Item 1

Item 1: Annual Report, Group and Parent Company Accounts for Financial Year 2007 Reports of the Group and Statutory Auditors

A. Motion
The Board of Directors proposes that the Report on the Financial Year 2007 and the Group and Parent Company Accounts for 2007 be approved.

B. Explanations
The reports of the Board of Directors and the Group Executive Board on the financial year 2007 are contained in the "Financial Statements". Additional information on the strategy, organization and activities of the Group and the Business Groups, as well as on risk management and control may be found in the respective reports ("Strategy, Performance and Responsibility Report" and "Risk, Treasury and Capital Management Report"). Information relating to corporate governance as required by the SWX Swiss Exchange Directive and the amended Swiss Code of Obligations ("CO") can be found in the "Corporate Governance and Compensation Report 2007". These reports are also available on the internet at Shareholders registered in the Share Register in Switzerland will receive the respective reports as per their individual orders. Shareholders in the US who are registered with BNY Mellon Shareowner Services will receive a copy of the Review 2007, which contains the most important information relating to UBS's performance in 2007.

The Group income statement shows total operating income of CHF 31,980 million and total operating expenses of CHF 34,915 million, resulting in an operating loss from continuing operations before tax of CHF 2935 million and a net loss attributable to UBS shareholders of CHF 4384 million. The Financial Businesses (excluding Industrial Holdings) achieved a net loss attributable to UBS shareholders of CHF 4970 million. Total consolidated assets decreased by CHF 73,8 billion to reach a new total of CHF 2 272,6 billion. Equity attributable to UBS shareholders totalled CHF 35,6 billion. Parent Company net loss was CHF 4251 million. Total operating income of CHF 21,339 million and total operating expenses of CHF 18,696 million resulted in an operating profit of CHF 2643 million. Depreciation, write-offs and provisions amounted to CHF 11,440 million and extraordinary income to CHF 4665 million. Extraordinary expenses totalled CHF 4 million and taxes amounted to CHF 115 million.

In their reports to the Annual General Meeting, Ernst & Young Ltd., as Group and Statutory Auditors, recommended without qualification that the Group and Parent Company Accounts be approved. The Group Auditors confirm that, in their opinion, the Group Financial Statements accurately reflect the consolidated financial position of UBS AG and the consolidated results of operations and cash flows, in conformity with the International Financial Reporting Standards (IFRS), and that they comply with Swiss law. With respect to the Parent Company, the Statutory Auditors confirm that the accounting records and financial statements and the proposal of the Board of Directors relating to the proposed appropriation of results comply with Swiss law and with the Articles of Association of UBS AG.

As UBS AG has already informed, the Swiss Federal Banking Commission ("EBK") has initiated an investigation into the effects of the US mortgage crisis on UBS AG, the root causes of UBS AG's losses in this area, and what the appropriate corrective measures are. As a first step, UBS AG is required by the end of Q1 2008 to prepare a report providing a detailed analysis of the causes, as well as recommendations on how such events can be avoided in the future. In order to ensure objectivity, two law firms and an external auditing firm support the UBS AG internal working group responsible for the report.

On 14 March 2008, Ethos, Swiss Foundation for Sustainable Development ("Ethos"), published a press release stating that they had agreed with UBS AG on the following procedure and accordingly will not pursue its request for a special audit raised at the Extraordinary General Meeting of 27 February 2008. On or around the date of the Annual General Meeting, UBS AG will provide its shareholders with a comprehensive summary of the report submitted to the EBK. UBS AG will keep shareholders informed on the further developments of the EBK investigation and will publish further reports on the results of such investigation (subject to EBK approval). UBS AG, together with Ethos, will appoint an independent expert who will on behalf of UBS's shareholders review the complete reports and the summaries thereof and determine whether the shareholders receive fair summaries of the complete reports.

Once the EBK investigation is closed, the Board of Directors will ask for discharge for the financial year 2007.

Revised version of 1 April 2008