HSBC 2003 Annual Report Download - page 300

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
298
HSBC1HSBC
Holdings1Associates
US$m US$m US$m
Other reserves
Reserve in respect of obligations under CCF share options:
At 1 January 2001 ......................................................................................... 496 496 –
On exercise of CCF share options ................................................................. (16
)
(16
)
–
At 31 December 2001 ................................................................................... 480 480 –
Merger reserve:
At 1 January and 31 December 2001 ............................................................ 8,290 – –
Total other reserves ............................................................................................... 8,770 480 –
Revaluation reserves
Investment property revaluation reserve:
At 1 January 2001 ......................................................................................... 289 – 53
Unrealised deficit on revaluation of land and buildings ................................ (23
)
–(5
)
Transfer from revaluation reserve ................................................................. 8 – –
Exchange and other movements ................................................................... (5
)
–(2
)
At 31 December 2001 ................................................................................... 269 – 46
Revaluation reserve:
At 1 January 2001 ......................................................................................... 2,322 32,165 10
Realisation on disposal of properties ............................................................ (7
)
––
Unrealised deficit on revaluation of properties ............................................. (227
)
(3
)
–
Transfer of depreciation from profit and loss account reserve ...................... (54
)
––
Transfer to investment property revaluation reserve ..................................... (8
)
–(4
)
Net increase in attributable net assets of subsidiary undertakings ................. – 247 –
Exchange and other movements ................................................................... (24
)
27 –
At 31 December 2001 ................................................................................... 2,002 32,436 6
Total revaluation reserves ..................................................................................... 2,271 32,436 52
Profit and loss account
At 1 January 2001 ............................................................................................. 27,018 5,604 189
Retained profit/(loss) for the year ..................................................................... 525 (1,185
)
39
Revaluation reserve realised on disposal of properties ...................................... 7 – –
Arising on shares issued in lieu of dividends .................................................... 866 866 –
Transfer of depreciation to revaluation reserve ................................................. 54 – –
Amortisation of shares in restricted share plans................................................. 25 7
Exchange and other movements ........................................................................ (1,213
)
–27
At 31 December 2001 ....................................................................................... 27,282 5,292 255
1Figures for 2002 and 2001 have been restated to reflect the adoption of UITF Abstracts 37 ‘Purchases and sales of own shares’, and
38 ‘Accounting for ESOP trusts’, details of which are set out in Note 1.
The accumulated foreign exchange translation adjustment as at 31 December 2003 increased HSBC’ s reserves by
US$5,729 million (2002: increased by US$411 million; 2001: reduced by US$3,370 million).
Cumulative goodwill amounting to US$5,138 million (2002: US$5,138 million; 2001: US$5,138 million) has been
charged against reserves in respect of acquisitions of subsidiary undertakings prior to 1 January 1998.
Statutory share premium relief under Section 131 of the Companies Act 1985 was taken in respect of the acquisition
of CCF in 2000 and Household in 2003 and the shares issued were recorded at their nominal value only. In HSBC’s
consolidated accounts the fair value difference of US$8,290 million in respect of CCF and US$12,768 million in
respect of Household was transferred to a merger reserve, as a consequence of which, most of the net asset value
(including goodwill) of Household is reflected in the reserve of HSBC Holdings in the revaluation reserve.
Many of HSBC’ s banking subsidiary undertakings, joint ventures and associates operate under local regulatory
jurisdictions which could potentially restrict the amount of reserves which can be remitted to HSBC Holdings plc in
order to maintain local regulatory capital ratios. In addition, the remittance of reserves may result in further taxation
liabilities.