Barclays 2005 Annual Report Download - page 199

39 Ordinary shares and share premium (continued)
The other current scheme is the BGI Equity Ownership Plan (EOP) which provides for options to be granted to certain management personnel for
shares in Barclays Global Investors UK Holdings Limited, a subsidiary of Barclays Bank PLC. Under the terms of the plan, options are normally
exercisable upon vesting. One-third of the options will generally vest at each anniversary of the grant date over three years. If unexercised, the
options will lapse ten years after the grant.
At 31st December 2005, 5.4 million (2004: 7.6 million) options were outstanding under the terms of the BGI EOP (which would represent a 5.6%
interest if exercised), enabling certain management personnel to subscribe for shares in Barclays Global Investors UK Holdings Limited between
2006 and 2015 at prices between £6.11 and £56.94. One year following the exercise of the option, the shareholder has the right to offer to sell the
shares to Barclays Bank PLC. Barclays Bank PLC may accept the offer and purchase the shares at the most recent agreed valuation. The most
recently agreed valuation at 30th June 2005 was £56.94 (2004: £32.10). Employees in BGI own 12.1% of the shares in Barclays Global Investors
UK Holdings Limited (2004: 11.1%).
If all the current options were exercised, £137.5m (2004: £96.5m) would be subscribed. At the most recently agreed valuation these shares would
be valued at £309.9m, resulting in a gain of £172.4m to the option holders if these shares were sold at this price. Since the scheme was introduced,
options over 17.1 million (2004: 12.7 million) shares have been exercised, of which 11 million are still held by employees and represent a minority
interest in the Group.
At 31st December 2005, there were 25.1 million, 5.4 million and 73.2 million options granted over Absa Group Limited shares under the Absa Group
Limited Share Incentive Trust, Absa Group Limited Share Ownership Trust, Absa Group Limited Black Economic Empowerment Scheme respectively.
40 Revaluation reserves, retained earnings and other reserves
Revaluation reserves
Available Cash flow
for sale hedging Translation
reserve reserve reserve Total
£m £m £m £m
At 1st January 2005 314 302 (58) 558
Net losses from changes in fair value (250) (51) – (301)
Gains transferred to net profit (120) (69) – (189)
Currency translation differences arising during the year – – 214 214
Changes in insurance liabilities (64) – – (64)
Losses transferred to net profit due to fair value hedging 260 – – 260
Tax 85 (112) – (27)
At 31st December 2005 225 70 156 451
Translation
reserve
£m
At 1st January 2004 –
Currency translation differences arising during the year (58)
At 31st December 2004 (58)
The translation reserve represents the cumulative gains and losses on the retranslation of the Group’s net investment in foreign operations, net of
the effects of instruments that have qualified as hedges of net investments.
The cash flow hedging reserve represents the net gains on effective cash flow hedging instruments that will be recycled to the income statement
when the hedged transaction affects profit or loss.
The available for sale reserve represents the unrealised change in the fair value of available for sale investments.
Barclays PLC
Annual Report 2005 197
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