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

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Notes Maturity structure of assets and liabilities 90 JULIUS BAER GROUP Due within Due within Due within 3 to 12 12 months Due after On demand Callable 3 months months to 5 years 5 years Total CHF 1000 CHF 1000 CHF 1000 CHF 1000 CHF 1000 CHF 1000 CHF 1000 Assets Cash 483553 - - - - - 483553 Due from banks 1648356 79127 3569193 1493497 1720 - 6791893 Due from customers - 1381718 2443358 1134508 778797 92957 5831338 Trading portfolios 1189347 - - - - - 1189347 Derivative financial instruments 1336543 - - - - - 1336543 Financial investments 88576 32068 1397255 2202310 2485728 827092 7033029 Investments in associates 927 - - - - - 927 Property and equipment - - - - - 334524 334524 Intangible assets - - - - - 4987787 4987787 Accrued income and prepaid expenses 455146 - - - - - 455146 Deferred tax assets 49441 - - - - - 49441 Other assets 154849 - - - - - 154849 Total assets 31.12.2005 5406738 1492913 7409806 4830315 3266245 6242360 28648377 Total assets 31.12.2004, restated 3507828 709515 5061300 3293575 2692220 765521 16029959 Borrowed funds Due to banks 352387 30805 1197434 258670 293993 311888 2445177 Due to customers in savings and investment accounts - 388884 - - - - 388884 Due to customers, other 6731762 859964 6044343 423326 3014 - 14062409 Trading liabilities 432375 - - - - - 432375 Derivative financial instruments 1394861 - - - - - 1394861 Financial liabilities designated at fair value - - 810032 719247 246448 75778 1851505 Debt issued 7174 - 2525 - 278779 225000 513478 Accrued expenses and deferred income 775021 - - - - - 775021 Other liabilities 172791 - - - - - 172791 Current tax liabilities 125556 - - - - - 125556 Deferred tax liabilities 89830 - - - - - 89830 Provisions - - - 24005 165208 - 189213 Total liabilities 31.12.2005 10081757 1279653 8054334 1425248 987442 612666 22441100 Total liabilities 31.12.2004, restated 5904278 1847992 5892889 542641 155726 147723 14491249
Hedges The Group hedges a portion of interest rate risk associated with cash flows resulting from term deposits or term loans by employing interest rate swaps. The market value of these swaps on 31 December 2005 amounted to a net CHF –1.0 million. On 31 December 2005, the Group carried no fair value hedges on its books. 6. Operational risks 6.1. Operational risk framework and process We define operational risk as the potential occurrence of losses as a result of the inappropriateness or failure of internal procedures, personnel and systems or due to external events. This framework also includes regulatory and supervisory risks. Within this context, in its paper Sound Practices for the Management and Supervision of Operational Risk the Basel Committee formulates qualitative standards regarding organizational structure and risk management as well as quantitative guidelines for identifying and measuring operational risks. We already adhere to these standards today while preparing for the demands of the future by implementing targeted measures and taking a proactive approach. The department Group Risk Management Operational Risk has Group-wide responsibility for developing and implementing an internal framework for steering operational risk (excluding legal risks and compliance risks), which includes guidelines and methods for identification and early detection of risks as well as the definition of appropriate reporting structures for achieving timely and efficient management reporting. In addition, this department coordinates all topics associated with operational risk in order to chronicle and illuminate these topics throughout the Group as well as to be able to minimize the potential financial consequences from operational risks by taking appropriate measures. The objectives of operational risk management are as follows: Notes – Avoiding potential substantial losses – Reinforcing a high degree of risk awareness at all levels – Reinforcing an efficient early warning system – Reinforcing the existing “culture of risk awareness, risk responsibility and risk control” – Assessing all operational risk issues before new services or products are offered by the organization – Assuring the smooth operation of business in the event of infrastructure breakdowns and catastrophes by regularly monitoring and updating the business recovery plan as well as the crisis management preparations within the scope of effective Business Continuity Management (BCM) The goal of BCM is to ensure that precautionary measures are in place to mitigate the vulnerability for interruption of vital business functions due to natural disasters, catastrophic events and other events over which businesses have no control such as fire, earthquake, terrorist attacks, war, floods and epidemics. Therefore respective directives and standards are in place. If a catastrophic event occurs, an Emergency Management Team (EMT) consisting of pre-determined members will convene with the purpose of ensuring that Julius Baer Group reacts to any catastrophic event in a way that minimizes any interruption to the business. The EMT investigates the origin, and assesses the effects of potentially catastrophic events and is responsible for identifying and implementing adequate counter-measures. The EMT is supported by several sub-committees, responsible for, among other things, taking emergency measures, gathering information and resuming business. Each branch has its own emergency organization, tailormade to the size of the branch. All local EMTs are supported by the main team in Zurich. All processes JULIUS BAER GROUP 91
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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
Page 43 and 44: Corporate Governance tors of Julius
Page 45 and 46: 3.3 Cross-involvement Since 2004, M
Page 47 and 48: The Chairman’s Committee receives
Page 49 and 50: Group Executive Board The Group Exe
Page 51 and 52: Group Managing Board of UBS AG, 199
Page 53 and 54: 4.3 Other activities and functions
Page 55 and 56: Equity Bonus Plan 2004 2005 Number
Page 57 and 58: 5.3 Compensation for former members
Page 59 and 60: 5.7 Additional honorariums No addit
Page 61 and 62: 7. Changes of control and defense m
Page 63 and 64: 9. Information policy Julius Baer H
Page 65 and 66: Financial Report
Page 67 and 68: Consolidated income statement 2004
Page 69 and 70: 31.12.2004 31.12.2005 Change Change
Page 71 and 72: 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: The liquidity position of Bank Juli
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 and 124: 28 Derivative financial instruments
Page 125 and 126: 29 Financial instruments (continued
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
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lion to CHF 28 million due to capit
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Balance sheet 31.12.2004 31.12.2005
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Proposal of the Board of Directors
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Report of the statutory auditors to
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Addresses and contacts
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2005 Annual Report Julius Baer Holding Ltd. - GAM Holding AG

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