HSBC 2008 Annual Report Download - page 410

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Notes 21 and 22
408
30 September 2008, taking into account changes in the subsequent period from 1 October 2008 to 31 December 2008
that would have materially affected their results.
HSBC also has a 100 per cent interest in the issued preferred stock (less than US$1 million) of Wells Fargo HSBC
Trade Bank, N.A. HSBC has a 40 per cent economic interest in Wells Fargo HSBC Trade Bank, N.A. by virtue of the
joint agreement under which HSBC’s equity capital and preferred stock interests are being held.
HSBC’s investment in Financiera Independencia S.A.B. de C.V. was equity accounted with effect from June 2006,
reflecting HSBC’s significant influence over this associate. HSBC’s influence results from representation on the
Board of Directors. HSBC disposed of its equity interest in Financiera Independencia on 25 November 2008.
HSBC acquired 15 per cent of Vietnam Technological & Commercial Joint Stock Bank in October 2007. This
investment was equity accounted from that date due to HSBC’s representation on the Board of Directors and
involvement in the Technical Support and Assistance Agreement. In December 2007, as a result of a rights issue in
which HSBC did not participate, HSBC’s equity interest was diluted to 14.44 per cent. In September 2008, HSBC
increased its equity interest to 20 per cent.
HSBC acquired 13.95 per cent of VocaLink in June 2007. This investment was equity accounted from that date,
reflecting HSBC’s significant influence over that entity arising from representation on the Board of Directors and
transactions with the associate.
During 2007, certain HSBC associates issued new shares which HSBC did not subscribe for. As a result, its interests
in the associates’ equity decreased. The resulting gains from dilution of the Group’s interest in the associates are
described in Note 4.
Principal interests in joint ventures
At 31 December 2008
Country of
incorporation
Principal
activity
HSBC’s interest
in equity
capital
Issued
equity
capital
HSBC Saudi Arabia Limited ............................. Saudi Arabia Investment banking 60.00% SR50m
Vaultex UK Limited .......................................... England Cash management 50.00% £10m
Hana HSBC Life Insurance Co., Ltd ................. South Korea Insurance manufacturing 49.99% KRW120,402m
Canara HSBC Oriental Bank of Commerce
Life Insurance Company Limited ................. India Insurance manufacturing 26.00% INR5,250m
Summarised aggregate financial information on joint ventures
2008 2007
US$m US$m
HSBC’s share of:
– current assets .............................................................................................................................. 594 448
– non-current assets ....................................................................................................................... 281 76
– current liabilities ......................................................................................................................... 260 397
– non-current liabilities ................................................................................................................. 449 46
– income ........................................................................................................................................ 301 339
– expenses ...................................................................................................................................... 240 302
Goodwill included in carrying amount of associates and joint ventures
2008 2007
US$m US$m
Gross amount
At 1 January .......................................................................................................................................... 1,308 1,172
Additions .............................................................................................................................................. 88 203
Disposals ............................................................................................................................................... (46) (29)
Exchange differences ............................................................................................................................ 86 90
Other changes ....................................................................................................................................... 17 (128)
At 31 December .................................................................................................................................... 1,453 1,308
Included in the above total, the carrying amount of goodwill arising from joint ventures was US$39 million
(2007: nil).