SFIL Annual financial report 2018

Management report I 1 31 Annual Financial Report 2018 SFIL Management report Report on corporate governance Consolidated financial statements in accordance with IFRS Annual financial statements in accordance with French GAAP Shareholders’ Meeting of May 29, 2019 General information ing its case within the legal recourse framework provided for under current laws and regulations. As of the end of 2018, the tax authority had levied adjust‑ ments relating to the 2012 and 2013 tax audit. It neverthe‑ less reduced the amount of the adjustment relating to the add-back of the results of the former branch in Ireland, but maintained the principle of taxation of these results in France. Caisse Française de Financement Local settled this adjustment and reversed the relevant provisions. It kept in its accounts the amount of the provision set aside in respect of sums not yet paid. The 2018 accounting result consequently shows income corresponding to the provision’s adjustment. the former Dublin branch of Dexia Municipal Agency (CAFFIL’s former name), which closed in 2013, and, on an ancillary note, with the deductibility of provisions for non-performing loans. In order to safeguard its rights to the disputed adjustment, in 2017 the tax authority initiated a review procedure relating to the consequences on the taxable income for the 2014 to 2016 fiscal years of its previous audit, as a result of which it had canceled the loss for fiscal year 2013. This review upheld the two points of disagreement resulting from the 2015 tax audit. Caisse Française de Financement Local had set aside a tax provision to cover the eventuality of an unfavorable outcome. However, since 2016 it has contested the tax authority’s posi‑ tion on the results of the former branch in Ireland, present‑