Barclays 2008 Annual Report Download - page 255

3
Financial statements
42 Other entities
There are a number of entities that do not qualify as subsidiaries under UK Law but which are consolidated 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 policies 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%, or it may have the power to appoint a majority of their Boards
of Directors, they are excluded from consolidation because the Group either does not direct the financial and operating policies of these entities, or on
the grounds that another entity has a superior economic interest in them. Consequently, these entities are not deemed to be controlled by Barclays.
The table below includes information in relation to such entities as required by the Companies Act 1985, Section 231(5).
Equity Retained
Percentage of share- loss
ordinary share holders’ for the
Country of registration capital held funds year
or incorporation Name % £m £m
UK Oak Dedicated Limited 100 (4) (1)
UK Oak Dedicated Two Limited 100 (4) –
UK Oak Dedicated Three Limited 100 1–
UK Fitzroy Finance Limited 100 ––
Cayman Islands St James Fleet Investments Two Limited 100 2–
Cayman Islands BNY BT NewCo Limited –––
Barclays PLC Annual Report 2008 253