1. General

Company information
BinckBank N.V., established and registered in the Netherlands, is a public limited liability company incorporated under Dutch law whose shares are publicly traded. BinckBank N.V. is officially domiciled at Vijzelstraat 20, 1017 HK Amsterdam. BinckBank N.V. provides conventional and online broking services in securities and derivative transactions for private and professional investors. The subsidiary Syntel Beheer B.V. specialises in developing software used by financial institutions to process and account for securities transactions. In the following pages, the name ‘BinckBank’ will be used to refer to BinckBank N.V. and its various subsidiaries.

BinckBank’s consolidated financial statements for the year ended 31 December 2009 have been prepared by the company’s executive board and approved for publication pursuant to a formal decision taken by the executive board and the supervisory board on 18 February 2010. The financial statements for 2009 will be adopted at the General Meeting of Shareholders to be held on 26 April 2010.

    
    
   




Presentation of the financial statements
The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board and endorsed by the European Commission.

Unless otherwise stated, the consolidated financial statements are in euros, with all amounts rounded to the nearest thousand.

Implications of new, amended and improved standards

New and amended IFRS standards and IFRIC interpretations applying to financial years beginning on
1 January 2009

BinckBank has implemented the following new and amended IFRS standards and IFRIC interpretations applying to financial years beginning on 1 January 2009:

• IAS 1 - Presentation of financial statements. The amended standard distinguishes between movements in equity arising from direct transactions with the owners of the company and other movements. The statement of movement in equity contains detailed information regarding direct transactions with the owners and the other movements are presented separately per equity component. The standard also introduces a statement of realised and unrealised results, in which all the income and expenses included in the income statement are presented, as well as all the unrealised results not included in the income statement. This can be in the form of either one statement, or two related statements. The presentation of comparative figures for previous periods has been adjusted.
• IFRS 7 - Financial Instruments: Disclosures. Part of the revised standard relates to improvements in the disclosure of the fair value of financial instruments. The standard requires a disclosure for each category of the three levels of financial instruments valued at fair value and specific disclosures of reclassifications of financial instruments between the levels. Detailed disclosures are furthermore required for financial instruments included in level 3. The disclosures relating to the liquidity of derivatives transactions and assets used in liquidity management have also been amended.
• IFRS 8 - Operating Segments. IFRS 8 replaces IAS 14 - Segmented Information. IFRS 8 requires that the financial and descriptive information reported for business segments is the same as the information used internally for the evaluation of the results of business segments and for decision-making regarding the allocation of resources. BinckBank uses the same performance measures and reporting structures for its internal performance measurement as it uses for its external reporting.

The following new and amended IFRS standards and IFRIC interpretations are compulsory from 1 January 2009, but have no effect on the financial position and results of BinckBank:

• IFRS 2 - Share-based payments
• IAS 23 – Borrowing costs
• IAS 32 and IAS 1 - Puttable financial instruments and obligations arising on liquidation
• IFRIC 9 and IAS 39 - Reassessment of embedded derivatives
• IFRIC 13 - Loyalty programmes
• IFRIC 14 and IAS 19 - The limit on a defined benefit asset, minimum funding requirements and their interaction.

Improvement of IFRS standards
In May 2008 the IASB published a first draft of changes to the standards, mainly intended to remove inconsistencies and for clarification. Different transition provisions apply for each standard.

• IAS 23 – Borrowing costs: The definition of borrowing costs has been revised, as a result of which two separate components of borrowing costs (interest on loans taken up and amortisation) are combined into one term: the interest expense by the effective interest method under IAS 39. BinckBank has adjusted its accounting principle accordingly. This had no effect on BinckBank’s financial position.
• IAS 27 Consolidated and company financial statements: This amendment clarifies that if a parent company includes a subsidiary company in its company financial statements at fair value under IAS 39, this treatment is continued after the subsidiary has subsequently been classified as held for sale. This amendment has no effect on the financial position and results of BinckBank.
• IAS 28 Investments in associates:
  

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  This amendment concerns a reduction in the information provided for entities if associates are reported in accordance with IAS 39. If an associate is included at fair value under IAS 39, the only provision of IAS 28 that applies - since the associate is then exempt from the provisions of IAS 28 - is that information must be provided regarding the nature and extent of any significant restrictions on the ability of associates to transfer funds to the entity in the form of cash dividends, or to repay loans.

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  It is further clarified that in the test for impairment (including any reversal of an impairment loss) an investment in an associate is treated as a single asset. An impairment is therefore not separately allocated to the goodwill included in the amount of the investment.

  BinckBank has adjusted its accounting principle accordingly. This had no effect on BinckBank’s financial position.
• IAS 31 Interests in joint ventures: This amendment concerns a reduction in the information provided for entities if the entities over which collective control is exercised are reported in accordance with IAS 39. If a joint venture is included at fair value under IAS 39, the only requirement of IAS 31 that applies - since it is then exempt from the provisions of IAS 31 - is that information must be provided regarding the liabilities entered into by the venturer, as well as summary information regarding the assets, liabilities, income and expenses. BinckBank has adjusted its accounting principle accordingly. This had no effect on BinckBank’s financial position.

Changes to the following standards as a result of improvements had no effect on the accounting principles, results and financial position of BinckBank.

• IFRS 5 Non-current assets held for sale and discontinued operations
• IAS 1 Presentation of financial statements
• IAS 16 Property, plant and equipment
• IAS 19 Employee benefits
• IAS 20 Accounting for government grants and disclosure of government assistance
• IAS 29 Financial reporting in hyperinflationary economies
• IAS 36 Impairment of assets
• IAS 38 Intangible assets
• IAS 39 Financial instruments: recognition and measurement
• IAS 40 Investment property
• IAS 41 Agriculture

New and amended IFRS standards and IFRIC interpretations applying to financial years beginning
after 1 January 2009

The following standards, amendments of standards and interpretations that have not yet taken effect or have not yet been ratified by the European Union have not yet been applied by BinckBank:

• IFRS 1 First-time adoption of International Financial Reporting Standards (revised), effective as of 1 January 2010. Since BinckBank is not a first-time adopter of IFRS, the revised standard does not apply.
• IFRS 1 First-time adoption of International Financial Reporting Standards - Additional exemptions for first-time adopters, effective as of 1 January 2010. Since BinckBank is not a first-time adopter of IFRS, the revised standard does not apply.
• IFRS 2 Share-based payments – share-based payment transactions settled in cash within a group, effective as of 1 January 2010. This change clarifies the scope of the standard and the treatment of share-based payment transactions settled in cash within a group.
• IFRS 3 Business combinations (revised) and IAS 27 The consolidated and separate financial statements (amended), effective as of 1 July 2009. The changes pursuant to IFRS 3 (revised) and IAS 27 (amended) will be applied prospectively and affect future business combinations, loss of control over subsidiary companies and transactions with minority interests (minority shareholders).
• IFRS 9 Financial instruments, effective as of 1 January 2013. BinckBank does not expect to apply this standard before 1 January 2013 and is currently studying and evaluating its effects.
• IAS 24 Related party disclosures (revised), effective as of 1 January 2011. BinckBank does not expect to apply this standard before 1 January 2011 and is currently studying and evaluating its effects.
• IAS 32 Financial Instruments: presentation – Classification of rights issues, effective as of 1 February 2010. BinckBank has concluded that this change has no effect on its financial position and results, since it has not issued any rights in foreign currency.
• IAS 39 Financial Instruments: recognition and measurement – Eligible hedged items, effective as of 1 July 2009. BinckBank has concluded that this change has no effect on its financial position and results, since it does not hold any such hedged items.
• IFRIC 12 – Service concession arrangements, effective as of 29 March 2009, does not apply to BinckBank.
• IFRIC 15 Agreements for the construction of real estate, effective as of 1 January 2010, does not apply to BinckBank.
• IFRIC 16 Hedges of a net investment in a foreign operation, effective as of 1 July 2009, does not apply to BinckBank.
• IFRIC 17 Distributions of non-cash assets, effective as of 1 November 2009, does not apply to BinckBank.
• IFRIC 18 Transfer of assets from customers, effective for transactions after 1 July 2009. This will have no effect on our financial position and results.
• IFRIC 19 Extinguishing financial liabilities with equity instruments, effective as of 1 July 2010, does not apply to BinckBank.
• General improvements to IFRS standards (published in April 2009), various effective dates.

Changes in accounting principles
The accounting principles with regard to valuation and result are consistent with those applied in the previous year.

Significant accounting judgements and estimates
The preparation of the financial statements involves making assumptions and estimates on the recognition and measurement of assets and liabilities, contingent rights and liabilities and income and expense items. The most significant assumptions for the future and other key sources of estimation uncertainty at balance sheet date that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are:

Fair value of financial instruments
Where the fair value of financial assets and financial liabilities cannot be obtained from active markets, it is arrived at using valuation methods, including discounted cash flow models. Observable market data is used as the input to these models wherever possible but, where this is not possible, judgements are required in determining fair values. These judgements involve consideration of input factors including liquidity risk, credit risk and volatility. Changes in assumptions regarding these factors can affect the fair value of financial instruments. The valuation of financial instruments is explained in detail in Note 35.

Impairments of loans and receivables
BinckBank performs periodical tests to ascertain whether the fair value of the securities portfolio serving as collateral for collateralised lending is sufficient to cover the credit. If the collateral provided by the securities portfolio is not sufficient to cover the collateralised lending, this is an initial indication that an impairment loss has occurred. BinckBank makes individual estimates of the future cash flows, the proceeds from execution of collateral net of transaction costs and the costs of collecting the receivables. BinckBank assesses periodically whether any changes have taken place which necessitate an adjustment of the impairment provision.

Impairment of goodwill
BinckBank performs an impairment test on the carrying amount of goodwill at least once a year. This involves estimating the value in use of the cash-generating units to which the goodwill is attributed. In order to estimate the value in use, BinckBank makes an estimate of the expected future cash flows from the cash-generating unit and also determines a suitable discount rate for calculating the net present value of those cash flows.

Fair value of identified intangible assets acquired with acquisitions
BinckBank measures the value of the identifiable intangible assets acquired with the acquisition of a company or business activities. The measurement is performed using cash flow models and/or royalty models. BinckBank makes assumptions and projections of future revenues and results in order to arrive at the cash flows and for determining the applicable discount rate. Where the royalty method is used, an estimate is also made of the appropriate royalty percentage.
An impairment test is performed on each balance sheet date.

Economic life of intangible assets and property, plant and equipment
BinckBank applies standard amortisation and depreciation percentages for various groups of assets. BinckBank assesses each individual asset periodically to establish whether the standard amortisation or depreciation percentage still corresponds to the economic life of the asset concerned. Circumstances may occur during the use of the asset which may lead to a situation in which the standard period no longer corresponds to the actual economic life. As soon as such deviation is identified, the remaining carrying amount of the asset is written off over the revised remaining economic life on a straight-line basis.

Deferred tax assets
Deferred tax assets are recognised if it is probable that future taxable profits will be generated to allow the tax loss carryforwards to be utilised.