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2000A N N U A L R E P O R T

A U D I T O R S :E R N S T & Y O U N G S A , L a u s a n n e

B O A R D O F D I R E C T O R S

President of the Board

M. Guy Studer*Former Executive Vice President of the Credit Suisse for the State of Vaud, Pully

Vice President of the Board

M. Claude Haegi*Former President of the Government of the Republicand Canton of Geneva and Mayor of Geneva

Members of the Board

Mme Anna MenariniIndustrialist, Italy

M. Jacques Meyer de Stadelhofen*Legal Advisor, Geneva

Me Jean-Philippe RochatAttorney at law, Lausanne

Off the Board Secretary

M. Raphaël HardrickCertified Swiss Banker(until 30.09.2000)

M. Daniel GlasnerLic. HEC, Lic Sc. Politiques(from 1.10.2000 to 30.03.2001)

Mme Sophie QuincerotLegal Advisor, admitted to the Geneva Bar(as from 1.04.2001)

Mme Belen MagadanSenior Vice President

M. Vincenzo RolloVice President

M A N A G E M E N T

* Members of the Executive Committee of the Board of Directors

D I R E C T O R S A N D O F F I C E R S

Members of the Executive Committee

M. Daniel Glasner Managing Director / CEO

Members of the Management

M. Patrizio FabbrisSenior Vice President

M. Marc Henri BalmaSenior Vice President(as from 1.06.2001)

M. Trang Phan CôngVice President

M. Christophe PeléSenior Vice President

M. Raphaël HardrickSenior Vice President(until 30.09.2000)

M. Alexandre HeussVice President

D E P A R T M E N T S

PORTFOLIO MANAGEMENT

M. Christophe PeléSenior Vice President

Mme Anne-Laure CharriotAssistant Vice President

Mme Niloufar EghtedarAssistant Vice President

M. Arturo BaroneSenior Commercial Representative

Mme Nadi RezzonicoPortfolio Manager

Mme Maris GiovanniniPortfolio Manager

Mme Sonia SpagnoloPortfolio Manager

M. Stéphane NahumPortfolio Manager

FAMILY OFFICE

Mme Catherine Cusin

DEVELOPMENT

M. Patrizio FabbrisSenior Vice President

M. Gianni De MarcoSenior Advisor

INVESTMENT STRATEGY

M. Daniel GlasnerManaging Director

LEGAL & COMPLIANCE

Mme Sophie QuincerotAssistant Vice President

TREASURER

M. Martial BallamanAssistant Vice President

TRADING

M. Raphaël AntoniniAssistant Vice President

M. Roberto CapitanioAssistant Vice President

M. Giorgio PaolucciAssistant Vice President

FINANCIAL MARKETING

M. Roberto ContiSenior Advisor

M. Colin HillSenior Advisor

FINANCIAL ANALYSIS

M. Michel EckertAssistant Vice President

CREDIT - ADMINISTRATION

M. Marc Henri Balma Senior Vice President

Yves DussexSenior Commercial Representative

ACCOUNTING

M. Trang Phan CôngHead of accounting / Vice President

Mme Catherine MeratSenior Commercial Representative

IT

M. Vincenzo RolloVice President

HUMAN RESSOURCES -LOGISTIC

Mme Belen MagadanSenior Vice President

CUSTOMER DATA FILE -CASHIER

Mme Diane BriguetAssistant Vice President

BACK OFFICE

M. Alexandre HeussVice President

M. Rolf WipraechtigerAssistant Vice President

M. Frédéric LeubaAssistant Vice President

M. Philippe RochatSenior CommercialRepresentative

MIDDLE OFFICEBOURSE

M. Laurent DubuisSenior CommercialRepresentative

M. Stéphane MaffioliSenior CommercialRepresentative

BACK OFFICE FORDERIVATIVES

M. Gabriel FavreSenior CommercialRepresentative

D E P A R T M E N T S

6

5

4

3

2

1

0

19991998 19971996 2000

1.3

2.3

2.9

3.6

5.3

17.7

21.8

27.0

32.8

39.5

4.03.32.72.21.8

45.00

40.00

35.00

30.00

25.00

20.00

15.00

10.00

5.00

0.00

19991998 19971996 2000

NET PROF IT IN M ILL IONS OF CHF

TOTAL OF EQUITY CAPITAL AT THE END OF THE FINANCIAL YEARREFERENCE IN MILLIONS OF CHF (before benefit allocation)

NET PROFIT BEARER SHARE

REGISTERED SHARE

NET PROF IT PER SHARE ( IN CHF )

16

14

12

10

8

6

4

2

0

19991998 19971996 2000

6.25.9

8.9

12.2

14.870

60

50

40

30

20

10

0

19991998 19971996 2000

32.735.0

39.443.1

62.8

GROSS PROFIT OF THE F INANCIAL YEAR IN MILLIONSOF CHF

GROSS PROFIT EQUITY CAPITAL

C O M M E N T S O F T H E B O A R D O F D I R E C T O R S

In a much less favourable and stable environment than 1999, our Company has realised its set objectives.

Like many other financial institutions, we experienced a remarkable expansion in our activities up until the end of September. The

results for the months of March and April 2000 were nothing short of exceptional.

The final quarter, however, saw a marked drop in activity, in a context of recessionary growth, the likely duration of which is still not

easy to judge.

On the international scene, the controversial election of the President of the United States, the political instability in the Middle East,

and the uncertainty over crude oil prices did not comfort investors.

Since1995, our Company has been working in comfortable offices in a fine old building in the heart of Geneva’s Old Town.

The rapid growth of the Company’s activities has, however, required it to relocate its back-office business to premises outside its recep-

tion offices.

The increase in the number of employees, which has doubled over the last few years to reach a total of 64 people, has particularly

affected the executive management level. In addition, the Company has extended its equity capital, which reached a total of over 63

million at the end of the financial year. We also have to thank our shareholders for the creation of these sizeable reserves, since they

decided to forego more generous dividend payments in order to strengthen the financial situation of our Company.

Beyond these quantitative factors, the Board is also particularly conscious of the improvements made in quality. The application of the

Due Diligence Convention is strictly and constantly monitored. The various directives issued by the Swiss Banker’s Association have

been successfully integrated into our procedures.

Our desire to consolidate all of our activities aims at reinforcing the continuity and stability of our Institute, while still preparing it to

take bold new steps towards growth over the coming years.

The loyalty of our oldest clients and the commitment of our Management and our employees allow us to feel the greatest confidence

about the future of our Company.

The Board of Directors would like to take this opportunity to thank everybody who contributes to the success of the Société Financière

Privée: the shareholders who participate in the increases in capital, the members of the management team and the executives for their

unstinting determination, and our employees for their hard work, their professionalism and their loyalty.

Geneva, March 2001 T H E B O A R D O F D I R E C T O R S

S O C I É T É F I N A N C I È R E P R I V É E S A

AAN N U A L R E P O R T

O F T H E S O C I E T E

F I N A N C I E R E P R I V E E , I N C .

F I N A N C I A L Y E A R 2 0 0 0

5

P R O P O S I T I O N S O F T H E B O A R D O F D I R E C T O R S

A N D C O M M E N T S O F T H E M A N A G I N G D I R E C T O R S

8 S O C I É T É F I N A N C I È R E P R I V É E S A

PP R O F I T F O R F I N A N C I A L Y E A R 2 0 0 0

The income statement shows net profits of CHF 5’303’473.15, a 48.8 % increase compared to the previous financial year,

which stood at CHF 3’563’807.34.

D I S T R I B U T I O N O F T H E R E T A I N E D E A R N I N G S

The Board of Directors proposes to the General Assembly that the profits for the financial year of CHF 5’303’473.15 and the

retained earnings carried forward to the previous financial years of CHF 686’051.33, making a total available income of

CHF 5’989’524.48,should be distributed as follows:

PR O P O S A L S M A D E B Y T H E B O A R D

O F D I R E C T O R S T O T H E G E N E R A L

A S S E M B L Y O F S H A R E H O L D E R S

O N 1 9 A P R I L 2 0 0 1

Dividend 15% CHF 2’015’280.00

Allocation to the general reserve CHF 134’375.00

Allocation to the special reserve CHF 3’000’000.00

Amount brought forward from financial year 2000 CHF 839’869.48

Total CHF 5’989’524.48

Sum at the disposal of the General Assembly CHF 5’989’524.48

P R O P O S A L S M A D E T O T H E G E N E R A L A S S E M B L Y

The Board of Directors proposes that the General Assembly approve the management report, the balance sheet, the incomestatement and their appendix for the financial year 2000, in the form in which they have been submitted.

In addition, the Board of Directors proposes that the General Assembly grant it a full discharge for its management.

Furthermore, the Board of Directors proposes that the General Assembly approve the distribution of profits such as it hasbeen submitted.

Finally, in addition to the renewal of the terms of office held by Mme Anna MENARINI and M. Jacques MEYER de STA-DELHOFEN, the Board of Directors proposes that the Assembly renew for a further period of one year the review body man-date held by the trustee ERNST & YOUNG, Inc.

Geneva, March 2001

T H E B O A R D O F D I R E C T O R S

9S O C I É T É F I N A N C I È R E P R I V É E S A

PPR O P O S A L S M A D E B Y T H E B O A R D

O F D I R E C T O R S T O T H E G E N E R A L

A S S E M B L Y O F S H A R E H O L D E R S

O N 1 9 A P R I L 2 0 0 1

A B R I E F L O O K A T T H E F I N A N C I A L Y E A R

The financial year 2000 was a period of great consolidation for the new structure that had been set up, and a period during which

exceptional results were achieved.

The Board of Directors rewarded the staff by means of an extensive distribution of shares which was carried out alongside an increase

in our capital stock.

The number of full-time staff members rose from 48 to 56. If the part-time employees are included, our total workforce now num-

bers 64. The integration of new members to our workforce gave our clients all the advantages of an intensive and personalized ser-

vice during the course of what was to prove a very uncertain year for the stock markets.

The euphoria of rapid expansion which was so tangible during the first half of the year, particularly in the market of telecommuni-

cations, media and technology firms, later gave way to a justified sense of anxiety among stock market specialists. This anxiety was

also to prove a testing time for the directors of the central banks.

The SOCIETE FINANCIERE PRIVEE was able to conserve the economic interests of its clients while at the same time laying down

a series of logistic markers in the course of a troubled financial year:

• it was accepted as a member of S.W.I.F.T. (Society for Worldwide Interbank Financial Telecommunication). This membership

will allow the company to speed up transfer processes and to have greater control over capital flows

• it opened a “SIC” clearing account with the BANQUE NATIONALE SUISSE. Thus, the reception and transfers in Swiss

francs are optimised

• as from 1 January 2001, it was granted the status of “QUALIFIED INTERMEDIARY” by the United States Internal Revenue

Service as part of a series of increased demands imposed by the American tax authorities. This status enables us to preserve

the confidentiality of our clients’ data

• furthermore, it was admitted as a member of the ASSOCIATION SUISSE DES BANQUIERS (ASB)

The increase in the volume of operations handled from both our private and institutional clients required us to set up a new platform

within our Back Office department, which resulted in a 61% increase in income from commissions compared to the previous financial

year.

10

CCO M M E N T S O F T H E M A N A G I N G

D I R E C T O R S O N T H E A C T I V I T Y

O F T H E S O C I É T É F I N A N C I È R E

P R I V É E O V E R T H E C O U R S E

O F T H E F I N A N C I A L Y E A R 2 0 0 0


T H E B U S I N E S S M A R K E T

Credit transactions • Despite the fact that at the end of the financial year 2000 the debts receivable from clients only amoun-

ted to 87.9 million as against 101.7 million on previous year closing, our credit transactions grew positively, in particular over

the first six months of the year. The rise in interest rates, the strength of the US dollar and the bullish stock markets which cha-

racterized the first half of the year proved to be very beneficial. The income from interest transactions from advances on current

accounts and time-deposit accounts grew by 43.4 %, while the income from interest, 10.5 million, showed an increase of 38.7 %.

Most of our lending transactions were focused on granting Lombard lines of credit and on “intraday” limits.

The decrease in the mortgage debt item is naturally due to the fact that the Company did not register mortgage-related business

as part of its general credit policy, and only wishes to retain a small number of such transactions.

Result of commissions and service provision transactions • The overall result for this item is 19 million, an increase of

19.6 %. This growth can be explained by the strong rise in revenue from securities transactions (brokerage and commissions on

deliveries and receipts collection).

This is offset by an increase in our charges, corresponding on the one hand to the development of our relations with indepen-

dent managers, to whom we reassign certain commissions, and on the other to the fees debited by our correspondents.

Trading transactions • Our Company chiefly takes up positions in currency for its cash flow requirements. The negative yield of

this item at the end of the financial year only has a slight influence on our overall results.

Other running costs • The workforce grew by 17 %, making a total of 56 full-time and 8 part-time staff members. This recruit-

ment effort was particularly centered on the needs in terms of executive management. Overall, the staff-related costs of 7.7 mil-

lion, 8.2 million if the exceptional free distribution of shares to employees is included, as against 6.2 million for the previous

financial year, an increase of around 24 %. The Company carried out this share distribution in order to reward its staff for their

immense contribution to the success of the firm. The number of employees reached a size compatible with the new implemen-

ted structure.

Conservative policy with regard to the allocation of reserves • The Company has a prudent management policy by building

up reserves and making every effort to amortize its assets in a sensible fashion.

Equity capital • Our equity capital rose to a total of 62.8 million before the profit distribution ( 43.1 million at the end of 1999),

an increase of 45.7 %. This sizeable growth of our equity capital is attributable to the robust health of our business. It is also a

result of the conversion of convertible bonds carried out by some clients and principally by the increase in capital stock carried

out during the financial year.

Net result • The excellent management policies implemented throughout the financial year under review enabled us to show net results

which have increased by no less than 48.8 % over the previous year. The effort made in terms of the quality of service provided to our

clients, our desire to improve our transaction handling processes as well as the constant growth in the competence of our employees -

all of these factors are amply rewarded by these figures.







C O M M E N T S O N T H E B A L A N C E S H E E T

Our Company complied with the main regulations and legal directives which govern the trading of securities and listed companies

on the Swiss stock exchange.

ASSETS

Cash and debts due from banks • This item has grown in line with the increase in the total volume of business and underlines our

intention to maintain constant positive liquidity.

Debts due from clients and mortgage debts • Advances made to clients and mortgage debts account for a considerable pro-

portion of our balance sheet, 56%.


Millions of CHF2000 1999

Total incomes 62.6 38.6

Total costs 47.8 26.4

Gross profit 14.8 12.2

Depreciations, Valuation adjustments and taxes 9.5 8.7

Net profit 5.3 3.5

Summary comparison of the result






Trading Portfolio • This item consists of listed assets valued at the market rate on the date of closure.

Financial investments • The major increase may be explained by the purchase of bond securities which are pledged to Clearing

institutions or to the Swiss Stock Exchange, in order to allow us, if need be, to have access to lines of credit. This item is valued

according to the principle of lowest value.


In CHF2000 1999

Swiss bonds

Confederation and Cantons 2’178’050 313’650

Banks and Financial Companies 4’867’977 1’971’477

Foreign bonds

Financial Companies 219’996 250’723

Foreign shares

Miscellaneous 614’250 597’563

Total 7’880’273 3’133’413

Securities







Fixed assets • The decrease in this item is a reflection of the writing-off policy applied when the accounts were closed. A num-

ber of investments, particularly in computer equipment and technology, were made during the year under review.

Adjustment accounts • This item includes all the active transitory transactions.

Other assets • This item is made up of taxes to be recovered, of own account warranties and positive replacement values deter-

mined on the basis of the various derivatives on the date of closure.

LIABILITIES

Due to banks • A policy of independence with regard to banks and a tight control over our outstanding amounts enable us to

have only modest debts to banks appearing on our balance sheet.

Due to clients • The sum which appears in the due to clients must be interpreted as the outstanding balance of transactions in pro-

gress and/or as sums waiting to be invested. No interest is paid on client accounts.

Borrowings • Over the course of the year 2000, the Company announced to the Swiss Stock Exchange an exchange of CHF

4,035,000.– of bonds at their nominal value against the conversion of 5,649 bearer shares. The general terms and conditions

under which the loan was made are set out below:

Issue price 100%

Duration 1994 – 30.05.2001

Interest rate 3 1/8%

Pay up date 30 June 1994

Denomination CHF 5’000.– only

Conversion price CHF 725.– as of 30.05.1996 against 7 bearer shares of

a nominal value of CHF 100.– with a compensatory

payment of CHF 75.–

Early reimbursement authorized at 125% as of 30.05.1999

Payment address Banque Cantonale Vaudoise, Lausanne






Equity capital • The company’s capital stock was increased during the year 2000 by CHF 2,564,900.–. This increase was achie-

ved, on one hand, by the issue of 200,000 registered shares of Fr. 10, fully paid up, of which 50,000 were allocated to employees

of the Company, making a total of CHF 2,000,000.– and, on the other, by the conversion of 807 bonds against 5,649 bearer

shares of a nominal value of Fr. 100, a total of CHF 564,900.–.

These operations meant that the general legal reserve was increased by the agio from the issue of new shares and the agio from the

conversion of the loan of CHF 13,280,625.– as well as the statutory payment from the previous financial year of CHF 97,875.–.

The other reserves were also increased by CHF 3,000,000.– as part of the allocation of the profits of the financial year 2000.

Personnel • It would be impossible for the Company to make any form of progress without the immense motivation of all our staff.

May we take this opportunity to thank them most sincerely for their dedication and the quality of the work they do.

The workforce on 31 December 2000 stood at a total of 56. The equivalent figure at the end of the previous financial year was 48.

Promotions • Over the course of the year 2000, our Board of Directors made the following promotions:

Promotion to Senior Vice President

Mrs Belen MAGADAN, Human Resources and Logistic Department

Promotion to Vice President

Mr Alexandre HEUSS, Back Office Department

Mr Vincenzo ROLLO, IT Department

Promotion to Assistant Vice President

Mrs Niloufar EGHTEDAR, Portfolio Management Department

Mr Frédéric LEUBA, Back Office Department

Mr Giorgio PAOLUCCI, Trading Department

Promotion to Senior Commercial Representative

Mr Arturo BARONE, Portfolio Management Department

Mr Laurent DUBUIS, Middle Office Department

Mr Yves DUSSEX, Credit Department

Mr Stéphane MAFFIOLI, Middle Office Department

Mr Philippe ROCHAT, Middle Office Department

T H E M A N A G I N G D I R E C T O R S







B A L A N C E S H E E T A N D I N C O M E S T A T E M E N T

A S O F D E C E M B E R 3 1 , 2 0 0 0


BBA L A N C E S H E E T

A S O F D E C E M B E R 3 1 , 2 0 0 0

In CHF 2000 * 1999*

A S S E T S

Cash 1’013’712.07 1’165’486.01

Due from money market papers 00.00 1’313.12

Due from banks 60’196’317.79 71’711’694.69

Due from customers 87’977’985.48 101’682’117.11

Due secured by mortgage 14’946’100.00 16’347’200.00

Securities and precious metal trading portfolio 813’575.87 4’636.69

Financial investments 7’880’273.62 3’133’413.20

Fixed assets 2’126’311.98 2’643’609.04

Accrued income and prepaid expenses 3’779’450.70 3’701’274.45

Other assets 5’275’715.38 3’124’910.58

Total assets 184’009’442.89 203’515’654.89

Total due from group entities and significant shareholders 9’431’767.82 11’305’547.99

* before allocation



A S O F D E C E M B E R 3 1 , 2 0 0 0

In CHF 2000* 1999*

L I A B I L I T I E S A N D S H A R E H O L D E R S ’ E Q U I T Y

Amounts due arising from money market papers 1’781’376.94 671’247.24

Due to banks 1’189’172.93 4’720’763.30

Due to customers 84’815’773.63 123’564’748.52

Convertible bond 9’120’000.00 13’155’000.00

Accrued expenses and deferred income 2’452’687.24 1’765’582.80

Other liabilities 5’897’320.37 4’079’340.85

Valuation adjustments and provisions 15’996’262.30 12’429’278.85

Reserves for general banking risks 2’900’000.00 2’900’000.00

Registered capital 13’435’200.00 10’870’300.00

General legal reserve 31’462’125.00 18’083’625.00

Other reserves 8’970’000.00 6’970’000.00

Retained earnings brought forward 686’051.33 741’960.99

Net income 5’303’473.15 3’563’807.34

Total liabilities and shareholders’ equity 184’009’442.89 203’515’654.89

Total due to group entities and significant shareholders 3’016’255.25 7’594’921.80

* before allocation



A S O F D E C E M B E R 3 1 , 2 0 0 0

In CHF 2000 1999

O F F - B A L A N C E S H E E T T R A N S A C T I O N S

Contingent liabilities 6’846’708.04 7’367’643.75

Derivative instruments

Positive replacement values 4’945’190.04 2’928’343.01

Negative replacement values 4’814’053.17 3’155’906.11

Underlaying amounts 467’051’569.00 493’786’061.00

Fiduciary transactions 221’970’071.00 281’967’501.35


iIN C O M E S T A T E M E N T

A S O F D E C E M B E R 3 1 , 2 0 0 0

In CHF 2000 1999

1. Revenues and expenses from ordinary activities

Result from interest activities

Interest and discount income 13’856’249.47 8’363’291.07Interest and dividend income on trading portofolios 4’065.57 0.00

Interest and dividend income on financial fixed assets 138’655.52 94’213.76

Interest expense (3’461’843.04) (860’926.21)

Net interest income (Subtotal) 10’537’127.52 7’596’578.62

Results from commission and service fee activities

Commission income on lending activities 200’788.32 170’660.25Commission income on securities and investment transactions 47’501’539.15 29’377’645.70Commission income on other services 876’560.58 624’504.59

Commission expense (29’562’178.34) (14’278’602.25)

Results from commission and service fee activities (Subtotal) 19’016’709.71 15’894’208.29

Results from trading operations (223’137.03) 8’415.46


Ii N C O M E S T A T E M E N T

A S O F D E C E M B E R 3 1 , 2 0 0 0

In CHF 2000 1999

Other ordinary results

Other ordinary incomes 56’324.80 15’651.64

Other ordinary expenses (9’141.07) (24’821.35)

Other ordinary results (Subtotal) (47’183.73) (9’169.71)

Operating expenses

Personnel expenses (8’222’288.48) (6’189’960.08)

Other operating expenses (6’306’920.11) (5’058’451.89)

Operating expenses (Subtotal) (14’529’208.59) (11’248’411.97)

2. Net income

Gross profit 14’848’675.34 12’241’620.69

Depreciation and write-offs of non-current assets (1’446’173.00) (1’058’670.00)

Valuation adjustments, provisions and losses (6’041’824.30) (4’017’968.61)

Intermediary result 7’360’678.04 7’164’982.08

Extraordinary incomes 189’855.41 201’396.33

Extraordinary expenses (233’520.30) (1’614’571.07)

Taxes (2’013’540.00) (2’188’000.00)

Net income 5’303’473.15 3’563’807.34


II N C O M E S T A T E M E N T

A S O F D E C E M B E R 3 1 , 2 0 0 0

In CHF 2000 1999

3. Allocation of retained earnings

Net income of the year 5’303’473.15 3’563’807.34

Retained earnings brought forward 686’051.33 741’960.99

Available income 5’989’524.48 4’305’768.33

Allocation and dividend setting proposal from the Board of Directors (coupon N°9)

The Board of Directors proposes to the shareholders that the retained

earnings be allocated as follows:

Dividend 15%

Fr 1.50 per registered share 622’500.00 301’000.00

Fr 15.00 per bearer share 1’392’780.00 1’220’842.00

Allocation to legal reserve 134’375.00 97’875.00

Allocation to other reserves 3’000’000.00 2’000’000.00

Balance brought forward 839’869.48 686’051.33

Available income 5’989’524.48 4’305’768.33


PPR O P O S A L F O R A L L O C A T I O N

O F R E T A I N E D E A R N I N G S

In CHF 2000

3. Allocation of retained earnings

Net income of the year 5’303’473.15

Retained earnings brought forward 686’051.33

Available income 5’989’524.48

Allocation and dividend setting proposal from the Board of Directors (coupon N°9)

The Board of Directors proposes to the shareholders that the retained earnings be allocated as follows:

Dividend 15%

Fr 1.50 per registered share 622’500.00

Fr 15.00 per bearer share 1’392’780.00

Allocation to legal reserve 134’375.00

Allocation to other reserves 3’000’000.00

Balance brought forward 839’869.48

Available income 5’989’524.48

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A P P E N D I X T O T H E A N N U A L A C C O U N T S 2 0 0 0


AAP P E N D I X T O

T H E A N N U A L A C C O U N T S 2 0 0 0

The information in this appendix is numbered in line with article 25c of the Ordonnance sur les banques (OB) [Ruling on Banks]. The information which does not concern our Company is not commented upon.

1 . COMMENTS REGARDING THE ACTIVITY AND MENTION OF THE WORKFORCE

General points • The principal objective of the SOCIETE FINANCIERE PRIVEE S.A. is the activity of securities trading.

Its business includes financial transactions, such as consultancy in investments and fortune management, the trading of currencies and pre-cious metals, stock exchange dealing and Lombard credits. Mortgages are currently running for various employees and customers who havemade sizeable deposits. Last of all, a mortgage advance is financing the building which the company occupies as a tenant. The companytrades for its own account.

Personnel • As of 31 December, the workforce numbered 56, as opposed to 48 at the end of the previous financial year.

2 . ACCOUNTING AND VALUATION PRINCIPLES

General principles • The principles followed for valuation and the presentation of accounts are in compliance with the provisions ofthe Code of Obligations, with the Federal Law on stock exchanges and the trade of securities, with the directives which govern the dra-wing up of accounts, as issued by the Federal Banking Commission on 14 December 1994, with the modifications to the directives madeon 14 November 1996, 22 October 1997 and 28 October 1999, as well as the Listing Regulations of the Swiss Stock Exchange.

The main rules for valuation are summarized below.

Accounts entry principles • All transactions are accounted according to the transaction date principle.

Conversion of foreign accounts and currencies • Those items of the assets and liabilities which are made out in foreign currency areconverted into Swiss francs at the market price in force on the date of the balance sheet.The Company converts every day, at the rate in force on that day, the elements which influence the income statement.

Cash, debts due from and to banks and customers, amounts due arising from money market papers • Debts due from and to areregistered in the balance sheet at their nominal value.The debts appear on the balance sheet at most at their nominal value, after the deduction of valuation adjustments.

Securities and precious metal trading portfolio • The values in the securities and precious metals portfolio are evaluated at the marketprice in force on the date of the balance sheet. Fluctuations in price are registered in the income statement under the heading “Results fromtrading operations”.

Financial investments • Securities are entered into the accounts and evaluated according to the principle of the lowest value between thepurchase price or the market value. The way in which the financial investments are entered and evaluated is based on the prevailing inten-tion at the time the transaction was carried out.

Fixed assets • Fixed assets appear on the balance sheet at their purchase cost, after deduction of the depreciations that may be necessary, depen-ding on circumstances. Leasing assets appear on the balance sheet at their purchase value, after the deduction of depreciations which are calcula-ted over the full duration of the contracts.


AAP P E N D I X T O


Adjustment accounts • On the assets side, this item includes accrued income, prepaid expenses and accrued pro rata asset interest,while the liabilities side includes accrued expenses, deferred income and accrued pro rata liability interest. These positions are eva-luated at their real value on the date the balance sheet is closed.

Valuation adjustments and provisions • The Company applies a principle of prudence for all risks which are deemed potential and iden-tifiable at the date the balance sheet is drawn up, by making individual provisions which appear under this heading on the balance sheet.Any losses suffered are entered into the financial statement of the corresponding financial year as soon as they are identified.Latent risks are fully covered by valuation adjustments and provisions which function as a reserve.Fiscal costs are defined on the basis of the principle which applies for postnumerando taxation.

Contingent liabilities and commitments to pay up and make further payments • These transactions are registered off balancesheet at their nominal value. To cover known risks, provisions are created and entered into the balance sheet.

Derivative instruments • Open transactions at the date of the balance sheet are evaluated at market prices. Their replacement values areentered on the balance sheet.All the transactions carried out on futures and options are done so on behalf of customers and are hedged on the market. For its ownaccount, the Company only carries out time-deposit exchange deals in order to cover its risk on currencies.

Modification with regard to the previous financial year • No practical changes have been made in the way these accounting prin-ciples have been applied in 2000.


COMMENTS ON RISK MANAGEMENT

Rate risks • As far as the management of interest rate risks is concerned, the Company carries out the requisite analyses and monitoring withinthe prescribed limits. In light of the current rate structure and the low amounts necessary for refinancing, the Company takes no special mea-sures to cover interest rate risks.

Credit risk • Potential identified risks on lending transactions are automatically covered 100%. This provision is deducted from the item “Duefrom customers” on the assets side of the balance sheet. A provision calculated as a percentage of the item is constituted and entered under“Valuation adjustments and provisions” on the liabilities side.

Market risk • The Company currently only carries out a very low level of transactions for its own account, chiefly to carry out time-depositexchange deals. All of the customer-related transactions are hedged on the market. The management of this type of risk is carried out withinthe prescribed limits.

Operational risk • The Company has its own internal directives and procedures to determine the volume of transactions which can be hand-led, and the verification processes which must be set up.

AAP P E N D I X T O



AAP P E N D I X T O


3 . INFORMATION REGARDING THE BALANCE SHEET

3.1 Overview of the covers for loans and off balance sheet transactions

3.1.1 Summary of cover according to type

T Y P E O F C OV E R

Mortgage Other Unsecured TotalIn CHF 000 guarantees guarantees

Loans

Due from customers – 79’096 8’882 87’978

Mortgages- residential properties 13’561 – – 13’561- commercial properties 500 – – 500- others 885 – – 885

Total loans

31.12.2000 14’946 79’096 8’882 102’924

31.12.1999 18’518 97’671 1’840 118’029

Off balance sheet

Contingent liabilities – 6’821 26 6’847

Total Off balance sheet

31.12.2000 – 6’821 26 6’847

31.12.1999 – 7’346 22 7’368


AAA P P E N D I X T O


3.2 Allocation of the securities and precious metal trading portfolios

3.2.1 Securities and precious metal trading portfolios

In CHF 000 2000 1999

Debt instruments

- listed 810 –

Equity investments 4 4

Total of the securities and precious metal trading portfolios 814 4

Main debts from and due included under other heading in the balance sheet, valued at market price and presented under the heading “Results from trading operations”

- Positive replacement values for the derivative instrumentsin the trading portfolios (Other assets) 9 152

- Negative replacement values for the derivative instrumentsin the trading portfolios (Other liabilities) (16) (379)

Total (7) (227)


AAP P E N D I X T O


3.2.2 Fixed financial investments

Book value Purchase value Market value

In CHF 000 2000 1999 2000 1999 2000 1999

Debt instruments

- own bond issue 1’971 1’971 1’971 1’971 2’040 2’120- evaluated according to principle of the lowest value 5’295 564 5’325 590 5’396 564

Equity investments- stakes 614 598 614 598 614 598

Total 7’880 3’133 7’910 3’159 8’050 3’282- of which securities admitted as rediscount or

pledge by issuing bank 5’075 314 5’095 326 5’175 314

3.4 Presentation of fixed assets 2000

In CHF 000 Purchase Aggregate Book Invest- Disinvest- Deprecia- Bookvalue deprecia- value ments ments tions value

tions 31.12.99 on 31.12.00

Other fixed assets 6’267 (3’916) 2’351 827 (1’241) 1’937Financial leasing objects 501 (208) 293 101 (205) 189

Total fixed assets 6’768 (4’124) 2’644 928 (1’446) 2’126

Value of fire insurance forother fixed assets 4’347

Commitments: future leasing terms resultingfrom financial leasing 154


AAP P E N D I X T O


3.6 Assets pledged or assigned as security for liabilities and assets subject to reservation of title

In CHF 000 2000 1999

Carrying Related Carrying Relatedamount liabilities amount liabilities

Pledged assets

Due from banks 12’652 5’963 1’087 11’011

Own securities (book value as in “Securities and precious metal trading portfolios” and “Financial investments” of the Company, assigned as warranty) 5’884 2’285

Total pledged assets 18’536 5’963 3’372 11’011

Assets subject to a reservation of title 189 292

The effective debts are chiefly constituted by surety of CHF 5.7 million issued by banks on behalf of customers whose corresponding assets have been entirely pledged to the Company.

3.8 Current bond issues

Year of Interest Year of Amount Amountissue rate (%) maturity outstanding outstanding

In CHF 000 31.12.2000 31.12.1999

Convertible issue 1994 3,125 2001 9’120 13’155

Total current issues 9’120 13’155

reimbursable in advance as of 30 May 1999 at the rate of 125%.


AAP P E N D I X T O


3.9 Presentation of the valuation adjustments and the provisions for the reserve for credit risk fluctuations, as well as reserves for general banking risks and their variations over the course of a financial year

Valuation adjustments and provisions / reserves for general banking risks

In CHF 000 Balance at Applied in Allocation Recovery New Dissolutions State on31.12.99 compliance changes compromised settlements in favor 31.12.00

with their (new interest charged to of thespecified allocations) exchange the financial financialpurpose differences statement statement

Valuation adjustments and provisions for default risks(recovery risks and country risks) 3’362 (48) – 201 620 (37) 4’098Valuation adjustments and provisionsfor other operating risks 1’400 (349) – – 1’300 – 2’351Provisions for taxes and latent taxes 1’879 (1’828) – – 745 (51) 745Other provisions 7’590 – – – 3’750 – 11’340

Total valuation adjustments and provisions 14’231 (2’225) – 201 6’415 (88) 18’534

to be deducted:valuation adjustments directly compensatedin the assets (1’802) 48 – (201) (620) 37 (2’538)

Total valuation adjustments and provisions as per balance sheet 12’429 (2’177) – – 5’795 (51) 15’996

Reserves for general banking risks 2’900 – – – – – 2’900

3.10 Presentation of the registered capital and indications as to shareholders bearing a stake which gives a right to more than 5% of voting rightsMajor shareholders and groups of shareholders bound by voting conventions

Registered capital 2000 1999

In CHF 000 Total Number Capital Total Number Capitalnominal of securities opening nominal of securities opening

value value dividend rights value dividend rights

Total of registered capital 13’435 507’852 13’435 10’870 302’203 10’870

The total of conditional share capital is CHF 2’314’800.– (99: CHF 2’879’700.–), making 23’148 bearer shares with a nominal value of CHF 100.– (99: 28’797 bearer shares with a nominal value of CHF 100.–)

The total of authorized capital is CHF 3’300’000.– (99: CHF 5’300’000.–) making 33’000 bearer shares with a nominal value of CHF 100.– (99: 33’000 bearer shares with a nominal value of CHF 100.– and 200’000 registered shares with a nominal value of CHF 10.–).


AAP P E N D I X T O


Major shareholders and groups of shareholders bound by voting conventions

In CHF 000 2000 1999

Stake held Nominal Stake held Nominalvalue Value

Fondation Ciugulu (Tattoni family) 22.45% 3’017.06 15.69% 1’706.10Fondation Caslano (Menarini family) 16.24% 2’182.65 25.27% 2’746.50Riccardo Tattoni 1.30% 174.20 1.13% 122.80Silvia Donelli-Tattoni 0.93% 124.57 1.15% 124.60Patrizio Fabbris 7.80% 1’048.46 1.76% 191.40Colin Hill 7.69% 1’033.40 6.98% 758.50Sara Scheiner 2.89% 387.88 3.50% 380.90

3.11 Justification of equity capital CHF 000Equity capital on 31.12.1999

Registered capital 10’870General legal reserve 18’084Other reserves 6’970Reserves for general banking risks 2’900

Available income 4’306

Total equity capital on 31.12.1999 43’130(before allocation of retained earnings)

+ Increase in capital 2’565+ Agio 13’281+ Other allocations to reserves 2’098– Dividend and other allocations taken from the retained earnings of the previous financial year (3’620)+ Retained earnings in financial year of reference 5’303

Total equity capital on 31.12.1999 62’757(before allocation of retained earnings)

Registered capital 13’435General legal reserve 31’462Other reserves 8’970Reserves for general banking risks 2’900Available income 5’990


AAP P E N D I X T O


3.12 Presentation of the maturity structure for current assets, financial investments and foreign capital

In CHF 000 On sight Terminable Payable Total

within between 3 from 12 over Capitalized3 months to 12 months to 5 years

months 5 years

Current assetsCash 1’014 – – – – – – 1’014Due from banks 24’033 16’326 16’057 3’780 – – – 60’196Due from customers – 45’752 37’063 5’163 – – – 87’978Mortgages – 14’946 – – – – – 14’946Securities and precious metal tradingportfolios 4 – – – – – 810 814Financial investments 614 – – 2’191 – – 5’075 7’880

Total floating assets 31.12.00 25’665 77’024 53’120 11’134 – – 5’885 172’82831.12.99 72’194 79’740 35’516 4’059 2’536 – – 194’045

Foreign capitalAmounts due arising frommoney market papers 1’781 – – – – – – 1’781Due to banks 1’189 – – – – – – 1’189Other amounts due to customers 83’205 1’458 6 64 83 – – 84’816Convertible bond – – – 9’120 – – – 9’120

Total foreign capital 31.12.00 86’175 1’458 6 9’184 83 – – 96’90631.12.99 120’887 4’663 3’187 155 13’220 – – 142’112

3.13 Debts due and from related parties and company’s governing bodies

In CHF 000 2000 1999

Debts from loans to company’s governing bodies 2’670 3’211

3.14 Distribution of the balance sheet between Switzerland and abroadIn CHF 000 2000 1999

Switzerland Abroad Switzerland AbroadAssetsCash 1’014 1’166Due from money market papers 1Due from banks 1’180 59’016 683 71’029Due from customers 32’596 55’382 21’090 80’592Mortgages 14’946 16’347Securities and precious metaltrading portfolios 814 4Financial investments 7’046 834 2’285 848Fixed assets 2’126 2’644Adjustment accounts 2’161 1’618 3’701

Other assets 5’276 3’125

Total assets 66’345 117’664 51’041 152’474

LiabilitiesAmounts due arising from money market papers 11 1’771 4 667Due to banks 68 1’121 178 4’543Due to customers 7’640 77’176 12’821 110’744Convertible bond 9’120 13’155Adjustment accounts 2’453 1’669 96Other liabilities 5’897 4’079Valuation adjustments and provisions 15’996 12’429Reserves for general banking risks 2’900 2’900Registered capital 13’435 10’870General legal reserve 31’462 18’084Other reserves 8’970 6’970Retained earnings brought forward 686 742

Net income for financial year 5’303 3’564

Total liabilities 103’941 80’068 87’465 116’050


AAP P E N D I X T O


3.15 Distribution of assets by country / group of countriesIn CHF 000 2000 1999

value share in % value share in %AssetsSwitzerland 66’346 36.06 51’041 26.08Europe 81’287 44.18 66’696 32.77North America 9’838 5.35 36’426 17.90Central America 24’356 13.24 44’886 22.06Others 2’182 1.19 4’466 2.19

Total assets 184’009 100.00 203’515 100.00

3.16 Balance sheet by currency In CHF 000 CHF USD EUR GBP YEN OTHERS TOTAL

AssetsCash 611 96 241 62 - 4 1’014 Due from banks 13’178 20’917 22’162 645 1’193 60’196 Due from customers 41’215 21’959 17’074 1’495 253 5’982 87’978 Mortgages 14’946 - - - - - 14’946 Securities and precious metaltrading portfolios - 814 - - - - 814 Financial investments 7’046 614 - - - 220 7’880 Fixed assets 2’126 - - - - - 2’126 Adjustment accounts 3’521 115 91 31 1 20 3’779 Other assets 5’276 - - - - - 5’276

Total assets 87’919 44’515 39’568 3’689 899 7’419 184’009

LiabilitiesAmounts due arising from money market papers 1’220 7 385 43 - 127 1’782 Due to banks 49 889 155 63 - 33 1’189 Due to customers 9’755 31’502 38’140 3’368 918 1’133 84’816 Convertible bond 9’120 - - - - 9’120 Adjustment accounts 2’453 - - - - - 2’453 Other liabilities 5’897 - - - - - 5’897 Valuation adjustments and provisions 15’996 - - - - - 15’996 Reserves for general banking risks 2’900 - - - - - 2’900 Registered capital 13’435 - - - - - 13’435 General legal reserve 31’462 - - - - - 31’462 Other reserves 8’970 - - - - - 8’970 Retained earnings brought forward 686 - - - - - 686 Net income for financial year 5’303 - - - - - 5’303

Total liabilities 107’246 32’398 38’680 3’474 918 1’293 184’009


AAP P E N D I X T O



AAP P E N D I X T O


4 . INFORMATION RELATIVE TO OFF BALANCE SHEET TRANSACTIONS

4.1 Contingent liabilities

In CHF 000 2000 1999

Irrevocable guarantees 6’847 7’368

Total 6’847 7’368

4.2 Derivative instrumentsAnalysis of derivative instruments according to the type of contract

In CHF 000 2000

Positive Negative Underlyingreplacement replacement amounts

values valuesCurrenciesTerm contracts 3’820 3’689 149’585Futures – – 2’417

Precious metals

Equity shares / IndicesFutures – – 1’683Options (exchange traded) 1’125 1’125 313’367

OthersTerm contracts – –Futures – –Options (exchange traded) – – –

Total 31.12.2000 4’945 4’814 467’052

31.12.1999 2’928 3’156 493’786

AAP P E N D I X T O



4.4 Fiduciary Transactions

In CHF 000 2000 1999

Fiduciary investments 143’723 157’516Fiduciary loans 78’247 124’452

Fiduciary transactions 221’970 281’968


AAP P E N D I X T O


5 . INFORMATION RELATIVE TO THE INCOME STATEMENT

5.2 Result of trading operations

In CHF 000 2000 1999

Trading in

- Debt instruments and interest rate futures (23) (146)- Currencies and bills (200) 154

Total (223) 8

5.3 Personnel expenses

In CHF 000 2000 1999

Governing bodies, percentages and fixed indemnities 279 234Salaries and indemnities 6’131 4’608AVS, AI, APG and other statutory taxes 797 572Payments to pensions institutions 720 556Other personnel expenses 295 220

Total 8’222 6’190

5.4 Other running costs

In CHF 000 2000 1999

Premises expenses and energy 1’208 1’091Costs of machines, furniture,vehicles and other facilities 776 597Telecommunication expenses 290 319Advertising 808 667Fees for lawyers, auditors and others 1’199 1’055Other running costs 2’026 1’329

Total 6’307 5’058


5.5. Comments on material losses, extraordinary income and expenses and material releases of silent reserves, reserves for

general banking risks and valuation adjustments and provisions no longer required.

Extraordinary income of CHF 189’855.41 is coming from previous financial year incomes (CHF 101’233.51) and from the dissolu-tion of economically unessential provisions (CHF 88’621.90).

The extraordinary expenses, which amount to CHF 233’520.30, are chiefly the result of a complementary amount related to the taxdue on financial year 1998 (CHF 52’880.50) and complementary payments made for indemnities and taxes related to financial year1999 (CHF 180’639.80).

The freely available provisions under heading “valuation adjustments and provisions” increased by CHF 3’750’000.–.

AAP P E N D I X T O



G E N E V A

3, RUE FRÉD. G. MAURICE . P.O. BOX 3668 . 1211 GENEVA 3 . SWITZERLAND

TEL. 022-818 31 31 . FAX 022-818 31 00 . TELEX 421 662

3, RUE FRÉD. G. MAURICE . P.O. BOX 3668 . 1211 GENEVA 3 . SWITZERLAND

TEL. + 41 22 - 818 31 31 . FAX + 41 22 - 818 31 00 . TELEX 421 662

SWIFT: SFPI CH GG

ADMINISTRATION: 24 CHEMIN DU VELOURS . 1231 CONCHES . SWITZERLAND

2000 - hugin onlinereports.huginonline.com/895174/114689.pdfannual report. 2000 annual report ....

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