HSBC 2009 Annual Report Download - page 468

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Notes 40, 41 and 42
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further terms. Lessees may participate in any sales proceeds achieved. Lease rentals arising during the lease terms
will either be fixed in quantum or be varied to reflect changes in, for example, tax or interest rates. Rentals are
calculated to recover the cost of assets less their residual value, and earn finance income.
2009 2008
Total future
minimum
payments
Unearned
finance
income
Present
value
Total future
minimum
payments
Unearned
finance
income
Present
value
US$m US$m US$m US$m US$m US$m
Lease receivables:
– no later than one year ...... 2,874 (328) 2,546 3,013 (389) 2,624
– later than one year and
no later than five years .... 9,525 (1,061) 8,464 8,783 (1,186) 7,597
– later than five years ......... 6,902 (1,737) 5,165 8,114 (2,334) 5,780
19,301 (3,126) 16,175 19,910 (3,909) 16,001
At 31 December 2009, unguaranteed residual values of US$230 million (2008: US$197 million) had been accrued,
and the accumulated allowance for uncollectible minimum lease payments receivable amounted to US$21 million
(2008: US$21 million).
During the year, no contingent rents were received (2008: US$10 million) and recognised in the income statement.
Operating lease receivables
HSBC leases a variety of different assets to third parties under operating lease arrangements, including transport
assets (such as rolling stock), property and general plant and machinery.
2009 2008
Land and
buildings Equipment
Land and
buildings Equipment
US$m US$m US$m US$m
Future minimum lease payments under
non-cancellable operating leases:
– no later than one year ....................................................... 37 857 37 678
– later than one year and no later than five years ............... 21 917 31 625
– later than five years .......................................................... 23 447 21 110
81 2,221 89 1,413
At 31 December 2009, future minimum sublease payments of US$21 million (2008: nil) are expected to be received
under non-cancellable subleases at the balance sheet date.
41 Rights issue
On 2 March 2009, HSBC Holdings announced its proposal to raise £12.5 billion (US$17.8 billion), net of expenses,
by way of a fully underwritten rights issue. Under the proposal, HSBC offered its shareholders the opportunity to
acquire 5 new ordinary shares for every 12 ordinary shares at a price of 254 pence per new ordinary share. For
shareholders on the Hong Kong and Bermuda Overseas Branch Registers this offer was expressed in Hong Kong
dollars and US dollars, respectively, fixed at published exchange rates on 27 February 2009. The proposal was
subject to authorisation by the shareholders which was obtained at a general meeting held on 19 March 2009. The
offer period commenced on 20 March 2009 and closed for acceptance on 3 April 2009. Dealing in the new shares
began on 6 April 2009.
For details of called-up share capital and other equity instruments see Note 37.
Merger reserve
As part of the arrangement for the rights issue, HSBC Holdings entered into a share-for-share exchange with
Chinnery Limited, thereby availing itself of Statutory Share Premium Relief under Section 612 of the Companies Act
2006. The nominal value of the new shares issued was credited to share capital and the remaining consideration was
credited to the merger reserve and translated into US dollars at the foreign exchange rate on that date.