Annual Report 2008 – The 220. financial year – Sal ... - paperJam

Annual Report 2008The 220 th Financial Year2008 2007€ M € MTotal assets 41,367 41,090Risk assets 16,391 17,540Equity 1,867 2,174Profit/(loss) from operating activities -144 333Net income/(loss) for the period -117 255Pre-tax return on equity (%) -6.8 17.0Equity ratio (%) 11.0* 11.8Cost/income ratio (%) >100.0 91.8Employees (annual average) 4,330 3,769*Allowing for IFRS 5Fitch Ratings Ltd. (February 2009) Long-term Short-term Individual ratingA F1 B/CKEY FINANCIAL FIGURES FOR THE GROUP IN ACCORDANCE WITH IFRSSal. Oppenheim jr. & Cie. S.C.A.

Annual Report 2008The 220 th Financial Year

table of contentsboards and committees ........................................................................................................ 42008 overview........................................................................................................................ 6report of the personally liable partners ......................................................................... 8Table of Contentsbusiness activities ................................................................................................................ 12business divisions ............................................................................................................ 13Asset Management ....................................................................................................... 13Investment Banking ..................................................................................................... 17competence and service divisions .................................................................................. 22Research ...................................................................................................................... 22Bank Services .............................................................................................................. 24Our Employees ............................................................................................................ 26sal. oppenheim group ...................................................................................................... 28corporate governance .................................................................................................... 33kaleidoscope .................................................................................................................... 34group management report ................................................................................................... 36business performance ...................................................................................................... 37outlook for 2009 ............................................................................................................ 42risk management ............................................................................................................. 44consolidated financial statements .................................................................................... 64consolidated income statement ..................................................................................... 65consolidated balance sheet ........................................................................................... 66consolidated statement of recognised income and expense ....................................... 67consolidated cash flow statement ................................................................................ 68notes to the consolidated financial statements .......................................................... 70report of the réviseur d’entreprises ............................................................................. 160report of the supervisory board ........................................................................................ 162addresses ............................................................................................................................... 164imprint ................................................................................................................................... 164annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 3

oards and committeessupervisory boardGeorg Baron von Ullmann, ChairmanFriedrich Carl Freiherr von Oppenheim, Deputy ChairmanNicolaus Freiherr von OppenheimHenri PferdmengesRomain BauschPaul MouselBoards and Committeesshareholders’ committeeKarin Baronin von Ullmann, Honorary ChairwomanFriedrich Carl Freiherr von Oppenheim, ChairmanGeorg Baron von Ullmann, Deputy ChairmanIlona Gräfin von KrockowIsabelle MarquardtPeter W. MarxNicolaus Freiherr von OppenheimHenri PferdmengesDr. Clemens Freiherr von Wredepersonally liable partnersMatthias Graf von Krockow, Spokesman for the Personally Liable PartnersFriedrich Carl JanssenChristopher Freiherr von OppenheimDieter Pfundtmanagement committeeMatthias Graf von KrockowFriedrich Carl JanssenRalf J. BauklohRolf EndersAlfons KleinFrançois PaulyDr. Thomas Sonnenberg*Manfred UthoffAs at: 31 December 2008*Until 31 December 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 5

2008 overviewNet income/(loss) for the period of € -117 million*Shareholders resolve capital increase of € 200 million to strengthen equity*Assets under management of € 132 billion*Acquisition of domiciliation business from Mercuria Services S. A., Luxembourg*Bundling the Private Equity investment offeringin Sal. Oppenheim Private Equity Partners GmbH2008 Overview*First place in Berlin FUCHSBRIEFE report for advisory service to foundationsawarded to Sal. Oppenheim jr. & Cie. and Oppenheim Vermögenstreuhand GmbH*Private banking advisory service quality award in the Elite Report 2009*Oppenheim Fonds Trust GmbH placed top for the first timein Capital magazine’s annual ranking of investment companies*Fifth place in Thomson Reuters M&A League Tables 2008by number of transactions announced with German participation*Spin-off of the investments in ARCANDOR Aktiengesellschaft,IVG Immobilien AG and Sal. Oppenheim Private Equity Partners GmbH intoan independent company newly formed by the Bank’s ownersannual report 2008 | sal. oppenheim jr. & cie. s.c.a. 7

eport of the personally liable partnersReport of the PersonallyLiable PartnersTHE PERSONALLY LIABLE PARTNERSFrom left to right: Friedrich Carl Janssen, Christopher Freiherr von Oppenheim,Dieter Pfundt, Matthias Graf von Krockowannual report 2008 | sal. oppenheim jr. & cie. s.c.a. 9

eport of the personally liable partnersreport of the personally liable partnersLuxembourg, 20 April 2009Dear clients, business associates and shareholders,Financial year 2008 was marked by the fi nancial crisis for Sal. Oppenheim too. Now, after years ofgrowth, a necessary phase of consolidation follows due to the dramatic changes in the financial climate.The Sal. Oppenheim Group has responded to these changed market conditions by taking appropriatemeasures.The negative impact of the financial crisis particularly following the collapse of American investmentbanks in the autumn of 2008 made it unmistakably clear that the entire financial world was radically affectedand that everything would profoundly change for good. The foreseeable future does not hold theprospect of another such positive business environment for banks as in recent years. In light of this, theentire financial sector must become accustomed to a “new state of normality” characterised by lower levelsof assets and earnings. This also has implications for Sal. Oppenheim.Nonetheless, with the exception of Equity Trading, our operational divisions have remained stable andprofitable. We are also satisfied with the development of BHF-BANK in 2008.Capital market slides and the reduction of assets in nearly all classes also burdened Sal. Oppenheim’scapital market-related business activities in 2008. As a result we sustained losses in some of our assets andequity investments. We took advantage of all opportunities for financial year 2008, in order to burden netincome only one time; we also reported extraordinary losses and measurement losses in full in accordancewith IFRS. We plan to achieve adequate results in the coming financial years as well, with positive signsalready evident in the first few months of this year.We also addressed changes in market conditions by reducing risks. Our entrepreneurial and businessmindedsense of responsibility furthermore demands that we address the decrease in earnings by cuttingcosts and making the necessary structural adjustments.The move, now completed, to combine Private Banking and Asset Management to form today’s newAsset Management division has proven effective. With a timely revision of forecasts, Asset Management’sinvestment strategy with its clearly structured investment processes and tactical investment policy preventedmore drastic losses in client portfolios. The forecasts were based on an emphatically conservative view.The owning family and shareholders of the Sal. Oppenheim Group have resolved to restructure theGroup’s business and investment activities. In future, the holdings in the listed companies Arcandor AGand IVG Immobilien AG, along with Sal. Oppenheim Private Equity Partners GmbH will be managedin a newly formed, independent holding structure not affi liated with the Bank. The shareholders alsotook a first step in further strengthening the Bank in December 2008 by resolving a capital increase of€ 200 million.Our Bank has overcome a great number of challenges during its 220-year history. We also successfullyled our Bank through the financial market crisis in 2008. The Sal. Oppenheim family as a reliable ownershipstructure, our dedicated employees and the clients who stand by us are the foundation upon whichwe will further develop our Bank.The public discussion about our economic and financial system has revealed that basic business valueshave been jettisoned. Only a return to the virtues of successful entrepreneurship, sustainable managementand sound business dealings can preserve values and ensure the necessary confidence in the financial sector.As a family-managed private bank, we have lived by these values for generations. We are just as conscious,as entrepreneurs, of our responsibility to our clients as we are of our responsibility as trustee to futuregenerations. We are especially grateful to our clients for their trust, even in difficult times. Our corporatephilosophy will maintain its primary focus on the needs and expectations of our clients into the future.Only in this manner do we earn the trust placed in us.Yours faithfully,Matthias Graf von Krockow10 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 11

Asset Management / business divisions / business activitiesBUSINESS DIVISIONSAsset ManagementBusiness Activitiesasset management is an integral component of the sal. oppenheim business model. the twounits institutional and private asset management have been bundled in the core business area of our integratedasset management and investment bank. The business area has not been untouched by the turbulence on the fi -nancial markets and charted a course of consolidation in view of the persisting uncertainty regarding the furtherdevelopment of the global market and economic environment. Assets under management amounted to around€ 132 billion at the end of 2008. In order to mitigate the eff ects of the fi nancial and confi dence crisis for ourclients as well as possible, Sal. Oppenheim reacted systematically by extending asset diversifi cation opportunities,applying a more defensive investment strategy and expanding the advisory service and product off erings.When Asset Management and Private Banking were combined into an integrated Asset Managementdivision in 2007, the investment competencies in all asset classes were bundled in the Investment PolicyCommittee (IPC). On the basis of investment process results from institutional asset management, the IPCprepares short-term market forecasts for the most important asset classes and uses them to make tacticalinvestment decisions.The major losses suffered on the capital markets however hardly permitted any positive securitiesaccount development, particularly in the second half of 2008. In light of this, the conservative positioningwith which we started 2008 proved to be the right choice. By reducing our equity exposure duringthe course of the year, we were able to mitigate the losses in the mixed portfolios, especially in the crashmonths October and November. In our economic analysis, we revised the economic forecasts downward ata relatively early stage. Thus we painted a considerably more pessimistic economic picture than the marketaverage, judging by the consensus data, and structured our portfolios more defensively.further development of asset allocationOne focus of bundling asset management at Sal. Oppenheim is on our asset allocation advice. In strategicasset allocation, this included broader structuring within the traditional bonds and equities asset classes,such as additional regions and special focuses. Moreover, in addition to equities and bonds, particularlylarger portfolios of alternative investments were taken into account in long-term asset structuring. Thisenabled utilisation of more cost-effective correlation or diversification characteristics of real estate, hedgefunds, commodities and private equity to reduce investment risks in client or fund portfolios.At the same time, Sal. Oppenheim’s asset management integration also included further developmentof tactical asset allocation in which short-term investment decisions are based on a structured investmentprocess – a successful practice in institutional asset management for many years. These tactical investmentannual report 2008 | sal. oppenheim jr. & cie. s.c.a. 13

usiness activities / business divisions / Asset ManagementAsset Management / business divisions / business activitiesdecisions are aimed at active deviation from a long-term asset structure on the basis of short-term marketforecasts in order to create corresponding added value for clients. Consequently, we strongly underweightedequities and preferred long maturities in the bonds area. Not least our cautious approach to investmentsin commodities proved correct.alternative investments – competence through partnershipsWe reinforced the trust-based business relationship within our investment network during the past year.The Sal. Oppenheim Group merged interests held since 2003 in CAM Private Equity, Cologne, and VCMCapital Management, Munich, into the new company Sal. Oppenheim Private Equity Partners at the turnof 2008/2009.The holding in Oppenheim ACA, Frankfurt am Main, with which we have been involved in the areaof investments in European small and mid-caps for many years, was increased. In 2007, we acquired aminority interest in the largest independent European alternative asset manager GLG Partners LP, London,and assumed selected mutual funds from GLG in our product offering in the past business year.In light of the turbulence on the financial markets, alternative investments proved to be less volatileoverall than equities or corporate bonds, for example. Our conservative real estate exposures have provedto be pillars of stable value with the lion’s share of their income generated by long-term rental income. Themore stable real estate markets primarily include those that have not experienced any exaggerations, suchas Germany and the Benelux countries.The investments we selected in private equity also proved to be similarly robust. The reasons for thiswere firstly, our investment focus on sound financed medium-sized companies, and secondly, broad diversification,which proved effective, particularly in these times of volatile financial markets. Hedge funds,in contrast, suffered – unlike real estate and private equity investments – visibly in light of more difficultfinancing terms and erratic market fluctuations. Our hedge fund investments were also affected, althoughthey did better than the market-wide indices. The current slump in the commodities markets was anticipatedin time for us to dispose of exposures.asset development of the investment companiesTotal assets under management by our investment companies in Germany and Luxembourg decreased toaround € 43 billion. Gross new assets in the amount of € 9.7 billion were offset by outflows of € 11.4 billion.Losses on the international financial markets made a difference of around € -7.2 billion.Assets managed in mutual funds declined by a net total of € 4.7 billion to € 14.1 billion. New investmentfunds of Oppenheim Fonds Trust GmbH (OPFT) in the amount of € 6 billion, of which aroundtwo thirds is in the Luxembourg-based Oppenheim Asset Management Services S.à r.l. (OPAM) funds andone third in funds of Oppenheim Kapitalanlagegesellschaft mbH (OKAG) in Cologne – were insufficientto compensate for the outflows and negative performance.As administrator of fund vehicles for existing and new alternative investments of institutional clients,OPAM created a second pillar in addition to the existing business with partner and private label funds.The OPFT product offering in equities and convertible bond funds was bolstered with a view to long-termperformance potential for our clients through a sales partnership for select GLG Partners funds. Marketingof a Lloyd George Management equities fund, which is expected to benefit from a sustained trend towardmore environmentally friendly economies in Asian emerging markets, was launched also with a view tolong term prospects. To address our investors’ current security requirements, OKAG has developed productinnovations, which cover the short-term bond area in particular.FIVE STARS FOR OPPENHEIM FUNDSOppenheim Fonds Trust GmbH (OPFT) is awarded the best score of fi vestars (previous year: four stars) in Capital magazine’s annual rankingof investment companies. This puts Sal. Oppenheim in sixth place among86 German fund providers (previous year: seventh). Each year fund quality/performance, the scope and versatility of the product range, experienceand continuity in management and service is assessed.asset management advisory servicesOutflows and market-related losses which exceeded our new business (€ 3.3 billion) were recorded in the fundbusiness with institutional clients. However, we also acquired mandates in active-quantitative management.In addition, our capital protection mandates as well as a defensive balanced decision took effect at an earlystage. Thanks to its good results as manager for the internationally respected currency platform “FXSelect”, theOKAG currency management was selected, achieving correspondingly positive rankings with its good earningsas well as a great response from institutional investors from Europe and overseas. The mutual fund OP FXOpportunities established itself as one of the best currency funds on the market in an annual comparison.The advisory service was restructured by client segment in order to be able to offer institutional clientstargeted, customised sector-specific solutions. The integration of asset management now offers institutionalclients the added benefit of our private client support’s regional network. Our clients also profit in this lastregard from the strategic ties between asset management and the Investment Banking competence centres.Asset management solutions are thus available to Investment Banking clients just as the Investment Bankingofferings are available to Asset Management clients.Our family office network in Luxembourg was strategically expanded with the acquisition of the domiciliationbusiness of Mercuria Services S. A. and the merger with the wholly-owned Luxembourg subsidiarySGG S. A. (previously Services Généraux de Gestion S. A.).We strengthened the Oppenheim Vermögenstreuhand GmbH (OVT) advisory service to foundationsat the beginning of 2008. We are especially pleased about the recognition we received from well-knowninstitutions in the past year for our offering in this special area of long-term asset planning and manage-14 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 15

usiness activities / business divisions / Asset ManagementInvestment Banking / business divisions / business activitiesment. We were placed first among 33 providers in the FUCHSBRIEFE report “Foundation assets – thebest names in 2008”. The Elite Report 2009 recognised the advisory quality of our private banking byawarding it the top mark of “summa cum laude” once again.PRIVATE BANKING ADVISORY SERVICE QUALITY AWARDSal. Oppenheim’s advisory service to foundations was awarded fi rstplace in the “Foundation assets – the best names in 2008” report ofthe Berlin-based fi nancial publishing house FUCHSBRIEFE and thefi nancial services assessment institution Institut für Qualitätssicherungund Prüfung von Finanzdienstleistungen GmbH (IQF). Moreover, theElite Report 2009 recognised the advisory quality of our private bankingservice by awarding it the top mark “summa cum laude” once again.BUSINESS DIVISIONSInvestment BankingAs a further contribution to securing the future of family businesses, in addition to our advisory and productoffering, we created a seminar offering in cooperation with the Witten-Herdecke University and theEQUA foundation aimed at the new generation of partners in family businesses. The seminars focus onaspects of asset and partner management, family business organisation and the dynamics typically foundthere as well as basic issues in economics and company law.outlook for 2009Any forecasts on the further development of the market and economic environment made in the currentsituation are saddled with considerable uncertainty. However, even if the crisis and its still incalculableconsequences can only be overcome in the long term, we will attempt everything in our power to continuesupporting our clients as a reliable partner. We have already undertaken major measures to stabilise theportfolios with the further development of tactical asset allocation and the targeted extension of competencein alternative investments. Our foremost goal is, together with our clients, to apply such measures toaddress the far-reaching loss of confidence in the international financial markets’ ability to function.We will continue to forge ahead on the course we have charted of making all investment decisions onthe basis of an active and fundamentally structured investment process that is pursued with discipline. Thetop priority for all of us in the coming months will be to focus on dealing appropriately with the continuingvolatility on the fi nancial markets. The principles guiding our actions will be broad diversifi cation,conservative positioning in the portfolios and a focus on intensive advisory service on all aspects of assetmanagement. On the basis of the economic analyses of the financial crisis, we will take all measures necessaryin order to be able to react in the interests of our clients early enough and with consideration for therespective implications on asset management.investment banking with the corporate finance and financial markets sections is sal.Oppenheim’s second core business area. It combines industry and product knowledge with transaction expertise.The business faced unique challenges in 2008, particularly in the second half of the year. Corporate Financeposted a very satisfactory business result. In Financial Markets, in contrast, the drastic rise in volatility resultingfrom the fi nancial crisis had primarily negative results on our trading, investment and hedging activities, asfar as equities are concerned. We addressed this development by introducing measures to limit volume and risk;however, negative net trading income was unavoidable. On a positive note in this environment, our Equity Salesteam posted a good result.corporate finance–> mergers & acquisitionsSal. Oppenheim also asserted its position in M&A advisory services in German-speaking countries in 2008.This is evidenced by the 2008 league tables published by Thomson Reuters. In terms of the number ofM&A transactions announced in Germany, Sal. Oppenheim was ranked fifth, with 27 transactions. Thetransaction volume amounted to a total of around $ 6 billion.In 2008, we provided advice regarding strategically important transactions to listed companies, familybusinesses, private equity funds and public-sector institutions. Mandates worth highlighting includeadvisory service to the METRO Group in the sale of its Extra supermarket chain to the REWE Group, andto Beiersdorf AG in the sale of the disinfection specialist BODE Chemie to Paul Hartmann AG.The M&A business remained largely stable until into the third quarter 2008. The worsening of thebanking crisis in September/October 2008, which created accelerated turbulence on the equity marketsand increasingly recessive prospects in the real economy in the fourth quarter, resulted in noticeablerestraint also in M&A activities until the end of the year.16 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 17

usiness activities / business divisions / Investment BankingInvestment Banking / business divisions / business activitiesRANKING BY NUMBER OF TRANSACTIONS –ANNOUNCED TRANSACTIONS WITH GERMAN PARTICIPATION IN 2008Ranking Investment bank Number of transactions1 Deutsche Bank 1042 UBS 333 Goldman Sachs 294 Morgan Stanley 285 Sal. Oppenheim 276 Rothschild 236 Credit Suisse 238 JP Morgan 218 Merrill Lynch 2110 Citi 1910 Lazard 1912 Leonardo 1313 Commerzbank 1213 Dresdner Kleinwort 1215 UniCredit 10* Source: Thomson Reuters, January 2009–> equity capital marketsOn the basis of broad diversification in product offerings, Equity Capital Markets (ECM) operated profitablydespite difficult exchange market conditions throughout the whole of the financial year. The year wascharacterised by very high volatility for capital market issuers in view of the uncertainties resulting fromthe global financial crisis. The initial public offering (IPO) business almost came to a complete standstillin Germany as well as in other parts of the world. However, in Switzerland, Sal. Oppenheim advisedon the IPO of the photovoltaic plant operator Edisun Power Europe AG. We took a leading role in fivecapital increases, including D+S europe AG and Evotec AG in fi nancial year 2008. Furthermore, as coleadmanager we supported Deutsche Postbank AG’s valued capital increase of € 1 billion guaranteed bythe majority shareholder. The private placements of Freenet AG and Smartrac AG shares are of particularnote concerning secondary placements. We structured and placed registered participation certificates forthe Schön clinics as hybrid capital. Due to our market position and reputation, we also received numerousmandates for implementing acquisition and cash payment offers as well as squeeze-outs, also frominternational customers such as the British Carlyle Group, Sweden’s Vattenfall AB, the Israel-based RoninInvestment Managing Company Ltd. and the Australian Macquarie Group.–> structured financeThe Structured Finance team covers the leveraged fi nance, special situations, and special transactionsproduct lines, among others. This division successfully delivered a satisfactory result despite the difficultmarket situation. Proof of this is the “Debt Provider of the Year” award from the Deutsche Private EquityAwards 2008.The leveraged finance market experienced ambivalent development in 2008. While large-cap transactionsencountered extraordinary financing difficulties, it was less problematic for mid-cap transactions.Overall, this resulted in a proportionate contribution to income.The Special Transactions area, which offers customised transaction structures in interests in Germany andabroad, realised a significant earnings increase in the business year due to its great structuring expertise.–> real estateAs advisor for complex real estate transactions, important transactions for the Real Estate InvestmentBanking team in the past year included the Federal Republic of Germany’s sale of 100% of the shares inVivico Real Estate at a volume of more than € 1 billion as well as structuring and launching the HAHNFCP-FIS German Retail Fund for the listed company HAHN Immobilien-Beteiligungs-AG. In additionto these individual transactions, the Real Estate unit held numerous strategic advisory mandates for realestate blue chip companies and real estate investors in the past financial year. For 2008, the transactionvolume concluded in the Real Estate unit totalled just under € 2.0 billion.18 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 19

usiness activities / business divisions / Investment BankingInvestment Banking / business divisions / business activitiesfinancial markets–> equity salesEquity Sales continued the positive business trend of the previous years in 2008. Fifty equity specialistsfrom Frankfurt am Main, Cologne, Munich, New York, Paris, Vienna and Zurich advised more than 700institutional investors on their investment decisions in European equity markets. In so doing, the unitachieved a net result based on a substantial market share gain in the “equity markets in German-speakingcountries” competence sector. A major factor in the unit’s success was the quality of the events numberingover 600 for institutional investors in the major international financial centres.The team’s success is also reflected in the result of Institutional Investor magazine’s annual survey ofportfolio managers from 562 international investment companies. The Sal. Oppenheim Equity Sales teamplaced first in the “German equities” category in the “2008 Pan-Europe Sales Team Report”.FIRST PLACE IN THE “2008 PAN-EUROPE SALES TEAM REPORT”The Sal. Oppenheim Equity Sales team placed first in the “Germanequities” category in the “2008 Pan-Europe Sales Team Report”published by the renowned American magazine Institutional Investor.In the global survey of portfolio managers from 562 companies, Sal.Oppenheim received the top rating for advising international institutionalinvestors.–> equity trading & derivativesAs a result of the high market volatility, Equity Trading & Derivatives was also faced with a numberof major challenges, which had a negative impact on performance. Numerous measures were takenduring the course of the year to keep these effects to a minimum. Proprietary trading and securitieslending transactions continued to focus on European small and mid-cap equities in 2008. The DesignatedSponsoring area, which provides support for the equities of the relevant companies, held 42mandates.–> foreign exchangeThe Foreign Exchange unit developed well in 2008 despite the financial crisis. Nearly all segments recordedincreases. Client trading in particular increased its annual result.–> asset and liability managementAsset and liability Management monitors and controls liquidity risks in order to guarantee the Bank’ssolvency at all times. Liquidity is controlled through traditional money-market trading and repo transactions.The Bank primarily uses client and interbank deposits for refinancing, particularly in the finalquarter of 2008.outlook for 2009In 2009, the Investment Banking area aims to continue the adjustment processes with the goal of generatingsustainable stable earnings even if at a significantly lower level than in previous years. We reacted tothe persistently difficult market environment by setting a new strategic focus, implementing cost-savingmeasures and modifying incentive systems, in order to be able to successfully continue following the provenintegrated asset management and investment banking business model.20 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 21

usiness activities / competence and service divisions / ResearchResearch / competence and service divisions / business activitiesCOMPETENCE AND SERVICE DIVISIONSResearchoppenheim research provides considerable support to the client advisory services of the investmentBanking and Asset Management business areas. Diligent generation, processing and focussed communicationof company, industry and macroeconomic data are essential success factors for qualified analysis and advisoryservices. Research is a competence centre across the Group, and its analyses of economic parameters and microand macroeconomic issues are available to both internal and external parties.In Germany, Oppenheim Research operates at locations in Cologne and Frankfurt am Main as well as internationallyin Paris, Vienna and Zurich, employing nearly 50 analysts. After having spun off the economicsdepartment, as well as quantitative analysis and asset management buy side into Asset Management, itcomprises investment banking research, in the form of primary analysis for equities, and a strategy team,as well as buy-side research for private banking.primary analysisInvestment Banking Primary Analysis focuses on equity, stock and capital market issues, as well as onevaluating company business models. The results are largely based on information and data sourced independently.The forecasts, market assessments, and market and company models produced form the basis forinvestment decisions and recommendations. The aim of Primary Analysis is to make industry and capitalmarket expertise available to the entire value chain of the investment bank.Primary Analysis analyses data and facts on more than 280 companies. Our analysts are distinguishedby their specialist expertise in German, Austrian and Swiss companies, with a clear emphasis on smalland medium-sized companies. In addition, our strategy team addresses the equity market and sectorstrategy. The core sectors include Auto/Industrials, Chemicals/Healthcare, Technology/Telecommunications,Financial Services/Real Estate, Consumer/Retail and Utilities/Logistics. The research activities inthe reporting year comprised support for IPOs, placements and corporate actions for German, Austrian,Greek, and Swiss companies.A standardised cross-border production infrastructure and an analysis database were also established. In2008, the company also focused on setting up a new logistics industry group, forming a research nucleus inParis, and strengthening corporate finance and placement activities for international equities. Cross-bordercoordinated support of major international investors continued to make up a large proportion of advisoryactivities. The Research area also offers specialist expertise on topics such as accounting or banking rulesas further differentiation potential.The Bank occupies a leading position in German-speaking countries with its research activities. In2008, the analyst team also won awards in a number of sectors and SME categories, particularly forGerman and Austrian equities.LEADING RESEARCH COMPANY IN GERMAN-SPEAKING COUNTRIESCategory Awarded by Media partner Place YearEuropean equities Stoxx 600 JCF La Tribune 1 2008Austrian equities StarMine/Thomson Reuters Die Presse 1 2008Sal. Oppenheim occupies a leading position in German-speaking countries with its researchactivities. In 2008, Sal. Oppenheim once again received numerous awards including “Leadingresearch company for Austrian equities” from StarMine/Thomson Reuters (media partner: DiePresse) and “Leading European mid-cap company” from JCF (media partner: La Tribune).outlook for 20092009 will be characterised by consolidation through further improvement in quality and a focus onshort-term value-creating activities with primarily liquid stocks. In addition it will be necessary to continueto increase research efficiency in a market environment that is likely to be difficult and to achieveabsolutely positive investment results through tactical equity and sector allocations as well as targetedequity selection.22 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 23

usiness activities / competence and service divisions / Bank ServicesBank Services / competence and service divisions / business activitiesCOMPETENCE AND SERVICE DIVISIONSBank Servicesbank services ensures that processes run smoothly and professionally, and is responsiblefor the infrastructure of operating activities. The Finance, Corporate Investments & Controlling, InformationTechnology, Corporate Communications and PR, Legal and Tax, Internal Audit and Facility Management unitsform the foundation for everyday operations.corporate investments & controllingCorporate Investments & Controlling supports the management with performance and risk managementof Sal. Oppenheim Group equity investments. The responsibilities of Corporate Investments & Controllingcomprise the coordination of all steps, from reviewing equity investment opportunities through ongoingrisk and performance monitoring to the sale of investments. The AMI shareholding management informationsystem (Anteilsbesitz-Management-Informationssystem), which contains all relevant shareholdinginformation for the Sal. Oppenheim Group, is the technical platform used to support shareholding management.Since 31 December 2005, all data has been recorded historically, so it can be retrieved for any date.Individual or standardised reports or master data sheets can be prepared and analysed using the database.Corporate Investments & Controlling’s main areas of responsibility are as follows:(1) Assessing investment options and preparing position papers for the acquisition and disposal of equityinvestments,(2) Providing up-to-date monitoring with regular reports of the economic development of investmentsusing quantitative and qualitative indicators,(3) Supporting the management in executing supervisory board mandates,(4) Supporting the management in calculating the equity investment risk within the risk bearing capacityconcept,(5) Submitting the investment-related reports to the Commission de Surveillance du Secteur Financier(CSSF) in accordance with financial sector legislation in Luxembourg,(6) Ensuring that suffi cient legal and fi nancial documentation is provided for all equity investments,and(7) Dealing with ad hoc topics relating to equity investments.Corporate Investments & Controlling works closely with Group Legal and Tax, Group Development,Group Finance and the Equity Investment Office of Sal. Oppenheim jr. & Cie. KGaA.information technologyIn 2008, Information Technology focused on centralising the group management system in the groupparent company. Major group-wide projects such as the central calculation core for risk management, thedaily income statement in accordance with IFRS and the introduction of the SAP financial and managementaccounting software modules were centrally organised from Luxembourg in the reporting year. As aresult of market conditions, the focus in the second half of the year was on supporting the group units inadjusting to new developments and preparing structural measures to increase efficiency. The developmentof a service-oriented architecture, which is already in progress, and the use of group-wide standardisedtechnologies have proven to be a successful base for this.corporate communications and prCorporate Communications concluded the implementation of the new corporate design and the updatesto all Sal. Oppenheim Group publications in 2008. Evidence of the high quality of the design concept andimplementation was reflected in the large number of awards received. For example, Bankmagazin selectedthe Sal. Oppenheim annual report as Germany’s best bank report for the first time.The numerous events that the bank organised for clients the past year on financial and economic topicsas well as in the areas of culture and sport contributed to a greater public awareness.legal and taxLegal and Tax also lent major support to the acquisition and divestment of Sal. Oppenheim Group equityinvestments, in addition to performing the general banking business in financial year 2008. The main tasksincluded supporting the business areas in restructuring the Sal. Oppenheim private equity fund of fundsgroup, in acquiring Mercuria Services S.A., Luxembourg, and in acquiring an interest in MediobancaS.p.A., Milan. The department supported Investment Banking in a number of M&A mandates, corporateactions, takeover bids and squeeze-outs. It also prepared fairness opinions for public offers. It providedparticular support to the Structured Finance area in lead management roles and subsequent syndication.24 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 25

usiness activities / competence and service divisions / Our EmployeesOur Employees / competence and service divisions / business activitiesCOMPETENCE AND SERVICE DIVISIONSOur Employeesthe group’s annual average number of employees in 2008 was 4,330 (previous year: 3,769);2,328 of these were with Sal. Oppenheim (previous year: 1,926) and 2,002 with BHF-BANK (previousyear: 1,843).The total average increase of 561 employees in the past year was largely due to the consolidation of newcompanies. As a result of this, the Group gained a total of 311 employees. In addition, Sal. Oppenheimhired a total of 250 new employees in the first half of 2008. Overall, the Sal. Oppenheim Group recordedan average annual rate of increase in staff of 14.9%.staff developmentThe Academy set up by Sal. Oppenheim to further educate the Bank’s client support staff plays a centralrole in personnel development. With its curriculum designed to meet the specific requirements of clients,the Sal. Oppenheim Academy makes a major contribution to strengthening the advisory service, which isbased on continuity, partnership and trust.Last year’s agenda focused strongly on a more intensive networking of the two core business areas AssetManagement and Investment Banking, in order to promote holistic advisory services for corporate clients.The objective of the Academy’s newly conceived personnel development module was to sensitise privateclient advisors to corporate development issues and to train them as turning point managers that maintaina view to the company’s needs as well as the private asset situation. Together with entrepreneurs and investmentbankers, the client advisors learn to recognise shifts in corporate development, e.g. expansion plans,sale of parts of the company, successor solutions, advising on financing questions or preparing for IPOs.As an integrated asset management and investment bank, Sal. Oppenheim possesses the necessary expertisein all these areas. In the past year, more than 260 client support staff from both units took advantage ofthe training on offer at the Academy.Not only the further development of its specialists but also the promotion of new talent is an integral partof personnel development. Ten trainees successfully completed their bank clerk training programme in thesummer of 2008. With the next group of traineeships, Human Resources was once again responsible for atotal of 20 trainees at the end of 2008. Moreover, a large number of students were again given the opportunityto obtain comprehensive insight into modern banking by completing an internship. Sal. Oppenheimrecruited a total of 24 graduates in 2008. Twelve of them were recruited from a pool of former trainees, temporarystudent employees and interns who were regarded as having particular potential. The Bank remainsin regular contact with such students, for example by organising daylong workshops.Sal. Oppenheim also maintains very personal contact with its retired former employees. The Bankcontinues a tradition dating back decades of inviting retired employees to a pre-Christmas event followedby a religious service, a practice which Gabriele Freifrau von Oppenheim started in 1953 after her husbanddied. Retired former employees receive special congratulations on milestone birthdays. They, in turn, regularlyinquire with great interest about current development of the Sal. Oppenheim Group, which is a signof how much the Bank’s employees continue to identify with the company even after they retire.many thanks to our employeesAs in the past, Sal. Oppenheim once again has its staff to thank for their tremendous commitment and highdegree of motivation in 2008. Our employees have earned the respect and recognition of the partners, themanagement, the Supervisory Board and the Shareholders’ Committee, who are equally grateful for theconstructive attitude and cooperation of the employee representatives.ANNIVERSARIES IN 2008Celebrating their 50-year anniversaries:– Franz-Josef Loeffelsender, Product Services and Operations, CologneCelebrating their 40-year anniversaries:– Frau Marlene Voigt, Product Services and Operations, CologneCelebrating their 25-year anniversaries:– Wera Paszek, Offi ce Managementfor the Limited Liability Shareholders, Cologne– Raziye Kaplan, Asset Management, Cologne– Michael Henkel, Asset Management, Cologne26 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 27

usiness activities / sal. oppenheim groupsal. oppenheim group / business activitiesSal. Oppenheim Groupsal. oppenheim jr. & cie. s.c.a has been parent company of the sal. oppenheim group since july2007. The company controls the Group’s business activities from its headquarters in the international fi nancialcentre Luxembourg. In addition to its function as parent company, the Bank supports high net-worth privateclients and institutional investors from here, off ering its clients the full range of services of the integrated assetmanagement and investment bank.sal. oppenheim jr. & cie. kgaaSince July 2007, Cologne-based Sal. Oppenheim jr. & Cie. KGaA, which had previously bundled Groupactivities, has been a wholly-owned subsidiary of Sal. Oppenheim jr. & Cie. S.C.A. Business activities focuson asset management for high net-worth private clients and investment banking centring on corporatefinance and financial markets.bhf-bank agBHF-BANK is wholly owned by Sal. Oppenheim jr. & Cie. S.C.A. All shares were transferred to the Sal.Oppenheim Group parent company in Luxembourg at the end of financial year 2008. The existing profitand loss transfer agreement between BHF-BANK and Oppenheim Beteiligungs-AG in Cologne was cancelledat midnight on 31 December 2008. BHF-BANK has operated on the market as an independentinstitution as part of the two-bank strategy within the Sal. Oppenheim Group since 2005. Its businessmodel is conservative and risk-averse.BHF-BANK headquarters are in Frankfurt am Main. There are branches at twelve locations in Germany.Moreover, BHF-BANK is represented in many major financial centres, such as Zurich, Geneva, Luxembourgand Abu Dhabi. BHF-BANK publishes its own annual report providing detailed information on its performance.For this reason, only key developments are mentioned here.Despite the fundamental financial market crisis, BHF-BANK successfully stood its ground in financial year2008 and is well positioned for the years to come. The Bank has aligned its resources across all divisionseven more directly with its core competency, consultation-intensive business with high net worth privateclients, entrepreneurs and institutional investors. To this end, the Private Banking and Asset Managementdivisions were merged to form a joint division in order to increase knowledge transfer and analyticaldecision-making power. Moreover, the Bank will more strongly align its structured products know-howto the complex individual requirements of its high net worth private clients and institutional investors infuture. In the past financial year, existing clients and an encouraging number of new ones recently depositeda record amount of over € 4 billion for asset management with BHF-BANK.With its newly opened branch office in Münster, BHF-BANK is now also at home in the region ofWestphalia. At an international level, the Bank has successfully enabled its clients access to investor groupsin the Middle East for the third year in a row through its representative office in Abu Dhabi. BHF-BANKand Abu Dhabi Investment Company (ADIC) formed a strategic partnership at the start of the currentfinancial year.BHF-BANK spun off its custody services, custodian bank and securities business into an independentspecialised bank, BHF Asset Servicing GmbH, transferring to a new shareholder structure at the end of2008. This was influenced by the owning families of Sal. Oppenheim.The bank employees around 2,000 employees across the Group and has total assets of € 21.8 billion,which is € 2.8 billion more than in 2007. Shareholders’ equity in accordance with IFRS amounts to € 642million, which is an increase of € 25 million over the previous year. Capital resources thus remain at acomfortable level based on business focus. The banking supervisory ratio of eligible own funds is 13.4 %.No net additions to the provision for loan losses were thus necessary in the reporting year.The capital market crisis will cause investors to scrutinize basic requirements for investments moreclosely. Comprehension and transparency of product constructions will become more important again.Investors’ security requirements will continue to increase. All in all, this could establish a basis forhealthier capital market development that is successful in the long term. With this in mind, BHF-BANKalso looks ahead with cautious optimism and confidence in its high advisory quality to the developmentof financial year 2009.bank sal. oppenheim jr. & cie. (österreich) agSal. Oppenheim Austria was founded in 2001, with its head office in Vienna. Since 2006, it has operatedas an independent full-service bank in the form of a public limited company. In 2002, the presence wasexpanded to include a branch office in Salzburg. With a current total of 83 employees, Sal. Oppenheimjr. & Cie. (Österreich) AG focuses on asset management and investment banking. The bank is responsiblefor the business in central and eastern Europe and has been present at the Prague location since 2005 andin Warsaw and Budapest since 2008.28 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 29

usiness activities / sal. oppenheim groupsal. oppenheim group / business activitiesTotal volume in Asset Management was reduced to a total of € 3.2 billion due to the negative marketdevelopment. Total assets amounted to € 326 million at the end of the year. In 2008, income fell onlyslightly by 1.7 % year-on-year. Pre-tax net income amounts to € 1.52 million. The confi dence clientsplace in Sal. Oppenheim is nonetheless evident in the acquisition of new mandates in Austria and foreignlocations, increasing the number of clients in 2008 by around 10 %. The products from our London cooperationpartner GLG Partners LP have been well received in Austria, particularly the equities long-onlystrategies. Sal. Oppenheim Austria performed a number of advisory mandates in corporate finance. Forexample, the Polish NFI Empik Media & Fashion Group’s acquisition of the German company SpieleMax AG was successfully concluded. In the past year, the newly formed Viennese Equity Sales team alsostarted domestic and international sales of Austrian equities. In Corporate Finance, we continue to seespecific opportunities in restructuring the financial services industry as well as a progressive consolidationof the traditional industry sectors in Austria in 2009.bank sal. oppenheim jr. & cie. (schweiz) agZurich-based Bank Sal. Oppenheim jr. & Cie. (Schweiz) AG focuses on asset management for private clientsand investment banking for institutional clients. The Swiss asset manager offers its discerning domestic andinternational clientele a comprehensive and customised range of support and advisory services, enhancedthrough the cooperation with Oppenheim Landert Family Office AG. Investment Banking focuses on research,as well as on sales of Swiss and German equities and structured products. The bank cooperates withSal. Oppenheim jr. & Cie. Corporate Finance (Schweiz) AG in the advisory business for M&A, real estateand other capital market transactions. The bank’s opening of a branch in Lugano in the autumn expanded itsprivate banking services in Switzerland. Despite the net inflow of new funds of over 8 %, the bank’s privateclient assets under management fell by 23.7 % due to market development. The bank’s net income fell to CHF15.4 million in financial year 2008. Total assets amounted to CHF 902.2 million at the end of the year.In 2009, Bank Sal. Oppenheim jr. & Cie. (Schweiz) AG will continue to provide comprehensive,high-quality support and advisory services for its private clients despite the diffi cult market situation.Switzerland remains an important European financial market, and thus for our Group as well.oppenheim landert family office agThe Sal. Oppenheim Group and the Zollikon-based Dr. Landert Group are bundling their strengths incomprehensive asset advisory and management services for families under the name Oppenheim LandertFamily Office AG. The new company will support both existing Landert Group clients and new clients.The advisory and management mandates comprise wealthy families and individuals, international companies,banks, pension funds and foundations.The Oppenheim Landert Family Office pursues an active and independent investment philosophy, whichincluded further expanding the research activities in the past year. Thanks to the timely implementation ofa very defensive investment policy, losses were not completely avoided but at least significantly limited.sal. oppenheim jr. & cie. corporate finance (schweiz) agWith 42 staff, Sal. Oppenheim jr. & Cie. Corporate Finance (Schweiz) AG provides services in mergers& acquisitions, capital market, real estate investment banking in Switzerland. The activities continued todevelop satisfactorily in the third year of the company’s existence. The company maintained its leadinglocal role in mergers & acquisitions. The expansion of the offering of the Luxembourg Fund of Fundsunder the 4IP label established the company also as a competence centre for real estate funds. Moreover,four major real estate transactions were performed in 2008. Along with Bank Sal. Oppenheim jr. &Cie. (Schweiz) AG , the company supported the only IPO on the Swiss Exchange (SIX) in the secondhalf of 2008, acting as sole lead manager in Switzerland for the first time with the Edisun Power EuropeAG IPO.sgg s.a.Based in Luxembourg and with close to 230 employees, SGG S.A. (formerly Services Généraux de GestionS.A.) has specialised in family offi ce services and support for corporate and institutional clients fordecades. SGG S.A.’s services are a key component of the Sal. Oppenheim Group’s integrated offeringfor private and institutional clients.The Sal. Oppenheim Group expanded its Family Offi ce network offering in the past year with theacquisition of the domiciliation business of Mercuria Services S.A. in Luxembourg and the subsequentmerger with SGG S.A. Moreover, Sal. Oppenheim acquired a 70 % stake in the Luxembourg-based trustcompany Fiduciaire F. Winandy & Associés S.A., which is well positioned in the Grand Duchy of Luxembourgin advisory services to private clients, thus enhancing Sal. Oppenheim Group’s family offi cenetwork. SGG relocated to new offices in Luxembourg’s Cloche d’Or in financial year 2008. In order tomeet increasing demand in Belgium, SGG founded a subsidiary there. Thus, the SGG Group now hassubsidiaries in Switzerland, Cypress, the Netherlands, Belgium and the UK.sal. oppenheim (france) s.a.The French asset management company Sal. Oppenheim (France) S.A. (Financière Atlas S.A. until23 February 2009), founded in 1988, has been a wholly-owned subsidiary of Sal. Oppenheim since 2007.The company focuses on designing and marketing funds and structured investment products, establishingitself in the French financial world through its close cooperation with insurance companies, Pensionskassen,pension schemes, banks and financial intermediaries.30 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 31

usiness activities / sal. oppenheim groupcorporate governance / business activitiesCorporate Governancesal. oppenheim jr. & cie. s.c.a. is committed to the principles governing the responsiblemanagement and control of the Company. Although the Corporate Governance Code does not apply to theCompany as it is not a listed company, we advocate the aims of such a code relating to transparency in managementand eff ective control, as far as the legal form of a société en commandite par actions (S.C.A.) and itsbodies do not prescribe otherwise.sal. oppenheim (hong kong) limitedSal. Oppenheim (Hong Kong) Limited, which was founded in 2007, has established itself in the market.The investment teams have made their first investments in the Asian markets. In future, clients will be ableto make investments in Asian products tailored to the needs of European investors.sal. oppenheim private equity partners gmbhSal. Oppenheim Private Equity Partners GmbH, founded in 2008, acquired all shares in CAM PrivateEquity Consulting & Verwaltungs-GmbH and VCM Capital Management GmbH at the end of the year,thus bundling the Sal. Oppenheim Group’s private equity fund of funds business. Merging the competenciesinto the new company enables its investment managers to have a stronger specialisation and toaddress the market more efficiently. Sal. Oppenheim Private Equity Partners GmbH is to be integratedinto the company for industrial holdings newly formed by the Bank’s owners and will maintain a marketpresence as an independent provider with assets under management of around € 5 billion.capitects gmbhCapitects GmbH based in Frankfurt am Main was founded in 2008 as a joint venture between Sal.Oppenheim jr. & Cie. S.C.A. (51%) and the leading provider of risk software Algorithmics (49%).Clients of the new company include, in particular, the risk specialist areas of the Sal. Oppenheim Group.In future, the service offering will include analyses, which highlight the interplay between risk, earningsand capital, in addition to the calculation of risk indicators. As target clients, the joint venture addressessmall to medium-sized banks, family offices, hedge funds, independent asset managers, SMEs, insurancecompanies, utilities companies as well as the corresponding areas in the Sal. Oppenheim Group.company’s boards and committeesThe Company is represented by the management, which comprises the Personally Liable Partners of Sal.Oppenheim jr. & Cie. S.C.A. and other managing directors. Other bodies include the Shareholders’Committee of the Supervisory Board, which is entitled to form committees, and the Shareholders’ AnnualGeneral Meeting.By virtue of their status under company law, the Personally Liable Partners are responsible for managingthe Bank and the Group as a whole, and for everything outside of day-to-day management. ThePersonally Liable Partners are both management and owners in that they are liable to the extent of all theirassets for the liabilities of the Company.The management is responsible for the Bank’s daily business. As at 31 December 2008, the managementcomprised ten members, and has formed the following sub-committees: the Credit Committee andthe Management Committee, which as at 31 December 2008 comprised two Personally Liable Partnersand six further managers. The Shareholders’ Committee performs the tasks assigned to it by the Articlesof Association and the Shareholders’ General Meeting and represents the limited liability shareholdersvis-à-vis the Personally Liable Partners, unless the shareholders’ General Meeting or the Supervisory Boardis required to take responsibility. The Shareholders’ Committee and the Personally Liable Partners havejointly stipulated that the approval of the Shareholders’ Committee is required for transactions exceedingnormal parameters.The Shareholders’ General Meeting decides on the approval of the annual financial statements, the appropriationof unappropriated profit and the discharge of the other boards and committees. The resolutionon the approval of the annual financial statements and resolutions regarding amendments to the Articlesof Association require the consent of the Personally Liable Partners. The Supervisory Board is responsiblefor monitoring the Bank’s business.The Supervisory Board has an Audit Committee consisting of three members. It deals with issues relatingto internal auditing and compliance in the Group and in the Company’s banking business. The AuditCommittee also works directly with the independent auditors.32 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 33

usiness activities / kaleidoscopekaleidoscope / business activitiesKALEIDOSCOPEEvents 2008To address current developments, Sal. Oppenheim organised a range of conferences and symposia oncurrent issues in fi nancial and economic spheres for clients, business partners, shareholders and staff.Moreover, the Bank maintained its traditional commitment as supporter and sponsor of musical, artisticand sporting events throughout 2008, despite the year’s economic difficulties.17.01. museum frieder burda,baden-badenPreview of the exhibition “Gerhard Richter.Pictures from private collections”15.05. opening of the branch office inbudapest, hungaryFormal reception at the National Museum21.–22.02.200836th investment conferenceMore than 500 institutional investors met at Sal.Oppenheim’s 36 th Investment Conference to discuss causes,consequences and strategies of global structural changes.Guest speakers included the President of the Center ofFinancial Studies, Prof. Dr. Otmar Issing, and GermanFederal Foreign Minister Dr. Frank-Walter Steinmeier.04.03.2008round table discussionsat the mendelssohn houseThe round table discussions at the Mendelssohn House inBerlin, to which Sal. Oppenheim regularly invites entrepreneursand board members, traditionally focus on economicand political issues and debates. The new series openedwith Wolfgang Bosbach, Member of the German Bundestag,and Christopher Freiherr von Oppenheim speakingwith clients of the Berlin branch. The guests were particularlyinterested in politicians’ responsibility for sustainablystrengthening SMEs in Germany.21.–22.02. 36th investment conference forinstitutional investors, cologne“Structural changes in the global economyand on the capital markets – taking advantageof earnings opportunities”26.02. lecture by christopher freiherrvon oppenheim, saarbrücken“Family businesses, drivers of the economy”04.03. round table discussions at themendelssohn house, berlin“Exchange of ideas on economics and businessin the fireside room at the Berlin branch office”06.03. odeon dialogues, munich“Tolerance and the individual” byAbbot Primate Dr. Notker Wolf, OSB11.03. private banking lecture, frankfurt“Financial market crisis:Macroeconomic risks – political consequences”by Prof. Dr. Dr. h.c. Bert Rürup21.04. opening of the representativeoffice in warsaw, polandFormal reception in Teatr Wielki – Polish NationalOpera, “An Evening at the Opera – Three ArtisticHighlights”11.06. classic meets jazz, düsseldorfScharoun Ensemble – Members of the BerlinPhilharmonic & Friends invited to Düsseldorf15.06. oppenheim union race, cologneTraditional horse race in Weidenpesch, Cologne01.–03.08. german polo masters –sal. oppenheim gold cup, sylt17.08. rheingau music festival, eltvilleConcert series in the basilica of Eberbach Monastery15.09. official opening of a new locationat an historical address, cologneReturn to the office building in Oppenheimstrasse15.09. special religious serviceat cologne cathedralConsecration of the “apocalypse” window17.09. opening of the branch officein lugano28.10. talks at the gosslerhaus, hamburg“Women in the world of foundations: Motivation,experience, goals”01.11. special concert by the bavarianstate orchestra, kemptenConcert conducted by Maestro Kent Naganoin the Kempten Theatre15.09.2008cathedral window consecrationat cologne’s high cathedralMore than 450 employees accepted the invitation from theBank’s partners to attend a special religious service followedby a consecration of a reconstructed 19 th century cathedralwindow. The window, which depicts scenes from the apocalypse,was designed on the basis of original plans by theViennese historical painter Johannes Klein. The bankingfamily has been actively committed to the constructionand maintenance of Cologne cathedral for more than onehundred years.01.11.2008special concert by the bavarianstate orchestraFor many years, our Bank has focused its cultural commitmenton conveying cultural values and promotingfirst-rate partners – particularly in classical music. For thisreason, Sal. Oppenheim has cooperated with the BavarianState Orchestra conducted by Kent Nagano, among otherparties. The Munich branch sent out an invitation to aspecial concert at the beginning of November, followed bya reception attended by the maestro and his orchestra.34sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 35

usiness performance / group management reportGROUP MANAGEMENT REPORTBusiness PerformanceGroup Management Reportthe financial world is suffering from a severe crisis. the sal. oppenheim group also feltthe impact in fi nancial year 2008. Net loss for the period totalled € -117 million (previous year: net incomeof € 255 million). This unsatisfactory result is largely due to considerable losses in equity trading and impairmentlosses in the banking book of Sal. Oppenheim jr. & Cie. KGaA. Satisfactory results were achieved inasset management, corporate banking, equity sales, and currency and fi xed-income trading. Total assets remainnearly unchanged at € 41 billion.2008 2007 +/- +/-€ M € M € M %Net interest income 344 249 95 38Share of the profit or loss of associatesand joint ventures accounted for using the equity method 44 81 -37 -46Provision for loan losses -1 -10 9 90Net commission income 573 629 -56 -9Net trading income/(loss) -295 -37 -258 >-100Net income/(loss) from non-current financial assets 96 327 -231 -71Administrative expenses -906 -918 12 1Other operating income and expenses, net 8 26 -18 -69Profit/(loss) from operating activities in continuing operations -137 347 -484 >-100Profit/(loss) from operating activities in discontinued operations -7 -14 7 50Profit/(loss) from operating activities -144 333 -477 >-100Income taxes 27 -78 105 >100Net income/(loss) for the period -117 255 -372 >-100INCOME STATEMENT 1 JANUARY TO 31 DECEMBER 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 37

group management report / business performancebusiness performance / group management reportnet interest incomeNet interest income amounted to € 344 million, and in addition to the traditional components from lendingand money market business, also includes interest income and expense from banking book securities.provision for loan lossesProvision for loan losses amounted to € 1 million. While allowances for impairment losses on loansand advances increased by € 6 million in net terms, provisions for loan losses fell by € 5 million due toreversals. Net additions to allowances for impairment losses on loans and advances relate primarily to theincrease in specifi c valuation allowances. The vast majority of the loan portfolio comprises InvestmentGrade borrowers.share of the profit or loss of associates and joint venturesaccounted for using the equity methodThe share of the profit or loss of associates and joint ventures accounted for using the equity method was€ 44 million.net commission incomeThe financial market crisis had a considerably negative impact on the equity business. This resulted amongother things in a sharp decline in retail derivatives sales. Thus net commission income of € 573 million stoodat 9 % below the prior-year level. In particular, the net commission income from the securities business aswell as the advisory business and brokerage was unable to achieve the very high level of the previous year.This was offset by continued positive development in net commission income from asset management.net trading incomeNet trading loss totalled € -295 million. This was particularly due to the result from bonds and interestrate derivatives as well as equities and equity derivatives. At Sal. Oppenheim, the focus is on equity retailderivatives business, while BHF-BANK AG concentrates on fixed-income and currency trading.net income/(loss) from non-current financial assetsThe net income from non-current financial assets of € 96 million is primarily composed of gains from thedisposal of equity investments and securities in the amount of € 300 million as well as impairments onequity investments and securities amounting to € 202 million. The gains from the sale of equity investmentsrelate primarily to the sale of 94.9 % of the shares in BHF Asset Servicing GmbH.administrative expensesAdministrative expenses decreased slightly to € 906 million. Personnel expenses were, despite an increasein the number of employees, considerably less than those of the previous year due to lower profit-basedremuneration, while other administrative expenses increased. These included for example legal, auditingand consultancy costs. Depreciation and amortisation totalled € 41 million.consolidated net incomeProfit/(loss) from operating activities totalled € -144 million. After current tax expenses of € 43 million,and deferred tax income of € 70 million, net loss for the period totalled € -117 million. The share of profitattributable to minority interests amounted to € 13 million.2008 2007 +/- +/-€ M € M € M %Cash and cash equivalents 709 475 234 49Assets held for trading 10,522 13,472 -2,950 -22Positive fair values from hedge accounting 47 31 16 52Financial assets designated at fair value through profit or loss (fair value option) 1,802 3,190 -1,388 -44Loans and advances to banks 8,913 10,170 -1,257 -12Loans and advances to customers 7,626 7,116 510 7Allowances for impairment losses on loans and advances -172 -167 -5 -3Non-current financial assets and investments accountedfor using the equity method 9,865 5,531 4,334 78Property, plant and equipment 490 322 168 52Remaining assets 971 950 21 2Non-current assets held for sale and assets from discontinued operations 594 0 594 -Assets 41,367 41,090 277 1Liabilities held for trading 10,512 12,439 -1,927 -15Negative fair values from hedge accounting 145 17 128 >100Deposits from banks 8,662 5,206 3,456 66Deposits from customers 18,751 19,614 -863 -4Debt securities 420 676 -256 -38Provisions 80 85 -5 -6Remaining liabilities 632 693 -61 -9Liabilities from discontinued operations 91 0 91 -Subordinated capital 207 186 21 11Equity 1,867 2,174 -307 -14Liabilities and equity 41,367 41,090 277 1BALANCE SHEET AS AT 31 DECEMBER 2008total assetsThe Group’s total assets amount to € 41.4 billion, practically unchanged compared to the previous year.38 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 39

group management report / business performancebusiness performance / group management reportassets held for tradingAssets held for trading decreased by € 2,950 million year-on-year to € 10,522 million. They include positivefair values from derivative financial instruments at € 8,531 million, bonds and other fixed-income securitiesat € 1,058 million, and equities and other non-fixed income securities at € 928 million.financial assets designated at fair value through profit or lossFinancial assets designated at fair value through profit or loss decreased by € 1,388 million to € 1,802 million.This item includes, in particular, bonds and other fixed-income securities totalling € 1,438 million,and equities and other non-fixed income securities totalling € 329 million.loans and advancesLoans and advances to banks amounted to € 8,913 million at the reporting date, a decrease of 12 %year-on-year. This item includes liquidity provided to us that was not channelled into other asset items.As far as loans and advances are concerned, we substituted unsecured money market transactions withrepo transactions with top-quality collateral. These transactions were concluded on a short-term basisas far as possible, to ensure sufficient flexibility for the outflow of funds. From the loans and advancesto banks, € 3,398 million are due on demand. Loans and advances to customers rose by € 510 millionto € 7,626 million. € 4,733 million of this amount is attributable to business with corporate clients,and € 2,750 million to private client business. The remaining € 143 million is primarily attributable topublic-sector clients.allowances for impairment losses on loans and advancesAllowances for impairment losses on loans and advances were up slightly on the prior year at € 172 million,€ 132 million of which was attributable to specific valuation allowances and € 40 million to general allowancesfor doubtful accounts.non-current financial assetsNon-current financial assets including investments accounted for using the equity method increased by78 % to € 9,865 million. € 8,758 million of this amount is attributable to bonds and other fixed-incomesecurities, and € 573 to equity investments. An additional € 187 million is attributable to investment property.In light of the financial market crisis, securities held for trading and available for sale were reclassifiedto the loans and receivables category.remaining assetsRemaining assets totalling € 971 million include income tax refund claims at € 475 million, and intangibleassets at € 266 million.liabilities held for tradingLiabilities held for trading decreased by € 1,927 million to € 10,512 million. These are largely attributableto negative fair values from derivative financial instruments of € 8,922 million, and bonds and notes issuedfrom the trading portfolio of € 1,425 million.liabilitiesDeposits from banks rose by 66 % to € 8,662 million. These relate primarily to money market deposits atBHF-BANK AG. Client deposits have decreased by € 863 million to € 18,751 million und continue toaccount for nearly half of total liabilities and equity. These deposits remain the Group’s main refinancinginstrument and reflect the trust placed in our Bank. Debt securities also serve for refinancing. The portfolioamounts to € 420 million compared to € 676 million the previous year due to maturities.remaining liabilitiesRemaining liabilities totalled € 632 million. These include current and deferred income tax liabilities of€ 235 million, and minority interests qualified as debt of € 138 million.subordinated capitalThe subordinated capital of € 207 million relates solely to BHF-BANK AG and contains subordinatedliabilities only.equityEquity was reduced by 14 % to € 1,867 million, which is, in particular, a result of the net loss for the periodand the decrease in revaluation surplus.performance indicatorsThe Bank uses the cost/income ratio as a key performance indicator. The calculation of the cost/income ratioincludes all of the pre-tax income statement items with the exception of impairments and the proceeds fromthe sale of equity investments. Administrative expenses are weighed against income items. This produces acost/income ratio higher than 100 % for the reporting year. Return on equity is another key indicator. To calculatereturn on equity, net income for the period before taxes is weighed against equity. The annual result isassumed to have been continuously generated throughout the year for the purpose of the calculation. Thus,equity as at 1 January 2008, less dividends paid, plus half of the annual net income, forms the basis for thecalculation. This produces return on equity of -6.8%. The solvency ratio and the related risk assets serve asadditional indicators. At the end of financial year 2008, the total capital ratio was 11.0 % after allowing forIFRS 5 with risk assets of € 16.4 billion. Own funds are composed primarily of tier 1 capital.supplementary reportThe owners of Sal. Oppenheim jr. & Cie. S.C.A. have resolved to restructure the business and investmentactivities of the Group. In the future, industry holdings will be managed in a newly formed holding structurethat is not affiliated with the Bank. This affects the industrial holding ARCANDOR Aktiengesellschaftin which Sal. Oppenheim jr. & Cie. S.C.A. has a 28.6 % stake, 24.9 % of which will be sold to the newholding company. In addition, 20 % of shares in IVG Immobilien AG held by the wholly owned subsidiarySal. Oppenheim jr. & Cie. Beteiligungen S. A. will be sold to the industrial holding company. The groupparent company Sal. Oppenheim jr. & Cie. S.C.A. will sell Sal. Oppenheim Private Equity Partners S. A.and Sal. Oppenheim Private Equity Partners GmbH with its subsidiaries CAM Private Equity Consulting& Verwaltungs-GmbH and VCM Capital Management GmbH to the industrial holding company.40sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 41

group management report / outlookoutlook / group management reportGROUP MANAGEMENT REPORTOutlook for 2009sal. oppenheim expects a serious recession for 2009. economic forecasts were alreadyadjusted downwards several times in the fourth quarter of 2008. The fi nancial markets remain under immensepressure. Not until the latter part of 2009 following a recovery in the fi nancial sector are we likely to see a moderateturnaround in the real economy; we therefore expect slight growth in 2010.macroeconomic expectationsThe problems in the financial sector triggered a global economic crisis. The financial crisis took anotherturn for the worse in the wake of the collapse of Lehman Brothers investment bank in September 2008.This led to the first emergency law for economic stabilisation being passed in the USA at the beginningof October. Many other governments have followed the American example since then. The internationalrescue packages have added up to an unprecedented dimension: $ 800 billion in the US, over € 1,800billion in the euro zone and £ 500 billion in the UK.The IMF predicts that the global economy will shrink by 0.8 % in 2009. The economic performanceof EMU countries – including Germany – will likely shrink substantially more. Consequently, both theindustrial nations and the emerging markets are attempting to combat the downturn with signifi cantstimulus packages. The government bailout measures for banks have yet to have the desired effect. Thefinancial system has been stabilised to a certain extent, but the banks’ ongoing need for write-downs willmean new capital injections are necessary. A sustainable recovery on the financial markets can scarcely beexpected to occur without further government intervention.Central banks around the world are continuing their very accommodative policies. The US FederalReserve has maintained its key rates close to zero and is increasingly turning to quantitative measures (openmarket operations). The European Central Bank (ECB) is likely to scale the tender rate down to 1.0 % bythe end of the second quarter of 2009. Thereafter, “unconventional” monetary measures can be expectedin the euro zone as well.sal. oppenheim in financial year 2009The Sal. Oppenheim Group has responded to these changed market conditions by taking risk reductionmeasures. One major step at the beginning of the year was the resolution to manage the industry holdingsARCANDOR Aktiengesellschaft and IVG Immobilien AG, along with Sal. Oppenheim Private EquityPartners S. A. and Sal. Oppenheim Private Equity Partners GmbH and its subsidiaries CAM Private EquityConsulting & Verwaltungs-GmbH and VCM Capital Management GmbH in a newly formed, independentholding structure not affiliated with the Bank. Moreover, the issue volume in Equity Trading will beconsiderably reduced. New transactions will only be performed on a selective basis with regard to nostroinvestments. Across the Group, we are pursuing the systematic adjustment and further development of ourrisk measurement methods and models.We expect 2009 to be another difficult year, with reduced asset and earnings levels for the coming yearand beyond throughout the entire fi nancial sector. The Sal. Oppenheim Group has reacted with a costreduction program for the current financial year, aimed at a savings volume of € 100 million. We considerourselves well positioned after implementing these measures. Despite the difficult market environmentexpected for 2009 as well, we are confident that we will be able to achieve a positive result.The experiences of the past year show that forecasts are subject to a considerably higher level of uncertainty.The predictions regarding the future development of the Sal. Oppenheim Group represent estimatesmade on the basis of all information available at this time.asset managementWe have already undertaken major measures to stabilise the portfolios with the further development oftactical asset allocation and the targeted extension of competence in alternative investments. We will continueto forge ahead on the course we have charted of making all investment decisions on the basis of anactive and fundamentally structured investment process that is pursued with discipline. The top priorityfor all of us in the coming months will be to focus on dealing appropriately with the continuing volatilityon the financial markets. The principles guiding our actions will be broad diversification, conservativepositioning in the portfolios and a focus on intensive advisory service on all aspects of asset management.On the basis of the economic analyses of the financial crisis, we will take all measures necessary in orderto be able to react in the interests of our clients early enough and with consideration for the respectiveimplications on asset management. In the current situation, we will attempt everything in our power tocontinue supporting our clients as a reliable partner. We expect to generate stable operating income for thecoming year, particularly at our locations in Luxembourg, Germany, Austria and Switzerland.investment bankingIn 2009, the Investment Banking area aims to continue the adjustment processes with the goal of generatingsustainable stable earnings even if at a significantly lower level than in previous years.In addition to expanding the Corporate Finance business and tapping into new target markets, expansionof transatlantic cross-border business with mergers and acquisitions is planned. We reacted to the persistentdifficult market environment by setting a new strategic focus, implementing cost-savings measures andchanging incentive systems, in order to be able to successfully continue following the proven integratedasset management and investment banking business model.42 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 43

group management report / risk management risk management / group management report–> icaapInternal processes have been implemented group-wide to identify, measure, manage and report risks theSal. Oppenheim Group is exposed to or can be potentially exposed to as part of the Internal Capital AdequacyAssessment Process (ICAAP). Moreover, a second internal process is in place to plan and manageinternal capital. Both processes are subject to regular review and continuously developed in order to ensurethat risk-coverage potential and risks taken are appropriately balanced at all times.GROUP MANAGEMENT REPORTRisk Managementthe focus of risk and earnings management in the sal. oppenheim group is on stabilisingearnings power, thus making a signifi cant contribution to maintaining stability and continuity. Risk strategies,process organisation, and risk measurement and monitoring mechanisms apply to all of Sal. Oppenheim’sbusiness divisions. Our risk management analysis focuses on the Sal. Oppenheim Group and the two group unitsSal. Oppenheim and BHF-BANK.risk strategiesThe group business strategy is determined by the group management and revised annually. The group riskstrategy, which defi nes the framework for the Group’s risk management, is derived from it. Additionalpartial risk strategies serve to flesh out the general risk strategy and are geared at continuously recording,measuring and controlling all existing and potential risks using adequate procedures and methods. The riskstrategies are determined by the group management and revised annually.regulatory requirementsThe Sal. Oppenheim Group continues the path taken, thus remaining with the standardised approach tocredit risk in accordance with the options for measuring capital offered under Basel II. The instrumentsused for internal management are based on the IRB foundation approach.COREP supervisory reporting based on IFRS was adopted as at 1 January 2008 (implementation ofthe Basel II requirements).For financial year 2008, disclosure at Sal. Oppenheim jr. & Cie. S.C.A. was made for the first time inLuxembourg in accordance with the rules of the Basel Accord (International Convergence of Capital Measurementand Capital Standards – A Revised Framework Comprehensive Version, June 2006).risk-bearing capacityThe basis and main parameter for determining risk-bearing capacity is the risk coverage potential, whichis the maximum amount of capital that can be made available for the risks the Sal. Oppenheim Grouphas assumed and potential risks it faces. This is mainly comprised of equity, unrealised reserves and theexpected net income. Part of the risk coverage potential is made available to group companies as aggregaterisk cover.The amount of aggregate risk cover made available is a strategic decision, which sets the frameworkfor seizing business opportunities. As such it is taken by management, reassessed each year and approvedby the supervisory body.On the basis of the business strategy and the planning in each business area, the risk limits requiredto achieve projected results and which must be backed by the aggregate risk cover made available by theGroup, are allotted in an iterative process. Clearly defined limits have been set group-wide for the types ofrisk to the Group which are considered important, i.e. equity investment, market, credit and business risk,as well as operational risk, and ongoing checks and monitoring are performed to ensure compliance.Group management is responsible for ensuring that the risks taken in the Sal. Oppenheim Group arebacked by the available aggregate risk cover at all times. To this end, aggregate risk cover and utilisationof all risk limits are subject to routine comparison. The result of the risk-bearing capacity analysis is acomponent of the management’s monthly reporting. Escalation processes are established for any adjustmentmeasures that may be necessary.The Sal. Oppenheim Group addressed the extraordinary requirements of fi nancial year 2008 by areduction in risk exposure as well as a capital increase to strengthen its equity and thus aggregate riskcover. Sal. Oppenheim maintained sufficient risk-bearing capacity at all times in 2008.The risk-bearing capacity concept is to be adapted to the economic environment for fi nancial year2009. The portion of risk coverage potential not allotted as aggregate risk cover is considered a buffer,which ensures that both simulated stress scenarios as well as non-quantifiable risks are covered.risk management structureGroup Risk Management coordinates risk management across the Group and is responsible for the aggregationof the group units’ risk information. BHF-BANK AG operates as a legally separate bank in dailyoperating business, independent of the other group companies. The group companies are responsible formanaging and controlling risks that they have taken themselves, by means of a structured process subject touniform requirements for all group companies. This process is based on strategies and guidelines adoptedby group management.44 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 45

group management report / risk management risk management / group management report–> group chief risk officerThe Group Chief Risk Officer (GCRO) is a personally liable partner of Sal. Oppenheim jr. & Cie. S.C.A.and responsible for risk management activities.–> group risk managementThis function is responsible for identifying, measuring, and monitoring risks resulting from the Sal.Oppenheim Group’s business activities, in particular for the Group Chief Risk Officer (GCRO), but alsofor the group management in general, as well as for the supervisory body. GRM conducts risk analyses onthe basis of the aggregated risk information from group companies, derives alternative plans of action ifnecessary and initiates their implementation.–> risk controlThe risk control units of the respective group companies are responsible for quantifying the risks taken. Themethods used are aligned and further developed in line with Sal. Oppenheim Group specifications.–> risk reportingThe group companies report on risk exposures in accordance with the information requirements defined byGRM. On this basis, GRM regularly prepares a group risk report which provides the group managementand the supervisory body with an overview of the group’s entire risk situation.market risksMarket risk constitutes the risk of loss from own risk positions entered into, due to changes in marketprices. Traditional price risks (interest rate, equity, currency and commodity risk), option-specifi c risks(delta, gamma, vega, theta and rho risk) and other market price risks (spread risk and basis risk) have tobe taken into account here.For new business activities, a concept must be worked out including an analysis of the risk associatedwith these activities. Trading is only permitted in products and on markets which have been approved aspart of the product launch process.–> market risk organisationThe structure and organisation of operations comprises the risk management and control processes forall market risks. The processes are clearly established, communicated and documented at group level andthroughout the group companies in accordance with the supervisory requirements.The structure and organisation of operations is subject to regular checks and assessments by theGroup’s internal audit department and by the group companies.–> measurement and assessment of market risksThe trading book positions entailing market risks are assessed on a daily basis. The banking book positionsentailing market risks are assessed on a regular basis, both daily and monthly, depending on relevance. Thefollowing minimum requirements apply to group monitoring:–> Value at Risk (VaR): confidence level of 99 %, minimum holding period of one day, 250-day historicalobservation period.–> Daily calculation of a clean P/L (assessment of a day’s positions under the market conditions of thenext day).–> Worst-case/stress scenarios: Scenarios are defined on the basis of specific changes to the risk parametersor historically derived market movements.For purposes of utilisation of aggregate risk cover for market risks, VaR calculation is based on longerholding periods and additional multipliers.The market risk quantification methodology used by each group company takes account of its respectivebusiness focus. At Sal. Oppenheim, Monte Carlo simulations are used for equity-related transactions.Historical simulations are used in the interest rate and currency asset classes. At BHF-BANK, marketrisks in all asset classes are determined using a risk model authorised by the Federal Financial SupervisoryAuthority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin).Different stress tests depending on the type of transaction are performed daily at Sal. Oppenheimjr. & Cie. KGaA. For equity portfolios, for example, an instantaneous shock of prices and volatilities isperformed simultaneously, in order to measure the effects on the income statement. Daily stress scenariosto determine general market risk are used in BHF-BANK market risk control. In addition to basic riskfactors (exchange rates, share prices, yield curves, credit spreads), change in volatility is also simulated asa risk factor and a full valuation performed under every stress scenario.An instantaneous rate shock is simulated as a parallel shift in the yield curve by 200 basis pointsboth upwards as well as downwards to measure interest rate risks of the banking book from the maturitytransformation.The suitability and reliability of the methods and processes are subject to regular review in the groupcompanies in accordance with group market risk strategy requirements. This encompasses in particularappropriate backtesting procedures. Group Market Risk Controlling (GMRC) performs daily backtestingat a consolidated and aggregated level. This did not result in any outliers for business year 2008 dueto diversification effects at the full trading and banking book portfolio level as well as to the conservativeaddition of VaR contributions of the individual group companies.46 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 47

group management report / risk management risk management / group management reportProduct area 2008 2007*€ M € MInterest-related transactions 2.3 2.7Currency-related transactions 0.9 1.9The increase in VaR for equity and interest-related transactions in the Group’s banking book is primarilydue to increased share price risks in the funds with interest-bearing securities and equity positions in thebanking book as well as the inclusion of Sal. Oppenheim jr. & Cie. (Schweiz) AG’s banking book as a resultof the consolidation process.Equity-related transactions 4.0 8.2Total 7.2 12.8* During the reporting year, further consolidation of subsidiaries occurred as well as a reclassification of exposures from the trading into the banking book,which resulted in deviations compared to the presentation in the 2007 annual report for the values recalculated on this basis for 2007 for purposes of comparison.VaR Max VaR Min VaR Median*€ M € M € MTrading book 22.2 7.0 12.4VALUE AT RISK FOR THE TRADING BOOK AS AT 31 DECEMBER 2008the value at risk figure is calculated using the following parameters:holding period of one day, confidence level of 99 %, historical observation period of one year.Banking book 29.9 11.9 18.2* The median is the value which separates the higher half of values observed from the lower half.SITUATION PARAMETER VALUE AT RISK 2008The VaR for equity-related trading book transactions was significantly reduced in 2008 through a lowerissue volume for equity derivatives.the value at risk figure is calculated using the following parameters:trading book: holding period of one day, confidence level of 99 % , historical observation period of one year.banking book: confidence level of 99 % , historical observation period of one year.Product area 2008 2007*€ M € MInterest-related transactions 9.9 6.1Currency-related transactions 1.3 0.6Equity-related transactions 15.8 9.9Total 27.0 16.6* During the reporting year, further consolidation of subsidiaries occurred as well as a reclassification of exposures from the trading into the banking book, which resultedin deviations compared to the presentation in the 2007 annual report for the values recalculated on this basis for 2007 for purposes of comparison.VALUE AT RISK FOR THE BANKING BOOK AS AT 31 DECEMBER 2008the value at risk figure is calculated using the following parameters:confidence level of 99 % , historical observation period of one year.–> market risk limits and operational managementRisk management is based on a multi-tier limit system. Limits (i.e. largely VaR limits, sensitivity limitsand stop-loss limits) are approved at least once a year. When limits are exceeded, established escalationprocedures come into play, which ensure that steps are taken quickly to reduce risk.Risks are monitored once a day (end-of-day process), several times a day (separate limits are approvedfor intraday monitoring by responsible partners and/or Executive Board members), or for longer observationperiods.–> market risk reportingComprehensive and transparent risk reporting serves to appropriately communicate risks.Reporting is adjusted in line with changes in requirements on a continual basis. The figures calculatedby the individual group companies are aggregated daily by the Group’s risk control department and madeavailable to group management. A report covering the current risk position and operating results of therespective group company is also discussed by management on a monthly basis.48 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 49

group management report / risk management risk management / group management reportThe management information system was expanded across the Group in financial year 2008 to includethe results of measurement of interest rate risks in the banking book in accordance with the Basel IIrequirement. Utilisation of the group’s regulatory capital is contained in the monthly risk reporting togroup management.GMRC will also arrange for the incorporation of group-wide liquidity and concentration risk figuresin financial year 2009.liquidity risksLiquidity risk in its narrow sense means the risk that the Bank may not have sufficient funds to fulfil itspayment obligations. Such payment obligations result from deposits being called, trading transactionsbeing settled, interest payments and loan granting, among other reasons. Liquidity risks in a broader senseinclude:–> inability to source suffi cient liquidity at the expected conditions when required (refi nancing risk),and–> inability to liquidate or close transactions at all, or only with losses, due to inadequate market depthor market disruptions (market liquidity risk) .–> liquidity risk management structureLiquidity risk management in the Sal. Oppenheim Group has a decentralised structure, which meansthe respective group companies, in particular Sal. Oppenheim jr. & Cie. KGaA and BHF-BANK AG,are responsible for managing the risks they have taken themselves. This includes responsibility for implementingregulatory requirements. Liquidity risk management is centralised at Sal. Oppenheim jr. & Cie.KGaA for the relevant group companies. In particular, this includes Sal.Oppenheim jr. & Cie. (Schweiz)AG as well as Sal. Oppenheim jr. & Cie. S.C.A.This encompasses critical recognition of illiquidity risk, refi nancing risk and market liquidity riskusing appropriate indicators, such as stress values for market price development of significant positions onthe assets side, as well as liquidity coefficients of relevant cash flow maturities in the short, medium andlong-term maturity ranges.Liquidity risks are adequately addressed in the risk management and control processes of the groupcompanies and conservatively controlled, ensuring solvency of the Sal. Oppenheim Group at any time. Aworking group was formed at Sal. Oppenheim Group management level as a reaction to the turbulenceson the financial markets.–> liquidity risk measurementThe German Liquidity Regulation (Liquiditätsverordnung – LiqV) with the liquidity coefficient as centralassessment criterion forms the basis for liquidity risk determination from a supervisory point of view takinginto account the liquidity risk management structure. In addition, liquidity requirement (surplus), liquiditystatus, liquidity projection and capital commitment balance are determined on a regular basis (once/several times a day); liquidity requirement may not exceed the available refinancing funds.The liquidity situation is also analysed through simulated crisis scenarios which examine various risksituations. Refinancing risk is taken into consideration here in that some extreme crisis situations withoutthe possibility of refi nancing are analysed. The results of these simulations, which are a component ofquarterly reporting at group unit level, show that the established procedures also address at any time theincreased requirements caused by the financial market crisis.–> liquidity managementThe core responsibility of liquidity management is to ensure group solvency at all times. Liquidity isdetermined on an ongoing basis, with surplus liquidity placed on the market or short-term refinancingneeds covered at market conditions.The majority of liquidity is controlled through traditional money-market trading and repo transactions,as well as via client deposits and own issues of structured bonds and borrower’s notes. Unforeseen liquidityrestraints can also be countered in the form of a portfolio of securities eligible as collateral with DeutscheBundesbank.In view of the worsening crisis, new instruments for secured money-market trading as well as proceduresfor efficient utilisation of collateral received as a result were used to extend the scope of action.The liquidity risk of traded products (market liquidity risk) is monitored and duly considered in thecontext of market risk control.Even under the effects of the financial market crisis, the recently introduced as well as the establishedprocedures and the instruments and processes used proved appropriate for adequate management of liquidityrisk. The sustained high level of deposits during the crisis highlighted the considerable trust private andinstitutional clients placed in the Bank.Liquidity risks will also require special attention in 2009. For this reason, secured transactions (repotransactions) will continue to be more relevant than unsecured money market transactions. In this context,a stronger focus will be placed on collateral management. Moreover, for inter-bank business, the Groupwill concentrate on banks with top credit ratings.–> liquidity risk reportingThe management of the group units and the Sal. Oppenheim Group receive daily reports on the Group’sliquidity and refinancing situation based on key figures The daily reporting also includes an outlook forthe next few business days. Reports are also issued on a monthly and quarterly basis.Group Risk Controlling provides regular reports to the Sal. Oppenheim Group management, at leastmonthly, on significant consolidated results relating to the Group’s liquidity risk situation and also initiatesescalation processes if necessary and/or proposes measures to manage liquidity risk.50 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 51

group management report / risk management risk management / group management reportcredit risksIn the Sal. Oppenheim Group, the term credit risk is understood as counterparty risk. In addition to traditionalcredit risk in the lending business, this includes counterparty risk in trading transactions, issuerrisk in securities transactions as well as country risk. Traditional credit risk quantifies potential losses inthe lending business as a result of the borrower not fulfi lling his contractual obligations. Counterpartyrisk arises from potential counterparty default in trading activities. A general distinction is made betweenreplacement risks and settlement risks. Issuer risk results from the Bank’s proprietary positions in securitiesor synthetic security positions (e.g. credit derivatives) upon default of the issuer or the reference borrower/the underlying. Country risks arise in cross-border lending (political and/or economic risk).–> credit risk strategy and organisationCredit risk strategy defines risk identification, risk measurement and risk management procedures, as wellas limitation and escalation mechanisms. The product launch procedure applies to business activities innew products or markets in the same manner as for market risks.The group lending procedures in place ensure that credit risks are assessed for each individual borrower.The credit assessment results in a rating. In accordance with the internal competence structures, the responsibledecision-makers in the group companies and at group level for amounts that exceed pre-determinedlimits authorise credit lines. Group Credit Risk Management (GCRM) assumes additional monitoringresponsibilities for exposures that are of major significance to the Sal. Oppenheim Group.–> rating systemsThe Sal. Oppenheim Group has internally developed rating procedures for all the main types of credit riskin the Asset Management, Corporates and Banks areas. The regulatory framework was taken into accountin developing these rating systems. Existing rating methods were further developed in 2008.Using these rating models, the respective client rating is calculated on the basis of quantitative andqualitative information. The processes used ensure that the ratings are reviewed at least once a year. Eventsthat influence credit-rating trigger an ad-hoc reassessment.A new accounting analysis and evaluation tool BARS (Bilanzanalyse- und Reportingsystem) was acquiredin 2008 and modifi ed to meet the requirements of Sal. Oppenheim Group. It is to be graduallyintroduced in the group companies starting 2009.–> collateralAcceptance and valuation of collateral is uniformly performed across the Sal. Oppenheim Group.Collateral Management, which is part of the Risk Management department, is responsible for managingand monitoring standardised collateral agreements for OTC trading transactions. Correspondingnetting agreements are concluded and taken into consideration.–>portfolio structureIn credit risk assessment, the Sal. Oppenheim Group’s total exposure, which aggregates the risks of individualcounterparties or borrower entities, is evaluated. Loan commitments and bank guarantees are alsoincluded in the total exposure with a credit conversion factor.The following table shows the gross exposure for the Sal. Oppenheim Group by sub-portfolios. Thevalues recorded as at 31 December 2007 for BHF-BANK and the group companies Bank Sal. Oppenheimjr. & Cie. (Österreich) AG and Bank Sal. Oppenheim jr. & Cie. (Schweiz) AG were recalculated on thebasis of a further standardisation for the sake of comparability with financial year 2008. Liquidity managementin the Group is centralised in Sal. Oppenheim jr. & Cie. KGaA; no special presentation is thereforemade here of intra-group receivables in the bank portfolio.Portfolio Group of which KGaA of which BHF of which L, A, CH*2008 2007 2008 2007 2008 2007 2008 2007€ M € M € M € M € M € M € M € MAsset Management 3,447 3,418 3,149 3,090 278 313 20 15Corporates 7,567 6,002 2,870 2,092 4,564 3,884 **133 26Banks 11,608 9,992 2,652 4,554 8,352 5,142 604 296Eligible as collateralfor borrowings fromBundesbank 534 852 132 350 179 161 223 341Other 36 21 36 21 0 0 0 0Intensified loanmanagement 335 237 276 207 59 30 0 0Total 23,527 20,522 9,115 10,314 13,432 9,530 980 678* This item aggregates gross exposure by sub-portfolios for group companies Sal. Oppenheim jr. & Cie. S.C.A. as an operating entity, Bank Sal. Oppenheim jr. & Cie.(Österreich) AG and Bank Sal. Oppenheim jr. & Cie. (Schweiz) AG.** Increase resulting from intra-group loans of Sal. Oppenheim jr. & Cie. S.C.A. to consolidated companies.The increase in volume at BHF-BANK results from setting up a covered bond portfolio for the BHF-BANK AG subsidiary BHF Asset Servicing GmbH and from redesignationof bonds from the trading to the banking book.GROSS EXPOSURE BY SUB-PORTFOLIO AS AT 31 DECEMBER 2008Overall, the Sal. Oppenheim Group’s lending portfolio from lending and trading business has a diversifiedstructure. As regards subprime risks, the existing exposures were analysed, Subprime exposure is limited52 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 53

group management report / risk management risk management / group management reportto an indirect investment via a fund in the amount of € 42 million as at 31 December 2008; 98 % of thesecurities comprising the fund portfolio have an investment grade rating. The majority of the transactionswere issued in 2004 and earlier years. Overall, no particularly high risks are currently recognisable as resultingfrom this investment. Moreover, additional indirect investments exist in European (non-subprime)ABS paper via two funds with a volume of € 266 million as at the end of 2008 and a rating structure of98 % in the investment grade area as well as a money market fund in the amount of € 37 million. At least75 % of the individual shares contained in each of the funds have a rating of A or better. Originator orsponsor positions in subprime ABS portfolios were not entered into. The Sal. Oppenheim Group has nohedging transactions with monolines.In contrast to the previous gross exposure tables, the table below shows total credit risk exposures includingSal. Oppenheim jr. & Cie. KGaA and BHF-BANK nostro securities.Equivalent S&P ratingCash loans and advancesand bank guaranteesOTCderivativesSecurities portfolios, repos,reverse reposand securities lending2008 2007 2008 2007 2008 2007 2008 2007€ M € M € M € M € M € M € M € MTotalSize range (in € M)Exposure2008 2007€ M € M0 – 5 1,816 1,4525 – 15 2,530 2,05515 – 25 1,702 1,67325 – 50 3,679 3,54950 – 100 5,281 5,377100 – 200 2,974 3,834> 200 5,545 2,087Other* - 495Total 23,527 20,522* Recording gross exposure values by size range for Bank Sal. Oppenheim jr. & Cie. (Schweiz) AG and Bank Sal. Oppenheim jr. & Cie. (Österreich) AG was implementedin financial year 2008; the corresponding values were recorded under Other as at 31 December 2007.As part of the continuous improvement process of group reporting, recording by size range was further optimised in that deviations appear in the distribution by size rangeshown as at 31 December 2007 compared to the previous presentation.AAA 1,609 1,299 196 33 6,166 5,362 7,971 6,694AA 3,155 6,482 1,181 791 4,323 4,143 8,659 11,416GROSS EXPOSURE BY SIZE RANGE AS AT 31 DECEMBER 2008A 3,974 4,992 1,370 842 2,942 2,637 8,286 8,471BBB 2,612 3,013 491 58 616 1,026 3,719 4,097Non Investment Grade 2,377 1,413 52 20 479 147 2,908 1,580Other* 235 164 115 0 358 1,298 708 1,462Total 13,962 17,363 3,405 1,744 14,884 14,613 32,251 33,720*Other consists mainly of nostro exposures (equities, fixed-income securities and covered bonds) the credit ratings of which lie in the upper investment grade range.CREDIT RISK EXPOSURES INCLUDING NOSTRO SECURITIES ACCORDING TO CREDIT RATINGAND PRODUCT AS AT 31 DECEMBER 2008As at 31 December 2008, 88.8 % of total exposure was attributable to investment grade paper (previousyear: 91.0 %); 77.3 % had a rating of A or better (previous year: 78.8 %).In order to address risk concentration, existing processes ensure that portfolio diversifi cation is alreadytaken into account when lending decisions are made.The increase in exposures in the > € 200 million size category is primarily the result of covered bonds andbonds with public guarantee obligation (Gewährträgerhaftung); the general increase in volume results fromsetting up a covered bond portfolio for the subsidiary BHF Asset Servicing GmbH of BHF-BANK AGand from redesignation of bonds from the trading to the banking book.–> loan portfolio managementThe Sal. Oppenheim Group performs the internal management of the loan portfolio based on a loan portfoliomodel, which is used to calculate a Credit Value at Risk (CVaR) of the Group’s total loan portfolio.With a confidence level of 99.95 %, CVaR represents the maximum risk of loss for a period of one year. Asat 31 December 2008, this totalled € 427 million (previous year: € 341 million). Additionally, the groupcompanies perform stress tests to analyse risks by simulating the downgrade of the entire portfolio by onenotch. This combined PD / LGD stress test is performed at least once a quarter to determine expected loss.As of 2009, this testing including CVaR is to be performed on a monthly basis.GCRM analyses the detailed results calculated in order to actively steer processes and to developrecommendations for handling credit risks.54 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 55

group management report / risk management risk management / group management reportPortfolioGroup2008 2007€ M € MThe aims of Intensified Loan Management are to reduce and qualitatively improve risk exposure of performingloans as well as to restructure and workout defaulted exposures in a manner that maximisesrecovery value and is time and cost-effective.Asset Management 90.8 71.6Corporates 240.3 188.8Banks 76.9 69.6Eligible as collateral for borrowings from Bundesbank 0.0 1.3Other 1.1 0.4Intensified loan management 17.8 9.5Total 426.9 341.2In 2008, the assignment to sub-portfolios was further improved and enhanced, which resulted in deviations compared to the presentation in the 2007 annual report for thevalues recalculated on this basis for 2007.–> credit risk reportingThe group companies prepare a monthly credit risk report in line with group requirements as part of regularreporting to GCRM. On this basis, GCRM then prepares a group-level risk report which provides thegroup management and the supervisory body with an overview of the group’s entire portfolio.equity investment riskEquity investment risk means the risk of a loss due to negative performance in the Sal. Oppenheim Groupequity investment portfolio. The term “equity investments” refers to all affiliated and associated companies(irrespective of consolidation) and other group holdings.CREDIT VALUE AT RISK BY SUB-PORTFOLIO AS AT 31 DECEMBER 2008–> derivativesIn the case of derivative instruments, exposures included in credit risk measurement are calculated accordingto the mark-to-market method. This method is based on current market prices. For BHF-BANK,potential future fluctuations in value are also taken into account. At rates of 94.8 % (previous year 98.9 %)for Sal. Oppenheim jr. & Cie. KGaA and 96.6 % (previous year 98.5 %) for BHF-BANK AG, the derivativesportfolio focuses on counterparties with investment-grade ratings.–> country risksAggregate exposure to countries or debtors with an Institutional Investor Rating of less than 60 pointsafter deductions of valuable collateral amounted to € 6.2 million (previous year: € 0.13 million) for Sal.Oppenheim jr. & Cie. KGaA and € 389 million (previous year: € 319 million) for BHF-BANK AG atthe end of 2008. At BHF-BANK, country risks are managed using country limits, which serve to restricttransfer and conversion risk, as well as political and economic risk involved with transactions with borrowersfrom the respective countries. Limit monitoring, which is the back office’s responsibility, involvescomparison of the net risk of each country with that country’s limit. In the event that a country’s situationsignificantly deteriorates, the country limit is adjusted accordingly.–> dealing with defaulted exposures and workoutWithin the respective credit department, the unit which has been entrusted with intensified loan management,is the specialised internal service area responsible for:–> early identification of problem exposures (asset managers, corporates and banks) and–> monitoring the intensified loan management exposures remaining under front-office management.–> equity investment risk strategy and organisationAn equity investment strategy and an equity investment risk strategy defining the framework have beenimplemented in the Sal. Oppenheim Group on the basis of the group business strategy.The equity investment risks taken in line with the strategies and prescribed limits at Sal. Oppenheimand BHF-BANK are backed with capital on the basis of the risk-bearing capacity assessment.Management of equity investment risk at Sal. Oppenheim jr. & Cie. KGaA is the responsibility ofStrategic Equity Investments. Credit Portfolio Management at Sal. Oppenheim jr. & Cie. KGaA is responsiblefor the selecting the methods and calculating Sal. Oppenheim’s equity investment risks. The resultsare reported to Corporate Investments & Controlling at Sal. Oppenheim jr. & Cie. S.C.A. at fixed datesand are included in the group-level examination. Correspondingly, Corporate Investments & Controllingis responsible for the management of equity investment risk at Sal. Oppenheim jr. & Cie. S.C.A. bothfrom a single entity and from a group perspective. It is BHF-BANK AG’s responsibility to calculate andmanage its own equity investments, including equity investment risk.–> measurement of equity investment riskWith the exception of banking and asset management subsidiaries, equity investment risk is quantifi edusing the VaR method and compared to the risk limits derived using the risk-bearing capacity concept.This is an integrated market and credit risk model. The potential loss due to negative performance whichwill not be exceeded at portfolio level in a one-year period with a confidence level of 99 % is used as a riskmeasure. In addition to the value fl uctuations driven by market risk, defaults of equity investments aresimulated on an integrated basis during an observation period for historical default probabilities (analogousto a credit risk default model). Stress scenarios are also calculated in addition to a VaR for a normalscenario. This involves evaluating the model sensitivity regarding individual parameters and parameterconstellations which reflect different economic scenarios.The portfolio of other equity investments at BHF-BANK is of subordinate importance because of itsbusiness model. It consists predominantly of strategic equity investments for the purpose of implementing56 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 57

group management report / risk management risk management / group management reportthe bank’s business model and performing internal services, and also includes various mandatory investments.For this reason, a simplified economic capital calculation is carried out on the basis of the carryingamount taking the associated risk into account. At the banking and asset management subsidiaries, risk ismeasured for each relevant type of risk.The risk determination methods are reviewed and developed on a regular basis.–> monitoring and management of equity investment riskValue-based equity investment management includes regular monitoring and management of the portfolioas a whole, with the aim of identifying economic risks early and reacting accordingly.To this end, each investment is assigned to a cluster which determines the level of intensity of management.Cluster allocation is based on factors which ensure that both important strategic investments andthose which represent high-risk positions due to their size or current economic situation are subject tointensive monitoring. One aspect of the monitoring involves defined value drivers which, using operationsrelatedand market-oriented indicators, show the development of the equity investment. Another involvesmonitoring the achievement of objectives on the basis of planning data and also a risk assessment. In addition,a qualitative assessment of each equity investment’s corporate development, strategy and marketposition is carried out.The risk measurement results in an equity investment VAR in the Group of € 685.5 million. 70 % ofthis is attributable to Strategic Equity Investments and around 30 % to Alternative Investments. Brokendown by sector, equity investment risk mainly relates to investments in the financial sector (51 %), the realestate sector (33.7 %) and the services sector (12.3 %).Spinning off select equity investments into an industrial holding company that is not affiliated withSal. Oppenheim Group will result in significantly lower equity investment risk in future.Stress scenarios will be calculated on a monthly basis for Sal. Oppenheim jr. & Cie. KGaA and Sal.Oppenheim jr. & Cie. S.C.A. (single entity) with effect from 2009. This will involve simulation of thesensitivity of equity investment risk to changes in the input parameters volatility, default probability,LGD and default correlation. BHF-BANK’s equity investments which are not directly included in the riskcalculation or tracked via the market risk model are less important and are thus recorded under equityinvestment risk with no explicit stress tests.–> reporting equity investment riskCorporate Investments & Controlling calculates and reports the level of the equity investment risk (VaR) inline with the risk-bearing capacity concept and in consultation with Finance/Controlling and Market andGroup Credit Risk Management on a monthly basis and separately for Sal. Oppenheim jr. & Cie. S.C.A.and Sal. Oppenheim jr. & Cie. KGaA. If certain risk thresholds or concentrations are reached, differentoptions for courses of action are available to management.operational risksAccording to the Basel Committee on Banking Supervision, operational risks are defined as the risk of lossresulting from inadequate or failed internal processes, people and systems or external events.The Sal. Oppenheim Group has assumed this definition from the Basel Committee on Banking Supervision;moreover, the definition includes legal and reputational risks for the Sal. Oppenheim Group, but excludesstrategic risks.–> operational risk strategyThe Sal. Oppenheim Group has implemented a risk strategy for the Group on the basis of the group businessstrategy. The group risk strategy defines the framework for risk management in the Group. The grouprisk strategy is defined in the group operational risk strategy through principles and methods specific tomanaging operational risks in the Group. All operational risks are guaranteed to be identified, assessed andreported on a continuous basis with suitable methods. These principles are implemented at group levelthrough policies and guidelines applicable throughout the Group.–> operational risk organisationThe structure and organisation of operations comprise the organisation and design of risk managementand control processes for all operational risks. The processes are clearly established, communicated anddocumented at group level and throughout the group companies.Operational risk management has a decentralised structure. The group companies are individuallyresponsible for managing operational risks as well as for meeting all relevant regulatory requirements.The structure and organisation of operations are subject to regular checks and assessments by theGroup’s internal audit department and by the group companies.–> measurement and assessment of operational risksThe Sal. Oppenheim Group applies the basic indicator approach to measuring the capital to be allocatedto cover operational risks. With the basic indicator approach, capital must be available that is equal to theaverage amount over the past three years of a fixed percentage of the positive annual gross income.–> risk inventory, documentation, reportingThe process for collecting data relating to losses has been implemented across the Group. A daily reportingprocess is in place throughout the Bank, which includes negative reports.In 2008, on the basis of regulatory requirements and the Sound Practices for the Management andSupervision of Operational Risk, the focus of operational risk management was on the introduction andestablishment of the uniform, group-wide “GORA” (Group Operational Risk Application) MIS infrastructureto support the processing, analysis, reporting and administration of all information relevant tooperational risk in addition to the following already productive operational risk components:–> Loss database (structural, Basel II-compliant, group-wide collection of loss data),–> Risk inventory and documentation (Identification of risk potential with corresponding documentation,including risk avoidance and early identification measures, as well as emergency measures),–> Key figures, risk indicators and reporting (continuous development of defined and established risk keyfigures/indicators and uniform group reporting).58 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 59

group management report / risk managementrisk management / group management reportcompliance risksCompliance risk refers to the risk of damages which the Sal. Oppenheim Group may suffer if its activitiesare not carried out in conformance with the relevant rules and regulations. The Group’s most importantcompliance risks include in particular:–> the risk of non-compliance with statutory and supervisory requirements–> sanction risk, i.e. the risk of penalty from a court, government agency or disciplinary action due tonon-compliance with laws, regulations, standards or contractual agreements–> reputational risk and–> the risk of a breach of ethical rules of conduct.–> compliance strategyThe excellent reputation enjoyed by the Sal. Oppenheim Group as a whole and by its individual subsidiariesis a main pillar of the Bank’s business success. A sound reputation forms the basis for client confidencein the services offered by the Sal. Oppenheim Group. This confidence goes hand in hand with confidencein the integrity and the specialised know-how of bank employees as well as in the high quality of our products.For this reason, key principles of compliance for the Sal. Oppenheim Group are ensuring employeeintegrity and maintaining service and product quality. Compliance is primarily aimed at maintaining andcontinuously improving the Bank’s reputation.Ensuring the Bank’s integrity and that of its employees is accomplished by adhering to compliancerelevantlegislation. It is also achieved by conveying adequate knowledge of the compliance legislation tobe adhered to as well as by monitoring the resultant compliance guidelines and principles.–> compliance committeeThe Sal. Oppenheim Group has resolved to identify, analyse, aggregate and minimise compliance risk atgroup level in accordance with the comprehensive Luxembourg definition via the Compliance Committee.In accordance with Luxembourg law, the compliance unit can delegate compliance duties to other areas.The purpose of the Compliance Committee is therefore to consolidate and take steps to minimise thespecific compliance risks identified for the Group in the areas represented. Compliance issues and riskswhich may affect interfaces between the individual areas and which may require reallocation or redefinitionof responsibilities are also addressed by the committee, and measures applied accordingly. This also preventscompliance risks occurring because they are at the interface between two areas and therefore occur due tounclearly defined responsibilities or a lack of appropriate measures applied.–> compliance steering committeeThe aim of the committee is to identify, analyse and control compliance risks in the narrower sense (preventionof money laundering and terrorist financing, securities compliance) at group level and to minimisethem as far as possible.–> management and monitoring of compliance riskCompliance risk in the narrower sense is consolidated across the Group by Group Compliance. GroupCompliance continuously analyses the Group’s legal and business environment for early identification andminimisation of compliance risks that arise.Compliance risk is assessed in each group company and these are then assigned to a risk class with theappropriate level of supervision. Supervision comprises inclusion in reports (ad-hoc, quarterly and annualreports), visits or analysis on site, analysis of risk identification sources (e.g. self assessment, audit reports)and summarising the results in the compliance risk management system.–> uniform group level framework for actionAt group level, uniform understanding of the identification of compliance risks in the narrower sense, thespecification of the respective degree of risk as well as the appropriate minimisation measures is necessary.A uniform action framework for identifying and controlling compliance risks in the narrower sense hasbeen set up. This group-wide action framework contains guidelines and methodical procedures to ensureuniform understanding of individual compliance risks and how to manage them.–> prevention of money laundering and terrorist financingUsing the risk analyses in the individual group companies undertaken thus far as a basis, Compliance hasestablished a uniform methodology of risk analysis to identify potential risks of the Bank being misusedfor money laundering or terrorist financing. The relevant units are required to identify and analyse theirindividual potential risks and implement the necessary minimisation measures for the risks determined,based on this methodology.The Third EU Money Laundering Directive was implemented in business processes and workflows indue time across the Group to the extent legally required.–> securities complianceCompliance has established a uniform method of risk analysis in securities compliance with a securitiescompliance risk management policy. The policy has been implemented as a pilot scheme at BHF-BANK.One by one, the relevant units will be required to identify and analyse their individual potential securitiescompliance risks and implement the necessary minimisation measures for the risks determined, based onthis methodology. Introducing a uniform method at group level is a requirement for adequate risk controlacross the group.–> reporting compliance risksCompliance risks in accordance with the comprehensive Luxembourg definition are reported and consolidatedin the Compliance Committee. The areas represented report on the specific compliance risks theyhave identified, in the regular meetings, on an ad-hoc basis and via quarterly and annual reports to thecompliance unit or the Group Chief Risk Officer.60 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 61

group management report / risk managementrisk management / group management reportAs regards compliance risks in the narrower sense, the individual compliance units of each group companyare required to prepare a risk-oriented annual report on the basis of compliance self assessments, and takinginto consideration all available risk identification sources, such as internal and external audit reports, findingsfrom operational risk reports or complaints management. This is then provided to local managementand Group Compliance. Group Compliance uses these reports, also taking risk identification sources intoconsideration to prepare the group annual report and individual reports for each group company. The latterinclude planned measures for minimising risk, the implementation of which the group companies reporton in their quarterly reports. These reports are supplemented by risk-oriented ad-hoc reporting. GroupCompliance reports regularly to the group management about compliance risks in the monthly ComplianceCommittee meetings, and by way of ad-hoc, quarterly and annual reports.The annual reports prepared by the various areas represented in the Compliance Committee are integratedinto the compliance annual report.outlook for 2009The macroeconomic environment, which also determines the general conditions of business orientationfor the near future for the Sal. Oppenheim Group, has been shaped by one of the sharpest downturns ofthe last decades. Market conditions will likely call for a phase of consolidation – following a sustained periodof growth, in which the Sal. Oppenheim Group successfully garnered itself a leading position amongindependent private banks.The focus of activities in fi nancial year 2009 will thus continue to be on the further developmentof existing risk management procedures and processes, combined with the further expansion of the riskmanagement functions. In this context, a basic review will be conducted of the risk profile of all businessareas combined with a reduction in risk positions and the realignment of areas which have demonstratedweaknesses. Further risk reduction can thus also be accomplished in some areas by consciously waivingearnings.Moreover, in the future, key industry holdings will be managed in a newly formed, independentholding structure that is not affiliated with the Sal. Oppenheim Group. Concentrating on the traditionalbanking business with a focus on the integrated asset management and investment banking business modelwill contribute to a reduction in volatility, thus serving to stabilise the risk profile.Moreover, in financial year 2009, a number of additional measures to further develop the risk managementprocesses will be implemented, including the following:–> To further develop the Internal Capital Adequacy Assessment Process (ICAAP), the calculation methodsfor the risk types: equity investment, market and credit risk are to be adjusted (e.g. includinga credit spread VaR in the total VaR). In general, use of a confidence level of 99.93 % in economiccapital risk calculation is to be standardised for all risk types.–> In the area of Compliance, the group-wide implementation of the risk analysis methods developed forthe securities compliance area, the further development of methods to standardise risk analysis for theidentification of money laundering risks at the group level.–> Establishing a compliance risk assessment review concept to monitor the implementation of grouppolicy in local compliance units.On the whole for 2009, we expect further risks or impairments. This could impact alternative investments,individual equity interests and securities. In loan loss provisioning, we assume an increase with provisioningremaining at an overall low level.–> Implementation of group-wide presentation of liquidity and concentration risks in market risk control.–> Coordination of activities in liquidity management via a management level working group.–> Further development of the MIS infrastructure GORA (Group Operational Risk Application) to process,analyse, manage and report all information relevant to operational risk.–> Further development of the stress tests to improve risk measurement. A project is already underwayto develop a consistent stress plan covering the major types of risk.62 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 63

consolidated income statement / consolidated financial statementsconsolidated income statementfor the sal. oppenheim jr. & cie. s.c.a. group, luxembourg, for the periodfrom 1 january 2008 until 31 december 20082008 2007Notes € M € MInterest income 1,381 1,297Interest expense -1,037 -1,048Net interest income 32 344 249Share of the profit or loss of associates and joint ventures accountedfor using the equity method 33 44 81Provision for loan losses 34 -1 -10Net interest income after provision for loan losses 387 320Commission income 844 909Commission expense -271 -280Net commission income 35 573 629Net trading income/(loss) 36 -71 -152Consolidated Financial StatementsResult from hedge accounting 37 -3 -1Result from fair value option 38 -221 116Net income/(loss) from non-current financial assets 39 96 327Administrative expenses 40 -906 -918Other operating income and expenses, net 41 8 26Profit/(loss) from operating activities in continuing operations -137 347Profit/(loss) from operating activities in discontinued operations 43 -7 -14Profit/(loss) from operating activities -144 333Income taxes from continuing operations 42 26 -78Income taxes from discontinued operations 1 0Net income/(loss) for the period -117 255Share of the profit attributable to minority interests -13 -5Net income/(loss) for the period after share of the profit attributableto minority interests -130 250annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 65

consolidated financial statements / consolidated balance sheetconsolidated statement of recognised income and expense / consolidated financial statementsconsolidated balance sheetfor the sal. oppenheim jr. & cie. s.c.a. group, luxembourg, as at 31 december 2008consolidated statement of recognised income and expensefor the sal. oppenheim jr. & cie. s.c.a. group, luxembourg, for the periodfrom 1 january 2008 until 31 december 2008assets 2008 2007Notes € M € M2008 2007€ M € MCash and cash equivalents 09, 45 709 475Assets held for trading 10, 46 10,522 13,472Positive fair values from hedge accounting 08, 47 47 31Financial assets designated at fair value through profit or loss (fair value option) 11, 48 1,802 3,190Loans and advances to banks 12, 49 8,913 10,170Loans and advances to customers 12, 50 7,626 7,116Allowances for impairment losses on loans and advances 13, 52 -172 -167Non-current financial assets 14, 54 9,673 5,387Investments accounted for using the equity method 15, 55 192 144Property, Plant and Equipment 16, 56 490 322Intangible Assets 17, 57 266 304Income tax assets 28, 59 475 381Other assets 19, 60 230 265Non-current assets held for sale and assets from discontinued operations 20, 61 594 0Total assets 41,367 41,090Foreign currency translation 13 -6of which from discontinued operations 0 0Changes in fair value from available-for-sale financial instruments -189 44of which from discontinued operations -2 0Actuarial gains and losses on defined benefit plans and associated plan assets 21 11of which from discontinued operations 0 0Tax on items taken directly to or transferred from equity -13 7of which from discontinued operations 0 0Income and expenses recognised directly in equity (after tax) -168 56Net income/(loss) for the period -117 255Total recognised income and expense for the period -285 311Attributable to Sal. Oppenheim Group shareholders -298 306Attributable to minority interests 13 5liabilities and equity 2008 2007Notes € M € MLiabilities held for trading 21, 62 10,512 12,439Negative fair values from hedge accounting 08, 63 145 17Deposits from banks 22, 64 8,662 5,206Deposits from customers 22, 65 18,751 19,614Debt securities 22, 66 420 676Provisions 23, 24, 67 80 85Income tax liabilities 28, 68 235 247Other liabilities 25, 69 397 446Liabilities from discontinued operations 20, 70 91 0Subordinated capital 26, 71 207 186Equity 27, 72Issued capital 950 900Capital reserve 200 200Revenue reserves 874 692Revaluation surplus -71 125Foreign currency translation reserve 4 -9Net income/(loss) for the period after share of the profit attributableto minority interests -130 250Minority interests 40 161,867 2,174Total liabilities and equity 41,367 41,09066 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 67

consolidated financial statements / consolidated cash flow statementconsolidated cash flow statement / consolidated financial statementsconsolidated cash flow statementfor the sal. oppenheim jr. & cie. s.c.a. group, luxembourg, for the periodfrom 1 january 2008 until 31 december 2008consolidated cash flow statementfor the sal. oppenheim jr. & cie. s.c.a. group, luxembourg, for the periodfrom 1 january 2008 until 31 december 20082008 2007€ M € M2008 2007€ M € MNet income/(loss) from continuing operations -111 269Net income/(loss) from discontinued operations -6 -14Net income/(loss) for the period -117 255Non-cash items included in net income/(loss) for the period andreconciliation to cash flow from operating activitiesDepreciation, amortisation of / impairment and reversal of impairment losses onloans and advances, property, plant and equipment and non-current financial assets 244 105Changes in provisions -1 -20Changes in other non-cash items -323 352Net gains/(losses) from the sale of non-current financial assets,property, plant and equipment and intangible assets -301 -376Other adjustments, net -583 -1,123Subtotal -1,081 -807Changes to assets and liabilities relating to operatingactivities adjusted by non-cash itemsLoans and advances to banks 1,235 -928Loans and advances to customers -529 -874Securities (other than non-current financial assets) 4,342 -2,506Other operating assets 76 -163Deposits from banks 3,549 -2,371Deposits from customers -839 5,218Debt securities -256 -39Liabilities held for trading -5,146 1,571Other operating liabilities -61 14Interest and dividends received 1,598 1,496Interest paid -1,037 -1,048Income tax paid -15 -89Cash flow from operating activities 1,836 -526Cash receipts from sales ofNon-current financial assets 2,468 3,816Property, Plant and Equipment 12 8Intangible assets 1 3Cash payments for acquisitions ofNon-current financial assets -3,888 -3,451Property, Plant and Equipment -65 -79Intangible assets -53 -30Effects of changes in the scope of consolidated financial statementsCash receipts from sales of previously consolidated companiesand other business units 541 750Cash payments for acquisitions of consolidated companiesand other business units -500 -240Cash flow from investing activities -1,484 777Proceeds from issue of share capital 50 0Dividends paid -80 -75Changes in funds from other financing activities, net 0 -9Cash flow from financing activities -30 -84Cash and cash equivalents as at 1 January 475 361Cash flow from operating activities 1,836 -526Cash flow from investing activities -1,484 777Cash flow from financing activities -30 -84Effects of changes in the scope of consolidated financial statements -88 -53Cash and cash equivalents as at 31 December 709 475Please refer to the notes to the statement of cash flows in chapter 4.68 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 69

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSTable of Contents1. general ............................................................................................................................... 731.1 basis of preparation ........................................................................................................ 7301_applied ifrs and ias standards, and ifric and sic interpretations .......................... 731.2 summary of significant accounting policies ............................................................... 7502_accounting policies................................................................................................... 7503_scope of consolidated financial statements ............................................................ 7504_basis of consolidation .............................................................................................. 7805_significant changes in the scope of consolidated financial statements ............... 7906_foreign currency translation .................................................................................. 8007_financial instruments: recognition and measurement (ias 39)............................... 8108_hedge accounting ..................................................................................................... 8609_cash and cash equivalents ........................................................................................ 8710_assets held for trading ............................................................................................. 8711_financial assets designated at fair value throughprofit or loss (fair value option) ............................................................................. 8712_loans and advances to banks and customers ............................................................ 8713_allowances for impairment losses on loans and advances ....................................... 8714_non-current financial assets .................................................................................... 8815_investments accounted for using the equity method ............................................. 8916_property, plant and equipment ................................................................................. 8917_intangible assets ........................................................................................................ 9018_leases ........................................................................................................................... 9019_other assets ................................................................................................................ 9120_non-current assets held for sale and assets from discontinued operations ....... 9121_liabilities held for trading ...................................................................................... 9122_liabilities ................................................................................................................... 9223_employee benefits ....................................................................................................... 9224_other provisions ........................................................................................................ 9325_other liabilities ......................................................................................................... 9426_subordinated capital ................................................................................................. 9427_equity ......................................................................................................................... 9428_taxes ............................................................................................................................ 9429_trust activities .......................................................................................................... 9430_financial guarantees ................................................................................................. 9531_contingent liabilities ................................................................................................ 952. notes to the consolidated income statement ............................................................... 9632_net interest income ................................................................................................... 9633_share of the profit or loss of associates and joint venturesaccounted for using the equity method ................................................................. 9634_provision for loan losses .......................................................................................... 9735_net commission income .............................................................................................. 9836_net trading income ................................................................................................... 9837_result from hedge accounting ................................................................................. 9938_result from fair value option ................................................................................... 9939_net income/(loss) from non-current financial assets ............................................ 9940_administrative expenses ............................................................................................ 10141_other operating income and expenses, net ............................................................... 10242_income taxes ............................................................................................................... 10243_discontinued operations ........................................................................................... 10444_segment reporting ..................................................................................................... 1043. notes to the consolidated balance sheet ..................................................................... 11045_cash and cash equivalents ......................................................................................... 11046_assets held for trading ............................................................................................ 11047_positive fair values from hedge accounting ............................................................ 11148_financial assets designated at fair value throughprofit or loss (fair value option) ............................................................................ 11149_loans and advances to banks .................................................................................... 11150_loans and advances to customers ............................................................................. 11251_lending volume .......................................................................................................... 11352_allowances for impairment losses on loans and advances ...................................... 11353_maximum credit risk exposure ................................................................................... 11454_non-current financial assets .................................................................................... 11555_investments accounted for using the equity method ............................................. 11656_property, plant and equipment ................................................................................. 11657_intangible assets ........................................................................................................ 11758_statement of changes in non-current assets ........................................................... 11859_income tax assets ....................................................................................................... 12060_other assets ............................................................................................................... 12161_non-current assets held for sale and assets from discontinued operations ....... 12162_liabilities held for trading ...................................................................................... 12263_negative fair values from hedge accounting ........................................................... 12270sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 71

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements64_deposits from banks ................................................................................................... 12265_deposits from customers ........................................................................................... 12366_debt securities ........................................................................................................... 12467_provisions................................................................................................................... 12468_income tax liabilities ................................................................................................ 12769_other liabilities ........................................................................................................ 12870_liabilities from discontinued operations ................................................................ 12971_subordinated capital ................................................................................................. 13072_equity ......................................................................................................................... 13073_disclosures on financial instruments ...................................................................... 13374_maturity structure (according to residual maturities) ......................................... 13975_derivative transactions ............................................................................................. 14176_repurchase agreements with a buy-back commitment (echte pensionsgeschäfte) 14377_securities lending ..................................................................................................... 1444. notes to the consolidated cash flow statement .......................................................... 1455. other disclosures ............................................................................................................. 14778_trust activities .......................................................................................................... 14779_off-balance sheet liabilities ..................................................................................... 14780_letters of comfort .................................................................................................... 14881_investment funds managed on behalf of unit holders ........................................... 14982_subordinated assets ................................................................................................... 14983_assets pledged as collateral .................................................................................... 15084_collateral received ................................................................................................... 15085_regulatory capital and solvency ratio ..................................................................... 15086_employees ................................................................................................................... 15287_related party disclosures.......................................................................................... 15288_extraordinary events after the balance sheet date ................................................ 15489_scope of consolidated financial statements ............................................................ 15490_fees paid to the auditor ............................................................................................ 15891_annual report publication date ................................................................................ 15892_boards and committees ............................................................................................. 1581. General1.1 basis of preparationThe consolidated financial statements of Sal. Oppenheim jr. & Cie. S.C.A. for the 2008 financial year havebeen prepared in accordance with the International Financial Reporting Standards (IFRS), as applicable inthe European Union (EU), as well as with the interpretations set out by the International Financial ReportingInterpretation Committee (IFRIC) and thus conform to the IFRS applicable in the EU.The consolidated financial statements comprise the consolidated income statement, the consolidatedbalance sheet, the consolidated statement of recognised income and expense, the consolidated cash flowstatement and the notes. The group management report meets the requirements of section 110 of theLaw of 17 June 1992 relating to annual and consolidated accounts of Luxembourg incorporated creditinstitutions.For purposes of clarity, amounts are stated in millions of euros (€ M).The personally liable partners of Sal. Oppenheim jr. & Cie. S.C.A. approved the consolidated financialstatements for presentation to the General Meeting. The General Meeting is obliged to examine theconsolidated financial statements and pass a resolution on the approval of the 2008 accounts.01_Applied IFRS and IAS standards, and IFRIC and SIC interpretationsThe consolidated fi nancial statements as at 31 December 2008 are based on the following IFRS/IASstandards:IFRS 3IFRS 5IFRS 7IAS 1IAS 7IAS 8IAS 10IAS 11IAS 12IAS 14IAS 16IAS 17IAS 18IAS 19IAS 21Business CombinationsNon-Current Assets held for Sale and Discontinued OperationsFinancial Instruments: DisclosuresPresentation of Financial StatementsCash Flow StatementsAccounting Policies, Changes in Accounting Estimates and ErrorsEvents after the Balance Sheet DateConstruction ContractsIncome TaxesSegment ReportingProperty, Plant and EquipmentLeasesRevenueEmployee BenefitsThe Effects of Changes in Foreign Exchange Rates72sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 73

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsIAS 23IAS 24IAS 27IAS 28IAS 31IAS 32IAS 36IAS 37IAS 38IAS 39IAS 40Borrowing CostsRelated Party DisclosuresConsolidated and Separate Financial StatementsInvestments in AssociatesInterests in Joint VenturesFinancial Instruments: Disclosure and PresentationImpairment of AssetsProvisions, Contingent Liabilities and Contingent AssetsIntangible AssetsFinancial Instruments: Recognition and MeasurementInvestment PropertyWe did not take into account IFRS 1, 2, 4 and 6 or IAS 2, 20, 26, 29, 33, 34 and 41 when preparingour consolidated financial statements, as they are not relevant to the Sal. Oppenheim Group or to thesefinancial statements.In conjunction with the applied standards, we also took into account the following relevant IFRIC andSIC interpretations:IFRIC 4 Determining whether an Arrangement contains a LeaseIFRIC 9 Reassessment of Embedded DerivativesIFRIC 10 Interim Financial Reporting and ImpairmentSIC 12SIC 15SIC 25SIC 27SIC 32Consolidation – Special Purpose EntitiesOperating Leases – IncentivesIncome Taxes – Changes in the Tax Status of an Entity or its ShareholdersEvaluating the Substance of Transactions Involving the Legal Form of a LeaseIntangible Assets – Web Site CostsIFRIC 1, 2, 5, 6, 7, 8 and 11, and SIC 7, 10, 13, 21, 29 and 31 were not relevant to the Group.The IASB has published amendments to existing standards, which the Sal. Oppenheim Group is requiredto apply as of 31 December 2008. The amendments to IFRS 7 Financial Instruments: Disclosuresand IAS 39 Financial Instruments: Recognition and Measurement concerning reclassification of financialassets became effective as of 1 July 2008 and have been applied by the Sal. Oppenheim Group since then.The effects thereof are presented in note 07 Financial instruments and note 73 Disclosures on fi nancialinstruments.The publication of IFRS 8 replaces IAS 14 Segment Reporting. IFRS 8 will be mandatory with effectfrom 1 January 2009 but will not result in material changes for the Sal. Oppenheim Group.1.2 summary of significant accounting policies02_Accounting policiesThe accounts for the Sal. Oppenheim Group were prepared in accordance with uniform group accountingpolicies. Any options exercised are explained in detail under each balance sheet item.The consolidated financial statements are based on the going concern principle. Income and expensesare recorded pro rata temporis and recognised in profit or loss in the period to which the respective transactionsare attributable.Assumptions and estimations must be made to a certain extent when preparing the consolidatedfi nancial statements in accordance with IFRS. All assumptions and estimations underlying the accountingprocess are assessed on an ongoing basis and are based on either historical experience or expected futureevents. All estimations and assumptions are made in line with the relevant IFRS or IAS standards and areexplained under the descriptions of the individual accounting policies for each balance sheet item.Net income/(loss) for the period of Oppenheim-Esch Holding GbR was determined using the percentageof completion method for the first time in financial year 2008. In this method, property, plantand equipment are recognised in proportion to the stage of completion of contract activity in accordancewith IAS 11.03_Scope of consolidated financial statementsIn addition to the group parent company, Sal. Oppenheim jr. & Cie. S.C.A., 15 domestic (previous year:26) and 59 foreign subsidiaries (previous year: 58) in which Sal. Oppenheim Group directly or indirectlyholds a majority of the capital or voting rights, or over which the Group has control, were included inthe scope of the consolidated financial statements. In addition, 13 special purpose entities and investmentfunds (previous year: 12) were included in the consolidated financial statements in accordance with IAS27 in conjunction with SIC 12, as the Sal. Oppenheim Group has control over them.The following companies were included in the consolidated financial statements for the first time in financialyear 2008:–> 4IP Management AG, Zurich–> BHF Asset Servicing GmbH, Frankfurt am Main–> Grundstücksgesellschaft Bockenheimer Landstr. GbR, Frankfurt am Main–> Oppenheim ACA GmbH, Frankfurt am Main–> Sal. Oppenheim Asia Alternative Investments GmbH, Cologne–> Sal. Oppenheim Boulevard Konrad Adenauer S.à r.l., Luxembourg–> Sal. Oppenheim Private Equity Partners GmbH, Cologne–> Zimbo Beteiligungsgesellschaft mbH, Cologne74sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 75

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsSal. Oppenheim jr. & Cie. S.C.A., Luxembourg, acquired 100 % of the shares in SGG Corporate ServicesS.A., Luxembourg, in May 2008, after which SGG Corporate Services S.A., Luxembourg, was broughtunder the umbrella of and merged with SGG S.A. (formerly Services Généraux de Gestion S.A.), Luxembourg.In the reporting year, SGG S.A. acquired 100 % of shares in the following companies, which were allfully consolidated:–> BOCARIL S.A., Luxembourg–> Fiduciaire F. Winandy & Associés S.A., Luxembourg–> SGG (Nederland) B.V., AmsterdamWith effect from 1 July 2008, BHF-BANK AG spun off its custody, custodian bank and securities servicingbusiness into BHF Asset Servicing GmbH. As an independent bank, BHF Asset Servicing GmbH is a whollyowned subsidiary of BHF-BANK AG, which is included as a fully consolidated company in the consolidatedfinancial statements of BHF-BANK AG. No hidden reserves were realised in relation to this spin-off.In December 2008, 94.9 % of capital shares and 49 % of voting rights in BHF Asset Servicing GmbHwere sold to SODALIS Beteiligungs GmbH, Cologne. The remaining capital share still held by BHF-BANK AG amounts to 5.1 %, and voting rights still held to 51 %. As BHF-BANK AG still retains themajority of voting rights, BHF Asset Servicing GmbH continues to be included as a fully consolidatedcompany in the consolidated financial statements.During the current financial year, the share in CAM Private Equity Consulting & Verwaltungs-GmbH,Cologne, was increased from 63.8 % to 100 %.The shares in Oppenheim Investment Managers Limited, Dublin, and Walespart Holding S.A., Luxembourg,were sold in the reporting year.FRANKFURT-TRUST Vertriebsgesellschaft mbH, Frankfurt am Main, was first sold to the BHF-BANK AGsubsidiary FRANKFURT-TRUST Investment-Gesellschaft mbH, Frankfurt am Main, as at 1 January 2008and then merged with it. Moreover, The Sal. Oppenheim Figaro Currency Fund, Dublin, was merged withSal. Oppenheim Figaro Currency Fund PLC (formerly The Sal. Oppenheim Feeder Fund I Plc), Dublin.In financial year 2008, the following investment funds were included in the scope of consolidated financialstatements; the Sal. Oppenheim Group owns more than 50 % of each of the funds.–> FT Liquima, Frankfurt am Main–> OP Cash Euro Plus, Luxembourg–> OP Hedge Multi Strategies, Cologne–> OP Hedge Multi Strategies Plus, CologneThe shares in OP Strategieportfolio IV, Cologne, and in OP Strategieportfolio V, Cologne, were sold.18 companies or investment funds (previous year: 5) were deconsolidated due to the discontinuation oftheir business activities or their minor significance for the net assets, financial position and results of operationsof the Group. These companies are:–> BLUESTONE HOLDING S.A., Luxembourg–> CAM Private Equity-Schweiz AG, Zurich–> Co Invest GbR, Munich–> DELFAS S.A., Luxembourg–> DMC S.à r.l., Luxembourg–> EFFIGI S.à r.l., Luxembourg–> FIDIS S.à r.l., Luxembourg–> FIN-CONTRÔLE S.A., Luxembourg–> FINDI S.à r.l., Luxembourg–> Fitrus Limited BVI, Tortola–> KANAKA HOLDING S.A., Luxembourg–> LOUV S.à r.l., Luxembourg–> MADAS S.à r.l., Luxembourg–> Oppenheim Eunomia GmbH, Cologne–> SGG Limited (BVI), Tortola–> SIBEMOL HOLDING S.A., Luxembourg–> TEXTO INTERNATIONAL S.A., Luxembourg–> TREMA HOLDING S.A., LuxembourgIn addition, 17 companies (previous year: 15) were included at equity in the scope of consolidated financialstatements.Due to expansion of the scope of business, Baigo Capital Partners Fund I Parallel GmbH & Co. KG,Frankfurt am Main, Cipio Partners Fund V GmbH & Co. KG, Munich, and Cipio Partners Fund VaGmbH & Co. KG, Munich, were accounted for using the equity method for the first time. Altigefi S.A.,Paris, was also included at equity in the scope of consolidated financial statements for the first time.The associated company MS “CONELBE” 1240 Bereederungsgesellschaft mbH & Co. KG, Bremen,was sold. CAM-Fairview Private Equity Partners LP, Farmington, was deconsolidated due to its minorsignificance for the net assets, financial position and results of operations of the Group.76sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 77

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsThe total number of companies included in the consolidated fi nancial statements is shown in the tablebelow:2008 2007Number of fully consolidated companies 88 97Number of companies included using the equity method 17 15Total 105 112213 subsidiaries and associated companies (previous year: 165) that have no signifi cant impact on thepresentation of the Group’s net assets, financial position and results of operations have not been includedin the scope of consolidated financial statements. These companies account for less than 2 % of the Group’stotal assets.With respect to the effects of the deconsolidation of the companies, please refer to note 39 Net income/(loss) from non-current financial assets.A detailed list of consolidated companies and investment funds can be found in note 89. The majorityof the consolidated companies prepared their annual financial statements as at 31 December 2008.04_Basis of consolidationThe first-time consolidation of group companies is based on the purchase method. This means that theacquired subsidiary’s assets, liabilities and contingent liabilities identified under IFRS 3 are restated at fairvalue at the time of acquisition, allowing for deferred taxes, and compared with the cost of the acquisitionof the company (purchase price allocation).Goodwill arising on a business combination is recognised at cost, less any impairment, under Intangibleassets. Goodwill is subsequently subject to an impairment test at least once a year. Please refer tonote 17 Intangible assets for a more detailed explanation of the impairment test. Negative goodwill fromconsolidation is recognised immediately in profit or loss.Any inter-company assets and liabilities are eliminated, as are inter-company expenses and revenues,and intra-group profits.Joint ventures and associated companies were accounted for in accordance with IAS 31 and IAS 28using the equity method, with assets included at restated values, and reported separately on the balancesheet under Investments accounted for using the equity method (see note 15). The first-time measurementof any difference between the cost of acquisition and the share of equity attributable to the stake acquiredis based on the principles of purchase price allocation applicable to full consolidation.Shares in minor subsidiaries and associated companies not included in the scope of consolidated financialstatements are recognised in accordance with IAS 39 at fair value or, if none can be reliably determined,at cost under non-current financial assets.05_Significant changes in the scope of consolidated financial statementsThe owners of Sal. Oppenheim jr. & Cie. S.C.A. resolved to restructure the business and investment activitiesof the Group. In the future, industry holdings will be managed in a newly formed, independent holdingstructure that is not affiliated with the Bank. This affects the shares acquired in 2008 in ARCANDORAktiengesellschaft, Essen, Sal. Oppenheim Private Equity Partners S.A., Luxembourg, and Sal. OppenheimPrivate Equity Partners GmbH, Cologne, which held the shares in CAM Private Equity Consulting &Verwaltungs-GmbH and VCM Capital Management GmbH. The share in CAM Private Equity Consulting& Verwaltungs-GmbH was increased to 100 % in 2008. Furthermore, the interest in IVG ImmobilienAG, Bonn, which was increased to 20 % plus one share in 2008, was sold.The impacts of the acquisitions made in 2008 and the sale to the new holding company resolved on11 November 2008 are detailed as follows.CAM Private Equity Consulting & Verwaltungs-GmbH and VCM Capital Management GmbHThe Group increased its share in CAM Private Equity Consulting & Verwaltungs-GmbH via a number oftransactions from 63.8 % to 100.0 %. The shares were acquired by Sal. Oppenheim jr. & Cie. S.C.A. andSal. Oppenheim Private Equity Partners S.A. and then brought under the umbrella of the newly formedSal. Oppenheim Private Equity Partners GmbH. The difference between the cost and the net fair valueof the identifiable assets, debt and contingent liabilities at the time of acquisition was € 54 million. Thecompany’s contribution to consolidated net income amounted to € -5 million.As at 31 December 2007, BHF-BANK AG held a 69.0 % stake in VCM Capital Management GmbH,Munich. Due to the additional put and call options on the remaining minority interests agreed as part ofthe business combination, the company was included in the scope of consolidated financial statements asat 31 December 2007 with a stake of 100 %.Sal. Oppenheim jr. & Cie. S.C.A., Luxembourg, acquired all shares from BHF-BANK AG on14 November 2008. Moreover, all shares were acquired from minority shareholders, after which Sal.Oppenheim jr. & Cie. S.C.A. brought all shares under the umbrella of the newly formed Sal. OppenheimPrivate Equity Partners GmbH. The acquisition of minority shares resulted in additional goodwill in theamount of € 7 million.The VCM Capital Management GmbH contribution to consolidated net income amounted to € -1million.The resolution to sell the interest in Sal. Oppenheim Private Equity Partners GmbH to the newholding company was adopted on 11 November 2008. Just as CAM Private Equity Consulting & Verwaltungs-GmbH and VCM Capital Management GmbH, the company will remain fully consolidated in theSal. Oppenheim jr. & Cie. S.C.A. financial statements until its final disposal. The companies’ assets andliabilities are to be recognised as separate items on the balance sheet in accordance with IFRS 5. As thecompanies meet the criteria of a discontinued operation, their result is reported in the income statementas a separate item Profit/(loss) from operating activities in discontinued operations. The prior year’s figureswere adjusted accordingly on the income statement.78sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 79

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsARCANDOR AktiengesellschaftOn 29 September 2008, Sal. Oppenheim jr. & Cie. KGaA acquired 23,020,552 shares in ARCANDORAktiengesellschaft, Essen, in a capital increase. Moreover, Sal. Oppenheim acquired 49,377,900 sharesfrom the majority shareholder Madeleine Schickedanz, thus giving Sal. Oppenheim jr. & Cie. KGaA atotal of 28.6 % of the shares in ARCANDOR Aktiengesellschaft. Acquisition cost totalled € 154 million.24.9 % of shares in ARCANDOR Aktiengesellschaft were acquired for resale to the newly formed holdingstructure. For this reason, ARCANDOR Aktiengesellschaft was not included as an associated companyin the consolidated financial statements of Sal. Oppenheim jr. & Cie. S.C.A. The shares held for sale arereported as of the balance sheet date as non-current assets held for sale and measured at the lower of carryingamount and fair value less selling costs. The 3.7 % of shares retained by the Group are reported underNon-current financial assets and recognised at fair value in accordance with IAS 39.IVG Immobilien AGIn 2008, the shareholding in IVG Immobilien AG, Bonn, was increased to 20 % plus one share. Thusthe company was included in the scope of consolidated financial statements and accounted for using theequity method as at 30 September 2008. The interest in IVG Immobilien AG will also be sold to the newholding company as part of restructuring investment activities. Equity accounting was thus terminatedwith adoption of the resolution on disposal as at 11 November 2008. The shares are recorded as of thebalance sheet date as non-current assets held for sale, and accounted for at the lower of carrying amountand fair value less selling costs. The valuation did not result in a need for impairment. The result of prorata temporis inclusion using the equity method is recognised in the share of the profit or loss of associatesand joint ventures accounted for using the equity method.06_Foreign currency translationForeign currency denominated monetary assets and liabilities, as well as unsettled foreign currency spotcontracts and non-monetary items carried at fair value were translated at mean exchange rates, and outstandingforward contracts were translated at the forward rate prevailing on the balance sheet date. Nonmonetaryitems carried at cost were translated using historical exchange rates.Effects resulting from the translation of balance sheet items are recognised in profit or loss.Annual financial statements prepared by consolidated subsidiaries in foreign currencies are translatedinto euros for the consolidated financial statements in accordance with IAS 21 using the concept of functionalcurrency. The same method was applied to the translation of adjustments to the carrying amountof foreign companies included using the equity method. The translation of assets and liabilities is basedon the mean exchange rate at the balance sheet date, whereas the income statement is translated using theannual average exchange rate, and net income recognised directly in equity is converted using historicalexchange rates.Exchange rate gains/losses arising on consolidation are recognised directly in equity (revaluation surplus).Where companies are deconsolidated, the corresponding cumulated exchange differences are amortisedto profit or loss.07_Financial instruments: recognition and measurement (IAS 39)IAS 39 prescribes principles for recognising and measuring fi nancial assets and liabilities. On first-timerecognition, financial assets and liabilities are to be assigned, according to their features and purpose, toone of the following categories:–> Financial assets/financial liabilities designated at fair value through profit or loss–> Held-to-maturity investments–> Loans and receivables–> Available-for-sale financial assets–> Other liabilitiesFinancial assets/financial liabilities at fair value through profit or lossThe category Financial assets/financial liabilities designated at fair value through profit or loss is brokendown into Held for trading and Financial Assets (fair value option).Held for trading comprises financial instruments that were primarily acquired with the intention ofgenerating gains from short-term market price fl uctuations or changes in the dealer’s margin. Financialassets held for trading include, in particular, fixed-income securities, equities, borrower’s note loans and allderivative financial instruments with positive fair values. Negative fair values from derivative transactionsare recognised under Financial liabilities at fair value. Bonds issued and delivery obligations from shortsales are also recognised under this item.Reclassifications are possible for non-derivative financial assets held for trading if the management nolonger intends to hold these assets for trading and one of the two subsequent requirements is met at thesame time:–> Rare circumstances prevail at the time of reclassification, such as the deterioration of the global financialmarkets since the third quarter of 2008, or–> the asset fulfils the definition of the category Loans and Receivables and management has the intentionand ability to hold this asset for the foreseeable future at the time of reclassification.All gains and losses from these assets accumulated prior to reclassification remain part of net trading income.The fair value on the date of reclassification represents the new cost of the reclassified asset. Reclassificationout of the held-for-trading category is irreversible. In the current financial year, fixed-income securities fromthis category were reclassified to the loans and receivables as well to the available-for-sale financial assetscategories. Further information on this subject is provided in note 73 Disclosures on financial instruments.Reclassifications are still not allowed for derivatives and financial liabilities held for trading.In addition, in accordance with the fair value option introduced in IAS 39, financial instruments notacquired for the purposes of trading, which fall within the scope of IAS 39, and whose fair value can bereliably measured, may be designated at fair value, with value changes recognised in profi t or loss. Therequirements for such designation are met if the designated fi nancial instruments are either structured80sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 81

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsfinancial instruments with one or more embedded derivatives requiring separation, or a group of financialinstruments which are managed in accordance with a documented risk management or investment strategy,or which, if designated, eliminate measurement inconsistency.The decision to exercise the fair value option is made at the time of acquisition. Subsequent reclassificationof financial instruments into or out of this category is not possible.We use the fair value option for equities and bonds which are hedged with derivatives, in order toavoid or reduce measurement differences from these securities, as well as for bond funds whose positionsare managed on a fair value basis and whose performance is measured at fair value. Moreover, we also usethe fair value option for equity investments, which are managed on a fair value basis.The fi nancial instruments allocated to this category are recognised at fair value in the balance sheetunder Financial assets designated at fair value through profit or loss (fair value option) or Financial liabilitiesdesignated at fair value through profit or loss (fair value option). Market price fluctuations and gains or losseson disposal are recognised immediately in the income statement under Result from fair value option.Interest and dividend payments for fi nancial assets and liabilities held for trading, less refi nancingcosts, are recognised under Net trading income. Interest and dividend payments for assets and liabilitieswhich were reported as financial assets or liabilities designated at fair value through profit or loss (fair valueoption) upon initial recognition are included under Net interest income.Derivatives embedded in structured financial instruments which are to be separated in accordance withIAS 39, are also allocated to the held-for-trading category.Held-to-maturity investmentsNon-derivative financial assets with fixed or determinable payments and fixed maturity acquired with thepositive intention and ability to hold to maturity can be classified as held-to-maturity investments. Thesefinancial assets are carried at amortised cost. The Sal. Oppenheim Group did not use the category Heldto-maturityinvestments in 2008 either.Loans and receivablesThis category contains non-derivative financial assets with fixed or determinable payments which are notquoted in an active market and do not belong to any other category. These include both loans originatedand purchased.Loans and receivables are carried at amortised cost and reported under Loans and advances to banks,Loans and advances to customers and Non-current financial assets. Premiums and discounts are deferredusing the effective interest method and recognised as interest expense/income in the income statement.Impairments due to changes in credit risk, causing the fair value to fall below amortised cost due tofull or partial uncollectibility of a financial asset, are included in the Provision for loan losses.There are currently no loans outside this category in the Sal. Oppenheim Group. Borrower’s note loansare also allocated to this category provided that they are not held for trading.Securities from the categories Financial assets held for trading as well as Available-for-sale fi nancialassets were reclassified to this category in the current financial yearAvailable-for-sale financial assetsThis category comprises all non-derivative financial assets that have not been allocated to any of the aforementionedcategories. In the Sal. Oppenheim Group, these include, in particular, fixed-income securities,shares and equity investments. A reclassification out of this category to the loans and receivables category ispossible if management no longer has the intention or ability to dispose of the asset, and the asset fulfils thecriteria for the loans and receivables category at this time. Reclassification to the held-to-maturity categoryis also possible, although the reclassified asset is then subject to the strict requirements of this category.Moreover, financial assets held for trading may be reclassified to this category if the requirements forthis category are met.At the time of acquisition or reclassification, the financial assets are recognised at their fair value (at cost)plus any transaction costs incurred. Subsequent measurement is at fair value. Any changes in the value ofavailable-for-sale assets arising from the subsequent measurement of financial assets are recognised directly inequity (revaluation surplus) after allowing for deferred tax, until the asset is sold or an impairment loss hasto be recognised in profit or loss. If the reasons for impairment losses cease to exist in subsequent periods,such losses may only be reversed through the revaluation surplus, i.e. recognition directly in equity, in thecase of equity instruments. For all other securities, a reversal of impairment losses is recognised in profit orloss. An impairment test is conducted at every balance sheet date. Any premiums and discounts are spreadover the term and recognised under Net interest income using the effective interest method. If financialassets are reclassified to the loans and receivables category, the accumulated changes in fair value at the timeof reclassification recognised directly in equity in the revaluation surplus are reversed over the maturity ofthe asset through profit or loss and included in the net interest income using the effective interest method.The effective interest rate is to be redetermined at the time of reclassification in this case.Hedge accounting overwrites the recognition and measurement rules described above.Available-for-sale assets are included under Non-current financial assets or Other assets. Any impairmentsdue to changes in credit risk arising in connection with non-current financial assets are recognisedunder Net income/(loss) from non-current financial assets; similar impairments relating to Other assetsare included under Other operating income and expenses, net. In the current financial year, fixed-incomesecurities from this category were reclassified to the loans and receivables category. Further information onthis subject is provided in note 73 Disclosures on financial instruments.Other liabilitiesThis category includes all other fi nancial liabilities which are not held for trading or are designated tobe measured at fair value. They are measured at amortised cost. Any premiums and discounts are spreadover the term and recognised under Net interest income using the effective interest method. In the Sal.Oppenheim Group, this category includes Deposits from banks and customers, Debt securities and Subordinatedcapital.Hedge accounting overwrites the recognition and measurement rules described above.Moreover, this item covers all shares held by minority investors in fully consolidated investment fundsreported under Other liabilities. Shares of these investors represent a financial liability from the Group’s82sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 83

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementspoint of view as the minority investors have the possibility of redeeming their shares at the current shareprice at any time and the Group or the fully consolidated investment fund has no means of avoiding thepayment obligation. This redemption obligation is measured at fair value for initial as well as subsequentmeasurement. Changes in the value are recognised through profit or loss in the net interest income.Allocation to classes in accordance with IFRS 7Due to the classification of financial instruments prescribed by IFRS 7.6, we have allocated the financialinstruments to the following classes:Recognition and derecognition of financial instrumentsFinancial instruments are recognised for the first time upon entry into the contract. As far as the recognitionof standard market purchases or sales of financial assets is concerned, IAS 39 provides for recognitioneither on the trade date or on the settlement date, with a single option per category. The Sal. OppenheimGroup always recognises such transactions on the trade date, irrespective of the category.Financial instruments are only partially or fully derecognised if the risks and rewards of ownershiphave been transferred to the new owner (risk and reward approach). As a result, lent securities are notderecognised, because both the market risk and the credit risk of the underlying security remain with therepo seller or borrower.If, when assets are transferred, the transfer of risks and rewards is unclear, an examination is requiredto ascertain whether or not the transferor has retained control of the assetClasses (IFRS 7)ValuationBalance sheet item Measurement category (IAS 39)Amortised cost* Cash and cash equivalents Loans and receivablesLoans and advances to banksLoans and receivablesLoans and advances to customers Loans and receivablesNon-current financial assetsAvailable-for-sale financial assetsNon-current financial assetsLoans and receivablesDeposits from banksOther liabilitiesDeposits from customersOther liabilitiesDebt securitiesOther liabilitiesSubordinated capitalOther liabilitiesFair value Assets held for trading Financial assets held for tradingLiabilities held for tradingFinancial liabilities held for tradingPositive fair values fromhedge accountingNegative fair values fromhedge accountingFinancial assets designatedFair value optionat fair value through profit or lossNon-current financial assetsAvailable-for-sale financial assetsOther assetsAvailable-for-sale financial assetsNot measured in accordance Irrevocable loan commitmentswith IAS 39Contingent liabilitiesFinancial guaranteesLiabilities from finance leaseagreementsAssets held for sale (IFRS 5)*Including fair value changes to the hedged risk for hedged positions (fair value hedge).The class definition is the result of assigning financial instrument categories in accordance with IAS 39 inconjunction with the corresponding balance sheet items.The Sal. Oppenheim Group does not use the category Held-to-maturity investments.84sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 85

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsDetails on the nature and extent of risks resulting from financial instruments, as required by IFRS 7, arepresented in the risk report if not presented in the Notes.All assets are carried at face value.09_Cash and cash equivalents08_Hedge accountingAt present, only BHF-BANK AG makes use of the option to use hedge accounting in accordance withIAS 39 in the Sal. Oppenheim jr. & Cie. S.C.A. consolidated financial statements. Of the various types ofhedging relationships, BHF-BANK AG only implements fair value hedges.This involves using derivatives to hedge the fair value of financial assets and liabilities. The risk of changesin fair value is particularly relevant for fixed-interest loans, securities and issued debt. In a fair value hedge, thehedging instrument is recognised at fair value under Positive or Negative fair values from hedge accounting.Changes in the fair value of hedging instruments are recognised in the income statement. Any changes inthe fair value of the hedged assets or liabilities are also recognised, in the amount of the hedged exposure, inprofit or loss. Any changes in the fair value of the hedging instruments and/or hedged assets and liabilities arerecognised under the Result from hedge accounting as measurement gains/(losses) from hedging.If the hedged asset or liability is carried at amortised cost in accordance with general accounting rules,the carrying amount is adjusted for the cumulative change in fair value resulting from the hedged exposure.If, at the start of the hedging relationship, there is already a difference between the amortised cost (carryingamount) and the fair value, this amount is also amortised into net interest income over the remaining lifeof the hedged financial instrument.Qualification for hedge accounting is also subject to a series of additional conditions. These relate, inparticular, to the documentation of the hedging relationship at inception, as well as the effectiveness of thehedge. Documentation of the hedging relationship includes a description of the hedging instrument andhedged item, as well as the hedged exposure and the method used to assess the effectiveness of the hedge.Within a single hedging relationship, for instance, one or more hedging instruments can be designatedto hedge one or more equivalent hedged assets, liabilities, forecast transactions or fi rm commitments(homogeneous sub-portfolios). Hedging instruments must be designated for their entire life. In order fora hedging transaction to be effective at group level as well, hedging instruments and hedged items mustbe concluded with external third parties.The hedging relationship must be highly effective, both at inception and over its entire life, i.e. changesin fair value of the hedging instrument and the hedged item must balance almost completely. The effectivenessof the hedge must be tested regularly throughout its life. A hedge is deemed highly effective if the ratioof fair value changes is between -0.8 and -1.25.At BHF-BANK AG, hedge accounting is used only in respect of the hedging of interest rate risks bymeans of fair value hedges. The hedging of interest rate risks relates solely to long-term fixed-interest debt(own issues). The only hedging instruments used are interest rate swaps, which transform fi xed-interestpayments into variable-interest payments. Fair value hedging is used for both individual transactions andhomogeneous sub-portfolios. All fair value hedges are subject to ex ante effectiveness evaluation in theform of a sensitivity analysis of the hedging instrument and the hedged item, including a homogeneity testin the case of sub-portfolios. The ex post effectiveness evaluation is performed on the basis of a statisticalmethod (linear regression analysis).10_Assets held for tradingSecurities, loans and advances, foreign currency assets and precious metals held for trading, as well as allderivative financial instruments with positive fair values are measured at fair value.Exchange-traded products are recognised at their trading price. Non-listed products are measuredusing the net present value method or another suitable valuation model (e.g. option pricing models).All realised and unrealised gains/losses are recognised in profit or loss and stated under Net tradingincome. Net trading income also includes interest and dividend income from financial assets and liabilitiesheld for trading, as well as refinancing costs.11_Financial assets designated at fair value through profit or loss (fair value option)This balance sheet item includes financial assets that are designated at fair value through profit or loss uponinitial recognition.Assets designated at fair value are measured in the same way as assets held for trading in note 10.12_Loans and advances to banks and customersLoans and advances to banks and customers which are neither held for trading nor quoted on an activemarket, are carried at amortised cost. As the difference between the amount received and the amount repayable,premiums and discounts are deferred using the effective interest method and recognised in profitor loss as interest expense/income. Impairments are recognised in profit or loss. They are deducted fromloans and advances, and reported separately as provision for loan losses.13_Allowances for impairment losses on loans and advancesThe risks in lending business are addressed through specific valuation allowances and general allowances fordoubtful accounts. Provisions for off-balance sheet transactions are presented as provisions for loan losses.Impairment is calculated on the basis of the discounted cash flow method.Any need for provisioning in relation to individual exposures is determined using a catalogue of criteriato assess whether there is substantial objective evidence of loan impairment. Such evidence is deemed toexist concerning a specific debtor, if the loan is more than 90 days overdue or a default on the loan is highlyprobable or has already occurred (e.g. due to a debt waiver or the institution of insolvency or restructuringproceedings against the debtor).In the event that potential impairment is identified, the estimated recoverable amount is calculated andcompared with the carrying amount. The estimated recoverable amount is measured as the present valueof all expected interest and principal payments plus proceeds from the disposal of collateral, discountedat the original effective interest rate of the loan. The amount by which the carrying amount exceeds theestimated recoverable amount is accounted for as an impairment.86sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 87

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsUncollectible loans are directly written off. Receipts from written-off loans are recognised as income. All otherimpairments are recorded in an allowance account.General allowances for doubtful accounts are made on the basis of portfolios of assets with similarcredit risk characteristics. The level of portfolio impairments is determined by the underlying default probabilitiesand recovery rates.14_Non-current financial assetsNon-current financial assets includes all bonds and other fixed-income securities, shares and other nonfixedincome securities, equity investments, shares in non-consolidated subsidiaries as well as investmentproperty, which are not classified as financial assets held for trading or financial assets designated at fairvalue through profit or loss (fair value option).Available-for-sale financial instruments are recognised and measured at fair value. In cases where fairvalue cannot be reliably measured, such assets are carried at amortised cost. Interest and dividend incomeis recognised under Net interest income.Temporary fair value changes are recognised directly in equity (revaluation surplus) after allowingfor deferred tax. Impairments due to changes in credit risk, by contrast, are recognised in profi t or lossunder Net income/(loss) from non-current financial assets. For fixed-income securities, the recognition ofimpairments in profit or loss is based on the same criteria as for loans and receivables. Please refer to thenotes on Allowances for impairment losses on loans and advances. In accordance with IAS 39, a significantor prolonged decline in fair value below cost is objective evidence of an impairment in the case of equityinstruments. In these cases the net losses previously recognised in equity are to be transferred from therevaluation surplus to the income statement.If the causes for impairment losses cease to exist in subsequent periods, the reversal of impairment lossesfor shares and equity investments results in a corresponding increase in the revaluation surplus (recognitiondirectly in equity). For fixed-income securities, the reversal of impairment losses is recognised in profit orloss under Net income/(loss) from non-current financial assets.Financial instruments allocated to the loans and receivables category are carried and measured atamortised cost. Interest income from bonds, including premiums or discounts spread over the term, isrecognised under Net interest income. Impairments are recognised in Net income/(loss) from non-currentfinancial assets.Land, buildings or parts of buildings held for the purpose of generating rental income or capital appreciation,but not for own use or sale in the context of ordinary business, are recognised as Investmentproperty (Non-current financial assets) in accordance with IAS 40, and carried at cost. Buildings underInvestment property are depreciated using the straight-line method over a useful life of 50 years. We reportthe rental income from these investment properties under Other operating income. Depreciation andimpairments are recognised under Net income/(loss) from non-current financial assets.For information on changes in non-current financial assets, please refer to note 54 or 58.15_Investments accounted for using the equity methodInvestments in associates and joint ventures are carried at amortised cost using the equity method. Uponacquisition, the investments are recognised at cost and subsequently increased or decreased by the shareattributable to the Sal. Oppenheim Group of net income for the period of the associated company or jointventure. Distributions received from companies accounted for using the equity method also diminish thecarrying amount. Moreover, changes in equity not recognised in the income statement of companies accountedfor using the equity method affect their carrying amount without running through the incomestatement.Goodwill from companies accounted for using the equity method is included under Investmentsaccounted for using the equity method. The Sal. Oppenheim Group currently holds no shares in listedassociated companies or joint ventures.Every balance sheet date, a check is carried out using objective evidence in accordance with IAS 36, toascertain whether the carrying amount of the shares in investments accounted for using the equity methodis impaired.For a breakdown of investments accounted for using the equity method, please refer to note 89. Thechanges in investments accounted for using the equity method are available under note 55 or note 58.16_Property, plant and equipmentLand and buildings for own use, operating and office equipment as well as assets under construction arerecognised under Property, plant and equipment. They are measured at cost less straight-line depreciationaccording to their expected useful life. Useful life is determined on the basis of physical life, technicaladvancement and legal and contractual limitations. Subsequent expenditure is only capitalised providedit increases the economic benefi t of the respective asset. Maintenance measures for property, plant andequipment are reported as expenses in the year in which they are carried out.All property, plant and equipment is depreciated over the following periods:BuildingsOperating and office equipmentEstimated useful life30 to 50 years3 to 23 yearsAdditional impairments are accounted for in the form of write-downs. Once the reasons for impairmentlosses cease to exist, they are reversed up to a maximum of the amortised cost amount.Depreciation is recognised under Other administrative expenses. Gains or losses on the disposal ofproperty, plant and equipment are included under Other operating income or Other operating expenses.With respect to investment property, please refer to note 14. For information on fi nance lease assetsplease refer to note 18.Please refer to note 56 and 58 for information on changes in non-current assets.88sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 89

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements17_Intangible assetsThis item primarily includes goodwill from full consolidation, acquired and leased software and clientrelationships. Internally generated intangible assets are of minor significance for the Group.Goodwill carries an indefinite useful life. All goodwill assets are assessed annually to determine theirfuture economic benefits. For this purpose, the goodwill assets are allocated, at the time of acquisition,to the cash-generating units intended to profi t from the synergies of the business combination. A cashgeneratingunit is defined as the smallest identifiable group of assets within the Sal. Oppenheim Group thatgenerates cash inflows that are largely independent of the cash inflows from other assets. For impairmenttesting purposes, the expected cash fl ows from the most recent management projections at the level ofthe cash-generating unit are used, and discounted with specific growth rates and cost of equity. A writedownis performed if the assets, including goodwill, less the debt of the cash-generating unit exceed therecoverable amount (value in use) calculated in accordance with the criteria above. Write-downs resultingfrom the impairment test are recognised under Other operating expenses. A reversal of impairment lossesis not possible.An additional impairment test will be carried out during the year if events occur which indicate asustained value decrease.Please refer to note 57 regarding the individual assumptions used for the impairment tests in financialyear 2008.Acquired software is carried at amortised cost and amortised over a period of three to seven years. Withrespect to finance lease software assets, please refer to note 18.Amortisation of intangible assets is recognised under Other administrative expenses.Purchase price allocation in accordance with IFRS 3 in connection with company acquisitions includedidentifying and capitalising client relationships which have a contractually specified limited usefullife. These can be amortised using the straight line method over a maximum of the term of the contract orover a shorter expected economic useful life.Amortisation of capitalised client relationships is recognised under Amortisation and impairments onintangible assets as other administrative expenses. Please refer to note 57 or note 58 for information onchanges in intangible assets.18_LeasesIAS 17 distinguishes between operating leases and finance leases. A lease is classified as a finance lease if itsubstantially transfers all the risks and rewards incident to ownership of the asset to the lessee. Otherwise,the lease is deemed an operating lease.The companies included in the scope of consolidated financial statements are only lessees.Leasing payments made on operating leases are included in rental payments under Administrativeexpenses.Under fi nance leases, leased assets are recognised at inception of the lease at their fair value or, iflower, at the present value of the outstanding lease payments, under Property, plant and equipment or, forintangible assets, under Intangible assets.The leased assets are depreciated over the subsequent years in line with their useful life. At inception, outstandinglease payments are recognised as a liability.Payments made on fi nance leases are apportioned between the fi nance charge and the reduction ofthe outstanding liability; the finance charge is allocated to the periods during the lease term, subject to aconstant rate of interest.19_Other assetsOther assets is a compound item for all remaining assets not attributable to the foregoing asset items, andwhich have minimal significance when considered individually.20_Non-current assets held for sale and assets from discontinued operationsNon-current assets the carrying amount of which will be recovered principally through a sale transaction ratherthan through continuing use and which meet the requirements of IFRS 5 are to be classified as held for sale.Non-current assets held for sale are assets or groups of assets which can be sold in their present conditionand for which sale is highly probably. Discontinued operations are components of an entity that havebeen sold or are classified as held for sale. Non-current assets held for sale are to be recognised in accordancewith IFRS 5 on the balance sheet date at the lower of carrying amount and fair value less costs to selland are to be stated separately from other assets. They are reported as „Non-current assets held for sale andassets from discontinued operations”. Liabilities from discontinued operations are reported separately fromother liabilities under Liabilities from discontinued operations. Information on the assets and liabilitiesallocated to this balance sheet item is presented in note 61 and note 70.Gains and losses from the recognition of assets held for sale at fair value less costs to sell and profit/lossfrom discontinued operations are to be reported as a separate item Profit/(loss) from operating activities indiscontinued operations in the income statement. We have accordingly adjusted the comparative figureson the income statement.The disposal approved by the owners of Sal. Oppenheim jr. & Cie. S.C.A. of Sal. Oppenheim PrivateEquity Partners S.A. and Sal. Oppenheim Private Equity Partners GmbH with the majority holdings inCAM Private Equity Consulting and Verwaltungs-GmbH and VCM Capital Management GmbH constitutesa discontinued operation in accordance with IFRS 5.21_Liabilities held for tradingDerivative financial instruments with negative fair value, as well as delivery obligations under short salesare recognised at fair value as liabilities held for trading. Bonds issued by the Bank are also recognisedunder this item.Trading prices are used for measuring exchange-traded products. Non-listed products are measuredusing the net present value method or other suitable valuation model (e.g. option pricing models).Net trading income in the income statement includes all realised and unrealised gains/losses, as wellas trading-related interest and dividend income and refinancing costs.90sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 91

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements22_LiabilitiesAll liabilities, with the exception of liabilities held for trading, are classified as Other liabilities. Liabilitiesare carried at amortised cost. As the difference between the amount received and the amount repayable,premiums and discounts are deferred using the effective interest method and recognised in profit or lossas interest expense/income.23_Employee benefitsBoth direct pension commitments (book reserve schemes), which are classified as defined benefits plans,and indirect, defined contribution plans, are made available to the employees of several group companies,particularly to those of Sal. Oppenheim jr. & Cie. KGaA, as well as those of BHF-BANK AG and itssubsidiaries. The contributions for these are paid to BVV Versicherungsverein des Bankgewerbes a.G.(Pensionskasse) or BVV Versorgungskasse des Bankgewerbes e.V., Berlin.The payments to the pension schemes are expensed as incurred and do not entail any provisions. Thelevel of provisions for defined benefit plans is based on the number of years of service and the pensionablesalary level.Besides general pension commitments, Sal. Oppenheim jr. & Cie. KGaA and several other Germansubsidiaries provided additional individual benefits through the conversion of cash payments to pensioncontributions. During financial year 2005, this model was replaced by a new occupational pension model(AV OPP 2005), which is also based on the conversion of salary payments to pension contributions.With effect from 1 January 2005, Sal. Oppenheim jr. & Cie. KGaA and several other German subsidiariesclosed all previous, primarily employer-funded pension schemes. For all employment contractsconcluded prior to this date, the old plans will continue unchanged; for contracts as of 1 January 2005, anew model applies exclusively, allowing all employees to convert salary components into pension contributions.Depending on the length of employment, the employer makes a contribution to the plan basedon a percentage of the amount converted. In financial year 2005, all funds for the refinancing of old andnew pension commitments were transferred to Sal. Oppenheim Treuhand e.V., in order to qualify as planassets in accordance with IFRS.In line with a contractual trust arrangement (CTA), assets were transferred to BHF Pension Trust e.V.on 16 January 2006, in order to secure the pension liabilities of BHF-BANK AG and five German subsidiariesof the BHF-BANK group unit. The assets transferred were classified as plan assets in accordancewith IAS 19.7. The market value of the plan assets and pension liabilities were netted.Pensions for the majority of employees at BHF-BANK AG and its German subsidiaries are covered byVersorgungsverein der BHF-BANK e.V., in the form of a support fund (Unterstützungskasse). Based ontheir salary class, employees acquire a so-called “basic building block” each year, which later serves to definetheir monthly pension entitlement. This future benefit can be enhanced with a self-financed building block(salary conversion) of up to 50 % of the basic building block. If this option is exercised, the resulting pensionentitlement is doubled with the granting of a supplementary building block of equal amount. The obligationsof the Versorgungsverein are determined actuarially in the same manner as for book reserve schemes,for which pension provisions are recognised, and are covered for the most part by the scheme assets. Thescheme assets are treated as plan assets, measured at fair value and offset against pension liabilities.The personally liable partners of Bankhaus Sal. Oppenheim jr. & Cie. KGaA, Cologne, receive individualpension commitments. These are fi nanced internally through the scheduled accumulation of pensionprovisions. No separate entity or fund has been created for these pension liabilities which would satisfythe IAS 19 requirements for plan assets (“wholly unfunded plan”).The measurement of pension provisions for defi ned benefi t plans is based on actuarial assessmentin accordance with IAS 19, using the projected unit credit method. Demographic parameters such asmortality, invalidity, retirement age and staff turnover, as well as financial parameters including currentmarket rates of interest, future wage and salary increases and career trends are taken into account in thecalculation.Pensions and similar commitments have been recognised in accordance with the amended IAS 19since 2006. The option included in the standard of recognising actuarial gains and losses directly in equitywas exercised.Other pension costs were recognised in profit or loss and comprise several components. Service costrepresents the increase in present value of defined benefit obligations resulting from employee service inthe reporting year. The interest cost on the present value of the obligation is also recognised in profit orloss because the benefits are one period closer to settlement. The pension costs calculated in this way arereduced by the net income expected from plan assets.In Germany, calculations are based on the following actuarial assumptions:Biometric values2008 2007% %Reference table Reference table2005G 2005GProf. Dr. HeubeckTechnical interest rate 6.25 5.00Escalation rate 0.3 to 2.5 1.0 to 1.7Salary escalation or benefit escalation rate for active employees and early retirees 1.5 to 2.3 2.2 to 2.5Expected return on plan assets 3.0 to 5.5 4.0 to 5.0Provisions for commitments similar to pensions include provisions for part-time retirement and earlyretirement schemes. These are recognised under Other provisions. and are also determined using actuarialmethods based on the aforementioned assumptions.24_Other provisionsOther provisions includes provisions for uncertain liabilities to third parties, as well as provisions foranticipated losses from onerous contracts, recognised at the best estimate of the expenditure required tosettle the obligation.Long-term provisions are recognised at present value, based on the relevant market interest rate.92sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 93

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements2. Notes to the Consolidated Income Statement32_Net interest incomeNet interest income can be broken down as follows:Interest income2008 2007€ M € MInterest income from lending and money market transactions 720 733Interest income from fixed-income and book-entry securities (available-for-sale) 117 323Interest income from fixed-income and book-entry securities (loans and receivables) 111 0Oppenheim-Esch Holding GbR’s proportion of consolidated net income from 2007 and 2008 was takenas its profi t. This was calculated using the percentage of completion method for the fi rst time in 2008.In accordance with IAS 11, contract revenue and contract costs associated with construction contractsfor real estate projects are recognised by reference to the stage of completion of the contract activity. Thecontracts relating to the projects in question enable a reliable estimate to be made of both revenues andexpenses and thus of the outcome of the contract. We also took into account a haircut of 33.3%. The levelof completion used in the calculation was confirmed by an external service provider who regularly managesprojects initiated by the Esch Group.34_Provision for loan lossesThe provision for loan losses reflected in the income statement can be broken down as follows:2008 2007€ M € MInterest income from fixed-income and book-entry securities (fair value option) 102 116Interest income from balances with central banks 19 8Reversal of impairment losses relating to hedge accounting differences 13 22Current income from equities (available-for-sale) 11 24Current income from equities (fair value option) 3 6Current income from equity investments 31 39Additions to allowances for impairment losses on loans and advances -25 -19Reversal of allowances for impairment losses on loans and advances 19 8Additions to provisions for loan losses 0 -1Reversal of provisions for loan losses 5 2Total -1 -10Current income from shares in affiliated companies 3 2Other interest income 251 24Total interest income 1,381 1,297Interest expenseInterest expense incurred on deposits from customers -689 -604Interest expense incurred on deposits from banks -232 -251Interest expense incurred on bonds and notes issued -20 -25Interest expense for hedge accounting adjustments amortised to profit and loss -15 -16Interest expense incurred on deposits from central banks -11 0Interest expense incurred on subordinated capital issued -9 -9Other interest expense -61 -143Total interest expense -1,037 -1,048Net interest income 344 24933_Share of the profit or loss of associates and joint venturesaccounted for using the equity methodIn the reporting year, this item amounted to € 44 million (previous year: € 81 million) of which € 42 million(previous year: € 29 million) related to Oppenheim-Esch Holding GbR, Troisdorf. In the previousyear, this item included a further € 43 million from IVG Immobilien AG, Bonn.96sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 97

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements35_Net commission incomeNet commission income can be broken down as follows:non-current financial assets; the measurement gains/(losses) from these assets are recognised in the Resultfrom fair value option or in Net income/(loss) from non-current financial assets.2008 2007€ M € M37_Result from hedge accountingThe Result from hedge accounting includes fair value hedges and can be broken down as follows:Commission incomeSecurities business 364 4432008 2007€ M € MAsset Management 299 282Advisory business and brokerage 92 110Foreign transactions, foreign exchange and payment transactions 19 20Lending business 12 11Trust business 4 1Other 54 42Total commission income 844 909Commission expenseAsset Management -122 -140Securities business -90 -97Advisory business and brokerage -22 -9Result from fair value hedges -3 -1of which: Result from hedging instruments (derivatives) -79 -31of which: Result from hedged items 76 30Total -3 -138_Result from fair value optionThe Result from fair value option can be broken down as follows:2008 2007€ M € MForeign transactions, foreign exchange and payment transactions -1 -1Other -36 -33Total commission expense -271 -280Net commission income 573 629Equities -181 177Bonds 8 -71Other income/expenses -48 1036_Net trading incomeNet trading income can be broken down as follows:2008 2007€ M € MTotal -221 11639_Net income/(loss) from non-current financial assetsNet income/(loss) from non-current financial assets can be broken down as follows:2008 2007€ M € MForeign exchange 6 24Equities and equity derivatives/equity index derivatives -57 -265Bonds and interest rate derivatives -190 -26Interest income from fixed-income securities (trading) 6 5Dividend income from equities (trading) 166 112Other income/expenses -2 -2Total -71 -152Net trading income contains results from derivatives, which serve as collateral for assets, which are notclassified as held for trading. These assets are designated at fair value through profit or loss or reported asDisposal gains/(losses) from securities in the available-for-sale and loans and receivables categories -71 64Measurement gains/(losses) from securities in the available-for-sale and loans and receivables categories -74 -12Gains/(losses) from securities in the available-for-sale and loans and receivables categories -145 52Disposal gains/(losses) from equity investments and shares in affiliated companies 371 56Impairments on equity investments and shares in affiliated companies -128 -33Gains/(losses) from equity investments and shares in affiliated companies 243 23Disposal gains/(losses) from companies accounted for using the equity method 1 252Impairments on investment property -3 0Total 96 32798sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 99

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsThe gains from the disposal of shares in affiliated companies relate primarily to the sale of 94.9% of theshares in BHF Asset Servicing GmbH, Frankfurt am Main, and the sale of IVG Immobilien AG, Bonn.The impairments on equity investments relate to the investments in Dedalus-GmbH & Co. KGaA, Frankfurtam Main (€ 42 million), GLG Partners Inc., New York (€ 30 million), IKB Deutsche IndustriebankAktiengesellschaft, Düsseldorf (€ 15 million), Management Capitali S.p.A., Milan, Lehman Brothers CDOOpportunity Partners 2004 -1 L.P., Cayman Islands and Olivant Limited Guernsey, Channel Islands (€ 7million each), KKR European Fund II L.P., Alberta, Canada (€ 5 million) and real estate fund Köln-DeutzArena und Mantelbebauung GbR, Troisdorf (€ 4 million).40_Administrative expensesAdministrative expenses, broken down into personnel expenses, other administrative expenses and depreciationand amortisation were as follows:Personnel expenses2008 2007€ M € MSalaries 409 481Social security contributions 42 40Pension benefit expenses 24 25of which BVV contributions 4 3Total personnel expenses 475 546Other administrative expensesIT costs 88 66Legal, auditing and consultancy costs 58 45Advertising and promotional costs 43 48Occupancy costs 43 39Communication and information costs 40 37Business travel expenses 17 13Securities settlement costs 13 12Maintenance costs 11 12Premiums and insurance policies 11 9Rental payments under operating leases 9 4Automobile-related expenses 5 6Underwriting business expenses 0 8Expenses related to other banking business 52 35Total other administrative expenses 390 334Depreciation and amortisationon operating and office equipment 18 17on intangible assets 17 13on buildings 4 3on finance-lease assets 2 5Total depreciation and amortisation 41 38Total administrative expenses 906 918100sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 101

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements41_Other operating income and expenses, netNet other operating expense and income can be broken down as follows:2008 2007€ M € MGains from the disposal of venture capital investments 8 1Rental income 7 3Income from the reversal of other provisions 3 6Income from service level agreements 1 2Income from the disposal of property, plant and equipment 0 4Other income 38 33Other operating income 57 49Compensation payments -10 -4Other taxes -9 -2Management fees for funds of funds -7 -5Expenses from additions to provisions -4 -4Impairments on venture capital investments and other shares in companies -4 0Losses from the disposal of property, plant and equipment -1 -1Other expenses -14 -7Other operating expenses -49 -23Other operating income and expenses, net 8 2642_Income taxesThe taxes owed or paid on income in the individual countries are recognised under Income taxes. Incometax expenses can be broken down as follows:2008 2007€ M € MCurrent taxes amount to € 43 million in total in the reporting year, which was largely attributable toOppenheim Beteiligungs-AG. This is a result of application of the minimum taxation principles of Germantax law.As a result of the significantly higher tax loss carryforwards for the Sal. Oppenheim jr. & Cie. KGaAgroup unit, there was income from deferred income taxes in continuing operations of € 69 million for theGroup in financial year 2008 (previous year: expenses in the amount of € 34 million). Impairments ondeferred tax assets due to tax loss carryforwards were reduced by € 3 million in the reporting year.The expected income tax expense, calculated on the basis of the group income tax rate of 30% for theIFRS consolidated net income before tax, can be reconciled to the actual taxes as reported in the incomestatement as follows:2008 2007€ M € MProfit/(loss) from operating activities in continuing operations -137 347Group income tax rate 30.0% 39.0%Expected income taxes on profit/(loss) from operating activities in continuing operations -41 135Effects of differences between tax rates 6 -60Effects of non-deductible operating expenses 74 35Effects of tax-exempt income -81 -123Effects of taxes from previous years recorded in the reporting year -8 4Effects of non-deductible income taxes 9 13Changes to permanent accounting-related effects -17 -1Effects of impairments and changes in recognition 26 60Effects of changes in tax rates 1 28Other effects 5 -13Income taxes from continuing operations -26 78Income taxes attributable to discontinued operations -1 0Income taxes -27 78Current taxes on income 43 44Deferred taxes from temporary differences -67 -10Deferred taxes due to changes in tax rates 1 24Deferred taxes from impairments on tax refund claims -3 20Income taxes from continuing operations -26 78Income taxes attributable to discontinued operations -1 0Total -27 78Current income taxes were calculated on the basis of tax results from financial year 2008, which, in turn,were based on the relevant country’s tax rate. Companies based in Luxembourg are subject to an overalltax rate of 29.6%. Companies based in Germany are subject to an overall tax rate of 31.7%. The overalltax rate in Switzerland is 21.2%.The effects of differing tax rates for partnerships and investment companies from the tax rate applicableto the group parent company and similar effects regarding foreign income taxes are reported accordinglyin the reconciliation.102sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 103

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsThe significant change in the effects of non-deductible income-related expenses and tax-exempt income inthe reporting year was a result of the low disposal gains and the disposal losses from equity investments.The main changes to permanent accounting-related effects result largely from the decline in other impairmentsnot recognised for tax accounting purposes in connection with equity investments. Signifi cantchanges in the effects of impairments and changes in recognition have resulted from loss carryforwardsfrom previous years recognised again.43_Discontinued operationsThe disposal presented in note 05 of Sal. Oppenheim Private Equity Partners S.A. and Sal. OppenheimPrivate Equity Partners GmbH with the majority holdings in CAM Private Equity Consulting & Verwaltungs-GmbHand VCM Capital Management GmbH constitutes a discontinued operation in accordancewith IFRS 5. The results of these companies are recognised separately as profit/(loss) from discontinuedoperations, as follows:2008 2007€ M € Mpreviously presented separately, were merged into a joint Asset Management division. At the same time,Corporate Banking und Financial Markets were combined into the Investment Banking division. Thesecond breakdown is by region; Germany, Luxembourg, Switzerland and Other/consolidation.Asset management activities are aimed primarily at high net worth private clients, small and mediumsizedcompanies, foundations and institutional clients. Besides traditional asset management and advisoryservices, the areas of financial planning, estate planning, real estate investments, private equity and familyoffice also play an important role. Institutional investor assets are managed in the form of investmentfunds, institutional funds and management mandates.Investment Banking constitutes Sal. Oppenheim’s second core business area alongside Asset Management.The target group includes SMEs, institutional and private investors, as well as the public sector. Theresults from Mergers & Acquisitions, Equity Capital Markets. Structured Finance and equity, bond andcurrency trading are summarised in this segment.The Other/consolidation segment presents group management costs, costs which cannot be clearlyallocated to individual business divisions, and the results of strategic positions (sale of equity investments,banking book), as well as the results of fund investments in Alternative Investments.Income 12 8Expenses -19 -22Pre-tax profit/(loss) from discontinued operations -7 -14Income taxes 1 0Net income/(loss) from discontinued operations -6 -14Cash flows from discontinued operations break down as follows:2008 2007€ M € MCash flow from operating activities 52 -34Cash flow from investing activities -36 044_Segment reportingThe aim of segment reporting, as required in accordance with IAS 14, is to allow better assessment of a company’sincome sources and its risks, and a differentiated appraisal of the Group’s economic performance.The segments are presented firstly by business division and then according to geographical markets.The breakdown into business divisions is based on the Sal. Oppenheim Group structure as at the end ofthe year, and reflects the type of products and services offered and the respective target client groups. Themonthly management accounts provide the basis for segment reporting.The fi rst breakdown of the segment report is by business division; Asset Management, InvestmentBanking, and Other/consolidation. The Private Banking and Asset Management divisions, which werePresentation of income components and key figuresThe results from the various business divisions were broken down into net interest income, net commissionincome, net trading income, result from hedge accounting, result from fair value option, administrativeexpenses and net other operating income and expenses in accordance with the regulations relating to consolidatednet income as set out in the IAS/IFRS standards.Provision for loan losses includes specific valuation allowances for client exposures in the respectivebusiness divisions as well as changes in general allowances for doubtful accounts.Assets and liabilities are shown at their value on the reporting date, 31 December 2008, and are allocatedto the appropriate segment.The carrying amount reported for investments accounted for using the equity method comprises thecarrying amounts reported on the balance sheet for these equity investments.Risk assets includes the assets on the balance sheet, off-balance sheet transactions and derivatives fromthe individual segments according to risk weighting.The items entailing price change risks for the respective division are presented under Market risks.Risk capital is allocated to the individual segments based on the risks of the respective transactions.The remaining equity is allocated to Other. In the individual divisions, the average equity is reported.The cost/income ratio is calculated on the basis of the ratio of administrative expenses to total operatingincome before risk provisions. Not included in the calculation are disposals of equity investmentsincluding investments in associates as well as impairments on equity investments and shares in affiliatedcompanies.The profitability of the regulatory capital corresponds to the ratio of the operating result before taxesto capital.104sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 105

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementssegment report by business divisionsegment report by business divisionAssetManagementContinuing operationsInvestmentBankingOther/consolidationTotalDiscontinuedoperationsTotaloperationsAssetManagementContinuing operationsInvestmentBankingOther/consolidationTotalDiscontinuedoperationsTotaloperations2008€ M € M € M € M € M € MNet interest income and share ofthe profit or loss of associates andjoint ventures accounted forusing the equity method 137 172 79 388 5 393Provision for loan losses -5 -4 8 -1 -1 -2Net commission income 381 138 54 573 1 574Net trading income/(loss) 13 15 -99 -71 0 -71Result from hedge accounting 0 -4 1 -3 0 -3Result from fair value option -56 -158 -7 -221 0 -221Net income/(loss) from noncurrentfinancial assets -53 7 142 96 0 96Administrative expenses -367 -297 -242 -906 -16 -922Other operating income andexpenses, net 22 14 -28 8 4 12Profit/(loss) from operatingactivities 72 -117 -92 -137 -7 -144Assets 7,163 32,407 1,797 41,367Liabilities and equity 10,556 28,031 2,780 41,367Risk assets 6,243 7,390 2,758 16,391Market risks 6 23 23 52Investments accountedfor using the equity method 66 0 126 192Equity 691 796 380 1,867Cost/income ratio 73.8% >100.0% >100.0%Pre-tax return on equity 10.4% -14.7% -6.8%2007€ M € M € M € M € M € MNet interest income and share ofthe profit or loss of associates andjoint ventures accounted forusing the equity method 170 231 -71 330 1 331Provision for loan losses -9 -12 11 -10 0 -10Net commission income 467 191 -29 629 4 633Net trading income/(loss) 28 -149 -31 -152 0 -152Result from hedge accounting 0 -1 0 -1 0 -1Result from fair value option -10 117 9 116 0 116Net income/(loss) from noncurrentfinancial assets 18 49 260 327 -10 317Administrative expenses -381 -311 -226 -918 -11 -929Other operating income andexpenses, net 24 7 -5 26 2 28Profit/(loss) from operatingactivities 307 122 -82 347 -14 333Assets 8,099 38,462 -5,471 41,090Liabilities and equity 15,654 30,890 -5,454 41,090Risk assets 6,898 11,081 -439 17,540Market risks 6 16 39 61Investments accountedfor using the equity method 32 0 112 144Equity 742 895 537 2,174Cost/income ratio 56.0 % 78.3% 91.8%Pre-tax return on equity 41.4% 13.6% 17.0 %106sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 107

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementssegment report by geographical marketssegment report by geographical marketsContinuing operationsGermany Luxembourg Switzerland Other/consolidationTotalDiscontinuedoperationsTotaloperationsContinuing operationsGermany Luxembourg Switzerland Other/consolidationTotalDiscontinuedoperationsTotaloperations2008€ M € M € M € M € M € M € M2007€ M € M € M € M € M € M € MNet interest income and share ofNet interest income and share ofthe profit or loss of associates andthe profit or loss of associates andjoint ventures accounted forjoint ventures accounted forusing the equity method 391 16 13 -32 388 5 393Provision for loan losses 1 -2 0 0 -1 -1 -2Net commission income 401 72 79 21 573 1 574Net trading income/(loss) -48 -3 17 -37 -71 0 -71Result from hedge accounting 0 0 0 -3 -3 0 -3Result from fair value option -250 -10 -1 40 -221 0 -221Net income/(loss) from non-currentfinancial assets 73 20 0 3 96 0 96Administrative expenses -679 -116 -91 -20 -906 -16 -922Other operating income and expenses, net 1 0 9 -2 8 4 12Profit/(loss) from operating activities -110 -23 26 -30 -137 -7 -144Total assets 39,941 7,050 1,090 -6,714 41,367Risk assets 15,145 1,112 505 -371 16,391Market risks 51 1 0 0 52Investments accounted for usingthe equity method 162 0 0 30 192Equity 1,340 255 181 91 1,867Cost/income ratio >100.0% >100.0% 78.5% >100.0%Pre-tax return on equity -8.3% -8.7% 13.8% -6.8%using the equity method 374 -17 13 -40 330 1 331Provision for loan losses -10 0 0 0 -10 0 -10Net commission income 430 51 103 45 629 4 633Net trading income/(loss) -171 8 9 2 -152 0 -152Result from hedge accounting -1 0 0 0 -1 0 -1Result from fair value option 143 -24 0 -3 116 0 116Net income/(loss) from non-currentfinancial assets 125 239 0 -37 327 -10 317Administrative expenses -726 -69 -95 -28 -918 -11 -929Other operating income and expenses, net 0 11 0 15 26 2 28Profit/(loss) from operating activities 164 199 30 -46 347 -14 333Total assets 37,626 7,021 1,124 -4,681 41,090Risk assets 17,816 711 998 -1,985 17,540Market risks 58 1 2 0 61Investments accounted for usingthe equity method 110 0 0 34 144Equity 1,558 317 218 81 2,174Cost/income ratio 88.5% 239.4% 76.0% 91.8 %Pre-tax return on equity 9.6% 62.7% 13.8% 17.0 %108sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 109

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements47_Positive fair values from hedge accounting2008 2007€ M € MPositive fair values from hedge accounting 47 31of which fair value hedges 47 313. Notes to the Consolidated Balance SheetTotal 47 3148_Financial assets designated at fair value through profit or loss (fair value option)45_Cash and cash equivalents2008 2007€ M € M2008 2007€ M € MBonds and other fixed-income securities 1,438 2,209Bonds and notes 1,438 2,209of public-sector issuers 0 244Cash on hand 13 8Balances with central banks 686 448Public sector debt instruments and bills of exchange eligible for refinancingwith central banks 10 19of other issuers 1,438 1,965Equities and other non-fixed income securities 329 895Equity investments 35 86Total 1,802 3,190Government bills and discount notes as well as similar public sector debt instruments 10 19Total 709 475Deferred interest in the amount of € 36 million (previous year: € 51 million) is included in Bonds.46_Assets held for trading49_Loans and advances to banks2008 2007€ M € M2008 2007€ M € MBonds and other fixed-income securities 1,058 4,175Bonds and notes 1,058 4,175of public-sector issuers 184 469of other issuers 874 3,706Equities and other non-fixed income securities 928 3,693Positive fair values from derivative financial instruments 8,531 5,591Borrower’s note loans 5 13domestic banks 255 535On demand 255 20Other loans and advances 0 515foreign banks 8,658 9,635On demand 3,143 2,179Other loans and advances 5,515 7,456Total 8,913 10,170Total 10,522 13,472Deferred interest in the amount of € 4 million (previous year: € 58 million) is included in Bonds. Furtherinformation relating to derivatives can be found in note 75.This item contains money market loans and advances to banks totalling € 2,324 million (previous year:€ 6,095 million). A breakdown of residual maturities can be found in note 74.As of the balance sheet date, there are no overdue or impaired loans and advances to banks.110sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 111

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements50_Loans and advances to customers51_Lending volume2008 2007€ M € M2008 2007€ M € Mdomestic clients 39 62Corporate clients 23 52Private clients 16 9Other clients 0 1foreign clients 7,587 7,054Corporate clients 4,710 4,077Private clients 2,734 2,923Public-sector clients 129 48Other clients 14 6Total 7,626 7,116Loans in the amount of € 319 million (previous year: € 295 million), included in Loans and advances to customers,were secured by mortgages or land charges. Note 74 contains a breakdown of residual maturities.Loans to banks 1,377 1,349Loans to customers 7,318 6,873Total 8,695 8,222In contrast to Loans and advances to banks and customers, only such loans were included for whichspecial loan agreements were concluded with the borrowers. Moreover, we do not report any repotransactions in the lending volume.52_Allowances for impairment losses on loans and advancesSpecific valuationallowancesGeneral allowances fordoubtful accountsTotal2008 2007 2008 2007 2008 2007€ M € M € M € M € M € MFor information on credit quality, loans and advances to customers can be broken down as follows:2008 2007€ M € MNeither overdue nor impaired 7,380 6,869Overdue but not impaired 1 50of which 3 to 6 months overdue 1 24of which 6 months to 1 year overdue 0 25of which more than 1 year overdue 0 1Impaired 245 197Total 7,626 7,116As at 1 January 124 125 43 34 167 159Established 14 10 11 9 25 19of which affecting net interest income 4 4 0 0 4 4Utilised -5 -8 0 0 -5 -8Reversed -5 -8 -14 0 -19 -8Reclassifications 0 1 0 0 0 1As at 31 December 132 124 40 43 172 167Provisions for loan losses are recognised under Other provisions. Total risk provision comprising allowancesfor impairment losses on loans and advances and provisions for loan losses can be broken down as follows:2008 2007€ M € MOverdue loans and advances include loans and advances that have not yet been impaired but for which thedebtor has not met contractual payment obligations. Impaired loans and advances include those loans andadvances recorded at the loan amount granted, for which specific valuation allowances were made on thereporting date taking collateral received into account. Information on the amount of the allowances forimpairment losses as well as the collateral received can be found in the details on allowances for impairmentlosses on loans and advances in note 52.Allowances for impairment losses on loans and advances 172 167Loans and advances to banks 6 6Loans and advances to customers 164 161Non-current financial assets 2 0Provisions for loan losses 2 7Total 174 174112sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 113

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsOverall, collateral was pledged in the form of cash contributions, securities and security interests in landwith a total value of € 66 million (previous year € 40 million), which was considered as risk-reducing incalculating the provision for loan losses.53_Maximum credit risk exposureCollateral received such as cash and securities or other credit enhancements such as guarantees, indemnitiesor netting agreements are not taken into account in calculating the maximum exposure to credit risk inaccordance with IFRS 7.36 (a). The on-balance sheet items are recognised at carrying amount, while theoff-balance sheet items are recognised at the maximum amount of possible utilisation.2008 2007€ M € MLoans and receivables 23,583 17,28654_Non-current financial assets2008 2007€ M € MBonds and other fixed-income securities 8,758 3,918Bonds and notes 8,758 3,918of public-sector issuers 862 332of other issuers 7,896 3,586Equities and other non-fixed income securities 118 383Equity investments 573 845Shares in affiliated companies (non-consolidated) 37 47Investment property 187 194Total 9,673 5,387Loans and advances to banks 8,913 10,170Loans and advances to customers 7,626 7,116Non-current financial assets 7,044 0Financial assets held for trading 10,522 13,472Assets held for trading 10,522 13,472Hedge accounting derivatives 47 31Fair value option 1,802 3,190Financial assets designated at fair value through profit or loss 1,802 3,190Available-for-sale financial assets 2,442 5,181Non-current financial assets 2,405 5,146of which carried at amortised cost 391 319of which carried at fair value 2,014 4,827Other assets 37 35Financial guarantees 416 214Contingent liabilities from guarantees and indemnity agreements 1,130 1,564Irrevocable loan commitments 2,017 2,270Non-current assets held for sale (IFRS 5) 594 0Total 42,553 43,208Of bonds and other fixed-income securities, € 7,044 million are carried at amortised cost for the first time.This item includes securities for which there was no active market upon acquisition, as well as securitiespreviously recognised under Assets held for trading or Non-current financial assets at fair value which werereclassified during the financial markets crisis. Further information on this subject is provided in note 73Disclosures on financial instruments.Of equities and other non-fixed income securities, no securities (previous year € 2 million) are carriedat amortised cost.Of equity investments and shares in affiliated companies, € 428 million (previous year € 364 million)are carried at cost. These are shares in partnerships and non-listed companies for which a fair value cannotbe reliably determined.The development of equity investments and shares in affi liated companies is presented in the tableunder note 58, and a breakdown of residual maturities in note 74.In connection with investment property which generated rental income during the reporting period,directly attributable expenses were recorded through profit or loss in the amount of € 1 million.For information on credit quality, non-current financial assets can be broken down as follows:2008 2007Further notes on the calculation and internal management of credit risk as well as credit quality of financialassets are presented in the risk report within the management report. Moreover, information on creditquality can be found in note 49 Loans and advances to banks, note 50 Loans and advances to customers,note 52 Allowances for impairment losses on loans and advances as well as note 54 Non-current financialassets.€ M € MNeither overdue nor impaired 9,266 5,147Impaired 407 240Total 9,673 5,387114sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 115

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsConcerning the requirement to establish allowances for impairment losses, we refer to the information onnon-current financial assets in note 14.55_Investments accounted for using the equity method57_Intangible assetsIntangible assets can be broken down as follows:2008 2007€ M € M2008 2007€ M € MInvestments in associates 124 116Investments in joint ventures 68 28Total 192 144Investments accounted for using the equity method contains goodwill from equity accounting, unchangedfrom the previous year in the amount of € 17 million.Goodwill 186 203Purchased software 36 25Assets under construction 29 15Payments on account 9 1Leased assets (finance leases) 3 3Internally generated software 3 2Client bases 0 55Total 266 30456_Property, plant and equipmentThe changes in intangible assets can be seen in the table in note 58.2008 2007€ M € MGoodwill from investments accounted for using the equity method was reported under Investmentsaccounted for using the equity method.Land and premises 351 256Operating and office equipment 81 57Assets under construction 57 1Leased assets (finance leases) 1 8Total 490 322The majority of land and premises reported under this item are used for banking business. The changes inproperty, plant and equipment are presented in the table in note 58.In the context of existing finance lease agreements, depreciation on capitalised leased assets at € 2 million(previous year: € 5 million) was recognised in the reporting year.All goodwill was subject to an impairment test in the reporting year in accordance with IAS 36. The testswere carried out at the level of the smallest cash-generating unit on the basis of value in use. There was noneed for impairment.The changes to goodwill were largely a result of the acquisition of SGG Corporate Services S.A. Goodwillfrom the full consolidation of CAM Private Equity Consulting & Verwaltungs-GmbH and VCM CapitalManagement GmbH is recognised under assets from discontinued operations. The same applies to clientbase assets resulting from the full consolidation of CAM Private Equity Consulting & Verwaltungs-GmbHand VCM Capital Management GmbH. Please refer to note 61.116sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 117

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements58_Statement of Changes in Non-current AssetsThe changes in non-current financial assets, property, plant and equipment and intangible assets can besummarised as:Equity investmentsShares inaffi liatedcompaniesInvestmentsaccounted forusing theequity methodInvestmentpropertyLand and premisesfor own useOperating andoffi ceequipmentOther property, plant andequipmentGoodwillfromfull consolidationPurchased softwareAssets under construction(Intangible assets)Other intangibleassets€ M € M € M € M € M € M € M € M € M € M € MCostAs at 1 January 2008 740 50 110 194 278 177 17 218 133 15 66Changes in shareholdings andthe scope of consolidated financial statements -200 0 222 0 0 2 0 30 0 0 0Additions 665 1 8 9 96 42 63 62 14 29 11Disposals -281 0 -24 -13 0 -10 -21 -6 -6 -2 -4Reclassifications -168 -4 -189 0 0 -1 0 -113 13 -13 -57Foreign currency translation 0 0 0 0 3 2 0 0 0 0 0As at 31 December 2008 756 47 127 190 377 212 59 191 154 29 16Reversal of impairment losses (+)/Depreciation, amortisation and impairments (-)As at 1 January 2008 105 -3 34 0 -22 -120 -8 -15 -108 0 -5Changes in shareholdings andthe scope of consolidated financial statements -163 0 68 0 0 -1 0 0 0 0 0Current depreciation, amortisation and impairment -142 -7 -11 -3 -4 -18 -2 0 -13 0 -7Current reversal of impairment losses 9 0 42 0 0 0 0 0 0 0 0Disposals 6 0 0 0 0 9 9 0 3 0 2Reclassifications 2 0 -68 0 0 0 0 10 0 0 9Foreign currency translation 0 0 0 0 0 -1 0 0 0 0 0As at 31 December 2008 -183 -10 65 -3 -26 -131 -1 -5 -118 0 -1Carrying amount as at 1 January 2008 845 47 144 194 256 57 9 203 25 15 61Carrying amount as at 31 December 2008 573 37 192 187 351 81 58 186 36 29 15The amounts reported under “Reclassifications” were primarily recognised under “Non-current assets held for sale” (in accordance with IFRS 5).118sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 119

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements59_Income tax assetsIncome tax assets can be broken down as follows:60_Other assetsOther assets comprises the following items in particular:2008 2007€ M € M2008 2007€ M € MCurrent income tax assets 191 154Deferred income tax assets 284 227Deferred tax assets 168 162Deferred tax assets from unused tax loss carryforwards 116 65Total 475 381Reimbursement claims from other taxes 61 17Surplus from IAS 19 (pension provisions) 44 9Other shares in companies 37 35Deferred income 34 15Income not yet distributed from partnerships 5 0Other 49 189The deferred income tax assets, or liabilities, offset against the revaluation surplus and revenue reservesamounted to € -13 million in the reporting year (previous year: € 7 million). No deferred income tax assetswere reported for loss carryforwards for corporate income tax, which amounted to € 336 million (previousyear: € 143 million), or trade tax loss carryforwards, which amounted to € 123 million (previous year:€ 83 million) because a realisation was not considered to be sufficiently warranted. This concerns lossesfrom Organgesellschaften (affiliated companies for tax consolidation) not currently offsettable in tax termsin the amount of € 2 million (previous year: € 1 million) and tax losses in the amount of € 457 million(previous year: € 225 million) from group companies which will not report positive tax results at all, ornot enough, in the foreseeable future due to their earnings structures.The deferred tax assets relate to the following items:Total 230 265Other shares in companies are allocated to available-for-sale assets and are carried at amortised cost. These areshares in partnerships and non-listed companies for which a fair value cannot be reliably determined. Other sharesin companies includes venture capital and private equity investments in the amount of € 19 million (previousyear: € 23 million).In the previous year, Other included receivables from the disposal of Deutsche Hypothekenbank (Actien-Gesellschaft), Hanover, in the amount of € 121 million.61_Non-current assets held for sale and assets from discontinued operations2008 2007€ M € M2008 2007€ M € MAssets/liabilities held for trading 51 71Financial assets designated at fair value through profit or loss (fair value option) 17 13Loans and advances and allowances for impairment losses on loans and advances 6 6Non-current financial assets 18 28Other assets 1 7Deposits from banks 1 0Deposits from customers 7 4Negative fair values from hedge accounting 46 6Provisions 20 27Other liabilities 1 0Tax loss carryforwards 116 65Total 284 227Non-current assets held for sale 391 0Assets from discontinued operations 203 0Loans and advances to banks 5 0Non-current financial assets 32 0Intangible assets 153 0Income tax assets 2 0Other assets 11 0Total 594 0The non-current assets held for sale largely relate to IVG Immobilien AG, Bonn (€ 257 million) andARCANDOR Aktiengesellschaft, Essen (€ 134 million).120sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 121

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements62_Liabilities held for trading65_Deposits from customers2008 2007€ M € M2008 2007€ M € MNegative fair values from derivative financial instruments 8,922 5,700Interest-related transactions 2,567 1,648Currency-related transactions 1,624 712Equity/equity index-related transactions 4,705 3,340Loan-related transactions 15 0Savings deposits 2 3With agreed period of notice of 3 months 2 2With agreed period of notice of more than 3 months 0 1Other deposits from customers 18,749 19,611Total 18,751 19,614Other transactions 11 0Bonds and notes issued 1,425 6,611Delivery obligations under short sales 165 128Total 10,512 12,439Other liabilities can be broken down as follows:Other liabilities63_Negative fair values from hedge accounting2008 2007€ M € M2008 2007€ M € MNegative fair values from hedge accounting 145 17of which fair value hedges 145 17Total 145 1764_Deposits from banksdomestic clients 2,326 3,186Corporate clients 2,298 3,169Private clients 28 17foreign clients 16,423 16,425Corporate clients 11,566 12,768Private clients 4,021 3,356Public-sector clients 680 212Other 156 89Total 18,749 19,6112008 2007€ M € MNote 74 includes a breakdown of residual maturities.domestic banks 198 933On demand 9 30With agreed term or period of notice 189 903foreign banks 8,464 4,273On demand 2,967 1,184With agreed term or period of notice 5,497 3,089Total 8,662 5,206Deposits from banks contains money market liabilities totalling € 503 million (previous year: € 2,067million). A breakdown of residual maturities can be found in note 74.122sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 123

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements66_Debt securities2008 2007of a salary sacrifice scheme. The value of pensions paid to employees entitled to benefits is based on theterms in the pension agreement.€ M € MBonds and notes issued 413 669Own acceptances and promissory notes outstanding 7 7Total 420 676Plan assets exist in the form of assets from Sal. Oppenheim Treuhand e.V. and BHF-BANK Versorgungsvereine.V., BHF Pension Trust e.V. and the staff pension foundation of Bank Sal. Oppenheim jr. & Cie.(Schweiz) AG.2008 2007€ M € MA breakdown of residual maturities can be found in note 74.67_Provisions2008 2007€ M € MProvisions for pensions and similar commitments 51 48Other provisions 29 37Total 80 85Breakdown of provisions for pensions and similar commitmentsThe value for Provisions for pensions and similar commitments reported in the balance sheet is derivedas follows:2008 2007€ M € MDefined benefit obligation (DBO) at beginning of year 382 372Change in the scope of consolidated financial statements 0 0Current service cost 13 11Past service cost 0 0Interest cost 16 14Plan participants contribution 5 9Actuarial gains -25 -19Benefits paid -24 -10Amortisation -3 -1Transfers 2 8Exchange rate differences 8 -2Defined benefit obligation (DBO) at year end 374 382Fair value of plan assets2008 2007€ M € MPresent value of the defined benefit plan not financed via a fund 46 48Present value of benefit obligations fully or partly financed via a fund 328 334Fair value of plan assets -367 -343Net pension liabilities 7 39Surplus in pension plans 44 9Recognised pension liabilities 51 48Pension benefit obligations without external funding are covered by internal assets.Changes in the present value of pensions and similar commitmentsProvisions for pensions and similar commitments relates primarily to provisions for occupational pensionbenefi ts under book reserve schemes. This item also includes benefi t entitlements of employees ofSal. Oppenheim jr. & Cie. KGaA and some German subsidiaries which are accrued within the frameworkFair value at beginning of year 343 313Expected return on plan assets 15 13Actuarial losses -3 -9Contributions to plan assets: Employer contributions 21 16Contributions to plan assets: Plan participants’ contributions 5 11Benefits paid -20 -6Amortisation -2 0Settlements 1 7Exchange rate differences 7 -2Fair value at year end 367 343Actual return on plan assets was € 18 million (previous year: € 4 million).124sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 125

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsPension costs for the current yearThe components of net periodic pension costs are as follows:The trend analysis produces the following results:2008 2007 2006 20052008 2007€ M € M € M € M€ M € MDefined benefit obligation (DBO) 374 382 372 238Current service cost 13 11Past service cost 0 0Interest cost 16 14Expected return on plan assets -15 -13Amortisation -1 -1Net periodic pension costs 13 11Less: fair value of plan assets -367 -343 -313 -104Unfunded benefit obligation 7 39 59 134Surplus in pension plans 44 9 0 0Recognised pension liabilities 51 48 59 134Other provisionsTotal pension costs are reported under Personnel expenses.The composition of plan assetsThe plan assets of the Versorgungsverein are composed of the following asset classes:01.01.2008 Established Change inthe scope ofconsolidatedfinancialstatementsUtilised Reclassification Reversed 31.12.2008€ M € M € M € M € M € M € M2008 2007€ M € MProvisions for loan losses 7 0 0 0 0 -5 2Provisions in Human ResourcesPart-time retirement provisions 2 0 0 0 0 -1 1Cash assets 42 19Equities and non-fixed income securities (including investment funds) 232 231Bonds and other fixed-income securities 44 44Land 26 25Other assets 23 24Total 367 343Anniversary provisions 2 0 0 0 2 -2 2Other provisionsRestructuring 3 0 0 0 0 0 3Legal risks 4 4 0 0 0 -1 7Other provisions 19 8 0 -10 0 -3 14Total 37 12 0 -10 2 -12 29At the time of reporting, there were no plans to create further plan assets in 2009.68_Income tax liabilitiesIncome tax liabilities can be broken down as follows:2008 2007€ M € MCurrent income tax liabilities 68 66Income tax liabilities due to tax offices 68 66Deferred income tax liabilities 167 181Deferred tax liabilities 167 181Total 235 247126sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 127

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsThe deferred tax liabilities relate to the following items:2008 2007€ M € MLiabilities from finance lease agreementsThe liabilities from finance lease agreements relate to agreements for leased hardware and software. Thetable contains a breakdown by term for the minimum lease payments and their respective present values:Assets/liabilities held for trading 1 1Financial assets designated at fair value through profit or loss (fair value option) 11 87Loans and advances and allowances for impairment losses on loans and advances 1 1Positive fair values from hedge accounting 15 10Non-current financial assets 76 18Property, plant and equipment 19 21Intangible assets 2 19Other assets 7 3Deposits from banks 0 1Debt securities 6 1Provisions 20 6Other liabilities 8 5Deferred tax liabilities relating to future intra-group dividends 0 1Other 1 7Total 167 181Sum of futureminimum leasepaymentsPresent valuesof future leasepayments2008 2007 2008 2007€ M € M € M € MUp to one year 2 2 2 2Over one year, up to five years 1 9 1 8Total 3 11 3 10In 2007, the difference between the total minimum lease payments as at the balance sheet date andtheir present value corresponds to the interest portion of the minimum lease payments, amountingto € 1 million.70_Liabilities from discontinued operationsLiabilities from discontinued operations break down as follows:2008 2007€ -13 million (previous year: € 7 million) of deferred income tax assets or liabilities were recognised directlyin equity (revaluation surplus and revenue reserves).69_Other liabilitiesOther liabilities comprises the following items in particular:2008 2007€ M € MDeposits from banks 62 0Deposits from customers 2 0Income tax liabilities 16 0Other liabilities 11 0Total 91 0€ M € MMinority interests designated as debt 138 76Liabilities from Human Resources 49 91Liabilities from other taxes 36 39Accruals 21 33Non-received income from non-incorporated companies 14 9Deferred income 12 10Liabilities from finance lease agreements 3 10Other 124 178Total 397 446128sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 129

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements71_Subordinated capitalThe subordinated capital in the amount of € 207 million (previous year € 186 million) continues to consistsolely of subordinated liabilities. These are attributable in the full amount to BHF-BANK AG. Interestexpense for subordinated loans amounted to € 9 million (previous year: € 9 million); of which € 7 million(previous year: € 7 million) are attributable to deferred interest.72_EquityIssued capitalShare capital was increased by € 50 million to € 750 million. It is divided into 7,500,000 registered no-parvalue shares. A further 1,500,000 shares are not yet paid-up. Any transfer of the shares is subject to approvalby the Company; the personally liable partners are responsible for granting this approval by meansof a unanimous decision. Each share represents one vote at the General Meeting. In addition to sharecapital, there are silent holdings of € 200 million.Capital reserveThe Capital reserve is the result of payments made by the shareholders to strengthen the equity base. Itremained unchanged year-on-year at € 200 million.Revenue reservesRevenue reserves are solely composed of Other revenue reserves. They are largely a result of retained earnings,as well as of actuarial gains and losses from defined benefit plans which have been recognised in Otherrevenue reserves since 2006 in accordance with IAS 19.Revaluation surplusThe results from the fair value measurement of available-for-sale fi nancial instruments are recognised inrevaluation surplus. Any related deferred taxes are also reported under this item. Gains and losses are onlyrecognised in the income statement at the time of a disposal or impairment.Revaluation surplus developed as follows:2008 2007€ M € MAs at 1 January 125 69Fluctuations in fair value -300 134Impairments 57 -35Disposals 54 -55Net changes from deferred taxes -7 12As at 31 December -71 125Foreign currency translationThe foreign currency translation reserve is the result of gains and losses from translation in the context ofcapital consolidation. Currency translation effects in the reporting year led to an increase in the foreigncurrency translation reserve from € -9 million to € 4 million.consolidated statement of changes in equityfor the sal. oppenheim jr. & cie. s.c.a. group, luxembourg, for the period from 1 january until 31 december 2008IssuedcapitalCapitalreserveRevenuereservesRevaluationsurplusForeigncurrencytranslationreserveNet income/(loss)for the periodafter share of theprofit attributableto minorityinterestsMinorityinterests€ M € M € M € M € M € M € M € Mequity as at 1 january 2008 900 200 692 125 -9 250 16 2,174Net income/(loss) for the period 0 0 0 0 0 -130 13 -117Dividends 0 0 0 0 0 -80 0 -80Income and expensesrecognised directlyin equity 0 0 15 -196 13 0 0 -168Changes in shareholdingsand the scope of consolidatedfinancial statements 0 0 -3 0 0 0 13 10Other appropriation 50 0 170 0 0 -170 -2 48equity as at 31 december 2008 950 200 874 -71 4 -130 40 1,867Of which: Equity fromdiscontinued operations 0 0 -11 -2 0 -6 0 -19Total130sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 131

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsconsolidated statement of changes in equityfor the sal. oppenheim jr. & cie. s.c.a. group, luxembourg, for the period from 1 january until 31 december 2007IssuedcapitalCapitalreserveRevenuereservesRevaluationsurplusForeigncurrencytranslationreserveNet income/(loss)for the periodafter share of theprofit attributableto minorityinterestsMinorityinterests€ M € M € M € M € M € M € M € Mequity as at 1 january 2007 900 200 525 69 -3 234 10 1,935Net income/(loss) for the period 0 0 0 0 0 250 5 255Dividends 0 0 0 0 0 -70 0 -70Income and expensesrecognised directlyin equity 0 0 6 56 -6 0 0 56Changes in shareholdingsand the scope of consolidatedfinancial statements 0 0 -3 0 0 0 5 2Other appropriation 0 0 164 0 0 -164 -4 -4equity as at 31 december 2007 900 200 692 125 -9 250 16 2,174Total73_Disclosures on financial instrumentsFair values of financial instrumentsnThe fair value is the amount for which an asset could be exchanged or a liability settled between knowledgeable,willing parties in an arm’s length transaction. Trading prices and similar market prices are used,as far as they are available, for the calculation of the fair value. Internal calculation methods with currentmarket parameters were used where trading prices were not available.When assessing the accounting policies for financial instruments, it is of relevance whether there is anactive market for the instruments. In accordance with IAS 39.AG71, a financial instrument is regarded asquoted in an active market if quoted prices are readily and regularly available from an exchange, dealer,broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularlyoccurring market transactions on an arm’s length basis. If these criteria are not met, the market is inactive.There are no liquid markets for loans and deposits carried at amortised cost. For short-term loans anddeposits, it is assumed that the fair value is equal to the book value. For all other loans and deposits, the fairvalue is calculated by discounting the future cash flows defined in the agreements. In this case, interest ratesequal to those that would be agreed for loans with the same risk structure, original currency and maturityapply to the loans. The interest rates offered in the interbank market are used for deposits.For shares in partnerships and non-listed companies, it is assumed that the book value is equal to thefair value. A reliable calculation of the fair value would only be possible within the framework of salesnegotiations.Quoted market prices are used for exchange-traded securities and derivatives. The fair value of othersecurities is calculated as the present value of the expected future cash flow.Because there were no active or liquid markets available for many securities due to the financial marketcrisis, model prices were used for them. This was the case for asset-backed securities in particular, but alsofor certain corporate bonds and certain subordinated bonds.The model price was calculated on the basis of the discounted cash flow method. For this purpose,credit spreads derived from market data were added to the risk-free rate. The credit spreads for Europeanasset-backed securities were derived from historical default rates. The deterioration of the market in 2008was taken fully into consideration here. In addition to credit spreads, liquidity spreads for securities heldfor trading and available for sale were used. Different credit spreads were used according to rating or industry.US asset-backed securities were also measured using the DCF procedure of an external provider. Thiswas based on conservative assumptions and a standard market system. This approach was reviewed bygroup risk control and deemed appropriate.For corporate and subordinated bonds, market quotes were used in the case of an active market, andmodel prices if the market was inactive. Credit spreads were derived from CDS spreads in any modelprices calculated, and if the securities were classified as held-for-trading or available-for-sale, there was anadditional mark-up of liquidity spreads on the credit spreads.132sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 133

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsThe fair values of interest rate and cross-currency swaps, and interest rate forward transactions are calculatedon the basis of discounted cash flows. Prevailing market rates for the time to maturity of the financialinstruments are used as discount rates. The fair value of currency forward transactions is determined onthe basis of current forward rates.Options are measured using recognised option pricing methods and models. Such procedures are generallybased on the estimated future cash flows from the financial instrument, taking into account any riskfactors. A wide range of valuation parameters are factored into a model to enable the accurate forecastingof future cash flows. The most important factors are the prices of the underlyings, yield curves, impliedvolatilities, dividend forecasts and correlations. These valuation parameters may be observed directly onthe markets, derived from the quoted market prices of financial derivatives by applying no-arbitrage conditions,or determined on the basis of the historical price performance of financial products.In the determination of the fair value of the liabilities held for trading, the Sal. Oppenheim creditspread was included in the underlying valuation parameters.Fair value Book value Deviation2008 2007 2008 2007 2008 2007€ M € M € M € M € M € MassetsCash and cash equivalents 709 475 709 475 0 0Assets held for trading 10,522 13,472 10,522 13,472 0 0Positive fair values from hedge accounting 47 31 47 31 0 0Financial assets designated at fair valuethrough profit or loss (fair value option) 1,802 3,190 1,802 3,190 0 0Loans and advances to banks 8,881 10,169 8,913 10,170 -32 -1Loans and receivables unhedged 8,881 10,169 8,913 10,170 -32 -1Loans and advances to customers 7,632 7,151 7,626 7,116 6 35Loans and receivables unhedged 7,632 7,151 7,626 7,116 6 35Non-current financial assets 9,662 5,387 9,673 5,387 -11 0carried at fair value 2,014 4,827 2,014 4,827 0 0carried at amortised cost 7,648 560 7,659 560 -11 0liabilities and equityLiabilities held for trading 10,512 12,439 10,512 12,439 0 0Negative fair values from hedge accounting 145 17 145 17 0 0Deposits from banks 8,666 5,206 8,662 5,206 4 0Other liabilities unhedged 8,319 4,779 8,315 4,779 4 0Other liabilities hedged 347 427 347 427 0 0Deposits from customers 18,789 19,593 18,751 19,614 38 -21Other liabilities unhedged 18,098 18,750 18,060 18,771 38 -21Other liabilities hedged 691 843 691 843 0 0Debt securities 420 676 420 676 0 0Other liabilities unhedged 420 676 420 676 0 0Subordinated capital 207 186 207 186 0 0Other liabilities hedged 207 186 207 186 0 0134sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 135

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsNet gains/(losses) on financial instruments by categoryThe following table shows the breakdown of individual income components from financial instrumentsinto the categories in accordance with IAS 39:The amount recognised directly in equity (revaluation surplus) due to changes in the fair value, and theamount removed from equity this financial year and recognised in profit or loss, can be seen in the consolidatedstatement of recognised income and expense.2008Financialinstrumentsheld fortradingFair valueoptionLoansandreceivablesAvailablefor-salefinancialinstrumentsOtherliabilitiesTotal€ M € M € M € M € M € MNet interest income 3 104 853 162 -962 160Provision for loan losses 0 0 -1 0 0 -1Net trading income -71 0 0 0 0 -71Result from fair value option 0 -221 0 0 0 -221Net income/(loss) from non-current financial assets 0 0 -8 -137 0 -145Other operating income and expenses, net 0 0 0 8 0 8Total -68 -117 844 33 -962 -2702007Financialinstrumentsheld fortradingFair valueoptionLoansandreceivablesAvailablefor-salefinancialinstrumentsOtherliabilitiesTotal€ M € M € M € M € M € MDisclosures on reclassified financial instrumentsIASB amendments to IAS 39 and IFRS 7 concerning reclassifications of financial assets and their disclosurewere passed by the IASB on 13 October 2008 and came into effect on 17 October 2008. In accordancewith these amendments, reclassifications of non-derivative financial assets out of the categories Held-fortradingor Available-for-sale are possible under certain circumstances. Please refer to note 07 Financialinstruments regarding the conditions for reclassification and associated recognition.The Sal. Oppenheim Group exercised this option and reclassified bonds from the non-current financialassets of BHF-BANK AG with retroactive effect from 1 July 2008. In addition, bonds from the held-fortradingcategory at BHF-BANK AG were reclassifi ed as of 30 October 2008, with some then used forhedge accounting purposes.Reclassifi cation of bonds from held for trading to available for sale requires the existence of a ‘rarecircumstance’ in addition to no further intention of trading. The international financial crisis, which hasbeen worsening since Q3 2008, meets the rare circumstance criterion.In order for bonds to be reclassified as loans and receivables, there must be a change in the intentionto hold these bonds. They are now held for a longer period or for the foreseeable future, and at the timeof reclassification they are no longer traded on an active market in our view.Net interest income -116 122 741 389 -890 246Provision for loan losses 0 0 -9 0 0 -9Net trading income -152 0 0 0 0 -152Result from fair value option 0 116 0 0 0 116Net income/(loss) from non-current financial assets 0 0 0 52 0 52Other operating income and expenses, net 0 0 0 1 0 1Total -268 238 732 442 -890 254Interest and dividend payments relating to financial assets and liabilities held for trading, less refinancingcosts, are recognised under Net trading income. Interest and dividend payments relating to assets and liabilitieswhich were allocated to the fair value option category upon initial recognition are included underNet interest income.Available-for-sale financial instruments are recognised under Non-current financial assets; the net gainsor losses on these financial instruments are included in Net income/(loss) from non-current financial assets.Venture capital investments and other shares in companies, which are also classified as available-for-salefinancial instruments, are included in Other assets. The net gains/losses on these shares in companies areincluded in Other operating income and expenses, net.136sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 137

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsThe reclassified amounts at the time of reclassification and their book value and fair value as of 31 December2008 are listed in the following table:ReclassifiedamountDisposals* Book value Fair value€ M € M € M € MLoans and advances to banks74_Maturity structure (according to residual maturities)2008 2007€ M € MReclassified assets held for trading 2,792 0 2,824 2,829From financial assets held for trading to available-for-sale financial assets 194 0 196 196From financial assets held for trading to loans and receivables 2,598 0 2,628 2,633Reclassified non-current financial assets 2,887 102 2,794 2,794From available-for-sale financial assets to loans and receivables 2,887 102 2,794 2,794Total 5,679 102 5,618 5,623*Bullet bondsThe measurement effects resulting from the amounts reclassified in 2008 for the income statement and/or the change in revaluation surplus prior to the reclassification and for 2008 as a whole are presented inthe following table.The columns labelled hypothetical contain amounts which would have appeared on the income statementor under Revaluation surplus if the respective bonds allocated to the held-for-trading or availablefor-salecategories had not been reclassified.01.01.2008reclassificationIncome statementTotal2008Hypothetical2008Revaluation surplus (change)01.01.2008reclassificationTotal2008Hypothetical2008€ M € M € M € M € M € MReclassified assets held for trading 52 84 89 0 0 0From financial assets held for trading toavailable-for-sale financial assets 6 8 8 0 0 0From financial assets held for tradingto loans and receivables 46 76 81 0 0 0Reclassified non-current financial assets 0 2 3 -32 -25 -25From available-for-sale financial assets toloans and receivables 0 2 3 -32 -25 -25Total 52 86 92 -32 -25 -25On demand 3,398 2,199Up to 3 months 5,197 7,499More than 3 months and up to 1 year 222 346More than 1 year and up to 5 years 86 113More than 5 years 10 13Total loans and advances to banks 8,913 10,170Loans and advances to customersOn demand 1,806 1,664Up to 3 months 2,255 1,787More than 3 months and up to 1 year 1,013 1,043More than 1 year and up to 5 years 1,469 1,864More than 5 years 1,083 758Total loans and advances to customers 7,626 7,116Bonds and notes of public-sector and other issuers*Up to 3 months 803 171More than 3 months and up to 1 year 948 220More than 1 year and up to 5 years 5,528 2,540More than 5 years 1,479 987Total bonds and notes of public-sector and other issuers 8,758 3,918Deposits from banksOn demand 2,976 1,214Up to 3 months 5,003 3,396More than 3 months and up to 1 year 567 106More than 1 year and up to 5 years 88 456More than 5 years 28 34Total deposits from banks 8,662 5,206*Non-current financial assets only.138sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 139

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements75_Derivative transactionsThe following table shows the respective notional amounts and fair values of OTC and exchange-tradedderivatives:2008 2007€ M € MNotional amountsResidual maturityNotional amounts< 1 year 1-5 years > 5 years Total 2008 Total 2007€ M € M € M € M € MDeposits from customersOn demand 10,704 11,728Up to 3 months 5,650 6,186More than 3 months and up to 1 year 1,670 403More than 1 year and up to 5 years 201 551More than 5 years 526 746Total deposits from customers 18,751 19,614Debt securitiesUp to 3 months 420 676More than 3 months and up to 1 year 0 0More than 1 year and up to 5 years 0 0Total debt securities 420 676Subordinated capitalUp to 3 months 7 7More than 5 years 200 179Total subordinated capital 207 186interest-related transactionsOTC productsForward rate agreements 4,246 100 0 4,346 1,972Interest rate swaps 36,734 57,625 28,884 123,243 151,104Interest rate options – purchases 597 3,566 942 5,105 6,024Interest rate options – sales 1,012 3,198 514 4,724 6,671Exchange-traded productsInterest rate futures 7,298 485 0 7,783 22,904Interest rate options 2,200 0 0 2,200 14,100Total interest-related transactions 52,087 64,974 30,340 147,401 202,775currency-related transactionsOTC productsCurrency forward transactions 25,237 2,814 114 28,165 33,053Cross-currency swaps 355 74 0 429 578Currency options – purchases 5,195 1,337 0 6,532 5,062Currency options – sales 4,952 1,255 2 6,209 5,108Other currency-related derivatives 8 0 0 8 0Total currency-related transactions 35,747 5,480 116 41,343 43,801equity/index-related transactionsOTC productsEquity/index swaps 0 0 0 0 1Equity/index options – purchases 2,303 2,821 0 5,124 3,885Equity/index options – sales 2,104 3,003 0 5,107 7,764Other equity/index-related contracts 6 37 0 43 27Exchange-traded productsEquity/index futures 1,027 4 0 1,031 763Equity/index options 31,648 16,415 277 48,340 52,492Total equity/index-related transactions 37,088 22,280 277 59,645 64,932loan-related transactionsOTC productsCredit default swaps 40 1,933 0 1,973 0Total loan-related transactions 40 1,933 0 1,973 0other transactionsOTC productsPrecious metal transactions 195 0 0 195 0Other transactions 1 0 0 1 792Exchange-traded productsFutures 123 0 0 123 71Options 0 0 0 0 0Total other transactions 319 0 0 319 863Total financial derivatives 125,281 94,667 30,733 250,681 312,371140sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 141

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsFair values2008Fair values2007Positive Negative Positive Negative€ M € M € M € Minterest-related transactionsOTC productsForward rate agreements 1 2 1 1Interest rate swaps 2,375 2,617 1,581 1,600Interest rate options – purchases 90 0 50 0Interest rate options – sales 0 90 0 53Exchange-traded productsInterest rate futures 7 7 9 7Interest rate options 1 1 1 1Total interest-related transactions 2,474 2,717 1,642 1,662currency-related transactionsOTC productsCurrency forward transactions 1,111 1,248 494 561Cross-currency swaps 67 0 22 0Currency options – purchases 407 0 184 0Currency options – sales 0 384 0 157Other currency-related derivatives 0 0 0 0Total currency-related transactions 1,585 1,632 700 718equity/index-related transactionsOTC productsEquity/index swaps 0 0 0 0Equity/index options – purchases 1,315 0 730 31Equity/index options – sales 0 1,186 0 977Other equity/index-related contracts 9 2 0 1Exchange-traded productsEquity/index futures 10 46 4 11Equity/index options 3,152 3,459 2,543 2,311Total equity/index-related transactions 4,486 4,693 3,277 3,331loan-related transactionsOTC productsCredit default swaps 22 14 0 0Total loan-related transactions 22 14 0 0other transactionsOTC productsPrecious metal transactions 5 5 0 0Other transactions 0 0 1 4Exchange-traded productsFutures 6 6 0 0Options 0 0 2 2Total other transactions 11 11 3 6Total financial derivatives 8,578 9,067 5,622 5,717The positive and negative fair values break down according to counterparty as follows:Positive fair valueNegative fair value2008 2007 2008 2007€ M € M € M € Moecd counterparties 8,575 5,619 9,049 5,712Central governments 5 0 0 16Banks and other financial institutions 8,276 5,486 8,234 5,471Other 294 133 815 225non-oecd counterparties 3 3 18 5Banks and other financial institutions 1 3 13 3Other 2 0 5 2Total 8,578 5,622 9,067 5,71776_Repurchase agreements with a buy-back commitment (echte Pensionsgeschäfte)Within the framework of repurchase agreements with a buy-back commitment (echte Pensionsgeschäfte),the Sal. Oppenheim Group sells or buys securities with a repurchase or return obligation. The cash receivedfrom repo agreements in which the Sal. Oppenheim Group was the borrower (repurchase obligation forthe securities) is reported under Deposits from banks or customers.The securities sold are all measured at fair value and are fully attributable to bonds and other fixedincomesecurities.The following tables show the repurchase agreements concluded as at the balance sheet date, alongwith the resulting assets and liabilities recognised.2008 2007€ M € Mrepo agreementsCarrying amount of securities sold 35 463of which bonds held for trading 0 0of which fair value option bonds 20 136of which available-for-sale bonds 0 327of which loans and receivables bonds 15 0Carrying amount of associated liabilities 47 475Deposits from banks 32 439Deposits from customers 15 36142sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 143

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements2008 2007€ M € Mreverse repo agreementsCarrying amount of securities purchased 4,103 2,861of which equitie 0 243of which bonds 4,103 2,618Carrying amount of associated assets 4,103 2,861Loans and advances to banks 4,103 2,760Loans and advances to customers 0 10177_Securities lendingSecurities lending transactions are undertaken with other banks and customers to fulfil delivery obligationsor to be able to effect repurchase agreements in the money market.Securities which on the balance sheet date were lent in connection with securities lending transactionswere reported under Assets held for trading or Non-current financial assets at their respective fair values.In accordance with IAS 39, securities borrowed within the framework of securities lending transactionsare not recognised in our consolidated balance sheet.Income and expenses resulting from securities lending transactions are recognised in Net interestincome.Collateral pledged and received as part of securities lending transactions can be seen in note 83 Assetspledged as collateralThe following table shows securities lending transactions as at the reporting date. The securities lentwere all measured at fair value.2008 2007€ M € MCarrying amount of securities lent 29 1,851of which securities held for trading 29 1,376of which equities 29 179of which bonds 0 1,197of which available-for-sale securities 0 475of which bonds 0 475Carrying amount of securities borrowed 438 181of which equities 428 122of which bonds 10 594. Notes to the Consolidated Cash Flow StatementIn accordance with the requirements of IAS 7, the Sal. Oppenheim Group is also obliged to publish a cashflow statement presenting the changes in the Group’s cash and cash equivalents from operating activities,investing activities and financing activities. In line with established international practices, cash flow fromoperating activities is derived from the consolidated financial statements using the indirect method.Cash and cash equivalents corresponds to the Cash item on the balance sheet and comprises cash onhand, balances with central banks, public sector debt instruments and bills of exchange eligible for refinancingwith central banks.Cash flow from operating activities reflects cash flows (receipts and payments) from loans and advancesto banks and customers, and securities. Cash receipts and payments from deposits from other banks andcustomers, from debt securities and other liabilities are also included under operating activities. Cash flowfrom operating activities also contains interest and dividends paid as a result of operating activities.Cash flows from investing activities comprise in particular proceeds from the sale of, or payments madefor the acquisition of non-current financial assets and property, plant and equipment, and intangible assets.Financing activities comprise all cash flows from equity transactions and subordinated capital.Shares in fully consolidated companies were acquired in the reporting year for a purchase price of€ 211 million (previous year: € 224 million).144sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 145

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsAssets and liabilities from acquired fully-consolidated companies can be broken down as follows:5. Other disclosures2008 2007€ M € MassetsAssets held for trading 38 3Financial assets designated at fair value through profit or loss (fair value option) 93 0Loans and advances to banks 16 30Loans and advances to customers 7 26Non-current financial assets 0 14Property, plant and equipment 16 26Intangible assets 0 36Income taxes 0 1Other assets 3 4Total assets 173 14078_Trust activitiesTrust activities are not be reported in banks’ consolidated fi nancial statements. As at the balance sheetdate, trust activities were as follows:2008 2007€ M € MTrust assets 1,952 2,551Trust receivables 1,694 2,344Trust investments 256 204Trust shares 2 3Trust liabilities 1,952 2,551deposits from banks and customersLiabilities held for trading 0 2Deposits from banks 0 32Deposits from customers 0 21Provisions 2 1Income taxes 1 19Other liabilities 9 13Total liabilities 12 8879_Off-balance sheet liabilities2008 2007€ M € MContingent liabilities from guarantees and indemnity agreements 1,130 1,564Other commitments 2,912 2,894Irrevocable loan commitments 2,017 2,270Placement and underwriting commitments 484 348of which from discontinued operations 11 0Commitments arising from rental and operating lease agreements 371 194Other commitments 40 82An obligation to make additional contributions in the amount of € 2 million (previous year € 9 million)exists in relation to our equity investment in Liquiditäts-Konsortialbank GmbH, Frankfurt am Main. Inaddition, we have a proportional contingent liability for the fulfilment of the obligation to make additionalcontributions of other partners who are members of the Association of German Banks (Bundesverbanddeutscher Banken e.V.), Berlin.Placement and underwriting commitments comprise capital contribution obligations from investmentsin private equity funds of € 434 million (€ 11 million of which from discontinued operations) (previousyear € 308 million), investments in real estate companies of € 33 million (previous year € 0 million), andinvestments in mezzanine funds of € 17 million (previous year: € 38 million).146sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 147

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsThe commitments arising from rental, operating lease and other service agreements have a remaining termof up to 49 years (previous year: up to 20 years).Our subsidiary FRANKFURT-TRUST Invest Luxemburg AG assumed a risk limitation guaranteefor investors in the FT Protected Growth Fund launched by FRANKFURT-TRUST Invest LuxemburgAG . This means that FRANKFURT-TRUST Invest Luxemburg AG is obliged to pay 95 % of the netasset value established at the beginning of the respective financial year pro rata to an investor at the latter’srequest against the return of fund units at the end of the financial year, if the redemption price is belowthe redemption price calculated in accordance with the Fund Rules.80_Letters of comfortSal. Oppenheim jr. & Cie. KGaAThe Bank has issued letters of comfort to third parties within the framework of special agreements forOppenheim Kapitalanlagegesellschaft mbH, Cologne, Grundstücksgesellschaft Köln-Ossendorf VI mbH,Cologne, and for Sal. Oppenheim jr. & Cie. Beteiligungs GmbH, Cologne. Letters of comfort were alsoissued for Oppenheim Vermögenstreuhand GmbH, Cologne, and Sal. Oppenheim jr. & Cie. SecuritiesInc., New York.On 11 January 2005, the Bank confirmed to Fitch Deutschland GmbH, Frankfurt am Main, in thecourse of the latter’s credit assessment of BHF-BANK AG, Frankfurt am Main, that it considers its indirectequity investment in BHF-BANK AG to represent a strategic investment and that it intends to retainthis holding for the foreseeable future. In addition, it confirmed that a profit and loss transfer agreementwould be concluded between BHF-BANK AG and Oppenheim Beteiligungs-AG, Wuppertal, effective1 January 2005, that this agreement will remain unaltered for at least one year, and that it will, in its roleas the group parent company, ensure that BHF-BANK AG performs its business activities with the duecare and diligence of a prudent business person.With effect from 31 December 2008/1 January 2009, Oppenheim Beteiligungs-AG sold its entireinterest in BHF-BANK AG to the group parent company Sal. Oppenheim jr. & Cie. S.C.A. The profitand loss transfer agreement between BHF-BANK AG and Oppenheim Beteiligungs-AG signed on 12 and15 April 2005 with effect from 1 January 2005 was cancelled on 15 and 17 December 2008 with effectfrom 31 December 2008. Accordingly, the letters of comfort to Fitch Deutschland GmbH and the Associationof German Banks were revoked.The Association of German Banks acknowledged the revocations in a letter dated 19 February 2009.Thus, the above letters of comfort in favour of the Association of German Banks will only remain in forcein the event that facts already existed at the time of the revocation which result in remedial measures at alater date in accordance with section 2 (2) of the By-Laws of the Deposit Protection Fund.BHF-BANK AGWithin the scope of its (indirect) stake, BHF-BANK AG ensures that BHF-BANK International S. A.,Luxembourg, BHF-BANK (Schweiz) AG, Zurich, and FRANKFURT-TRUST Invest Luxemburg AG,Luxembourg, are in a position to fulfil their liabilities, subject to political risks.BHF-BANK AG has undertaken to provide BHF Trust Management Gesellschaft für VermögensverwaltungmbH, Frankfurt am Main, with sufficient funds at all times, to enable the company to meet allobligations resulting from an asset management agreement with the recipient. BHF-BANK AG also hasissued a letter of comfort for the shareholding in AKA Ausfuhrkredit-Gesellschaft mbH, Frankfurt amMain.On 21 February 2009, BHF-BANK AG issued a letter of comfort to a particular recipient undertakingto provide BHF Asset Servicing GmbH and its subsidiary Frankfurter Service Kapitalanlage-Gesellschaft,with sufficient funds at all times, to enable them to meet their obligations. At the same time, BHF-BANKAG also issued a letter of comfort for BHF Asset Servicing GmbH to another special recipient.81_Investment funds managed on behalf of unit holders2008 2007€ M € MTotal net asset value 36,211 44,217Number of investment funds under management 540 51382_Subordinated assetsAssets are classified as subordinated if they rank behind the claims of other creditors in the event of insolvencyor liquidation of the debtor. The volume of subordinated assets was € 293 million (previous year:€ 327 million), of which € 177 million was attributable to bonds and notes (previous year: € 232 million),and € 116 million to loans and advances to customers (previous year: € 95 million).148sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 149

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements83_Assets pledged as collateralThe carrying amounts of the assets pledged as collateral can be broken down as follows:Regulatory capital2008 2007Cash collateralSecurities€ M € M2008 2007 2008 2007€ M € M € M € MStock market transactions 316 0 3,158 2,160Core capital (Tier I capital) 1,433 1,908Supplementary capital (Tier II capital) 198 165Total 1,631 2,073OTC transactions 909 495 107 0Securities lending transactions 0 0 437 804Other transactions 0 5 71 190A further € 3,759 million in securities was deposited as collateral at the European Central Bank and otherdomestic central banks (previous year: € 4,267 million). Collateral was pledged in line with current marketconditions.84_Collateral receivedCollateral received with the entitlement to rehypothecate can be broken down as follows:Cash collateralSecurities2008 2007 2008 2007€ M € M € M € MOTC transactions 916 582 0 0Securities lending transactions 0 77 97 143Other transactions 0 0 2,419 9As at the reporting date, the collateral received was not rehypothecated (previous year: € 1,235 million).No collateral was realised in the reporting year (previous year: less than € 1 million).85_Regulatory capital and solvency ratioThe regulatory capital adequacy requirements applicable to the Group are based on recommendations fromthe Basel Committee on Banking Supervision, for which the Bank for International Settlements (BIS) providesthe secretariat function, and on European Council directives put into Luxembourg legislation. TheCommission de Surveillance du Secteur Financier (CSSF) monitors compliance with these requirements.The Company complied with the requirements for the whole of the reporting period.Risk assets and market risk positions2008 2007€ M € MRisk assets 13,418 14,165Capital charge for market risk positions 1,354 3,375Capital charge for operational risk 1,619 0Total positions subject to a capital charge 16,391 17,540Capital ratiosThe solvency ratio is the key indicator for measuring capital adequacy of banks. This ratio puts a bank’sregulatory capital in relation to its counterparty and market price risks. Counterparty risk is measured bycompiling on and off-balance sheet exposures into risk-weighting categories according to degree of risk.The Group’s market risk component is made up of the combined market risk positions of the individualgroup units. These are calculated in accordance with a standard approach, or, if using internal models, aremultiples of the Value at Risk calculated on the basis of the models for regulatory purposes. These internalmodels for calculation of the market risk component of the Bank’s risk position were approved by BaFinprior to the relocation of the group headquarters to Luxembourg.2008 2007% %Total capital ratio 10.0 11.8Regulatory capital requirements 8.7 10.8After allowing for IFRS 5 the total capital ratio was 11.0%.150sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 151

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements86_EmployeesMale Female Total2. Related party transactionsLoans granted to, and commitments entered into for related parties were as follows:2008 2007 2008 2007 2008 2007Type of loan Loan volume Averageeffective interest rateAverage termaverage number of employees for the yearFull-time employees 2,474 2,187 1,435 1,241 3,909 3,428Part-time employees 83 43 275 233 358 276Trainees 37 42 26 23 63 65Total 2,594 2,272 1,736 1,497 4,330 3,76987_Related party disclosures1. Related parties of the BankRelated parties are any natural or legal persons that can control the reporting company or one of its subsidiaries,or that can exercise significant influence over the company or its subsidiaries either directly orindirectly, as well as all natural and legal persons controlled by the reporting company, or over which thelatter can exercise significant influence.We have therefore identified all affiliated companies, insofar as these are not consolidated, joint venturesand associated companies as related parties. A breakdown can be found under note 89 in the list ofcompanies included in the consolidated financial statements.We consider all key management employees of the Bank, as well as their immediate relatives within themeaning of section 1589 of the German Civil Code (Bürgerliches Gesetzbuch – BGB) and their spouses,to be private individuals related to the Bank. Key management employees include the Bank’s partners andManaging Committee, as well as the members of the Supervisory Board and the Shareholders’ Committee.2008 2007 2008 2007 2008 2007€ M € M % % Months MonthsOvernight and short-term loans 812 639 5.83 4.93 12 10Roll-over loans 4 2 3.96 4.73 116 14Subtotal 816 641 5.82 4.93 13 10Other loans and advances 44 4 6.17 0.00 7 12Total 860 645 5.84 4.93Of these loans and commitments, € 207 million can be attributed to the personally liable partners (previousyear: € 185 million), while € 74 million can be attributed to the members of the Supervisory Board(previous year: € 69 million).The loans granted to related parties were granted in line with current market conditions.As at the balance sheet date, the Bank held deposits belonging to related parties in the amount of:Type of investment Deposit Average interest Average maturity2008 2007 2008 2007 2008 2007€ M € M % % Months MonthsDemand deposits 120 114 1.25 3.40 12 4Savings deposits 141 26 4.68 4.67 6 2Total 261 140 3.10 3.63The conditions granted to related parties are in line with market conditions.The commission income (in line with current market conditions) generated by related parties duringthe financial year totalled € 5.4 million.The group company CAM Private Equity Consulting & Verwaltungs-GmbH, Cologne, received € 0.3million from Oppenheim Private Equity Manager GmbH, Cologne, under an advisory agreement, and paid€ 0.3 million to CAM-Fairview Private Equity Partners L.P., Farmington, under a service agreement.152sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 153

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements3. Disclosures on the remuneration of related partiesRemuneration of the management totalled € 4.9 million (previous year: € 16.2 million). Of this figure,€ 1.8 million (previous year: € 7.3 million) relates to fixed, and € 3.1 million (previous year: € 8.9 million)to variable remuneration components.The pension provisions for former personally liable partners and their surviving dependents amountedto € 18 million (previous year: € 14 million). The pension payments to former personally liable partnersand their surviving dependents amounted to € 1.5 million (previous year: € 1.2 million).88_Extraordinary events after the balance sheet dateThe owners of Sal. Oppenheim jr. & Cie. S.C.A. have resolved to restructure the business and investmentactivities of the Group. In the future, industry holdings will be managed in a newly formed holding structurethat is not affiliated with the Bank. This affects the industrial holding ARCANDOR Aktiengesellschaft inwhich Sal. Oppenheim jr. & Cie. S.C.A. has a 28.6 % stake, 24.9 % of which will be sold to the new holdingcompany. In addition, 20 % of shares in IVG Immobilien AG held by the wholly owned subsidiary Sal.Oppenheim jr. & Cie. Beteiligungen S. A. will be sold to the industrial holding company. The group parentcompany Sal. Oppenheim jr. & Cie. S.C.A. will sell Sal. Oppenheim Private Equity Partners S. A. andSal. Oppenheim Private Equity Partners GmbH with its subsidiaries CAM Private Equity Consulting &Verwaltungs-GmbH and VCM Capital Management GmbH to the industrial holding company.89_Scope of consolidated financial statementscompanies included in the consolidated financial statements as at 31 december 2008Name Registered office Capital share in %1. fully consolidated companiesSal. Oppenheim jr. & Cie. S.C.A.LuxembourgBank Sal. Oppenheim jr. & Cie. (Schweiz) AG Zurich 100.00Betrados B.V. Amsterdam 100.00BfI-Beteiligungsgesellschaft für Industriewerte mbH Frankfurt/M. 100.00BHF-BANK AG Frankfurt/M. 100.00BHF Capital Management GmbH Frankfurt/M. 100.00BHF Grundbesitz-Verwaltungsgesellschaft mbH & Co am Kaiserlei OHG Frankfurt/M. 100.00BHF Immobilien-GmbH Frankfurt/M. 100.00BHF-BANK (Jersey) Ltd. St. Hélier 100.00BHF-BANK (Schweiz) AG Zurich 100.00BHF-BANK International S. A. Luxembourg 100.00BHF-Betriebsservice GmbH Frankfurt/M. 100.00BHF LUX IMMO S. A. Luxembourg 100.00BHF Private Equity Treuhand- und Beratungsgesellschaft mbH Frankfurt/M. 100.00Name Registered office Capital share in %BOCARIL S. A. Luxembourg 100.00CAM Private Equity Consulting & Verwaltungs-GmbH Cologne 100.00FARAMIR Beteiligungs- und Verwaltungs GmbH Cologne 100.00Fiduciaire F. Winandy & Associés S. A. Luxembourg 100.00Sal. Oppenheim (France) S. A. (formerly Financière Atlas S. A.)* Paris 100.00Frankfurter Fondsbank GmbH Frankfurt/M. 100.00FRANKFURT-TRUST Invest Luxemburg AG Luxembourg 100.00FRANKFURT-TRUST Investment-Gesellschaft mbH Frankfurt/M. 100.00GAVDOS GmbH Wuppertal 100.00Grundstücksgesellschaft Köln-Ossendorf VI mbH Cologne 100.00Industrie-Beteiligungs-Gesellschaft mbH Frankfurt/M. 100.00LGB Beteiligungs GmbH Cologne 100.00NEPTUNO Verwaltungs- und Treuhand-Gesellschaftmit beschränkter Haftung Cologne 100.00OPB-Holding GmbH Cologne 100.00OP-INVEST CHF Management S. A. Luxembourg 100.00Oppenheim Asset Management Services S.à r.l. Luxembourg 100.00OPPENHEIM Beteiligungs-Treuhand GmbH Cologne 100.00Oppenheim Beteiligungs-AG Cologne 100.00OPPENHEIM Capital Advisory GmbH Cologne 100.00Oppenheim Capital Management GmbH Cologne 100.00Oppenheim Fonds Trust GmbH Cologne 100.00Oppenheim Kapitalanlagegesellschaft mbH Cologne 100.00Oppenheim Research GmbH Cologne 100.00Oppenheim Vermögenstreuhand GmbH Cologne 100.00SALOMON OPPENHEIM GmbH Cologne 100.00Sal. Oppenheim Alternative Investments GmbH Cologne 100.00Sal. Oppenheim Alternative Asset Management S. A.(formerly Sal. Oppenheim Alternative Investments S. A.) Luxembourg 100.00Sal. Oppenheim Asia Alternative Investments GmbH(formerly NEOLA Beteiligungs - und Verwaltungs GmbH) Cologne 100.00Sal. Oppenheim Boulevard Konrad Adenauer S.à.r.l. Luxembourg 100.00Sal. Oppenheim Corporate Finance North America Holding, LLC Wilmington 100.00Sal. Oppenheim Healthcare Beteiligungs GmbH Cologne 100.00Sal. Oppenheim (Hong Kong) Limited Hong Kong 100.00Sal. Oppenheim Investments GmbH Cologne 100.00Sal. Oppenheim jr. & Cie. Beteiligungen S. A. (Luxembourg) Luxembourg 100.00Sal. Oppenheim jr. & Cie. Beteiligungs GmbH Cologne 100.00154sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 155

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statementsName Registered office Capital share in %Name Registered office Capital share in %Sal. Oppenheim jr. & Cie. KGaA Cologne 100.00Sal. Oppenheim jr. & Cie. Securities Inc. Wilmington 100.00Sal. Oppenheim Private Equity Partners GmbH Cologne 100.00Sal. Oppenheim Private Equity Partners S. A.(formerly Sal. Oppenheim Special Situations S. A.) Luxembourg 100.00SGG S. A. (formerly Services Généraux de Gestion S. A.) Luxembourg 100.00SGG Services Généraux de Gestion (Suisse) S. A. Geneva 100.00SGG Anstalt Vaduz 100.00SGG CYPRUS LIMITED Nicosia 100.00SGG (Nederland) B.V. Amsterdam 100.00VB Glas-Großhandelsgesellschaft mit beschränkter Haftung Pforzheim 100.00VCM Capital Management GmbH Munich 100.00Atlas Gestion S. A.S. Paris 99.99PHARMA w/HEALTH MANAGEMENT COMPANY S. A. Luxembourg 99.98Grundstücksgesellschaft Frankfurt Bockenheimer Landstraße GbR Frankfurt/M. 94.90GbR Goethestraße Cologne 94.00Bank Sal. Oppenheim jr. & Cie. (Österreich) AG Vienna 87.00Oppenheim ACA GmbH (formerly ACA Equity-Partners GmbH) Frankfurt/M. 75.00Zimbo Beteiligungsgesellschaft mbH Cologne 67.10Sal. Oppenheim jr. & Cie. Corporate Finance (Schweiz) AG Zurich 51.004IP Management AG Zurich 51.004IP FUND MANAGEMENT S. A. Luxembourg 51.00Grundstücksgesellschaft Wiesbaden Luisenstraße/Kirchgasse GbR Troisdorf 49.68OPPENHEIM Buy Out GmbH & Co. KG Cologne 27.69Oppenheim-OEH S. A. Luxembourg 9.99BHF Asset Servicing GmbH (formerly BBM GmbH) Frankfurt/M. 5.10Frankfurter Service Kapitalanlage-Gesellschaft mbH Frankfurt/M. 5.102. fully consolidated special purpose entities and investment fundsin accordance with ias 27 and sic 12FT ABS Institutional Luxembourg 100.00OP-Fonds ABSAX Cologne 100.00OP-Fonds ABSPRU Cologne 100.00OP-Fonds OPAL Cologne 100.00OP-Strategieportfolio I Cologne 100.00OP-Strategieportfolio II Cologne 100.00OP-Strategieportfolio III Cologne 100.00SOAR European Equity Fund plc Dublin 100.00Sal. Oppenheim Figaro Currency Fund Plc(formerly The Sal. Oppenheim Feeder Fund I Plc) Dublin 100.00FT Liquima Frankfurt/M. 86.90OP Cash Euro Plus Luxembourg 83.90OP Hedge Multi Strategies Cologne 74.60OP Hedge Multi Strategies Plus Cologne 74.183. companies included at equityArgantis GmbH Cologne 50.00Liegenschaft Hainstraße GbR Frankfurt/M. 50.00Oppenheim Immobilientreuhand GmbH Cologne 50.00Oppenheim Verwaltung von Immobilienvermögen GmbH Cologne 50.00Oppenheim-Esch Holding GbR Troisdorf 50.00BVT-CAM Private Equity Beteiligungs GmbH Grünwald 50.00BVT-CAM Private Equity Management & Beteiligungs GmbH Grünwald 50.00Baigo Capital Partner Fund 1 Parallel GmbH & Co. KG Frankfurt/ M. 49.01Altigefi S. A. Paris 49.00Alternative Investment Strategies Mauritius Ltd. Mauritius 33.00Argantis Private Equity GmbH & Co. KG Cologne 25.07Argantis Private Equity Gründer GmbH & Co. KG Cologne 25.01VCM VI Institutional Private Equity GmbH & Co. KG Munich 25.00Grundstücksgesellschaft Leipzig Petersstraße GbR Troisdorf 23.20Cipio Partners Fund V GmbH & Co. KG Munich 21.11Cipio Partners Fund Va GmbH & Co. KG Munich 21.11Investcorp Coinvestment Partners I, L.P. New York 20.13*As of 23 March 2009156sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 157

consolidated financial statements / notes to the consolidated financial statementsnotes to the consolidated financial statements / consolidated financial statements90_Fees paid to the auditorThe following fees paid to the auditor in the year under review for agreed services were reported as expensesin accordance with Article 107 (15) of the Law of 19 June 1992:2008 2007€ M € MFor the audit 6.7 4.2For other audit-related and valuation services 2.2 0.5For tax advisory services 0.8 0.4For other services 3.2 3.4Total 12.9 8.591_Annual Report publication dateThe Annual Report will be published on 28 April 2009.92_Boards and committeessupervisory board– Georg Baron von Ullmann, businessman, Chairman– Friedrich Carl Freiherr von Oppenheim, businessman, Deputy Chairman– Nicolaus Freiherr von Oppenheim, businessman, Shareholder representative– Henri Pferdmenges, businessman, Shareholder representative– Romain Bausch, manager– Paul Mousel, attorney-at-lawpersonally liable partners– Matthias Graf von Krockow, Spokesman for the Personally Liable Partners– Friedrich Carl Janssen, Risk Management, Equity Investments and Bank Services– Christopher Freiherr von Oppenheim, Asset Management– Dieter Pfundt, Investment Bankingmanagement committee– Matthias Graf von Krockow– Friedrich Carl Janssen– Ralf J. Baukloh– Rolf Enders– Alfons Klein– François Pauly– Dr. Thomas Sonnenberg (until 31 December 2008)– Manfred UthoffLuxembourg, 20 April 2009shareholders’ committee– Karin Baronin von Ullmann, Honorary Chairwoman– Friedrich Carl Freiherr von Oppenheim, Chairman– Georg Baron von Ullmann, Deputy Chairman– Ilona Gräfin von Krockow– Isabelle Marquardt– Peter W. Marx– Nicolaus Freiherr von Oppenheim– Henri Pferdmenges– Dr. Clemens Freiherr von Wrede158sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 159

consolidated financial statements / report of the réviseur d’entreprisesreport of the réviseur d’entreprises / consolidated financial statementsReport of the Réviseur d’Entreprisesreport on the consolidated annual accountsFollowing our appointment by the General Meeting of the Shareholders, we have audited the accompanyingconsolidated annual accounts of Sal. Oppenheim jr. & Cie. S.C.A., which comprise the consolidated balancesheet as at 31 December 2008 and the consolidated income statement, consolidated statement of changesin equity and consolidated cash flow statement for the period from 1 January 2008 to 31 December 2008,and a summary of significant accounting policies and other explanatory notes.board of managers’ responsibility for the consolidated annual accountsThe Board of Managers is responsible for the preparation and fair presentation of these consolidatedannual accounts in accordance with International Financial Reporting Standards. This responsibilityincludes: designing, implementing and maintaining internal control relevant to the preparation and fairpresentation of consolidated annual accounts that are free from material misstatement, whether due tofraud or error; selecting and applying appropriate accounting policies; and making accounting estimatesthat are reasonable in the circumstances.responsibility of the réviseur d’entreprisesOur responsibility is to express an opinion on these consolidated annual accounts based on our audit. Weconducted our audit in accordance with International Standards on Auditing as adopted by the Institutdes Réviseurs d’Entreprises. Those standards require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance whether the consolidated annual accounts are freefrom material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the consolidated annual accounts. The procedures selected depend on the judgement of the Réviseurd’Entreprises, including the assessment of the risks of material misstatement of the consolidated annualaccounts, whether due to fraud or error. In making those risk assessments, the Réviseur d’Entreprises considersinternal control relevant to the entity’s preparation and fair presentation of the consolidated annualaccounts in order to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of accounting estimatesmade by the Board of Managers, as well as evaluating the overall presentation of the consolidated annualaccounts. We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.opinionIn our opinion, the consolidated annual accounts give a true and fair view of the consolidated financialposition of Sal. Oppenheim jr. & Cie. S.C.A. as of 31 December 2008, and of its financial performanceand its consolidated cash flows for the period from 1 January 2008 to 31 December 2008 in accordancewith International Financial Reporting Standards.report on other legal and regulatory requirementsThe consolidated management report, which is the responsibility of the Board of Managers, is consistentwith the consolidated annual accounts.Luxembourg, 20 April 2009KPMG Audit S.à r.l.Réviseurs d’EntreprisesRiehl Brüne160 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 161

eport of the supervisory boardreport of the supervisory boardReport of the Supervisory BoardLuxembourg, 20 April 2009At the four meetings held in financial year 2008, the Supervisory Board kept itself thoroughly informed ofbusiness developments and the risk position of both the Bank and the Group, as well as of general managementand corporate planning issues. The meetings focused on assessing the latest monthly balance sheetsand income statements of both the Bank and the Group against the comparables for the previous yearand projected figures. The Supervisory Board and the personally liable partners held in-depth discussionsabout the international financial market crisis and the consequences thereof for the Bank, with a particularview to the risk position and operating results. This included debates on initiatives and strategies for thenecessary reorientation of business activities and cost management.Alongside key personnel decisions and investment planning, the Supervisory Board took noteof significant individual transactions that were executed during the financial year. These includedthe signifi cant changes in the equity investments portfolio, in particular the acquisition of furthershares in IVG Immobilien AG and the investment in Arcandor AG and the subsequent spin-off ofthese investments into an independent company newly formed by the Bank’s owners, into whichSal. Oppenheim Private Equity Partners S. A. and Sal. Oppenheim Private Equity Partners GmbH are alsoto be integrated. The relevant transactions also included the intra-group acquisition of BHF-BANK AGfrom Oppenheim Beteiligungs-AG with effect from 31 December 2008/1 January 2009.The Supervisory Board’s Audit Committee dedicated a great deal of attention in the meetings tothe Bank’s risk position, with the focus on the effects of the financial crisis. In addition, at its meetingon 17 October 2008, the Committee agreed on the audit plan and focal points of the audit with theauditors, and at its meeting on 12 December 2008 received a report on the progress of the audit andthe results of the loan review.The audit results for the annual financial statements and consolidated financial statements were discussedon 20 April 2009. Prior to this meeting, KPMG Audit S.à r.l., Luxembourg submitted the reportson its audit of the annual financial statements and the management report and its audit of the consolidatedfinancial statements and the group management report as at 31 December 2008, all of which it found tohave been prepared in accordance with the statutory requirements. The auditors awarded an unqualifiedaudit opinion to both the annual financial statements and the consolidated financial statements.On the basis of this information and the comments in the audit report, the Audit Committee of theSupervisory Board examined the annual fi nancial statements, the management report and the management’sproposal regarding the appropriation of profit. It also assessed the consolidated financial statementsand the group management report. The Committee approved the auditor’s report, and in accordance withthe final results of its examination, does not raise any objections.In the meetings of the Supervisory Board held on 12 December 2008 and 20 April 2009, the AuditCommittee reported on the meetings with the auditors. At the recommendation of the Audit Committee,the Supervisory Board approved the annual financial statements, the management report, the consolidatedfinancial statements and the group management report. The Supervisory Board endorses the proposal ofthe management on appropriation of profit.The management and the auditors were at the disposal of the Audit Committee of the SupervisoryBoard, and of the Supervisory Board throughout the reporting year to discuss any specific questions.The Supervisory Board thanks the personally liable partners and the other members of managementfor their great commitment and perceptiveness in times marked by the turbulent developments on thefinancial markets, as well as the managers and all employees, without whose commitment and performancethe results achieved would not have been possible.The Supervisory BoardGeorg Baron von Ullmann(Chairman)162 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 163

addressesSal. Oppenheim – AddressesAddressesGROUP PARENT COMPANYSal. Oppenheim jr. & Cie. S.C.A.4, rue Jean Monnet2180 LuxembourgPhone +352 221522-1Fax +352 221522-690info@oppenheim.luMAJOR SUBSIDIARIES ANDEQUITY INVESTMENTSLUXEMBOURGSal. Oppenheim jr. & Cie. KGaALuxembourg branch4, rue Jean Monnet2180 LuxembourgPhone +352 476822-1Fax +352 476822-680info@oppenheim.luBHF-BANK International S.A.534, rue de Neudorf2220 LuxembourgPhone +352 457676-1Fax +352 458320direktion@bhf.luFRANKFURT-TRUSTInvest Luxemburg AG534, rue de Neudorf2220 LuxembourgPhone +352 457676-1Fax +352 458324ftlux@bhf.luOppenheim Asset ManagementServices S.à r.l.4, rue Jean Monnet2180 LuxembourgPhone +352 221522-1Fax +352 221522-500fonds@oppenheim.luOppenheim-OEH S.A.4, rue Jean Monnet2180 LuxembourgPhone +352 221522-1Fax +352 221522-690info@oppenheim.luSal. Oppenheim AlternativeAsset Management S.A.412F, route d’Esch2086 LuxembourgPhone +352 476822-1Fax +352 476822-680info@oppenheim.luSal. Oppenheim jr. & Cie.Beteiligungen S.A. (Luxembourg)12F, rue Guillaume Kroll1882 LuxembourgPhone +352 272707-26Fax +352 272707-27email@sobl.luSal. Oppenheim Private EquityPartners S.A.23, Avenue Monterey2086 LuxembourgPhone +352 27048083-00Fax +352 27048083-03info@sopep.euSGG S.A.412F, route d’Esch2086 LuxembourgPhone +352 466111-1Fax +352 4711-01contact@sgg.luGERMANYSal. Oppenheim jr. & Cie. KGaAHead officeUnter Sachsenhausen 450667 ColognePhone +49 221 145-01Fax +49 221 145-1512info@oppenheim.deSal. Oppenheim jr. & Cie. KGaABaden-Württemberg branchVilla FedererMörikestraße 2070178 StuttgartPhone +49 711 220088-01Fax +49 711 220088-12stuttgart@oppenheim.deSal. Oppenheim jr. & Cie. KGaANiederlassung Baden-WürttembergBaden-Baden officePalais BironLichtentaler Straße 9276530 Baden-BadenPhone +49 7221 99293-01Fax +49 7221 99293-13baden-baden@oppenheim.deSal. Oppenheim jr. & Cie. KGaABerlin branchJägerstraße 5110117 BerlinPhone +49 30 206276-0Fax +49 30 206276-21berlin@oppenheim.deSal. Oppenheim jr. & Cie. KGaADüsseldorf branchMalkastenstraße 21/Pempelforter Straße 1140211 DüsseldorfPhone +49 211 828249-0Fax +49 211 828249-26duesseldorf@oppenheim.deSal. Oppenheim jr. & Cie. KGaAFrankfurt am Main branchInvestment BankingUntermainanlage 160329 Frankfurt am MainPhone +49 69 7134-0Fax +49 69 7134-5211info@oppenheim.deFirstly you will find the banks and their branches listed for each country,followed by further major subsidiaries and equity investmens in alphabetic order.annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 165

addressesaddressesSal. Oppenheim – AddressesSal. Oppenheim – AddressesSal. Oppenheim jr. & Cie. KGaAFrankfurt am Main branchAsset ManagementBockenheimer Landstraße 2360325 Frankfurt am MainPhone +49 69 7134-0Fax +49 69 7134-5211info@oppenheim.deSal. Oppenheim jr. & Cie. KGaAMunich branchOdeonsplatz 1280539 MunichPhone +49 89 290074-0Fax +49 89 290074-29muenchen@oppenheim.deSal. Oppenheim jr. & Cie. KGaANorthern Germany branchColonnaden 320354 HamburgPhone +49 40 355496-0Fax +49 40 355496-11hamburg@oppenheim.deBHF-BANK AktiengesellschaftHead officeBockenheimer Landstraße 1060323 Frankfurt am MainPhone +49 69 718-0Fax +49 69 718-2296corp-comm@bhf-bank.comBHF-BANK AktiengesellschaftBaden-Baden branchLudwig-Wilhelm-Straße 1576530 Baden-BadenPhone +49 7221 70165-0Fax +49 7221 70165-15baden-baden@bhf-bank.comBHF-BANK AktiengesellschaftBerlin branchFranzösische Straße 9–1210117 BerlinPhone +49 30 20959-0Fax +49 30 20959-287berlin@bhf-bank.comBHF-BANK AktiengesellschaftDüsseldorf branchBenrather Straße 18–2040213 DüsseldorfPhone +49 211 3663-0Fax +49 211 3663-257duesseldorf@bhf-bank.comBHF-BANK AktiengesellschaftFrankfurt am Main branchNeue Mainzer Straße 7460311 Frankfurt am MainPhone +49 69 718-0Fax +49 69 718-3197frankfurt@bhf-bank.comBHF-BANK AktiengesellschaftHamburg branchAm Rathausmarkt/Mönckebergstraße 3120095 HamburgPhone +49 40 32009-0Fax +49 40 32009-200hamburg@bhf-bank.comBHF-BANK AktiengesellschaftHannover branchGeorgsplatz 930159 HannoverPhone +49 511 3046-0Fax +49 511 3046-219hannover@bhf-bank.comBHF-BANK AktiengesellschaftCologne branchKonrad-Adenauer-Ufer 1150668 ColognePhone +49 221 510919-0Fax +49 221 510919-16koeln@bhf-bank.comBHF-BANK AktiengesellschaftMainz branchLudwigsstraße 155116 MainzPhone +49 6131 142-0Fax +49 6131 142-227mainz@bhf-bank.comBHF-BANK AktiengesellschaftMunich branchPrannerstraße 1180333 MunichPhone +49 89 55173-0Fax +49 89 55173-250muenchen@bhf-bank.comBHF-BANK AktiengesellschaftMünster branchAnnette-Allee 448149 MünsterPhone +49 251 596855-0Fax +49 251 596855-15muenster@bhf-bank.comBHF-BANK AktiengesellschaftNuremberg branchHauptmarkt 190403 NurembergPhone +49 911 66943-0Fax +49 911 66943-12nuernberg@bhf-bank.comBHF-BANK AktiengesellschaftStuttgart branchKleiner Schlossplatz 1370173 StuttgartPhone +49 711 22792-0Fax +49 711 22792-418stuttgart@bhf-bank.comBHF Asset Servicing GmbHBockenheimer Landstraße 1060323 Frankfurt am MainPhone +49 69 667744-0Fax +49 69 667744-111info@bhfassetserv.comCapitects GmbHBockenheimer Landstraße 2360325 Frankfurt am MainPhone +49 69 8700428-22Fax +49 69 8700428-11solutions@capitects.comCollineo Asset Management GmbHBrinkhoffstraße 444137 DortmundPhone +49 231 1082-1Fax +49 231 1082-468service@collineo-am.comFrankfurter Fondsbank GmbHNeue Mainzer Straße 8060311 Frankfurt am MainPhone +49 69 77060-200Fax +49 69 77060-555info@frankfurter-fondsbank.deFRANKFURT-TRUSTInvestment-Gesellschaft mbHNeue Mainzer Straße 8060311 Frankfurt am MainPhone +49 69 92050-0Fax +49 69 92050-101info@frankfurt-trust.deIVG Institutional Funds GmbHWettiner Straße 365189 WiesbadenPhone +49 611 9010-0Fax +49 611 9010-1199Oppenheim ACA GmbHFreiherr-vom-Stein-Straße 6360323 Frankfurt am MainPhone +49 69 719142-0Fax +49 69 719142-29info@oppenheimaca.comOppenheim Beteiligungs-AGUnter Sachsenhausen 450667 ColognePhone +49 221 145-1989Fax +49 221 145-91989Oppenheim CapitalManagement GmbHUnter Sachsenhausen 450667 ColognePhone +49 221 145-01Fax +49 221 145-1918ocm@oppenheim.deOppenheim-Esch Holding GbRChristian-Esch-Straße 2–453844 TroisdorfPhone +49 2241 987-0Fax +49 2241 987-196*By 23.03.2009 Financière Atlas S.A.Oppenheim Fonds Trust GmbHUnter Sachsenhausen 450667 ColognePhone +49 221 145-05Fax +49 221 145-2911fonds@oppenheim.deOppenheim KapitalanlagegesellschaftmbHUnter Sachsenhausen 450667 ColognePhone +49 221 145-03Fax +49 221 145-1918fonds@oppenheim.deOppenheim Research GmbHUnter Sachsenhausen 450667 ColognePhone +49 221 145-02Fax +49 221 145-2862research@oppenheim.deOppenheim VermögenstreuhandGmbHOppenheimstraße 1150668 ColognePhone +49 221 145-2400Fax +49 221 145-2409info@ovt.deSal. OppenheimAlternative Investments GmbHUnter Sachsenhausen 450667 ColognePhone +49 221 145-01Fax +49 221 145-1454Sal. Oppenheim jr. & Cie.Beteiligungs GmbHUnter Sachsenhausen 450667 ColognePhone +49 221 145-01Fax +49 221 145-1512Sal. Oppenheim Private EquityPartners GmbHZeppelinstraße 4–850667 ColognePhone +49 221 937085-0Fax +49 221 937085-19cologne@sopep.euSal. Oppenheim Private EquityPartners GmbHMax-Joseph-Straße 780333 MunichPhone +49 89 5490858-0Fax +49 89 5490858-45munich@sopep.euSALOMON OPPENHEIM GmbHJägerstraße 5110117 BerlinPhone +49 30 206276-52Fax +49 30 206276-59info@salomon-oppenheim.deFRANCESal. Oppenheim jr. & Cie. KGaAParis branch13, rue Royale75008 ParisPhone +33 1 449464-00Fax +33 1 449464-10paris@oppenheim.frSal. Oppenheim (France) S.A.*4, place Vendôme75001 ParisPhone +33 1 445088-88Fax +33 1 445088-65info@finatlas.comUNITED KINGDOMIntegrated Asset Management plc.4 Hill StreetLondonW1J 5NEPhone +44 20 7514-9200Fax +44 20 7514-9211contact@integratedam.com166 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 167

addressesaddressesSal. Oppenheim – AddressesSal. Oppenheim – AddressesITALYSal. Oppenheim jr. & Cie. KGaAMilan branchVia Dante 920123 MilanPhone +39 0272 4902-1Fax +39 0272 4902-90milano@oppenheim.itPrader Bank S.p.A.Musterplatz 239100 BozenPhone +39 0471 067788Fax +39 0471 067789info@praderbank.comAUSTRIABank Sal. Oppenheim jr. & Cie.(Austria) AGVienna head officePalais EquitableStock im Eisen-Platz 31010 ViennaPhone +43 1 51866-0Fax +43 1 51866-9000wien@oppenheim.atBank Sal. Oppenheim jr. & Cie.(Austria) AGSalzburg officeGetreidegasse 105024 SalzburgPhone +43 662 2224-0Fax +43 662 2224-7000salzburg@oppenheim.atPOLANDBank Sal. Oppenheim jr. & Cie.(Austria) AGPoland branchAleje Ujazdowskie 5100-536 WarsawPhone +48 22 379-4000Fax +48 22 379-4001polska@oppenheim.plSWITZERLANDBank Sal. Oppenheim jr. & Cie.(Switzerland) Ltd.Head officeUraniastrasse 288022 ZurichPhone +41 44 214-2214Fax +41 44 211-1085bank@oppenheim.chBank Sal. Oppenheim jr. & Cie.(Switzerland) Ltd.Geneva branch9, rue du Commerce1204 GenevaPhone +41 22 319-4777Fax +41 22 319-4787bank@oppenheim.chBanca Sal. Oppenheim jr. & Cie.(Svizzera) S.A.Lugano branchVia Soave 56900 LuganoPhone +41 91 98660-60Fax +41 91 98660-70bank@oppenheim.chBHF-BANK (Schweiz) AGSchulhausstrasse 68027 ZurichPhone +41 44 2097511Fax +41 44 2025606info@bhf.chOppenheim Landert FamilyOffice AGAlte Landstrasse 1028702 ZollikonPhone +41 44 39633-00Fax +41 44 39633-03mail@oppenheim-landert.chSal. Oppenheim jr. & Cie.Corporate Finance(Switzerland) Ltd.Löwenstrasse 38022 ZurichPhone +41 44 214-2600Fax +41 44 214-2690corporatefinance@oppenheim.chSGG Services Généraux deGestion (Suisse) S.A.7, rue de l’Arquebuse1211 Geneva 11Phone +41 22 80703-80Fax +41 22 80703-81sgg@sggsa.chCZECH REPUBLICBank Sal. Oppenheim jr. & Cie.(Austria) AGCzech Republic branchVáclavské náměstí 19110 00 Prague 1Phone +420 234 656-111Fax +420 234 656-300praha@oppenheim.czHUNGARYBank Sal. Oppenheim jr. & Cie.(Austria) AGHungary branchLánchíd PalotaFő u. 1.1011 BudapestPhone +36 1 8022-000Fax +36 1 8022-090budapest@sal-oppenheim.huUNITED STATES OF AMERICASal. Oppenheim jr. & Cie.Securities Inc.250 Park Avenue, Suite 911New York, NY 10177Phone +1 212 888-5246Fax +1 212 888-0916jhagenbuch@sal-oppenheim.comMiller Buckfire & Co., LLC153 East 53rd Street22nd FloorNew York, NY 10022Phone +1 212 895-1800Fax +1 212 895-1853info@millerbuckfire.comPEOPLE‘S REPUBLIC OFCHINASal. Oppenheim (Hong Kong)LimitedSuite 3408, 34/F,Two Exchange Square8 Connaught PlaceCentral, Hong KongPhone +852 3793 3890Fax +852 3101 9606sohkinfo@oppenheim.com.hkLloyd George Management(B.V.I.) Ltd. c/o Lloyd GeorgeManagement (Hong Kong) Ltd.Suite 3808One Exchange SquareCentral, Hong KongPhone +852 2845 4433Fax +852 2845 3911info@lloydgeorge.com168 sal. oppenheim jr. & cie. s.c.a. | annual report 2008annual report 2008 | sal. oppenheim jr. & cie. s.c.a. 169

imprintpublisherSal. Oppenheim jr. & Cie.Société en commandite par actions4, rue Jean Monnet2180 LuxembourgeditorSal. Oppenheim jr. & Cie. S.C.A., LuxembourgFinance and Corporate CommunicationslayoutKonzeption + Design GbR, Colognesource of photographsPage 36 (top) – Sal. Oppenheim jr. & Cie. KGaA, ColognePage 36 (bottom) – Sal. Oppenheim jr. & Cie. KGaA, ColognePage 37 (top) – Bernd Arnold, ColognePage 37 (bottom) – Wilfried Hösl, MunichThis Annual Report contains both information on the past financial year and forward-looking statements. Forward-lookingstatements are based on expectations regarding future economic and political developments (e.g. with relation to financialmarkets and exchange rates) and the effects thereof on net assets, financial position and results of operations. Forward-lookingstatements relating to the future are based on forecasts, expectations and estimates and as such are subject to uncertaintiesand risks. Actual events and developments may therefore differ from the forward-looking statements. The company acceptsno responsibility for updating the statements made in this Annual Report based on the circumstances at the time.170sal. oppenheim jr. & cie. s.c.a. | annual report 2008

Significant equity investments of the Sal. Oppenheim GroupSal. Oppenheim jr. & Cie. S.C.A.100% 87% 100% 100% 100% 100% 100% 100% 9,99%BankSal. Oppenheimjr. & Cie.(Schweiz) AGBankSal. Oppenheimjr. & Cie.(Österreich) AGOppenheim AssetManagementServices S.à r.l.OppenheimCapitalManagementGmbHOppenheim FondsTrust GmbHOppenheimKapitalanlagegesellschaftmbHSal. Oppenheim(France) S.A.*Sal. Oppenheim(Hong Kong)LimitedOppenheim-OEHS.A.10%100% 100% 51% 27,28% 10% 9% 6%50%OppenheimLandert FamilyOffice AGCollineo AssetManagementGmbH**SGG S.A.***Capitects GmbHIntegrated AssetManagement plc.Miller Buckfire& Co., LLC**Prader BankS.p.A.IVG InstitutionalFunds GmbHOppenheim-EschHolding GbR100% 100%Sal. Oppenheim jr. & Cie. KGaABHF-BANK AG100% 100%100% 100%100% 100%100% 100% 5,1%OppenheimResearch GmbHOppenheimVermögenstreuhandGmbHSALOMONOPPENHEIMGmbHSal. OppenheimAlternativeInvestmentsGmbHBHF-BANK(Schweiz) AGBHF-BANKInternationalS.A.FRANKFURT-TRUSTInvestment-GesellschaftmbHFrankfurterFondsbankGmbHBHF AssetServicing GmbH100% 100%75%51%Sal. Oppenheimjr. & Cie.BeteiligungsGmbHSal. Oppenheimjr. & Cie.BeteiligungenS. A.(Luxembourg)OppenheimACA GmbHSal. Oppenheimjr. & Cie.CorporateFinance(Schweiz) AG* Until 23 March 2009 Financière Atlas S.A.** Indirect equity investment*** Until 22 December 2008 Services Généraux de Gestion S.A.

Sal. Oppenheim Group OverviewSal. Oppenheim jr. & Cie. S.C.A.4, rue Jean Monnet 2180 LuxembourgBaden-Baden Berlin Budapest Düsseldorf Frankfurt am Main Geneva Hamburg Hong Kong Cologne London LuganoLuxembourg Milan Munich New York Paris Prague Salzburg Stuttgart Warsaw Vienna Zurichwww.oppenheim.luAnnual Report 2008 Sal. Oppenheim