Barclays 2006 Annual Report Download - page 228

Notes to the accounts
For the year ended 31st December 2006
Barclays PLC
Annual Report 2006
224
48 Other entities
There are a number of entities that do not qualify as subsidiaries under UK Law but which are consolidated under IAS 27 (SIC-12) when the
substance of the relationship between the Group and the entity (usually a Special Purpose Entity (SPE)) indicates that the entity is controlled by the
Group. Such entities are deemed to be controlled by the Group when relationships with such entities gives rise to benefits that are in substance no
different from those that would arise were the entity a subsidiary.
The consolidation of such entities may be appropriate in a number of situations, but primarily when:
•the operating and financial polices of the entity are closely defined from the outset (i.e. it operates on an ‘autopilot’ basis) with such policies
being largely determined by the Group;
•the Group has rights to obtain the majority of the benefits of the entity and/or retains the majority of the residual or ownership risks related to
the entity; or
•the activities of the entity are being conducted largely on behalf of the Group according to its specific business objectives.
Such entities are created for a variety of purposes including securitisation, structuring, asset realisation, intermediation and management.
Entities may have a different reporting date from that of the parent of 31st December. Dates may differ for a variety of reasons including local
reporting regulations or tax laws. In accordance with our accounting policies, for the purpose of inclusion in the consolidated financial statements
of Barclays PLC, entities with different reporting dates are made up until 31st December.
Entities may have restrictions placed on their ability to transfer funds, including payment of dividends and repayment of loans, to their parent entity.
Reasons for the restrictions include:
•Central bank restrictions relating to local exchange control laws.
•Central bank capital adequacy requirements.
•Company law restrictions relating to treatment of the entities as going concerns.
Although the Group’s interest in the equity voting rights in certain entities exceeds 50%, these entities are excluded from consolidation because the
Group either does not direct the financial and operating policies of these entities, or on the ground that another group has a superior economic
interest in such entities. Consequently, these entities are not deemed to be controlled by Barclays under IAS 27 (SIC-12).
The table below includes information in relation to such entities as required by the Companies Act 1985, Section 231(5).
Subsidiaries excluded from consolidation
Equity Retained
Percentage of share- profit/
ordinary share holders’ (loss) for
Country of registration capital held funds the year
or incorporation Name %£m£m
UK Oak Dedicated Limited 100 (7) (2)
UK Oak Dedicated Two Limited 100 (5) (1)
UK Oak Dedicated Three Limited 100 – –
USA Ivanhoe Funding LLC(a) 75 6 –
UK Fitzroy Finance 100 – –
UK St James Fleet Investments Two Limited 100 2 –
Cayman Islands 29 Park Investment No1 Limited(b) –––
Cayman Islands 29 Park Investment No2 Limited(b) –––
Notes
(a) Barclays has 51% of voting rights in the entity.
(b) Barclays appoint the majority of Directors of these entities.