2005 Annual Report Julius Baer Holding Ltd. - GAM Holding AG

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Notes The following methods are used in calculating calculating the estimated estimated fair fair value of of financial instruments1 instruments in the balance sheet: 1 in the balance sheet: Short-term financial instruments Financial instruments with a maturity or a refinancing profile of one year or less are generally classified as short-term. This includes the balance sheet items cash and money market instruments. Depending on the maturity, it also includes the following: due from banks; due from customers; mortgages; due to banks; due to customers in savings and investment accounts; due to customers, other; cash bonds and bonds. For short-term financial instruments which do not have a market price published by a recognized stock exchange or notable market (referred to hereinafter as a market price), the book value fundamentally approximates the market value. Long-term financial instruments Depending on the maturity, these include the following balance sheet items: due from banks; due from customers; mortgages; due to banks; due to customers, other; cash bonds and bonds. The fair value of long-term financial instruments, which have a maturity or a refinancing profile of more than one year, is derived by using the net present-value method. Trading securities and financial investments For the majority of the financial instruments in the securities trading portfolio and in the financial investments as well as for the entire precious metal trading portfolio (see Notes 11 and 12), the fair value corresponds to the market price. The fair value of instruments without a market price is derived by using generally accepted valuation methods. Derivative financial instruments The fair value of the derivative financial instruments is derived primarily by using uniform models. The market price is used for derivative instruments which have one. The table does not reflect the fair values of non-financial assets and liabilities such as investments in associates, property, equipment, intangible assets and accruals. 1 Compare to IAS 32, Financial Instruments: Disclosure and Presentation 120 JULIUS BAER GROUP
29 Financial instruments (continued) For listed trading portfolio securities and financial investments as well as for exchange-traded derivatives and other financial instruments whose prices are quoted in an active market, the fair value is determined directly from the quoted market prices. For financial instruments for which quoted market prices are not directly available, fair values are estimated using valuation techniques or models based wherever possible on assumptions supported by observable market prices or rates existing on the balance sheet date. This is the case for the majority of OTC derivatives, most unlisted financial instruments, and other items that are not traded in active markets. For a small portion of financial instruments, neither quoted market prices nor valuation techniques or models based on observable market prices are available for determining the fair value. In these cases, fair value is estimated indirectly using valuation techniques or models based on reasonable assumptions reflecting market conditions. The following valuation methods are used in determining the fair value of financial instruments carried at fair value as of 31 December 2005: Determination of fair values from quoted market prices or valuation techniques Notes Valuation technique Valuation technique market- non-market- Quoted market price observable inputs observable inputs Total CHF m CHF m CHF m CHF m Trading portfolios 987.0 198.1 4.2 1189.3 Derivative financial instruments 614.0 718.2 4.3 1336.5 Financial investments 1090.5 5928.2 14.3 7033.0 Total assets 2691.5 6844.5 22.8 9558.8 Trading liabilities 39.6 365.6 27.2 432.4 Derivative financial instruments 617.0 773.6 4.3 1394.9 Financial liabilities designated at fair value - 1739.7 111.8 1851.5 Total liabilities 656.6 2878.9 143.3 3678.8 Sensitivity of fair values to changing significant assumptions to reasonably possible alternatives For a small portion of financial instruments, the fair value is estimated using valuation techniques based on assumptions that are not supported by observable market prices or rates. Julius Baer subjects the models used in these situations to a detailed internal examination process before they are approved for use. The potential effect of using reasonable alternative assumptions as inputs to valuation models from which the fair values of these financial instruments are calculated has been determined to be negligible when using either less favorable assumptions or more favorable assumptions. JULIUS BAER GROUP 121
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2005 Annual Report Julius Baer Hold
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Key figures 2004 2005 Change CHF m
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Annual Report 2005
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Foreword 4 Dear Shareholders and Cl
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Foreword 6 Annual financial results
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Foreword 8 The significant economie
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Foreword 10 2005 will go down in th
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anks, the decision has been made to
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this corresponds to CHF 2.59 per re
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2004 2005 Change Change CHF m CHF m
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Private Banking 20 Private Banking
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Asset Management 22 Asset Managemen
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Trading & Sales 24 Trading & Sales
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Corporate Center 26 Corporate Cente
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Corporate Center 28 Our model of su
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Corporate Governance
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1.2 Cross-shareholdings There are n
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2.3 Changes of capital The descript
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egistered shares not physically rep
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Corporate Governance tors of Julius
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3.3 Cross-involvement Since 2004, M
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The Chairman’s Committee receives
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Group Executive Board The Group Exe
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Group Managing Board of UBS AG, 199
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4.3 Other activities and functions
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Equity Bonus Plan 2004 2005 Number
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5.3 Compensation for former members
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5.7 Additional honorariums No addit
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7. Changes of control and defense m
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9. Information policy Julius Baer H
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Financial Report
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Consolidated income statement 2004
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31.12.2004 31.12.2005 Change Change
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Translation differences 2003 2004 2
Page 73 and 74: Consolidation policies and valuatio
Page 75 and 76: when the contractually stipulated p
Page 77 and 78: A hedge is regarded as highly effec
Page 79 and 80: Intangible assets Intangible assets
Page 81 and 82: In the case of defined benefit pens
Page 83 and 84: Under revised IAS 32, certain deriv
Page 85 and 86: Notes JULIUS BAER GROUP 81
Page 87 and 88: 3. Credit risks Credit or counterpa
Page 89 and 90: Assets by countries/country groups
Page 91 and 92: 5. Liquidity and financing risks Th
Page 93 and 94: The liquidity position of Bank Juli
Page 95 and 96: Hedges The Group hedges a portion o
Page 97 and 98: 7. Reputational risks The Group’s
Page 99 and 100: 3 Results from trading operations N
Page 101 and 102: 7 Taxes Notes 2004 2005 Change Chan
Page 103 and 104: The depreciation and write-offs of
Page 105 and 106: Information on the consolidated bal
Page 107 and 108: 12 Financial investments 31.12.2004
Page 109 and 110: Notes 31.12.2004 31.12.2005 Change
Page 111 and 112: 18 Financial liabilities designated
Page 113 and 114: 20a Deferred tax assets Notes 31.12
Page 115 and 116: 23 Corporate capital Notes Register
Page 117 and 118: 25 Pension plans and other employee
Page 119 and 120: 26 Assets and liabilities by domest
Page 121 and 122: 27 Consolidated off-balance-sheet t
Page 123: 28 Derivative financial instruments
Page 127 and 128: 30 Risk-weighted assets (BIS) Notes
Page 129 and 130: Notes Head Office Currency Capital
Page 131 and 132: Notes Head Office Currency Capital
Page 133 and 134: Pro-forma information The following
Page 135 and 136: Movements in shares granted under v
Page 137 and 138: Notes 31.12.2004 31.12.2004 31.12.2
Page 139 and 140: Breakdown of assets under managemen
Page 141 and 142: Report of the Group auditors to the
Page 143 and 144: Financial Report of Julius Baer Hol
Page 145 and 146: lion to CHF 28 million due to capit
Page 147 and 148: Balance sheet 31.12.2004 31.12.2005
Page 149 and 150: Proposal of the Board of Directors
Page 151 and 152: Report of the statutory auditors to
Page 153 and 154: Addresses and contacts
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2005 Annual Report Julius Baer Holding Ltd. - GAM Holding AG

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