Consolidated Financial Statements and Consolidated Management ...

REPORT ON THE CONSOLIDATED
FINANCIAL STATEMENTS
NH HOTELES, S.A. AND SUBSIDIARIES
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR 2011
1. ACTIVITY AND COMPOSITION OF THE PARENT COMPANY
NH HOTELES, S.A. (hereinafter the Parent Company) was incorporated as a public limited company in Spain on 23 December 1881 under the trade
name “Material para Ferrocarriles y Construcciones, S.A.”, which was subsequently changed to “Material y Construcciones, S.A.” (MACOSA) and later to
“Corporación Arco, S.A.”
In 1992, Corporación Arco, S.A. took over Corporación Financiera Reunida, S.A. (COFIR), while at the same time adopting the trade name of the company
taken over and amending its corporate purpose to the new activity of the Parent Company, which focused on the management of its shareholding portfolio.
In 1998, Corporación Financiera Reunida, S.A. (COFIR) merged with Grupo Catalán, S.L. and its subsidiaries and Gestión NH, S.A. through the absorption
of these companies by the former. Subsequently, Corporación Financiera Reunida, S.A. (COFIR) took over NH Hoteles, S.A., adopted its trade name and
broadened its corporate purpose to allow for the direct performance of hotel activities, activities in which it had already been engaged indirectly through its
subsidiaries.
Information on these mergers can be found in the financial statements of the years in which said transactions took place.
In October 1999, a public takeover bid for 100% of the capital of Sotogrande, S.A. was launched, which has allowed the Company to hold a permanent
controlling interest exceeding 75%.
An essentially European expansion strategy was initiated in 2000 aimed at creating a strong global brand in the city hotel segment through the incorporation
of the Dutch hotel company “Krasnapolsky Hotels and Restaurants N.V.”, followed by the acquisition of the Mexican company “Nacional Hispana de Hoteles,
S.R.L de C.V.” in June 2001 and the purchase of the German hotel company “Astron Hotels” in 2002.
Between 2003 and 2005, the Group broke into different European markets, such as the Italian and Rumanian markets, as well as into new cities such as London,
through organic growth. It also entered the quality tourist sector, with a significant real estate component, in 2005 with projects in Cap Cana (Dominican
Republic) and the Mayan Riviera (Mexico).
Having consolidated acquisitions made in preceding periods, the Group continued its international expansion strategy in 2007 and 2008 through the
acquisition of the Italian Framon and Jolly Hotel chains.
The Group entered into an agreement with Grupo Inversor Hesperia, S.A. (hereinafter “Hesperia”) in 2009 to merge their respective hotel management
businesses. The Group thus came to manage forty-nine hotels owned or managed by Hesperia.
The Parent Company heads a group of subsidiary companies engaged in the same activity, which together with NH Hoteles, S.A. comprise NH Hoteles Group
(hereinafter the “Group” – see Annexes I, II and III).
At the end of 2011, NH Hoteles was operating hotels in twenty five countries, with 397 hotels and 59,052 rooms, of which around 82% are located in Spain,
Germany, Italy and the Benelux.
NH Hoteles, S.A. has its registered address in Madrid.
2. BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL
STATEMENTS AND CONSOLIDATION PRINCIPLES
2.1. Basis of presentation of the Financial Statements
The consolidated annual accounts for 2011 were drawn up by the Directors of NH Hoteles, S.A. at the Board meeting held on 29 March 2012 in accordance
with the legal framework that applies to the Group. Said framework is set forth in the Code of Commerce and business law, and in the International Financial
Reporting Standards (hereinafter IFRS) adopted by the European Union in accordance with Regulation (EC) No. 1606/2002 of the European Parliament
and in Act 62/2003 of 30 December on Fiscal, Administrative and Social Measures, and as such present a true image of the Group’s equity and financial
situation at 31 December 2011 and of the results of Group’s transactions, changes in equity and cash flows during the financial year ending on said date.
The process of refinancing NH Hoteles Group came to an end on 20 April 2012 (see Note 30). This refinancing substantially modifies the Group’s financing
structure. The Parent Company’s Directors therefore took the decision to reformulate its annual accounts for 2011 at the Board of Directors meeting held
on 25 April 2012.
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS 65