HSBC 2001 Annual Report Download - page 221

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In 1999, HSBC established a qualifying employee share ownership trust (QUEST) to operate in conjunction with the
Savings-Related Share Option Plan by acquiring shares in HSBC Holdings and using them to satisfy share options.
The HSBC QUEST has subscribed at market value for 3,343,173 ordinary shares at a total cost of US$39 million
(2000: US$388 million). HSBC provided US$nil (2000: US$324 million) for this purpose.
8,774,315 ordinary shares (2000: 23,412,488 shares) were transferred from the HSBC QUEST to participants in
HSBC’ s Savings-Related Share Option Plan in the UK on exercise of their options. US$39 million (2000: US$64
million) was received from the share option plan participants. The price paid by option holders, ranged from £1.806
to £6.7536 (2000: £1.806 to £6.0299) per ordinary share of US$0.50.
At 31 December 2001, the trust held 4,905,939 ordinary shares (2000: 10,337,081 shares) of US$0.50 with a market
value of US$57,308,030 (2000: US$151,905,628) in respect of these options. Dividends on these shares are waived
by the QUEST.
HSBC has taken advantage of the exemptions applicable to Inland Revenue approved SAYE share option schemes
and equivalent overseas schemes under Urgent Issues Task Force Abstract 17 (revised 2000) ‘Employee share
schemes’ .
37 Analysis of total assets and total liabilities
(a) Assets subject to sale and repurchase transactions
2001 2000
US$m US$m
Total assets subject to sale and repurchase transactions ................................... 28,973 18,352
(b) Assets leased to customers
2001 2000
US$m US$m
Loans and advances to customers ..................................................................... 7,523 6,934
Tangible fixed assets – equipment on operating leases (Note 25(a))................ 2,666 2,721
10,189 9,655
The cost of assets acquired during 2001 for letting to customers under finance leases and hire purchase contracts
by HSBC amounted to US$4,097 million (2000: US$3,203 million).
(c) Assets charged as security for liabilities
HSBC has pledged assets as security for liabilities included under the following headings:
Amount of liability secured
2001 2000
US$m US$m
Deposits by banks ............................................................................................. 290 260
Customer accounts............................................................................................ 5,371 4,903
Debt securities in issue ..................................................................................... 1,692 3,090
Other liabilities ................................................................................................. 3,175 3,544
10,528 11,797
The amount of assets pledged to secure these amounts is US$32,757 million (2000: US$30,432 million). This is
mainly made up of items included in ‘Debt securities’ and ‘Treasury bills and other eligible bills’ of US$30,682
million (2000: US$26,466 million).