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b Includes cash bonus based on amount accrued during the year, to be paid in the following year Amount under 500,000
44.4 Share options granted to the Bank’s directors and key management personnel No share options were granted to the Bank’s directors and key management personnel during the financial year. The
outstanding number of share options granted to the Bank’s directors and key management personnel at the end of the financial year were 888,225 and 1,127,550 2005: 888,225 and 1,645,550 respectively.
44.5 Performance shares granted to the Bank’s directors and key management personnel During the financial year, 240,740 and 271,390 2005: 204,080 and 209,620 awards in respect of DBSH ordinary
shares were granted to the Bank’s directors and key management personnel respectively. The awards represented a 100 payout. The payout at the end of the performance period could have ranged from a minimum of 100 of the
shares awarded to 200, depending on the Bank Group’s performance as measured by return on equity.
44.6 Income received and expenses paid to related parties
Bank In millions
2006 2005 Income received from:
-Subsidiaries
a
72 89
-Associatesjoint ventures
1 5
Total 73
94
Expenses paid to:
-Subsidiaries
a
233 158
-Subsidiaries of DBSH -Associatesjoint ventures
5 8
Total 238
166
Amount under 500,000 a
Includes special purpose entities
44.7 Amounts due to and from related parties
Bank In millions
2006 2005 Amounts due from:
-Subsidiaries
a
486 595
-Associatesjoint ventures Total
486 595
Amounts due to:
-DBSH 201
59 -Subsidiaries
a
4,537 2,934
-Subsidiaries of DBSH 5
-Associatesjoint ventures Total
4,738 2,998
Amount under 500,000 a
Includes special purpose entities
44.8 Loans and guarantees to related parties Loans granted to subsidiaries amounted to 1,127 million 2005: 257 million and will be settled in cash. Loans granted
from subsidiaries to the Bank amounted to Nil million 2005: 51 million and will be settled in cash. No expense has been recognised in the period for bad or doubtful debts in respect of amounts owed by subsidiaries.
Guarantees granted to and from subsidiaries amounted to 697 million 2005: 1 million and 6 million 2005: 41 million respectively.
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45 Financial Assets and Liabilities not carried at fair value
For financial assets and liabilities not carried at fair value on the financial statements, the Bank Group has ascertained that their fair values were not materially different from the carrying amounts at year-end. The basis of arriving at their fair
value is as follows: a
Cash and balances with central banks and Due from banks
The estimated fair value of placements is based on the discounted cash flows using the prevailing money market interest rates for placements with similar credit risk and remaining maturity.
b Financial
investments
For equities where market price information is not available, fair value has been estimated by reference to the net tangible asset backing of the investee. As at 31 December 2006, unquoted equities of 133 million 2005: 105 million
for the Bank Group, and 125 million 2005: 97 million for the Bank, were stated at cost because the fair values cannot be reliably estimated using valuation techniques supported by observable market data.
c
Loans and advances to customers
The estimated fair value takes into account the relevant market interest rates and credit spread by product types. d
Due to banks and Due to non-bank customers
The estimated fair value of deposits with no stated maturity, which includes non-interest-bearing deposits, is the amount repayable on demand. The estimated fair value of fixed interest-bearing deposits and other borrowings is based on
discounted cash flows using prevailing interest rates with similar remaining maturity. e
Other debt securities issued and bills payable
The fair value approximates their carrying amounts. f
Subordinated term debts
The estimated fair value of subordinated term debts is based on a discounted cash flow model using a current yield curve appropriate for the remaining term to maturity.
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46 Financial Instruments – Usage and Risk Management
46.1 Use of financial instruments
