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ANNUAL INFORMATION FORM
CAISSE CENTRALE DESJARDINS
Year ended December 31, 2014
March 13, 2015
TABLE OF CONTENTS
AIF
AR incorporated
by reference
Information incorporated by reference .............................................
4
Caution concerning forward-looking statements ..............................
4
Corporate structure ..........................................................................
5
Name, address and incorporation..............................................
5
Subsidiaries ...............................................................................
6
General development of the business..............................................
6
Recent developments ................................................................
6
Past 3 quarters...........................................................................
6
Description of the business ..............................................................
8
13-25
Business segments ..........................................................................
8
15, 16, 113
Regulatory capital and capital management .............................
9
22-24, 104, 105
Regulation and control ...............................................................
9
7-9, 47, 116, 117
Loans .........................................................................................
9
28-34, 69, 70, 88
Risk factors ................................................................................
9
26-46
Dividends and distributions ..............................................................
9
Capital structure ...............................................................................
10
General description....................................................................
10
103, 116, 117
Credit ratings..............................................................................
10
39
Market for securities .........................................................................
11
37-39
Directors and executive officers .......................................................
14
Directors.....................................................................................
14
Executive officers.......................................................................
18
Cease trade orders or bankruptcy .............................................
19
Penalties or sanctions................................................................
19
Conflicts of interest ....................................................................
19
Legal proceedings ............................................................................
20
Material contracts .............................................................................
20
Interest of experts.............................................................................
20
Additional disclosure ........................................................................
20
Indebtedness of directors and executive officers ......................
21
Transactions with restricted parties and associates .................
21
Auditors ......................................................................................
21
116, 117, 130, 131
47, 114, 115
Page 2
AIF
AR incorporated
by reference
Additional information.......................................................................
21
Statement of Caisse centrale’s senior
executive officers compensation .....................................................
22
Audit Commission information..........................................................
48
Rules of the Audit Commission..................................................
48
Composition of the Audit Commission.......................................
48
Relevant education and experience ..........................................
48
Pre-approval policies and procedures .......................................
49
External auditor service fees billed (by category)......................
49
Corporate governance disclosure ....................................................
50
Board of Directors and Board mandate .....................................
50
119-124, 129
Descriptions of roles ..................................................................
51
120, 123-126
Orientation and continuing education ........................................
51
123
Business ethics ..........................................................................
52
119
Director nomination process ......................................................
52
120-126
Compensation............................................................................
53
127, 128
Board committees ......................................................................
53
125, 126
Evaluation ..................................................................................
53
123
Schedules.........................................................................................
54
A – Rating categories by credit rating agency
B – Audit Commission Charter (Caisse centrale Desjardins)
C – Institutional Policy, External Auditors of Desjardins Group
AIF:
AR:
Annual Information Form of Caisse centrale Desjardins for the fiscal year ended December 31, 2014
Annual Report of Caisse centrale Desjardins for the fiscal year ended December 31, 2014
Page 3
INFORMATION INCORPORATED BY REFERENCE
Some information in this Annual Information Form is taken from the Annual Report of Caisse centrale
Desjardins du Québec (Caisse centrale) for the fiscal year ended December 31, 2014 (Annual Report) and
is incorporated by reference into this Annual Information Form as indicated in the table of contents. The
Annual Report of Caisse centrale is available on the System for Electronic Document Analysis and
Retrieval (SEDAR) at www.sedar.com.
Unless otherwise indicated or the context otherwise requires, the expression “Caisse centrale” refer to
Caisse centrale Desjardins and its direct and indirect subsidiaries, its predecessor companies and other
entities it controls or that comprise it.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
Caisse centrale’s public communications often include oral or written forward-looking statements. Such
forward-looking statements are contained in this Annual Information Form and may be incorporated in
other filings with Canadian regulators or in any other communications. These statements include, but are
not limited to, comments about Caisse centrale’s objectives regarding financial performance, priorities,
operations, the review of economic conditions and markets, as well as the outlook for the Canadian, U.S.,
European and other international economies. Such forward-looking statements include, in particular, those
in Section 1.0, “Changes in the economy and the industry”, Section 2.0, “Review of the financial results”,
Section 3.0, “Balance Sheet Review”, and Section 5.0, “Additional information”, of the Annual Report. They
are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “intend,” “estimate,”
“plan,” and “may”; words and expressions of similar import; and future and conditional verbs.
By their very nature, such statements involve assumptions, inherent risks and uncertainties, both general
and specific. It is therefore possible that, due to many factors, these predictions, forecasts or other
forward-looking statements as well as Caisse centrale’s objectives and priorities may not materialize or
may prove to be inaccurate and that actual results differ materially. Caisse centrale cautions readers
against placing undue reliance on these forward-looking statements since actual results, conditions,
actions and future events could differ significantly from the targets, expectations, estimates or intents
expressed explicitly or implicitly therein.
A number of factors, many of which are beyond Caisse centrale’s control, and the effects of which can be
difficult to predict, could affect the accuracy of the forward-looking statements in this Annual Information
Form. These factors include those discussed in Section 4.0, “Risk management”, in the Annual Report, and
include, without limitation, credit, market, liquidity, operational, strategic and reputation risks. The factors
that can impact the accurateness of the forward-looking statements contained in this Annual Information
Form include the regulatory and legal environment risk, such as legislative or regulatory developments in
Quebec, Canada or elsewhere in the world, such as changes in fiscal and monetary policies, reporting and
liquidity and capital adequacy requirements guidelines, or new interpretations thereof, and environmental
risk, which is the risk of financial, or operating losses, or loss of reputation for Caisse centrale as a result of
environmental impacts or issues, whether they are a result of Caisse centrale’s credit or investment
activities or its operations. Another such factor is pension plan risk, which is the risk of losses resulting from
pension plan commitments made by Caisse centrale in favour of its employees arising primarily from
interest rate, price, foreign exchange and longevity risks.
Page 4
Other factors that can impact the accuracy of the forward-looking statements contained in this Annual
Information Form include factors related to the economic and business conditions in the regions in which
Caisse centrale operates; changes in economic and financial conditions in Quebec, Canada or elsewhere
in the world including short- and long-term interest rates, inflation, changes in debt security markets,
foreign exchange rates, financial market volatility and the tightening of liquidity in certain markets, the
strength of the economy, and Caisse centrale’s business volume in a given region. Further examples of
such factors are monetary policies, competition, amendments to standards, legislation and regulations, the
accuracy and completeness of information about customers and counterparties, Caisse centrale’s
accounting policies, new products and services intended to maintain or expand Caisse centrale’s market
share, the ability to recruit and retain key senior officers, including senior management, commercial
infrastructure, geographical concentration, and credit ratings.
Other factors that could influence the accuracy of the forward-looking statements in this Annual Information
Form include amendments to tax laws, unexpected changes in personal spending and savings habits,
technological developments, the ability to implement Caisse centrale’s disaster recovery plan within a
reasonable time, the potential impact of international conflicts or natural disasters on operations, and
Caisse centrale’s ability to anticipate and manage the risks associated with these factors properly, despite
a disciplined risk management environment.
It is important to note that the above list of factors that could influence future results is not exhaustive.
Other factors could have an adverse effect on the results of Caisse centrale. Additional information on
these and other factors is found in Section 4.0, “Risk management”, of the Annual Report. Although Caisse
centrale believes that the expectations expressed in these forward-looking statements are reasonable, it
cannot guarantee that these expectations will prove to be correct. Caisse centrale cautions readers against
placing undue reliance on the forward-looking statements when making decisions. Readers shoud carefully
consider such risk factors as well as other uncertainties and potential events before relying on these
forward looking statements.
The forward-looking statements contained in this Annual Information Form represent the point of view of
management only on the date hereof, and are communicated to help readers understand and interpret the
Caisse centrale’s balance sheet as at the dates indicated or the results for the periods ended on such
dates, as well as its strategic priorities and objectives, and these statements may not be appropriate for
other purposes. Caisse centrale does not undertake to update any verbal or written forward-looking
statements that may be made from time to time by or on behalf of Caisse centrale, except as required
under applicable securities legislation.
CORPORATE STRUCTURE
NAME, ADDRESS AND INCORPORATION
Created on June 22, 1979, Caisse centrale is a financial services cooperative governed by the Act
respecting the Mouvement Desjardins, 2000 S.Q., c. 77, as amended, and by the Act respecting financial
services cooperatives, R.S.Q., c. C-67.3 (AFSC), as amended. Caisse centrale may also conduct its
activities under the name “Caisse centrale Desjardins”.
Caisse centrale is part of the Mouvement des caisses Desjardins (Desjardins Group). The shares of Caisse
centrale’s capital stock of are held primarily by the Fédération des caisses Desjardins du Québec
(Federation) which, with its member caisses (caisses), is a full member of Caisse centrale.
Caisse centrale’s head office is located at 1170 Peel Street, Suite 600, Montreal, Quebec, Canada
H3B 0B1. Additional information on its other establishments on pages 116, 117, 130 and 131 of the Annual
Report are incorporated herein by reference.
Page 5
SUBSIDIARIES
Through its wholly-owned subsidiary Desjardins FSB Holdings, Inc. (a holding company incorporated under
the laws of the State of Delaware, USA), Caisse centrale holds all of the capital stock of Desjardins Bank,
National Association (incorporated under the federal laws of the United States) and of Desjardins Florida
Loan Center, Inc. (incorporated under the laws of the State of Delaware, USA). Caisse centrale also
operates a branch in the State of Florida, Caisse centrale Desjardins U.S. Branch, which is incorporated
under the federal laws of the United States and wholly-owned.
GENERAL DEVELOPMENT OF THE BUSINESS
RECENT DEVELOPMENTS
On January 20, 2015, Caisse centrale Desjardins issued variable-rate medium-term notes in the European
market under its global multi-currency medium-term note program for a total value of €500 million. These
notes will mature on January 20, 2020. Also, on January 29, 2015, Caisse centrale Desjardins issued in the
U.S. market medium-term notes with a coupon rate of 1.75% for a total value of US$750 million and
variable-rate medium-term notes for a total value of US$250 million. These notes will mature on January
29, 2018.
On March 2, 2015, Caisse centrale Desjardins issued 15,000,000 medium-term notes in the Canadian
market under its Canadian medium-term note program at a price of C$100 each for a total value of
C$1.5 billion. These notes have a 1.748% coupon rate and will mature on March 2, 2020.
PAST THREE QUARTERS
Caisse centrale’s consolidated assets totalled $44.3 billion as at December 31, 2014 compared with
$34.8 billion in 2013 and $29.3 billion in 2012. The growth compared with 2013 and 2012 was driven
primarily by an increase in outstanding loans. In its role as Desjardins Group’s treasurer, Caisse centrale
continued to meet the refinancing needs of the Federation and other Desjardins Group entities. Desjardins
caisse network’s increased liquidity needs significantly affected the portfolio of outstanding loans to the
Federation and other network entities, resulting in growth of $6.2 billion since December 31, 2013 and
$9.8 billion since December 31, 2012.
Ongoing business development by the Business and Institutional Services segment has met with continued
success over the past few year years. As at December 31, 2014, personal and business loan portfolios
were up $323.2 million and $1,873.0 million respectively since December 31, 2012. This growth was
notably achieved while maintaining the quality of these portfolios, as seen from the net impaired loans ratio,
expressed as a percentage of the total gross loan portfolio, which stood at 0.04% as at
December 31, 2014, an improvement from 0.09% as at December 31, 2012. The public and parapublic
sector loan portfolio, including clients’ liability under acceptances, amounted to $1.8 billion, down
$0.1 billion since the end of fiscal 2012.
Liquidities, consisting of cash and deposits with financial institutions as well as securities, totalled
$7.7 billion as at the end of 2014, marking a slight increase of $0.4 billion compared with the end of 2012.
The liquidity ratio stood at 18% of total assets in 2014, down from 25% in 2012. In spite of the decline from
its December 31, 2012 level, this ratio is well within regulatory requirements and will allow Caisse centrale
to support Desjardins network growth.
Page 6
To ensure stable and diversified refinancing, Caisse centrale diversifies its sources of financing on the
institutional capital markets. Over the past three years, Caisse centrale has regularly raised funds through
capital markets when conditions were favourable and made public and private offerings of term notes on
Canadian, U.S. and European markets. For instance, Caisse centrale’s activities under the securitization
program insured by the Canada Mortgage and Housing Corporation totalled $1.6 billion in 2014 and
$4.8 billion over the past three fiscal years. During fiscal 2014, Caisse centrale also issued $0.7 billion of
medium-term notes in the Canadian market and US$275.0 million in the United States as well as a
US$1.3 billion issue through its multi-currency medium-term note program. During the same period, Caisse
centrale also made two covered bond issuances in the European market for a total amount of €2.0 billion.
In 2013 and 2012, Caisse centrale completed several debt security offerings in Canadian, U.S. and
European markets totalling $5.0 billion.
To maintain solid capital levels, during the last three fiscal years, Caisse centrale made three capital stock
issues totalling $0.9 billion, the first during the second quarter of 2013, the second during the first quarter of
2014 and the third during the last quarter of 2014. Caisse centrale is among the best capitalized financial
institutions in Canada. As at December 31, 2014, its Tier 1a, Tier 1 and total capital ratios measured under
the Basel III regulatory framework stood at 13.8%, 13.8% and 14.3%, respectively. As at
December 31, 2012, Caisse centrale had Tier 1 and total capital ratios measured under Basel II
requirements of 16.5% and 17.2%, respectively.
Total income for the year ended December 31, 2014 grew 30% compared with fiscal 2012. The increase in
income in 2014 was primarily driven by higher business loan portfolio outstandings resulting from the
prudent growth strategy adopted by the Business and Institutional Services segment, which yielded higher
loan outstandings and loan portfolio margins. Desjardins Group Treasury segment income was up
$45.7 million, compared with 2012, and $40.0 million compared with 2013. This performance is attributable
to all segment activities, which generated income higher than the previous year, despite a persistently lowinterest environment. Note that income growth was generated by trading, foreign exchange and assetliability matching activities while portfolio managers were able to fully capitalize on market conditions
prevailing during the fiscal year. Income generated by liquid asset portfolio management was also up
compared with the previous year, particularly due to higher gains on disposal of available-for-sale
securities as well as the increase in the average liquidity volume maintained by Caisse centrale.
Caisse centrale recognized a $27.5 million provision for credit losses in 2014, compared with provisions of
$1.6 million and $7.4 million in 2013 and 2012, respectively. The significant increase in the provision for
credit losses compared with 2013 reflects the best estimate of management regarding allowances for credit
losses that have not yet been designated as impaired loans at an individual level. These results confirm the
sound performance of the overall portfolio. The decrease in the provision recognized in 2013 compared
with 2012 stemmed primarily from the improved quality of the business loan portfolio, as well as the
decrease in average portfolio duration, which favourably affected the collective allowance.
Finally, Caisse centrale’s net income rose $45.3 million compared with 2012, increasing Caisse centrale’s
contribution to the Desjardins caisse network, consisting of remuneration on capital stock and other
payments to the Desjardins network, which totalled $219.7 million in 2014 compared with $201.1 million in
2013 and $183.8 million in 2012.
Page 7
Also, on December 19, 2014, Caisse centrale announced the signing of a new capital maintenance
agreement by the Federation and the Fédération des caisses populaires de l’Ontario Inc. This agreement
replaces the agreement signed in May 1993 by the eleven Desjardins regional federations of Québec and
the Fédération des caisses d’économie du Québec (grouped together under the Federation since the
merger of these entities with the Confédération des Caisses populaires et d’économie Desjardins du
Québec on July 1, 2001), as well as a similar agreement signed in October 1993 by the Fédération des
caisses populaires de l’Ontario Inc., the Fédération des Caisses Populaires Acadiennes Limitée and the
Fédération des Caisses populaires du Manitoba Inc. (Caisse Populaire Groupe Financier Ltée since
September 1, 2010). Under this new agreement, the Federation and the Fédération des caisses populaires
de l’Ontario Inc. undertake to maintain the capital base of Caisse centrale at a level that satisfies the
requirements for a domestic systemically important financial institution, as set out in the Ligne directrice sur
les normes relatives à la suffisance du capital de base pour les coopératives de services financiers of the
Autorité des marchés financiers (AMF), namely:
1) The percentage corresponding to the minimum required assets-to-capital ratio, or any other ratio of a
similar type set by the AMF, plus 0.5%;
2) The percentage corresponding to the minimum required Tier 1a capital ratio, or any other ratio of a
similar type set by the AMF, for a domestic systemically important financial institution, which is 8%;
3) The percentage corresponding to the minimum required Tier 1 capital ratio, or any other ratio of a
similar type set by the AMF, for a domestic systemically important financial institution, which is 9.5%;
4) The percentage corresponding to the minimum required total capital ratio, or any other ratio of a similar
type set by the AMF, for a domestic systemically important financial institution, which is 11.5%.
This new agreement aims to integrate the new Basel III capitalization rules developed by the Bank for
International Settlements and applicable to the Desjardins Group since January 2013. The agreement also
takes into account regulatory changes applicable to financial services cooperatives designated as domestic
systemically important financial institutions with respect to capital base adequacy. The 1993 capital
maintenance agreements had become obsolete and required updating mainly due to changes in the
definitions and minimum required capital ratios. The new capital maintenance agreement signed by the
Federation and the Fédération des caisses populaires de l’Ontario Inc. on December 19, 2014, is available
on SEDAR (www.sedar.com).
Page 8
DESCRIPTION OF THE BUSINESS
Caisse centrale is a cooperative institution that provides financial services to Desjardins Group,
governments, public and parapublic sector institutions, individuals as well as medium-sized and large
businesses. It meets the needs of the Federation, Desjardins Group caisses and other Desjardins Group
components. Caisse centrale’s mandate is to provide institutional funding for the Desjardins network and to
act as financial agent, in particular by supplying interbank exchange services, including clearing house
settlements. Caisse centrale’s activities in Canadian and international markets complement those of other
Desjardins Group entities. Caisse centrale had 431 employees as at December 31, 2014.
Information describing the business on pages 13-25 of the management’s discussion and analysis (MD&A)
in the Annual Report is incorporated herein by reference.
BUSINESS SEGMENTS
Caisse centrale conducts its activities in three segments, providing different services and using
separate strategies:
●
Business and Institutional Services segment: This is the segment responsible for developing and
marketing the Business and Institutional Services offering. It is also responsible for distributing a range
of financial products and services, including financing in the form of lines of credit and term loans to
public and parapublic entities and businesses. This segment also includes cross-border financings to
clients of Caisse centrale’s U.S. branch. In the corporate market, where Caisse centrale focuses on the
service and manufacturing sectors, many of its teams specialize in agrifood, forest products,
communications, energy, real estate, steel and transportation.
●
Desjardins Group Treasury segment: Caisse centrale acts as the financial agent and treasurer of
Desjardins Group. Caisse centrale is Desjardins Group’s direct clearer at the Canadian Payments
Association and at The Canadian Depository for Securities Limited (CDS) which provide clearing
settlements for payment instruments and securities transactions in Canada.
Caisse centrale supplies Desjardins Group with refinancing and also provides various treasury
products. It obtains its funds principally from depositors from the short-, medium- and long-term
Canadian and international capital markets. Under the Act respecting the Mouvement Desjardins,
Caisse centrale may not receive deposits from individuals. The Desjardins Group Treasury segment is
also in charge of asset/liability management for Caisse centrale, as well as securities and financial
derivative instrument portfolio and cash management for Desjardins Group. As Desjardins Group
treasurer, Caisse centrale develops and implements liquidity management and asset/liability
matching strategies.
This segment also grants financing in the form of lines of credit and term loans to members and other
entities within the scope of Desjardins Group.
●
Other segment: This segment comprises the activities of the U.S. subsidiary, Desjardins FSB
Holdings Inc. through which Desjardins Bank, National Association, which is headquartered at
Hallandale Beach in Florida, provides U.S. personal banking services.
For segment analysis of Caisse centrale’s activities, see the information on pages 15 and 16 of the MD&A
in the Annual Report which is incorporated herein by reference. Also, for a summary of Caisse centrale’s
financial results by business segment, see the information appearing on page 15 of the MD&A in the
Annual Report, Table 4, “Components of Net Interest Income and Other Income by Business Segment,”
and on page 113 of the notes to the consolidated financial statements in the Annual Report, which is
incorporated herein by reference.
Page 9
REGULATORY CAPITAL AND CAPITAL MANAGEMENT
Information on regulatory capital and capital management on pages 22-24 of the MD&A in the Annual
Report and on pages 104 and 105 of the notes to the consolidated financial statements in the Annual
Report is incorporated herein by reference.
REGULATION AND CONTROL
Caisse centrale’s activities are governed by the Act respecting financial services cooperatives (AFSC) and
an Act respecting the Mouvement Desjardins. The Minister of Finance and the Economy of Quebec is
responsible for the application of the AFSC and the AMF is in charge of its administration. The AMF is the
main government authority that supervises and oversees deposit-taking institutions (other than banks)
operating in Quebec, including the caisses and Caisse centrale. On December 5, 2013, the Minister of
Finance and the Economy of Quebec at the time submitted his Report on the application of An Act
respecting financial services cooperatives to the National Assembly. This report sets out the merits of
amending the AFSC and adapting it to the changing realities of financial services cooperatives as well as
the requirements under new international standards imposed on financial institutions. The bill amending the
legislative framework is currently expected to come into force in late 2015.
Desjardins Bank, National Association is licensed with and supervised by the Office of the Comptroller of
the Currency (OCC), an independent branch of the U.S. Department of the Treasury. Caisse centrale’s
U.S. operations are subject to the supervisory and regulatory authority of the Board of the Governors of the
Federal Reserve System under the U.S. International Banking Act of 1978 due to the fact that its
wholly-owned subsidiary, Desjardins FSB Holdings Inc., is a bank holding company. Federal Reserve
policies require Caisse centrale to be a source of financial strength for Desjardins Bank, National
Association. U.S. federal legislation limits the ability of Desjardins Bank, National Association to engage in
certain transactions with the affiliated entities of Desjardins Group. Any such transaction is limited to 10%
of Desjardins Bank, National Association’s capital and the aggregate of these transactions may not exceed
20% of its capital. These transactions must also be on terms as favourable to Desjardins Bank, National
Association as those entered into with non-affiliates. Caisse centrale Desjardins U.S. Branch is also
licensed with and supervised by the OCC under the provisions of the International Banking Act of 1978.
Additional information on regulation and control on pages 7-9 and 47 of the MD&A in the Annual Report
and on pages 116 and 117 in the Annual Report is incorporated herein by reference.
LOANS
Information on loans on pages 28-34 of the MD&A in the Annual Report and on pages 69, 70 and 88 of the
notes to the consolidated financial statements in the Annual Report is incorporated herein by reference.
RISK FACTORS
Information on risk factors on pages 26-46 of the MD&A in the Annual Report is incorporated herein
by reference.
DIVIDENDS AND DISTRIBUTIONS
An amount of $177.8 million was declared as interests on subscribed and paid-up capital shares as at
December 31, 2014. An amount of $162.2 million was declared as interest on subscribed and paid-up
capital shares for the year ended December 31, 2013 and $144.5 million for the year ended
December 31, 2012. Additional information on dividends and distributions on page 17 of the MD&A in the
Annual Report is incorporated herein by reference.
Page 10
CAPITAL STRUCTURE
GENERAL DESCRIPTION
Information on capital structure on page 103 of the notes to the consolidated financial statements in the
Annual Report and on pages 116 and 117 in the Annual Report is incorporated herein by reference.
CREDIT RATINGS
Maintaining competitive credit ratings is instrumental for Caisse centrale in order to access sources of
wholesale funding, obtain low-cost funding and boost its credibility and recognition among institutional
investors and counterparties. The rating agencies analyze Caisse centrale primarily on a combined basis
because the credit ratings of Caisse centrale are backed by Desjardins Group’s financial strength. The
agencies recognize Desjardins Group’s capitalization, the stability of its operating surplus earnings, its
significant market shares in Quebec and the quality of its assets.
During 2014, the four rating agencies confirmed the credit ratings for securities issued by Caisse centrale.
During the second quarter of 2014, Moody’s revised downward its outlook on the Canadian banking system
to “negative” from “stable” due to concerns that the government is becoming less willing to bail out banks,
which nevertheless remain among the highest rated in the world. In its press release, Moody’s confirmed
its ratings for the seven largest banks in Canada, including Caisse centrale. Moody’s considers that the
implementation of a “bail-in” regime could lead to a reduction in government support.
During the third quarter of 2014, rating agency Standard & Poor’s revised downwards its outlook on the
credit ratings of the six leading Canadian banks to “negative” from “stable” due to a possible decline in
support from the federal government in the event of a financial crisis. Standard & Poor’s stated that its
decision was based on the view that the proposed federal bail-in policy regime might lead it to trim ratings
on financial institutions within two years. The outlook on the rating of Caisse centrale Desjardins was not
affected by this announcement and remains “stable.”
On March 11, 2014, Fitch issued an AAA rating with a stable outlook for the covered bonds issued on the
same date in the European market under Caisse centrale Desjardins’s Legislative Covered Bond Program
for a total value of €1 billion. Moody’s also issued an Aaa rating for these covered bonds on
March 11, 2014. On October 22, 2014, Moody’s and Fitch confirmed an Aaa rating for the covered bonds
issued on the same date in the European market under the same program for a total value of €1 billion.
On January 23, 2015, Fitch confirmed the credit ratings of Caisse centrale with a stable outlook. This
statement is reflective of the capitalization, solid asset quality and steady earnings of Desjardins Group.
This confirmation was published by Fitch as part of its periodic review of Canadian banking institutions.
Caisse centrale continues to boast credit ratings that are among the best of the major banking institutions
in Canada and abroad.
Page 11
The following table shows the ratings for the outstanding securities of Caisse centrale assigned by these
agencies as at the date of this Annual Information Form:
DBRS
Standard &
Poor’s
Moody’s
Fitch
R-1 (high)
A-1
P-1
F1+
AA
A+
Aa2
AA-
Stable
Stable
Negative
Stable
2/10
3/10
2/9
2/10
Caisse centrale Desjardins
Short term
Medium and long term, senior
Outlook
Rank
(1)
(1)
Rank out of all assignable ratings for long-term debt securities (descending order, 1 being the highest rank).
A definition of the categories of each rating has been obtained from the respective rating agency’s website
and is outlined in Schedule A to this Annual Information Form. Further information may be obtained from
the applicable rating agency.
Credit ratings are meant to provide purchasers with an independent assessment of the quality of the credit
attached to securities that will be issued. It is recommended that prospective purchasers of Caisse centrale
notes consult the rating agencies to familiarize themselves with the interpretation and significance of the
foregoing provisional ratings. The foregoing ratings should not be construed as recommendations to buy,
sell or hold on to the Caisse centrale notes. Ratings may be revised or withdrawn at any time by the rating
agency. As is customary, Caisse centrale paid fees to credit rating agencies for their credit rating services
and certain rating agencies received fees for other services rendered during the two last financial years.
Caisse centrale expects to pay similar fees to them in the future.
Additional information on credit ratings on page 39 of the MD&A in the Annual Report is incorporated
herein by reference.
MARKET FOR SECURITIES
On March 24, 2011, Caisse centrale issued US$1.0 billion worth of covered bonds at a price of US$99.855
under its Structured Covered Bond Program. The prospectus under which the bonds were issued expired
on March 14, 2012. These bonds have a 2.55% coupon rate and mature in March 2016. On March 6, 2012,
Caisse centrale issued US$1.5 billion worth of covered bonds at a price of US$99.976 under the same
program. These bonds have a 1.6% coupon rate and mature on March 6, 2017. These bonds are listed on
the London Stock Exchange, United Kingdom.
On January 31, 2014, Caisse centrale Desjardins filed a base shelf prospectus with the Irish Stock
Exchange and the Central Bank of Ireland to have the covered bonds issued under the Caisse centrale
Desjardins Legislative Covered Bond Program listed on the Irish Stock Exchange. This program was added
to the registry of Canada Mortgage and Housing Corporation on January 29, 2014. On March 11, 2014,
Caisse centrale issued covered bonds under this program in the European market for a total value of
€1 billion.These notes have a 1.125% coupon rate and mature on March 11, 2019. On October 22, 2014,
Caisse centrale also issued covered bonds under this program in the European market for a total value of
€1 billion. These notes have a 0.375% coupon rate and mature on October 22, 2019.
Page 12
On March 27, 2014, Caisse centrale Desjardins issued medium-term notes in the U.S. market for a total
value of US$275 million under its global multi-currency medium-term note program. These notes have a
variable rate and will mature on March 27, 2017. They were issued under a private placement and are not
listed on any stock exchange or similar market for securities.
On July 17, 2014, Caisse centrale Desjardins issued 7,000,000 medium-term notes in the Canadian market
under its Canadian medium-term note program at a price of C$100 each for a total value of C$700 million.
These notes have a 2.443% coupon rate and will mature on July 17, 2019. On March 2, 2015, Caisse
centrale Desjardins issued 15,000,000 medium-term notes in the Canadian market under its Canadian
medium-term note program at a price of C$100 each for a total value of C$1.5 billion. These notes have a
1.748% coupon rate and will mature on March 2, 2020. The medium-term notes issued by Caisse centrale
Desjardins in Canada under its Canadian medium-term note program are not listed on any stock exchange
or similar market for securities. Caisse centrale does not file a prospectus for the Canadian medium-term
note program as it benefits from specific statutory exemptions in this respect.
On April 2, 2014, Caisse centrale Desjardins also filed a base shelf prospectus with the Irish Stock
Exchange and the Central Bank of Ireland to have the medium-term notes issued under its global multicurrency medium-term note program listed on the Irish Stock Exchange. On September 15, 2014, Caisse
centrale Desjardins issued in the U.S. market medium-term notes with a coupon rate of 1.55% for a total
value of US$1 billion and medium-term notes with a variable rate for a total value of US$250 million. These
notes will mature on September 12, 2017. They were issued under a private placement. On
January 20, 2015, Caisse centrale Desjardins issued variable-rate medium-term notes in the European
market under its global multi-currency medium-term note program for a total value of €500 million. These
notes will mature on January 20, 2020. These notes are listed on the Irish Stock Exchange. On
January 29, 2015, Caisse centrale Desjardins issued in the U.S. market medium-term notes with a coupon
rate of 1.75% for a total value of US$750 million and medium-term notes with a variable rate for a total
value of US$250 million. These notes will mature on January 29, 2018. They were issued under a
private placement.
Moreover, on March 18, 2014, Caisse centrale issued to the Federation and the Fédération des caisses
populaires de l'Ontario Inc. a total of 400,000 Class A Capital shares, each with a coupon value of C$1,000
for a total amount of C$400 million. On December 22, 2014, Caisse centrale issued to the Federation and
the Fédération des caisses populaires de l'Ontario Inc. a total of 200,000 A Capital shares, each with a
coupon value of C$1,000 for a total amount of C$200 million. These capital shares are not listed on any
stock exchange or similar market for securities.
Additional information on Caisse centrale’s refinancing programs on pages 37-39 of the MD&A of the
Annual Report is incorporated herein by reference.
Page 13
The following table shows, for the indicated periods of the fiscal year ended December 31, 2014, the range
of market prices traded on the London Stock Exchange’s Main Market in the United Kingdom for the
covered bonds issued by Caisse centrale on March 24, 2011 and March 6, 2012, in addition to the range of
market prices traded on the Irish Stock Exchange’s Main Securities Market for corporate debt for the
covered bonds issued by Caisse centrale on March 11, 2014 and October 22, 2014.
2.550%
1.600%
1.125%
0.375%
Note maturing
2016-03-24
US$
Note maturing
2017-03-06
US$
Note maturing
2019-03-11
EUR
Note maturing
2019-10-22
EUR
101.690
101.098
101.648
(1)
(1)
(1)
(1)
(1)
(1)
101.950
101.730
101.873
(1)
(1)
(1)
(1)
(1)
(1)
101.998
101.278
101.373
100.286
99.724
100.167
(1)
(1)
(1)
101.763
101.268
101.560
100.653
99.989
100.575
(1)
(1)
(1)
101.965
101.468
101.873
101.549
100.512
101.449
(1)
(1)
(1)
101.780
101.420
101.673
102.012
101.354
102.005
(1)
(1)
(1)
101.628
101.223
101.288
102.209
101.909
102.130
(1)
(1)
(1)
101.693
101.322
101.435
102.820
102.084
102.804
(1)
(1)
(1)
101.358
101.125
101.175
103.232
102.789
103.232
(1)
(1)
(1)
101.727
101.170
101.263
103.410
103.049
103.241
99.589
99.339
99.589
101.305
101.125
101.260
103.376
103.117
103.278
99.790
99.482
99.737
101.370
100.828
100.980
103.304
103.106
103.268
99.789
99.485
99.784
Month 2014
January
High
104.086
Low
103.902
Closing
104.086
February
High
104.165
Low
104.018
Closing
104.046
March
High
104.069
Low
103.703
Closing
103.773
April
High
103.877
Low
103.659
Closing
103.713
May
High
103.731
Low
103.642
Closing
103.646
June
High
103.607
Low
103.355
Closing
103.394
July
High
103.330
Low
103.115
Closing
103.149
August
High
103.241
Low
103.010
Closing
103.036
September
High
103.046
Low
102.813
Closing
102.813
October
High
103.028
Low
102.693
Closing
102.693
November
High
102.668
Low
102.537
Closing
102.592
December
High
102.545
Low
102.175
Closing
102.226
(1) Information not available
Page 14
DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
The following table shows, as at the date of this Annual Information Form, the name, province and country
of residence, and position held with Desjardins Group, the principal positions of each director of Caisse
centrale during the past five years, as well as the period or periods during which each director of Caisse
centrale has served as a director, and the committees or commissions on which each director has served.
Except for the Chair of the Board, President and CEO of Desjardins Group, directors are elected for a
three-year term and may be re-elected provided they are officers of their caisses. Their term expires at the
end of the annual general meeting of members. The Chair of the Board, President and CEO of Desjardins
Group is elected for a four-year term and may be re-elected for an additional four-year term only. The
members of the Board of Directors of Caisse centrale are the same as those of the Federation, Capital
Desjardins inc. and Desjardins Trust Inc. In addition, Stéphane Achard is a director of Desjardins Trust Inc.
Michel Allard and Benoît Turcotte are managing directors of the Caisse centrale Board of Directors and, as
such, cannot vote at board meetings.
Beginning
of term
(yyyy-mm-dd)
End of term
(yyyy-mm-dd)
2001-07-01
2005-04-02
2008-03-29
2011-03-26
2014-03-28
2005-04-02
2008-03-29
2011-03-26
2014-03-28
2017-03-28
Retired from the education
sector since 2003
2013-04-06
2016-04-06
Name, province and country
of residence
Position held within
Desjardins Group
Principal positions
BARIL, Jacques(1)(4)
Quebec, Canada
President, Regional
Council - Est de Montréal
Retired from the education
sector since 2010
Chair, Investment
Commission of the
Federation
Previously: Assistant
Director - Administration,
Commission scolaire de la
Pointe-de-l’Île
President, Regional
Council - Bas-Saint-Laurent
and Gaspésie – Îles-de-laMadeleine
BÉLANGER, Annie P.
Quebec, Canada
Chair of the Board of
Directors of Développement
international Desjardins inc.
BOULERICE, Donat(2)
Ontario, Canada
President, Regional
Council - Ontario
Teacher, University of
Ottawa
2010-04-17
2013-04-06
2013-04-06
2016-04-06
CHAMBERLAND, Serges(1)
Quebec, Canada
President, Regional
Council - Saguenay-LacSaint-Jean, Charlevoix and
Côte-Nord
Retired from the municipal
sector since 2011
2006-03-25
2008-03-29
2011-03-26
2014-03-28
2008-03-29
2011-03-26
2014-03-28
2017-03-28
CHEVALIER, Carole
Quebec, Canada
President, Regional
Council - Mauricie
General Manager of Centre
d’action bénévole du
Rivage
2011-03-26
2014-03-28
2014-03-28
2017-03-28
DESSUREAULT, Sylvain
Quebec, Canada
General Manager, Caisse
Desjardins du Mont-SaintBruno
General Manager, Caisse
Desjardins du Mont-SaintBruno
2013-04-06
2016-04-06
FORAND, Luc (2)
Quebec, Canada
President, Regional
Council - Richelieu-Yamaska
Businessman
Previously: manager,
Hydro-Québec
2014-03-28
2017-03-28
GAGNÉ, André(2)
CPA, CGA
Quebec, Canada
President, Regional
Council - Québec-Est
Member of the Ordre des
comptables professionnels
agréés du Québec
2001-07-01
2004-03-27
2007-03-31
2010-03-27
2013-04-06
2004-03-27
2007-03-31
2010-03-27
2013-04-06
2016-04-06
Chair of the Audit and
Inspection Commission of
the Federation and Caisse
centrale
Previously: Assistant
General Manager, Ville de
Saguenay
Retired from the Quebec
Ministère du Revenu since
2000
Page 15
Name, province and country
of residence
Position held within
Desjardins Group
GENEST, Yves
Quebec, Canada
General Manager,
Caisse populaire Desjardins
de Montmagny
LAFORTUNE, Andrée(4)
FCPA, FCA
Quebec, Canada
President, Regional
Council - Ouest de Montréal
President, Risk Management
Commission of the
Federation and Caisse
centrale
Principal positions
General Manager,
Caisse populaire
Desjardins
de Montmagny
Previously: General
Manager, Caisse populaire
Desjardins des Abénakis
Fellow of the Ordre des
comptables professionnels
agréés du Québec
Professor, HEC Montréal
Beginning
of term
(yyyy-mm-dd)
2013-04-05
End of term
(yyyy-mm-dd)
2016-04-06
2001-07-01
2004-03-27
2007-03-31
2010-03-27
2013-04-06
2004-03-27
2007-03-31
2010-03-27
2013-04-06
2016-04-06
LAPORTE, Jean-Robert(4)
Quebec, Canada
President, Regional
Council - Lanaudière
Lawyer
Roy, Laporte Inc.
2013-04-06
2016-04-06
LAROUCHE, Sylvie
Quebec, Canada
President, Regional
Council - Québec-Ouest and
Rive-Sud
Retired from the federal
civil service since 2010
2012-01-18
2013-04-06
2013-04-06
2016-04-06
Retired from the education
sector since 2001
2001-07-01
2003-03-28
2006-03-25
2009-03-28
2012-03-31
2003-03-28
2006-03-25
2009-03-28
2012-03-31
2015-03-28
Chair of the board, President
and CEO of Desjardins
Group
Fellow of the Ordre des
comptables professionnels
agréés du Québec
2008-03-29
2012-03-31
2012-03-31
2016
Chair of the Board of
Directors of the Federation
and Caisse centrale
Chair of the Board,
President and CEO of
Desjardins Group
Chair of the Executive
Committee of the Federation
Previously: Senior
Executive Vice-President
and Chief Financial Officer
of Desjardins Group
(2004-2008)
Previously: Regional
Manager, Accounting and
Acquisitions, Fisheries and
Oceans Canada
LAUZON, Marcel(3)
Quebec, Canada
President, Regional
Council - Laval-Laurentides
Chair, Board of Directors,
Desjardins General
Insurance Group Inc.
LEROUX, Monique F.(1)(3)
C.M., O.Q., FCPA, FCA
Quebec, Canada
Chair of the Governance
Commission of the
Federation and Caisse
centrale
Chair of the Human
Resources Commission of
the Federation
LEVASSEUR, Pierre(2)(3)
Quebec, Canada
President, Regional
Council - Centre-du-Québec
Retired from the health
sector since 2002
2009-03-28
2012-03-31
2012-03-31
2015-03-28
PARÉ, Denis(1)(3)
Quebec, Canada
President, Regional
Council - Cantons-de-l’Est
Notary partner
Paré Tanguay S.E.N.C.
2001-07-01
2003-03-28
2006-03-25
2009-03-28
2012-03-31
2003-03-28
2006-03-25
2009-03-28
2012-03-31
2015-03-28
Vice-Chair of the Board of
Directors of the Federation
and Caisse centrale
Chair of the Committee on
the Aggregate Remuneration
of the President and Chief
Executive Officer of
Desjardins Group
Page 16
Name, province and country
of residence
Position held within
Desjardins Group
Principal positions
Beginning
of term
(yyyy-mm-dd)
End of term
(yyyy-mm-dd)
2010-09-29
2012-01-18
2011-12-05
2015-03-28
2009-12-07
2011-03-26
2014-03-28
2011-03-26
2014-03-28
2017-03-28
Chair of the Federation’s
Cooperation and Network
Liaison Commission
PERRON, Johanne
Quebec, Canada
General Manager, Caisse
populaire Desjardins du
Mont-Royal
General Manager, Caisse
populaire Desjardins du
Mont-Royal
Previously: General
Manager, Caisse
Desjardins du QuartierLatin de Montréal
RAÎCHE, Alain(1)
Quebec, Canada
General Manager, Caisse
Desjardins Pierre-LeGardeur
General Manager, Caisse
Desjardins Pierre-LeGardeur
Previously: General
Manager, Caisse
Desjardins Les Méandres
ROUSSEAU, Serge(4)
Quebec, Canada
President, Regional
Council - Kamouraska and
Chaudière-Appalaches
General manager, CPE
Parc-en-ciel and
coordinating office for
home-based child care in
the Appalaches and family
services
2014-03-28
2017-03-28
SAINT-PIERRE BABIN,
Sylvie(1)(3)
Quebec, Canada
President, Regional Council
- Outaouais,
Abitibi-Témiscamingue and
Nord-du-Québec
Lawyer
2001-07-01
2008-03-29
2014-03-28
2005-04-02
2011-03-26
2017-03-28
TOURANGEAU, Serge(4)
Quebec, Canada
President, Regional
Council - Group Caisses
Retired from the Quebec
ministère de l’Agriculture,
des Pêcheries et de
l’Alimentation since 2005
2006-03-25
2009-03-28
2012-03-31
2009-03-28
2012-03-31
2015-03-28
Notary partner
Les Notaires Lupien,
Patenaude, Vinet,
Gougeon, Monette Inc.
2009-03-28
2012-03-31
2012-03-31
2015-03-28
Chair of the Board of
Directors of Desjardins
Securities Inc.
VINET, Yvon(1)
Quebec, Canada
President, Regional
Council - Rive-Sud de
Montréal
Secretary of the Board of
Directors of the Federation
and Caisse centrale
Chair of the Board of
Directors of Desjardins
Financial Security, Life
Assurance Company
(1)
(2)
(3)
(4)
Member of the Executive Committee of Caisse centrale (seven members).
Member of the Audit Commission of Caisse centrale (five members)*.
Member of the Governance Commission of Caisse centrale (five members)*.
Member of the Risk Management Commission of Caisse centrale (five members)**.
*
**
The fifth member is Benoît Turcotte, managing director. Also, Alain Raîche is an observer on the Audit Commission of Caisse centrale.
The fifth member is Michel Allard, managing director. Also, André Gagné and Johanne Perron are observers on the Risk Management
Commission of Caisse centrale.
As at the date of this Annual Information Form, no director had or exercised any control over any voting
security of Caisse centrale.
Page 17
EXECUTIVE OFFICERS
The following table sets forth, as at the date of this Annual Information Form, the name, province and
country of residence, the position held within Caisse centrale as well as principal positions held within
Caisse centrale by the executive officers of Caisse centrale, both current and for the past five years.
Name, province and country Position held within
of residence
Caisse centrale
Principal positions
LEROUX, Monique F.
C.M., FCPA, FCA
Quebec, Canada
Chair of the Board, President and Chief
Executive Officer
President and CEO of Desjardins Group
PARÉ, Denis
Quebec, Canada
Vice-Chair of the Board of Directors
Notary partner
Paré Tanguay S.E.N.C
VINET, Yvon
Quebec, Canada
Secretary of the Board of Directors
Notary partner
Les Notaires Lupien, Patenaude, Vinet, Gougeon,
Monette Inc.
ACHARD, Stéphane
Quebec, Canada
Senior Vice-President, Business and
Institutional Services
Senior Vice-President and General Manager,
Business and Institutional Services and Card and
Payment Services, Desjardins Group
Previously: various positions within Desjardins Group
BÉCHARD, Sylvie
FCPA, FCMA
Quebec, Canada
Vice-President, Finance and Administration
Vice-President, Business and Institutional Services
and Card and Payment Services, Desjardins Group
Previously: various positions within Desjardins Group
BELLEMARE, Réal
Quebec, Canada
Senior Vice-President, Operations and
Performance
Senior Vice-President, Desjardins Group Operations
and Performance
Previously: various positions within Desjardins Group;
Regional Director (Quebec), Risk Management of
Commercial Credit and Special Loans Group, Royal
Bank of Canada (from 2007 to 2009)
CHAMPOUX, Francine
Quebec, Canada
Chief Risk Officer
Chief Risk Officer, Desjardins Group
Previously: various positions within Desjardins Group
COULOMBE, Renaud
Quebec, Canada
General Counsel
DESCÔTEAUX, Jacques
Quebec, Canada
Chief Treasurer
Chief Treasurer, Desjardins Group
Previously: various positions within Desjardins Group
DUPUIS, Daniel
CPA, CA
Quebec, Canada
Senior Vice-President and Chief Financial
Officer
Senior Vice-President, Finance and Chief Financial
Officer, Desjardins Group
Previously: various positions within Desjardins Group
GAUVIN, L.-Daniel
Quebec, Canada
General Manager
Senior Vice-President and General Manager of
Caisse centrale Desjardins and Capital Desjardins
inc.
Previously: various positions within Desjardins Group
LEPROHON, Alain
CPA, CA
Quebec, Canada
Vice-President, Financial Disclosure
Vice-President, Finance, Desjardins Group
Previously: various positions within Desjardins Group
PERREAULT, Sylvain
Quebec, Canada
Vice-President and Chief Compliance Officer
Chief Compliance Officer, Desjardins Group
Previously: various positions within Desjardins Group
General Counsel, Desjardins Group
Previously: Partner, Ogilvy Renault LLP
(1998 to 2009)
As at the date of this Annual Information Form, none of the executive officers had or exercised any control
over any voting security of Caisse centrale.
Page 18
CEASE TRADE ORDERS OR BANKRUPTCY
None of our directors or executive officers is, as at the date of this Annual Information Form, or has been,
within 10 years before the date of this Annual Information Form, a director, CEO or CFO of any company
(including Caisse centrale) that (1) was subject to an order that was issued while the director or executive
officer was acting in the capacity as director, CEO or CFO; or (2) was subject to an order that was issued
after the director or executive officer ceased to be a director, CEO or CFO and which resulted from an
event that occurred while that person was acting in the capacity as a director, CEO or CFO.
For the purposes of the paragraph above, “order” means: (1) a cease trade order; (2) an order similar to a
cease trade order; or (3) an order that denied the relevant company access to any exemption under
securities legislation that was in effect for a period of more than 30 consecutive days.
No director or executive officer of Caisse centrale or shareholder holding a sufficient number of securities
to affect materially the control of Caisse centrale (1) is, as at the date of this Annual Information Form, or
has been within 10 years before the date of this Annual Information Form, a director or executive officer of
Caisse centrale or any other company that, while that person was acting in that capacity, or within a year of
that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation
relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or
compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or
(2) within 10 years before the date of this Annual Information Form became bankrupt, made a proposal
under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings,
arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold
his or her assets, with the exception of Monique F. Leroux, who was a director of Quebecor World Inc. for
part of the 12 months before the company applied for and received protection under the Companies’
Creditors Arrangement Act on January 21, 2008.
PENALTIES OR SANCTIONS
No director or executive officer of Caisse centrale or a shareholder holding sufficient securities to materially
affect the control of Caisse centrale has been subject to:
a) any penalties or sanctions imposed by a Court relating to securities legislation or by a securities
regulatory authority or has entered into a settlement agreement with a securities regulatory authority;
b) any other penalties or sanctions imposed by a Court or regulatory body that would likely be considered
material by a reasonable investor making an investment decision.
CONFLICTS OF INTEREST
To the best of the knowledge of Caisse centrale, there are no existing or potential conflicts of interest
between Caisse centrale and its directors, its executive officers or other officers or those of Caisse
centrale’ subsidiaries, except that certain of Caisse centrale directors and officers serve as directors and
officers of other companies, and therefore it is possible that a conflict may arise between their duties to
Caisse centrale and their duties as a director or officer of such other companies. See “Transactions with
Restricted Parties and Associates” and “Directors and Officers” in this Annual Information Form.
Page 19
LEGAL PROCEEDINGS
Caisse centrale is party to various disputes and legal proceedings in the normal course of business in
connection with its different products, services, investments and other activities. It is not possible at this
time to assess the outcome of these disputes and proceedings, when they might be resolved or their
potential impact on the financial position of Caisse centrale. In management’s opinion, the outcome of such
disputes and proceedings, insofar as they may be measured, could have an impact on the results of
Caisse centrale for a given period, but would not have any significant adverse effect on its
financial position.
MATERIAL CONTRACTS
Except otherwise indicated in this AIF, Caisse centrale is not a party to any material contracts entered into
outside the normal course of business.
INTEREST OF EXPERTS
The accounting firm PricewaterhouseCoopers LLP is the auditor of Caisse centrale and has, as such,
prepared the independent auditors’ report on the audited financial statements for the fiscal years ended
December 31, 2014 and December 31, 2013, contained in the Annual Report. This firm is independent
within the meaning of the Code of Ethics of the Ordre des comptables professionnels agréés du Québec.
ADDITIONAL DISCLOSURE
SECURITIES OUTSTANDING AND PRINCIPAL HOLDERS
As at the date of this Annual Information Form, there were 2,787,203 Class A capital shares and
600 qualifying shares issued and outstanding of Caisse centrale. No Class B capital shares had been
issued or were outstanding. Neither the Class A capital shares nor the qualifying shares carry the right
to vote.
The following table sets forth information with respect to ownership, beneficially or of record, of more than
10% of the Class A capital shares of Caisse centrale:
Name and address
Fédération des caisses Desjardins du Québec
100, rue des Commandeurs
Lévis, Quebec
G6V 7N5
Number of Class A
capital shares held
Percentage of
outstanding Class A
capital shares held
2,640,050
94.72%
The balance of Class A capital shares are held by the Fédération des caisses populaires de l’Ontario Inc.,
Caisse Populaire Groupe Financier Ltée (an entity resulting from the merger between the caisses of
Manitoba and of the Fédération des caisses populaires du Manitoba) and the Fédération des caisses
populaires acadiennes ltée.
Page 20
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
Except for routine indebtedness (as described below), there is no outstanding indebtedness to Caisse
centrale or its subsidiaries of current and former directors, executive officers, or employees of Caisse
centrale, or associates of current and former directors and executive officers. Routine indebtedness
includes: (1) loans made on terms no more favourable than loans to employees generally, for which the
amount remaining unpaid does not exceed $50,000 at any time during the last completed fiscal year to any
director, executive officer or proposed nominee together with his or her associate; (2) loans to full-time
employees, fully secured against their residence and not exceeding their annual salary; (3) loans, other
than to full-time employees, on substantially the same terms available to other customers with comparable
credit and involving no more than the usual risk of collectability; and (4) loans for purchases on usual trade
terms, or for ordinary travel or expense advances, or similar reasons, with repayment arrangements in
accordance with usual commercial practice.
TRANSACTIONS WITH RESTRICTED PARTIES AND ASSOCIATES
Information on transactions with related parties on page 47 of the MD&A in the Annual Report and on
pages 114 and 115 of the notes to the consolidated financial statements in the Annual Report is
incorporated herein by reference.
AUDITORS
In accordance with applicable legislation, each year Caisse centrale appoints an accounting firm to act as
its auditor. On March 28, 2014, PricewaterhouseCoopers LLP, 1250 René-Lévesque Blvd. West, Suite
2800, Montreal, Quebec H3B 2G4, was appointed auditor of Caisse centrale for the fiscal year ended
December 31, 2014. PricewaterhouseCoopers LLP has been the Caisse centrale's auditor since 2002.
ADDITIONAL INFORMATION
Additional financial information is provided in the audited consolidated financial statements, the MD&A of
Caisse centrale for its most recently completed fiscal year and in its Annual Report. Copies of such
consolidated financial statements, the MD&A, the Annual Report and this Annual Information Form as well
as any other document that is incorporated by reference may be obtained from the Secretary of Caisse
centrale. When securities of Caisse centrale are in the course of a distribution pursuant to a short form
prospectus or a preliminary short form prospectus has been filed in respect of a distribution of Caisse
centrale’s securities, copies of the audited consolidated financial statements of Caisse centrale for the
years ended December 31, 2014 and 2013 and the auditors’ report thereon and of any subsequent interim
unaudited consolidated financial statements of Caisse centrale, this Annual Information Form and of any
document incorporated by reference therein, the MD&A for the year ended December 31, 2014, the Annual
Report of Caisse centrale and any other document that is incorporated by reference into the preliminary
short form prospectus or the short-form prospectus may be obtained on request from the Secretary of
Caisse centrale, at 1170 Peel Street, Suite 600, Montreal, Quebec H3B 0B1.
Additional information about Caisse centrale is available on SEDAR at www.sedar.com and on Caisse
centrale’s website at www.desjardins.com/ccd, even though no information on that site is incorporated by
reference into this Annual Information Form.
Caisse centrale does not prepare a proxy circular. Information concerning compensation and indebtedness
of directors and senior officers, principal holders of Caisse centrale’s securities, options to purchase
securities and interests of insiders in material transactions, where applicable, governance and the Audit
Commission is contained hereinafter in this Annual Information Form.
Page 21
STATEMENT OF CAISSE CENTRALE’S SENIOR EXECUTIVE OFFICER COMPENSATION
DESJARDINS GROUP COMPENSATION
Certain Desjardins Group components must comply with various disclosure obligations in respect of
executive compensation. This is namely the case of the Federation, Caisse centrale and Capital Desjardins
inc. Pursuant to Regulation 51-102 Respecting Continuous Disclosure Obligations, this Annual Information
Form discloses the Caisse centrale’s Named Executive Officers compensation.
Certain Caisse centrale Named Executive Officers are also Named Executive Officers of the Federation
and/or Capital Desjardins inc. This Annual Information Form reflects the compensation paid to Named
Executive Officers of Caisse centrale for all their functions within Desjardins Group.
COMPENSATION THAT REFLECTS THE SIGNIFICANCE OF DESJARDINS GROUP AND ITS MAJOR ACHIEVEMENTS
In 2014, Desjardins Group’s executive compensation was based not only on Desjardins Group’s financial
performance, but also on member and client experience and its cooperative achievements.
During the last fiscal year, Desjardins Group continued to grow its key business segments and achieved its
financial objectives. With the acquisition of the Canadian businesses of the U.S. insurance mutual State
Farm on January 1, 2015 (over 1,900 employees in Canada and nearly 500 agencies serving more than a
million clients), Desjardins Group, with its already unparalleled regional presence in Quebec, has
strengthened its position in Ontario, Alberta and New Brunswick where it can offer a greater range of
Desjardins products and services. Desjardins Group is the leading cooperative financial group in Canada
and its capital ratios are still among the best in the industry in 2014, which contributed to the rise in its
ranking from thirteenth to second strongest financial institution in the world according to Bloomberg news
and to its ranking as the strongest financial institution in North America, ahead of all U.S. banks.
All these results were achieved while complying with the three priorities of Desjardins Group’s Strategic
Plan: service, growth and efficiency to ensure greater satisfaction for members and clients. In 2014,
Desjardins Group continued to implement this plan, particularly by diversifying its offering and creating
strategic partnerships, simplifying and enhancing member and client experience, and by introducing
relevant technological innovations to meet the changing needs of members and clients. All these initiatives
guarantee greater efficiency and organizational agility. These efforts were rewarded, particularly by top
rankings for customer satisfaction from J.D. Power and recognition at the prestigious international EfmaAccenture Innovation Awards for Desjardins Group’s innovations in Property and Casualty Insurance.
In the cooperative field, the year 2014 was highlighted by the organization of the second International
Summit of Cooperatives at the initiative of Desjardins Group in collaboration with the International
Cooperative Alliance, which brought together 2,600 participants and 214 speakers from 93 countries. This
event of the cooperative world promoted the creation of business partnerships among cooperatives and the
rise in influence of the cooperative business model. Desjardins Group also rose in the Corporate Knights
magazine’s 2014 rankings to the second most sustainable cooperative and to the fifth place among the
Best 50 Corporate Citizens in Canada, ahead of all the Canadian banks. It also continued to develop its
Co-opme program, aimed at supporting financial education for members, particularly youth. Desjardins
Group also made a contribution to the development of the communities it serves, particularly through its
vast network of caisses and their Community Development Fund. With nearly 46,000 employees,
Desjardins Group is the largest private sector employer in Quebec and also ranks as one of the 50 Best
Employers in Canada.
Page 22
NAMED EXECUTIVE OFFICERS
For the 2014 fiscal year, the following individuals are Named Executive Officers of Caisse centrale:
 Monique F. Leroux, C.M., O.Q., FCPA, FCA
Chair of the Board of Directors and Chief Executive Officer

Daniel Dupuis, CPA, CA
Senior Vice-President and Chief Financial Officer

Jacques Descôteaux
Chief Treasurer

Stéphane Achard
Senior Vice-President, Business and Institutional Services

Louis-Daniel Gauvin
General Manager
DESJARDINS GROUP OVERALL COMPENSATION POLICY
Desjardins Group, Canada’s leading cooperative financial group and the fifth in the world, operates in a
highly competitive market. Its overall compensation policy is influenced by both its need to be able to
recruit and retain the talent it requires to develop and by its cooperative nature.
Like any responsible financial institution, Desjardins Group pays close attention to risk management in the
interest of its members and clients. This includes maintaining capital levels above industry standards,
which is reflected in its overall compensation policy.
Desjardins Group’s overall compensation policy applies to all Caisse centrale personnel. It takes into
account specific salary surveys among cooperative financial groups of comparable size to Desjardins
Group in different countries as well as the median of the Canadian financial market so as to recruit and
retain the talent it needs to develop.
This policy may be put to a “say on pay” vote with delegates present at the Federation’s Annual General
Meeting regarding its guidelines and its specific application to employees, managers, senior executives as
well as Desjardins Group’s, President and CEO. This initiative has paved the way for changes in the overall
compensation policy’s application to the President and CEO of Desjardins Group, whose compensation is
now compared exclusively with cooperative financial groups of comparable size.
M ARKET ANALYSIS AND REFERENCE DATA
Market data used to establish compensation for executive officer positions in 2014 were produced by the
firm Hexarem.
The data were drawn from the financial sector and from cooperative financial groups of comparable size to
Desjardins Group. Hexarem has obtained and analyzed compensation information published by the
following organizations. Hexarem supplemented this information with statistics from the IBM Kenexa
CompAnalyst database. The compensation benchmarking for Management Committee members presents
data adjusted for the size and complexity of Desjardins Group.
Page 23
PEER GROUP: CANADIAN FINANCIAL SECTOR
58 organizations
Aberdeen International Inc.
Accord Financial Corp.
AGF Management Limited
AIMCO (Alberta Investment Management Corporation)
Aston Hill Financial Inc.
Bank of Montreal
Bank of Nova Scotia
Canadian Imperial Bank of Commerce
Bank of Canada
Laurentian Bank
National Bank of Canada
Royal Bank
TD Bank
bcIMC (British Columbia Investment Management Corporation)
Caisse de dépôt et placement du Québec
Canaccord Financial Inc.
Canadian Western Bank
Carfinco Financial Group Inc.
Cash Store Financial Services Inc. (The)
CI Financial Corp.
Counsel Corporation
Davis + Henderson Corporation
Dundee Corporation
EGI Financial Holdings Inc.
E-L Financial Corporation Limited
Equitable Group Inc.
Equity Financial Holdings Inc.
Export Development Canada (EDC)
Fairfax Financial Holdings Limited
Sun Life Financial
First National Financial Corporation
Genterra Capital Inc.
Genworth MI Canada Inc.
Gluskin Sheff + Associates Inc.
GMP Capital Inc.
Great-West Lifeco Inc.
Guardian Capital Group Limited
Home Capital Group Inc.
IGM Financial Inc.
Industrial Alliance Insurance and Financial Services
Intact Financial Corporation
PSP Investments
Kingsway Financial Services Inc.
Manulife Financial Corporation
MCAN Mortgage Corporation
Nicholas Financial, Inc.
Olympia Financial Group Inc.
OMERS (Ontario Municipal Employees’ Retirement System)
Pacific & Western Credit Corp.
Pethealth Inc.
Power Corporation of Canada
Power Financial Corporation
Canada Mortgage and Housing Corporation
Sprott Inc.
Sprott Resource Lending Corp.
Ontario Teachers’ Pension Plan
TMX Group Limited
Tricon Capital Group Inc.
PEER GROUP: COOPERATIVE FINANCIAL GROUPS
78 organizations
1st Choice Savings & Credit Union, AB
Access Credit Union, MB
Advantage Credit Union, SK
Affinity Credit Union, SK
AgFirst FCB
AgriBank, FCB
Alberta Central, AB – Caisse centrale
Alterna Savings, ON
Assiniboine Credit Union, MB
Auto Workers Community Credit Union, ON
Bayview Credit Union, NB
Beaumont Credit Union, AB
Bow Valley Credit Union, AB
Caisse populaire de la Vallée inc., ON
Caisse Populaire Groupe Financier, MB
Canada Safeway Employees Savings and CU, AB
Casera Credit Union, MB
Central 1, BC
Coast Capital Savings
CoBank
Concentra
Conexus Credit Union, SK
Co-op Bank plc
Crédit Agricole
Credit Union Central of Canada
Credit Union Central of Manitoba
Diamond North Credit Union, SK
DZ Bank
East Coast Credit Union, NS
Farm Credit Bank of Texas
First Calgary Financial, AB
First Ontario Credit Union, ON
First West Credit Union, BC
G&F Financial Group, BC
Ganaraska Credit Union, ON
Goderich Community Credit Union, ON
Greater Vancouver Community CU, BC
Groupe BPCE
Groupe Crédit Mutuel
Hamilton Teachers Credit Union, ON
Innovation Credit Union, SK
Interior Savings, BC
Kawartha Credit Union, ON
Kootenay Savings Credit Union, BC
Lakeland Credit Union Limited, AB
Lakeview Credit Union, BC
League Savings and Mortgage Company, NS
Liberty Mutual (Insurance)
Libro Financial Group, ON
Malpeque Bay Credit Union
MassMutual (Insurance)
MemberOne Credit Union, ON
Meridian Credit Union, ON
Mountain View Credit Union, AB
Nationwide Building Society
Niverville Credit Union, MB
North Peace Savings and Credit Union, BC
Portage Credit Union, MB
Rabobank
Rocky Credit Union, AB
RZB Austria
SaskCentral, SK
Servus Credit Union, AB
Shell Employee’s Credit Union, AB
Spectra Credit Union, SK
St. Stanislaus Credit Union, ON
Stella Maris Credit Union, PEI
Sudbury Credit Union, ON
Sunova Credit Union
Sunrise Credit Union, MB
Swan Valley Credit Union, MB
The Co-Operator’s Group (Insurance)
The Police Credit Union Limited, ON
Tignish Credit Union, PEI
Vancity, BC
Westminster Savings, BC
Westoba Credit Union Limited, MB
Weyburn Credit Union Limited, SK
Page 24
JOB ASSESSMENT OF EXECUTIVE OFFICER POSITIONS
Internal relativity between executive officer positions is determined using the Hay Plan for job assessment
and salary categories that apply to all senior executive positions at Desjardins Group. A senior executive
position validation committee makes recommendations to the Human Resources Commission, which is
responsible for establishing the job assessments for executive officers. This validation process aims to
ensure internal equity.
OVERALL COMPENSATION POLICY FOR DESJARDINS GROUP’S SENIOR EXECUTIVES
The overall compensation policy for senior executives meets the following objectives:
 Reflect Desjardins Group’s cooperative nature and values;
 Recognize the complexity of an integrated financial group and the resulting management scope;
 Maintain a close link between performance and compensation that supports Desjardins Group’s
financial and Strategic Plan;
 Have a short- and long-term vision that promotes the creation of economic value and sustainable
development for Desjardins Group members.
OVERALL COMPENSATION POLICY FOR THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF DESJARDINS GROUP
There are two distinct functions to the position of President and CEO of Desjardins Group. The first,
serving as president and CEO of Desjardins Group, the Federation and its subsidiaries, involves
responsibilities similar to those of her peers from large financial institutions.
The second, serving as Chair of the Board, is similar to the role of her financial cooperative peers. This
function requires greater independence under governance requirements than the other senior executive
positions. The Chair of the Board is accountable for Desjardins Group’s performance and sustainability
from both financial and cooperative standpoints. This is why the annual assessment of this position is
divided equally between cooperative objectives and business and strategic development objectives.
The compensation for this position was determined in such a manner that the Chair of the Board, President
and CEO can exercise her independence from those who report directly to her and not be in a situation of
conflict of interest with respect to these individuals. That is why no long-term compensation plan is
provided for Desjardins Group’s President and CEO. Compensation also takes into account the limited
duration of her position.
Finally, the overall compensation policy for the President and Chief Executive Officer is established so as
to reflect the complexity of managing a cooperative financial group and to maintain a sufficient distinction
between her compensation and that of other Desjardins Group employees while remaining within the
median for cooperative financial groups of comparable size.
The Committee on the Aggregate Remuneration of the President and Chief Executive Officer of Desjardins
Group is mandated to analyze the ongoing progress of the President and CEO against her current year
objectives, measure her annual compensation accordingly and recommend objectives for the upcoming
year. Its members meet at least three times per year and report directly to the Board of Directors in an incamera session.
Page 25
OVERALL COMPENSATION GOVERNANCE AND RISK MANAGEMENT
Several years ago, Desjardins Group implemented rigorous overall compensation corporate governance
practices which are built around the responsibilities of the following bodies.
Board of Directors
The Board of Directors is responsible for determining Desjardins Group’s overall compensation policy,
establishing annual objectives, and annually assessing the President and CEO of Desjardins Group.
The Board is also responsible for annual development of the overall compensation of senior executives
who are members of the Management Committee and all employees. This involves performing annual
salary reviews, setting objectives and assessing the results of the general incentive plan.
It also establishes a framework for all individual incentive plans that apply to Desjardins Group’s sales and
investment personnel.
Every year, the incentive plans are first analyzed by the Risk Management Department in order to identify
any item that could induce excessive risk-taking.
All these plans entitle the Board of Directors to choose to reduce or cancel the payment of bonuses under
exceptional circumstances. The Board did not exercise this right in 2014.
The Board enlists the services of an independent expert from the firm Hexarem, which has supported
Desjardins Group in respect of overall compensation of senior executives since 2013.
In 2014, Desjardins Group was billed fees by this firm in the amount of $95,485 for the performance of this
mandate. These fees also covered the analysis and advice provided to the members of the Human
Resources Commission and the Committee on the Aggregate Remuneration of the President and Chief
Executive Officer of Desjardins Group. In 2013, these fees totalled $42,550.
Desjardins Group was also billed other fees by this firm for the performance of various mandates
concerning compensation of other job categories, which totalled $109,815 in 2014 and $0 in 2013. These
mandates, mainly specific surveys on compensation practices and employee or management positions in
various sectors of the organization, were performed upon the request of compensation teams.
The table below lists fees billed by this firm in the last two fiscal years.
Services provided
Fees related to executive officer compensation matters
Other fees
Billed in
2014
Billed in
2013
$95,485
$42,550
$109,815
$0
(1)
(1)
Desjardins Group was also billed other fees by Towers Watson for performance of various mandates concerning mainly
compensation of other job categories, which totalled $187,602 in 2013.
Page 26
The Human Resources Commission of the Federation
The Human Resources Commission is made up of four members of the Board of Directors and the
President and CEO of Desjardins Group. It is responsible for making recommendations to the Board of
Directors with respect to all aspects of overall compensation for all Desjardins Group employees and
executives other than the President and CEO. Its members, other than the President and CEO, are the
same as those on the Committee on the Aggregate Remuneration of the President and Chief Executive
Officer of Desjardins Group and are all, except for the President and CEO, independent directors.
This Commission also enlists the services of an independent expert for the performance of its work.
Committee on the Aggregate Remuneration of the President and Chief Executive Officer of
Desjardins Group
The Committee on the Aggregate Remuneration of the President and Chief Executive Officer of Desjardins
Group consist of four members. The President and CEO does not serve on this committee. The members
are:
Denis Paré
(Chair)
President, Regional Council - Cantons-de-l’Est, and Vice-Chair of the
Board of Directors
Annie P. Bélanger
President, Regional Council - Bas-Saint-Laurent and Gaspésie-Îles-de-laMadeleine
Carole Chevalier
President, Regional Council - Mauricie
Yvon Vinet
President, Regional Council - Rive-Sud de Montréal and Secretary of the
Board of Directors
These individuals define the annual objectives of the President and CEO, discuss them with her, and
recommend them to the Board of Directors of the Federation during an in-camera meeting presided by the
Vice-Chair of the Board and the committee chair. The Board accepts the recommendations with or without
modifications. The Committee carries out a mid-year progress review of achievements against the target
objectives. At year-end, the committee presents the results for each objective to the Board of Directors,
which is ultimately responsible for the assessment of the President and CEO. Each of the 21 other
members of the Board votes, by secret ballot, his or her assessment of the degree of achievement
(maximum of 100%) of each of the objectives. The votes are then compiled to obtain the final weighted
result for all the objectives. These processes are carried out in an in-camera session presided by the ViceChair of the Board and the committee chair.
As needed, the committee also enlists the services of an independent expert for the performance of
its work.
Specific actions to limit risks related to compensation
Every general and individual incentive plan has been analyzed beforehand using the analysis parameters
and evaluation grids established by the Risk Management sector prior to being recommended to the
decision-making bodies.
In addition, with respect to Desjardins Group’s senior executives and high-income earners, with the
exception of the President and Chief Executive Officer, all incentive plans provide for deferring a significant
part of the participants’ annual bonus over the medium or long term. The amounts thus deferred may vary
annually depending on the results of Desjardins Group.
Page 27
This formula encourages key stakeholders to adopt a long-term development view for Desjardins Group,
benefitting its members and clients for whom its sustainability is both fundamental and encouraging.
Particular attention has been given to overall compensation of members of the Management Committee,
and specifically that of the President and CEO, to avoid any significant risk resulting from their
compensation. Members of the Human Resources Commission and the Committee on the Aggregate
Remuneration of the President and Chief Executive Officer of Desjardins Group have exercised great care
in this respect. On an annual basis, they also have the opportunity to note arising results, indicate their
expectations for the coming year and recommend any corrective measure deemed necessary.
ANALYSIS OF OVERALL COMPENSATION COMPONENTS
Executive compensation is determined based on the market value of the work performed, internal pay
relativity and the level of individual performance on the job. Overall the executive compensation includes a
base salary as well as short-term and long-term incentive bonuses, to which are added fringe benefits, a
pension plan and perquisites.
These items are summarized in the table below:
Components
 Recognition of skills, competencies and experience
Base salary
Variable
compensation
(risk-based)
Objectives
Annual bonus
 Value creation for members and clients
 Recognition of individual, business unit and Desjardins
Group performance
Mid-term and long Creation of sustainable values for the whole Desjardins
(1)
term compensation
Group
 Retention
Indirect
compensation
Pension plan and
fringe benefits
 Maintenance of adequate revenue at retirement
Perquisites
 Required for business purposes
 Adequate protection in case of death, disability or illness
 Linked to the position’s status
Overall compensation
 Offering overall compensation:
Competitive for expected-level performance and
individual performance fully satisfying expectations
- Superior for superior performance and exceptional
individual performance.
-
Target positioning for overall compensation
Non-executive employees
 100% of the median for the Canadian financial sector
Executives (levels 1 to 5)
 100% of the median for the Canadian financial sector
Executives (levels 6 to 10)
 95% of the median for the Canadian financial sector
Vice-presidents
 85% of the median for the Canadian financial sector
Senior vice-presidents
 85% of the median for the Canadian financial sector
President and CEO
 100% of the median for cooperative financial groups of
comparable size
(1)
The mid-term and long-term compensation applies exclusively to members of the Management Committee with the
exception of the President and CEO of Desjardins Group.
Page 28
DESCRIPTION OF COMPONENTS OF OVERALL COMPENSATION OF EXECUTIVE OFFICERS
Base Salary
The salary of the executive officers is reviewed annually. Individual performance, level of responsibility and
experience are all taken into consideration so that the compensation of each officer reflects his or her
work contribution.
Individual objectives are set for each executive officer. These objectives are of a strategic and/or financial
nature and are based on the annual objectives of the President and CEO of Desjardins Group.
Their performance is reviewed by the Human Resources Commission and the outcome of the review is
used in revising the annual salaries.
Annual Incentive Plan
The incentive plan for senior executives of Desjardins Group reflects their role and responsibilities for the
collective results of Desjardins Group.
It seeks to recognize the participants’ contributions to meet objectives that support the financial and
Strategic Plan of Desjardins Group, generating results over the short term and medium term.
A bonus will be paid only if the overall profitability trigger defined at the beginning of the year for Desjardins
Group is met and if individual performance fully meets expectations.
General Framework of the Annual Incentive Plan
The plan is based on two sets of objectives: Desjardins Group and Business Sectors.
These two sets of objectives have the same trigger, which is based on Desjardins Group’s net
surplus earnings.
Nature and weighting of objectives
A first block, shared by all, weighted at 60% (100% for support functions), is based on Desjardins
Group’s objectives and priority projects.
A second block, weighted at 40%, is based on the priority objectives of business sectors resulting from
Desjardins Group’s business plan.
Desjardins Group
Position
Objectives
Senior vice-presidents (off-line)
Senior vice-presidents responsible for a
business sector
90%
45%-47.5%
Priority
projects
Sector
objectives
10%
0%
12.5-15%
40%
Page 29
Annual Incentive Plan objectives for 2014
In 2014, the annual objectives for the Desjardins Group category were as follows:
Desjardins Group 2014 objectives
Relative weight
Net surplus earnings
35%
Financial productivity indicator
20%
Operating revenues
15%
Member satisfaction
30%
In 2014, the results totalled 106%.
Two priority projects were also determined for fiscal 2014, namely the integration project for the Canadian
businesses of State Farm and the efficiency gains project. The results attained for these two projects were
138% and 100%, respectively.
The objectives of business sectors consist of quantifiable and measurable business or strategic objectives
resulting from Desjardins Group’s financial and Strategic Plan. Detail of their composition is provided in the
section dealing with the specific situation of the Senior Vice-Presidents affected.
Rules for establishing Annual Incentive Plan objectives
The annually established objectives must comply with the following rules set forth by the Board of Directors
of Desjardins Group:
Rules
Trigger

Defined based on Desjardins Group’s net surplus earnings objective and
generally represents Desjardins Group’s ability to pay.
Performance
indicators



Limited number; minimum weighting of 10% for each indicator.
Profitability must be one of the indicators; minimum weighting of 25%.
Individual/personal objectives are excluded (except as triggers).
Target

Level required for budget achievement (or at the median of a comparison
group, in the case of external indicators, or superior performance approved by
the Board of Directors).
Threshold and
maximum

The range above and below the target need not to be symmetrical.
Threshold

Level under which performance is deemed unacceptable.
Maximum

Objective significantly exceeded.
Objectives

Of a financial and strategic nature resulting from Desjardins Group’s financial
and Strategic Plan.
Well defined (unequivocal), measurable and quantifiable.
Consistent amongst themselves and from year to year.


Supporting
information



Historical (at least three years) for each performance indicator.
Summary written documentation of the steps taken to establish the threshold,
target, and maximum objectives retained.
Financial validation:
- Amount of bonus if only thresholds are achieved for all indicators
(assuming that the financial trigger is met);
- Amount of bonus if all indicators maximums are achieved.
Page 30
Rules
Finance


Mandatory target bonus budgeting.
All objectives linked to profitability or performance must be “net of the payment
of bonuses”.
Bonus payment
The annual bonus established for the reference year is paid at the beginning of the following year after the
results are certified by the Internal Audit sector.
Only 60% of the annual bonus earned is paid, and the remaining 40% is deferred for a three-year period.
The 40% deferred portion may increase or decrease throughout the three-year deferral period, depending
on the overall performance of Desjardins Group.
This:
 extends the time horizon of the executive compensation package in a manner that appropriately
reflects their influence on Desjardins Group’s long-term performance;
 is aligned with the compensation standards and principles of the G20’s Financial Stability Board to limit
incentives awarded for excessive risk-taking that compensation programs produce; and
 corresponds to general practices in Canadian capital market.
Desjardins Group’s net surplus earnings indicator is used to determine the fluctuation in the 40% deferred
portion of the bonus. The target rate retained corresponds to the level of profitability established by the
Board of Directors of the Federation. Fluctuation is determined on a proportional basis and is only earned
at the end of the three-year period following the date on which the bonus was declared.
Long-term incentive plan
Members of the Desjardins Group’s Management Committee, with the exception of the President and
CEO, participate in a long-term incentive plan referred to as the “Partenariat Carrière Desjardins” (PCD),
established based on an indicator related to the profitability of Desjardins Group.
Through the PCD overall compensation based on internal and external equity is balanced and the time
horizon of the compensation package is extended, which helps maintain ambitions and development
strategies of Desjardins Group without inducing excessive risk-taking.
Each year, PCD participants are awarded an amount that subsequently evolves (either up or down)
depending on Desjardins Group’s performance. The bonus generated by the long-term incentive plan only
becomes payable upon retirement.
A bonus percentage is determined for each executive officer based on the level of their position. If the
overall performance indicator threshold of Desjardins Group is met, this percentage is paid into the
participant’s reserve. Otherwise, no amount is paid.
This reserve will also be adjusted based on Desjardins Group’s annual rate of return. The adjustment made
represents twice the difference between the target rate of return and the actual rate of return. For example,
if the target rate is 12% and a rate of 13% is achieved, the additional 1% provides for an upward
adjustment of 2%. Downward adjustments may also apply.
Page 31
INCENTIVE PLAN FOR THE PRESIDENT AND CEO OF DESJARDINS GROUP
As Chair of the Board, President and CEO of Desjardins Group, Monique F. Leroux participates in a plan
specifically designed for her.
Annual incentive plan
Under the short-term incentive plan applicable to her, maximum bonuses are set at 120% of her base
salary, depending on whether all objectives set for Desjardins Group are met.
This plan is subject to a trigger based on Desjardins Group’s net surplus earnings objective.
The committee mandated to determine the overall compensation of the President and CEO of Desjardins
Group sets the objectives of the President and CEO, discusses them with her, and submits them to the
Board of Directors of the Federation, which accepts them with or without modifications.
At year-end, this committee presents the Board of Directors with a report on the achievements of the
President and CEO. The Board members vote individually on the degree to which the results have been
achieved on a 100% basis. The average of the results thus obtained is applied. For example, if the overall
result is 80%, the bonus will then equal 80% x 120% (maximum bonus), which is 96%, but will be paid only
if the trigger is met.
Pension plan enhancement
The President and CEO of Desjardins Group is not eligible for the long-term incentive program offered to
Desjardins Group’s other executive officers.
Instead, the Board of Directors preferred to complement the President and CEO’s overall compensation by
enhancing her pension. The enhanced pension provides for an annual addition to her pension payable
upon departure, the actuarial value of which corresponds to 75% of her base salary.
This increase contributes to achieving the overall compensation policy objective of 100% of the median for
cooperative financial groups of comparable size.
BENEFITS UNDER PENSION PLANS
Desjardins Group Pension Plan (DGPP)
Named Executive Officers are members of the DGPP. This pension plan was created for all employees
and senior executives of Desjardins Group. The DGPP is funded and administered by a pension committee
consisting of members representing employers and employees of Desjardins Group.
Amendments were made to the DGPP on January 1, 2013. The new provisions apply only to years of
service completed as of this date and mainly apply to indexation, salary used to calculate the pension and
coverage in the event of death after retirement.
Under this plan, members are entitled to:
 receive a pension, for each year credited before 2009, equal to 1.3% of their average salary for their
five highest paid years up to the average maximum pensionable earnings of the last five years, plus
2.0% of the excess amount;
 receive a pension, for each year credited between 2009 and 2012, equal to 1.5% of their average
salary for their five highest paid years up to the average maximum pensionable earnings of the last five
years, plus 2.0% of the excess amount;
 receive a pension, for each year credited as of January 2013, equal to 1.5% of their average salary for
their eight highest paid years up to the average maximum pensionable earnings of the last five years,
plus 2.0% of the excess amount.
Page 32
The normal retirement age is 65. However, members may take early retirement from age 55. For service
years credited before 2009, all members who are at least 57 years old and for whom the total of their age
and their years of continuous service is equal to at least 85 are not subject to any actuarial adjustment. For
service years credited starting as of 2009, any member who is at least 62 years old is not subject to any
actuarial adjustment.
However, the total pension may not exceed the maximum pension permitted by the Income Tax Act
(Canada), which is currently $2,770.00 per year of credited service as at December 31, 2014, less any
reduction for early retirement, if applicable.
The DGPP provides for the payment, for each year credited before 2013, of a joint and survivorship annuity
that is guaranteed for a period of 10 years. After the member’s death, the pension payable is reduced to
60% of the pension which otherwise would have been payable. However, if the member does not have a
spouse at retirement, the annuity is guaranteed for 15 years. Annuities for the years credited starting in
January 2013 have a 10-year guarantee. The pension paid for service credited prior to 2013 is indexed
based on the average Consumer Price Index, subject to a maximum of 3% per year. For service credited
starting in January 2013, the pension paid is indexed based on the cost of living as of age 65, subject to a
maximum of 1% per annum, over 10 years.
DGPP costs are shared by the employer and employee in the proportions of 65% and 35%, respectively,
up to the maximum set out in the plan regulations.
Supplemental Pension Plan
The Named Executive Officers benefit from an unfunded Supplemental Pension Plan the cost of which is
borne entirely by the employer. Under this plan, designated participants are entitled to a supplemental
pension equal to the difference between the pension that would be payable without the ceiling imposed by
the Income Tax Act (Canada) and the pension actually payable under the DGPP.
The normal retirement age is 65. However, members may take early retirement from age 55. The
supplemental pension paid is not indexed.
Page 33
OVERALL COMPENSATION INFORMATION FOR DESJARDINS GROUP FOR 2014
In 2014, the overall compensation paid to all Desjardins Group executives and employees was generally in
line with its compensation policy guidelines.
Canadian financial market
Job Category
Target
objectives
Overall actual
compensation
Non-executive employees
100%
105%
Executives (levels 1 to 5)
100%
100%
Executives (levels 6 to 10)
95%
90%
Vice-presidents
85%
83%
Cooperative financial groups
of comparable size
Canadian financial market
Job category
Senior vice-presidents
President and CEO
Target
objectives
Overall actual
compensation
Target
objectives
Overall actual
compensation
100%
102%
85%
80%
100%
N/A
N/A
100%
(1)
Difference between the overall compensation of the President and CEO of Desjardins Group and
that of the average regular full-time Desjardins Group employee
The difference between the salary and overall compensation of the incumbent is verified each year by the
Committee on the Aggregate Remuneration of the President and Chief Executive Officer of Desjardins
Group. As a benchmark, in 2014, the ratio was a multiple of 39 compared to the average regular full-time
employee.
(1)
The overall compensation of the President and CEO is compared exclusively with cooperative financial groups of comparable size
while the compensation of senior vice-presidents is also compared with the Canadian financial market.
Page 34
General incentive plan for executive officers for 2014
The general incentive plan is based on the attainment of the various strategic and financial objectives set
(1)
forth in the business plan for Desjardins Group and its subsidiaries. There are two levels of objectives
namely, overall objectives and priority projects for Desjardins Group and objectives for the major business
sectors.
In 2014, the results were as follows:
Desjardins
Group
Target
objectives
(budget)
Results
for 2014
Objectives
100%
106%
Average for priority
projects
100%
119%
100%
110%
Average for business sectors
Triggers
(Desjardins Group
net surplus earnings)
Exceeded
Under the general incentive plan, the amounts for prior years put in reserve (i.e. 40% of the annual bonus)
fluctuated by 1.1182 times their value owing to results for net surplus earnings for Desjardins Group. It
must be borne in mind that this reserve is “at risk” and may vary annually between 0.8 and 1.2 times its
value based on results achieved per the net surplus earnings annual target objective for Desjardins Group.
2014 Long-term incentive plan
The plan provides that if the threshold for overall performance indicator results for Desjardins Group is
achieved, the stipulated percentage is paid into the participant’s reserve. Otherwise, no amount is paid.
Given that performance indicator results for Desjardins Group were exceeded, all stipulated bonuses
(expressed as a percentage of the base salary of each executive officer) were awarded.
The participants’ reserve of amounts earned in prior years was adjusted by 1.18%, which is equal to twice
the difference between the expected return on equity and the realized return on equity.
(1)
A summary of those objectives is disclosed on pages 30 and 31.
Page 35
OVERALL INDIVIDUAL COMPENSATION PAID IN 2014 TO NAMED EXECUTIVE OFFICERS OF CAISSE CENTRALE
Overall
2014
compensation
Monique F. Leroux
of
the
President
and
CEO
of
Desjardins
Group
Incentive compensation for the President and Chief Executive Officer is triggered when an annually
determined threshold is met. In 2014, the trigger threshold was for Desjardins Group’s net surplus earnings
to reach $1,100 million. Surplus earnings amounted to $1,593 million.
Objectives and achievements of the President and CEO of Desjardins Group for 2014
In 2014, under the leadership of the President and CEO, Desjardins Group had a banner year.
Desjardins Group continued to grow its financial results while significantly increasing investments in
technological and development projects. Generally, the performance indicators set out in Desjardins
Group’s 2013-2016 Strategic Plan were met or exceeded and the underlying initiatives delivered.
Strategic planning process
In 2014, a number of achievements resulting from the Strategic Plan’s priorities, namely service, growth
and efficiency, impacted the development of Desjardins Group as a whole and the network of caisses in
particular.
Service
The comprehensive initiative launched last year to nurture a distinctive member and client experience and
position Desjardins Group as a customer service leader among Canadian financial groups already
generated considerable benefits in 2014. For instance, satisfaction indicators in many business segments,
caisses and Desjardins Business centres improved, achieving and even exceeding strategic targets.
Furthermore, the Desjardins Member Advantages program was successfully launched among employees
and members.
Growth
The number of members and clients continued to grow in 2014 across Canada. Moreover, many caisses in
the network recorded a return to growth in the number of members and an increase in the products held
per member. Growth in assets and premiums was strong in Quebec and in other provinces.
Also, significant efforts were made to integrate, as at January 1, 2015, the Canadian businesses of State
Farm mutual, making Desjardins Group Canada’s second largest property and casualty insurer and
expanding its share of the life and health insurance sector.
Efficiency
In 2014, Desjardins Group ranked second in Bloomberg’s ranking of the world’s strongest banks and first
among the strongest banks in North America, ahead of all U.S. banks.
Significant gains were made in 2014 to transform Desjardins Group’s distribution network and optimize its
business processes with a view to improving service quality and overall efficiency. Major productivity gains
were also achieved through an initiative that will continue in 2015 in all Desjardins Group business
segments.
As a result of being designated a domestic systemically important financial institution by the AMF,
Desjardins Group actively pursued its capital strengthening initiatives.
Page 36
Cohesiveness, engagement and succession of executives and senior management
With the support of Desjardins Group’s President and CEO, significant progress was made in 2014
regarding executive and senior management succession at Desjardins Group. Several Senior
Vice-Presidents were entrusted with new responsibilities.
Desjardins Group’s President and CEO also supported succession planning initiatives at all levels of
management, including caisse general manager positions.
Building on the profile of Desjardins Group and the cooperative movement as a whole
The second Quebec International Summit of Cooperatives held in 2014 recorded increased participation, in
the number of countries represented as well as registered participants.
The President and CEO of Desjardins Group was instrumental in enhancing Desjardins Group’s profile
among fellow members of key provincial, national and international cooperative advocacy organizations. In
particular, she chairs the Conseil québécois de la cooperation et de la mutualité and serves on the boards
of Co-operatives and Mutuals Canada, International Co-operative Alliance, European Association of Cooperative Banks and International Confederation of Popular Banks. She also actively contributed to the
work of the International Co-operative Alliance by chairing the International Accounting Task Force and its
Leadership Circle, while contributing to the implementation of the first strategic plan for Co-operatives and
Mutuals Canada and the Conseil québécois de la cooperation et de la mutualité.
This representation resulted in the forging of national and international business relationships for
Desjardins Group, thereby helping to meet its strategic and financial objectives.
Impact of the achievements on the incentive plan
(1)
Given the foregoing achievements and that Desjardins Group’s results exceeded objectives , the Board of
Directors deemed that Monique F. Leroux achieved superior performance in 2014 (93%), which triggered a
bonus equal to 112% of her eligible base salary.
2014 Direct compensation
Monique F. Leroux
Components
Value for
2014
Base salary
$1,193,270
Annual incentive plan
$1,333,240
Total direct compensation
$2,526,510
(1)
A summary of those objectives is disclosed on pages 30 and 31.
Page 37
Pension Plan Enhancement Program
The President and CEO of Desjardins Group is not eligible for the long-term incentive plan offered to
Desjardins Group’s other executive officers.
Instead, the Board of Directors preferred to complement the President and CEO’s overall compensation by
enhancing her pension. The enhanced pension provides for an annual addition to her pension payable
upon departure, the actuarial value of which corresponds to 75% of her eligible salary.
This increase contributes to achieving the overall compensation policy objective of 100% of the median for
cooperative financial groups of comparable size.
For 2014, the value amounted to $896,396.
Page 38
2014 Overall compensation of Senior Vice-President Chief Financial Officer
Daniel Dupuis
Daniel Dupuis was evaluated with respect to Desjardins Group objectives and priority projects only.
In 2014, incentive plan results were detailed as follows:
Target
objectives
(budget)
Desjardins Group
Triggers
(Desjardins Group
net surplus earnings)
Results
for 2014
Objectives
100%
106%
Priority projects
100%
119%
Exceeded
The results attained earned Daniel Dupuis a bonus equal to 107% of his eligible base salary.
In addition, he was granted $138,705 under the long-term incentive plan. An amount of $206,526 deferred
in 2011 also vested, becoming payable after adjustment for Desjardins Group’s financial performance.
2014 Direct compensation
Daniel Dupuis
Components
Value for
2014
Base salary
$460,228
Annual incentive plan
$252,871
(1)
Long-term incentive plan
$345,231
(2)
Total direct compensation
$1,058,330
(1) Pursuant to the pro visio ns o f the 2014 incentive plan fo r Desjardins Gro up senio r executives, the annual incentive co mpensatio n co mprised a
fixed annual co mpo nent (60% o f the 2014 bo nus) and a variable deferred co mpo nent (40% o f the 2014 bo nus). The deferred co mpo nent will
vary based o n Desjardins Gro up’ s financial perfo rmance and will o nly be earned at the end o f the three-year perio d fo llo wing the date o n which
the bo nus was declared. Co nsequently, the amo unt indicated o nly represents the co mpo nent o f the annual incentive co mpensatio n earned in
fiscal 2014 (60% o f the 2014 bo nus) and paid at the beginning o f fiscal 2015.
(2) The amo unt indicated represents the variable deferred co mpo nent o f the annual incentive co mpensatio n awarded fo r the year ended
December 31, 2011 and earned in 2014, facto ring in all the changes based o n the parameters established by the Desjardins Gro up senio r
executives incentive plan and paid at the beginning o f fiscal 2015. This also includes the co mpensatio n awarded fo r fiscal 2014 under the lo ngterm incentive plan (P CD). The PCD will vary based o n Desjardins Gro up’ s financial perfo rmance and will beco me payable upo n retirement.
Page 39
2014 Overall compensation of Chief Treasurer
Jacques Descôteaux
Apart from Desjardins Group objectives and priority projects, Chief Treasurer Jacques Descôteaux is
eligible for a specific incentive plan, which is based on two sets of objectives:
 The first set (weighted at 40%) consists of financial objectives related to business development or the
generation of income;
 The second set (weighted at 60%) is based on strategic objectives linked to his major responsibilities.
Jacques Descôteaux is not eligible to participate in the long-term incentive plan (PCD) for Named
Executive Officers of Desjardins Group.
In 2014, the results were as follows:
Desjardins
Group
Objectives
Priority projects
Specific incentive plan
Target
objectives
(budget)
100%
100%
100%
Triggers
(Desjardins Group
net surplus earnings)
Results for
2014
106%
119%
Exceeded
218%
The results attained earned Jacques Descôteaux a bonus equal to 190% of his eligible base salary.
2014 Direct compensation
Jacques Descôteaux
Components
Value for
2014
Base salary
$412,007
Annual incentive plan
$190,701
(1)
Specific incentive plan
$258,749
(2)
Long-term incentive plan
$367,996
(3)
Total direct compensation
$1,229,453
(1) Pursuant to the pro visio ns o f the 2014 incentive plan fo r Desjardins Gro up senio r executives, the annual incentive co mpensatio n co mprised a
fixed annual co mpo nent (60% o f the 2014 bo nus) and a variable deferred co mpo nent (40% o f the 2014 bo nus). The deferred co mpo nent will
vary based o n Desjardins Gro up’ s financial perfo rmance and will o nly be earned at the end o f the three-year perio d fo llo wing the date o n which
the bo nus was declared. Co nsequently, the amo unt indicated o nly represents the co mpo nent o f the annual incentive co mpensatio n earned in
fiscal 2014 (60% o f the 2014 bo nus) and paid at the beginning o f fiscal 2015.
(2) That amo unt reflects the fixed co mpo nent (60% o f the 2014 bo nus) o f Jacques Descô teaux's specific incentive plan earned fo r fiscal 2014 and
paid at the beginning o f fiscal 2015. The deferred co mpo nent (40% o f the 2014 bo nus) o f the specific incentive plan will be paid in instalments o f
1/3 each year starting in 2015, the who le subject to adjustments.
(3) The amo unt indicated represents the variable deferred co mpo nent o f the annual incentive co mpensatio n awarded fo r the year ended
December 31, 2011 and earned in 2014, facto ring in all the changes based o n the parameters established by the Desjardins Gro up senio r
executives incentive plan and paid at the beginning o f fiscal 2015, as well as the co mpensatio n awarded fo r fiscal 2014.
Page 40
2014 Overall compensation of Senior Vice-President, Business and Institutional Services
Stéphane Achard
Apart from Desjardins Group objectives and priority projects, the following specific objectives have been
set for Stéphane Achard, Senior Vice-President, Business and Institutional Services:
SVP, Business and Institutional Services
specific objectives
Relative weight
Profitability
30%
Productivity
20%
Growth
20%
Satisfaction
30%
In 2014, the incentive plan results were as follows:
Desjardins Group
Objectives
Priority projects
SVP, Business and Institutional Services
Target
objectives
(budget)
100%
100%
100%
Results for
2014
106%
115%
Triggers
(Desjardins Group
net surplus earnings)
Exceeded
118%
The results attained earned Stéphane Achard a bonus equal to 112% of his eligible base salary.
In addition, he was granted $152,799 under the long-term incentive plan. An amount of $255,872 deferred
in 2011 also vested, becoming payable after adjustment for Desjardins Group’s financial performance.
Direct compensation for 2014
Stéphane Achard
Components
Value for
2014
Base salary
$507,114
Annual incentive plan
$307,328
(1)
Long-term incentive plan
$408,671
(2)
Total direct compensation
$1,223,113
(1) Pursuant to the pro visio ns o f the 2014 incentive plan fo r Desjardins Gro up senio r executives, the annual incentive co mpensatio n co mprised a
fixed annual co mpo nent (60% o f the 2014 bo nus) and a variable deferred co mpo nent (40% o f the 2014 bo nus). The deferred co mpo nent will
vary based o n Desjardins Gro up’ s financial perfo rmance and will o nly be earned at the end o f the three-year perio d fo llo wing the date o n which
the bo nus was declared. Co nsequently, the amo unt indicated o nly represents the co mpo nent o f the annual incentive co mpensatio n earned in
fiscal 2014 (60% o f the 2014 bo nus) and paid at the beginning o f fiscal 2015.
(2) The amo unt indicated represents the variable deferred co mpo nent o f the annual incentive co mpensatio n awarded fo r the year ended
December 31, 2011 and earned in 2014, facto ring in all the changes based o n the parameters established by the Desjardins Gro up senio r
executives incentive plan and paid at the beginning o f fiscal 2015. This also includes the co mpensatio n awarded fo r fiscal 2014 under the lo ngterm incentive plan (P CD). The PCD will vary based o n Desjardins Gro up’ s financial perfo rmance and will beco me payable upo n retirement.
Page 41
2014 Overall Compensation of General Manager
Louis-Daniel Gauvin
Apart from Desjardins Group objectives and priority projects, specific objectives apply to Louis-Daniel
Gauvin as General Manager of Caisse centrale.
In 2014, the incentive plan results were as follows:
Target
objectives
(budget)
Desjardins
Group
Results for
2014
Objectives
100%
106%
Priority projects
100%
119%
100%
150%
Specific objectives
Triggers
(Desjardins Group net
surplus earnings)
Exceeded
The results attained earned Louis-Daniel Gauvin a bonus equal to 110% of his eligible base salary.
In addition, he was granted $134,366 under the long-term incentive plan. An amount of $228,301 deferred
in 2011 also vested, becoming payable after adjustment for Desjardins Group’s financial performance.
2014 Direct compensation
Louis-Daniel Gauvin
Components
Value for
2014
Base salary
$449,538
Annual incentive plan
$295,567
(1)
Long-term incentive plan
$362,767
(2)
Total direct compensation
$1,107,872
(1) Pursuant to the pro visio ns o f the 2014 incentive plan fo r Desjardins Gro up senio r executives, the annual incentive co mpensatio n co mprised a
fixed annual co mpo nent (60% o f the 2014 bo nus) and a variable deferred co mpo nent (40% o f the 2014 bo nus). The deferred co mpo nent will
vary based o n Desjardins Gro up’ s financial perfo rmance and will o nly be earned at the end o f the three-year perio d fo llo wing the date o n which
the bo nus was declared. Co nsequently, the amo unt indicated o nly represents the co mpo nent o f the annual incentive co mpensatio n earned in
fiscal 2014 (60% o f the 2014 bo nus) and paid at the beginning o f fiscal 2015.
(2) The amo unt indicated represents the variable deferred co mpo nent o f the annual incentive co mpensatio n awarded fo r the year ended
December 31, 2011 and earned in 2014, facto ring in all the changes based o n the parameters established by the Desjardins Gro up senio r
executives incentive plan and paid at the beginning o f fiscal 2015. This also includes the co mpensatio n awarded fo r fiscal 2014 under the lo ngterm incentive plan (P CD). The PCD will vary based o n Desjardins Gro up’ s financial perfo rmance and will beco me payable upo n retirement.
Page 42
SUMMARY TABLE OF THE OVERALL COMPENSATION SPECIFIC TO NAMED EXECUTIVES OFFICERS OF
CAISSE CENTRALE
Nam e and principal position
Year
Salary
($ )
No n-equity incentive plan
co mpensatio n
($ )
A nnual incentive
plan
Pensio n
value
($ )
All o ther
To tal
co mpensatio n(2) co mpensatio n
($ )
($ )
Lo ng-term
incentive plan(1)
Monique F. Leroux
2014 1,193,270
1,333,240
N/A
1,164,289
N/A
3,690,799
Chair o f the B o ard o f Directo rs
and Chief Executive Officer
2013 1,119,236
1,239,561
N/A
1,193,243
N/A
3,552,040
2012 1,047,729
1,112,663
N/A
1,180,021
N/A
3,340,413
Daniel Dupuis
Senio r Vice-P resident and Chief
Financial Officer
Jacques Descôteaux
Chief Treasurer
Stéphane Achard
Senio r Vice-P resident, B usiness
and Institutio nal Services
2014
460,228
252,871
(3)
345,231
70,471
N/A
1,128,801
330,396
112,517
N/A
1,185,939
147,246
N/A
902,036
2013
445,054
297,972
(3)
2012
418,723
209,855
(3)
126,212
2014
412,007
449,450
(3,4)
367,996
(5)
68,021
N/A
1,297,474
495,796
(5)
77,694
N/A
1,408,656
(5)
100,023
N/A
1,215,022
2013
400,241
434,925
(3,4)
2012
369,140
417,721
(3,4)
328,138
2014
507,114
307,328
(3)
408,671
84,200
N/A
1,307,313
399,169
211,159
N/A
1,395,839
2013
477,796
307,715
(3)
2012
439,096
222,347
(3)
132,451
311,015
N/A
1,104,909
Louis-Daniel Gauvin
2014
449,538
295,567
(3)
362,767
87,721
N/A
1,195,593
General M anager
2013
435,432
335,543
(3)
408,840
249,080
N/A
1,428,895
2012
488,981
260,070
(3)
168,061
313,465
N/A
1,230,577
(1)
The amo unts indicated represent, fo r each Named Executive Officer, the variable deferred co mpo nent o f the annual incentive co mpensatio n
awarded fo r the year ended December 31, 2011and earned in 2014, facto ring in the changes that to o k place based o n the parameters established by
the Desjardins Gro up senio r executives incentive plan and paid at the beginning o f fiscal 2015, as well as the co mpensatio n awarded fo r fiscal 2014
under the lo ng-term incentive plan (P CD). The P CD will vary based o n Desjardins Gro up’s financial perfo rmance and will beco me payable upo n
retirement. The Chair o f the B o ard o f Directo rs and Chief Executive Officer o f Desjardins Gro up is no t eligible fo r this plan o wing to the
independence that her po sitio n requires. A pensio n enhancement pro gram is mo re in line with her po sitio n, when the principle o f term limits is also
facto red in to determine the target po sitio ning o f her o verall co mpensatio n.
(2)
During fiscal 2014, the perso nal benefits granted to executive o fficers did no t exceed the lesser o f 10% o f their salary o r $ 50,000.
(3)
Pursuant to the pro visio ns o f the 2014 incentive plan fo r Desjardins Gro up senio r executives, the annual incentive co mpensatio n co mprised a
fixed annual co mpo nent (60% o f the 2014 bo nus) and a variable deferred co mpo nent (40% o f the 2014 bo nus). The deferred co mpo nent will vary
based o n Desjardins Gro up’ s financial perfo rmance and will o nly be earned at the end o f the three-year perio d fo llo wing the date o n which the
bo nus was declared. Co nsequently, the amo unt indicated o nly represents the co mpo nent o f the annual incentive co mpensatio n earned in fiscal
2014 (60% o f the 2014 bo nus) and paid at the beginning o f fiscal 2015.
(4)
That amo unt reflects the fixed co mpo nent o f the specfic incentive plan (60%) fo r the current year. The deferred co mpo nent (40% o f the bo nus) o f
the specific incentive plan will be paid in instalments o f 1/3 each year starting the fo llo wing year, the who le subject to adjustments. A s such, the
amo unt indicated o nly represents the fixed co mpo nent earned during the current year and paid at the beginning o f fiscal 2015.
(5)
The amo unt indicated represents the variable deferred co mpo nent o f the annual incentive co mpensatio n awarded fo r the year ended
December 31, 2011 and earned in 2014, facto ring in the changes that to o k place based o n the parameters established fo r the Desjardins Gro up
senio r executives incentive plan and paid at the beginning o f fiscal 2015, as well as the co mpensatio n awarded fro m previo us results and acquired
at the end o f fiscal 2014.
Page 43
INCENTIVE PLAN AWARDS SPECIFIC TO NAMED EXECUTIVE OFFICERS OF CAISSE CENTRALE
The following table summarizes incentive plan compensation:
Non-equity incentive plan compensation Value earned during the fiscal year
($)
Name and principal position
Year
Monique F. Leroux
Chair of the Board of Directors and
Chief Executive Officer
2014
1,333,240
Daniel Dupuis
Senior Vice-President and Chief
Financial Officer
2014
598,102
(1)
2014
817,446
(2)
2014
715,999
(1)
2014
658,334
(1)
Jacques Descôteaux
Chief Treasurer
Stéphane Achard
Senior Vice-President, Business and
Institutional Services
Louis-Daniel Gauvin
General Manager
(1)
The amo unts indicated represent the fixed co mpo nent o f the annual incentive co mpensatio n (60% o f the 2014 bo nus), the variable
deferred co mpo nent o f the annual incentive co mpensatio n awarded fo r the year ended December 31, 2011 and earned in 2014, facto ring in
the changes that to o k place based o n the parameters established by the Desjardins Gro up senio r executives incentive plan, as well as the
co mpensatio n awarded under the lo ng-term incentive plan (P CD) fo r fiscal 2014,which will beco me payable upo n retirement. That amo unt
will vary each year based o n Desjardins Gro up’ s financial perfo rmance and will beco me payable upo n retirement.
(2)
The amo unt indicated includes the annual incentive co mpensatio n fixed co mpo nent (60% o f the 2014 bo nus), the variable deferred
co mpo nent o f the incentive co mpensatio n awarded fo r the year ended December 31, 2011and earned in 2014, facto ring in the changes that
to o k place based o n the parameters established by the Desjardins Gro up senio r executives incentive plan, as well as 1/3 o f the deferred
balance o f Jacques Descô teaux's specific incentive plan.
All the incentive plans are linked to financial indicators as described in the table in the section on these
incentive plans.
Page 44
LONG-TERM INCENTIVE PLAN AWARDS SPECIFIC TO NAMED EXECUTIVE OFFICERS OF CAISSE CENTRALE
Nam e and principal position
Monique F. Leroux
Chair of the Board of Directors and Chief
Executive Officer
Daniel Dupuis
Senior Vice-President and Chief Financial
Officer
Jacques Descôteaux
Chief Treasurer
Stéphane Achard
Senior Vice-President, Business and
Institutional Services
Louis-Daniel Gauvin
General Manager
Accum ulated value
as at
Decem ber 31, 2013
($) (1)
Am ount aw arded for Accum ulated value
the year ended
as at
Decem ber 31, 2014 Decem ber 31, 2014
($) (2)
($)
N/A
N/A
N/A
499,466
138,705
638,171
N/A
N/A
N/A
529,913
152,799
682,712
573,517
134,466
707,983
(1) The amo unts indicated represent, fo r each Named Executive o fficer, the accumulated value o f the co mpensatio n awarded under the lo ng-term
incentive plan (PCD) as at December 31, 2013, facto ring in the changes that to o k place based o n the parameters established under the P CD.
That amo unt will vary each year based o n Desjardins Gro up’ s financial perfo rmance and will beco me payable upo n retirement. The Chair o f the
B o ard o f Directo rs and Chief Executive Officer o f Desjardins Gro up is no t eligible fo r this plan o wing to the independence that her po sitio n
requires. A pensio n enhancement pro gram is mo re in line with her po sitio n, when the principle o f term limits is also facto red in to determine the
target po sitio ning o f her o verall co mpensatio n.
(2) The amo unts indicated represent, fo r each Named Executive Officer, the co mpensatio n awarded fo r fiscal 2014 under the P CD. That amo unt will
vary each year based o n Desjardins Gro up’ s financial perfo rmance and will beco me payable upo n retirement.
Page 45
BENEFITS UNDER A PENSION PLAN SPECIFIC TO NAMED EXECUTIVE OFFICERS OF CAISSE CENTRALE FOR 2014
The following table details all pension benefits:
N ame
Years o f
reco gnized
service
A t fiscal yearend ($ )
Monique F. Leroux
Chair of the Board of
Directors and Chief
Executive Officer
16.95
Daniel Dupuis
Senior Vice-President and
Chief Financial Officer
21.98
Jacques Descôteaux
Chief Treasurer
Stéphane Achard
Senior Vice-President,
Business and Institutional
Services
Louis-Daniel Gauvin
General Manager
(1)
(1)
A ccrued
pensio n benefit
obligatio n at
start o f
fiscal year
($ )
A nnual benefits payable
($ )
A t age 65
648,098
670,811
170,558
(2)
Co mpensato ry
change
($ )
No nA ccrued pensio n
co mpensato ry benefit o bligatio n
change
at fiscal year-end
($ )
($ )
8,354,622
1,164,289
1,623,672
11,142,583
220,625
2,464,637
70,471
514,803
3,049,911
21.75
(3)
142,706
240,778
1,969,549
68,021
664,215
2,701,785
25.59
(4)
134,710
246,856
1,982,488
84,200
667,287
2,733,975
21.81
(5)
191,979
250,908
2,707,757
87,721
556,025
3,351,503
M o nique F. Lero ux was previo usly credited with three additio nal years fo r purpo ses o f the supplemental pensio n calculatio n. In 2014, the enhanced
pensio n payable to M o nique F. Lero ux co rrespo nds to an actuarial value equal to 75% o f her base salary fo r 2014.
(2) M o nique F. Lero ux's annuity co mes into effect at the end o f her seco nd mandate as P resident and CEO (A pril 1, 2016).
(3) Jacques Descô teaux was credited 2.38 additio nal years fo r DGP P (included in the 21.75) which are no t reco gnized fo r purpo ses o f the supplemental
pensio n plan.
(4) Stéphane A chard was previo usly credited with 13.94 additio nal years for DGP P purpo ses (included in the 25.59) which are no t reco gnized fo r purpo ses
o f the supplemental pensio n plan.
(5) Lo uis-Daniel Gauvin was previo usly credited three additio nal years (included in the 21.81) fo r the purpo ses o f the supplemental pensio n plan.
Compensatory changes are a function of the number of years of credited service, of any difference
between salary earned during the year and salary expected as well as any change in employment status.
They may be the result of changes in actuarial assumptions and/or methods compared to the
previous year.
The accrued obligations at year end in the preceding table were calculated based on the methods and
assumptions used in the most recent accounting valuation.
Non-compensatory changes are mainly attributable to changes in assumptions, including the decrease in
long-term interest rates.
TERMINATION AND CHANGE OF CONTROL BENEFITS
Monique F. Leroux is entitled to receive a payment of $571,612, which will be paid at the end of
her mandate.
Page 46
DIRECTOR COMPENSATION
Pursuant to the compensation policy for officers of the Federation, the members of the Board of Directors
of Caisse centrale are entitled to an annual retainer and meeting fees.
The annual retainer for Board members is $32,000 (the Chair of the Board receives an additional $20,000,
unless this position is held by the President and CEO). The retainer is for serving on the Board of Directors
of the Federation, Caisse centrale, Desjardins Trust Inc. and Capital Desjardins inc. and is paid on a
prorated basis by the Federation, Desjardins Trust Inc. and Caisse centrale. Directors chairing
commissions or committees of the Board of Directors that meet at least four times a year receive an
additional retainer of $6,500.
Under the compensation policy for officers of the Federation, each member of the Board who is not an
employee of the Federation receives a meeting fee of $1,200 per day of Board meeting attendance. For
attendance of Board commission/committee meetings, the fee amounts to $600 per half day, up to a
maximum of $1,200 per day regardless of the number of commission/committee meetings attended. Each
officer is also entitled to a meeting fee of $200 for each meeting held via conference call or any other
means that do not require travel. Directors are further entitled to reimbursement of out-of-pocket expenses
incurred in the course of their duties. However, no meetings fees are paid or expenses reimbursed for
directors who attend a meeting of the Board of Directors, Executive Committee or Audit Committee or any
other committee of the Federation, as the case may be, held on the same day as a meeting of the Board of
the Federation, Caisse centrale, Desjardins Trust Inc. or Capital Desjardins inc.
Page 47
Director compensation
The table below discloses the individual compensation received in 2014 by the members of the Board of
Directors in the course of directorships with the Federation, Caisse centrale (CCD), Desjardins Trust Inc.
(DT) and Capital Desjardins inc. (CDI) or as otherwise indicated below:
Compensation received
for directorships with
the Federation, CCD, DT
and CDI
Name
Meeting
fees
ALLARD, Michel
Annual
retainer
Other fees(1)
Meeting
fees
Annual
retainer
2014
TOTAL
$31,326
$34,300
$1,074
-
$66,700
$39,360
$55,500
$1,840
-
$96,700
$34,537
$49,000
$9,283
$18,755
$111,575
BOULERICE, Donat
$29,790
$49,000
$6,879
$17,472
$103,141
CHAMBERLAND, Serges
$29,493
$49,000
$10,607
$17,000
$112,350
CHEVALIER, Carole
$33,543
$49,000
$3,657
$4,064
$90,264
DESSUREAULT, Sylvain
$31,626
$34,000
$574
-
$66,200
FORAND, Luc(3)
$21,979
$36,665
$3,121
$2,917
$64,682
GAGNÉ, André, CPA, CGA
$38,364
$68,500
$4,256
$11,500
$122,620
GENEST, Yves
$30,436
$34,000
$1,084
-
$65,520
LAFORTUNE, Andrée, FCPA, FCA
$31,976
$68,500
$1,824
-
$102,300
LAPORTE, Jean-Robert
$31,226
$49,000
$9,074
$7,000
$96,300
LAROUCHE, Sylvie
$24,226
$49,000
$9,374
$13,500
$96,100
$27,526
$48,161
$46,574
$33,542
$155,803
N/A
N/A
N/A
N/A
N/A
LEVASSEUR, Pierre
$38,487
$49,000
$5,133
$5,000
$97,620
PARÉ, Denis
$41,774
$82,000
$4,426
-
$128,200
PERRON, Johanne
$33,026
$34,000
$574
-
$67,600
RAÎCHE, Alain
$30,804
$34,000
$2,596
-
$67,400
ROUSSEAU, Serge(3)
$22,329
$36,665
$1,671
$2,903
$63,568
ST-PIERRE BABIN, Sylvie
$41,916
$45,325
$984
-
$88,225
$32,510
$49,000
$11,390
$28,500
$121,400
$30,487
$37,975
$12,933
$17,000
$98,395
$36,167
$49,000
$19,633
$28,500
$133,300
$742,909
$1,090,592
$168,560
$207,652
$2,209,713
BARIL, Jacques
BÉLANGER, Annie P. (Chair of the Board of DID)
(2)
LAUZON, Marcel (Chairman of the Board of DGIG)(2)
LEROUX, Monique F., C.M., O.Q., FCPA, FCA
(4)
TOURANGEAU, Serge (Chairman of the Board of DS)(2)
TURCOTTE, Benoît (Chairman of the Board of FSD)
VINET, Yvon (Chairman of the Board of DSF)(2)
Total
(2)
(1)
Amounts received for chairing the Board of a subsidiary and serving on the Desjardins Group Retirement Committee, Desjardins Group Retirement
Committee’s Investment Committee or Desjardins Group Retirement Committee’s Audit, Professional Practices and Compliance Committee. Amounts
also received for directorships with Desjardins Financial Security Inc. and Fonds de sécurité Desjardins. Amounts also received for serving on the
Comité Grand Montréal and the Desjardins Group and Desjardins Financial Security Inc. Advisory Committee.
(2)
Développement international Desjardins (DID), Desjardins General Insurance Group Inc. (DGIG), Desjardins Financial Security Life Assurance
Company (DFS), Desjardins Securities Inc. (DS) and Fonds de sécurité Desjardins (FSD).
(3)
Term began on March 28, 2014.
(4)
The Chair of the Board, President and CEO of Desjardins Group receives no compensation as chair of the Board of Directors of the Federation, CCD
and DT.
Denis Duguay and Michel Roy completed their term of office on March 28, 2014.
Page 48
AUDIT COMMISSION INFORMATION
RULES OF THE AUDIT COMMISSION
The rules of the Audit Commission of Caisse centrale are included in the Audit Commission Charter, a
copy of which is appended hereto as Schedule B.
COMPOSITION OF THE AUDIT COMMISSION
The Audit Commission of Caisse centrale consists of five members, namely Donat Boulerice, Luc Forand,
André Gagné, Pierre Levasseur and Benoît Turcotte. Each member of the Audit Commission is
independent and financially literate in accordance with Regulation 52-110 Respecting Audit Committees.
RELEVANT EDUCATION AND EXPERIENCE
Audit Commission members have the necessary education and experience to assume their responsibilities
within the Audit Commission. More specifically, their expertise is as follows:

Donat Boulerice holds a bachelor’s degree in education and a master’s degree in physical education
and recreation, with a concentration in administration. He serves on the Board of Directors of Caisse
populaire Rideau-Vision d’Ottawa Inc. He has been Chairman of the Board of Directors of the
Fédération des caisses populaires de l’Ontario Inc. since April 2010 and is an ex-officio member of its
Audit Committee. Donat Boulerice has directorships with the Federation, Caisse centrale, Capital
Desjardins inc. and Desjardins Trust, and serves on the Audit and Inspection Commission, the Audit
Commission and the audit committees of those entities and on the Audit Committee of Desjardins
Financial Corporation Inc. He also serves on the Board of Directors of Fonds de sécurité Desjardins.

Luc Forand holds a bachelor’s degree in computer science. He is Chairman of the Board of Caisse
Desjardins de Saint-Césaire. Luc Forand has directorships with the Fédération, Caisse centrale
Desjardins, Capital Desjardins inc. and Desjardins Trust Inc., and is a member of the Audit and
Inspection Commission, the Audit Commission and the audit committees of those entities and the Audit
Committee of Desjardins Financial Corporation Inc.

André Gagné holds a master’s degree in accounting. He is a member of the Ordre des comptables
professionnels agréés du Québec (CPA) and Chairman of the Board of Caisse Desjardins des Chutes
Montmorency. André Gagné has directorships with the Federation, Caisse centrale, Capital Desjardins
inc. and Desjardins Trust, and serves on the Audit and Inspection Commission, the Audit Commission
and the audit committees of those entities and on the Audit Committee of Desjardins Financial
Corporation Inc. He serves on the Board of Directors of Fonds de sécurité Desjardins and is an
observer on the Risk Management Commission of the Federation and Caisse centrale, as well as the
Risk Management Committee of Desjardins Trust Inc.

Pierre Levasseur holds a bachelor’s degree in administration from Université du Québec à
Trois-Rivières and serves on the Board of Directors of the Caisse Desjardins de Nicolet. He has
directorships with the Federation, Caisse centrale, Capital Desjardins inc. and Desjardins Trust, and
serves on the Audit and Inspection Commission, the Audit Commission and the audit committees of
those entities and on the Audit Committee of Desjardins Financial Corporation Inc. He also serves on
the Board of Directors of Fonds de sécurité Desjardins, the Desjardins Group Investment Commission,
and the Corporate Governance Commission of the Federation and Caisse centrale, as well as the
Conduct Review Committee of Desjardins Trust Inc.
Page 49

Benoît Turcotte is a businessman. He is Chairman of the Board of Caisse Desjardins de l’Est de
l’Abitibi. He has directorships with the Federation, Caisse centrale, Capital Desjardins inc. and
Desjardins Trust. He serves on the Audit and Inspection Commission, the Audit Commission and the
audit committees of those entities and on the Audit Committee of Desjardins Financial Corporation Inc.
He is Chairman of the Board of Fonds de sécurité Desjardins. He also serves on the Desjardins Group
Retirement Committee and its Investment Committee.
Members also have access to orientation and ongoing training programs.
PRE-APPROVAL POLICIES AND PROCEDURES
The Board of Directors of the Federation has adopted a policy respecting the awarding of contracts for nonaudit services by a component of Desjardins Group, including Caisse centrale, to the independent auditors
of Desjardins Group. Under this policy, a copy of which is appended to this Annual information Form as
Schedule C, the Audit and Inspection Commission of the Federation has the legal responsibility to preapprove non-audit services provided by the external auditors of Desjardins Group, whether rendered to
Desjardins Group or its components. The goal is to eliminate threats to the external auditors’ independence
or lower them to more acceptable levels, thus avoiding situations that may affect or are likely to affect their
judgment or objectivity.
EXTERNAL AUDITOR SERVICE FEES BILLED (BY CATEGORY)
Audit related fees
2013
2014
$977,862
$827,305
These fees include services related to the 2013 annual audit and quarterly reviews of Caisse centrale.
They also include fees for work performed for subsidiary Desjardins FSB Holdings Inc. and for Caisse
centrale Desjardins U.S. Branch.
Audit-related services fees
2013
2014
$751,750
$1,226,330
These fees include audit-related services provided by the auditor, including work performed on a
prospectus, the translation of financial reports and preliminary work in connection with covered bonds.
These fees also include services rendered pertaining to renewal of the global multi-currency medium-term
deposit note program in Europe, services related to the issuance of medium-term notes in the United
States, costs relating to audit reporting for the public companies performed by the Canadian Public
Accountability Board (CPAB).
Tax fees
2013
2014
$16,911
$-
These fees primarily include assistance services for tax planning related to U.S. tax issues.
All other fees
No other fees were invoiced during the last two fiscal years for services provided by the external auditors.
Page 50
CORPORATE GOVERNANCE DISCLOSURE
BOARD OF DIRECTORS AND BOARD MANDATE
Caisse centrale’s Board of Directors is composed of 22 directors, the majority of which are independent.
These directors are the same as those on the Boards of Directors of the Federation, Desjardins Trust Inc.
and Capital Desjardins inc. The vice-presidents of the regional councils of the Outaouais, AbitibiTémiscamingue and Nord-du-Québec region and the Bas-Saint-Laurent and Gaspésie-Îles-de-laMadeleine region also attend Board meetings as managing directors.
After each Board of Directors, commission, committee or executive committee meeting, a closed-door
session is held without the members of Caisse centrale management being present, except for the Chair of
the Board, President and Chief Executive Officer as long as he or she is not required to withdraw for
independence reasons. In 2013, seven meetings of the Board of Directors were followed by a closed-door
session without members of management being present. Unrelated directors are independent within the
meaning of Regulation 58-101 respecting disclosure of corporate governance practices and Regulation
52-110 respecting Audit Committees.
Administrators are independent if they have no material relationships with Caisse centrale that, in the
Board’s opinion, could be perceived as detrimental to their judgement.
The Board of Directors has five non-independent directors within the meaning of the Act respecting the
Mouvement Desjardins, the Act respecting financial services cooperatives, the Securities Act (Quebec) and
their regulations: the Chair of the Board, President and CEO of Caisse centrale and four caisse general
managers. In the opinion of Caisse centrale’s Board of Directors, the first one is non-independent since she
is a member of Caisse centrale’s Management Committee, and the four others, since they are employed by
Desjardins Group, namely by caisses. However, no directors have business or personal relationships with
Caisse centrale’s members of Management Committee or interests that, in the Board's opinion, could
materially affect their ability to act in the best interest of Caisse centrale and Desjardins Group, or interests
reasonably likely, in the Board's opinion to be perceived as detrimental.
For guidance on exercising its judgment, the Board of Directors refers to the Desjardins Group Code of
Professional Conduct governing its directors and the declarations of interests they file each year. None of
the directors serve on the board of directors of a non-Desjardins Group reporting issuer, except for the
Chair of the Board, President and CEO of Desjardins Group who serves on the Board of Directors of the
French bank Crédit Industriel et Commercial whose shares are listed on the Paris Stock Exchange. Within
Desjardins Group, the directors of Caisse centrale are also directors of the Federation and Capital
Desjardins inc.
Independent directors
The following is a list of directors who are independent within the meaning of corporate governance
disclosure and the concept of independence defined in Regulation 52-110 respecting Audit Committees:
 Annie P. Bélanger
 Jacques Baril
 Serges Chamberland
 Donat Boulerice
 Luc Forand
 Carole Chevalier
 Andrée Lafortune
 André Gagné
 Sylvie Larouche
 Jean-Robert Laporte
 Pierre Levasseur
 Marcel Lauzon
 Serge Rousseau
 Denis Paré
 Serge Tourangeau
 Sylvie St-Pierre Babin
 Yvon Vinet
Michel Allard and Benoît Turcotte are managing directors, and are independent, to the same extent as
directors.
Page 51
Non-independent directors
In the opinion of Caisse centrale’s Board of Directors, the following directors are not independent within the
meaning of corporate governance disclosure and the concept of independence defined in Regulation
52-110 respecting Audit Committees:
 Sylvain Dessureault
 Johanne Perron
 Yves Genest
 Alain Raîche
 Monique F. Leroux
Additional information on the Board of Directors, the independence of its members, the independence of
the Board of directors in relation to Caisse centrale’s management, attendance reports and the Board
mandate on pages 119-124 and on page 129 of the Annual Report is incorporated herein by reference.
DESCRIPTIONS OF ROLES
Each commission or committee of the Board of Directors of Caisse centrale is chaired by an external
director (Commission Chair). The Commission Chair is responsible for managing the Commission or
committee and ensuring the efficiency of its work. The Chair shall take all reasonable actions to ensure that
the Commission and committee perform their mandate fully.
The Commission Chair’s responsibilities include:
 taking all reasonable actions to ensure cohesion among members of the Commission or the committee
and demonstrating the leadership required to that end;
 taking all reasonable actions to obtain adequate resources that will allow the Commission or the
committee to perform its work;
 taking all reasonable actions to implement a process that will allow the efficiency of the Commission or
the committee and each member’s contribution to be evaluated on a regular basis;
 presiding over Commission or the committee meetings;
 setting the agenda for each Commission meeting, in consultation with the General Secretariat;
 adopting work methods that favour effectiveness and efficiency;
 taking all reasonable actions to promote discussions during the conduct of Commission meetings and
ensure that enough time is allotted for serious and in-depth discussions of the matters;
 ensuring that the Commission or the committee discharges its responsibilities fully.
Each commission or committee Chair shall report to the Board of Directors on the committee or the
Commission’s discussions and decisions made or recommendations formulated.
Additional information on work descriptions on pages 120 and 123-126 in the Annual Report is
incorporated herein by reference.
ORIENTATION AND CONTINUING EDUCATION
Caisse centrale offers orientation sessions and continuing training to its directors, it also develops activities
tailored to the directors’ specific needs.
All new directors attend an onboarding session that involves meeting with certain members of management
and receiving a reference manual containing all the critical information they need in order to carry out their
duties. Directors can also access the manual on an intranet site specifically intended for them: the
Executive Portal. All directors receive a document reminding them of the expectations and the duties that
come with their position. Orientation sessions are held to ensure effective and efficient integration of new
members of Board commissions and committees.
Page 52
As needed and upon request, meetings with specialists from the Caisse centrale are also organized to help
directors increase their general and specific knowledge of the organization and of its main strategic
projects.
The training program for Board members falls under the activities of the Desjardins Cooperative Institute, a
training institute created for the managers, employees and elected officers of Desjardins Group.
Information about the orientation and training program for new directors appearing on pages 123 of the
Annual Report is herein incorporated by reference.
BUSINESS ETHICS
The Caisse centrale Code of Professional Conduct (Code) was filed on SEDAR, at www.sedar.com.
The Board of Directors is responsible for preserving the cooperative nature of Caisse centrale, which is
defined by the cooperative values and principles established by the International Co-operative Alliance,
and for promoting Desjardins Group values, namely money at the service of human development,
democratic action, personal commitment, integrity and rigour in the cooperative enterprise, solidarity with
the community, and intercooperation. The Board of Directors is also responsible for enforcing the rules of
ethics and professional conduct of Desjardins Group and Caisse centrale among executive officers,
managers, employees and elected officers, and for building their awareness of the organization’s values.
The Caisse centrale has a Board of Ethics and Professional Conduct. The members of the Board of Ethics
and Professional Conduct are elected at the council of representatives. This Board is responsible for
adopting the rules of ethics and professional conduct applicable to Caisse centrale, for helping update the
Code and, as needed, for issuing advice with regard to ethical or professional conduct and cooperation.
Directors, officers, including executive officers, and employees are subject to rules of ethics and
professional conduct that require them to avoid being placed in real or perceived conflict of interest
situations. They must report without fail any such situation to the authorities concerned or their superior
and abstain from voting or making a decision in such respect or influencing the related vote or decision.
Agreements for transfers of assets between the Caisse centrale and these persons must also be approved
by the Board of Directors of the Caisse centrale, upon prior opinion of the Board of Ethics and Professional
Conduct. The same applies to agreements for the supply of goods and services, which must be approved
by the Board of Directors, upon prior advice of the Board of Ethics and Professional Conduct (unless the
agreement involves only small amounts). Directors and officers must also regularly complete written
declarations indicating their own interests or those of related persons, in any business.
The Board has a support structure in place to allow it to carry out awareness and training activities and to
provide advisory services. These are some of the practical measures taken by Caisse centrale to promote
its values and to ensure compliance with the Code. The Code also imposes penalties for violations.
Desjardins Group also has a confidential procedure for reporting violations to the Code and other
regulatory frameworks.
Additional information on business ethics on page 119 of the Annual Report is incorporated herein
by reference.
DIRECTOR NOMINATION PROCESS
Given the cooperative structure of Caisse centrale and the principle of delegation which prevails within the
organization, its Board of Directors is composed of persons elected by the delegates of member caisses of
Caisse centrale and the Federation who directly elect 17 of the 22 directors at regional or group caisse
meetings. These persons chair the regional councils and the council of group caisses.
Information on the director nomination process, including information on representation of the Board of
Directors and the appointment of executive officers to Caisse centrale on pages 120-126 of the Annual
Report is incorporated herein by reference.
Page 53
COMPENSATION
Additional information on director compensation on pages 127 and 128 of the Annual Report is
incorporated herein by reference.
For further details, see the “Statement of Caisse centrale’s executive officers compensation” section of this
Annual Information Form.
BOARD COMMITTEES
The Board forms committees and commissions to support and streamline its various activities (guidance,
planning, monitoring and control) and defines the mandates of these committees and commissions, which
are composed entirely or almost entirely of independent members. At the end of each meeting, these
commissions and committees hold in camera sessions which management members do not attend, except
for the Chair of the Board, President and CEO (unless his or her recusal is necessary for independence
reasons). The membership and mandates of these commissions and committees are reviewed every year.
A report on the work of each committee and commission is systematically presented at a meeting of the
Board monitoring their work.
Information on the committees of the Board of Directors of Caisse centrale on pages 125 and 126 of the
Annual Report is herein incorporated by reference.
For more information on the Audit Committee of Caisse centrale, please see the “Audit Commission
Information” section in this Annual Information Form.
EVALUATION
The Board of Directors and its commissions and committees evaluate their performance annually using
quantifiable objectives set by the Board at the beginning of the year. Areas for improvement and points to
be monitored are identified during this evaluation and written into an action plan recommended to the
Board by the Corporate Governance Commission, which also follows up on the plan. The Board receives a
mid-year progress report and a full report at year-end. The evaluation program for all Caisse centrale
structures also calls for a personal self-assessment, followed by a meeting between each director and the
Chair of the Board. Peer evaluation is integrated into the process. Skills development is also integrated into
the process in accordance with the guideline of the AMF governing integrity and competency criteria. The
Chair of the Board is responsible for the evaluation process, and the Corporate Governance Commission
oversees it.
At the end of every meeting, the Board reviews all of its decisions and evaluates whether the cooperative
difference was taken into consideration in a concrete and measurable manner. The Board’s conclusions
are included in its report on the achievement of its objectives.
Information on evaluation on page 123 of the Annual Report is herein incorporated by reference.
Page 54
SCHEDULES
Page 55
SCHEDULE A
Rating categories by credit rating agency
Credit rating
agency
Rating
Outlook
DBRS

Short-term obligations rated “R-1” indicate very strong capacity for
payment of short-term financial commitments at maturity. This
capacity is not significantly vulnerable to foreseeable events.


A rating of “AA” denotes superior credit quality, and protection of
interest and principal is considered high. In many cases, they differ
from obligations rated “AAA” only to a small degree.
A stable outlook
indicates that a
rating is not likely
to change.

Each rating category is denoted by the subcategories “high” and “low.
The absence of either a “high” or “low” designation indicated the
rating is in the middle of the category.

“A-1” is the highest rating for short-term obligations and indicate the
issuer’s strong capacity to meet its financial commitments.


An obligation rated “A” indicates that the issuer has strong capacity to
meet its financial commitments, but is somewhat more susceptible to
the adverse effects of changes in circumstances and economic
conditions than obligations in higher-rate categories.
A stable outlook
indicates that a
rating is not likely
to change.

The addition of a “+” or “-“ shows the relative standing within the
rating categories.

Short-term obligations rated “P-1” indicate that an issuer has superior
ability to meet such obligations.


Debt obligations rated “Aa” are judged to be high quality with very low
credit risk.
A negative outlook
indicates that a
rating is more
likely to change in
the medium term.

Modifiers “1,” “2” and “3” respectively indicate that the obligation
ranks in the higher end, mid-range or lower end of its rating category.

Short-term obligations rated “F1” denote the highest credit quality and
the strongest capacity to repay financial commitments in a
timely manner.


Debt obligations rated “AA” denote expectations of very low credit
risk and are judged to be of high credit quality. They indicate very
strong capacity for payment of financial commitments. This capacity
is not significantly vulnerable to foreseeable events.
A stable outlook
indicates that a
rating is not likely
to change.

The modifiers “+” or “-” may be appended to a rating to denote
relative status within major rating categories.
Standard &
Poor’s
Moody’s
Fitch
Page 1
SCHEDULE B
Caisse centrale Desjardins
Audit Commission Charter
Approved by the Board of Directors at its meeting of February 24, 2015.
Subsequent to the recommendation of the Audit Commission on November 4, 2014.
Page 1
TABLE OF CONTENTS
1.
THE MANDATE................................................................................................................ 3
2.
OPERATING PRINCIPLES .............................................................................................. 3
2.1
Values .................................................................................................................... 3
2.2
Communications ..................................................................................................... 3
2.3
Financial literacy ..................................................................................................... 4
2.4
Findings and information needs .............................................................................. 4
2.5
External resources.................................................................................................. 4
2.6
Reports to the Board and General Assembly .......................................................... 4
2.7
Commission self-assessment ................................................................................. 4
2.8
Independent auditor................................................................................................ 4
2.9
Internal Audit Division of the DGMO ....................................................................... 4
2.10 Risk management................................................................................................... 4
2.11 Compliance............................................................................................................. 5
2.12 Regulators .............................................................................................................. 5
3.
4.
OPERATIONS.................................................................................................................. 5
3.1
Composition............................................................................................................ 5
3.2
Core member qualifications .................................................................................... 5
3.3
Development .......................................................................................................... 6
3.4
Meetings: frequency and participation..................................................................... 6
DUTIES AND RESPONSIBILITIES .................................................................................. 7
4.1
Financial information............................................................................................... 7
4.2
Internal controls ...................................................................................................... 8
4.3
Risk management................................................................................................... 9
4.4
Compliance............................................................................................................. 9
4.5
Regulators .............................................................................................................. 9
4.6
External audit.........................................................................................................10
4.7
Internal audit..........................................................................................................11
4.8
The finance team ...................................................................................................11
Page 2
1.
THE MANDATE
The Board of Directors (“Board”), within the scope of its monitoring, control and reporting responsibilities,
delegates responsibility for monitoring the financial reporting process to the Audit Commission
(“Commission”).
To that end, the Commission:
■ Reviews the interim and annual consolidated financial statements and management’s discussion
and analyses (“MD&As”)
■ Reviews press releases, as applicable, and the Annual Information Form
■ Reviews financial reporting, in particular the independent auditors’ report
■ Oversees the internal control system
■ Oversees the management of risks related to the financial reporting process
■ Oversees the internal audit and external audit processes
■ Oversees compliance management
■ Reviews any other element entrusted by the Board
■ Comments on the mandate of the finance team, within the scope of the Commission’s
responsibilities
Moreover, the Commission ensures the independence of the independent auditor, the Chief Monitoring
Officer of Desjardins Group, the head of the Internal Audit Division of the Desjardins Group Monitoring
Office (DGMO) and the Company’s Chief Compliance Officer.
This Charter details how the Commission operates to fulfill the mandate entrusted to it by the Board. It
complies with the regulatory requirements for a reporting issuer, as set out in Regulation 52-110. Where
Regulation 52-110 provides no guidance, the rules pursuant to the Act respecting financial services
cooperatives, the Act respecting the Mouvement Desjardins, or Desjardins Group’s Policy on the
Composition of Commissions and Committees have been cited.
2.
OPERATING PRINCIPLES
The Commission assumes its responsibilities guided by the following principles:
2.1
Values
The Commission expects management to act in accordance with Caisse centrale Desjardins
Code of Professional Conduct, the legislation and regulations that apply to Caisse centrale
Desjardins, the principles of sound governance, and to adopt a rigorous approach to
compliance, financial disclosure and oversight.
2.2
Communications
Through its Chair, members of the Commission expect to have direct access and open
communication with management, employees, the chairs of the other committees or
commissions of Caisse centrale Desjardins, the independent auditor, the Senior VicePresident and Chief Financial Officer of Caisse centrale Desjardins, the Chief Monitoring
Officer of Desjardins Group, the head of the Internal Audit Division of the DGMO and the
Company’s Chief Compliance Officer.
Page 3
2.3
Financial literacy
Commission members are financially literate within the meaning of Regulation 52-110
respecting Audit Committees, and in particular, they are able to read and understand a set of
financial statements that present a breadth and level of complexity of accounting issues that
are generally comparable to the breadth and complexity of the issues that can reasonably be
expected to be raised by reading the consolidated financial statements of Caisse centrale
Desjardins.
2.4
Findings and information needs
The Commission communicates its concerns to senior management, the independent
auditor, the Chief Monitoring Officer of Desjardins Group and the head of the Internal Audit
Division of the DGMO, according to the responsibilities of each.
2.5
External resources
In addition to any assistance it may receive from the independent auditor and the DGMO in
performing its duties, the Commission may engage external resources with specialized
expertise at the expense of Caisse centrale Desjardins.
2.6
Reports to the Board and General Assembly
After each meeting, the Commission Chair submits a written report at the next Board
meeting. Each year, the Commission Chair drafts an activity report to the Board and the
General Assembly for inclusion in the Annual Report of Caisse centrale Desjardins.
2.7
Commission self-assessment
The Commission annually reviews and discusses its performance, and reviews its role,
responsibilities, and the performance of its members.
2.8
Independent auditor
The independent auditor is accountable to the Board through the Commission, and must
report any significant or potentially significant event to the Commission.
2.9
Internal Audit Division of the DGMO
The Commission expects the Internal Audit Division of the DGMO to provide assurance as to
the degree of control over operations by delivering an independent assessment of risk
management processes, controls and governance.
2.10
Risk management
Under its financial reporting oversight responsibilities, the Commission monitors financial
risks and the related internal controls, consistent with the work of Caisse centrale
Desjardins’s Risk Management Commission.
Page 4
2.11
Compliance
The Commission expects the Company’s Chief Compliance Officer to provide assurance as
to the degree of control over regulatory compliance and to express an opinion on the
application and adequacy of compliance management mechanisms.
2.12
Regulators
The Commission meets as required and reports on its activities to regulators, including the
Autorité des marchés financiers (AMF).
3.
OPERATIONS
The Commission’s operating principles comprise the following:
3.1
Composition
The Commission is composed of five members appointed by the Board, including the Chair. All
Commission members must be independent, in accordance with Regulation 52-110. They must
be free from any relationship or interest that might interfere with the exercise of their independent
judgment.
The Commission Chair is designated in accordance with Desjardins Group’s Policy on the
Composition of Commissions and Committees.
The term of a member’s mandate ranges from one to six years, and may be extended by one or
two years in certain exceptional circumstances. However, to ensure continuity, it is preferable that
all members not be replaced in the same year.
The Commission Secretary is a person appointed by the Commission.
The Chief Monitoring Officer of Desjardins Group and the Senior Vice-President and Chief
Financial Officer of Caisse centrale Desjardins jointly assume functional leadership of the
Commission.
3.2
Core member qualifications
These mainly include:
■
Business experience, specialized qualifications, sound judgment and pragmatism
■
Objectivity, integrity, and independent thought
■
Diligence
■
Familiarity with the activities of Caisse centrale Desjardins and the industry
■
Financial literacy which can be acquired within a reasonable timeframe following the
member’s appointment
Page 5
3.3
Development
3.3.1
The Commission must offer new members an information or orientation session explaining,
among other things, the mandate of the Commission, the role and responsibilities of its members,
the activities of Caisse centrale Desjardins, its financial statements, accounting practices and
standards, financial policies, internal control requirements, financial ratios, risks, and
requirements of regulators and compliance policies.
3.3.2
Members shall be responsible for enquiring about new practices that are likely to influence the
Commission’s role and responsibilities in order to propose that the Board make any necessary
changes to redefine its mandate.
3.3.3
Members must receive information periodically on new accounting standards and
recommendations issued by the Canadian Accounting Standards Board, and regulators, or
international practices and their repercussions on the entity. They are to receive information
periodically, where available, on sound practices regarding compliance policies and the internal
control environment.
3.4
Meetings: frequency and participation
3.4.1
Statutory meetings are to be determined at the beginning of the year, in accordance with a
schedule approved by the Board, and must be held at least once every quarter. When necessary,
other meetings may be added in the course of the year.
3.4.2
Meeting participation:
Regular attendees:
■
Commission members
■
General Manager, Caisse centrale Desjardins
■
Senior Vice-President and Chief Financial Officer, Caisse centrale Desjardins
■
Vice-President, Financial Disclosure, Caisse centrale Desjardins
■
Chief Monitoring Officer, Desjardins Group
■
Head of the Internal Audit Division of the DGMO
■
Independent auditor
■
Person acting as secretary of the Commission
Other attendees:
■
The Commission may invite any individual from Desjardins Group to attend all or part of
Commission meetings, as it deems necessary or desirable.
The quorum for any meeting shall be a majority of members. However, if a quorum is no longer
present due to a requirement for one or several members to leave the meeting, quorum shall be
reduced to the number of voting members present for the duration of deliberations on that issue.
The Commission may include on the agenda for each meeting, or on an ad hoc basis, a
discussion period without managers or observers present.
Page 6
3.4.3
4.
The Commission carries out annual planning of its activities, including:
■
Annual activity plan of the Commission
■
Update of the Commission’s charter
■
Review of the organizational chart of Caisse centrale Desjardins to assess whether any
changes to the Commission’s activities are necessary
■
Confirmation of Commission members’ independence
■
Assessment of Commission members’ financial literacy
■
Performance assessments of the Commission and each of its members
■
Planning for member training on accounting/regulatory developments
DUTIES AND RESPONSIBILITIES
The Commission has the following duties and responsibilities:
4.1
Financial information
The Commission reviews, and recommends that the Board approve, the interim and annual
consolidated financial statements and MD&A, and ancillary documents. The Commission
ensures the quality and integrity of the presentation and reporting of financial information in
accordance with IFRS, and the use of adequate accounting procedures.
4.1.1
Quarterly and annually:
■
■
■
■
■
■
■
■
■
■
■
■
■
Determine whether the consolidated financial statements, including schedules, as applicable,
and the MD&A present fairly the financial position and the results and activities for the period
Assess the consolidated financial statements’ compliance with and application of IFRS.
Assess whether management uses the appropriate accounting practices, applied
consistently, and obtain the opinion of the independent auditor thereon
Verify whether accounting practices are comparable to those used in the industry or other
Desjardins Group entities
Review, with management and the independent auditor, the effects of adopting new
accounting policies
Review with management the significant decisions made in preparing the consolidated
financial statements and MD&A
Obtain a letter from management certifying the reliability of the results and use of appropriate
accounting practices (management representation letter)
Review and revise the processes regarding financial certification, the information disclosed
in the MD&A and the certificate signed by the Chairman of the Board and Chief Executive
Officer of Caisse centrale Desjardins and the Senior Vice-President and Chief Financial
Officer of Caisse centrale Desjardins that are to be included in the annual and interim public
filings of Caisse centrale Desjardins in compliance with Regulation 52-109
Pay close attention to complex or unusual transactions, particularly acquisitions,
discontinued operations and related party transactions.
Review, specifically, issues requiring subjectivity, such as the assessment of assets and
liabilities, provisions/reserves (including tax provisions) or other commitments
Review litigations and determine whether they are sufficiently provisioned
Ensure that materiality is adhered to
Ensure that the financial ratios are met and that the consolidated balance sheet is balanced,
as well as the Company’s liquidity and funding capacity indicators
Page 7
■
■
■
■
■
Review the press releases of significant financial information as well as any other significant
financial communications
Review the impact on the consolidated financial statements of new regulatory or accounting
measures as well as off-balance sheet structures
Review the independent auditor’s report accompanying the annual and interim consolidated
financial statements
Meet privately with the Senior Vice-President and Chief Financial Officer of Caisse centrale
Desjardins on a quarterly basis
Recommend that the Board approve the consolidated financial statements, MD&A and press
releases, as applicable
Pursuant to article 44 of the Act respecting the Mouvement Desjardins, the Commission must, if it
becomes aware of an error or misstatement in a financial statement, cause such statement to be
corrected and inform the Board thereof.
4.1.2
Annually, the Commission must:
■
■
■
■
■
Review the Annual Information Form including the information set out in Form 52-110F1,
Audit Committee Information Required in an AIF and recommend its adoption to the Board
Oversee the application and updating, as needed, of Desjardins Group’s material financial
information reporting policy and recommend its adoption to the Board
Ensure that adequate procedures are implemented to review public reporting of financial
information extracted or derived from the consolidated financial statements other than
information provided for in the documents stipulated in section 4.1 and periodically assess
the adequacy of such procedures
Review tax and tax planning issues that are material to the consolidated financial statements
Ensure that all taxes, income taxes and payroll deductions have been paid for Caisse
centrale Desjardins
4.1.3
Review prospectuses before their publication on issuance of securities and program renewals.
4.2
Internal controls
The Commission shall ensure that management has designed and implemented an effective
internal control system with regard to financial reporting, safekeeping of assets, detection of fraud
and compliance.
4.2.1
Direct management to design, implement and maintain internal control mechanisms,
including the controls for fraud prevention, identification and detection, and assess the
effectiveness thereof.
4.2.2
Review the actions of management following the recommendations made by the
independent auditor and the head of the Internal Audit Division of the DGMO regarding
internal controls.
4.2.3
Receive from management, the independent auditor, the Chief Monitoring Officer of
Desjardins Group, the head of the Internal Audit Division of the DGMO, the Vice-President,
Financial Disclosure, Caisse centrale Desjardins, as well as from other units, the regular
reports on major control deviations or the detection of fraud, including those involving
management, and how such shortcomings have been corrected.
4.2.4
Obtain from management an annual evaluation of the effectiveness of its internal control
system and mechanisms including the audit strategy for outsourced services, as well as the
audit results.
4.2.5
Review fraud detection and prevention programs and policies.
Page 8
4.2.6
Ensure procedures are in place for the receipt, retention and treatment of complaints
received regarding accounting, internal controls or audit matters and that reporting is
received thereon.
4.2.7
Ensure procedures are in place for the confidential and anonymous submission by
employees of concerns regarding questionable accounting or audit matters and that
reporting is received thereon.
4.3
Risk management
4.3.1
Work closely with the Risk Management Commission to ensure that material financial risks are
adequately managed and controlled, and discuss the steps taken to manage and report on such
exposures.
4.3.2
Obtain an opinion from the independent auditor, the Chief Monitoring Officer of Desjardins Group
and the head of the Internal Audit Division of the DGMO regarding financial reporting risks.
4.3.3
Meet annually or as needed in the performance of the Commission’s responsibilities with the
General Counsel, the Senior Vice-President, Technologies and Shared Services Centre and other
units of Desjardins Group, as required.
4.3.4
Meet privately on an annual basis, or as needed, with the General Manager of Caisse centrale
Desjardins.
4.4
Compliance
Ensure that Caisse centrale Desjardins has and applies a compliance management framework
that provides the Company’s Chief Compliance Officer with reasonable assurance that
regulations are adhered to and regulatory risks are effectively managed.
4.4.1
Ensure and maintain the independence of the Company’s Chief Compliance Officer.
4.4.2
Examine the Chief Compliance Officer’s reports on compliance management, the anti-money
laundering and anti-terrorist financing policy, and the adequacy of the Company’s compliance
framework
4.4.3
Ensure that it has sufficient resources to appropriately fulfill its responsibilities in respect of
Caisse centrale Desjardins.
4.4.4
Examine the DGMO’s reports on compliance and on the application and effectiveness of
compliance management mechanisms. Ensure that appropriate follow-up is carried out.
4.4.5
Receive the annual report of the Company’s Chief Compliance Officer.
4.4.6
Meet privately, on an annual basis or as needed, with the Company’s Chief Compliance Officer.
4.5
Regulators
4.5.1
Examine and follow up on relevant correspondence regarding requests or investigations
pertaining to internal controls and all other relevant reports issued by supervisors regarding
Caisse centrale Desjardins.
4.5.2
Examine regulatory filings deemed relevant that fall under the Commission’s purview and ensure
that their requirements are met.
Page 9
4.6
External audit
The independent auditor is directly accountable to the Commission. The Commission is directly
responsible for monitoring the work of the independent auditor engaged to prepare or deliver the
annual audit reports and interim review reports or provide other audit, review or attest services.
The Commission is responsible for assessing and monitoring the independent auditor's
independence and effectiveness.
In order to meet its responsibilities in that respect, the Commission must:
4.6.1
Ensure and maintain the independence of the independent auditor by:
4.6.1.1 Recommending its appointment and reappointment to the Board in accordance
with the Institutional Policy, “External Auditors of Desjardins Group”.
4.6.1.2 Establishing and recommending its compensation to the Board.
4.6.1.3 Approving beforehand all non-audit services provided to Caisse centrale
Desjardins in accordance with the Institutional Policy, “External Auditors of
Desjardins Group”.
4.6.1.4 Recommending policies to the Board and adopting specific procedures governing
procurement of non-audit services.
4.6.1.5 Ensuring management complies with the supply policy or rules in effect with
regard to awarding service contracts to its independent auditor.
4.6.1.6 Receiving a detailed quarterly list of the new engagements awarded by entity.
4.6.1.7 Having direct communication access.
4.6.1.8 Reviewing and recommending for Board approval the hiring policies in connection
with the current of former partners and employees of the current or former
independent auditor, as set out in the Institutional Policy, “External Auditors of
Desjardins Group.”
4.6.1.9 Overseeing the rotation of the engagement, concurring and other audit partners.
4.6.1.10 Reviewing and discussing with the auditor its internal independence policies and
procedures.
4.6.1.11 Receiving a confirmation of independence once a year from the independent
auditor, disclosing all relationships the independent auditor and his or her firm
have, within the exercise of related activities, with Caisse centrale Desjardins and
its related parties and that, in their professional judgment, may reasonably be
considered as likely to influence its independence.
4.6.2
Approve the scope of the annual audit plan and proposed approach.
4.6.3
Review materiality annually based on audit risks.
4.6.4
Examine its post-audit report and comment on such items as audit highlights, summary of
audit differences (corrected or not), quality of the accounting principles applied and work
on fraud.
4.6.5
Examine and ensure follow-up on the management letter or any other report addressed to
management.
4.6.6
Question the coordination of its work with that carried out by the Chief Monitoring Officer
of Desjardins Group and the head of the Internal Audit Division of the DGMO and the use
made thereof.
Page 10
4.6.7
Once each year, discuss with the independent auditor its internal quality control procedures and
the summary of its Canadian Public Accountability Board (CPAB) inspection results).
4.6.8
Discuss the recognition and presentation of certain transactions, estimates, decisions and
assumptions of management.
4.6.9
Resolve disputes between management and the independent auditor in connection with financial
reporting, as applicable.
4.6.10 Meet privately with the independent auditor on a quarterly basis.
4.7
Internal audit
The head of the Internal Audit Division of the DGMO receives his or her mandate from Desjardins
Group’s Audit and Inspection Commission (AIC) and from the subsidiaries’ audit
commission/committees. The Internal Audit Division’s responsibilities are defined by the AIC and
the subsidiaries’ audit commission/committees in connection with their oversight role.
The AIC and the subsidiaries’ audit commission/committees contribute to the assessment of
Internal Audit Division performance. The AIC approves the appointment or removal of the head of
the Internal Audit Division of the DGMO on recommendation by the Chief Monitoring Officer of
Desjardins Group. The chairs of the subsidiaries’ audit commission/committees are stakeholders
in the appointment or removal of the head of the Internal Audit Division of the DGMO.
To that end, the Commission must:
4.7.1
Ensure and maintain the independence of the head of the Internal Audit Division of the DGMO.
4.7.2
Challenge the strategies used to develop the annual internal audit plan.
4.7.3
Ensure that the annual internal audit plan focuses on the risks of the organization.
4.7.4
Approve the annual internal audit plan and any subsequent amendments made thereto.
4.7.5
Ensure the execution of the annual internal audit plan and receive, on a quarterly basis, an
adequate account of audit work performed.
4.7.6
Follow up on previous recommendations, findings and measures taken by management.
4.7.7
Coordinate its work with the independent auditor.
4.7.8
Resolve any disputes between management and the head of the Internal Audit Division of the
DGMO and review any difficulties identified during its work, while ensuring it has sufficient
resources and sufficient access to information to properly fulfill its responsibilities.
4.7.9
Meet privately with the Chief Monitoring Officer of Desjardins Group and the head of the Internal
Audit Division of the DGMO on a quarterly basis.
4.8
The finance team
In that respect, the Commission may:
4.8.1.
Where deemed necessary, address commentaries to the General Manager of Caisse centrale
Desjardins concerning execution of the mandate of the Senior Vice-President and Chief Financial
Officer of Caisse centrale Desjardins, within the scope of the Commission’s responsibilities.
Page 11
SCHEDULE C
INSTITUTIONAL POLICY
TITLE: External Auditors of Desjardins Group
Adopted in: June 2001
Last reviewed on: December 13, 2013
1. STATEMENT
This policy has the three following purposes:
a)
It sets out the administrative rules for selecting external auditors for Desjardins Group, the
Fédération des caisses Desjardins du Québec (Federation), the components and investment
funds, excluding Desjardins caisses in Québec and those of the Fédération des caisses populaires
de l’Ontario, and recommending their appointment to decision-making bodies.
b)
Although it is not a reporting issuer, Desjardins Group has elected to apply the practices set out in
Regulation 52-109, thereby demonstrating its intention to comply with best practices in financial
governance. Desjardins Group has implemented oversight mechanisms for services that may be
rendered by the external auditor of each of its entities. These protections complement those issued
by the profession, legislation and regulations, as well as accounting firms.
c)
Certain employment and other relationships between Desjardins Group and current or former
employees and partners of external auditors could compromise the independence and
effectiveness of the external auditors. Therefore, the nature of these relationships requires
clarification.
2. OBJECTIVES
This policy aims to meet the following three objectives:
a)
Develop an overall strategy for Desjardins Group covering the external auditor selection and
appointment process as well as rules for soliciting donations, sponsorships, partnerships and any
other type of contribution from the external auditors;
b)
Implement oversight mechanisms for services that may be rendered by the external auditor of each
of its entities;
c)
Implement rules for recruiting accounting firm personnel.
Page 12
3. TERMINOLOGY
In the context of a Desjardins Group approach, all the components and investment funds are subject to this
policy. Note that the combined financial statements of Desjardins Group are audited by the external
auditors.
Financial reporting oversight functions
The term financial reporting oversight functions covers functions where a person in that position can
potentially influence the content of accounting documents or any person is in charge of preparing these
documents, which include in particular the following positions and all similar functions.



Director
President and Chief Executive Officer
Senior Executive Vice-President, Desjardins Group and General Manager of the
Federation
Senior Vice-President, Finance and Chief Financial Officer
Chief Monitoring Officer
Chief Treasurer
Vice-President and General Counsel
Vice-President, Finance Division





Audit engagement team
The term audit engagement team includes all the partners, principals and professionals of the external
auditor participating or serving as “advisor” in an audit, review or attest engagement for Desjardins Group.
The advisory services are related to technical or industry issues, transactions or events.
4. POLICY COMPONENTS
4.1.
External auditor selection
4.1.1.
External auditor’s term of appointment
4.1.1.1.
Annually, the Audit Committee, in the case of reporting issuers, the Audit and Inspection
Commission (AIC) or the Board of Directors of the Federation, of each component or
investment fund, assesses, together with management, the quality of the external
auditor’s work, with a view to recommending its reappointment. If a component or an
investment fund decides not to reappoint the external auditor, such decision must be
referred to the AIC.
4.1.1.2.
After a period of five years, a more in-depth review of processes and the quality of the
external auditor’s work is carried out for all the components and investment funds. Upon
recommendation of the Audit Committee or the AIC, the Board of Directors of the
component in question shall decide on the matter.
4.1.1.3.
The external auditor shall be appointed by the components or the investment funds
every year.
Page 13
4.1.2. Request for proposals
The Board of Directors is responsible for deciding whether or not to issue a request for
proposals. If so, the Audit Committee and the AIC shall ensure that:

none of the accounting firms are in a legal dispute with any of the other investment funds
or components;

the selection criteria are clearly defined;
 a request for proposal template is used.
4.1.3.
Selection committee
To ensure that the selection process under a request for proposals is aligned with the policy
objectives and guidelines, the selection committee shall be comprised of the members of the
AIC and audit committees of subsidiaries as well as the Senior Vice-President Finance and
Chief Financial Officer and the Chief Monitoring Officer of Desjardins Group. An additional
non-voting member shall serve as coordinator. The committee shall consult the Senior
Executive Vice-President, Desjardins Group and General Manager of the Federation
regarding the request for proposals process.
The selection committee shall determine a rating scale for the following and other factors:

the expertise of the team proposed by the accounting firm, for the area of business;

the accounting firm’s capacity to meet the requirements of regulatory organizations;

the availability of resources;
 the range of services authorized and available;

4.1.4.
the audit fees.
Soliciting external auditors
Given the importance of protecting their independence and objectivity, the external auditors
shall be considered as suppliers with a privileged status. In this respect, the solicitation of
donations, sponsorships, partnerships and any other type of contribution could be
detrimental to maintaining such independence and objectivity.
Accordingly, any type of solicitation amounting to over $25,000, made directly or indirectly by
a Desjardins Group manager or by a member of the Board of Directors is strictly prohibited,
whether on behalf of oneself or an organization that he/she represents, unless authorization
is obtained from the AIC or the Audit Committee of the component or the investment fund in
question.
4.1.5.
Monitoring the application of the policy
4.1.5.1.
The AIC of the Federation shall monitor the awarding of engagements to external
auditors of components and investment funds subject to this policy.
4.1.5.2.
The Senior Vice-President, Finance and Chief Financial Officer, Desjardins Group shall
present the following to the AIC every year:
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
a report on the quality of services rendered by the external auditors, as assessed by
management and the Audit Committee of the AIC of each of the components and
investment funds;
 a summary of fees paid for the external audit.
4.1.6.
Exemptions
In the event of a request for exemption from the policy, excluding Section 4.1.5, the
component or the investment fund in question shall obtain prior authorization from the Board
of Directors of the Federation which shall consult with the AIC.
4.2.
Rules for awarding contracts for related services to the auditors of Desjardins Group
The current rules meet the requirements of securities regulations, particularly the provisions of
Regulation 52-110 adopted by the Canadian Securities Administrators, which set forth the
framework that applies to these services.
Therefore, where circumstances permit, one of the principles adopted is that Desjardins Group
will favour the use of accounting firms other than the component’s external auditor.
4.2.1.
Main threats to independence
According to the Canadian Institute of Chartered Accountants (CICA), certain interests,
activities and relationships, in the context of an audit engagement, can pose a threat or risk
to independence:
4.2.2.

Self-review threat:
When a practitioner provides assurance on his or her own work.

Self-interest threat:
When a practitioner could benefit from a (direct or indirect) financial interest in a client.

Advocacy threat:
When a practitioner promotes a client’s position or opinion.

Familiarity threat:
When a practitioner becomes too sympathetic to a client’s interests.

Intimidation threat:
When a practitioner is deterred from acting objectively by actual or perceived threats
from a client.
External auditor
4.2.2.1.
Federation
For the external auditor of the consolidated financial statements of the Federation and
the combined financial statements of Desjardins Group, these guidelines apply to all of
the services offered by the external auditor to all or each of the components of
Desjardins Group.
4.2.2.2.
Other components
For any component whose external auditor is not identified in Section 4.2.2.1, these
guidelines apply only to services rendered to that component by its auditor.
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4.2.3.
Authorized services
The external auditor may offer the following services:
4.2.3.1.
4.2.3.2.
Audit services

All services rendered in accordance with generally accepted auditing standards in
order to meet responsibilities associated with providing an opinion on the financial
statements, and reviewing annual reports as well as other regulatory reports of the
various entities of Desjardins Group.

Examining the financial statements and reviewing the quarterly financial reports.
Audit-related services
Assurance and related services provided by the external auditor that are related to the
audit or review of the financial statements, including:

audit of the employee benefit plans;

due diligence for mergers and acquisitions (safeguard required: specific
preapproval of the AIC);

accounting advisory services and acquisition-related audits;

internal control reviews (safeguard required: specific preapproval of the AIC);

attest services not required by legislation or regulations;

advisory services relating to financial accounting and financial reporting standards,
including opinions on the interpretation and application of generally accepted
accounting principles; (note: the external auditor may comment on opinions issued by
the component, but cannot issue its own opinion before the component has given its
own);

comfort letters;

translation of financial statements and other financial reports.
4.2.3.3. Tax Services
All services provided by the tax department of the external auditor.
However, preapproval is required for the following services:

tax minimization solutions;

advisory services respecting the taxation aspects of merger, acquisition and
restructuring strategies;

personal tax planning.
4.2.3.4. Other services
Other services include:

risk management services (safeguard required: specific preapproval of the AIC);
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4.2.4.

legislative or regulatory compliance services
preapproval of the AIC);

translation services.
(safeguard required: specific
Prohibited services
None of the services listed below may be provided by the external auditor:

bookkeeping and other services relating to the preparation of accounting documents and
financial statements;

creation and implementation of financial information systems that will be used to
generate information that will be integrated into financial statements;
 actuarial services;
4.2.5.

valuation services;

internal audit services or work usually carried out under the control of the internal
auditor;

management and human resources functions;

brokerage services, investment consulting services and investment banking services;

legal services in connection with the settlement of a dispute or litigation;

expert services in connection with a civil, criminal, regulatory, administrative or judicial
proceeding or investigation.
Exemption procedure
Only the AIC of the Federation may approve exceptions to this policy for each component of
Desjardins Group. Whenever necessary, it shall request the opinion of the Audit Committee
of the component in question.
This permission may be granted when it is deemed reasonable to believe that the results of
these services will not be subjected to audit procedures when the financial statements are
audited, that the said exceptions are in the best interests of Desjardins Group and will not pose
a threat to the independence of the external auditor.
4.2.6.
Approval process
4.2.6.1.
Annual audit plan
The Audit Committee or Commission of the component at issue shall review and approve
the annual audit plan submitted by the external auditor. The AIC shall do the same for
Desjardins Group. Any engagement to attest the financial statements shall therefore be
deemed approved by the AIC.
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4.2.6.2.
Specific responsibilities
4.2.6.2.1.
For the external auditor contemplated by the section
Under subsection 2.3(4) of Regulation 52-110 respecting audit committees of the Canadian
Securities Administrators, the AIC shall preapprove all non-audit services that the external
auditor of the consolidated financial statements of the Federation and the annual report of
Desjardins Group (combined financial statements) must provide to the components of
Desjardins Group.
4.2.6.2.2.
For the external auditor contemplated by section 4.2.2.2
The Audit Committee (AC) of the component shall preapprove all non-audit services that the
external auditor must provide to the entity.
4.2.6.3. Procedures
Note: For the purposes of this section 4.2.6.3, the expression “responsible AC” means,
where applicable, section 4.2.6.2.1 or 4.2.6.2.2.
4.2.6.3.1.
The responsible AC may delegate its preapproval power to one or several of
its members, provided that preapproved mandates are tabled at the
following meeting.
4.2.6.3.2.
The responsible AC may set guidelines and establish steps to be taken when
preapproving specific services. It may therefore authorize, annually or
quarterly, a preapproved expense limit per category of specific service
(e.g., accounting opinions, translation, etc.). To that end, management of the
component at issue shall be responsible for declaring to the responsible AC, on
a quarterly basis, all services awarded.
4.2.6.3.3.
Any new engagement that exceeds the scope of the annual recurring audit
engagement (authorized tax services, accounting advisory services, etc.)
shall be preapproved by the responsible AC.
4.2.6.3.4.
Management of the component to which the service is provided shall have
responsibility for obtaining preapproval from the responsible AC.
4.2.6.3.5.
Management shall be responsible for negotiating the best fees for the
annual audit engagement or any other authorized service.
4.2.6.3.6.
Management of each component of Desjardins Group shall be responsible
for submitting to the responsible AC, on a quarterly basis, a list of the
contracts awarded to other accounting firms not contemplated by the
guidelines set out herein.
4.2.6.3.7.
The VP, Internal Audit, Desjardins Group, in conjunction with management
of each component, shall monitor the cumulative use of services subject to
the preapproved limits of Desjardins Group and each component, and report
to the AIC and the Audit Committee of the component.
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4.3.
4.3.1.
Rules governing the recruitment of employees of public accounting firms
External auditor
For the external auditor of the consolidated financial statements of the Fédération des
caisses Desjardins du Québec and the annual report of Desjardins Group (the combined
financial statements), the rules apply to all of the external auditor’s employees having
participated on an audit engagement team for a Desjardins Group component. For the other
external auditors performing an audit engagement, the rules apply to the component
concerned only.
4.3.2.
4.3.3.
Prohibited relationships

The current partners, principals, shareholders and professionals of the external
auditor cannot be employees or serve on the boards of directors of
any Desjardins Group components.

An employee of the external auditor shall not participate on the audit engagement
team if the employee’s spouse, common-law spouse, child whether dependent or
not, father, mother, brother or sister has an accounting role or a financial reporting
oversight role with the entity being audited, or had such a position with the entity
during a period covered by an audit.
Restriction on recruitment
The former partners, principals, shareholders and professionals of the current and former
external auditor shall be prohibited from serving as directors or having an accounting role or a
financial reporting oversight role, unless the following four conditions are met:
4.3.4.

Does not exercise significant influence over the external auditor’s financial activities and
directives.

Does not have any debt payable to the external auditor.

Has not entered into any financial agreement with the external auditor, other than a
financial agreement providing for regular payments under a pension plan.

Has had no association with the Desjardins customer service team and has not
participated on the audit engagement team of Desjardins Group during the blackout
period.
Blackout period
The blackout period ends one year after the date on which the financial statements
appearing in the annual report of Desjardins Group were filed with a regulator for the
fiscal year including the recruitment date.
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4.3.5.
Preapproval
For financial reporting oversight roles, the AIC, on the recommendation of the Senior
Executive Vice-President of Desjardins Group and General Manager of the Federation, shall
approve the recruitment, except for directors of a Desjardins Group component, of any
person having been employed by the external auditor during the year preceding the audit
engagement.
The Governance Commission, in its role as Nominating Committee for directors of
subsidiaries, shall seek the advice of the AIC regarding the blackout period, to hire any
person having been employed by the external auditor during the year preceding the audit
engagement.
5. RESPONSIBLITIES, APPLICATION AND REVIEW
The Audit Committee or AIC of the component concerned is legally responsible for preapproving the
non-audit services of the external auditors of Desjardins Group, whether they are provided to Desjardins
Group or its components, as well as for recommending policies and adopting specific procedures for retaining
non-audit services. The AIC is further responsible for assessing and monitoring the independence and
effectiveness of the external auditors. This responsibility has been delegated to the audit committees of the
entities with regard to their respective external auditor.
The AIC shall monitor external auditor independence for all of Desjardins Group, with the exception of the
Desjardins caisses in Quebec. Each Audit Committee or Commission shall support it in this role. The
Board of Directors of a component that has no Audit Committee shall assume this role. In that respect, the
AIC of Desjardins Group or the Audit Committee of the component shall:

Ensure that management of the entity complies with the policy or supply rules in effect for that
entity as regards the awarding of contracts to its external auditor.

Receive from each external auditor, through the VP, Internal Audit, Desjardins Group, a detailed
list on a quarterly basis of new engagements awarded to them by each entity.

Receive a written confirmation of independence at least annually from each of the external
auditors, disclosing all relationships the external auditor and his or her firm have, engaging in all
activities ancillary or incidental to his or her audit work, with the entity and its related parties and
that, in his or her professional judgment, may reasonably be thought to bear on independence.
Note that the Board of Ethics and Professional Conduct has responsibility for monitoring the independence
and objectivity of the Desjardins Group Monitoring Office.
This policy shall be reviewed at least once every three years and shall fall under their purview of the SVP,
Finance and CFO, Desjardins Group.
6. DELEGATION
None.
7. EFFECTIVE DATE
This policy shall be effective on the date of its adoption by the Board of Directors.
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