Notes to the financial statements continued53. Report on Directors' remuneration and interests continuedDirectors' remuneration - 2010TotalSalary <strong>annual</strong> Temporary& benefits * Fees ** Pension ^ remuneration allowances # Total€'000 €'000 €'000 €'000 €'000 €'000Executive DirectorA.M.R. (Mike) Aynsley 547 - 133 680 294 974Non-executive DirectorsAlan Dukes (1) - 127 - 127 - 127Dr. Noel Cawley (2) - 52 - 52 - 52Aidan Eames (2) - 52 - 52 - 52Maurice Keane - 112 - 112 - 112Gary Kennedy (2) - 59 - 59 - 59Donal O'Connor (3) - 114 - 114 - 114Total 547 516 133 1,196 294 1,490* Comprises a base salary of €500,000 and other taxable benefits including an <strong>annual</strong> car allowance.** Fees to Non-executive Directors comprise a basic <strong>annual</strong> fee of €73,600 and additional fees paid to the Chairmen ofeach of the principal Board Committees. The Chairmen of the Audit Committee and the Risk and Compliance Committeereceive an <strong>annual</strong> fee of €25,760. The Chairmen of the Nomination and Governance Committee and the RemunerationCommittee receive an <strong>annual</strong> fee of €12,880. During 2010, due to the limited number of Directors on the Board <strong>for</strong> aperiod of time, certain Directors were required to act as Chairmen of more than one committee <strong>for</strong> part of the year.Details of appointments to the Board Committees in 2010 are described in the Corporate governance statement in the2010 Annual Report and Accounts.^Comprises employer contributions to pension funds. Includes €8,000 in respect of 2009 entitlements which were paidduring 2010.# Comprises the gross value, be<strong>for</strong>e deduction of tax, of temporary relocation assistance which includes rent, travel andother agreed expenses received during the year.(1) Appointed as Chairman on 14 June 2010. The Chairman has decided to take an <strong>annual</strong> fee of €150,000, which is€100,000 lower than the agreed contractual fee of €250,000, effective as and from his date of appointment as Chairman.(2) Co-opted on 24 May 2010.(3) Resigned as Chairman and as a Director on 14 June 2010. The <strong>annual</strong> fee <strong>for</strong> the role of Chairman was €250,000 andthis was paid on a pro rata basis up to the date of his resignation.150
<strong>Irish</strong> <strong>Bank</strong> <strong>Resolution</strong> <strong>Corporation</strong> LimitedAnnual Report & Accounts <strong>2011</strong>54. Related party transactions<strong>Irish</strong> GovernmentParties are considered to be related if one party has the ability to control, or exercise significant influence over, another party'sfinancial or operational decision making, or when both parties are under common control. During the period ended31 December 2009 the Group was taken into State ownership and, as a result, the <strong>Irish</strong> Government is considered a relatedparty. CISA, enacted on 21 December 2010, provides the legislative basis <strong>for</strong> the reorganisation and restructuring of thebanking system agreed in the joint EU/IMF Programme of Financial Support <strong>for</strong> Ireland. It will facilitate the plannedrestructuring of the <strong>Bank</strong> as set out in the programme agreement and consistent with EU State aid requirements. The <strong>Irish</strong>Government and the Troika (IMF, EC and European Central <strong>Bank</strong>) may there<strong>for</strong>e exert significant influence which could impactthe Group's future results and financial condition.The Government, under the ELG Scheme, has provided guarantees in respect of certain liabilities of the Group. Fees payableunder the ELG Scheme are set out in note 4.On 8 February <strong>2011</strong> a Direction Order was made by the <strong>Irish</strong> High Court directing the <strong>Bank</strong> to begin a process, managed by theNTMA, to transfer certain deposits and assets held by the <strong>Bank</strong>. Subsequently on 24 February <strong>2011</strong> the AIB Transfer Order wasmade by the <strong>Irish</strong> High Court, under which, in return <strong>for</strong> transferring its <strong>Irish</strong> and UK deposits, the <strong>Bank</strong> was required to pay AIBand AIB UK €1.6bn in excess of book value. In addition the <strong>Bank</strong>'s shareholding in its Isle of Man deposit taking subsidiary wastransferred to AIB at approximately net asset value. The total net loss on disposal be<strong>for</strong>e tax arising from the transaction in<strong>2011</strong>, including the transfer of NAMA senior bonds, is €0.2bn.From 24 February <strong>2011</strong> the legal effect of the AIB Transfer Order is that the vast majority of customer deposit accounts heldwith the <strong>Bank</strong>'s <strong>Irish</strong> branches are now held with AIB and in the case of the UK are now held with its subsidiary, AIB UK. Underthe terms of the AIB Transfer Order, certain employees of the <strong>Bank</strong> associated with the deposit business automaticallytransferred to AIB and AIB UK. The <strong>Bank</strong> is providing certain administrative and operational services to AIB and AIB UKfollowing the deposit transfer pursuant to the TSA and has earned fee income of €3m during the year in respect of theseservices.In March and April <strong>2011</strong> the <strong>Bank</strong> entered into two cross currency swaps with the NTMA on market terms. The principalamounts of the swaps are €2.3bn / $3.2bn and €0.6bn / £0.6bn respectively and these amounts were exchanged between theparties. The swaps have an amortising profile and contractual maturity of 2021. The interest rates on the swaps are marketbasedplus an agreed spread over the respective currency interbank benchmark rate. The swaps assist the <strong>Bank</strong> in meeting its<strong>for</strong>eign currency funding requirements. Placements with banks (note 22) include a cash collateral placement of €143m (2010:€nil) with the NTMA relating to these transactions.On 7 April <strong>2011</strong> the Minister <strong>for</strong> Finance issued to the <strong>Bank</strong> certain requirements under Section 50 of CISA pursuant to whichthe <strong>Bank</strong> was obliged to implement in all material respects, with the approval of the NTMA, the high level steps plansappended thereto in relation to (i) the rationalisation and, where appropriate, closure of the <strong>Bank</strong>’s UK offices and its branchesin Dusseldorf, Vienna and Jersey, (ii) the disposal of the <strong>Bank</strong>’s Wealth Management business and (iii) the <strong>Bank</strong>’s acquisitionof/merger with INBS. The <strong>Bank</strong> was also required to prepare, in conjunction with INBS and the NTMA, a high level restructuringand work-out steps plan, based on the Restructuring Plan (the ‘High Level Steps Plan’) and, subject to the approval of theNTMA, implement that High Level Steps Plan, subject to any variations directed by the EC. The <strong>Bank</strong> is proceeding to implementthe High Level Steps Plan, following its approval by the NTMA on 20 June <strong>2011</strong>.On 29 June <strong>2011</strong> the EC approved, under EU State aid rules, the joint restructuring and work-out plan <strong>for</strong> the <strong>Bank</strong> and INBSwhich had been submitted by the <strong>Irish</strong> Government to the EC on 31 January <strong>2011</strong>. Pursuant to the restructuring plan, the <strong>Bank</strong>and INBS were to be combined and then resolved over a period of up to ten years. On 1 July <strong>2011</strong> all of the assets and liabilities(with the exception of certain limited excluded liabilities) of INBS transferred to the <strong>Bank</strong> by way of a further transfer ordermade, by the <strong>Irish</strong> High Court, under Section 34 of CISA (the ‘INBS Transfer Order’) and on that date the <strong>Bank</strong> announced itsintention to change its name to <strong>Irish</strong> <strong>Bank</strong> <strong>Resolution</strong> <strong>Corporation</strong> Limited (‘<strong>IBRC</strong>’).During the year the <strong>Bank</strong> has recognised a net reduction of €776m in the overall <strong>report</strong>ed loss on disposal of assets to NAMA(note 14). This results primarily from settled valuation adjustments relating to the completion of full due diligence by NAMA onassets previously transferred during November and December 2010. €296m of the net reduction relates to INBS assets and hasbeen recognised during the six months ended 31 December <strong>2011</strong>.At 31 December <strong>2011</strong> the <strong>Bank</strong> held promissory notes issued by the Minister <strong>for</strong> Finance with a carrying value of €29.9bn(2010: €25.7bn) (note 25). The promissory notes pay 10% of the initial principal amount <strong>annual</strong>ly. The <strong>Bank</strong> received the firstinstalment payment of €2.53bn on 31 March <strong>2011</strong>.151
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