Barclays 2010 Annual Report Download - page 238

Notes to the financial statements
For the year ended 31st December 2010 continued
32 Investment in subsidiaries continued
Following the restructuring of Group operations in the US during the year, Barclays Group US Inc. is no longer a US Bank Holding Company.
Full information of all subsidiaries will be included in the Annual Return to be filed at UK Companies House.
Entities in which the Group holds less than half the voting rights
There are a number of entities in which the Group holds less than half the voting rights which are consolidated when the substance of the relationship
between the Group and the entity indicates that the entity is controlled by the Group. Such entities are deemed to be controlled by the Group when
relationships with such entities give 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.
Subsidiaries with a different reporting date from that of the Parent of 31st December
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 where the Group’s interest exceeds 50% which are excluded from consolidation
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 controlling 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 2006 Section 410(2)(b).
Country of registration or incorporation Name
Percentage
of ordinary
share
capital held
%
Equity
shareholders’
funds
£m
Retained
Profit for the
year
£m
UK Fitzroy Finance Limited 100 – –
Cayman Islands Palomino Limited 100 1 –
33 Profit on disposal of subsidiaries, associates and joint ventures
During the year, the profit on disposal of subsidiaries, associates and joint ventures was £81m (2009: £188m), principally relating to the disposal of
Barclays Africa custody business to Standard Chartered Bank for a consideration of £81m generating a gain on disposal before tax of £77m. During
2009, the Group disposed of 50% of Barclays Vida y Pensiones Compañía de Seguros and the 7% of Barclays Africa Botswana business for consideration
of £276m generating a gain on disposal before tax of £184m.
34 Discontinued operations
On 1st December 2009 the Group completed the sale of BGI to BlackRock, Inc. (BlackRock) recognising a profit on disposal before tax of £6,331m.
The tax charge of £43m reflects the application of UK substantial shareholdings relief in accordance with UK tax law.
The consideration at completion was $15.2bn (£9.5bn), including 37.567 million new BlackRock shares, giving an economic interest of 19.9% of the
enlarged BlackRock group. Barclays Group holds 4.9% of the voting rights and under the terms of the transaction may not acquire additional voting
rights and will vote in accordance with the recommendations of the BlackRock Board of Directors. John Varley and Bob Diamond were appointed to the
BlackRock Board, which comprises 18 Directors. The Group is not deemed to exercise significant influence and the investment has been accounted for
as an available for sale equity investment.
236 Barclays PLC Annual Report 2010 www.barclays.com/annualreport10