DBS Annual Report 2015 144
32 Other Equity Instruments
The Group The Company
In millions 2015 2014 2015 2014
S805m 4.70 Non-Cumulative Non-Convertible Perpetual Capital 803 803 803 803
Securities First Callable in 2019 Total
803 803 803 803
The Capital Securities are non-cumulative non-convertible perpetual capital securities and qualify as Additional Tier 1 Capital under the Monetary Authority of Singapore MAS Notice on Risk Based Capital Adequacy Requirements for Banks Incorporated in Singapore MAS
Notice 637 on the basis that the Company is subject to the application of MAS Notice 637.
The Capital Securities are subordinated to all liabilities of the Company and senior only to shareholders of the Company. They do not have any voting rights. They are first callable at the option of the Company on 3 June 2019, subject to regulatory approval. Their terms include a write-
down feature that is triggered if and when MAS notifies the Company that without the write-off of the principal, partially or in full, or a public sector injection of capital or equivalent support, it considers that the Company or the Group would become non-viable. In addition to the first
call in June 2019, the terms permit redemption for a change in qualification event and for taxation reasons.
The Capital Securities yield 4.70 per annum up to the first call date, 3 June 2019. If not called, the distribution rate resets every 5 years to the then applicable five-year Swap Offer Rate plus 3.061 per annum. Distributions are paid semi-annually in June and December.
The non-cumulative distributions may only be paid out of distributable reserves and may be cancelled at the option of the Company. As long as any distribution on the Capital Securities has not been made, certain restrictions are placed on the distributions and redemptions that may
be made by the Group on parity obligations and junior obligations as defined in the terms governing the Capital Securities.
For more information on each instrument, please refer to the “Capital Disclosures” section at the Group’s website http:www. dbs.cominvestorcapital-disclosures.html unaudited.
33 Other Reserves and Revenue Reserves
33.1 Other reserves
The Group The Company
In millions 2015 2014 2015 2014
Available-for-sale revaluation reserves 96 284
– –
Cash flow hedge reserves 8 33 –
– General reserves
2,453 2,453 –
– Capital reserves
213 233 –
– Share option and share plan reserves
168 152 168 152
Others 4,193 4,271
– –
Total 6,705 6,894
168 152
Financial statements 145
Movements in other reserves during the year are as follows:
The Group Available-
Share for-sale
Cash flow
option and
revaluation hedge
General Capital
share plan
Other In millions
reserves reserves
reserves
a
reserves
b
reserves reserves
c
Total
2015 Balance at 1 January
284 33 2,453 233 152 4,271 6,894
Net exchange translation 1 1 –
19 – – 21
adjustments Share of associates’ reserves
1 2 – 1 – – 2
Cost of share-based payments – – – –
103 – 103
Reclassification of reserves upon – – – – 1 – 1
exercise of share options Draw-down of reserves upon
– – – – 86 –
86
vesting of performance shares Acquisition of non-controlling
– – – – – 78
78
interest Note 22.1.1 Available-for-sale financial
assets and
others: – net valuation taken to equity
74 144 – – – –
218
– transferred to income statement 125
186 – – – – 61
– tax on items taken directly to 11 4 – – – – 7
or transferred from equity Balance at 31 December
96 8 2,453 213 168 4,193 6,705
2014 Balance at 1 January
30 14
2,453 324
136 4,271
6,492 Net
exchange translation
– – – 91 – –
91 adjustments
Share of
associates’ reserves
7 – – – – – 7 Cost
of share-based
payments – – – –
88 – 88
Reclassification of reserves upon –
– –
– 4
– 4
exercise of share options Draw-down of reserves upon
– –
– –
68 –
68 vesting of performance shares
Available-for-sale financial assets
and others:
– net valuation taken to equity 534
67 –
– –
– 467
– transferred to income statement 212
47 –
– –
– 165
– tax on items taken directly to 15
1 –
– –
– 14
or transferred from equity Balance at 31 December
284 33
2,453 233
152 4,271
6,894
a General reserves are maintained in accordance with the provisions of applicable laws and regulations. These reserves are non distributable
unless otherwise approved by the relevant authorities. Under the Banking Reserve Fund Transitional Provision regulations 2007, which came into effect on 11 June 2007, the Bank may distribute or utilise its statutory reserves provided that the amount distributed or utilised for each
financial year does not exceed 20 of the reserves as at 30 March 2007 b
Capital reserves include net exchange translation adjustments arising from translation differences on net investments in foreign subsidiaries, associates and branches, and the related foreign currency financial instruments designated as a hedge
c Other reserves mainly relate to share premium of the Bank prior to the restructuring of the Bank under the Company pursuant to a scheme
of arrangement under Section 210 of the Singapore Companies Act on 26 June 1999
The Company Share option and
share plan reserves In millions
2015 2014
Balance at 1 January 152 136
Cost of share-based payments 103 88
Reclassification of reserves upon exercise of share options 1 4
Draw-down of reserves upon vesting of performance shares 86 68
Balance at 31 December 168 152
DBS Annual Report 2015 146
33.2 Revenue reserves