HSBC 2003 Annual Report Download - page 258

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
256
6 Loss from foreign currency redenomination in Argentina
The Argentine Government have issued and propose to issue bonds as compensation to the banks (including HSBC)
who suffered losses as a result of the original redenomination. Certain of these bonds will be issued in exchange for
Argentine Government loans which have been fair valued accordingly. The net effect of these transactions largely
offset losses in 2003 which arose from continued repayment of certain deposits historically denominated in US
dollars at current market rates rather than the pesification rates specified by the Argentine Government.
The losses in 2002 related to the further impact of pesification including revisions to government decrees,
renegotiation of banking contracts, and payments made to certain customers who had obtained court orders requiring
HSBC to repay their deposits historically denominated in US dollars at the then current market rates rather than the
pesification rate specified by the Argentine Government. The loss of US$520 million in 2001 arose on the
redenomination by the Argentine Government of certain in-country US dollar assets and liabilities into pesos at
various mandatory but different rates of exchange.
7 Profit on ordinary activities before tax
Profit on ordinary activities before tax is stated after:
2003 2002 2001
US$m US$m US$m
Income
Aggregate rentals receivable under
– finance leases and hire purchase contracts ............................................. 3,279 2,502 3,458
– operating leases ..................................................................................... 553 490 465
Income from listed investments ................................................................. 4,276 4,361 4,761
Profits less losses on debt securities and equities dealing ........................... 294 19 348
Gains on disposal of investment securities ................................................. 396 405 475
Charges
Charges incurred with respect to subordinated liabilities ........................... 958 862 1,074
Finance charges in respect of finance leases and similar hire purchase
contracts ................................................................................................ 38 36 27
Hire of plant and machinery ....................................................................... 110 81 90
Rentals payable on premises held under operating leases ........................... 773 548 516
Gains on the disposal of investments and tangible fixed assets attracted a tax charge of US$84 million (2002:
US$86 million; 2001: US$114 million). Of the after-tax amount, US$23 million (2002: US$23 million; 2001:
US$18 million) is attributable to minority interests.