Annual Report 2011 - Hong Kong Monetary Authority

Consolidation principles
The consolidated financial statements of the Banque Privée
Edmond de Rothschild Group have been prepared in accordance
with the provisions of the Federal Law on Banks
and Savings Banks, its implementing ordinance (OB), the
guidelines issued by FINMA (the Swiss Financial Market
Supervisory Authority) and the provisions on the drawing
up of financial statements in the Listing Rules of the Swiss
Exchange. The financial statements provide a true picture
of the Group’s assets, financial situation and earnings.
Scope of consolidation
Group companies
The consolidated financial statements of the Banque Privée
Edmond de Rothschild Group include the financial statements
of the major companies operating in the banking
and financial sector, as well as the real estate companies in
which the parent company holds, directly or indirectly, a
majority interest (for details of the companies concerned,
refer to pages 62-65).
Changes in the scope of consolidation
The following companies were consolidated during the
reporting period:
- Privaco Family Office (HK) Ltd
- Edmond de Rothschild Corporate Finance SA
The following company was deconsolidated during the
reporting period:
- Edmond de Rothschild Real Estate - Mediação
Imobiliaria, SA
Change of corporate name:
- Privaco Family Office SA, formerly Privaco Trust SA
Holdings accounted for using the equity method
Associated companies in which the Group owns a 20% to
50% interest are consolidated using the equity method; the
value shown under “Holdings” represents the Group’s
share in the equity and net income of these entities, rather
than the value of the shares under our control.
66 2011 ANNUAL REPORT - BANQUE PRIVÉE EDMOND DE ROTHSCHILD SA
The companies concerned are La Compagnie Benjamin de
Rothschild SA (34.68 %), A.C.H. Management SA (38 %),
LCF EdR Nikko Cordial Japon (50 %) and LCH Investment
NV (44 %).
The difference resulting from the first consoli dation is
shown under “Retained earnings”. The impact of applying
the Group’s accounting principles to the affiliated companies
has been considered as minor on the consolidated
financial statements. As a consequence, the equity application
is based on the unadjusted accounts of the companies
held.
Equity stakes accounted for under the equity method are
shown under “Non-consolidated holdings”.
The Group’s share in the profits of companies consol i dated
using the equity method is presented as a sepa rate item in
the consolidated profit and loss account.
Other holdings
Majority interests of lesser impact or whose sale is envisaged,
as well as other stakes of less than 50%, are disclosed under
“Non-consolidated holdings”.
Consolidation methods
Full consolidation method
The financial statements of all companies within the Group
are fully consolidated.
All assets and liabilities, as well as expenses and income of
Group companies, are fully integrated (line-by-line).
Intercompany balance sheet items and profit and loss
transactions between consolidated Group companies are
set off against each other.
Off-balance sheet items are also fully consoli dated and set
off when they relate to intercompany transactions within
the Group.