Annual report 2010 - Dexia.com

Declaration of corporate governanceCOREP reporting is communicated electronically (XBRL andby mail); it consists of various documents falling within theresponsibility of different services.Ratio assembly is the responsibility of Finance.Calculation of regulatory capitalRegulatory capital is calculated on the basis of:• consolidation of the financial statements on a prudentialscope for capital elements, for the value of holdings to bededucted (by the equity method or not), for items to bededucted;• calculation of the fair value of subordinated loans by thedifferent consolidation levels; compliance of the calculationbase with the accounting balances is checked centrally; theresult of the calculation is entered under a technical headingon the Magnitude consolidation software;• calculation provided by Risk Management regardingexpected loss; the amount is entered under a technicalheading on the Magnitude consolidation software.The calculation of regulatory capital is stored in the Magnitudeconsolidation software.such as Financial Communication, External Communication,Finance Capital & Structuring, Mergers & Acquisitions, RiskManagement. This involves the following reports:• Activity monitoring;• Result per entity;• Analytical result;• Performance fees;• Use of capital;• Financial remarks;• Monitoring specific expenditure;• Transversal cost matrix.In this context, it performs the following tasks:• Determining the conceptual framework of the analysisof the results and profitability of Group business lines andanalytical entities;• Guiding the annual budget procedure;• Establishing periodic commercial and financial reports;• Making projections of periodic quarterly and annualresults;• Making themed studies intended to analyse the profitabilityof certain sectors of activity or certain entities.Management reportMemorandum of UnderstandingThe process of elaboration and control of reportingestablished by virtue of the Memorandum of Understandingand any additional documents (1) is similar to those applicableto the Dexia consolidated financial statements. Dexia SA willbe subject to new FINREP reporting which will replace theMemorandum of Understanding from 2011.Producing management informationThe main aim of management information is to givemanagement reliable information as soon as possible on theactivity and the profitability of business lines and analyticalentities.The financial statements sent by the Dexia Group to itsshareholders and to the public are completed by otherelements from detailed analyses such as activity reportsand results per business line, which are integrated into theFinancial Report or communicated at presentations to financialanalysts. Most of this information requires a cross-referencingand aggregation of data from different sources, a breakdownof figures available globally or a reprocessing of accountingdata in relation to management parameters. It is checkedand provided to the editors of the Financial Report by theStrategic Planning and Controlling department.Apart from this information intended for the public, theStrategic Planning and Controlling department establishesa series of management reports intended for Dexia’smanagement bodies. Management reports are established forthe Dexia Management Board and heads of business lines.They are then sent wholly or in part to other departments,(1) The reporting list is included in the appendix to the Memorandum ofUnderstanding concluded on 11 September 2000 between the Banking,Finance and Insurance Commission (Belgium), the Banking Commission andthe Credit Establishment and Investment Company Committee (France) andthe Financial Sector Supervisory Commission (Luxembourg) on the controlon a consolidated basis of the Dexia banking group, as revised on Dexia’smigration to IFRS.Consolidation toolsManagement information is produced via a multidimensionaldatabase enabling data to be stored and processed. It alsoenables targeted on-line analyses to be performed rapidly andis used for the management of all data relating to activitiesand profitability.Planning reportingAs part of its planning task, the Strategic Planning andControlling department establishes the following reports:• a guidance note, produced annually by the Chief FinancialOfficer;• a financial and budget plan: a note presenting globalforecasts and forecasts per business line, produced annuallyat the end of the year;• basic standards and hypotheses for budget elaboration.Financial and budget plans are produced entirely in theentities/subsidiaries, per business line.When the entity’s budget is established, apart from its beingin line with the guidance note, the Chief Executive Officerof the entity/subsidiary ensures the budget’s consistencyas a whole, its feasibility from the points of view both offinancial, capital and human resources and observance of anylocal constraint, and presents it to the member of the DexiaManagement Board responsible for its scope.First-level challenging is by the latter, with the assistanceof the Strategic Planning and Controlling, Organisation,Risk Management, Human Resources and Finance Capital &Structuring divisions. Its aim is to check it is in line with theguidance note. Budgets thus established are then presentedto the Chief Executive Officer. They are then presented to theManagement Board of Dexia SA before being submitted forapproval to the Board of Directors.Consolidatedfinancial statementsAdditional information Annual financial statementsAnnual report 2010 Dexia61