as at December 31, 2003 - EFG Bank Group

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72 Notes to the Financial Statements (continued) borrower (or group of borrowers), large exposures and country risk are monitored on an ongoing and independent basis by the Credit Administration and Control department. An internal grading system is used as a supporting tool for determining any provisioning requirement for doubtful debts on an individual basis. Operational risk Operational risk is the risk of loss or business suspension resulting from failures in business processes, systems and people, or from external causes, whether accidental or deliberate. It is limited by means of organisational measures, automations, internal controls, security measures, authorisation frameworks, written procedures, legal documentation and support, and compliance checks under the responsibility of management. In addition, a monthly operational report is produced for the attention of management. (c) Outsourcing Back offices, information technology, transactions execution and settlement, custody and corporate actions, electronic fund transfers, asset management, daily risk management activities, legal and compliance have been outsourced to the Bank’s Swiss subsidiary, EFG Private Bank SA using common operating procedures with reporting lines to and distinct supervision by the Bank’s management. Salary and pension fund administration have been outsourced to a third service company specialising in this area. Several IT development projects have also been outsourced to third local vendors. EFG Bank European Financial Group
Notes to the Financial Statements (continued) 3. Fire insurance value of fixed assets (All figures in thousands of CHF) Dec. 31, 2003 Dec. 31, 2002 Investment properties 16’943 16’174 Other tangible fixed assets 1’000 1’100 4. Pledged or assigned assets in guarantee of own liabilities Dec 31, 2003 Dec 31, 2002 Book value of Actual Book value of Actual (All figures in thousands of CHF) pledged assets liabilities pledged assets liabilities Balance sheet positions Money market instruments 6’497 - 6’687 - Total 6’497 - 6’687 - 5. Pension The pension schemes cover employees for retirement pension and against disability or death (in which case spouse and dependent children are the beneficiaries). They are run in accordance with applicable Swiss law and regulation on pension. Up until December 31, 2003, retirement schemes were defined-benefit schemes. However, on January 1, 2004, except for 5 employees aged over 51 years old for whom a defined-benefit scheme (insured through an insurance company) remains in place, all other retirement schemes became defined-contribution schemes. Generally funded by employees and employers, the schemes are legally independent from the Bank. Employer’s contribution expenses are booked as personnel expenses. Liabilities towards pension funds: (All figures in thousands of CHF) Dec. 31, 2003 Dec. 31, 2002 Balance sheet positions Other amounts due to clients 61 212 Total 61 212 6. Valuation adjustments and provisions/Reserve for general banking risks Recoveries, New provisions Balance at Specific doubtful interest, charged to Reversals in Balance at (All figures in thousands of CHF) Dec. 31, 2002 usage exch. differences earnings earnings Dec. 31, 2003 Valuation adjustments and provisions for credit risks 528 - (6) 30 - 552 Valuation adjustments and provisions for country risks 36 - - - - 36 Other provisions 17’589 - - - - 17’589 Total valuation adjustments and provisions as per balance sheet (liabilities) 18’153 - (6) 30 - 18’177 Reserve for general banking risks 10’345 - - - - 10’345 Annual Report 2003 73
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Annual Report 2003
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Contents 3 Consolidated financial h
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4 Report of the Board of Directors
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6 Report of the Board of Directors
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8 EFG Bank Group’s Activities The
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10 EFG Bank Group’s Activities (c
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12 Consolidated Statement of Income
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14 Consolidated Statement of Change
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16 Notes to the Consolidated Financ
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Page 24 and 25: 22 Notes to the Consolidated Financ
Page 60 and 61: 58 Principal Offices (continued) Pr
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Page 64 and 65: Contents 64 Review of Parent Bank a
Page 66 and 67: 64 Review of Parent Bank Activities
Page 68 and 69: 66 Statement of Income for the year
Page 70 and 71: 68 Off Balance Sheet Positions at D
Page 72 and 73: 70 Notes to the Financial Statement
Page 76 and 77: 74 Notes to the Financial Statement
Page 78: 76 Board of Directors and Advisory
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as at December 31, 2003 - EFG Bank Group

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