TIDMBARC TIDM38AK
RNS Number : 0173Z
Barclays PLC
09 March 2012
9 March 2012
Barclays PLC
Annual Report and Accounts
In compliance with Listing Rule 9.6.1, the following documents
have been submitted to the National Storage Mechanism and will
shortly be available for inspection at: www.Hemscott.com/nsm.do
1. Annual Report 2011
2. Annual Review 2011
Copies of the Annual Report 2011 and the Annual Review 2011 are
available on our website, www.barclays.com/investorrelations
Barclays has also today published its Pillar III Report for
2011, which is available on our website at
www.barclays.com/investorrelations and which has been submitted to
the National Storage Mechanism and will shortly be available for
inspection at www.Hemscott/nsm.do
The Annual Review (or the full Annual Report for those
shareholders who have requested it) will be posted to shareholders
in mid March.
A condensed set of financial statements, the Chief Executive's
Review and the Group Finance Director's Review were included in the
final results announcement issued on 10 February 2012. This
announcement contains additional information for the purposes of
compliance with the Disclosure and Transparency Rules, including
principal risk factors, details of related party transactions and a
responsibility statement. This information is extracted from the
Annual Report 2011 in full unedited text. Accordingly, page
references in the text refer to page numbers in the Annual Report
2011.
Risk factors
The Group's approach to identifying, assessing, controlling,
reporting and managing risks is formalised in its Principal Risks
framework and supporting processes.
During 2011, the Principal Risks Policy was updated, resulting
in risks being grouped into four categories with no significant
change to the underlying risk types. Definitions of the four
Principal Risks are provided on pages 75 to 78. This summary also
includes discussions of the impact of business conditions and the
general economy and regulatory changes which can impact risk
factors and so influence the Group's results. The Principal Risks
described below can also potentially impact the Group's reputation
and brand.
The following information describes the risk factors which the
Group believes could cause its future results to differ materially
from expectations. However, other factors could also adversely
affect the Group's results and so the factors discussed in this
report should not be considered to be a complete set of all
potential risks and uncertainties.
Business conditions and the general economy
The Group has significant activities in a large number of
countries. Consequently there are many ways in which changes in
business conditions and the general economy can adversely impact
profitability, whether at Group level, the individual business
units or specific countries of operation.
During 2011, the economic environment in Barclays main markets
was marked by generally weaker than expected growth and the ongoing
sovereign debt crisis in the Eurozone. In the UK, the economy
recovered slightly during 2011 although GDP declined slightly in
the fourth quarter leading to uncertainty in the near term. The
potential for persistent unemployment, higher interest rates and
rising inflation may increase the pressure on disposable incomes,
affecting an individual's debt service ability with the potential
to adversely impact performance in the Group's retail sector. US
economic conditions were better than the UK in 2011. However,
unemployment is still high, which increases uncertainty in the near
term. Credit conditions in Europe remain weak and a depressed
housing sector and high unemployment may, in the near term,
adversely affect Barclays business operations in this region. The
global wholesale environment has been affected by the sovereign
debt crisis and the business confidence has generally declined.
Performance in the near term, therefore, remains uncertain.
The business conditions facing the Group in 2012 globally and in
many markets in which the Group operates are subject to significant
uncertainties which may in some cases lead to material adverse
impacts on the Group's operations, financial condition and
prospects including, for example, changes in credit ratings, share
price and solvency of counterparties as well as higher levels of
impairment, lower revenues or higher costs.
Significant uncertainties by Principal Risk include:
Credit risk
- Impact of potentially deteriorating sovereign credit quality,
particularly debt servicing and refinancing capability;
- Extent and sustainability of economic recovery, including
impact of austerity measures on the European economies;
- Increase in unemployment due to weaker economies in a number
of countries in which the Group operates, fiscal tightening and
other measures;
- Impact of rising inflation and potential interest rate rises
on consumer debt affordability and corporate profitability;
- Possibility of further falls in residential property prices in
the UK, South Africa and Western Europe;
- Potential liquidity shortages increasing counterparty
risks;
- Potential for large single name losses and deterioration in
specific sectors and geographies;
- Possible deterioration in remaining credit market exposures;
and
- Potential exit of one or more countries from the Euro as a
result of the European debt crisis.
Market risk
- Reduced client activity leading to lower revenues;
- Decreases in market liquidity due to economic uncertainty;
- Impact on banking book income from uncertain interest and
exchange rate environment; and
- Asset returns underperforming pension liabilities.
Funding risk
- Impact of Basel 3 as regulatory rules are finalised;
- Impacts on capital ratios from weak profit performance;
- Availability and volatility in cost of funding due to economic
uncertainty; and
- Reduction in available depositor and wholesale funding.
Operational risk
- Implementation of strategic change and integration programmes
across the Group;
- Continued regulatory and political focus, driven by the global
economic climate;
- Impact of new, wide ranging, legislation in various countries
coupled with changing regulatory landscape;
- Increasingly litigious environment; and
- The crisis management agenda and breadth of regulatory change
required in global financial institutions.
1. Credit risk
Credit Risk is the risk of the Group suffering financial loss if
any of its customers, clients or market counterparties fails to
fulfil their contractual obligations to the Group.
The credit risk that the Group faces arises mainly from
wholesale and retail loans and advances together with the
counterparty credit risk arising from derivative contracts entered
into with its clients. Other sources of credit risk arise from
trading activities, including debt securities, settlement balances
with market counterparties, available for sale assets and reverse
repurchase loans. It can also arise when an entity's credit rating
is downgraded, leading to a fall in the value of Barclays
investment in its issued financial instruments.
Risk management
The Board and management have established a number of key
committees to review credit risk management, approve overall Group
credit policy and resolve all significant credit policy issues.
These comprise: the BRC, the Financial Risk Committee, the
Wholesale Credit Risk Management Committee and the Retail Credit
Risk Committee.
Barclays constantly reviews its concentration in a number of
areas including, for example, portfolio segments, geography,
maturity, industry and credit rating.
Diversification is achieved through setting maximum exposure
guidelines and mandate and scale limits to portfolio segments,
individual counterparties, sectors and countries, with excesses
reported to the Financial Risk Committee and the BRC.
For further information see Credit Risk Management (pages 79 to
120).
Key specific risks and mitigation
Specific areas and scenarios where credit risk could lead to
higher impairment charges in future years include:
Sovereign risk
Fiscal deficits continue to remain high, leading to high levels
of public debt in some countries at a time of modest GDP growth.
This has led to a loss of market confidence in certain countries to
which the Group is exposed causing deteriorating sovereign credit
quality, particularly in relation to debt servicing and
refinancing. The Group has put certain countries on watch list
status with detailed monthly reporting to the Wholesale Credit Risk
Management Committee.
For further information see Group exposures to selected Eurozone
countries (pages 112 to 120).
Economic weakness
The implementation of austerity measures to tackle high levels
of public debt has negatively impacted economic growth and led to
rising unemployment in some European countries and the monetary,
interest rate and other policies of central banks and regulatory
authorities may also have a significant adverse effect on a number
of countries in which the Group operates.
The threat of weaker economies in a number of countries in which
the Group operates could lead to even higher increasing levels of
unemployment, rising inflation, potentially higher interest rates
and falling property prices. For example, the Spanish and
Portuguese housing sectors continue to be depressed, impacting the
Group's wholesale and retail credit risk exposures.
The Group has experienced elevated impairment across its
operations in these two regions, although impairment in Spain
decreased in 2011, following a marked reduction in construction
activity and shrinking consumer spending. The Group has reduced its
credit risk appetite to the most severely affected segments of the
economy. In Spain, new lending to the property and construction
sector ceased and workout team resources have been increased
significantly.
In addition, if funding capacity in either the wholesale markets
or central bank operations were to change significantly, liquidity
shortages could result which may lead to increased counterparty
risk with other financial institutions. This could also have an
impact on refinancing risks in the corporate and retail sectors.
The Group continues to actively manage this risk including through
its extensive system of Mandate and Scale limits.
For further information see Retail Credit Risk and Wholesale
Credit Risk (pages 96 to 103).
Eurozone crisis
Concerns about credit risk (including that of sovereigns) and
the Eurozone crisis remain very high. The large sovereign debts
and/or fiscal deficits of a number of European countries have
raised concerns regarding the financial condition of financial
institutions, insurers and other corporates (i) located in these
countries; (ii) that have direct or indirect exposure to these
countries (both to sovereign debt and private sector debt); and/or
(iii) whose banks, counterparties, custodians, customers, service
providers, sources of funding and/or suppliers have direct or
indirect exposure to these countries. The default, or a further
decline in the credit rating, of one or more sovereigns or
financial institutions could cause severe stress in the financial
system generally and could adversely affect the markets in which
the Group operates and the businesses, economic condition and
prospects of the Group's counterparties, customers, suppliers or
creditors, directly or indirectly, in ways which it is difficult to
predict.
For further information see Group exposures to selected Eurozone
countries (pages 112 to 120).
Credit market exposures
Barclays Capital holds certain exposures to credit markets that
became illiquid during 2007. These exposures primarily relate to
commercial real estate and leveraged finance loans. The Group
continues to actively manage down these exposures.
For further information see Barclays Capital Credit Market
Exposures (pages 110 to 111).
2. Market risk
Market Risk is the risk of the Group suffering financial loss
due to the Group being unable to hedge its balance sheet at
prevailing market levels.
The Group can be impacted by changes in both the level and
volatility of prices e.g. interest rates, credit spreads, commodity
prices, equity prices and foreign exchange rates.
The risk is reported as Traded Risk where Barclays supports
customer activity primarily via Barclays Capital; Non-Traded Risk
to support customer products primarily in the retail bank; and
Pension Risk where the investment profile is reviewed versus the
defined benefit scheme.
Risk management
The Board approves Market Risk appetite for trading and
non-trading activities, with limits set within this context by the
Group Market Risk Director.
Group Risk is responsible for the overall Barclays Market Risk
Control Framework which implements the five step risk management
process.
Business specific Market Risk teams are responsible for
implementing the Control Framework. Oversight and challenge is
provided by business committees, group committees and the central
Group Market Risk team.
For further information see Market Risk (pages 121 to 129).
Key specific risks and mitigation
Specific areas and scenarios where market risk could lead to
lower revenues in future years include:
Reduced client activity and decreased market liquidity
While the Group is exposed to continued market volatility,
Barclays Capital's trading activities are principally a consequence
of supporting customer activity.
The impact of ongoing economic uncertainty on client volumes,
reduced market liquidity and higher volatility could lead to lower
revenues. The cost base and risk positions are constantly reviewed
to ensure that they are calibrated appropriately. The portfolios
are constantly reviewed to ensure that inventories are sized
appropriately to support customer activity taking into account
market volatility.
For further information see Market Risk (pages 121 to 129).
Non-traded interest rate risk
Interest rate volatility can impact the firm's net interest
margin. The potential for future volatility and margin changes
remain and it is difficult to predict with any accuracy, changes in
absolute interest rate levels, yield curves and spread.
For further information see Market Risk (pages 121 to 129).
Pension fund risk
Adverse movements between pension assets and liabilities for
defined benefit could contribute to a pension deficit. Barclays and
the Pension Trustees dedicated Investment Management team
constantly review the asset liability mismatch to ensure
appropriate investment strategy.
For further information see Market Risk (pages 121 to 129) and
Note 39.
3. Funding risk
Funding Risk is the risk that the Group is unable to achieve its
business plans due to liquidity risk and capital risk or the
management of structural balance sheet risks.
Liquidity Risk is the risk that the Group is unable to meet its
obligations as they fall due resulting in: an inability to support
normal business activity; failing to meet liquidity regulatory
requirements; or changes to credit ratings.
Capital Risk is the risk that the Group is unable to maintain
appropriate capital ratios which could lead to an inability to
support business activity; failing to meet regulatory requirements;
or changes to credit ratings.
Structural Risk relates to the management of non-contractual
risks and predominantly arises from the impact on the Group's
balance sheet of changes in primarily interest rates on income or
foreign exchange rates on capital ratios.
Risk management
The Board approves the Group's Liquidity Risk Appetite, Capital
Plan and approach for Structural Hedging.
Group Risk provides oversight review and challenge to the
Liquidity, Capital and Structural Risk Control Frameworks. The Risk
function also provides direct input into as well as approval of
various aspects of the calibration, calculation and reporting for
these key risks.
Group Treasury has responsibility for implementing the Key Risk
control frameworks for Liquidity, Capital and Structural Risks at
both the Group and Legal Entity level and for ensuring that the
firm maintains compliance with all local regulatory minimum limit
requirements relating to these key risks.
Oversight and challenge is provided by local and Group Asset
Liability Committees all reporting up to Group Treasury Committee
which meets at least monthly.
For further information see Funding risk - Capital (pages 130 to
138) and Funding risk - Liquidity (pages 139 to 150).
Key specific risks and mitigation
Specific areas and scenarios where funding risk could lead to
higher costs or limit Barclays ability to execute its business
plans include:
Increasing capital requirements
There are a number of regulatory developments that impact
capital requirements. Most significantly Basel 3 as adopted into EU
law through the fourth Capital Requirements Directive (CRD4) and
Capital Requirements Regulation which are still going through the
EU legislative process. Additional capital requirements may arise
from other proposals including the recommendations of the
Independent Commission on Banking.
Barclays continues to prepare for the implementation of CRD4 and
includes the estimated impact of future regulatory changes in its
capital planning framework. Current forecasts already include the
impact of Basel 3 as currently understood, and forecasts will be
continually updated as CRD4 and other proposals for regulatory
developments are finalised. Further detail on the regulatory
developments impacting capital is included on pages 137 to 138.
Maintaining capital strength
A material adverse deterioration in the Group's financial
performance can affect the capacity to support further capital
deployment. The Capital Plan is continually monitored against the
internal target capital ratios with Risk, the business and legal
entities through a proactive and forward looking approach to
capital risk management which ensures that the Plan remains
appropriate. The capital management process also includes an
internal and regulatory stress testing process which informs the
Group capital plan. Further detail on the Group's regulatory
capital resources is included on pages 130 to 138.
Changes in funding availability and costs
Market liquidity, the level of customer deposits and the Group's
ability to raise wholesale funding impacts both the Group's net
interest margin, which is sensitive to volatility in cost of
funding, and its ability to both fulfil its obligations and support
client lending, trading activities and investments. Large
unexpected outflows, for example from customer withdrawals, ratings
downgrades or loan drawdowns, could also result in forced reduction
in the balance sheet, inability to fulfil lending obligations and
regulatory breaches. The Liquidity Profile is monitored constantly
and is supported by a range of early warning indicators to ensure
the profile remains appropriate and sufficient liquid resources are
held to protect against unexpected outflows. Further details are
provided in the Funding Risk - Liquidity section on pages 139 to
150.
Local balance sheet management and redenomination risk
The introduction of capital controls or new currencies by
countries (for example in the Eurozone) to mitigate current
stresses could have an ongoing or point-in-time impact on the
performance of local balance sheets of certain Group companies
based on the asset quality, types of collateral and mix of
liabilities. Local assets and liability positions are carefully
monitored by local asset and liability committees with oversight by
Group Treasury. For further information see the Group's exposures
to selected Eurozone countries (pages 112 to 120).
4. Operational risk
Operational Risk is the risk of direct or indirect impacts
resulting from human factors, inadequate or failed internal
processes and systems or external events. Operational risks are
inherent in the Group's business activities.
The Key Risks that this Principal Risk includes are External
Suppliers, Financial Reporting, Fraud, Information, Legal, Product,
Payment Process, People, Premises & Security, Regulatory,
Taxation, Technology and Transaction operations. For definitions of
these key risks see page 151.
Risk management
The Operational risk framework enables Barclays to manage and
measure its Operational risk profile and to calculate the amount of
Operational risk capital that it needs to hold. The minimum
mandatory requirements applicable to all Business Units are set out
in the Group Operational risk policies.
Group Key Risk Owners are required to monitor information
relevant to their Key Risk from each Operational risk framework
element. In addition, each Key Risk Owner mandates control
requirements specific to their Key Risk through a Key Risk Control
Framework.
For further information see Operational risk management (pages
151 to 153).
Key specific risks and mitigation
Specific areas and scenarios where Operational risk could lead
to financial and/or non-financial impacts including legal or
regulatory breaches or reputational damage include:
Regulatory risk
Regulatory risk arises from a failure or inability to comply
fully with the laws, regulations or codes applicable specifically
to the financial services industry which are currently subject to
significant changes. Non-compliance could lead to fines, public
reprimands, damage to reputation, increased prudential
requirements, enforced suspension of operations or, in extreme
cases, withdrawal of authorisations to operate.
The regulatory response to the financial crisis has led and will
continue to lead to very substantial regulatory changes in the
countries in which the Group operates. It has also (amongst other
things) led to (i) a more assertive approach being demonstrated by
the authorities in many jurisdictions; and (ii) enhanced capital
and liquidity requirements (for example pursuant to CRD4). Current
examples of specific areas of concern include:
The Independent Commission on Banking (ICB)
The ICB was charged by the UK Government with reviewing the UK
banking system and its findings were published on 12 September
2011. The ICB recommended (amongst other things) that: (i) the UK
and EEA retail banking activities of a UK bank or building society
should be placed in a legally distinct, operationally separate and
economically independent entity (so-called "ring-fencing"); and
(ii) the loss-absorbing capacity of ring-fenced banks and
UK-headquartered global systemically important banks (such as
Barclays Bank PLC) should be increased to levels higher than the
Basel 3 proposals.
The UK Government published its response to the ICB
recommendations in December 2011 and indicated that primary and
secondary legislation relating to the proposed ring-fence will be
completed by May 2015, with UK banks and building societies
expected to be compliant as soon as practicable thereafter, and the
requirements relating to increased loss-absorbing capacity of
ring-fenced banks and UK-headquartered global systemically
important banks will be applicable from 1 January 2019. Changes to
the structure of UK banks and an increase in the amount of
loss-absorbing capital issued by UK banks may have a material
adverse impact on the Bank's and the Group's results and financial
condition. It is also not possible to predict the detail of the
implementation legislation or the ultimate consequences to the
Group.
The Dodd-Frank Wall Street Reform and Consumer Protection Act
(DFA)
DFA will have an impact on the Group and its business. A
significant number of rules and draft rules have been issued
through 2011. While the impact of this rule-making will be
substantial, the full scale of this impact remains unclear as many
of the provisions of the Act require rules to be made to give them
effect and this process is still underway. Barclays has taken a
centralised approach to monitoring this process and to ensuring
compliance with the rules that are developed as a result.
Recovery and resolution plans
The strong regulatory focus on resolvability has continued in
2011, both from UK and international regulators. The Group has been
engaged, and continues to be engaged, with the authorities on
taking forward recovery planning and identifying information that
would be required in the event of a resolution. The Group will be
required to prepare an initial plan for the UK and US regulators in
the first half of 2012.
Any future regulatory changes may restrict the Group's
operations, mandate certain lending activity and impose other,
significant compliance costs. For further information see
Supervision and Regulation (pages 154 to 158).
Legal risk
The Group is subject to a comprehensive range of legal
obligations in all countries in which it operates and so is exposed
to many forms of legal risk, which may arise in a number of ways:
(i) business may not be conducted in accordance with applicable
laws around the world; (ii) contractual obligations may either not
be enforceable as intended or may be enforced in an adverse way;
(iii) intellectual property may not be adequately protected; and
(iv) liability for damages may be incurred to third parties harmed
by the conduct of the Group's business. The Group also faces risk
where legal proceedings are brought against it. The Group is, and
may in the future be, involved in various disputes, legal
proceedings and regulatory investigations in various jurisdictions,
including in the US. Furthermore, the Group, like many other
financial institutions, has come under greater regulatory scrutiny
in recent years and expects that environment to continue
particularly as it relates to compliance with new and existing
corporate governance, employee compensation, conduct of business,
anti-money laundering and anti-terrorism laws and regulations, as
well as applicable international sanctions regimes.
Key legal risks to which the Group was exposed during 2011 have
included litigation in relation to:
- Lehman Brothers Holdings Inc;
- American Depository Shares;
- US Federal Housing Finance Agency and Other Residential
Mortgage-Backed Securities; and
- Devonshire Trust.
For further information see Legal Proceedings (pages 248 to
249).
Payment protection insurance (PPI)
During 2011 Barclays agreed with the FSA that it would process
all on-hold and any new complaints from customers about PPI
policies that they hold. Barclays also announced that, as a
goodwill gesture, it would pay out compensation to customers who
had PPI complaints put on hold during the judicial review. Barclays
took a provision of GBP1bn in the second quarter of 2011 to cover
the cost of future redress and administration. For further
information see Provisions (pages 246 to 247).
CyberSecurity risk
Barclays recognises the growing threats from cyberspace to its
systems, including in respect of customer and its own information
held on them and transactions processed through these systems. The
implementation of measures to manage the risk is involving
increasing investment and use of internal resources. However, given
the increasing sophistication and scope of potential attacks from
cyberspace, it is possible that in the future such attacks may lead
to significant breaches leading to associated costs and
reputational damage.
The Group has invested for many years in building defences to
counter these threats and continues to do so, recognising that this
is an area of risk that changes rapidly and requires continued
focus.
To date the Group is not aware of any significant breaches of
its systems from cyberspace.
Taxation risk
Taxation risk is the risk that the Group suffers losses arising
from additional tax charges, financial penalties or reputational
damage associated with failure to comply with procedures required
by tax authorities, changes in tax law and the interpretation of
tax law. The Group is subject to the tax laws in all countries in
which it operates, including tax laws adopted at an EU level, and
is impacted by a number of double taxation agreements between
countries.
HMRC, being the Group's primary taxation authority, recently
took the unusual step of issuing a public statement that the
Government was drafting retrospective tax legislation. Such steps
add to the need to closely monitor changes in the way in which HMRC
approaches the application of its Code of Practice for Taxation of
Banks. For all tax jurisdictions, within which the Group operates,
we continue to monitor the potential impact of proposed and
recently enacted taxes aimed at banks.
In 2011 the Group continued to settle open tax issues in a
number of jurisdictions and in meeting its tax obligations made
global tax payments totalling GBP6.4bn. The profit forecasts that
support the Group's deferred tax assets, principally in the US and
Spain, have been subject to close scrutiny by management. For
further information see the Financial review (pages 168 to 169) and
Tax (pages 213 to 216).
46 Related party transactions and Directors' remuneration
a) Related party transactions
Parties are considered to be related if one party has the
ability to control the other party or exercise significant
influence over the other party in making financial or operation
decisions, or one other party controls both. The definition
includes subsidiaries, associates, joint ventures and the Group's
pension schemes, as well as other persons.
Subsidiaries
Transactions between Barclays PLC and subsidiaries also meet the
definition of related party transactions. Where these are
eliminated on consolidation, they are not disclosed in the Group
financial statements. Transactions between Barclays PLC and its
subsidiary, Barclays Bank PLC are fully disclosed in its balance
sheet and income statement. A list of the Group's principal
subsidiaries is shown in Note 40.
Associates, joint ventures and other entities
The Group provides banking services to its associates, joint
ventures, the Group pension funds (principally the UK Retirement
Fund) and to entities under common directorships, providing loans,
overdrafts, interest and non-interest bearing deposits and current
accounts to these entities as well as other services. Group
companies also provide investment management and custodian services
to the Group pension schemes. The Group also provides banking
services for unit trusts and investment funds managed by Group
companies and are not individually material. All of these
transactions are conducted on the same terms as third-party
transactions.
Entities under common directorships
The Group enters into normal commercial relationships with
entities for which members of the Group's Board also serve as
Directors. The amounts included in the Group's financial statements
relating to such entities that are not publicly listed are shown in
the table opposite under Entities under common directorships.
Amounts included in the accounts, in aggregate, by category of
related party entity are as follows:
Pension funds,
unit trusts
and
Entities under investment
Joint common fundsa
Associates ventures directorships
GBPm GBPm GBPm GBPm
--------------------------------- ---------- --------- -------------- --------------
For the year ended and as at 31
December 2011
--------------------------------- ---------- --------- -------------- --------------
Income (40) 20 1 17
--------------------------------- ---------- --------- -------------- --------------
Impairment (2) (6) - -
--------------------------------- ---------- --------- -------------- --------------
Total assets 176 1,529 364 -
--------------------------------- ---------- --------- -------------- --------------
Total liabilities 36 454 112 182
--------------------------------- ---------- --------- -------------- --------------
For the year ended and as at 31
December 2010
--------------------------------- ---------- --------- -------------- --------------
Income 19 (15) 10 -
--------------------------------- ---------- --------- -------------- --------------
Impairment (5) (9) - -
--------------------------------- ---------- --------- -------------- --------------
Total assets 135 2,113 45 -
--------------------------------- ---------- --------- -------------- --------------
Total liabilities 28 477 110 142
--------------------------------- ---------- --------- -------------- --------------
For the year ended and as at 31
December 2009
--------------------------------- ---------- --------- -------------- --------------
Income (57) (55) (64) 6
--------------------------------- ---------- --------- -------------- --------------
Impairment (2) (5) - -
--------------------------------- ---------- --------- -------------- --------------
Total assets 155 2,080 43 -
--------------------------------- ---------- --------- -------------- --------------
Total liabilities 4 503 27 171
--------------------------------- ---------- --------- -------------- --------------
No guarantees, pledges or commitments have been given or
received in respect of these transactions in 2011 or 2010.
Derivatives transacted on behalf of the Pensions Funds, Unit Trusts
and Investment Funds were GBP568.9m (2010: GBP206.8m)a.
Note
a 2009 and 2010 balances have been revised to include cash
collateral, deposit balances and derivatives transacted on behalf
of the Pension Funds, Unit Trusts and Investment Funds.
46 Related party transactions and Directors' remuneration
continued
Key Management Personnel
The Group's Key Management Personnel, and persons connected with
them, are also considered to be related parties for disclosure
purposes. Key Management Personnel are defined as those persons
having authority and responsibility for planning, directing and
controlling the activities of Barclays PLC (directly or indirectly)
and comprise the Directors of Barclays PLC and the Officers of the
Group (listed on page 279), certain direct reports of the Chief
Executive and the heads of major business units.
There were no material related party transactions with Entities
under common directorship where a Director or other member of Key
Management Personnel (or any connected person) is also a Director
or other member of Key Management Personnel (or any connected
person) of Barclays.
The Group provides banking services to Directors and other Key
Management Personnel and persons connected to them. Transactions
during the year and the balances outstanding at 31 December 2011
were as follows:
2011 2010
GBPm GBPm
---------------------------------- ----- -----
Loans outstanding at 1 January 4.4 6.6
---------------------------------- ----- -----
Loans issued during the year 0.7 0.5
---------------------------------- ----- -----
Loan repayments during the year (0.7) (2.1)
---------------------------------- ----- -----
Loans outstanding at 31 December 4.4 5.0
---------------------------------- ----- -----
No allowances for impairment were recognised in respect of loans
to Directors or other members of Key Management Personnel (or any
connected person).
2011 2010
GBPm GBPm
------------------------------------- ------- ------
Deposits outstanding at 1 January 35.0 30.3
------------------------------------- ------- ------
Deposits received during the year 244.1 104.9
------------------------------------- ------- ------
Deposits repaid during the year (240.4) (99.3)
------------------------------------- ------- ------
Deposits outstanding at 31 December 38.7 35.9
------------------------------------- ------- ------
Interest expense on deposits 0.1 -
------------------------------------- ------- ------
Of the loans outstanding above, GBPnil (2010: GBP0.5m) relates
to Directors and other Key Management Personnel (and persons
connected to them), who left the Group during the year. Of the
deposits outstanding above, GBP1.1m (2010: GBP0.2m) related to
Directors and other Key Management Personnel (and persons connected
to them), who left the Group during the year. The amounts disclosed
as at 1 January includes deposits outstanding for those who became
Directors or Key Management Personnel during the year.
All loans to Directors and other Key Management Personnel (and
persons connected to them), (a) were made in the ordinary course of
business, (b) were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the same time
for comparable transactions with other persons and (c) did not
involve more than a normal risk of collectability or present other
unfavourable features.
Remuneration of Directors and other Key Management Personnel
Total remuneration awarded to Directors and other Key Management
Personnel below represents the awards made to individuals that have
been approved by the Board Remuneration Committee as part of the
latest payround decisions and is consistent with the approach
adopted for disclosures set out on pages 54 to 65. Costs recognised
in the income statement reflect the accounting charge for the year
included within operating expenses. The difference between the
values awarded and the recognised income statement charge
principally relates to the recognition of deferred costs for prior
year awards. Figures are provided for the period that individuals
met the definition of Directors and other Key Management
Personnel.
2011 2010
GBPm GBPm
------------------------------------------------------------- ------ ------
Salaries 20.9 28.1
------------------------------------------------------------- ------ ------
Employer social security costs 9.1 12.4
------------------------------------------------------------- ------ ------
Post retirement benefits 0.4 1.0
------------------------------------------------------------- ------ ------
Share-based payment awards 33.7 39.3
------------------------------------------------------------- ------ ------
Other long-term benefit awards 39.1 41.9
------------------------------------------------------------- ------ ------
Costs recognised for accounting purposes 103.2 122.7
------------------------------------------------------------- ------ ------
Employer social security costs (9.1) (12.4)
------------------------------------------------------------- ------ ------
Share-based payments - difference between awards granted
and costs recognised (17.7) (20.8)
------------------------------------------------------------- ------ ------
Other long-term benefit - difference between awards granted
and costs recognised (14.2) (9.3)
------------------------------------------------------------- ------ ------
Total remuneration awarded 62.2 80.2
------------------------------------------------------------- ------ ------
46 Related party transactions and Directors' remuneration
continued
b) Disclosure required by the Companies Act 2006
The following information is presented in accordance with the
Companies Act 2006:
2011 2010
GBPm GBPm
================================================ ----- -----
Aggregate emoluments 15.9 15.8
------------------------------------------------ ----- -----
Amounts paid under long-term incentive schemes 5.8 7.0
================================================ ----- -----
21.7 22.8
================================================ ----- -----
There were no pension contributions paid to defined contribution
schemes on behalf of Directors (2010: GBP13,588). There were no
notional pension contributions to defined contribution schemes.
As at 31 December 2011, there were no Directors accruing
benefits under a defined benefit scheme (2010: one Director).
Directors' and Officers' shareholdings and options
The beneficial ownership of ordinary share capital of Barclays
PLC by all Directors and Officers of Barclays PLC (involving 22
persons) at 31 December 2011 amounted 43,978,451 (2010: 29,102,334)
ordinary shares of 25p each (0.36% of the ordinary share capital
outstanding).
At 31 December 2011 Executive Directors and Officers of Barclays
PLC (involving 11 persons) held options to purchase a total of
1,920,575 Barclays PLC ordinary shares (2010: 2,961,264) of 25p
each at prices ranging from 152p to 470p under Sharesave and
ranging from 317p to 506p under the Incentive Share Option Plan,
respectively.
Advances and credit to Directors and guarantees on behalf of
Directors
In accordance with Section 413 of the Companies Act 2006 as at
31 December there were no advances and credits or guarantees in
relation to those who served as Directors of the Company at any
time in the financial year (2010: GBPnil).
Directors' Responsibilities
The Directors confirm to the best of their knowledge that:
(a) The financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of Barclays PLC and the undertakings included in the consolidation
taken as a whole; and
(b) The management report, which is incorporated into the
Directors' Report on pages 46 to 49, includes a fair review of the
development and performance of the business and the position of
Barclays PLC and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face.
By order of the Board
Lawrence Dickinson Company Secretary 7 March 2012
Barclays PLC
Registered in England, Company No. 48839
This information is provided by RNS
The company news service from the London Stock Exchange
END
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