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BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2003




CONTENTS                                              PAGES




MANAGEMENT DISCUSSION AND ANALYSIS                     2 - 13




AUDITORS‟ REPORT                                      14 - 15




BALANCE SHEET                                         16 – 17




INCOME STATEMENT                                          18




STATEMENT OF CHANGES IN EQUITY                            19




CASH FLOW STATEMENT                                       20




ACCOUNTING POLICIES                                   21 - 26




FINANCIAL RISK MANAGEMENT                             27 - 36




NOTES TO THE FINANCIAL STATEMENTS                     37 – 45
                                                                                                                      Page 2


BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

MANAGEMENT DISCUSSION AND ANALYSIS – YEAR ENDED 31 DECEMBER 2003


We are pleased to present our Management Discussion and Analysis, in accordance with the Bank of Mauritius guideline on
Public Disclosure of Information.

1         FINANCIAL REVIEW

Barclays Bank Plc – Mauritius Offshore Banking Unit‟s main objective is to operate an efficient and profitable operation in
compliance with the local regulatory framework and at the same time adhering to international banking standards and practices.
2003 has been a challenging year for the Mauritius Offshore Banking Unit the “Bank”. Priority was given to development of a
synergy for the merged business and to satisfy the bigger customer base.

Despite a tough international banking environment, the Bank has been able to maintain its growth due to a number of strategies
put in place to increase its deposit base, lending portfolio and non interest income. The Mauritius Offshore Banking Unit
managed to achieve a profitable before tax of USD 9.42m compared to USD 6.12m in 2002, representing an increase of 54%.


1.1       PERFORMANCE AGAINST OBJECTIVES

                                                                 Budget 2003            Actual 2003             Budget 2004
AREAS OF PERFORMANCE                                                      %                      %                       %
REVENUE GROWTH RATIOS
Net interest income                                                       39.39               62.38                    38.84
Other income                                                              34.53               62.32                      4.38
Total income growth                                                       37.57               62.61                    24.42
Net interest margin                                                        0.71                 0.86                     1.03
Other income/Total income (net of interest expense)                       42.05               41.83                    35.09

EXPENSE GROWTH
Operating expense growth                                                  68.82               95.00                    19.64


PRODUCTIVITY RATIO

Non-interest expense/(Net interest income +
 Other income)                                                            26.29               25.04                    23.61

OVERALL PERFORMANCE RATIO
Return on equity                                                          31.02               44.79                    40.34
Return on average assets                                                   0.59                1.26                     0.84

CREDIT PERFORMANCE/QUALITY RATIOS
Specific provision for credit losses/Average loans                         0.06                 0.08                     0.04
Net impaired loans/Average loans                                           1.21                 1.28                     1.15



As a result of a good marketing plan, both our customer deposit and lending portfolio have increased to exceed our 2003 budget
by 6.23% and 20.29% respectively. Consequently, our net interest income reached USD 7.3m that is 16.49% above our 2003
budget. For 2004, we expect to expand deposits and lending by 9.77% and 44.94% respectively. The Bank delivered a
commendable performance following the success of our 2003 target to enlarge our customer base further and improve our non-
interest generating activities.


The increase in our clients‟ portfolio has led to additional ancillary earnings, our fee income and commissions has reached
USD 3.6m also exceeding our 2003 budget.

We expect this to continue in 2004 and have a budgeted growth of 4.38%.
                                                                                                                        Page 3


BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

MANAGEMENT DISCUSSION AND ANALYSIS – YEAR ENDED 31 DECEMBER 2003 (CONTINUED)



1.2       REVIEW BY FINANCIAL PRIORITY AREAS

1.2.1     Revenue growth

                                                                              2003                 2002                   2001
                                                                                %                    %                      %
REVENUE GROWTH
Net interest margin (Net interest income/total
 average interest earnings assets)                                            0.866                0.87                  1.466
Net interest income/Total average assets                                      0.855                0.84                  1.400




                                            Interest income      Related assets        Interest income         Related assets
                                                        2003               2003                   2002                  2002
                                                        USD                USD                     USD                  USD

Loans and advances to customers                   6,418,107         241,477,495                2,231,515         120,055,977
Placements                                        9,800,345         608,536,690                6,846,600         608,767,112
Loans to banks                                    1,202,848         113,237,916                  849,490           5,285,536

                                          Interest expense     Related liabilities    Interest expense       Related liabilities
                                                      2003                  2003                  2002                   2002
                                                      USD                    USD                  USD                    USD

Deposits                                          7,803,156         751,552,281                5,029,694         667,763,718
Deposits and borrowings from
 banks                                            2,305,810         190,838,804                 394,578            52,277,611

As mentioned earlier and despite low interest prevailing on the international market, we have managed to increase our customer
deposit base by USD 75.6m to reach USD 755.2m, i.e an increase of 11.13%.

Loans to customer in 2003 have more than doubled, while loans to banks have jumped from USD Nil in 2002 to USD 113.2m in
2003. That has been the result of active marketing in the African Continent.

Consequently, our net interest income has improved by 62.38%, reaching USD 7.3m in 2003 compared to USD 4.5m in 2002,
despite interest rate cuts in USD.

                                                                             2003                  2002                   2001
                                                                             USD                   USD                    USD

Net interest income                                                      7,312,334             4,503,333            4,014,285


Fee income and commissions
Service related fees and commissions                                     1,951,832             1,330,305               951,073
Risk related fees and commissions                                        1,672,134               911,222               191,489

Fee and commissions expenses
Management fees                                                      (      9,731)         (      10,846)                      -
Net fee and commission income                                            3,614,235             2,230,681            1,142,562



Profits arising from dealings in foreign currencies
Foreign exchange                                                         1,644,091             1,008,770              794,347


In connection with these new businesses, the Bank has also been able to attract additional ancillary earnings. Other income has
increased by 62.32% to reach USD 5.3m in 2003. Under other income, forex income accounted for USD 1.6m compared to
USD 1m in 2002. This improvement is mainly due to Forex transaction volumes following business expansion and instability in
foreign exchange markets.
                                                                                                                           Page 4


BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

MANAGEMENT DISCUSSION AND ANALYSIS – YEAR ENDED 31 DECEMBER 2003 (CONTINUED)



1.2       REVIEW BY FINANCIAL PRIORITY AREAS (CONTINUED)

1.2.2     Cost control
                                                                            2003                    2002                     2001
                                                                            USD                     USD                      USD
Operating expenses
 Staff costs                                                             723,653                 470,127                  281,251
 Depreciation                                                             76,090                  49,268                   38,877
Other expenses
 Equipment expenses                                                      245,687                 163,271                  107,858
 Property expenses                                                       123,759                  52,372                   41,756
Amortisation of goodwill                                                 766,400                 127,733                       -
Other                                                                  1,212,375                 751,598                  819,843
                                                                       3,147,964               1,614,369                1,289,585


Our cost base has increased by 95.00% to reach USD 3.1m compared to USD 1.6m in 2002. This was mainly associated with
the acquisition of the BNPI business, which has led to an increase in staff cost, premises and amortisation of goodwill for a total
amount of USD 3.8m.



1.2.3     Credit exposure
                                                                           2003                    2002                     2001
                                                                        USD 000                 USD 000                  USD 000
Lendings
Agriculture and fishing                                                   26,659                   3,082                    4,219
Manufacturing                                                             43,921                  14,870                   15,378
Tourism                                                                   13,185                   4,417                    4,230
Transport                                                                     -                       -                        -
Construction                                                              22,832                  34,297                    8,649
Traders                                                                   43,774                  26,705                       -
Statutory and parastatal bodies                                            6,944                  18,293                   13,401
Personal                                                                   7,578                   4,946                    1,069
Others                                                                    76,585                  13,446                      372
Total                                                                    241,478                 120,056                   47,318


Off Balance sheet activities
Non Fund based
Agriculture and fishing                                                    5,000                  10,638                    5,000
Manufacturing                                                             10,202                   9,963                    2,748
Transport                                                                     -                      176                    1,283
Construction                                                              33,100                  29,525                      308
Traders                                                                      935                     577                       -
                                                                                                                          Page 5


BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

MANAGEMENT DISCUSSION AND ANALYSIS – YEAR ENDED 31 DECEMBER 2003 (CONTINUED)



1.2       REVIEW BY FINANCIAL PRIORITY AREAS (CONTINUED)

1.2.3     Credit exposure (Continued)

                                                                          2003                    2002                     2001
                                                                       USD’000                 USD’000                  USD’000
New economy
Financial and business services                                              218                    5,994
Infrastructure                                                                82
Personal                                                                      50
Professional                                                                 205
Others                                                                    12,001                   11619                   2843
                                                                          61,793                   68,492                12,462


Loans
Residence in Mauritius                                                    56,069                   35,890                15,420
Residence outside Mauritius                                              127,128                    5,088                   921
Offshore Companies domiciled in Mauritius                                 54,062                   71,648                30,978

CONCENTRATION OF RISK

The Central Bank guideline on limit on concentration of risk is not applicable to offshore banking units. However, management
monitors concentration of risk closely as part of Barclays credit risk policy.


Overall, the Bank‟s portfolio is well diversified with exposures not exceeding 18% in any particular economic sector.

Most of the lending exposure is outside Mauritius.

1.2.4     Credit quality

                                                            Non
                                                     Performing Provision for
                                          Loans           loans credit losses
                                             (A)             (B)           (C)             B/A              C/B           C/A
                                        USD 000        USD 000      USD 000                  %                %             %
31 December 2003
Lendings                                                        4
Agriculture and fishing                     26,659                           267                                          1.00
Manufacturing                               43,921                           419                                          0.95
Tourism                                     13,185                           117                                          0.66
Transport
Construction                                22,832                           218                                          0.95
Traders                                     43,774                           437                                          1.00
New economy
Financial and business services
Infrastructure
Statutory and parastatal bodies              6,944                             69                                         0.99
Personal                                     7,578                             75                                         0.99
Professional
Education
Media, entertainment and
recreational activities
Special certificate holders
Others                                      76,585           244             853            0.32    349.59                1.11
                                                                                                                       Page 6


BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

MANAGEMENT DISCUSSION AND ANALYSIS – YEAR ENDED 31 DECEMBER 2003 (CONTINUED)



1.2       REVIEW BY FINANCIAL PRIORITY AREAS (CONTINUED)


1.2.4     Credit quality (Continued)

                                                          Non        Provision
                                                   performing        for credit
                                         Loans          loans           losses             %                %              %
                                            (A)            (B)              (C)          B/A              C/B            C/A
                                       USD’000       USD’000          USD’000
31 December 2002
Lendings
Agriculture and fishing                   3,082                             31                                            1.00
Manufacturing                            14,870                            149                                            1.00
Tourism                                   4,417
Transport
Construction                             34,297                            343                                            1.00
Traders                                  26,705                             27                                            1.00
New economy
Financial and business services
Infrastructure
Statutory and parastatal bodies          18,293                            183                                            1.00
Personal                                  4,946                             49                                            0.99
Professional
Education
Media, entertainment and
recreational activities
Special certificate holders
Others                                   13,446            251             179            1.87            71.31           1.33

31 December 2001
Lendings
Agriculture and fishing                   4,219                             42                                            1.00
Manufacturing                            11,159                            104                                            0.93
Tourism                                   4,230
Transport
Construction                              8,649                             83                                            0.96
Traders
New economy
Financial and business services
Infrastructure
Statutory and parastatal bodies          17,620                            176                                            1.00
Personal                                  1,069                              8                                            0.75
Professional
Education
Media, entertainment and
recreational activities
Special certificate holders
Others                                      372                              3                                            0.81



2.        CAPITAL STRUCTURE
                                                                         2003                   2002                    2001
                                                                      USD’000                USD’000                 USD’000

Capital and Reserves                                                    20,367                   15,488                 9,556


As an offshore business, Barclays Bank Plc Offshore Banking Unit is specifically exempted from maintaining a minimum capital
adequacy ratio to support it‟s credit risk exposures. Furthermore, it‟s historically low rate of default and the nature of it‟s
business makes it less exposed to credit risk. However, management always monitor it‟s capital level to ensure soundness and
stability of the business and its capacity to support unexpected losses.
                                                                                                                           Page 7


BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

MANAGEMENT DISCUSSION AND ANALYSIS – YEAR ENDED 31 DECEMBER 2003 (CONTINUED)

POINTS 3 AND 4 ARE MISSING – MUST MAKE REFERENCES TO THE NECESSARY SECTIONS WITHIN THE FS AND
ALSO ASSESS IF ALL MDA QUERIES ON THESE MATTERS HAVE BEEN ANSWERED.

3




4




5         STATEMENT OF CORPORATE GOVERNANCE PRACTICES

Barclays Bank PLC - Mauritius Offshore Banking Unit was licensed in accordance with Section 5 (2) of the Banking Ordinance
to carry on banking business in Mauritius from 14 July 1989 and is a branch of Barclays Bank PLC, registered in London,
England, Reg. No. 1026167, Registered office 54 Lombard Street, London EC3P 3AH.

The Board of Directors is seated in London and consists of the Chairman, eight non-executive Directors and four Executive
Directors.

Executive Directors generally have responsibility for formulating and implementing operational decisions and running of the
Group‟s businesses. The non-executive Directors support the skills and experience of the Executive Directors by approving and
monitoring the implementation of strategy and policy based on their knowledge and experience of other businesses and
industries.

The Board is committed to business integrity and professionalism in all its activities. As part of this commitment, the Board
supports the highest standard of corporate governance and the development of best practice.

The roles of the Chairman and Chief Executive are separate with responsibilities divided between them.

The names of the Directors who held office in the year ended 31 December 2003 are listed below:

Executive Directors

Name                                                          Position held
Sir Peter Middleton GCB                                       Group Chairman
Matthew William Barrett                                       Group Chief Executive
Christopher John Lendrum                                      Chief Executive Corporate Banking, appointed Vice
                                                               Chairman as from 01 January 2004
John Silvester Varley                                         Group Finance Director, appointed Group Deputy
                                                               Chief Executive as from 01 January 2004
Kheraj Naguib                                                 Group Finance Director as from 01 January 2004
Roger Davis                                                   Chief Executive of UK Banking as from 01 January 2004
Gary Hoffman                                                  Chief Executive, Barclaycard as from 01 January 2004
David Roberts                                                 Chief Executive, Private Clients and International as from
                                                               01 January 2004
                                                                                                                                 Page 8


BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

MANAGEMENT DISCUSSION AND ANALYSIS – YEAR ENDED 31 DECEMBER 2003 (CONTINUED)


5         STATEMENT OF CORPORATE GOVERNANCE PRACTICES (CONTINUED)

Non-Executive Directors

Name (Position held outside Barclays Bank PLC)                            Position held in Barclays Bank PLC
Thomas David Guy Arculus (Chairman of Severn Trent                        Member of the Board Remuneration and Board Nominations
 PLC)                                                                      Committees

Hilary Mary Cropper CBE (Member of the Financial                          Member of the Board Risk Committee
 Reporting Council, External Advisor to the Home Civil
 Senior Appointments Selection Committee, member of
 the UK Government‟s National Employment Panel)

Sir Brian Garton Jenkins GBE (Chairman of the Charities                   Deputy Chairman, member of the Board Remuneration,
 Aid Foundation)                                                           Board Nominations and Board Risk Committees

Sir Nigel Rudd DL (Chairman of Kidde PLC, non-                            Chairman of the Board Remuneration Committee, member of
 executive Chairman of Pilkington PLC and Pendragon                        the Board Nominations Committee
 PLC, non-executive Director and Deputy Chairman of
 The Boots Company PLC)

Stephen George Russell (Was previously Chief                              Chairman of the Board Audit and member of Board Risk
 Executive of The Boots Company PLC)                                       Committees

Dr Jurgen Zech (Director of Misys Plc and Partner,                        Member of the Board Audit Committee
 Re Limited)

Dame Sandra Dawson (KPMG Professor of Management                          Member of the Board Audit Committee
 Studies at the University of Cambridge)

Sir Richard Broadbent (Was previously a member of the
 Group Executive Committee of Shroders Plc)

The reporting line of Barclays Bank PLC Mauritius to the Executive Directors of Barclays Bank PLC is done through Barclays
Africa (based in London and Johannesburg), which formed part of the Corporate Banking cluster until 31 December 2003 and is
under the responsibility of Chris Lendrum, Executive Director. As from 01 January 2004, Barclays Africa forms part of Private
Clients and International cluster, which is under the responsibility of David Roberts, Executive Director.

The chart below describes the above reporting line:


                                        Mauritius Reporting Line to Group as from 01 January 2004


                                                       Sir Peter Middleton G C B
                                                            Group Chairman
                                                       Barclays Bank PLC London


                                                            Mathew Barrett
                                                        Group Chief Executive
                                                       Barclays Bank PLC London

                                                             David Roberts
                                                       Chief Executive of private
                                                        Clients & International
                                                       Barclays Bank PLC London


                                                        Dominic Bruynseels (MD)
                                                             Barclays Africa
                                                         Strategic Business Unit
                                                                 London



                                                              Malcolm Hewitt
                                                        MD, Core Businesses Portfolio




                                                         Jacques de Navacelle (MD)
                                                             Barclays Mauritius
                                                           100% Branch operation
                                                            Port-Louis, Mauritius
                                                                                                                           Page 9


BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

MANAGEMENT DISCUSSION AND ANALYSIS – YEAR ENDED 31 DECEMBER 2003 (CONTINUED)


BARCLAYS AFRICA ROLE

Barclays Africa is a strategic business unit which controls all Barclays banks situated in Africa. It is in fact the lead business
Group for Barclays branches and subsidiaries in Botswana, Ghana, Mauritius, South Africa, Uganda, Zimbabwe, Egypt, Kenya,
Seychelles, Tanzania and Uganda. It also has a corporate and merchant banking presence in South Africa and has cross
border responsibility for all those countries within Africa geographical spread where the Group has no representation. As from
01 January 2004, it also controls Barclays businesses in the United Arab Emirates.

The senior management structure within Barclays Africa comprises the Heads of Function who report to Dominic Bruynseels,
Managing Director of Barclays Africa. In turn, each business also has its own Board of Directors (in case of locally incorporated
subsidiary operations) and Executive structure (for branches). As from 01 January 2004, the business model for Barclays Africa
has been split in two portfolios; Core Businesses and Developing Businesses. All Mauritius businesses fall under Core Business
Portfolio, which is under the responsibility of Malcolm Hewitt.

The list of Heads of Function at 31 December 2003 is as follows:

Charles Middleton                          -      Director, Country Management

Andrew Bainbridge                          -      Business Risk Director, responsible for Barclays Africa‟s Credit and
                                                  Operational Risk Management

Marcus Andrade                             -      Managing Director, Corporate and Merchant Banking

Malcolm Hewitt                             -      Managing Director, Retail Customers, responsible for management of
                                                  Barclays Africa retail sector

Charles Simmonds                           -      Director of Service Delivery

Alexander Filshie                          -      Chief Financial Officer, responsible for Barclays Africa Finance

William Gibbon                             -      Human Resources Director

The list of Heads of Function of Core Business as from 01 January 2004 is as follows:

Andrew Bainbridge                          -      Business Risk Director, responsible for Barclays Africa‟s Credit and
                                                  Operational Risk Management
Paul Freer                                 -      Managing Director, Corporate and Merchant Banking
Andy Riggs                                 -      Managing Director, Retail Customers, responsible for management of
                                                  Retail sector
Dave Jones                                 -      Director of Service Delivery
Alexander Filshie                          -      Chief Financial Officer, responsible for Barclays Africa Finance
William Gibbon                             -      Human Resources Director


The roles and responsibilities of the Heads of Function/Country Managing Directors flow from the Managing Director, Barclays
Africa, and are agreed on a personal basis; roles and responsibilities are in turn sub-delegated. Thus, the chain of responsibility
passes down through individuals who are held accountable for the soundness of their delegation and the performance of the
activities delegated.

Authorities and discretions are delegated by the Corporate Banking Cluster Head (as from 01 January 2004; Private Clients and
International Cluster) to the Managing Director, Barclays Africa, who may in turn delegate powers and discretionary limits within
his authority to his subordinates. As a general rule, those to whom authority is delegated may, in turn, sub-delegate this
authority to named individuals in a responsible manner.

BARCLAYS BANK PLC MAURITIUS

Barclays Bank PLC Mauritius (the “Bank”) consists of three entities, the Mauritius Domestic Branch, the Offshore Banking Unit
and Barclays Leasing Company Limited. The role of managing these businesses in Mauritius has been delegated to Jacques
de Navacelle (Country Managing Director) through an appointment letter dated 23 August 1998 signed by Ian Richardson,
Managing Director of Barclays Africa at that date.

Jacques de Navacelle joined Barclays Bank PLC in Paris in 1978. He holds a Diploma in Philosophy from the Paris University
and is a Graduate of „L‟Institut du Commerce Internationale‟ and of the French Banking Institute. Before being appointed
Country Managing Director in Mauritius, he held various managerial positions in Large Corporate Banking, Retail Banking,
International Finance, Financial Institutions and Global Custody.
                                                                                                                    Page 10


BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

MANAGEMENT DISCUSSION AND ANALYSIS – YEAR ENDED 31 DECEMBER 2003 (CONTINUED)


BARCLAYS BANK PLC MAURITIUS (CONTINUED)

Jacques de Navacelle is responsible for the implementation of the Group Strategy in Mauritius and for the performance of the
different entities under his control.

He is supported by the local Country Management Committee which also deals with any operational issues and is committed to
implementing sound governance practices.

Country Management Committee

The other members of this Committee at 31 December 2003 were:

Kamal Taposeea joined Barclays Bank Plc in Mauritius in August 2003 as Director of Corporate and Merchant Banking,
Offshore and Asset Finance. Barrister-at-Law and a holder of a Masters in International and Comparative Law, he has acquired
a vast international financial markets and banking operations experience from the managerial positions he held in blue-chips
financial institutions. Kamal Taposeea is responsible for business development and client relationship management with
Barclays Corporate clients.

Roger Leung Shin Cheung ACIB joined the Bank in 1967 and worked in various departments and was promoted to managerial
grade in 1986. Since then, he has worked in Retail and Corporate Banking and was appointed Corporate Director in 2000. He
now leads the onshore Corporate Banking arm of the Bank and is responsible for the maintenance and development of the
corporate customers‟ portfolio.

Robert Warlow ACIB joined Barclays Bank PLC in the UK in 1984 and has carried out managerial functions since 1991 when he
was appointed Small Business Manager in UK. Before coming to Mauritius, he occupied the post of Senior Corporate Manager
in Uganda. He was, until 28 February 2003, the Bank‟s Risk Management Director and was responsible for the credit risk
function that is, managing, monitoring and implementing sound credit risk policies and procedures. He was also, until 28
February 2003, responsible for proper monitoring of credit risk assessment tools and systems.

Subsequent to Robert Warlow‟s departure on 28 February 2003, the risk department was restructured into the Corporate Credit
and Retail Credit Units. The Retail Credit Unit is headed by Amar Woomchurn while the Corporate Credit Director is Sakeel
Dilmohamed ACIB. The latter has also been appointed on the Country Management Committee on 03 March 2003. As from 01
January 2004, Sakeel Dilmohamed ACIB, has been appointed Country Credit Director and head of both Retail and Corporate
Credit Units

Wence Mootoosamy FCIB joined the Bank in 1973. He has undertaken various managerial duties in Retail Banking, Card
Business and Head Office Administration as from 1994. He was appointed Finance Director in 2000 with overall responsibility
for implementing, maintaining and monitoring sound financial policies and strategies.

Mario Hennequin ACIB, MBA is since 2001 the Head of Retail Performance (“HORP”). He joined the Bank in 1974. He was
appointed as manager in 1995 and subsequently worked in the Offshore Business Unit, Card Business and Corporate Banking
before his appointment as HORP in 2001. He is now responsible for the maintenance and development of the Retail Banking
customers‟ portfolio of the Bank.

Percy Laxade is holder of a diploma in Human Resources Management from the University of Mauritius. Before joining Barclays
in 2000 as Head of Human Resources, he worked for Delphis Bank as Human Resources Manager. He has responsibility for
implementing and monitoring sound human resources policies and strategies within the Bank, and ensuring that correct
employee/employer relationships are maintained.

Loganaden Sidambaram was appointed Head of Treasury Sales when he joined Barclays Bank PLC Mauritius in 2001 and was
subsequently promoted to Treasurer in 2002. He holds a Certificate in ACI Dealing and has more than 11 years of experience in
Treasury. He worked for 16 years with the State Bank of Mauritius, of which 8 years in its Treasury department, and spent 3
years in Delphis Bank before joining the Bank. He is now responsible for managing the treasury business and maximising
returns on liquid financial assets and dealings, while minimising the impact of market and liquidity risks.

Martin Fay ACIB was until March 2003, Head of Service Delivery – Indian Ocean. He joined Barclays in 1979 and has 13 years
of experience at managerial level. He has occupied senior positions in branches and regional operations and in change
management. Before joining the Bank, he worked as Head of Operational Risk for Barclays Bank of Kenya Ltd. He is
responsible for the implementation and monitoring of sound operation policies, strategies and practices and IT systems while
minimising operational risk. His areas of responsibility include both Mauritius and Seychelles.

Country Management Committee (previously the “Executive Committee”)

Subsequent to Martin Fay‟s departure in March 2003, Jean Claude Capiron was appointed Head of Service Delivery.

Yashodaren Umanee ACIB, MBA, joined the Bank in 1977. In 1999, he entered managerial grade and was later appointed
Offshore Banking Unit Director. He is responsible for proper management, administration and development of the Offshore
Business entity.
                                                                                                                       Page 11

BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT


MANAGEMENT DISCUSSION AND ANALYSIS – YEAR ENDED 31 DECEMBER 2003 (CONTINUED)


BARCLAYS BANK PLC MAURITIUS (CONTINUED)

Each of the members reports both to Jacques de Navacelle (MD) and to their Heads overseas who are the Executive
Committee members of Barclays Africa, thus ensuring independent functioning, with the exception of the Offshore Business Unit
Director and the Corporate Director who report to Kamal Taposeea only. Reporting lines with Barclays Africa are as follows:

         Jacques de Navacelle, Country Managing Director, reports to Malcolm Hewitt;
         Robert Warlow, Risk Management Director, reports to Andrew Bainbridge;
         Wence Mootoosamy, Finance Director, reports to Alexander Filshie;
         Mario Hennequin, Head of Retail Performance, reports to Andy Riggs;
         Percy Laxade, Head of Human Resources Management, reports to William Gibbon;
         Loganaden Sidambaram, Treasurer, reports to Andy King, Barclays Africa Treasurer;
         Martin Fay, Head of Service Delivery – Indian Ocean, reports to Dave Jones;
         Kamal Taposeea, Head of Corporate and Merchant Banking, Offshore and Asset Finance, reports to Paul Freer.

Following the departure of Robert Warlow, both Amar Woomchurn and Sakeel Dilmohamed ACIB report to Andrew Bainbridge.
Also following the departure of Martin Fay, Jean Claude Capiron reports to Dave Jones.

The local Country Management Committee has powers to decide on all normal business without referring to Barclays Africa.
However, all strategic decisions must be ratified by the Barclays Africa Board prior to implementation.

In addition there are other committees to manage Credit Risk, Interest Rate Risk, Market Risk and Liquidity Risk. These are the
Credit Committee and the Assets and Liabilities Management Committee (“ALCO”).

Mauritius Credit Committee

The Credit Committee sets out the credit policy for the Mauritian businesses. Its terms of reference have been changed in 2003
to include:

         Review exposures sanctioned by Africa Corporate Credit Team (ACCT) and Specialist Lending International (SLI)
         Review new Barclays Capital Financial Institution counterparty limits with Treasurer
         To give guidance on credit appetite for new business opportunities to sales teams
         To receive reports on significant deterioration in the risk profile of exposures.
         To review specific and general provisions raised in the portfolio
         Provide comment on annual reviews of Large Exposures (greater than or equal to 15% of our capital base)
         To receive analysis of the trends in the Advances portfolio.

Members are the:

         Country Managing Director (Chairman)
         Director of Corporate and Merchant Banking, Offshore and Asset Finance
         Corporate Director
         Head of Retail performance
         Offshore Banking Unit Director
         Barclays Leasing Managing Director
         Country Credit Director
         Head of Retail Credit Unit
         Corporate Credit Manager – Secretary

The Committee‟s sanctioning power was withdrawn on 19 May 2003. Henceforth, sanctioning limits are as follows:-

         Up to the local equivalent of GBP 200K (depending on grading of customer) – Corporate Credit Sanctionner
         Up to the local equivalent of GBP 500K (depending on grading of customer) – Country Credit Director.

Any requests above those limits are sanctioned by the Africa Corporate Credits Team or Specialist Lending International, two
pan-African credit sanctioning departments which are under the responsibility of Andrew Bainbridge, Business Risk Director,
Barclays Africa.

Assets and Liabilities Management Committee

The Assets and Liabilities Management Committee (“ALCO”) is responsible for the management of liquidity risk, interest rate
risk, market risk, balance sheet structure as well as capital management. The Committee is essentially a strategic decision
committee whose primary concern is that of financial risk management. Its purpose is to achieve sustainable and stable profits
within a framework of acceptable financial risks and controls. Monthly meetings are held but can be scheduled more frequently if
need be. A copy of the minutes is sent to Barclays Africa‟s Chief Financial Officer and to the Barclays Africa Treasurer. In
addition, a copy must be forwarded to David Dean, Director, Group Market Risk.
                                                                                                                           Page 12


BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

MANAGEMENT DISCUSSION AND ANALYSIS – YEAR ENDED 31 DECEMBER 2003 (CONTINUED)


BARCLAYS BANK PLC MAURITIUS (CONTINUED)

Permanent members are the:

         Country Managing Director, Chairperson
         Treasurer
         Finance Director
         Corporate Director
         Head of Retail Performance
         Secretary
         Country Credit Director
         Director of Corporate and Merchant Banking, Offshore and Asset Finance

By invitation only the:

         Head of Service Delivery
         Head of Human Resources
         Head of Liquidity and/or Market Making Management
         Economist

Governance and Control Committee

The Governance and Control Committee was set up in 2002 to enhance internal control and compliance. It is responsible for
the establishment, operation, compliance with and review of completeness of Bank and regulatory Governance and Control
framework. Meetings are held on a quarterly basis.

Executive members are the:

         Country Managing Director, Chairperson
         Corporate Director
         Head of Retail Performance
         Finance Director
         Head of Service Delivery
         Operational Risk Manager, Secretary
         Assurance Manager
         Regional Head of Assurance for Barclays Africa, attending as an external challenger.

External attendees can attend specific meetings as agreed and by invitation only.

Remuneration Policy

The remuneration policy for staff up to management is generally decided by the Country Managing Director and Head of Human
Resources Management with the input of Function Heads. For individual staff, this is performance related and is recommended
by the relevant Head of the business unit. For the Heads of Function and Directors this is decided by their reporting line
overseas with the input of the Managing Director. For the Country Managing Director, this is decided by the Managing Director
Barclays Africa Core Business.

Management performance is assessed by measuring actual performance during the year against performance contract agreed
at the start of the year between direct reporting contact and the individual. Each performance contract is drafted based on the
objectives to be achieved at year-end by each function, and flows from the Chief Executive, Private Clients and International (As
from 01 January 2004) and delegated to all function heads via Barclays Africa.

The total amount of remuneration paid to directors is given in Note 17, Related Party Transactions, which is on pages 45 and 46
of the financial statements.

Internal audit

It is the policy of Barclays Bank PLC to maintain internal controls to provide reasonable assurance of effective and efficient
operations, internal financial and operational control and compliance with laws and regulations. To ensure independency and
objectivity of action, an internal Audit Team has been created within Barclays Africa and is under the responsibility of the
Business Risk Director of Barclays Africa. The team is selected according to the specificity of the area, which is subject to
inspection and visits territories at least twice yearly. However, in case of need, the team can visit at more regular intervals. The
areas under its inspection are:
          IT System
          Treasury Operation
          Card Business
          Lending Risk and Corporate Business
          Retail Operations
          Operational procedures and systems (including FOREX)
          General administration, finance and controlling office
          Offshore Business
                                                                                                                            Page 13


BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

MANAGEMENT DISCUSSION AND ANALYSIS – YEAR ENDED 31 DECEMBER 2003 (CONTINUED)


BARCLAYS BANK PLC MAURITIUS (CONTINUED)

Regular reports are presented to the Country Managing Director of Barclays Africa confirming that adequate control procedures
are in place for identifying weaknesses. Any weaknesses that are identified should be acknowledged by the local Executive
Team and steps should be taken to resolve them quickly.

As from 01 January 2004, Devraj Rye Rughoo has been appointed as local Assurance Manager to enhance the Bank‟s internal
control system. He will be involved in inspecting the Bank‟s systems and processes to ensure control is adequate and effective.

A copy of the reports is also distributed to overseas Heads of Function, the Bank of Mauritius and the external auditors.

Furthermore a monthly internal control statement of compliance referred to as the Turnbull Control Self-Evaluation Return is
signed by the Country Managing Director and submitted to the Managing Director of Barclays Africa.

Compliance

The Governance and Control Committee monitors all compliance issues on a permanent basis. The Finance Director is
accountable for the control of non-customers accounts, known as General Ledger Control, and a monthly Certificate of
Compliance is submitted to Barclays Africa Finance. A Compliance guide is also distributed to all staffs and the Non-Financial
Risk Manager, ensures that all staffs are aware of these guidelines.

Statement of directors' responsibilities in respect of the financial statements

Company law requires the Directors to prepare financial statements for each financial year which present fairly the financial
position, financial performance and cash flows of the Bank. In preparing those financial statements, the Directors are required
to:

     select suitable accounting policies and then apply them consistently;
     make judgements and estimates that are reasonable and prudent;
     state whether International Financial Reporting Standard have been followed, subject to any material departures
      disclosed and explained in the financial statements; and
     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Bank will
      continue in business.

The Directors confirm that they have complied with the above requirements in preparing the financial statements.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the Bank and to enable them to ensure that the financial statements comply with the Mauritian Companies
Act 2001. They are also responsible for safeguarding the assets of the Bank and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.




                                                                                                                     27 April 2004
                                                                                           Page 14

AUDITORS' REPORT TO THE DIRECTORS OF

BARCLAYS BANK PLC


We have audited the financial statements of Barclays Bank PLC – Mauritius Offshore Banking
Unit (the “Bank”) on pages 16 to 45 which have been prepared in accordance with the accounting
policies set out on pages 21 to 26.

Directors’ responsibilities

As described on page 13, the Bank's directors are responsible for the preparation and
presentation of financial statements which are in accordance with and comply with International
Financial Reporting Standards, which give a true and fair view of the matters to which they relate,
and which present fairly the financial position of the Bank at 31 December 2003 and its financial
performance, changes in equity and cash flows for the year ended on that date.

Auditors’ responsibilities

We are responsible for expressing an independent opinion, based on our audit, on the financial
statements presented by the directors and reporting our opinion to you.

Basis of opinion

We conducted our audit in accordance with International Standards on Auditing. An audit includes
examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the accounting policies
are appropriate to the Bank's circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance
as to whether the financial statements are free from material misstatement. In forming our
opinion, we also evaluated the overall adequacy of the presentation of information in the financial
statements. We believe that our audit provides a reasonable basis for our opinion.

We have no relationship with or interests in the Bank other than in our capacities as auditors,
consultants and tax advisers.
                                                                                           Page 15

AUDITORS' REPORT TO THE DIRECTORS OF

BARCLAYS BANK PLC (CONTINUED)


Opinion

We have obtained all the information and explanations we have required.

In our opinion:

(a)     proper accounting records have been kept by the Bank as far as appears from our
        examination of those records and;

(b)     the financial statements on pages 16 to 45:

        (i)       have been prepared in accordance with and comply with International Financial
                  Reporting Standards;

        (ii)      give a true and fair view of the matters to which they relate; and

        (iii)     present fairly the financial position of the Bank at 31 December 2003 and its
                  financial performance, changes in equity and cash flows for the year ended on
                  that date.




PricewaterhouseCoopers




Jean-Paul de Chazal
Signing partner                                                                        27 April 2004
Page 16
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

BALANCE SHEET - 31 DECEMBER 2003




                                                Notes               2003          2002          2001
                                                                    USD           USD           USD
 ASSETS
 Cash resources
 Balances with Category 1 banks and
  interbank loans                                                   5,932     5,285,536     7,092,382
 Balances with Category 2 banks in
  Mauritius and banks abroad                                  608,530,758   608,767,112   252,068,840
                                                              608,536,690   614,052,648   259,161,222
 Securities, placements and other investments
 Investment securities - Available-for-sale      1                    -       5,235,347    20,257,351
                                                                      -       5,235,347    20,257,351
 Loans
 Personal and credit cards                                      7,595,527     4,690,489     1,051,988
 Business                                                     226,938,218    80,516,415    28,645,947
 Governments                                                    6,943,750    34,849,073    17,619,749
 Entities outside Mauritius                                   113,237,916            -             -
                                                 2            354,715,411   120,055,977    47,317,684


 Other
 Goodwill                                        3              2,937,867     3,704,267           -
 Property, plant and equipment                   4                212,759       267,402       77,004
 Other assets                                    5              3,601,210     2,626,786      268,473
 Retirement benefit assets                       6                 65,517       135,055       66,124
                                                                6,817,353     6,733,510      411,601
                                                        USD   970,069,454   746,077,482   327,147,858
Page 17
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

BALANCE SHEET - 31 DECEMBER 2003 (CONTINUED)




                                             Notes               2003                 2002                2001
                                                                 USD                  USD                  USD
 LIABILITIES, EQUITY AND RESERVES
 Deposits
 Personal                                                  150,310,456          135,912,146         58,173,681
 Business                                                  601,241,825          531,851,572        232,694,447
 Banks                                                       3,611,848           11,797,012                277
                                              7            755,164,129          679,560,730        290,868,405
 Borrowings
 Category 1 banks and interbank borrowings                    453,297                 2,254                 277
 Category 2 banks in Mauritius and
  banks abroad                                             186,773,659           40,478,345          6,889,609
                                                           187,226,956           40,480,599          6,889,886
 Other
 Income tax                                   8                303,455              184,229                 -
 Retirement benefit obligations               6                     -                 8,519              7,703
 Other liabilities and provisions             9              7,007,779           10,355,201         19,825,653
                                                             7,311,234           10,547,949         19,833,356
 Total liabilities                                         949,702,319          730,589,278        317,591,647


 Equity and reserves
 Assigned capital                                            4,500,000            4,500,000          4,500,000
 Reserves                                                   15,867,135           10,988,204          5,056,211
 Total equity and reserves                                  20,367,135           15,488,204          9,556,211
 Total equity and liabilities                        USD   970,069,454          746,077,482        327,147,858



 CONTINGENT LIABILITIES

 Acceptances, guarantees, letters of
  credit, endorsements and other
  obligations on account of customers,
  and spot foreign exchange contracts         10     USD    61,792,799           68,491,950         12,462,227




___________________________________                                ___________________________________
     YASHODAREN UMANEE                                                         SUNIL RAMGOBIN
          DIRECTOR                                                            DEPUTY DIRECTOR

                                                                                                   27 April 2004
Page 18
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

INCOME STATEMENT - YEAR ENDED 31 DECEMBER 2003




                                                 Notes              2003                 2002               2001
                                                                    USD                  USD                USD

Interest income
Loans                                                           6,232,509            2,059,073        2,000,120
Placements and loans to banks                                  11,003,193            7,696,090        9,503,610
Other                                                             185,598              172,442           34,368
                                                               17,421,300            9,927,605       11,538,098

Interest expense
Deposits                                                        7,235,966            5,029,694        7,434,986
Deposits and borrowings from banks                              2,305,810              394,578           88,827
Other                                                             567,190                   -                -
                                                               10,108,966            5,424,272        7,523,813


Net interest income                                             7,312,334            4,503,333        4,014,285
Impairment losses on loans                        2                    -         (      12,193)              -
Net interest income after impairment
losses                                                          7,312,334            4,491,140        4,014,285
 on loans

Other income
Fee income and commissions                        11            3,614,235            2,230,681        1,142,562
Profits arising from dealings in foreign
 currencies                                       12            1,644,091            1,008,770          794,347
                                                                5,258,326            3,239,451        1,936,909
Net interest and other income                                  12,570,660            7,730,591        5,951,194
Non-interest expense
Salaries and human resource development           13              616,021              494,113            254,478
Pension contributions and other staff benefits    13              107,632        (      23,986)            26,773
Depreciation                                      4                76,090               49,268             38,877
Other                                             14            2,348,221            1,094,974            969,457
Total operating expenses                                        3,147,964            1,614,369        1,289,585
Net profit before income tax                                    9,422,696         6,116,222           4,661,609
Income tax                                        8            ( 300,792)        ( 184,229)                  -
Net profit                                               USD    9,121,904            5,931,993        4,661,609




___________________________________                                 ___________________________________
     YASHODAREN UMANEE                                                         SUNIL RAMGOBIN
          DIRECTOR                                                            DEPUTY DIRECTOR


                                                                                                   27 April 2004
Page 19
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

STATEMENT OF CHANGES IN EQUITY - YEAR ENDED 31 DECEMBER 2003




                                                            2003              2002             2001
                                                             USD              USD              USD
 EQUITY AND RESERVES

 Assigned capital
 At 01 January 2003 and 31 December 2003                4,500,000         4,500,000        4,500,000


 Reserves
 General banking reserve
 At 01 January 2003                                       808,345          416,481          343,329
 Transfer from retained earnings                        1,505,853          391,864           73,152
 At 31 December 2003                                    2,314,198          808,345          416,481


 Retained earnings
 At 01 January 2003                                    10,179,859         4,639,730           51,273
 Transfer to general banking reserve                  ( 1,505,853)   (      391,864)   (      73,152)
 Transfer to Head Office                              ( 4,242,973)               -                -
 Net profit                                             9,121,904         5,931,993        4,661,609
 At 31 December 2003                                   13,552,937        10,179,859        4,639,730


 Total reserves and surplus                            15,867,135        10,988,204        5,056,211


 Total equity and reserves                 USD         20,367,135        15,488,204        9,556,211
Page 20
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

CASH FLOW STATEMENT - YEAR ENDED 31 DECEMBER 2003




                                                Notes                    2003                2002            2001
                                                                          USD                 USD             USD
Cash flow from operating activities
Net profit before income taxes                                       9,422,696           6,116,222       4,661,609
Income tax paid                                                (      181,566)                  -               -
Adjustments to determine net cash flows
Depreciation                                                            76,090              49,268          38,877
Provision and adjustments to income for
 credit losses                                                             -               12,193               -
Amortisation of goodwill                                              766,400             127,733               -
Operating profit before changes in
  operating assets and liabilities                                  10,083,620           6,305,416       4,700,486
(Increase)/decrease in operating assets
   Loans and advances                                          ( 234,659,434)      ( 46,521,486)        32,249,715
   Other assets                                                (     974,424)      (    373,313)           756,738
   Retirement benefit assets                                          69,538       (     68,931)      (      6,678)
(Decrease)/increase in operating liabilities:
Increase in deposits                                                75,603,399      194,867,325         68,162,580
  Other liabilities and provisions                             (     3,347,422)    ( 10,368,452)        16,440,597
  Retirement benefit obligations                               (         8,519)             816       (        470)
Net cash (used in)/from operating activities                   ( 153,233,242)     ( 143,841,375)       122,302,968


Cash flow from financing activities
Transfer to Head Office                                        (    4,242,973)                 -                -
Net cash from financing activities                             (    4,242,973)                 -                -



Cash flow from investing activities
Acquisition of net assets, net of cash
 acquired                                                                   -          162,444,000              -
Payments for purchase of property, plant
 and equipment                                                 (        21,447)    (         6,666)   (     22,838)
Payments for purchase of investment                                         -                   -     ( 20,257,351)
Proceeds from sale of investments                                    5,235,347          15,022,004              -
Net cash from/(used in) investing                                    5,213,900         177,459,338    ( 20,280,189)
activities

Net (decrease)/increase in cash and cash
 equivalents                                                  ( 152,262,315)           321,300,713     102,022,779
Cash and cash equivalents at 01 January
 2003                                                              573,572,049         252,271,336     150,248,557
Cash and cash equivalents at
 31 December 2003                                15     USD        421,309,734         573,572,049     252,271,336
Page 21
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

ACCOUNTING POLICIES
YEAR ENDED 31 DECEMBER 2003

Index to accounting policies

                                                          Page

A   Basis of preparation                                      22
B   Offsetting financial instruments                          22
C   Interest income and expense                               22
D   Foreign currency translation                              22
E   Derivative financial instruments and hedging         22 - 23
F   Fee and commission income                                 23
G   Investment securities                                     23
H   Originated loans and provision for loan impairment   23 - 24
I   Goodwill                                                  24
J   Computer software development costs                       24
K   Property, plant and equipment                             24
L   Cash and cash equivalents                                 25
M   Provisions                                                25
N   Employee benefits                                         25
O   Deferred income taxes                                     26
P   Assigned capital                                          26
Q   Borrowings                                                26
R   Acceptances                                               26
S   Comparatives                                              26
                                                                                                                                     Page 22
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

ACCOUNTING POLICIES
YEAR ENDED 31 DECEMEBR 2003 (CONTINUED)

The financial statements have been prepared in accordance with and comply with International Financial Reporting Standards (“IFRS”).
The principal accounting policies adopted in the preparation of these financial statements, which have been applied consistently, are set
out below:

A    Basis of presentation

     These financial statements are prepared under the historical cost convention as modified by the revaluation of available-for-sale
     investment securities and all derivative contracts.

     The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates
     and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
     date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these
     estimates are based on management‟s best knowledge of current events and actions, actual results ultimately may differ from
     those estimates.

B    Offsetting financial instruments

     Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right
     to set off the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability
     simultaneously.

C    Interest income and expense

     Interest income and expense are recognised in the income statement for all interest bearing instruments on an accrual basis using
     the effective yield method based on the actual purchase price. When loans become doubtful of collection, they are written down to
     their recoverable amounts and interest income is thereafter recognised based on the rate of interest that was used to discount the
     future cash flows for the purpose of measuring the recoverable amount.

D    Foreign currency translation

     (1)   Measurement currency

     Items included in the financial statements of the Bank are measured using the currency that best reflects the economic substance
     of the underlying events and circumstances (the “measurement currency”). The financial statements are presented in United
     States dollars which is the measurement currency of the Bank.

     (2)   Transactions and balances

     Foreign currency transactions are translated into the measurement currency at the exchange rates prevailing at the dates of the
     transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of
     monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Such balances are
     translated at the rates of exchange ruling at the balance sheet date.

E    Derivative financial instruments and hedging

     Derivative financial instruments including foreign exchange contracts, currency swaps and other derivative financial instruments,
     are initially recognised in the balance sheet at cost (which includes transaction costs).

     On the date a derivative contract is entered into, the Bank designates certain derivatives as either (1) a hedge of the fair value of a
     recognised asset or liability (fair value hedge); or, (2) a hedge of a future cash flow attributable to a recognised asset or liability, a
     forecasted transaction or a firm commitment (cash flow hedge). Derivative financial instruments are subsequently remeasured at
     their fair value. Fair values are obtained from discounted cash flow models and options pricing models as appropriate. All
     derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.
                                                                                                                                 Page 23
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

ACCOUNTING POLICIES
YEAR ENDED 31 DECEMEBR 2003 (CONTINUED)



E   Derivative financial instruments and hedging (Continued)

    The Bank‟s derivative transactions, while providing effective economic hedges under the Group‟s risk management policies, do not
    qualify for hedge accounting under the specific rules of IAS 39 and are therefore treated as derivatives held for trading with fair
    value gains and losses reported in the income statement.

F   Fee and commission income

    Fees and commissions are generally recognised on an accrual basis when the service has been provided. Loan origination fees
    which are probable of being drawn down, are deferred (together with related direct costs) and recognised upon disbursement.
    Commission and fees arising from negotiating, or participating in the negotiation of a transaction for a third party are recognised on
    completion of the underlying transaction. Fees for custody services are recognised ratably over the period the service is provided.

G   Investment securities

    The Bank classifies its investment securities as held-for-trading, held-to-maturity or available-for-sale assets. Management
    determines the appropriate classification of its investments at the time of the purchase. Investment securities intended to be held
    for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or
    equity prices are classified as available-for-sale.

    Investment securities are initially recognised at cost (which includes transaction costs). Available-for-sale financial assets are
    subsequently remeasured at fair value based on quoted bid prices or amounts derived from cash flow models. Fair values for
    unlisted equity securities are estimated using applicable price/earnings or price/cash flow ratios refined to reflect the specific
    circumstances of the issuer. Unrealised gains and losses arising from changes in the fair value of securities classified as available-
    for-sale are recognised in equity. Equity securities for which fair values cannot be measured reliably are recognised at cost less
    impairment. When the securities are disposed of or impaired, the related accumulated fair value adjustments are included in the
    income statement as gains and losses from investment securities.

    A financial asset is impaired if its carrying amount is greater than its estimated recoverable amount. The amount of the impairment
    loss for assets carried at amortised cost is calculated as the difference between the asset‟s carrying amount and the present value
    of expected future cash flows discounted at the financial instrument‟s original effective interest rate. By comparison, the
    recoverable amount of an instrument measured at fair value is the present value of expected future cash flows discounted at the
    current market rate of interest for a similar financial asset.

    Interest earned while holding investment securities is reported as interest income. Dividends receivable are included separately in
    dividend income when a dividend is declared.

    All regular way purchases and sales of investment securities are recognised at trade date which is the date that the Bank commits
    to purchase or sell the asset. All other purchases and sales are recognised as derivative forward transactions until settlement.

H   Originated loans and provision for loan impairment

    Loans originated by the Bank by providing money directly to the borrower (at draw down) are categorised as loans originated by
    the Bank and are carried at amortised cost, which is defined as the fair value of cash consideration given to originate those loans
    as is determinable by reference to market prices at origination date. Third party expenses, such as legal fees, incurred in securing
    a loan are treated as part of the cost of the transaction.

    All loans and advances are recognised when cash is advanced to borrowers.

    An allowance for loan impairment is established if there is objective evidence that the Bank will not be able to collect all amounts
    due according to the original contractual terms of the loans. The amount of the provision is the difference between the carrying
    amount and the recoverable amount, being the present value of expected cash flows, including amounts recoverable from
    guarantees and collateral, discounted at the original effective interest rate of the loans.
                                                                                                                                 Page 24
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

ACCOUNTING POLICIES
YEAR ENDED 31 DECEMEBR 2003 (CONTINUED)



H   Originated loans and provision for loan impairment (Continued)

    The loan loss provision also covers losses where there is objective evidence that probable losses are present in components of the
    loan portfolio at the balance sheet date. These have been estimated based upon historical patterns of losses in each component,
    the credit ratings allocated to the borrowers and reflecting the current economic climate in which the borrowers operate. When a
    loan is uncollectible, it is written off against the related provision for impairment; subsequent recoveries are credited to the
    provision for loan losses in the income statement.

    Statutory and other regulatory loan loss reserve requirements that exceed these amounts are dealt with in the general banking
    reserve as an appropriation of retained earnings.

    If the amount of the impairment subsequently decreases due to an event occurring after the write-down, the release of the
    provision is credited as a reduction of the provision for loan losses.

I   Goodwill

    Goodwill represents the excess of the cost of an acquisition over the fair value of the Bank‟s share of the net assets acquired at the
    date of acquisition. Goodwill on acquisition of the assets and liabilities is reported in the balance sheet as an intangible asset and
    is amortised using the straight-line method over its estimated useful life.

    Management determines the estimated useful life of goodwill based on its evaluation of the respective companies at the time of the
    acquisition, considering factors such as existing market share, potential growth and other factors inherent in the acquired
    companies. Goodwill is generally amortised over 5 years.

    At each balance sheet date the Bank assesses whether there is any indication of impairment. If such indications exist an analysis
    is performed to assess whether the carrying amount of goodwill is fully recoverable. A write down is made if the carrying amount
    exceeds the recoverable amount.

    The gain or loss on disposal of an entity includes the related unamortised balance of goodwill relating to the entity disposed.

J   Computer software development costs

    Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Costs that are
    directly associated with identifiable and unique software products controlled by the Bank and will probably generate economic
    benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include staff costs of the software
    development team and an appropriate portion of relevant overheads.

    Expenditure which enhances or extends the performance of computer software programmes beyond their original specifications is
    recognised as a capital improvement and added to the original cost of the software. Computer software development costs
    recognised as assets are amortised using the straight-line method over their useful lives, not exceeding a period of 5 years.

K   Property, plant and equipment

    All property, plant and equipment is stated at historical cost less accumulated depreciation.

    Depreciation is calculated on the straight line method to write down the cost of such assets to their residual values over their
    estimated useful lives as follows:

         Office equipment                                 20%
         Furniture and fittings                           20%
         Motor vehicles                                   20%
         Improvement to rented premises                   20%

    Property, plant and equipment are periodically reviewed for impairment. Where the carrying amount of an asset is greater than its
    estimated recoverable amount, it is written down immediately to its recoverable amount. Gains and losses on disposal of property,
    plant and equipment are determined by reference to their carrying amount and are taken into account in determining operating
    profit. Repairs and renewals are charged to the income statement when the expenditure is incurred.
                                                                                                                                Page 25
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

ACCOUNTING POLICIES
YEAR ENDED 31 DECEMEBR 2003 (CONTINUED)



L   Cash and cash equivalents

    For the purposes of the cash flow statement, cash and cash equivalents comprise balances with less than 183 days maturity from
    the date of acquisition including: Balances with Category 1 banks and inter bank loans, Balances with Category 2 banks in
    Mauritius and banks abroad, borrowings from Category 1 banks and inter bank borrowings and borrowings from Category 2 banks
    in Mauritius and banks abroad.

M   Provisions

    Provisions are recognised when the Bank has a present legal or constructive obligation as a result of past events, it is probable
    that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the
    amount of the obligation can be made.

N   Employee benefits

    Pension obligations

    The Bank has two pension schemes. The schemes are funded through payments to trustee-administered funds as determined by
    periodic actuarial calculations. A defined benefit plan is a pension plan that defines an amount of pension benefit to be provided,
    usually as a function of one or more factors such as age, years of service or compensation.

    The liability in respect of these defined benefit pension plans is the present value of the defined benefit obligation at the balance
    sheet date minus the fair value of plan assets, together with adjustments for unrecognised actuarial gains/losses curtailments and
    past service costs. The defined benefit obligation is calculated every two years by independent actuaries using the projected unit
    credit method (the latest valuation was done at 31 December 2002). The present value of the defined benefit obligation is
    determined by the estimated future cash outflows using a discount rate set by reference to current interest rates and the yield on
    bonds, treasury bills and recent corporate debenture issues. Both pension plans are final salary plans and the charge for such
    pension plans, representing the net periodic pension cost is included in staff costs. Actuarial gains and losses arising from
    experience adjustments, changes in actuarial assumptions and amendments to pension plans are charged or credited to income
    over the service lives of the related employees.

    Other post-retirement obligations

    The Bank provides post-retirement healthcare benefits to its employees who remain members of the scheme after retirement. The
    entitlement to these benefits is based on the employee remaining in service up to retirement age and the completion of a minimum
    service period. The expected costs of these benefits are accrued over the period of employment, using a methodology similar to
    that for defined benefit pension plans. These obligations are valued every two years by independent qualified actuaries.

    Termination benefits

    Termination benefits become payable whenever an employee‟s employment is terminated before the normal retirement date or
    whenever an employee accepts voluntary redundancy in exchange for these benefits. The Bank recognises termination benefits
    when it is demonstrably committed to either terminate the employment of current employees according to a detailed formal plan
    without possibility of withdrawal or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.
                                                                                                                                 Page 26
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

ACCOUNTING POLICIES
YEAR ENDED 31 DECEMEBR 2003 (CONTINUED)



O    Deferred income taxes

     Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets
     and liabilities and their carrying amounts in the financial statements. Currently enacted tax rates are used in the determination of
     deferred income tax.

     The principal temporary differences arise from depreciation of property, plant and equipment, revaluation of certain financial assets
     and liabilities including derivative contracts, provisions for impairment losses on loans and advances and pensions and other post
     retirement benefits; and, in relation to acquisitions, on the difference between the fair values of the net assets acquired and their
     tax base. The rates enacted or substantively enacted at the balance sheet date are used to determine deferred income tax.

     Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the
     temporary differences can be utilised.

     Income tax payable on profits, based on the applicable tax law, is recognised as an expense in the period in which profits arise.
     The tax effects of income tax losses available for carry forward are recognised as an asset when it is probable that future taxable
     profits will be available which these losses can be utilised against.

     Deferred tax related to fair value re-measurement of available-for-sale investments, which are charged or credited directly to the
     income statement, is also credited or charged directly to the income statement.

P    Assigned capital

     Assigned capital represents the capital contribution made by the Head Office to the Bank. Incremental external costs directly
     attributable to raising additional capital are shown in equity as a deduction, net of tax, from the proceeds.

Q    Borrowings

     Borrowings are recognised initially at „cost‟, being their issue proceeds (fair value of consideration received) net of transaction
     costs incurred. Borrowings are subsequently stated at amortised cost and any difference between net proceeds and the
     redemption value is recognised in the income statement over the period of the borrowings using the effective yield method.

R    Acceptances

     Acceptances comprise undertakings by the Bank to pay bills of exchange drawn on customers. The Bank expects most
     acceptances to be settled simultaneously with the reimbursement from the customers. Acceptances are accounted for as off-
     balance sheet transactions and are disclosed as contingent liabilities and commitments.

S    Comparatives

The comparatives figures have been adjusted to conform with changes in presentation in the current year.
                                                                                                                                    Page 27
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

FINANCIAL RISK MANAGEMENT

A   Strategy in using financial instruments

    By its nature the Bank‟s activities are principally related to the use of financial instruments including derivatives. The Bank accepts
    deposits from customers at floating rates and for various periods and seeks to earn above average interest margins by investing
    these funds in high quality assets. The Bank seeks to increase these margins by consolidating short-term funds and lending for
    longer periods at higher rates whilst maintaining sufficient liquidity to meet all claims that might fall due.

    The Bank also seeks to raise its interest margins by obtaining above average margins, net of provisions, through lending to
    commercial and retail borrowers with a range of credit standing. Such exposures involve not just on-balance sheet loans and
    advances but the Bank also enters into guarantees and other commitments such as letters of credit and performance, and other
    bonds.

B   Credit risk

    Credit risk arises because the customers, clients or counterparties may not be willing or able to fullfil their contractual obligations.
    The Bank uses a grading structure to show the probability of future default by borrowers. This is used to estimate levels of
    annualised credit losses from the overall lending portfolio (termed Risk Tendency). Risk Tendency assists in portfolio management
    decisions, such as setting exposure limits for any single counterparty or borrower, establishing the desired aggregate exposure
    levels to individual sectors, determining pricing policy and setting the level of the general provision. Gradings also provide a guide
    to changes in the underlying credit quality of the lending portfolio over time.

    Derivatives

    The Bank maintains strict control limits on net open derivative positions, i.e. the difference between purchase and sale contracts,
    by both amount and term. At any one time the amount subject to credit risk is limited to the current fair value of instruments that are
    favourable to the Bank (i.e. assets), which in relation to derivatives is only a small fraction of the contract or notional values used to
    express the volume of instruments outstanding. This credit risk exposure is managed as part of the overall lending limits with
    customers, together with potential exposures from market movements. Collateral or other security is not usually obtained for credit
    risk exposures on these instruments, except where the Bank requires margin deposits from counterparties.

    Credit related commitments

    The primary purpose of these instruments is to ensure that funds are available to a customer as required. Guarantees and
    standby letters of credit, which represent irrevocable assurances that the Bank will make payments in the event that a customer
    cannot meet its obligations to third parties, carry the same credit risk as loans. Documentary and commercial letters of credit,
    which are written undertakings by the Bank on behalf of a customer authorising a third party to draw drafts on the Bank up to a
    stipulated amount under specific terms and conditions, are collateralised by the underlying shipments of goods to which they relate
    and therefore carry less risk than a direct borrowing.

    Commitments to make loans at a specific rate of interest during a fixed period of time are accounted for as derivatives and
    accounted for as such unless these commitments do not extend beyond the period expected to be needed to perform appropriate
    underwriting, in which case they considered to be “regular way” transactions.

    Commitments to extend credit represent unused portions of authorisations to extend credit in the form of loans, guarantees or
    letters of credit. With respect to credit risk on commitments to extend credit, the Bank is potentially exposed to loss in an amount
    equal to the total unused commitments. However, the likely amount of loss is less than the total unused commitments since most
    commitments to extend credit are contingent upon customers maintaining specific credit standards. The Bank monitors the term to
    maturity of credit commitments because longer-term commitments generally have a greater degree of credit risk than shorter-term
    commitments.
                                                                                                                                   Page 28
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

FINANCIAL RISK MANAGEMENT (CONTINUED)



 B       Credit risk (Continued)

 Geographical concentrations of assets, liabilities and off balance sheet items


                                                                                          Credit                                   Capital
                                          Total assets        Total liabilities   commitments        Operating income          Expenditure
                                                  USD                     USD            USD                      USD                USD
 At 31 December 2003


 Mauritius                                 118,085,752           673,518,980         11,331,915              12,570,660             21,447
 European countries                        644,097,955           207,261,835          1,395,539                      -                  -
 Other countries                           207,955,285            68,626,568         49,065,345                      -                  -
 Total                        USD          970,069,454           949,702,319         61,792,799              12,570,660             21,447



 At 31 December 2002

 Mauritius                                 124,606,284           577,855,524         68,491,952               7,742,784              6,666
 European countries                        578,421,964            79,579,258                 -                       -                  -
 Other countries                            43,049,234            73,154,496                 -                       -                  -
 Total                        USD          746,077,482           730,589,278         68,491,952               7,742,784              6,666

 At 31 December 2001


 Mauritius                                 54,282,844           243,557,313           12,462,227              5,951,194            22,838
 European countries                       270,593,701            49,301,430                   -                      -                 -
 Other countries                             2,271,313           24,732,904                   -                      -                 -
 Total                         USD        327,147,858           317,591,647           12,462,227              5,951,194            22,838



 Economic sector risk concentrations within the customer loan portfolio were as follows: -

                                                                2003                               2002                              2001
                                                  USD             %                 USD              %                   USD           %

 Agricultural and Fishing                   26,658,838          7.52          3,081,850             2.57        4,218,750             8.91
 Manufacturing                              43,921,246         12.38         14,869,771            12.38       15,378,143            32.50
 Tourism                                    13,185,383          3.72          4,417,060             3.68        4,229,955             8.94
 Construction                               22,831,992          6.44         34,296,970            28.57        8,648,568            18.28
 Traders                                    43,773,967         12.34         26,704,539            22.24               -                -
 Statutory and Parastatal bodies             6,943,750          1.96         18,293,390            15.24       13,400,999            28.32
 Personal                                    7,577,706          2.14          4,946,126             4.12        1,068,823             2.26
 Entities outside Mauritius                113,237,916         31.92                 -                -                -                -
 Other                                      76,584,613         21.59         13,446,271            11.20          372,446             0.79
                               USD         354,715,411        100.00        120,055,977           100.00       47,317,684           100.00

C    Market risk

Market risk is the risk of loss arising from changes in the level or volatility of market prices, which can occur in the interest rate and
foreign exchange markets. It is incurred as a result of both trading and asset/liability management activities. The market risk
management policies of the Bank are determined by the Group Risk Management Committee, which also determines overall market risk
appetite.

The Bank uses the Interest Earnings At Risk (“IEAR”) calculator as the primary mechanism for controlling interest rate risk. The IEAR
estimates the impact on interest earnings for given changes in interest rates.

To monitor foreign exchange risk a mismatch ladder is used, which identifies mismatches between foreign currency assets and
liabilities.
                                                                                                                                                                                                    Page 29
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FINANCIAL RISK MANAGEMENT (CONTINUED)




D    Currency risk

The Bank takes on exposure to effects of fluctuations in the prevailing foreign currency exchange rates on its financial position and cash flows. Management sets limits on the level of exposure by currency
and in total for both overnight and intra-day positions, which are monitored daily. The table below summarises the Bank‟s exposure to foreign currency exchange rate risk at 31 December 2003, 2002 and
2001. Included in the table are the Bank‟s assets and liabilities at carrying amounts, categorised by currency. The off-balance sheet gap represents the difference between the notional amounts of foreign
currency derivative financial instruments, which are principally used to reduce the Bank‟s exposure to currency movements, and their fair values.

 Concentrations of assets, liabilities and off balance sheet items



                                                                                                EURO                        USD                       GBP                    Other                     Total
                                                                                                  USD                       USD                       USD                     USD                      USD
 At 31 December 2003
 Assets
 Balances with Category 1 banks and interbank loans                                                -                         -                         -                       5,932                   5,932
 Balances with Category 2 banks in Mauritius and banks abroad                              81,291,528               407,828,295               108,130,517              11,280,418              608,530,758
 Loans                                                                                    110,983,689               228,043,904                    27,642              15,660,176              354,715,411
 Goodwill                                                                                          -                  2,937,867                        -                       -                 2,937,867
 Property, plant and equipment                                                                     -                    212,759                        -                       -                   212,759
 Other assets                                                                                      -                  3,574,190                        -                   27,020                3,601,210
 Retirement benefit assets                                                                         -                         -                         -                   65,517                   65,517
 Total assets                                                           USD               192,275,217               642,597,017               108,158,159              27,039,061              970,069,454

 Liabilities
 Borrowings                                                                                26,471,328               153,407,583                   117,048               7,230,997              187,226,956
 Deposits                                                                                 142,606,545               481,400,629               118,256,769              12,900,186              755,164,129
 Other liabilities and provisions                                                             941,093                 5,585,900                   479,304                   1,482                7,007,779
 Income tax                                                                                        -                    303,455                        -                       -                   303,455
 Total liabilities                                                      USD               170,018,966               640,697,567               118,853,121              20,132,665              949,702,319

 Net on balance sheet position                                          USD                22,256,251                  1,899,450            ( 10,694,962)               6,906,396                20,367,135

 Off balance sheet net notional position
 Credit commitments                                                     USD                13,212,873                 31,917,828                  890,472              15,771,627                61,792,800
                                                                                                                                                  Page 30
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

FINANCIAL RISK MANAGEMENT (CONTINUED)



D    Currency risk (Continued)

Concentrations of assets, liabilities and off balance sheet items (Continued)

                                                                                         EURO            USD             GBP         Other          Total
                                                                                          USD            USD             USD          USD           USD
 At 31 December 2002

 Total assets                                                                       131,376,688   519,278,964     62,199,805     33,222,025   746,077,482
 Total liabilities                                                                  131,342,957   509,860,980     62,205,950     27,179,391   730,589,278
 Net on balance sheet position                                    USD                    33,731     9,417,984   (      6,145)     6,042,634    15,488,204

 Off balance sheet net notional position

 Credit commitments                                               USD                11,206,195    46,247,534              -     11,038,221    68,491,950




 At 31 December 2001


 Total assets                                                                        29,785,930   268,316,243       20,405,917    8,639,768   327,147,858
 Total liabilities                                                                   29,824,038   258,677,202       20,474,445    8,615,962   317,591,647
 Net on balance sheet position                                    USD           (       38,108)     9,639,041   (      68,528)      23,806      9,556,211
                                                                                                                                                    Page 31
         BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

         FINANCIAL RISK MANAGEMENT (CONTINUED)




                                                             Up to 1         1-3            3-6       6-12        1-5       Over    Non- interest
                                                              Month       Months       months       months      years     5 years        bearing              Total
                                                               USD          USD          USD          USD        USD        USD             USD               USD
At 31 December 2003
Assets
Balances with Category 1 banks and interbank loans                                                                                         5,932              5,932
Balances with Category 2 banks in Mauritius and banks
abroad                                                   449,201,648   142,168,032    4,988,044   10,740,930   665,001   767,103                        608,530,758
Loans                                                     45,911,634   257,133,436   51,658,708       11,633                  -               -         354,715,411
Goodwill                                                          -             -                                   -         -        2,937,867          2,937,867
Property, plant and equipment                                     -             -                                   -         -          212,759            212,759
Other assets                                                      -             -                                   -         -        3,601,210          3,601,210
Retirement benefit assets                                         -             -                                   -         -           65,517             65,517
Total assets                                       USD   495,113,282   399,301,468   56,646,752   10,752,563   665,001   767,103       6,823,285        970,069,454
                                                                                                                                                                                                      Page 32
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

FINANCIAL RISK MANAGEMENT (CONTINUED)



E    Interest rate risk


The Bank takes on exposure to the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows. Interest margins may increase as a result of such changes
but may reduce or create losses in the event that unexpected movements arise. Management sets limits on the level of mismatch of interest rate repricing that may be undertaken, which is monitored
monthly.

The table below summarises the Bank‟s exposure to interest rate risks. Included in the table are the Bank‟s assets and liabilities at carrying amounts, categorised by the earlier of contractual repricing or
maturity dates. The off-balance sheet gap represents the net notional amounts of all interest-rate sensitive derivative financial instruments.

Expected repricing and maturity dates do not differ significantly from the contract dates, except for the maturity of USD 489,003,864 (2002 – USD 642,612,730; 2001 - USD 273,206,462) of Deposits up to 1
month, of which 44% (2002 -50%; 2001 - 50%) represent balances on current accounts considered by the Bank as a relatively stable core source of funding of its operations.

Interest sensitivity of assets and liabilities - repricing analysis
                                                                                                                                                                                             Page 33
          BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

          FINANCIAL RISK MANAGEMENT (CONTINUED)




          E    Interest rate risk (Continued)

          Interest sensitivity of assets and liabilities - repricing analysis (Continued)

                                                                    Up to 1                  1-3                     3-6       6-12              1-5           Over        Non-interest
                                                                     Month              Months                               months            years        5 years            bearing                    Total
                                                                      USD                 USD                                  USD              USD            USD                USD                     USD
At 31 December 2003 (Continued)
Liabilities
Borrowings from Category 1 banks and interbank loans                453,297                                                                                                                             453,297
Borrowings from Category 2 banks in Mauritius and banks
abroad                                                           2,557,360          139,930,447            41,285,852       3,000,000                                                            186,773,659
Deposits                                                       491,107,216          245,760,969             6,045,683      10,942,625        540,790        766,846                  -           755,164,129
Income tax                                                              -                    -                                                    -              -              303,455              303,455
Other liabilities and provisions                                        -                    -                                                    -              -            7,007,779            7,007,779
Total liabilities                                  USD         494,117,873          385,691,416            47,331,535      13,942,625        540,790        766,846           7,311,234          949,702,319

On balance sheet interest sensitivity gap           USD             995,409          13,610,052                9,315,217   (3,190,062)       124,211           257


At 31 December 2002
Total assets                                                   669,433,802          48,521,0698                                              314,550        639,585          11,968,857          746,077,482
Total liabilities                                              649,632,507           55,285,632                                              430,000        639,000          10,547,949          730,589,278
On balance sheet interest sensitivity gap           USD         19,801,295         ( 6,763,934)                                          (   115,450)           585


            At 31 December 2001
            Total assets                                                      269,578,492         23,754,071                                            -             18,761,958          327,147,858
            Total liabilities                                                 268,625,153         16,042,914                                            -             24,414,666          317,591,647
            On balance sheet interest sensitivity gap           USD               953,339          7,711,157                                            -
                                                                                                                                                                           Page 34
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FINANCIAL RISK MANAGEMENT (CONTINUED)




E    Interest rate risk (Continued)

Interest sensitivity of assets and liabilities - repricing analysis (Continued)

The table below summarises the effective interest rate by major currencies for monetary financial instruments:

                                                                                                                 EURO                      USD                      GBP
                                                                                                      Lowest            Highest   Lowest         Highest   Lowest         Highest
                                                                                                        %                  %        %               %        %               %
 At 31 December 2003

 Assets
 Balances with Category 1 banks and interbank loans                                                    n/a               n/a       n/a            n/a       n/a            n/a
 Balances with Category 2 banks in Mauritius and banks abroad                                          4.47              5.55      n/a            n/a       n/a            n/a
 Due from Head Office and branches                                                                     1.93              2.77      0.89           1.30      3.21           3.87
 Loans                                                                                                 2.95              4.90      1.27           4.17      4.24           5.00

 Liabilities
 Category 1 banks and interbank borrowings                                                             n/a               n/a       n/a            n/a       n/a            n/a
 Category 2 banks in Mauritius and banks abroad                                                        1.68              5.50      0.64           1.42      2.96           3.99
 Deposits                                                                                              0.48              1.90      0.05           0.90      1.40           3.00

 At 31 December 2002

 Assets
 Balances with Category 1 banks and interbank loans                                                    n/a               n/a       n/a             n/a      n/a             n/a
 Balances with Category 2 banks in Mauritius and banks abroad                                          2.89              3.37      1.27           1.83      3.78           4.03
 Loans                                                                                                 4.39              4.87      2.77           3.33      5.28           5.53

 Liabilities
 Category 1 banks and interbank borrowings                                                             n/a               n/a       n/a             n/a      n/a             n/a
 Category 2 banks in Mauritius and banks abroad                                                        n/a               n/a       n/a             n/a      n/a             n/a
 Deposits                                                                                              0.25              1.50      0.05           0.05      0.65           1.50
                                                                                                                                                     Page 35
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FINANCIAL RISK MANAGEMENT (CONTINUED)




E    Interest rate risk (Continued)

Interest sensitivity of assets and liabilities - repricing analysis (Continued)



                                                                                           EURO                      USD                      GBP
                                                                                  Lowest          Highest   Lowest         Highest   Lowest         Highest
                                                                                    %                %        %               %        %               %
 At 31 December 2001

 Assets
 Balances with Category 1 banks and interbank loans                                n/a             n/a       n/a             n/a      n/a             n/a
 Balances with Category 2 banks in Mauritius and banks abroad                      3.25            4.75      2.00           6.50      3.25           5.25
 Loans and advances to customers                                                   4.75            6.25      3.50           8.00      4.75           6.75

 At 31 December 2001

 Liabilities
 Category 1 banks and interbank borrowings                                         n/a             n/a       n/a             n/a      n/a             n/a
 Category 2 banks in Mauritius and banks abroad                                    n/a             n/a       n/a             n/a      n/a             n/a
 Deposits                                                                          0.75            3.25      0.05           4.80      0.65           3.80
                                                                                                                                                                                                        Page 36
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FINANCIAL RISK MANAGEMENT (CONTINUED)




F    Liquidity risk

The management of liquidity within the Bank has two principal strands. Firstly, day-to-day funding is managed by monitoring future cash flows to ensure that requirements can be met including the
replacement of existing funds as they mature or are withdrawn to satisfy demand by customers for additional borrowings. Secondly, to maintain a stock of highly marketable assets that can easily be
liquidated as protection against any unforeseen interruption to cash flow.

In order to avoid reliance on a particular group of customers or market sectors the distribution of sources and the maturity profile of deposits are actively managed. Important factors in assuring liquidity are
competitive rates and the maintenance of depositors‟ confidence. Such confidence is based on reputation, the strength of earnings and the Bank‟s financial position.


Liquidity management includes control over asset maturities and the volume and quality of liquid assets and short-term funds. Additionally, in evaluating the Bank‟s liquidity position, management takes
account of undrawn lending commitments, the usage of overdraft facilities and the possible impact of certain contingent liabilities such as standby letters of credit and guarantees.

Maturities of assets and liabilities

At 31 December 2003                                                                         Up to 1                    1-3                      3-6                 6-12                     1-5                 Over
                                                                                             Month                  months                                        months                   years              5 years
                                                                                              USD                     USD                                           USD                     USD                  USD
Assets
Balances with Category 1 banks and interbank loans                                            5,932

Balances with Category 2 banks in Mauritius and banks abroad                        449,201,648              142,168,032                4,988,044             10,740,930                665,001            767,1030     608,5
Loans to customers                                                                      36,366,147              29,291,986              35,287,410             71,031,552           167,568,064           15,170,252    354,7
Goodwill                                                                                 2,937,867                      -                                                                                         -       2,9
Property, plant and equipment                                                              212,759                      -                                                                                         -         2
Other assets                                                                             3,601,210                      -                                                                                         -       3,6
Retirement benefit assets                                                                   65,517                      -                                                                                         -
Total assets                                                           USD            492,391,080              171,460,018              40,275,454             81,772,482           168,233,065           15,937,355    970,0
                                                                                                                                                                                     Page 37
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FINANCIAL RISK MANAGEMENT (CONTINUED)



F     Liquidity risk (Continued)

Maturities of assets and liabilities (Continued)

At 31 December 2003 (Continued)                                    Up to 1                    1-3                     3-6                6-12                   1-5               Over
                                                                    Month                  months                                      Months                 years            5 years               Total
                                                                     USD                     USD                                         USD                   USD                USD                USD

Liabilities
Category 1 banks and interbank borrowings                         453,297                                                                                                                         453,297

Category 2 banks in Mauritius and banks abroad               2,557,360              139,930,447               41,285,852             3,000,000                                                 186,773,659
Deposits                                                    491,107,216             245,760,969                6,045,683            10,942,625              540,790           766,846            755,164,129
Income tax                                                             -                  303,455                                            -                   -                    -            303,455
Other liabilities and provisions                                7,007,779                      -                                             -                   -                  -            7,007,779
Total liabilities                                  USD       501,125,652              385,994,871             47,331,535             13,942,625             540,790            766,846         949,702,319

Net liquidity gap                                  USD          (8,734,572)           ( 214,534,853)           (7,056,081)          67,829,857           167,692,275         15,170,509         20,367,135


At 31 December 2002

Total assets                                                   631,490,199              34,571,270                                   6,775,267            54,395,303         18,845,443        746,077,482
Total liabilities                                              645,203,336              45,235,430                                  39,081,512               430,000            639,000        730,589,278

Net liquidity gap                                        USD( 13,713,137)             ( 10,664,160)                             ( 32,306,245)             53,965,303         18,206,443         15,488,204


At 31 December 2001
Total assets                                                          227,660,536                21,647,244            49,249,006          10,992,383           17,598,689      327,147,858
Total liabilities                                                     286,083,101                16,042,914            15,465,632                  -                   -        317,591,647
Net liquidity gap                                        USD          ( 58,422,565)               5,604,330            33,783,374           10,992,383          17,598,689        9,556,211
                                                                                                                                     Page 38
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

FINANCIAL RISK MANAGEMENT (CONTINUED)




G   Fair values of financial assets and liabilities

    In the opinion of the management, the financial assets and liabilities disclosed in the balance sheet are at their fair values as they
    are all on variable interest rates or linked to a short-term base rate.

H   Compliance risk

    Compliance risk arises from a failure or inability to comply with the laws, regulations or codes applicable to the financial services
    industry. Non-compliance can lead to fines, public reprimands, enforced suspension of operations or, in extreme cases,
    withdrawal of authorisation to operate.

I   Operational risk management

    Operational risk, which is inherent in all business activities, is the potential for financial loss, and business instability arising from
    failures in internal controls, operational processes or the systems that support them.

    The goal of operational risk management is to balance cost and risk within the constraints of the risk appetite of the Bank and to be
    consistent with the prudent management required of a large financial organisation.

    It is recognised that such risks can never be entirely eliminated and that the cost of controls in minimising these risks may outweigh
    the potential benefits. Accordingly, the Bank continues to invest in risk management and mitigation such as business continuity
    management and incident management. In reinforcement of the implementation of the Bank‟s risk strategy, independent checks
    on risk issues are undertaken by the internal audit function.

J   Legal risk

    Legal risk is the risk that the business activities of the Bank have unintended or unexpected legal consequences. It includes risk
    arising from:

        Inadequate documentation, legal or regulatory incapacity, insufficient authority of a counterparty and uncertainty about the
         validity or enforceability of a contract in counterparty insolvency;

        Actual or potential violations of law or regulation (including activity unauthorised for a bank and which may attract a civil or
         criminal fine or penalty);

        Failure to protect the Bank‟s property (including its interest in its premises and its intellectual property such as the Barclays
         logo, brand names and products); and

        The possibility of civil claims (including acts or other events which may lead to litigation or other disputes).

    The Bank identifies and manages legal risk through effective use of its internal and external legal advisers.

K   Tax risk

    Tax risk is the risk of loss or increased charges associated with changes in, or errors in the interpretation of, taxation rates or law.
                                                           Page 39
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

NOTES TO THE FINANCIAL STATEMENTS



Index to the notes to the financial statements               Page


1    Investment securities – Available-for-sale                  38
2    Loans and advances                                          38
3    Goodwill                                                    38
4    Property, plant and equipment                               39
5    Other assets                                                39
6    Retirement benefit assets/obligations                  40 - 41
7    Deposits                                                    41
8    Income tax                                                  42
9    Other liabilities and provisions                            42
10   Contingent liabilities and commitments                      42
11   Fee income and commissions                                  43
12   Profits arising from dealings in foreign currencies         43
13   Staff costs                                                 43
14   Operating expenses                                          43
15   Cash and cash equivalents                                   44
16   Reserves                                                    44
17   Related party transactions                             44 - 45
18   Incorporation and registered office                         45
19   Reporting currency                                          45
                                                                                                Page 40
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2003 (CONTINUED)




 1   Investment securities - Available-for-sale
                                                                     2003              2002         2001
                                                                     USD               USD          USD


     Debt securities                                                   -          5,235,347      18,094,351
     Investment in bonds                                               -                 -        2,163,000
                                                      US
                                                      D                -          5,235,347      20,257,351



 2   Loans and advances

     Originated loans
     Bills discounted                                            4,360,208         7,577,992           -
     Overdrafts                                                 36,366,144        14,566,234    2,771,999
     Term loans                                                313,989,059        97,923,944   44,545,685
     Loans and advances                                        354,715,411       120,068,170   47,317,684
     Less: provision and adjustments to income for
      credit losses                                                    -     (       12,193)          -
                                                      US
                                                      D        354,715,411       120,055,977   47,317,684


     Provision and adjustments to income for credit
      losses
     At 01 January 2003                                            12,193                -            -
     Provision for loan impairment                                     -             12,193           -
     Loans written off during the year as
      uncollectible                                        (       12,193)               -            -
                                                      US
     At 31 January 2003                               D                -             12,193           -




 3   Goodwill
     Cost:
     At 01 January 2003                                         3,832,000                 -           -
     Addition                                                          -           3,832,000          -
                                                      US
     At 31 December 2003                              D         3,832,000          3,832,000          -


     Accumulated amortisation:
     At 01 January 2003                                           127,733                -            -
     Charge for the year (Note 14)                                766,400           127,733           -
                                                      US
     At 31 December 2003                              D           894,133           127,733           -


     Net book amount:
                                                      US
     At 31 December 2003                              D         2,937,867          3,704,267          -
                                                                                                               Page 41
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2003 (CONTINUED)




 4   Property, plant and equipment

                                                                                Furniture
                                             Office           Leasehold                and         Motor
                                         equipment         improvements           fittings       vehicles           Total
                                              USD                  USD                USD           USD             USD
     Cost:
     At 01 January 2001                    188,503                  -              79,760          20,205        288,468
     Additions                              17,811                  -                5,027               -        22,838
     At 31 December 2001                   206,314                  -              84,787         20,205          311,306
     Additions                               6,666                  -                  -              -             6,666
     Acquisitions                           35,334              178,986             6,497         12,183          233,000
     At 31 December 2002                   248,314              178,986           91,284          32,388         550,972
     Additions                              21,447                  -                 -               -           21,447
     Written off                          ( 82,529)                 -           ( 3,985)              -        ( 86,514)
     At 31 December 2003           USD     187,232              178,986            87,299         32,388          485,905


     Accumulated depreciation:
     At 01 January 2001                    121,505                  -              65,835              8,085     195,425
     Charge for the year                    29,529                  -               5,308              4,040      38,877
     At 31 December 2001                   151,034                                 71,143         12,125        234,302
     Charge for the year                    31,264                7,235             6,052          4,717         49,268
     At 31 December 2002                   182,298                7,235           77,195          16,842         283,570
     Charge for the year                    23,871               40,364            4,641           7,214          76,090
     Written off                          ( 82,529)                 -           ( 3,985)              -        ( 86,514)
     At 31 December 2003           USD     123,640              47,599             77,851         24,056        273,146


     Net book amount:
     At 31 December 2003           USD      63,592              131,387             9,448           8,332       212,759


     At 31 December 2002           USD      66,016              171,751            14,089         15,546        267,402


     At 31 December 2001           USD      55,280                  -              13,644           8,080        77,004




 5   Other assets
                                                                         2003                    2002             2001
                                                                         USD                     USD              USD


     Accrued interest receivable                                   597,041                    607,295          163,531
     Derivative financial assets                                  2,850,770                        -                -
     Other                                                         153,399                   2,019,491         104,942
                                                      US
                                                      D           3,601,210                  2,626,786         268,473
                                                                                                       Page 42
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2003 (CONTINUED)




     Retirement benefit
 6   assets/obligations

     (a) Pension benefits
                                                                            2003          2002            2001
                                                                            USD           USD             USD
     The amounts recognised in the balance sheet are as follows:


     Present value of funded obligations                                525,018        440,297       298,451
     Fair value of plan assets                                        ( 579,392)     ( 498,118)    ( 333,596)
                                                                      (    54,374)   (   57,821)   (    35,145)
     Unrecognised actuarial losses                                    (    11,143)   (   77,234)   (    30,979)
                                                         US                          ( 135,055)    (    66,124)
     Asset in the balance sheet                          D            (    65,517)


     The amounts recognised in the income statement are as follows:


     Current service cost                                                  43,606        34,316         25,821
     Interest cost                                                         47,601        37,156         28,169
     Expected return on plan assets                                   (    53,423)   (   44,888)   (    37,558)
     Curtailment loss/(gain)                                               62,136    (   55,666)            -
     Actuarial loss recognised                                                533            -              -
     Past service cost recognised                                          16,400            -              -
     Exchange difference                                              (    15,162)   (    2,303)         4,860
                                                         US
     Total, included in staff costs (Note 13)            D                101,691    (   31,385)        21,292


     Movement in the liability recognised in the balance sheet:


     At 01 January 2003                                               ( 135,055)     (   66,124)   (    59,446)
     Total expense/(income) - as above                                  101,691      (   31,385)        21,292
     Contributions paid                                               ( 32,153)      (   37,546)   (    27,970)
                                                           US
     At 31 December 2003                                    D         (    65,517)   ( 135,055)    (    66,124)

                                                           US
     The actual return on plan assets was:                  D              74,883        30,245          6,579



                                                                            2003          2002            2001
                                                                              %             %               %
     The principal actuarial assumptions used were as
     follows:


     Discount rate                                                         10.00         11.00           11.50
     Expected return on plan assets                                        10.00         11.00           12.00
     Future salary increases                                                7.50          8.50            9.00
     Future pension increases                                               3.00          3.00            3.00
                                                                                                        Page 43
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2003 (CONTINUED)




 6   Retirement benefit assets/obligations (Continued)

     (b) Healthcare benefits
                                                                            2003           2002            2001
                                                                            USD            USD             USD
     The amounts recognised in the balance sheet are as follows:


     Present value of funded obligations                                      -           9,717           7,901
     Fair value of plan assets                                                -      (      342)    (       198)
                                                                              -           9,375           7,703
     Unrecognised actuarial losses                                            -      (      856)             -
                                                       US                                  8,519          7,703
     Liability in the balance sheet                    D                      -


     The amounts recognised in the income statement are as follows:


     Current service cost                                                   3,767          3,182          2,347
     Interest cost                                                            913            684            628
     Expected return on plan assets                                   (        76)   (        34)            -
     Curtailment or settlement gain                                   (    10,388)            -              -
     Exchange difference                                                      956            269    (       668)
                                                       US
     Total, included in staff costs (Note 15)          D              (     4,828)         4,101          2,307


     Movement in the asset recognised in the balance sheet:


     At 01 January 2003                                                     8,519          7,703          8,173
     Total (income)/expense - as above                                (     4,828)         4,101          2,307
     Contributions paid                                               (     3,691)   (     3,285)   (     2,777)
                                                         US
     At 31 December 2003                                  D                   -            8,519          7,703

                                                         US
     The actual return on plan liability was:             D                   -      (      308)             -



                                                                            2003           2002            2001
                                                                              %              %               %
     The principal actuarial assumptions used were as
     follows:


     Discount rate                                                           10.00        11.00           11.50
     Expected return on plan assets                                          10.00        11.00           12.00
     Future salary increases                                                  8.00
     Future medical cost increases                                            8.00         9.00            9.00



                                                                            2003           2002            2001
                                                                            USD            USD             USD

 7   Deposits

     Demand deposits                                                  294,835,785    314,491,028    123,851,314
     Time deposits                                                    460,328,344    365,069,702    167,017,091
                                                       US             755,164,129    679,560,730    290,868,405
                                                                   Page 44
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2003 (CONTINUED)




                                             D
                                                                                                                        Page 45
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2003 (CONTINUED)




 8   Income tax
                                                                             2003                     2002                  2001
                                                                             USD                      USD                   USD


     Income tax expense:

     Current tax, based on the profit for the year as
      adjusted for tax purposes at 15%                                    303,455                  184,229                    -
     Overprovision in previous year                                 (       2,663)                      -                     -
                                                        US                                         184,229                    -
                                                        D                 300,792


     The reconciliation between the actual income tax rate 3.19% for 2003 (2002 – 3.01%) and the applicable income tax rate of 15%
     (2002 – 15%) is as follows:

                                                                             2003                     2002                  2001
                                                                               %                        %                     %


     Applicable income tax rate                                             15.00                    15.00                    -
     Impact of:
      Expenses not allowed for tax purposes                                  1.28                     0.34                    -
      Deferred tax asset not provided                              (         0.08)           (        0.28)                   -
      Deduction for foreign source income                          (        12.96)           (       12.05)                   -
      Overprovision in prior year                                  (         0.03)                      -                     -
     Actual income tax rate                                                  3.21                     3.01                    -


                                                                             2003                     2002                  2001
                                                                             USD                      USD                   USD
     Income tax liability:
     At 01 January 2003                                                   184,229                       -                     -
     Charge for the year                                                  303,455                  184,229                    -
     Overprovision in previous year                                 (       2,663)                      -                     -
     Paid during the year                                           (     181,566)                      -                     -
                                                        US                                         184,229                    -
     At 31 December 2003                                D                 303,455



 9   Other liabilities and provisions

     Accrued interest payable                                              546,171                  345,637              357,698
     Derivatives financial liabilities                                   2,168,371                       -                    -
     Others                                                              4,293,237               10,009,564           19,467,955
                                                        US                                       10,355,201           19,825,653
                                                        D                7,007,779



10   Contingent liabilities and commitments

     The following table indicates the contractual amounts of the Bank's off-balance sheet financial instruments that commit it to
     extend credit to customers.
                                                                          2003                       2002                  2001
                                                                          USD                        USD                   USD


     Guarantees and standby letters of credit                           61,356,968               59,745,703           12,462,227
     Documentary and commercial letters of credit                          435,831                8,746,247                   -
                                                                                  Page 46
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2003 (CONTINUED)




                                             US                     68,491,950   12,462,227
                                             D         61,792,799
                                                                                                                            Page 47
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2003 (CONTINUED)




                                                                                 2003                       2002                2001
                                                                                 USD                        USD                 USD
11   Fee income and commissions

     Fee income and commissions
     Service related fees and commissions                                    1,951,832                  1,330,305            951,073
     Risk related fees and commissions                                       1,672,134                   911,222             191,489
                                                                             3,623,966                  2,241,527          1,142,562
     Fee expense and commissions
     Management fees                                                     (      9,731)              (     10,846)                 -
                                                           USD           (      9,731)              (     10,846)                 -


     Fee income and commissions                            USD               3,614,235                  2,230,681          1,142,562



12   Profits arising from dealings in foreign currencies

     Foreign exchange net trading income includes gains and losses from spot and forward contracts and translated foreign currency
     assets and liabilities. Interest rate instruments includes the results of making markets in instruments in government securities,
     corporate debt securities, money market instruments, interest rate and currency swaps, options and other derivatives.


13   Staff costs
                                                                                 2003                       2002                2001
                                                                                 USD                        USD                 USD
     Salaries and human resource development
     Wages and salaries                                                       589,085                    343,082             254,478
     Compensation under Voluntary Early Leavers Scheme                         26,936                    151,031                  -
                                                           USD                616,021                    494,113             254,478
     Pension contributions and other staff benefits
     Social Security costs                                                     10,769                      3,298               2,294
     Pension benefits - defined benefit plan
      (Note 6)                                                                101,691           (         31,385)             21,292
     Healthcare benefits - defined benefit plan (Note 6)             (          4,828)                     4,101               2,307
     Other benefits                                                                -                          -                  880
                                                                              107,632           (         23,986)             26,773
     Total staff costs                                     USD                723,653                    470,127             281,251


                                                                              Number                     Number              Number


     Number of employees at year end                                               34                         37                  18



14   Other operating expenses
                                                                                 2003                       2002                2001
                                                                                 USD                        USD                 USD


     Other operating expenses                                                1,202,375                   748,598             817,093
     Equipment expenses                                                        245,687                   163,271             107,858
     Property expenses                                                         123,759                    52,372              41,756
     Amortisation of goodwill (Note 3)                                         766,400                   127,733                  -
     Auditors' remuneration - audit                                             10,000                     3,000               2,750
                                                           USD               2,348,221                  1,094,974            969,457
                                                                                                                              Page 48
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2003 (CONTINUED)




15   Reserves

     The general banking reserve represents a general provision on performing loans and advances, net of facilities secured by credit
     balances.

16   Cash and cash equivalents                                                2003                       2002                    2001
                                                                              USD                        USD                     USD
     Assets
     Balances with Category 1 banks and interbank
     loans                                                                   5,932                  5,285,536                7,092,382
     Balances with Category 1 banks and interbank
     loans                                                             608,530,758                608,767,112           252,068,840

     Liabilities
     Category 1 banks and interbank borrowings                        (    453,297)           (         2,254)          (         277)
     Category 2 banks in Mauritius and banks abroad                  ( 186,773,659)           ( 40,478,345)             ( 6,889,609)
     Cash and cash equivalents                          USD            421,309,734                573,572,049           252,271,336



17   Related party transactions                                              2003                       2002                    2001
                                                                             USD                        USD                     USD
     (i) Payments for services rendered

     Barclays Bank Plc - Medical Aid Scheme
      (medical contribution)                                                 2,620                      1,595                      695
     Barclays Bank Plc - Mauritius Staff Pension
      Fund (pension contribution)                                           46,900                     37,546                    28,850
     Barclays Bank Plc - Mauritius Domestic
      Branch (rent of premises)                                                 -                     30,224                    30,912
     Barclays Africa (support services)                                    728,891                   487,278                   635,484
     Barclays Africa (reimbursement of third party
      charges)                                                             217,166                   123,540                   153,154
                                                       US
                                                       D                   995,577                   680,183                   849,095


     (ii) Balances and placements with Barclays Banks abroad

     At 01 January 2003                                               596,788,505              251,956,573              165,486,110
     Made during the year                                          34,125,748,932           19,113,534,443          126,389,701,055
     Repaid during the year                                      ( 34,116,944,552)        ( 18,768,702,511)        (126,303,230,592)
                                                       US
     At 31 December 2003                               D               605,592,885                596,788,505               251,956,573

                                                       US
     Interest receivable during the year               D                 9,800,345                  6,846,600                 9,395,437


     (iii) Borrowings from Barclays banks abroad

     At 01 January 2003                                                 39,048,872                 11,470,918                15,505,790
     Made during the year                                              231,189,155                 95,017,549                22,354,490
     Repaid during the year                                      (      83,469,793)       (        67,439,595)      (        26,389,362)
                                                       US
     At 31 December 2003                               D               186,768,234                 39,048,872                11,470,918

                                                       US
     Interest payable during the year                  D                 2,182,064                   313,489                     87,952


     (iv) Deposits from other related parties

     At 01 January 2003                                                    917,051                  1,620,862                          -
                                                                                       Page 49
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2003 (CONTINUED)




     Made during the year                                936,217        288,568        2,470,718
     Repaid during the year                        (     917,051)   (   992,379)   (     849,856)
                                            US
     At 31 December 2003                    D            936,217        917,051        1,620,862

                                            US
     Interest payable during the year       D             27,154         54,080          11,827
                                                                                                                           Page 50
BARCLAYS BANK PLC - MAURITIUS OFFSHORE BANKING UNIT

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2003 (CONTINUED)




17   Related party transactions (Continued)

     (v) Deposits from other related parties (Continued)

     Deposits from other related parties include Barclays Bank Plc Mauritius Staff Pension Fund, which holds Fixed and Call deposits.
     All deposits are agreed at commercial rates and on same terms and conditions as for all customers and staff of the bank.

     (v) Remuneration of directors and key management personnel

     In 2003, the total remuneration of the directors and key management personnel employed by the Bank was USD 127,660 (2002
     – USD 53,931 / 2001 – USD 28,047).



18   Incorporation and registered office

     The Company is incorporated with limited liability under the laws of the United Kingdom. It is registered in Mauritius under the
     Companies Act as a foreign company. The registered office of the Bank is Sir William Newton Street, Port Louis.



19   Reporting currency

     The financial statements are presented in United States dollars. The Bank has been granted a Category 1 Global Business
     Licence under the Financial Services Development Act 2001 which requires that the Bank‟s business or other activity is carried
     on in a currency other than the Mauritian rupee.

								
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