HSBC 2008 Annual Report Download - page 383

381
2008 2007
Number
Exercise
price Number
Exercise
price
(000s) € (000s) €
Outstanding at 1 January .............................................. 604 142.5 648 142.5
Exercised in the year ..................................................... – 142.5 (42) 142.5
Outstanding and exercisable at 31 December .............. 604 142.5 604 142.5
The weighted average share price at the date the share options were exercised was nil (2007: US$18.08). The
remaining contractual life for options outstanding at the balance sheet date was 1.3 years (2007: 2.3 years).
At the date of its acquisition in 2000, certain of HSBC France’s subsidiary companies also operated employee share
option plans under which options could be granted over their respective shares. On exercise of certain of these
options, the subsidiary shares are exchanged for HSBC ordinary shares. The total number of HSBC ordinary shares
exchanged under such arrangements in 2008 was 12,810 (2007: 113,240).
HSBC Finance
Upon acquisition, HSBC Finance share options previously granted were converted to share options over HSBC
ordinary shares of US$0.50 each at a rate of 2.675 HSBC share options (the same ratio as the Exchange Offer for
HSBC Finance) for each HSBC Finance share option. Options granted under HSBC Finance’s own share option
schemes prior to the announcement of the acquisition by HSBC in November 2002 vested as options over HSBC
shares upon acquisition by HSBC. Options granted after the announcement of the acquisition in November 2002 but
prior to its completion on 28 March 2003 generally vest equally over four years and expire ten years from the date of
grant.
2008 2007
Number
Exercise
price Number
Exercise
price
(000s) US$ (000s) US$
Outstanding at 1 January .............................................. 2,455 10.66 3,126 10.66
Exercised in the year ..................................................... (12) 10.66 (671) 10.66
Expired in the year ........................................................ (41) 10.66 – 10.66
Outstanding and exercisable at 31 December .............. 2,402 10.66 2,455 10.66
The weighted average share price at the date the share options were exercised was US$14.65 (2007: US$18.08). The
remaining contractual life for options outstanding at the balance sheet date was 3.9 years (2007: 4.9 years).
11 Tax expense
2008 2007 2006
US$m US$m US$m
Current tax
UK corporation tax charge – on current year profit ........................................ 1,738 1,372 772
UK corporation tax charge – adjustments in respect of prior years ................ (67) (46) (122)
Overseas tax – on current year profit .............................................................. 1,732 3,976 4,600
Overseas tax – adjustments in respect of prior years ...................................... (29) (97) (48)
3,374 5,205 5,202
Deferred tax
Origination and reversal of temporary differences ......................................... (504) (1,247) (51)
Effect of changes in tax rates ........................................................................... (89) (35) –
Adjustments in respect of prior years .............................................................. 28 (166) 64
(565) (1,448) 13
Tax expense ..................................................................................................... 2,809 3,757 5,215
The UK corporation tax rate applying to HSBC Holdings and its subsidiaries changed from 30 per cent to 28 per cent
with effect from 1 April 2008 (2007: 30 per cent; 2006: 30 per cent). Overseas tax included Hong Kong profits tax of
US$846 million (2007: US$1,137 million; 2006: US$751 million). The Hong Kong tax rate applying to the profits of
subsidiaries assessable in Hong Kong changed from 17.5 per cent to 16.5 per cent with effect from 1 January 2008