Annual report 2009 - Dexia.com

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Notes to the consolidated fi nancial statements9.4. Related parties transactionsManagement reportA. RELATED PARTIES TRANSACTIONSSubsidiaries Associates Joint ventures inKey management (1) Entities with jointthe entity (2)control or significantinfluence overwhich the entity isa venturer31/12/08 31/12/09 31/12/08 31/12/09 31/12/08 31/12/09 31/12/08 31/12/09 31/12/08 31/12/09Loans (3) 0 0 1,777 1,674 6 2 234 217 64 32Interest income 0 0 52 72 0 0 12 12 3 1Deposits (3) 3 2 1,744 1,675 6 96 304 104 2,676 838Interest expense 0 0 (32) (39) 0 (7) (7) (2) (135) (25)Net commission 0 0 1 0 0 1 4 19 (11) (9)Guarantees issued andcommitments provided bythe Group (4) 0 0 347 349 0 9 44 63 1,737 1,709Guarantees and commitmentsreceived by theGroup 0 0 507 740 1,853 0 4 9 15 30Consolidatedfinancial statementsAnnual financial statements(1) Key management includes the Board of Directors and the Management Board.(2) We refer here to the main shareholders of Dexia (2008-2009): Arcofin, Holding Communal, Caisse des dépôts et consignations.Dexia applies IAS 24 § 25 for those transactions concluded at general market conditions.As a consequence, transactions with the Belgian and French States are not disclosed in the table A.However, significant transactions which are carried out on non-market terms are disclosed under 9.4.C.(3) Transactions with related parties are concluded at general market conditions.(4) Unused lines granted.No provisions were recorded on loans given to related parties.Dexia Group entered no investment transactions exceeding EUR 25 million with related parties.B. KEY MANAGEMENT COMPENSATIONS31/12/08 31/12/09Short-term benefits 9 5Post-employment benefits 3 1Other long-term benefits 0 0Termination benefits 0 0Share-based payments 2 0Details per person are reported on pages 39-42 of the annual report.Short-term benefits include the salaries, bonuses and other advantages. Payment of bonuses is subject to some conditions and is partiallydeferred as explained on page 41.Post-employment benefits: service cost calculated in accordance with IAS 19.Share-based payments include the cost of stock options and the discount given on capital increase allowed to the key management.Additional information166Dexia Annual report 2009
Notes to the consolidated fi nancial statementsC. TRANSACTIONS WITH THE BELGIAN ANDFRENCH STATES3 October 2008 capital increase and resultingshareholdingsOn 3 October 2008, the Belgian federal State, the Flemishand Walloon Regions, the Brussels-Capital Region and theFrench State, together with the historical reference shareholders(Holding Communal, Arcofin, Ethias, the Caisse desDépôts et Consignations and CNP Assurances), subscribed fora capital increase of Dexia in an amount of EUR 6 billion.The capital increase was subscribed for in the followingproportion:• the Belgian federal State, through the Federal Holding andInvestment Company, invested EUR 1 billion;• the three Belgian Regions invested a total amount of EUR1 billion (EUR 500 million by the Flemish Region, EUR 350million by the Walloon Region, and EUR 150 million by theBrussels-Capital Region);• the French State, through the Société de Prise de Participationde l’Etat, invested EUR 1 billion;• the Caisse des Dépôts et Consignations and CNP Assurancesinvested EUR 2 billion; and• the other reference shareholders invested a total amountof EUR 1 billion (EUR 500 million by the Holding Communal,EUR 350 million by Arcofin, and EUR 150 million by Ethias).This capital increase resulted in a shareholding of 5.73% forthe Belgian federal State, 5.73% for the French State, 2.87%for the Flemish Region, 2.01% for the Walloon Region and0.86% for the Brussels-Capital Region. (the total participationof the three regions amounts to 5.73%).Guarantee mechanism in favour of Dexia’sfinancingOn 9 December 2008, the French, Belgian and LuxembourgStates and Dexia entered into a First Demand GuaranteeAgreement implementing the principles set forth inthe Protocol of 9 October 2008 between the three Statesand Dexia. Pursuant to this guarantee agreement, the threeStates guarantee severally, but not jointly, the performanceby Dexia SA, Dexia Banque Internationale à Luxembourg,Dexia Bank Belgium and Dexia Crédit Local (including certainof their branches and issuance vehicles) of their repaymentobligations resulting from certain financings providedby central banks, credit institutions and other institutional orprofessional investors, provided that these financings werecontracted or issued between 9 October 2008 and 31 October2009 and maturing at the latest on 31 October 2011.The States guarantee the repayment obligations in the followingproportion:(i) 60.5% for the Belgian State;(ii) 36.5% for the French State; and(iii) 3.0% for the Luxembourg State.To supplement the Guarantee Agreement on operational andprocedural aspects, the three States and Dexia have enteredinto an Operational Memorandum. This memorandum provides,among other things, for a monitoring process of theguaranteed financings on a daily basis, including a dailypublication of the aggregate guaranteed amount and, withrespect to guaranteed bond issues of Dexia, a system of eligibilitycertificates whereby the States issue, on Dexia’s request,certificates confirming for each bond issue that it is coveredby the Guarantee Agreement.On 19 November 2008, the European Commission authorisedthis guarantee mechanism for a period of 6 months asfrom 3 October 2008, with an automatic extension until theCommission’s definitive decision, on condition that a restructuringplan be filed with the Commission. In March 2009,the three States confirmed the extension of the guarantee inaccordance with the decision of the European Commissionof 13 March 2009.By an Addendum to the above-mentioned Guarantee Agreementof 9 December 2008, dated 14 October 2009, theBelgian, French and Luxembourg States and Dexia agreed torenew the guarantee scheme for a period of one year, coveringfinancings contracted or issued at the latest on 31 October2010. The parties also wished to effect certain changesto the guarantee in order to limit the States’ intervention toa strict minimum and to allow an orderly exit out of the guaranteewithin a credible time-horizon. The changes include:(i) the decrease of the maximum of the total amount of guaranteedfinancings from EUR 150 billion to EUR 100 billion,with a commitment by Dexia to undertake its best efforts tolimit this amount to EUR 80 billion;(ii) the extension to 4 years of the maximum duration of thenew financings contracted or issued; and(iii) the waiver by Dexia of the benefit of the guarantee, asfrom 16 October 2009, for all new contracts with a maturityof less than one month and all contracts with an indefiniteterm.The Guarantee Agreements provided for the following remunerationto be paid by Dexia to the States:(i) for financings with a maturity of less than 12 months:50 bps on an annual basis calculated on the average amountguaranteed financings outstanding; and(ii) for financings with a maturity of 12 months or more:50 bps on an annual basis, increased by the lowest of (i) themedian of the Dexia CDS 5 years spread calculated between1 January 2007 and 31 August 2008 or (ii) the median of the5 years CDS spreads of all credit institutions with a long-termcredit rating equivalent to that of Dexia, calculated on theaverage amount guaranteed financings outstanding.The renewal and modifications as provided for in the Addendumof 14 October 2009 have been duly authorised by aninterim decision of the European Commission for a period of 4months as from 30 October 2009 (i.e., until 28 February 2010)or until the final decision – if such decision is adopted prior to28 February 2010 – of the European Commission in the contextof the State aid procedure opened on 13 March 2009.By separate agreement dated 17 March 2010, the Belgian,French and Luxembourg States and Dexia amended and supplementedthe above-mentioned Addendum to the GuaranteeAgreement of 14 October 2009 to reflect the terms of the finaldecision of the European Commission in the context of the Stateaid procedure of 26 February 2009. The changes include:(i) advancing the latest issue date for guaranteed financingsto 31 May 2010 (for financings with a maturity of less than12 months) resp. 30 June 2010 (for financings with a maturityof than 12 months);Management reportConsolidatedfinancial statementsAnnual financial statementsAdditional informationAnnual report 2009 Dexia 167
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9Management report
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Group profi leSIMPLIFIED GROUP STRU
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Group profi leQUALITY OF RISKS Dexi
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In accordance with the agreement wi
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2009 and early 2010 highlightsExit
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2009 and early 2010 highlightsCreat
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Corporate governanceIntroduction: t
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Corporate governanceThe European Ad
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Corporate governanceNAMEPIERREMARIA
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Corporate governanceNAMEROBERTDE ME
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Corporate governanceNAMESPECIALISTC
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Corporate governanceNAMEKOEN VAN LO
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Corporate governanceNew directors a
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Corporate governanceConsidering tho
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Corporate governancemade and the fi
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Corporate governanceDIRECTORS’ AN
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Corporate governanceOperation and a
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Corporate governanceThe Appointment
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Corporate governanceResponsibilitie
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Corporate governanceVariable compen
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Corporate governancetional entities
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Corporate governance• It identifi
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Shareholder informationStock market
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Shareholder informationPRINCIPAL DE
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Human resourcesAGE PYRAMID> 5955-59
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Sustainable developmentThe 2009 Dex
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Risk managementIntroductionIn 2009,
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Risk managementThe Rating Committee
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Risk managementAsset qualityBy the
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Risk managementBond portfolioDexia
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Risk managementThis good performanc
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Risk managementRisk and control sel
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Risk managementECONOMIC CAPITALBY T
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Financial resultsPreliminary notes
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Financial resultsSolvency31/12/08 3
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Financial resultsAssetsLoans and ad
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Activity and results of the busines
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General information3. Overview of t
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General informationAll the above-me
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General information4.5. Dexia banka
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General information6.3. Notificatio
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Consolidated balance sheet ........
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Consolidated balance sheetManagemen
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Consolidated statementof incomeMana
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Management reportConsolidatedfinanc
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Consolidated statementof comprehens
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Additional informationGeneral dataN
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Additional informationDexia FP Hold
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Dexia’s annual report 2009 has be
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Annual report 2009 - Dexia.com

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