HSBC 2006 Annual Report Download - page 396

394
HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Notes 39 and 40
2004
Other reserves
Called up share capital
Share premium
Retained earnings1
Foreign exchange reserve2
Share- based payment reserve
Merger reserve3
Total share- holders’ equity
Minority interests
Total equity
US$m US$m US$m US$m US$m US$m US$m US$m US$m
At 1 January ......................................................................................................................... 5,481 4,406 41,673 – 1,130 21,058 73,748 11,105 84,853
Shares issued/redeemed in connection with the HSBC Finance 8.875 per cent
Adjustable Conversion-Rate Equity Security Units ....................................................... 1 – – – (1) – – – –
Shares issued under employee share plans .......................................................................... 25 555 – – – – 580 – 580
Shares issued in lieu of dividends and amounts arising thereon ......................................... 80 (80) 2,607 – – – 2,607 – 2,607
Profit for the year ................................................................................................................. – – 12,918 – – – 12,918 1,340 14,258
Dividends to shareholders ................................................................................................... – – (6,914) – – – (6,914) (1,194) (8,108)
Own shares adjustment ........................................................................................................ – – (842) – 235 – (607) – (607)
Actuarial gains/(losses) on defined benefit plans ............................................................... – – (709) – – – (709) (22) (731)
Exchange differences .......................................................................................................... – – – 3,215 – – 3,215 505 3,720 Charge to the income statement in respect of equity settled share-based payments .......... – – – – 450 – 450 – 450 Exercise of HSBC share awards .......................................................................................... – – 380 – (465) – (85) – (85)
Tax on items taken directly to or transferred from equity .................................................. – – 319 – – – 319 – 319
Net increase in minority interest on acquisitions, disposals and capital issuance .............. – – – – – – – 1,941 1,941
At 31 December ................................................................................................................... 5,587 4,881 49,432 3,215 1,349 21,058 85,522 13,675 99,197 1 Retained earnings include 36,255,999 (US$1,424 million) of own shares held within HSBC’s insurance business, its retirement funds for the benefit of policyholders or beneficiaries within employee trusts
for the settlement of shares expected to be delivered under employee share schemes or bonus plans, and the market-making activities in Global Markets.
2 Net exchange differences arising on the retranslation of amounts recognised in ‘Retained earnings’.
3 Statutory share premium relief under Section 131 of the Companies Act 1985 was taken in respect of the acquisition of HSBC Bank plc in 1992, HSBC France in 2000 and HSBC Finance Corporation 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 HSBC France and US$12,768 million in
respect of HSBC Finance Corporation is a merger reserve.
Cumulative goodwill amounting to US$5,138 million has been charged against reserves in respect of acquisitions of subsidiaries prior to 1 January 1998, including US$3,469 million charged against the merger reserve arising on the acquisition of HSBC Bank plc. The balance of US$1,669 million has been charged against retained earnings.