Rothschild Bank AG Annual Report 2011/2012

Rothschild Bank AG Zurich
Annual Report 2011/2012

Annual Report for the year ended 31st March 2012
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Part 1 Overview
Key Figures Chairmans Statement Directors, Executive Committee, Auditors and Senior Staff 2 3 4
Part 2 Consolidated Financial Statements

A Consolidated Balance Sheet B Consolidated Income Statement and Statement of Cash Flows C Notes to the Consolidated Financial Statements D Consolidation, Accounting and Valuation Principles E Notes on Risk Management Business and Services Provided by Rothschild Bank AG Zurich and Subsidiaries Report of the Statutory Auditor on the Consolidated Financial Statements 6 9 11 25 29 32 34
Part 3 Financial Statements of Rothschild Bank AG

Balance Sheet of Rothschild Bank AG Income Statement Proposal of the Board of Directors to the Annual General Meeting Notes to the Financial Statements Accounting and Valuation Principles of Rothschild Bank AG Notes on Risk Management Report of the Statutory Auditor on the Financial Statements 38 41 42 43 48 51 53
Part 4 Addresses
Head Office, Subsidiaries and Representatives of Rothschild Bank AG Group Directory 55 56
Part 1
Key Figures
Rothschild Bank AG Zurich, consolidated
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2
Consolidated balance sheet Total shareholders equity Total assets Consolidated income statement Net interest income Net commission income Results from trading operations Gross income Total operating expenses Consolidated net profit Net profit per employee Staff (at the end of business year) Staffing level domestic Staffing level abroad Total staffing level
31.3.2012 1000 CHF 401,728 3,911,762 23,313 109,551 29,018 169,688 135,190 19,602 43.4
31.3.2011 1000 CHF 417,866 3,051,928 17,994 126,878 25,485 177,583 130,980 33,373 83.2
Change 1000 CHF 16,138 859,834 5,319 17,327 3,533 7,895 4,210 13,771 39.9
3.9 28.2 29.6 13.7 13.9 4.4 3.2 41.3 47.9
358 94 452
306 95 401
52 1 51
17.0 1.1 12.7
Part 1
Chairmans Statement
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The past year has been one of very good development in a particularly difficult environment. Our focus on real wealth preservation and providing the best independent advice has remained attractive for clients, and we have seen near-record inflows of net new assets. We have reinforced our position in our core markets, bolstering our client and investment teams in the UK, Switzerland, Germany and Asia with a series of hires, including new staff in Singapore and Hong Kong and new team heads in Frankfurt and Geneva. At the same time, we have also invested heavily in our operational systems, introducing a new global IT platform which was successfully implemented at the end of May 2012. This platform brings together all the functions and processes that are crucial to our business model and allows our teams to service their clients more effectively. In addition, we reorganised our investment process last year, placing a greater emphasis on real capital preservation and providing more flexibility to take meaningful positions in promising asset classes. Within our trust business, we have continued to enhance our wealth planning expertise. For the full year, assets under management rose by 4 % to CHF 13.3 billion. The net inflow of close to CHF 1 billion has shown a marked increase over the previous year (+ 36 %). However, the persistent strength of the Swiss franc weighed heavily on our bottom line, as did our combined investment in new people and systems. Our net profit fell by 41 % to CHF 19.6 million. Looking ahead, we are optimistic about the new financial year and expect to see further strong inflows of assets. Our clear positioning and targeted investment should also enable us to achieve a renewed and sustainable improvement in our long-term profitability. On behalf of the Board, I take this opportunity to thank our clients for their continued faith in our Bank. Hans-Heinrich Coninx, Richard Martin, Otto H. Suhner and Guy Wais stepped down from the Board in the financial year just ended and I thank them again for their invaluable services. This year was particularly stressful for our staff in view of the work needed to reach the successful introduction of the new IT platform. I would like to extend my thanks to all of them for their dedication to the Bank and the services they render to our clients.
On behalf of the Board of Directors
Baron Eric de Rothschild
Part 1
Directors, Executive Committee and Auditors

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Board of Directors
Chairman
Baron Eric de Rothschild1)
Deputy Chairman
Baron David de Rothschild1)
Members
Dr Hans Heinrich Coninx3)* Sylvain Hefes2) Nigel Higgins Philip Marcovici2) *
1) 2) 3)
Richard Martin3) Alain Massiera Claude Messulam* Bernard I. Myers1) 2) *
Otto H. Suhner3)* Peter A. Smith2) * Dr Rudolf Tschni1) 2) * Guy Wais3)*
Members of the Committee of the Board Members of the Audit Committee Stepped down as of March 2012
* Meets the criteria on independence in accordance with FINMA circular 08/24
Executive Committee
General Manager
Veit de Maddalena
Members of the Executive Committee

Stefan Liniger Alexander Troschel Thomas Pixner Dirk Wiedmann
Internal Audit
Wilfried Brge, Managing Director and Head Internal Audit Soheyla Sadeghian, Assistant Director
Statutory Auditors
KPMG AG
Part 1
Senior Staff
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Managing Directors
Daniel Arnold Andreas Bickel Gregg P. Blonigan Carlo Braunwalder Luca Dal Dosso Robert Deverell Marc Dietrich Edward Ennis Ernst A. Furrer Aitor I. Garcia Giovanna Lagutaine Schwarzenbach Marc Lauer Simon Lutch Steffen Mack Dr Joe Maersch Daniel Maurer Matthias Montani Heinz Nesshold Riccardo Petrachi Jon Andrea Mario von Planta1) Ariane Richter Merz Luigi Roccu Claudio Sacchet Christopher Schallenberger Marco Schaller Christoph Schrer Jean-Pierre Stillhart Barbara Vannotti-Holzrichter Marcel Weiss
Directors
Victoria Burke Dr Urs Peter Klin Robert Baumann Jrg Kopp Ursizin Blumenthal Bruno Knecht Siegbert Bttinger Valeria Khne Irina Buholzer Lon Lee Bernhard Bumann Dominique Julien Maire Michael Curschellas Urs Meier Mark de Munk Martin Noseda Patrik Gilli Benjamin M. Prior Agnieszka Joanna Golynska Davide Rima Marie-Hlne Guex Sofie Rosman Harold Rudel Roger Schwarzenbach Cristina Theus Sigismondi Michel van der Spek Guido V. Vassalli Sven Vinther Daniel Weber Ernst Wegmann Christian H. Wentzel
Assistant Directors
Thomas Balmer Fernando Beltrn de Otlora Thomas Blum Kerstin Bttcher Jan Brunschwig Enrica Cargasacchi Edith Dennis Jaume Domnech Roland Ducommun Mario Fischer Urs-Beat Fus Alejandro Garcia
1)
Viktor Izakowicz1) Ivo Hubli Kurt Immer Harry Jskelinen Guido Lustenberger Mirjam Meili Urs Pfister Jacop Rentschler Claudia Ruggli Regg Claudia Rutishauser Yasmin Sabeti Soheyla Sadeghian
Thomas Schmid Susanne Schweizer-Hagmann Jacobo Steiner Ludwig Stierli Marc Triebswetter1) Barbara Ursprung Marco Vonesch Fiona Wallace-Mason Joachim Wegmann Karl Wieland Beat Wolfer Rudolf A. Wrmli
From April 2012
Part 1
A Consolidated Balance Sheet

as of 31st March 2012 and 2011
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Assets
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Cash Money market instruments Due from banks Due from customers Trading balances in securities and precious metals Financial investments Participations Fixed assets Intangible assets Accrued income and prepaid expenses Other assets Total assets Total assets due from non-consolidated participations and significant shareholders
Notes 13 9, 13 9, 13, 14 1, 2, 11, 13, 14 3, 9, 13 4, 9, 13 5, 6 6, 7 6 8 15, 16, 17
31.3.2012 1000 CHF 2,313,758 40,000 524,633 536,326 1,212 286,009 84,722 45,694 32,817 11,723 34,868 3,911,762 13,085
31.3.2011 1000 CHF 299,646 373,842 1,331,949 580,673 829 251,050 84,722 45,972 5,937 12,624 64,684 3,051,928 13,367
Change 1000 CHF 2,014,112 333,842 807,316 44,347 383 34,959 278 26,880 901 29,816 859,834 282
672.2 89.3 60.6 7.6 46.2 13.9 0.6 452.8 7.1 46.1 28.2 2.1
Part 2
A Consolidated Balance Sheet

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Liabilities and shareholders equity 31.3.2012 1000 CHF 32 13, 14 13, 14 8 11, 12 11, 12 12 12 12 12 12 12 15, 17 50,252 3,345,353 45,800 51,181 17,416 22,769 10,330 4,620 336,951 7,456 19,602 2,531 3,911,762 33,840 31.3.2011 1000 CHF 676 80,781 2,441,482 47,314 53,542 10,267 22,769 10,330 4,620 337,351 9,423 33,373 1,648 3,051,928 17,526 Change 1000 CHF 644 30,529 903,871 1,514 2,361 7,149 400 1,967 13,771 4,179 859,834 16,314
Notes Money market instruments Due to banks Due to customers, other Accrued expenses and deferred income Other liabilities Valuation adjustments and provisions Reserves for general banking risks Share capital Capital reserve Reserves and retained earnings Minority interests in shareholders equity Consolidated net profit of which minority interest in consolidated net profit Total liabilities and shareholders equity Total liabilities due to non-consolidated participations and significant shareholders
95.3 37.8 37.0 3.2 4.4 69.6 0.1 20.9 41.3 253.6 28.2 93.1
Part 2
A Consolidated Off-Balance Sheet Transactions

31.3.2012 1000 CHF 62,837 7,925 1,276,939 24,981 43,792 4,200,844 31.3.2011 1000 CHF 75,904 5,685 1,476,854 51,332 48,176 2,467,896 Change 1000 CHF 13,067 2,240 199,915 26,351 4,384 1,732,948
Notes
% 39.4
Contingent liabilities Irrevocable commitments Fiduciary transactions Derivative instruments positive replacement value negative replacement value contract volume
1, 18 1, 19 22 20, 21
17.2 13.5 51.3 9.1 70.2
Part 2
B Consolidated Income Statement

for the period 1st April to 31st March
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2011/12 1000 CHF 22,376 2,013 1,076 27 23,313 426 71,499 39,277 681 2,332 27 24, 27 109,551 29,018 6,200 1,606 27 27 10, 25, 27 26, 27 27 27 6 11 11, 28 12 7,806 169,688 105,756 29,434 135,190 34,498 4,740 4,720 25,038 5,436 19,602 2,531 2010/11 1000 CHF 16,487 2,556 1,049 17,994 628 81,589 46,413 838 2,590 126,878 25,485 49 5,772 1,503 7,226 177,583 99,811 31,169 130,980 46,603 5,084 752 40,767 7,394 33,373 1,648 Change 1000 CHF 5,889 543 27 5,319 202 10,090 7,136 157 258 17,327 3,533 49 428 103 580 7,895 5,945 1,735 4,210 12,105 344 3,968 15,729 1,958 13,771 4,179
Notes Interest and discount income Interest and dividend income on financial investments Interest expense Net interest income Commission income on lending activities Commission income on asset management Commission income on trust and company management services Commission income on other services Commission expense Net commission income Results from trading operations Results from the sale of financial investments Income from non-consolidated participations Real estate income Total other ordinary results Total income Personnel expenses Operating expenses Total operating expenses Gross profit Depreciation and write-offs of non-current assets Valuation adjustments, provisions and losses Result before extraordinary items and taxation Taxation Consolidated net profit of which minority interest in consolidated net profit
% 35.7
21.2 2.6 29.6 32.2 12.4 15.4 18.7 10.0 13.7 13.9 100.0 7.4 6.9 8.0 4.4 6.0 5.6 3.2 26.0 6.8 527.7 38.6 26.5 41.3 253.6
Part 2
B Consolidated Statement of Cash Flows

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31.3.2012 Application Balance of funds 1000 CHF 1,514 32,000 3,553 37,067 4,195 27,167 31,362 50,649 383 34,959 2,361 88,352 2,014,112 30,529 974 2,200,448 7,104 31,362 1,224,168 31.3.2011 Application Balance of funds 1000 CHF 22,000 3,533 25,533 4,452 5,947 10,399 82,594 55,929 150,072 3,588 292,183 118,901 874 119,775 447,890 16,007 10,363 39,108 44,752
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Source of funds Consolidated net profit incl. minorities Depreciation of non-current assets Valuation adjustments and provisions Accrued income and prepaid expenses Accrued expenses and deferred income Dividend of previous year Dividend paid to minorities Cash flow from operating results Participations Tangible fixed assets Intangible assets Cash flow from investment activities Due to banks over 90 days Due from banks over 90 days Money market instruments Due to customers, other Due from customers Trading balances in securities and precious metals Financial investments Other assets Other liabilities Cash flow from banking operations Cash Due from banks up to 90 days Due to banks up to 90 days Other positions Liquidity Total source of funds Total application of funds 19,602 4,740 4,720 901 29,963 334,486 903,871 44,347 29,816 1,312,520 857,965 857,965 2,200,448
Source of funds 33,373 5,084 1,750 497 836 41,540 36 36 79 327,792 523 2,897 331,291 37,423 37,600 75,023 447,890
2,043,667 1,185,702
Part 2
C Notes to the Consolidated Financial Statements

Information on the Balance Sheet
1 Listing of collateral of loans and off-balance sheet transactions Mortgage collateral 1000 CHF Due from customers Total loans Contingent liabilities Irrevocable commitments Total off-balance sheet transactions Current year Previous year 2 Endangered receivables Gross debt amount 1000 CHF Total bad and doubtful debts Current year Previous year 3 Trading balances in securities and precious metals 31.3.2012 1000 CHF Shares Trading balances in securities and precious metals 4 Financial investments Book value 31.3.2012 31.3.2011 1000 CHF 1000 CHF Interest bearing securities/accrual method Precious metals Total financial investments of which eligible for repo based on liquidity requirements 67,787 218,222 286,009 64,290 103,483 147,567 251,050 52,085 Fair value 31.3.2012 31.3.2011 1000 CHF 1000 CHF 69,112 218,222 287,334 105,163 147,567 252,730 1,212 1,212 31.3.2011 1000 CHF 829 829 Change 1000 CHF 383 383 % 46.2 46.2 Estimated realisable value of collateral 1000 CHF Net debt amount 1000 CHF Current year Previous year Other collateral 1000 CHF 497,539 497,539 544,374 62,833 62,833 75,890 Without collateral 1000 CHF 38,787 38,787 36,299 4 7,925 7,929 5,699 Total 1000 CHF 536,326 536,326 580,673 62,837 7,925 70,762 81,589
11
Individual provisions 1000 CHF
Part 2

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5 Participations
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Consolidated participations Partici- ParticiShare pation pation capital of votes of capital in 1000 in % in % 27,000 CHF 1,000 CHF 2,000 CHF 250 EUR 100 CHF 100 CHF 100 CHF 100 CHF 500 SGD 10,000 HKD 5,000 CHF 500 CHF 100 CHF USD 400 KYD 250 USD USD 987 SGD 250 GBP GBP 3,500 GBP USD 10 CAD GBP NZD CAD 100.00 90.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 56.84 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 90.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 56.84 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Name Rothschild Bank (C.I.) Ltd. Equitas SA Rothschild Advisory Partners AG Rothschild Vermgensverwaltungs-GmbH RBZ Treuhand AG Creafin AG Sagitas AG Anterana Holdings AG Rothschild Wealth Management (Singapore) Ltd. Rothschild Wealth Management (Hong Kong) Ltd. Rothschild Private Trust Holdings AG Rothschild Trust (Schweiz) AG RTS Geneva SA Master Nominees Rothschild Trust Cayman Ltd. Rothschild Trust BVI Ltd. RTB Trustees Rothschild Trust (Singapore) Ltd. Rothschild Trust Corp. Ltd. Rothschild Nominees Rothschild Trust Guernsey Ltd. Rothschild Trust (Bermuda) Ltd. Rothschild Trust Canada Inc. Rothschild Trust Financial Services Ltd. Rothschild Trust New Zealand Ltd. Rothschild Trust Protectors Ltd.
Domicile Guernsey Geneva Zurich Frankfurt Zurich Zurich Glarus Glarus Singapore Hong Kong Zurich Zurich Geneva Tortola George Town Tortola Tortola Singapore London London Guernsey Bermuda St. Peter Port Auckland
Business activity Bank Asset management Advisory services Asset management Fiduciary services Asset management In liquidation Fiduciary services Asset management Asset management Holding Trust services Trust services Nominee services Trust services Trust services Trust services Trust services Trust services Nominee services Trust services Trust services Trust services Trust services
Charlottetown Trust services
Charlottetown Trust services
Part 2

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Non-consolidated participations 31.3.2012 1000 CHF Non-consolidated participations without market value Total non-consolidated participations Major non-consolidated participations Share capital in 1000 5000 GBP Participation of votes in % 0.00 Participation of capital in % 40.00 84,722 84,722 31.3.2011 1000 CHF 84,722 84,722 Change 1000 CHF
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Name Rothschild Bank International Ltd.
Domicile Guernsey
Business activity Bank
The investment in Rothschild Bank International Ltd. (RBI), formerly NM Rothschild & Sons (CI) Ltd., Guernsey, has a book value of CHF 83.3 million (preferred shares without voting rights). RBI is an affiliated company, which is controlled by Rothschilds Continuation Holdings AG, Zug.
Participations and fixed assets Accumulated depreciation write-offs 1000 CHF 34,383 16,092 10,927 7,653 69,055 2,735 2,735 71,790 Book value previous year 1000 CHF 84,722 84,722 17,000 11,000 14,087 3,885 45,972 5,203 734 5,937 136,631 Depreciation/ Valuation adjustments 1000 CHF 2,671 1,773 4,444 296 296 4,740 Book value current year 1000 CHF 84,722 84,722 17,000 11,000 14,280 3,414 45,694 31,888 929 32,817 163,233
Historical cost 1000 CHF Other participations Total participations Bank buildings Other properties Outfitting costs Other fixed assets Total fixed assets IT platform (host system) Other intangible assets Total intangible assets Total 84,722 84,722 51,383 27,092 25,014 11,538 115,027 5,203 3,469 8,672 208,421
Reclassifications 1000 CHF
Additions 1000 CHF 2,853 1,342 4,195 26,685 482 27,167 31,362
Disposals/ Forex impact 1000 CHF 11 40 29 9 9 20
Fire insurance value 31.3.2012 1000 CHF 31.3.2011 1000 CHF 93,190 79,868
Fire insurance value of real estate Fire insurance value of other fixed assets
94,681 71,543
Part 2

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8 Other assets and other liabilities 31.3.2012 Other Other assets liabilities 1000 CHF 1000 CHF Replacement values of all derivative financial instruments Compensation accounts, stamp duty, VAT, withholding tax Due from Trust customers Other assets and liabilities Total other assets and other liabilities 9 24,781 2,801 5,693 1,593 34,868 43,792 3,459 3,930 51,181 31.3.2011 Other Other assets liabilities 1000 CHF 1000 CHF 51,332 2,569 9,289 1,494 64,684 48,176 3,057 2,309 53,542
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Indication of pledged or assigned assets to secure own commitments and of assets with reservation of title 31.3.2011 Book value 1000 CHF 40,000 40,784 64,290 145,074 of which used 1000 CHF 11,764 11,764 31.3.2011 Book value 1000 CHF 29,956 17,117 94,969 142,042 of which used 1000 CHF 2,299 2,299
Pledged or ceded assets and assets with reservation of title without securities lending and borrowing and without repurchase and reverse repurchase agreements Money market instruments Due from banks Securities Total
10 Disclosure of liabilities to Rothschild Bank pension plan Swiss pension plans BVG pension scheme 31.3.2012 31.3.2011 1000 CHF 1000 CHF Cover margin according Swiss GAAP FER 16 Excess in relation to disclosed liabilities in % Economic benefit Economic liability 9,554 5.7% 15,794 9.8% Additional supporting foundation 31.3.2012 31.3.2011 1000 CHF 1000 CHF 5,265 25.9% 5,791 28.2%
The disclosures are based on the annual accounts of the pension schemes as of 31.12.2011 and 31.12.2010 respectively.
Part 2

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Additional supporting foundation 31.3.2012 31.3.2011 1000 CHF 1000 CHF
BVG pension scheme 31.3.2012 31.3.2011 1000 CHF 1000 CHF Employer contribution reserve not capitalised 598 598
Total 31.3.2012 31.3.2011 1000 CHF 1000 CHF 598 598
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All employees of Rothschild Bank and its Swiss subsidiaries are members of a definied contribution pension scheme, which covers the mandatory benefits specified in the BVG and super-obligatory benefits. A second supporting foundation provides further supplementary super-obligatory benefits. Due to pension schemes amount to CHF 2.1 million (last year: CHF 11.3 million). NMR Overseas Pension Plan The Groups subsidiaries Rothschild Bank (CI) Ltd., Guernsey (RBCI), and Rothschild Trust Guernsey Ltd., Guernsey (RTG), participate in the NMR Overseas Pension Fund, a defined benefit scheme operated for the benefit of employees of certain Rothschild Group entities outside the United Kingdom and outside of Switzerland. A funding valuation (which is being prepared at least every three years) of the scheme as of 31st March 2009 revealed a funding deficit of GBP 15.9 million. The Board of Trustees has agreed that annual contributions of GBP 2.1 million should be paid to the scheme from 31st March 2009 to 31st March 2019. The proportion to be carried by RBCI and RTG amounts to GBP 1 million p.a. or 46% of the total contributions. As restructuring measures were agreed, the economic liability was determined based on the net present value of the future extraordinary contributions. The provision has been increased by CHF 3.3 million to CHF 9.2 million. In the case of a recovery of the Plan, the decision of the Board of Trustees maybe unwound. 11 Valuation adjustments and provisions, reserves for general banking risks Usage in conformity with their purpose 1000 CHF 90 90 Recoveries, overdue interest, currency differences 1000 CHF 104 5 109 New creation, charged to income statement 1000 CHF 3,265 4,083 7,348 Reversals, credited to income statement 1000 CHF
Balance previous year 1000 CHF Provisions for deferred taxes Provisions for pension obligations Other provisions Total valuation adjustments and provisions Total valuation adjustments and provisions as per balance sheet Reserves for general banking risks 3,425 5,997 845 10,267 10,267 22,769
Balance current year 1000 CHF 3,425 9,158 4,833 17,416 17,416 22,769
tatutory accounts include hidden reserves according to para. 30 Swiss Banking GAAP. These are treated under reserves for general banking risks in the consolidated S true and fair accounts.
Part 2

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12 Statement of changes in shareholders equity
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1000 CHF Share capital Capital reserve Reserves and retained earnings Minority interest in shareholders equity Reserves for general banking risks Consolidated net profit incl. minority interests Shareholders equity at beginning of current year Dividends paid Dividends paid to minorities Translation adjustments Consolidated net profit incl. minority interests Shareholders equity at end of current year Share capital Capital reserve Reserves and retained earnings Minority interest in shareholders equity Reserves for general banking risks Consolidated net profit incl. minority interests Shareholders equity at end of current year 10,330 4,620 337,351 9,423 22,769 33,373 417,866 32,000 3,553 187 19,602 401,728 10,330 4,620 336,951 7,456 22,769 19,602 401,728
Part 2

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13 Maturity structure of current assets, financial investments and liabilities Redeemable At sight by notice 1000 CHF 1000 CHF Cash Money market instruments Due from banks Due from customers Trading balances in securities and precious metals Financial investments Total current assets Previous year Money market instruments Due to banks Due to customers, other Total borrowed funds current year Previous year 2,313,758 449,588 32,591 1,212 218,222 3,015,371 812,186 32 50,252 3,326,444 3,376,728 2,319,257 235,105 235,105 97,961 180,935 Maturity within 3 months 1000 CHF 40,000 5,925 157,531 1,808 205,264 1,480,045 13,845 13,845 2,709 Maturity within 3 12 months 1000 CHF 69,120 102,216 16,529 187,865 352,636 5,064 5,064 20,038 Maturity Maturity within after Total 15 years 5 years 31.3.2012 1000 CHF 1000 CHF 1000 CHF 8,883 49,450 58,333 95,161 2,313,758 40,000 524,633 536,326 1,212 286,009 3,701,938 2,837,989 32 50,252 3,345,353 3,395,637 2,522,939
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14 Disclosure of amounts due from and due to affiliated companies as well as loans and exposures to directors and senior executives 31.3.2012 1000 CHF Claims against affiliated companies Liabilities against affiliated companies Loans and exposures to directors and senior executives 75,754 1,234 30,981 31.3.2011 1000 CHF 10,505 1,844 45,718 Change 1000 CHF 65,249 610 14,737
621.1 33.1 32.2
Transactions with affiliated persons and companies (in particular parent and subsidiary companies) such as securities transactions, granting loans and account interest are carried out at the conditions offered to third parties. Members of the Executive Committee (ExC) and the internal audit department are offered the Banks normal conditions for employees. Members of the Board are charged at least the Banks normal conditions for employees.
Part 2

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15 Balance sheet by domestic and foreign origin 31.3.2012 Foreign Total 1000 CHF 1000 CHF 7 430,596 485,908 1,212 64,795 84,672 546 623 1,648 3,625 1,073,632 2,313,758 40,000 524,633 536,326 1,212 286,009 84,722 45,694 32,817 11,723 34,868 3,911,762 31.3.2011 Foreign Total 1000 CHF 1000 CHF 4 44,102 838,994 541,093 829 93,494 84,672 874 292 1,576 11,621 1,617,551 299,646 373,842 1,331,949 580,673 829 251,050 84,722 45,972 5,937 12,624 64,684 3,051,928
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Assets Cash Money market instruments Due from banks Due from customers Trading balances in securities and precious metals Financial investments Participations Fixed assets Intangible assets Accrued income and prepaid expenses Other assets Total assets Liabilities and shareholders equity Money market instruments Due to banks Due to customers, other Accrued expenses and deferred income Other liabilities Valuation adjustments and provisions Reserves for general banking risks Share capital Capital reserve Reserves and retained earnings Consolidated net profit Total liabilities and shareholders equity
Domestic 1000 CHF 2,313,751 40,000 94,037 50,418 221,214 50 45,148 32,194 10,075 31,243 2,838,130
Domestic 1000 CHF 299,642 329,740 492,955 39,580 157,556 50 45,098 5,645 11,048 53,063 1,434,377
32 10,938 570,796 44,615 41,966 4,920 22,769 10,330 4,620 344,407 19,602 1,074,995
39,314 2,774,557 1,185 9,215 12,496 2,836,767
32 50,252 3,345,353 45,800 51,181 17,416 22,769 10,330 4,620 344,407 19,602 3,911,762
676 59,734 460,492 44,417 47,880 3,925 22,769 10,330 4,620 346,774 33,373 1,034,990
21,047 1,980,990 2,897 5,662 6,342 2,016,938
676 80,781 2,441,482 47,314 53,542 10,267 22,769 10,330 4,620 346,774 33,373 3,051,928
Part 2

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16 Geographical analysis of assets 31.3.2012 1000 CHF Share in % Europe America Asia, Australia, New Zealand Others Total 3,576,760 263,309 58,751 12,942 3,911,762 91.5 6.7 1.5 0.3 100.0 31.3.2011 1000 CHF Share in % 2,629,258 366,672 49,912 6,086 3,051,928 86.2 12.0 1.6 0.2 100.0
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Part 2

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17 Balance sheet by currencies in 1000 CHF
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Assets Cash Money market instruments Due from banks Due from customers Trading balances in securities and precious metals Financial investments Participations Fixed assets Intangible assets Accrued income and prepaid expenses Other assets Total on balance assets Contingent assets from forex spot, forex forward and forex options transactions Total assets Liabilities and shareholders equity Money market instruments Due to banks Due to customers, other Accrued expenses and deferred income Other liabilities Valuation adjustments and provisions Reserves for general banking risks Share capital Capital reserve Reserves and retained earnings Consolidated net profit Total on balance liabilities
CHF
EUR
GBP
USD
AUD
Other
Total 31.3.2012
2,312,796 40,000 42,211 83,805 27,988 84,722 45,175 32,766 7,601 30,845 2,707,909 279,913
738 238,389 214,985 24 39,799 193 1,756 1,030 496,914 642,596
61 19,939 115,636 170 51 1,999 2,987 140,843
89 122,012 101,428 1,188 201 224,918
912 1,362 7 2,281 43,610 45,891
74 2,313,758 40,000 101,170 19,110 218,222 156 159 6 524,633 536,326 1,212 286,009 84,722 45,694 32,817 11,723 34,868
338,897 3,911,762 248,890 3,689,776 587,787 7,601,538
510,376 1,964,391 651,219 2,189,309
2,987,822 1,139,510
32 8,341 448,375 43,326 50,503 16,421 22,769 10,330 4,620 344,407 19,602 968,726 8,098 520,299 142 9 995 529,543 603,976 5,991 5,786 2,323 660 21,578 1 1,307 9,937 2 11,246 35,561 46,807 916 5,142 6 9 401,656 1,561,588
32 50,252 45,800 51,181 17,416 22,769 10,330 4,620 344,407 19,602 403,498 3,345,353
410,425 1,583,167 231,989 8,805 604,957 1,185
408,655 3,911,762 172,912 3,708,365 581,567 7,620,127 6,220
Contingent liabilities from forex spot, forex forward and forex options transactions 2,058,970 Total liabilities and shareholders equity Net position per currency 39,874
3,027,696 1,133,519
642,414 2,188,124
Part 2

Information on Off-Balance Sheet Transactions
18 Analysis of contingent liabilities 31.3.2012 1000 CHF Guarantees and letters of credit 19 Irrevocable commitments 31.3.2012 1000 CHF Liability against the Swiss deposit guarantee Other 20 Outstanding derivative instruments Trading instruments Replacement value positive negative 1000 CHF 1000 CHF Foreign exchange Forwards Options (OTC) Total before consideration of netting contracts Current year Previous year 20,194 4,787 24,981 51,332 39,007 4,785 43,792 48,176 3,437,848 762,996 4,200,844 2,467,896 4,570 3,355 31.3.2011 1000 CHF 3,746 1,939 Change 1000 CHF 824 1,416 62,837 31.3.2011 1000 CHF 75,904 Change 1000 CHF 13,067
21
17.2
% 22.0 73.0
Contract volume 1000 CHF
There were no hedging instruments and no netting agreements open at current and previous business year-end. 21 Analysis of counterparties of derivative instruments 31.3.2012 Replacement value Contract positive negative volume 1000 CHF 1000 CHF 1000 CHF Banks and derivative exchanges with duration up to 1 year Customers with collateral Total 13,965 11,016 24,981 26,413 17,379 43,792 2,790,234 1,410,610 4,200,844 29,092 22,240 51,332 13,338 34,838 48,176 1,143,451 1,324,445 2,467,896 31.3.2011 Replacement value Contract positive negative volume 1000 CHF 1000 CHF 1000 CHF
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22 Analysis of fiduciary transactions
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Fiduciary placements with third-party banks Fiduciary placements with affiliated banks Fiduciary credits and other fiduciary transactions Total 23 Client assets
31.3.2012 1000 CHF 1,101,906 175,033 1,276,939
31.3.2011 1000 CHF 1,325,937 149,589 1,328 1,476,854
Change 1000 CHF 224,031 25,444 1,328 199,915
% 17.0
16.9 100.0 13.5
31.3.2012 CHF Mio. Type of client assets Other client assets Fund assets managed by RBZ Group Assets with management mandate Total client assets (incl. double count) thereof double count Net new assets Custody assets 7,054 216 5,986 13,256 216 971 5,549
31.3.2011 CHF Mio. 6,935 231 5,634 12,800 231 714 4,819
Change CHF Mio. 119 15 352 456 15 257 730
% 1.7
6.5 6.2 3.6 6.5 36.0 15.1
Client assets include deposits as well as the market value of securities, precious metals and fiduciary investments. Net new assets consist of all external cash deposits and withdrawals on client accounts as well as all external in- and outflows from/into client deposits. Interest and dividend income are not taken into account. Assets with management mandate cover both assets deposited with Group companies and assets deposited at third-party institutions for which the Bank holds a management mandate. Custody assets include assets for which the Bank provides custody services only. These relate mainly to assets from Group Companies. In addition, assets from the Banks pension schemes and assets of employees are included.
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Information on the Income Statement

24 Result from trading operations 2011/12 1000 CHF Profit on foreign exchange and bank notes Profit on bullion transactions Profit on securities Total 25 Personnel expenses 2011/12 1000 CHF Salaries and allowances Social security contributions Pension contributions Other personnel expenses Total Staff Rothschild Bank AG Staff Rothschild Bank AG and subsidiaries 26 Other operating expenses 2011/12 1000 CHF Occupancy expenses Cost of IT, machinery, furniture, vehicles and other equipment Printing and postage Research, communication and public relations Insurance Travel and entertainment Legal, audit, consultancy and regulatory fees Other operating expenses Total 3,893 6,863 1,007 5,885 1,999 5,496 4,136 155 29,434 2010/11 1000 CHF 4,663 6,214 926 5,428 2,180 5,720 5,852 186 31,169 Change 1000 CHF 770 649 81 457 181 224 1,716 31 1,735 80,798 4,697 13,404 6,857 105,756 257 452 2010/11 1000 CHF 77,155 4,492 11,783 6,381 99,811 225 401 Change 1000 CHF 3,643 205 1,621 476 5,945 32 51 26,935 1,276 807 29,018 2010/11 1000 CHF 24,015 623 847 25,485 Change 1000 CHF 2,920 653 40 3,533
23
% 12.2 104.8 4.7 13.9
% 4.7 4.6 13.8 7.5 6.0 14.2 12.7
16.5 10.4 8.7 8.4 8.3 3.9 29.3 16.7 5.6
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27 Gross profit by domestic and foreign origin
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Net interest income Net commission income Results from trading operations Other ordinary results Total gross income Personnel expenses Other operating expenses Total operating expenses Gross profit 28 Taxation
Domestic 1000 CHF 20,842 86,660 26,979 7,023 141,504 92,949 22,740 115,689 25,815
2011/12 Foreign Total 1000 CHF 1000 CHF 2,471 22,891 2,039 783 28,184 12,807 6,694 19,501 8,683 23,313 109,551 29,018 7,806 169,688 105,756 29,434 135,190 34,498
Domestic 1000 CHF 16,074 93,843 23,608 11,211 144,736 84,968 23,073 108,041 36,695
2010/11 Foreign Total 1000 CHF 1000 CHF 1,920 33,035 1,877 3,985 32,847 14,843 8,096 22,939 9,908 17,994 126,878 25,485 7,226 177,583 99,811 31,169 130,980 46,603
2011/12 1000 CHF Deferred tax expense Costs for current income and capital taxes Total Unrecognised tax assets on losses 5 5,441 5,436 2,962
2010/11 1000 CHF 294 7,688 7,394 3,018
Change 1000 CHF 289 2,247 1,958 56
98.3 29.2 26.5 1.9
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D Consolidation, Accounting and Valuation Principles

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General Principles
The consolidated financial statements have been prepared in accordance with the Swiss Bank Accounting Guidelines of the Swiss Financial Market Supervisory Authority (BAG-FINMA). The Group accounts present a true and fair view of the financial position of the Group, and of the results of its operations and its cash flows in compliance with the accounting rules applicable for banks.
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Consolidated Companies
Subsidiaries are entities controlled by the Bank. Control exists when the Group has the power, directly or indirectly, usually based on a participation of over 50% of voting capital, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
Method of Consolidation
The Groups capital consolidation is prepared in accordance with the purchase method.
Change in the Scope of Consolidation

There are no changes in the scope of consolidation.
Accounting and Recording of Transactions

All transactions effected up to and including the balance sheet date are accounted for on the trade date and are, from this date on, stated and assessed according to the principles laid out below.
Foreign Currency Translation of the Financial Statements

Income statements of foreign entities are translated into the Groups reporting currency at average exchange rates for the period and their balance sheets are translated at the exchange rate at the end of the period. Foreign exchange differences arising from the translation are recognised directly as a separate component of equity. On disposal of a foreign entity, these translation differences are recognised in the income statement as part of the gain or loss on sale. Transactions in foreign currencies are translated at the foreign exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into Swiss Francs at the foreign exchange rate ruling at the balance sheet date. Foreign exchange differences are recognised in the income statement. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at the foreign exchange rates ruling at the dates the fair value was determined. The following rates prevailing on the balance sheet date were used for foreign currency translations: Foreign exchange rates used EUR GBP USD 2011/12 Spot rate Average rate 1.2058 1.2141 1.4448 1.4072 0.9005 0.8778 2010/11 Spot rate Average rate 1.2998 1.3300 1.4704 1.5619 0.9125 1.0041
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Cash, Due from and to Banks, Due to Customers and Money Market Instruments
Assets and liabilities are stated in the balance sheet at their nominal value.
Due from Customers

Due from customers are stated in the balance sheet at their nominal value. Claims taking all off-balance sheet items into account which the debtor will be unlikely to satisfy in future are covered by individual provisions. These are classified as non-performing if interest and capital payments are overdue for more than 90 days. Individual provisions are deducted directly from the corresponding asset positions. Claims rated as uncollectible are written off against the individual provisions made.
Trading Portfolios in Securities and Precious Metals

Securities and precious metals in trading portfolios are in principle stated at the fair value. The price obtained on a price-efficient and liquid market is taken as the fair value, which as a rule corresponds to the market value. If in exceptional cases there is no fair value available, securities and precious metals in trading portfolios will be valued and stated at the lower of cost or market. Interest, discount and dividend income from trading securities are set off against refinancing expenses and booked as income from trading operations.
Financial Investments
Fixed income securities that are planned to be held until maturity are valued by the accrual method. Premiums and discounts are amortised over the remaining life of the respective security and are recognised in interest and dividend income on financial investments. Other financial investments are valued at the lower of cost or market value.
Non-consolidated Participations
An associate is an entity in which the Group has significant influence, but no control over the operating and financial management policy decisions. This is generally demonstrated by the Group holding in excess of 20%, but no more than 50%, of the voting rights. The Groups investments in associates are initially recorded at cost. Subsequently their value is increased or decreased by the Groups share of the post-acquisition profit or loss, or by other movements reflected directly in the equity of the associate. When the Groups share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. All other participations without a significant influence are stated at cost less necessary depreciation.
Fixed Assets
Fixed assets are valued at cost less depreciation over an expected useful lifetime of maximum ten years for fitout costs and maximum six years for other tangible fixed assets and maximum three years for IT assets. Bank buildings and other properties are depreciated to a base level generally accepted by the tax authorities. The value is reviewed on a regular basis. If a review reveals an impairment in value, an additional, unscheduled write-off is made. The remaining book value is subsequently written down over the residual useful lifetime. If the review reveals a change in the useful lifetime, the remaining book value is written down as planned over the adjusted useful life. Small investment outlays are charged directly to operating expenses at the time of purchase.
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Intangible Assets
Intangible assets acquired are stated at cost less depreciation over a measurable useful life of maximum three years for IT software and ten years for the components of the IT platform (host system). Review and adjustments of value are carried out in the same way as with tangible assets. Small investment outlays are charged directly to operating expenses at the time of purchase.
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Derivative Instruments
Derivative financial instruments are stated at fair value. The positive and negative replacement values are included in the balance sheet under other assets and other liabilities. Unrealised/realised gains are included in results from trading operations. All derivative financial instruments are allocated to the trading book.
Liabilities to Pension Plans

Pension liabilities are treated according to Swiss GAAP FER 16 (accounting standard for pension benefit obligations relevant for Swiss Banking GAAP). The employers contributions according to the defined contribution pension plans are included within personnel expenses. Employer contribution reserves (prepaid pension contributions paid by the employer) are not capitalised.
Valuation Adjustments and Provisions

Claims that a debtor is unlikely to satisfy in future are covered by individual valuation adjustments. Individual valuation adjustments are deducted directly from the corresponding asset positions. Individual valuation adjustments and individual provisions are made for all other recognisable loss risks according to a concept of prudence.
Interest Income and Expense

Interest income and expense are recognised in the income statement for all interest bearing instruments on an accrual basis. Revenue is recognised only when it is probable that the economic benefits associated with the transaction will flow to the entity. Interest including accrued interest that are due but unpaid for more than 90 days are considered as being at risk and an appropriate provision is established.
Fee and Commission Income and Expense

The Group earns fee and commission income from services provided to clients. Fee income from advisory and other services can be divided into two broad categories; fees earned from services that are provided over a period of time, which are recognised over the period in which the service is provided; and fees that are earned on completion of a significant act or on the occurrence of an event, such as the completion of a transaction, which are recognised when the act is completed or the event occurs. Revenue is recognised only when it is probable that the economic benefits associated with the transaction will flow to the entity. Commission including accrued commission that are due and unpaid for more than 90 days are considered as being at risk and an appropriate allowance is established. Portfolio and other management advisory and service fees are recognised based on the applicable service contracts. Asset management fees related to investment funds are recognised over the period the service is provided. The same principle is applied to the recognition of income from wealth management, financial planning and custody services that are continuously provided over an extended period of time.
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Operating Lease and Rental Agreements

The Group has entered into operating leases in respect of equipment. The total payments made under operating leases are charged to the income statement on a straight-line basis over the period of the leases. There are no claims or commitments from finance leases.
Income Tax
Current taxes are recurring taxes on capital and income. Current taxes are determined in accordance with the local fiscal regulations on ascertaining profits and capital tax and are stated as expenses during the accounting period. Taxes owed are recorded as accrued expenses. Deferred taxes arise when valuation principles other than those relevant from the fiscal law perspective are used in drawing up consolidated annual financial statements. Deferred tax liabilities are booked under provisions and valuation adjustments and any changes are recognised in the income statement.
Fiduciary Placement Activities

The Group acts as custodian and in other fiduciary capacities that result in the holding or placing of assets on behalf of customers. These assets and the interest income arising therefrom are excluded from these financial statements, as they are not assets of the Group.
Contingent Liabilities and Fiduciary Operations

Transactions resulting from these activities are stated off-balance sheet at their face value. For recognisable risks, provisions are made and recorded under liabilities.
Changes in Accounting and Valuation Principles

There were no changes in accounting and valuation principles.
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E Notes on Risk Management

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General Principles
The Board of Directors of the Bank is responsible for the stipulation of the risk policy. The Board of Directors has released a risk policy, which both takes into account the circumstances of the business activities of the Bank and its subsidiaries and also reflects the capital funds situation of the Group, the interest of the shareholders and the regulatory environment. The risk policy is constantly monitored and amended if necessary. The formal methodology of the risk policy relates primarily to the observance of quantitative risk limits, especially for credit and market risks, and to the qualitative aspects of risk diversification and of working procedures for reducing operational risks. At the same time, great importance is attached to the risk awareness of the management bodies and all Group staff. Hence the Board of Directors and the Executive Committee pursue an open risk culture which is also implemented by responsible, careful and professional behaviour from all employees. The Group consciously depends on the personal integrity, specialist competence and risk awareness of each individual and undertakes the necessary steps. The implementation of the risk policy is delegated to the Executive Committee. Management is supported in this by a risk control unit which is independent from trading and client-related services and monitor compliance with limits and the risk policy.
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Credit Risks
Credit risk describes the potential for loss as a result of insolvency of a client or counterparty. A potential loss arises in particular when maturing loans or other obligations to payment are not repaid or cannot be repaid when due. For this reason loans and other credits are only granted after taking into account fundamental principles of caution. Since the banking business is strongly focused on private banking, loans are mainly granted against collateral in the form of pledged investment portfolios. The competencies for loans approvals and the monitoring of credit positions are subject to clear rules and supervised by people who are independent of the client advisors. The Board of Directors and the Executive Committee have laid down clear guidelines for loanable values and the pledging of assets (collateral). In general, assets serving as collateral are held in the Banks custody and pledged in favour of the Bank under contractual agreements. The loanable values of the pledged assets, which are derived from market values, are compared daily to the loan commitments secured and are subject to constant monitoring. If coverage threatens to become insufficient, steps are taken to reestablish the necessary loanable value. If in exceptional cases no published market value is available for pledged assets, internal valuations calculated using standard banking methods will be applied. General principles have also been set out that aim for appropriate diversification of loan commitments and collateral. The concentration of risks on one client or counterparty or on one group of linked clients or counterparties is constantly monitored. Appropriate measures are taken to avoid the emergence of large exposures. Counterparties are defined as banks or brokers with which the Bank trades or from which it purchases services. Counterparties are carefully selected on the basis of their creditworthiness, drawing on external ratings. Internal limits have to be approved by the competent bodies according to the risk policy and internal guidelines.
Liquidity Risk
Liquidity risk describes the risk that in some circumstances, for example changed market conditions, the Bank might not be able to meet all its payment obligations as they fall due. The Bank maintains committed liquidity facilities with clearing institutions for the exceptional event that counterparties or clients do not meet their payment obligations punctually. Compliance with the liquidity rules as set out in the Banking Ordinance is constantly monitored.
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Market Risk
Market risk describes the risk that the Bank could suffer losses as a result of changes on the financial markets (interest rates, FX rates, share prices). The business policy of the Bank is to only permit open market risk positions to a small degree in relation to client business volumes and available capital funds. Trading positions are valued daily. Calculation of risk positions and monitoring of compliance with the limits is performed by a team independent from the trading department. The Treasury Committee manages interest rate risk in the banking book and monitors the balance sheet structure.
Operational Risk
Operational risk entails the possibility that losses may be incurred directly or indirectly due to the inappropriateness or failure of internal procedures, persons or systems or due to external events that cannot be influenced. In accordance with best practice standards in banking and the Banks dedication to ensure high quality services for its clients, the Executive Committee has implemented a set of processes and work flows by means of internal policies and procedures on organisation setup and controls, which are designed to maintain operational security at a high level. Particular attention is given to the quality and skills of staff, the segregation of duties, the careful selection of counterparties and the security of the central computer systems and networks. The Internal Audit department reviews the procedures and internal controls at regular intervals. Due to an escalation procedure it is assured that the responsible line management is adequately involved in the reporting and analyses process. The Group has outsourced the operation of its computer systems to Banque Prive Edmond de Rothschild in Geneva. Both banks subscribe to high security standards developed to ensure that bank-client confidentiality is maintained. The Board of Directors has considered the main operational risks of the Group and has issued guidelines (principles) for the measurement and limitation of operational risk.
Legal Risks and Compliance

In order to monitor legal and regulatory risks, the Bank maintains a Legal and Compliance Department. These ensure that the Banks business activities are conducted in accordance with the applicable regulations and the obligation of financial intermediaries to observe due diligence. If required, external legal advice is sought.
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Capital Adequacy Disclosures

Eligible and mandatory capital 31.3.2012 1000 CHF Gross capital of which minority interests Deductions from the core capital Eligible equity Credit risk (international standard approach) Non-counterparty-related risk Market risk (Swiss standard approach) Operational risk (basis indicator method) SA-BIS and IRB approach: Additional capital requirement for non-counterparty-related risk and credit risk (multiplicators according to art. 64 und 65 CAO). Required equity Equity cover ratio BIS-ratio 374,670 7,456 77,267 297,403 37,474 6,281 4,701 27,007 31.3.2011 1000 CHF 384,493 9,423 84,722 299,771 48,498 4,153 3,864 27,658 Change 1000 CHF 9,823 1,967 7,455 2,368 11,024 2,128 837 651
31
2.6 20.9 8.8 0.8 22.7 51.2 21.7 2.4
16,310 91,773 3.24 0.26
13,155 97,328 3.08 0.25
3,155 5,555 0.16 0.01
24.0 5.7 5.2 5.2
The required information according to the FINMA Circular 08/22 is disclosed in the notes on risk managment (qualitative information) and in the above table (quantitative information). Additional information is available on www.rothschildbank.com
Part 2
Business and Services Provided by Rothschild Bank AG Zurich and Subsidiaries

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Rothschild Bank AG is an independent Swiss bank specialising in private banking and asset management. Consequently the most important contributions to income are derived from commissions and the provision of services. As a result of the links between its shareholders who are members of the Rothschild family, the Bank is also a member of an important worldwide group that has the benefit of farreaching resources and knowledge in the field of financial services. The most important services that are offered within private banking are the management of accounts in all convertible currencies, the management and safekeeping of securities and precious metals, trading in currencies, securities and derivatives, secured lending and the provision of structures for the safeguarding and transfer of private wealth. The accounts are managed at the head office in Zurich and within the subsidiaries, Rothschild Bank (CI) Ltd., in Guernsey, Equitas SA, in Geneva, Rothschild Vermgensverwaltungs-GmbH in Frankfurt, Rothschild Wealth Management (Singapore) Ltd. in Singapore and Rothschild Wealth Management (Hong Kong) Ltd. in Hong Kong. In addition Rothschild Bank AG is represented through the worldwide network of the Rothschild Group. It has been the principle of Rothschilds for generations that clients and their needs are of the highest importance. This principle, together with the personal relationship between the client and the portfolio manager, forms the foundation for successful capital growth and protection.
Portfolio Management
In addition to active investment advisory services for clients, the core competence lies in asset management tailored to the individual needs of clients. The investment philosophy of Rothschild Bank Zurich is aimed at the development of long-term solutions. The dynamic asset management process is designed for the evaluation of broad individual client needs and for their special requirements. This process takes place within the investment policy of the Bank that reflects the guidelines and instructions of the client and minimises the investment risks. The investment process is systematically organised and simple to understand. In investment advisory services as well as in asset management we make use of fundamental and financial analysis developed by specialists of the worldwide Rothschild Group. An internal investment committee reviews their recommendations. To ensure an ideal asset allocation, the Bank utilises both outstanding third party products as well as first class products developed by the Rothschild Group.
Trust and Company Management Services

Trust and corporate services are largely provided by subsidiaries of Rothschild Private Trust Holdings AG. This company holds various subsidiaries, both in Switzerland, Guernsey and in a large number of other jurisdictions, which are specialised in the formation and management of trusts, foundations and corporate vehicles for private clients. This activity is a traditional service provided by the Rothschild Group. The trust specialists have the benefit of considerable experience over many years, in the structuring and management of trusts and foundations in many jurisdictions, which bring significant benefits for the transfer of wealth between generations of clients. These services make it possible to meet the needs of a widely distributed international clientele through the selection of the most beneficial and flexible vehicles and taking account of the individuals personal preferences, tax, and legal situation.
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Business and Services Provided by Rothschild Bank AG Zurich and Subsidiaries

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Trading
The provision of portfolio management services is supported by specialists and the necessary infrastructure in the trading department of the Bank. This allows quick execution and processing of orders in foreign exchange, fiduciary deposits and securities transactions on good terms in all the major financial centres as well as in investment funds and derivatives as instruments for investment management and risk. Rothschild Bank AG is a licenced securities dealer, an associated member of the Swiss Stock Exchange and a member of the German Stock Exchange Xetra.
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Lombard Lending
Within the context of overall investment management and private banking, the Bank grants loans to clients and guarantees to third parties on behalf of clients. This credit activity is based upon lombard lending against marketable securities in diversified portfolios and normally does not allow granting advances over more than twelve months. Within the credit policies, there are strict rules regarding the quality of collateral together with margin requirements.
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Report of the Statutory Auditor on the Consolidated Financial Statements

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Report of the Statutory Auditor on the Consolidated Financial Statements to the General Meeting of Shareholders of Rothschild Bank AG, Zurich As statutory auditor, we have audited the accompanying consolidated financial statements of Rothschild Bank AG, Zurich, which comprise the balance sheet, income statement, cash flow statement and notes (pages 8 to 35) for the year ended 31st March 2012. Board of Directors Responsibility The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the provisions governing the preparation of financial statements for Banks and the requirements of Swiss law as well as the consolidation and valuation principles as set out in the notes. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditors Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entitys preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements for the year ended 31st March 2012 give a true and fair view of the financial position, the results of operations and the cash flows in accordance with the provisions governing the preparation of financial statements for Banks and comply with Swiss law.
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Report of the Statutory Auditor on the Consolidated Financial Statements

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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 and article 11 AOA) and that there are no circumstances incompatible with our independence. In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the Board of Directors. We recommend that the consolidated financial statements submitted to you be approved.
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KPMG AG
Christoph Grbli Daniel Senn

Licensed Audit Expert Auditor in Charge Licensed Audit Expert
Zurich, 24th May 2012
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Financial Statements of Rothschild Bank AG
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Balance Sheet of Rothschild Bank AG

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Assets
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Cash Money market instruments Due from banks Due from customers Trading balances in securities and precious metals Financial investments Participations Fixed assets Intangible assets Accrued income and prepaid expenses Other assets Total assets Total due from Group companies and significant shareholders
Notes
31.3.2012 1000 CHF 2,313,750 40,000
31.3.2011 1000 CHF 299,641 373,842 1,221,597 499,476 829 247,056 135,420 45,098 5,645 7,031 53,704 2,889,339 74,626
Change 1000 CHF 2,014,109 333,842 735,753 35,640 383 36,457 5,723 871 26,857 975 27,539 948,909 10,067
672.2 89.3 60.2 7.1 46.2 14.8 4.2 1.9 475.8 13.9 51.3 32.8 13.5
2, 8 4, 8 2
485,844 463,836 1,212 283,513 141,143 44,227 32,502 6,056
26,165 3,838,248 64,559
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Balance Sheet of Rothschild Bank AG

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Liabilities and shareholders equity 31.3.2012 1000 CHF 32 8 3, 8 1 4 4, 7 5, 6, 7 7 7 7 7 612,166 2,770,919 34,058 46,915 17,264 7,000 10,330 63,300 240,500 5,010 30,754 3,838,248 616,950 31.3.2011 1000 CHF 676 433,061 1,999,341 30,030 51,822 16,269 7,000 10,330 60,100 240,500 3,994 36,216 2,889,339 403,129 Change 1000 CHF 644 179,105 771,578 4,028 4,907 995 3,200 1,016 5,462 948,909 213,821
Notes Money market instruments Due to banks Due to customers, other Accrued expenses and deferred income Other liabilities Valuation adjustments and provisions Reserves for general banking risks Share capital General legal reserve Other reserves Retained earnings brought forward Net profit Total liabilities and shareholders equity Total due to Group companies and significant shareholders
% 41.4 38.6 13.4
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95.3
9.5 6.1 5.3 25.4 15.1 32.8 53.0
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Off-Balance Sheet Transactions

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31.3.2012 1000 CHF 60,616 7,258 9 1 1 1,326,184 24,902 43,903 4,176,210 31.3.2011 1000 CHF 73,898 5,243 1,561,921 51,239 48,189 2,460,675 Change 1000 CHF 13,282 2,015 235,737 26,337 4,286 1,715,535
Note
% 38.4
40
Contingent liabilities Irrevocable commitments Fiduciary transactions Derivative instruments positive replacement value negative replacement value contract volume
18.0 15.1 51.4 8.9 69.7
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Income Statement
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2011/12 1000 CHF 20,589 1,941 1,692 20,838 379 53,705 7,005 1,929 59,160 11 27,216 17,034 1,566 18,600 125,814 66,439 18,926 85,365 40,449 3,832 1,216 35,401 12 12 4,647 30,754 2010/11 1000 CHF 15,136 2,448 1,516 16,068 566 63,072 6,190 2,401 67,427 23,998 51 19,930 1,492 21,371 128,864 61,360 21,083 82,443 46,421 4,506 332 41,583 15,769 15,769 5,367 36,216 Change 1000 CHF 5,453 507 176 4,770 187 9,367 815 472 8,267 3,218 51 2,896 74 2,771 3,050 5,079 2,157 2,922 5,972 674 884 6,182 15,769 15,769 720 5,462
Notes Interest and discount income Interest and dividend income on financial investments Interest expense Net interest income Commission income on lending activities Commission income on asset management Commission income on other services Commission expense Net commission income Results from trading operations Results from the sale of financial investments Participation income Net income from real estate holdings Total other ordinary results Total income Personnel expenses Other operating expenses Total operating expenses Gross profit Depreciation and write-offs of non-current assets Valuation adjustments, provisions and losses Result before extraordinary items and taxation Extraordinary income Extraordinary expenses Taxation Net profit
% 36.0
20.7 11.6 29.7 33.0 14.9 13.2 19.7 12.3 13.4 100.0 14.5 5.0 13.0 2.4 8.3 10.2 3.5 12.9 15.0 266.3 14.9 100.0 100.0 13.4 15.1
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Part 3
Proposal of the Board of Directors to the Annual General Meeting

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The following amount is available for distribution:
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1000 CHF Net profit for current financial year Carried forward from previous year 30,754 5,010 35,764
The Board of Directors proposes to the Annual General Meeting to allocate this amount as follows: Allocation to general legal reserve Allocation to other reserves Distribution of a gross dividend Balance to be carried forward 2,000 20,000 13,764 35,764
After distribution of the proposed dividend capital resources are as follows: Share capital General legal reserves Other reserves Reserves for general banking risks Balance to be carried forward Shareholders equity after distribution of the dividend 10,330 65,300 240,500 7,000 13,764 336,894
Part 3
Notes to the Financial Statements

Information on the Balance Sheet
1 Other assets and other liabilities 31.3.2012 Other Other assets liabilities 1000 CHF 1000 CHF Replacement values of all derivative financial instruments Compensation accounts, stamp duty, VAT, withholding tax Total other assets and other liabilities 2 24,902 1,263 26,165 43,903 3,012 46,915 31.3.2011 Other Other assets liabilities 1000 CHF 1000 CHF 51,239 2,465 53,704 48,189 3,633 51,822
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Indication of pledged or assigned assets to secure own commitments and of assets with reservation of title 31.3.2012 Book value 1000 CHF 40,000 40,784 64,290 145,074 Disclosure of liabilities to Rothschild Bank pension plan BVG pension scheme 31.3.2012 31.3.2011 1000 CHF 1000 CHF Additional supporting foundation 31.3.2012 31.3.2011 1000 CHF 1000 CHF 5,265 25.9% 5,791 28.2% of which used 1000 CHF 11,764 11,764 31.3.2011 Book value 1000 CHF 29,956 17,117 94,969 142,042 of which used 1000 CHF 2,299 2,299
Pledged or ceded assets and assets with reservation of title without securities lending and borrowing and without repurchase and reverse repurchase agreements Money market instruments Due from banks Securities Total 3
Cover margin according Swiss GAAP FER 16 Excess in relation to disclosed liabilities in % Economic benefit Economic liability
9,554 5.7%
15,794 9.8%
The disclosures are based on the annual accounts of the pension schemes as of 31.12.2011 and 31.12.2010 respectively.
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Additional supporting foundation 31.3.2012 31.3.2011 1000 CHF 1000 CHF 1,259 1,259 1,260 1,260
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Accrued contributions Pension expense Employer contribution reserve not capitalised
BVG pension scheme 31.3.2012 31.3.2011 1000 CHF 1000 CHF 3,924 3,924 598 3,641 3,641 598
Total 31.3.2012 31.3.2011 1000 CHF 1000 CHF 5,183 5,183 598 4,901 4,901 598
All employees of Rothschild Bank and its Swiss subsidiaries are members of a definied contribution pension scheme, which covers the mandatory benefits specified in the BVG and super-obligatory benefits. A second supporting foundation provides further supplementary super-obligatory benefits. Due to pension schemes amount to CHF 2.1 million (last year: CHF 11.3 million). 4 Valuation adjustments and provisions, reserves for general banking risks ReNew Change in coveries, doubtful creation, Reversals, definition interest, charged credited to of purpose, income reclassi- currency to income fications differences statement statement 1000 CHF 1000 CHF 1000 CHF 1000 CHF 995 995
Balance previous year 1000 CHF Other provisions Total valuation adjustments and provisions Total valuation adjustments and provisions as per balance sheet Reserves for general banking risks

Special usage and reversals 1000 CHF
Balance current year 1000 CHF 17,264 17,264
16,269 16,269
16,269 7,000
17,264 7,000
As of 31st March 2012 there are no endangered receivables.
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5 Schedule of share capital 31.3.2012 Nominal value 1000 CHF Capital structure Share capital 6 10,330 Dividend bearing capital 1000 CHF 10,330 31.3.2011 Nominal value 1000 CHF 10,330 Dividend bearing capital 1000 CHF 10,330
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Number of units 103,300
Number of units 103,300
Significant shareholders and shareholder groups 31.3.2012 Nominal Participation 1000 CHF in % 31.3.2011 Nominal Participation 1000 CHF in % 10,330 7,793 1,402 1,016 100 74.0 13.3 9.6
Rothschild Holding AG Significant Shareholders of Rothschild Holding AG: Rothschilds Continuation Holdings AG1) Apollolaan Holdings AG2) Banque Prive Edmond de Rothschild SA
1)
10,330 7,793 1,402 1,016
100 74.0 13.3 9.6
The majority (approx. 53%) of the share capital of Rothschilds Continuation Holdings AG is directly or indirectly held by a group of shareholders which consists of Rothschild Family members (through Rothschild Concordia SAS) or entities controlled by Rothschild Family members. Other important shareholders of Rothschilds Continuation Holdings AG are Jardine Strategic Investment Holdings GmbH with 20.1% and Rabobank International Holding BV with 7.5 %. 2) The share capital of Apollolaan Holdings AG is wholly owned by Intergritas BV, a Dutch Company which in turn is owned by the Trustees of trusts for the benefit of members of the English branch of the Rothschild Family.
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7 Statement of changes in shareholders equity 1000 CHF Share capital General legal reserve Other reserves Reserves for general banking risks (all taxed) Retained earnings Shareholders equity at beginning of current year (before profit distribution) Dividends out of retained earnings brought forward Net profit Shareholders equity at end of current year (before profit distribution) Share capital General legal reserve Other reserves Reserves for general banking risks (all taxed) Retained earnings Shareholders equity at end of current year 10,330 63,300 240,500 7,000 35,764 356,894 32,000 30,754 356,894 10,330 60,100 240,500 7,000 40,210 358,140
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Disclosure of amounts due from and due to affiliated companies as well as loans and exposures to directors and senior executives 31.3.2012 1000 CHF 31.3.2011 1000 CHF 6,138 1,844 45,718 Change 1000 CHF 61,737 621 14,737
Claims against affiliated companies Liabilities to affiliated companies Loans and exposures to directors and senior executives
67,875 1,223 30,981
1,005.8 33.7 32.2
Transactions with affiliated persons and companies (in particular parent and subsidiary companies) such as security transactions, granting loans, and interest accounts are carried out at the conditions offered to third parties. Members of the Executive Committee (ExC) are offered the Banks normal conditions for employees. Members of the Board are charged at least the Banks normal conditions for employees.
Information on Off-Balance Sheet Transactions

9 Analysis of fiduciary transactions 31.3.2012 1000 CHF Fiduciary placements with third-party banks Fiduciary placements with banks of the Group and affiliated banks Fiduciary credits and other fiduciary transactions Total 1,222,915 103,269 1,326,184 31.3.2011 1000 CHF 1,252,761 307,832 1,328 1,561,921 Change 1000 CHF 29,846 204,563 1,328 235,737
2.4 66.5 100.0 15.1
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10 Client assets 31.3.2012 CHF Mio. Type of client assets Other client assets Fund assets managed by RBZ Group Assets with management mandates Total client assets (incl. double count) thereof double count Net new assets Custody assets 6,677 216 3,663 10,556 216 621 2,103 6,454 231 3,633 10,318 231 594 1,981 223 15 30 238 15 27 122 3.5 6.5 0.8 2.3 6.5 4.5 6.2 31.3.2011 CHF Mio. Change CHF Mio.
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Client assets include deposits as well as the market value of securities, precious metals and fiduciary investments. Net new assets consist of all external cash deposits and withdrawals on client accounts as well as all external in- and outflows from/into client deposits. Interest and dividend income are not taken into account. Assets with management mandate cover both assets deposited with Group companies and assets deposited at third-party institutions for which the Bank holds a management mandate. Custody assets include assets for which the Bank provides custody services only. These relate mainly to assets from Group Companies. In addition, assets from the Banks pension schemes and assets of employees are included.
Information on the Income Statement

11 Results from trading operations 2011/12 1000 CHF Profit on foreign exchange and bank notes Profit on bullion transactions Profit on securities Total 12 Extraordinary income and expense 25,130 1,276 810 27,216 2010/11 1000 CHF 22,569 580 849 23,998 Change 1000 CHF 2,561 696 39 3,218
% 11.3
120.0 4.6 13.4
In prior year, the Zurich Cantonal Tax Authorities issued a decree that prevents banks from holding untaxed reserves for general banking risks. However, there is the option under Swiss tax rules and Swiss Banking GAAP to hold untaxed hidden reserves within the position other provisions. Accordingly, the Bank released all untaxed reserves for general banking risks in the amount of CHF 15.8m and created a hidden reserve in the same amount within the position other provisions.
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Accounting and Valuation Principles of Rothschild Bank AG

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General Principles
The accounting and valuation principles comply with the Swiss Code of Obligations, the Bank Law, including the Swiss Financial Market Supervisory Authority guidelines as required for non-consolidated banks, and Statutory directives.
Accounting and Recording of Transactions

All transactions effected up to and including the balance sheet date are accounted for on the trade date and are, from this date on, stated and assessed according to the principles laid out below.
Foreign Currency Translation of the Financial Statements

Transactions in foreign currencies are translated at the foreign exchange rate prevailing at the date of the transaction. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated into Swiss Francs at the foreign exchange rate ruling at the balance sheet date. Foreign exchange rates used EUR GBP USD 31st March 2012 1.2058 1.4448 0.9005 31st March 2011 1.2998 1.4704 0.9125
Cash, Due from and to Banks, Due to Customers and Money Market Instruments
Assets and liabilities are stated in the balance sheet at their nominal value.
Due from Customers

Due from customers are stated in the balance sheet at their nominal value. Claims taking all off-balance sheet items into account which the debtor will be unlikely to satisfy in future are covered by individual provisions. These are classified as non-performing if interest and capital payments are overdue for more than 90 days. Individual provisions are deducted directly from the corresponding asset positions. Claims considered as uncollectible are written off against the individual provisions made.
Trading Portfolios in Securities and Precious Metals

Securities and precious metals in trading portfolios are in principle stated at the fair value. The price obtained on a price-efficient and liquid market is taken as the fair value, which as a rule corresponds to the market value. If in exceptional cases there is no fair value available, securities and precious metals in trading portfolios will be valued and stated at the lower of cost or market value. Interest, discount and dividend income from trading securities are set off against refinancing expenses and are included in income from trading operations.
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Financial Investments
Financial investments are securities held on a long term basis for special business purposes. Fixed income securities that are planned to be held until maturity are valued by the accrual method. Premiums and discounts are amortised over the remaining life of the respective security and are recognised in interest and dividend income on financial investments. Other financial investments are valued at the lower cost or market value.
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Participations
Participations are stated at cost less any necessary depreciation. The Bank applies a collective valuation method as described in BAG-FINMA paragraph 17.
Fixed Assets
Fixed assets are valued at cost less depreciation over an expected useful lifetime of maximum ten years for fitout costs and maximum six years for other tangible fixed assets and maximum three years for IT assets. Bank buildings and other properties are depreciated to a base level generally accepted by the tax authorities. The value is reviewed on a regular basis. If a review reveals an impairment in value, an additional, unscheduled write-off is made. The remaining book value is subsequently written down over the residual useful lifetime. If the review reveals a change in the useful lifetime, the remaining book value is written down as planned over the adjusted useful life. Small investment outlays are charged directly to operating expenses at the time of purchase.
Intangible Assets
Intangible assets acquired are stated at cost less depreciation over a measurable useful life of maximum three years for IT software and ten years for the components of the IT platform (host system). Reviews and adjustments of value are carried out in the same way as with tangible assets. Small investment outlays are charged directly to operating expenses at the time of purchase.
Derivative Instruments
Derivative financial instruments are stated at fair value. The positive and negative replacement values are recorded in the balance sheet under other assets and other liabilities. Unrealised/realised gains are booked to results from trading operations. All derivative financial instruments are allocated to the trading book.
Pensions
Pension liabilities are treated according Swiss GAAP FER 16. Employer contribution reserves are not capitalised.
Valuation Adjustments and Provisions

Claims that the debtor will be unlikely to satisfy in future are covered by individual valuation adjustments. Individual valuation adjustments are deducted directly from the corresponding asset positions. Individual valuation adjustments and individual provisions are made for all other recognisable loss risks according to the principle of caution. Part 3

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Income Tax
Current taxes are recurring taxes on capital and income. Current taxes are determined in accordance with the local fiscal regulations on ascertaining profits and capital tax and are stated as expenses during the accounting period. Taxes owed are recorded in accrued expenses.
Fiduciary Placement Activities

The Bank acts as custodian and in other fiduciary capacities that result in the holding or placing of assets on behalf of customers. These assets and the interest income arising therefrom are excluded from these financial statements, as they are not assets of the Bank.
Contingent Liabilities and Fiduciary Operations

Transactions resulting from these activities are stated off-balance sheet at their face value. For recognisable risks, provisions are made and recorded under liabilities.
Change in Accounting Policies

There were no changes in accounting policies.
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Notes on Risk Management

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General Principles
The Board of Directors of the Bank is responsible for the stipulation of the risk policy. The Board of Directors has released a risk policy which both takes into account the circumstances of the business activities of the Bank and its subsidiaries and also reflects the capital funds situation of the Group, the interest of the shareholders and the regulatory environment. The risk policy is constantly monitored and amended if necessary. The formal methodology of the risk policy relates primarily to the observance of quantitative risk limits, especially for credit and market risks, and to the qualitative aspects of risk diversification and of working procedures for reducing operational risks. At the same time, great importance is attached to the risk awareness of the management bodies and all Group staff. Hence the Board of Directors and the Executive Committee pursue an open risk culture which is also implemented by responsible, careful and professional behaviour from all employees. The Group consciously depends on the personal integrity, specialist competence and risk awareness of each individual and undertakes the necessary steps. The implementation of the risk policy is delegated to the Executive Committee. Management is supported in this by a risk control unit which is independent from trading and client-related services and monitor compliance with limits and the risk policy.
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Credit Risks
Credit risk describes the potential for loss as a result of insolvency of a client or counterparty. A potential loss arises in particular when maturing loans or other obligations to payment are not repaid or cannot be repaid when due. For this reason loans and other credits are only granted after taking into account fundamental principles of caution. Since the banking business is strongly focused on private banking, loans are mainly granted against collateral in the form of pledged investment portfolios. The competencies for loans approvals and the monitoring of credit positions are subject to clear rules and supervised by staff who are independent of the client advisors. The Board of Directors and the Executive Committee have laid down clear guidelines for loanable values and the pledging of assets (collateral). In general, assets serving as collateral are held in the Banks custody and pledged in favour of the Bank under contractual agreements. The loanable values of the pledged assets, which are derived from market values, are compared daily to the loan commitments secured and are subject to constant monitoring. If coverage threatens to become insufficient, steps are taken to re-establish the necessary loanable value. If in exceptional cases no published market value is available for pledged assets, internal valuations calculated using standard banking methods will be applied. General principles have also been set out that aim for appropriate diversification of loan commitments and collateral. The concentration of risks on one client or counterparty or on one group of linked clients or counterparties is constantly monitored. Appropriate measures are taken to avoid the emergence of large exposures. Counterparties are defined as banks or brokers with which the Bank trades or from which it purchases services. Counterparties are carefully selected on the basis of their creditworthiness, drawing on external ratings. Internal limits have to be approved by the competent bodies according to the risk policy and internal guidelines.
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Notes on Risk Management

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Liquidity Risk
Liquidity risk describes the risk that in some circumstances, for example changed market conditions, the Bank might not be able to meet all its payment obligations as they fall due. The Bank maintains additional liquidity facilities in the form of overdraft lines at correspondent banks and secured finance facilities with clearing institutions for the exceptional event that counterparties or clients do not meet their payment obligations punctually. Compliance with the liquidity rules as set out in the Bank Ordinance is constantly monitored.
Market Risk
Market risk describes the risk that the Bank could suffer losses as a result of changes on the financial markets (interest rates, FX rates, share prices). The business policy of the Bank is to only permit open market risk positions to a small degree in relation to client business volumes and available capital funds. Trading positions are valued daily. Calculation of risk positions and monitoring of compliance with the limits is performed by a team independent from the trading department. The Treasury Committee manages general interest rate risk in the banking book and monitors the balance sheet structure.
Operational Risk
Operational risk entails the possibility that losses may be incurred directly or indirectly due to the inappropriateness or failure of internal procedures, persons or systems or due to external events that cannot be influenced. In accordance with best practice standards in banking and the Banks dedication to ensure high quality services for its clients, the Executive Committee has implemented a set of processes and work flows by means of internal policies and procedures on organisation setup and controls, which are designed to maintain operational security at a high level. Particular attention is given to the quality and skills of staff, the segregation of duties, the careful selection of counterparties and the security of the central computer systems and networks. The Internal Audit department reviews the procedures and internal controls at regular intervals. Due to an escalation procedure it is assured that the responsible line management is adequately involved in the reporting and analysis process. The Group has out-sourced the operation of its computer systems to Banque Prive Edmond de Rothschild in Geneva. Both banks subscribe to high security standards developed to ensure that bank-client confidentiality is maintained. The Board of Directors has considered the main operational risks of the Group and has issued guidelines (principles) for the measurement and limitation of operational risk.
Legal Risks and Compliance

In order to monitor legal and regulatory risks, the Bank maintains a legal and compliance department. This ensures that the Banks business activities are conducted in accordance with the applicable regulations and the obligation of financial intermediaries to observe due diligence. If required, external legal advice is sought.
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Report of the Statutory Auditor on the Financial Statements

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Report of the Statutory Auditor on the Financial Statements to the General Meeting of Rothschild Bank AG, Zurich As statutory auditor, we have audited the accompanying financial statements of Rothschild Bank AG, Zurich, which comprise the balance sheet, income statement and notes (pages 40 to 55) for the year ended 31st March 2012. Board of Directors Responsibility The Board of Directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law and the companys articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The board of directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entitys preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements for the year ended 31st March 2012 comply with Swiss law and the companys articles of incorporation.
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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 and article 11 AOA) and that there are no circumstances incompatible with our independence. In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the Board of Directors. We further confirm that the proposed appropriation of available earnings complies with Swiss law and the companys articles of incorporation. We recommend that the financial statements submitted to you be approved.
KPMG AG
Christoph Grbli
Licensed Audit Expert Auditor in Charge
Daniel Senn
Licensed Audit Expert
Zurich, 24th May 2012
Part 3
Head Office, Subsidiaries and Representatives of Rothschild Bank AG

Head Office
Rothschild Bank AG
Zollikerstrasse 181 8034 Zurich Telephone +41 (0)44 384 7111 Facsimile +41 (0)44 384 7222 www.rothschildbank.com
Subsidiaries
Equitas SA
3, rue du Commerce 1204 Geneva Telephone +41 (0)22 818 5900 Facsimile +41 (0)22 818 5901
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RTS Geneva SA
3, rue du Commerce 1204 Geneva Telephone +41 (0)22 818 5995 Facsimile +41 (0)22 818 5902
Rothschild Vermgensverwaltungs-GmbH
Brsenstrasse 2-4 60313 Frankfurt am Main, Germany Telephone +49 (0)69 4080 2600 Facsimile +49 (0)69 4080 2655
Rothschild Trust Guernsey Limited

St. Peters House, Le Bordage St. Peter Port, Guernsey Channel Islands GY1 6AX Telephone +44 (0)1481 707800 Facsimile +44 (0)1481 712686
Rothschild Bank (CI) Limited

St. Julians Court St. Julians Avenue, St. Peter Port Guernsey, Channel Islands GY1 3BP Telephone +44 (0) 1481 713713 Facsimile +44 (0) 1481 711272
Rothschild Trust Corporation Limited

New Court, St. Swithins Lane London EC4N 8AL, UK Telephone +44 (0)20 7280 5000 Facsimile +44 (0)20 7929 5239
Rothschild (Hong Kong) Limited Rothschild Wealth Management (Hong Kong) Limited
16/F Alexandra House 18 Chater Road Central, Hong Kong Peoples Republic of China Telephone +852 2525 5333 Facsimile +852 2868 1728
Rothschild Trust (Singapore) Limited

One Raffles Quay, North Tower 1 Raffles Quay#10-02 Singapore 048583 Telephone +65 6532 0866 Facsimile +65 6532 4166
Rothschild Wealth Management (Singapore) Limited

One Raffles Quay, North Tower 1 Raffles Quay#10-02 Singapore 048583 Telephone +65 6532 08 66 Facsimile +65 6532 41 66
Rothschild Trust (Switzerland) AG

Zollikerstrasse 181 8034 Zurich Telephone +41 (0)44 384 7111 Facsimile +41 (0)44 384 7201
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Australia
Rothschild Australia Limited
Level 41, 50 Bridge Street, Sydney, NSW 2000, Australia Telephone +61 (0)2 9323 2000 Facsimile +61 (0)2 9323 2040 Level 21, 120 Collins Street Melbourne Victoria 3000, Australia Telephone +61 (0)3 9656 4600 Facsimile +61 (0)3 9656 4950
Rothschild Canada Inc

Eight Avenue Place 1910, 525 - 8th Avenue SW Calgary, Alberta Canada T2P 1G1 Telephone +1 403 537 6300 Facsimile +1 403 537 6389
France
Rothschild Concordia SAS Paris Orlans SCA
23 bis avenue de Messine 75008 Paris, France Telephone +33 (0)1 5377 6510 Facsimile +33 (0)1 4563 8528
Channel Islands
Rothschild Bank International Limited
St. Julians Court, St. Julians Avenue St. Peter Port, Guernsey Channel Islands GY1 3BP Telephone +44 (0)1481 713713 Facsimile +44 (0)1481 727705
Rothschild & Cie Banque

29 avenue de Messine 75008 Paris, France Telephone +33 (0)1 4074 4074 Facsimile +33 (0)1 4074 9847
Belgium
Rothschild Belgique
Succursale de Rothschild & Cie Banque Avenue Louise, 166 1050 Bruxelles, Telephone +32 (0)2 627 77 30 Facsimile +32 (0)2 627 77 59
Rothschild & Cie

23 bis avenue de Messine 75008 Paris, France Telephone +33 (0)1 4074 4074 Facsimile +33 (0)1 4074 9847
China
Rothschild China Holding AG
Beijing Representative Office Room 912A, Winland International Finance Center 7 Finance Street, Xicheng District Beijing 100033 Peoples Republic of China Telephone +86 10 6655 5660 Facsimile +86 10 6655 5880 Shanghai Representative Office Suite 3207, Tower 2, Plaza 66 1266 Nan Jing Xi Lu Road Shanghai 200040 Peoples Republic of China Telephone +86 21 6288 1528 Facsimile +86 21 6288 1517
Rothschild & Cie Gestion

29 avenue de Messine 75008 Paris, France Telephone +33 (0)1 4074 4074 Facsimile +33 (0)1 4074 4969
Brazil
Rothschild (Brasil) Ltda
Av. Brigadeiro Faria Lima 2055 18th Floor, Jardim Paulistano 01451-000 So Paulo, Brazil Telephone +55 (0)11 3039 5828 Facsimile +55 (0)11 3039 5826
Germany
Rothschild GmbH
Brsenstrasse 2 - 4, 60313 Frankfurt am Main, Germany Telephone +49 (0)69 4080 2600 Facsimile +49 (0)69 4080 2655
Canada
Rothschild (Canada) Limited
1002, rue Sherbrooke Ouest Bureau 2300, Montral, Qubec Canada H3A 3L6 Telephone +1 514 840 1016 Facsimile +1 514 840 1015 Brookfield Place TD Canada Trust Tower 161 Bay Street, Suite 3150 PO Box 206, Toronto Ontario, Canada, M5J 2SI Telephone +1 416 369 9600 Facsimile +1 416 864 1261
Rothschild & Sons Financial Advisory Services

(Beijing) Co Ltd F910 Winland International Finance Center No. 7 Finance Street, Beijing 100033 Peoples Republic of China Telephone +8610 6655 5660 Facsimile +8610 6655 5880
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India
Rothschild (India) Private Limited
103, 1st Floor, Piramal Tower Penninsula Corporate Park Ganpatrao Kadam Marg, Lower Parel Mumbai 400 013, India Telephone +91 (0)22 4081 7000 Facsimile +91 (0)22 4081 7001 Unit No. F1 + F2, 1st Floor, Plot No. 2 The Grand Hotel Nelson Mandela Road, Vasant Kunj New Delhi - 110 070, India Telephone +91 (0)11 4922 3000 Facsimile +91 (0)11 4922 3001
Japan
Rothschild Bank AG
Tokyo Representative Office 20F Kmaiyacho MT Building 4-3-20 Toranomon Minato-ku, Tokyo 105-001, Japan Telephone +81 (0)3 5408 8045 Facsimile +81 (0)3 5408 8048
Portugal
Rothschild Portugal, Limitada
Calada do Marqus de Abrantes 40-1 Esq., 1200-719 Lisbon, Portugal Telephone +351 (0)21 397 5378 Facsimile +351 (0)21 397 5476
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Russia
RCF (Russia) BV (Representative Office)
Novinsky Passazh (8th Floor) 31 Novinsky Boulevard 123242, Moscow, Russia Telephone +7 495 775 8221 Facsimile +7 495 775 8222
Malaysia
Rothschild Malaysia Sdn Bhd
Letter Box No. 42, 29th Floor UBN Tower, 10, Jalan P. Ramlee 50250 Kuala Lumpur, Malaysia Telephone +603 2687 0966 Facsimile +603 2070 1001
Indonesia
PT Rothschild Indonesia
Indonesia Stock Exchange Building Tower 1, 15th Floor Jl. Jend. Sudirman Kav. 5253 Jakarta 12190, Indonesia Telephone +62 (0)21 515 3588 Facsimile +62 (0)21 515 3589
Mxico
Rothschild (Mxico) SA de CV
Campos Eliseos 345-8 piso, Polanco CP 11550 Mxico D.F, Mxico Telephone +52 55 5327 1450 Facsimile +52 55 5327 1485
Singapore
Rothschild (Singapore) Limited
One Raffles Quay, North Tower 1 Raffles Quay #10-02 Singapore 048583 Telephone +65 6535 8311 Facsimile +65 6535 8326
Israel
Rothschild Israel
Rothschild Blvd. 32 Tel Aviv 6688210, Israel Telephone + 972 72 220 4100 Facsimile + 972 72 220 4106
Netherlands
Rothschild Europe BV
Appollolaan 133 - 135 1077 AR Amsterdam, The Netherlands Telephone +31 (0)20 570 2916 Facsimile +31 (0)20 570 2901
South Africa
Rothschild (South Africa) (Proprietary) Limited
3rd Floor Oxford Corner 32a Jellicoe Avenue Rosebank 2196, South Africa Telephone +27 (0)11 428 3700 Facsimile +27 (0)11 447 0967
Italy
Rothschild SpA
Via Santa Radegonda 8 20121 Milan, Italy Telephone +39 02 7244 31 Facsimile +39 02 7244 3310 Via S. Nicola da Tolentino 1/5 00187 Rome, Italy Telephone +39 06 4217 01 Facsimile +39 06 4217 0252
Poland
RCF Polska sp. z. o.o.
Warsaw Financial Centre Emilii Plater 53 00-113 Warsaw, Poland Telephone +48 22 549 6400 Facsimile +48 22 549 6402
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Spain
Rothschild SA
Paseo de la Castellana, 35-3 28046 Madrid, Spain Telephone +34 91 702 2600 Facsimile +34 91 702 2531 Avigunda Diagonal, 442-31 08037 Barcelona, Spain Telephone +34 93 254 7503 Facsimile +34 93 254 7504
United Arab Emirates

Rothschild Middle East Limited
PO Box 506570 Dubai International Financial Centre Gate Precinct Building, 6, Level 7 Dubai, United Arab Emirates Telephone +971 4 428 4300 Facsimile +971 4 365 3183
Rothschild Wealth Management (UK) Limited

New Court, St. Swithins Lane London EC4N 8AL, UK Telephone +44 (0)20 7280 5000 Facsimile +44 (0)20 7929 1567
Five Arrows Leasing Group Limited

Heron House, 5 Heron Square Richmond-upon-Thames Surrey TW9 IEL, UK Telephone +44 (0)20 8334 3900 Facsimile +44 (0)20 8332 1636
Rothschild Europe BV (Representative Office)

Office 114, Bainunah Street 34 Al Bateen, PO Box 113100 Abu Dhabi, United Arab Emirates Telephone +971 2 406 9866 Facsimile +971 2 406 9810
Sweden
Rothschild Nordic AB
Strandvgen 7A 114 56 Stockholm, Sweden Telephone +46 (0)8 586 33590 Facsimile +46 (0)8 660 9791
United States
Rothschild North America Inc Rothschild Inc Rothschild Asset Management Inc
1251 Avenue of the Americas 51st Floor New York, NY 10020, USA Telephone +1 (0)212 403 3500 Facsimile +1 (0)212 403 3501
Rothschild (Qatar) LLC

PO Box 31316, Al Fardan Office Tower Offices 924, 8-9th Floor, West Bay Doha, Qatar, United Arab Emirates Telephone +974 410 1680 Facsimile +974 410 1500
Switzerland
Rothschilds Continuation Holdings AG Rothschild Concordia AG Five Arrows Capital AG
Baarerstrasse 95, P.O. Box 735 6301 Zug, Switzerland Telephone +41 (0)41 720 0680 Facsimile +41 (0)41 720 0683
United Kingdom
N M Rothschild & Sons Limited
New Court, St. Swithins Lane London EC4N 8AL, UK Telephone +44 (0)20 7280 5000 Facsimile +44 (0)20 7929 1643 82 King Street Manchester M2 4WQ, UK Telephone +44 (0)161 827 3800 Facsimile +44 (0)161 835 3789 67 Temple Row Birmingham B2 5LS, UK Telephone +44 (0)121 600 5252 Facsimile +44 (0)121 643 7207 1 Park Row Leeds ls1 5NR, UK Telephone +44 (0)113 200 1900 Facsimile +44 (0)113 243 4507
Rothschild Inc.
1101 Connecticut Avenue NW Suite 700, Washington DC 20036, USA Telephone +1 (0)202 862 1660 Facsimile +1 (0)202 862 1699
Turkey
Rothschild Kurumsal Finansman Hizmetleri Limited S irketi
Akmerkez Rezidans No. 14 D 2 Akmerkez I s Merkezi Yani Nispetiye Caddesi, 34340 Etiler Istanbul, Turkey Telephone +90 212 371 0800 Facsimile +90 212 371 0809
Zimbabwe
MBCA Bank Limited
14th Floor, Old Mutual Centre Third Street, Harare, Zimbabwe Telephone +263 (0)4 701636 Facsimile +263 (0)4 708005
Part 4

Rothschild Bank AG Annual Report 2011/2012

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Rothschild Bank AG Annual Report 2011/2012

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Rothschild Bank AG Zurich

Annual Report 2011/2012

Rothschild Bank AG Zurich

Part 2 Consolidated Financial Statements

Part 3 Financial Statements of Rothschild Bank AG

Rothschild Bank AG Zurich

3.9 28.2 29.6 13.7 13.9 4.4 3.2 41.3 47.9

17.0 1.1 12.7

Rothschild Bank AG Zurich

On behalf of the Board of Directors

Baron Eric de Rothschild

Rothschild Bank AG Zurich

Directors, Executive Committee and Auditors

Richard Martin3) Alain Massiera Claude Messulam* Bernard I. Myers1) 2) *

Otto H. Suhner3)* Peter A. Smith2) * Dr Rudolf Tschni1) 2) * Guy Wais3)*

* Meets the criteria on independence in accordance with FINMA circular 08/24

Members of the Executive Committee

Rothschild Bank AG Zurich

From April 2012

Rothschild Bank AG Zurich

A Consolidated Balance Sheet

Notes 13 9, 13 9, 13, 14 1, 2, 11, 13, 14 3, 9, 13 4, 9, 13 5, 6 6, 7 6 8 15, 16, 17

Rothschild Bank AG Zurich

A Consolidated Balance Sheet

Rothschild Bank AG Zurich

A  Consolidated Off-Balance Sheet Transactions

17.2 13.5 51.3 9.1 70.2

Rothschild Bank AG Zurich

B Consolidated Income Statement

Rothschild Bank AG Zurich

B Consolidated Statement of Cash Flows

Rothschild Bank AG Zurich

C Notes to the Consolidated Financial Statements

Individual provisions 1000 CHF

Rothschild Bank AG Zurich

C Notes to the Consolidated Financial Statements

Charlottetown Trust services

Charlottetown Trust services

Rothschild Bank AG Zurich

C Notes to the Consolidated Financial Statements

Name Rothschild Bank International Ltd.

Business activity Bank

Reclassifications 1000 CHF

Disposals/ Forex impact 1000 CHF 11 40 29 9 9 20

Rothschild Bank AG Zurich

C Notes to the Consolidated Financial Statements

Rothschild Bank AG Zurich

C Notes to the Consolidated Financial Statements

Total 31.3.2012 31.3.2011 1000 CHF 1000 CHF 598 598

Rothschild Bank AG Zurich

C Notes to the Consolidated Financial Statements

Rothschild Bank AG Zurich

C Notes to the Consolidated Financial Statements

621.1 33.1 32.2

Rothschild Bank AG Zurich

C Notes to the Consolidated Financial Statements

39,314 2,774,557 1,185 9,215 12,496 2,836,767

21,047 1,980,990 2,897 5,662 6,342 2,016,938

Rothschild Bank AG Zurich

C Notes to the Consolidated Financial Statements

Rothschild Bank AG Zurich

C Notes to the Consolidated Financial Statements

A Consolidated Off-Balance Sheet Transactions