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

Report of the DirectorsIrish Bank Resolution Corporation LimitedAnnual Report & Accounts 2011The Directors present their report and the audited financialstatements for the year ended 31 December 2011.ResultsThe Group loss attributable to the owner of the parent amountedto €884m (2010: €17,651m) as set out in the Consolidatedincome statement on page 32.Review of activitiesFollowing the approval by the European Commission of the jointrestructuring and work-out plan for the Bank and IrishNationwide Building Society (‘INBS’) on 29 June 2011, the Bank’ssingle activity has become the orderly resolution of the Groupover a period of up to ten years, securing the best possibleoutcome for the taxpayer.On 1 July 2011 the assets and liabilities of INBS (with theexception of certain limited excluded liabilities) were transferredto the Bank under a transfer order made by the Irish High Court.The Chairman’s statement, the Group Chief Executive’s reviewand the Business review on pages 3 to 14 report ondevelopments during the year, recent events and likely futuredevelopments. The financial statements for the year ended31 December 2011 are set out in detail on pages 32 to 168.DividendsNo dividends were paid during the year. It is not proposed to paya dividend in respect of the year ended 31 December 2011.CapitalThe capital resources of the Group include €29.3bn of capitalcontributed by the Minister for Finance. In addition, prior to themerger with the Bank, the Minister had contributed €5.4bn ofcapital to INBS.The transfer of the assets and liabilities of INBS on 1 July 2011resulted in an increase in the Group’s shareholders’ funds,increasing Core Tier 1 capital by €0.7bn.Details of changes in capital during the year are included in notes42 to 47 to the financial statements.Accounting policiesThe principal accounting policies, together with the basis ofpreparation of the financial statements, are set out in note 1 tothe financial statements.Directors and SecretaryThe names of the Bank’s Directors, together with a shortbiographical note on each, appear on page 15.Oliver Ellingham and Roger McGreal were appointed to the Boardon 14 October 2011 and 15 November 2011 respectively.On 13 January 2012 Dr. Max Barrett resigned as Group Secretaryand was replaced by Philip Brady who was appointed on thesame date.The interests of the Directors and Secretary who held office at31 December 2011 in the share capital of the Bank are shown inthe Remuneration Committee's report on behalf of the Board, setout in note 53 to the financial statements. Details of the totalremuneration of the Directors in office during 2011 and 2010 arealso shown in the Remuneration Committee’s report.Credit Institutions (Stabilisation) Act 2010In the performance of their functions the Directors have a dutyto have regard to the matters set out in section 4(f) of theCredit Institutions (Stabilisation) Act 2010. This duty is owed bythe Directors to the Minister for Finance on behalf of the Stateand takes priority over any other duties of the Directors to theextent of any inconsistency.Substantial shareholdingsOn 21 January 2009, under the terms of the Anglo Irish BankCorporation Act, 2009, all of the Bank’s ordinary andpreference share capital was transferred to the Minister forFinance. As at the date of this Report, all of the Bank’s issuedshare capital is held by the Minister.Foreign branchesThe Bank has an established branch, within the meaning of EUCouncil Directive 89/666/EEC, in the United Kingdom. Duringthe year branches in Germany and Jersey were closed and deregistered.The Bank’s branch in Austria was also closed during2011 and is currently in the final stages of de-registration.Corporate governanceThe Directors' Corporate governance statement appears onpages 25 to 29.Principal risks and uncertaintiesInformation concerning the principal risks and uncertaintiesfacing the Bank and the Group is set out in the Principal risksand uncertainties section on pages 18 to 22. The Group’sfinancial risk management objectives and policies and its use offinancial instruments are discussed in notes 21 and 50 to thefinancial statements.Books of accountThe Directors are responsible for ensuring that proper books ofaccount, as outlined in Section 202 of the Companies Act,1990, are kept by the Bank. To ensure compliance with theserequirements the Directors have appointed professionallyqualified accounting personnel with appropriate expertise andhave provided adequate resources to the Finance function. Thebooks of account of the Bank are maintained at the Bank'sregistered office at Stephen Court, 18/21 St. Stephen's Green,Dublin 2.AuditorThe Auditor, Deloitte & Touche, Chartered Accountants, hasexpressed willingness to continue in office in accordance withSection 160(2) of the Companies Act, 1963.Directors:Alan Dukes (Chairman),A.M.R. (Mike) Aynsley (Group Chief Executive),Gary Kennedy (Non-executive Director).Secretary:Philip Brady.28 March 201223