Barclays plc - Annual Report 2008 - Financial statements - The Group

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Barclays Bank PLC data Notes to the accounts d Administration and general expenses (continued) Fees payable for the audit of the Bank’s associates pursuant to legislation comprise the fees for the statutory audit of the subsidiaries and associated pension schemes both inside and outside Great Britain and fees for the work performed by the associates of PricewaterhouseCoopers LLP in respect of the consolidated financial statements of the Bank. The fees relating to the audit of the associated pension schemes were £0.2m (2007: £0.3m, 2006: £0.3m). Other services supplied pursuant to such legislation comprise services in relation to statutory and regulatory filings. These includes audit services for the review of the interim financial information under the Listing Rules of the UK listing authority and fees paid for reporting under Section 404 of the US Sarbanes-Oxley Act (Section 404). In 2008 fees paid for reporting under Section 404 are not separately identifiable from the fees of the audit of the Bank’s annual accounts and the Bank’s associates. Fees for the audit of Barclays Bank PLC Group accounts are not separately identifiable from Barclays PLC, therefore there is no difference in the amounts reported in both Annual Reports. In addition, other services include Section 404 advisory, reporting accountant work for capital raising, securitisations and services relating to acquisition activities. Taxation services include compliance services such as tax return preparation and advisory services such as consultation on tax matters, tax advice relating to transactions and other tax planning and advice. Services relating to corporate finance transactions comprise due diligence related to transactions and other work in connection with such transactions. e Tax The charge for tax is based upon the UK corporation tax rate of 28.5% (2007: 30%, 2006: 30%) and comprises: 2008 2007 2006 £m £m £m Current tax charge/(credit) Current year 1,559 2,385 1,929 Adjustment for prior years 97 (11) 8 1,656 2,374 1,937 Deferred tax (credit)/charge Current year (597) (367) (16) Adjustment for prior years (273) (26) 20 (870) (393) 4 Total charge 786 1,981 1,941 The effective tax rate for the years 2008, 2007 and 2006 is lower than the standard rate of corporation tax in the UK of 28.5% (2007: 30%, 2006: 30%). The differences are set out below: 2008 2007 2006 £m £m £m Profit before tax 6,035 7,107 7,197 Tax charge at standard UK corporation tax rate of 28.5% (2007: 30%, 2006: 30%) 1,720 2,132 2,159 Adjustment for prior years (176) (37) 24 Differing overseas tax rates 215 (77) (17) Non-taxable gains and income (including amounts offset by unrecognised tax losses) (833) (136) (393) Share-based payments 229 72 27 Deferred tax assets not previously recognised (514) (158) (4) Change in tax rates (1) 24 4 Other non-allowable expenses 146 161 141 Overall tax charge 786 1,981 1,941 Effective tax rate 13% 28% 27% The effective rate of tax for 2008, based on profit before tax, was 13% (2007: 28%). The effective tax rate differs from the 2007 effective rate and the UK corporation tax rate of 28.5% principally due to the Lehman Brothers North American businesses acquisition. Under IFRS the gain on acquisition of £2,262m is calculated net of deferred tax liabilities included in the acquisition balance sheet and is thus not subject to further tax in calculating the tax charge for the year. Furthermore, Barclays has tax losses previously unrecognised as a deferred tax asset but capable of sheltering part of this deferred tax liability. This gives rise to a tax benefit of £492m which, in accordance with IAS 12, is included as a credit within the tax charge for the year. The effective rate has been adversely impacted by the effect of the fall in the Barclays share price on the deferred tax asset recognised on share awards. In common with prior years there have been offsetting adjustments relating to different overseas tax rates, disallowable expenditure and non taxable gains and income. 306 Barclays PLC Annual Report 2008 | Find out more at www.barclays.com/annualreport08
f Other income 2008 2007 2006 £m £m £m (Decrease)/increase in fair value of assets held in respect of linked liabilities to customers under investment contracts (10,422) 5,592 7,417 Decrease/(increase) in liabilities to customers under investment contracts 10,422 (5,592) (7,417) Property rentals 73 53 55 Other income 381 171 202 Other income 454 224 257 Included in other income are sub-lease rentals of £18m (2007: £18m, 2006: £18m), and in 2008 only is a £47m gain from the Visa IPO. g Trading portfolio assets 2008 2007 £m £m Trading portfolio assets Treasury and other eligible bills 4,544 2,094 Debt securities 148,686 152,778 Equity securities 30,544 36,342 Traded loans 1,070 1,780 Commodities 802 732 Trading portfolio assets 185,646 193,726 h Available for sale financial investments 2008 2007 £m £m Debt securities 58,831 38,673 Treasury bills and other eligible bills 4,003 2,723 Equity securities 2,182 1,860 Available for sale financial investments 65,016 43,256 3 Movement in available for sale financial investments 2008 2007 £m £m At beginning of year 43,256 51,952 Exchange and other adjustments 14,275 1,499 Acquisitions and transfers 59,703 26,950 Disposals (through sale and redemption) (50,629) (37,498) (Losses)/gains from changes in fair value recognised in equity (1,190) 391 Impairment (382) (13) Amortisation of discounts/premium (17) (25) At end of year 65,016 43,256 Financial statements i Other assets 2008 2007 £m £m Sundry debtors 4,814 4,045 Prepayments 882 551 Accrued income 483 400 Reinsurance assets 123 157 Other assets 6,302 5,153 Included in the above Group balances are £4,704m (2007: £4,541m) expected to be recovered within no more than 12 months after the balance sheet date; and balances of £1,598m (2007: £612m) expected to be recovered more than 12 months after the balance sheet date. Other assets include £3,096m (2007: £3,966m) of receivables which meet the definition of financial assets. Barclays PLC Annual Report 2008 307
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Financial statements Presentation o
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Independent Auditors’ report Inde
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Consolidated accounts Barclays PLC
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) financial assets, loans to custom
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11. Collateral and netting The Grou
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17. Issued debt and equity securiti
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24. Taxes, including deferred taxes
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The following IFRIC interpretations
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Consolidated balance sheet As at 31
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Consolidated cash flow statement Fo
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Statement of recognised income and
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4 Principal transactions 2008 2007
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9 Administration and general expens
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12 Trading portfolio 2008 2007 £m
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14 Derivative financial instruments
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16 Available for sale financial inv
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20 Investments in associates and jo
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22 Intangible assets 2008 Internall
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24 Financial liabilities designated
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26 Insurance assets and liabilities
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27 Subordinated liabilities (contin
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27 Subordinated liabilities (contin
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29 Securitisations The Group was pa
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30 Retirement benefit obligations (
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31 Ordinary shares, share premium,
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32 Reserves (continued) Retained ea
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34 Contingent liabilities and commi
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37 Leasing The Group is both lessor
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39 Acquisitions The Group made the
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39 Acquisitions (continued) (c) Exp
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42 Other entities There are a numbe
Page 67 and 68: 43 Related party transactions and D
Page 69 and 70: 43 Related party transactions and D
Page 71 and 72: 45 Share-based payments (continued)
Page 77 and 78: 47 Credit risk (continued) Whilst t
Page 79 and 80: 47 Credit risk (continued) Credit r
Page 81 and 82: 47 Credit risk (continued) Credit r
Page 83 and 84: 47 Credit risk (continued) All loan
Page 85 and 86: 47 Credit risk (continued) Loans an
Page 87 and 88: 47 Credit risk (continued) Renegoti
Page 89 and 90: 47 Credit risk (continued) Reverse
Page 91 and 92: 48 Market risk (continued) To furth
Page 93 and 94: 48 Market risk (continued) Foreign
Page 95 and 96: 49 Liquidity risk (continued) Year-
Page 97 and 98: 49 Liquidity risk (continued) At 31
Page 99 and 100: 50 Fair value of financial instrume
Page 105 and 106: 52 Capital Management (continued) R
Page 107 and 108: 53 Segmental reporting (continued)
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Page 111 and 112: Barclays Bank PLC data Consolidated
Page 117: c Principal transactions (continued
Page 121 and 122: k Called up share capital (continue
Page 123 and 124: l Reserves Other reserves Available
Page 125 and 126: Barclays Bank PLC data Financial Da
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Barclays plc - Annual Report 2008 - Financial statements - The Group

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