HSBC 2005 Annual Report Download - page 334

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
332
HSBC Holdings
Transactions and balances during the year with subsidiaries were as follows:
2005 2004
Highest
balance during
the year1
Balance at
31 December1
Highest
balance during
the year
1
Balance at
31 December1
Subsidiaries US$m US$m US$m US$m
Assets
Cash at bank ................................................................ 756 756 1,409 246
Derivatives ................................................................... 1,795 968 1,643 1,643
Loans and advances ..................................................... 17,282 14,092 16,636 16,636
Financial investments .................................................. 6,240 3,256 1,885 1,885
Investments in subsidiaries .......................................... 58,038 58,038 55,668 55,668
Total related party assets .............................................. 84,111 77,110 77,241 76,078
Liabilities
Amounts owed to HSBC undertakings ........................ 7,352 4,075 7,352 7,352
Derivatives ................................................................... 286 286 38 10
Subordinated liabilities:
– cost ....................................................................... 3,997 3,786 8,143 8,143
– fair value ............................................................... 4,498 4,055 ––
Total related party liabilities ........................................ 16,133 12,202 15,533 15,505
Contingent liabilities and commitments ...................... 41,455 36,877 40,789 40,708
1 The disclosure of the year-end balance and the highest balance during the year is considered the most meaningful information to
represent transactions during the year.
The above outstanding balances arose from the ordinary course of business and are on substantially the same terms,
including interest rates and security, as for comparable transactions with third party counterparties, except for
US$3,296 million of loans and advances to subsidiaries and US$3,235 million of loans from HSBC undertakings to
HSBC Holdings made at an agreement of zero per cent interest.
44 Events after the balance sheet date
A fourth interim dividend of US$3,513 million (US$0.31 per share) (2004: US$3,007 million, US$0.27 per share)
was declared after 31 December 2005 and is subject to approval by the shareholders at the Annual General Meeting.
On 6 March 2006, the Board of Directors authorised the financial statements for issue.
45 UK and Hong Kong accounting requirements
The financial statements have been prepared in accordance with IFRSs. There would be no material differences had
they been prepared in accordance with Hong Kong Accounting Standards.
46 Transition to IFRSs
HSBC’s reported financial position, financial performance and cash flows have been affected by the transition from
UK GAAP to IFRSs. The transition has not affected HSBC’s net cash flows nor the underlying economics of its
businesses, though the periods in which certain income and expenses are recognised have changed.
HSBC has taken advantage of the section in IFRS 1 that exempts companies from presenting comparative
information in accordance with IAS 32, IAS 39 and IFRS 4. The transitional adjustments are therefore set out in two
stages: those relating to the restatement of 2004 comparative financial information (Notes (a) to (d) below), and those
taking effect from 1 January 2005 (Notes (e) and (f)).
(a) Transitional exemptions adopted by HSBC in addition to the exemption from restating comparative information
in accordance with IAS 32, IAS 39 and IFRS 4.
(b) Key impact analysis of IFRSs on the financial position at 31 December 2004, and financial performance and
cash flows for the year ended 31 December 2004. The most significant effects of the transition to IFRSs on