BANQUE PRIVÉE EDMOND DE ROTHSCHILD S.A. · Edmond de Rothschild S.A., Geneva Corporate ... education and training. ... in Africa can also be seen in the financial activities of the

ANNUAL REPORT 2008

EDMOND DE ROTHSCHILD S.A.LCF ROTHSCHILD GROUP

BANQUE PRIVÉE

2

Contents

Private banking has a name

10 Chairman’s message13 Report of the Executive Committee15 Viewpoint17 Governing bodies of Banque Privée

Edmond de Rothschild S.A., Geneva

Corporate governance

30 Introduction31 Group structure and shareholders33 Capital structure35 Board of Directors43 Executive Committee47 Remuneration, profit-sharing and loans48 Shareholders’ rights49 Take-overs and defensive measures50 Independent Auditors51 Information policy51 Major changes since the balance sheet date

Financial report

52 Banque Privée Edmond de Rothschild Group

Financial report

102 Banque Privée Edmond de Rothschild S.A., Geneva130 Addresses

Peace Parks

Africa brims with diversity. With its millions ofanimal and plant species, the continent forms aprecious storehouse of life that further includesa teeming human popu lation. Today, however,

a great part of this diversity is threatened byextinction: migration corridors are disappearing

pollution and overex ploitation of resources are upsettingnatural processes; poverty is growing.

The Peace Parks Foundation aims to restore the peacefulcoexistence of conservation and socio-economic devel opment.

Peace Parks are preserves that in the interest of people, wildlifeand vegetation lie astride the national bound aries inherited from

Africa’s colonial era. These preserves are chosen for their richbiodiversity, as well as for their cultural heritage and growth potential.

Thanks to the support of local governments, international organisations and the private sector, a totalof ten Peace Parks have been created in southern Africa. After a bleak period of civil wars that laid waste to the region, the Peace Parks Foundation was set upby three visionaries, Nelson Mandela, Prince Bernhard of the Netherlands and Dr Anton Rupert.Baron Edmond de Rothschild embraced this ambitious project as well, becoming one of theFoundation’s financial managers and international ambassadors from its inception in 1997. Since then the Peace Parks have enjoyed the active support of the Edmond and Benjamin deRothschild Foundations, which likewise strive to foster sustainable development, environmentalawareness, education and training.

www.peaceparks.org

6

10 Chairman’s message

13 Report of the Executive Committee

15 Viewpoint

17 Governing bodies of Banque PrivéeEdmond de Rothschild S.A., Geneva

Private banking has a name

At the turn of the 20th century, vast swaths of eastern Africa were largely uncharted and fraught withdangers. Among the handful of explorers who boldly ventured into this terra incognita was BaronMaurice de Rothschild, grandfather of Benjamin de Rothschild.Baron Maurice led scientific expeditions that yielded a rich harvest of studies, along with bird, reptile,fish, insect and mammal specimens, some of them previously unknown. Preserved with the utmostcare by the Museum of Natural History in Paris, they provided researcher with fresh ground toinvestigate and have thus contributed to the advancement of science.The passion for Africa has been handed down through the generations and today still fuels thecommitments of Baron and Baroness Benjamin de Rothschild. In South Africa they continue toexpand a joint wine-making venture with the Rupert family that started up ten years ago, when thecouple were also forming ties with the Peace Parks Foundation.

Hym - Anthidium Rothschildi Hym - Anochetus Rothschildi

At present Benjamin de Rothschild is personally involved in developing the Niassa game reserve inMozambique, the last sanctuary for large buffalo, antelope and elephant populations. The aims of thisundertaking are to prevent poaching, build park infrastructure and promote ecotourism.The Rothschild family’s interest in Africa can also be seen in the financial activities of the LCF RothschildGroup, which together with international organisations and local entrepreneurs supports numerouslarge-scale programmes ranging from project financing to rainforest conservation.

Col - Omophron Rothschildi

crisis. We believe that the loyalty of our clients andour teams is nurtured by the Group’s own loyalty toour single line of business.

Finally, two and a half centuries of experience hastaught our family that fortunes cannot be built andpreserved without regard for the long run. The mainlesson of the present predicament will be the need to reckon with time, a concern that in recent yearsfell by the wayside amid an overriding lust for gain.Interest rates, or time’s opportunity cost, werechoked by the glut of liquidity formed early in thedecade. But cheap credit was a snub to the long view.Our own gaze, instead of on overnight success, isfocused on lasting performance–for our Group andour clients alike.

If the maelstrom were to spin deeper, it is clear that nearly everything of value–and not just financialassets–would be towed under for a long time tocome. But if continuing headway can be made inefforts to control the situation, and if the leaders ofthe great powers do not let themselves be won overby the selfish cause of protectionism, then the periodof recovery is sure to yield a wealth of opportunities.This will be particularly true for healthy investmenthouses that did not squander their cash while the sunshone and which kept a supply aside for the currentharsh winter and the first buds of spring.

Exploiting opportunities should not mean shamefullysnapping up bargains to profit from the damageinflicted by finance itself. What I have in mind, actually,is investment in genuine sunrise segments that willundoubtedly drive the next wave of growth. Our familyand our Group were already wading into two suchareas of opportunity before the financial crisis erupted.

The first of these is ecology. I do not mean the balefulkind that prohibits, stymies and stalls, but rather thesort that fuels growth with new projects to make it

No one now disputes the scale of the financial crisisand recession, the most destructive since the 1930s.On the face of it, neither those lending nor thosemanaging money were able to foresee the awesome -ness of the disaster. Nor, indeed, can anyone claim to know how long it will last, let alone how to avoid all of its consequences.

Our Group, our portfolio managers and our clientsare together feeling the pain of the markets’ collapse.And together we are coping because we benefit from the strengths of a family-owned bank. I willmention but three of these.

To begin with, we do not allow ourselves to take majorrisks. So while we are obviously suffering collateraldamage from the worldwide downturn, we are bettershielded than most. Instinctive caution is a commontrait among family-controlled businesses, whosesuperior long-term performance has been amplydemonstrated. Many banks have only survived thecurrent crisis through massive injections from newshareholders–often from sovereign wealth funds or national governments. Our Bank, by contrast,would lose its soul without its main shareholder,who across the generations has given it his name, his culture and his tradition. Our senior managers,who also have a stake in the Bank’s share capital,keep a watchful eye on our shareholders’ equity.Embedded in it is an essential asset: the name borneby all of our Group entities. And embedded in thename is our reputation, which after 250 yearsremains intact despite revolutions, wars, waves ofpersecution and stockmarket crashes–damaging in their own way.

Secondly, we have never strayed from our corebusiness of private banking and wealth management.This speciality does not shelter us from every risk ormiscalculation, but by sticking to what we do best wecan focus on containing fallout from the current

Chairman’s message

10

sustainable. From this standpoint, America’s newpresident has set a new course that will change theworld. And it was high time: what was once aquestion of “alternative” now represents a burningobligation towards our children.

The emerging economies are a second realm ofopportunity. After entertaining the prospect of theirdecoupling, the financial community is now shud -dering at the thought of their implosion. Yet China,India and Latin America deserve neither such apedestal nor such indignity. Clearly, demographicsand savings will continue to power these engines ofthe future. Our Group is already present in theseregions, and we would like to extend our influence.

Our wish is for this new frontier to benefit from ourexpertise and for our investors to tap into thisburgeoning El Dorado.

I know that for now the crisis is gouging individualfortunes, and mine is no exception. Our thanks go toour clients for their abiding trust and fresh endorse -ments: in 2008 all of our banks registered numerousaccount openings. The battering of major lendinginstitutions alone cannot explain this outpouring ofconfidence, which seems more an attraction to ourmanagement style. We have always sought to dobetter in wealth preservation. Many of the techniquesdeveloped within our Group are designed to enhancethe safety of state-of-the-art products.

11

Giraffa camelopardalis Rothschildi Lydekker

Tomorrow’s finance will be guided by a return totime-honoured principles, a fine illustration ofwhich can be found in our family motto, Concordia,Integritas, Industria. Concordia, or unity, is the globalvillage that alone can overcome recession, harnessemerging economies to the upswing and rein inclimate risk. Integritas, or ethics, consists of themutual respect of labour and capital, failing whichthe system is torn asunder. Industria, or work,reminds us that there can be no respect for clients or employees without respect for the trade that weply: those playing fast and loose with leverageignored this at their peril.

Our Group held back during the years of wildopportunities. We can now abandon that restraint in a more bridled era. In Chinese the word "crisis" iswritten with two ideograms, one meaning dangerand the other opportunity. In 2009, the Year of theOx, opportunity cannot help but be bridled.

Baron Benjamin de Rothschild

12

13

Let’s bring back Rhenish capitalism

Anglo-Saxon capitalism, where the markets have freerein, has been blown apart by its own excesses. Butdoes that spell the end of capitalism predicted byMarx in his epic work Das Kapital? Probably not, for to parody Churchill, of all economic systemscapitalism is merely the least bad.

The worst financial crisis of the post-war period issowing destruction far and wide like the Horsemenof the Apocalypse. Stock markets plunged 50% lastyear and began 2009 by shedding 20% more. Theorigin of the debacle dates back to the early 1980s,when Margaret Thatcher and Ronald Reagan cham -pioned the market-driven capitalism propounded by Milton Friedman, the Chicago Boys and a numberof Nobel prize-winners. Trust the markets toregulate the economy and solve society’s problems to boot, they said. Actually, this simple doctrine wasso successful that it spread to the four corners of theearth. Any criticism of it was branded as heresy. Oneby one, all the regulations introduced in the 1930s to avert another 1929 Crash were done away with.Globalisation became the watchword. The spectaculargrowth of international trade and prosperity drewpraise from all sides. But because the markets hadtaken control, everything became negotiable andsecuritisation–particularly of mortgage-backed debtinstruments–was soon expanding at exponential rates.

The rise of raw market forces was goaded on by fivemain developments:

- the fall of the Berlin Wall in 1989, enabling easternEurope to embrace free enterprise;

- short-sighted Fed policy under Alan Greenspan thatkept interest rates low despite the mushroomingdebt of consumers, companies and the government;

- no-holds-barred finance and leveraging for the sakeof return on equity, a worldwide movement that inthe US drove up the share of banks’ earnings from10% to 30% of the national total;

- the wild rush for stock options and immediatebonuses at banks that were speculating for theirown account;

- forced deleveraging caused by the complete or near disintegration of Wall Street icons like BearStearns, Lehman Brothers and AIG that sentequities into a tailspin and froze the credit markets.

The recession unleashed on Main Street soon defiedcomparison. Fortunately, central banks and politi cianscoordinated their efforts to provide minimal liquidityto a system where wholesale mistrust had replacedblind confidence overnight. The world was awash withnew acronyms like CDS, CDO and CLO for productsthat poisoned banks’ balance sheets and paralysedlending operations already strained by higher capitaladequacy requirements under the Basel II accords.

Central banks and state treasuries are now strivingfor solutions to rescue leading lenders and credit-starved automakers. Politicians are trying to cobbletogether a new world order for the post-crisis era. Itis time to come back down to earth, to make thecentre hold again. The dream of total virtual controland the heady days of leverage are over. Gone too isthe maniac individualism of the past twenty yearsthat caused so much social breakdown. Heads ofpublic and private corporations will have to pursue apragmatic, creative vision of the future that does notsacrifice social purpose in the name of earnings.Shameless bonuses will have to give way to long-termprofit-sharing. Unless the system is put back in orderresponsibly, massive unemployment might even raisethe spectre of totalitarian horrors.

Report of the Executive Committee

What we need is to return to an economy at the serviceof man and society. That is the ideal that Adenauer,de Gaulle, de Gasperi, Schumann and Monet wereseeking when they forged a new Europe from theashes of the Second World War. It is also the idealthat Michel Albert, a former chief executive of AGF,had in mind when he coined the term “Rhenish”capitalism to refer to a socially responsible brand thatmelded the philosophies of France and Germany, on either side of the Rhine, and that would counter -balance the heads-I-win-tails-you-lose capitalismentrenched in America and Britain. Let’s hope thattoday’s politicians and business leaders will be asinspired as their forebears in following this beaconand that they will rebuild the economy with bricksinstead of clicks.

The Rothschilds have long combined finance andphilanthropy, driven by awareness of their socialresponsibility as well as by their commitment toprogress. Every generation of the family has soughtto reconcile business development and respect forthe men and women who work for their companies.Socially responsible entrepreneurship is a dailyconcern for the Rothschilds because it endeavours tomarry economic advancement and human fulfilment.The Rothschild family motto Concordia, Integritas,Industria is a perfect illustration of these essentialvalues that our Bank has likewise espoused.

The Executive Committee

14

As the financial crisis and recession reach a magnitudenot seen since the Second World War, a legitimatefear has been loosed. Our world seems to be hurtlinginto a black hole. The prosperity we enjoyed fordecades may be lost for ever. This dark and pervasiveapprehension, inconceivable only a short time ago, hassuddenly gripped people everywhere. Our economicsystem is under fire, along with self-regulatingmarkets, the benefits of globalisation, the sturdinessof institutions, confidence in trading partners, theeffectiveness of oversight, the clear-sightedness ofleaders, and the list goes on. While we are probably notwitnessing the end of the world, it could be the end ofthe world as we know it. The one we had grown usedto has caved in like a gigantic house of cards. Whatwill become of us? What dreadful events lie ahead?

Anzevui’s doomsday

The same atmosphere of anxiety and foreboding wasevoked masterfully in What If the Sun Didn’t RiseAgain? by Charles Ramuz, a Swiss writer whosebooks have long been required reading in our schools.In an obscure village nestled at the end of a remotevalley in Wallis, an ageing wizard and bonesetternamed Anzevui makes a jarring prophesy. Usingarcane calculations, he predicts that during thesummer of 1937 (in fact the eve of one of the worstrecessions of the century) war will inevitably breakout and “the sky will turn darker and darker, untilone day the sun will not return–not for six months(of winter)–but for ever.” As often happens, thevillagers are divided into two camps. There are theresigned ones, who drown their terror in alcohol.And there are the brave ones, who set out to seek the source of all light. Some readers scoff at this fable as only good for scaring children. Perhaps,but Ramuz is taken seriously enough to be featuredon Switzerland’s 200-franc note. A matter of chance, some would argue.

The Great Karl

Anzevui is of course not the only visionary. The farmore famous Karl Marx left an indelible imprint onhistory by predicting the inevitable and necessarycollapse of capitalism. In Das Kapital, a monumentalwork of 2500 pages that took him 18 years to write,the father of dialectical materialism railed against therapacious barons of finance. “Capital is dead labour,”he wrote, “which vampire-like lives only by suckingthe blood of our toil.” Yet that was not his mainthrust. He was more interested in laying bare thetendencies inherent in the capitalist system and thelaws underlying its development. These, he claimed,would eventually lead it to dig its own grave. Marxdemonstrated how profit declines in an environmentof free trade, forcing company bosses to innovaterelentlessly to survive; how every economic boomends in bust; and how in every downturn big corpo -rations absorb smaller ones before succumbing inturn. Obviously, the unchecked pursuit of capitalgains would one day cause capitalism’s downfall. Theonly way out would be for government to set itselfabove financial interests and to liberate men fromtheir near-sighted selfishness. While many havecriticised the Cartesian mindset of Marx’s writings,there is no denying his extraordinary foresight.Financial engineering with derivative instruments,the Bush administration’s pro-Wall Street partisanship,the swaggering banks with feet of clay–none of oursystem’s recent flaws could have been imagined inthe late 19th century. And yet the Great Karl foretold it all!

ViewpointWhat if the sun didn't rise again?

15

Moral

The sky has fallen. Many see the present crisis asproof of capitalism’s failure. So what is the alternative?Capitalism may indeed be the exploitation of man by man, but is socialism–the exact opposite–thesolution? In a variation on Churchill’s memorabledefence of democracy, we could describe capitalismas the worst economic system except for all the others.In 1776 Adam Smith laid the groundwork of freeenterprise, stating in his masterwork The Wealth ofNations that in a competitive market economyeveryone must simply look out for his own interestin order for society as a whole, as if guided by aninvisible hand, to benefit. The system works well, headded, provided that ways to get rich are acceptableto an impartial spectator as neither abnormal nordeviant. Everyone has to live by morals. The Germanphilosopher Immanuel Kant wrote abundantly onthis theme in his Critique of Practical Reason, positingthat we should “always act according to a maxim that we wish at the same time were a universal law”.What we are experiencing now is not the crisis ofcapitalism as such, but of its cowboy/casino streakthat has run roughshod over the English-speakingworld. A self-perpetuating mechanism of greed hasbeen set in motion, abetted by deregulation andgovernment permissiveness.

As a consequence, redesigning global financialgovernance has top priority. Reforms are needed,and they are needed now. More transparency, bettersupervision of financial transactions and effectiverisk management will be the guiding principles. Forexample, replacing over-the-counter markets withorganised ones and normalising the traceability ofsecuritised products would be highly recommendable.International accounting standards (IFRS and Basel II) will also have to be reviewed in light of thepresent upheaval, in order to blunt their tendency to accentuate economic fits and starts. The rating

agencies and their practices also need to be challenged:their inability to foresee three of the worst financialcrises of the past 15 years (1997, 2001 and 2008) is shocking. But we must not go overboard. Theproblem will be to tighten the screws without givingin to over-regulation, which has two drawbacks: itcan either stifle business activity and thus dash anyhope of recovery, or it can give rise to crafty newfinancial engineering to get around it. Whatever therestraints, we will never really free ourselves from ourvices. As Raymond Aron put it, “Man is reasonable.But what about men?”

Michel Lagier

16

Governing bodies of Banque PrivéeEdmond de Rothschild S.A., Geneva

Board of Directors

ChairmanBaron Benjamin de Rothschild

Vice-ChairmanE. Trevor Salathé

SecretaryManuel Dami

MembersJohn AlexanderLuc ArgandWalter Blum GentilomoMichel CicurelFrançois HottingerJacques-André ReymondDaniel Y. TrèvesGuy Wais

Board Committee

ChairmanBaron Benjamin de Rothschild

Vice-ChairmanE. Trevor Salathé

SecretaryManuel Dami

MembersJohn AlexanderMichel Cicurel

Auditing Committee

E. Trevor SalathéManuel DamiJacques-André ReymondGuy Wais

17

Executive Committee

Chairman and General ManagerClaude Messulam

Vice-Chairman and Deputy General ManagerSylvain Roditi

Member and Deputy General ManagerJean-Pierre Pieren

Membersand Senior Vice-PresidentsLuc BaatardPhilippe CurratMichel LusaBernard SchaubPatrick Ségal

Financial Markets

General ManagerClaude Messulam

Equity Markets Senior Vice-PresidentJean-François Michaillat

First Vice-PresidentGéry Brodier

Vice-PresidentsLorenzo BacciMartin Reinhardt

Forex Market Senior Vice-PresidentPhilippe Scherrer

Vice-PresidentManuel Curty

Internal Auditors

Senior Vice-PresidentFrançois Maendly

First Vice-PresidentMaurice Moser

Vice-PresidentsSerge CochetPhilippe Rebmann

Independent Auditors

PricewaterhouseCoopers S.A.

18

Central Accounting / Financial Controlling

Senior Vice-PresidentMartin Leuthold

First Vice-PresidentLaurent Gumy

Vice-PresidentsLaure AllegreStéphane PiotChantal Tozzini Emmenegger

Cash Management and Payments / General Services

Senior Vice-PresidentJean-Pierre Bruhin

Vice-PresidentPrudencio Vicente

Corporate Organisation First Vice-PresidentEric Pfefferlé

Vice-PresidentsFrancesco Del GiudiceRémy Wenger

Internal Monitoring First Vice-PresidentDidier Jubin

Operations and Administration

General ManagerClaude Messulam

Vice-PresidentMichèle Resin

Information Technology and Telecommunications

Senior Vice-PresidentsTerence DentonJean-Philippe Grob(since le 1.4.2009)

Patrick Schindler

First Vice-PresidentsNicolas BerthenetSerge ChatelainJean-François DelessertHugo MittempergherSylvain StiassnyBernard Joseph Tissot

Vice-PresidentsMarkus LeuenbergerJean-Claude PittetGérard Trevisan

19

Portfolio Management

Deputy General ManagerSylvain Roditi

Senior Vice-PresidentsChristiane ArlettazVictor AkselrodLuc BaatardHenri BaroffioFrédéric BinggeliEric BornerPascal BourquiAthanasios GontikasElie JooryVincent de KerchoveFrançois KernThierry LoneyMichel LusaJanos LuxBernhard MeierRoland MisrahiFlorian NguyenBarbara Pythoud-McAllisterVincent RappoJean-Pierre RibesBernard SchaubPatrick SégalJogishwar SinghPhilippe Wurlod

First Vice-PresidentsEve AmramViktor BenardeteOlivier BernardWilly de BottonCharles E. BrandtGerman ChaparroChristophe ConiglianoFrédéric DariolyBjörn ForsgrenLoreno GobbiEmmanuelle GramoliniCharles-Aymeric HainaultFrédéric HoudoyArne KirchnerArnaud Liguer-LaubhouetBenoît LombardFrédéric LoveyRose-Mary Lozano MartinezJuan MorenoSylvie OlivierPatrizia Pardini GobetCenk ParmanMartin PearmundAna Pegada GuertchakoffAnying Reynaud-WangAlain SamanFrédéric de Selliers de MoranvilleDan SerillonAlain TeminianGuy van UsselPhilippe VasasPascal VuichardRobert WortelboerDominique Zinner

Vice-PresidentsFrançoise AyatsVéronique BarrasAlexandre BerenguierThomas BiseAnne-Catherine BourgerRégis BoursonFrançoise CambdenOlivier CandrianEdgar Alves de CarvalhoDany Chan Sum FatChristophe ClercSébastien CornuZélia Da RosaZuhal DrevermannMarie José DubeyDavid Georges-PicotWilliam KohnShireen Meyer de StadelhofenChristopher MillerChristophe PéclardRosella PellegriniAnne-Catherine PingeonLaurent ScibozDavid SoulierEva Viedma Salvador

20

Investment Funds


Senior Vice-PresidentAlexandre Col

First Vice-PresidentsMichèle BarréAlexandre PiniMarc Sbeghen

Vice-PresidentsStéphane EnsiniJaume Sabater MartosLisiane Spicher

AdviserHubert Tonson La Tour

Structured Products


First Vice-PresidentsFrancesco RanzaXavier Roesle

Vice-PresidentDaniel Elias

Independent Managers / Portfolio Management Coordination

Senior Vice-President Bernard Schaub

Independent Managers Senior Vice-PresidentMarc Venti

First Vice-PresidentsPierre DonnetFlavio MossiDominique Pamingle

Vice-PresidentBernard Rapin


Coordination

First Vice-PresidentFrank Schmidt

21

Human Resources / Correspondent Banking / Loans and Guarantees /

Risks / Securities and Cash Management

Deputy General ManagerJean-Pierre Pieren

Human Resources Senior Vice-PresidentDidier Wicky

Vice-PresidentsClaude BiasiJérôme CommentAlain Cuendet

Correspondent Banking First Vice-PresidentPriska Lance

Vice-PresidentJérôme Moser

Loans and Guarantees First Vice-PresidentColette Hendgen

Risk Management Senior Vice-PresidentRoland Schneeberger

Securities

and Cash Management

Senior Vice-PresidentsMarc-Henri BalmaJean-Claude Rampa

First Vice-PresidentUlrike Gorres

Vice-PresidentsSerge BongardJean-Philippe GachetYves MonneratThéo PerottiDominique Riccardi

22

23

Lepidoptera - Nudaurelia oubievar. Rothschildi, f. Neuvillei ♂

Coleoptera - Omophron Rothschildi Hymenoptera - Arge Rothschildi ♀

24

General Secretariat

Senior Vice-President Philippe Currat

Legal Services Senior Vice-PresidentAlain Heck

First Vice-PresidentsAndré FallettiAurélie Rougemont Tolis

Tax Services Senior Vice-PresidentYves Cogne

Compliance Office Senior Vice-PresidentMaryse Battaglia Rinolfi

First Vice-PresidentsLise BinggeliGérard ConterioBernard SonrelAnne Waldburger Berthenet

Vice-PresidentGiuseppina Partini

Wealth Planning First Vice-PresidentsAlexandre ConelliAntoinette Borgnana Zulian

Central Register First Vice-PresidentAngela Rime

Vice-PresidentYvette Ferrali

Information / Marketing First Vice-PresidentsValérie BoscatJean-Christophe Teigner

Vice-PresidentMouloudia Duval

Capital Markets

Senior Vice-President Patrick Ségal

Senior Vice-PresidentClaude Charmillot

First Vice-PresidentAlfred Jans

Vice-PresidentsPhilippe CartierMark KowalskiChristian Rohrbasser

25

Investment Research / Fribourg and Lausanne Branches

Senior Vice-PresidentMichel Lusa

Investment Research Senior Vice-PresidentsPierre-Yves BrackMichel Lagier

First Vice-PresidentsBruno JacquierPhilippe LederreyStéphane Mayor

Vice-PresidentLinda Abdelli

Fribourg Branch

Senior Vice-President in charge of the BranchPatrick Zurkinden

Vice-PresidentFrédéric Bersier

Lausanne Branch

Senior Vice-Presidentin charge of the BranchRoland Humbert

Senior Vice-PresidentsPaul BalleneggerBernard FierensHervé MaillardRolf Rempfler

First Vice-PresidentsChristian DustourFélix RattinJean-Daniel Renevey

Vice-PresidentsSteve FauquexPaulo Ferreira

26


30 Introduction

31 Group structure and shareholders

33 Capital structure

35 Board of Directors

43 Executive Committee

47 Remuneration, profit-sharing and loans

48 Shareholders’ rights

49 Take-overs and defensive measures

50 Independent Auditors

51 Information policy

51 Major changes since the balance sheet date

Education

The Peace Parks Foundation believes adamantly that community education, commitment andparticipation can wisely foster interdependence between man and his natural environment. This isachieved by supporting ecotourism, a segment that can claim phenomenal worldwide growth, as avector of local economic development.Southern African Wildlife College and South African College for Tourism, both managed by thePeace Parks Foundation, are renowned for their excellence in training rangers and hotel executives.The colleges cater for the inhabitants of areas bordering the Peace Parks, to whom they provide theskills and experience needed to work in ecotourism. Reflecting the wealth of expertise and diversityfound around them, their curricula enable graduates to create sustainable new facilities such as touristsites and lodges.Blending local traditions and modern management training contributes to the survival of ruralcommunities, and thus helps to ensure the future of Africa’s natural treasures.

Education is the linchpin of the commitment underlying the Edmond and Benjamin deRothschild Foundations’ purpose. In 2008 the Foundations continued to sponsornumerous schools and universities around the world (Columbia in New York, Cambridgein England, Boulle in Paris, Hebrew University in Jerusalem, etc.).This support is provided not only for academic teaching in the traditional sense, but alsofor innovative programmes geared towards action learning.

30

Introduction

On 25 March 2002, the Federation of Swiss Businesspublished a Swiss Code of Best Practice containingstandards for corporate governance. These standardsare meant as recommendations, not as legallyenforceable rules, and primarily concern companieslisted in Switzerland.

The Guidelines on Corporate Governance issuedby SIX Swiss Exchange (“SIX”) came into force on 1 July 2002 and were amended on 29 March 2006effective 1 Jan. 2007. They state when and howmatters involving corporate governance should bemade public, based on art. 8 of Switzerland’s StockExchanges and Securities Trading Act and on art. 1, 3and 64 of the SIX’s Listing Regulations. They mainly apply to issuers incorporated in Switzerlandwhose equity securities are traded on the SIX.

The major concerns underlying these “codes ofconduct” are to limit economic risks, safeguardcompanies’ reputations and promote responsibility.Corporate governance is anchored in a set of prin -ciples designed to protect shareholders by ensuringtransparency, the issuance of clear information and a balance at the highest level between the company’sexecutives, on the one hand, and its owners, on theother. At the same time, these principles upholddecision-making power and efficiency.

The following pages disclose the most importantinformation required by the SIX guidelines that came into force on 1 July 2002/1 Jan. 2007.There are also cross-references to items includedelsewhere in this report, while the Bank’s articles of association and bylaws can be found on ourwebsite (www.lcf-rothschild.ch).


31

1.1. Group structure

1.1.1. Presentation of the Group operating structure

1. Group structure and shareholders

1) = member of the Board Committee2) = member of the Auditing Committee

Independent Auditors

PricewaterhouseCoopers S.A.

Board of Directors

Chairman: Baron Benjamin de Rothschild1)

Vice-Chairman: E. Trevor Salathé1) 2)

Secretary: Manuel Dami1) 2)

Members: John Alexander1), Luc Argand,Walter Blum Gentilomo, Michel Cicurel1), François Hottinger,

Jacques-André Reymond, Daniel Y. Trèves, Guy Wais

Internal Auditors

Senior Vice-President: François MaendlyFirst Vice-President: Maurice Moser

Private Banking

Investment Funds

Structured Products

Deputy General Manager:Sylvain Roditi

Financial Markets

Operations

and Administration

General Manager:Claude Messulam

Capital

Markets

Senior Vice-President:Patrick Ségal

Independent Managers


Coordination

Senior Vice-President:Bernard Schaub

General

Secretariat

Senior Vice-President:Philippe Currat

Human Resources

Correspondent Banking

Guarantees

Risks / Securities

Deputy General Manager:Jean-Pierre Pieren

Investment Research

Fribourg and Lausanne

Branches

Senior Vice-President:Michel Lusa

Executive Committee

Chairman and General Manager: Claude MessulamVice-Chairman and Deputy General Manager: Sylvain Roditi

Member and Deputy General Manager: Jean-Pierre PierenMembers and Senior Vice-Presidents: Luc Baatard,

Philippe Currat, Michel Lusa, Bernard Schaub, Patrick Ségal

1.2. Major shareholders (at 31.12.2008)

Par value Percentageof sharecapital

Percentageof voting

rights

(in thousands of CHF) (in%) (in%)

Major shareholdersLCF Holding Benjamin et Edmond de Rothschild S.A.(1) 35,299.5 78.4 85.8

Rothschild Holding AG, Zurich (2) 3,799.5 8.4 9.4

(1) The entire share capital of LCF Holding Benjamin et Edmond de Rothschild S.A. is directly or indirectly controlled by members of the de Rothschild familiy.17% of the company’s share capital (representing 6.77% of voting rights) is owned by Baroness Edmond de Rothschild and 66.33% (representing 89.84% ofvoting rights) by Baron Benjamin de Rothschild.

(2) The following entities and individuals, all represented by Rothschild Continuation Holdings AG, Rudolf Tschaeni, Zug; Eric de Rothschild, Paris; Davidde Rothschild, Paris; Alexandre de Rothschild, London; Stéphanie de Rothschild, London; Louise de Rothschild, Paris; Financière de Tournon, Paris;Financière de Reux, Paris; Bero, Paris; Ponthieux Rabelais, Paris; Integritas Investments B.V., Amsterdam; Rothschild Trust (Schweiz) AG, Zurich togethercontrol 20,000 registered shares and 3,600 bearer shares of Banque Privée Edmond de Rothschild SA, Geneva, representing 8.4% of the total share capitaland 9.4% of voting rights.The members of the group have a controlling interest in Rothschild Concordia SAS, Paris, which controls Concordia BV, Amsterdam. Concordia BVcontrols Rothschild Concordia AG, Zug, which in turn controls Rothschilds Continuation Holdings AG, Zug. Rothschilds Continuation Holdings AGcontrols Rothschild Holding AG, Zurich, which owns a direct stake in Banque Privée Edmond de Rothschild S.A., Geneva. (Published in the FOSC on 29.01.08)

1.1.2. / 1.1.3. Group legal structure

The fully consolidated entities of the BanquePrivée Edmond de Rothschild Group are listed onpp. 64-67 of this report.

1.3. Cross-holdings (at 31.12.2008)

Numberof shares

owned

Percentageof sharecapital

Percentageof voting

rights

(in%) (en%)

Cross-holdings

Rothschild Holding AG, Zurich 10,161 9.5 9.5

32

33

2. Capital structure

2.2. Specific indications regarding

authorised and contingent capital

Banque Privée Edmond de Rothschild S.A. has noauthorised or contingent capital.

2.4. Shares and non-voting certificates

The 200,000 unlisted registered shares with a parvalue of CHF 100 and the 50,000 bearer shares with apar value of CHF 500 listed on the SIX (stock marketcapitalisation on 31.12.2008: CHF 1.325 billion;ISIN: CH0001347498; Swiss security number:134749TK) confer the same entitlements inproportion to their par value, in accordance with art. 7 para. 2 and 3 of our articles of incorporation.The registered and bearer shares are fully paid up.

Under art. 6 para. 5 and 6 of the articles of incor -poration, the restricted registered shares conferpreferential membership rights: each share, regardlessof its par value (art. 15 para. 1), entitles the owner to one vote at the Annual General Meeting. Again in respect of membership rights, art. 18 para. 3 of the articles of incorporation provides that eachgroup of shareholders (i.e. the owners of bearer orregistered shares) may demand to be represented on the Board of Directors by at least one member of its choice.

2.1. Share capital

Par value Numberof shares

Capitalranking for

dividend

(in thousands of CHF) (in thousands of CHF)

Share capital

Fully paid registered shares at CHF 100.– par value 20,000 200,000 20,000

Fully paid bearer shares at CHF 500.– par value 25,000 50,000 25,000

Total share capital 45,000

2.3. Changes in share capital2008 2007 2006 2005

(in thousands of CHF)

Share capital Total 45,000 45,000 45,000 45,000

200,000 fully paid registered shares with a par value of CHF 100.– 20,000 20,000 20,000 20,000

50,000 fully paid bearer shares with a par value of CHF 500.– 25,000 25,000 25,000 25,000

2.5. Dividend-right certificates

Banque Privée Edmond de Rothschild S.A. has notissued any dividend-right certificates.

2.6. Transferability restrictions

and registration of nominees

2.6.1. Transferability restrictions and provisionsgoverning dispensations

In order for an owner or usufructuary of registeredshares to exercise the voting rights and other rightsaccruing to him, he must first be accepted as ashareholder by the Board of Directors and have hisname entered in the Bank’s share register.

Under art. 6 para. 5 of the articles of incorporation,the Board of Directors may refuse the transfer of title to or use of registered shares on valid grounds,having due regard for either the corporate purpose or the Bank’s desire to preserve its financialindependence and, in particular, its family character.

2.6.2. Grounds for granting dispensations duringthe reporting year

No dispensations were granted in 2007 and nonewere requested.

2.6.3. Eligibility of nominees

There is no provision for dispensations from the rules governing nominees referred to in item 2.6.1.above (art. 5 of the articles of incorporation).

2.6.4. Procedure and conditions for liftingtransferability restrictions

Any amendment to the provisions of the articles ofincorporation relating to registered share transfer -ability restrictions must be approved by a two-thirdsmajority of the votes represented at the AnnualGeneral Meeting and by an absolute majority of thepar value of the shares represented.

2.7. Convertible bonds and options

Banque Privée Edmond de Rothschild S.A. has notissued any convertible bonds or options.

34

3.1. Members of the Board of Directors

The Board of Directors is made up of 11 members, whoin accordance with industry practice do not exercisean executive function within the Bank. Notwith -standing this, some of them do exercise managerialduties within the Group, or did so in the past.

Baron Benjamin de RothschildChairman, French, 1963

Education/training1984 Master’s in Business and Management, Pepperdine

University (California)

Career summary1985 BP, London1985-1987 LCF Rothschild Group, Geneva and Paris1989 Founded Compagnie Benjamin de Rothschild

– Chairman

Present dutiesSince 1997 Chairman of the LCF Rothschild Group

DirectorshipsLCF Holding Benjamin et Edmond de Rothschild S.A. – ChairmanHolding Benjamin et Edmond de RothschildPregny S.A. – ChairmanBanque Privée Edmond de Rothschild S.A. –Geneva – ChairmanBanca Privata Edmond de Rothschild Lugano S.A. –Lugano – ChairmanLa Compagnie Benjamin de Rothschild S.A. –Geneva – ChairmanBanque Privée Edmond de Rothschild Europe S.A.– Luxembourg – ChairmanArbinter-Omnivalor S.A. – Geneva – ChairmanCompagnie Financière Saint-Honoré – Paris –Chairman of the Supervisory BoardLa Compagnie Financière Edmond de RothschildBanque – Paris – Chairman of the Supervisory BoardBanque de Gestion Edmond de Rothschild –Monaco – DirectorIsrop Participations S.A. – Luxembourg – DirectorThe Caesarea Edmond Benjamin de RothschildDevelopment Corporation Ltd – Caesarea (Israel)– ChairmanRothschild Continuation Holdings AG – Zurich– Director La Compagnie Vinicole Baron Edmond deRothschild S.A. – Paris – Director

La Compagnie Fermière Benjamin et Edmond deRothschild S.A. – Paris – Director Société Française des Hôtels de Montagne – Paris– Vice-ChairmanCogifrance S.A. – Paris – DirectorAssurances et Conseils Saint-Honoré – Paris– Chairman of the Supervisory BoardLes Domaines Barons de Rothschild (Lafite)– Chairman of the Supervisory BoardEBR Ventures – Director

E. Trevor SalathéVice-Chairman, Swiss and British, 1925

Education/training1946 Master’s in Law, University of Geneva1948 Admitted to the Geneva Bar1953 Trained in various departments of Société

Bancaire de Genève

Career summary, present duties and directorships1954-1959 Executive Assistant with Société Bancaire de Genève1989-present Managing Director with Banque Privée S.A. (which

became Banque Privée Edmond de Rothschild S.A.)Since 1972 Vice-Chairman of Banca Privata Edmond de

Rothschild Lugano S.A.Since 1985 Director and member of the Board Committee

of LCF Holding Benjamin et Edmond deRothschild S.A.

Since 1988 Vice-Chairman of Banque Privée Edmond deRothschild Europe, Luxembourg

Since 1989 Vice-Chairman of Compagnie Benjamin deRothschild S.A., Geneva

Since 1995 Vice-Chairman of Arbinter-Omnivalor S.A., GenevaUntil 2000 Managing Director and Chairman of the

Executive Committee of Banque Privée Edmondde Rothschild S.A., Geneva

Since 2000 Managing Director of Banque de GestionEdmond de Rothschild - Monaco

Since 2008 Director of Edmond de Rothschild Gestion Monaco – SAM, Monaco

Manuel DamiSecretary, Swiss, 1930

Education/training1952 Master’s in Law, University of Geneva1954 Admitted to the Geneva Bar

Career summary1955-1956 Worked for a firm of solicitors in Geneva1956-1965 Legal Counsel and Secretary General of Banque

pour le Commerce Suisse-Israélien, Geneva

3. Board of Directors

35

36

1965-1996 First Vice-President, then Deputy GeneralManager of Banque Privée S.A. (became BanquePrivée Edmond de Rothschild S.A. in 1987).Member of the Executive Committee. Assigned toorganise and manage Banca Privata Lugano S.A. (a subsidiary of Banque Privée S.A., Geneva)in 1972

Present duties1997-present Director and Secretary of the Board of

Directors of Banque Privée Edmond deRothschild S.A., Geneva

DirectorshipsLCF Holding Benjamin et Edmond de Rothschild S.A., GenevaBanca Privata Edmond de Rothschild Lugano S.A.,LuganoBanque Privée Edmond de Rothschild Ltd,Nassau, BahamasMemorial Adolphe de Rothschild, Geneva Equitas S.A., GenevaAdministration & Gestion S.A., Geneva

John AlexanderMember, British, 1941

Education/trainingBA (honours), Oxford University

Career summary1972-1983 Director of Hill Samuel & Co. Limited

Present dutiesSince 1984 CEO of Edmond de Rothschild Limited, LCF

Edmond de Rothschild Securities Limited andLCF Edmond de Rothschild Asset ManagementLimited, London

DirectorshipsSterling Insurance Group LimitedThe Bristol Port Company (Trustees) LimitedFirst Corporate Shipping Ltd, UKBanque Privée Edmond de Rothschild S.A., GenevaLCF Holding Benjamin et Edmond deRothschild S.A., GenevaLa Compagnie Financière Edmond deRothschild Banque, ParisBanque Privée Edmond de Rothschild Europe,LuxembourgCompagnie Financière Saint-Honoré, ParisLeveraged Capital Holdings NV, CuraçaoTrading Capital Holdings NV, CuraçaoEuropean Capital Holdings S.A., Luxembourg

Asian Capital Holdings Fund, LuxembourgLCF Edmond de Rothschild (CI) LimitedLCF Edmond de Rothschild Holdings (CI)LimitedEdmond de Rothschild International Funds Ltd.C.A. Sperati (The Special Agency) Plc.CPRE Oxfordshire Buildings Preservation TrustLimitedFEDEX Corporation S.A., PanamaThatchcastle Limited (United Kingdom)The Great Haseley Windmill Trust (United Kingdom)

Luc J. Argand

Member, Swiss, 1948

Education/training1968 Diploma in Classical Studies, Collège Calvin

(Geneva)1968-1972 University of Geneva1972 Master’s in Law, University of Geneva1972-1974 Articled at Antoine Hafner Solicitors1974 Admitted to the Geneva Bar1976 MBA, INSEAD

Career summary and present duties1977-1981 Trained at La Compagnie Financière Benjamin

& Edmond de Rothschild; Goldman Sachs, New York; NMR, LondonWorked for Banque Privée Edmond de Rothschild S.A., Geneva

1982-present Partner of Pfyffer & Associés Solicitors, Geneva1993-present Director of Banque Privée Edmond de

Rothschild S.A. Geneva1996-1998 President of the Geneva Bar Association1998-2006 President of the Arbitral Tribunal set up by the

Self-regulating Body of the Swiss AttorneysFederation under the Law on the Prevention ofMoney Laundering

1990-present Arbitrator for the Court of Arbitration for Sport, Lausanne

1998-2007 Member of the Geneva Magistrates’ UpperCouncil

2004-present Member of the Geneva Notaries’ SupervisoryCommission

Since July 2005 President of the Geneva Auto Show

Walter Blum Gentilomo

Member, Swiss, 1941

Education/trainingStudied in the UK and trained in various financialinstitutions

Career summary and present duties1964 Joined Banca Solari & Blum, Lugano1975 Became CEO of Banca Solari & Blum, Lugano1991 Became Chairman of the Executive Committee of

Banca Solari & Blum, Lugano1998 Banca Solari & Blum becomes Banca Privata

Edmond de Rothschild Lugano S.A.Since 2002 Member of the Board of Directors and Board

Committee of Banca Privata Edmond deRothschild Lugano S.A.

Michel Cicurel

Member, French, 1947

Education/training1969 Graduated from the Institut d’Etudes Politiques, Paris1970 Master’s in Economics1973 Graduated from the Ecole Nationale

d’Administration, Paris

Career summary1973-1977 Headed the Financing and Trusteeships division

of the French Treasury1977-1979 Assistant Director in charge of financing for the

Construction division of the Ministry ofEquipment and Housing

1979-1982 Project manager, then head of the Cabinet of he Treasury Director

1983 Project manager for Compagnie Bancaire1984 CEO of Banque Cortal1988 Deputy CEO of Compagnie Bancaire1989-1991 Managing Director of Galbani (Groupe BSN)1991-Jan. 1993 Director and CEO of CERUS1992-Jan. 1996 Chairman and CEO of Banque Duménil-Leblé1993-1999 Vice-Chairman and CEO of CERUS

Present dutiesSince Jan. 1999 Chairman of the Executive Board of

La Compagnie Financière Edmond de Rothschild Banque, ParisChairman of the Executive Board of CompagnieFinancière Saint-Honoré, Paris

Director or member of supervisory boardBouygues Telecom La Société GénéraleMember of the Supervisory Board of Publicis

François Hottinger

Member, Swiss, 1943

Education/training1965 French Banking Association courses at the

Sorbonne1966-1967 Trained at BNP (ex BNCI), Paris

1967-1968 Trained in the commercial banking department ofBanque Hottinguer & Cie, Paris

1968 Trained at Baring Bros, London

Career summary1969-1992 Managing partner of Banque Hottinger & Cie,

Zurich1975-1990 Managing partner of Banque Hottinguer & Cie,

Paris1992-2008 Managing partner of J.F.E. Hottinger & Co,

Zurich

Present dutiesSince 1970 Director of Banque Privée Edmond de

Rothschild S.A., GenevaSince 1992 Director of Jean-Philippe Hottinguer & Cie,

Corporate Finance S.A., ParisSince 1992 Director of Jean-Philippe Hottinguer & Cie,

Gestion Privée S.A., ParisSince 1995 Director of Bolux Sicav, LuxembourgSince 1998 Chairman of the supervisory board of Banque

Jean-Philippe Hottinger & Cie, ParisSince 2009 Partner of J.C.E. Hottinger & Co, Zurich

Jacques-André Reymond

Member, Swiss, 1937

Education/training1959 Master’s in Law, University of Geneva1962 Master’s in Commerce, University of Geneva1963 Degree from the Institute of Comparative Law,

New York University1966 Admitted to the Geneva Bar1973 Ph. D. in Law, University of Geneva

Career summary1964-1965 Articled at Shearman & Sterling, New York1965-1966 Articled at Helg, Picot, Grandjean, Geneva1966-1968 Worked for Lenz Solicitors1968-1996 Worked for and in 1972 became a partner of

Sandoz, Mayor, Moreillon & Reymond Solicitors

1974-1998 Professor of commercial and tax law at the Facultyof Law, University of Geneva, Dean from 1989 to 1993

Present dutiesSolicitor, honorary professor at the University ofGeneva, member of the Board of Directorsof Banque Privée Edmond de Rothschild S.A.,member of the Board of Directors and theExecutive Committee of LCF Holding Benjaminet Edmond de Rothschild S.A.

37

38

Daniel Yves Trèves

Member, French, 1947

Education/training1966-1969 Ecole Supérieure de Commerce de Paris1969-1971 Master’s in Business Administration, Wharton

School (Philadelphia)

Career summary1971-1984 Treasurer and Director of Financial Services for

Nestle Group, Vevey 1984-1991 Head of Business Development for Tradition

Group, Lausanne

Present dutiesSince 1991 CEO of Compagnie Benjamin de Rothschild S.A.,

Geneva

DirectorshipsLCF Holding Benjamin et Edmond de Rothschild S.A., GenevaLa Compagnie Financière Edmond de RothschildBanque S.A., ParisBanque Privée Edmond de Rothschild Europe,LuxembourgBanque Privée Edmond de Rothschild S.A., GenevaPrifund Conseil S.A., LuxembourgTreasury Investments (C.I.) Limited, Channel IslandsLCF-Partners (SICAV), LuxembourgPriquam Advisory Limited, Cayman IslandsBeCitizen SAS, ParisUnirisc S.A., Geneva (current term began in 2008)

Associated Investors Inc., British Virgin IslandsFoundation for the Furtherance of TeachingPhysical Education to French Youth, Geneva

Guy Wais

Member, Swiss, 1942

Education/training1968 Degree in Chemical Engineering, Swiss Institute

of Technology at Zurich1972 MBA, INSEAD Fontainebleau

Career summary1968-1971 Dow Chemical Europe, Zurich1972-1992 Guyerezeller AG, Zurich (now HSBC Guyerzeller

Bank S.A.); General Manager and Chairman ofthe Executive Committee from 1989

1992-2006 General Manager, CEO and Chairman of theExecutive Committee of Rothschild Bank AG,Zurich

Present dutiesDirector of Rothschild Holding AG, ZurichDirector of Rothschild Bank AG, Zurich(since 01.07.2006)

3.2. Other activities and vested interests

Luc Argand is a member of the Geneva Magistrates’Upper Council and of the Geneva Notaries’Supervisory Commission.

3.3. Interdependencies (deleted)

3.4. Election and terms of the Directors

The Directors are elected for three-year terms untilthey reach the age of 70 during the calendar yearwhen their term ends. Thereafter they may be electedfor one-year terms. The average age of the Directorspresently stands at 66.

The following table provides details of the lengthof Board members’ current terms

Director Member of the Term Board since ends

Baron Benjamin de Rothschild 1985 2009E. Trevor Salathé 1959 2009John Alexander 1994 2009Luc J. Argand 1993 2011Walter Blum Gentilomo 1994 2009Michel Cicurel 1999 2011Manuel Dami 1997 2009François Hottinger 1969 2011Jacques-André Reymond 1996 2009Daniel Y. Trèves 1993 2011Guy Wais 1994 2009

Members of the Board of Directors are elected byindividual ballot at an Annual General Meeting ofshareholders.

3.5. Organisational structure

Board of DirectorsAt its meeting on 24 October 2008, the Board ofDirectors passed a new set of by-laws (hereinafter, the“by-laws”). In a dispatch dated 18 November 2008 theby-laws were filed with FINMA (formerly the SwissBanking Commission) for approval. On the same date,the Bank sent a copy of the bylaws to its IndependentAuditors, PricewaterhouseCoopers, Geneva, whohave approved their content without recom mendingany amendments or additions. In a letter dated 25March 2009, FINMA served notice of its approval.

The reasons for drafting this new set of by-laws wereas follows:

1. Our Bank and the Group it controls have grownconsiderably in the past 10 years. It was thereforetime to adapt the by-laws accordingly;

2. Swiss and international banking legislation has beencontinually reinforced (e.g. Basel II, anti-moneylaundering rules (AMLA – AMLO) and the FINMAOrdinance on Capital Adequacy and Risk Diversifi -cation for Banks and Securities Traders (CRBTO));

3. On 27 September 2006 FINMA issued a highlyimportant circular entitled “Supervision andInternal Control” (hereinafter “FINMA Circular 08/24”).

The main new features of the by-laws are as follows:

1. In the introduction, the Bank enshrines a de factosituation when it states that in addition to its wealthmanagement and securities dealing core business,it operates as the parent company of a banking andfinancial group as defined in Swiss legislation andrules on banking. As a result, the duties and powersof the Bank’s governing bodies have increased;

2. The by-laws go on to state the required level ofskills, experience, diligence, availability, loyalty andindependence for each governing body;

3. The Bank points out that the members of itsgovern ing bodies must organise their personal andwork relationships so as to avoid as much aspossible any conflict of interests with the Bankand the banking and financial group of which it isthe parent company;

4. The Bank cancels the Managing Director’sfunction, which has become obsolete;

5. Both for itself and for the banking and financialgroup of which it is the parent company, the Bankbroadens the duties and reinforces the powers of theAuditing Committee and the Internal Auditors, as well as of the Compliance Office and RiskManagement department;

6. The Bank consolidates the internal monitoring,information management, reporting and riskmanagement systems;

7. Finally, in a document appended to the by-lawsthe Bank’s Board of Directors sets out in detail itspolicy regarding counterparty, market, reputationaland operating risks.

The Board of Directors is chaired by Baron Benjaminde Rothschild. E. Trevor Salathé and Manuel Damirespectively hold the offices of Vice-Chairman andSecretary. The Board of Directors operates as acollegial body. Resolutions are passed by an absolutemajority of the directors present and in the event of atie, the Chairman has the casting vote. In specialcircumstances, Board resolutions may be passed bycircular as prescribed in the by-laws.

CommitteesIn accordance with the Bank’s articles of incorpo -ration and by-laws, the Board of Directors has set upa Board Committee and is empowered to set up anAuditing Committee.

These committees’ main preparatory, consultativeand dicisional powers are set out in the by-laws.

39

Board CommitteeThe Board of Directors has delegated some of itspowers (notably relating to loans, liabilities andmanagement oversight) to the Board Committee.The Board Committee is made up of five members,all of whom belong to the Board of Directors. BaronBenjamin de Rothschild serves as Chairman of thisCommittee, E. Trevor Salathé as Vice-Chairman andManuel Dami as Secretary. The other two membersof the Board Committee are John Alexander andMichel Cicurel. Resolutions are passed by an absolutemajority of the directors present and in the event of a tie, the Chairman has the casting vote. In specialcircumstances, Committee resolutions may be passed by circular as prescribed in the by-laws.

In 2008 the Board of Directors met five times andthe Board Committee five times. On average, meetingsof the Board of Directors and the Board Committeelast half a day. The work of both bodies is based onagendas drawn up by their respective Secretaries and by the Chairman of the Executive Committee(see section 3.7 below). Minutes are taken at themeetings of the Board and the Committee; they areduly numbered and signed by the Chairman andSecretary. Each meeting follows a standing agendathat includes the following items: approval of theminutes of the previous meeting; report by theChairman of the Board Committee (only for Boardmeetings); progress report from the Bank’s head -quarters, branches and affiliates; loans, liabilities andreports of major risks; legal and reputational risks(only for Board meetings); securities portfolio andlong-term holdings; administrative matters; reportsfrom the Internal Auditors; and any other business.

Auditing CommitteeUnder the new by-laws approved by FINMA on 25March 2009, the Board of Directors delegates part ofits powers to an Auditing Committee made up of atleast three Board members. Their powers primarily

include acting as a liaison unit between the Inde -pendent Auditors and the Board and supervising theactivities of the Internal Auditors, the ComplianceOffice and the Risk Management department. TheBoard has appointed four of its members (E. TrevorSalathé, Manuel Dami, Jacques-André Reymond and Guy Wais) to form the Auditing Committee.All four of these members have the necessaryindependence, skills and experience.

3.6. Powers

The Board of Directors is the Bank’s highestgoverning body and is responsible for supervisingand monitoring its operations. Under the statutesand the articles of incorporation (art. 22), it has thewidest powers of oversight as regards how the Bank’sbusiness is managed. Aided by its committees, it sets the general strategy of the Bank and of thebanking and financial group formed by the Bank’saffiliates. It lays down the principles pertaining toorganisation, management and control and ensuresthat they are applied. It supervises on a consolidatedbasis all the Swiss and foreign entities that togethercomprise the Banque Privée Edmond de RothschildGroup. The Board of Directors has delegatedoversight of the Bank’s day-to-day business to theExecutive Committee (see section 4 below).

The Board of Directors has no official terms ofreference. Its powers and those of its Committees are clearly delineated in the Bank’s articles ofincorporation and by-laws (see our website www.lcf-rothschild.ch).

40

3.7. Meetings with and oversight

of the Bank’s General Management

Description of reporting by the Executive Committee and the Management Information SystemAt each meeting of the Board of Directors and BoardCommittee, the General Manager and/or the twoDeputy General Managers report on the major deci -sions taken by the Executive Committee and on theoperations dealt with, presenting those matters thatfall within the jurisdiction of the Board or the BoardCommittee. However, the General Manager and hisDeputies may only participate in an advisory capacity.

To help them perform their oversight obligations, ateach meeting the members of the Board of Directorsare given among other documents a monthly progressreport that primarily includes the General Manager’scomments, the summarised monthly accounts of thevarious Group entities comparing actual businessperformance with the budget and, finally, a list of the Group’s financial investments and holdings.

At meetings the Board members also receive aquarterly report on risks noting, inter alia: the levelof shareholders’ equity; major risks, if any; market,interest rate and counterparty risks in the bankingindustry; the level of cash reserves; and risks of a legaland reputational nature.

The Board of Directors has also put facilities in placethat are designed to monitor and supervise mana -gement at the Group level. These facilities are outlinedon pp. 76 et seq of this annual report.

Between meetings of the Board of Directors and the Board Committee, the Chairman and DeputyChairman of the Executive Committee keep theChairman of the Board of Directors regularlyinformed on major executive decisions.

Other members of the Executive Committee, as wellas other Bank executives, employees, internal auditorsand external advisers or experts whose presence isneeded, may also be invited to the meetings of theBoard of Directors and the Board Committee.However, these persons may only participate in anadvisory capacity.

Description of the internal auditing systemPursuant to the statutes, the Board of Directors hasan Internal Auditing Dept that is immediately subor -dinated to it in the chain of command. The chiefinternal auditor and his assistant are appointed bythe Board, to which they report directly. The rightsand obligations of the Internal Auditing Dept are setout in the Bank’s by-laws. In particular, it has accessto all the documents of the Bank and of theconsolidated affiliates that it audits.

The Internal Auditing Dept currently has a staff of 12.

It draws up an auditing programme each year that isdiscussed and approved by the Auditing Committee.In addition to a detailed list of assignments planned forthe current year, this programme contains a summaryof the departments and functions that have beenaudited over the past three years and of those for whicha review is scheduled in the three coming years.

This programme is also discussed with the Inde -pendent Auditors.

A separate report is drafted for each area audited. TheExecutive Committee’s view on each item is includedin the report, along with a deadline for implementingthe recommended steps. At its meetings the Board of Directors deals with the Internal Auditing Dept’sreports in the presence of the chief internal auditorand resolves to take additional measures when neces -sary. The Chief Internal Auditor and his assistant

41

Description of the risk controland management systemPlease refer to pp. 76, 77 and 78 of the “Notes to theconsolidated financial statements”.

42

are asked to attend the meetings of the Board ofDirectors, the Board Committee and the AuditingCommittee. In certain circumstances the Chairmanof the Board may assign special tasks to the ChiefInternal Auditor.

The Independent Auditors draw up an auditing planfor each financial year and submit it to the BoardCommittee (acting as the Auditing Committee) fordiscussion and implementation. The 2008 auditingplan was presented to the Board Committee at itsmeeting on 20 Nov. 2008. The Board Committeemeets regularly with representatives of the Inde -pendent Auditors.

Pursuant to the statutes, to art. 23 of the articles ofassociation and to item 3.4 of the new by-laws, theBoard of Directors has set up an Executive Committeeto act as the Bank’s senior management body. TheExecutive Committee is responsible for supervisingthe Bank’s day-to-day business in accordance withpolicy laid down by the Board of Directors and theBoard Committee. It is currently comprised of eightmembers appointed by the Board of Directors andoperates as a collegial body, holding weekly meetingsthat on average last half a day. In 2008 it met 49 times.Resolutions are passed by an absolute majority of the members present, provided they form a quorum.In the event of a tie, the Chairman has the castingvote. The Executive Committee’s resolutions mayalso be passed by circular as prescribed in the by-laws.Minutes are taken at the meetings of the ExecutiveCommittee; they are duly numbered and signed bythe Chairman and Vice-Chairman. Each meetingfollows a standing agenda that covers the full rangeof the Bank’s operations.

Each of the Bank’s departments is placed under thesupervision of a member of the Executive Committee(see pp. 17-25 of this annual report). At meetingsmembers report to the rest of the Committee on anymajor developments that have occurred in their area of responsibility.

The members of the Executive Committee receivedocuments and statistics issued weekly, monthly orquarterly by the departments and groups concerned.In particular, they receive a progress report containingthe following: the General Manager’s comments;various stastics including summarised monthly accountscomparing actual business performance with thebudget; monthly lists of financial investments; thefinancial statements of the various entities forming theBanque Privée Edmond de Rothschild Group; a report on risk control noting market, interest rateand counterparty risks; the level of shareholders’

equity; and risks of a legal and reputational nature(cf. compliance). The Executive Committee can alsorely on the supervision and monitoring facilitiesdescribed in section 3.7 above. These facilities arehoned year after year to enhance their effectiveness.

To help it perform its duties, the Executive Committeehas set up the following committees: a ManagementCommittee; a Traditional Management Committee;an Alternative Management Committee; an InvestmentFunds Committee; a Strategy Committee; a StandingCommittee for Operations; a Credit Committee; a Risk Committee; a Compliance Committee; and a Security Committee.

Minutes are taken at the meetings of these committees.They are numbered, dated and signed, and a copy isremitted to each member of the Executive Committee.

Other Bank executives, as well as employees, internalauditors and external advisers or experts may also beinvited to the meetings of the Executive Committee.However, these persons may only participate in anadvisory capacity.

4. Executive Committee

43

44

4.1. Members of the Executive Committee

Claude Messulam

Chairman, Swiss, 1951General Manager

Education/training1974 Master’s in Commerce, University of Geneva1975 Business Administration teaching certificate 1984 Federal Chartered Accountancy certificate

Career summary1974-1976 Cetecom S.A.1976-1987 Deloitte & Touche1988-1990 Partner in charge of bank auditing in French

Switzerland for Deloitte & Touche

Present dutiesBanque Privée Edmond de Rothschild S.A., Genevain charge of Operations / Administration, Holdings,Equity Markets, Forex Market and CorporateOrganisation (see pp. 18 and 19)

1991-1993 Senior Vice-President, member of the ExecutiveCommitee

1994-2000 Senior Vice-President, Vice-Chairman of theExecutive Commitee

Since 2001 General Manager, Chairman of the ExecutiveCommitee

DirectorshipsLCF Holding Benjamin et Edmond de Rothschild S.A.,Pregny-Chambésy – Vice ChairmanLa Compagnie Benjamin de Rothschild S.A., Meyrin– Vice ChairmanArbinter-Omnivalor S.A., Geneva – Vice ChairmanBanca Privata Edmond de Rothschild Lugano S.A.Banque Privée Edmond de Rothschild Europe,LuxembourgBanque de Gestion Edmond de Rothschild - MonacoBanque Privée Edmond de Rothschild Ltd, NassauLCF Edmond de Rothschild Limited, LondonLCF Edmond de Rothschild Prifund, Luxembourg – ChairmanLa Compagnie Financière Edmond de RothschildBanque, ParisCompagnie Financière Saint-Honoré, ParisRothschild Bank AG, ZurichRothschild Holding AG, ZurichHolding Benjamin et Edmond de Rothschild PregnyS.A., Pregny-Chambésy – Vice-ChairmanLCF Communication S.A., Pregny-Chambésy – ChairmanEdmond de Rothschild International Funds Ltd(E.D.R.I.F.) Hamilton, Bermuda

Sylvain Roditi

Deputy Chairman, Swiss, 1951Deputy General Manager

Education/training1970 College diploma from Institut Florimont, Geneva1973 B. Sc., London School of Economics

Career summary1973-1974 Trained at Keyser Ullmann S.A., Geneva1974-1985 Co-founded and directed Stock & Commodity

Services S.A., Geneva 1985-1989 CEO of Thomson McKinnon Securities Inc, Geneva1989-1991 CEO of Shearson Lehman Bros, Geneva1989-1991 Co-founded and directed SCS Alliance S.A., Geneva1991-2000 Deputy CEO in charge of wealth management

for Republic National Bank of New York(Switzerland) S.A., Geneva

Present dutiesSince 2000 Deputy General Manager and Vice-Chairman of the

Executive Committee of Banque Privée Edmond deRothschild S.A., Geneva (see pp. 18, 20 and 21)

DirectorshipsSince 2000 Chairman of the Boards of Directors of Edmond de

Rothschild Servicios Argentina S.A., Buenos Airesand Representación B.P. Edmond de RothschildS.A., Montevideo – Director of LCH InvestmentsNV, ACH Management S.A. and ECH HoldingsChairman of the Board of Directors of PrifundConseil S.A., Luxembourg

Jean-Pierre Pieren

Member, Swiss, 1943Deputy General Manager

Education/training1970 Graduated from the Institut des Hautes Etudes

Commerciales, University of Geneva

Career summary1969-1980 Banque Privée S.A., Geneva1980-1993 CEO of Compagnie de Banque et de Crédit S.A.,

Lausanne (part of the Tradition Group)1993-1995 CEO of Banque Privée Edmond de Rothschild

Lausanne S.A.

Present dutiesSince 1996 Senior Vice-President and member of the Executive

Committee of Banque Privée Edmond de RothschildS.A., Geneva in charge of Human Resources /Correspondent Banking / Loans and Guarantees /Risks / Securities and Cash Management(see pp. 18 and 22)

Since 2006 Deputy General Manager of Banque Privée Edmondde Rothschild S.A., Geneva

DirectorshipsSince 1993 Director of Interterra Parking S.A., LausanneSince 1995 Director of Banque de Gestion Edmond de

Rothschild - MonacoSince 2008 Director of Edmond de Rothschild Gestion

Monaco – SAM, Monaco

Luc Baatard

Member, Swiss, 1957Senior Vice-President

Education/training1967-1976 College certificate (Economics / Sciences stream)

from Institut Florimont, Geneva1977-1978 Trained at Messel & Co, London and Drexel, London1978-1979 Trader in eurobonds at Merrill Lynch, London1979-1981 Master’s in Commerce (major in Banking),

University of Geneva

Career summary1981-1982 Securities analyst at Merryl Lynch, New York

and then at Thomson McKinnon, New York1983-1984 Assigned to manage Omnivalor, Geneva on behalf of

Banque Privée Edmond de Rothschild S.A.

Present dutiesSince 1984 Chairman of the Executive Board of Arbinter-

Omnivalor S.A. (until 31.12.2008)

Since 1996 Member of the Executive Committee of BanquePrivée Edmond de Rothschild S.A., Geneva

DirectorshipsSince 1989 Director and member of the Board of Compagnie de

Trésorerie Benjamin de Rothschild S.A., GenevaSince 1995 Director of Banca Privata Edmond de Rothschild

Lugano S.A.Since 1996 Director and member of the Board Committee

of Banca Privata Edmond de Rothschild Lugano S.A.;Banque Privée Edmond de Rothschild Europe,Luxembourg; Compagnie Benjamin de Rothschild S.A.GenevaPresident of the Swiss Rugby Federation(until February 2008)

Director of the European Rugby Association

Philippe Currat


Education/training1972 Master’s in Law, University of Fribourg1976 Admitted to the Fribourg Bar

Career summary1976-1977 Credit Depts of UBS, Fribourg and Zurich 1977-1979 Legal Dept of Banque Hentsch & Cie, Geneva1979-1981 Partner of Etude Nouveau and Weck, Nordmann

& Bussey Solicitors, Fribourg.1981-1986 Secretary of the Federal Banking Commission

(deputy to the Head of the Legal Dept)


Committee of Banque Privée Edmond de RothschildS.A., GenevaSecretary General in charge of the Legal Dept / TaxDept / Wealth Planning / Compliance Office / CentralRegister and the Communications / Marketing Dept(see pp. 18 and 24)

DirectorshipsSince 1988 Chairman of the Board of Directors of Privaco

Trust S.A., Fribourg

Michel Lusa


Education/training1974 Master’s in Law, University of Lausanne1974 Master’s in Economics, University of Lausanne1979 Admitted to the Geneva Bar

Career summary1979-1987 Asset manager at UBS, Geneva1987-1992 Headed the Middle East section of the Wealth

Management Dept at UBS, Zurich1992-1998 Headed the Wealth Management Dept at UBS, Geneva


Committee of Banque Privée Edmond de Rothschild S.A., Geneva ( for duties, see pp. 18 and 25)

DirectorshipsMember of the Boards of Directors of LCF Edmondde Rothschild Prifund, ECH Investment Ltd andRouiller, Zurkinden & Cie Finance S.A., Fribourg

Bernard Schaub


Education/training1979 Master’s in Law, University of Geneva

Career summary1980-1983 Various internships with companies in

Switzerland the US

45

46

1983-1995 Ferrier Lullin, Geneva (junior securities analyst from1983; portfolio manager from 1984; Head of theIndependent Managers Dept from 1990; member ofthe Executive Committee and Co-head of thePortfolio Mgt Dept from 1992)

1995-2000 Senior Vice-President in charge of administration inthe Portfolio Mgt Dept of Banque Privée Edmond deRothschild S.A., Geneva

Present dutiesSince 1999 Member of the Executive Board of Banque Privée

Edmond de Rothschild S.A. Personnel WelfareFoundation

Since 2000 Senior Vice-President and member of the ExecutiveCommittee of Banque Privée Edmond de RothschildS.A. in charge of Independent Managers andCoordination for the Portfolio Mgt Dept (see pp. 18 and 21)

DirectorshipsSince 1997 Director of Priasia LtdSince 2000 Director of LCF Edmond de Rothschild PrifundSince 2005 Chairman of Priasia Ltd

Patrick Ségal


Education/trainingCollege certificate (Mathematics and Philosophystream) from Collège Saint-Joseph, Reims

1965-1967 Ecole Supérieure de Commerce de Paris

Career summary1968-1970 US securities analyst for Caisse Centrale des Banques

Populaires, managed the Valorem investment fund1970-1972 Trading and Financial Mgt Depts of Banque

Nationale de Paris1972-1979 Vice-President in charge of the French American

Capital Corp. (BNP Group), New York1979-1980 Returned to Paris to manage BNP’s Epargne

Croissance fund; headed the securities section ofBNP’s Private Investment Advisory Services division


Committee of Banque Privée Edmond de Rothschild S.A., Geneva (see pp. 18 and 24)

4.2. Other activities and vested interests

The members of the Executive Committee have noother activities or vested interests within the meaningof art. 4.2. of the SIX Guidelines on CorporateGovernance.

4.3. Management contracts

No such contracts exist at Banque Privée Edmond deRothschild S.A.

5.1. Procedure for fixing remuneration

and terms of stock options programmes

Under art. 10.2.18 and 11.2.16 of the Bank’s by-laws,the Board of Directors or the Board Committee isresponsible for deciding the remuneration of Boardmembers and senior executives.

The members of the Board of Directors are paidfixed fees. The remuneration of members of theBank’s Executive Committee includes a fixed annualsalary set by the Board of Directors plus a bonusdependent on the achievement of objectives. Theseinclude the Bank’s quantitative (as measured by cashflow) and qualitative targets, as well as the members’own personal objectives. There is no stock optionplan for members of the Board of Directors or theExecutive Committee.

In accordance with article 663 bis and 663 c section 3of the Swiss Code of Obligations, the remunerationand loans granted to current members of the Bank’sgoverning bodies are indicated in item 15 of the Notesto the Financial Statements (pp. 125-127 below).

5.2. Remuneration paid to past members

of the governing bodies

No such remuneration was paid in 2008.

5.3./5.4. Shares allotted and held during

the reporting year

There was no allotment of shares during the reportingyear. For shareholdings see item 15 of the Notes tothe Financial Statements on p. 127.

5.5. Options

Banque Privée Edmond de Rothschild S.A. has notissued any options on its own shares.

5.6. Additional fees and remuneration

In 2008 there were no additional fees or remunerationas defined in the SIX Guidelines on CorporateGovernance.

5. Remuneration, profit-sharing and loans

47

48

6.1. Limitation and representation

of voting rights

Under art. 6 para. 4 of the articles of incorporation, thename and permanent address of the owners and usufruc -tuaries of registered shares are entered in the Bank’sshare register. Only the owners and usufructu aries ofregistered shares whose inclusion in the share registeris endorsed by a director may legitimately exercise therights in respect of the Company attaching to a regis -tered share. Para. 5, 6 and 8 state the grounds on whichthe Board may refuse to grant such an endorsement.

Moreover, an owner of registered shares may only berepresented at an Annual General Meeting by anotherowner of registered shares in possession of a writtenproxy (cf. art. 14, para. 2). Holders of bearer sharesmust merely produce such shares (or comply with anyother formality required by the Board under art. 14,para. 3) in order to exercise their rights.

6.2. Quorums

Annual General Meetings are deemed validly heldwhen over half the shares are represented. In caseswhere this quorum is not achieved, a second meetingmay be convened with the same agenda (cf. art. 15,para. 2 of the articles of incorporation). The secondmeeting may not take place until after at least 30 dayshave elapsed and is deemed validly held regardless of the number of shares represented. This must bementioned in the notice (art. 15, para. 3).

6.3. Notice of annual general meetings

The rules pertaining to notices of AGMs are set forthin art. 11, 12 and 31 of the articles of incorporation,which draw on the provisions of the Swiss Codeof Obligations.

6.4. Items on the agenda

The rules pertaining to agendas and deadlines are setforth in art. 11 and 12 of the articles of incorporation,which draw on the provisions of the Swiss Code of Obligations.

Article 11General Meetings shall be convened by the Board ofDirectors and, if necessary, by the Auditors, theliquidators or the representatives of bondholders.One or more shareholders together representing at least10 percent of the capital stock may also request that aGeneral Meeting be convened.Shareholders representing shares with a total par valueof 1 million francs may request that an item beincluded in the agenda.Any convocation or inclusion of an item in the agendais to be requested in writing, with mention made of thetopics of discussion and proposals.

Article 12General Meetings shall be convened at least 20 daysprior to the date on which they are to be held, inaccordance with the procedures stipulated in article 31for the Corporations’s notices.Items included on the agenda shall be referred to in thenotice of the General Meeting, together with theproposals of the Board of Directors and the shareholderswho requested the convocation or the inclusion of anitem in the agenda.

6.5. Entries in the share register

In accordance with Company practice, the deadlinefor entering unlisted registered shares falls on the daythe AGM agenda is published.

6. Shareholders’ rights

The Bank has included in art. 6 para. 3 of its articlesof incorporation a clause providing that biddersare not required to make a formal take-over bidpursuant to art. 32, 52 and 53 of the Swiss StockExchanges and Securities Trading Act.

7. Take-overs and defensive measures

49

50

8.1. Duration of the auditors’ mandate

and of the chief auditor’s term of service

Since 1982, PricewaterhouseCoopers S.A., Genevahas audited the parent company financial statementsof Banque Privée Edmond de Rothschild S.A., Geneva.The financial statements of the Banque PrivéeEdmond de Rothschild Group are also audited byPricewaterhouseCoopers S.A. Philippe Bochud hasserved as chief auditor for our account since 2005.

8.2. Auditing fees

Banque Privée Edmond de Rothschild S.A. in 2008paid a total of CHF 583,000 in auditing fees toPricewaterhouseCoopers S.A., Geneva, within themeaning of this provision of the Guidelines onCorporate Governance.

8.3. Additional fees

The Bank paid additional fees totalling CHF 136,000(e.g. for consulting services), within the meaningof this provision of the Guidelines on CorporateGovernance.

8.4. Consultation with

the Independent Auditors

PricewaterhouseCoopers S.A. draws up an auditingplan each year. It drafts one report on its review ofthe annual financial statements and another on itsprudential audit. The auditor in charge of our accountdiscusses these reports with the Board of Directors or the Board Committee at three or four meetingsheld during the course of each year. The most recentauditing plan was presented to the Board Committeeat its meeting on 20 Nov. 2008. The Independent

Auditors’ findings in respect of the annual financialstatements are presented and discussed with theBoard of Directors each year at its meeting in March.

The Independent Auditors have access to the BoardCommittee at all times, as well as to the ExecutiveCommittee and to the Internal Auditing Dept., all of whom they meet with regularly.

PricewaterhouseCoopers S.A. is hired on an annualbasis. The company’s qualifications, performance andfees are assessed each year by the Board Committeeor the Board of Directors.

As required by the Swiss Federal BankingCommission, the auditor in charge of our account isrotated every seven years.

8. Independent Auditors

Banque Privée Edmond de Rothschild S.A. providesthe fullest disclosure possible to the Bank’s existingand potential shareholders as well as to its employeesand the general public. This information, includingdetails on risk management and the calculation ofconsolidated shareholders’ equity, is mainly conveyedin the Bank’s annual reports, at press conferences on its annual results, through interviews given to the financial media and securities analysts, atGeneral Meetings and on the Bank’s website(www.lcf-rothschild.ch, section “Investors / Pressreleases” or “Investors / Publications”).

Events and agenda

2 April 2009:- Publication of the notice of the Annual General

Meeting of shareholders and its agenda in theFOSC (full text), Le Temps, L’AGEFI, the NeueZürcher Zeitung and Finanz und Wirtschaft(summarised editions)

- Press conference on 2008 results in Geneva

- Publication of a media release summarising our management report in the electronic media and the press, with a copy sent to our onlinesubscribers

- Publication of the annual report

28 April 2009:- Annual General Meeting of shareholders in Geneva,

at the Château de Pregny

August 2009:- Publication of our semi-annual results in the FOSC

- Publication of a media release summarising ourmanagement report in the electronic media and thepress, with a copy sent to our online subscribers

ContactsMedia relations:Valérie BoscatHead of Information / MarketingBanque Privée Edmond de Rothschild S.A.18, rue de Hesse, 1204 GenevaPhone: 058 818 94 62

058 818 94 83Fax: 058 818 91 91E-mail: [email protected]

Relations with investors:Martin LeutholdChief Financial OfficerBanque Privée Edmond de Rothschild S.A.18, rue de Hesse, 1204 GenevaPhone: 058 818 93 41Fax: 058 818 91 39E-mail: [email protected]

Website:www.lcf-rothschild.ch

Online subscriptions:www.lcf-rothschild.ch/fr/geneve/news/newsletter.asp

9. Information policy

10. Major changes since the balance sheet dateBanque Privée Edmond de Rothschild S.A. absorbed Arbinter-Omnivalor S.A. in February 2009, retroactive to 1 January 2009.

51

52

Financial reportBanque Privée Edmond de Rothschild Group

56 Key figures

57 Report of the Directorson the consolidated financial statements

62 Report of the Independent Auditors on the Group financial statements

64 Consolidated affiliates

68 Consolidation principles

70 Valuation policies

72 Consolidated balance sheet

74 Consolidated profit and loss account

75 Consolidated cash flow statement

76 Notes to the consolidated financial statements

This is an English translation of the original document in French which may be obtained from the Bank. In the event of a discrepancy between the English and French versions, the French one shall prevail.

Sustainabledevelopment

Ten years ago, the will to see herds of elephants migrating once again across the plains of Africa gaverise to a far-reaching conservation and development project embodied at present by the Peace ParksFoundation.For people living in and alongside the Peace Parks, economic potential lies chiefly in the abundanceof available natural resources. Rather than relying on subsistence farming, unmanaged hunting andfishing and clear-cutting of the regions’ forests, the Peace Parks seek to enhance land use through thepromotion of viable alternatives. One of the most successful of these is tourism, which marriesconservation with development by involving local peoples in the parallel management of wildlifepreserves and hotels.The Peace Parks draw on a combination of scientific modelling and detailed field work, making thema fine example of collective economic development where modern technology is harnessed side byside with folk traditions and ancestral knowledge.By ensuring environmental protection and helping ecosystems to thrive, the Peace Parks offer anindispensable opportunity for man to coexist with nature. That, after all, is the only solution for theirmutual survival.

As part of its staunch commitment to sustainable development, the LCF RothschildGroup last year stepped up operations in this area. Our efforts focused on evaluating andmanaging carbon risk, marketing new instruments for the responsible use of naturalresources and financing novel clean technologies.

2008 2007 Change

(in CHF) (in %)

111,283

561,718

116,524

508,371

201,017

17.8

1.6

2,019

404

5,746,762

1,627,652

440,298

10,271,650

1,252,407

12,989,491

82,298

8,449 5,398

1,517 607 910

1,587

1,555

106,342

583,945

128,870

501,636

246,402

22.3

2.5

2,385

477

8,250,863

1,908,479

815,286

8,559,640

1,333,081

11,458,132

100,268

10,939 10,249

1,375 563 812

1,438

1,402

4,941

(22,227)

(12,346)

6,735

(45,385)

-

-

(365)

(73)

(2,504,101)

(280,826)

(374,989)

1,712,010

(80,675)

1,531,359

(17,970)

(2,490)(4,851)

142 44 98

149

153

4.6

(3.8)

(9.6)

1.3

(18.4)

-

-

(15.3)

(15.3)

(30.3)

(14.7)

(46.0)

20.0

(6.1)

13.4

(17.9)

(22.8)(47.3)

10.3 7.8

12.1 10.4

10.9

56

Key figuresBanque Privée Edmond de Rothschild Group

Consolidated profit and loss account (in thousands of CHF)

Net interest income

Fee and commission income

Results of trading operations

Operating expenses (personnel costs and other overheads)

Group net income

Profitability (%)

Return on equity - net income (2) /average shareholders’ equity (3)

Return on assets- net income/average assets

Shares (in CHF)

Earnings per bearer share after deducting portion due to minority interests

Earnings per registered share after deducting portion due to minority interests

Consolidated balance sheet (in thousands of CHF)

Due from banks

Advances to customers

Due to banks

Customer deposits

Shareholders’ equity (1)

Balance sheet total

Assets under management (in millions of CHF)

Total assets under management (includes double reporting)

of which: - double reportingNet inflow of fresh funds

Group personnel (number of employees)

Average number of employees - in Switzerland- abroadTotal number of employees at year-end

Number of employees at year-end, converted into full-time jobs

(1) Including Group net income before payment of dividend by parent company and minority interests.(2) Annualised(3) After appropriation of the parent company’s earnings.

57

Dear Shareholders,

2008 was marked by great upheavals and contrastedstarkly with the exceptional year enjoyed by the BanquePrivée Edmond de Rothschild Group in 2007.

The financial industry was hammered in turns by theUS subprime mortgage implosion, a global crisis ofconfidence and a steep plunge in equity prices thattogether pushed the international banking system tothe precipice. These punishing blows reminded usthat asset prices are not open-ended and made usrealise that things will never be quite the same again.

Completing this vision of doomsday, a $50 billionfraud perpetrated by an American fund managertarnished the image of the hedge funds industrywhich was already reeling from the financial crisis.And to add insult to injury, the US authoritiesstepped up their legal action against a major Swissbank, putting yet more pressure on banking secrecy.

In a sector that has suffered numerous bankruptciesand amid particularly trying times for the globaleconomy, our Bank remains a family-controlledenterprise with a focus on wealth management and a stable ownership structure.

A cautious investment policy enabled our Group tosteer clear of the US subprime debacle. We made nodirect investments in this segment either for ourselvesor on behalf of clients. Likewise, thanks to the profes -sionalism and clear-sightedness of our teams responsiblefor picking alternative funds, none of our funds ofhedge funds was invested in “Madoff” products.

2008 saw continuing efforts to reinforce our corebusiness and improve our organisational structure.We continued to look steadfastly to the future byrecruiting new wealth management teams with aview to serving clients better.

This combination of caution and dynamism partiallycounterbalanced the stockmarket meltdown andenabled us to post a gross profit of CHF 317.7 million,down 12.8% on the 2007 figure (CHF 364.4 million).Consolidated net earnings came to CHF 201 millioncompared with CHF 246.4 million a year earlier,marking a drop of 18.4%.

Thanks to the efforts made in recent years, our Groupwas able to attract CHF 5.4 billion of fresh money in2008. Despite the sell-off in equities and the appre -ciation of the Swiss franc, assets under managementat year’s end totalled CHF 82.3 billion, down 17.9%on the 2007 level of CHF 100.3 billion.

The Group last year continued to expand in the areaof private wealth management through our nationaland international networks.

Swiss network

GenevaBanque Privée Edmond de Rothschild S.A., Genevaspecialises in wealth management, mainly on behalfof private clients. The Bank is directed by ClaudeMessulam, who also coordinates Group operationsfrom our head office. In an extremely hostile economicand stockmarket environment, BPER Geneva contin -ued to expand throughout 2008 and registered asubstantial increase in the inflow of client funds. Thisenabled the Bank to post a net profit of CHF 159.3million for the reporting year, down by a mere 1.9%from the 2007 figure (CHF 162.4 million).

FribourgThe Fribourg branch of Banque Privée Edmond deRothschild S.A. is headed by Patrick Zurkinden. Wehave operated in Fribourg since 1986 with a view toextending our reach in this area astride Switzerland’sFrench- and German-speaking communities.

Report of the Directorsto the shareholders on the consolidated accounts

of Banque Privée Edmond de Rothschild S.A. at the general meeting on 28 April 2009

Despite last year’s very tough economic context,business development at the branch and at the assetmanagement firm Rouiller, Zurkinden & CieFinance S.A. was in line with expectations.

LausanneOur Lausanne branch has operated since 1993 andcurrently employs a staff of 26 focused on privatebanking. Lausanne, as “Olympic capital” of the world,contributes to the Bank’s international scope and thebranch promotes our presence in Vaud Canton.Since 2002 this unit has been housed in a handsomebuilding with appointments ideally suited to ourprofession and clientele. Under the guidance ofRoland Humbert, business continues to grow at agratifying pace.

LuganoBanca Privata Edmond de Rothschild Lugano S.A.,headed by Robert Misrahi, is 99.8% owned by ourparent company. In 2008 this subsidiary reported anet profit of CHF 32.6 million, up 77.6% on the 2007figure of CHF 18.3 million.

The 2008 amount includes CHF 12.7 million ofprofit on the sale to Banque Privée Edmond deRothschild S.A. of the subsidiary’s stake in Arbinter-Omnivalor S.A. Excluding this sale, net profit cameto CHF 19.9 million, up 8.6% on the 2007 level.

GenevaArbinter-Omnivalor S.A., our separate asset manage -ment unit in Geneva, is now fully owned by BanquePrivée Edmond de Rothschild S.A. following the saleof a 15% stake controlled by Luc Baatard and thepurchase of Banca Privata Edmond de RothschildLugano S.A.’s 20% holding. The affiliate posted a netprofit of CHF 6.7 million in 2008, compared withCHF 7.4 million the year earlier (-9.6%). The entitymerged with Banque Privée Edmond de Rothschild S.A.on 1 March 2009 retroactive to 1 Jan. 2009.

International network

LuxembourgLed by Frédéric Otto and his teams, Banque PrivéeEdmond de Rothschild Europe, Luxembourg lastyear continued to expand in line with its strategy oflong-term growth and ongoing efforts to enhancethe quality of customer service. An ever broaderbusiness mix has enabled our Grand Duchy subsidiaryto diversify its sources of revenue considerably.

Growth at BPERE’s representative offices in Spain,Portugal, Belgium, Slovakia, Italy and Poland hasproceeded in line with projections.

Despite last year’s extremely shaky economic condi -tions, our Luxembourg affiliate reported excellentresults. Net profit totalled CHF 47.7 million (EUR 32.1 million), down only 17.7% on the 2007figure of CHF 57.9 million (EUR 35 million).

United KingdomOur London operations are directed by John Alexanderand gravitate around four main lines of business.LCF Edmond de Rothschild Securities Ltd is mainlygeared towards trading in bonds and emerging marketfunds, but has also carved out a niche in corporatefinance where it is active in management buyoutsand M&A activity. Marshalling the resources ofinstitutional clients is the job of LCF Edmond deRothschild Asset Management Ltd. Its teams ofexperts market and direct funds of hedge funds andother multimanager vehicles, in close cooperationwith the Group as a whole.

Our London subsidiary reported a net profit of CHF 12.3 million (GBP 7.9 million), as against CHF 20.2 million (GBP 9 million) in 2007, marking a fall of 39%. The conversion of earnings into Swissfrancs illustrates the sharp depreciation of the pound during the reporting year.

58

Report of the Directors

59

GuernseyIn Guernsey LCF Edmond de Rothschild (C.I.)Limited provides asset risk management services on a consulting basis as well as under discretionarymandates. The company is a shareholder of theChannel Islands Stock Exchange, where it handlesissuance of investment funds and notes. In 2008 it added fixed-income management to its business mix.

MonacoOur Monaco affiliate, Banque de Gestion Edmondde Rothschild – Monaco, is 54.1% owned by theBanque Privée Edmond de Rothschild Group and isrun by Giampaolo Bernini. This unit posted a netprofit of CHF 9.6 million (EUR 6.4 million), down8.4% on the previous year’s level of CHF 10.5 million(EUR 6.3 million).

BahamasUnder the guidance of Gian Fadri Pinoesch, ourNassau subsidiary continued to grow steadily. InDecember 2008 we celebrated the 10th anniversaryof the company’s founding and inaugurated our newbuilding. Banque Privée Edmond de Rothschild Ltdreported a net profit of CHF 7 million, 9.3% higherthan the 2007 figure (CHF 6.4 million).

Roundup of 2008 results

The Group registered a consolidated net profit ofCHF 201 million in 2008, marking an 18.4% decline compared with the previous year’s level of CHF 246.4 million.

RevenueInterest income totalled CHF 111.3 million, up 4.6%on the CHF 106.3 million reported at end-2007. Theincrease was mainly attributable to a higher volumeof lending.

Income from fees and commissions edged down by3.8% to CHF 561.7 million from CHF 583.9 millionthe previous year. The drop in fees and commissionswas partially counterbalanced by a decrease incommissions payable.

Results of trading operations amounted to CHF 116.5million, down 9.6% on their 2007 level of CHF 128.9million. The decline was largely due to a lower profit on securities transactions.

Other ordinary results totalled CHF 36.6 million,versus a year-earlier figure of CHF 46.9 million. Thisitem chiefly comprised dividends deriving from non-consolidated holdings.

ExpensesThe average number of staff employed by the Group last year was 1517, up from 1375 in 2007.Personnel expenses amounted to CHF 383.1 million,compared with the previous year’s level of CHF 388.2 million.

Other operating expenses rose 10.4% to CHF 125.2million from CHF 113.4 million in 2007.

Total operating expenses came to CHF 508.4 million,1.3% higher than the year-earlier level.

Gross profitGroup gross profit was down 12.8% and totalled CHF 317.7 million, versus CHF 364.4 million in 2007.

Depreciation of fixed assets worked out to CHF 32.3 million, as against CHF 29.7 million theprevious year.

Extraordinary income amounted to CHF 23 million,up by CHF 9.1 million on the 2007 figure. This item chiefly included the release of provisions nolonger required for operating purposes.


Extraordinary expenses totalled CHF 25.8 million,CHF 4.9 million more than the CHF 20.9 million re -ported the previous year. This line primarily contains theGroup allocation to reserves for general banking risks.

Taxes came to CHF 47.4 million, down 22.9% on theyear-earlier figure of CHF 61.5 million.

Balance sheet reviewThe consolidated balance sheet total stood at CHF 13 billion at end-2008, 13.4% higher than theyear-earlier level.

Current assets including cash, bank deposits, loans to customers, mortgage bills, claims arising frommoney market paper and securities and preciousmetals held for trading purposes, totalled CHF 11.4billion. This marked a 9.2% increase compared withthe previous year’s figure of CHF 10.4 billion.

Financial investments amounted to CHF 492.3 million,as against CHF 235.2 million in 2007. Most of thisrise was attributable to the stock of precious metalsused to cover our clients’ metal accounts.

Fixed assets stood at CHF 194.1 million, practicallyunchanged versus the end-2007 level of CHF 194.7million.

Adjustment accounts totalled CHF 145 million,compared with CHF 150.5 million the previous year.

“Other assets” were sharply higher at CHF 657.3million, mainly reflecting an increase in the positivereplacement value of forward contracts which cameto CHF 602.7 million at the close of the reportingyear as against CHF 240.2 million at end-2007.

On the liabilities side, borrowed funds comprised ofdebits on money market paper, medium-term bondsand sums due to banks and customers together

amounted to CHF 10.7 billion, or 82.5% of the balancesheet total, versus CHF 9.4 billion the previous year.The rise mostly stemmed from the larger volume of clients’ claims.

“Other liabilities” rose sharply to CHF 672.2 million,primarily as a consequence of the higher negativereplacement value of forward contracts which cameto CHF 597.5 million at the close of the reportingyear compared with CHF 229.3 million at end-2007.

Valuation adjustments and provisions totalled CHF 115 million, up from CHF 102 million in 2007.

Reserves for general banking risks were raised 8.4%to CHF 223 million from their year-earlier level ofCHF 205.8 million.

Prior to the dividend payout, Group capital andreserves stand at CHF 1.3 billion, representing 9.6%of the balance sheet total.

Return on equity worked out to 17.8%. Shareholders’equity as required by the BIS (under Basel II) cameto CHF 412 million. Eligible capital totalled CHF 1.1billion. The BIS ratio (eligible capital in relation toshareholders’ equity required under Swiss law) was20.6%, well above the legal minimum.

60


61

Outlook for 2009

Our 2008 results should not allow us to forget thatour operating environment has changed profoundly.2009 will be much tougher from every standpoint.Regulatory pressure is bound to increase and thefinancial crisis will probably last a long time. The keyto our success will be our ability to adapt to thesenew conditions and to meet the needs of our clients.We are convinced that our strategy will enable us to achieve these objectives.

We will continue adding new professionals to ourworkforce and will invest considerably in premises aswell as in IT equipment, not only to provide ourclients with top-quality service but also to enhanceour competitiveness. Our attitude remains guarded,however, in view of geopolitical, economic and marketenvironments fraught with uncertainty.

We cannot conclude this report without expressinggratitude to our shareholders and clients for theirabiding trust.

Our thanks also go to our management and staff fortheir dedication and fine work.

The Board of Directors


62

Report of the statutory auditorto the general meeting of Banque Privée Edmond de Rothschild S.A., Geneva

Report of the statutory auditor on the

consolidated financial statements

As statutory auditor, we have audited the consoli -dated financial statements of Banque Privée Edmond de Rothschild S.A., which comprise thebalance sheet, income statement, statement of cash flows and notes (pages 64 to 101), for the yearended 31 December 2008.

Board of Directors’ ResponsibilityThe Board of Directors is responsible for the prepa -ration and fair presentation of the consolidatedfinancial statements in accordance with accountingrules for banks and the requirements of Swiss law.This responsibility includes designing, implementingand maintaining an internal control system relevantto the preparation and fair presentation of consoli -dated financial statements that are free from materialmisstatement, whether due to fraud or error. TheBoard of Directors is further responsible for selectingand applying appropriate accounting policies andmaking accounting estimates that are reasonable inthe circumstances.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on ouraudit. We conducted our audit in accordance withSwiss law and Swiss Auditing Standards. Those stan -dards require that we plan and perform the audit to obtain reasonable assurance whether the consoli -dated finan cial statements are free from materialmisstatement.

An audit involves performing procedures to obtainaudit evidence about the amounts and disclosures inthe consolidated financial statements. The proceduresselected depend on the auditor’s judgment, includingthe assessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditorconsiders the internal control system relevant to theentity’s preparation and fair presentation of theconsolidated financial statements in order to designaudit procedures that are appropriate in the circum -stances, but not for the purpose of expressing anopinion on the effectiveness of the entity’s internalcontrol system. An audit also includes evaluating theappropriateness of the accounting policies used andthe reasonableness of accounting estimates made, aswell as evaluating the overall presentation of theconsolidated financial statements. We believe thatthe audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statementsfor the year ended 31 December 2008 give a true and fair view of the financial position, the results ofoperations and the cash flows in accordance withaccounting rules for banks and comply with Swiss law.

63

Report on other legal requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act(AOA) and independence (article 728 CO andarticle 11 AOA) and that there are no circumstancesincompatible with our independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirmthat an internal control system exists which has been designed for the preparation of consolidatedfinancial statements according to the instructions ofthe Board of Directors.

We recommend that the consolidated financialstatements submitted to you be approved.

PricewaterhouseCoopers SA

Philippe Bochud Alain Lattafi Audit Expert Audit ExpertAuditor in charge

Geneva, 19 March 2009

Report of the statutory auditor

In Switzerland

Parent company

Banque Privée Edmond de Rothschild S.A.Geneva

CHF 45.0 m 2)

Bank

Banca Privata Edmond de Rothschild Lugano S.A.Lugano99.8% 1) CHF 5.0 m 2)

Service companies

Privaco Trust S.A.Geneva100% 1) CHF 2.1 m 2)

Les Conseillers du Léman Associés S.A.Geneva 6)

100% 1) CHF 0.1 m 2)

Financial and asset management companies

Arbinter-Omnivalor S.A.Geneva100% 1) CHF 2.0 m 2)

Rouiller, Zurkinden & Cie Finance S.A.Fribourg100% 1) CHF 0.6 m 2)

Cefeo Investimenti S.A.Lugano 3)

99.8% 1) CHF 0.1 m 2)

Castinvest S.A.Geneva 4)

100% 1) CHF 0.1 m 2)

Priadvisory Holding S.A.Geneva 5)

100% 1) CHF 3.120 m 2)

Consolidated affiliatesat 31 December 2008

Fully consolidated entities of the Banque Privée Edmond de Rothschild Group

Figures:1) Direct and/or indirect holding by parent company2) Share capital3) Wholly owned by Banca Privata Edmond de Rothschild Lugano S.A., Lugano4) Wholly owned by Arbinter-Omnivalor S.A., Geneva5) Wholly owned by Banque Privée Edmond de Rothschild Europe, Luxembourg6) Wholly owned by Privaco Trust S.A., Fribourg

64

Abroad

Banks

Banque Privée Edmond de Rothschild EuropeLuxembourg100% 1) EUR 31.5 m 2)

Banque Privée Edmond de Rothschild Ltd, NassauBahamas100% 1) CHF 15.0 m 2)

Banque de Gestion Edmond de Rothschild -MonacoMonaco 3)

54.10% 1) EUR 12.0 m 2)

Service and real estate companies

COPRI III S.A.Luxembourg100% 1) EUR 0.747 m 2)

Immobilière du 3 Joseph IILuxembourg 7)

100% 1) EUR 0.064 m 2)

Edmond de Rothschild Real Estate - Mediaçao Imobiliaria S.A.Portugal 8)

99.70% 1) EUR 0,050 mio. 2)

Trust and asset management companies

LCF Edmond de Rothschild Asset Management LimitedU.K. 4)

80% 1) GBP 0.25 m 2)

LCF Edmond de Rothschild Fund Management LtdU.K. 4)

80% 1) GBP 0.25 m 2)

LCF Rothschild Conseil S.A.Luxembourg 5)

100% 1) EUR 0.375 m 2)

LCF Edmond de Rothschild Asset Management (C.I.) LimitedGuernsey 6)

75% 1) GBP 0.133 m 2)

Consolidated affiliates

Figures:1) Direct and/or indirect holding by parent company2) Share capital3) Owned 34% by Banque Privée Edmond de Rothschild S.A., Geneva, 18% by Banca Privata Edmond de Rothschild Lugano S.A., Lugano and 2.10% by Incentive

Management SAM, Monaco4) Wholly owned by Edmond de Rothschild Limited, London5) Owned 99.74% by Banque Privée Edmond de Rothschild Europe, Luxembourg and 0.26% par Pri Investment, Luxembourg6) Owned 75% by La Compagnie Privée de Finance (Jersey), Jersey7) Wholly owned by Banque Privée Edmond de Rothschild Europe, Luxembourg8) Owned 99.6% by Banque Privée Edmond de Rothschild Europe, Luxembourg and 0.1% by LCF Edmond de Rothschild Conseil, Luxembourg

65

Abroad

Financial and brokerage firms

Edmond de Rothschild LimitedLondon 80% 1) GBP 1.0 m 2)

LCF Edmond de Rothschild Securities LimitedU.K. 3)

80% 1) GBP 1.0 m 2)

Edmond de Rothschild International Funds LtdBermuda 4)

62.27% 1) USD 0.4 m 2)

Pri Investment Luxembourg 10)

100% 1) EUR 0.125 m 2)

LCF Edmond de Rothschild Holdings (C.I.) LimitedGuernsey 5)

75% 1) GBP 0.053 m 2)

La Compagnie Privée de Finance (Jersey)Jersey100% 1) GBP 0.005 m 2)

LCF Edmond de Rothschild (C.I.) LimitedGuernsey 5)

75% 1) GBP 0.4 m 2)

Testafid AnstaltVaduz 6)

99.8% 1) CHF 0.020 m 2)

Rhoninvest EstablishmentVaduz 7)

100% 1) CHF 0.020 m 2)

Incentive Management SAMMonaco 8)

54% 1) EUR 0.150 m 2)

Priglobal Advisory LimitedCayman Islands 9)

100% 1) USD 1.210 m 2)


Figures:1) Direct and/or indirect holding by parent company2) Share capital3) Wholly owned by Edmond de Rothschild Limited, London4) Owned 31.25% by Banque Privée Edmond de Rothschild S.A., Geneva, 2.25% by Banca Privata Edmond de Rothschild Lugano S.A., Lugano,

14.75% by Banque Privée Edmond de Rothschild Europe, Luxembourg, 11.80% by Edmond de Rothschild Limited, London, 1.22% by Banque de Gestion Edmond de Rothschild-Monaco, Monaco and 1% by Arbinter-Omnivalor S.A., Geneva

5) Owned 75% by La Compagnie Privée de Finance (Jersey), Jersey6) Wholly owned by Banca Privata Edmond de Rothschild Lugano S.A., Lugano7) Wholly owned by Arbinter-Omnivalor S.A., Geneva8) Wholly owned by Banque de Gestion Edmond de Rothschild-Monaco, Monaco 9) Wholly owned by Priadvisory Holding S.A., Geneva10) Owned 99.92% by Banque Privée Edmond de Rothschild Europe, Luxembourg and 0.08% by LCF Rothschild Conseil S.A., Luxembourg

66

Abroad

Financial and brokerage firms (cont’d)

Prifund Conseil S.A.Luxembourg 3)

96.10% 1) EUR 0.078 m 2)

Representación B.P. Edmond de Rothschild S.A.Montevideo100% 1) USD 0.003 m 2)

Priasia LimitedB.V.I.100% 1) USD 0.0003 m 2)

Edmond de Rothschild Servicios Argentina S.A.Argentina 5)

100% 1) USD 0.5 m 2)

Rushmore Finance Corp.B.V.I.100% 1) USD 0.050 m 2)

Edmond de Rothschild Conseil & courtaged’assurancesMonaco 10)

53.89% 1) EUR 0.150 m 2)

Iberian Renewable Energies GP, S.à r.l.Luxembourg 11)

100% 1) EUR 0.012 m 2)


Figures:1) Direct and/or indirect holding by parent company2) Share capital 3) Owned 24.20% by Banque Privée Edmond de Rothschild S.A., Geneva, 69.35% by Priglobal Advisory Limited, Cayman Islands,

2% by LCF Fund Advisory Ltd, Bermuda, 0.55% by Treasury Investment (C.I.), Guernsey4) Owned 19.92% by Banque Privée Edmond de Rothschild S.A., Geneva, 3.98% by Edmond de Rothschild Limited, London,

7.47% by Banque Privée Edmond de Rothschild Europe, Luxembourg, 14.12% by Edmond de Rothschild International Funds Ltd, Bermuda5) Owned 95% by Banque Privée Edmond de Rothschild S.A., Geneva, 5% by Privaco Trust S.A., Geneva6) Wholly owned by Edmond de Rothschild International Funds Ltd, Bermuda7) Wholly owned by Privaco Trust S.A., Geneva8) Owned 99.68% by Banque Privée Edmond de Rothschild Europe, Luxembourg, 0.32% by Pri Investment, Luxembourg9) Owned 55% by Priadvisory Holding S.A., Geneva, 45% by Banque Privée Edmond de Rothschild S.A., Geneva10) Owned 99.60% by Banque de Gestion Edmond de Rothschild-Monaco, Monaco 11) Wholly owned by Banque Privée Edmond de Rothschild Europe, Luxembourg12) Owned 99.40% by Banque de Gestion Edmond de Rothschild-Monaco, Monaco

67

E.C.H. Investments LtdLuxembourg 4)

45.49% 1) EUR 0.251 m 2)

Privaco (Uruguay) S.A.Montevideo 7)

100% 1) USD 0.037 m 2)

Mizen Finance Corp.B.V.I.100% 1) USD 0.0005 m 2)

LCF Fund Advisory LtdBermuda 6)

62.27% 1) USD 0.050 m 2)

Adjutoris ConseilLuxembourg 8)

100% 1) EUR 0.031 m 2)

Multi Alpha Advisory S.A.Luxembourg 9)

100% 1) EUR 0.075 m 2)

Edmond de Rothschild Gestion Monaco - SAMMonaco 12)

53.78% 1) EUR 0.150 mio. 2)

68

The consolidated financial statements of the BanquePrivée Edmond de Rothschild Group have beenprepared in accordance with the provisions of theFederal Law on Banks and Savings Banks, itsimplementing ordinance (OB), the guidelines issued by the Federal Banking Commission and theprovisions on the drawing up of financial statementsin the Listing Rules of the Swiss Exchange. Thefinancial statements provide a true picture of theGroup’s assets, financial situation and earnings.

Scope of consolidation

Group companiesThe consolidated financial statements of the BanquePrivée Edmond de Rothschild Group include thefinancial statements of the major companies operatingin the banking and financial sector, as well as the real estate companies in which the parent companyholds, directly or indirectly, a majority interest (for details of the companies concerned, refer topages 64, 65, 66 and 67).

Changes in the scope of consolidationThe following companies were consolidated for thefirst time during the reporting period:- Edmond de Rothschild Real Estate - Mediaçao

Imobiliaria S.A., Portugal- Edmond de Rothschild Gestion Monaco - SAM,

Monaco

There were no deconsolidations.

Holdings accounted for using the equity methodAssociated companies in which the Group owns a20% to 50% interest are consolidated using theequity method; the value shown under “Holdings”represents the Group’s share in the equity and netincome of these entities, rather than the valueof the shares under our control.

The companies concerned are La CompagnieBenjamin de Rothschild S.A. (34.68%), A.C.H.Management S.A. (41.98%) and LCF EdR NikkoCordial Japon (50%).

The difference resulting from the first consoli dationis shown under “Retained earnings”. The impact ofapplying the Group’s accounting principles to theaffiliated companies has been considered as minor on the consolidated financial statements. As aconsequence, the equity application is based on theunadjusted accounts of the companies held.

Equity stakes accounted for under the equity methodare shown under “Non-consolidated holdings”.

The Group’s share in the profits of companiesconsol i dated using the equity method is presented as a sepa rate item in the consolidated profit andloss account.

Other holdingsMajority interests of lesser impact or whose sale isenvisaged, as well as other stakes of less than 50%, aredisclosed under “Non-consolidated holdings”.

Consolidation principles

Consolidation methods

Full consolidation methodThe financial statements of all companies within the Group are fully consolidated.

All assets and liabilities, as well as expenses andincome of Group companies, are fully integrated(line-by-line).

Intercompany balance sheet items and profit and loss transactions between consolidated Groupcompanies are set off against each other.

Off-balance sheet items are also fully consoli datedand set off when they relate to intercompanytransactions within the Group.

Dividends are eliminated through reserves. The enti tlement of third-party shareholders (minorityinterests) to equity and net income is disclosedseparately.

Capital consolidationThe capital invested in the Group’s banks andinvestment, asset management and real estatecompanies is consolidated in accordance with thepurchase method.

The positive or negative differences arising from the first consolidation are disclosed under“Intangible assets” and “Retained earnings”respectively.

The value of the Bank’s treasury stock, or own shares in BPER S.A., is deducted from capital andreserves and reported under “Additional paid-incapital and other reserves” at the shares’ cost price.Dividends and the proceeds of subsequent salesare directly allocated to “Additional paid-in capitaland other reserves”.

Newly acquired companies

As a rule, newly acquired companies are included in the consolidated financial statements in the year of their acquisition.

Closing date for consolidated accounts

The consolidated companies all end their financial year on 31 December except for Priadvisory Holding S.A. and Prifund Conseil S.A., whosefinancial years conclude on 30 November.

Consolidation principles

69

2008 2007

Closingrate

Average2008rate

Closingrate

Average2007rate

Major currencies

USD 1.07 1.08 1.12 1.19

GBP 1.56 1.98 2.26 2.40

EUR 1.49 1.58 1.65 1.65

70

Translation of financial

statements in foreign currency

Transactions in foreign currency are reported at theexchange rate applicable on the date of the relevanttransaction. Profits and losses arising from thesettlement of these transactions are reported in theprofit and loss account, along with profits and lossesarising from the conversion at the exchange rate on thebalance sheet date of claims and liabilities on moneymarket placements denominated in foreign currency.

The balance sheets of fully consolidated companiesexpressed in foreign currency are trans lated into Swissfrancs at the year-end exchange rate, except for share -holders’ equity which is translated at historical rates.

The profit and loss accounts of Group companies aretranslated at yearly average exchange rates.

In the case of foreign companies consolidated usingthe equity method, the year-end market rate isapplied to the Group’s share of equity expressed inforeign currency. The Group’s share of the netincome of these affiliated companies is translated atthe annual average exchange rate.

Translation differences resulting from full conso -lidation and from the equity method are reportedas shareholders’ equity in “Retained earnings”.

The exchange rates used to convert sums in foreigncurrency are as follows:

Transaction bookings

and balance sheet reporting

Since 31 Dec. 2006 the balance sheet and profit andloss statement have been drawn up on the basis ofsettlement dates.

Results of forex and precious

metals transactions

Trading positions in forex and precious metals areevaluated at year-end rates and prices.

Forward positions are estimated at year-end at theforward rate for the remainder of the period. Forexdifferences are recorded in the profit and lossaccount.

Income and expenses expressed in foreign currencyare translated at the market rate prevailing on thetransaction date.

Fixed assets

and financial investments

Fixed assets are stated at cost less depreciation(see Note 8), except for the equity stakes in associatedcompanies consolidated as per the equity method.These are shown under “Non-consolidated holdings”.

Income and expenses

The income and expenses generated by the Groupcompanies are accounted for in the period to whichthey relate.

No substantial intermediate profit arises from onintercompany transactions.

Valuation policies

Personnel welfare liabilities

Contributions are reported as personnel expensesin the profit and loss account for the year to whichthey relate.

Each year the Group determines whether it hasderived any economic benefits or commitments frompersonnel welfare plans for Group staff. If any arefound, they are stated in the balance sheet pursuantto rule 16 of the Swiss accounting principles (GAAP RPC 16). The difference in relation tothe corresponding amount reported the previousyear is included in “Personnel expenses” in the profit and loss account.

This annual study is based on contracts, on financialstatements bearing a closing date no older than12 months and drawn up in accordance with GAAP RPC 16 (in the case of Swiss pension funds)and on any other relevant calculations.

Other balance sheet

and profit and loss items

The accounting principles and valuation policiesconcerning other items are set out in the Notes to the Consolidated Financial Statements.

Valuation policies

71

72

Consolidated balance sheetat 31 December 2008 (in thousands of CHF)

Assets

Cash and other liquid assets

Claims arising from money market paper

Due from banks

Due from customers

Mortgage loans

Total advances to customers

Securities and precious metals trading portfolios

Financial investments

Non-consolidated holdings

Fixed assets

Intangible assets

Accrued income and prepaid expenses

Other assets

Total assets

Subordinated amounts receivable

Due from non-consolidated Group companiesand qualifying shareholders

Notes 2008 2007 Change

(in thousands of CHF) (in %)

18

1, 18

2, 18

3, 18

3, 18

4, 20

5, 18

6, 18

7, 8

8

8

9

8, 19, 21, 22, 23

7, 14

3,904,096

37,519

5,746,762

1,619,008

8,644

1,627,652

78,570

492,275

87,190

194,133

19,040

144,959

657,295

12,989,491

2,985

23

215,001

20,261

8,250,863

1,900,983

7,496

1,908,479

43,902

235,181

89,481

194,692

15,545

150,457

334,270

11,458,132

3,144

555

3,689,095

17,258

(2,504,101)

(281,974)

1,148

(280,826)

34,668

257,094

(2,291)

(560)

3,495

(5,498)

323,025

1,531,359

(159)

(532)

1,715.8

85.2

(30.3)

(14.8)

15.3

(14.7)

79.0

109.3

(2.6)

(0.3)

22.5

(3.7)

96.6

13.4

(5.1)

(95.8)

Consolidated balance sheetat 31 December 2008 (in thousands of CHF)

73

Liabilities

Liabilities arising from money market paper

Due to banks

Due to customers on savings or deposit accounts

Other amounts due to customers

Medium-term bank bonds

Total due to customers

Loans from central mortgage bond institutions

Accrued expenses and deferred income

Other liabilities

Valuation adjustments and provisions

Reserves for general banking risks

Share capital

Additional paid-in capital and other reserves

Retained earnings

Treasury stock

Minority interests in shareholders’ equity

Consolidated net incomeof which: - minority interestsTotal Group capital and reserves

Total liabilities

Subordinated liabilities

Due to non-consolidated holdingsand qualifying shareholders

Off-balance sheet transactions

Contingent liabilities

Irrevocable liabilities

Liabilities for unpaid share capital and additional capital contributions

Guarantee loans

Derivative instruments

Positive replacement values

Negative replacement values

Underlying values

Fiduciary transactions



4, 20, 24, 25

4

4

26

27

460,703

64,148

-

-

602,692

597,502

24,423,355

9,202,710

429,192

93,677

-

-

240,204

229,314

22,052,176

11,383,544

31,512

(29,529)

-

-

362,489

368,188

2,371,179

(2,180,834)

7.3

(31.5)

-

-

150.9

160.6

10.8

(19.2)



18

18

18

11, 18

18

12

13

13

14

15

16

17

19, 21, 23

7, 14

61

440,298

8,488

10,263,162

-

10,271,650

-

237,942

672,162

114,972

222,983

45,000

133,197

662,811

(42,545)

29,945

201,017 23,044

1,252,407

12,989,491

-

41,652

544

815,286

5,135

8,554,505

-

8,559,640

-

279,581

367,997

102,003

205,767

45,000

123,973

706,915

(46,977)

52,001

246,402 37,369

1,333,081

11,458,132

-

47,767

(483)

(374,989)

3,353

1,708,657

-

1,712,010

-

(41,639)

304,165

12,970

17,216

-

9,224

(44,104)

4,432

(22,056)

(45,385)(14,325)(80,675)

1,531,359

-

(6,115)

(88.8)

(46.0)

65.3

20.0

-

20.0

-

(14.9)

82.7

12.7

8.4

-

7.4

(6.2)

(9.4)

(42.4)

(18.4)(38.3)

(6.1)

13.4

-

(12.8)

74

Consolidated profit and loss accountfor the year ended 31 December 2008 (in thousands of CHF)

Interest and discount income

Interest and dividend income on trading portfolios

Interest and dividend income on financial investments

Interest payable

Interest income, net

Commission income on lending activities

Commission income on securitiesand investment transactions

Commission income on other services

Commissions payable

Fee and commission income, net


Proceeds from the sale of financial investments

Income from holdings

of which: - holdings reported usingthe equity method

- other non-consolidated holdingsReal estate income

Other ordinary income

Other ordinary expenses

Other ordinary results

Total operating income

Personnel expenses

Other operating expenses

Total operating expenses

Gross profit

Depreciation of fixed assets

Valuation adjustments, provisions and losses

Result before extraordinary items and taxes

Extraordinary income

Extraordinary expenses

Taxes

Consolidated net incomeof which: - minority interests’ share in consolidated net income



29

29

29

30

31

32

33

34

35

36

8,37

38

39

39

40

41, 42, 43

364,350

828

5,335

259,231

111,283

1,564

569,441

83,410

92,697

561,718

116,524

(3,146)

28,727

7,187 21,540

735

11,259

1,019

36,556

826,080

383,135

125,235

508,371

317,709

32,322

34,113

251,274

22,957

25,843

47,371

201,017 23,044

371,070

911

5,054

270,693

106,342

1,661

607,302

88,772

113,790

583,945

128,870

7,884

30,719

11,557 19,162

743

7,741

172

46,915

866,072

388,197

113,439

501,636

364,436

29,685

19,791

314,960

13,858

20,936

61,480

246,402 37,369

(6,720)

(83)

281

(11,462)

4,941

(97)

(37,861)

(5,362)

(21,093)

(22,227)

(12,346)

(11,030)

(1,992)

(4,370)2,378

(8)

3,518

847

(10,359)

(39,992)

(5,062)

11,796

6,735

(46,727)

2,637

14,322

(63,686)

9,099

4,907

(14,109)

(45,385)(14,325)

(1.8)

(9.1)

5.6

(4.2)

4.6

(5.9)

(6.2)

(6.0)

(18.5)

(3.8)

(9.6)

-

(6.5)

(37.8)12.4 (1.1)

45.4

492.6

(22.1)

(4.6)

(1.3)

10.4

1.3

(12.8)

8.9

72.4

(20.2)

65.7

23.4

(22.9)

(18.4)(38.3)

Consolidated cash flow statementat 31 December 2008 (in thousands of CHF)

75

Consolidated net income





Reserve for general banking risks

Previous year’s dividend

Other changes in reserves and minority interests

Net cash used in/provided by operating activities (results of operations)

Share capital

Additional paid-in capital

Net cash used in/provided by transactions involving shareholder’s equity


Real estate

Other fixed assets

Intangible assets

Exchange rate changes

Net cash used in/provided by transactions involving financial investments and fixed assets



Money market transactions

Due from banks

Due to banks


Banking and trading activities

Due from customers

Mortgage loans

Savings and deposit accounts


Medium-term bank bonds

Transactions with customers

Other assets

Other liabilities

Other balance sheet items



Liquid assets

Net cash used in/provided by banking activities

Total cash flows

2008 2007

Sourceof funds

Applicationof funds

Balance Sourceof funds

Applicationof funds

Balance

201,017

32,322

5,498

-

12,970

17,216

-

269,023

9,224

9,224

1,691

-

-

-

11,191

12,882

-

-

-

2,504,101

-

-

2,504,101

281,974

-

3,353

1,708,657

-

1,993,984

-

304,165

304,165

-

-

-

4,802,250

5,093,378

-

-

-

41,639

-

-

216,000

92,131

349,770

-

-

-

240

32,720

12,888

-

45,848

17,258

483

17,741

-

374,989

257,094

632,083

-

1,148

-

-

-

1,148

323,025

-

323,025

3,689,095

34,668

3,723,763

4,697,760

5,093,378

(80,747 )

(32,966)

(17,741)

1,872,018

1,992,836

(18,860)

(3,723,763)

100,259

246,402

29,685

-

53,792

1,632

18,279

-

349,791

24,448

24,448

-

-

-

-

100

100

5,215

501

5,716

-

84,409

786

85,195

-

-

-

2,684,479

-

2,684,479

-

106,949

106,949

-

-

-

2,882,339

3,256,677

-

-

54,976

-

-

-

81,000

48,664

184,640

-

-

8,123

17,291

20,803

10,584

2,715

59,516

-

-

-

2,533,376

-

-

2,533,376

317,946

2,414

1,635

-

-

321,995

101,950

-

101,950

33,228

21,972

55,200

3,012,521

3,256,677

165,151

(59,416)

5,716

(2,448,181)

2,362,484

4,999

(55,200)

(130,182)

76

Description of operations

and disclosure of staff size

Banque Privée Edmond de Rothschild S.A. is afull-service bank specialising in wealth manage mentfor private and institutional clients. It is a member of SIX Swiss Exchange.

Converted to full-time jobs, the number of staffemployed by the Banque Privée Edmond deRothschild Group stood at 1555 at end-2008 versus 1402 a year earlier.

Through its network of branches and subsidiariesin Switzerland and abroad, the Group conducts onits clients’ behalf all the operations customarilyperformed by private banking institutions. Fee andcommission business on behalf of clients mainlyincludes portfolio management, fiduciary depositsand payment transactions, along with trading insecurities, precious metals and derivative instru -ments. The Group also manages and administersinvestment funds.

In addition, the Group actively deals in debtinstruments, equities, currencies, precious metalsand derivatives on a proprietary basis, but does notengage in commodity trading.

Disclosure of accounting principles

and valuation policies

The general accounting and consolidation principlesare set out under a separate heading.

All assets, liabilities and off-balance sheettransactions reported under the same heading areevaluated item by item.

Description of our risk control and management

system

Risk management

Risk policyBanque Privée Edmond de Rothschild (“the Bank”)and the Banque Privée Edmond de RothschildGroup (“the Group”) specialise in wealthmanagement. In order to satisfy the requirements of our mainly private clientele, we have to be able to offer a broad range of products and services that primarily involve currency and securities tradingand credit. The Group also manages a number ofinvestment funds and provides investment advice.

In line with this business focus and with the existing legal provisions, the Board of Directors hasset the guidelines of the policy covering all the risksto which the Group is exposed. These are chieflycounterparty risk, market risk, operating risk andreputational risk.

Thanks to the resources made available by the Bank’ssenior management, an effective risk managementstructure has been put in place along with the necessarytools. These are suited to the realities of our businessand satisfy the requirements of the Basel II accords.Special efforts are made on an ongoing basis tocoordinate and consolidate information and datafrom our affiliates, in order to be able to analyse andestimate the risks faced by the Group as a whole.

Risk exposureThe Group mainly has to contend with the risksinherent in wealth management, as well as with therisk of default and operating risks.

The Executive Committee is monitoring thefinancial crisis closely. The rout, which originated inthe US subprime implosion and took a dramatic

Notes to the consolidated financial statements

turn in the second half of 2008, is so serious that it has imperilled numerous banks around the world.Some of these could only be saved thanks to state intervention.

Prudent management of the Bank’s proprietarydealing and lending business reduces our exposure to risk. However, considering the general risk that the crisis represents for all financial institutions,the Bank has taken special precautions regarding the choice of counterparties and investments.Increased monitoring has been put in place on anongoing basis, and risks are evaluated regularly by means of stress testing and other scenarios. TheExecutive Committee and the other governingbodies concerned are kept constantly informed on developments.

Counterparty riskThis risk concerns the losses that the Group would suffer in the event of a counterparty default.

The counterparty risk covers credit and othercommit ments in favour of clients, banks andfinancial insti tutions that we deal with, as well as the default risk attaching to securities in the Bank’sinvestment portfolio. The risks inherent in thisexposure are sharply reduced by continuousmonitoring, by rigorous counterparty selection and by the diversified, top-quality collateral werequire under pledge agree ments with clients. Theuse of banking and financial counterparties ismonitored daily, and the limits granted are updatedperiodically or in real time if required by adeteriorating situation.

Market riskThis refers to sudden losses that the Group could incurin its trading portfolio as a result of unforeseeableswings in currency rates or in the prices of securities,precious metals and derivatives.

The market risk can be considered small as the limits granted to traders are low. Another mitigatingfactor has been the setup of an Internal Monitoringdepartment to supervise the business of our tradingrooms continuously. Our Risk Managementdepartment operates separately, evaluating liabilitiesand the limits granted to traders.

Interest rate and liquidity riskThese risks concern the consequences that adversemovements in interest rates would have on the Group’snet worth and net interest margin.

Interest rate risks are gauged using the most up-to-date techniques that focus on the alignment of maturities. To reduce the inherent risks, theGroup strives to match positions perfectly, not only as regards curren cies but also in respect ofinvestments and deposits.

Positions are tracked with software specially designedfor the purpose. In order to optimise returns, theGroup uses appropriate hedging instruments asdictated by interest rate developments.

The Bank’s reserves and cash position exceed theminimum legal requirements by a wide margin. Thissurplus makes it possible for us to maintain an ade -quate level of liquidity even during crisis conditionsin the markets. Reserves and cash are moreovermonitored daily, thereby ensuring minimal risk.

Operating riskThis is the risk of losses the Group would face due toendogenous or exogenous occurrences, such as systemfailure, criminal acts and organisational breakdowns,including damage to our reputation.

Our Group has put a system of operating risk controlsin place that covers our activities and workflow, inline with the Basel II requirements. An Internal


77


78

Monitoring department with clearly specified dutieswas set up. Group employees in charge of trackingand managing operating risks use specially designedsoftware that makes it possible, among other things,to historise and analyse operating mishaps.

The Bank last year made considerable efforts toreinforce data confidentiality security and to improvebusiness continuity planning, which ensures that all the necessary steps have been taken to ensure rapidrecovery of our technical facilities, organisationalstructure and human resources in the event of a disaster.

Outsourcing

Our Group does not outsource services within themeaning of circular 08/7 of Switzerland’s federalmarket regulator FINMA.


79

1 Claims arising from money market paper

Rescriptions and treasury bills

Other bills and money market paper

3 Due from customers

Current account overdrafts

Advances and fixed term loans

Public corporations

Total due from customers

Mortgage loans

Current account overdrafts, advances and fixed term loans and mortgage loans are shown at face value, less any required adjustments.

4 Schedule of collateral (in thousands of CHF)

Loans

Due from customers

Mortgage loans:- residential property- commercial property- industry and crafts- other

Total 2008

2007




Liabilities for unpaid-in capital

Total 2008

2007

(Note 4 cont’d next page)

2008 2007 Change


Total 37,519

37,512

7

37,519

20,261

20,215

46

20,261

85.2

85.6

(84.7)

2 Due from banks

Due from banks

Reverse repos

2008 2007 Change


Total 5,746,762

2,485,014

3,261,748

5,746,762

8,250,863

4,547,762

3,703,101

8,250,863

(30.3)

(45.4)

(11.9)

2008 2007 Change


Total 1,627,652

894,810

716,198

8,000

1,619,008

8,644

1,627,652

1,908,479

1,135,596

757,258

8,129

1,900,983

7,496

1,908,479

(14.7)

(21.2)

(5.4)

(1.6)

(14.8)

15.3

Mortgagecollateral

Othercollateral

Unsecured Total

-

8,644 - - -

8,644

17,450

-

-

-

-

-

1,150,468

- - - -

1,150,468

1,804,932

400,322

57,312

-

457,634

517,786

468,541

- - - -

468,541

86,097

60,381

6,836

-

67,217

5,083

1,619,008

8,644 - - -

1,627,652

1,908,479

460,703

64,148

-

524,851

522,869

80



Debt instrumentsof which: - listedEquity paper

Securities are reported at their fair value on the balance sheet date (securities traded on a recognised Stock Exchange or representative market; if these conditions are not fulfilled, the securities are evaluated at their lowest quoted price); capital gains and losses are recorded under “Results of trading operations”.

Regarding balance sheet reporting of treasury stock, see Note 17.

5

Nonperforming loans (in thousands of CHF) (Note 4 cont’d)

Total 2008

2007

Delinquent claims, i.e. claims for which the borrower is unlikely to honour his future commitments, are evaluated on an individual basis and theresulting depreciation is covered by itemised valuation adjustments. Off-balance sheet transactions, primarily involving contingent liabilities, guarantees andderivative instruments, are also included in this review. A claim is deemed delinquent when there is substantive evidence that future principal and interestpayments due under contract are unlikely to be made or are over 90 days in arrears.

Interest is deemed in arrears when overdue for more than 90 days. Nonperforming loans and overdue interest do not appear in the profit and loss account, butare reported instead in “Valuation adjustments and provisions”.

Financial investments6

Debt instruments

of which: - intended to be held until maturity- reported as per lowest valuation

Equity paperof which: - qualifying equity stakes (min. 10% of capital or votes)Precious metals

of which: - securities eligible for repo agreements under liquidity regulations

Interest-bearing securities that are intended to be held until maturity are evaluated using the accrual method. Capital gains and losses are calculated for theduration of issues, i.e. until their redemption date. Interest-bearing securities that are not intended to be held until maturity appear at their lowest valuation.

When the market value of listed securities is below their acquisition price or when the price of unlisted securities is below the net asset value of the issuingcompany, the difference is charged to “Other ordinary expenses”.

Regarding balance sheet reporting of treasury stock, see Note 17.

Grossvalue

Estimatedproceeds from

sale of collateral

Netvalue

Individualvaluation

adjustments

19,483

12,986

4,090

4,139

15,393

8,846

15,398

8,853

2008 2007 Change


Total 78,570

20,222 20,222 58,347

78,570

43,902

14,489 14,489 29,413

43,902

79.0

39.6

98.4

2008 2007 Change

(in %)

Total 492,275 235,181 109.3

2008 2007

Bookvalue

Fairvalue

Bookvalue

Fairvalue

213,455

152,407 61,048 34,882

- 243,938

492,275

132,898

192,044

145,398 46,646 43,093

- 44

235,181

105,924

216,742

153,521 63,221 38,124

-243,938

498,803

-

190,911

142,237 48,674 56,834

-44

247,789

-


81


Holdings consolidated using the equity method

Non-consolidated majority holdings excluded from consolidation

“Holdings consolidated using the equity method” includes significant interests owned by the Group (20-50% of the relevant company’s share capital).

Differences arising from the first equity consolidation:

- positive, included under “Retained earnings”- negative, shown under “Intangible assets”

Companies consolidated on the balance sheet using the equity method:- La Compagnie Benjamin de Rothschild S.A. - Geneva, owned by:

Banca Privata Edmond de Rothschild Lugano S.A., Lugano (17.34%) and Arbinter-Omnivalor S.A. - Geneva (17.34%) Total share capital CHF 11,534,000.–

- A.C.H. Management S.A., Luxembourg, owned by:Banque Privée Edmond de Rothschild S.A., Geneva (27%), Edmond de Rothschild Limited, London (5%) and Edmond de Rothschild International Funds Ltd, Bermuda (10%) Total share capital USD 87,590

- LCF EdR Nikko Cordial, Japan, owned by:Banque Privée Edmond de Rothschild Europe, Luxembourg (50%)Total share capital JPY 100,000,000

Due from or to holdings consolidated using the equity method:

Due from customers

Adjustments accounts

Other assets

Total assets


Adjustment accounts

Other liabilities

Total liabilities

The other equity stakes are evaluated at their acquisition price less any write-offs to allow for long-term capital losses. Other capital losses are shown in thebalance sheet as “Valuation adjustments and provisions” and in the relevant item of the profit and loss account.

Due from and to majority holdings excluded from consolidation:

Due from banks

Total assets


Total liabilities

7

2008 2007 Change


Total 87,190

41,038

46,152

87,190

89,481

42,208

47,273

89,481

(2.6)

(2.8)

(2.4)

2008 2007 Change


23

-

-

23

21,799

-

-

21,799

38

517

-

555

47,603

40

-

47,643

(95.8)

(54.2)

2008 2007 Change


-

-

-

-

-

-

44

44

-

(100.0)

2008 2007


2,372-

3,980-

82


Schedule of non-current assets (in thousands of CHF)

Holdings consolidated using the equity method

Other holdings


Bank premises

Other buildings

Other fixed assets

Total fixed assets

Goodwill

Other intangible assets

Intangible assets

8

Valeur d’assurance incendie des immeubles à l’usage de la Banque

Valeur d’assurance incendie des autres immeubles

Valeur d’assurance incendie des autres immobilisations corporelles

Engagement : termes de leasing futurs résultant de leasing d’exploitation

Fixed assets

Increases and decreases in the value of holdings consolidated using theequity method are shown under “Investments” and “Divestitures” respectively.

Investments in new fixed assets which are to be used for more than onefinancial year and exceed the balance-sheet reporting threshold are stated attheir purchase value. Investments in existing fixed assets are reported asassets if their market or usage value increases for an extended period or iftheir useful life increases significantly.

Fixed assets are reported in subsequent years at their purchase value lessaccumulated depreciation. They are written down according to a prede -termined schedule throughout their useful life, and the correctness oftheir value is reviewed each year. If this assessment reveals a change in anasset’s projected useful life or a decrease in its actual worth, the residualbook value is either amortised as per the new schedule or written downaccordingly at the end of the reporting period. Planned and additionalunplanned write-downs are stated as expenses under “Depreciation of fixedassets” in the profit and loss account. If the reason for a write-down ceasesto exist, the relevant asset is re-evaluated.

Buildings are depreciated over 66 years.

Other fixed assets are made up of furniture, machines and equipment(including any improvements being carried out on the premises). Thesefixed assets are depreciated over two to five years, depending on theiruseful lives.

Profits on sales of fixed assets are included in “Extraordinary income” andlosses in “Extraordinary expenses”.

Goodwill

If the cost of an acquisition exceeds its net value as assessed according toGroup principles, the difference is considered goodwill and stated as anasset in the balance sheet. The positive differences arising from a company’sfirst-time full consolidation or consolidation at equity are amortised inthe profit and loss account on a straight-line basis.

Other intangible assets

Other intangible assets when acquired are reported in the balance sheet ifit is believed they will provide the Group with economic benefits over anumber of years. Other intangible assets created by the Group itself do notappear at their fair value: following their evaluation, they are reported inthe balance sheet at their purchase price and amortised in the profit andloss account as per their residual value over a period of two to five years.The currency of the residual value is reviewed each year. If this reviewreveals a change in the duration of their useful lives or a decrease in theiractual worth, the Group depreciates the residual book value in accordancewith the new useful life or by means of an unplanned write-down.

Acquisitionvalue at

1 January2008

Accumulateddepreciation at

1 January2008

42,208

47,720

89,928

170,079

13,200

188,923

372,202

66,063

71,645

137,708

-

(447)

(447)

(37,034)

(2,887)

(137,589)

(177,510)

(64,930)

(57,233)

(122,163)

2008 2007

(en milliers de CHF)

150,903

12,605

51,744

-

148,797

12,404

54,048

-

83

Groupvalue at

1 January2008

Forexadjustments

Redesignations Investmentsand newly

consolidatedasssets

Divestituresand assets

no longerconsolidated

Depreciation,including changes

in scope ofconsolidation

Groupvalue at

31 December2008

42,208

47,273

89,481

133,045

10,313

51,334

194,692

1,133

14,412

15,545

431

(1,031)

(600)

(4,868)

-

(4,501)

(9,370)

-

(1,221)

(1,221)

(22)

-

(22)

-

-

-

-

-

-

-

4,066

-

4,066

240

-

32,728

32,968

2,495

10,393

12,888

(5,646)

(89)

(5,735)

-

-

(7)

(7)

-

-

-

-

-

-

(2,593)

(309)

(21,248)

(24,150)

(828)

(7,344)

(8,172)

41,037

46,153

87,190

125,824

10,004

58,305

194,133

2,800

16,240

19,040

84


Other assets

Positive replacement value of derivative instruments

Other

Consolidation difference resulting from the set-offof overall balances between Group companies*

*The method of stating intercompany differences was changed in 2008, with the relevant sums credited directly to balance sheet positions.

9

Assets pledged or assigned to cover own liabilities and assetssubject to reservation of ownership (in thousands of CHF)

Securities pledged to a Stock Exchange to cover settlements

Mortgage notes pledged to cover Bank premises

Other

Assets pledged or assigned to cover own liabilities

Assets subject to reservation of ownership

Total encumbrances covering own liabilities

Securities lending and repurchase agreements

Claims arising from cash pledged as collateral under securities borrowingand reverse repo agreements

Liabilities arising from cash received as collateral under securities lending and repo agreements

Securities held for own account and tendered as collateral under securitiesborrowing and repo agreements

of which: - those which the recipient has been authorised without restrictionto sell or pledge subsequently

Securities received as collateral under securities lending agreements and securities received under borrowing or reverse repo agreements which the Bank has been authorised without restriction to sell or pledge subsequently

of which: - those of the above securities which were sold or pledged

The fees earned or paid as a result of securities lending are reported as per the duration of the loan and appear respectively as interest income or interest charges.Repos and reverse repos are used to finance and refinance the purchase of special kinds of equities. They are stated as loans secured by financial instruments oras deposits secured by shares from the Bank’s treasury stock. They are stated as advances secured by securities or as deposits for which the Bank has pledgedsecurities. The interest income arising from reverse repos and the interest charges arising from repos are reported as per the duration of the relevant transactions.

10

Disclosure of commitments to own pension plans

Commitments to own pension plans (joint and employer foundations alike) are stated under “Other amounts due to customers”.

11

2008 2007 Change


Total 657,295

602,692

54,602

-

657,295

334,270

240,204

69,660

24,406

334,270

96.6

150.9

(21.6)

(100.0)

2008 2007

Book valueof assets

Actualencumbrance

Book valueof assets

Actualencumbrance

31,508

-

8,359

39,867

-

39,867

-

-

-

-

-

-

19,069

-

7,370

26,439

-

26,439

-

-

-

-

-

-

2008 2007

3,261,748

-

-

-

3,290,418

-

3,703,101

-

-

-

3,743,355

-

2008 2007 Change


Total 31,387 20,967 49.7


85

Other liabilities

Negative replacement value of derivative instruments

Escrow

Other

Consolidation difference resulting fromthe set-off of overall balances between Group companies*

*The method of stating intercompany differences was changed in 2008, with the relevant sums charged directly to balance sheet positions.

12

Valuation adjustments and provisionsReserves for general banking risks (in thousands of CHF)

Provision for taxes and deferred taxes

Valuation adjustments and provisionsfor default and other risks:

- valuation adjustments and provisionsfor default risks (credit and country risks)

- valuation adjustments and provisions for other operating risks

- other provisions

Subtotal

Total valuation adjustments and provisions

Less valuation adjustmentsdeducted directly from assets:

of which: - banks- customers- mortgage loans- financial investments- other

Total valuation adjustments andprovisions as per balance sheet


Reflecting the Group’s cautious stance, valuation adjustments and provisions are allocated on an individual basis to all discernible risks of loss.Valuation adjustments and provisions that become economically unnecessary during the course of a financial year are released and reported under the relevantheading in the profit and loss account. Individual valuation adjustments are deducted from the relevant balance sheet items. Deferred taxes mainly relate totemporary changes in reserves for general banking risks. They are calculated based on the average tax rate foreseen at the time the balance sheet is drawn up.Reserves for general banking risks form part of consolidated shareholders’ equity. The portion accruing to the Group minority shareholders is deducted fromthese reserves.

13

2008 2007 Change


Total 672,162

597,502

-

74,660

-

672,162

367,997

229,314

85,109

49,895

3,679

367,997

82.7

160.6

(100.0)

49.6

(100.0)

Situation atend-2007

Uses andreleases asdesignated

Recoveries,interests

at risk andforex

differences

Newprovisionscharged to

profit andloss account

Releasesreported in



52,404

12,359

-

48,107

60,466

112,870

10,867

- 8,853

- 2,014

-

102,003

205,767

-

(49)

-

(6,428)

(6,477)

(6,477)

147

(1,150)

1,051

-

(1,873)

(821)

(1,972)

-

2,660

5,706

-

25,510

31,215

33,875

19,446

(666)

(130)

-

(5,906)

(6,036)

(6,702)

(2,378)

53,247

18,937

-

59,410

78,347

131,594

16,622

- 15,398

- 1,224

-

114,972

222,983

86


Share capital

200,000 fully paid registered shares with a par value of CHF 100.–

50,000 fully paid bearer shares with a par value of CHF 500.–

For treasury stock, see Note 17.

Amounts due to and from LCF Holding Benjamin et Edmond de Rothschild S.A.,the only shareholder with a qualifying interest in the parent company:

Due from customers

Total claims


Total liabilities

14

Retained earnings and other reserves

Retained earnings

Passive difference from consolidation and equity consolidation

Accrued currency translation differences

15

Minority interests in shareholders’ equity

Minority interests’ share in reserves for general banking risks

Minority shareholders’ share in retained earnings

Minority shareholders’ share in accrued currency translation differences

16

2008 2007 Change


Total 45,000

20,000

25,000

45,000

-

-

19,853

19,853

45,000

20,000

25,000

45,000

-

-

80

80

-

-

-

-

-

2008 2007 Change


Total 662,811

675,958

9,295

(22,442)

662,811

706,915

687,215

8,841

10,859

706,915

(6.2)

(1.6)

5.1

(306.7)

2008 2007 Change


Total 29,945

-

36,968

(7,023)

29,945

52,001

147

50,899

955

52,001

(42.4)

(100.0)

(27.4)

(835.4)


87

Statement of changes in shareholders’ equity

Share capital at beginning of year

Change

Share capital at year-end

Additional paid-in capital at beginning of year

Proceeds from sales of treasury stock

Change in treasury stock

Reclassification of treasury stock

Additional paid-in capital at year-end

Retained earnings at beginning of year

Group net income from previous year

Less minority interests’ share in net income of previous year

Dividend

Reclassification of treasury stock

Effect of changes in scope of consolidation and/or equity consolidation

Change due to allocations to/releases from reserves

Effect of accrued currency translation adjustments

Depreciation of negative balances arising from first consolidation,equity consolidation and/or other factors

Net change during the reporting year

Retained earnings at year-end

Reserves for general banking risks at beginning of year

Change due to allocations to/releases from reserves

Minority interests’ share in change in reserves for general banking risks


Reserves for general banking risks at year-end

Minority interests’ share in shareholders’ equity at beginning of year

Share in net income of previous period

Dividends

Effect of changes in scope of consolidation

Effect of accrued currency translation adjustments

Share in change in reserves for general banking risks

Other factors


Minority interests’ share in shareholders’ equity at year-end

Group net income for the period (including minority interests’ share)

Treasury stock

Total Group shareholders’ equity at year-end

The minority shareholders are considered as providers of funds to the Group. As a consequence, their interest is treated as Group equity.Similarly, net income attribuable to minority interests is included in consolidated net income.


17

2008 2007


45,000

-

45,000

123,973

13,656

(4,432)

-

133,197

706,915

246,402

(37,369)

(216,000)

-

(3,344)

5,582

(33,301)

(6,075)

(44,105)

662,811

205,767

17,069

147

17,216

222,983

52,001

37,369

(35,960)

(11,709)

(7,978)

(147)

(3,631)

(22,056)

29,945

201,017

(42,545)

1,252,407

45,000

-

45,000

99,525

13,125

11,323

-

123,973

635,308

192,664

(31,936)

(81,000)

-

(859)

(10,067)

1,955

850

71,607

706,915

187,488

18,300

(21)

18,279

205,767

49,285

31,936

(32,533)

(2,068)

951

147

4,283

2,716

52,001

246,402

(46,977)

1,333,081

88


Maturity profile of current assets, financial investments and borrowed funds (in thousands of CHF)

Current assets



Due from banks

Due from customers

Mortgage loans

Securities and precious metalsheld for trading purposes

Total 2008

2007


Total 2008

2007

Borrowed funds

Liabilities arising frommoney market paper

Due to banks

Due to customers on savingsor deposit accounts


Total 2008

2007

18

Own shares deducted from shareholders’ equity

Treasury stock included in securities and precious metals trading portfolio (Note 17 cont’d)

- number of own shares at 1 Jan. 2007- number of shares purchased during the reporting year- number of shares sold during the reporting year

- number of own shares at 31 Dec. 2007

Treasury stock reported as financial investments

- number of own shares at 1 Jan. 2007- number of shares purchased during the reporting year- number of shares sold during the reporting year

- number of own shares at 31 Dec. 2007

2008 2007

(number of shares)

92 553

(530)

115

2,250 1,000

(1,500)

1,750

136 504

(548)

92

2,250 500

(500)

2,250

On demand Callable Within3 months

In 3 to 12 months

In 12 monthsto 5 years

After5 years

Total

3,904,096

31,515

552,129

1,263,275

-

78,570

5,829,585

2,457,265

288,231

288,231

47,767

46

313,150

5,554

7,643,397

7,962,148

5,008,508

-

-

72,765

-

8,644

-

81,409

68,871

-

-

-

15

-

2,934

-

2,949

1,860

-

5,867

5,005,972

212,627

-

-

5,224,466

7,532,422

15,676

15,676

18,255

-

127,147

-

2,502,669

2,629,816

4,307,141

-

137

115,896

77,524

-

-

193,557

289,251

43,014

43,014

31,293

-

-

-

112,196

112,196

53,030

-

-

-

48,859

-

-

48,859

60,237

137,237

137,237

131,011

-

-

-

-

-

-

-

-

-

16,724

-

-

16,724

30,460

8,118

8,118

6,855

-

-

-

4,901

4,901

4,931

3,904,096

37,519

5,746,762

1,619,008

8,644

78,570

11,394,600

10,438,506

492,275

492,275

235,181

61

440,298

8,488

10,263,163

10,712,009

9,375,470


89

Due from and to affiliated companies

Due from banks

Due from customers

Adjustment accounts

Other assets

Total claims

Due to banks


Adjustment accounts

Other liabilities

Total commitments

Affiliated companies include the majority holdings of LCF Holding Benjamin et Edmond de Rothschild S.A., which are not part of the Banque Privée Edmondde Rothschild Group, Geneva.

19

2008 2007 Change


253,212

1,440

1,433

-

256,085

989

1,842

748

417

3,996

29,693

16

4,788

4,318

38,815

956

5,371

28

7,909

14,264

559.8

(72.0)

90


Loans granted to the governing bodies of the BankGuarantee commitments on behalf of the governing bodies of the BankRemuneration paid to the governing bodies of the Bank

Loans granted to the governing bodies: (in thousands of CHF)

- to members of boards of directors- to members of executive committees- to internal auditors- to independent auditors

Total

Guarantee commitments on behalf of:(in thousands of CHF)

- members of boards of directors- members of executive committees- internal auditors- independent auditors

Total

20

2008 2007

LoansNumber

of members LoansNumber

of members

2,449 4,193

- -

6,642

4 6 - -

10

1,904 5,510

- -

7,414

3 9 - -

12

2008 2007

CommitmentsNumber

of members CommitmentsNumber

of members

301 580

33 -

914

5 8 7 -

20

333 687

27 -

1,047

6 8 5 -

19


91

Breakdown of Swiss and foreign assets and liabilities (in thousands of CHF)

Assets



Due from banks

Due from customers

Mortgage loans

Securities and precious metals held for trading purposes



Fixed assets

Intangible assets


Other assets

Total assets

Liabilities


Due to banks

Customer savings and deposit accounts



Other liabilities



Share capital


Retained earnings

Treasury stock

Minority interests’ share in shareholders’ equity


Total liabilities

The breakdown of Swiss and foreign origin is based on the location of the registered office of the debtor, creditor or the body issuing the shares or debt instruments.In the case of mortgage-backed securities, guarantees and liens, the place of the security interest applies.

21

2008 2007

Swiss Foreign Total Swiss Foreign Total

1,087,729

4,960

596,954

73,667

8,644

1,010

362,429

76,670

103,942

7,504

24,087

451,366

2,798,963

61

37,575

5,542

1,402,144

90,690

346,930

89,764

174,933

45,000

132,266

474,933

(42,545)

28

49,311

2,806,632

2,816,367

32,559

5,149,808

1,545,342

-

77,559

129,846

10,520

90,191

11,536

120,872

205,929

10,190,528

-

402,723

2,946

8,861,018

147,252

325,232

25,208

48,050

-

931

187,878

-

29,917

151,706

10,182,860

3,904,096

37,519

5,746,762

1,619,008

8,644

78,570

492,275

87,190

194,133

19,040

144,959

657,295

12,989,491

61

440,298

8,488

10,263,162

237,942

672,162

114,972

222,983

45,000

133,197

662,811

(42,545)

29,945

201,017

12,989,491

60,285

10

1,751,802

108,053

7,496

1,061

97,176

73,063

100,915

5,332

21,970

262,192

2,489,355

544

29,326

3,811

1,523,972

95,860

92,820

76,932

167,800

45,000

123,042

504,650

(46,977)

10,433

50,678

2,677,892

154,716

20,251

6,499,061

1,792,930

-

42,841

138,005

16,418

93,777

10,213

128,487

72,078

8,968,777

-

785,960

1,324

7,030,533

183,721

275,177

25,071

37,967

-

931

202,265

-

41,568

195,724

8,780,240

215,001

20,261

8,250,863

1,900,983

7,496

43,902

235,181

89,481

194,692

15,545

150,457

334,270

11,458,132

544

815,286

5,135

8,554,505

279,581

367,997

102,003

205,767

45,000

123,973

706,915

(46,977)

52,001

246,402

11,458,132

92


Breakdown of consolidated assets by country/country group (in thousands of CHF)

Assets

Switzerland

Europe excluding Switzerland

North America

South America

Asia / Pacific

Caribbean

Africa Middle East

Total assets

22

2008 2007

Actual value % share Actual value % share

2,798,963

9,390,016

226,376

78,810

57,281

407,794

30,250

12,989,491

21.5

72.3

1.7

0.6

0.4

3.1

0.2

100.0

2,489,355

8,170,513

226,376

78,810

57,301

405,527

30,250

11,458,132

21.7

71.3

2.0

0.7

0.5

3.5

0.3

100.0


93

Breakdown of consolidated assets and liabilities by currency (in thousands of CHF)

Assets



Due from banks

Due from customers

Mortgage loans




Fixed assets

Intangible assets


Other assets

Total positions reported as assets

Delivery claims arising from spot,forward and options transactions

Total assets 2008

Total assets 2007

Liabilities


Due to banks

Customer savings and deposit accounts



Other liabilities



Share capital


Retained earnings

Treasury stock

Minority interests’ share in shareholders’ equity


Total positions reported as liabilities

Delivery commitments arising from spot,forward and options transactions

Total liabilities 2008

Net position per currency

Total liabilities 2007

23

CHF USD EURO Other Total

1,086,544

4,960

225,709

84,067

8,050

5,081

204,687

77,071

111,925

7,525

6,637

424,677

2,246,933

2,089,277

4,336,209

3,037,473

61

6,203

8,476

926,225

89,325

353,847

90,669

174,933

45,000

132,266

495,194

(42,545)

33

48,350

2,328,038

2,007,921

4,335,958

251

2,967,320

292

2,118

2,809,434

602,220

-

20,951

14,371

1,681

505

3

6,260

128

3,457,961

10,610,432

14,068,394

12,590,681

-

289,695

-

3,108,549

3,248

283

282

-

-

-

3,162

-

1,314

3,336

3,409,868

10,631,447

14,041,315

27,079

12,559,893

2,817,132

30,433

2,377,050

854,843

594

32,490

29,160

7,971

81,365

11,435

130,152

232,342

6,604,968

10,211,580

16,816,547

15,480,447

-

109,814

12

5,627,596

125,382

317,367

24,021

48,050

-

931

128,796

-

20,911

141,489

6,544,368

10,257,097

16,801,465

15,082

15,567,662

128

8

334,569

77,878

-

20,048

244,058

467

338

76

1,910

148

679,629

1,289,448

1,969,078

2,544,330

-

34,586

-

600,792

19,987

665

-

-

-

-

35,659

-

7,686

7,842

707,217

1,304,272

2,011,489

(42,412)

2,558,056

3,904,096

37,519

5,746,762

1,619,008

8,644

78,570

492,275

87,190

194,133

19,040

144,959

657,295

12,989,491

24,200,737

37,190,228

33,652,931

61

440,298

8,488

10,263,162

237,941

672,162

114,972

222,983

45,000

133,197

662,811

(42,545)

29,945

201,017

12,989,491

24,200,737

37,190,228

-

33,652,931

94



Irrevocable guarantees in the form of avals, sureties and guarantees (including guarantee commitments under irrevocable letters of credit), advance payment guarantees and endorsement obligations from rediscounting

Performance bonds, bid bonds, letters of indemnity and other service guarantees(including service guarantees in the form of irrevocable letters of credit)

For guarantee commitments made on behalf of the Bank’s governing bodies, see Note 20.These commitments are reported in “Off-balance sheet transactions” at their face value. Foreseeable risks are provisioned on the liabilities side of the balance sheet.

24

Guarantee commitments for third parties

Surety bonds

Guarantees

25

2008 2007 Change


Total 460,703

408,813

51,890

460,703

429,192

392,021

37,171

429,192

7.3

4.3

39.6

2008 2007 Change


Total 460,703

3,167

457,536

460,703

429,192

3,032

426,160

429,192

7.3

4.5

7.4


95

Open interest in derivative instruments (in thousands of CHF)

Interest rate products

Forward contracts including FRAs

Swaps

Futures

OTC options

Traded options

Forex products / Precious metals

Forward contracts

Combined interest and currency swaps

Futures

OTC options

Traded options

Equity index products

Forward contracts

Futures

OTC options

Traded options

Other

Forward contracts

Futures

OTC options

Traded options

Total before impact of netting agreements

2008

2007

Total after impact of netting agreements

2008

2007

Derivative instruments are reported at their fair value. The positive and negative replacement values represent the Bank’s claims and obligations respectively,should the Bank enter into contracts identical to the intial ones with other counterparties. The positive and negative replacement values are shown in the balancesheet under “Other assets” and “Other liabilities” respectively, and in the profit and loss account under “Results of trading operations”. The fair value is eitherthe market price (if the instrument is traded on an efficient, liquid market), the price quoted by market makers or the price determined using valuation models.The underlying value represents the net claim arising from trading in derivative instruments for own account or on behalf of customers (contract value).


26

Trading instruments Hedging instruments

Positivereplacement

values

Negativereplacement

values

Underlying values

Positivereplacement

values

Negativereplacement

values

Underlying values

-

1,703

-

-

-

596,596

-

-

1,824

-

-

-

2,569

-

-

-

-

-

602,692

240,204

50

886

-

-

-

592,173

-

-

1,824

-

-

-

2,569

-

-

-

-

-

597,502

229,314

21,339

104,156

-

-

-

24,111,902

-

-

147,347

-

-

-

38,611

-

-

-

-

-

24,423,355

22,052,176

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Positive replacementvalues (accumulated)

Negative replacementvalues (accumulated)

602,692

240,204

597,502

229,314

96


Open interest in derivative instruments (in thousands of CHF) (Note 26 cont’d)

Banks and derivatives exchanges

- expiring in less than 1 year- expiring in more than 1 year

Brokers

Secured customers

Unsecured customers

Total


Fiduciary deposits with other banks

Fiduciary loans

27

Assets under management

Assets invested in funds managed by the Bank

Assets under discretionary management

Other assets

Total assets under management (incl. double reporting)

of which: - double reportingnet deposits/withdrawals of fresh money

Net entries/exits of fresh client funds includes account openings and closures as well as deposits and withdrawals by existing clients. Changes in assets due toperformance (e.g. price variations, payments of interest and dividends and bank charges) are not considered as deposits/withdrawals.

28


Due from banksof which: - reverse repo interest Claims arising from money market paper




29

2008 2007

Positivereplacement

values

Negativereplacement

values

Underlyingvalues

Positivereplacement

values

Negativereplacement

values

Underlyingvalues

432,911 -

-

169,782

-

602,692

334,837 -

-

262,665

-

597,502

14,355,389 -

-

10,067,966

-

24,423,355

211,564 -

-

28,640

-

240,204

91,648 -

-

137,666

-

229,314

12,491,430 -

-

9,560,746

-

22,052,176

2008 2007 Change


Total 9,202,710

9,024,815

177,895

9,202,710

11,383,544

11,203,053

180,491

11,383,544

(19.2)

(19.4)

(1.4)

2008 2007 Change


Total 364,350

296,062 139,591

1,123

67,165

364,350

828

5,335

371,070

297,017 141,129

848

73,205

371,070

911

5,054

(1.8)

(0.3)(1.1)32.4

(8.3)

(9.1)

5.6

2008 2007 Change


13,637,522

18,309,677

50,349,393

82,296,592

8,449,1635,398,259

12,572,318

23,162,980

64,532,224

100,267,522

10,938,940 10,249,278

8.5

(21.0)

(22.0)

(17.9)

(22.8)(47.3)


97

Interest payable

To banks

On customer deposits

30

Commission income on other service operations

Commissions on other services consist of administration fees charged to customers and commissions for safe rentals, money transfers, cheques and otherservices.

32


Securities trading (including equity product and index derivatives)

Forex trading (including forex derivatives)

Precious metals (including precious metals derivatives)

Income and expenses arising from trading portfolios – profits and losses on trades, along with interest and dividends – are included in “Results of tradingoperations”. The Group does not debit portfolio refinancing costs to these results. Results of securities lending and borrowing appear in “Interest income, net”.

33


This heading mainly covers fees received, coupon collection income and VAT refunds.

34

Commission income on securities and investment transactions

This heading covers brokerage fees, custody fees, management fees, advisory fees and commissions on investment activities (fiduciary loans and deposits, gold,currency options, futures, investment trusts, securities transfers and new issues).

31

2008 2007 Change


Total 259,231

46,087

213,143

259,231

270,693

74,878

195,815

270,693

(4.2)

(38.4)

8.8

2008 2007 Change


Total 569,441 607,302 (6.2)

2008 2007 Change


Total 83,410 88,772 (6.0)

2008 2007 Change


Total 116,524

47,791

67,961

772

116,524

128,870

72,117

56,343

410

128,870

(9.6)

(33.7)

20.6

88.3

2008 2007 Change


Total 11,259 7,741 45.4

98


Personnel expenses

Salaries

Employee benefits:- statutory social security- contributions to pension funds

Other personnel expenses

“Salaries” covers the payroll of permanent and temporary staff, plus bonuses, fees paid to directors and supplementary allowances.

Personnel welfare plansThe staff of the parent company and of some affiliates are insured by the Personnel Welfare Foundation for the Staff of Banque Privée Edmond de Rothschild S.A.and Allied Companies (the “Joint Foundation”). Its purpose is to protect the staff of its member companies from the economic consequences of old age,disability and death. The Joint Foundation is semi-autonomous and operates on the basis of actual contributions (the “primacy of contributions” principle).Contribution rates increase with age. Employers pay in two-thirds of contributions and employees one-third. Death and disability coverage is financed by theEmployers’ Personnel Welfare Foundation for the Staff of Banque Privée Edmond de Rothschild S.A. and Allied Companies (the “Employers’ Foundation”).Administrative overheads are covered by member employers. Employees are jointly liable in full within the Joint Foundation.The Foundation’s latest audited financial statements showed a funding ratio of 116.2% at 31 Dec. 2007 (as against 111.9% at 31 Dec. 2006). Since theFoundation’s reserves for fluctuations in value did not reach the regulatory ceiling, there was no funding ratio surplus as defined in rule RPC 16 of theaccounting principles (Swiss GAAP).Due to the extreme severity of the financial crisis, however, the Foundation’s capital account has been considerably affected. The Foundation Board believes thatthe funding ratio of the Foundation’s liabilities will be less than 100% at 31 Dec. 2008. Accordingly, the Foundation Board resolved to pay only 1.5% interest oncapital savings accounts for 2008. It further decided not to adjust pensions and not to allow capital withdrawals for the purpose of paying down existingmortgages until the shortfall in the funding ratio has been covered. It deems these measures adequate at this stage, given the estimated limited extent ofunderfunding at 31 Dec. 2008.The Board of Directors believes that any funding ratio surplus as defined in RPC 16 of the Swiss GAAP will be used for the benefit of employees and that, as aconsequence, no profit will arise for the member companies.The member companies whose staff are insured by the Joint Foundation also pay into the Employers’ Foundation. The purpose of the Employers’ Foundationis, for example, to provide additional benefits or relief allowances at its discretion. Such benefits are financed by the member companies’ voluntary contributions.The employers are jointly liable in full within the Employers’ Foundation.The Employers’ Foundation’s latest audited financial statements showed a funding ratio of 891.5% at 31 Dec. 2007 (as against 760.0% at 31 Dec. 2006). TheBoard of Directors believes that this surplus will be used for the benefit of employees and that, as a consequence, no profit will arise for the member companies.Despite the severity of the financial crisis, the Foundation was able to maintain a high funding ratio at 31 Dec. 2008.The employees of other Group entities belong to personnel welfare funds that also operate on the primacy of contributions principle.At 31 Dec. 2008 there was no employer contributions reserve.

Economic benefits /commitments and personnelwelfare expenses

Employers’ funds / employers’personal welfare institutions

Personnel welfare institutionswith a surplus funding ratio

Personnel welfare institutionswith no proprietary assets

Total


35

2008 2007 Change


Total 383,135

316,915

23,109 25,738

17,374

383,135

388,197

323,336

24,223 23,788

16,850

388,197

(1.3)

(2.0)

(4.6)8.2

3.1

2007funding

surplus / deficit

Entity’s share Change v.previous year

Period-adjusted

contributions

Personnel welfare costsincluded in personnel expenses

2007 2006 2007 2006

15,573

42,319

-

57,892

-

-

-

-

-

-

-

-

-

-

-

-

3,745

14,018

6,025

23,788

3,745

14,018

6,025

23,788

3,420

9,057

9,070

21,547


99


Cost of premises

Equipment costs:- IT systems- machines- furniture- vehicles- other equipment

Other operating expenses:- office supplies- communications costs- professional fees and other expenses

36

Depreciation of non-current assets

Fixed assets:- land and buildings- office furniture, machines and equipment

Intangible assets

In the case of non-consolidated holdings shown at cost, only provisions for permanent capital depreciation are shown under this heading; see Note 7.Depreciation of fixed assets is set out in Note 8.

37

Group personnel(number of employees) (Note 35 cont’d)

Average number of employees

Total number of employeesat year-end

Number of employeesat year-end, converted intofull-time jobs

2008 2007

CH EU Other country Total CH EU Other country Total

607

636

623

875

913

896

35

38

36

1,517

1,587

1,555

563

582

560

781

822

810

31

34

32

1,375

1,438

1,402

2008 2007 Change


Total 125,235

19,546

20,866 624

2,541 516

-

8,606 20,732 57,105

125,236

113,439

15,368

18,302 757

1,456 405

-

7,694 20,148 49,309

113,439

10.4

27.2

14.0 (17.6)

74.5 27.5

-

11.9 2.9 5.1

2008 2007 Change


Total 32,322

2,902 21,248

8,172

32,322

29,685

2,704 17,141

9,840

29,685

8.9

7.3 24.0

(16.9)

100




Losses

The breakdown of funds allocated to valuation adjustments and provisions is shown in Note 13.

38

Extraordinary income and expenses



“Extraordinary income” mainly includes a release of other provisions no longer required for operating purposes. “Extraordinary expenses” mainly includes an allocation of CHF 23.9 million to reserves for general banking risks.

39

Taxes

Current taxes

Deferred taxes

Corporate taxes are calculated on the basis of the financial statements of each individual Group company and charged to the accounting periodin which they were incurred. Tax provisions are set out in Note 13.

40


The share of minority interests in net income is incorporated in consolidated net income based on the Group unity principle explained in Note 17.

41

Earnings per share

Group earnings after deduction of portion due to minority interests (in thousands of CHF)

Weighted average of number of shares outstanding

Bearer shares (par value CHF 500.–)

Registered shares (par value CHF 100.–)

Weighted average of number of shares used to calculate earnings per share (with a par value of CHF 500.–)after deducting own shares held by the Bank (Treasury stock)

Earnings per bearer share (in CHF)

Earnings per registered share (in CHF)

42

2008 2007 Change


22,957

25,843

13,858

20,936

65.7

23.4

2008 2007 Change


Total 34,113

26,753

7,359

34,113

19,791

16,828

2,963

19,791

72.4

59.0

148.4

2008 2007 Change


Total 47,371

45,377

1994

47,371

61,480

59,252

2,228

61,480

(22.9)

(23.4)

(10.5)

2008 2007 Change


Total 201,017 246,402 (18.4)

2008 2007

177,973

50,000

200,000

88,135

2,019.32

403.86

209,033

50,000

200,000

87,658

2,384.64

476.93


101

Breakdown of Group results by Swiss and foreign origin (in thousands of CHF)


Interest and dividend incomeon trading portfolios

Interest and dividend incomeon financial investments

Interest payable



Commission income on tradingoperations and investments


Commissions payable




Total income from holdings

Real estate income




Personnel expenses


Operating expenses

Gross profit






Taxes


This breakdown of results by Swiss and foreign origin is based on the location of business operations.

43

2008 2007

Swiss Foreign Total Swiss Foreign Total

45,902

40

4,223

9,766

40,399

1,116

269,266

25,422

56,096

239,708

38,817

(521)

22,855

735

9,222

1,013

31,278

181,315

53,240

234,555

115,647

17,144

23,398

75,105

10,397

12,937

23,255

49,311

318,448

788

1,112

249,465

70,884

448

300,175

57,988

36,601

322,010

77,707

(2,625)

5,872

-

2,037

6

5,277

201,820

71,996

273,815

202,062

15,178

10,715

176,169

12,560

12,906

24,116

151,706

364,350

828

5,335

259,231

111,283

1,564

569,441

83,410

92,697

561,718

116,524

(3,146)

28,727

735

11,259

1,019

36,556

383,135

125,236

508,370

317,709

32,322

34,113

251,273

22,957

25,843

47,371

201,017

44,199

82

3,836

13,168

34,949

1,182

255,904

23,359

54,151

226,294

34,990

849

20,541

705

7,511

136

29,470

166,037

47,452

213,489

112,214

13,728

14,711

83,775

7,562

12,559

28,100

50,678

326,871

829

1,218

257,525

71,393

479

351,398

65,413

59,639

357,651

93,880

7,035

10,177

38

230

36

17,444

222,160

65,987

288,147

252,221

15,957

5,080

231,184

6,296

8,377

33,380

195,724

371,070

911

5,054

270,693

106,342

1,661

607,302

88,772

113,790

583,945

128,870

7,884

30,719

743

7,741

172

46,915

388,197

113,439

501,636

364,436

29,685

19,791

314,960

13,858

20,936

61,480

246,402

102

Financial reportBanque Privée Edmond de Rothschild S.A., Geneva

106 Key figures

107 Report of the Directors

112 Report of the Independent Auditors on the parent company financial statements

114 Balance sheet before profit appropriation

116 Profit and loss account

117 Notes to the financial statements

130 Addresses

Environment

While Africa is considered the cradle of mankind, it is our imprint that over the centuries has disturbedthe delicate balance between people and nature. Food, water, climate, culture, biodiversity–all areinterdependent. The slightest upset can unleash epidemics or plunge entire regions into poverty and distress.The preservation of ecosystems has a direct impact on human health and on the survival of species.That is the message conveyed by the establishment of Peace Parks, which are designed to restore life’snatural ways. Like freely evolving fauna and flora, traditional cultures here have the chance to flourishbeyond national boundaries. Such crucibles of ecology are rare. Peace Parks stand as a serendipitouslegacy of Africa’s natural splendour. They teem with animal and plant life found nowhere else in the world.The fate of our planet is linked closely to that of our imperilled African homeland. Rebuilding anintricate balance between fauna, flora and people is an urgent duty.

Respect for the environment is an abiding concern in the LCF Rothschild Group’sfarming, wine-making and hotel-keeping interests, which in France, South Africa andArgentina combine age-old arts and ultra-modern techniques.In 2008, our wineries and dairy farm continued to retool in a green way by reducingtheir carbon imprint, harnessing methane, purifying waste water, saving energy andrecycling organic matter.

2008 2007 Change

(in CHF) (in %)

1,299,505

480,973

247,775

2,350,810

536,931

4,106,037

31,672

187,165

31,535

207,057

159,323

513

31.2

4.7

108,000

240

2,173,000

1,770

1,200

26,500

4.5

1,432,461

418,764

483,696

929,637

484,459

2,620,327

37,313

179,411

34,246

183,160

162,350

457

31.8

7.0

216,000

480

3,567,000

1,804

2,400

43,500

5.5

(132,956)

62,209

(235,921)

1,421,173

52,472

1,485,710

(5,641)

7,754

(2,711)

23,897

(3,027)

56

-

-

(108,000)

(240)

(1,394,000)

(34)

(1,200)

(17,000)

-

(9.3)

14.9

(48.8)

152.9

10.8

56.7

(15.1)

4.3

(7.9)

13.0

(1.9)

12.3

-

-

(50.0)

(50.0)

(39.1)

(1.9)

(50.0)

(39.1)

-

Key figuresof Banque Privée Edmond de Rothschild S.A., Geneva

Balance sheet (in thousands of CHF)

Due from banks


Due to banks

Customer deposits

Shareholders’ equity (after appropriation)

Balance sheet total

Profit and loss account (in thousands of CHF)




Operating expenses (personnel costs and overheads)

Net income

Staff (number of employees)

Number of employees at year-end (converted into full-time jobs)

Profitability (%)

Return on equity- net profit /average shareholders’ equity after profit appropriation

Return on assets- net profit /average assets

Shares

Dividend (in thousands of CHF)

Dividend (% of share capital)

Stock market capitalisation (in thousands of CHF)

Data per bearer share:

- net income per share (CHF)

- dividend (CHF)

- quoted price at 31.12 (CHF)

- gross yield (%)

The Bank’s registered shares are reported at their 31 Dec. 2008 value less 20%.

106

Balance sheet review

At 31 Dec. 2008 the balance sheet total stood at CHF 4.1 billion, up sharply by CHF 1.5 billion comparedwith the year-earlier figure.

This increase was due to the financial crisis and stock -market rout that prompted clients to sell investmentsand move into more liquid asset classes. In order toensure maximum security, the Bank deposited fundswith counterparties under existing reverse repoagreements and made sight deposits directly with theSwiss National Bank.

On the assets side, cash and claims arising frommoney market paper totalled CHF 1.0 billion, up byCHF 949 million on the 2007 level.

Funds due from banks fell by CHF 133 million to CHF 1.3 billion, including CHF 719.1 million held with correspondents under reverse repoagreements.

Cash, bank deposits and money market claimstogether came to CHF 2.3 billion, as against CHF 1.5billion the previous year, and accounted for 56.7% of the balance sheet total.

Loans to customers amounted to CHF 481 million,or 15% more than at end-2007. They represented11.7% of the balance sheet total.

Securities and precious metals held for tradingpurposes totalled CHF 22.6 million, up slightly on the previous year’s level.

Financial investments totalled CHF 350.6 million, upCHF 243 million on the year-earlier figure. Most ofthis rise was attributable to the stock of preciousmetals used to cover our clients’ metal accounts.

Holdings amounted to CHF 269.2 million, up CHF 32.5 million on the 2007 level. The increasestemmed primarily from the purchase of theremaining share capital of Arbinter-Omnivalor S.A.,which we now fully control. On 1 March 2009 thissubsidiary was merged with Banque Privée Edmondde Rothschild S.A. retroactive to 1 Jan. 2009.

Fixed assets came to CHF 83.4 million, comparedwith CHF 79.5 million at end-Dec. 2007.

Other assets amounted to CHF 551.5 million, up by CHF 330.4 million on the 2007 total. The increasewas mainly attributable to the higher replacementvalue of open forward currency contracts. This itemis counter balanced by the corresponding increase in negative replacement values included in “Other liabilities”.

On the liabilities side, funds due to banks declinedsharply to CHF 247.8 million, chiefly reflecting cash management at the Group level.

At 31 Dec. 2008 customer deposits totalled CHF 2.4 billion, as against CHF 930 million a yearearlier, and accounted for 57.3% of the balance sheet total.

At CHF 578.1 million, other liabilities were up as a result of the higher replacement value of openforward currency contracts at the end of thereporting period.

Valuation adjustments and provisions grew by CHF 15.1 million to CHF 153.7 million, mainly owingto the increase in “Other provisions”.

Following appropriation of net income, share -holders’ equity will amount to CHF 536.9 million, or 13.1% of the balance sheet total. On that basisreturn on equity at end-2008 worked out to 31.2%,

Report of the Directorsto the shareholders of Banque Privée Edmond de Rothschild S.A.

at the ordinary general meeting on 28 April 2009

107

compared with 31.8% the previous year. Applyingthe BIS rules under Basel II, required shareholders’equity totalled CHF 134.5 million while eligiblecapital came to CHF 401.5 million. The BIS ratiostood at 23.8%.

Roundup of results

The Bank’s net profit at 31 Dec. 2008 totalled CHF 159.3 million, marking a slight drop of 1.9%compared with the year-earlier figure of CHF

162.3 million.

RevenueInterest income declined 15.1% versus the 2007 levelto CHF 31.7 million. This reflected lower moneymarket interest rates.

Income from fees and commissions amounted to CHF 187.2 million, compared with CHF 179.4 millionin 2007.

Results of trading operations came to CHF 31.5 million,versus CHF 34.2 million the previous year. Thedecrease was mainly attributable to the results ofsecurities transactions, which were partially counter -balanced by an increase in profit on currency trading.

Other ordinary results grew by 17% to CHF 171.3million, thanks in particular to the higher dividendscollected on our long-term holdings and, to a lesserextent, to sales of financial investments.

ExpensesOperating expenses totalled CHF 207.1 million,marking a 13% increase on the 2007 level. Personnelexpenses were up by 10.5% and other operating costs up by 22.4%.

At CHF 214.7 million, gross profit was flat comparedwith the year-earlier figure (CHF 214.2 million).

Depreciation of fixed assets amounted to CHF 16million, up by CHF 3.7 million on the previous year.

Valuation adjustments, provisions and losses fell4.9% from the end-2007 level to CHF 23.9 million.

Taxes due on our 2008 earnings are estimated at CHF 16 million, down by CHF 5 million on the year-earlier level.


108

Approval of the financial statements and

proposed allocation

We hereby submit the financial statements for fiscalyear 2008 for your approval, together with ourproposal for the allocation of available income.

Proposal of the Board of Directors concerning

the appropriation of earnings


Net income for 2008 CHF 159,323,457.–Net income brought forward from previous year CHF 4,073,842.–Total CHF 163,397,299.–

which we propose to appropriate as follows:

Payment of a 240% ordinary dividend on200,000 registered shares with a par value of CHF 100CHF 20,000,000 at 240% CHF 48,000,000.–50,000 bearer shares with a par value of CHF 500 CHF 25,000,000 at 240% CHF 60,000,000.–Total ordinary dividend CHF 108,000,000.–

Allocation to statutory general reserves Nil

Allocation to other reserves CHF 47,850,660.–

Net income carried forward CHF 7,546,639.–

Total CHF 163,397,299.–

109

Subject to your acceptance of our proposal, thedividend will be made payable via Coupon No. 22from 4 May 2009 at all domestic counters of UBS,Credit Suisse, Rothschild Bank AG and Banque Privée Edmond de Rothschild S.A., at the rate of CHF 240 per registered share with a par value of CHF 100 and CHF 1,200 per bearer share with a parvalue of CHF 500, less 35% withholding tax.Following the allocation of CHF 47,850,660 to other reserves, shareholders’ equity will amount toCHF 536,931,639, or 13.1% of the balance sheet total.

Elections as per bylaws

The terms of Baron Benjamin de Rothschild, E. TrevorSalathé, John Alexander, Walter Blum Gentilomo,Manuel Dami, Jacques-André Reymond and GuyWais expire on the date of the 2009 Annual GeneralMeeting. We propose that these Directors be re-elected for the periods prescribed in article 19 of the Bank’s bylaws.

We propose that two new Directors, BaronessBenjamin de Rothschild and Veit de Maddalena, be elected for the three-year term provided in the bylaws.

We further propose that for 2009 Pricewaterhouse-Coopers S.A. be re-appointed as the IndependentAuditors of the Bank and Group.

Outlook for 2009

Our 2008 results should not allow us to forget thatour operating environment has changed profoundly.2009 will be much tougher from every standpoint.Regulatory pressure is bound to increase and thefinancial crisis will probably last a long time. The keyto our success will be our ability to adapt to thesenew conditions and to meet the needs of our clients.We are convinced that our strategy will enable us to achieve these objectives.

We will continue adding new professionals to ourworkforce and will invest considerably in premises aswell as in IT equipment, not only to provide ourclients with top-quality service but also to enhanceour competitiveness. Our attitude remains guarded,however, in view of geopolitical, economic andmarket environments fraught with uncertainty.

We cannot conclude this report without expressinggratitude to our shareholders and clients for theirabiding trust.

Our thanks also go to our management and staff fortheir dedication and fine work.

The Board of Directors


110


Breakdown of revenues(% of total)

Allocation of profit(in millions)

Net interestincome

Net feeand commission

income

Trading income Other ordinaryincome

A Net profit B Dividend C Transfer to reserves

%

in millions of CHF

111

112

Report of the statutory auditor on the financial

statements

As statutory auditor, we have audited the financial state -ments of Banque Privée Edmond de Rothschild S.A.,which comprise the balance sheet, income statement,statement of cash flows and notes (pages 114 to 128),for the year ended 31 December 2008.

Board of Directors’ ResponsibilityThe Board of Directors is responsible for the prepa -ration of the financial statements in accordance withthe requirements of Swiss law and the company’sarticles of incorporation. This responsibility includesdesigning, implementing and maintaining aninternal control system relevant to the preparationof financial statements that are free from materialmisstatement, whether due to fraud or error. TheBoard of Directors is further responsible for selectingand applying appropriate accounting policies andmaking accounting estimates that are reasonable inthe circumstances.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with Swiss lawand Swiss Auditing Standards. Those standardsrequire that we plan and perform the audit to obtainreasonable assurance whether the financial statementsare free from material misstatement.

An audit involves performing procedures to obtainaudit evidence about the amounts and disclosures inthe financial statements. The procedures selecteddepend on the auditor’s judgment, including theassessment of the risks of material misstatement ofthe financial statements, whether due to fraud orerror. In making those risk assessments, the auditorconsiders the internal control system relevant to theentity’s preparation of the financial statements inorder to design audit procedures that are appropriatein the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of theentity’s internal control system. An audit also includesevaluating the appropriateness of the accountingpolicies used and the reasonableness of accountingestimates made, as well as evaluating the overall presen -tation of the financial statements. We believe thatthe audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements for the yearended 31 December 2008 comply with Swiss lawand the company’s articles of incorporation.

Report of the statutory auditorto the general meeting of Banque Privée Edmond de Rothschild S.A., Geneva

113

Report on other legal requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act(AOA) and independence (article 728 CO andarticle 11 AOA) and that there are no circumstancesincompatible with our independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirmthat an internal control system exists which has beendesigned for the preparation of financial statementsaccording to the instructions of the Board of Directors.

We further confirm that the proposed appropriationof available earnings complies with Swiss law and thecompany’s articles of incorporation. We recommendthat the financial statements submitted to you be approved.

PricewaterhouseCoopers SA

Philippe Bochud Alain Lattafi Audit Expert Audit ExpertAuditor in charge

Geneva, 19 March 2009

Report of the statutory auditor

114

Balance sheetbefore profit appropriation at 31 December 2008 (in thousands of CHF)

Assets



Due from banks

Due from customers

Mortgage loans

Total advances to customers



Holdings

Fixed assets


Other assets

Total assets

Subordinated amounts receivable

Amounts due from Group companiesand qualifying shareholders

Liabilities


Due to banks


Total due to customers


Other liabilities



Share capital

General statutory reserve

Other reservesof which: - treasury stock

Net profit brought forward

Net profit for the year

Total shareholders’ equity before profit appropriation

Total liabilities

Subordinated liabilities

Due to Group companies and qualifying shareholders



1

2

3

4

5

6

7, 14

4, 11

8

9

10

10

11

11,12,13

14

4, 11

995,309

31,508

1,299,505

473,357

7,616

480,973

22,621

350,584

269,151

83,375

21,500

551,511

4,106,037

-

262,639

46

247,775

2,350,810

2,350,810

80,756

578,065

153,654

50,000

45,000

119,385

317,149 42,545

4,074

159,323

644,931

4,106,037

-

536,432

58,532

19,078

1,432,461

412,342

6,422

418,764

21,980

107,540

236,677

79,519

24,674

221,102

2,620,327

-

378,047

529

483,696

929,637

929,637

85,561

231,878

138,567

50,000

45,000

98,010

391,254 46,977

3,845

162,350

700,459

2,620,327

-

455,095

936,777

12,430

(132,956)

61,015

1,194

62,209

641

243,044

32,474

3,856

(3,174)

330,409

1,485,710

-

(115,408)

(483)

(235,921)

1,421,173

1,421,173

(4,805)

346,187

15,087

-

-

21,375

(74,105)(4,432)

229

(3,027)

(55,528)

1,485,710

-

81,337

1,600.5

65.2

(9.3)

14.8

18.6

14.9

2.9

226.0

13.7

4.8

(12.9)

149.4

56.7

-

(30.5)

(91.3)

(48.8)

152.9

152.9

(5.6)

149.3

10.9

-

-

21.8

(18.9)(9.4)

6.0

(1.9)

(7.9)

56.7

-

17.9

Balance sheetat 31 December 2008 (in thousands of CHF)

115




Derivative instruments:- positive replacement values- negative replacement values- underlying values




16

17

212,400

5,586

550,444 550,282

21,164,041

5,015,334

233,425

3,706

220,284 213,691

20,284,500

7,402,583

(21,025)

1,880

330,160 336,591 879,541

(2,387,249)

(9.0)

50.7

149.9 157.5

4.3

(32.2)

Profit and loss accountfor the year ended 31 December 2008 (in thousands of CHF)

116




Interest payable



Commission income on securities and investment transactions


Commissions payable




Income from holdings

Proceeds from real estate




Personnel expenses


Operating expenses

Gross profit






Taxes

Net income for the reporting year



18

19

19

49,991

40

1,176

19,535

31,672

1,072

226,149

21,547

61,603

187,165

31,535

16,653

148,382

62

6,736

498

171,335

158,326

48,731

207,057

214,650

15,988

23,899

174,763

565

28

15,977

159,323

48,620

82

1,228

12,617

37,313

1,117

211,402

21,836

54,944

179,411

34,246

10,730

130,130

57

5,603

136

146,384

143,334

39,826

183,160

214,194

12,338

25,133

176,723

6,725

130

20,968

162,350

1,371

(42)

(52)

6,918

(5,641)

(45)

14,747

(289)

6,659

7,754

(2,711)

5,923

18,252

5

1,133

362

24,951

14,992

8,905

23,897

456

3,650

(1,234)

(1,960)

(6,160)

(102)

(4,991)

(3,027)

2.8

(51.2)

(4.2)

54.8

(15.1)

(4.0)

7.0

(1.3)

12.1

4.3

(7.9)

55.2

14.0

8.8

20.2

266.2

17.0

10.5

22.4

13.0

0.2

29.6

(4.9)

(1.1)

(91.6)

(78.5)

(23.8)

(1.9)

Overview of accounting policies

The financial statements of Banque Privée Edmondde Rothschild S.A., Geneva have been prepared inaccordance with the provisions of the Swiss Code of Obligations, the Federal Law on Banks andSavings Banks and its implementing ordinance (OB)as revised on 1 February 1995, and the guidelinesissued by the Federal Banking Commision. The Bank’s separate financial statements provide astrue a picture as possible of its assets, financialsituation and earnings.

Hidden (“latent”) reserves are included in the profit and loss account under the headings “Depre -ciation of fixed assets”, “Valuation adjustments,provisions and losses” and “Extraordinary expenses”.Released hidden reserves are included in “Extraor -dinary income”.

Description of the Bank’s

operations and staff size

Banque Privée Edmond de Rothschild S.A. is afull-service bank specialising in wealth managementfor private and institutional clients. It is a member of the Swiss Exchange and became an accrediteddealer in transferable securities on 3 April 1998.

Converted to full-time jobs, the number of staff employed by Banque Privée Edmond deRothschild S.A. stood at 513 at end-2008 versus 457 a year earlier.

Through its network of branches and subsidiaries inSwitzerland and abroad, the Bank conducts on itsclients’ behalf all the operations customarily providedby private banking institutions. Fee and commissionbusiness for the account of clients mainly includes

portfolio management, fiduciary deposits and pay -ment transactions, along with trading in securities,precious metals and derivative instru ments.

The Bank also actively deals in debt instru ments,equities, currencies, precious metals and derivativeson a proprietary basis, but does not engage incommodity trading.

The Bank does not outsource its services.

Notes to the financial statements

117

Accounting

and valuation principles

The financial statements of the parent company have been drawn up in accordance with theaccounting principles of the Banque Privée Edmondde Rothschild Group, with the exception of thefollowing items:

“Holdings”This item comprises of interests in associatedestablishments of either a long-term or infras truc -tural nature (regardless of the percentage stake).These holdings are stated, at most, at theiracquisition value.

“Fixed assets”This item includes Bank premises, other buildings,furniture, machines and equipment, as well asintangible assets.

Fixed assets are evaluated at their acquisition cost,less the relevant depreciation for each fixed assetcategory.

Risk management

The principles adopted by the Group regardingcontrol of market, credit, interest rate and countryrisks also apply to the parent company.


118

Due from banks

Due from banks onreverse repos

Securities and precious metals portfolios held for trading purposes

Swiss shares and other securities:

- banksof which: - treasury stock

Foreign shares and other securities

Precious metals

Treasury stock owned by Banque Privée Edmond de Rothschild S.A., Geneva at 31 December

Treasury stock transactions are reported at the market price on the trade date and are carried out as part of the Bank’s customary trading operations.

2


Swiss bonds:

- Federal Government

- cantons and municipalities

- banks

- financial services companies

- industrial enterprises

Swiss shares and other securities:

- banksof which treasury stock

Foreign bonds:

- public corporations

- other

Precious metals

Units of investment trusts


3


2008 2007 Change


Total 22,621

3,048 3,048

19,573

-

22,621

21,980

4,059 4,002

17,921

-

21,980

2.9

(24.9)

9.2

-

2008 2007 Change


Total 1,299,505

580,380 719,125

1,299,505

1,432,461

778,901 653,560

1,432,461

(9.3)

(25.5)10.0

2008 2007 Change

(number of shares) (in %)

Total 115 92 25.0

2008 2007 Change


Total 350,584

14,122

559

4,240

298

1,446

20,665

39,497 39,497 39,497

5,531

26,752

32,283

243,938

14,201

350,584

107,540

13,654

253

4,199

399

701

19,206

42,975 42,975 42,975

5,774

23,181

28,955

44

16,360

107,540

226.0

7.6

(8.1)

11.5

-

(13.2)

1

119

120


Holdings

Swiss shares and other securities:- banks- financial companies- real estate companies

Foreign shares and other securities :- banks- financial companies- real estate companies

Details of significant holdings

Banks:

Banca Privata Edmond de Rothschild Lugano S.A., Lugano

Banque Privée Edmond de Rothschild Ltd, Nassau, Bahamas

Banque Privée Edmond de Rothschild Europe, Luxembourg

Banque de Gestion Edmond de Rothschild - Monaco, Monaco

Financial and asset management companies:

Edmond de Rothschild Ltd, London

Privaco Trust S.A., Geneva

Arbinter-Omnivalor S.A., Geneva

Rouiller, Zurkinden & Cie Finance S.A., Fribourg

Real estate companies:

Copri III S.A., Luxembourg


4

2008 2007 Change


Total 269,151

94,748 92,215

483

187,446

78,001 1,367 2,337

81,705

236,677

94,748 59,652

483

154,883

78,001 1,456 2,337

81,794

13.7

21.0

(0.1)

Share capital(in millions)

Per centstake

CHF 5.0

CHF 15.0

EUR 31.5

EUR 12.0

GBP 1.0

CHF 2.1

CHF 2.0

CHF 0.6

EUR 0.7

99.8%

100%

100%

34%

80%

100%

100%

100%

100%

Treasury stock owned by Banque Privée Edmond de Rothschild S.A., Genevaat 31 December (Note 3 cont’d)

2008 2007 Change

(number of shares) (in %)

Total 1,750 2,250 (22.2)


121

Fire insurance value of fixed assets

Bank premises

Furniture, machines and equipment

5

Other assets

Positive replacement value of derivative instruments

Other

6

Own liabilities subject to reservation of ownership (in thousands of CHF)

Securities pledged to a Stock Exchange to cover settlementsand as collateral for payment transactions

Other

Assets pledged or assigned to cover own liabilities

Total assets pledged or assigned and subject to reservationof ownership for own commitments

7

Amounts due to and from companies in which the Bankhas a majority interest (fully consolidated and non-consolidatedholdings for Group accounting purposes): (Note 4 cont’d)

Due from banks

Due from customers


Other assets

Total assets

Due to banks


Accrued expenses and defferred income

Other liabilities

Total liabilities

2008 2007 Change


122,020

2

4,518

136,099

262,639

167,292

111,575

362

237,350

516,579

350,609

1

8,336

19,101

378,047

291,873

29,328

704

133,110

455,015

(30.5)

13.5

2008 2007 Change


92,971

17,035

91,211

17,035

1.9

-

2008 2007 Change


Total 551,511

550,444

1,067

551,511

221,102

220,284

818

221,102

149.4

149.9

30.3

2008 2007

Bookvalue

of assets

Actualencumbrance

Bookvalue

of assets

Actualencumbrance

31,508

3,737

35,245

35,245

-

-

-

-

19,069

2,722

21,791

21,791

-

-

-

-


Valuation adjustments and provisionsReserves for general banking risks (in thousands of CHF)

Valuation adjustments and provisions for default and other risks:

- valuation adjustmentsand provisions for default risks(credit and country risks)

- valuation adjustments and provisionsfor other operating risks

- other provisions

Subtotal

Total valuation adjustmentsand provisions

Less valuation adjustmentsset off directly against assets:

of which: - banks- customers- mortgage loans- financial investments- other

Total valuation adjustments andprovisions as per balance sheet


Reserves for general banking risks are not taxed.

10


Uses andreleases asdesignated

Redesi-gnations

(transfers)

Recoveries,interests at risk

and currencydifferences

New provisionscharged to


Releasesreported in



7,735

-

135,067

142,802

142,802

4,235

- 4,235

- - -

138,567

50,000

(2)

-

(1,954)

(1,956)

(1,956)

-

-

-

-

-

-

-

438

-

-

438

438

-

4,773

-

17,601

22,374

22,374

-

(5)

-

(560)

(565)

(565)

-

12,939

-

150,154

163,093

163,093

9,439

- 9,439

- - -

153,654

50,000

Commitments to own pension plans

Other liabilities

Negative replacement value of derivative instruments

Other

9

8

2008 2007 Change


Total 578,065

550,282

27,783

578,065

231,878

213,691

18,187

231,878

149.3

157.5

52.8

2008 2007 Change


Total 31,387 20,967 49.7

122


Share capital

Fully paid registered sharesat CHF 100.– par value

Fully paid bearer sharesat CHF 500.– par value

Total share capital

See Notes 1 and 2 for treasury stock.

Major shareholders

LCF Holding Benjaminet Edmond de Rothschild S.A.(1)

Rothschild Holding AG, Zurich (2)

(1) The entire share capital of LCF Holding Benjamin et Edmond de Rothschild S.A. is directly or indirectly controlled by members of the de Rothschildfamiliy. 17% of the company’s share capital (representing 6.77% of voting rights) is owned by Baroness Edmond de Rothschild and 66.33%(representing 89.84% of voting rights) by Baron Benjamin de Rothschild.

(2) The following entities and individuals, all represented by Rothschild Continuation Holdings AG, Rudolf Tschaeni, Zug; Eric de Rothschild, Paris; Davidde Rothschild, Paris; Alexandre de Rothschild, London; Stéphanie de Rothschild, London; Louise de Rothschild, Paris; Financière de Tournon, Paris;Financière de Reux, Paris; Bero, Paris; Ponthieux Rabelais, Paris; Integritas Investments B.V., Amsterdam; Rothschild Trust (Schweiz) AG, Zurich togethercontrol 20,000 registered shares and 3,600 bearer shares of Banque Privée Edmond de Rothschild SA, Geneva, representing 8.4% of the total share capitaland 9.4% of voting rights.The members of the group have a controlling interest in Rothschild Concordia SAS, Paris, which controls Concordia BV, Amsterdam. Concordia BVcontrols Rothschild Concordia AG, Zug, which in turn controls Rothschilds Continuation Holdings AG, Zug. Rothschilds Continuation Holdings AGcontrols Rothschild Holding AG, Zurich, which owns a direct stake in Banque Privée Edmond de Rothschild S.A., Geneva. (Published in the FOSC on 29.01.08)

Cross-holdings

Rothschild Holding AG, Zurich

Due to and from qualifying shareholders

Due to and from LCF Holding Benjaminet Edmond de Rothschild S.A., the only shareholderwith a qualifying interest in the parent company:

Due from customers

Total claims


Total liabilities

11

2008 2007Par value Number

of sharesCapital

ranking fordividend

Par value Numberof shares

Capitalranking for

dividend(in thousands of CHF) (in thousands of CHF) (in thousands of CHF) (in thousands of CHF)

20,000

25,000

45,000

200,000

50,000

20,000

25,000

20,000

25,000

45,000

200,000

50,000

20,000

25,000

2008 2007Par value Percentage

of capitalPercentage

of votingrights

Par value Percentageof capital

Percentageof voting

rights(in thousands of CHF) (in%) (in%) (in thousands of CHF) (in%) (in%)

35,299.5

3,799.5

78.4

8.4

85.8

9.4

34,799.5

3,799.5

77.3

8.4

85.4

9.4

2008 2007Number

of sharesheld

Per centstake

in sharecapital

Per centof totalvotingrights

Numberof shares

held

Per centstake

in sharecapital

Per centof totalvotingrights

(in%) (in%) (in%) (in%)

10,161 9.5 9.5 10,161 9.5 9.5

2008 2007 Change


-

-

19,853

19,853

-

-

80

80

-

-

123


Schedule of shareholders’ equity before appropriation of available earnings

Shareholders’ equity at beginning of the reporting period:

- share capital- general statutory reserve- other reserves

of which: - treasury stock

Reported profit

Total shareholders’ equity at beginning of the reporting period(before appropriation of available earnings)

Allocated to/released from reserves

Less dividend deducted from net income of previous year

Net income

Total shareholders’ equity at end of the reporting period(before appropriation of available earnings)

of which: - share capital- general statutory reserve- other reserves

of which: - treasury stock- reported profit

12

Shareholders’ equity after appropriation of available earnings

Shareholders’ equity before appropriation of net income

Less dividend

Total shareholders’ equity after appropriation of available earnings

of which: - share capital- general statutory reserve- other reserves

of which treasury stock- reported profit

13

Due to and from affiliated companies

Due from banks


Other assets

Total claims

Due to banks



Other liabilities

Total liabilities

Affiliated companies consist of the controlling interests of LCF Holding Benjamin et Edmond de Rothschild S.A. which are not part of the Banque PrivéeEdmond de Rothschild Group, Geneva.

14

2008 2007 2006 Change


45,000 98,010

391,254 46,977

166,195

700,459

1,150

(216,000)

159,323

644,931

45,000 119,385 317,149

42,545 163,397

45,000 90,135

357,113 35,654

125,606

617,854

1,255

(81,000)

162,350

700,459

45,000 98,010

391,254 46,977

166,195

45,000 84,960

325,630 31,367 92,549

548,139

1,113

(54,000)

122,601

617,854

45,000 90,135

357,113 35,654

125,606

0.0 8.7 9.6

31.8 32.3

13.4

(8.4)

166.7

(1.9)

(7.9)

2008 2007 2006 Change


644,931

(108,000)

536,931

45,000 119,385 365,000

42,545 7,546

700,459

(216,000)

484,459

45,000 119,385 316,000

46,977 4,074

617,854

(81,000)

536,854

45,000 98,010

389,999 35,654

3,845

(7.9)

(50.0)

10.8

2008 2007 Change


238,010

1,118

-

239,128

-

862

95

417

1,374

611

2,008

1,662

4,281

91

1,300

-

132

1,523

5,485.8

(9.8)

124


Loans granted to the Bank’s governing bodiesGuarantee commitments on behalf of the Bank’s governing bodiesRemuneration paid to the Bank’s governing bodies


- Board of DirectorsBaron Benjamin de Rothschild ChairmanE. Trevor Salathé Vice-ChairmanManuel Dami SecretaryJohn AlexanderLuc J. ArgandWalter Blum GentilomoMichel CicurelFrançois HottingerJacques-André ReymondDaniel Yves TrèvesGuy Wais

- Executive CommitteePhilippe Currat

- Internal Auditors- Independent Auditors

Total

These facilities are lombard loans, secured by pledged securities, and floating-rate mortgages.

Mortgage interest is charged at the usual market rates. However, as in the case of loans granted to Bank employees, members of the governing bodies receivea 25% rebate on the applicable interest rate up to a maximum amount of CHF 750,000 per borrower.

At 31 Dec. 2008, the relevant mortgage rates ranged from 2.50% to 3.50% and the interest rates charged on lombard loans from 3% to 4%. The value ofloans granted to members of the Executive Committee totalled 1,092 (in thousands of CHF). The value of loans granted to non-executive members of theBoard of Directors amounted to 440 (in thousands of CHF).

15

2008 2007

Loans granted to the Bank’s

governing bodies

Guaranteecommitments

on behalf of the Bank’s

governing bodies

Loans granted to the Bank’s

governing bodies

Guaranteecommitments

on behalf of the Bank’s

governing bodies

440 - -

440 - - - - - - - -

1,092 625

- -

1,532

13 - - - -

13 - - - - - -

49 11 33

-

95

466 - -

466 - - - - - - - -

1,525 625

- -

1,991

278 248

- 17

- 13

- - - - - -

49 8

27 -

354

125


Remuneration paid to members:(in thousands of CHF) (Note 15 cont'd)


- Executive CommitteeClaude Messulam General Manager

Total

Remuneration paid to members: (in thousands of CHF)


- Executive CommitteeClaude Messulam General Manager

Total

Since the fees paid to each individual are decided after the closing date of the annual financial statements, the above-mentioned fees are stated as per the accrualmethod.The 2007 figures have been restated to comply with the presentation of the financial statements as adapted during the reporting year.

(Note 15 cont'd next page)

2008 2007

Employeewelfare

expenses

Total Employeewelfare

expenses

Total

545 - - -

545 - - - - - - -

846119

1,391

6,789 -

916 156

4,990 64

187 122

63 88

143 60

21,3317,682

28,120

- - - - - - - - - - - -

782119

782

9,631 -

721 152

8,126 64 87

123 64 88

146 60

21,8568,916

31,487

2008 2007

Fixed fees Bonus Fixed fees Bonus

Cash Number of shares




1,950 -

356156711

64187122

6388

14360

4,361760

6,311

- - - - - - - - - - - -

- -

-

4,294 -

560 -

3,734 - - - - - - -

16,124 6,803

20,418

- - - - - - - - - - - -

- -

-

2,335 -

721152830

6487

1236488

14660

4,206810

6,541

- - - - - - - - - - - -

- -

-

7,296 - - -

7,296 - - - - - - -

16,868 7,987

24,164

- - - - - - - - - - - -

- -

-

126

Ownership of shares in BPER S.A., Geneva: (Note 15 cont’d)

- Board of Directors and related personsBaron Benjamin de Rothschild ChairmanE. Trevor Salathé Vice-ChairmanManuel Dami SecretaryJohn AlexanderLuc J. ArgandWalter Blum GentilomoMichel CicurelFrançois HottingerJacques-André ReymondDaniel Yves TrèvesGuy Wais

- Executive Committee and related personsClaude Messulam General ManagerSylvain Roditi Deputy General ManagerJean-Pierre Pieren Deputy General ManagerLuc BaatardPhilippe CurratMichel LusaBernard SchaubPatrick Ségal

Total

2008 2007

Number of bearer

shares

Number of registered

shares

Number of bearer

shares

Number of registered

shares

775 186 270

40 -

67 197

- 10

5 - -

1,170 1,075

85 5 - - - 5 -

1,945

7 - 1 - 1 1 1 1 1 - 1 -

- - - - - - - - -

7

768 186 270

40 -

62 195

- 10

5 - -

1,142 1,075

60 2 - - - 5 -

1,910

7 - 1 - 1 1 1 1 1 - 1 -

- - - - - - - - -

7


127



Securities trading (including equity product and index derivatives)

Forex trading (including forex derivatives)

Precious metals (including precious metals derivatives)

18

Guarantees to third parties

Surety bonds

Guarantees

16


Fiduciary deposits with banks outside the Group

Fiduciary deposits with Group banks

Fiduciary loans

17

Extraordinary income and expenses



“Extraordinary income” mainly includes a release of other provisions no longer required for operating purposes totalling CHF 0.6 million.

19

2008 2007 Change


565

28

6,725

130

(91.6)

(78.5)

2008 2007 Change


Total 212,400

3,167

209,233

212,400

233,425

3,032

230,393

233,425

(9.0)

4.5

(9.2)

2008 2007 Change


Total 5,015,334

4,513,479

498,423

3,432

5,015,334

7,402,583

6,439,764

957,627

5,192

7,402,583

(32.2)

(29.9)

(48.0)

(33.9)

2008 2007 Change


Total 31,535

(3,410)

34,235

710

31,535

34,246

6,117

27,746

383

34,246

(7.9)

(155.7)

23.4

85.4

128

129

Head office

SWITZERLAND

BANQUE PRIVÉE EDMOND DE ROTHSCHILD S.A.18, rue de Hesse1204 GenevaPhone (41-58) 818 91 11 Fax (41-58) 818 91 21Website: www.lcf-rothschild.ch

Branches in Switzerland

11, rue de Morat - CP 1441701 FribourgPhone (41-26) 347 24 24 Fax (41-26) 347 24 20Website: www.lcf-rothschild.ch

2, avenue Agassiz1003 LausannePhone (41-21) 318 88 88 Fax (41-21) 323 29 22Website: www.lcf-rothschild.ch

Affiliates in Switzerland

BANCA PRIVATA EDMOND DE ROTHSCHILDLUGANO S.A.Via Ginevra 2 - CP 58826901 LuganoPhone (41-91) 913 45 00 Fax (41-91) 913 45 01Website: www.privata.ch

ARBINTER-OMNIVALOR S.A.4, cours de Rive1204 GenevaAbsorbed in February 2009 by Banque Privée Edmond deRothschild S.A.

ROUILLER, ZURKINDEN & CIE FINANCE S.A.11, rue de Morat - CP 12961701 FribourgPhone (41-26) 347 26 00 Fax (41-26) 347 26 15

PRIVACO TRUST S.A.2, rue Firmin-Abauzit1204 GenevaPhone (41-58) 818 96 19 Fax (41-58) 818 91 78

Representative offices outside Switzerland

URUGUAY

BANQUE PRIVÉE EDMOND DE ROTHSCHILD S.A.Representación Montevideo“World Trade Center Montevideo” Torre II - Piso 21Avenida Luís Alberto de Herrera 1248 11300 Montevideo - UruguayPhone (598-2) 623 24 00 Fax (598-2) 623 24 01

CHINA

BANQUE PRIVÉE EDMOND DE ROTHSCHILD S.A.Representative OfficeSuite 3006 One Exchange Square8 Connaught PlaceCentral - Hong KongCHINA-SARPhone (852) 2869 1711 Fax (852) 2877 2185Email: [email protected]

Addresses

130

Affiliates outside Switzerland

UNITED KINGDOM

EDMOND DE ROTHSCHILD LIMITED- LCF EDMOND DE ROTHSCHILDSECURITIES LIMITED- LCF EDMOND DE ROTHSCHILD ASSETMANAGEMENT LIMITEDOrion House5 Upper St. Martin’s LaneLondon WC2H 9EAPhone (44) 20 7845 5900 Fax (44) 20 7845 5901Website: www.lcfr.co.uk

LCF EDMOND DE ROTHSCHILD HOLDINGS(C.I.) LIMITED- LCF EDMOND DE ROTHSCHILD (C.I.) LIMITED- LCF EDMOND DE ROTHSCHILD ASSETMANAGEMENT (C.I.) LIMITEDHirzel Court Suite DSt. Peter Port - Guernsey GY1 2NHChannel Islands UKPhone (44-1481) 716 336 Fax (44-1481) 714 416Website: www.lcfci.com

MONACO

BANQUE DE GESTIONEDMOND DE ROTHSCHILD - MONACOLes Terrasses2, avenue de Monte-Carlo - BP 31798000 Monaco CedexPhone (377) 93 10 47 47 Fax (377) 93 25 75 57Website: www.lcf-rothschild.mc

EDMOND DE ROTHSCHILD CONSEILET COURTAGE D’ASSURANCE - MONACOLes Terrasses2, avenue de Monte-Carlo98000 Monaco Phone (377) 97 98 28 00 Fax (377) 97 98 28 01

EDMOND DE ROTHSCHILD GESTION(MONACO)Les Terrasses2, avenue de Monte-Carlo98000 Monaco Phone (377) 97 98 22 14 Fax (377) 97 98 22 18

BAHAMAS

BANQUE PRIVÉEEDMOND DE ROTHSCHILD LTD.P.O. Box SP-63948Lyford Financial Center Lyford Cay No. 2West Bay St.N-1136 NassauPhone (+1 242) 702 80 00 Fax (+1 242) 702 80 08Website: www.lcf-rothschild.bs

TAIWAN

PRIASIA LIMITED (LCF ROTHSCHILD GROUP)Tortola, British Virgin IslandsRepresentative office in Taiwan at:Bank Tower205 Tun Hwa North RoadSuite 202Taipei - Taiwan 105Phone (886-2) 2545 0505 Fax (886-2) 2545 1407

ARGENTINA

EDMOND DE ROTHSCHILDSERVICIOS ARGENTINA S.A.Torre BouchardBouchard 547, Piso 12C1106ABG Buenos Aires - ArgentinaPhone (54-11) 4313 6400 Fax (54-11) 4313 6500

LUXEMBOURG

BANQUE PRIVÉE EDMOND DE ROTHSCHILDEUROPE20, boulevard Emmanuel Servais2535 LuxembourgPhone (352) 24 88-1 Fax Senior Mgt. (352) 24 88-8222Website: www.lcf-rothschild.lu

Addresses

131

Branches

BELGIUM

BANQUE PRIVÉE EDMOND DE ROTHSCHILDEUROPE Avenue Louise 480 Bte 16A1050 Brussels Phone (32) 2 645 5757 Fax (32) 2 645 5720Website: www.lcf-rothschild.be

Liège branch

Quai de Rome 564000 LiègePhone (32) 4 234 9595 Fax (32) 4 234 9575Website: www.lcf-rothschild.be

Antwerp branch

Frankrijklei 1032000 AntwerpenPhone (32) 3 212 2111 Fax (32) 6 212 2122Website: www.lcf-rothschild.be

SPAIN

BANQUE PRIVÉE EDMOND DE ROTHSCHILDEUROPE Calle Orfila, 8 Bajo C28010 MadridPhone (34) 91 364 66 00 Fax (34) 91 364 66 60Website: www.lcf-rothschild.es

Barcelona branch

Josep Bertrand, 1108021 BarcelonaPhone (34) 93 272 05 04 Fax (34) 93 215 06 97Website: www.lcf-rothschild.es

ITALY

BANQUE PRIVÉE EDMOND DE ROTHSCHILDEUROPE Via Ulrico Hoepli 720121 MilanPhone (39) 02 72 17 44 1 Fax (39) 02 72 17 44 57Website: www.lcf-rothschild.lu

PORTUGAL

BANQUE PRIVÉE EDMOND DE ROTHSCHILDEUROPE Rua D. Pedro V, 1301250-095 LisbonPhone (351) 21 351 46 60 Fax (351) 21 351 46 88Website: www.lcf-rothschild.lu

Representative offices

ISRAEL

BANQUE PRIVÉE EDMOND DE ROTHSCHILDEUROPE 46, boulevard Rothschild66883 Tel AvivPhone (972-3) 56 698 18 Fax (972-3) 56 698 21Website: www.lcf-rothschild.lu

SLOVAKIA

BANQUE PRIVÉE EDMOND DE ROTHSCHILDEUROPE Hlavné námestie 4811 01 BratislavaPhone (421) 2 5443 0940 Fax (421) 2 5443 4084Website: www.lcf-rothschild.lu

POLAND

BANQUE PRIVÉE EDMOND DE ROTHSCHILDEUROPE Rondo ONZ 1, 12th Fl00-124 WarsawPhone (48) 22 581 64 00 Fax (48) 22 581 64 01Website: www.lcf-rothschild.lu

Joint venture affiliate

JAPAN

LCF EDMOND DE ROTHSCHILDNIKKO CORDIAL CO, LTDTokyo Building7-3 Marunouchi 2–chomeChiyoda, 100-6421 TokyoPhone (81) 3 3283-3535 Fax (81) 3 3283-1611

Addresses

132

Other LCF Rothschild

Group banks and companies

SWITZERLAND

LA COMPAGNIE BENJAMIN DE ROTHSCHILD S.A.29, route de Pré-Bois - CP 4901215 Geneva 15Phone (41-22) 319 75 00 Fax (41-22) 319 75 09Website: www.ctbr.ch

FRANCE

Head office

LA COMPAGNIE FINANCIÈRE EDMOND DE ROTHSCHILD BANQUE47, rue du Faubourg Saint-Honoré 75401 Paris Cedex 08Phone (33-1) 40 17 25 25 Fax (33-1) 40 17 24 02Website: www.lcf-rothschild.fr

Representative offices

Hôtel de Saige23, cours du Chapeau Rouge 33000 BordeauxPhone (33-5) 56 44 20 66 Fax (33-5) 56 51 66 03Website: www.lcf-rothschild.fr

55, avenue Foch 69006 LyonPhone (33-4) 72 82 35 25 Fax (33-4) 78 93 59 56Website: www.lcf-rothschild.fr

165, avenue du Prado13272 Marseille Cedex 08Phone (33-4) 91 29 90 80 Fax (33-4) 91 29 90 85Website: www.lcf-rothschild.fr

10-12, rue du Président Edouard Herriot44000 NantesPhone (33-2) 59 59 10 00 Fax (33-2) 53 59 10 09Website: www.lcf-rothschild.fr

22, rue Croix Baragnon31000 ToulousePhone (33-5) 67 20 49 00 Fax (33-5) 61 73 49 04Website: www.lcf-rothschild.fr

6, avenue de la Marseillaise67000 StrasbourgPhone (33-3) 68 33 90 00 Fax (33-3) 88 35 64 86Website: www.lcf-rothschild.fr

Representative office abroad

CHINA

Room 0328F China Insurance Building166 East Lujiazui RoadPudong New AreaShanghai 200120Phone (86-21) 58 76 51 90 Fax (86-21) 58 76 71 80Website: www.lcf-rothschild.fr

Affiliates and sub-affiliates

EDMOND DE ROTHSCHILD ASSET MANAGEMENT47, rue du Faubourg Saint-Honoré75401 Paris Cedex 08Phone (33-1) 40 17 25 25 Fax (33-1) 40 17 24 42Website: www.edram.fr

EDMOND DE ROTHSCHILD FINANCIAL SERVICES47, rue du Faubourg Saint-Honoré75401 Paris Cedex 08Phone (33-1) 40 17 25 25 Fax (33-1) 40 17 23 67Website: www.edrfs.com

EDMOND DE ROTHSCHILD FINANCIAL SERVICES47, rue du Faubourg Saint-Honoré75401 Paris Cedex 08Phone (33-1) 40 17 25 25 Fax (33-1) 40 17 23 67Website: www.edrfs.com

EDMOND DE ROTHSCHILD CORPORATE FINANCE47, rue du Faubourg Saint-Honoré75401 Paris Cedex 08Phone (33-1) 40 17 21 11 Fax (33-1) 40 17 25 01Website: www.edrcf.com

EDMOND DE ROTHSCHILD PRIVATE EQUITY PARTNERS47, rue du Faubourg Saint-Honoré75401 Paris Cedex 08Phone (33-1) 40 17 25 25 Fax (33-1) 40 17 23 91Website: www.lcf-rothschild.fr

Addresses

133

EDMOND DE ROTHSCHILD CAPITAL PARTNERS47, rue du Faubourg Saint-Honoré75401 Paris Cedex 08Phone (33-1) 40 17 25 25 Fax (33-1) 40 17 23 91Website: www.edrcp.com

EDMOND DE ROTHSCHILD INVESTMENT PARTNERS47, rue du Faubourg Saint-Honoré75401 Paris Cedex 08Phone (33-1) 40 17 25 25 Fax (33-1) 40 17 31 43Website: www.edrip.fr

ASSURANCES SAINT-HONORÉ PATRIMOINE47, rue du Faubourg Saint-Honoré75401 Paris Cedex 08Phone (33-1) 40 17 22 32 Fax (33-1) 40 17 89 40Website: www.lcf-rothschild.fr

EDMOND DE ROTHSCHILD ENTREPRISES PATRIMONIALES47, rue du Faubourg Saint-Honoré 75401 Paris Cedex 08Phone (33-1) 40 17 31 63 Fax (33-1) 40 17 23 93Website: www.edrep.fr

EDMOND DE ROTHSCHILD ENTREPRISES PATRIMONIALES CROISSANCE55, avenue Foch 69006 LyonPhone (33-4) 26 72 95 00 Fax (33-4) 37 42 51 91Website: www.lcf-rothschild.fr

Affiliates and sub-affiliates abroad

CHILE

EDMOND DE ROTHSCHILD ASSET MANAGEMENT CHILEApoquindo 4001, oficina 305, Las CondesSantiagoPhone (56) 2598 99 00 Fax (56) 2598 99 01Website: www.edram.fr

CHINA

EDMOND DE ROTHSCHILD ASSET MANAGEMENT HONG KONG LTDSuite 2802One Exchange Square8 Connaught Place, CentralHong Kong - ChinaPhone (852) 39 26 51 99 Fax (852) 39 26 50 08Website: www.edram.fr

ISRAEL

EDMOND DE ROTHSCHILD INVESTMENT SERVICES LIMITEDAlrov Tower46, Rothschild Boulevard66883 Tel AvivPhone (972) 3 566 33 23 Fax (972) 3 566 66 89Website: www.edris.co.il

ITALY

EDMOND DE ROTHSCHILDS.G.R. SpAVia Palestro 2420121 MilanPhone (39-02) 76 061 200 Fax (39-02) 76 061 222Website: www.lcf-rothschild.it

EDMOND DE ROTHSCHILDS.I.M. SpAVia Palestro 2420121 MilanPhone (39-02) 76 06 14 03 Fax (39-02) 76 06 14 18Website: www.lcf-rothschild.fr

Addresses

134

UNITED KINGDOM

EDMOND DE ROTHSCHILD PRIVATE EQUITY SELECT LLPOrion House 5 Upper St. Martin’s LaneLondon WC2H 9EAPhone (44) 20 7845 59 93 Fax (44) 20 7557 59 93Website: www.lcf-rothschild.fr

Branches abroad

BELGIUM

Edmond de Rothschild Asset Management BeneluxMarnix 231000 BrusselsPhone (32) 2517 6090 Fax (32) 2517 6500 Website: www.edram.fr

ITALY

EDMOND DE ROTHSCHILD FINANCIAL SERVICESVia Palestro 2420121 MilanPhone (39-02) 76 061 200 Fax (39-02) 76 061 222Website: www.edrfs.com

Also part of the LCF Rothschild Group

COGIFRANCE47, rue du Faubourg Saint-Honoré75008 ParisPhone (33-1) 40 17 25 25 Fax (33-1) 40 17 25 64

Addresses

135

Photo credits

Peace Parks

pp. 3-5Large visual:© Koos van der LendeSmall visuals, from left to right : © Koos van der Lende© Michael Viljoen© Koos van der Lende© Koos van der Lende© Peace Parks FoundationMap:© Peace Parks Foundation

The Rothschilds and Africa

pp. 7-11The original photo plates were taken from 1904-1905, Baron Maurice deRothschild’s Journey to East Africa, a two-volume work published by theLaboratory of Entomology of the Paris National Museum of Natural History,printed by the Imprimerie Nationale in 1922. The photos in the bookpublished by the Group were drawn from this same work.

Education

pp. 27-29Large visual:© Peace Parks FoundationSmall visuals, from left to right:© Matt Prophet© Heinrich van den Berg© Peace Parks Foundation© iStock.com© Peace Parks Foundationp. 42© Peace Parks Foundationp. 49 From top to bottom and from left to right:© iStock.com© Heinrich van den Berg© Peace Parks Foundation© Peace Parks Foundation

Sustainable development

pp. 53-55Large visual:© Koos van der LendeSmall visuals, from left to right:© Michael Viljoen© Peace Parks Foundation© Tony Weaver© Michael Viljoen© Tony Weaverp. 71From top to bottom and from left to right:© Matt Prophet© Tony Weaver© Matt Prophetp. 83From top to bottom and from left to right:© Koos van der Lende© Heinrich van den Berg© Roger de la Harpe© Heinrich van den Bergp. 92From top to bottom and from left to right:© Peace Parks Foundation© Heinrich van den Berg© Koos van der Lende© Matt Prophetp. 89From top to bottom and from left to right:© Koos van der Lende© Koos van der Lende© Tony Weaver© Tony Weaver

Environment

pp. 103-105Large visual:© Heinrich van den BergSmall visuals, from left to right:© Koos van der Lende© Michael Viljoen© Michael Viljoen© Matt Prophet© Koos van der Lendep. 115From top to bottom and from left to right:© Michael Viljoen© Koos van der Lende© Koos van der Lende© Michael Viljoenp. 129From top to bottom and from left to right:© Koos van der Lende© Michael Viljoen© Heinrich van den Berg© Koos van der Lende

All rights reservedDesign and production : Théorème S.A., CH-1205 Geneva, www.theoreme.chPrinted by: Atar Roto Presse S.A., CH-1214 Vernier/Geneva, www.atar.ch

136

Documents

BANQUE PRIVÉE EDMOND DE ROTHSCHILD S.A. · Edmond de Rothschild S.A., Geneva Corporate ... education and training. ... in Africa can also be seen in the financial activities of the