Barclays 2013 Annual Report Download - page 82

Directors’ report
Directors’ report continued
Exercisability of rights under an employee share scheme
Employee Benefit Trusts (EBTs) operate in connection with certain of
the Group’s Employee Share Plans (Plans). The trustees of the EBTs
may exercise all rights attached to the shares in accordance with their
fiduciary duties other than as specifically restricted in the relevant Plan
governing documents. The trustees of the EBTs have informed the
Company that their normal policy is to abstain from voting in respect of
the Barclays shares held in trust. The trustees of the Global
Sharepurchase EBT and UK Sharepurchase EBTs may vote in respect of
Barclays shares held in the EBTs, but only as instructed by participants
in those Plans in respect of their Partnership shares and (when vested)
Matching and Dividend shares. The trustees will not otherwise vote in
respect of shares held in the Sharepurchase EBTs.
Special rights
There are no persons holding securities that carry special rights with
regard to the control of the company.
Major shareholders
Major shareholders do not have different voting rights from those of
other shareholders. Information provided to the Company by major
shareholders pursuant to the Financial Conduct Authority’s DTR is
published via a Regulatory Information Service and is available on the
Company’s website. As at 31 December 2013, the Company had been
notified under Rule 5 of the DTR of the following holdings of voting
rights in its shares.
Person interested
Number of
Barclays Shares
% of total voting
rights attaching
to issued
share capitala
Qatar Holding LLCb813,964,552 6.65
BlackRock, Incc 805,969,166 7.06
The Capital Group Companies Incd 809,174,196e 5.03
Notes:
a The percentage of voting rights and shares held are as calculated at the time of the
relevant disclosures made in accordance with Rule 5 of the DTR and may not reflect
the impact of the rights issue.
b Qatar Holding LLC is wholly-owned by Qatar Investment Authority.
c Total shown includes 8,003,236 contracts for difference to which voting rights are
attached.
d The Capital Group Companies Inc (CG) holds its shares via CG Management
companies and funds.
e This figure also includes the ordinary share equivalent of 361,579 ADRs.
The Company has not been notified of any changes to the holdings of
major shareholders between 31 December 2013 and 28 February 2014.
Powers of Directors to issue or buy back the Company’s shares
The powers of the Directors are determined by the Companies Act
2006 and the Company’s Articles. The Directors are authorised to issue
and allot shares, and to repurchase shares subject to annual
shareholder approval at the AGM. Such authorities were granted
by shareholders at the 2013 AGM. It will be proposed at the 2014
AGM that the Directors be granted new authorities to allot and
buy-back shares.
Issue of shares pursuant to the Rights Issue
On 30 July 2013, Barclays announced an underwritten rights issue to
raise approximately £5.8bn (net of expenses). Under the terms of the
Rights Issue, Barclays offered 3,219,067,868 New Ordinary Shares by
way of Rights to Qualifying Shareholders at 185 pence per New
Ordinary Share. The Rights Issue was made on the basis of one New
Ordinary Share for every four Existing Ordinary Shares held by
shareholders at close of business on the record date, 13 September
2013. The latest date for acceptance of the Rights Issue was 2 October
2013, and by this date, Barclays received valid acceptances in respect
of 3,046,197,378 New Ordinary Shares, representing 94.63% of the
total number of New Ordinary Shares offered to shareholders. The
remaining 172,870,490 New Ordinary Shares were purchased by
subscribers through the Underwriters for the Rights Issue.
Repurchase of shares
The Company did not repurchase any of its Ordinary Shares during
2013 (2012: none). As at latest practicable date, the Company had an
unexpired authority to repurchase Ordinary Shares up to a maximum
of 1,286,066,272 Ordinary Shares.
Change of control
There are no significant agreements to which the Company is a party
that are affected by a change of control of the Company following a
takeover bid. There are no agreements between the Company and its
Directors or employees providing for compensation for loss of office or
employment that occurs because of a takeover bid.
Risk Management and Internal Control
The Directors have responsibility for ensuring that management
maintain an effective system of risk management and internal control
and for reviewing its effectiveness. Such a system is designed to
manage rather than eliminate the risk of failure to achieve business
objectives and can only provide reasonable and not absolute assurance
against material misstatement or loss.
Barclays is committed to operating within a strong system of internal
control that enables business to be transacted and risk taken without
exposing itself to unacceptable potential losses or reputational
damage. Barclays has an overarching framework that sets out Barclays
approach to internal governance (the Barclays Guide). The Barclays
Guide establishes the mechanisms and processes by which the Board
directs the organisation, through setting the tone and expectations
from the top, delegating its authority and monitoring compliance.
A key component of the Barclays Guide is the Enterprise Risk
Management Framework (ERMF). The purpose of the ERMF is to
identify and set minimum requirements in respect of the main risks to
achieving the Group’s strategic objectives and to provide reasonable
assurance that internal controls are effective. The key elements of the
Group’s system of internal control, which is aligned to the
recommendations of The Committee of Sponsoring Organizations of
the Treadway Commission, Internal Control – Integrated Framework
(COSO 2), are set out in the risk control frameworks relating to each of
the Group’s Key Risks and in the Group operational risk framework. As
well as incorporating our internal requirements, these reflect material
Group-wide legal and regulatory requirements relating to internal
control and assurance.
Effectiveness of internal controls
Key controls are assessed on a regular basis for both design and
operating effectiveness. Issues arising out of business risk and control
assessments and other internal and external sources are considered to
identify pervasive themes. Where appropriate, individually significant
issues or those affecting more than one business may be categorised
as having Group level significance and are reported to the Board Audit
Committee via the Operational Risk and Control Committee. The Board
Audit Committee monitors resolution of any identified control issues of
Group level significance through to a satisfactory conclusion. In
addition, regular reports are made to the Board Audit Committee by
management, internal audit and the finance, compliance and legal
functions covering in particular financial controls, compliance and
other operational controls.
Risk management and internal control framework
The Directors formally review the effectiveness of the system of internal
control annually. Processes are in place for identifying, evaluating and
managing the significant risks facing the Group in accordance with the
guidance ‘Internal Control: Revised Guidance for Directors on the UK
Corporate Governance Code’ published by the Financial Reporting
Council (the Turnbull Guidance).
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80 Barclays PLC Annual Report 2013