Total 2,235,447 2,017,809 The life of the operating lease agreements signed by the NH Hoteles Group ranges from five to thirty years. The agreements likewise include several methods to determine the rent to be paid. Essentially, the methods used to determine the rent can be reduced to fixed rents linked to the consumer price index; fixed rents complemented by a variable part, which is linked to the property’s operation; or completely variable rents which are determined by business performance during the year. In some cases, variable rents are set with a minimum profitability threshold for the owners of the property under operation. The breakdown by business unit of the current value of the rental instalments at 31 December 2011 is as follows: Less than one year Between two and five years More than five years Total Spain 90,683 360,421 281,199 732,303 Germany and Central Europe 101,734 380,741 328,623 811,098 Italy 44,713 182,760 123,211 350,684 Benelux 34,530 135,164 159,548 329,242 Latin America 3,352 8,621 147 12,120 Total 275,012 1,067,707 892,728 2,235,447 The breakdown by business unit of the current value of the rental instalments at 31 December 2010 is as follows: Less than one year Between two and five years More than five years Total Spain 88,498 350,460 260,279 699,237 Germany and Central Europe 106,680 383,879 254,007 744,566 Italy 44,003 157,597 96,050 297,650 Benelux 31,963 117,931 113,947 263,841 Latin America 2,879 8,736 900 12,515 Total 274,023 1,018,603 725,182 2,017,809 100 REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
26.6. Financial expenses and changes in fair value of financial instruments The breakdown of this item of the consolidated profit and loss account for 2011 and 2010 is as follows: Thousand euros 2011 2010 Expenses for interest 57,954 50,882 Financial expenses for means of payment 10,409 11,020 Other financial expenses 283 - Total financial expenses 68,646 61,902 Thousand euros 2011 2010 Sale option on Donnafugata Resort (Note 17) 231 492 Derivative financial instruments based on interest rate (2,644) (4,746) Remuneration Scheme 2007-2013 linked to listed value of shares 9,238 3,605 Total change in fair value of financial instruments 6,825 (649) 27. RELATED-PARTY TRANSACTIONS The main balances and transactions the Group performed in 2011 and 2010 with different related parties are as follows: Loans and accounts receivable not available for trading The composition of this item at 31 December 2011 and 2010 is as follows: Thousand euros 2011 2010 Loans to staff (Note 11.1) 6,123 14,458 Loans to joint ventures (Note 11.1): Residencial Marlin, S.L. - 14,960 Los Alcornoques de Sotogrande, S.L. - 1,077 Accounts receivable from joint ventures (Note 11.1): Los Alcornoques de Sotogrande, S.L. 4,469 4,469 Other accounts receivable from joint ventures 1,740 1,036 Current accounts with joint ventures: Residencial Marlin, S.L. - 698 Resco Sotogrande, S.L. 369 169 Loans to associated companies Harrington Hall Hotel, Ltd. 2,250 2,250 Corporación Hotelera Dominicana, S.A. 582 504 Sotocaribe, S.L. 1,520 685 Current accounts and interest with associated companies 2,144 6,211 Total 19,197 46,517 The “Credits to staff” item includes the financing amounting to 14.46 million euros granted to the Group’s directors in 1998 to purchase shares in the Parent Company. Part of said loan was redeemed in March 2011 through payment in lieu of the shares pledged in guarantee, as provided for contractually, thereby reducing the loan amount to 6.12 million euros. Said financing was converted into a loan in 2001 and sufficiently guaranteed at 31 December 2011. It grants the borrowers the entitlement to extend the term of the loans up to 30 April 2013 (see Note 11.1). These loans have accrued interest amounting to 70,000 euros this financial year. The “Loans to joint ventures” item reflects the proportional part (50%) of the participative subordinated loans granted by Sotogrande, S.A. to the companies Residencial Marlin, S.L. and Los Alcornoques de Sotogrande, S.L. for the acquisition of plots. On 6 May 2011 and 28 December 2011, the General Shareholders’ Meeting of Residencial Marlin, S.A. approved two increases of share capital which were partially subscribed by Sotogrande, S.A. by offsetting the participative loan it had granted to this company in accordance with an agreement signed by both parties on 14 July 2004. On 28 December 2011, the General Shareholders’ Meeting of Los Alcornoques de Sotogrande, S.A. also approved an increase of share capital which was partially subscribed by Sotogrande, S.A. by offsetting the participative loan it had granted to this company in accordance with an agreement signed by both parties on 26 December 2006. The “Accounts receivable from joint ventures - Los Alcornoques de Sotogrande, S.L.” item includes the outstanding balance from Los Alcornoques de Sotogrande, S.L., one of the Group’s joint ventures. The maturity of this outstanding balance is subject to approval of the new San Roque General Urban Zoning Plan. The “Other accounts receivable from joint ventures” item includes the current balance at 31 December 2011 for the services provided by Sotogrande, S.A. for the execution works, as well as the commission fees invoiced for the sale of apartments and retail outlets. The “Loans to associated companies- Harrington Hall Hotel Ltd.” item includes the subordinated loan granted by the Group to Harrington Hall Hotel Ltd. for the amount of 2,250,000 euros to refinance the entity’s financial debt prior to its acquisition (see Note 11.1). REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS 101
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Lamps which create a special atmosp
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ANNUAL REPORT 2011 CONSOLIDATED FIN
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10. INVESTMENTS VALUED USING THE EQ
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INDEPENDENT AUDITORS’ REPORT ON C
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End customers, who are even more de
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Revenue from Real Estate Activity,
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The level of consolidated net finan
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SUBSEQUENT DISCLOSURES The process
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A.3. Complete the following tables
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B. STRUCTURE OF THE COMPANY’S COR
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B.1.7. Identify, as applicable, the
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Process for determining the remuner
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For the purposes of this definition
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State and explain, as applicable, w
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Does the Appointments Committee not
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Explain the rules Article 14.2.e) o
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Committee name AUDIT COMMITTEE Shor
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C. RELATED-PARTY TRANSACTIONS C.1.
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D. RISK CONTROL SYSTEMS D.1. Genera
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The Audit Department therefore cont
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In any event, the website shall con
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E.10. State and explain the policie
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) The following decisions: i) The a
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23. All directors must be able to e
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