Annual Report 2003 - Caisse des dépôts et consignations€¦ · Caisse des Dépôts Group 2...

Annual ReportFinancial Statements 0320

Caisse des Dépôts Group 2Consolidated balance sheet and income statement

Central Sector 56Balance sheet and income statement

Savings funds centralized by Caisse des Dépôts 84Balance sheet and income statement

FINANCIALSTATEMENTS 2003

ForewordThe 2003 financial statements include the audited consolidated financial statements of Caisse des Dépôts Group, the audited financial statements of Caisse des Dépôts’ Central Sector, presented in accordance with French banking regulations, and the audited financial statements of the savings funds centralized by Caisse des Dépôts.The financial statements of financial subsidiaries and other Group units and institutions managed by Caisse des Dépôts are not appended.

02 Caisse des Dépôts Group/// 2003 Annual Report

CONSOLIDATED FINANCIAL STATEMENTS

Notion of Group

The activities of Caisse des Dépôts et Consignations derive fromits original mission as the legal depository for private funds thatthe French legislature wanted to safeguard by ensuring that theywere managed in a way guaranteeing their protection.

The management of these funds, which are used to finance pub-lic-interest investments and assist local development in France,also led Caisse des Dépôts to become a major player in financialmarkets, which it does today through specialized subsidiariessubject to market conditions.

This entity forms a public and decentralized group, carrying outits business in France and internationally, specialized in finan-cial activities and services governed by public fiduciary obliga-tions or exercised freely in the competitive sector:

Public-interest missions

• management of passbook savings accounts and financing forpublic housing;

• fiduciary management of major public retirement programsfrom its decentralized offices in Angers and Bordeaux;

• regulated banking and financial activities;• support for local development, urban policy, job creation and

small and medium-sized businesses.

Competitive businesses

• Finance activities under the auspices of EULIA, the holding com-pany providing strategic governance for the competitive busi-nesses of the alliance between Caisse des Dépôts and the Caissesd’Epargne Group, in particular:(1) investment banking and financing activities with the CDC IXIS Group: capital markets and financing, asset mana-gement (financial, real estate and private equity), banking andsecurities services,(2) insurance and guaranty activities,(3) real estate activities, mainly with the Crédit Foncier de FranceGroup;

• life insurance with CNP Assurances;• services and engineering for local and regional development

through C3D’s subsidiaries.

In 2003, Caisse des Dépôts Group implemented several majorchanges and reforms. First, the strategy of Caisse des Dépôts wasclarified, the public-interest missions were strengthened andthe subsidiaries were developed through growth and partnerships.

Caisse des Dépôts was chosen to administer the supplementaryretirement plan for civil servants, and will soon acquire SociétéNationale Immobilière (SNI), a vehicle for selling off the State’sreal estate assets. Caisse des Dépôts will also commit €4 billionin loans from the Savings Funds to finance France’s major infra-structure projects.

Regarding the subsidiaries, the shareholders’ agreement forCNP Assurances was renewed for the long term. The partner-ship with Caisses d’Epargne will be restructured along solid andlasting lines, as Caisse des Dépôts becomes the strategic share-holder of France’s third-largest bank. The creation of CDCEntreprises will open up a full range of private equity financingto French small and medium-sized businesses.

Finally, Caisse des Dépôts has reaffirmed its commitment toserving as a long-term strategic investor in French companies.To that end, it has equipped itself with robust and transparentgovernance bodies, starting with an advisory committee for itsmajor holdings in listed companies, which is chaired by RenéBarbier de La Serre.

Underpinning this clear and transparent strategy, the organi-zation of Caisse des Dépôts has been streamlined and simpli-fied, with significant changes in the management team.

For purposes of accounting and financial presentation, Caissedes Dépôts Group’s activities are divided according to their twoprincipal missions:• the fiduciary management of the funds entrusted to Caisse des

Dépôts according to the rules defining the nature of the servicesprovided and the related financial conditions. These funds aremanaged individually and include, in particular, the SavingsFunds centralized with Caisse des Dépôts and the managementof public retirement funds;

• the direct activity performed by the Central Sector – Caisse desDépôts’ financial and administrative entity, managed sepa-rately from the operations under mandate – and by affiliatedgroups, notably EULIA, CDC IXIS, C3D and CNP Assurances,in France and internationally. This activity alone is consideredto constitute a group for the purpose of preparing consolidatedfinancial statements drawn up in accordance with accountingstandards applicable to credit institutions. The consolidatingentity is the Central Sector and, depending on the level of control,subsidiaries are consolidated under the full or proportionalmethod, or accounted for by the equity method.

This distinction is evidenced by the exclusion of the SavingsFunds and Retirement Funds from the scope of consolidation.Their financial statements are presented separately.

03

Introductory noteThe activities of Caisse des Dépôts et Consignations comprisetwo main missions:• the direct business of the Central Sector – the financial and

administrative entity of Caisse des Dépôts which is managedseparately from the operations under mandate – and of thesubsidiaries and long-term equity holdings attached to it, notably the CDC IXIS, C3D and CNP Assurances groups, andthe Caisse des Dépôts departments that have been spun offinto subsidiaries;

• the management of the funds entrusted to it. The accountingstructure of Caisse des Dépôts reflects the nature of the rela-tionships existing between the public institution and thesefunds. A series of legal, regulatory and contractual provisionsdefines the nature of the services provided by Caisse des Dépôtsand their remuneration. The accounting systems used makeit possible to identify the resources of each fund, their uses andthe earnings generated. Therefore, a balance sheet and anincome statement are drawn up for each fund. These funds,which consist mainly of savings funds centralized by Caissedes Dépôts, include deposits taken on the Livret A passbookaccounts of the Caisses d’Epargne, Livrets d’Epargne Populairepassbook accounts for low-income savers, the Livret Bleu pass-books accounts of Crédit Mutuel, CODEVI accounts and thedeposits collected by La Poste (Livret A, Livret B and CNE home-purchase savings plans). This mission also includes the man-agement of retirement funds and other organizations.

This section presents financial information relating to the firstof these missions: • the audited consolidated balance sheet and income statement

of Caisse des Dépôts Group;• the audited balance sheet and income statement of the Central

Sector reporting Caisse des Dépôts’ own activities.

Audit of the financial statements Although not a legal requirement given its status, Caisse desDépôts has chosen to have its financial statements audited in accordance with ordinary law in order to guarantee that the accounting and financial information provided is of the quality and transparency required by the nature and volume ofits activities.The independent auditors have issued unqualified audit opinions on the 2003 financial statements of the Central Sector andthe consolidated financial statements of Caisse des Dépôts Group.This is also the case, in particular, for the accounts of the savingsfunds, and of the CDC IXIS, C3D and CNP Assurances groups.These accounts have been published separately.



(Euro millions) Note 12.31.2003 12.31.2002

ASSETSInterbank and similar transactions 129,022 128,980

Cash, central banks and post office banks 4,317 3,844

Public-sector securities and similar 3 27,196 21,354

Advances and loans to financial institutions 1 97,509 103,782

Customer transactions 52,249 34,454

Overdrafts 2 1,882 2,867

Commercial loans 2 13 11

Other loans to customers, lease financing and similar agreements 2 50,354 31,576

Bonds, equities, other fixed and variable income securities 94,443 83,573

Bonds and other fixed income securities 3 72,295 65,425

Equities and other variable income securities 3 22,148 18,148

Investments of insurance companies 4 68,938 63,332

Long-term equity holdings, shares in related undertakings, other long-term investments 4,465 4,053

Long-term equity holdings 5 3,188 2,950

Investments accounted for by the equity method 6 1,277 1,103

Tangible and intangible fixed assets 7 5,296 5,557

Goodwill on acquisitions 8 731 896

Accruals, deferrals and other assets 9 24,362 28,346

TOTAL 379,506 349,191

LIABILITIESInterbank and similar transactions 120,173 126,740

Central banks and post office banks 47 12

Advances and loans from financial institutions 10 120,126 126,728

Customer transactions 68,819 43,658

Customer deposits 11 28,572 25,033

Other customer advances and loans 11 40,247 18,625

Debt securities 52,663 51,199

Cash certificates 12 – 1

Interbank and negotiable debt securities 12 30,712 29,802

Bonds and similar debt securities 12 21,951 21,396

Technical provisions of insurance companies 13 66,559 60,840

Accruals, deferrals and other liabilities 14 52,779 50,458

Goodwill on acquisitions 8 11 11

Provisions for risks and charges 15 976 829

Subordinated debt 12 2,034 1,315

Fund for general banking risks (FGBR) 16 795 676

Minority interests (excluding FGBR) 16 1,157 962

Group share of retained earnings (excluding FGBR) 16 13,540 12,503

Consolidated and other reserves 11,959 11,793

Income for the year 1,581 710

TOTAL 379,506 349,191

Consolidated balance sheet

05

Consolidated off-balance sheet commitments

(Euro millions) 12.31.2003 12.31.2002

Financing, guarantee and securities commitments given

Financing commitments

To financial institutions 6,136 6,577

To customers 19,884 20,833

Guarantees

To financial institutions 14,660 9,939


Securities transactions

Securities to be delivered 1,360 607

Commitments given by insurance companies 1,546 141

Financing, guarantee and securities commitments received


From financial institutions 10,526 10,308

Guarantees


From customers 10,058 2,056


Securities to be received 4,229 1,608

Commitments received by insurance companies 1,767 1,291

Other commitments

Other commitments given 21,655 19,356

Other commitments received 6,391 5,088



Consolidated income statement


Interest and similar revenues 10,042 10,399

Treasury and interbank transactions 20 3,351 4,779

Customer transactions 21 1,796 1,722


Other interest and similar revenues 2,214 1,436

Interest and similar expenses (9,674) (11,324)

Treasury and interbank transactions 20 (4,221) (5,656)

Customer transactions 21 (949) (916)

Bonds and other fixed income securities 22 (2,328) (2,548)

Other interest and similar expenses (2,176) (2,204)

Revenues from variable income securities 23 427 469

Commissions (revenues) 24 924 955

Commissions (expenses) 24 (252) (218)

Gains or losses on trading security transactions 25 1,274 1,534

Gains or losses on available-for-sale security transactions and similar 26 743 209

Other net operating banking revenues and expenses 27 279 404

Gross margin on insurance activities 28 802 750

Net income from other activities 29 1,699 1 607

NET BANKING INCOME 6,264 4,785

Operating expenses (3,475) (3,408)

Payroll expenses 30 (2,397) (2,300)

Other administrative expenses (1,515) (1,532)

Rebillings 437 424

Net amortization, depreciation and provision charges 31 (277) (232)

GROSS INCOME FROM OPERATIONS 2,512 1,145

Cost of risk 32 (208) (79)

NET INCOME FROM OPERATIONS 2,304 1,066

Net income from investments accounted for by the equity method 6 53 36

Gains or losses on fixed assets 33 105 31

RECURRING INCOME BEFORE INCOME TAX 2,462 1,133

Net non-recurring income (expenses) 1 6

Income taxes 34 (591) (377)

Net amortization of goodwill on acquisitions 8 (65) (231)

Net movement in FGBR (123) 266

Minority interests (103) (87)

NET INCOME 1,581 710

07

Notes to the consolidated financial statements

HighlightsCaisse des Dépôts Group recorded consolidated net income of€1,581 million in 2003, up 123% from the €710 million recordedthe previous year. This favorable performance was due to theoverall financial market rebound in 2003 and the absence ofnon-recurring expenses that negatively affected 2002 earnings(non-recurring provision charges on the long-term equity port-folio and goodwill amortization for CDC IXIS Asset ManagementNorth America).

For Caisse des Dépôts et Consignations, this result includesa €157 million write-back of provisions on the long-termequity portfolio, compared to a provision charge of €928 mil-lion in 2002.

Adjusted for these non-recurring factors, consolidated net incomerose by nearly 25% in 2003.

In addition to the favorable impact of rising markets on the hold-ings of Caisse des Dépôts related to its role as a long-term investor,last year CDC IXIS Group increased its earnings contributionby posting gains across all business lines.

In 2003, Caisse des Dépôts clarified its long-term managementstrategy and overhauled its organizational structure. To that end,Caisse des Dépôts and the Caisses d’Epargne Group signaledtheir intent to restructure the terms of their partnership througha memorandum of agreement signed on October 1, 2003.

Income statementNet banking income rose by 31% to €6,264 million, up from€4,785 million in 2002. This increase was largely driven by thecumulative impact of write-backs of provisions related to theportfolio securities business, thanks to the market rebound,compared with provision charges recorded in 2002. These write-backs added a total of €1,259 million to net banking income.Conversely, capital gains realized on these portfolios fell by €355 million year-on-year.

Growth in net banking income was also fueled by contributionsfrom Caisse des Dépôts et Consignations and CDC IXIS, whichrose by 32% at constant scope and exchange rates.

Gross income from operations climbed by 119% to €2,512 mil-lion, up from €1,145 million. This increase was significantlyhigher than that of net banking income as a result of the strictcontrol over administrative expenses, which rose by only 3% in 2003, compared with 7% in 2002. Last year thus marked thefirst tangible results of the stepped-up cost control effort, notablyat the Central Sector.

Net recurring income before income tax rose by 117% to €2,462 million, as the increase in cost of risk provision chargesfor the year was offset by higher income from companiesaccounted for under the equity method and gains on fixed-assetdisposals, which included the sale of the headquarters buildingof Crédit Foncier de France.

The tax charge rose by 57% to €591 million, driven largely bythe increase in pretax income, the lower portion of income tax-able at a reduced rate and unused tax loss carry forwards, as wellas the non-deductible nature of FGBR allocations.

The sharp decrease in goodwill amortization, which totaled only€65 million in 2003 compared with €231 million the previousyear, was due to the non-recurring goodwill amortization in 2002

on CDC IXIS AM NA LP and the impact of exchange rates in 2003, as the dollar depreciated against the euro.

In 2003, the FGBR made a negative contribution to consolidatednet income of €123 million, including €32 million for CDC IXISand €91 million for Crédit Foncier, compared to a positive contribution of €266 million in 2002 (including €259 millionfor CDC).

Consolidated net income totaled €1,581 million, up 123% relative to 2002

Caisse des Dépôts contributed €759 million to consolidated netincome, more than triple its €227 million contribution in 2002,and 48% of the total. EULIA-CDC IXIS contributed €488 mil-lion, up from €142 million in 2002, when CDC IXIS’s contri-bution was negatively affected by the non-recurring goodwillamortization on CDC IXIS AM North America. Adjusted for thisnon-recurring item, the contribution from EULIA-CDC IXISrose by 36%. Crédit Foncier de France’s contribution increasedby 18% to €85 million. CFF’s net income includes a significantcapital gain related to the sale of its headquarters building anda €200 million allocation to the FGBR. The other EULIA sub-sidiaries (Ecureuil Vie, Ecureuil IARD, EULIA Caution, etc.)contributed €42 million, up from €19 million in 2002. The contribution from CNP Assurances was up by 4% to €244 mil-lion, on a par with the prior-year figure. Despite a difficult economic environment at the beginning of the year, CNPAssurances performed well in 2003 by achieving its growth tar-gets in terms of revenues (+6%) and earnings (+2%). Moreover,the company’s embedded value reached a record level of €45.5

per share as of December 31, 2003, an increase of 8% on theyear. C3D’s contribution fell by 16% to €90 million. Adjustedfor consolidation scope effects in 2002 and 2003, however, thiscontribution increased by 5% to €91 million.



Balance sheetConsolidated total assets rose by 8.7% to €380 billion in 2003,an increase of €31 billion.

The changes in the balance sheet were not affected by any material changes in consolidation scope.

On the asset side, interbank transactions remained unchangedat €129 billion. The relative increase in the share of public-sector securities at the expense of financial institutions resultedmainly from the contribution of CDC IXIS.

Customer transaction volume increased by 51% to €52.2 bil-lion, or €17.8 billion in nominal terms. With ACOSS volumeup sharply, the Central Sector accounted for €11.8 billion of thisincrease, while CDC IXIS NA contributed €4.3 billion.

The Group’s securities portfolio rose by 12.9% to €94.4 billion,up from €83.6 billion in 2002. This increase involved both equi-ties and other variable income securities, which increased by€4.0 billion, and bonds and other fixed-income securities, whichwere up €6.9 billion.

Insurance company investments increased by 9%, or €5.6 bil-lion. CNP Assurances accounted for all of this increase, as itsassets under management increased by 8.5%.

On the liabilities side, interbank transactions were down 5.2%to €120.1 billion. The Central Sector and CDC IXIS accountedfor €2.6 billion and €3.4 billion of this decline, respectively.

The €25.2 billion increase in customer transactions was largelydue to the Central Sector, whose transactions were up €14.5 bil-lion, mainly attributable to the initial €11.6 billion deposit bythe Retirement Trust Fund (FRR), which was made in late 2003.CDC IXIS’s contribution increased by €10.7 billion. Customerdeposits totaled €68.8 billion.

Debt securities increased by 3%, or €1.5 billion, to €52.6 bil-lion as of December 31, 2003. This increase was largely due tothe €2.2 billion increase at CFF as a result of real estate bondissues through Compagnie de Financement Foncier.

Insurance company technical reserves totaled €66.6 billion asof December 31, 2003, up from €60.8 billion the previous year.CNP Assurances accounted for the bulk of this 9.4% increase,equivalent to €5.7 billion, which is related to the 9% increase ininsurance investments.

Provisions for risks and charges increased by €147 million to€976 million, mainly due to CDC IXIS, which accounted for€123 million of the total. Of the €92 million total increase inprovision charges by CDC IXIS, €29 million was for sector risksand €51 million was for default risk.

The FGBR totaled €795 million as of December 31, 2003. The€119 million increase resulted primarily from net chargesrecorded by CDC IXIS (€32 million) and CFF (€91 million).

After factoring in €1,581 million in net income for the period,€346 million paid out in the form of dividends and a €196 mil-lion decrease in retained earnings related to currency translationeffects (mainly due to the US subsidiaries), the Group share ofretained earnings totaled €13.5 billion.

09

Accounting principles used in preparing the consolidatedfinancial statements of Caisse des Dépôts GroupThe consolidated financial statements have been prepared inaccordance with generally accepted accounting principles appli-cable to French banking and financial institutions.

Principal policies for accounting and presentation of the consolidated financial statements

1 - Signature of a memorandum of agreement on restructuring the partnership between Caisse des Dépôts et Consignations and CNCE

On October 1, 2003, Caisse des Dépôts et Consignations and Caissed’Epargne Group signed a memorandum of agreement aimed atrestructuring their partnership on a new and lasting basis.

Under this agreement:• Caisse d’Epargne Group would operate all the banking activities

of the Alliance, including CDC IXIS and the activities currentlyheld by Compagnie financière EULIA;

• Caisse des Dépôts would own a strategic 35% stake in the newCNCE, which would consolidate all banking activities, and wouldhave a direct interest in the results of the Caisse d’Epargne savingsbranch network through the subscription of non-voting prefer-red shares;

• Caisse des Dépôts would acquire direct control over CDC IXIS’sportfolios of listed securities, private equity and real estateinvestments. It would also acquire CDC IXIS’s interest inSogeposte and a 65% majority interest in CDC IXIS PrivateEquity, the balance being held by CNCE.

The signing of a definitive agreement should take place in 2004.Therefore, this agreement has not had any impact on the 2003

financial statements.

2 - Changes in accounting methods

Credit risk CRC Standard 2002-03 of December 12, 2002 dealing with creditrisk for companies governed by the Comité de la RéglementationBancaire et Financière – CRBF (French Banking and FinanceRegulations Committee) – took effect on January 1, 2003. Someapplication methods for this CRC standard were set forth in theCNC’s November 21, 2003 statement on accounting for loansrestructured at non-market conditions and in opinion 2003-Gof the CNC Urgent Issues Task Force dated December 18, 2003

concerning methods for reclassifying non-performing loans toirrecoverable loans.

Credit risk can be defined as the potential loss arising from thefailure by a counterparty to fulfill its obligations. The credit riskarises once it becomes likely that the bank will not receive partor all of the amounts due under the contract, notwithstandingthe existence of guarantees and security deposits.

This standard applies to all credit-risk-bearing commitments:loans to financial institutions and customers, signature com-mitments, fixed income securities (in the available-for-sale orheld-to-maturity portfolios) and forward instruments traded overthe counter that have a positive market value. Information relatedto credit risk is given in Note 19.

LoansLoans are classified as non-performing once the credit risk arises,and in any event no later than three months after payments arepast due (six months for real estate loans and nine months forloans to local governments). Similarly, once a loan for a given counterparty is classified asnon-performing, all loans to that counterparty are classified asnon-performing under the contagion principle. For groups ofcompanies, the contagion principle is applied selectively.

The non-performing loans category includes irrecoverable loans.These include loans in default and some loans that have beenclassified as non-performing for more than one year.

Non-performing loans are classified as irrecoverable when theyrequire the establishment of a provision and when it is likelythat the loan will ultimately be written off. This analysis mustbe made while taking existing guarantees on these loans intoaccount.

Non-performing loans and irrecoverable loans may be reclassi-fied as performing loans when payments have resumed in asteady fashion for the amounts corresponding to the originalcontractual payment schedule and once the counterparty nolonger presents a default risk. They may also be classified asrestructured loans if debt has been rescheduled and followinga waiting period.

For loans with credit risk exposure, provisions are establishedto cover all projected losses on loans classified as non-perform-ing or irrecoverable.

A full provision is established on all outstanding, accrued andunpaid interest.

Once the loan is deemed to be definitively irrecoverable, a lossis recorded.

The new accounting measures discussed above have no impacton balance sheet and income statement items; nevertheless,supplementary disclosures to the notes to the financial state-ments are provided.

Restructured loans at non-market conditions are broken out separately, where applicable, in a specific sub-category for per-forming loans. At the time of the restructuring, the loan isrecorded at nominal value less a discount corresponding to theamount of forfeited interest. This interest differential will betaken into account in determining the lending margin on theloans concerned.

All restructured loans are immediately reclassified as irrecov-erable once the borrower fails to make scheduled payments.

As of December 31, 2003, there were no material restructuredloans at non-market conditions, and no interest differential wastherefore calculated to be taken into account for lending mar-gin purposes.



Securities and futuresThe accounting principles and methods of CRC Standard 2002-03 of December 12, 2002 dealing with the accounting treatment of credit risk for companies governed by the CRBF, described above for loans, also apply to fixed income securitiesand futures traded on over-the-counter markets.

These new accounting methods have no impact on the finan-cial statements, but they require additional disclosures in thenotes to the financial statements.

Inflation-indexed OATsIn the absence of specific regulations for credit institutions, theindexing effects on the face value of inflation-indexed OATs maybe recorded using one of the following methods: • at the time the bond is sold or reaches maturity; • spread over the bond’s term to maturity;• as income or expense for the period.

Beginning with the year ending December 31, 2003, Caisse desDépôts Group decided to use the example of the accountingmethod prescribed by Article R 332-19 of the Insurance Code,as amended by decree No. 2002-1535 of December 24, 2002, andto enter gains or losses related to the indexing of the face valueof the bonds to the consumer price index as income or expensesfor the year.

This change in accounting method increased opening retainedearnings as of January 1, 2003 by €4 million after taxes and grossincome for the year ended December 31, 2003 by €7.1 million.

Depreciation, amortization and impairment of assetsCRC Standard 2002-10 of December 12, 2002 related to the depre-ciation, amortization and impairment of assets is effective forfinancial years beginning January 1, 2005.

No entity of Caisse des Dépôts Group opted for early applicationof this standard, nor did they choose the option allowed by thestandard which consists of applying the component approachto major maintenance or repairs during the transition period.

However, in accordance with opinion No. 2003-F of the CNCUrgent Issues Task Force, approved December 12, 2003 by theCRC, the entities of Caisse des Dépôts Group recorded provi-sions for major repairs to real estate to cover so-called Category2 major maintenance expenses.

Application of this standard resulted in an €11 million provi-sion for major repairs. This amount, charged against openingretained earnings at January 1, 2003, is net of tax effects and corresponds to Category 2 expenses that are part of multi-yearmaintenance plans.

Retirement commitmentsThe CNC Urgent Issues Task Force opinion of January 21, 2004

provides guidelines on the accounting treatment of the conse-quences of the French Pensions Reform Act (act No. 2003-775

of August 21, 2003). Under the new rules, employees can electto retire before the age of 65, but cannot be required to do so bytheir employer. The statutory retirement bonus payable whenthey retire is subject to payroll taxes. However, in light of calcu-lation assumptions applied previously, these modifications donot have a material impact on the provision amounts in theCaisse des Dépôts Group financial statements.

Consolidation principles and policies

1 - Consolidation methods and scope of consolidation

The consolidated financial statements include the accounts ofthe Central Sector of Caisse des Dépôts et Consignations, theconsolidated accounts of the sub-groups and the accounts ofsubsidiaries, whenever their consolidation is material to the consolidated accounts of the entities included in the scope ofthe consolidation.

Those companies whose contribution to the results of the sub-group to which they belong is considered material, and newlyformed or acquired companies for which strong growth isexpected, are also consolidated.

Full consolidationUndertakings over which the Group exercises exclusive controlare fully consolidated.

Exclusive control is defined as the ability of an undertaking to dir-ect the financial and operational policies of another undertaking with a view to gaining economic benefits from its activities.

It results from the ownership of more than one half of the voting rights of an undertaking, or from the appointment fortwo successive years of more than one half of the members ofthe governing bodies, or from the power to exert a dominantinfluence by virtue of company by laws or agreements.

Proportional consolidationCompanies over which the Group exercises joint control are pro-portionally consolidated.

Joint control is defined as sharing of the control of an under-taking jointly run by a limited number of partners or share-holders, such that the financial and operating policies resultfrom their agreement.

11

Equity method consolidationUndertakings over which significant influence is exerted areaccounted for under the equity method. Significant influenceresults from the ability to take part in determining the financialand operational policies of an undertaking without exercisingcontrol.

Special case of ad hoc entitiesWhen the Group or a Group company controls an undertakingin substance, notably by virtue of contractual agreements or provisions in company bylaws, the undertaking is consolidatedeven if there is no ownership of shares. The existence of controlin substance is assessed using the following criteria, as definedby CRC Standard 99-07: decision-making and management powers in respect of the daily operations of an ad hoc entity or in respect of its assets; and the ability to obtain the majorityor all of the economic benefits and be exposed to a majority ofthe risks.

Entities that carry out their activities under a fiduciary relation-ship, where management is carried out on behalf of third par-ties and in the interest of the various parties involved, are notconsolidated.

The following types of companies are not consolidated: semi-public companies (SEMs and SAIEMs) and public housing cor-porations (HLMs), for which access to their assets and profits isrestricted. As regards insurance activities, controlled pooledinvestment vehicles and transparent companies with propertyrental activities representing policyholder liabilities are not consolidated.

The accounts of consolidated entities are generally prepared toDecember 31. Companies preparing their accounts more thanthree months before or after this date are consolidated usinginterim accounts at December 31.

2 - Changes in the scope of consolidation

As of December 31, 2003, the scope of consolidation comprisedthe Central Sector of Caisse des Dépôts, 23 ad hoc entities (ofwhich six venture capital funds and similar entities), a debt securitization fund and 790 other direct and indirect subsidiaries,representing an overall total of 815 entities, compared with 857 one year earlier.

The most significant consolidation changes at Caisse des Dépôtslast year were as follows:

CNCE sub-group• Acquisition during the second half of 2003 by CNCE of a 60%

stake in the French subsidiary of Sanpaolo IMI, consisting of13 companies.

• Consolidation of Océor, a group of 13 companies consisting ofretail banks whose activities are mainly in the French overseasdepartments and territories.

CDC IXIS sub-group• CDC IXIS’s acquisition of a 38.7% stake in Nexgen Financial

Holdings Group, which specializes in high-value-added financial engineering transactions, was completed in late December 2002. This group was not consolidated as of December 31, 2002, given its non-material impact on the financial statements of CDC IXIS Group at the time. As of January 1, 2003,this group is accounted for under the equity method.

• In accordance with the laws of certain U.S. states regardingownership of insurance companies operating in their juris-diction, the shares of CDC IXIS Financial Guaranty NorthAmerica were transferred on September 20, 2003 to a votingtrust, with the approval of the New York State InsuranceDepartment. Under the voting trust agreement, two of the fivetrustees must be employed by CDC IXIS and two by CDC IXISFinancial Guaranty Services. In addition, three of the trusteesmust be residents of the United States. Under the voting trustagreement signed on September 17, 2003 by the five trusteesas well as CDC IXIS Financial Guaranty North America andCDC IXIS Financial Guaranty Services, the shares of CDC IXISFinancial Guaranty North America will be owned by the trustees. However, CDC IXIS Financial Guaranty Services continues to control all related revenues and expenses. As aresult, CDC IXIS Financial Guaranty North America remainsfully consolidated in the financial statements of CDC IXIS Groupand proportionally consolidated in the financial statements ofCaisse des Dépôts Group.

C3D sub-group• Sale of Médica France, consisting of 69 companies offering

assisted living residences and a subsidiary of Icade Group.

CNP Assurances sub-group• Sale of Carivita in the first half of 2003.

3 - Goodwill and fair value adjustments

When an undertaking is consolidated for the first time, the dif-ference between the cost of acquisition of the shares and thetotal restated value of the assets, liabilities and off-balance sheetitems constitutes goodwill on acquisition.

The difference between the value retained for an item in the con-solidated balance sheet and its carrying value in the individualbalance sheet of the acquired undertaking constitutes a fair valueadjustment. These differences are amortized, written down orwritten back to income using the rules normally applicable tothe corresponding items.

Goodwill on acquisition, which may be positive or negative, isamortized through the income statement over a period thatreflects the assumptions made and the objectives set at the timeof the acquisition, but does not exceed twenty years allowing forexceptions.

If material unfavorable changes occur affecting the assumptionson which the amortization schedule is based, the rate of amor-tization of goodwill on acquisition should be increased.



4 - Deferred taxes

Deferred taxes are recognized when a temporary difference isidentified between the restated carrying amount and the tax baseof assets and liabilities.

They are calculated using the liability method, whereby deferredtaxes from prior years are adjusted to account for changes in taxrates. The corresponding impact is recognized under deferredtax in the consolidated income statement.

The deferred tax rates applied in 2003 for France were 35.43%for the full rate and 20.20% for the reduced rate. These rateswere unchanged from 2002.

Deferred taxes are calculated separately for each tax entity. Inaccordance with the rule of prudence, deferred tax assets are recognized only if there is a strong likelihood that they may beset against future tax liabilities.

Certain directly and indirectly held Group entities make up consolidated tax group.

5 - Foreign currency translation

Balance sheet items and off-balance sheet commitments offoreign companies are translated at the year-end rates, with theexception of equity capital, which is maintained at the histori-cal rate. Income statements are translated on the basis of theaverage exchange rates during the year. The resulting differencesare entered in consolidated reserves under “Translation reserve.”

6 - Intra-Group transactions

Intra-Group accounts as well as income and expenses resultingfrom transactions within the Group are eliminated on consoli-dation whenever they relate to fully or proportionally consolidatedsubsidiaries.

Securities issued by Group companies are also eliminated fromthe balance sheet if they are not part of the trading portfolio.

7 - Rental and leasing transactions with purchaseoption and lease-financed goods

Rental and leasing transactions are entered in the companyaccounts according to their legal nature.

Under accounting regulations, transactions that are in fact com-parable to credit transactions must be restated in the consoli-dated financial statements in such a way as to recognize theireconomic purpose.

Rental and leasing transactions with a purchase option are there-fore entered on the consolidated balance sheet with the out-standing amount determined using the so-called financialmethod. The unrealized reserve, which consists of the differencebetween the reported amortization and the financial amortiza-tion of the invested capital, is entered in consolidated reservesnet of deferred taxes.

Fixed assets acquired through a lease or similar agreement arerestated for the purpose of consolidation and entered on the bal-ance sheet as if they had been acquired through borrowing.

Presentation and accounting policiesBanking and financial activities

1 - Income statement items

Interest and commissions classified as such are recorded on an accruals basis. Commissions not classified as interest arerecorded on a cash basis.

2 - Foreign-currency-denominated transactions

Foreign-currency-denominated assets, liabilities and off-balancesheet commitments have been translated at exchange rates onDecember 31, 2003.

Currency gains and losses from ordinary currency transactionsare recorded in the income statement.

Spot foreign exchange transactions are valued at the spot rate.Forward currency transactions, other than hedging, are valuedat the forward rate of the remaining period. Forward currencytransactions for hedging purposes are valued by symmetry withthe item hedged.

Premiums and discounts related to hedged foreign currencytransactions are taken as income and expenses over the periodremaining until the maturity of these transactions.

3 - Advances and loans to financial institutions and customers

These items include loans, overdrafts and securities purchasedunder collateralized and uncollateralized fixed resale agreements.

LoansLoans are recorded as assets in the balance sheet at redemptionvalue. Accrued interest is recognized as income over the life ofthe loan.

Loans are now accounted for in accordance with the principlesof CRC Standard 2002-03 of December 12, 2002 dealing withcredit risk for companies governed by the CRBF, which took effectJanuary 1, 2003 and whose application was further complementedby various opinions of the Urgent Issues Task Force and a statement by the CNC. These accounting principles and methodsare presented above in the section on changes in accountingmethods.

Securities purchased under collateralized and uncollateralized fixed resale agreementsThese securities are recorded as assets in the balance sheet onthe line representing the receivable arising from the transac-tion. The corresponding income is recognized on an accrualsbasis. Securities received as collateral and subsequently sold arerecorded as liabilities and valued at market value.

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4 - Securities and securities transactions

Securities are classified under accounting categories corre-sponding to the institution’s activities.

Trading securitiesTrading securities include in particular Treasury bills and negotiable debt securities. They are expected to be held for periods not exceeding six months. They are highly liquid and aremarked to market. Valuation differences are recognized in theincome statement.

When the Group is in a market-making position and the security is actively traded, these securities may be held in thetrading portfolio beyond the regulatory period of six months.This is also the case when these securities are under specializedmanagement to hedge instruments valued on a marked-to-market basis.

Available-for-sale securitiesAvailable-for-sale securities represent securities that are not tobe held until maturity or for trading purposes. They also include,except in the case of market-making activities, trading securitiesreclassified after being held for a period of more than six months.In this case, the reclassification is made at market value on thedate of the transfer.

Available-for-sale securities are treated according to the FIFOmethod and are valued as follows:• bonds and equities: unrealized losses calculated based on their

year-end closing price are taken to expenses through a provi-sion for impairment;

• Treasury bills, negotiable debt securities, and interbank instruments: provisions are made on the basis of the individualsituation of the issuer and market indicators.

Any premiums and discounts are written off over the residuallife of the asset on a yield-to-maturity basis for negotiable debtsecurities and on a straight-line basis for other securities.

Held-to-maturity securitiesThis portfolio comprises fixed income securities that are intendedto be held until maturity, and financed with dedicated long-termresources or covered through hedging instruments.

Unrealized capital losses resulting from differences betweenbook and market values are not covered by provisions. However,if applicable, default risks are taken into account in determiningthe value of these securities at year-end. The difference betweenthe acquisition price and the redemption value of the securities(premium or discount) is amortized using the yield-to-maturitymethod for negotiable debt securities and the straight-linemethod for other securities.

Portfolio securities (TAP)Portfolio securities are investments made on a regular basis withthe aim of realizing a capital gain in the medium term butwithout the intention of investing on a long-term basis in thedevelopment of the business or taking an active part in the operational management of the issuing undertaking.

These securities are recorded at cost.

A provision is taken in respect of any permanent impairmentin the value of the security due to a fundamental deteriorationin the undertaking’s position.

Fair value is determined taking into account the general eco-nomic outlook for the issuer and the remaining period for whichthe securities will be held. It is calculated using a multi-criteriaapproach, with a predominant role given to the market priceover a sufficiently long term.

Non-consolidated equity securitiesNon-consolidated equity securities are recorded at acquisitioncost.

They are valued on the basis of their fair value, with referenceto various criteria such as net assets, potential return, and capitalization of earnings. Provisions are constituted to reflectany permanent impairment in the fair value of these securities.

Lending and borrowing of securities Securities are valued using the rules applicable to the portfolioof origin.

Borrowed securities are recorded as an asset under trading secu-rities at their market value on the day they were borrowed, andas a liability to recognize the debt towards the lender. They arevalued on the basis of their year-end market value.

Loans and borrowings guaranteed by cash and notes are treatedin the same way as collateralized resale agreements.

Income from these transactions is recognized on an accrualsbasis in the income statement.

Issues indexed on fund performanceThese consist in structured issues, the most often with a zerocoupon in fine, that are indexed on fund performance. The indexis hedged by the purchase of units in the fund whose perfor-mance accrues entirely to the subscribers at maturity.

The overall financial engineering margin on these transac-tions is estimated by reference to the market value of the unitsin the fund and the present value of future cash flows relat-ing to these issues as well as to future management expenses.As required by applicable regulations, extremely prudentassumptions are used regarding early redemption when thevaluation is based on models.



5 - Forward financial instruments

In application of the strategy defined for the development of itstrading activities and the management of market risks, Caisse des Dépôts Group operates on all organized and over-the-counter markets for interest rate, currency and equity futuresand options. In France as well as abroad, these transactions areentered into as part of specific or general hedging, or in connec-tion with specialized management of trading portfolios.

For all of these instruments, whatever the management policypursued, the face value of the futures and options contracts, thevalue of the underlying assets, or the exercise price is recordedin the off-balance sheet.

The method of accounting for expenses and revenues on theseinstruments depends on the management policy pursued.

Interest rate and currency swaps• Hedging transactions: expenses and revenues resulting from

hedging instruments (taken singly or as a homogeneous group)are recognized symmetrically with the revenues and expensesresulting from the transaction hedged.

• Specialized portfolio management transactions: contracts arevalued at year-end at their market value. In accordance withregulations, the market value takes into account an adjustmentfor default risks and the discounted value of future manage-ment costs. The total net valuation difference is recognized inthe income statement.

Other interest rate and currency transactionsThese transactions relate primarily to futures and options.• Hedging transactions: expenses or revenues are recognized in

the income statement on a symmetrical basis with the revenuesor expenses on the transaction hedged.

• Other transactions: these transactions are marked to market.Unrealized gains or losses at year-end are recognized in theincome statement.

In order to give a fair view of the value of these instruments,those that are not highly liquid are also valued by reference totheir theoretical market value.

Complex transactionsComplex transactions include derivatives, which combine repackaged instruments of various types, characteristics and pricing methods.

Each component of the transaction is recorded in the on- or off-balance sheet according to the nature of the underlying.

The result is considered globally and recorded through one entryreflecting the economic nature of the transactions, as if theywere a single instrument. In the case of totally new products,when not governed by explicit regulation, the accountingapproach for recognition of any gains and losses is based on similar existing products.

The method of accounting for gains and losses depends on themanagement policy pursued:• hedging transactions: for reasons of prudence, notably when

market liquidity is low, results are recorded on an accruals basis.A provision is made when market value is negative;

• trading portfolio or transactions for which the result can be con-sidered as an arrangement fee: the result is recognized when thetransaction is initiated. A discount is applied to take into accountfuture management expenses and possible default risks.

Credit derivativesCredit derivatives are instruments whose purpose is to transferthe credit risk in respect of an asset from one counterparty toanother, generally in exchange for a premium paid at the outsetor by installments. In the case of events predefined in the relatedcontract, known as credit events, the seller of the cover is calledupon to bear the cost under the terms defined in the contract.

There are three categories of credit derivatives: credit defaultswaps, total rate of return swaps and credit linked notes that canbe likened to options, interest rate swaps and securities swaps,respectively.

In the absence of a specific accounting text, the accountingapproach for credit derivatives is based on their analogy to exist-ing products with which they can be likened and taking intoaccount the management policy being pursued:• hedging transactions: expenses and revenues are recognized

symmetrically with the revenue and expenses on the transac-tion hedged;

• isolated open position transactions undertaken as part of a long-term holding: the result is booked on an accruals basis. A provi-sion is made against unrealized losses;

• specialized portfolio management transactions: when marketliquidity for the derivative is ensured, contracts are valued atmarket price with a discount applied to take into account pos-sible default risks and the present value of future managementexpenses. Otherwise, contracts are valued using the applicableregulations for the underlying transactions, which involvesvaluing them at cost and, where necessary, establishing a pro-vision for impairment.

Market valuesWhen the market price of the instruments or the valuation para-meters are not officially quoted, alternative valuation methodsare used, making reference to one or more of the followingcomponents: price confirmation by brokers or outside counter-parties, comparison with actual transactions and research byissuer or instrument category.

When instruments are valued using models, these integrate theparameters that affect the valuation of the instruments, in par-ticular the liquidity level of the related markets. Applying a pru-dent approach, the calculations are adjusted to take account ofthe weaknesses of some of these parameters, in particular theirrelevance over a long period.

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6 - Tangible and intangible fixed assets

Fixed assets are valued at cost. In the case of buildings, initialfixtures, fittings and installation expenditure may be added tothe cost of acquisition.

Depreciation is calculated using the straight-line method andaccording to the type and quality of the building, over its esti-mated useful life. Thus, buildings are depreciated over twentyto fifty years. Partial renovation work on old buildings is depre-ciated over periods of between fifteen and twenty-five years.

Installations, improvements and fittings are generally writtenoff over ten years.

Market shares acquired are not amortized. They are, however,periodically subjected to an impairment test based on the valua-tion of the benefits arising from the competitive position held.

As for insurance activities, the surplus value of the contractsportfolio, which corresponds to the estimated present value offuture distributable profits attributable to the portfolio at thetime of the acquisition, is depreciated for like groups of con-tracts using a schedule that is updated regularly and reflects thelikelihood of future profits over a reasonable period.

As a general rule, software is written off over three years (maxi-mum of five years).

Forests are subject to provisions for impairment as required. Inthe event of an irreversible loss, an exceptional depreciationcharge is taken for the amount of the loss.

7 - Investment property risks

Caisse des Dépôts Group owns a large portfolio of rental propertiesheld as long-term investments.

Market values are determined regularly by independent appraisers. A provision is booked for any permanent impair-ment in value of these properties, representing the differencebetween carrying value and market value.

8 - Advances and loans from financial institutions and customer deposits

These liabilities include deposits, loans and securities sold undercollateralized and uncollateralized fixed repurchase agreements.

LoansLoans are recorded in the balance sheet at redemption value andaccrued interest is charged to income over the life of the loan.

Securities sold under collateralized fixed repurchase agreementsThe debt is recorded under liabilities. The securities are main-tained in their original portfolio and valued according to therules applicable to that portfolio. The corresponding interest isrecognized through the income statement as it is accrued.

9 - Debt securities

Debt securities are reported according to the type of security:interbank and negotiable debt securities (commercial paper, cer-tificates of deposit and medium-term notes), bonds and similardebt securities.

Accrued interest is recorded on the same balance sheet line asthe debt security and is charged to income.

Commissions on the issue of debt securities and any premiumson their issue or redemption are charged to income over the lifeof the securities.

10 - Provisions for risks and charges

This heading includes:• provisions for country risk, which are determined based on an

appraisal of the risk carried by the Group in the respective coun-tries or on borrowers in those countries; the appraisal criteriaare generally based on an assessment of the country’s eco-nomic, financial and socio-political situation;

• provisions for sector risks and general provisions to cover losseswhose realization and valuation are uncertain;

• provisions for pension-related commitments correspondingmainly to retirement benefits and expenses related to the establishment of framework agreements to organize early andgradual cessation of activities within various Group entities;

• provisions for risks and charges not related to banking trans-actions, established in accordance with the terms of CRCStandard 2000-06 regarding the accounting for liabilities. Theseprovisions are intended to cover risks and charges that are clearly defined but whose amount or timing remainsuncertain. The establishment of these provisions is subject tothe existence of an obligation to a third party at year-end, andthe absence of at least an equivalent consideration from thisthird party. This standard does not cover, in particular, banking transac-tions, financial instruments and insurance contracts in force;

• provisions for default risks established among the Real EstateDivision’s subsidiaries cover the scope of sound commitmentsentered on the balance sheet or as off-balance sheet commit-ments, for which statistical information is available that makesit possible to assess default probabilities. These provisions aredetermined by applying multiples segmented by rating cate-gory and residual term, and weighted by recovery assumptionsin the event of a default. In particular, they cover potential riskson office space, financial institutions, the local and regionalpublic sector and structured financing;

• provisions for major repairs established in accordance withCRC Standard 2002-10 related to the depreciation, amortiza-tion and impairment of assets and whose application methodsare described in the section on changes in accounting methods.



11 - Pension and related committments

In France, pension liabilities are generally covered by contribu-tions taken as expenses and paid to retirement or insurancefunds, which then handle pension payments, or by the gov-ernment in the case of civil servants.

Provisions are made in respect of the rights of employees to apayment on retirement that are not covered by insurance contracts, for each category of employee based on collective bargaining agreements. These provisions are calculated usingan actuarial method taking into account the age and seniorityof the personnel, the mortality rate and probable remaining service with the Group until retirement age and estimated futuresalary levels. This provision is adjusted each year based onchanges in the actuarial liabilities.

When these commitments are covered by an insurance policy,the annual premiums paid are included in expenses for theperiod.

In countries other than France, there are various compulsoryretirement plans to which employers and employees pay con-tributions. Depending on each case, the corresponding com-mitments are paid to company pension funds or recognized inthe individual accounts of the companies concerned. No restate-ments are made in this respect in the consolidated financialstatements.

Commitments related to bonuses awarded for work medals orCaisse des Dépôts medals are calculated using the same methodas is used to determine commitments for retirement indemnities.

12 - Subordinated debt

This category includes debts whose repayment in the event ofliquidation of the debtor would occur only after other creditorshave been repaid.

Accrued interest payable is carried in a debtor account andcharged against income.

13 - Fund for general banking risks

This fund is constituted to cover operational risks and losses arising from banking activities and the management of finan-cial assets that are not covered by general or specific provisions.Transfers are made to and from this fund on a regular basis tocover these risks.

14 - Other information

Some of the previous year’s figures have been restated from thefigures reported in 2002.

Principal accounting and presentation policies – Insurance business Accounting policies and valuation methods specific to insuranceactivities have been maintained in the consolidated financial statements of Caisse des Dépôts Group.

Caisse des Dépôts Group applies CRC Standard 2000-05 regardingrules for consolidating companies governed by the InsuranceCode.

Constituent items of the consolidated financial statements of insurance companies are presented on the lines of the balancesheet, income statement and off-balance sheet that are of the samenature, with the exception of the following items:

Investments of insurance companiesInvestments of insurance companies include real estate, investmentsrepresenting unit-linked policies and various other investments.

Real estate investments are shown in the balance sheet at acqui-sition cost, net of acquisition expenses, but increased to reflectthe cost of improvements and certain taxes. Properties are depre-ciated over their estimated useful life. The estimated value of properties is based on reports produced by independent appraisers. A provision is recognized in the event of permanentdiminution in value.

Investments allocated to unit-linked policies are reassessed atthe year-end by reference to variations in related unrealized capital gains or losses. Technical liabilities relating to these poli-cies are similarly reassessed.

Equities and other variable income securities are recorded at cost excluding expenses. A provision for impairment is established to cover permanent impairment of the securities,determined relative to the estimated recoverable amount.

Marketable securities and other fixed income securities arerecorded at cost excluding accrued income. The differencebetween the redemption value of these securities and their cost,excluding accrued income, is allocated on an actuarial basis overthe remaining term to maturity. A provision is established inthe event of a default risk on the part of the issuer.

Moreover, when the net book value of the real estate investmentsand variable rate securities exceeds the realizable value of theseassets, a provision for the call risk of the technical commitments,which is equal to the difference between these two amounts,must be established.

Technical provisions of insurance companiesTechnical provisions correspond to commitments to policy-holders and beneficiaries.

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Life insurance and capitalizationFor policies including whole life insurance, the provision takencomprises the share of written premiums not earned in theperiod concerned.

The mathematical provisions relating to premiums on policiesdenominated in monetary terms correspond to the differencein the present value of the liabilities of the policyholder and ofthe insurer.

Life insurance provisions are set aside using a discount rate notexceeding the expected return, prudently estimated, on the assetsrepresenting these provisions.

Liabilities are discounted applying a rate that is at the most equalto the rate of the policy concerned, and using published mor-tality rates or actual mortality tables if these are more prudent.

An overall provision is made for the amount of the total futuremanagement expenses of policies not covered by expenses leviedon premiums or on the financial income generated thereon.

When remuneration in excess of the minimum guaranteed rate,based on the results of technical and financial management, isdue to the policyholders and has not been distributed to themduring the period, this remuneration is included in the provi-sion for profit-sharing payments.

The provision for claims payable includes outstanding claimsand capital due at the year-end.

Mathematical provisions in respect of unit-linked policies areassessed on the basis of the assets underlying these policies.

Disability, accident and health insuranceA provision is taken for incremental risks to cover timing differ-ences between the time when guarantees are acquired by poli-cyholders and when they are financed by insurance premiums.

Provisions for claims are based on the estimated value of fore-seeable expenses net of any recourse recovery.

Non-life insuranceNon-life insurance technical provisions comprise provisions forunearned premiums (share of premiums issued that correspondto subsequent years) and provisions for claims payable.

Gross margin on insurance activitiesThe gross margin on insurance activities comprises earnedincome from premiums and contributions, the cost of benefits(including changes in technical provisions) and net investmentincome.

Recording of movements in the liquidity risks reserve of insurance companiesIn 2002, CNP Assurances added €504 million to the liquidityrisks reserve (€217 million attributable to Caisse des DépôtsGroup), which were maintained in the consolidated financialstatements. These provisions were written back in full in 2003

in the context of the financial market recovery. This write-backwas recorded as income in accordance with the CNC’s UrgentIssues Task Force opinion of January 21, 2004, which followedthe decree of December 22, 2003.

Principal accounting and presentation policies – Service sector businessesAccounting policies and valuation methods specific to servicesector businesses have been maintained in the consolidatedfinancial statements of Caisse des Dépôts Group.

Constituent items of the financial statements of service com-panies are presented on the lines of the consolidated balancesheet, income statement and off-balance sheet that are of thesame nature.

One specific line only has been added, entitled “Net income fromother activities” in the intermediate management balances. Netincome from other activities comprises mainly sales and otheroperating income, less purchases consumed.

Note 2 - Customer transactions (assets)

(Euro millions) 12.31.2003 12.31.2002

Overdrafts 1,876 2,866

Non-performing loans 13 9

Provisions (7) (8)

Overdrafts 1,882 2,867

Commercial loans 13 11

Loans to financial sector customers 1,312 896

Other cash advances (1) 17,074 6,390

Loans for infrastructure projects 4,078 4,132

Loans for housing projects 11,825 11,497

Other loans to customers 4,627 4,385

Securities purchased under uncollateralized fixed resale agreements – 1

Securities purchased under collateralized fixed resale agreements 9,486 2,376

Subordinated loans 62 45

Lease financing and similar agreements 1,140 1,127


Provisions (299) (298)

Accrued interest 216 230

Other loans to customers, lease financing and similar agreements 50,354 31,576

CUSTOMER TRANSACTIONS (2) 52,249 34,454

Total at sight 1,882 2,867

Total term loans 50,367 31,587

(1) Of which, ACOSS for €14,130 million as of December 31, 2003, compared with €2,285 million in 2002.(2) The majority of loans to customers relate to entities engaged in banking and financial activities.



Note 1 - Interbank and similar transactions: advances and loans to financial institutions

(Euro millions) 12.31.2003 12.31.2002

Ordinary accounts 10,595 8,740

Current accounts of the savings funds 238 149

Overnight accounts and advances 2,871 4,430

Securities purchased under overnight uncollateralized fixed resale agreements – 13



Sight amounts due from financial institutions 15,297 18,821

Term loans and advances 56,532 55,581

Securities purchased under uncollateralized fixed resale agreements 8 9






Term loans to financial institutions 82,212 84,961

ADVANCES AND LOANS TO FINANCIAL INSTITUTIONS 97,509 103,782

The majority of advances and loans to financial institutions relates to entities engaged in banking and financial activities.

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Note 3 - Transactions on trading, available-for-sale, held-to-maturity and portfolio activities

A) BREAKDOWN BY NATURE AND TYPE OF PORTFOLIO

(Euros millions) 12.31.2003 12.31.2002Available- Held-to- Available- Held-to-

Trading for-sale maturity Portfolio Trading for-sale maturity Portfoliosecurities securities securities securities TOTAL securities securities securities securities TOTAL

French government securities 9,032 446 5,821 15,299 7,467 945 6,486 14,898

Treasury bills 10,593 79 380 11,052 4,987 176 5 5,168

Securities on loan 844 1 – 845 1,278 10 – 1,288Public-sector securities and similar 20,469 526 6,201 27,196 13,732 1,131 6,491 21,354

Bonds 19,105 4,875 14,912 38,892 15,069 8,608 14,898 38,575

Subordinated securities – 38 74 112 16 93 73 182Securitized debt funds 1,089 2,903 43 4,035 1,777 2,537 26 4,340Negotiable debt securities 1,114 23,497 1,833 26,444 8,131 9,269 1,706 19,106

Securities on loan 2,681 9 122 2,812 2,944 90 188 3,222Bonds and other fixed income securities 23,989 31,322 16,984 72,295 27,937 20,597 16,891 65,425Equities 6,969 1,976 9,132 18,077 3,851 1,039 8,950 13,840Mutual funds 1,197 2,851 4,048 1,085 3,116 4,201Securities on loan 21 2 23 105 2 107Equities and other variable income securities 8,187 4,829 9,132 22,148 5,041 4,157 8,950 18,148

TOTAL BY TYPE OF PORTFOLIO 52,645 36,677 23,185 9,132 121,639 46,710 25,885 23,382 8,950 104,927

Securities portfolios are mainly held by entities engaged in banking and financial activities.Portfolio securities include venture capital investments.



Note 3 (cont.)

B) SUPPLEMENTARY INFORMATION

(Euro millions) 12.31.2003 12.31.2002Available- Held-to- Available- Held-to-


Public-sector securities and similar

Gross value (1) 20,468 503 5,976 26,947 13,731 1,047 6,217 20,995

Premiums/discounts 17 66 83 8 98 106

Accrued interest 1 6 159 166 1 76 176 253

Provisions – – – – – –

Net book value 20,469 526 6,201 27,196 13,732 1,131 6,491 21,354Market value of trading and available-for-sale securities 20,468 568 13,731 1,260

Bonds and other fixed income securities

Gross value (1) 23,989 31,166 16,703 71,858 27,937 20,428 16,524 64,889

Premiums/discounts 85 (10) 75 73 18 91

Accrued interest – 115 352 467 – 160 353 513

Provisions – (44) (61) (105) (64) (4) (68)Net book value 23,989 31,322 16,984 72,295 27,937 20,597 16,891 65,425

Of which, listed securities 22,369 28,549 15,549 66,467 17,836 17,470 15,998 51,304

Market value of trading and available-for-sale securities (2) 23,989 31,921 27,937 20,697

Equities and other variable income securities

Gross value 8,187 4,978 11,057 24,222 5,041 4,475 11,017 20,533

Accrued interest – – 36 36 – – 28 28

Provisions (149) (1,961) (2,110) (318) (2,095) (2,413)Net book value 8,187 4,829 9,132 22,148 5,041 4,157 8,950 18,148

Of which, listed securities (3) 7,670 2,413 8,439 18,522 3,375 1,195 8,162 12,732

Market value (trading and available-for-sale securities) or value in use (portfolio securities) (2) (3) 8,187 5,195 11,410 24,792 5,041 4,066 12,693 21,800

(1) Gross values shown under “available-for-sale securities” and “held-to-maturity securities” correspond to redemption value.(2) These amounts do not take into account unrealized gains and losses on financial instruments allocated, where applicable, as hedges for available-for-sale securities.(3) The value in use of portfolio securities is determined on the basis of moving averages for listed securities, adjusted where necessary when a specific value in useappears to better reflect the fair market value of the securities.

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Note 4 - Investments of insurance companies

(Euro millions) 12.31.2003 12.31.2002

Investments to cover unit-linked policies 5,962 5,083

Other investments

Land and buildings 1,361 1,311

Investments in related undertakings and long-term equity holdings 22 63

Other investments 61,593 56,875

INVESTMENTS OF INSURANCE COMPANIES 68,938 63,332

This relates mainly to investments by the CNP Assurances Group, which was proportionally consolidated for 42.98% as of December 31, 2003in the consolidated financial statements of Caisse des Dépôts Group.As of December 31, 2003, the insurance subsidiaries of EULIA (namely Ecureuil IARD, Cegi, Saccef, Foncier Assurance and Socamab)and CDC IXIS Financial Guaranty were also consolidated proportionally.As of December 31, 2003, the line “other investments” comprised mainly equities and equity funds (€7.3 billion), and bonds and bond funds(€47.3 billion), these being the proportionally consolidated amounts excluding accrued interest relating to the CNP Assurances Group.Other investments include notably the value of companies of the CNP Assurances Group accounted for under the equity method (see Note 6).

Note 5 - Long-term equity holdings

A) MOVEMENTS

Acquisitions/ Disposals/ Other(Euro millions) 12.31.2002 charges reversals movements 12.31.2003

Long-term equity holdings

Gross value (2) 2,926 455 (98) (109) 3,174

Provisions (310) (49) 16 (34) (377)

Net book value 2,616 406 (82) (143) 2,797

Advances

Gross value 515 253 (166) (17) 585

Provisions (181) (30) 17 – (194)

Net book value 334 223 (149) (17) 391

TOTAL (1) 2,950 629 (231) (160) 3,188

(1) This item mainly corresponds to entities engaged in banking and financial activities.(2) The increase in long-term equity holdings was mainly due to the following transactions: acquisition of shares in CNR (€207 million) and Dexia (€80 million) by the CentralSector, sale of Gecina shares by Crédit Foncier de France (€48 million) and reclassification of Nexgen shares, which were fully consolidated in 2003 (€74 million).



Note 5 (cont.)

B) MAIN LONG-TERM EQUITY HOLDINGS AS OF 12.31.2003

Bookvalue of Total Percentage

(Euro millions) securities Advances Provisions 12.31.2003 heldCompanies in which the net book value of the Group’s investment is over €50 million

Dexia 944 944 5.84%

Areva 360 360 3.59%

Sanpaolo IMI (1) 233 233 1.44%

Compagnie Nationale du Rhône 207 207 30.37%

Banca Carige (2) 128 128 7.08%

Crédit Logement (2) 105 105 8.94%

Sicovam Holding 51 51 8.83%

Sub-total 2,028 – – 2,028

Other non-consolidated holdings 916 (342) 574

Advances related to non-consolidated holdings 567 (183) 384

SEM and SAIEM 230 18 (46) 202

TOTAL CONSOLIDATED AND NON-CONSOLIDATED LONG-TERM EQUITY HOLDINGS AND ADVANCES 3,174 585 (571) 3,188

Of which, listed companies 1,305 – – 1,305

These securities are held mainly by banking and financial subsidiaries.(1) Jointly held by CDC, CNP Assurances and EULIA.(2) Held by EULIA.

Note 6 - Investments accounted for by the equity method

(Euro millions) 12.31.2003 12.31.2002Equity- Equity- Of which,

accounted Of which, accounted pro forma Investment amount net income amount net income

BDPME 350 13 330 12

CNCE Group (1) 87 (26) 48 (37)

Ecureuil Vie 579 49 531 38

Nexgen (2) 61 2 – –

AIH-PBW Group 43 1 47 1

Other (3) 157 14 147 20

INVESTMENTS ACCOUNTED FOR BY THE EQUITY METHOD 1,277 53 1,103 34Of which, investments accounted for by the equity method by entities engaged in banking and financial activities 1,246 52 1,076 32

Of which, investments accounted for by the equity method by entities engaged in non-banking activities (excluding CNP Assurances) 31 1 27 2

Companies accounted for by the equity method by CNP Assurances (4) 2 – 17 2

Net income of companies accounted for by the equity method, including CNP Assurances Group 53 36

(1) Including Océor Group and Banque Sanpaolo France.(2) Including the impact of the deterioration in the euro/dollar exchange rate in the amount of €15 million.(3) Essentially from Crédit Foncier de France Group and C3D.(4) Included in investments of insurance companies (see Note 4).

23

Note 7 - Tangible and intangible fixed assets

A) BREAKDOWN OF ASSETS

(Euro millions) 12.31.2003 12.31.2002

Amortization, Amortization,depreciation depreciation

Gross and provisions Net Gross and provisions Net

Operating fixed assets 3,191 (1,509) 1,682 3,255 (1,480) 1,775

Investment properties

Construction in progress 113 – 113 116 (1) 115

Land and buildings 3,082 (1,050) 2,032 3,188 (1,048) 2,140

Forests and undeveloped land 20 – 20 20 – 20

Real estate holding companies 584 (23) 561 480 (52) 428

TANGIBLE ASSETS 6,990 (2,582) 4,408 7,059 (2,581) 4,478

Purchased goodwill (1) 117 (45) 72 160 (35) 125

Concessions, licences and patents 443 (320) 123 403 (253) 150

Other intangible assets (2) 759 (66) 693 862 (58) 804

INTANGIBLE ASSETS 1,319 (431) 888 1,425 (346) 1,079

TANGIBLE AND INTANGIBLE ASSETS 8,309 (3,013) 5,296 8,484 (2,927) 5,557Of which, assets of entities engaged in banking and financial activities 4,215 (1,131) 3,084 4,167 (1,059) 3,108

Of which, assets of entities engaged in non-banking activities (3) 4,094 (1,882) 2,212 4,317 (1,868) 2,449

(1) The decrease in purchased goodwill resulted primarily from the disposal of Médica France Group by C3D.(2) Of which, market share identified at the time of the acquisition of CDC IXIS Asset Management North America LP for $719 million (€570 million as of December 31, 2003 com-pared with €685 million in 2002). This decrease in valuation was due entirely to currency translation effects.(3) Contributed mainly by C3D Group.

B) MOVEMENTS

Disposals/ Other(Euro millions) 12.31.2002 Acquisitions reversals movements 12.31.2003

Gross tangible operating fixed assets 3,255 251 (145) (170) 3,191

Depreciation and provisions (1,480) (179) 106 44 (1,509)

Tangible operating assets 1,775 72 (39) (126) 1,682

Investment properties, gross 3,804 253 (222) (36) 3,799

Depreciation and provisions (1,101) (115) 119 24 (1,073)

Investment properties 2,703 138 (103) (12) 2,726

Intangible assets, gross (1) 1,425 72 (15) (163) 1,319

Amortization and provisions (346) (101) 13 3 (431)

Intangible assets 1,079 (29) (2) (160) 888

TANGIBLE AND INTANGIBLE ASSETS 5,557 181 (144) (298) 5,296

(1) Other movements were mainly due to the negative €115 million effect of the euro/dollar exchange rate on valuation of the market share identified at the time of theacquisition of CDC IXIS AM North America LP.

Note 8 - Goodwill on acquisitions

(Euro millions) 12.31.2003 12.31.2002

Goodwill on acquisitions

Goodwill on acquisitions, gross as of January 1 1,275 1,318

Goodwill arising on investments and other movements (1) (2) (174) (43)

Goodwill on acquisitions, gross 1,101 1,275

Amortization as of January 1 (379) (166)

Net amortization for the period (2) (3) (66) (247)

Other movements (4) 75 34

Amortization (370) (379)

GOODWILL ON ACQUISITIONS, NET 731 896

Negative goodwill

Net negative goodwill as of January 1 11 22

Reversals in the period (1) (16)

Other movements 1 5

NEGATIVE GOODWILL, NET 11 11

IMPACT ON NET INCOME FOR THE PERIOD (65) (231)

(1) The main movements in 2003 involved changes in C3D’s consolidation scope. The acquisition of TRP (formerly CAÏMA) added €25 million, disposals deducted €107 million (including Médica France and Egis Port for €58 million and €21 million, respectively) and the impact of changes in the euro/dollar exchange rate had a €98 million negative impact on the goodwill of CDC IXIS Asset Management North America LP.

(2) Pursuant to paragraph No. 2110 of CRC Standard 99-07 relating to the consolidation rules of companies governed by the CRBF, in 2001 CDC IXIS Group performed due diligence and additional audits that led to a more precise market share estimate (see Note 7) and to record a deferred tax asset of $363 million, whichis included in the acquisition price of CDC IXIS Asset Management North America LP. This deferred tax asset is being written back over a period of fifteen years usingan actuarial method. As of December 31, 2003, it totaled €249 million (Group share: €179 million).The goodwill on this acquisition totaled $841 million before amortization (€667 million based on the December 31, 2003 exchange rate, or a Group share of €481 million,compared with €801 million and €577 million, respectively, the previous year).The downturn in the U.S. financial markets in 2002, which represented an indication of impairment in value, prompted the Group to conduct an impairment test that examined both identifiable intangible assets (market share) and residual goodwill. The results of this impairment test led the Group to record $203 million (€215 million basedon the average exchange rate for the period, or a Group share of €155 million) in non-recurring amortization.The net book value of the goodwill, which as of December 31, 2002 totaled $547 million (or a Group share of €394 million), is now being amortized over its residual life of 214 months as of January 1, 2003.

As of December 31, 2003, the recoverable amount of the intangible assets was deemed not to have deteriorated, given the favorable performance of the leading indi-cators, including the changes in assets under management and the operating income of the US businesses. As a result, non-recurring amortization was not recordedin 2003. After ordinary amortization during the period of $31 million (€27 million at the average exchange rate for the year, or a Group share of €19 million), residualgoodwill totaled $516 million (€409 million based on the year-end exchange rate, or a Group share of €295 million) as of December 31, 2003, compared with $547 mil-lion (€521 million based on the 2002 year-end exchange rate, or a Group share of €376 million) as of December 31, 2002.

(3) Goodwill amortization was down relative to 2002 given the changes in consolidation scope at C3D and the non-recurring goodwill amortization in 2002 for CDC IXISAsset Management North America LP.

(4) Other movements included in particular the euro currency translation effects of the dollar-denominated goodwill on CDC IXIS AM NA LP.



25

Note 9 - Accruals, deferrals and other assets


Deferred charges 454 662

Prepaid expenses 239 248

Accrued income 894 873

Currency and forward financial instrument adjustments 6,997 8,195

Collection accounts 15 906

Other accruals 2,681 3,612

Deferred tax assets 34 529 423

Accruals and deferrals 11,809 14,919

Premiums on purchases of options 1,833 566

Miscellaneous receivables 6,102 6,309

Settlement accounts on securities transactions (1) 1,381 3,688

Inventories and similar 442 457


Impairment provisions (89) (116)

Other assets 9,685 10,963

Share of reinsurers in technical provisions 1,734 1,572

Other insurance assets 1,134 892

Other insurance assets and share of reinsurers in technical provisions 2,868 2,464

ACCRUALS, DEFERRALS AND OTHER ASSETS 24,362 28,346

Of which, miscellaneous assets of entities engaged in banking and financial activities 7,898 9,132

Of which, miscellaneous assets of entities engaged in non-banking activities 1,787 1,831

(1) The decrease in this item resulted mainly from the unwinding of the Gestitres activity from the Central Sector’s systems as of January 1, 2003, representing a decrease of €1,072 million.

Note 10 - Interbank and similar transactions: advances and loans from financial institutions

(Euro millions) 12.31.2003 12.31.2002

Current accounts 11,055 8,471

Overnight advances 10,415 1,999

Securities sold under overnight uncollateralized fixed repurchase agreements – 1

Securities sold under collateralized fixed repurchase agreements 824 4,269

Other amounts due 21 16


Sight amounts due to financial institutions 22,325 14,785


Securities sold under collateralized fixed repurchase agreements 25,028 35,325

Accrued interest 932 1,028

Term loans from financial institutions 97,801 111,943

ADVANCES AND LOANS FROM FINANCIAL INSTITUTIONS 120,126 126,728

Nearly all the amounts due to financial institutions relate to entities engaged in banking and financial activities.



Note 11 - Customer transactions (liabilities)

(Euro millions) 12.31.2003 12.31.2002



Customer deposits 28,572 25,033

Loans from financial sector customers 2,830 1,221

Escrow accounts (“consignations”) 2,593 2,490

Term deposits (1) 21,929 9,757

Securities sold under uncollateralized fixed repurchase agreements 4 12


Other 596 189


Other customer advances and loans 40,247 18,625

CUSTOMER TRANSACTIONS 68,819 43,658

(1) Including retirement trust fund (Fonds de réserve des retraites – FRR), whose assets totaled €11,583 million as of December 31, 2003.

Note 12 A) DEBT SECURITIES

(Euro millions) 12.31.2003 12.31.2002

Cash certificates – 1

Commercial paper 2,524 4,892

Certificates of deposit 12,193 12,559

Medium-term notes and other negotiable debt securities 15,779 12,157


Interbank and negotiable debt securities 30,712 29,802

Bonds and similar debt securities 21,325 20,753


Bonds and similar debt securities (1) 21,951 21,396

DEBT SECURITIES 52,663 51,199

(1) Bonds relate almost entirely to Crédit Foncier de France Group in the amount of €15,781 million, CDC IXIS in the amount of €5,500 million and CDC IXIS CapitalMarkets for €511 million.

B) SUBORDINATED DEBTIssue Due Interestdate date rate 12.31.2003 12.31.2002

Term subordinated debt

Crédit Foncier de France Group July 1994 July 2004 8.12500% 22 22October 1994 October 2004 8.32500% 35 35December 1994 December 2004 8.50000% 11 11February 1993 February 2003 Libor 6 months (1) 32

Total Crédit Foncier de France Group 68 100

CDC IXIS Group August 2000 August 2010 Euribor 3 months (2) 198 198September 2002 September 2022 Euribor 6 months 16 16November 2002 November 2027 Euribor 3 months (2) 37 37January 2003 January 2033 Euribor 3 months (2) 42March 2003 April 2023 Euribor 3 months (2) 17April 2003 April 2015 Euribor 3 months (2) 61April 2003 January 2033 Euribor 3 months (2) 6June 2003 March 2018 Euribor 6 months 8July 2003 July 2018 Euribor 3 months (2) 397

Total CDC IXIS Group 782 251

CNP Assurances Group May 1999 May 2009 4.62500% 173 173

April 2001 As of 5.75% until 2011April 11, 2011 and Euribor + 1.57% 64 64through 2021 after July 11, 2011

May 2001 21 21July 2001 21 21December 2001 64 64February 2002 43 43April 2002 109 109

April 2003 As of 5.25% until 2013May 16, 2013 and Euribor + 2% 129and through 2023 after July 11, 2013

June 2003 As of 4.7825% until 2013June 24, 2013 and Euribor + 2% 86and through 2023 after June 24, 2013

Total CNP Assurances Group 710 495

TOTAL TERM SUBORDINATED DEBT SECURITIES 1,560 846

Perpetual subordinated debt securities

Crédit Foncier de France Group 1992 – (3) 109 117Other companies 7 4

TOTAL PERPETUAL SUBORDINATED DEBT SECURITIES 116 121

Term subordinated debt

CDC IXIS Group December 2001 December 2011 Euribor 3 months 317 317Other companies 15 15

TOTAL TERM SUBORDINATED DEBT 332 332

Accrued interest

Crédit Foncier de France Group 3 4CDC IXIS Group 23 12Other companies 0 0

TOTAL ACCRUED INTEREST 26 16

TOTAL SUBORDINATED DEBT 2,034 1,315

(1) Libor USD 6 months less a 0.125% margin.(2) Subordinated debt securities hedged by a swap.(3) The issue proceeds represent a net total of approximately €174 million for the CDC Group share and are amortized using an actuarial method over twenty years.During the first twenty years, periodic payments in the form of interest will be made at a rate linked to PIBOR applied to the par value of the securities.

27

} }

Note 12 (cont.)



Note 13 - Technical provisions of insurance companies

(Euro millions) 12.31.2003 12.31.2002

Technical provisions relating to unit-linked policies 5,961 5,083

Other technical provisions

Technical provisions, life business 58,384 53,879

Technical provisions, non-life business 2,209 1,877

Equalization provisions 5 1

TECHNICAL PROVISIONS OF INSURANCE COMPANIES 66,559 60,840

The above comprise mainly the technical provisions of CNP Assurances, which was consolidated proportionally at 42.98% in the financial statements of Caisse des Dépôts Group as of December 31, 2003.

The insurance subsidiaries of EULIA (Ecureuil IARD, Cegi, Saccef, Foncier Assurance, Socamab) and CDC IXIS Financial Guaranty werealso consolidated proportionally.

Note 14 - Accruals, deferrals and other liabilities


Deferred income 1,237 1,009

Accrued charges 789 842

Currency and forward financial instrument adjustments 6,654 6,315

Other deferrals 2,746 8,003

Deferred tax liabilities 34 312 418

Accruals and deferrals 11,738 16,587

Premiums on sale of options 2,337 2,008

Securities on loan 27,720 20,254

Miscellaneous payables 10,178 8,136

Settlement accounts on securities transactions (1) 445 2,920

Accrued interest 3 –

Liabilities arising from direct insurance 352 546

Other insurance liabilities 6 7

Miscellaneous liabilities 41,041 33,871

ACCRUALS, DEFERRALS AND OTHER LIABILITIES 52,779 50,458

Of which, miscellaneous liabilities of entities engaged in banking and financial activities 38,785 31,266

Of which, miscellaneous liabilities of entities engaged in non-banking activities 2,256 2,605

(1) The decrease in this item is due primarily to the Central Sector, whose contribution was reduced by €964 million following the unwinding of the Gestitres activitiesas of January 1, 2003.

29

Note 15 - Provisions for risks and charges

(Euro millions) 12.31.2002 Charges Reversals Other movements 12.31.2003

Provisions for retirement and other employment-related expenses (1) 213 66 (45) 9 243

Provisions for real estate risks 77 14 (11) 11 91

Provisions for default risks (2) 204 149 (82) (9) 262

Other provisions for risks and charges 335 180 (146) 11 380

PROVISIONS FOR RISKS AND CHARGES 829 409 (284) 22 976

Of which, provisions arising from entities engaged in banking and financial activities 549 299 (203) 17 662Of which, provisions arising from entities engaged in non-banking activities 280 110 (81) 5 314

(1) These provisions include around €20 million related to the cost of implementing a new agreement on reduced workweek hours and job mobility by Informatique CDC.(2) As of December 31, 2003, provisions for default risks include provisions for dynamic risks (mainly from Crédit Foncier de France in the amount of €22 million) andprovisions for industry risks (CDC IXIS in the amount of €37 million).

Note 16 - Changes in the fund for general banking risks (FGBR), minority interests and consolidated retained earnings

Minority Minority RetainedFund for interests interests Consolidated earnings, Totalgeneral in reserves Minority in retained reserves Group share consolidated

banking risks (excluding interests earnings (excluding Translation Net (excluding retained(Euro millions) (FGBR) (1) FGBR) in income (excluding FGBR) FGBR) reserve income FGBR) earnings

Consolidated retained earnings as of December 31, 2002 676 875 87 962 12,009 (216) 710 12,503 14,141

Appropriation of 2002 earnings 87 (87) 710 (710)

Distribution in 2003 of 2002 earnings (2) (54) (54) (346) (346) (400)

Other changes (3) 119 146 146 (2) (196) (198) 67

2003 earnings 103 103 1,581 1,581 1,684

CONSOLIDATED RETAINED EARNINGS AS OF DECEMBER 31, 2003 795 1,054 103 1,157 12,371 (412) 1,581 13,540 15,492

(1) Fund for general banking risks of fully and proportionally consolidated entities. As of December 31, 2003, minority interests in the fund for general banking riskswere not material.

(2) Dividends paid in 2003 were calculated based on the €346 million contribution from mandatory deposits to consolidated net income in 2002. The amount actuallypaid to the government totaled €264 million. The balance of €82 million corresponded to the indemnification related to the Sagitrans loan, which was guaranteed by the State.

(3) Other changes included:– for the fund for general banking risks, net allocations recognized in the income statement of €123 million, which corresponded to the allocations made by Crédit

Foncier de France (€91 million) and CDC IXIS (€32 million), as well as several non-material reclassifications at the level of the subsidiaries;– for the Group share of retained earnings, the change was an overall decrease of €198 million, of which €196 million in currency translation effects largely related to

the U.S. subsidiaries. The other movements included in particular the impact of changes in accounting methods in 2003 related to the depreciation, amortization anddepreciation of assets pursuant to the implementation of CRC Standard 2002-10 (a decrease of €11 million) and related to inflation-indexed OATs (an increase of €4 million);

– movements in minority interests reflect changes in consolidation scope at C3D (a decrease of €20 million), first-time consolidations by CNCE Group (Océor Groupand Banque Sanpaolo France, for €17 million and €61 million, respectively) and capital increases (€92 million, of which €49 million for CDC PME Croissance, €24 million for CNP Assurances Group and €12 million for C3D Group).



Note 17 A) CONSOLIDATED BALANCE SHEET ITEMS BY TERM OF MATURITY

3 months 3 months 1 year More than Total(Euro millions) or less to 1 year to 5 years 5 years Eliminations 12.31.2003

ASSETSAdvances and loans to financial institutions 90,996 14,605 20,844 18,809 (47,745) 97,509

Advances and loans to customers 15,313 17,141 11,071 16,736 (8,012) 52,249

Securities portfolios excluding trading securities

Public-sector securities and similar 114 948 5,129 535 1 6,727

Bonds and other fixed income securities 19,755 3,383 8,148 17,925 (905) 48,306

LIABILITIESAdvances and loans from financial institutions 100,823 26,268 19,682 22,101 (48,748) 120,126

Of which, securities sold under collateralized fixed repurchase agreements (including accrued interest) 11,691 17,785 216 618 (4,377) 25,933

Customer advances and loans 62,354 6,637 1,943 3,904 (6,019) 68,819Of which, securities sold under collateralized fixed repurchase agreements (includingaccrued interest) 10,759 575 232 250 – 11,816

Debt securities

Bonds 1,667 2,204 9,824 8,727 (471) 21,951

Other debt securities 15,059 2,832 6,465 6,423 (67) 30,712

B) CONSOLIDATED BALANCE SHEET ITEMS BY CURRENCY

U.S. Pound Total(Euro millions) Euro dollar sterling Other Eliminations 12.31.03

ASSETSAdvances and loans to financial institutions 117,867 22,113 1,360 3,914 (47,745) 97,509

Advances and loans to customers 44,946 14,973 221 121 (8,012) 52,249

Securities portfolio excluding trading securities

Public-sector securities and similar 6,691 17 – 18 1 6,727

Bonds and other fixed income securities 44,130 3,981 535 565 (905) 48,306

LIABILITIESAdvances and loans from financial institutions 128,941 32,705 3,335 3,893 (48,748) 120,126

Of which, securities sold under collateralized fixed repurchase agreements (includingaccrued interest) 28,928 1,382 – – (4,377) 25,933

Customer advances and loans 58,771 15,795 63 209 (6,019) 68,819Of which, securities sold under collateralized fixed repurchase agreements (includingaccrued interest) 6,787 5,029 – – – 11,816

Debt securities

Bonds 20,801 1,610 11 – (471) 21,951

Other debt securities 19,923 6,648 1,468 2,740 (67) 30,712

31

Note 18 A) OFF-BALANCE SHEET COMMITMENTS RELATED TO SPOT OR FORWARD CURRENCY TRANSACTIONS

AND LENDING AND BORROWING OF FOREIGN CURRENCY

(Euro millions) 12.31.2003 12.31.2002

Spot transactions

Euros purchased to be received 1,429 1,628Foreign currencies purchased to be received 8,433 5,847Euros sold to be delivered 2,930 1,582Foreign currencies sold to be delivered 6,845 5,998Lending and borrowing

Foreign currencies loaned to be delivered 115 1,222Foreign currencies borrowed to be received 1,745 1,359Forward currency transactions

Euros to be received against foreign currencies to be deliveredEuros to be received 47,031 45,699Foreign currencies to be delivered 43,893 43,512

Foreign currencies to be received against euros to be deliveredForeign currencies to be received 49,486 45,849Euros to be delivered 52,288 47,530

Foreign currencies to be received against foreign currencies to be delivered 54,080 42,403Foreign currencies to be delivered against foreign currencies to be received 54,371 42,918Unaccrued premiums/discounts

To be received 319 328To be paid 300 368

B) FORWARD FINANCIAL INSTRUMENTS

(Euro millions) 12.31.2003 12.31.2002Cash/ Cash/

Trading (1) hedge (2) Trading hedge

Purchase/ Sale/ Purchase/ Sale/ Purchase/ Sale/ Purchase/ Sale/borrowing loan borrowing loan borrowing loan borrowing loan

FUTURES TRANSACTIONSOrganized marketsInterest rate contracts 34,012 47,054 – 126 38,263 58,978 1,422 1,429Foreign currency contracts – – – 12 – – – 26Other contracts 35,367 146,276 – – 19,905 64,910 – 2Over-the-counter markets

Interest rate swaps 1,067,618 72,351 1,025,616 69,178FRA 27,045 36,472 43 – 17,011 12,351 215 –Foreign currency contracts – 4 2,046 – – 74 2,049 –Other contracts 666 666 166 131 213 164 131 131

OPTIONS Organized markets

Interest rate options 87,679 135,155 – – 17,418 31,878 198 397Foreign currency options – – – – – – – –Other options 62,206 31,544 – – 24,740 16,406 – –Over-the-counter markets

Interest rate options 1,463 967 1,343 – 1,672 3,145 1,504 23Caps, floors 49,037 79,170 5,077 313 47,977 73,955 3,071 565Swaptions 21,424 29,421 – 16 19,782 25,289 1 25Foreign currency options 3,746 3,358 – – 1,658 1,683 – –Other options 12,047 14,857 419 72 11,299 13,674 448 191

(1) The trading transactions include the specialized investment portfolios and individual open positions.(2) The hedging transactions include micro- and macro-hedging portfolios.



C) FORWARD FINANCIAL INSTRUMENTS BY TERM TO MATURITY

3 months 3 months 1 year More than Total(Euro millions) or less to 1 year to 5 years 5 years Eliminations 12.31.2003

FUTURES TRANSACTIONSInterest rate contracts 39,883 29,691 11,618 – – 81,192

Foreign currency contracts 709 156 477 720 – 2,062

Interest rate swaps 281,364 239,550 459,604 375,941 (216,490) 1,139,969

FRA 6,398 53,711 5,299 41 (1,889) 63,560

Other contracts 72,813 87,568 20,307 3,322 (738) 183,272

OPTIONSInterest rate options 86,018 130,069 9,754 866 (100) 226,607

Caps, floors 17,851 21,114 68,389 44,324 (18,081) 133,597

Swaptions 4,767 11,073 25,667 13,311 (3,957) 50,861

Foreign exchange options 7,144 – – – (40) 7,104

Other options 42,339 45,395 29,600 4,041 (230) 121,145

Information on default risk related to forward financial instruments

The following analysis applies to EULIA Group, which is themain user in the Group of forward financial instruments. Thisinformation is prorated to the consolidation rates for CDC IXISand Crédit Foncier in the financial statements of Caisse desDépôts Group.

The default risk related to forward financial instruments is meas-ured by the probable loss on the consolidation scope under reviewif the counterparty was not able to meet its commitments. Thedefault risk exposure on forward interest rate and currency instru-ments (futures and options) may be determined by calculating anequivalent credit risk pursuant to the Banking Commission’s regulation No. 96-06, which consists of adding the following items:

• the replacement cost of these instruments, calculated at mar-ket value, including the impact of netting agreements that meetthe conditions of CRBF guideline No. 91-05, Article 4;

• the potential credit risk resulting from the application of add-ons, as defined by the above-mentioned regulation, calculatedon the nominal amount of the contracts depending on theirtype and residual term.

This default risk is moderated by:

• the signing of master netting agreements (ISDA-AFB), which,in the event of a default by the counterparty, make it possibleto offset the positive and negative replacement values;

• the signing of collateral contracts, which lead to the establish-ment of a guarantee in cash or securities.

OECD governments OECD

and central financial Other Total(Euro millions) banks institutions counterparties 2003

Equivalent unweighted credit risk before netting and collateralization agreements 1,829 26,511 6,066 34,406Impact of netting-by-liquidation agreements (794) (14,855) (705) (16,354)

Collateralization effects (13) (1,998) (34) (2,045)Equivalent unweighted credit risk after netting and collateralization agreements 1,022 9,658 5,327 16,007Equivalent weighted credit risk after netting and collateralization agreements 1,932 2,664 4,595

This table only includes transactions covered by Banking Commission regulation No. 96-06, namely transactions realized in over-the-counter markets and markets classified as organized markets.

Note 18 (cont.)

33

Note 18 (cont.)

D) OTHER OFF-BALANCE SHEET COMMITMENTS

a) CNCE commitments

As part of the Alliance’s transactions, Caisse des Dépôts Groupentered into commitments (given or reciprocal) with CNCE thatcould result in cash outflows or inflows. Because the effects ofthese commitments can not be assessed until after the guaran-tee periods have ended (between 2004 and 2011), only the maxi-mum contractual amounts have been recorded as off-balancesheet commitments. These commitments given and receivedtotaled €389 million and €238 million, respectively.

On October 1, 2003, Caisse des Dépôts Group and Caisses d’EpargneGroup signed a memorandum of agreement intended to restruc-ture their business relationship. In that context, the signature of adefinitive agreement planned for 2004 should include an earlyunwinding of the commitments made in 2001. Based on estimates

as of December 31, 2003, the unwinding of these commitmentswould result in CDC paying out around €150 million.

b) Sanpaolo IMI (SP IMI) commitment

Caisse des Dépôts Group and Sanpaolo IMI have signed an agree-ment that expresses their intention to create a lasting strategicpartnership. Along with this agreement, the two groups acquiredcross-holdings. In that context, Caisse des Dépôts granted SanpaoloIMI two options to purchase CDC IXIS shares, the first in theevent of a change in CDC IXIS’s controlling ownership, the second, which includes a liquidity commitment, in the eventthat the shares are not listed on an organized European market.In addition, Caisse des Dépôts has an option to buy CDC IXISshares owned by Sanpaolo IMI, which can be exercised in theevent of a change in the controlling interest in Sanpaolo IMI.These commitments expire in 2004. The sale price of the sharesin the event the options are exercised shall be determined byexpert financial appraisals.

Note 19 - Credit risks

A) GLOBAL CREDIT RISK EXPOSUREGross Gross Gross Gross

performing performing non-performing irrecoverable Total(Euro millions) loans restructured loans loans loans 12.31.2003

Loans to financial institutions 97,508 0 14 0 97,522Loans to customers 51,694 0 444 437 52,575Available-for-sale and held-to-maturity portfolios 54,938 0 199 1 55,138Financing and guarantee commitments given 56,413 0 22 0 56,435

TOTAL 260,553 0 679 438 261,670

The Group has no material restructured loans at other than market conditions.

B) PROVISIONS FOR DEFAULT RISKOther Total

(Euro millions) 12.31.2002 Allocations Reversals movements 12.31.2003

Loans to financial institutions (13) 0 0 0 (13)Loans to customers (324) (109) 127 (20) (326)Available-for-sale and held-to-maturity portfolios(fixed income securities) (68) (63) 6 55 (70)Provisions recorded against assets (1) (405) (172) 133 35 (409)

Signature risk (37) (4) 18 0 (23)Provisions for country risk (9) 0 1 0 (8)Provisions for industry risk 0 (30) 0 (7) (37)Other provisions for default risk (159) (116) 63 16 (196)Provisions recorded as liabilities (205) (150) 82 9 (264)

TOTAL PROVISIONS FOR DEFAULT RISK (610) (322) 215 44 (673)

(1) Of which, provisions for:

Gross performing loans (67) (12) 2 55 (22)

Gross performing restructured loans 0 0 0 0 0

Gross non-performing loans and irrecoverable loans (2) (338) (160) 131 (20) (387)

(405) (172) 133 35 (409)

(2) Of which, provisions on gross irrecoverable loans as of December 31, 2003: €217 million.



Note 19 (cont.)

C) CREDIT RISKS – LOANS TO FINANCIAL INSTITUTIONS

Gross GrossGross performing non- Gross

performing restructured performing irrecoverable Loan Total(Euro millions) loans loans loans loans provisions 12.31.2003

Breakdown by geographic region

France 95,544 0 14 0 (13) 95,545

Rest of Europe 821 0 0 0 0 821

United States 1,135 0 0 0 0 1,135

Asia 0 0 0 0 0 0

Rest of the world 8 0 0 0 0 8

TOTAL BY GEOGRAPHIC REGION 97,508 0 14 0 (13) 97,509

D) CREDIT RISK – LOANS TO CUSTOMERS

Gross GrossGross performing non- Gross

performing restructured performing irrecoverable Loan Total(Euro millions) loans loans loans loans provisions 12.31.2003

Breakdown by geographic region

France 44,647 0 434 437 (316) 45,202

Rest of Europe 1 0 0 0 0 1

United States 7,046 0 10 0 (10) 7,046

TOTAL BY GEOGRAPHIC REGION 51,694 0 444 437 (326) 52,249

Breakdown by sector

Sovereign and central governments 15,334 0 0 0 0 15,334

Local governments 4,716 0 14 26 (9) 4,747

Insurance and reinsurance 1,576 0 0 0 0 1,576

Other financial institutions 12,016 0 11 0 (11) 12,016

Funds (ABS/CDO, Securitization, etc.) 955 0 0 0 0 955

Corporate 5,691 0 176 263 (185) 5,945

Small businesses and professionals 1,990 0 34 30 (29) 2,025

Private individuals 9,416 0 209 118 (92) 9,651

TOTAL BY SECTOR 51,694 0 444 437 (326) 52,249

35

Note 19 (cont.)

E) CREDIT RISKS – FIXED INCOME SECURITIES

Grossnon- Gross

Performing performing irrecoverable Loan Total(Euro millions) loans (1) loans loans provisions (2) 12.31.2003Breakdown by currency

Euro 49,955 0 1 (9) 49,947

U.S. dollar 4,000 3 0 (1) 4,002

Pound sterling 399 196 0 (60) 535

Other currencies 584 0 0 0 584

TOTAL BY CURRENCY (1) 54,938 199 1 (70) 55,068

Breakdown by rating

AAA 34,436 0 0 (7) 34,429

AA 10,059 0 0 0 10,059

A 3,629 0 0 (1) 3,628

BBB 1,499 0 0 0 1,499

BB 63 0 0 (1) 62

B 168 0 0 0 168

Unrated 5,084 199 1 (61) 5,223

TOTAL BY RATING (1) 54,938 199 1 (70) 55,068

(1) Excluding provisions for interest-rate risk.(2) These mainly involve provisions against the senior securities issued by HTR (Box Clever Group) in respect of the company’s restructuring risk. These securities areheld by the held-to-maturity portfolio. The provision was calculated on the basis of the probable loss in light of the issuer’s operating forecast.

F) CREDIT RISK – SIGNATURE RISKAll signature risks were made by entities in the euro zone.

Note 20 - Interest and similar revenues and expenses on Treasury and interbank transactions

(Euro millions) 12.31.2003 12.31.2002Interest on current account advances 187 256

Interest on other loans and securities purchased under uncollateralized fixed resale agreements 2,471 2,868

Interest on securities purchased under collateralized fixed resale agreements 419 948

Premium/discount income and other interest and similar income 274 707

INTEREST AND SIMILAR REVENUES FROM TREASURY AND INTERBANK TRANSACTIONS 3,351 4,779

Interest on current accounts (193) (258)

Interest on loans and securities sold under uncollateralized fixed repurchase agreements (3,185) (3,547)

Interest on securities sold under collateralized fixed repurchase agreements (640) (1,151)

Premium/discount expenses and other interest and similar expenses (203) (700)

INTEREST AND SIMILAR EXPENSES ON TREASURY AND INTERBANK TRANSACTIONS (4,221) (5,656)



Note 21 - Interest and similar revenues and expenses on customer transactions

(Euro millions) 12.31.2003 12.31.2001

Interest on overdrafts 195 91

Interest on commercial and other loans to customers 1,095 1,184

Interest on other loans and securities purchased under uncollateralized fixed resale agreements 88 51

Interest on securities purchased under collateralized fixed resale agreements 150 58

Interest and similar income from leasing transactions 55 76

Other interest and similar income 180 234

Doubtful interest receivables 39 42

Provisions for doubtful interest receivables 18 14

Losses on uncollectable interest, reversals of provisions for interest and collections (24) (28)

INTEREST AND SIMILAR REVENUES FROM CUSTOMER TRANSACTIONS 1,796 1,722


Interest on escrow accounts (35) (40)

Interest on term deposits, borrowings and securities sold under uncollateralized fixed repurchase agreements (310) (264)

Interest on securities sold under collateralized fixed repurchase agreements (201) (90)

Interest and similar charges on lease transactions – (3)

Other interest and similar charges (142) (198)

INTEREST AND SIMILAR EXPENSES ON CUSTOMER TRANSACTIONS (949) (916)

Note 22 - Interest and similar revenues and expenses on bonds and other fixed income securities

(Euro millions) 12.31.2003 12.31.2002

Interest and similar revenues from available-for-sale securities 712 809

Interest and similar revenues from held-to-maturity securities 1,210 1,252

Other interest and similar revenues 759 401

INTEREST AND SIMILAR REVENUES FROM BONDS AND OTHER FIXED INCOME SECURITIES 2,681 2,462

Interest expenses on negotiable medium-term notes and certificates of deposit (1,310) (1,408)

Interest and expenses on bonds (414) (472)

Other interest expenses (604) (668)

INTEREST AND SIMILAR EXPENSES ON BONDS AND OTHER FIXED INCOME SECURITIES (2,328) (2,548)

NET INTEREST AND SIMILAR REVENUES (EXPENSES) ON BONDS AND OTHER FIXED INCOME SECURITIES 353 (86)

37

Note 23 - Revenues from variable income securities

(Euro millions) 12.31.2003 12.31.2002

Revenues from available-for-sale securities 63 87

Revenues from portfolio securities 261 273

Revenues from long-term equity holdings 103 109

REVENUES FROM VARIABLE INCOME SECURITIES 427 469

Note 24 - Commission revenues and expenses

(Euro millions) 12.31.2003 12.31.2002Revenues Expenses Revenues Expenses

Money-market and interbank transactions 1 (3) 1 (5)

Customer transactions 28 (2) 32 –

Security transactions 32 (41) 31 (39)

Forward financial instrument transactions 10 (45) 9 (27)

Financial services 840 (157) 847 (135)

Currency transactions 2 (1) 3 (1)

Other commissions 11 (3) 32 (11)

COMMISSIONS 924 (252) 955 (218)

Note 25 - Gains and losses on trading security transactions

(Euro millions) 12.31.2003 12.31.2002

Net gains (losses) on trading securities 1,588 940

Net gains (losses) on foreign currency instruments 1 163

Net gains (losses) on forward financial instruments (315) 431

GAINS AND LOSSES ON TRADING SECURITY TRANSACTIONS 1,274 1,534



Note 26 - Gains and losses on available-for-sale and portfolio security transactions

(Euro millions) 12.31.2003 12.31.2002

Net gains (losses) on the sale of available-for-sale securities 10 652

Other income and expenses on available-for-sale securities (4) (6)

Provisions taken/reversed on available-for-sale securities 187 (82)

GAINS (LOSSES) ON AVAILABLE-FOR-SALE SECURITY TRANSACTIONS 193 564

Net gains (losses) on the sale of portfolio securities 462 817

Provisions taken/reversed on portfolio securities 88 (1,172)

GAINS (LOSSES) ON PORTFOLIO SECURITY TRANSACTIONS 550 (355)

GAINS (LOSSES) ON AVAILABLE-FOR-SALE AND PORTFOLIO SECURITY TRANSACTIONS 743 209

Note 27 - Other net operating banking revenues and expenses

(Euro millions) 12.31.2003 12.31.2002Revenues Expenses Revenues Expenses

Gains or losses on disposal of investment properties 131 (7) 82 (17)

Depreciation and provision charges/reversals on investment properties 17 (122) 56 (108)

Revenues and expenses on investment properties 328 (81) 369 (83)

Total revenues and expenses on investment properties 476 (210) 507 (208)

Revenues and expenses on real estate development operations 16 (11) – (11)

Provision charges/reversals on real estate development operations 1 (1) 3 (1)

Total revenues and expenses on real estate development operations 17 (12) 3 (12)

Public-interest programs – (42) – (16)

Provision charges/reversals on public-interest programs – – 1 –

Total revenues and expenses on public-interest programs – (42) 1 (16)

Expenses rebilled, revenues recredited and expenses transferred 24 (5) 31 -

Other miscellaneous operating income and expenses 623 (252) 345 (243)

Provision charges/reversals on other operating income and expenses 6 (346) 12 (16)

Total other operating income and expenses 629 (598) 357 (259)

OTHER OPERATING BANKING INCOME AND EXPENSES 1,146 (867) 899 (495)

OTHER NET OPERATING BANKING REVENUES AND EXPENSES 279 404

Other net operating banking revenues and expenses decreased as a result of several negative trends:– a decrease in revenues from investment properties as a result of the disposals made last year and in previous years by various Group

entities, including ICADE in particular;– a decrease in IT services realized with non-consolidated entities;– an increase in engineering loan expenses of more than €25 million as part of the performance of public-interest programs;– offsetting these negative trends was the increase in net proceeds from the disposal of receivables by CDC IXIS (€72 million in 2003,

compared with €24 million in 2002) and of investment properties by Crédit Foncier de France (capital gain of €37 million attributable to CDC).

39

Note 28 - Gross margin on insurance activities

(Euro millions) 12.31.2003 12.31.2002

Earned premiums and contributions, paid or accrued 8 286 7,736

Cost of benefits including changes in technical provisions (10,505) (9,926)

Net investment income 3,021 2,940

GROSS MARGIN ON INSURANCE ACTIVITIES 802 750

Of which, gross margin on life business 653 633

Of which, gross margin on non-life business 149 117

This is the gross margin generated mainly by CNP Assurances, which was consolidated proportionally for 42.98% as of December 31, 2003,as well as the insurance subsidiaries of EULIA that were consolidated proportionally (Ecureuil IARD, Crédit Foncier Assurance, Saccef,CEGI, Socamab, CDC IXIS Financial Guaranty).

RECONCILIATION OF GROSS MARGIN AND NET RECURRING INCOME

12.31.2003 12.31.2002

(Euro millions) Life Non-life Total Life Non-life Total

Gross margin of life business 653 149 802 633 117 750

Dividends from equity holdings contributing to net technical income 0 0 0 0 (1) (1)

Restatement of intra-Group eliminations in gross margin (36) 0 (36) (38) 0 (38)

Attributable payroll expenses before intra-Group eliminations (95) (21) (116) (87) (24) (111)

Other attributable administrative expenses before intra-Group eliminations (103) (85) (188) (88) (66) (154)

Net operating amortization and depreciation (25) (1) (26) (11) (2) (13)

Net income from investments transferred and other adjustments (104) (16) (120) (102) (14) (116)

Net technical income of life business included in consolidation 290 26 316 307 10 317

Employee profit sharing (3) 0 (3) (5) 0 (5)

Net income from investments transferred 104 16 120 102 14 116

Net recurring income included in consolidation 391 42 433 404 24 428

TOTAL NET RECURRING INCOME (100%) 909 70 979 936 50 986

Note 29 – Net income from other activities

(Euro millions) 12.31.2003 12.31.2002

Sales and other operating revenues 2,362 2,253

Purchases consumed and other operating expenses (663) (646)

NET INCOME FROM OTHER ACTIVITIES 1,699 1,607

The above relate to the C3D Group only, other than the investment property activities that are included in other banking operating revenues and expenses.



Note 30 - Payroll expenses

(Euro millions) 12.31.2003 12.31.2002

Salaries (1,644) (1,613)

Retirement expenses and related provision charges and reversals (1) (100) (9)

Other employee-related charges (492) (506)

Incentive programs and profit-sharing (49) (48)

Payroll taxes (111) (108)

Provision charges and reversals (1) (16)

PAYROLL EXPENSES (2,397) (2,300)

(1) The changes in this item resulted from the impact of an accounting reclassification in 2003 (€42 million) and a revision in the calculation method for provisions forretirement benefits in 2002 (€41 million).

Note 31 - Net amortization, depreciation and provisions on fixed assets

(Euro millions) 12.31.2003 12.31.2002

Depreciation and amortization of operating fixed assets (275) (235)

Reversals of depreciation and amortization of operating fixed assets 3 2

Net amortization and depreciation (272) (233)

Provisions against operating fixed assets (11) (9)

Reversal of provisions against operating fixed assets 6 10

Net provisions against operating fixed assets (5) 1

NET AMORTIZATION, DEPRECIATION AND PROVISIONS ON FIXED ASSETS (277) (232)

41

Note 32 - Cost of risk (net appropriation to provisions)

(Euro millions) 12.31.2003 12.31.2002Provision charges in respect of

Impairment of receivables (109) (107)

Signature risk (4) (8)

Default and other risks (203) (55)

PROVISION CHARGES (316) (170)

Reversals of provisions for

Impairment of receivables 113 103

Signature risk 18 11

Default and other risks 60 28

REVERSALS OF PROVISIONS 191 142

Losses and collections

Losses on irrecoverable receivables and collections (83) (51)

LOSSES AND COLLECTIONS (83) (51)

COST OF RISK (208) (79)

Note 33 - Gains and losses on fixed assets

(Euro millions) 12.31.2003 12.31.2002Gains (losses) on disposals of tangible and intangible fixed assets (1) 68 20

Gains (losses) on transactions concerning long-term equity holdings and held-to-maturity securities 37 11

Gains (losses) on disposals of long-term equity holdings and on advances (2) 97 6

Provision charges and reversals (3) (62) 10

Net gains (losses) on transactions concerning long-term equity holdings and advances 35 16

Net gains (losses) on transactions concerning held-to-maturity securities – (1)

Provision charges and reversals 2 (4)

Net gains (losses) on transactions concerning held-to-maturity securities 2 (5)

GAINS (LOSSES) ON FIXED ASSETS 105 31

(1) As of December 31, 2003, gains on fixed assets consisted mainly of capital gains on disposals by Crédit Foncier de France through the sale of its registered office(Group share of €65 million).(2) This item includes in particular the capital gain on C3D’s disposal of its Médica France subsidiary (€70 million).(3) As part of C3D Group’s strategic planning with regard to VVF assets, a €33 million risk provision was established.



Note 34 - Income tax

A) BREAKDOWN OF DEFERRED AND CURRENT INCOME TAX AND EXPENSES

(Euro millions) 12.31.2003 12.31.2002

Current income tax (758) (424)

Deferred tax 167 47

TAX CHARGE (591) (377)

B) BREAKDOWN OF DEFERRED TAX ASSETS AND LIABILITIES

(Euro millions) 12.31.2003 12.31.2002

Deferred tax assets 529 423

Deferred tax liabilities (312) (418)

Net deferred taxes carried on the balance sheet 217 5

Tax credits (1) 203 226

Tax loss carryforwards (2) 97 88

Timing differences (3) (83) (309)

(1) Pursuant to paragraph No. 2110 of CRC Standard 99-07 relating to the consolidation rules of companies governed by the CRBF, in 2001 CDC IXIS Group performeddue diligence and additional audits that led to identifying a deferred tax asset of $363 million, which is included in the acquisition price of CDC IXIS Asset ManagementNorth America LP. This deferred tax asset is being written back over a period of fifteen years using an actuarial method. As of December 31, 2003, it totaled €249 mil-lion in the financial statements of CDC IXIS AM and €179 million in those of Caisse des Dépôts Group.

(2) Of which, €67 million attributable to CDC IXIS Asset Management North America LP. In late 2002, the Group chose to limit the volume of deferred tax assets relatedto the tax losses of CDC IXIS Asset Management North America to the portion that could be recovered within a five-year period. This prudent measure resulted in CDC IXIS AM recording a $93 million reduction in deferred tax assets as of December 31, 2002, while for its part Caisse des Dépôts Group recorded a $67 millionreduction. This prudent measure was maintained in 2003 by CDC IXIS Group, whose unrecognized deferred tax assets totaled €83 million, or €60 million for Caisse des Dépôts Group.

(3) The main changes in timing differences were recorded by CDC IXIS, whose deferred tax bases includes equalization payments on trades of financial instrumentstotaling €174 million, or €138 million attributable to Caisse des Dépôts Group, whose deductibility is spread over several years.

43

Note 35 - Income statement by business segment

CNP Caisse des EULIA Total (Euro millions) Assurances C3D Dépôts Alliance 12.31.2003

Interest and similar revenues – 30 1,889 8,123 10,042

Treasury and interbank transactions – – 108 3,242 3,351

Customer transactions – 18 234 1,544 1,796

Bonds and other fixed income securities – 12 1,253 1,416 2,681

Other interest and similar revenues – – 294 1,921 2,215

Interest and similar expenses (1) (68) (1,217) (8,388) (9,674)

Treasury and interbank transactions (1) (52) (363) (3,805) (4,221)

Customer transactions – (16) (510) (423) (949)

Bonds and other fixed income securities – – (44) (2,284) (2,328)

Other interest and similar expenses – – (300) (1,876) (2,176)

Revenues from variable income securities – 6 306 115 427

Commissions (revenues) 71 – 12 841 924

Commissions (expenses) (11) – (30) (211) (252)

Gains (losses) on trading securities (40) (6) 52 1,268 1,274Gains (losses) on available-for-sale securities and similar transactions 1 2 447 293 743

Other net banking operating revenues and expenses (27) 180 3 123 279

Gross margin on insurance activities 714 – – 88 802

Net revenues from other activities – 1,699 – – 1,699

NET BANKING INCOME 707 1,843 1,462 2,252 6,264

Operating expenses (263) (1,560) (329) (1,323) (3,475)

Payroll expenses (124) (916) (524) (833) (2,397)

Other administrative expenses (139) (680) (187) (509) (1,515)

Rebillings – 36 382 19 437

Net depreciation, amortization and provision charges (27) (110) (76) (64) (277)

GROSS INCOME FROM OPERATIONS 417 173 1,057 865 2,512

Cost of risk – (6) (36) (166) (208)

NET INCOME FROM OPERATIONS 417 167 1,021 699 2,304

Net income from investments accounted for by the equity method (3) 1 13 42 53

Gains (losses) on fixed assets – 71 (22) 56 105

RECURRING INCOME BEFORE INCOME TAX 414 239 1,012 797 2,462

Net non-recurring income (expenses) 1 – – – 1

Income tax (103) (82) (249) (157) (591)

Net amortization of goodwill on acquisitions (17) (27) (1) (20) (65)

Net movement in FRBG – – – (123) (123)

Minority interests (51) (39) (3) (10) (103)

NET INCOME 244 91 759 487 1,581



Note 36 - Income statement by geographical area

ConsolidatedUnited total

(Euro millions) Europe States Asia 12.31.2003

NET BANKING INCOME 5,581 679 4 6,264

Operating expenses (2,980) (492) (3) (3,475)

Payroll expenses (2,021) (374) (2) (2,397)

Other administrative expenses (1,393) (121) (1) (1,515)

Rebillings 434 3 – 437

Net depreciation, amortization and provision charges (265) (12) – (277)

GROSS INCOME FROM OPERATIONS 2,336 175 1 2,512

Cost of risk (202) (6) – (208)

NET INCOME FROM OPERATIONS 2,134 169 1 2,304

Net income from investments accounted for by the equity method 49 4 – 53

Gains or losses on fixed assets 105 – – 105

NET RECURRING INCOME BEFORE INCOME TAX 2,288 173 1 2,462

Net non-recurring income (expenses) 1 – – 1

Income tax (524) (67) – (591)

Net amortization of goodwill on acquisitions (45) (20) – (65)

Net increase in FGBR (123) – – (123)

Minority interests (100) (3) – (103)

NET INCOME, GROUP SHARE 1,497 83 1 1,581

45

Note 37 - Consolidation scope as of December 31, 2003

% % % %COMPANIES METH control held METH control held

2003 (1) 2003 2003 2002 (1) 2002 2002CDC(CENTRAL SECTOR) FULL 100.00 100.00 FULL 100.00 100.00

CDC KINEON FULL 100.00 99.90 FULL 100.00 99.90

CDC PME FULL 100.00 100.00 FULL 100.00 100.00

DABFI (*) (*) (*) FULL 100.00 76.74

INFORMATIQUE CDC FULL 100.00 76.70 FULL 100.00 76.70

CDC HOLDING FINANCE(formerly SODEVE) FULL 100.00 100.00 FULL 100.00 100.00

DFCI (*) (*) (*) FULL 100.00 76.33

CDC PME CROISSANCE FULL 100.00 55.90 FULL 100.00 56.64

BDPME GROUP EQUI 43.69 43.69 EQUI 43.69 43.69

BDPME EQUI 43.69 43.69 EQUI 43.69 43.69

AUXI CONSEIL EQUI – 42.95 EQUI – 42.70

AUXICOMI EQUI – 42.95 EQUI – 42.70

AUXIFINANCES EQUI – 42.95 EQUI – 42.70

AUXIMURS EQUI – 42.95 EQUI – 42.70

AVENIR ENTREPRISES EQUI – 33.05 EQUI – 32.86

AVENIR INVESTISSEMENTS (*) (*) (*) EQUI – 42.70

AVENIR PME SUCCESSION (*) (*) (*) EQUI – 20.51

AVENIR TOURISME EQUI – 23.81 EQUI – 23.67

BATIROC BRETAGNE EQUI – 21.49 EQUI – 21.37

BIOTECH GARANTIE EQUI – 25.83 EQUI – 25.83

BRETAGNE DEVELOPPEMENT EQUI – 21.49 EQUI – 21.37

CEPME EQUI – 42.95 EQUI – 42.70

CIE AUXILIAIRE DU CEPME (CAC) EQUI – 42.95 EQUI – 42.70

ENERBAIL EQUI – 42.95 EQUI – 42.70

PROCREDIT PROBAIL EQUI – 41.71 EQUI – 41.47

SOFARIS EQUI – 25.43 EQUI – 25.43

SOFARIS REGIONS EQUI – 13.35 EQUI – 13.35

CNP ASSURANCES Group PROP 42.98 42.98 PROP 42.98 42.98

CNP ASSURANCES PROP 42.98 42.98 PROP 42.98 42.98

CARIVITA – – – EQUI – 8.60

ASSURBAIL PROP – 42.58 PROP – 42.58

ASSURPOSTE PROP – 21.49 PROP – 21.49

CAIXA SEGUROS(formerly CNP DO BRASIL) PROP – 22.24 PROP – 21.81

CNP IAM PROP – 42.98 PROP – 42.98

CNP IMMOBILIER PROP – 42.98 PROP – 42.98

CNP INTERNATIONAL PROP – 42.98 PROP – 42.98

CNP SEGUROS DE VIDA PROP – 32.87 PROP – 32.87

FULLAL PROP – 35.90 PROP – 35.90


2003 (1) 2003 2003 2002 (1) 2002 2002

FULLAL VIDA PROP – 35.92 PROP – 35.92

INVESTISSEMENTTRESOR VIE – ITV PROP – 42.98 PROP – 42.98

PREVIPOSTE PROP – 42.98 PROP – 42.98

PREVISOL EQUI – 12.83 EQUI – 12.83

PREVISOL RETIRO EQUI – 12.82 EQUI – 12.82

PREVISOL VIDA EQUI – 12.84 EQUI – 12.84

PROVINCIA SEGUROS DE VIDA EQUI – 17.19 EQUI – 17.19

SICAC PROP – 42.98 PROP – 42.98

ECUREUIL VIE PROP – 21.49 PROP – 21.49

FONCIERE ANATOLE FRANCE GROUP FULL 100.00 100.00 FULL 100.00 100.00

SOCIETE FONCIERE ANATOLE FRANCE FULL 100.00 100.00 FULL 100.00 100.00

QUAI ANATOLE FRANCE SCI FULL 100.00 100.00 FULL 100.00 100.00

SARL ATHOS FULL 100.00 100.00 FULL 100.00 100.00

SCI ATHOS FULL 100.00 100.00 FULL 100.00 100.00

SCI ATRIUM FULL 100.00 100.00 FULL 100.00 100.00

SCI AUSTERLITZ FULL 100.00 100.00 FULL 100.00 100.00

SCI RIVE GAUCHE FULL 100.00 100.00 FULL 100.00 100.00

URBA CLUB FULL 100.00 100.00 FULL 100.00 100.00

CAISSE NATIONALE DES CAISSES D’EPARGNE GROUP EQUI 35.00 35.00 EQUI 35.00 35.00

CAISSE NATIONALE DES CAISSES D’EPARGNE EQUI 35.00 35.00 EQUI 35.00 35.00

CNETI EQUI 35.00 26.91 EQUI 26.91 26.91

HOLASSURE EQUI 35.00 35.00 EQUI 35.00 35.00

SOPASSUR EQUI 17.49 17.49 EQUI 17.49 17.49

OCEOR GROUP

FINANCIERE OCEOR EQUI 35.00 28.66 – – –

BANQUE DE LA REUNION EQUI – 23.39 – – –

BANQUE DE NOUVELLE–CALEDONIE EQUI – 27.45 – – –

BANQUE DE TAHITI EQUI – 27.36 – – –

BANQUE DES ANTILLES FRANCAISES EQUI – 27.93 – – –

BANQUE DES ILES SAINT-PIERRE-ET-MIQUELON EQUI – 27.79 – – –

BANQUE INTERNATIONALE DES MASCAREIGNES EQUI – 25.23 – – –

CAISSE D’EPARGNE DE NOUVELLE–CALEDONIE EQUI – 27.45 – – –

CREDIPAC POLYNESIE EQUI – 27.35 – – –

CREDIT COMMERCIAL DE NOUMEA EQUI – 25.63 – – –




2003 (1) 2003 2003 2002 (1) 2002 2002

CREDIT SAINT-PIERRAIS EQUI – 13.49 – – –

SLIBAIL REUNION EQUI – 23.38 – – –

SOCIETE HAVRAISE CALEDONIENNE EQUI – 24.80 – – –

SANPAOLO GROUP

BANQUE SANPAOLO EQUI 35.00 21.00 – – –

BAMI EQUI – 4.20 – – –

CONSERVATEUR FINANCE EQUI – 4.20 – – –

EUROSIC EQUI – 6.88 – – –

SANPAOLO ASSET MANAGEMENT EQUI – 21.00 – – –

SANPAOLO BAIL EQUI – 21.00 – – –

SANPAOLO FONDS GESTION EQUI – 21.00 – – –

SANPAOLO MUR EQUI – 21.00 – – –

SOCAVIE EQUI – 21.00 – – –

SOCIETE FONCIERE D’INVESTISSEMENT EQUI – 21.00 – – –

SOCIETE FONCIERE JOSEPH VALLOT EQUI – 21.00 – – –

SOCIETE IMMOBILIERE D’INVESTISSEMENT EQUI – 21.00 – – –

UNI INVEST EQUI – 21.00 – – –

C3D GROUP FULL 100.00 100.00 FULL 100.00 100.00

C3D FULL 100.00 100.00 FULL 100.00 100.00

C3D GROUP: ICADE (formerly SCIC) FULL 100.00 100.00 FULL 100.00 100.00

• REAL ESTATE AND HOLDING 100.00 100.00 100.00 100.00

ICADE SA (formerly SCIC SA) FULL 100.00 100.00 FULL 100.00 100.00

CIE IMMOBILIERE DE LA REGION PARISIENNE (CIRP) FULL – 92.73 FULL – 92.73

FONCIERE COMMERCES IDF FULL – 100.00 FULL – 100.00

SA POUR LA CONSTRUCTION DE LOGEMENTS ECONOMIQUES(SACLE) FULL – 100.00 FULL – 100.00

SCI LOCATIVES IDF (78 companies) FULL – – FULL – –

SCI LOCATIVES REGIONS(27 companies) FULL – – FULL – –

EMGP GROUP FULL 100 82.36 FULL 100 81.60

EMGP SA FULL – 82.36 FULL – –

SCI PDM 1 FULL – 82.36 FULL – –



SCI BASSIN NORD PROP – 41.18 FULL – –

SCI BATI GAUTIER FULL – 82.36 FULL – –

CFI (CHEMIN DE FER INDUSTRIEL)SAS FULL – 82.35 FULL – –

MANUTRA SECURITE SARL FULL – 45.33 FULL – –


2003 (1) 2003 2003 2002 (1) 2002 2002

MANUTRA SAS FULL – 45.26 FULL – –

SERAEL SA FULL – 41.03 FULL – –

SNC LE PARC DU MILLENAIRE FULL – 82.36 FULL – –

SCI 68 VICTOR HUGO FULL – 82.36 FULL – –

SCI LE PARC DU MILLENAIRE FULL – 82.36 FULL – –

• MEDICAL RESIDENCES

BEL-AIR CLAMART SARL – – – FULL – 91.15

CAYO LARGO SAS – – – FULL – 91.15

CLINIQUE DU VAL-DE-SEINE SAS – – – FULL – 90.88

HOLDING VAL-DE-SEINE – – – FULL – 91.15

LA PROVENCALE SAS – – – FULL – 91.15

LE SPLENDID SAS – – – FULL – 91.15

MF DEVELOPPEMENT SA – – – FULL – 91.15

SA MEDICA France (formerly SEMACS) – – – FULL – 91.15

SANTEL SAS – – – FULL – 91.15

SARL CENTRE CONV NEUVILLE(CCN) – – – FULL – 91.15

SARL CENTRE MEDICAL DES ALPILLES (CMA) – – – FULL – 91.15

SARL CENTRE MEDICAL DU VENTOUX (CMV) – – – FULL – 91.15

SARL LA ROCHE SAMUEL – – – FULL – 91.15

SARL LA ROCHETTE – – – FULL – 91.15

SCI LE SPLENDID – – – FULL – 91.15

SNC LES PINS – – – FULL – 90.24

SOCIETE DE DEVELOPPEMENT ET DE PARTICIPATION FINANCIERES (SDFI) SA – – – FULL – 91.15

SOLISANA SAS – – – FULL – 91.15

EIS GROUP

EIS SA – – – FULL – 100.00

QUALISANTE SUISSE SA – – – FULL – 84.99

RESIDENCE AUTOMNE DE CHALONS SA – – – FULL – 99.99

RESIDENCE AUTOMNE DE DINARD SA – – – FULL – 99.99

RESIDENCE AUTOMNE DE LAXOU SARL – – – FULL – 99.79

RESIDENCE AUTOMNE DE NEUVILLE SA – – – FULL – 99.99

GRAPA SARL – – – FULL – 99.79

INVAMURS SA – – – FULL – 100.00

JARDINS DE SERMAIZE SAS – – – FULL – 99.99

JARDINS D’HESTIA SA – – – FULL – 99.90

LA MOLE D’ANGOULINS SA – – – FULL – 99.98

LE MOULIN DE L’ISLE SAS – – – FULL – 99.99

47


2003 (1) 2003 2003 2002 (1) 2002 2002

POLYMED SANTE SA – – – FULL – 99.98

QUALISANTE SA – – – FULL – 99.99

RESIDENCE AUTOMNE DE SARZEAU SA – – – FULL – 99.99

RESIDENCE AUTOMNE DU MANS SARL – – – FULL – 99.79

RESIDENCE AUTOMNE LA FERME SARL – – – FULL – 99.99

RESIDENCE AUTOMNE LA GARE SARL – – – FULL – 99.99

RESIDENCE AUTOMNE LILLE STE THERESE SARL – – – FULL – 99.79

RESIDENCE AUTOMNE LYON GERLAND SARL – – – FULL – 99.79

RESIDENCE AUTOMNE ND SANILHAC SA – – – FULL – 99.99

RESIDENCE AUTOMNE SABLES-D’OLONNE SARL – – – FULL – 99.79

RESIDENCE AUTOMNE SAINT-MALO SARL – – – FULL – 99.79

RESIDENCE AUTOMNE ST GEORGES SARL – – – FULL – 99.79

RESIDENCE AUTOMNE VILLARS DOMBES SARL – – – FULL – 99.59

SA DE CHAINTREAUVILLE – – – FULL – 95.95

SA INVAMIS – – – FULL – 99.79

SA SOCEFI – – – FULL – 99.99

SCI BICHAT – – – FULL – 99.99

SCI DE L’EUROPE – – – FULL – 99.99

SCI LAXOU – – – FULL – 51.00

SCI LES CHENES – – – FULL – 99.91

SCI PIERRE DEBOURNOU – – – FULL – 99.79

SCI ST JEAN – – – FULL – 99.79

SDSA SA – – – FULL – 99.99

SERAPA SARL – – – FULL – 99.99

SERPA SARL – – – FULL – 99.99

SANTE INVESTISSEMENT FRANCE (SIF) SA – – – FULL – 99.99

SNC DE DINARD – – – FULL – 99.79

SNC DE L’EUROPE – – – FULL – 99.99

SOGEMAPAD SARL – – – FULL – 99.99

ST-JEAN CEDRES (BRIVE) SA – – – FULL – 99.99

CEDREPA INVESTISMTS SA – – – FULL – 99.99

SCI BRUAY-SUR-ESCAUT – – – – – –

SCI ST-GEORGES-DE-DIDONNE – – – – – –

SCI SABLES-D’OLONNE – – – – – –

SCI LYON GERLAND – – – – – –

SCI SAINT-MALO – – – – – –


2003 (1) 2003 2003 2002 (1) 2002 2002

SCI VILLARS DES DOMBES – – – – – –

SCI LE MANS – – – – – –

SCI ARS-EN-RE – – – – – –

• REAL ESTATE DEVELOPMENT

ESPACE & HABITAT SA FULL – 44.78 FULL – 45.52

GROUPE CAPRI ATLANTIQUE(53 companies) FULL – 65.00 FULL – 65.00

GROUPE CAPRI LYON MEDITERRANEE (48 companies) FULL – 65.00 FULL – 65.00

GROUPE CAPRI ILE-DE-FRANCEET REGION NORD (48 companies) FULL – 65.00 FULL – 65.00

GROUPE ELLUL (29 companies) FULL – 33.15 FULL – 33.15

SCI LA MUSEAU FULL – 44.78 – – –

GROUPE PROMOMIDI(7 companies) FULL – 33.15 – – –

SCI TUILERIES PROP – 22.38 – – –

CAPRI RESIDENCES FULL – 65.00 – – –

• REAL ESTATE SERVICES

PROJECT MANAGEMENT

ANTONY PARC SNC – – – FULL – 100.00

CENTRE EST PROMOTION SNC FULL – 100.00 FULL – 100.00

FRANCE OUEST PROMOTION SNC FULL – 100.00 FULL – 100.00

ARCOBA SAS FULL – 100.00 FULL – 99.99

GRANDE ARCHE ARCHITECTURE AMENAGEMENT(G3A) (SNC) FULL – 100.00 FULL – 100.00

NERUDA FONTANOTS SCI FULL – 100.00 FULL – 100.00

NORD PROMOTION SNC FULL – 100.00 FULL – 100.00

ODYSSEUM 2 SCI FULL – 77.00 FULL – 55.00

PB31 PROMOTION SNC PROP – 50.00 PROP – 50.00

RESA ESPANA SA FULL – 67.00 FULL – 67.00

SANESCO SA EQUI – 40.00 EQUI – 40.00

ICADE G3A SAS FULL – 100.00 FULL – 100.00

SCIC ESPANA SA FULL – 100.00 FULL – 100.00

SETRHI - SETAE SA FULL – 99.97 FULL – 99.88

ICADE CITES SNC FULL – 100.00 FULL – 100.00

TERTIAL SNC (10 companies) FULL – 100.00 FULL – 100.00

URBIS ATLANTIQUE – – – FULL – 90.00

SCI ESPACE MARCEAU FULL – 51.00 – – –

SCI NICE 400 PROMENADE DES ANGLAIS PROP – 50.00 – – –

SCI 22/24 RUE DE LAGNY FULL – 51.00 – – –

FACILITIES MANAGEMENT

EUROGEM SAS (*) (*) (*) FULL – 60.00

EURIS BELGIQUE SPRL FULL – 60.08 FULL – 60.00




2003 (1) 2003 2003 2002 (1) 2002 2002

EUROGEM SA FULL – 60.00 FULL – 60.00

EUROGEM SNC – – – FULL – 60.04

GESTEC RS CONSULTANTS SAS FULL – 60.00 FULL – 60.00

KLEBER FM SAS FULL – 45.00 FULL – 45.00

MANUTRA SARL – – – EQUI – 27.00

PROPERTIA FM SAS PROP – 29.40 PROP – 29.40

STHAL SNC PROP – 30.00 PROP – 30.00

TREGS SARL PROP – 30.00 PROP – 30.00

IMOP SA FULL – 46.80 – – –

FACIMALP SA FULL – 38.92 – – –

IMSI EUROGEM IBERICA SA FULL – 57.00 – – –

NORMANDIAL SERVICES FULL – 36.00 – – –

PROPERTY MANAGEMENT

GFF INSTITUTIONNELS SAS(formerly AGIFRANCE SA) FULL – 100.00 FULL – 100.00

EUROCAMPUS SARL FULL – 60.00 FULL – 60.00

EUROSTUDIOMES SNC FULL – 100.00 FULL – 100.00

GFF AQUITAINE SASU (*) (*) (*) FULL – 100.00

GFF ATLANTIQUE SA (*) (*) (*) FULL – 100.00

GFF FINCAS ANZIZU SARL(Spain) FULL – 90.00 FULL – 89.99

GFF HABITAT SAS FULL – 100.00 FULL – 100.00

GFF PARTICIPATIONS SAS(formerly GFF INSTITUTIONNELS) FULL – 100.00 FULL – 100.00

GFF LES FLANDRES SASU (*) (*) (*) FULL – 100.00

GFF MEDITERRANEE SASU (*) (*) (*) FULL – 100.00

GFF PATRIMOINE SASU (*) (*) (*) FULL – 100.00

GFF PROVENCE SASU (*) (*) (*) FULL – 100.00

GFF RHONES-ALPES SA (*) (*) (*) FULL – 100.00

GFF TOULOUSE SASU (*) (*) (*) FULL – 100.00

GFF VALORIAL SAS FULL – 100.00 FULL – 100.00

GROUPEMENT FONCIER DE FRANCE (GFF) SAS FULL – 100.00 FULL – 100.00

MARTEL ET BOURDAIS SAS (*) (*) (*) FULL – 100.00

MONTPARNASSE SERVICES SARL FULL – 99.80 FULL – 100.00

SPGI SAS (*) (*) (*) FULL – 100.00

SERVICES TO SEMs

BETURE CONSEIL SA – – – EQUI – 99.99

SOCIETE CENTRALE POUR L’EQUIPEMLENT DU TERRITOIRE (SCET) SA FULL – 100.00 FULL – 100.00

C3D GROUP: HOLDING & OTHER

ALTEAU SA FULL – 51.00 FULL – 51.00

C3D INVESTMENT SAS FULL – 100.00 FULL – 100.00

FINANCIERE TRANSDEV SA FULL – 50.12 FULL – 50.12


2003 (1) 2003 2003 2002 (1) 2002 2002

BETHURE GROUP/CAP ATRIUM SASU FULL – 99.96 FULL – 99.96

SADSI SA FULL – 99.96 FULL – 99.96

C3D GROUP: TRANSDEV FULL 100.00 68.01 FULL 100.00 68.01

• HOLDING

TRANSDEV SA FULL – 68.01 FULL – 68.01

COFITREC SNC FULL – 68.01 FULL – 68.01

TRANSAMO SA FULL – 67.84 FULL – 67.84

TRANSDATA SNC FULL – 68.01 FULL – 68.01

TRANSPART SNC FULL – 68.01 FULL – 68.01

RATP DEVELOPPEMENT SA EQUI – 17.00 – – –

TPT-SGPS SA FULL – 68.00 – – –

TRANSDEV ORLEANS SNC FULL – 68.01 – – –

• REGIONAL INTERCITY TRANSPORTATION

CARS ARIEGE PYRENEES SAS FULL – 67.98 FULL – 67.98

CARS BIZIERE SA FULL – 61.21 FULL – 61.21

CARS COMTADINS SAS FULL – 67.98 FULL – 67.98

CIE DES CHEMINS DE FER CAMBRESIS (CFC) SA – – – FULL – 66.83

CIE TRANSPORTS DE LA COMMUNAUTESNC (CTC) FULL – 54.41 FULL – 54.41

COMPAGNIE AUTOCARS DE PROVENCE SAS (CAP) FULL – 67.98 FULL – 67.98

COURRIERS DE L’AUBE SCS FULL – 63.77 FULL – 63.77

ALPES BUS FOURNIER SARL FULL – 68.01 FULL – 68.01

MARTIN FRERES SNC FULL – 67.66 FULL – 67.65

MONT BLANC BUS SARL FULL – 50.94 FULL – 50.93

PROGESUD SA FULL – 34.66 FULL – 34.67

VISUAL SUD SNC FULL – 68.01 FULL – 68.01

RAPIDES DE BOURGOGNE SNC FULL – 68.01 FULL – 68.01

RAPIDES DE COTE-D’OR (RCO) SNC FULL – 68.01 FULL – 68.01

RAPIDES DE SAONE- ET-LOIRE SA FULL – 44.43 FULL – 44.43

RAPIDES DU SUD EST SNC FULL – 67.98 FULL – 67.98

RAPIDES DU VAL-DE-LOIRE SNC FULL – 68.01 FULL – 68.01

SOCIETE AUTOMOBILE DE PROVENCE SA – – – PROP – 33.90

STCAR SARL – – – PROP – 33.90

STE NOUVELLE DES AUTOBUS AJACCIENS SA (SNAA) FULL – 68.00 FULL – 67.93

STE TRANSPORTAGGLOMERATION CHALONNAISE SARL (STAC) FULL – 54.41 FULL – 54.41

STE TRANSPORTS AUTOMOBILE DU MIDI SNC(STADIMI) FULL – 67.98 FULL – 67.98

49


2003 (1) 2003 2003 2002 (1) 2002 2002

TRANSAVOIE SA FULL – 67.67 FULL – 67.66

TRANSDEV ALPES SAS FULL – 68.01 FULL – 68.00

TRANSDEV EST SAS FULL – 68.01 FULL – 68.01

TRANSDEV LORRAINE ETB FULL – 68.01 FULL – 68.01

TRANSDEV SUD SAS FULL – 67.98 FULL – 67.98

TRANS’L SARL FULL – 67.73 FULL – 64.27

TRANSPORTS CAGNES-SUR-MER SA – – – PROP – 34.00

VOYAGES CROLARD SAS FULL – 68.01 FULL – 67.99

• PARIS REGION INTERCITY TRANSPORTATION

AEROPASS SAS FULL – 68.00 FULL – 68.00

AIRCAR SAS FULL – 68.00 FULL – 68.00

AUTOBUS DE MARNE-LA-VALLEE SAS (AMV) FULL – 61.31 FULL – 60.41

CARS BRIDET SA FULL – 67.94 FULL – 67.94

CARS D’ORSAY SAS FULL – 67.98 FULL – 67.97

CARS LE CAPLAIN SAS FULL – 67.96 FULL – 67.96

CIE EXPLOITATION AUTOMOBILE ET DE TRANSPORT SAS (CEAT) FULL – 68.00 FULL – 67.99

EUROPE AUTOCARS SAS FULL – 67.99 FULL – 67.99

INTERVAL SAS FULL – 67.96 FULL – 67.96

SOCIETE DE TRANSPORT DU BASSIN CHELLOIS SAS (STBC) FULL – 54.41 FULL – 54.41

SOFITRANS SA FULL – 68.00 FULL – 68.00

TRANSDEV PARIS EST SAS FULL – 68.01 FULL – 68.01

TRANSDEV PARIS SUD SA FULL – 68.01 FULL – 68.01

TRANSPORTS URBAIN DE CHELLES SA (TUC) FULL – 67.93 FULL – 67.90

VAL D’EUROPE AIRPORT SAS (VEA) FULL – 57.53 FULL – 57.49

VISUAL IDF SNC FULL – 68.01 FULL – 67.33

VISUAL TOURISME SAS FULL – 68.01 – – –

• URBAN TRANSPORTATIONFRANCE

SEMTAO SAEM – – – EQUI – 23.12

SOCIETE DOUAISIENNE DE TRANSPORT SAS (SDT) FULL – 67.99 FULL – 67.99

SODIPARC SAEM – – – EQUI – 16.16

STAB SA FULL – 60.87 FULL – 60.87

TRANSPORT EN COMMUN DE LA REGION D’AVIGNON SAS (TCRA) FULL – 68.01 FULL – 68.01

TRANSPORTS COMMUNS REGION METZ SAEM (TCRM) EQUI – 27.07 EQUI – 27.07

SETAO SNC FULL – 68.01 – – –


2003 (1) 2003 2003 2002 (1) 2002 2002

• INTERNATIONAL

LONDON UNITED 1994 LTD FULL – 68.01 FULL – 68.01

LONDON UNITED BUSWAYS LTD FULL – 68.01 FULL – 68.01

METROLINK PTY (Australia) PROP – 34.01 PROP – 34.00

SOVEREIGN BUSES LONDON LIMITED FULL – 68.01 FULL – 68.01

STANWELL LTD FULL – 68.01 FULL – 68.01

TRANSDEV AUSTRALIA LTD FULL – 68.01 FULL – 68.01

TRANSDEV NEW SOUTH WALES LTD (Australia) FULL – 68.01 FULL – 68.01

TRANSDEV PLC FULL – 68.01 FULL – 68.01

TRANSDEV Portugal (branch) FULL – 68.01 FULL – 68.01

TRANSDEV LIMITADA (Portugal) FULL – 68.01 FULL – 68.01

TRANSDEV TRAM UK LTD FULL – 68.01 FULL – 68.01

TRANSDEV VICTORIA LTD (Australia) FULL – 68.01 FULL – 68.01

DOMINGOS DA CUNHA LIMITIDA (Portugal) FULL – 68.01 – – –

TRANSPORTES RODOVARIOS DE PORTUGAL SA(formerly CAIMA SA) FULL – 68.01 – – –

RODOVIARIA DA BEIRA SA (RBL) FULL – 66.30 – – –

RODOVIARIA D’ENTRE DOURO E MINHO SA (REDM) FULL – 67.82 – – –

SOCIEDADE DE TRANSPORTES DO CARAMULO LIMITADA FULL – 66.30 – – –

CHARLINE LIMITIDA (Portugal) FULL – 68.01 – – –

CAVADO-SGPSLIMITADA (Portugal) FULL – 68.01 – – –

C3D GROUP: INFRASTRUCTURE ENGINEERING EGIS GROUP FULL 100.00 92.66 FULL 100.00 82.93

• HOLDING

EGIS DEUTSCHLAND GMBH FULL – 92.66 FULL – 82.93

EGIS INGENIERIE SA FULL – 92.66 FULL – 82.93

EGIS PROJECT VICTORIA PTY EQUI – 92.66 EQUI – 82.93

EGIS SA FULL – 92.66 FULL – 82.93

• ENGINEERING DIVISION

BCEOM SA FULL – 92.65 FULL – 82.92

BDPA–SCET AGRI SA FULL – 92.66 FULL – 82.93

BETEREM INFRASTRUCTURE SA FULL – 92.65 FULL – 82.92

BETURE INFRASTRUCTURE SA FULL – 92.66 FULL – 82.93

INGENIERIE DES SYSTEMES D’INFORMATIONS ET DE SECURITE (ISIS) SA FULL – 92.66 FULL – 82.93

ITAL CONSULT SPA (Italy) EQUI – 27.05 EQUI – 24.21

JEAN MULLER INTERNATIONAL SA FULL – 92.65 FULL – 82.92




2003 (1) 2003 2003 2002 (1) 2002 2002

SCETAUROUTE SA FULL – 92.66 FULL – 82.93

SEMALY SA FULL – 76.51 FULL – 67.92

SERALP INFRASTRUCTURE SA FULL – 92.65 FULL – 82.92

SOCIETE METRO MARSEILLE SA (SMM) EQUI – 76.51 EQUI – 64.53

GROUPE DORSCH CONSULT GMBH FULL – 92.66 FULL – 82.93

DORSCH CONSULT ERFURT FULL – 92.66 FULL – NC

AIRPLAN – – – FULL – NC

BERLIN DORSCH CONSULT FULL – 92.66 FULL – NC

BIRK HILLMAN – – – FULL – NC

CDC CHEMNITZ FULL – 92.66 FULL – NC

DC INDIA FULL – 92.66 – – –

DRESDEN DORSCH CONSULT FULL – 83.39 FULL – NC

GITEC CONSULT FULL – 92.66 FULL – NC

HYDROPROJECT FULL – 91.06 FULL – NC

I DORSCH CONSULT – – – FULL – NC

PLASSA FULL – 92.66 FULL – NC

WEIDLEPLAN FULL – 92.66 FULL – NC

ACI SA FULL – 92.62 – – –

EYSER SA (Spain) FULL – 92.66 – – –

EST INFRA SA FULL – 92.64 – – –

EGIS SEMALY INC (United States) FULL – 76.51 – – –

OUEST INFRA SA FULL – 78.74 – – –

SCET CAMEROUN SA (Cameroon) FULL – 92.58 – – –

SUD OUEST INFRA FULL – 60.21 – – –

• PROJECT MANAGEMENT DIVISION

EGIS DORSCH DEVELOPPEMENT(EDD) GMBH (Germany) FULL – 92.66 FULL – 82.93

EGIS PROJECTS GMBH (Austria) FULL – 92.66 FULL – 82.93

EGIS PROJECTS SA FULL – 92.66 FULL – 82.93

EPSYS (Philippines) FULL – 92.66 – – –

TOLLAUST PTY PROP – 46.33 PROP – 33.17

• ENGINEERING DIVISION

ADEGIS PTY (Austria) PROP – 46.32 PROP – 41.46

ATTIKES DIADROMES LTD (Greece) PROP – 45.40 PROP – 40.63

BHEGIS (Austria) PROP – 46.32 PROP – 41.46

EGIS PORTS SA EQUI – 18.53 FULL – 82.93

EUROPE ATLANTIQUE TERMINAL (EAT) SA – – – PROP – 26.95

GENERALE DE MANUTENTION PORTUAIRE (GMP) SA – – – PROP – 41.46

JELETRANS – – – PROP – 41.46

MANUTENTION TERMINAL NORD (MTN) SA – – – PROP – 41.46

MANUTENTION TERMINAL NORD DEVELOPPEMENT (MTND) SA – – – PROP – 41.46


2003 (1) 2003 2003 2002 (1) 2002 2002

MGM SA – – – FULL – 42.29

OPERSCUT (Portugal) FULL – 64.86 FULL – 53.90

STALEXPORTS TRANSROUTE (Poland) PROP – 41.70 PROP – 37.32

TRANSLINK INVESTMENT PTY LTD (Australia) PROP – 46.33 PROP – 41.46

TRANSROUTE INTERNATIONAL SA FULL – 92.66 FULL – 82.93

TRANSROUTE PHILIPPINES (Philippines) FULL – 92.66 FULL – 82.93

UK HIGHWAYS SERVICES LTD (U.K.) PROP – 46.33 FULL – 45.61

AUTOSTRADA EXPLO EKSPLOATACJA (Poland) PROP – 41.70 – – –

EGIS PROJECT ASIA PASIFIC(Australia) FULL – 92.64 FULL – 82.93

C3D GROUP: COMPAGNIE DES ALPES FULL 100.00 52.66 FULL 100.00 53.18

COMPAGNIE DES ALPES SA FULL – 52.66 FULL – 53.18

CENTRALE INVESTISSEMENTS ET LOISIRS SA (CIEL) FULL – 52.66 FULL – 53.17

CMBF (COURMAYEUR MT BLANC) SPA (Italy) FULL – 15.34 FULL – 15.49

COMPAGNIE DU MONT–BLANC SA (formerly CMB) SA PROP – 8.53 PROP – 8.58

DOMAINE SKIABLE DE FLAINE (DSF) SA FULL – 42.63 FULL – 43.05

DOMAINE SKIABLE DE GIF (DSG) SA FULL – 42.63 FULL – 43.05

FAVRE SPORTS SA – – – FULL – 23.93

FUNIVIE DELLE ALPI SRL (FDA) (Italy) FULL – 26.86 FULL – 27.12

MERIBEL ALPINA SA FULL – 52.66 FULL – 53.17

MONT–BLANC COMPAGNIE SA (formerly CMMG) (MBC) PROP – 11.54 PROP – 11.65

SAAS – FEE BERGBAHNEN AG (Switzerland) EQUI – 20.01 EQUI – 20.21

SEHRT SA (*) – (*) PROP – 8.57

SELALP SA FULL – 50.09 FULL – 50.58

SHM SA (*) – (*) PROP – 8.58

SKI SHOP SA – – – FULL – 53.18

SOCIETE DES MONTAGNES DE L’ARC SA (SMA) FULL – 48.44 FULL – 48.92

CMB RESTAURATION SARL PROP – 8.53 PROP – 8.58

STE AMENAGEMENT ARVES GIFFRE SA (SAG) FULL – 42.63 FULL – 43.05

STE AMENAGEMENT LA PLAGNE SA (SAP) FULL – 48.99 FULL – 48.08

STE CONSTRUCTION

IMMOBILIERE VALLEE DES BELLEVILLE (SCIVABEL) SCI FULL – 42.99 FULL – 43.41

STE EXPLOITATION VALLEE DES BELLEVILLE SA (SEVABEL) FULL – 42.98 FULL – 43.40

STE TELEPHERIQUES DE LA GRANDE MOTTE SA (STGM) FULL – 40.93 FULL – 41.34

51


2003 (1) 2003 2003 2002 (1) 2002 2002

STE TELEPHERIQUES DE L’AIGUILLE GRIVE SA (STAG) FULL – 48.44 FULL – 48.92

SWISSALP SA (Switzerland) FULL – 52.66 FULL – 53.18

TELEVERBIER SA (Switzerland) EQUI – 10.69 EQUI – 10.79

VVF VACANCES GROUP

VVF VACANCES SA FULL – 80.00 FULL – 80.00

VVF RESERVATION SA FULL – 80.00 FULL – 80.00

JUMBO TOURS FRANCE SA EQUI – 28.00 EQUI – 27.98

TOURING HOTEL SARL FULL – 80.00 FULL – 80.00

GREVIN Cie SA GROUP

GREVIN & Cie FULL – 52.66 FULL – 51.03

BAGATELLE SA FULL – 52.66 FULL – 51.02

FRANCE MINIATURE SA FULL – 52.66 FULL – 48.92

GREVIN & CIE TOURAINE(formerly AQUARIUM DU VAL DE LOIRE) FULL – 52.66 FULL – 51.02

AQUARIUM GEANT DE SAINT-MALO SA FULL – 52.66 FULL – 51.02

LES PRODUCTIONS DU PARC SA FULL – 52.66 FULL – 53.15

MINI CHATEAUX DU VAL DE LOIRE SA (*) – (*) FULL – 51.02

MUSEE GREVIN SA FULL – 50.49 FULL – 48.92

SOCIETE DE MISE EN VALEUR P SA FULL – 52.66 FULL – 51.02

BOIS DE BAGATELLE SCI (formerly FRANÇOIS PARENT) FULL – 52.66 – – –

SCI LE PARC DE LOISIRS DE BAGATELLE FULL – 52.66 – – –

FOREIGN SUBSIDIARIES

DOLFINARIUM (Netherlands) (*) – (*) FULL – 51.02

GREVIN DEUTSCHLAND GMBH(formerly FOR FUN) (Germany) FULL – 52.66 FULL – 51.02

GREVIN AVONTURENPARK HELLENDOORN BV (Netherlands) FULL – 52.66 FULL – 51.02

HARDERWIJK HELLENDOORN HOLDING BV (Netherlands) FULL – 52.66 FULL – 51.02

DOLFINARIUM HARDEWIJK BV(formerly ZEEDIERNPARK)(Netherlands) FULL – 52.66 FULL – 51.02

BICI ENTERTAINMENT SA(Switzerland) FULL – 52.66 – – –

COMPAGNIE FINANCIEREEULIA GROUP PROP 67.57 67.57 PROP 67.57 67.57

COMPAGNIE FINANCIERE EULIA PROP 67.57 67.57 PROP 67.57 67.57

CDC IXIS ITALIA HOLDING PROP 71.90 71.90 PROP 71.90 71.90

GROUPE CICOBAIL PROP 67.57 67.40 PROP 67.57 67.40

CICOBAIL PROP 67.57 67.40 PROP 67.57 67.40

CINERGIE PROP 67.57 67.47 PROP 67.57 67.47

MUR ECUREUIL PROP 67.57 67.48 PROP 67.57 67.48


2003 (1) 2003 2003 2002 (1) 2002 2002

BAIL ECUREUIL PROP 67.57 67.57 PROP 67.57 67.57

ECUREUIL GESTION PROP 69.89 69.89 PROP 69.89 69.89

ECUREUIL IARD PROP 67.57 43.92 PROP 67.57 43.92

ECUREUIL PARTICIPATIONS PROP 67.57 67.57 PROP 67.57 67.57

ECUREUIL VIE EQUI 33.64 33.64 EQUI 33.64 33.64

GESTITRES PROP 71.10 46.93 PROP 71.10 46.93

HOLGEST PROP 71.10 71.10 PROP 71.10 71.10

CREDIT FONCIER DE FRANCE GROUP PROP 45.71 45.71 PROP 45.69 45.69

CREDIT FONCIER DE FRANCE PROP 45.71 45.71 PROP 45.69 45.69

AUXILIAIRE DU CREDIT FONCIER DE FRANCE PROP 45.71 45.71 PROP 45.69 45.69

COFIMAB PROP 45.71 45.71 PROP 45.69 45.69

COMPAGNIE DE FINANCEMENT FONCIER PROP 45.71 45.71 PROP 45.69 45.69

COMPAGNIE FONCIERE DE CREDIT PROP 45.71 45.71 PROP 45.69 45.69

CREDIT DE L’ARCHE PROP 45.71 45.71 PROP 45.69 45.69

CREDIT FONCIER ASSURANCE COURTAGE PROP 45.71 45.66 PROP 45.69 45.64

CREDIT FONCIER BANQUE PROP 45.71 45.71 PROP 45.69 45.69

DOM2 – – – PROP 45.69 45.69

FCC TEDDY PROP 45.71 45.71 PROP 45.69 45.69

FINANCIERE DESVIEUX PROP 45.71 45.71 PROP 45.69 45.69

FONCIER ASSURANCE PROP 45.71 45.71 PROP 45.69 45.69

FONCIER BAIL PROP 45.71 45.71 PROP 45.69 45.69

FONCIER PARTICIPATIONS EQUI 45.71 45.71 EQUI 45.69 45.69

SICP EQUI 45.71 45.71 EQUI 43.41 43.41

SOCLIM PROP 45.71 45.71 PROP 45.69 45.69

SOCFIM GROUP PROP 67.57 67.50 PROP 67.57 67.50

SOCFIM PROP 67.57 67.50 PROP 67.57 67.50

SEI LOGEMENT PROP 67.57 67.50 PROP 67.57 67.50

SEI TERTIAIRE PROP 67.57 67.50 PROP 67.57 67.50

SOCFIM PARTICIPATIONS PROP 67.57 67.50 PROP 67.57 67.50

SOCFIM TRANSACTIONS PROP 67.57 67.50 PROP 67.57 67.50

SOCIETE EUROPEENNED’INVESTISSEMENT (SEI) PROP 67.57 67.50 PROP 67.57 67.50

EULIA CAUTION GROUP(formerly SOGECCEF) PROP 67.57 67.57 PROP 67.57 67.56

EULIA CAUTION PROP 67.57 67.57 PROP 67.57 67.56

CEGI PROP 67.57 47.30 PROP 67.57 47.30

FINANCIERE CEGI PROP 67.57 47.30 PROP 67.57 47.30

SACCEF PROP 67.57 67.56 PROP 67.57 67.56

SOCAMAB PROP 67.57 27.03 PROP 67.57 27.03




2003 (1) 2003 2003 2002 (1) 2002 2002

CDC IXIS GROUP PROP 79.36 79.36 PROP 79.36 79.36

CDC IXIS PROP 79.36 79.36 PROP 79.36 79.36

CDC ENTREPRISES 1 PROP 79.36 75.83 PROP 79.36 76.04

CDC ENTREPRISES 2 PROP 79.36 49.58 PROP 79.36 49.59

CDC INNOVATION 96 PROP 79.36 76.75 PROP 79.36 76.75

CDC IXIS ADMINISTRATION DE FONDS (formerly GSF) PROP 79.36 79.36 PROP 79.36 79.36

CDC URQUIJO PROP 79.36 40.48 PROP 79.36 40.48

ELECTROPAR FRANCE PROP 79.36 39.68 PROP 79.36 39.68

EURO MONTAIGNE NV PROP 79.36 79.36 PROP 79.36 79.36

FONDINVEST PROP 79.36 79.36 PROP 79.36 79.36

IXIS AEW EUROPE PROP 79.36 79.36 PROP 79.36 79.36

MARTIGNAC FINANCE PROP 79.36 79.36 PROP 79.36 79.36

PART’COM PROP 79.36 79.36 PROP 79.36 79.36

SOGEPOSTE EQUI 38.89 38.89 EQUI 38.89 38.89

MAGNANT SA (*) (*) (*) PROP 79.36 79.36

VEGA FINANCE GROUP PROP 79.36 67.46 PROP 79.36 67.46

VEGA FINANCE PROP 79.36 67.46 PROP 79.36 67.46

AGENCE FRANCAISE DU PATRIMOINE EQUI 13.49 13.49 EQUI 13.49 13.49

C & M FINANCE EQUI 13.49 13.49 EQUI 13.49 13.49

FIDUCIARA VEGA – – – PROP 79.36 67.46

P & B FINANCE EQUI 22.94 22.94 EQUI 22.94 22.94

STRATUTS CONSULTANTS PROP 79.36 45.87 PROP 79.36 42.50

VEGA GESTION DE FORTUNE PROP 79.36 67.46 PROP 79.36 67.46

VEGA MULTIMANAGER PROP 79.36 67.43 PROP 79.36 67.43

VEGA PARTENAIRES PROP 79.36 67.19 PROP 79.36 67.19

VEGAGEST ITALIA – – – PROP 25.63 25.63

CDC IXIS PRIVATE EQUITY GROUP PROP 79.36 79.36 PROP 79.36 79.36

CDC EQUITY CAPITAL PROP 79.36 79.36 PROP 79.36 79.36

CDC INNOVATION PARTNERS PROP 79.36 79.36 PROP 79.36 79.36

CDC IXIS PRIVATE EQUITY PROP 79.36 79.36 PROP 79.36 79.36

FONDINVEST CAPITAL PROP 79.36 63.47 PROP 79.36 63.47

PART COM MANAGEMENT (2) (2) (2) PROP 79.36 79.17

SERVICES INDUSTRIES GESTION PROP 79.36 79.36 PROP 79.36 79.36

CDC IXIS CAPITAL MARKET GROUP PROP 79.36 79.36 PROP 79.36 79.36

CDC IXIS CAPITAL MARKETS PROP 79.36 79.36 PROP 79.36 79.36

CDC IXIS SECURITIES PROP 79.36 79.36 PROP 79.36 79.36

CDC MARCHES INFORMATIQUE – – – PROP 79.36 78.11

CLEA2 PROP 79.36 79.36 PROP 79.36 79.36

CDC IXIS NORTH AMERICA GROUP PROP 79.36 79.36 PROP 79.36 79.36

CDC IXIS NORTH AMERICA PROP 79.36 79.36 PROP 79.36 79.36

CIMCO PROP 79.27 79.27 PROP 79.27 79.27


2003 (1) 2003 2003 2002 (1) 2002 2002

CDC IXIS CAPITAL MARKETS NORTH AMERICA GROUP PROP 79.36 79.36 PROP 79.36 79.36

CDC IXIS CAPITAL MARKETS NORTH AMERICA PROP 79.36 79.36 PROP 79.36 79.36

57 TH STREET HOLDINGS II – – – PROP 79.36 79.36

BEDFORD OLIVER FUNDING PROP 79.36 79.36 PROP 79.36 79.36

BLOOM ASSET HOLDING FUND PLC PROP 79.36 79.36 PROP 79.36 79.36

CCAV I PROP 79.36 79.36 PROP 79.36 79.36

CDC COMMERCIAL PAPER PROP 79.36 79.36 PROP 79.36 79.36

CDC DERIVATIVES INC PROP 79.36 79.36 PROP 79.36 79.36

CDC FINANCIAL PRODUCTS PROP 79.36 79.36 PROP 79.36 79.36

CDC FUNDING CORPORATION PROP 79.36 79.36 PROP 79.36 79.36

CDC HOLDING TRUST PROP 79.36 79.36 PROP 79.36 79.36

CDC MIRROR TRUST ST 1-3/11/00 PROP 79.36 79.36 PROP 79.36 79.36

CDC MIRROR TRUST ST 1-9/11/00 PROP 79.36 79.36 PROP 79.36 79.36

CDC MIRROR TRUST ST 1-FAC PROP 79.36 79.36 PROP 79.36 79.36

CDC MORTGAGE CAPITAL PROP 79.36 79.36 PROP 79.36 79.36

CDC MUNICIPAL PRODUCTS PROP 79.36 79.36 PROP 79.36 79.36

CDC PROPERTY TRUST PROP 79.36 79.36 PROP 79.36 79.36

CDC SECURITIES INC PROP 79.36 79.36 PROP 79.36 79.36

CDC SECURITIZATION CORP PROP 79.36 79.36 PROP 79.36 79.36

CDC WONDERLAND PROPERTY TRUST PROP 79.36 79.36 PROP 79.36 79.36

NINE WEST HOLDINGS – – – PROP 79.36 79.36

CDC RANDALL PARK MALL PROPERTY TRUST PROP 79.36 79.36 – – –

CDC CRESTED BUTTE HOTEL PROPERTY TRUST PROP 79.36 79.36 – – –

ANATOL INVEST GROUP PROP 79.36 79.36 PROP 79.36 79.36

ANATOL INVEST SA (*) (*) (*) PROP 79.36 79.36

ANATOL INVEST HOLDING BV PROP 79.36 79.36 PROP 79.36 79.36

PBW GROUP EQUI 39.68 39.68 EQUI 39.68 39.68

PBW REAL ESTATE FUND EQUI 39.68 39.68 EQUI 39.68 39.68

ATRIUM TOWER EQUI 39.68 39.68 EQUI 39.68 39.68

BRISTOL EQUI 39.68 39.68 EQUI 39.68 39.68

IBC EQUI 39.68 39.68 EQUI 39.68 39.68

MATY AS KIRALY EQUI 39.68 39.68 EQUI 39.68 39.68

MYSLBEK EQUI 39.68 39.68 EQUI 39.68 39.68

WEBC EQUI 39.68 39.68 EQUI 39.68 39.68

CDC IXIS FINANCIAL GUARANTY GROUP PROP 79.36 79.36 PROP 79.36 79.36

CDC IXIS FINANCIAL GUARANTY HOLDING PROP 79.36 79.36 PROP 79.36 79.36

CDC IXIS FINANCIAL GUARANTY PROP 79.36 79.36 PROP 79.36 79.36

CDC IXIS FINANCIAL GUARANTY EUROPE PROP 79.36 79.36 PROP 79.36 79.36

53


2003 (1) 2003 2003 2002 (1) 2002 2002

CDC IXIS FINANCIAL GUARANTY NA PROP 79.36 79.36 PROP 79.36 79.36

CDC IXIS FINANCIAL GUARANTY SERVICES INC. PROP 79.36 79.36 PROP 79.36 79.36

FONCIERE DES PIMONTS GROUP PROP 79.36 58.34 PROP 79.36 58.34

SOCIETE FONCIERE DES PIMONTS PROP 79.36 58.34 PROP 79.36 58.34

SA MESSINE PARTICIPATIONS PROP 79.36 58.34 PROP 79.36 58.34

SARL DESCARTES – – – PROP 79.36 58.34

SAS DESCARTES PROP 59.79 52.78 PROP 59.79 52.78

SCI CAMILLE DESMOULINS PROP 79.36 58.34 PROP 79.36 58.34

SCI DU 1 ROND-POINT DES CHAMPS-ELYSEES PROP 79.36 58.34 PROP 79.36 58.34

SCI DU 1 TERRASSE BELLINI PROP 26.45 19.45 PROP 26.45 19.45

SCI DU 114 AV. DES CHAMPS-ELYSEES PROP 79.36 58.34 PROP 79.36 58.34

SCI DU 2 RUE DU 4-SEPTEMBRE PROP 79.36 58.34 PROP 79.36 58.34

SCI DU 2-4 BLD HAUSSMANN (2) (2) (2) PROP 79.36 58.34

SCI DU 22-24 AV. DE WAGRAM PROP 79.36 58.34 PROP 79.36 58.34

SCI DU 26-28 AV. DE WAGRAM PROP 79.36 58.34 PROP 79.36 58.34

SCI DU 3-5 AV. DE FRIEDLAND PROP 79.36 58.34 PROP 79.36 58.34

SCI DU 31 RUE DE MOGADOR PROP 79.36 58.34 PROP 79.36 58.34

SCI DU 69 BLD HAUSSMANN PROP 79.36 58.34 PROP 79.36 58.34

SCI DU PONT-NEUF PROP 79.36 58.34 PROP 79.36 58.34

SCI MONTSOURIS 2001 PROP 39.68 29.17 PROP 39.68 29.17

SCI MORIZET PROP 79.36 58.34 PROP 79.36 58.34

SCI SEINE A4B PROP 79.36 58.34 – – –

LOGISTIS GROUP EQUI 26.45 26.45 EQUI 26.45 26.45

LOGISTIS EQUI 26.45 26.45 EQUI 26.45 26.45

SCI ARTOIPOLE ARRAS EQUI 26.45 26.45 EQUI 26.45 26.45

SCI CLESUD EQUI 26.45 26.45 EQUI 26.45 26.45

SCI EUROCENTRE TOULOUSE EQUI 26.45 26.45 EQUI 26.45 26.45

SCI PARISUD EQUI 26.45 26.45 EQUI 26.45 26.45

SCI PARISUD VI EQUI 26.45 26.45 EQUI 26.45 26.45

SCI PLAINE DE L’AIN EQUI 26.45 26.45 EQUI 26.45 26.45

SCI PORTE DE France EQUI 26.45 26.45 EQUI 26.45 26.45

SCI SAINT-LAURENT-DE-MURE EQUI 26.45 26.45 EQUI 26.45 26.45

SCI SAINT-OUEN-L’AUMONE(formerly SCI VILLEBON) EQUI 26.45 26.45 EQUI 26.45 26.45

NEXGEN GROUP EQUI 30.71 30.71 – – –

NEXGEN FINANCIAL HOLDINGS LTD EQUI 30.71 30.71 – – –

NEXGEN RE LTD EQUI 30.71 30.71 – – –

UNIVERSE HOLDINGS LTD EQUI 30.71 30.71 – – –

NEXGEN MAURITIUS LTD EQUI 30.71 30.71 – – –


2003 (1) 2003 2003 2002 (1) 2002 2002

NEXGEN CAPITAL LTD EQUI 30.71 30.71 – – –

NEXGEN FINANCIAL SOLUTIONS LTD EQUI 30.71 30.71 – – –

NEXGEN FINANCIAL

SOLUTIONS (ASIA) PTE LTD EQUI 30.71 30.71 – – –

BALTIMORE 2002-1 LTD EQUI 30.71 30.71 – – –

MANGO CDO LTD EQUI 30.71 30.71 – – –

CDC IXIS ASSET MANAGEMENT GROUP PROP 72.09 72.09 PROP 72.09 72.09

CDC IXIS ASSET MANAGEMENT PROP 72.09 72.09 PROP 72.09 72.09

CDC AM ASIA PROP 72.09 72.09 PROP 72.09 72.09

CDC AM JAPAN PROP 72.09 72.09 PROP 72.09 72.09

CDC IXIS AM ITALIA PROP 72.09 72.09 PROP 72.09 72.09

CDC IXIS AME PROP 72.09 72.09 PROP 72.09 72.09

CDC IXIS FONDSERVICES GMBH PROP 72.09 72.09 PROP 72.09 72.09

CDC IXIS PRIVATE CAPITAL MANAGEMENT PROP 72.09 72.09 PROP 72.09 72.08

CDC IXIS AM NORTH AMERICA CORPORATION GROUP PROP 72.09 72.09 PROP 72.09 72.09

CDC IXIS AM NORTH AMERICA CORPORATION PROP 72.09 72.09 PROP 72.09 72.09

CDC IXIS AM NA LP PROP 72.09 72.09 PROP 72.09 72.09

CDC IXIS AM US LLC PROP 72.09 72.09 PROP 72.09 72.09

AEW ADVISORS INC. PROP 72.09 72.09 PROP 72.09 72.09

AEW CAPITAL MANAGEMENT,LP PROP 72.09 72.09 PROP 72.09 72.09

AEW CAPITAL MANAGEMENT, INC. PROP 72.09 72.09 PROP 72.09 72.09

AEW CURZON LTD - - - PROP 72.09 72.09

AEW EQUITY SHARING LLC PROP 72.09 - PROP 72.09 0.00

AEW II CORPORATION PROP 72.09 72.09 PROP 72.09 72.09

AEW INVESTMENT GROUP, INC. PROP 72.09 72.09 PROP 72.09 72.09

AEW ITALIA – – – EQUI 57.67 57.67

AEW MANAGEMENT AND ADVISORS, LP PROP 72.09 72.09 PROP 72.09 72.09

AEW PARTNERS III, INC. PROP 72.09 72.09 PROP 72.09 72.09

AEW PARTNERS IV, INC. PROP 72.09 72.09 PROP 72.09 72.09

AEW REAL ESTATE ADVISORS, INC. PROP 72.09 72.09 PROP 72.09 72.09

AEW SECURITIES LIMITED PARTNERSHIP PROP 72.09 72.09 PROP 72.09 72.09

AEW TSF, INC. PROP 72.09 72.09 PROP 72.09 72.09

ASASHI NVEST INVESTMENT ADVISORY CO, LTD EQUI 35.32 35.32 EQUI 35.32 35.32

BACK BAY ADVISORS, INC. PROP 72.09 72.09 PROP 72.09 72.09

CAPITAL GROWTH MANAGEMENT, LP EQUI 36.05 36.05 EQUI 36.04 36.04

CASPIAN CAPITAL MANAGEMENT PROP 72.09 36.77 PROP 72.09 36.77




2003 (1) 2003 2003 2002 (1) 2002 2002

CDC IAM ADVISORS LP PROP 72.09 72.09 PROP 72.09 72.09

CDC IAM ASSOCIATES, INC. PROP 72.09 72.09 PROP 72.09 72.09

CDC IAM DISTRIBUTION CORPORATION PROP 72.09 72.09 PROP 72.09 72.09

CDC IAM DISTRIBUTORS, LP PROP 72.09 72.09 PROP 72.09 72.09

CDC IAM HOLDINGS, LLC PROP 72.09 72.09 PROP 72.09 72.09

CDC IAM SERVICES, INC. PROP 72.09 72.09 PROP 72.09 72.09

CDC IXIS INVESTMENT SERVICES JAPAN, INC. PROP 72.09 72.09 PROP 72.09 72.09

CREA WESTERN INVESTORS I, INC. PROP 72.09 72.09 PROP 72.09 72.09

CURZON FULLAL PARTNERS, LP – – – EQUI 36.04 36.04

FEDERAL STREET MANAGEMENT, INC. PROP 72.09 72.09 PROP 72.09 72.09

FIFTH COPLEY CORP. – – – PROP 72.09 72.09

MUTUALFUNDS.COM, LLC EQUI 34.60 34.60 EQUI 34.60 34.60

CDC IAM AUSTRALIA LTD PROP 72.09 72.09 PROP 72.09 72.09

CDC IAM HOLDINGS LLC (AUSTRALIA) HOLDINGS LLC PROP 72.09 72.09 PROP 72.09 72.09

GRAND CATHAY SECURITIES INVESTMENT TRUST – – – EQUI 14.42 14.42

HARRIS ASSOCIATES SECURITIES, LP PROP 72.09 72.09 PROP 72.09 72.09

HARRIS ASSOCIATES, INC. PROP 72.09 72.09 PROP 72.09 72.09

HARRIS ASSOCIATES, LP PROP 72.09 72.09 PROP 72.09 72.09

HARRIS PARTNERS, LLC PROP 72.09 72.09 PROP 72.09 72.09

JURIKA & VOYLES, INC. PROP 72.09 72.09 PROP 72.09 72.09

JURIKA & VOYLES, LP – – – PROP 72.09 72.09

KOBRICK FUNDS LLC PROP 72.09 72.09 PROP 72.09 72.09

LOOMIS SAYLES & COMPANY, INC. PROP 72.09 72.09 PROP 72.09 72.09

LOOMIS SAYLES & COMPANY, LP PROP 72.09 72.09 PROP 72.09 72.09

HANSBERGER GROUP INC. EQUI 18.02 18.02 – – –

LOOMIS SAYLES CONSUMER DISCRETIONARY HEDGE FUND PROP NC NC – – –


2003 (1) 2003 2003 2002 (1) 2002 2002

LOOMIS SAYLES DISTRIBUTORS, INC. PROP 72.09 72.09 PROP 72.09 72.09

LOOMIS SAYLES DISTRIBUTORS, LP PROP 72.09 72.09 PROP 72.09 72.09

LOOMIS SAYLES EQUITY SHARING, LLC PROP 72.09 – PROP 72.09 –

LOOMIS SAYLES INTERNATIONAL FUND SERVICES LTD PROP NC NC – – –

LOOMIS SAYLES SOLUTIONS, INC. PROP 72.09 72.09 – – –

MC MANAGEMENT, INC. PROP 72.09 72.09 PROP 72.09 72.09

MC MANAGEMENT, LP PROP 72.09 72.09 PROP 72.09 72.09

NEICOMP LLC PROP 72.09 72.09 PROP 72.09 72.09

NVEST INTERNATIONAL PARTNERSHIP, LP EQUI <15 <15 EQUI <15 <15

REICH & TANG DISTRIBUTORS, INC. PROP 72.09 72.09 PROP 72.09 72.09

REICH & TANG AM LLC PROP 72.09 72.09 PROP 72.09 72.09

REICH & TANG SERVICES, INC. PROP 72.09 72.09 PROP 72.09 72.09

SEAPORT SENIOR HOUSING, LLC PROP 72.09 72.09 PROP 72.09 72.09

SEVENTH COPLEY CORP. – – – PROP 72.09 72.09

SIXTH COPLEY CORP. – – – PROP 72.09 72.09

SNYDER CAPITAL MANAGEMENT, INC. PROP 72.09 72.09 PROP 72.09 72.09

SNYDER CAPITAL MANAGEMENT, LP PROP 72.09 72.09 PROP 72.09 72.09

VAUGHAN NELSON SCARBOROUGH & MC CULLOUGH, INC. PROP 72.09 72.09 PROP 72.09 72.09

VAUGHAN NELSON SCARBOROUGH & MC CULLOUGH, LP PROP 72.09 72.09 PROP 72.09 72.09

VAUGHAN NELSON TRUST COMPANY (formerlyVNSM TRUST COMPANY) PROP 72.09 72.09 PROP 72.09 72.09

WESTPEAK FULLAL ADVISORS PROP 72.09 72.09 PROP 72.09 72.09

WESTPEAK INVESTMENT ADVISORS AUSTRALIA LIMITED PROP 72.09 72.09 PROP 72.09 72.09

WESTPEAK INVESTMENT ADVISORS, INC. PROP 72.09 72.09 PROP 72.09 72.09

(1) Consolidation methods – FULL = fully consolidated; PROP = proportionally consolidated; EQUI = equity method; NC = non communicated.(2) Sold in 2003. However, earnings booked up until the date of the disposals.(*) Merger.

55

Auditors’ report on the consolidated financial statementsYear ended December 31, 2003

To the Chief Executive Officer,

In accordance with the assignment entrusted to us, we haveaudited the accompanying consolidated financial statements ofCaisse des Dépôts Group for the year ended December 31, 2003.

These consolidated financial statements have been approved byyou. Our role is to express an opinion on these financial state-ments based on our audit.

We conducted our audit in accordance with the professionalstandards applied in France. Those standards require that weplan and perform the audit to obtain reasonable assurance aboutwhether the consolidated financial statements are free of mate-rial misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the finan-cial statements. An audit also includes assessing the account-ing principles used and significant estimates made bymanagement, as well as evaluating the overall presentation ofthe financial statements. We believe that our audit provides areasonable basis for our opinion.

In our opinion, the consolidated financial statements give a trueand fair view of the assets and liabilities, financial position andresults of the entity formed by the companies included in theconsolidation scope, in accordance with French accounting reg-ulations and generally accepted accounting principles.

Without qualifying our opinion set out above, we draw yourattention to the note to the consolidated financial statementsentitled “Accounting principles used in preparing the consoli-dated financial statements of Caisse des Dépôts Group”, whichdescribes the changes in accounting methods resulting fromthe application of CRC Standard 2002-03 relating to the account-ing treatment of credit risk and CRC Standard 2002-10 relatingto asset depreciation, amortization and impairment; as well asthe change in accounting method applicable to recognizing gainsand losses on the indexing of inflation-indexed OATs.

Paris and La Défense, April 15, 2004

The AuditorsPricewaterhouseCoopers Audit Mazars & Guérard

Gérard Hautefeuille Guillaume Potel Denis Grison

This is a free translation into English of the statutory auditors’ report issued in the French language and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with,French law and professional auditing standards applicable in France.


CENTRAL SECTOR

(Euro millions) Notes 12.31.2003 12.31.2002

ASSETSInterbank and similar transactions 26,388 32,298

Cash, central banks and post office banks 1

Public-sector securities and similar 3 17,930 16,189

Advances and loans to financial institutions 1 8,457 16,109


Overdrafts 702 645


Bonds, equities, other fixed and variable income securities 38,969 27,753



Long-term equity holdings 9,648 10,218

Long-term equity holdings 4 and 5 9,648 10,218

Intangible fixed assets 6 57 55

Tangible fixed assets 6 1,579 498

Other assets 7 367 1,582

Accruals and deferrals 7 62 2,010

TOTAL 93,694 79,181

LIABILITIESInterbank and similar transactions 21,948 23,472

Central banks and post office banks 46 12

Advances and loans from financial institutions 8 21,902 23,460




Debt securities 10 1,284 1,307


Other liabilities 11 12,547 10,776

Accruals and deferrals 11 113 957

Provisions for risks and charges 12 743 738

Subordinated debt 2 2

Fund for general banking risks (FGBR) 13 608 608

Retained earnings (excluding FGBR) 13 9,864 9,248

Reserves 8,803 8,629

Revaluation adjustments 34 34

Regulatory provisions and investment subsidies 18 20

Other retained earnings 35 45

Income for the year 974 520

Balance sheet

57

(Euro millions) 12.31.2003 12.31.2002

Financing, guarantee and securities commitments given


To financial institutions 15 47


Guarantees

To financial institutions 1,137 244


Financing, guarantee and securities commitments received



Guarantees


From customers 1,478 818


Securities to be received 306 132

Other commitments

Other commitments given 371 5

Other commitments received 10 19

Off-balance sheet commitments relative to spot and forward foreign currency transactions and to the lending and borrowing of foreign currencies are described in Note 16.Off-balance sheet commitments relative to forward financial instruments are described in Note 17.

Off-balance sheet commitments


CENTRAL SECTOR

(Euro millions) Notes 12.31.2003 12.31.2002

Interest and similar revenues 2,116 2,249

Treasury and interbank transactions 20 216 643

Customer transactions 21 235 145


Other interest and similar revenues 410 124

Interest and similar expenses (1,388) (1,487)

Treasury and interbank transactions 20 (406) (790)

Customer transactions 21 (510) (536)

Bonds and other fixed income securities 23 (49) (159)

Other interest and similar expenses (423) (2)


Commissions (revenues) 24 16 28

Commissions (expenses) 24 (40) (38)

Gains or losses on trading security transactions 25 (1) (99)

Gains or losses on available-for-sale security transactions and similar 26 469 (517)

Other net operating banking revenues and expenses 27 (72) (91)

NET BANKING INCOME 1,611 699

Operating expenses (287) (318)

Payroll expenses 28 (387) (399)

Other administrative expenses (220) (237)

Rebillings 320 318

Net amortization, depreciation and provision charges 29 (48) (43)

GROSS INCOME FROM OPERATIONS 1,276 338

Cost of risk 30 (47) (31)

NET INCOME FROM OPERATIONS 1,229 307

Gains or losses on fixed assets 31 (30) 55

RECURRING INCOME BEFORE INCOME TAX 1,199 362

Net non-recurring income (expenses)

Income taxes 32 (227) (117)

Net movement in FGBR and regulatory provisions 33 2 275

NET INCOME 974 520

Income statement

59

Notes to the financial statements

Accounting principles used in preparing the financial statements

The financial statements for the year ended December 31, 2003

have been prepared in accordance with generally acceptedaccounting principles applicable to French banking and financial institutions.

The financial statements are presented in accordance with CRCRegulation 2000-03 related to the preparation of individual com-pany accounts by undertakings governed by the Comité de laréglementation bancaire et financière – CRBF (French Bankingand Finance Regulations Committee).

The accounting principles and valuation methods used are iden-tical to those used to prepare the financial statements for the year ended December 31, 2002, with the exception of the following points:


Credit risk CRC Standard 2002-03 of December 12, 2002 dealing with credit risk for companies governed by the CRBF took effect onJanuary 1, 2003. Some application methods for this CRCStandard were set forth in the CNC’s November 21, 2003

statement on accounting for loans restructured at non-marketconditions and in Opinion 2003-G of the CNC Urgent IssuesTask Force dated December 18, 2003 concerning methods forreclassifying non-performing loans to irrecoverable loans.


This standard applies to all credit-risk-bearing commitments:loans to financial institutions and customers, signature com-mitments, fixed-income securities (in the available-for-sale orheld-to-maturity portfolios) and forward instruments traded overthe counter that have a positive market value.


The non-performing loans category includes irrecoverable loans.These include loans in default and some loans that have beenclassified as non-performing for more than one year. CNC Opinion 2003-G of December 18, 2003 clarified the terms underwhich non-performing loans should be reclassified as irre-coverable loans, especially loans that have been classified as non-performing for more than one year. Non-performing loans are classified as irrecoverable when theyrequire the establishment of a provision and when it is likelythat the loan will ultimately be written off. This analysis mustbe made while taking existing guarantees on these loans intoaccount. Issued late in the year, this opinion could not be applied to the 2003 fiscal year. Thus the total amount of irrecoverable loansreported in the notes to the financial statements is higher thanor equal to the amount that would have been reported under theterms of this opinion. Non-performing loans and irrecoverable loans may be reclas-sified as performing loans when payments have resumed in asteady fashion for the amounts corresponding to the originalcontractual payment schedule and once the counterparty nolonger presents a default risk. They may also be classified asrestructured loans if debt has been rescheduled and followinga waiting period.

For loans with credit risk exposure, provisions are establishedto cover all projected losses on loans classified as non-performingor irrecoverable.



The new accounting measures discussed above have no impacton balance sheet and income statement items; nevertheless,supplementary disclosures to the notes to the financial state-ments are provided.

Restructured loans at non-market conditions are broken out separately, where applicable, in a specific sub-category for per-forming loans. At the time of the restructuring, the loan is recorded at nominal value less a discount corresponding to theamount of forfeited interest. This interest differential will be takeninto account in determining the lending margin on the loansconcerned.


As of December 31, 2003, there were no material restructuredloans at non-market conditions, and no interest differential wastherefore calculated to be taken into account for lending mar-gin purposes.


CENTRAL SECTOR

Securities and futures

The accounting principles and methods of CRC Standard 2002-03 of December 12, 2002 dealing with the accountingtreatment of credit risk for companies governed by the CRBF,described above for loans, also apply to fixed income securitiesand futures traded on the over-the-counter markets.These new accounting methods have no impact on the finan-cial statements, but they require additional disclosures in thenotes to the financial statements.

Inflation-indexed OATsIn the absence of specific regulations for credit institutions, theindexing effects on the face value of inflation-indexed OATs maybe recorded using one of the following methods: at the time thebond is sold or reaches maturity; spread over the bond’s termto maturity; as income or expense for the period.

In previous years, the method used was indexation of the facevalue at the time the OATi was sold or reached maturity.

Beginning with the year ending December 31, 2003, Caisse desDépôts decided to use the example of the accounting methodprescribed by Article R 332-19 of the Insurance Code, as amendedby decree No. 2002-1535 of December 24, 2002, and to entergains or losses related to the indexing of the face value of the bondsto the consumer price index as income or expenses for the year.

This change in the accounting method increased opening retained earnings as of January 1, 2003 by €4 million after taxesand gross income for the year ended December 31, 2003 by €7.1 million.

Depreciation, amortization and impairment of assetsCRC Standard 2002-10 of December 12, 2002 related to the depreciation, amortization and impairment of assets was appliedto the Central Sector financial statements for the year endedDecember 31, 2003.

In accordance with opinion No. 2003-F of the CNC Urgent IssuesTask Force, which was approved by the CRC on December 12, 2003,the Central Sector neither established provisions for major repairsnor applied the component approach for so-called Category 1replacement expenses. Provisions for major repairs were, how-ever, booked for so-called Category 2 major maintenance expenses.

Application of this standard resulted in a €13.9 million provi-sion for major repairs. This amount, charged against retainedearnings at January 1, 2003, corresponds to Category 2 expensesthat are part of multi-year maintenance plans (including €7.3 million for investment real estate), and a €2.8 million provision for 2003.

Retirement commitmentsThe CNC Urgent Issues Task Force opinion of January 21, 2004

provides guidelines on the accounting treatment of the conse-quences of the French pensions Reform Act (act No. 2003-775

of August 21, 2003). Under the new rules, employees can electto retire before the age of 65, but cannot be required to do so bytheir employer. The statutory retirement bonus payable whenthey retire is subject to payroll taxes. However, in light of calcu-lation assumptions applied previously, these modifications donot have a material impact on the provision amounts in theCentral Sector financial statements.

2 - Migration to a new accounting platform

The migration to the new CEDRE accounting platform onJanuary 1, 2003 resulted in the reclassification of some incomestatement and balance sheet (mainly interbank and customertransactions) items. These reclassifications did not have a mate-rial impact on the presentation of the financial statements as ofDecember 31, 2003.

Presentation and accounting policies

1 - Income statement items

Interest and commissions classified as such are recorded on an accruals basis. Commissions not classified as interest are recorded on a cash basis.

2 - Foreign-currency-denominated transactions

Foreign-currency-denominated assets, liabilities and off-balancesheet commitments have been translated at the exchange ratesruling on December 31, 2003. Currency gains and losses fromordinary currency transactions are recorded in the income sta-tement.

Spot foreign exchange transactions are valued at the spot rate.Forward currency transactions, other than hedging, are valuedat the forward rate of the remaining period. Forward currencytransactions for hedging purposes are valued by symmetry withthe item hedged.

Premiums and discounts related to hedged foreign currencytransactions are taken as income and expenses over the periodremaining until the maturity of these transactions.

61

3 - Advances and loans to financial institutions and customers

These items include loans, overdrafts and securities purchasedunder collateralized and uncollateralized fixed resale agreements.

LoansLoans are recorded as assets in the balance sheet at redemptionvalue. Accrued interest is recognized as income over the life ofthe loan.

Loans are now accounted for in accordance with the principlesof CRC Standard 2002-03 of December 12, 2002 dealing withcredit risk for companies governed by the CRBF, which tookeffect January 1, 2003 and whose application was further com-plemented by various opinions of the Urgent Issues Task Forceand a statement by the CNC. These accounting principles andmethods are presented above in the section on changes inaccounting methods.

Securities purchased under collateralized and uncollateralized fixed resale agreements These securities are recorded as assets in the balance sheet onthe line representing the receivable arising from the transac-tion. The corresponding income is recognized on an accrualsbasis. Securities received as collateral and subsequently sold arerecorded as liabilities and valued at market value.

4 - Securities and securities transactions

Securities are classified under five accounting categories cor-responding to the institution’s activities.

Trading securitiesTrading securities include in particular Treasury bills and negotiable debt securities. They are expected to be held for periods not exceeding six months. They are highly liquid andare marked to market. Valuation differences are recognized inthe income statement.

Available-for-sale securitiesAvailable-for-sale securities represent securities that are not tobe held until maturity or for trading purposes. They also includetrading securities reclassified after being held for a period ofmore than six months. In this case, the reclassification is madeat market value on the date of the transfer.

Available-for-sale securities are treated according to the FIFOmethod and are valued as follows:• bonds and equities: unrealized losses calculated based on their

year-end closing price are taken to expenses through a provi-sion for impairment;

• Treasury bills, negotiable debt securities, and interbank instruments: provisions are made on the basis of the individualsituation of the issuer and market indicators.

Any premiums and discounts are written off over the residuallife of the asset on a yield-to-maturity basis for negotiable debtsecurities and on a straight-line basis for other securities.

The accounting methods of CRC Standard 2002-03 dealing withcredit risk for companies governed by the CRBF apply, whererelevant, to credit risk for fixed-income available-for-sale secu-rities. These measures are presented above in the paragraph onchanges in accounting methods.

Held-to-maturity securitiesThis portfolio comprises fixed income securities that are intended to be held until maturity, and financed with dedicatedlong-term resources or covered through hedging instruments. Unrealized capital losses resulting from differences betweenbook and market values are not covered by provisions. However,if applicable, default risks are taken into account in determiningthe value of these securities at year-end. The difference betweenthe acquisition price and the redemption value of the securities(premium or discount) is amortized using the yield-to-maturitymethod for negotiable debt securities and the straight-linemethod for other securities.

The accounting methods of CRC Standard 2002-03 dealing withcredit risk for companies governed by the CRBF apply, whererelevant, to credit risk for held-to-maturity securities. These measures are presented above in the paragraph on changes inaccounting methods.

Portfolio securities (TAP)Portfolio securities are investments made on a regular basis withthe aim of realizing a capital gain in the medium term but withoutthe intention of investing on a long-term basis in the develop-ment of the business or taking an active part in the operationalmanagement of the issuing undertaking. These securities arerecorded at the lower of cost or fair value.

Fair value is determined by taking into account the general eco-nomic outlook for the issuer and the remaining period for whichthe securities will be held. For listed companies, fair value isgenerally represented by the average listed share price over asufficiently long period that reduces the impact of sharp pricefluctuations over the expected holding period.


CENTRAL SECTOR

Subsidiaries and affiliatesSubsidiaries and affiliates are recorded at acquisition cost. They are valued on the basis of their fair value, with referenceto various criteria such as net assets, share price, and capitali-zation of earnings. Provisions are constituted to reflect any per-manent impairment in fair value.

Lending and borrowing of securitiesSecurities are valued using the rules applicable to the portfolioof origin.

Borrowed securities are recorded as an asset under trading secu-rities at their market value on the day they were borrowed, andas a liability to recognize the debt towards the lender. They arevalued on the basis of their year-end market value.

Loans and borrowings guaranteed by cash and notes are treatedin the same way as collateralized resale agreements.Income from these transactions is recognized on an accrualsbasis in the income statement.

5 - Forward financial instruments

In application of the strategy defined for the development of its trading activities and the management of market risks, Caisse des Dépôts operates on all organized and over-the-countermarkets for interest rate, currency and equity futures and options.In France as well as abroad, these transactions are entered intoas part of:• specific or general hedging;• in connection with specialized management of trading

portfolios.

For all of these instruments, whatever the management policypursued, the face value of the futures and options contracts, thevalue of the underlying assets, or the exercise price is recorded inthe off-balance sheet. The method of accounting for expenses and revenues on these instruments depends on the management policy pursued.

The accounting methods of CRC Standard 2002-03 dealing withcredit risk for companies governed by the CRBF apply, whererelevant, to credit risk for futures traded over the counter. Thesemeasures are presented above in the paragraph on changes inaccounting methods.

Interest rate and currency swaps • Hedging transactions expenses and revenues resulting fromhedging instruments (taken singly or as a homogeneous group)are recognized symmetrically with the revenues and expensesresulting from the transaction hedged. Expenses and revenuesfrom hedging instruments for non-specific risks are recordedon an accruals basis. • Specialized portfolio management transactions: contracts arevalued at year-end at their market value. In accordance with regu-lations, the market value takes into account an adjustment fordefault risks and the discounted value of future managementcosts. The total net valuation difference is recognized in theincome statement.

Other interest rate and currency transactionsThese transactions relate primarily to futures and options.• Hedging transactions: expenses or revenues are recognized in

the income statement on a symmetrical basis with the reve-nues or expenses on the transaction hedged.

• Other transactions: these transactions are marked to market.Unrealized gains or losses at year-end are recognized in theincome statement.

In a departure from French regulations and in order to providea fair value of these instruments, those that are not highly liquidare also valued by reference to their theoretical market value.

Complex transactionsComplex transactions include derivatives, which combine repack-aged instruments of various types, characteristics and pricingmethods.

Each component of the transaction is recorded in the on- or off-balance sheet according to the nature of the underlying.

The result is considered globally and recorded through one entryreflecting the economic nature of the transactions, as if they werea single instrument. In the case of totally new products, when notgoverned by explicit regulation, the accounting approach for recognition of any gains and losses is based on similar existingproducts.

The method of accounting for gains and losses depends on themanagement policy pursued:• hedging transactions: for reasons of prudence, notably when

market liquidity is low, results are recorded on a time basis. Aprovision is made when market value is negative;

• trading portfolio or transactions for which the result can be con-sidered as an arrangement fee: the result is recognized when thetransaction is initiated. A discount is applied to take into accountfuture management expenses and possible default risks.

63

Market valuesWhen the market price of the instruments or the valuation parameters are not officially quoted, alternative valuationmethods are used, making reference to one or more of the following components: price confirmation by brokers or outsidecounterparties, comparison with actual transactions and researchby issuer or instrument category.

When instruments are valued using models, these integrate theparameters that affect the valuation of the instruments, in par-ticular the liquidity level of the related markets. Applying a pru-dent approach, the calculations are adjusted to take account ofthe weaknesses of some of these parameters, in particular theirrelevance over a long period.

6 - Tangible and intangible fixed assets

Fixed assets are valued at cost. In the case of buildings, initialfixtures, fittings and installation expenditure may be added tothe cost of acquisition.

Depreciation is calculated using the straight-line method andaccording to the type and quality of the building, over its esti-mated useful life. Thus, buildings are depreciated over twentyto fifty years. Partial renovation work on old buildings is depre-ciated over periods of between fifteen and twenty-five years.

Installations, improvements and fittings are generally depre-ciated over ten years. Software is generally depreciated over three years.

Forests are subject to provisions for impairment as required. Inthe event of an irreversible loss, an exceptional depreciationcharge is taken for the amount of the loss.

7 - Investment property risks

Caisse des Dépôts owns a large portfolio of rental properties held as long-term investments. A provision is booked for anypermanent impairment in value of these properties as well as properties earmarked for sale in the medium term. This provision represents the difference between carrying value andmarket value. Market values for material investment propertiesare determined regularly by independent appraisers.

8 - Advances and loans from financial institutions and customer deposits

These liabilities include deposits, loans and securities sold undercollateralized and uncollateralized fixed repurchase agreements.

LoansLoans are recorded in the balance sheet at redemption value andaccrued interest is charged to income over the life of the loan.

Securities sold under collateralized fixed repurchase agreementsThe debt is recorded under liabilities. The securities are main-tained in their original portfolio and valued according to therules applicable to that portfolio. The corresponding interest isrecognized through the income statement as it is accrued.

9 - Debt securities

Debt securities are reported according to the type of security:interbank and negotiable debt securities (certificates of depositand medium-term notes).

Accrued interest is recorded on the same balance sheet line asthe debt security and is charged to income.


CENTRAL SECTOR


This heading includes:• provisions for specifically identified risks related to banking

transactions and financial instruments as well as losses related to certain business sectors;

• provisions for pension-related commitments correspondingmainly to retirement benefits and expenses related to the establishment of a framework agreement in July 2002;

• provisions for risks and charges established in accordance withCRC Standard 2000-06 regarding the accounting treatment forliabilities. These provisions are intended to cover risks andcharges that are clearly defined but whose amount or timingremains uncertain. The establishment of these provisions issubject to the existence of an obligation to a third party at year-end, and the absence of at least an equivalent considerationfrom this third party. These provisions also include those intended to cover fore-seeable charges related to stated fiscal litigation:

• a provision for deferred taxes related to the deferred tax sched-ule for share exchange offers (Offres Publiques d’Echange –OPE – mergers);

• provisions for major repairs established in accordance withCRC Standard 2002-10 related to the depreciation, amortiza-tion and impairment of assets and whose application methodsare described in the section on changes in accounting methods.

11- Pension and related commitments

In France, pension liabilities are generally covered by contribu-tions taken as expenses and paid to retirement or insurancefunds, which then handle pension payments, or paid to thegovernment in the case of civil servants.

Provisions are made for employee retirement benefits for eachcategory of employees based on collective bargaining agree-ments. These provisions are calculated using an actuarial methodtaking into account the age and seniority of the personnel, themortality rate and probable remaining service with the companyuntil retirement age and estimated future salary levels. This provision is adjusted each year based on changes in the actuarialliabilities.

Commitments related to bonuses awarded for work medals orCaisse des Dépôts medals are calculated using the same methodas is used to determine commitments for retirement benefits.

12 - Fund for general banking risks

This fund is constituted to cover operational risks and losses arisingfrom banking activities and the management of financial assets thatare not covered by general or specific provisions. Transfers are madeto and from this fund on a regular basis to cover these risks.

13 - Income taxes

Each year, the Central Sector makes a voluntary payment in lieuof taxes to the Treasury. The amount of this payment is equivalentto what would be its corporate income tax liability.This amount is provisioned in the financial statements underincome taxes.

A provision for deferred taxes is calculated by applying the mostlikely future tax rate to these transactions. The deferred tax rateswere 35.43% for the full rate and 20.20% for the reduced rate,unchanged from 2002.

65

Note 1 - Interbank and similar transactions Advances and loans to financial institutions

(Euros millions) 12.31.2003 12.31.2002


Current accounts of savings funds 238 149


Sight amounts due from financial institutions 6,484 8,662


Securities purchased under collateralized fixed resale agreements 318 4,167





Term amounts due from financial institutions 1,973 7,447

ADVANCES AND LOANS TO FINANCIAL INSTITUTIONS 8,457 16,109

Note 2 - Customer transactions (assets)

(Euros millions) 12.31.2003 12.31.2002

Overdrafts 697 645


Provisions (7) (8)

Overdrafts 702 645

Loans to financial sector customers 36 13

Other cash advances (1) 14,286 2,498

Loans for infrastructure projects 357 396

Loans for housing projects 169 211

Other loans to customers 911 855




Accrued interest (2) 57 51



Total at sight 702 645

Total at term 15,922 4,122

(1) Of which ACOSS: €2,285 million as of December 31, 2002 compared with €14,130 million as of December 31, 2003.(2) Of which €3 million on non-performing loans.


CENTRAL SECTOR

Note 3 - Transactions on trading, available-for-sale, held-to-maturity and portfolio activities

A) BREAKDOWN BY NATURE AND TYPE OR PORTFOLIO

(Euro millions) 12.31.2003 12.31.2002Available- Held-to- Available- Held-to-


Public-sector securities and similar 7,827 351 5,686 13,864 4,720 1,037 6,313 12,070

Securities on loan (1) 4,066 4,066 4,109 10 4,119Public-sector securities and similar 11,893 351 5,686 17,930 8,829 1,047 6,313 16,189

Bonds 26 649 6,578 7,253 55 764 6,958 7,777

Other fixed income securities (2) 20,971 1,332 22,303 9,302 1,501 10,803

Securities on loan 527 527 536 536Bonds and other fixed income securities 26 21,620 8,437 30,083 55 10,066 8,995 19,116

Equities 523 7,128 7,651 394 6,738 7,132

Mutual funds (3) 1,119 114 1,233 1,252 251 1,503

Securities on loan 2 2 2 2Equities and other variable income securities 1,644 7,242 8,886 1,648 6,989 8,637

TOTAL BY TYPE OF PORTFOLIO 11,919 23,615 14,123 7,242 56,899 8,884 12,761 15,308 6,989 43,942

(1) Trading securities on loan are held against a loan from the DFE (see Note 11).(2) The increase is due mainly to the FRR deposit at the year-end (€11,583 million).(3) As of December 31, 2003, an opening balance of €147 million of shares in mutual funds was reclassified as equities.

Held-to-maturity securities totaling €35 million were sold during the year (2002: €136 million).

There were no transfers between the available-for-sale and portfolio security categories as of December 31, 2003.

67

Note 3 (cont.)

B) TRANSACTIONS ON TRADING, AVAILABLE-FOR-SALE, HELD-TO-MATURITY AND PORTFOLIO ACTIVITIES

Euro millions) 12.31.2003 12.31.2002Available- Held-to- Available- Held-to-



Gross value (1) 11,893 339 5,481 17,713 8,829 964 6,079 15,872

Premiums/discounts 6 53 59 8 59 67

Accrued interest 6 152 158 75 175 250

Provisions

Net book value 11,893 351 5,686 17,930 8,829 1,047 6,313 16,189Market value of trading and available-for-sale securities 11,893 361 8,829 1,176


Gross value (1) 26 21,580 8,178 29,784 55 10,009 8,732 18,796

Premiums/discounts 34 4 38 18 (3) 15

Accrued interest 13 255 268 50 266 316

Provisions (7) (7) (11) (11)

Net book value 26 21,620 8,437 30,083 55 10,066 8,995 19,116Market value of trading and available-for-sale securities 26 21,629 55 10,094


Gross value 1,716 8,768 10,484 1,849 8,674 10,523

Accrued interest 3 3 2 2

Provisions (2) (72) (1,529) (1,601) (201) (1,687) (1,888)

Net book value 1,644 7,242 8,886 1,648 6,989 8,637Market value of available-for-sale securities and value-in-usefor portfolio securities 1,932 8,939 10,871 1,687 9,920 11,607

(1) The gross values shown for available-for-sale and held-to-maturity securities correspond to redemption values.(2) The net change in provisions as of December 31, 2003 was minus €157 million. This change comprised a €118 million net writeback of provisions and foreignexchange income of €39 million.


CENTRAL SECTOR

Note 4 - Long-term equity holdings – Movements

Acquisition/ Disposals/(Euro millions) 12.31.2002 charges reversals SPIPL 12.31.2003

Long-term equity holdings

Gross value 9,602 432 (12) (381) (1) 9,641Provisions (188) (32) 26 1 (2) (193)

Net book value 9,414 400 14 (380) 9,448AdvancesGross value 983 79 (92) (603) (3) 367Provisions (179) (20) 15 17 (4) (167)

Net book value 804 59 (77) (586) 200

LONG-TERM EQUITY HOLDINGS 10,218 459 (63) (966) 9,648

(1) This movement reflects the reclassification of long-term equity holdings in Sociétés propriétaires d’immeubles de placement (SPIPL – real estate investment companies)to tangible fixed asset investment properties, in an amount of €381 million.(2) Reclassification of SPIPL-related provisions.(3) Reclassification of SPIPL-related advances and receivables to fixed asset investment properties.(4) Reclassification of provisions on SPIPL-related advances and receivables.

Note 5 - Principal long-term equity holdings

12.31.2003

(Euro millions) Shareholding Advances Provisions Total

Companies in which the Central Sector has a net investment of more than €40 million

AREVA 360 360

BDPME 193 193

CAISSE DES DEPOTS DEVELOPPEMENT – C3D 971 44 1,015

CDC Holding Finances (formerly Sodeve) 2,907 2,907

CDC IXIS 2,227 2,227

CDC IXIS ITALIA HOLDING 44 44

CDC KINEON 100 (20) 80

CDC PME 404 404

CNP ASSURANCES (*) 737 737

COMPAGNIE NATIONALE DU RHONE 207 207

DEXIA CREDIT LOCAL DE FRANCE (*) 944 944

SCIC HABITAT 18 128 (10) 136

SICOVAM HOLDING 51 51

SNI 56 56Total principal long-term equity holdings and advances 9,219 172 (30) 9,361

Other long-term equity holdings and advances 422 195 (330) 287

TOTAL LONG-TERM EQUITY HOLDINGS AND ADVANCES 9,641 367 (360) 9,648

Of which listed investments (*) 1,681 1,681

69

Note 6 - Tangible and intangible fixed assets

A) BREAKDOWN

(Euro millions) 12.31.2003 12.31.2002

Gross Amortization Net Gross Amortization Net value and provisions value value and provisions value

Operating fixed assets 547 (303) 244 539 (291) 248

Investment properties 1,479 (144) 1,335 367 (117) 250

Construction in progress 1 1 4 4

Land and buildings 340 (121) 219 343 (117) 226

Forests and undeveloped land 20 20 20 20

Real estate investment companies (SPIPL) 1,118 (23) 1,095

TANGIBLE FIXED ASSETS 2,026 (447) 1,579 906 (408) 498

Concessions, licenses, and patents 113 (94) 19 102 (79) 23

Other intangible fixed assets 38 38 32 32

INTANGIBLE FIXED ASSETS 151 (94) 57 134 (79) 55

TANGIBLE AND INTANGIBLE FIXED ASSETS 2,177 (541) 1,636 1,040 (487) 553

B) MOVEMENTS

Acquisitions/ Disposals/ Other(Euro millions) 12.31.2002 charges reversals movements 12.31.2003

Tangible operating fixed assets, gross 539 21 (13) 547

Depreciation and provisions (291) (24) 12 (303)

TANGIBLE OPERATING FIXED ASSETS 248 (3) (1) 244

Investment properties, gross 367 3 (9) 361

Depreciation and provisions (117) (9) 5 (121)

Investment properties held by SPIPL, gross 174 (40) 984 (1) 1,118

SPIPL-related provisions (6) 1 (18) (2) (23)

INVESTMENT PROPERTIES 250 162 (43) 966 1,335

Intangible fixed assets, gross 134 26 (9) 151

Amortization and provisions (79) (23) 8 (94)

INTANGIBLE FIXED ASSETS 55 3 (1) 57

TANGIBLE AND INTANGIBLE FIXED ASSETS 553 162 (45) 966 1,636

(1) This amount corresponds to the reclassification of long-term equity holdings in SPIPL in an amount of €381 million and of receivables related to these companiesin an amount of €603 million, a total of €984 million. (2) Reclassification of provisions, of which €1 million relating to SPIPL securities and €17 million relating to SPIPL-related advances and receivables.


CENTRAL SECTOR


(Euro millions) 12.31.2003 12.31.2002

Deferred charges 3 5

Prepaid expenses 4 5


Currency and forward financial instrument adjustment accounts 16 27

Collection accounts (1) 896

Other (1) 34 882

Accruals and deferrals 62 2,010

Premiums on purchases of options 6 26

Miscellaneous receivables 327 448

Settlement accounts on securities transactions 9 1,109

Inventories and similar 37 36

Impairment provisions (12) (37)

Other assets 367 1,582

ACCRUALS, DEFERRALS AND OTHER ASSETS 429 3,592

(1) Difference in the type of accruals accounts related to the migration to a new accounting application.

Note 8 - Interbank and similar transactionsAdvances and loans from financial institutions

(Euro millions) 12.31.2003 12.31.2002


Current accounts of the savings funds 1,751 1,979


Sight amounts due to financial institutions 4,336 5,998

Term loans and advances 297 318



Term amounts due to financial institutions 17,566 17,462

ADVANCES AND LOANS FROM FINANCIAL INSTITUTIONS 21,902 23,460

71

Note 9 - Customer transactions (liabilities)(Euro millions) 12.31.2003 12.31.2002

Current accounts (1) 26,475 22,826



Loans from financial sector customers 152 133

Escrow accounts (“consignations”) 2,593 2,490

Term deposits (2) 16,908 5,947

Securities sold under collateralized fixed repurchase agreements 254

Other 3 5




(1) Of which, ACOSS: €100 million as of December 31, 2003.(2) Of which, FFR: €11,583 million as of December 31, 2003.

Note 10 - Debt securities(Euro millions) 12.31.2003 12.31.2002

Negotiable medium-term notes 220 1,302

Other negotiable debt securities 1,060



DEBT SECURITIES 1,284 1,307


(Euro millions) 12.31.2003 12.31.2002

Deferred income 11 1


Currency and forward financial instrument adjustment accounts 4 39

Collection accounts (1) 302

Other (1) 32 457

Accruals and deferrals 113 957

Premiums on sale of options 10 33

Securities on loan (2) 11,919 8,884

Miscellaneous payables 622 593

Settlement accounts on securities transactions 1,266

Accrued interest (4)

Other liabilities 12,547 10,776

ACCRUALS, DEFERRALS AND OTHER LIABILITIES 12,660 11,733

(1) Difference in the type of accruals accounts related to the migration to a new accounting application.(2) Of which, loan from the DFE of €11,892 million (see Note 3A).


CENTRAL SECTOR


Reversals Reversals(Euro millions) 12.31.2002 Charges used not used Other 12.31.2003

Public-interest programs

Provisions for retirement and other employment-related charges (1) 18 12 30

Provisions for real estate risks (2) 5 6 14 25

Provisions for default risks 92 36 (9) (33) 86

Provisions for deferred taxes 530 (4) 526

Other provisions for risks and charges 93 18 (9) (26) 76

Of which, framework agreement 63 (18) 45

Of which, risks on long-term equity holdings 11 16 (1) 26

Other 19 2 (9) (7) 5

PROVISIONS FOR RISKS AND CHARGES 738 72 (22) (59) 14 743

(1) Provisions relating to the Collective Bargaining Agreement. They comprise: retirement provisions for personnel aged below 60 (€21 million) and long-service awards(€9 million). The net charge for the year comprises €8 million for retirement provisions and €4 million for long-service awards.

(2) €14 million of provisions for major repairs were charged directly to the opening balance of retained earnings.

Note 13 - Changes in retained earnings

Fund for Regulatorygeneral provisions Other Incomebanking General Revaluation and investment retained for the Retained

(Euro millions) risks reserve reserve subsidies earnings year earnings

Retained earnings as of December 31, 2001 867 8,267 34 36 48 1,283 10,535

Appropriation of 2001 earnings 362 921 (1,283) 0

Distribution in 2002 of 2001 earnings (909) (909)

Other (259) (16) (15) (290)

2002 earnings 520 520

Retained earnings as of December 31, 2002 608 8,629 34 20 45 520 9,856

Appropriation of 2002 earnings 174 346 (520) 0

Distribution in 2003 of 2002 earnings (264) (264)

Other (2) (10) (12)

2003 earnings (82) 974 892

RETAINED EARNINGS AS OF DECEMBER 31, 2003 608 8,803 34 18 35 974 10,472

Dividends paid in 2003 in respect of 2002 earnings were calculated on the basis of the €346 million contribution to income from man-datory deposits. The amount actually paid to the government totaled €264 million.The balance of €82 million corresponded to the indemnification related to the Sagitrans loan, which was guaranteed by the State.The €10 million remaining change to other retained earnings represents the constitution of a provision for major repairs in respect of2002 (€14 million) and a net €4 million adjustment relating to indexed OATs for 2002 (including tax of €2 million).

73

Note 14A) ADVANCES AND LOANS TO FINANCIAL INSTITUTIONS

12.31.2003

Gross Gross Provisionsperforming doubtful deducted

(Euro millions) loans loans from assets Total

France 8,457 13 (13) 8,457

Breakdown by geographic region 8,457 13 (13) 8,457

3 months or less 6,864 13 (13) 6,864

3 months to 1 year 833 833

1 to 5 years 752 752

More than 5 years 8 8

Breakdown by term to maturity 8,457 13 (13) 8,457

Provisions constituted (13) (13)

PROVISIONS DEDUCTED FROM ASSETS 0 (13) 0 (13)

B) ADVANCES AND LOANS TO CUSTOMERS

12.31.2003

Gross Gross Gross Provisionsperforming non-performing irrecoverable deducted

(Euro millions) loans loans loans from assets Total

France 16,566 63 96 (101) 16,624

Breakdown by geographic region 16,566 63 96 (101) 16,624

3 months or less 1,317 50 52 (63) 1,356

3 months to 1 year 13,720 9 13,729

1 to 5 years 757 2 26 (9) 776

More than 5 years 772 11 9 (29) 763

Breakdown by term to maturity 16,566 63 96 (101) 16,624

Sovereign 14,757 14,757

Local governments 94 7 (2) 99

Insurance and reinsurance 13 13

Other financial institutions 56 56

Corporate 686 10 32 (32) 696

Small businesses and professionals 194 1 (3) 192

Private individuals 766 53 56 (64) 811

Breakdown by sector 16,566 63 96 (101) 16,624

Provisions constituted (51) (51)

Charges (36) (1) (37)

Provision reversals not utilized 7 3 10

Reclassification from non-performing to irrecoverable 83 (83) 0Reclassification of provisions on miscellaneous assets as provisions for other customer transactions (23) (23)

PROVISIONS DEDUCTED FROM ASSETS 0 (20) (81) 0 (101)

Amounts written off (12) (12)


CENTRAL SECTOR

Note 14 (cont.)

C) FIXED INCOME SECURITIES (AVAILABLE-FOR-SALE AND HELD-TO-MATURITY SECURITIES)

12.31.2003

Gross Gross Provisionsperforming doubtful deducted

(Euro millions) receivables receivables from assets Total

Euro 35,939 (7) 35,932

U.S. dollar 79 79

Pound sterling 83 83

Breakdown by currency 36,101 0 (7) 36,094

3 months or less 19,432 0 19,432

3 months to 1 year 3,171 0 3,171

1 to 5 years 7,737 (1) 7,736

More than 5 years 5,761 (6) 5,755

Breakdown by term to maturity 36,101 0 (7) 36,094

Provisions constituted 0 (11) (11)

Charges (1) (1)

Provision reversals not utilized 6 6

Reclassification (1) (1)

PROVISIONS DEDUCTED FROM ASSETS 0 (7) 0 (7)

Note 15A) BALANCE SHEET ITEMS BY CURRENCY

U.S. Pound Total(Euro millions) Euro dollar sterling Other 12.31.2003

ASSETSAdvances and loans to financial institutions 7,904 43 298 212 8,457

Advances and loans to customers 16,624 16,624

Trading securities

Public-sector securities and similar 11,893 11,893

Bonds and other fixed income securities 26 26

Available-for-sale securities

Public-sector securities and similar 351 351

Bonds and other fixed income securities 21,468 70 82 21,620

Held-to-maturity securities

Public-sector securities and similar 5,686 5,686

Bonds and other fixed income securities 8,428 9 8,437

LIABILITIESAdvances and loans from financial institutions 21,166 146 302 288 21,902

Customer deposits and advances 46,472 12 1 100 46,585

Debt securities

Bonds

Other fixed income securities 1,284 1,284

75

Note 15 (cont.)

B) BALANCE SHEET ITEMS BY TERM TO MATURITY

3 months 3 months 1 to More than Total(Euro millions) or less to 1 year 5 years 5 years 12.31.2003

ASSETSAdvances and loans to financial institutions 6,864 833 752 8 8,457

Advances and loans to customers 1,356 13,729 776 763 16,624

Available-for-sale securities

Public-sector securities and similar 0 0 212 139 351

Bonds and other fixed income securities 18,772 1,693 346 809 21,620

Held-to-maturity securities

Public-sector securities and similar 98 692 4,595 301 5,686

Bonds and other fixed income securities 562 785 2,583 4,507 8,437

LIABILITIESAdvances and loans from financial institutions 4,365 17,363 174 21,902

Customer deposits and advances 39,754 5,506 140 1,185 46,585

Debt securities

Other fixed income securities 1,284 1,284

Note 16 - Off-balance sheet commitments relative to spot and forward foreign currency transactions and to the lending and borrowing of foreign currencies

(Euro millions) 12.31.2003 12.31.2002

Spot transactions

Euros purchased to be received 4

Foreign currencies purchased to be received 2

Euros sold to be delivered 2

Foreign currencies sold to be delivered 4

Forward transactions

Euros to be received against foreign currencies to be delivered

Euros to be received 1,587 831

Foreign currencies to be delivered 1,569 1,899

Foreign currencies to be received against euros to be delivered

Foreign currencies to be received 736 1,100

Euros to be delivered 739 431

Foreign currencies to be received against foreign currencies to be delivered 417

Foreign currencies to be delivered against foreign currencies to be received 854

Unaccrued premiums/discounts

To be received 3 5

To be paid 3 2


CENTRAL SECTOR

Note 17 - Forward financial instruments

12.31.2003Cash/

Transaction hedge

Purchase/ Sale/ Purchase/ Sale/(Euro millions) borrowing loan borrowing loan

FUTURES TRANSACTIONSOrganized markets

Interest rate contracts 108

Over-the-counter markets

Interest rate swaps (1) 39,030 18,987

OPTIONSOrganized markets

Interest rate options 161 162

Over-the-counter markets

Caps, floors 1,830 1,831 390 305

Swaptions 763 763

Other options 285 18

(1) For the most part, these transactions mirror transactions contributed to CDC Ixis.

Note 18 - Credit risks

SIGNATURE RISKS12.31.2003

Gross (Euro millions) performing loans Total

France 8,330 8,330

Breakdown by geographic region 8,330 8,330

FORWARD FINANCIAL INSTRUMENTS (OVER-THE-COUNTER TRANSACTIONS)12.31.2003

Gross (Euro millions) performing loans Total

France 64,202 64,202

Breakdown by geographic region 64,202 64,202

77

Note 19A) FORWARD FINANCIAL INSTRUMENTS BY CURRENCY

U.S. Pound Total(Euro millions) Euro dollar sterling Other 12.31.2003

FUTURES TRANSACTIONSInterest rate contracts (73) 166 15 108Interest rate swaps 50,009 354 7,654 58,017

OPTIONSInterest rate options 220 103 323Caps, floors 3,911 445 4,356Swaptions 1,080 446 1,526Other options 303 303

B) FORWARD FINANCIAL INSTRUMENTS BY TERM TO MATURITY

12.31.2003

3 months 3 months 1 to More than (Euro millions) or less to 1 year 5 years 5 years Total

FUTURES TRANSACTIONSInterest rate contracts 108 108Interest rate swaps 58,017 58,017

OPTIONSInterest rate options 16 97 194 16 323Caps, floors 218 1,307 2,613 218 4,356Swaptions 77 458 915 76 1,526Other options 15 91 182 15 303

Note 20 - Interest and similar revenues and expenses on Treasury and interbank transactions

(Euro millions) 12.31.2003 12.31.2002

Interest on central bank and post office bank accounts 15 19Interest on current account advances 96 233Interest on other loans and securities purchased under uncollateralized fixed resale agreements 69 165Interest on securities purchased under collateralized fixed resale agreements 15 145Premium/discount income 10 56Other interest and similar income 11 25

INTEREST AND SIMILAR REVENUES ON TREASURY AND INTERBANK TRANSACTIONS 216 643

Interest on current accounts (50) (132)Interest on loans and securities sold under uncollateralized fixed repurchase agreements (9) (51)Interest on securities sold under collateralized fixed repurchase agreements (335) (545)Premium/discount expenses (6) (48)Other interest and similar expenses (6) (14)

INTEREST AND SIMILAR EXPENSES ON TREASURY AND INTERBANK TRANSACTIONS (406) (790)


CENTRAL SECTOR

Note 21 - Interest and similar revenues and expenses on customer transactions

(Euro millions) 12.31.2003 12.31.2002

Interest on overdrafts 139 26

Interest on loans to customers 76 79

Interest on cash advances 5 6

Interest on loans for infrastructure projects 21 23

Interest on loans for housing projects 20 13

Interest on other loans to customers 30 37

Interest on other loans and securities purchased under uncollateralized fixed resale agreements 14 5

Other interest and similar income 5 35

Doubtful interest receivables 1

INTEREST AND SIMILAR REVENUES ON CUSTOMER TRANSACTIONS 235 145


Interest on escrow accounts (“consignations”) (35) (39)

Interest on term deposits, borrowings and securities sold under uncollateralized fixed repurchase agreements (220) (183)

Interest on securities sold under collateralized fixed repurchase agreements (14) (1)

Other interest and similar expenses (2) (1)

INTEREST AND SIMILAR EXPENSES ON CUSTOMER TRANSACTIONS (510) (536)

Note 22 - Revenues from securities portfolios

(Euro millions) 12.31.2003 12.31.2002

Interest and similar revenues from available-for-sale securities 382 399

Public-sector securities 45 62

Bonds 27 43

Other fixed income securities 310 294

Interest and similar revenues from held-to-maturity securities 873 938

Public-sector securities 386 437

Bonds 404 421


INTEREST AND SIMILAR REVENUES FROM BONDS AND OTHER FIXED INCOME SECURITIES 1,255 1,337

Revenues from available-for-sale securities 40 61

Equities 7 9

Mutual funds 33 52

Revenues from portfolio securities 205 209

Revenues from long-term equity holdings 266 384

REVENUES FROM VARIABLE INCOME SECURITIES 511 654

Note 23 - Interest and similar expenses on bonds and other fixed income securities

(Euro millions) 12.31.2003 12.31.2002

Interest on negotiable certificates of deposit (1) (1)

Interest on negotiable medium-term notes (42) (53)

Interest and expenses on bonds (7) (2)

Other interest expenses (2) (103)

INTEREST AND SIMILAR EXPENSES ON BONDS AND OTHER FIXED INCOME SECURITIES (49) (159)

(1) Following the Cèdre migration, €52 million was reclassified from interest on certificates of deposit to interest on medium-term notes.(2) Reclassification of interest on micro-hedge swaps as other interest and similar expenses.

79

Note 24 - Commissions revenues and expenses

12.31.2003 12.31.2002

(Euro millions) Revenues Expenses Revenues Expenses

Customer transactions 3 3Securities transactions (20) (12)Financial services and other 13 (20) 25 (26)

COMMISSIONS 16 (40) 28 (38)

(24) (10)

Note 25 - Gains or losses on trading security transactions

(Euro millions) 12.31.2003 12.31.2002

Net gains (losses) on trading securities (8)Net gains (losses) on foreign currency instruments (1) 31 (33)Net gains (losses) on financial instruments (32) (58)

GAINS OR LOSSES ON TRADING SECURITY TRANSACTIONS (1) (99)

(1) Of which €23 million foreign currency gain relating to prior years.

Note 26 - Gains or losses on available-for-sale and portfolio security transactions

(Euro millions) 12.31.2003 12.31.2002

Net gains (losses) on the sale of available-for-sale securities 25 (156)Other income and expenses on available-for-sale securities (3) (9)Provisions taken/reversed on available-for-sale securities 133 (31)Gains (losses) on available-for-sale securities 155 (196)

Net gains (losses) on the sale of portfolio securities 195 607Provisions taken/reversed on portfolio securities 119 (928)Gains (losses) on portfolio security transactions 314 (321)

GAINS (LOSSES) ON AVAILABLE-FOR-SALE AND PORTFOLIO SECURITY TRANSACTIONS 469 (517)

Note 27 - Other net operating banking revenues and expenses

12.31.2003 12.31.2002


Gains and losses on disposal of investment properties 3 2 (2)Amortization and provision charges/reversals on investment properties 5 (20) 5 (8)Income and expenses on investment properties 103 (39) 60 (40)Total revenues and expenses on investment properties 111 (59) 67 (50)

Public-interest programs (43) (16)Provisions taken/reversed on public-interest programs 1Total revenues and expenses on public-interest programs (43) 1 (16)

Expenses rebilled, revenues retroceded and expenses transferred 1 2Agent commissions (81) (87)Other operating income and expenses 52 (54) 20 (29)Provision charges and reversals on other operating income and expenses 1 1Other operating income and expenses 54 (135) 23 (116)

OTHER OPERATING BANKING REVENUES AND EXPENSES 165 (237) 91 (182)

NET OPERATING BANKING REVENUES AND EXPENSES (72) (91)


CENTRAL SECTOR

Note 28A) PAYROLL EXPENSES

(Euro millions) 12.31.2003 12.31.2002

Salaries (242) (272)

Retirement expenses and related provision charges and reversals (1) (53) 37

Other employee-related expenses (1) (66) (103)

Incentive programs and profit sharing (9) (8)

Payroll taxes (35) (32)

Provision charges and reversals (2) 18 (21)

PAYROLL EXPENSES (387) (399)

(1) Retirement expenses as of December 31, 2003 of public and private sector personnel totaled €41 million and the net charge to provisions totaled €12 million, comprising €8 million for retirement indemnities for private sector personnel and €4 million for long-service awards (see Note 12).The change between 2003 and 2002 is due mainly to: – the reclassification of retirement expenses (€42 million), recorded under other employee-related expenses in 2002;– reversal of a €41 million provision as of December 31, 2002 linked to reconsideration of the methods of calculation.(2) Of which €18 million provision reversal in connection with the framework agreement (see Note 12).

B) STAFF EMPLOYED

12.31.2003 12.31.2002

Average number of management staff 1,750 1,646

Of which, public sector 644 640

Of which, private sector 1,106 1,006

Average number of non-management staff 4,502 4,570

Of which, public sector 4,334 4,378

Of which, private sector 168 192

TOTAL AVERAGE NUMBER OF STAFF 6,252 6,216

Number of management staff at year-end 1,778 1,687

Of which, public sector 638 635

Of which, private sector 1,140 1,052

Number of non-management staff at year-end 4,446 4,582

Of which, public sector 4,283 4,395

Of which, private sector 163 187

TOTAL NUMBER OF STAFF AT YEAR END 6,224 6,269

81

Note 29 - Net amortization, depreciation and provisions on tangible and intangible fixed assets

(Euro millions) 12.31.2003 12.31.2002

Depreciation of operating fixed assets (47) (43)

Net depreciation of operating fixed assets (47) (43)

Provisions against operating fixed assets (1)

Net provisions against operating fixed assets (1)

NET AMORTIZATION, DEPRECIATION AND PROVISIONS ON TANGIBLE AND INTANGIBLE FIXED ASSETS (48) (43)

Note 30 - Cost of risk (net appropriations to provisions)

(Euro millions) 12.31.2003 12.31.2002

Provision charges in respect of

Impairment of receivables (39) (37)

Signature risk (4) (7)

Default risk (38) (19)

Other risks (1)

PROVISION CHARGES (81) (64)

Reversals of provisions in respect of

Impairment of receivables 10 15

Signature risk 16 10

Default risk 28 19

REVERSALS OF PROVISIONS 54 44

Losses on irrecoverable receivables and recoveries (20) (11)

LOSSES AND RECOVERIES (20) (11)

COST OF RISK (NET APPROPRIATIONS TO PROVISIONS) (47) (31)

Note 31 - Gains and losses on fixed assets

(Euro millions) 12.31.2003 12.31.2002

Gains (losses) on disposals of tangible and intangible fixed assets (1)

GAINS (LOSSES) ON DISPOSALS OF OPERATING FIXED ASSETS (1)

Gains (losses) on transactions concerning long-term equity holdings and advances (31) 62

Gains (losses) on disposals of long-term equity holdings and advances (13) (10)

Provision charges and reversals on long-term equity holdings and advances (18) 72

Net gain (loss) on transactions concerning held-to-maturity and other long-term securities 1 (6)

Gains (losses) on disposals of held-to-maturity and other long-term securities 1 (6)

GAINS (LOSSES) ON TRANSACTIONS CONCERNING LONG-TERM EQUITY HOLDINGS AND OTHER LONG-TERM SECURITIES (30) 56

GAINS AND LOSSES ON FIXED ASSETS (30) 55


CENTRAL SECTOR

Note 32 - Income tax

(Euro millions) 12.31.2003 12.31.2002

Contribution representative of corporate income tax (230) (131)

Deferred taxes 3 14

TAX CHARGE (227) (117)

Note 33 - Movement in fund for general banking risks and regulatory provisions

(Euro millions) 12.31.2003 12.31.2002

Net charge to/writeback from fund for general banking risks 259

Net charge to/writeback from regulatory provisions 2 16

MOVEMENT IN FUND FOR GENERAL BANKING RISKS AND REGULATORY PROVISIONS 2 275

Note 34a) Guarantee given by Caisse des Dépôts et Consignations to CDC IXIS

Since December 1, 2000, some of the transactions carried out by CDC IXIS have been covered by a joint guarantee from Caisse des Dépôts et Consignations. The transactionsconcerned are, first of all, transactions on financial instruments,including the issuing of such instruments, with the exception ofsubordinated issues, and interbank and Treasury transactions,as well as various types of guarantee commitments (endorse-ments, sureties and other guarantees). Under the terms of theagreement, CDC IXIS can in turn give guarantees to certain ofits subsidiaries under certain conditions.

In accordance with the agreement signed with the EuropeanCommission in May 2003, this guarantee will expire on January 23, 2007. Since April 1, 2003, balance sheet commit-ments that reach maturity after January 23, 2017 are no longerguaranteed. As from January 23, 2004, off-balance sheet itemsthat reach maturity after January 23, 2017 will no longer be guaranteed.

Effective April 1, 2003, the payment on the guarantee is thehighest of the following three amounts:a) an amount based on the ratio, on a consolidated basis, bet-

ween capital at risk and Tier 1 capital, as defined for capitaladequacy purposes;

b) the amount of total financial instruments outstanding issuedby CDC IXIS multiplied by the difference, at the time of issue,between compensation paid on financial instruments of com-parable maturity by financial institutions with the same ratingas CDC IXIS (without guarantee) and the compensation paidon such instruments by financial institutions enjoying thesame rating as CDC IXIS and guaranteed;

c) €8 million.

In 2003, compensation due by CDC IXIS to Caisse des Dépôtsamounted to €10.2 million.

b) Sanpaolo IMI (SP IMI) commitment

Caisse des Dépôts Group and Sanpaolo IMI have signed an agreement that expresses their intention to create a lasting strategic partnership. Along with this agreement, the two groupsacquired crossholdings. In that context, Caisse des Dépôts granted Sanpaolo IMI two options to purchase CDC IXIS shares,the first in the event of a change in CDC IXIS’s controlling ownership, the second, which includes a liquidity commitment,in the event that the shares are not listed on an organizedEuropean market. In addition, Caisse des Dépôts has an optionto buy CDC IXIS shares owned by Sanpaolo IMI, which can beexercised in the event of a change in the controlling interest in Sanpaolo IMI. These commitments expire in 2004. The saleprice of the shares in the event the options are exercised shallbe determined by expert financial appraisals.

c) Guarantee granted in respect of CDC Holding Finance (CDC HF)

Caisse des Dépôts has given an undertaking to ensure that CDC Holding Finance will be able to fulfill its commitments aspart of the reciprocal guarantees signed by CDC HF and CNCEat the time of the Alliance transaction, in the event it should becalled upon to do so.

83

Auditors’ report on the financial statements of the Central Sector Year ended December 31, 2003


In accordance with the assignment entrusted to us, we have audited the accompanying financial statements of the CentralSector of Caisse des Dépôts et Consignations for the year endedDecember 31, 2003.

These financial statements have been approved by you. Our roleis to express an opinion on these financial statements based onour audit.

We conducted our audit in accordance with the professionalstandards applied in France. Those standards require that weplan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstate-ment. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial state-ments. An audit also includes assessing the accounting prin-ciples used and significant estimates made by management, aswell as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basisfor our opinion.

In our opinion, the financial statements give a true and fair view of the results of the Central Sector for the year endedDecember 31, 2003 as well as of its assets, liabilities and finan-cial position at that date, in accordance with French accountingregulations and generally accepted accounting principles.

Without qualifying our opinion set out above, we draw yourattention to the note to the financial statements entitled“Accounting principles used in preparing the financial state-ments”, which describes the changes in accounting methodsresulting from the application of CRC Standard 2002-03 relat-ing to the accounting treatment of credit risk and CRC Standard2002-10 relating to asset depreciation, amortization andimpairment; as well as the change in accounting method applicable to recognizing gains and losses on the indexing ofinflation-indexed OATs.

Paris and La Défense, April 15, 2004

The Auditors

PricewaterhouseCoopers Audit Mazars & Guérard

Gérard Hautefeuille Guillaume Potel Denis Grison



SAVINGS FUNDS

Introductory note

The activities of Caisse des Dépôts et Consignations comprisetwo main missions:• the direct business of the Central Sector – the financial and

administrative entity of Caisse des Dépôts – and of the subsi-diaries and long-term equity interests attached to it, notablythe CDC IXIS, C3D and CNP groups;

• the management of the funds entrusted to Caisse des Dépôts:the accounting structure of Caisse des Dépôts reflects the natureof the relationship existing between the public institution andthese funds.

A series of legal, regulatory and contractual provisions definesthe nature of the services provided by Caisse des Dépôts et consignations and their remuneration.

The regulations governing the savings funds are contained forthe most part in the Caisses d’Epargne Code and the Monetaryand Finance Code.

The administration of the savings funds is largely determinedby the practical implementation of these regulations, particu-larly because the funds are not established as separate legal enti-ties; revenues must in some cases be identified separately; andstate guarantees may apply to certain deposits.

The accounting systems used make it possible to identify eachfund’s resources, their uses and the earnings generated.Therefore, a balance sheet, an income statement and a state-ment of off-balance sheet commitments are drawn up for eachfund.

This section presents the financial statements relating to thesavings funds centralized by Caisse des Dépôts. These includedeposits taken on the Livret A and LEP passbook accounts andCODEVI accounts of Caisses d’Epargne, the Livret Bleu pass-book accounts of Crédit Mutuel, the LEP passbook accounts andCodevi accounts of banks and the deposits collected by La Poste(Livret A, Livret B, PEP, LEP, CODEVI, CNE home-purchasesavings plans and Livret Jeunes passbook accounts).

85


ASSETSPublic-sector securities and similar 3 72,026 66,469

Interbank and Treasury transactions 1 1,622 2,340


Other amounts due by financial institutions 234 673

Financing transactions 2 111,794 111,530

Infrastructure loans 4,791 5,989

Housing loans 85,208 85,239

Other loans 21,795 20,302



Long-term equity holdings and other long-term investments 4 1 2

Tangible fixed assets 5 4 9

Accruals, deferrals and other assets 6 133 325

TOTAL ASSETS/LIABILITIES 231,889 226,696

LIABILITIESInterbank and Treasury transactions 7 1,706 5,149

Term loans 1,706 5,149

Savings deposits centralized with Caisse des Dépôts 8 217,707 209,247

Deposits 211,781 203,275

Livrets A and B 111,855 110,049

Livret d’Epargne Populaire 46,018 42,612

Livret Jeunes 1,015 957

CODEVI 8,329 7,644

Home-purchase savings 28,387 26,402

PEP CNE 1,069 1,054

Livret Bleu 15,108 14,557

Accrued interest on deposits 5,894 5,946

Withholding on interest payable to depositors 32 26

Accruals, deferrals and other liabilities 9 709 519

Provisions for risks and charges 10 1,475 1,426

Subsidies 11 1,752 1,763

Fund for general banking risks (FGBR) 12 2,908 2,600

Retained earnings (excluding FGBR) 13 5,632 5,992

Ordinary retained earnings 4,500 5,465

Unappropriated earnings 1,132 527

Balance sheetof savings funds centralized by Caisse des Dépôts


SAVINGS FUNDS

Livret A Livrets (Euro millions) CEP FRGCE A and B CNE FRGCNE LEP

ASSETSPublic-sector securities and similar 15,153 168 16,248 397 28,732

Interbank and Treasury transactions 404 979 1,067 600 485

Ordinary accounts 172 – 925 – 246

Other amounts due by financial institutions 232 979 142 600 239

Financing transactions 51,769 4 33,496 203 5,654

Infrastructure loans 2,904 4 1,574 – 309

Housing loans 47,711 – 31,922 – 5,345

Other loans 1,154 – – 203 –

Bonds and other fixed income securities 11,236 364 6,126 93 13,500

Equities and other variable income securities 2,917 – 1,951 – 1,114

Long-term equity holdings and other long-term investments – 1 – – –

Tangible fixed assets – 4 – – –

Accruals, deferrals and other assets 123 2 6 – 101

TOTAL ASSETS/LIABILITIES 81,602 1,522 58,894 1,293 49,586

LIABILITIESInterbank and Treasury transactions 3,291 119 2,087 316 920

Term loans 362 – 381 202 761

Other amounts due to financial institutions 2,929 119 1,706 114 159

Savings deposits centralized with Caisse des Dépôts 74,688 – 55,263 – 47,732

Deposits 72,970 – 53,993 – 46,018

Accrued interest on deposits 1,718 – 1,258 – 1,714

Withholding on interest payable to depositors – – 12 – –

Accruals, deferrals and other liabilities 200 107 70 – 362

Provisions for risks and charges 155 3 95 – 319

Subsidies 1,590 – 490 – –

Fund for general banking risks (FGBR) 946 – 582 – 288

Retained earnings (excluding FGBR) 732 1,293 307 977 (35)

Ordinary retained earnings 38 1,295 17 948 6

Unappropriated earnings 694 (2) 290 29 (41)

Breakdown of the balance sheet of savings funds centralized by Caisse des Dépôtsas of December 31, 2003

87

CNELEP Home- Other

reserve Livret purchase savings Combined Inter-fund Consolidatedfunds Jeunes CODEVI savings PEP CNE funds total financing total

172 519 879 8,744 317 697 72,026 – 72,026

702 319 1,010 1,177 4 164 6,911 5,289 1,622

(1) 26 (37) 32 (1) 26 1,388 – 1,388

703 293 1,047 1,145 5 138 5,523 5,289 234

– – 4,951 15,877 – – 111,954 160 111,794

– – – – – – 4,791 – 4,791

– – – 390 – – 85,368 160 85,208

– – 4,951 15,487 – – 21,795 – 21,795

35 284 1,872 5,126 840 851 40,327 – 40,327

– – – – – – 5,982 – 5,982

– – – – – – 1 – 1

– – – – – – 4 – 4

– – 6 2 – – 240 107 133

909 1,122 8,718 30,926 1,161 1,712 237,445 5,556 231,889

– – – – – 262 6,995 5,289 1,706

– – – – – – 1,706 – 1,706

– – – – – 262 5,289 5,289 –

– 1,056 8,578 29,284 1,106 – 217,707 – 217,707

– 1,015 8,329 28,387 1,069 – 211,781 – 211,781

– 41 249 880 34 – 5,894 – 5,894

– – – 17 3 – 32 – 32

– 1 10 57 1 8 816 107 709

– – 3 568 – 4 1,147 (328) 1,475

– – – – – – 2,080 328 1,752

– 2 91 974 25 – 2,908 – 2,908

909 63 36 43 29 1,438 5,792 160 5,632

887 56 63 47 11 1,332 4,700 200 4,500

22 7 (27) (4) 18 106 1,092 (40) 1,132


SAVINGS FUNDS


Commitments given in respect of financing,guarantees and securities 16 A 9,298 6,748

Financing commitments 8,910 6,710

Offers of loans 4,188 2,709


Undertakings to provide loans 2,352 1,914


Other loans 321 30

Loans agreed not disbursed 2,370 2,087


Home-purchase loans 749 613

Guarantee commitments 388 38

Securities pledged as guarantees 350 –

Other guarantees given 38 38

Commitments received in respect of financing, guarantees and securities 76,339 940

Guarantee commitments 76,265 927

Guarantees received from the State 1,008 927

Guarantees received from financial institutions 3,560 –

Other guarantees received 71,697 –

Commitments received in respect of securities 74 13


Other commitments given and received

Other commitments given 2 –

Real estate sales commitments 2 –


Subsidies to be received on PLA loans 12 21

Commitments given and received in respect of financial instruments 16 B

Commitments given 6,082 5,390

Futures 6,082 5,390

Commitments received 6,702 5,472

Futures 6,082 5,390

Options 620 82

Off-balance sheet commitments of savings funds centralized by Caisse des Dépôts, as of December 31, 2003

89

Breakdown of off-balance sheet commitments of savings funds centralized by Caisse des Dépôts, as of December 31, 2003

CNELivrets Home- Other

Livret A A and B purchase PEP savings Combined(Euro millions) CEP FRGCE CNE LEP CODEVI savings CNE funds total

Commitments given in respect of financing, guarantees and securities 5,273 – 2,045 872 321 749 – 38 9,298

Financing commitments 5,273 – 2,045 522 321 749 – – 8,910

Offers of loans 3,074 – 984 130 – – – – 4,188

Housing loans 3,074 – 984 130 – – – – 4,188

Undertakings to provide loans 1,254 – 437 340 321 – – – 2,352

Housing loans 1,254 – 437 340 – – – – 2,031

Other loans – – – – 321 – – – 321

Loans agreed not disbursed 945 – 624 52 – 749 – – 2,370

Housing loans 945 – 624 52 – – – – 1,621

Home-purchase loans – – – – – 749 – – 749

Guarantee commitments – – – 350 – – – 38 388

Securities given as guarantees – – – 350 – – – – 350

Other guarantees given – – – – – – – 38 38

Commitments received in respect of financing, guarantees and securities 44,526 3 28,589 2,245 976 – – – 76,339

Guarantee commitments 44,483 3 28,566 2,237 976 – – – 76,265

Guarantee commitments receivedfrom the State 17 3 12 – 976 – – – 1,008

Guarantee commitments received from financial institutions 2,352 – 1,154 54 – – – – 3,560

Other guarantee commitments received 42,114 – 27,400 2,183 – – – – 71,697

Commitments received in respect of securities 43 – 23 8 – – – – 74

Securities to be received 43 – 23 8 – – – – 74

Other commitments given and received

Other commitments given – 2 – – – – – – 2

Real estate sales commitments – 2 – – – – – – 2

Other commitments received 12 – – – – – – – 12

Subsidies to be received on PLA loans 12 – – – – – – – 12

Commitments given and received in respect of financial instruments

Commitments given 1,345 – 680 2,929 868 256 4 – 6,082

Futures 1,345 – 680 2,929 868 256 4 – 6,082

Commitments received 1,574 – 949 3,010 868 297 4 – 6,702

Futures 1,345 – 680 2,929 868 256 4 – 6,082

Options 229 – 269 81 – 41 – – 620


SAVINGS FUNDS


Interest and similar income 18 9,705 10,062

Treasury and interbank transactions 137 191

Financing transactions 4,988 5,108

Fixed income transactions 4,580 4,763

Interest and similar expenses 19 (7,276) (7,313)

Treasury and interbank transactions (392) (346)

Deposits (6,884) (6,967)


Net commissions 21 (2,347) (2,161)

Payments to centralizing networks (2,169) (1,992)

Other commissions (178) (169)

Gains or losses on trading securities 2 (1)

Foreign currency transactions 2 (1)

Gains or losses on available-for-sale securities 22 1,299 (517)

Available-for-sale securities 740 609

Provisions net of reversals 559 (1,126)

OTHER NET OPERATING BANKING REVENUES AND EXPENSES 23 9 16

NET BANKING INCOME 1,558 258

General and administrative expenses 24 (86) (88)

GROSS INCOME FROM OPERATIONS 1,472 170

Cost of risk (net appropriation to provisions) 25 (33) 112

Provision charges net of reversals on non-performing loans 17 180

Provisions for risks and charges net of reversals (49) (67)

Charges covered by a provision – (1)

Gains or losses on irrecoverable debts (1) –

NET INCOME FROM OPERATIONS 1,439 282

Net movement in the FGBR 26 (307) 245

NET INCOME 1,132 527

Income statement of savings funds centralized by Caisse des Dépôts, as of December 31, 2003

91

Notes to the financial statements

I - Highlights for the year

1 - Early repayment of savings fund loans to CDC IXIS

The loans acquired from CGLLS were repaid early, effective June 25, 2003. These loans corresponded to the refinancing ofthe former CGLS (Caisse de Garantie du Logement Social):• the savings funds initially sold these loans to CAR (Caisse

Autonome de Refinancement) between 1988 and 1993;• the savings funds then took over the loans as part of the acqui-

sition of CGLS’s financing business in 1996 (the savings fundsassumed CGLS’s loans to CAR as debt);

• they were then converted to loans to CDC IXIS when CAR wasmerged into CDC IXIS in 2000.

The early repayment of these loans was warranted by financiallyand economically favorable conditions for the savings funds,which used a portion of their significant surplus cash. In addition, this transaction, which required the agreement of bothparties, was made at a rate that reflects the creditworthiness ofthe savings funds and enables them to improve their future earnings by eliminating the related interest expense.

The loans were acquired in 1996 with a yield to maturity of 5.46%, and therefore included a premium, which was taken tothe income statement over the term of the loans.

The residual premium on the loans at the time of their repayment was €260 million, the outstanding balance was€2,804 million and accrued interest totaled €105 million.

Under an agreement with the counterparty, the repayment valuewas calculated on the basis of future payments (packaged withthe swaps entered into between the savings funds and CAR between 1988 and 1993 such that the loan and swap package soldcorresponds to an asset at a fixed rate equal to the rate at the timeof the sale). The difference between this repayment value and thebook value totaled €435 million. After writing back the premium,the net expense in 2003 totaled €252 million (see Note 19).


Credit risk

CRC Standard 2002-03 of December 12, 2002 dealing with creditrisk for companies governed by the Comité de la réglementa-tion bancaire et financière – CRBF (French Banking and FinanceRegulations Committee) – took effect on January 1, 2003.

Some application methods for this CRC Standard were set forthin the CNC’s November 21, 2003 statement on accounting forloans restructured at non-market conditions and in Opinion2003-G issued by the CNC Urgent Issues Task Force onDecember 18, 2003 concerning methods for reclassifying non-performing loans to irrecoverable loans.


This standard applies to all credit-risk-bearing commitments:loans to financial institutions and customers, signature com-mitments, fixed income securities (in the available-for-sale orheld-to-maturity portfolios) and forward instruments traded overthe counter that have a positive market value.


The non-performing loans category includes irrecoverable loans.These include loans in default and some loans that have beenclassified as non-performing for more than one year. CNC Opinion 2003-G of December 18, 2003 clarified the terms underwhich a non-performing loan should be reclassified as an irrecoverable loan, in particular for loans that have been clas-sified as non-performing for more than one year.


SAVINGS FUNDS

Non-performing loans are classified as irrecoverable when theyrequire the establishment of a provision and when it is likelythat the loan will be ultimately written off. This analysis mustbe made while taking existing guarantees on these loans intoaccount.

Non-performing loans and irrecoverable loans may be reclas-sified as performing loans when payments have resumed in asteady fashion for the amounts corresponding to the originalcontractual payment schedule and once the counterparty no longer presents a default risk. They may also be classified asrestructured loans if debt has been rescheduled and followinga waiting period.

For loans with credit risk exposure, provisions are establishedto cover all projected losses on loans classified as non-performingor irrecoverable.



Restructured loans at non-market conditions are broken out separately, where applicable, in a specific sub-category for per-forming loans. At the time of the restructuring, the loan is recordedat nominal value less a discount corresponding to the amount offorfeited interest. This interest differential will be taken into accountin determining the lending margin on the loans concerned.


The loans made by the savings funds are almost always guarant-eed in full by local governments or the French State. On December31, 2003, however, a €9 million loan was classified as irrecove-rable (see Note 14: Credit risk on financing transactions).

There were no material restructured loans at non-market condi-tions as of December 31, 2003, and no interest differential wastherefore calculated to be taken into account for lending margin purposes.

Securities and futuresThe accounting principles and methods of CRC Standard 2002-03 of December 12, 2002 dealing with the accounting treatment of credit risk for companies governed by the CRBF,described above for loans, also apply to fixed income securitiesand contracts traded on over-the-counter markets.

As of December 31, 2003, there was no default risk on fixedincome securities and contracts traded on the over-the-countermarkets held by the savings funds, nor were any of these secu-rities classified as non-performing (see Note 15: Credit risk onfixed-income securities).

Inflation-indexed OATsIn the absence of specific regulations for credit institutions, theindexing effects on the face value of inflation-indexed OATs maybe recorded at the time the bond is sold or reaches maturity,spread over the bond’s term to maturity or entered as incomeor expense for the period.

In previous years, the method used was indexation of the facevalue at the time the OAT was sold or reached maturity.

Beginning with the year ended December 31, 2003, Caisse desDépôts decided to use the example of the accounting method pres-cribed by Article R 332-19 of the Insurance Code, as amended bydecree No. 2002-1535 of December 24, 2002, and to enter gainsor losses related to the indexing of the face value of the bonds tothe consumer price index as income or expenses for the year.

This change in accounting method increased opening retainedearnings as of January 1, 2003 by €58 million (see Note 13-A).

3 - Taxation of home-purchase savings plans and accounts

Consistency audits have revealed that La Poste had receivedexcess fees on home-purchase savings plans and accounts (PELand CEL) from 1998 to 2001.

In 2002, an external audit conducted by La Poste and Caisse desDépôts confirmed the existence of overcharges in 2001 and pre-vious years and determined their exact amount. Following thesubmission of this audit report, Caisse des Dépôts asked La Posteto reimburse the sums concerned, which were recorded as receivables of €122 million in the 2002 financial statements. Inearly July 2003, La Poste paid the amounts due.

4 - Divestment of securities that do not conform with the Investment Code

Some held-to-maturity portfolio securities were sold in order to comply with the new Investment Code implemented by the Ministry of the Economy, Finance and Industry in a letter dated February 18, 2002. As of December 31, 2003, the book valueof the divested securities totaled €457 million, and their sale generated a capital gain of €50 million.

5 - Administration of home-purchase savings with La Poste

In accordance with the recommendations of the Noyer-Nassereport, efforts were undertaken to establish a new division ofresponsibilities between La Poste and Caisse des Dépôts for 2004. Income from home-purchase savings plans will beattributed to La Poste in substitution for the current collectionand distribution fees. The new administration agreement willapply as of January 1, 2004.

93

II - Accounting policies and methodsThe financial statements have been prepared in accordance withgenerally accepted accounting principles in France and specificregulations applicable to financial institutions.

1 - Fixed assets and long-term equity holdings

Fixed assets are valued at cost. In the case of buildings, the costof initial fixtures, fittings and installations may be added to theacquisition cost.

The asset represented by property built on land belonging to athird party and made available under a capital lease is depreciatedover eighteen years, which corresponds to the term of the lease.

A provision for impairment is recorded in respect of land hold-ings when there is a lasting decrease in their value.

Investments in non-trading real estate investment companiesare recorded at cost. Provisions for impairment are recordedwhen there is a lasting decrease in value determined by referenceto the companies’ net asset value.

The application of CRC Standard 2002-10 of December 12, 2002

related to asset depreciation, amortization and impairment hadno material impact on the savings funds.

2 - Loans and borrowings

LoansLoans are recorded at their redemption value.

Loans are now accounted for in accordance with the principlesof CRC Standard 2002-03 of December 12, 2002 dealing withcredit risk for companies governed by the CRBF, which tookeffect January 1, 2003 and whose application was further com-plemented by various opinions of the Urgent Issues Task Forceand a statement by the CNC. These accounting principles and methods are presented above (see I-2 Notes to the financialstatements).

Certain loans are repayable in increasing annual installments,resulting in cumulative differences between interest accruedand interest payable. These differences are recorded as accruedinterest, which is collected gradually over the life of the loan.

When a single borrower has both preferred and subordinated debtat the same time, the subordinated debt may be subject to a down-grade and the establishment of a provision, even though, as anexception to the contagion principle, the preferred debt is notdowngraded to non-performing loan status. The preferred debtrisk is clearly less material than the risk on the subordinated debt.

Compensation received when loans are repaid early or resched-uled is credited to income in the year when it is received.

Capital gains arising on the transfer of loans between savingsfunds are eliminated in the accounts of the savings funds cen-tralized by Caisse des Dépôts.

When the loans and borrowings of CGLLS and former govern-ment loans are assumed by the savings funds, the difference between the transaction value and the book value is recorded asa premium or discount, which is amortized by the yield-to-matu-rity method over the life of the corresponding loans or borrowings.Provisions for impairment are recorded in respect of premiumson loans with a high risk of being rescheduled or repaid early,since any premium paid when these loans were assumed no longer has any financial substance.

The amortization schedule is updated every quarter to reflectloans having given rise to early repayment or rescheduling aswell as any changes in interest rates.

BorrowingsLoans payable are recorded in the balance sheet at redemptionvalue. Interest expense is charged to the income statement onan accruals basis.

3 - Available-for-sale securities

The rules for the valuation of available-for-sale securities dependon the category to which they belong.

Fixed income securities At the time of purchase, fixed income securities are recorded atface value, with the difference (premium or discount) betweencost and face value taken to a separate account.

At year end:• the premium or discount is recognized in the income statement

on a straight-line basis over the remaining life of the security;• a provision for impairment is taken on a line-by-line basis in

respect of any unrealized loss determined by reference to themark-to-market value at end-December.

Fixed income securities are accounted for on a first-in, first-out(FIFO) basis.

Variable income securitiesVariable income securities are recorded at cost and revalued atyear-end and when sold using the weighted average cost method.A provision is taken when weighted average cost exceeds mark-to-market value at end-December or the future realizable valueof commitments received, or the latest redemption value in thecase of units in mutual funds.

Negotiable debt securities and other interbank securitiesAt the time of purchase, these securities are recorded at face value,with the difference (premium or discount) between cost and facevalue taken to a separate account.

At year-end the premium or discount is recognized in the incomestatement by the yield-to-maturity method over the remaininglife of the security. Provisions are taken by reference to the sol-vency of the issuer and market indicators.


SAVINGS FUNDS

4 - Held-to-maturity portfolio

This portfolio comprises bonds and negotiable debt instrumentsacquired with the intention of being held on a long-term basis –normally to maturity – and for which resources considered tohave at least the same maturity have been earmarked.

The securities are accounted for in accordance with rules appli-cable to held-to-maturity portfolios. Therefore:• provisions are not taken in respect of unrealized capital losses

arising only from increased interest rates;• any premium or discount is spread over the remaining life of

the security by the yield-to-maturity method for negotiable debtsecurities and on a straight-line basis for bonds.

Securities sold are accounted for on a first-in, first-out (FIFO) basis.

5 - Portfolio securities (TAP)

Portfolio securities are investments made on a regular basis withthe aim of realizing a capital gain in the medium term but withoutthe intention of investing on a long-term basis in the developmentof the business or taking an active part in the operational man-agement of the issuing undertaking.

These securities are recorded at the lower of cost or fair value.

Fair value is determined by taking into account the general economicoutlook for the issuer and the remaining period for which the securities will be held. For listed companies, fair value is generallyrepresented by the average listed share price over a sufficiently longperiod that reduces the impact of sharp price fluctuations over theexpected holding period.An impairment provision, based on the fair value, is establishedfor unrealized capital losses, determined by line of securitieswithout offsets with unrealized gains.

6 - Temporary divestment of securities

Lending and borrowing of securitiesSecurities lent are recorded on a separate line on the assets sideof the balance sheet at their book value in the portfolio fromwhich they were transferred, determined using the last-in, first-out (LIFO) method.At year-end, they are valued in accordance with rules applicableto the portfolios from which they were transferred.

Securities borrowed are recorded at their market value on theday they were borrowed, as an asset under trading securities andas a liability representing the amount due to the lender.At year-end, these items are marked to market.

Interest arising from lending and borrowing of securities is recognized on an accruals basis.

Securities sold (purchased) under collateralized fixedrepurchase (resale) agreements

Securities sold under collateralized fixed repurchase agreementsare maintained in their original portfolio and continue to bevalued according to the rules applicable to that portfolio. Theyare recorded on a separate line under liabilities.

Securities received as collateral are recorded under assets, withthe entry representing the amount receivable. These securitiesare not revalued.

At year-end, income or charges arising from the above agree-ments are recognized on an accruals basis.

7 - Public exchange offers

The exchange value used to determine the result of share exchangeoffers corresponds to the average stock market price for the com-pany making the offer, calculated over the period commencingon, but not including, the date of publication of the notice of filingof the offer with the appropriate authorities and ending on, andincluding, the date of publication of the results of the offer bythese same authorities. Prices used are market prices at the closeof business each day during the reference period. If several offersare filed in respect of the same securities, the period of referencestarts on the date of the first offer.

8 - Off-balance sheet commitments (other than interest rate swaps)

Off-balance sheet commitments given relate mainly to loansthat have been granted but for which the funds have not yet beendisbursed.Off-balance sheet commitments received include State guaran-tees and securities commitments. Until 2002, commitmentsreceived from financial institutions and local governments werenot recorded. Effective December 31, 2003, these commitmentsreceived in the form of guarantees totaling €75.3 million wererecorded as off-balance sheet commitments (see Note 16-A). Theyinvolve the bulk of the savings funds’ outstanding loan volume.

9 - Interest rate swaps

Interest rate swaps entered into by the savings funds in order tohedge specific, perfectly identified transactions are reported asoff-balance sheet commitments.Income and expenses generated by these instruments are recognized in the income statement symmetrically with theresults generated by the hedged item.

10 - Foreign currency transactionsForeign currency assets and liabilities are translated at the year-end exchange rates. Spot transactions are translated at the spotrate, while forward transactions are translated at the forwardrate for the remaining term.

95


Provisions are booked for losses that are certain, resulting fromloan programs at rates that are lower than the cost of the relatedresources:• for the LEP program, part of the PLI loans has been refinanced

by borrowings and a provision has been recorded to cover theactuarial loss;

• in the case of loans bearing interest at rates that are lower thanthe cost of the resources, provisions are booked to cover theactuarial loss. This concerns PLA-TS and urban renewal pro-ject loans, loans for emergency housing projects and demoli-tion-reconstruction loans indexed on Livret A rates, as well asPLI loans that are not refinanced by borrowings and PPU loanspaid out of LEP funds.

The provision for losses relating to all Livret A funds is sharedacross all funds since resources financing these loans are of thesame nature and bear identical interest rates.

A provision has also been recorded to cover specific risks relatedto home-purchase savings products.This risk, which corresponds to the commitment to grant loansat a rate that is set contractually in advance, is currently evalu-ated on a global basis at 2% of all home-purchase savings deposits at the year-end. As of December 31, 2003, €40 millionwas allocated to this provision.

12 - Funds for general banking risks (FGBR)

The funds for general banking risks are intended to cover general banking risks inherent to the activity of lending and investing in financial markets. These funds have been constitutedby each of the savings funds as a complement to specific provisionsrecorded by each of them, so as to ensure that they satisfy minimalcapital adequacy requirements as laid down in applicable bankingregulations for default and market risks.

Capital adequacy requirements are covered by regulatory reserveswhen these exist, and by the FGBR, available reserves, retainedearnings and income for the year.

The method used to calculate the amount of the FGBR is basedon covering the risk as follows:• by the establishment of reserves as required by regulations;• and then by an allocation to the FGBR, with the risk expressed

as the sum of the three components representative of the capi-tal adequacy requirements of each fund:– a component that corresponds to the capital adequacy requirement arising from the application of the European solvency ratio, based on the assets of each fund;– a second component that corresponds to the capital ade-quacy requirement to cover market risk, based on the tradingassets of each fund;– a component for so-called “projected risks”.

The coverage of the available-for-sale portfolio’s market risk cor-responds, in effect, to the year-end capital adequacy require-ments. For management purposes, this requirement may besubstantially less than the portfolio’s potential exposure to mar-ket risks. The FGBR’s ex ante component represents the addi-tional capital that corresponds to the difference between themaximum potential and actual exposure.

The increase in fund assets under management and the mar-ket recovery during the year led to an increase in general risksin 2003. A net allocation for the period of €371 million was therefore recorded as of December 31, 2003.

Following the capital adequacy recommendations of the Noyer-Nasse report, and in anticipation of the upcoming implemen-tation of Basel II, the efforts undertaken by the savings funds in2003 to cover their capital at risk may need to be complementedby additional measures, in particular to handle the interest raterisk component. Given this need for additional capital based onEuropean solvency ratio and Capital Adequacy Directive calcu-lations, and the desire to strengthen the equity portfolio in 2004,the FGBR component for projected risks was maintained asadditional capital. The component related to home-purchasesavings (€64 million) was written back in full, however, due tothe transfer of administrative responsibility for this fund was toLa Poste (see I-5 Notes to the financial statements ). The agree-ment scheduled to take effect on January 1, 2004 does not includethis component in the savings funds’ initial equity capital allocation.

III - Financial information on market risks

1 - Assets-liabilities management

The savings funds are exposed to a refinancing risk since theymake medium- to long-term loans out of resources repayableon demand. However, given the stability of these resources inthe past, the fact that interest rates for most loans are indexedto the cost of these resources and the satisfactory level of liquidity, the savings funds are able to refinance themselveswithout being exposed to a significant risk.

Interest rate and liquidity risks are measured using asset-liability management systems calibrated to take into accountthe characteristics of the assets and liabilities to the utmost levelof detail. In particular, it is possible to model the balance sheetto reflect various assumptions regarding deposit taking andlending. To provide depositors with the highest possible levelof protection, the size and structure of the portfolio of financialassets are designed to leave real possibilities for adapting theportfolio to possible changes in liquidity risk, while protectingthe interest margin earned now and in the future against move-ments in interest rates.


SAVINGS FUNDS

Following the July 21, 2003 announcement regarding the estab-lishment of an indexing rule for regulated savings products, thesavings funds began adapting their models and implementingthem in terms of the related portfolio structure and capital ade-quacy requirements.

Throughout the year, the groundwork was laid for the transitionto new capital adequacy requirements for the savings funds, inparticular to calibrate their level relative to that of the balancesheet risks.

2 - Risk management

Risk management at Caisse des Dépôts is organized on a three-tier basis, at the levels of the business line, institution and Group.At the Group level, Central Control sets standards and approvessystems and methods. The Risk Management Department is responsible, at the level of the public institution, for monitoringthe financial risk to which portfolios are exposed.Regarding credit risk, a Default Risk Committee meets eachmonth and is responsible for:• defining and monitoring the credit risk policy;• approving the method for setting counterparty limits, based

on proposals by Risk Management;• setting limits by counterparty, based on proposals by Risk

Management, bearing in mind that the limits for each port-folio are independent of one another.

Risk Management is responsible for controlling day by day thateach financial department complies with the limits set. Whenproposing limits, this work is based on summary data, mainlyfrom the analyses provided by CDC IXIS, credit rating agenciesand published information.

At end-2003, the savings funds’ largest commitment by coun-terparty of the fixed income portfolios was the French State, with64%, up from 62% in 2002.

The activity of the savings funds is regulated, and until December31, 1999 the use of derivative products was limited mainly to interest rate swaps entered into for micro-hedging purp-oses, namely to cover specific transactions as authorized orrequested by the supervisory authorities. These transactions,which are recorded in the off-balance sheet, totaled €1.6 billionas of December 31, 2003, of which €1.2 billion was with Crédit Foncier in connection with PLI loans.

In July 1999, the Ministry of the Economy, Finances and Industryauthorized the savings funds to make more frequent use of derivative products, with a view to reducing portfolio sensitivity.Therefore, the savings funds have entered into a number of transactions since 2000 that involve derivatives such as swapsand notional contracts traded on the MATIF.At year-end, asset swaps totaled €4.4 billion.

In early 2003, swaptions with a notional value of €540 millionand expiring in January 2004 were purchased in order to coverthe potential impairment of 2012 and 2016 OATs resulting froma significant increase in interest rates. Since rates declined rela-tive to the purchase and exercise rates, no income was recordedfrom these options.

IV - Financial statements presentationThe financial statements present the overall situation of thesavings funds centralized by Caisse des Dépôts. They includethe following funds:• Caisses d’Epargne et de Prévoyance (CEP): Livret A;• CEP Reserve and Guarantee Fund;• Caisse Nationale d’Epargne (CNE): Livrets A and B;• CNE Reserve and Guarantee Fund;• Livret d’Epargne Populaire (LEP): funds centralized by CEP,

CNE, banks and other networks;• LEP Reserve Fund;• Livret Jeunes (LJ);• LJ Reserve Fund;• CODEVI Fund;• Home-purchase savings plans;• PEP-CNE Fund.

Other funds:• Home Financing Reserve Fund (FRFL);• CEP Home Savings Reserve Fund;• Home Building Fund;• SDR Guarantee Fund;• CFF Special Fund.

The management of each of these funds is the object of sepa-rate financial statements. These financial statements provide anoverall view and a breakdown by fund.

97

Note 1 - Treasury and interbank transactions – Assets

(Euro millions) 12.31.2003 12.31.2002


Current accounts (1) 68 398

Current accounts representing minimum reserves 1,319 1,269

Accrued interest 1 –

Other amounts due by financial institutions 234 673

Securities purchased under collateralized fixed resale agreements 228 672


TOTAL 1,622 2,340

(1) The public institution Caisse des Dépôts, as a legal entity – the Central Sector – is the savings funds’ banker. As such, it centralizes the cash resources and provides all the services of a banking nature.

Note 2 - Financing transactions

Since the financing activity of the savings funds is analyzed fundamentally by reference to the nature of the loans, customer loans (including loans to financial institutions) are grouped under the heading of “Financing transactions.” As of December 31, 2003, loans to financial institutions amounted to €7,904 million, down from €8,601 million the previous year, includingaccrued interest.

A) INFRASTRUCTURE LOANS

Early Other(Euro millions) 12.31.2003 Payments Repayments repayments movements (1) 12.31.2002

Infrastructure loans 4,608 – (1,087) (64) (8) 5,767

New uses 27 1 (1) – – 27

Capital 4,635 1 (1,088) (64) (8) 5,794

Accrued interest not due 148 – – – (45) 193

Installments being collected 6 – – – 6 –

Unpaid installments 2 – – – – 2

TOTAL 4,791 1 (1,088) (64) (47) 5,989

of which:

Non-performing loans and interest 126 – – – (11) 137

Provisions (20) – – – – (20)

(1) Including rescheduled loans and changes in non-performing loans net of related provisions.Including reclassification of €38 million in bond and annuity loans as infrastructure loans and reclassification of €17 million in accrued interest on non-performing

housing loans as accrued interest on non-performing infrastructure loans as of December 31, 2002.


SAVINGS FUNDS

Note 2 (cont.)

B) HOUSING LOANS

Early Other (Euro millions) 12.31.2003 Payments Repayments repayments movements (1) 12.31.2002

PLA (2) (3) 44,946 2,283 (839) (81) (27) 43,610

PAM and PRV (3) 6,760 323 (678) (55) (16) 7,186

PLI and PHEBE 3,396 656 (78) (19) 23 2,814

PAP 1,115 – (891) (2) 1 2,007

PPU 2,876 252 (198) (44) 7 2,859

Other (3) (4) 20,764 1,029 (1,339) (89) (8) 21,171

Capital 79,857 4,543 (4,023) (290) (20) 79,647

Accrued interest not due 5,226 (235) 5,461

Installments being collected 128 (19) 147

Unpaid installments 4 – 4

Early repaymentsbeing processed (7) 13 (20)

TOTAL 85,208 4,543 (4,023) (290) (261) 85,239

(1) Including the reversal or amortization of premiums and discounts, capitalized interest, changes in non-performing loans net of related provisions and rescheduled loans.Including reclassification of €250 million in CFF long-term loans and €12 million in CCCI loans as other loans as of December 31, 2002.Including reclassification of €17 million in accrued interest on non-performing housing loans as accrued interest on non-performing infrastructure loans as of

December 31, 2002.Including reclassification of €1 million in housing loans as other loans as of December 31, 2002.(2) Excluding subsidies.(3) Rescheduled PLA, PAM and HLMA-HLMO loans were reclassified under “Other housing loans”.(4) The Voiron advance of €11 million was reclassified as other housing loans as of June 30, 2003.

In addition, a provision for impairment was set up for the premium paid on the assignment of the CGLLS PLA loans covering the entireamount remaining to be deferred (€7 million as of December 31, 2003, down from €10 million the previous year), as it is probable thatall loans concerned will be rescheduled at a lower rate than when assigned.

Non-performing loans and provisions are analyzed below:

12.31.2003 12.31.2002

Principal Principal(Euro millions) and interest Provisions Net and interest (1) Provisions Net

PLA 2,599 305 2,294 1,851 283 1,568

PAM and PRV 368 24 344 598 39 559

PLI and PHEBE 58 5 53 41 3 38

PAP – – – 1 – 1

PPU 143 6 137 159 7 153

Other 1,044 106 938 1,403 146 1,258

TOTAL 4,212 446 3,766 4,054 478 3,576

(1) Including reclassification of €17 million in accrued interest on non-performing housing loans as accrued interest on non-performing infrastructure loans as ofDecember 31, 2002.

99

Note 2 (cont.)

C) OTHER LOANS

Early Other (Euro millions) 12.31.2003 Payments Repayments repayments movements (1) 12.31.2002 CODEVI loans

BDPME 3,393 379 (152) – – 3,166

SDR 475 - (100) – – 575

Other 18 - (24) – – 42

Capital 3,886 379 (276) – – 3,783


Installments being collected 4 – – – (42) 46

Unpaid installments 18 – – – 7 11

TOTAL 4,040 379 (276) – (41) 3,978

of which:

Non-performing loans and interest 4 – – – 4 –

Home-purchase loans

Primary loans 2,414 478 (490) (102) - 2,528

Supplementary loans 10,762 2,369 (712) (530) (2) 9,637

Subsidized loans 2,094 631 (91) (154) (1) 1,709

Capital 15,270 3,478 (1,293) (786) (3) 13,874

Accrued interest not due 44 – – – 1 43

Installments being collected 1 – – – (9) 10

Unpaid installments 1 – – – – 1

TOTAL 15,316 3,478 (1,293) (786) (11) 13,928

of which:

Non-performing loans and interest 28 – – – 4 24

Provisions (11) – – – (1) (10)

Miscellaneous other loans

CNCEP 1,107 30 (127) – – 1,203

Other loans (2) 1,246 27 (129) (8) 222 1,134

Capital 2,353 57 (256) (8) 222 2,338


Installments being collected 37 – – – 37 –

Unpaid installments – – –

TOTAL 2,439 57 (256) (8) 249 2,397

of which:

Non-performing loans and interest (2) 972 – – – 556 416

Provisions (61) – – – (26) (35)

TOTAL OTHER LOANS 21,795 3,914 (1,825) (794) 197 20,302

(1) Including change in non-performing loans net of related provisions.Including reclassification of €250 million in CFF long-term housing loans and €12 million in CCCI loans as other loans as of December 31, 2002; reclassification of

€1 million in housing loans as other loans; reclassification of €38 million in bond and annuity loans as infrastructure loans as of December 31, 2002.(2) Including a €972 million subordinated loan backed by a 100% State guarantee recorded under off-balance sheet commitments downgraded to non-performing (see Note 16). In accordance with banking regulations, current and unpaid accrued interest was written down in full.


SAVINGS FUNDS

Note 3 - Securities transactions

A) BREAKDOWN BY NATURE AND TYPE OF PORTFOLIO, NET OF PROVISIONS

12.31.2003 12.31.2002

Available- Held-to- Available- Held-to-for-sale maturity Portfolio for-sale maturity

(Euro millions) securities securities securities securities securities


French government securities 26,570 11,516 – 24,432 13,876

Treasury bills 20,496 932 – 17,435 2,164

Securities loaned (1) 6,146 6,366 – 4,094 4,468

Sub-total by portfolio 53,212 18,814 – 45,961 20,508

Total all portfolios 72,026 66,469


Bonds 18,489 6,566 – 15,759 6,747

Other fixed income securities 13,829 1,419 – 16,753 1,490

Securities loaned (1) 24 – – 11 42

Sub-total by portfolio 32,342 7,985 – 32,523 8,279



Equities 5,565 – – 5,002 –

Other variable income securities (including mutual funds) (2) 395 – 22 218 –

Sub-total by portfolio 5,960 – 22 5,220 –


SUB-TOTAL BY PORTFOLIO (3) 91,514 26,799 22 83,704 28,787

TOTAL ALL PORTFOLIOS 118,335 112,490

Details of securities loaned

French government securities 3,759 6,214 – 779 4,151

Treasury bills 2,387 152 – 3,316 317

Bonds 24 – – 11 42

TOTAL 6,170 6,366 – 4,105 4,510

(1) Details of securities loaned.(2) Of which, dedicated mutual fund units – FCP Obligation Epargne – which had a book value of €22 million and a net asset value of €54 million as of December 31, 2003(compared with €43 million and €105 million, respectively, the previous year).(3) In 2002 and 2003, some held-to-maturity portfolio securities were sold in order to comply with the new investment code established by the Ministry of the Economy,Finance and Industry. As of December 31, 2003, the book value of the divested securities totaled €457 million, compared with €538 million the previous year, and theirsale generated a capital gain of €50 million, compared with €15 million in 2002.

101

Note 3 (cont.)

B) SUPPLEMENTARY INFORMATION

12.31.2003 12.31.2002

Available- Held-to- Available- Held-to-for-sale maturity Portfolio for-sale maturity

(Euro millions) securities securities securities securities securities


Gross value 50,923 17,916 – 44,173 19,437

Premiums/discounts 1,069 258 – 554 391

Accrued interest 1,244 640 – 1,234 680

Provisions (24) – – – –

Net book value by portfolio 53,212 18,814 – 45,961 20,508

Net book value of all portfolios 72,026 66,469

Market value of available-for-sale and held-to-maturity securities 52,832 18,877 46,273 20,645

Redemption value of available-for-sale and held-to-maturity securities 50,923 17,916 44,173 19,437


Gross value 31,564 7,693 – 31,875 7,933

Premiums/discounts 302 71 – 167 99

Accrued interest 513 221 – 506 247

Provisions (37) – – (25) –

Net book value by portfolio 32,342 7,985 32,523 8,279


Market value of available-for-sale and held-to-maturity securities 32,408 8,057 32,721 8,326

Redemption value of available-for-saleand held-to-maturity securities 31,564 7,693 31,875 7,933


Gross value 6,975 – 23 6,832 –

Provisions (1,015) – (1) (1,612) –

Net book value 5,960 – 22 5,220 –


Market value of available-for-sale and held-to-maturity securities 8,913 22 7,460


SAVINGS FUNDS

Note 4 - Long-term equity holdings and other long-term investments

(Euro millions) 12.31.2003 12.31.2002

Long-term equity holdings 1 2

Gross value 1 2

TOTAL 1 2

Note 5 - Tangible fixed assets

(Euro millions) 12.31.2003 Other movements (2) 12.31.2002

Investment property

Buildings (1) 4 (5) 9

Gross value 81 – 81

Depreciation (77) (5) (72)

Land – – –

Gross value 1 – 1

Provisions (1) – (1)

TOTAL 4 (5) 9

Gross value 82 – 82

Depreciation (77) (5) (72)

Provisions (1) – (1)

(1) This relates to a building erected on land belonging to a third party and made available under a finance lease.(2) This corresponds to asset disposals, depreciation charges and provisions net of reversals.


(Euro millions) 12.31.2003 12.31.2002



Accrued income on financial instruments 26 56

Home-purchase premiums receivable – 14

Other accrued income (1) 1 126

Deferred losses on derivatives 5 3

Other assets 100 127

Interest subsidies and other subsidies receivable 6 47

PLA subsidies receivable 6 9

PRU subsidies receivable – 37

Interest subsidies and rebates receivable – 1

Advances on Enténial refinancing 92 78

Other receivables 2 2

TOTAL 133 325

(1) Of which, €122 million due as part of commission repayments on PEL and CEL deposits as of December 31, 2002. This reimbursement was fully paid by La Poste in July 2003 (see I-3 Notes to the financial statements).

103

Note 7 - – Treasury and interbank transactions – Liabilities

(Euro millions) 12.31.2003 12.31.2002Term loans 1,706 5,149

From CFF (PLI) (1) 732 –

Other loans from CFF 148 158

From Caisse des Dépôts – Central Sector (PPU) (2) 46 46

From CDC IXIS (PLI) (1) – 735

Livret Bleu loans (3) – 18

Loans assumed from CGLLS (4) 543 3,854

Advances from Caisse des Dépôts – Central Sector (5) 201 186


TOTAL 1,706 5,149

(1) Sale to CFF of €700 million in PLI-PLS refinancing loans by CDC IXIS. (2) Refinancing of PPU loans (maturing 2021).(3) Livret Bleu loan settled in January 2003.(4) Early repayment of CGLLS loans to CDC IXIS for €2,804 million, €105 million of accrued interest not yet due and €260 million in write-backs of premiums (see I-1 Notes to the financial statements).(5) Refinancing of participatory loans to Crédit Logement.

Note 8 - Deposits

Since the centralizing of savings deposits is analyzed fundamentally by reference to the nature of the savings funds centralized, cus-tomer deposits (including amounts due to financial institutions) are grouped under the heading of “Centralized deposits.”As of December 31, 2003, deposits by financial institutions amounted to €122,602 million (up from €112,306 million the previous year),accrued interest included.

A) CENTRALIZED DEPOSITS

Deposits Capitalized Deposits Deposits Capitalized Depositsas of interest as of as of as of interest as of as of

(Euro millions) 01.01.2004 01.01.2004 (1) 12.31.2003 01.01.2003 01.01.2003 (1) 12.31.02

Livret A – CEP 65,617 1,712 63,905 64,726 1,827 62,899

Livrets A and B – CNE 49,205 1,255 47,950 48,493 1,343 47,150

LEP 47,851 1,833 46,018 44,339 1,727 42,612

Livret Jeunes 1,056 41 1,015 996 39 957

CODEVI (2) 8,329 – 8,329 7,644 – 7,644

Home-purchase 29,263 876 28,387 27,225 823 26,402

PEP-CNE 1,102 33 1,069 1,088 34 1,054

Crédit Mutuel Livret Bleu (3) 15,108 – 15,108 14,557 – 14,557

TOTAL 217,531 5,750 211,781 209,066 5,792 203,275

(1) Capitalized interest takes into account cumulative interest accrued during the year as well as specific items (method of centralization of the LEP Funds, etc.). It therefore is not directly comparable with accrued interest reported in the table below.(2) CODEVI deposits have been used to finance an issue of industrial development securities (Titres pour le Développement Industriel, or TDI) paying interest at theCODEVI rate plus 1.5% up to the centralization rate and at the CODEVI rate thereafter. Amounts capitalized on deposits are centralized the following year.(3) Until December 31, 1998 and in accordance with the memorandum of April 27, 1991 on requiring funds collected on Crédit Mutuel’s Livret Bleu to be used in the public interest, Caisse des Dépôts centralized 85% of the funds deposited with Crédit Mutuel and invested them for 15% in money market instruments, with theremaining 85% lent to the Livret A to finance public housing. Under the agreement of December 31, 1998, Crédit Mutuel centralized 100% of its deposits with Caisse des Dépôts. The Livret Bleu section has been transferred to the CEP Livret A and the CNE Livrets A and B for 60% and 40%, respectively, i.e. €9.1 billion and€6 billion as of December 31, 2003 (compared with €8.7 billion and €5.8 billion as of December 31, 2002).


SAVINGS FUNDS

Note 8 (cont.)

B) RELATED ACCRUED INTEREST

(Euro millions) 12.31.2003 12.31.2002

Livret A – CEP 1,718 1,831

Livrets A and B – CNE 1,258 1,343

LEP (1) 1,714 1,621

Livret Jeunes 41 39

CODEVI 249 247

Home-purchase 880 829

PEP-CNE 34 34

Crédit mutuel Livret Bleu (2) – –

TOTAL 5,894 5,946

(1) Accrued interest on LEP loans as of December 31, 2003 does not take into account interest for the month of December for the bank and local savings bank networks,which has been recorded under “Miscellaneous payables” (€124 million as of December 31, 2003, compared with €115 million the previous year), as the correspondingdeposits are only centralized in January of the following year.(2) In accordance with the agreement of December 31, 1998 between Caisse des dépôts and Crédit Mutuel, interest on the Livret Bleu is paid on the last working dayof the year.

C) LEVIES ON INTEREST DUE TO DEPOSITORS

(Euro millions) 12.31.2003 12.31.2002

Livret B – CNE 12 14

Home-purchase 16 8

PEP-CNE 4 4

TOTAL 32 26

This relates to withholding tax and various social security contributions payable on taxable savings products.


(Euro millions) 12.31.2003 12.31.2002



Amounts payable to centralizing networks 284 268

Accrued charges on financial instruments 94 79

Home-purchase bonus to be repaid 5 –

Interest payable on LEP deposits 124 115

Other accruals 15 19

Deferred income on financial instruments 178 14

Other liabilities 8 24

Interest subsidies and other subsidies payable – 6

Interest subsidies payable (1) – 6

Other miscellaneous payables 8 18

Income on CFF Special Fund payable to the State 8 8

Payables on FRU loan – 10

TOTAL 709 519

(1) €6 million interest subsidy payable on solidarity loans for high school development.

105


(Euro millions) 12.31.2002 Allocations Reversals 12.31.2003

PLI and PPU (LEP) (1) 369 – 51 318

SDR and FIM loans (CODEVI) (2) 3 – – 3

Geothermal heating (Livret A) (2) 19 – 7 12

PDR (Livret A) (1) (3) 70 – 10 60

Loans at 3.45% (including PLUS) (Livret A) (1) (4) 129 45 2 172

PLA –TS (Livret A) (1) 300 40 12 328

Litigation (5) 5 2 – 7

Home-purchase (6) 528 40 – 568

Hedging instruments 4 4 – 8

TOTAL 1,426 131 82 1,475

(1) These loans generate interest at rates that are below the cost of the related resources. A provision has therefore been booked to cover the resulting actuarial lossadjusted to take account of payments and new loan programs.(2) These loans have been rescheduled and now generate interest at rates that are below the cost of the related resources. A provision has therefore been booked tocover the future actuarial loss arising from this rescheduling.(3) These loans are fully subsidized by UESL since implementation of the new 2002-2004 program.(4) These loans were at 4.20% before August 1, 2003.(5) Of which, CFF provisions (€4 million).(6) Specific home-purchase savings provision (see II-11 Notes to the financial statements).

Note 11 - Subsidies

Subsidies relate mainly to PLA loans granted directly. They are taken to the income statement over the life of the related loans. As ofDecember 31, 2003, subsidies amounting to €6 million had not been received (€9 million at end-2002) and were therefore recordedunder “Accruals, deferrals and other assets”.

12.31.2003 12.31.2002

(Euro millions) CEP CNE CEP CNE

Gross subsidies (1) 2,194 1,033 2,087 1,011

Taken to income statement (604) (543) (530) (506)

Eliminations between funds (2) (328) – (300) –

Sub-total 1,262 490 1,258 505

TOTAL 1,752 1,763

(1) Including subsidies on PRU loans: €84 million on CEP Livret A and €63 million on CNE Livret A and B loans as of December 31, 2003 (compared with €61 millionand €45 million, respectively, the previous year).(2) Subsidy paid by the FRGCE to the CEP Livret A fund to offset the actuarial losses corresponding to the negative spread between lending rates and the cost of theLivret A resources. This subsidy is paid in respect of highly subsidized PLA loans, emergency housing loans and urban renewal project loans. Given the amount paidsince 1995 and the additional budget for 2003, €12 million was written back as of December 31, 2003 and €10 million was written back the previous year.


SAVINGS FUNDS

Note 12 - Fund for general banking risks

Net allocations (Euro millions) 12.31.2002 and reversals 12.31.2003

General risks (CAD + Specific Savings Risks)

Livret A – CEP 547 138 685

Livrets A and B – CNE 336 73 408

LEP – 99 99

Livret Jeunes 5 (3) 2

CODEVI 89 2 91

Home-purchase 897 77 974

PEP-CNE 39 (14) 25

Sub-total 1,913 371 2,284

Contingent general risks (1)

Livret A – CEP 260 – 260

Livrets A and B – CNE 174 – 174

LEP 189 – 189

Home-purchase 64 (64) –

Sub-total 687 (64) 623

TOTAL 2,600 307 2,908

(1) See II-12 Notes to the financial statements.

107

Note 13 - Retained earnings

A) FUNDS AND RETAINED EARNINGS

Other Appropriation of (Euro millions) 12.31.2003 movements 2002 earnings 12.31.2002

Funds

Fund – CEP 1,295 (239) (3) 282 (7) 1 252

Fund and guarantee fund – CNE 948 25 (3) (4) 11 (7) 912

Fund – LEP 887 18 (3) 25 (7) 844

Fund – Livret Jeunes 56 – 7 (7) 50

Home building – – – –

FRFL 1,235 (1,345) 152 2,429

Sub-total A 4,421 (1,541) 476 5,486

Retained earnings

Livrets A – CEP 37 37 (5)

Livrets A and B – CNE 17 15 (5) – 2

LEP 6 6 (5)

CODEVI 63 – (41) 104

Home-purchase 48 – 48 –

PEP-CNE 11 (10) (4) (3) 24

FREL 83 – 3 80

SDR guarantee funds 1 – – 1

Sub-total B 265 48 6 211

SDR guarantee deposits (C) (1) 13 – – 13

TOTAL (A + B + C) 4,699 (1,492) (6) 482 5,709

Eliminations (interfund transfers) (200) 44 (244)

Other eliminations 1 1 (1)

TOTAL (2) (199) 45 (244)

GRAND TOTAL 4,500 527 5,465

(1) Including 1% of loans paid to regional development companies (SDR) from CODEVI funds.(2) Corresponds to the restatement of capital gains and losses on loan transfers between funds.(3) FRGCE increased the FRGCNE by €16 million and the FRLEP by €18 million.(4) Increase paid to PEP-CNE in 2000 sold back to FRGCNE for €10 million.(5) Increase of €58 million (€37 million on the CEP Livret A, €15 million on the CNE Livret A and B and €6 million on the LEP) related to the change in accountingmethod for inflation-indexed OATs (see I-2 Notes to the financial statements). (6) Including state levy of €1,550 million (€205 million on the FRGCE and €1,345 million on the FRFL).(7) Earnings transferred to the reserve funds correspond to the earnings of the primary funds (CEP Livret A: €256 million; CNE Livrets A and B: €32 million (negative);LEP: €19 million (negative); and Livret Jeunes: €5 million) and of the reserve funds (CEP: €26 million; CNE: €43 million; LEP: €44 million; and Livret Jeunes: €2 million).


SAVINGS FUNDS

Note 13 (cont.)

B) UNAPPROPRIATED EARNINGS

Total earnings amounted to €1,132 million.Earnings, which are separately identifiable for each of the funds managed, will be appropriated in accordance with applicable regulations:

(Euro millions) 2003 earnings Funds (1) Unappropriated earnings

Livret A – CEP 694 694 –

Fund - CEP (2) (2) –

Livrets A and B – CNE 290 290 –

Fund – CNE 29 29 –

LEP (41) (41) –

Fund – LEP 22 22 –

Livret Jeunes 7 7 –

CODEVI (27) – (27)

Home-purchase (4) – (4)

PEP-CNE 18 – 18

Other funds 106 106 –

Sub-total 1,092 1,106 (14)

Eliminations (inter fund transfers) (2) 40

TOTAL 1,132

(1) Reserve fund specific to each fund.(2) Corresponds to the restatement of capital gains and losses on loan transfers between funds.

C) RETAINED EARNINGS AS OF JANUARY 1, 2004 BEFORE STATE LEVY AND EXCLUDING THE FGBR

01.01.2004 12.31.2003

Unappropri- 2003 Unappropri-(Euro millions) Total ated earnings Funds earnings Total ated earnings Funds

Livret A – CEP (1) 2,024 – 2,024 693 1,332 37 1,295

Livrets A and B – CNE (1) 1,284 2 1,282 319 965 17 948

LEP (1) 874 – 874 (19) 892 6 887

Livret Jeunes 63 – 63 7 56 – 56

CODEVI 36 36 – (27) 63 63 –

Home-purchase 43 43 – (4) 48 48 –

PEP-CNE 29 29 – 18 11 11 –

FRFL 1,339 1,339 104 1,235 – 1,235

FREL 85 85 – 2 83 83 –

SDR guarantee funds 1 1 – – 1 1 –

Sub-total 5,779 196 5,583 1,092 4,687 265 4,421

SDR guarantee deposit 13 – 13 – 13 – 13

TOTAL 5,792 196 5,595 1,092 (3) 4,699 265 4,434

Eliminations (interfund transfers) (160) (160) 40 (200) (200)

Other eliminations 1 1 – 1 1

TOTAL (2) (159) (159) 40 (199) (199)

GRAND TOTAL 5,632 196 5,436 1,132 4,500 265 4,235

(1) Allocation to reserve funds of unappropriated earnings due to the change in accounting method for inflation-indexed OATs.(2) Corresponds to capital gains and losses on loan transfers between funds.(3) Total earnings of the funds before eliminations.

The 2004 budget included an estimate of €1,614 million for the levy on the reserves of the savings funds.

109

Note 14 - Credit risk on financing transactions

12.31.2003

GrossGross non- Gross

performing performing irrecoverable (Euro millions) loans loans loans (1) Provisions (1) Total

Breakdown by geographic region 106,996 5,303 39 (545) 111,793

Loans to financial institutions 7,903 12 – (11) 7,904

France 7,903 12 – (11) 7,904

Customer loans 99,093 5,291 39 (534) 103,889

France 99,093 5,291 39 (534) 103,889

Provisions on financing transactions 515 30 545

Loans to banking institutions

12.31.02 – – –

Transfers 11 – 11

12.31.2003 11 – 11

Customer loans

12.31.02 553 – 553

Allocations 237 – 237

Reversals 256 – 256

Other changes (30) 30 –

12.31.03 504 30 534

(1) Interest related to irrecoverable loans is still accrued and provisions are established.

Note 15 - Credit risk on fixed income securities

Since the savings funds portfolio mainly comprises securities issued by AAA-rated companies, no securities were downgraded to non-performing as of December 31, 2003.

Gross performing (Euro millions) securities as of 12.31.03

Breakdown by currency 112,353

Available-for-sale securities 85,554

Euro 85,554

Held-to-maturity securities 26,799

Euro 26,799


SAVINGS FUNDS

Note 16 - Off-balance sheet commitments

A) COMMITMENTS IN RESPECT OF FINANCING, GUARANTEES, SECURITIES AND OTHER COMMITMENTS GIVEN OR RECEIVED


COMMITMENTS GIVEN IN RESPECT OF FINANCING,GUARANTEES AND SECURITIES 16 A 9,298 6,748

Financing commitments 8,910 6,710

Offers of loans 4,188 2,709


Undertakings to provide loans 2,352 1,914

Housing loans (1) 2,031 1,884

Other loans (2) 321 30

Loans granted but not disbursed 2,370 2,087


Home-purchase loan 749 613

Guarantee commitments 388 38

Securities pledged as guarantees (3) 350 –

Other guarantees given (4) 38 38

COMMITMENTS RECEIVED IN RESPECT OF FINANCING, GUARANTEES AND SECURITIES 76,339 940

Guarantee commitments 76,265 927

Guarantees received from the State (5) 1,008 927

Guarantees received from financial institutions (6) 3,560 –

Other guarantees received (6) 71,697 –

Commitments received in respect of securities 74 13


OTHER COMMITMENTS GIVEN AND RECEIVED 14 21

Other commitments given 2 –

Real estate sales commitments 2 –


Subsidies to be received on PLA loans (7) 12 21

(1) Caisse des Dépôts refinances financial institutions that issue PLI and PLS loans. It committed to refinance €670 million in PLS loans and €160 million in PLI loansin 2002 and 2003. As of December 31, 2003, the total unused portion of the lines was €1,042 million, including €300 million in respect of 2001 and 2002, and €742 million in respect of 2003.

(2) Commitment given to CEPME for €321 million as of December 31, 2003. The €30 million commitment as of December 31, 2002 represents the balance of the refinancing following the centralization reform of the Alsace-Moselle Livret A.

(3) Securities placed in guarantee as part of the Relit Grande Vitesse settlement/delivery system.

(4) This commitment concerns CFF.

(5) Including a commitment received from the State, guaranteeing a €972 million loan classified as non-performing, with no impairment recorded on the outstandingbalance due (see Note 2C).

(6) Presentation in 2003 of guarantees received from financial institutions and local governments. These commitments were not presented in 2002 (see II-8 Notes tothe financial statements).

(7) This subsidy relates to PLA loan agreements in the French overseas departments that have been signed but for which the corresponding funds have not yet beenreleased. With each release of funds, the subsidies are allocated to liabilities (see Note 11).

111

Note 16 (cont.)

B) ) FORWARD FINANCIAL INSTRUMENTS

12.31.2003 12.31.2002

Purchase Borrowing Sale Loan Purchase Borrowing Sale Loan

FUTURES 6,082 6,082 5,390 5,390

OTC markets 6,082 6,082 5,390 5,390

Interest rate swaps 6,082 6,082 5,390 5,390

OPTIONS 620 – 82 –

OTC markets 620 – 82 –

Caps 21 – 23 –

Swaptions 540 – – –

Index options 59 59 –

Interest rate swaps consist of:

• €1,642 million of swaps related to loans (down from €1,878 million as of December 31, 2002):

– €1,195 million (€1,241 million as of December 31, 2002) in connection with the refinancing of CFF’s PLI loans;

– €432 million (€390 million as of December 31, 2002) in connection with the refinancing of variable rate loans to regional development companies (SDR);

– €14 million (€16 million as of December 31, 2002) in connection with the refinancing of variable rate loans.

Interest rate swaps (€232 million as of December 31, 2002) related to a swap with CDC IXIS were settled in June 2003 as part of the earlyrepayment of loans to CDC IXIS (see I-1 Notes to the financial statements).

• €4,440 million (2002: €3,512 million) of securities hedging transactions in the form of asset swaps exclusively. Counterparties for theseasset swaps are banking institutions rated at least AA.

Note 17 - Credit risk on off-balance sheet commitments

No signature or forward financial instrument commitments were downgraded to non-performing as of December 31, 2003.

A) SIGNATURE COMMITMENTS

Gross commitments (Euro millions) as of 12.31.03Breakdown by geographic area

Guarantee given 38

France 38

B) FORWARD FINANCIAL INSTRUMENTS (OVER-THE-COUNTER TRANSACTIONS)

Gross commitments (Euro millions) as of 12.31.03Breakdown by geographic area

Futures 6,082

France 6,082

Options 620

France 620


SAVINGS FUNDS

Note 18 - Interest and similar income

A) TREASURY AND INTERBANK TRANSACTIONS

(Euro millions) 12.31.2003 12.31.2002

Revenues from cash advances (1) 39 49

Revenues from securities purchased under collateralized fixed resale agreements (1) 98 141

TOTAL 137 191

(1) Securities purchased under collateralized resale agreements and cash balances are remunerated in accordance with market practices.

B) FINANCING TRANSACTIONS

(Euro millions) 12.31.2003 12.31.2002

Interest revenues (1) 4,720 4,840

Infrastructure loans 335 430


Other loans 1,061 989

Penalties received on early repayments (2) 15 17

Infrastructure loans 8 (1)

Housing loans 7 (17)

Net reversals of subsidies on PLA loans (3) 97 89

Housing loans 97 89

Capital gains or losses (4) 162 176

Housing loans 162 176

Net charge or income on hedging transactions (10) (7)

Housing loans (21) (16)

Other loans 11 9

Provisions net of reversals 4 (7)

Infrastructure loans 2 (1)

Housing loans (5) 8 (6)

Other loans (6) –

TOTAL 4,988 5,108

Infrastructure loans 345 430


Other loans 1,066 997

(1) Including deferred interest.(2) Early repayment penalties are recognized on a cash basis.(3) After elimination of the PLA-TS subsidy paid by FRGCE to the CEP Livret A fund. (4) After elimination of residual capital gains and losses on loan transfers between funds (see Note 13-A).

Including the amortization of the net premiums on the loans assumed from CGLLS (€122 million as of December 31, 2003 and €141 million the previous year).(5) Including the reversal of the provisions relating to the premiums on the CGLLS loans (€3 million as of December 31, 2003 and €1 million the previous year) (see Note 2 B).

113

Note 18 (cont.)

C) REVENUES FROM FIXED INCOME SECURITIES

(Euro millions) 12.31.2003 12.31.2002

Available-for-sale securities 3,339 3,427

Public-sector and similar securities 2,134 2,264

French government securities 1,323 1,419

Treasury bills 811 845

Bonds 702 679


Net income from hedging transactions (37) (37)

Held-to-maturity securities 1,241 1,336

Public-sector and similar securities 868 949

French government securities 791 842


Bonds 305 312


TOTAL 4,580 4,763

Note 19 - Interest and similar expenses

A) TREASURY AND INTERBANK TRANSACTIONS

(Euro millions) 12.31.2003 12.31.2002

Charges relating to current accounts (1) (3) (4)

Charges relating to securities sold under collateralized fixed repurchase agreements (1) (102) (129)

Charges on term borrowings (287) (213)

Loans from CFF (PLI) (2) (54) (2)

Other loans from CFF (4) (4)

Loans from Caisse des Dépôts – Central Sector (PPU) (4) (4)

Loans from CDC IXIS (PLI) – (55)

Livret Bleu loans – (1)

Loans assumed from CGLLS (3) (220) (143)

Advances from Caisse des Dépôts – Central Sector (4) (4)

TOTAL (392) (346)

(1) Securities sold under collateralized repurchase agreements and cash balances are remunerated in accordance with market practices.(2) Including €57 million in accrued interest and €3 million in reversals relating to the discount as of December 31, 2003 on PLI-PLS refinancing loans sold to CFF byCDC IXIS.(3) Including €435 million in early repayment penalties on the CDC IXIS loan; €105 million in interest and €260 million in write-backs of premiums relating to the earlyrepayment in June 2003 of the CGLLS loans to CDC IXIS (see I-1 Notes to the financial statements).


SAVINGS FUNDS

Note 19 (cont.)

B) DEPOSITS

(Euro millions) 12.31.2003 12.31.2002

Interest paid to depositors (6,811) (6,878)

Livret A – CEP (1,742) (1,855)

Livrets A and B – CNE (1,271) (1,354)

LEP (1,862) (1,764)

Livret Jeunes (41) (40)

CODEVI (334) (329)

Home-purchase (884) (836)

PEP (35) (36)

Livret Bleu (642) (664)

Tax withheld at source on deposits (73) (88)

Livret B – CNE (12) (14)

Home-purchase (57) (70)

PEP (4) (5)

TOTAL (6,884) (6,967)

These expenses represent:

• interest paid by the savings funds managed by Caisse des Dépôts to which is added, in the case of the Crédit Mutuel Livret Bleu, commission paid to the network.

Interest rates for the various passbook deposits are regulated, and were as follows:

– Livret A: 3% from July 1, 2000 through July 31, 2003, and 2.25% since August 1, 2003;

– CNE Livret B: 2.75% from October 1, 2000 through September 15, 2003, and 2.25% since September 16, 2003;

– LEP: 4.25% since July 1, 2000;

– Livret jeunes: 4.25% since October 1, 2000;

– home-purchase savings:

- savings plan: rates, excluding the premium, depending on the generation: 3.21% from July 1, 2000 through July 31, 2003 and 2.50%since August 1, 2003,

- passbook deposits: 2% from July 1, 2000 through July 31, 2003, and 1.50% since August 1, 2003;

– Livret Bleu:

- for individuals: 3.27% before taxes from July 1, 2000 to July 31, 2003, and 2.45% since August 1, 2003,

- for legal entities: 3.16% before taxes from July 1, 2000 through July 31, 2003, and 2.37% since August 1, 2003.

Pursuant to Article L 221-18 of the Monetary and Finance Code, new PEP accounts may no longer be opened as of September 25, 2003.As for existing PEP accounts, terms remain the same. The interest on PEP-CNE accounts, which is set each year for the following year, was3.7% for 2002 and 2003;

• interest on industrial development securities (TDI) issued on CODEVI accounts (4.50% from July 1, 2000 through July 31, 2003, and 3.75%since August 1, 2003, see Note 8-A).

115

Note 20 - Revenues from variable income securities

(Euro millions) 12.31.2003 12.31.2002

Equities 164 172

Mutual funds 1 -

Other 1 -

TOTAL 166 172

Note 21 - Net commissions

A) PAYMENTS TO CENTRALIZING NETWORKS

(Euro millions) 12.31.2003 12.31.2002

Livret A – CEP (789) (754)

Livrets A and B – CNE (734) (704)

LEP (313) (288)

Livret Jeunes (7) (7)

Home-purchase (1) (316) (228)

PEP (10) (10)

TOTAL (2,169) (1,992)

(1) Commissions net of overpayments: €122 million for the period 1998 to 2002 (see I-3 Notes to the financial statements).

B) OTHER COMMISSIONS

12.31.2003 12.31.2002


Commissions on loan management 1 172 1 153

Home-purchase (1) – 172 – 153

Other loans 1 - 1 –

Other commissions(2) 3 10 – 18

Sub-total 4 182 1 171

NET TOTAL (178) (169)

(1) Payments to La Poste for managing these loans in accordance with the conditions defined by agreement.(2) Of which, commissions for securities-related custodian services performed by CDC IXIS totaling €10 million in 2003 and €14 million in 2002.


SAVINGS FUNDS

Note 22 - Gains and losses on available-for-sale securities

A) NET GAINS AND LOSSES ON THE SALE OF AVAILABLE-FOR-SALE SECURITIES

(Euro millions) 12.31.2003 12.31.2002

Fixed income securities 462 214

Public-sector and similar securities 320 160

French government securities 275 132


Bonds 86 41


Variable income securities 278 395

Equities 245 365

Mutual funds 32 30

Other variable income securities 1 -

TOTAL 740 609

B) PROVISIONS AGAINST AVAILABLE-FOR-SALE AND PORTFOLIO SECURITIES, NET OF REVERSALS

12.31.2003 12.31.2002

(Euro millions) Allocations Reversals Allocations Reversals

Against available-for-sale securities 81 641 1,336 210

Public-sector and similar securities 32 8 2 60

Bonds and other fixed income securities 37 25 70 144

Equities and other variable income securities 12 609 1,264 7

Against portfolio securities 1 – – –

Equities and other variable income securities 1 – – –

Sub-total 82 641 1,336 210

NET TOTAL 559 (1,126)

Note 23 - Other income and expenses from banking operations

12.31.2003 12.31.2002


Net income from tangible fixed assets 10 6 13 7

Revenues and expenses 10 1 13 2

Depreciation – 5 – 5

Thirty-year limit on unused Livret A CNE accounts 3 – 4 –

Accrued expenses – Special CFF Fund – 1 – 2

Other 6 3 10 2

Sub-total 19 10 26 10

NET TOTAL 9 16

117

Note 24 - General and administrative expenses

(Euro millions) 12.31.2003 12.31.2002

Operating expenses billed by Caisse des Dépôts (1) (86) (89)

of which:

Payroll expenses (20) (19)

Information systems expenses (10) (12)

Other Caisse des Dépôts services (50) (44)

Repayments relating to prior periods – 1

TOTAL (86) (88)

(1) The Central Sector provides the following services for the savings funds:– Banking: cash centralization, cash processing, and intermediation for market transactions;– Administration: various resources made available, notably staff and equipment.These services are rebilled to the savings funds.

Note 25 - Cost of risk (net appropriation to provisions)

12.31.2003 12.31.2002


Provisions for non-performing loans and doubtful receivables

Loans 31 48 53 184

Other receivables – – 11 61

Sub-total 31 48 64 245

NET TOTAL 17 180

Provisions for risks and charges net of reversals

Loans 85 82 103 69


Litigation 2 – – –

Rebate to public housing organizations (1) – – – 7

Hedging instruments 4 – 3 1

Sub-total 131 82 145 78

NET TOTAL (49) (67)

(1) Reversal in 2002 of the balance of the provision concerning the rebate paid to public housing organizations.


SAVINGS FUNDS

Note 26 - Transfers to the fund for general banking risks, net of reversals

12.31.2003 12.31.2002


General risks (CAD + Specific Savings Risks)

Livret A – CEP 150 12 – 161

Livrets A and B – CNE 77 4 – 82

LEP 99 – – 100

Livret Jeunes – 3 2 2

CODEVI 10 8 14 –


PEP-CNE 1 15 10 2

Sub-total 413 42 102 347

NET (371) 245

Contingent general risks

Home-purchase – 64 – –

Sub-total – 64 – –

NET 64 –

Total 413 106 102 347

NET TOTAL (307) 245

119

Auditors’ report on the financial statements of the savingsfunds centralized by Caisse des Dépôts et ConsignationsYear ended December 31, 2003


In accordance with the assignment entrusted to us, we haveaudited the accompanying financial statements of the savingsfunds centralized by Caisse des Dépôts et Consignations for theyear ended December 31, 2003.

These financial statements have been approved by you. Our roleis to express an opinion on these financial statements based onour audit.

We conducted our audit in accordance with the professionalstandards applied in France. Those standards require that weplan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstate-ment. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial state-ments. An audit also includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basisfor our opinion.

In our opinion, the financial statements give a true and fair viewof the results of the savings funds centralized by Caisse desDépôts et Consignations for the year ended December 31, 2003

as well as of their assets, liabilities and financial position at thatdate, in accordance with French accounting regulations andgenerally accepted accounting principles.

Without qualifying our opinion set out above, we draw yourattention to I-2 Notes to the financial statements , which describes the changes in accounting methods resulting fromthe application of CRC Standard 2002-03 relating to the account-ing treatment of credit risk and CRC Standard 2002-10 relatingto asset depreciation, amortization and impairment; as well asthe change in accounting method applicable to recognizing gainsand losses on the indexing of inflation-indexed OATs.

Paris and La Défense, March 24, 2004

The Auditors

PricewaterhouseCoopers Audit Mazars & Guérard

Gérard Hautefeuille Guillaume Potel Pierre Masieri


Annual ReportFinancial Statements 0320

Cai

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56, rue de Lille – 75356 Paris 07 SP

Phone: +33 1 58 50 00 00 – www.caissedesdepots.fr

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