Notes to the parent company
financial statements

• « 7 Debt securities in issue
• 8 Related party transactions
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8 Related party transactions

Key management personnel

The key management personnel of the Group and parent company are the same. The relevant disclosures are given in note 47 to the consolidated financial statements.

The Company has no employees (2007: nil).

As discussed in note 46 to the consolidated financial statements, the Group provides share based compensation to employees through a number of schemes; these are all in relation to shares in the Company and the cost of providing those benefits is recharged to the employing companies in the Group on a cash basis.

Investment in subsidiaries

The Company's investment in subsidiaries is carried at cost: there has been no movement in the carrying value during the year and there has been no impairment of the Company's investment in subsidiaries.

The principal subsidiaries, all of which have prepared accounts to 31 December and whose results are included in the consolidated accounts of Lloyds Banking Group plc, are:

	Country of registration/ incorporation	Percentage of equity share capital and voting rights held	Nature of business
Lloyds TSB Bank plc	England	100%	Banking and financial services
Lloyds TSB Commercial Finance Limited	England	100%†	Credit factoring
Lloyds TSB Leasing Limited	England	100%†	Financial leasing
Lloyds TSB Private Banking Limited	England	100%†	Private banking
The Agricultural Mortgage Corporation PLC	England	100%†	Long-term agricultural finance
Lloyds TSB Offshore Limited	Jersey	100%†	Banking and financial services
Lloyds TSB Scotland plc	Scotland	100%†	Banking and financial services
Lloyds TSB General Insurance Limited	England	100%†	General insurance
Scottish Widows Investment Partnership Group Limited	England	100%†	Investment management
Lloyds TSB Insurance Services Limited	England	100%†	Insurance broking
Lloyds TSB Asset Finance Division Limited	England	100%†	Consumer credit, leasing and related services
Black Horse Limited	England	100%†	Consumer credit, leasing and related services
Scottish Widows plc	Scotland	100%†	Life assurance
Scottish Widows Annuities Limited	Scotland	100%†	Life assurance

†Indirect interest.

The principal area of operation for each of the above subsidiaries is the United Kingdom and the Channel Islands, except as follows:

Lloyds TSB Bank plc operates principally in the UK but also through branches in Belgium, Dubai, Ecuador, France, Germany, Gibraltar, Hong Kong, Japan, Jersey, Luxembourg, Malaysia, Monaco, Netherlands, Singapore, Spain, Switzerland, Uruguay and the USA, and representative offices in China, Colombia, Guatemala and Paraguay.

None of the parent company's subsidiaries has experienced any significant restrictions in paying dividends or repaying loans and advances. All regulated banking and insurance subsidiaries are required to maintain capital at levels agreed with the regulators; this may impact those subsidiaries' ability to make distributions.

Loans to subsidiaries:

	2008 £m	2007 £m
At 1 January	2,820	1,723
Exchange and other adjustments	189	(14)
Amounts advanced	–	1,111
At 31 December	3,009	2,820

In addition the parent company carried out all of its banking activities through its subsidiary, Lloyds TSB Bank plc (the Bank). At 31 December 2008, the parent company held deposits of £1,201 million with the Bank (2007: £58 million). Given the volume of transactions flowing through the account, it is not meaningful to provide gross inflow and outflow information. In addition, at 31 December 2008 the parent company had interest rate and currency swaps with the Bank with an aggregate notional principal amount of £4,567 million and a net positive fair value of £1,297 million (2007: notional principal amount of £4,032 million and a net positive fair value of £140 million), of which contracts with an aggregate notional principal amount of £1,870 million and a net positive fair value of £501 million (2007: notional principal amount of £4,032 million and a net positive fair value of £140 million) were designated as fair value hedges to manage the Company's issuance of subordinated liabilities and debt securities in issue.

Related party information in respect of other related party transactions is given in note 47 to the consolidated financial statements.