Barclays 2008 Annual Report Download - page 244

Notes to the accounts
For the year ended 31st December 2008
242 Barclays PLC Annual Report 2008 |Find out more at www.barclays.com/annualreport08
31Ordinary shares, share premium, and other equity (continued)
In addition to the above, the independent trustee of the Barclays Group (ESAS) Employees’ Benefit Trust (ESAS Trust), established by Barclays Bank PLC
in 1996, operates the Executive Share Award Scheme (ESAS). ESAS is a deferred share bonus plan for employees of the Group. The key terms of the ESAS
are described in Note 45. The independent trustees of the ESAS Trust make awards of Barclays shares and grant options over Barclays shares to
beneficiaries of the ESAS Trust. Beneficiaries of the ESAS Trust include employees and former employees of the Barclays Group.
The independent trustee of the Barclays Group (PSP and ESOS) Employees’ Benefit Trust (PSP Trust), established by Barclays Bank PLC in 1996, operates
the Performance Share Plan (PSP) and may satisfy awards under the ESOS. No awards have been made under this trust since 1999. All awards are in the
form of options over Barclays shares.
The Sharepurchase scheme which was established in 2002 is open to all eligible UK employees, including executive Directors. The key terms of the
Sharepurchase scheme are described in Note 45.
Other equity – Mandatorily Convertible Notes
On 27th November 2008, Barclays Bank PLC issued £4,050m of 9.75% Mandatorily Convertible Notes (MCNs) maturing on 30th September 2009 to
Qatar Holding LLC, Challenger Universal Limited and entities representing the beneficial interests of HH Sheikh Mansour Bin Zayed Al Nahyan, a member
of the Royal Family of Abu Dhabi and existing institutional shareholders and other institutional investors. If not converted at the holders’ option
beforehand, these instruments mandatorily convert to ordinary shares of Barclays PLC on 30th June 2009. The conversion price is £1.53276, and, after
taking into account MCNs that were converted on or before 31st December 2008, will result in the issue of 2,642 million new ordinary shares. Following
conversion the relevant amounts will be credited to share capital and share premium.
Of the proceeds of the MCNs, £233m has been included in the Group’s liabilities, being the fair value of the coupon before issue costs at the date of issue.
The remaining proceeds are included in other equity and will be transferred to share capital and share premium on conversion in both the Barclays PLC Group
and Company.
32 Reserves
Other reserves – Barclays PLC Group
Capital Other Available Cash flow Currency
redemption capital for sale hedging translation
reserve reserve reserve reserve reserve Total
£m £m £m £m £m £m
At 1st January 2008 384 617 154 26 (307) 874
Net (losses)/gains from changes in fair value ––(1,736) 252 – (1,484)
Net (gains)/losses transferred to net profit ––(212) 19 –(193)
Currency translation differences ––––2,307 2,307
Losses transferred to net profit due to impairment ––382 ––382
Changes in insurance liabilities ––17 ––17
Net gains transferred to net profit due to fair value hedging ––(2) ––(2)
Tax ––207 (165) 840 882
Repurchase of shares 10 ––––10
At 31st December 2008 394 617 (1,190) 132 2,840 2,793
Capital Other Available Cash flow Currency
redemption capital for sale hedging translation
reserve reserve reserve reserve reserve Total
£m £m £m £m £m £m
At 1st January 2007 309 617 132 (230) (438) 390
Net gains from changes in fair value ––480 182 – 662
Net (gains)/losses transferred to net profit ––(560) 198 – (362)
Currency translation differences ––––29 29
Losses transferred to net profit due to impairment ––13 ––13
Changes in insurance liabilities ––22 ––22
Net losses transferred to net profit due to fair value hedging ––68 ––68
Tax ––(1) (124) 102 (23)
Repurchase of shares 75 ––––75
At 31st December 2007 384 617 154 26 (307) 874
The capital redemption reserve and other capital reserve represent transfers from retained earnings in accordance with relevant legislation.
These reserves are not distributable.
The available for sale reserve represents the unrealised change in the fair value of available for sale investments since initial recognition.
The cash flow hedging reserve represents the cumulative gains and losses on effective cash flow hedging instruments that will be recycled
to the income statement when the hedged transactions affect profit or loss.
The currency 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 hedging.
Transfers from cash flow hedging reserve
Gains and losses transferred from the cash flow hedging reserve were to: interest income: £4m loss (2007: £93m), interest expense: £74m loss
(2007: £11m gain), net trading income: £119m gain (2007: £100m loss), and administration and general expenses: £60m loss (2007: £16m loss).