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

In the case of defined benefit pension plans, the pension
expenses and obligations are valued according
to the projected unit credit method. The corresponding
calculations are carried out by independent qualified
actuaries, every other year.
The pension expenses recorded in the income statement
for the defined benefit pension plans correspond
to the actuarially determined expenses minus
the employee contributions. The sum of these
expenses is charged to the income statement as personnel
expenses.
Actuarial gains and losses that exceed the greater of
10% of the present value of the plan obligation and
10% of the fair value of plan assets are systematically
recognized in the income statement over the
expected average remaining working lives of employees
participating in the plan.
In the case of defined contribution pension plans, the
contributions are expensed when the employees render
the corresponding service, which normally occurs
in the same year in which the contributions are paid.
Other commitments following retirement
The Group companies in the USA pay part of the contributions
to the health insurance plans of retired
long-time employees. The expected expenses are
accrued during the duration of employment based on
actuarial calculations.
Business and geographic segments
In 2005, the Group was divided into three operational
and internationally active business lines that formed
the basis for the primary reporting. Income and
expenses that were not directly connected with the
three business lines were attributed to the Corporate
Center. Direct income and expenses were assigned to
the segments based on the principle of accountability.
Indirect costs for internal service relationships
between the segments were fundamentally accounted
for according to the principle of causation and
recorded as a cost reduction for the service provider
and as a cost increase for the service beneficiary.
These internal service allocations were based on a
transfer price system and are carried out at actual
cost. The financial information on the business lines
and geographic segments is presented in Note 8.
Treasury shares and earnings per share
Shares of Julius Baer Holding Ltd. held by the Group
are classified in shareholders’ equity as treasury
shares and accounted for at weighted average cost.
The difference between the proceeds from sales of
treasury shares and their cost (net of taxes, if any) is
recognized under retained earnings.
Basic consolidated earnings per registered share is
calculated by dividing the net profit for the reporting
period attributable to shareholders of Julius Baer
Holding Ltd. by the weighted average number of registered
shares outstanding during the period.
Diluted consolidated earnings per registered share is
calculated using the same method as for basic consolidated
EPS, but the determinants are adjusted to
reflect the potential dilution that could occur if
options, warrants, convertible debt securities or other
contracts to issue registered shares were converted
or exercised into registered shares.
Events after the balance sheet date
Notes
There are no events to report that had an influence
on the balance sheet or the income statement for the
2005 financial year.
The Audit Committee of the Board of Directors,
together with representatives of the Group Executive
Board and the external auditors, considered the
consolidated financial statements at its meeting on
6 February 2006.
The Board of Directors considered and approved the
consolidated financial statements at its meeting on
JULIUS BAER GROUP 77