Ronald Tourigny

Chair of theBoard of directors

MESSAGE FROM THE CHAIRMAN

On behalf of my colleagues on the Board of Directors, I would like to thank all 18,970 members of Caisse popu-laire Trillium for the confidence and interest they show in our cooperative financial institution. Along with Caisse di-rectors, managers and employees, you rejuvenate our coo-perative and secure it a bright future. The real winners are the 5.8 million members and 42,000 staff members of the Desjardins Group.

HIGHLIGHTS

Overall in 2011, our Caisse has achieved good result. I am happy to reveal that the Board of Directors has approved a payout of $600,000 in dividends. In fact, the entire Desjardins Group has reported excellent surpluses for 2011 and it is important to note that this was achieved with fluctuating financial markets and a fragile world economy in the backdrop. Our healthy capitalization paired with sound business and financial practices act as an insurance policy for the future of our Caisse and the Desjardins Group.

MERGER PROJECTS BETWEEN CAISSES POPULAIRES ORLÉANS AND TRILLIUM

During our 2011 strategic planning exercise, performed in collaboration with Caisse populaire Orléans, we reflected on the best way to meet our members’ needs, which have greatly evolved over the last years. Aware of future prospects and development opportunities, Board members also examined different methods they could follow to face a progressively competitive environment in the financial services industry.

We wish to inform you that we have now formed a committee – made up of representatives from both Caisses – to study the relevance and feasibility of a merger project. This 16-step project, of which many must be sanctioned by financial authorities, will require several months of work and reflection because we must be sure to put forward a path that best meets the needs of members of both Caisses respectively and also maintains cooperative viability.

In light of past experiences and available information, a merger may be a future solution since our Caisses are complementary in several areas and present many similarities.

One of the objectives of a potential merger would be to give our financial cooperative the means to address current and future challenges through this major project that will have many advantages for member-owners and will mobilize staff. In addition, we anticipate that merging our resources will allow us to better meet the ever-growing needs for advisory services of our members.

Strengthened by our cooperative difference, organizational spirit and awareness, our wish would be for this new Caisse to be a major economic lever and first-class financial institution in the Ottawa region as well as in eastern Ontario.

Finally, if we decide to bring the Caisse merger to fruition, it will be because we are convinced of the merits of such measures for our members. In this context, we will not hesitate to table the project for approval at a special general meeting in 2013. Over the coming months, we will keep you apprised of developments at the Board of Directors level and of the different steps to be taken to proceed with a merger.

OUR COOPERATIVE DIFFERENCE

At Caisse populaire Trillium, our cooperative difference shows through in various ways, such as our democra-tic structure, extensive offerings, the help we offer young entrepreneurs and our community involvement. Over the years, the Caisse has been a loyal partner to many organizations and joint and community projects. Through sponsorships and donations, the Caisse has maintained its support of various important community projects. In 2011, this support totalled $145,000 which the Caisse reinvested in its community.

Education and cooperation – catalysts of sustainable prosperity to which we want to contribute – also play a role in our cooperative difference. To this end, Caisse populaire Trillium helped several schools in its territory purchase smart boards, a technology that helps to garner the attention of students and, in turn, encourages participation and stimulates learning.

On its website, under the header “Desjardin’s Education and Cooperation Zone”, the Desjardins Group also launched an educational resource called “Co-opme”. I hope you will take a moment to discover this dynamic and interactive site that brings together a variety of tools and information modules presented in a clear and user-friendly manner. Among other things, you will find the Desjardins personal finance index and a self-assessment tool to help members – no matter what age – double check their financial knowledge and behaviour.

Ronald Tourigny

Chair of theBoard of directors

MESSAGE FROM THE CHAIRMAN

In 2012, Desjardins celebrates the United Nations’ Interna-tional Year of Cooperatives. In fact, Desjardins will be one of the hosts of the International Summit of Cooperatives, themed “The Amazing Power of Cooperatives,” which will be held in Quebec City and Lévis, from October 8th to 11th. In addition, our Caisse will mark Cooperation Week – which takes place in October each year – in a significant way, by organizing various activities, such as quizzes and draws, in all of our branches.

OUR SERVICE OFFERINGS

Throughout its history, Caisse populaire Trillium and the Desjardins Group have continually adapted and deve-loped to meet the constantly evolving needs of its members and improve the quality of its business relationship with Desjardins. This evolution allows us to now offer our members a multitude of advisory services and financial products that are more and more relevant and competitive.

We also offer you different ways to access our products and services. Where and when you choose, you can access AccèsD services by phone or Internet. The same applies to our cell phone app which, just one year after being launched, has already recorded 22 million transactions.

Also in an effort to better serve you, the Desjardins Group tests various service approaches such as, for example, the virtual advisor, with whom you can communicate online or the wealth management team of experts, which has moved to a new location.

One thing is certain, elected directors and I make every effort so that Caisse populaire Trillium continues to be accessible, well-performing and ever-present in the community. This is an unavoidable requirement for businesses who want to continue to thrive all the while offering competitive services that meet the highest standards. Our Caisse is also a stakeholder in the Desjardins Group’s productivity.

BUILDING A DESJARDINS OF WHICH WE CAN ALL BE PROUD

The Caisse’s overall results for 2011 would not have be achievable without the commitment and hard work of its elected directors, executive director Normand Leroux, managers and employees , who show dedication and concern for member services all the while respecting Desjardins core values. On your behalf, I sincerely thank them.

I am especially thrilled that, through our financial success, we are proving together that cooperation leads not only to great achievements for individuals but for society as a whole.

I encourage you all to continue to build a Desjardins of which we can all be proud!

Normand Leroux

General Manager

MESSAGE FROM THE EXECUTIVE DIRECTOR

Again this year, it is my pleasure to share with you our Caisse’s many accomplishments.

Last year, I informed you that your Caisse had devised a three-year strategic plan (2010-2012) inspired by direc-tions taken by the network of caisses populaires and the Desjardins Group.

Throughout 2011, we continued with the implementation of our strategic plan, ensuring that it meets our economic and financial needs. Productivity is a priority for the Caisse, as it is for Desjardins and for this reason, we closed our Clarence Creek and Sarsfield branches on March 25th, 2011 and transferred operations to the Rockland and Notre-Dame-des-Champs branches.

As expected, since the net income from interest continues to decrease, we have explored other avenues to increase revenues and cut costs. Of course, we have also prioritized member satisfaction and made further efforts in cooperative education.

Staff members strived – showing discipline and rigour and, on many occasions, going beyond the call of duty – to implement strategic plan objectives and attain financial results. In fact, our staff’s professionalism and expertise contribute to our Caisse’s longevity. I also sincerely believe that the cooperative values and principles by which we abide, such as ownership along with personal and mutual responsibility, are some of your Caisse’s distinctive features.

Below, I present to you the fiscal results for the Caisse, the Business Centre and the Desjardins Group subsidiaries’ portion of activities.

FINANCIAL REPORT

The Caisse publishes its financial statements in compliance with Canada’s generally accepted accounting principles (GAAP). Since January 1st, 2011, pursuant to the decision of the Canadian Accounting Standards Board, entities with a public disclosure requirement must publish financial state-ments under new authoritative accounting pronouncements – the International Financial Reporting Standards (IFRS).

The Caisse’s 2011 financial statements are the first to be prepared since the new IFRS came into effect, so 2010 comparative figures were reviewed in light of the new standards. For more information on accounting procedures and reconciliation of comparative figures, please refer respectively to note 2 “Main Accounting Procedures” and note 4 “Effects of the IFRS”, which are supplements to the financial statements.

The main change brought about by the IFRS affects recording of employee benefit plans which are now accounted for in the Caisse’s financial statements (see note 13 to financial statements).

BUSINESS VOLUME

Managing a business volume of $1,099,086,300 – up 4.7% since last year – the Caisse is well positioned in its market. Since it belongs to the Desjardins Group, the Caisse accesses a complete range of financial products and services that meet the increasingly diverse needs of its 18,970 members. Overall, total investment savings henceforth represent 54 % of the business volume while financing income accounts for 46% of the total business volume.

INVESTMENT SAVINGS

Investment savings increased by $38,381,500 to total $593,966,000, which represents a 6.9% increase over last year. In addition to traditional savings offered by the Caisse, members can also access the very best financial products – investment funds, securities and discretionary management services – all under the same roof.

Our superb performance in investment savings ranks us, for 2011, among the very best Desjardins caisses. In fact, during an evening of celebration in Montreal, our Caisse received a picture of Alphonse-Desjardins House, to recognize our investment savings performance. I take this opportunity to congratulate Robert Brazeau, head of wealth management, and all staff members who contributed to this accomplishment.

FINANCING

The Caisse’s total financing portfolio is $505,120,300, with an overall increase of 2.1% this year. The Caisse’s loans (personal and business) increased by 4% and represent the largest portion of activities.

Normand Leroux

General Manager

MESSAGE FROM THE EXECUTIVE DIRECTOR

COMMENTS REGARDING FINANCIAL STATEMENTS

BALANCE SHEET

Your financial cooperative’s assets increased by $37,097,000 to total $531,941,000, a 7.5% gain over last year.

The Caisse’s liabilities went up by 6.9% to reach $487,078,000. The main liability item – member deposits – rose by $28,339,000 or 6.4% and is a clear reflection of the faith our members put in their Caisse.

At December 31st, 2011, taking into account IFRS adjustments to 2010 figures, your Caisse’s equity noted a healthy 14.8% increase, from $39,096,000 to $44,863,000. Equity is made up of the share capital ($9,456,000) and reinvested earnings ($30,675,000). Funds collected in the capital gains reserves amount to $4,732,000.

Over the last few years, the shareholders’ equity has done a good job meeting Ontario’s capitalization standards with 4% for expansion assets and 8% for risk assets. However, IFRS standards force us to now account for our share of liabilities for defined benefit group plans, representing an amount of $4,401,000. Following these changes, the Caisse has only just reached a level in compliance with the Desjardins capitalization policy established according to Basle II – 12.5% for risk assets and expansion assets that are equal to or less than 17 times the shareholders’ equity.

INCOME STATEMENT

In the last fiscal year, your Caisse achieved surpluses, before taxes and dividends, amounting to $8,203,000, an increase of 17.3% over last year.

2011 surpluses were inflated by $2,549,000 in imputed earnings due to the fair value of derived financial instruments. Without the imputed earnings, 2011 surpluses would have capped at $5,654,000, a decrease of 11.4% since last year.

Interest income totalled $20,757,000, a slight decrease over last year, while interest charges increased by 4,8% or a shift of $362,000 since last year, due to the upturn in the volume of savings held by members. Losses on loans raised slightly - $405,000 – over 2010 but were still below the average of Desjardins caisses.

Other revenues, mostly resulting from the distribution of Desjardins products and services, totalled $4,489,000 and decreased by 3.1% since the previous year.

Overall, other charges decreased by $191,000 or 1.5%.

Dividends made a comeback in 2011. While being cautious in sharing surplus funds, members of the Board of Directors approved the distribution of $600,000 in dividends among individual and business members and for the first time, user fees were also included in the dividend. The formula adopted for the dispersal of funds takes into consideration the importance of balancing the distribution of surpluses, growth and capitalization.

Considering the current economic and financial context, your Caisse considers it advantageous – as does the Desjardins Group as a whole – to build its capitalization. In fact, healthy capitalization allows the Caisse to support its business growth and ensure its longevity.

FORECAST

In October 2011, to create the Caisse’s 2012 business plan and outline the fiscal year, the Board of Directors carried out a planning session focussing on business development. Supported by careful and efficient management, these directions will undoubtedly allow us to maintain our financial productivity all the while increasing member satisfaction in their Caisse populaire. Further to a recommendation of Board members, the amount of $1,000,000 in dividends is budgeted for the 2012 fiscal year.

CONCLUSION

In closing, I would like to thank all staff members for their continuous efforts and openness to the changes that have been made to our ways of doing things. I also thank chairman Ronald Tourigny and all Board members for their commitment and availability as well as each and every one of our members for the confidence they instill in their financial services cooperative.

Many are those who believe, like we do, that the relationship the Caisse cultivates with its members and community is one of Desjardins’ important distinctive features and the basis of its success in the future.