Annual report 2010 - Dexia.com

Declaration of corporate governanceManagement reportConsolidatedfinancial statementsAdditional information Annual financial statementsAnalytical information for realisationAn operating chart, established quarterly, contains a series ofkey indicators (production and outstanding long and shorttermfunding, commissions, volumes of deposits and assetsunder management, gross present value originations andguaranteed premiums from credit enhancement activity...).It is drawn up with the support of information provided bythe commercial services, on the basis of structures specificto each commercial business line and uniform across theGroup, established by Strategic Planning and Controlling.The information provided is accompanied by comments madedirectly by the commercial services. It allows for any possiblerepositioning of results expected for the current year.The Strategic Planning and Controlling support line checksthe consistency of the information provided and complianceof the presentation with the standards established for all theentities of the Dexia Group.This operating chart is presented by the head of business lineto the Management Board prior to being sent to FinancialCommunication which sees to its transcription for the annualreport and the quarterly Financial Report.Determining results per business line in theprofitability reportsThe elaboration of income per business line relies essentiallyon two types of analytical information, commercial marginon the one hand and other elements of the statement ofincome (commissions, general costs, value corrections...) onthe other hand.Aggregation of the interim balances over all business linesis subject to reconciliation of the accounting statement ofincome.To summarise, all of these processes contribute to theelaboration of the statement of income for each business line,thus allowing an assessment of the profitability-risk ratio andthe contribution to Dexia’s overall result.The aggregation processThe aggregation process is described in the Manual ofProcedures and Standards for Management Control, commonto the entire Dexia Group.The complete process is supervised by the Strategic Planningand Controlling department, which provides all the entitieswith standardised and secure collection tools, in order to makemore accurate and to optimise the mechanism for gatheringinformation. Finally, it also ensures global aggregation.The process of information aggregation per business line isfollowed in parallel to the consolidation process guided bythe Accounting and Consolidation division. In order to ensurethe consistency of analytical and accounting information,consistency checks have been introduced.Finance ControlThe role and tasks of the Finance Control function cover theFinance support line for the entire Group. This team has thetasks of completing the internal control mechanism of theDexia Group by aligning its work to the main entities (whichare responsible for maintaining the quality of the internalaudit in their respective group) and of representing theFinance support line in the general control mechanism withinthe Dexia Group.Relying on risk maps and controls within the Financefunctions to identify major risks, the Finance Control functionconcentrates its interventions on the consistent applicationof financial standards and principles (accounting, analytical,prudential and so on) of Dexia through the Group. The tasksmay therefore relate also to audit of contributions other thanAccounting/Management Control relating to the productionfinancial information (ICAAP/Pillar 2 reporting and so on).This team also has the task of contributing to a betteralignment of control processes between the different entitiesof the Dexia Group. The performance of transversal tasks alsocomes within this rationale.To summarise, its tasks break down as follows:• assessing the risks and the adequacy of control systemswithin the Finance support line (process/risk/control map);• performing transversal control tasks or those specific to anentity (in relation to a pre-established control plan);• coordinating the monitoring of recommendations on theFinance sphere (Control, Regulators, Internal and ExternalAudit);• acting as Finance correspondent for any internal controlquestion.Relations with the Statutory AuditorsThe Statutory Auditors make regular checks on the financialreporting of the various entities and subsidiaries of the DexiaGroup. They are involved with the entire process of checkingthe financial and accounting information with a concernfor efficiency and transparency. As part of their duties theyanalyse the accounting procedures and assess the internalaudit systems necessary for reliably establishing the financialstatements. They issue instructions to the auditors of theentities and ensure their work is centralised. They organisesummary meetings on the results of their audits and assess theinterpretation of standards. Finally, they check the consistencyof accounting information between the management reportand the financial statements. The performance of theseduties enables them to obtain a reasonable assurance that,considering the legal and regulatory provisions governingthem, the annual financial statements give a true picture ofthe assets, financial situation and results of the company andthat the information given in the Notes is appropriate.62 Dexia Annual report 2010