IBRC annual report for 2011 - Irish Bank Resolution Corporation ...

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Notes to the financial statements continued54. Related party transactions continuedIrish Government continuedPlacings with, and deposits from, the Central Bank of Ireland are detailed in notes 19, 22 and 37. In addition, in the normalcourse of business and on arm's length terms, the Group has entered into transactions with Government-related entities, whichinclude financial institutions in which the State has significant influence. The principal banking transactions include takingdeposits, investing in Government bonds and debt securities in issue, entering into derivative contracts and providing loans. At31 December 2011 normal banking transactions outstanding between the Group and such entities amounted to: deposits of€43m (2010: €540m), Government bonds of €303m (2010: €278m), debt securities issued by financial institutions in which theState has significant influence of €485m (2010: €383m), net derivative liabilities of €18m (2010: €24m) and loans and advancesto banks of €224m (2010: €365m).The volume and diversity of other non-banking transactions are not considered significant. Furthermore, while the IrishGovernment or Government-related entities may in the normal course of their business hold debt securities, subordinatedliabilities and other liabilities issued by the Group, it is not practical to ascertain and disclose these amounts. In the ordinarycourse of business the Group purchases certain utility and other services from entities controlled by the Irish Government.Pension fundsThe Group provides normal investment fund management and banking services to pension funds operated by the Group for thebenefit of its employees. These services are provided on similar terms to third party transactions and are not material to theGroup.Subsidiary undertakingsIrish Bank Resolution Corporation Limited (the 'Bank') is the ultimate parent of the Group. Banking transactions are entered intoby the Bank with its subsidiaries in the normal course of business. Balances between the Bank and its subsidiaries are detailed innotes 21, 22, 23, 27, 37, 38 and 40. Details of significant subsidiary undertakings are shown in note 30.During the year ended 31 December 2011, the Bank waived certain loans due to it from the following subsidiary undertakings:Aragone Limited, IBRC Assurance Company Limited, IBRC Property Investors Limited, Tincorra Investments Limited and IBRCProperty Lending Limited. As a result of the loan waivers the Bank has increased its investments in certain of these subsidiaries.Joint ventures and associatesThe Group provides certain banking and financial services to its joint ventures and associates. Details of the Group's loans andadvances to equity-accounted joint venture interests, joint venture interests held in respect of liabilities to customers underinvestment contracts and joint ventures and associates that are measured at fair value through profit or loss are disclosed innote 27. Details of deposits from joint ventures and associates are shown in note 37. Details of significant equity-accountedjoint ventures and associates are shown in note 29.In August 2010 the EC granted approval for the Bank and Ulster Bank to assume control of Arnotts Holdings Limited as agreedwith shareholders in a loan restructuring agreement in February 2010. The value of the Bank’s interest in Arnotts is included infinancial assets at fair value through profit or loss.In late 2011 the Bank obtained a minority equity stake in what was previously the manufacturing business of the Quinn Group.The Bank's interest is classified, upon initial recognition, at fair value through profit or loss. At 31 December 2011 the value ofthe Bank’s economic interest in this enterprise is not material.In 2011 the Group agreed a joint venture with Liberty Mutual Group to acquire the Republic of Ireland general insurancebusiness of Quinn Insurance Limited (Under Administration). The value of the Bank's interest is included in interests inassociates and the details are disclosed in note 29.152
Irish Bank Resolution Corporation LimitedAnnual Report & Accounts 2011Key management personnelKey management personnel comprise persons who, at any time during the year ended 31 December 2011, were members ofthe Board of Directors (the 'Board') and any other persons having authority and responsibility for planning, directing andcontrolling the activities of the Bank.Changes to the Board since 31 December 2010On 14 October 2011 and 15 November 2011 respectively Oliver Ellingham and Roger McGreal were appointed to the Board.On 13 January 2012 Dr. Max Barrett resigned as Group Secretary and was replaced by Philip Brady.Remuneration for the Non-executive Directors is in accordance with the fee levels as agreed with the Minister for Finance inconsultation with the Bank.Key management compensationThe following disclosures are made in accordance with the provisions of IAS 24 'Related Party Disclosures'. These disclosurescover the Board of Directors (Executive and Non-executive) and other key management personnel. The amounts presentedbelow include the figures separately reported in the Report on Directors' remuneration and interests in note 53.2011 2010*€m €mSalaries and short term employee benefits (1)Directors' fees (2)Post employment benefits (3)Termination benefits (4)6 51 11 1- 18 8(1)At 31 December 2011 key management personnel comprise the ten individuals who are members of the Bank’s GroupExecutive Committee, which includes the Executive Director. The amounts presented above include salaries and short termemployee benefits for seventeen persons (2010: fourteen), who were considered key management personnel at somepoint during the year, two of whom had left the Bank by 31 December 2011. In addition, to ensure compliance with taxrules, the Bank also engages professional advisors to assist in the preparation of Irish and foreign tax returns for certain keymanagement personnel who were hired from abroad.(2)(3)(4)Further details in respect of Directors' fees are presented separately in the Report on Directors' remuneration and interestsin note 53.Comprises employer contributions to pension funds.In the prior year termination benefits were paid to two former members of key management who left the Bank in 2010.* In 2010 a deferred bonus of €0.1m, which had previously been awarded and expensed in respect of the financial year to30 September 2006 and which represented a contractual obligation, was paid to one key manager in the prior year.153
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Chairman’s statementIrish Bank Re
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Business review continuedIrish Bank
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Report of the DirectorsIrish Bank R
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OpinionIn our opinion:• the Group
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