HONG KONG MONETARY AUTHORITY Annual Report 1996
NOTES ON THE ACCOUNTS*
20. OFF-BALANCE SHEET ITEMS
Outstanding forward foreign exchange contracts and gross replacement costs as at 31 December 1996 amounted to $121,025.6 million (1995 - $104,774 million) and $1,887.6 million (1995 - $1,650 million) respectively. These contracts are entered into for hedging purposes.
Notional principals and gross replacement costs of interest rate swap contracts as at 31 December 1996 amounted to $32,550 million (1995 - $23,860 million) and $360.9 million (1995 - $517 million) respectively. These contracts are entered into for hedging purposes.
Notional principals and gross replacement costs of outstanding futures contracts as at 31 December 1996 amounted to $248.2 million (1995 - $78.8 million) and $0.6 million (1995 - $0.5 million) respectively. These contracts are entered into for hedging purposes.
21. CONTINGENT LIABILITIES
At 31 December 1996, there was a contingent liability in respect of the uncalled portion of the investment in Bank for International Settlements shares amounting to $151.9 million (1995 - nil).
22. POST BALANCE SHEET EVENTS
The loan to the subsidiary company, HKNPL was converted into share capital on 21 February 1997 through the issue to the Exchange Fund of 25,499,990 new ordinary shares of $10 each. This increased the total share capital to $255 million. An agreement was reached on 2 March 1997 between the Financial Secretary and the China Banknote Printing and Minting Corporation to sell 3,825,000 ordinary shares of HKNPL. The consideration for the sale of these shares, which represent 15% of the issued share capital of HKNPL, is $42.5 million.