DUKASCOPY BANK SA

ANNUAL REPORT

2013

CONTENTSCONTENTSDUKASCOPY BANK SA ANNUAL REPORT 2013

Introducing the Bank

04

Message from the Board of Directors

05

Message from the CEO

06

Review of operations and key figures

07

Organisation of the Bank

08

Financial statements and proposed
appropriation of retained earnings

09

Report of the auditor on the statutoryfinancial statements

29

Consolidated financial statements

31

Report of the auditor on the consolidated
financial statements

51

INTRODUCING THE BANKINTRODUCING THE BANK

Dukascopy’s history started in 1998 as a project of physicists headed by Dr. Andrey Duka, aiming at serving thefinancial community with innovative solutions based on novel mathematical and econophysical techniques.
Thirteen years later, the founders’ vision materialised in an online bank, marketplace, and community offering not onlya unique home-made trading environment but also an interactive platform where investors may access specialised
information, exchange views, share know-how, and entertain themselves. Dukascopy will continue to heavily invest in
research and development and distinguish itself through innovation.
During its years of presence in the internet brokerage industry, Dukascopy has made its name known as a trusted
broker offering unrivalled trading technology.

04

DUKASCOPY BANK SA ANNUAL REPORT 2013

MESSAGE FROM THE BOARD
OF DIRECTORSMESSAGE FROM THE BOARD OF DIRECTORSThe execution of our strategy designed to achieve excellence, efficiency and our capacity to adapt and innovate led us
to conclude a record year in 2013, in a quite difficult political, regulatory and economic environment for Swiss banks.
While facing multiple local and international challenges, Dukascopy Bank continues its successful development in
new products and services and increases its international presence.
Anticipating the trend in financial services, we innovate on products such as Dukascopy Connect, a secure instantmessaging application and significantly upgrade our technology to provide our clients with state of the art solutions.
Our vision and our commitment to invest in the future have proven to be effective and successful to reach sustainable
development and growth.

DUKASCOPY BANK SA ANNUAL REPORT 2013

05

MESSAGE FROM THE CEOMESSAGE FROM THE CEO"Coming together is a beginning, keeping together is progress, working together is success" Henry Ford.
These words of Henry Ford describe the road Dukascopy Bank has been striding along. 2013 was the best year
Dukascopy has ever had, in spite of the aftermath of European financial crisis. Dukascopy is well placed to continue on
its path, based on three pillars: average spread of 0,2 pips in EURUSD, local and international visibility, and innovationof products.
Our business model linked to ultra-competitive spreads has set industry standards and is appreciated by our retailclients who have increased by 30%. The retail numbers, however, show just part of Dukascopy's success; newinstitutional clients as far afield as Japan, Hong Kong, Australia, Russia, and Turkey have joined Dukascopy WhiteLabelling program, proving its international reputation.
Dukascopy is ready to face the new challenges of more sophisticated clients and adapts its trading technologies andcommunication tools to compete in the vigorous digital banking war. Experience on our path has taught us to adapt tothe changing Forex industry and invest in continuing innovation. In 2013, we have developed new products, such as
binary options and VisualJForex; we also have added new crosses. We have increased membership of Dukascopy
community to more than 50,000 members and further increased our local and international visibility through the
Geneva Forex Event, the Dukascopy TV channel and local representative offices, such as the newly opened local officein Moscow.
Together with our clients, partners and community members, Dukascopy has achieved a lot during 2013 - and we areready to top these results in 2014 and work together for further success.

Alain Broyon
Chief Executive Officer

06

DUKASCOPY BANK SA ANNUAL REPORT 2013

REVIEW OF OPERATIONSREVIEW OF OPERATIONS

Dukascopy Bank SA
2013 shows strong financial results and continued organic growth at the Bank. Always more clients are seduced byDukascopy (JForex) trading technology. As a result, client deposits increased by 13.2% which triggered higher trading
volume and higher income compared to previous year. These favourable conditions combined with a controlled
increase of operating expenses improved gross and net profits (+23.4% and +31.2%). The latter will be retained so as tobuild up the Bank’s financing and solvency.
The Bank’s geographical expansion (a fourth office has been opened in 2013 out of Switzerland), its high investments
in innovative technologies and new products are reflected in the staff increase (+13.0%) and inevitably push operating
expenses up. However, this expansion strategy is profitable and necessary.
Dukascopy GroupOn a Group level, Dukascopy Europe IBS AS, a wholly owned subsidiary of Dukascopy Bank SA has closed its first
positive financial year and contributed by 22.5% to the consolidated net profit. Dukascopy Europe IBS AS’ financial
results 2013 are very encouraging and confirm the relevance of the Group strategy.

KEY FIGURES OF DUKASCOPY BANK
Year 2013

Year 2012

Variation(in CHF million) (in CHF million) (in CHF million)

Total operating income
Total operating expenses
Gross profit
Depreciation of fixed assets
Net profit
Cost / income ratio
Total assets
Total client deposits
Shareholders’ equity
Employees at 31 December (full time)
Solvency ratios (Tier1 and CET1)**

30.1
24.5
5.6
2.4
2.1
81.5%
151.5*
117.6
28.4
213.8
14.7%

27.2
22.7
4.5
2.2
1.5
83.4%
139.6
103.9
26.3
189.2
15.1%

+2.9
+1.9
+1.1
+0.2
+0.7
n/a
+11.9
+13.7
+2.1
+24.6
n/a

Variation(in %)+10.7%+8.2%+23.4%+9.6%+31.2%-1.9%+8.6%+13.2%+8.0%+13.0%-0.4%* would have been 153.3 without a change in accounting principles occurred in 2013** 10.5% minimum are required
DUKASCOPY BANK SA ANNUAL REPORT 2013

07

ORGANISATION OF THE BANKORGANISATION OF THE BANKBoard of Directors

Executive Committee

Chairman

ChairmanBogdan Prensilevich

Dr. Andrey Duka, Chief Technology officer

Vice-Chairman

Vice-Chairman

Pierre J-M. Bongard

Alain Broyon, Chief Executive Officer

Members

Members

Gérard de Cerjat

Laurent Bellières, Chief Financial & Risk Officer

Frank Guemara

Veronika Makarova, Chief Administrative Officer

Pierre-Alain Guillaume

Internal Auditor

External Auditor

PKF Certifica SA

KPMG SA08

DUKASCOPY BANK SA ANNUAL REPORT 2013

FINANCIAL STATEMENTS

BALANCE SHEET
as at 31 December 2013

AssetsLiquid assets
Amounts due from banks
Amounts due from customers
Financial investments
Participations
Tangible fixed assets
Intangible assets
Accrued income and prepaid expenses
Other assets
Total assets
Total amounts due from Group companies
and qualified participants
Liabilities
Amounts due to banks
Other amounts due to customers
Accrued expenses and deferred income
Other liabilities
Value adjustments and provisions
Share capital
General legal reserve
Profit brought forward
Profit for the year
Total liabilities
Total amounts due to Group companies
and qualified participants

31.12.2013
CHF
82,630,033
47,793,285
78,45915,961,977
1,486,497
1,690,401
97,033654,761
1,106,004
151,498,450

31.12.2012
CHF
92,787,467
36,476,546
120,697
1,386,497
1,988,905
1,550,971
326,620
4,917,563
139,555,266

1,362

-

CHF
17,957,916
99,662,228
3,056,781
1,425,232
959,885
22,000,000
226,000
4,094,494
2,115,914
151,498,450

CHF
7,370,681
96,510,469
2,910,204
5,077,313
1,366,105
22,000,000
151,000
2,713,304
1,456,190
139,555,266

4,247,744

2,090,501

31.12.2013
CHF

31.12.2012
CHF

82,499804,000

43,884808,000

2,557,160,717
2,951,326
2,879,174

2,590,427,030
4,916,361
4,385,060

OFF-BALANCE SHEET
as at 31 December 2013

Off-balance sheet commitments
Contingent commitments
Irrevocable commitments
Off-balance sheet financial instruments
Underlying amounts
Positive replacement values
Negative replacement values

DUKASCOPY BANK SA ANNUAL REPORT 2013

09

FINANCIAL STATEMENTS

STATEMENT OF INCOME
for the year 201331.12.2013
CHF

31.12.2012
CHF

Interest income

266,41332,006

Interest expenses(257,291)(5,698)Net interest income

9,122

26,308Commission income from other services

345,116

274,665

Commission expenses(169,539)(98,328)

Net income from commissions and services

175,577

176,337

Trading income

29,933,335

26,994,447

Interest income

Income from commissions and services

Operating expenses
Personnel expenses(14,078,266)(13,846,493)

Other operating expenses(10,463,994)(8,830,518)

Total operating expenses(24,542,260)(22,677,011)

Gross profit

5,575,774

4,520,081

Depreciation(2,433,964)(2,220,406)

Value adjustments, provisions and losses(90,145)(133,620)

Profit before extraordinary items and taxes

3,051,665

2,166,055

13,006

21,739--Extraordinary profit
Extraordinary expenses
Taxes(948,757)(731,604)

Profit for the year

2,115,914

1,456,190

10

DUKASCOPY BANK SA ANNUAL REPORT 2013

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
1. Activity and number of employees of the Bank
Dukascopy Bank SA (hereinafter the "Bank") has its head office in Geneva and representative offices in Riga (Latvia),
Kiev (Ukraine), Hong Kong (China) and Moscow (Russia).
In 2011, the Bank acquired from AS Rietumu Banka, Latvia, 100% of AS RB Securities IBS, a European regulated broker
based in Riga, Latvia. This subsidiary has been renamed Dukascopy Europe IBS AS. Consolidated financial statements
including the Bank and Dukascopy Europe IBS AS are also available in addition to the present financial statements ofDukascopy Bank SA. The Bank is mainly active in the dealing of foreign exchange and precious metals (hereinafter "FX")
through its home built trading platform.
Expressed in terms of full-time jobs, the number of employees at 31 December 2013 was 213.8 (189.2 at 31 December 2012).
2. Risk Management
The Board of Directors has established an analysis of the main risks the Bank is exposed to. This analysis relies on data
and means implemented by the Bank in matter of Risk Management, as described hereinafter as well as on aprospective estimate of the risks affecting the Bank. In its analysis, the Board of Directors has considered the internal
control system in place to manage risks. Based on its risk analysis, the Board of Directors has adopted a General Risk
Policy in order to limit and manage the main risks affecting the Bank. The internal control system includes, in particular,a system of limits, the definition of authorised activities as well as competences relating to the risk taking in conformity
with applicable prudential regulation. All significant risks are measured and controlled by an independent body.
Credit risk
FX trading is based on margin accounts which are mainly funded in cash deposited with the Bank or covered by bankguarantees. The trading platform automatically monitors the credit risk relating to clients by way of margin call andmargin cut functionalities which ensure that the Bank remains covered by sufficient collateral at any time.
The credit risk relating to banks and other FX counterparties is mitigated by the fixation of limits within thecompetences set by the Board of Directors. The respect of the risk limits is controlled on a daily basis and limits are
adapted as often as deemed necessary.
Market risk
The Bank measures the currency risk on a daily basis and ensures that limits granted by the Board of Directors arecomplied with. The balance sheet and off-balance sheet are converted at closing spot rates. When necessary, the Bank
executes FX trade transactions to reduce FX exposure and to comply with its risk limits.

DUKASCOPY BANK SA ANNUAL REPORT 201311

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
2. Risk Management (continued)
The Bank owns Swiss government bonds with the intention to hold them until maturity and is marginally exposed tointerest rate risk. The Bank calculates interest rate risk on a quarterly basis and optimises asset and liabilities
management as often as deemed necessary.
Operational risks
Operational risks include the legal risk and concentrate mainly on execution of FX trades on the Bank's trading
platform. The latter presents a high level of automation that reduces errors due to the human factor. The Bank has
implemented and monitors, on a regular basis, an internal control system which mitigates the operational risks relating
to Information Technology and to any other processes involving operational risks. The internal control system includes
segregations of duties, internal regulation, control activities such as reconciliations and reporting of relevant
information to the bodies in charge of risk supervision: Board of Directors, General Management and specialisedcommittees.
Compliance risks
The policy of Dukascopy Bank SA is to conduct its activities in respect of the law, banking regulation and the interests of
its clients. Compliance Officers follow the legal and regulatory developments and adjust the internal regulationaccordingly. Compliance Officers, Internal and External Auditors enquire about the respect of internal and external
regulations by the Bank and its personnel and report compliance issues to the Board of Directors.
3. Accounting and valuation principles
The accounting and valuation principles applied for the annual accounts at 31 December are in conformity with theregulations in force in Switzerland and more particularly with the Swiss Code of Obligations, the Federal Law on Banksand Saving institutions and with its Implementing Ordinance and the Guidelines governing the financial statements
establishment issued by the Swiss Financial Market Supervisory Authority (FINMA-Circ. 08/2).
Changes to accounting principles
Starting 2013, the Bank offsets positive and negative replacement values towards several trading counterparties inorder to more precisely calculate its risk positions vis-à-vis those counterparties. As a result, the captions “Other assets”,“Other liabilities” and the total balance sheet of the Bank as at 31.12.2013 are CHF 1.8 million less than what they would
be without netting. This change has no impact on the Bank's income and/or silent reserves. The comparative figures2012 have not been restated.

12

DUKASCOPY BANK SA ANNUAL REPORT 2013

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
3. Accounting and valuation principles (continued)
a. Amounts due from and Amounts due to banks
They are accounted for in the balance sheet at their face value. When deemed necessary, individual value adjustments
are recorded as "Valuation adjustments and provisions".
b. Loans and advances to customers
The Bank is not active in credit activities. However, loans and advances on salaries may be granted to employees of the
Bank and amounts receivable from clients may appear in the normal course of the Bank's core activities. Loans andadvances to customers are carried at their nominal value. Impaired loans are loans for which it is doubtful that debtors
will be able to meet their commitments. Impaired loans and any collateral obtained are valued at their liquidation value,
and any adjustments in value are made in light of the debtors' creditworthiness. If the repayment of a loan depends
exclusively on the sale of the collateral, a value adjustment is made for the entire unsecured portion of the loan.
c. Financial investments
This caption only comprises Swiss government bonds acquired with the intention to hold them until maturity. Held-tomaturity interest-bearing securities are carried at cost, with premiums or discounts (yield components) amortised over
the term of the instrument using the accrual method. Gains and losses arising from their sale or early redemption arerecorded proportionally up to the initial maturity date of the bonds.
d. Participations
They are recorded at their acquisition cost less necessary impairment losses.
e. Tangible fixed assets
They are carried on the balance sheet at the acquisition cost less any depreciation and accumulated impairment losses
required. Depreciation is accounted for on the basis of the estimated period of use of the fixed assets. The
appropriateness of the book-value is reviewed each year (impairment test). If this review brings to light a decrease invalue or a change in the period of use, the Bank records impairment losses by debiting the caption "Depreciation on
fixed assets" or adjusts the depreciation expense over the revised period of use.

* Annual depreciation amounts to 40% of the accounting value at the beginning of the year. Acquisition cost of fixed
assets acquired during the year are depreciated at the same rate on a prorata basis.
DUKASCOPY BANK SA ANNUAL REPORT 2013

13

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
3. Accounting and valuation principles (continued)
Fixed assets are depreciated over the following estimated periods of use:
- Fixtures and fittings
4 years, on a straight-line basis- Furniture
4 years, on a straight-line basis- IT hardware
3 years, on a degressive* basis- Vehicles
5 years, on a degressive* basis
f. Intangible assets
They consist in softwares acquired either by purchase or by contribution by the shareholders. Contribution values werebased on independent valuations. Softwares are carried at acquisition cost or at contribution value less any
depreciation and accumulated impairment losses required. Depreciation is accounted for on the basis of the estimatedperiod of use of the intangible assets. The appropriateness of the book-value is reviewed each year (impairment test). If
this review brings to light a decrease in value or a change in the period of use, the Bank accounts for impairment losses
by debiting the caption "Depreciation on fixed assets" or adjusts the depreciation expense over the revised period ofuse. Intangible assets are depreciated on a degressive* basis over 5 years.
g. Value adjustments and provisions
The Bank records value adjustments and provisions based on its assessment of the risks of loss and probable liabilities,
based on past events, of which the amount and due date are uncertain but assessable. Value adjustments andprovisions which are no longer necessary are released and entered in the statement of income or allocated to coverother risks or maintained in the form of silent reserves.
h. Employee benefit obligations
The treatment of pension commitments is based on the Swiss GAAP FER 16 standard. Employee benefit obligations
mean all commitments resulting from the pension fund to which Bank's employees are insured for retirement, death or
disablement.
There is an economic benefit if, due to contribution reserves, the Bank has the ability to reduce its future employer's
contributions. A contrario, there is a liability if, owing to a shortfall in the pension fund the Bank wants or has toparticipate in the financing of the pension fund.

* Annual depreciation amounts to 40% of the accounting value at the beginning of the year. Acquisition cost of fixed
assets acquired during the year are depreciated at the same rate on a prorata basis.

14

DUKASCOPY BANK SA ANNUAL REPORT 2013

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
3. Accounting and valuation principles (continued)
Each time the annual accounts are closed, the Bank determines whether there is an economic benefit or commitment on
the basis of the annual accounts of the pension fund prepared in accordance with the Swiss GAAP FER 26 rules. An
economic commitment is recorded as "Valuation adjustments and provisions" whereas an economic benefit isaccounted for under "Other assets".
i. Taxes
The Bank records liabilities for income and capital taxes on an accrual basis.
j. Trading operations
Trading operations are made up of spot foreign exchange and precious metals transactions which are marked-to-market.
Realised and unrealised results from trading operations are recorded in the "Trading income".
k. Use of swaps
The Bank uses currency swaps to rollover spot foreign exchange / precious metals transactions to the next spot
settlement date until positions are closed. Replacement values of these instruments are recorded in "Other assets" and"Other liabilities".
l. Recording of transactions
All transactions are recorded in accordance with the trade date principle with the exception of currency / precious
metals swaps and spot foreign exchange / precious metals transactions which are carried in the off-balance sheet until
their value date.
m. Conversion of foreign currencies
Transactions in foreign currencies are converted at the exchange rates of the transaction date. Assets and liabilities
carried in foreign currencies are converted at the exchange rates of the closing date of the financial statements.
Conversion gains and losses are entered in the statement of income as "Trading income". At 31 December, the exchange
rates used to convert the main foreign currencies were as follows:

USD

1.00

2013
CHF
0.89310EUR

1.00

1.227451.20765

GBP

1.00

1.47855

1.48745CAD

1.00

0.84060

0.92230JPY

1.00

0.008480.01055

AUD

1.00

0.79580

0.95160

NZD

1.00

0.734450.75855

LVL

1.00

1.74520

1.71821NOK

1.00

0.147100.16440SEK

1.00

0.138720.14071SGD

1.00

0.706840.74965

DUKASCOPY BANK SA ANNUAL REPORT 2013

2012
CHF
0.91520

15

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the balance sheet
A. Collateral for loans and off-balance-sheet commitments

Loans
Amounts due from customers
Total at 31 December 2013
Total at 31 December 2012
Off-balance sheet commitments
Contingent commitments
Irrevocable commitments
Total at 31 December 2013
Total at 31 December 2012

Breakdown of impaired loans/receivables

Secured by
mortgages
CHF
-

Other
collateral
CHF
16,436-Grossamounts

Unsecured

Total

CHF
78,45978,459104,261

CHF
78,45978,459120,697

82,49982,49943,884804,000
804,000
808,000

82,499804,000
886,499
851,884

Estimatedliquidation
proceeds
of collateral*Net debt
amountIndividual value
adjustments

CHF
10,81889,475

CHF
10,81888,945

CHF
CHF
10,818
Total at 31 December 2013
89,475
Total at 31 December 2012
* Credit or liquidation value per customer: the lower value is applied
B. Financial investments
Book value
Debt securitiesof which bonds held until maturity
Total

including securities eligible for repo transactionsin accordance with liquidity regulations

Fair value

2013
CHF
15,961,977
15,961,977

2012
CHF
-

2013
CHF
16,312,080
16,312,080

2012
CHF
-

15,961,977-

16,312,080

-

2013
CHF

2012
CHF

1,486,497
1,486,497

1,386,497
1,386,497

C. Participations
Participations
Without listed value
Total participations

16

DUKASCOPY BANK SA ANNUAL REPORT 2013

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the balance sheet (continued)
Participations
31December 2013

Activity

HeadofficeShare capital
CHF

Net book
value
CHF

Ownership andvoting rights

SWFX-Swiss FX Marketplace SA
Dukascopy Europe IBS AS
Dukascopy Community SA

dormant
brokerage
marketing

GenevaRiga
Geneva100,000
1,286,497
100,000

100,000
1,286,497
100,000

100%
100%
100%

Participations
31December 2012

Activity

HeadofficeShare capital
CHF

Net book
value
CHF

Ownership andvoting rights

SWFX-Swiss FX Marketplace SA
Dukascopy Europe IBS AS

dormant
brokerage

GenevaRiga

100,000
1,286,497

100,000
1,286,497

100%
100%

D. Fixed assets
Participations
Majority participations
Total participations
Tangible fixed assets
Intangible assets(softwares)
Total fixed assets

2012

Cost value

Accumulated
depreciation

Book value at
end of year

2013
Additions Disposals Depreciation

CHF

CHF

Book value at
end of year

CHF

CHF

CHF

CHF

CHF

1,386,497
1,386,497
7,111,881(5,122,976)

1,386,497 100,000
1,386,497 100,000
1,988,905 668,797-(967,301)

1,486,497
1,486,497
1,690,401

22,703,271(21,152,300)

1,550,971

12,726-(1,466,664)

97,03329,815,152(26,275,276)

3,539,876 681,523-(2,433,965)

1,787,433

2013
CHF

2012
CHF
4,304,877

4,202,446

Fire insurance value of other fixed assets

Future leasing installments arising from operating leases

2014
CHF
1,425,851

2015
CHF
1,051,654

2016
CHF
346,1872017
CHF
223,493

E. Other assets and liabilities

Other assets
Positive replacement values
OthersTotal other assets
Other liabilities
Negative replacement values
Wire transfers
Indirect taxes to be paid
Total other liabilities

DUKASCOPY BANK SA ANNUAL REPORT 2013

2013
CHF

2012
CHF

1,106,004
1,106,004

4,916,361
1,202
4,917,563

1,033,852
246,397
144,983
1,425,232

4,385,060
592,654
99,5995,077,313

17

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the balance sheet (continued)
F. Assets pledged as collateral or assigned to guarantee own commitments, as well as assets under reservationof ownership
2013
2012
Book value ofpledged assets
and assets
assigned ascollateral
CHF
Swiss government bonds
Deposits made with banks to cover guarantees
Total

15,961,977
244,530
16,206,507

CHFBook value ofpledged assets
and assets
assigned ascollateral
CHF

4,164,142
244,530
4,408,672

287,057
287,057

Effective
obligations

Effective
obligations
CHF
287,057
287,057

G . Indications relating to pension funds
A collective pension fund plan exists for the employees based in Switzerland (Caisse Inter-Entreprises-CIEPP).
This fund is a defined contributions scheme. As the Bank has not contributed to any employer's contribution reserve,
there is no identifiable economic benefit to be capitalised in the balance sheet (2012: nil).
Based on the last audited financial statements of the Caisse Inter-Entreprises-CIEPP as at 31 December 2012, thecoverage ratio is 107.5% (31 December 2011: 100.1%).
The employees based in Russia are affilated to a defined contributions scheme pension fund of the Russian state.
This fund does not allow any employer's contribution reserve.
There is no pension fund for the other foreign offices of the Bank.
Pension expenses included in "Personnel expenses" at 31 December were as follows:

Contributions paid by the Bank in Switzerland
Contributions paid by the Bank in Russia
Total

18

2013
CHF

2012
CHF

450,967984
451,951

503,613503,613DUKASCOPY BANK SA ANNUAL REPORT 2013

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the balance sheet (continued)
H. Value adjustments, provisions and reserves for general banking risks
Recoveries,
Balance at
Utilisation
Balance atpast due interest, New provisions
31 December in conformity with
ChangeReleases 31 December
charged todesignated purpose in allocation currency translation
2012
toincomeincome2013
differences
CHF
CHF
CHF
CHF
CHF
CHF
CHF
Value adjustments andprovisions for default risks(collection and country risks)
Value adjustments andprovisions for otherbusiness risks
Other provisions

88,945(18,715)(46,907)501-(13,006)

10,818816,160(375,000)

46,907---

488,067

461,000

-

-

-

-

-

461,000(393,715)

-

501

-

Total value adjustments
1,366,105
and provisions(13,006) 959,885

Value adjustments and provisions for other business risks include provisions for legal fees and litigations arising out of
the normal conduct of Dukascopy Bank SA's activities. Provisions are valued according to the best estimate principle.
I. Share capital

Share capital

2013
Total par value
CHF
22,000,000

Numberof shares
21,712,000

Capital eligible for dividend
CHF
22,000,000

2012

Share capital

Total par value
CHF
22,000,000

DUKASCOPY BANK SA ANNUAL REPORT 2013

Numberof shares
21,712,000

Capital eligible for dividend
CHF
22,000,000

19FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the balance sheet (continued)
J. Justification of equity

Shareholders' equity as at 1 January
Share capital
General legal reserve
Profit brought forward
Total shareholders' equity at 1 January
Profit brought forward allocated to general legal reserve
Contribution to the general legal reserve
Profit for the year
Total shareholders' equity at 31 December
Represented by:
Share capital
General legal reserve
Profit brought forward
Profit for the year

2013
CHF
22,000,000
151,000
4,169,494
26,320,494(75,000)
75,0002,115,914
28,436,408

2012
CHF
22,000,000
106,000
2,758,304
24,864,304(45,000)
45,0001,456,190
26,320,494

22,000,000
226,000
4,094,494
2,115,914

22,000,000
151,000
2,713,304
1,456,190

K. Large shareholders and groups of shareholders bounds by voting agreements (exceeding 5%)
2013

With voting rights
Dr. Andrey Duka
Veronika Makarova

Nominal
CHF

Number of shares
CHF% of equity

Capital eligible for dividend
CHF

10,890,000
10,890,000

10,746,000
10,746,000

49.5%
49.5%

10,890,000
10,890,000

2012

With voting rights
Dr. Andrey Duka
Veronika Makarova

20

Nominal
CHF

Number of shares
CHF% of equity

Capital eligible for dividend
CHF

10,890,000
10,890,000

10,746,000
10,746,000

49.5%
49.5%

10,890,000
10,890,000

DUKASCOPY BANK SA ANNUAL REPORT 2013

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the balance sheet (continued)
L. Presentation of the capital adequacy

Tier 1 capital./. Participations
Total eligible capital2013
CHF ('000)

2012
CHF ('000)

28,329(1,386)
26,94324,864(1,386)23,4782013
Used
approach*Credit risks
Risks without counterparty
Market risksof which on currenciesof which on precious metals
Operational risks
Total required capital
Surplus of eligible capital

Swiss standardised
Swiss standardised
standardised
standardised
standardised
basic indicator

Required capital
CHF ('000)
1,424
894
7,957
7,443
514
4,364
14,63912,304* The Bank uses the transitionary rules allowed by the capital adequacy ordinance.

2012
Used
approachCredit risks
Risks without counterparty
Market risksof which on currenciesof which on precious metals
Operational risks
Total required capital
Surplus of eligible capital

Swiss standardised
Swiss standardised
standardised
standardised
standardised
basic indicator

Ratio between eligible capital and required capital
Solvency ratios (Tier 1 and CET 1*)

Required capital
CHF ('000)
880
1,770
5,524
5,040
484
4,277
12,451
11,0272013

2012

184.0%
14.7%

188.6%
15.1%*before coverage of large exposures excess, 10.5% minimum are required

DUKASCOPY BANK SA ANNUAL REPORT 2013

21

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the balance sheet (continued)
M. Maturity structure

AssetsLiquid assets
Amounts due from banks
Amounts due from customers
Financial investments

At sight
CHF
82,630,033
47,548,755
11,830-Within 3 to 12
WithinCancellable 3 months
months
CHF
CHF
CHF
244,530
66,629-Within1 to 5 years
CHF
15,961,977

Total current assets at
31 December 2013

130,190,618

311,159--

129,061,985

322,725-

17,957,916
99,662,228-

Total third-party liabilities at
31 December 2013

117,620,144

Total third-party liabilities at
31 December 2012

103,881,150

Total current assets at
31 December 2012
Third-party liabilities
Amounts due to banks
Other amounts due to customers

NoOver
5 years maturity
CHF
CHF
-

-

Total
CHF
82,630,033
47,793,285
78,45915,961,977

15,961,977--

146,463,754

-

-

-

-

129,384,710

-

-

-

-

-

17,957,916
99,662,228

-

-

-

-

-

-

117,620,144

-

-

-

-

-

-

103,881,150

N. Amounts due to / from affiliated entities and loans to governing bodies
At 31 December 2013 and 2012, there were no loans granted to governing bodies and no amounts due to / fromaffiliated entities.
Transactions with related parties
Dukascopy Bank SA engages into transactions with related parties in the normal course of its business. Thesetransactions mainly include marketing services and software development support. Transactions with related partiesare conducted at arm's length and were recorded as follows:
2013
CHF

2012
CHF

84

-

Other operating expenses

699,647

688,361

Introducing Agent commissions paid

3,880

995

Amounts due to related companies at 31 December

22

DUKASCOPY BANK SA ANNUAL REPORT 2013

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the balance sheet (continued)
O. Analysis of domestic and foreign assets and liabilities
2013
in CHF ('000)
AssetsLiquid assets
Amounts due from banks
Amounts due from customers
Financial investments
Participations
Tangible fixed assets
Intangible assets
Accrued income and prepaid expenses
Other assets
Total assets
Liabilities
Amounts due to banks
Other amounts due to customers
Accrued expenses and deferred income
Other liabilities
Value adjustments and provisions
Share capital
General legal reserve
Profit brought forward
Profit for the year
Total liabilities

2012

Domestic

Foreign

Total

Domestic

Foreign

Total

82,01623,03072
15,962
200
860
82
612
492
123,326

614
24,763
6
1,286
831
15
43
614
28,172

82,63047,79378
15,962
1,486
1,691
97
655
1,106
151,498

88,40622,344
103
100
1,989
1,551
327
2,092
116,912

4,381
14,132
18
1,286
2,826
22,64392,78736,476
121
1,386
1,989
1,551
327
4,918
139,555

6,070
3,057
986
960
22,000
226
4,094
2,116
39,50917,95893,592439
111,989

17,95899,662
3,057
1,425
960
22,000
226
4,094
2,116
151,498

5,256
2,910
2,647
1,366
22,000
151
2,713
1,456
38,4997,371
91,2552,430
101,056

7,371
96,511
2,910
5,077
1,366
22,000
151
2,713
1,456
139,555

P. Analysis of total assets by country / group of countries
2013

2012

Absolute
CHF ('000)
123,326

Share
%
82

Absolute
CHF ('000)
116,912

Share
%
84

Europe excluding Switzerland

19,92913

15,822

11

United States and Canada

8,196

5

6,796

5

47

-

25

-

151,498100

139,555

100

Assets
Switzerland

OthersTotal assets

DUKASCOPY BANK SA ANNUAL REPORT 2013

23

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the balance sheet (continued)
Q. Analysis of the balance sheet per currency
in CHF ('000)
AssetsLiquid assets
Amounts due from banks
Amounts due from customers
Financial investments
Participations
Tangible fixed assets
Intangible assets
Accrued income and prepaid expenses
Other assets
Total assets
Claims arising from spot exchange andswap transactions
Total at 31 December 2013

CHF

EUR

USD

GBP

JPY

Others.

Total

82,0163,396
815,962
1,486
1,691
97
509
1,106
106,271

614
6,152
26
29
6,821

29,5482
67
29,617

6,061
21
6,082

483
483

2,153
42
29
2,224

82,63047,79378
15,962
1,486
1,691
97
655
1,106
151,498

207,952 432,383

1,095,041 240,982 196,860 383,871 2,557,089

314,223 439,204

1,124,658 247,064 197,343 386,095 2,708,587

Liabilities
7,473
86
Amounts due to banks
25,596
8,088
Other amounts due to customers
349
2,362
Accrued expenses and deferred income
49
1,201
Other liabilities
953
Value adjustments and provisions
22,000Share capital
226
General statutory reserve
4,094
Profit brought forward
2,116
Profit for the year
41,126 33,467
Total liabilities
Delivery obligations arising from spot
265,963 364,607
exchange and swap transactions
307,089 398,074
Total at 31 December 2013
7,134 41,130
Net position by currency

24

8,385
56,594256168
765,410

364
5,497
20
6
5,887

1,389
318
1,707

261
3,569
70
1
3,901

17,95899,662
3,057
1,425
960
22,000
226
4,094
2,116
151,498

1,110,770 219,824 205,689 390,236 2,557,089
1,176,180 225,711 207,396 394,137 2,708,587(51,522) 21,353 (10,053) (8,042)-

DUKASCOPY BANK SA ANNUAL REPORT 2013

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
5. Information concerning the off-balance sheet transactions
A. Open financial derivatives

Trading instruments
Positive
replacement values
CHF

Negative
replacement values
CHF

Contract
volumes
CHF

665,563
2,095,774
2,761,337

537,994
2,204,770
2,742,764

384,113,933
2,117,639,084
2,501,753,017

6,645
183,344
189,989

1,030
135,380
136,4102,049,850
53,357,850
55,407,700

Total at 31 December 2013 before impact
of netting contracts

2,951,326

2,879,174

2,557,160,717

Total at 31 December 2012 before impact
of netting contracts

4,916,361

4,385,060

2,590,427,030

OTC transactions
Currencies:- forward contracts*- swaps
Total currencies
Precious metals:- forward contracts*- swaps
Total precious metals* Represent the spot foreign exchange / precious metals transactions which are accounted for according to the value
date principle.

Total at 31 December 2013 after impact of netting contracts

Positive
replacement values
CHF

Negative
replacement values
CHF

1,106,004

1,033,852

No netting was applied on replacement values as at 31 December 2012.

6. Information concerning the statement of income
A. Trading income

2013

2012

Trading income
Currency and precious metals trading income
Total trading income

CHF

CHF

29,933,335
29,933,335

26,994,447
26,994,447

B. Personnel expenses

2013

2012

Personnel expenses
Salaries
Benefits
Other personnel expenses
Total personnel expenses

CHF

CHF

11,192,849
2,794,921
90,496
14,078,266

11,270,770
2,510,562
65,161
13,846,493

DUKASCOPY BANK SA ANNUAL REPORT 2013
26

DUKASCOPY BANK SA ANNUAL REPORT 2011

25

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
6. Information concerning the statement of income (continued)
C. Other operating expenses

Other operating expenses

2013
CHF

2012
CHF

Marketing and communication

3,178,847

2,731,519

Premises

2,321,330

2,285,417

Legal, audit and consulting

1,083,103

792,324Post, telecommunications and data

770,055

830,799

Travels

985,476

910,696

Office supply

237,502

197,646

IT related expenses

1,701,671

937,527

Others186,009

144,590

10,463,994

8,830,518

Extraordinary income

2013
CHF

2012
CHF

Dissolution of provision on doubtful debtors

13,006--

21,73913,006

21,739Total other operating expenses
D. Extraordinary income and expenses

Disposal of amortised fixed assets
Total extraordinary income
There was no extraordinary expense in 2013 and 2012.

26

DUKASCOPY BANK SA ANNUAL REPORT 2013

FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS
at 31 December 2013
6. Information concerning the statement of income (continued)
E. Analysis of domestic and foreign income and expenses
2013
Domestic
CHF

Foreign
CHF

Net interest income

9,122

-

Net income from commissions and services

175,577-

Trading income

29,933,335-

Personnel expenses(8,552,352)(5,525,914)

Other operating expenses(5,223,816)(5,240,178)

Gross profit

16,341,866(10,766,092)
2012

Domestic
CHF

Foreign
CHF

Net interest income

26,308-Net income from commissions and services

176,337-

Trading income

26,994,447-

Personnel expenses(9,268,974)(4,577,519)

Other operating expenses(5,631,819)(3,198,699)

Gross profit

12,296,299(7,776,218)

DUKASCOPY BANK SA ANNUAL REPORT 2013

27

FINANCIAL STATEMENTSPROPOSED APPROPRIATION OF AVAILABLE EARNINGS
at 31 December 2013

The Board of Directors proposes the following appropriation of available earnings:
2013
CHF
Profit for the year

2,115,914

Profit brought forward

4,094,494

Amount at the disposal of the Shareholders' meeting

6,210,408

2013

Contribution to the general legal reserve

CHF
106,000

To be carried forward

6,104,408

Total

6,210,408

Proposed utilisation

28

DUKASCOPY BANK SA ANNUAL REPORT 2013

REPORT OF THE STATUTORY AUDITOR

Report of the Statutory Auditor on the Financial Statements
to the General Meeting of shareholders ofDukascopy Bank SA, Geneva

As statutory auditor, we have audited the accompanying financial statements of Dukascopy Bank SA, which
comprise the balance sheet, income statement and notes for the year ended 31 December 2013.
Board of Directors ’ Responsibility
The Board of Directors is responsible for the preparation of the financial statements in accordance with therequirements of Swiss law and the company’s articles of incorporation. This responsibility includes designing,
implementing and maintaining an internal control system relevant to the preparation of financial statements thatare free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible forselecting and applying appropriate accounting policies and making accounting estimates that are reasonable inthe circumstances.
Auditor ’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan andperform the audit to obtain reasonable assurance whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of therisks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the internal control system relevant to the entity’s preparation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purposeof expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes
evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates
made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the financial statements for the year ended 31 December 2013 comply with Swiss law and thecompany’s articles of incorporation.

DUKASCOPY BANK SA ANNUAL REPORT 201329

REPORT OF THE STATUTORY AUDITOR

Dukascopy Bank SA, Geneva
Report of the Statutory Auditor
on the Financial Statements 2013
to the General Meeting

Report on Other Legal Requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) andindependence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our
independence.
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal
control system exists, which has been designed for the preparation of financial statements according to the
instructions of the Board of Directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company’s
articles of incorporation. We recommend that the financial statements submitted to you be approved.

KPMG SA

Philippe Ruedin

Nicolas Moser

Licensed Audit Expert

Licensed Audit Expert

Auditor in Charge

Geneva, 30 April 2014

Enclosure:- Financial statements (balance sheet, income statement and notes)- Proposed appropriation of available earnings

30

DUKASCOPY BANK SA ANNUAL REPORT 2013

CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEET
as at 31 December 2013

AssetsLiquid assets
Amounts due from banks
Amounts due from customers
Financial investments
Non-consolidated participations
Tangible fixed assets
Intangible assets
Accrued income and prepaid expenses
Other assets
Total assets
Total amounts due from non-consolidated Group
companies and qualified participants
Liabilities
Amounts due to banks
Other amounts due to customers
Accrued expenses and deferred income
Other liabilities
Value adjustments and provisions
Reserves for general banking risks
Share capital
Profit reserves
Profit for the year
Total liabilities
Total amounts due to non-consolidated Group
companies and qualified participants

31.12.2013
CHF
82,630,033
48,105,078
78,45915,961,977
200,000
1,690,401
97,033656,959
1,308,544
150,728,484

31.12.2012
CHF
92,787,467
36,635,582
120,698
100,000
1,988,905
1,550,971
326,621968,898
134,479,142

1,362

-

CHF
13,875,581
102,337,076
3,091,453
1,643,473
614,135
345,750
22,000,000
4,091,990
2,729,026
150,728,484

CHF
5,362,892
97,600,023
2,951,063
1,139,542
1,020,355
345,750
22,000,000
2,738,779
1,320,738
134,479,142

164,128

84,55031.12.2013
CHF

31.12.2012
CHF

82,499804,000

43,884808,000

2,557,231,828
3,127,018
3,072,004

2,590,404,750
4,941,544
4,417,527

CONSOLIDATED OFF-BALANCE SHEET
as at 31 December 2013

Off-balance sheet commitments
Contingent commitments
Irrevocable commitments
Off-balance sheet financial instruments
Underlying amounts
Positive replacement values
Negative replacement values

DUKASCOPY BANK SA ANNUAL REPORT 201331

CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED STATEMENT OF INCOME
for the year 201331.12.2013
CHF

31.12.2012
CHF

Interest income

266,41332,005Interest expenses(257,291)(5,697)

Net interest income

9,122

26,308Commission income from other services

345,116

274,686

Interest income

Income from commissions and services
Commission expenses(174,136)(99,653)

Net income from commissions and services

170,980

175,033

Trading income

30,962,064

27,220,125

Personnel expenses(14,415,031)(14,157,716)

Other operating expenses(10,538,100)(8,878,835)

Operating expenses

Total operating expenses(24,953,131)(23,036,551)

Gross profit

6,189,035

4,384,915

Depreciation(2,433,964)(2,220,406)

Value adjustments, provisions and losses(137,200)(133,906)

Profit before extraordinary items and taxes

3,617,871

2,030,603

59,913

21,739Extraordinary income
Taxes(948,758)(731,604)

Profit for the year

2,729,026

1,320,738

32

DUKASCOPY BANK SA ANNUAL REPORT 2013

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
1. Activity and number of employees of the GroupDukascopy Bank SA (hereinafter the "Bank") has its head office in Geneva and representative offices in Riga (Latvia),
Kiev (Ukraine), Hong Kong (China) and Moscow (Russia). The Bank is mainly active in the dealing of foreign exchange
and precious metals (hereinafter "FX") through its home built trading platform.
In 2011, the Bank acquired from AS Rietumu Banka, Latvia, 100% of AS RB Securities IBS, a European regulated broker
based in Riga, Latvia. This subsidiary has been renamed Dukascopy Europe IBS AS. Dukascopy Europe IBS AS offers thesame trading platform to its own clients through a white label agreement signed with the Bank.
Expressed in terms of full-time jobs, the number of employees in the Group at 31 December 2013 was 232.8 (206.3 at 31
December 2012).
2. Risk Management
Each Group entity has a supervisory body responsible for managing risks in accordance with applicable local
regulation and the Group standards set by the Bank. The Bank is responsible for exercising consolidated supervision
over Dukascopy Group which includes oversight of risks affecting all Group entities. Since the Bank is the main Group
entity, comments here-after focus on the Bank. The Bank’s Board of Directors has established an analysis of the mainrisks the Bank is exposed to. This analysis relies on data and means implemented by the Bank in matter of Risk
Management, as described hereinafter as well as on a prospective estimate of the risks affecting the Bank. In its analysis,
the Board of Directors has considered the internal control system in place to manage risks. Based on its risk analysis, theBank’s Board of Directors has adopted a General Risk Policy in order to limit and manage the main risks affecting theBank. The internal control system includes, in particular, a system of limits, the definition of authorised activities as wellas competences relating to the risk taking in conformity with applicable prudential regulation. All significant risks aremeasured and controlled by an independent body.
Credit risk
FX trading is based on margin accounts which are mainly funded in cash deposited with the Bank or covered by bankguarantees. The trading platform automatically monitors the credit risk relating to clients by way of margin call andmargin cut functionalities which ensure that the Bank remains covered by sufficient collateral at any time.
The credit risk relating to banks and other FX counterparties is mitigated by the fixation of limits within thecompetences set by the Bank’s Board of Directors. The respect of the risk limits is controlled on a daily basis and limits
are adapted as often as deemed necessary.

DUKASCOPY BANK SA ANNUAL REPORT 201333

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
2. Risk Management (continued)
Market risk
The Bank measures the currency risk on a daily basis and ensures that limits granted by the Board of Directors arecomplied with. The balance sheet and off-balance sheet are converted at closing spot rates. When necessary, the Bank
executes FX trade transactions to reduce FX exposure and to comply with its risk limits.
The Bank owns Swiss government bonds with the intention to hold them until maturity and is marginally exposed tointerest rate risk. The Bank calculates interest rate risk on a quarterly basis and optimises asset and liabilities
management as often as deemed necessary.
Operational risks
Operational risks include the legal risk and concentrate mainly on execution of FX trades on the Bank's trading
platform. The latter presents a high level of automation that reduces errors due to the human factor. The Bank has
implemented and monitors, on a regular basis, an internal control system which mitigates the operational risks relating
to Information Technology and to any other processes involving operational risks. The internal control system includes
segregations of duties, internal regulation, control activities such as reconciliations and reporting of relevant
information to the bodies in charge of risk supervision: Board of Directors, General Management and specialisedcommittees.
Compliance risks
The policy of Dukascopy Bank SA is to conduct its activities in respect of the law, banking regulation and the interests of
its clients. Compliance Officers follow the legal and regulatory developments and adjust the internal regulationaccordingly. Compliance Officers, Internal and External Auditors enquire about the respect of internal and external
regulations by the Bank and its personnel and report compliance issues to the Board of Directors.
3. Accounting principles of the consolidated financial statements
3.1. Principles ruling the establishment of the consolidated financial statements
The consolidated annual accounts are established in conformity with the regulations in force in Switzerland and moreparticularly with the Swiss Code of Obligations, the Federal Law on Banks and Saving institutions and with its
Implementing Ordinance and the Guidelines governing the financial statements establishment issued by the Swiss
Financial Market Supervisory Authority (FINMA-Circ. 08/2).

34

DUKASCOPY BANK SA ANNUAL REPORT 2013

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
3. Accounting principles of the consolidated financial statements (continued)
3.2. Changes to accounting principles
Starting 2013, the Bank offsets positive and negative replacement values towards several trading counterparties inorder to more precisely calculate its risk positions vis-à-vis those counterparties. As a result, the captions “Other assets”,“Other liabilities” and the total consolidated balance sheet as at 31.12.2013 were CHF 1.8 million less than what theywould be without netting. This change has no impact on the Group’s income. The comparative figures have been
restated as required by the DEC-FINMA 08/2. The impact is shown in note 5A.
3.3. Consolidation scope
All companies active in the financial sector in which Dukascopy Bank SA directly or indirectly holds a controllinginterest are fully consolidated in the financial statements. Control is the power to govern, directly or indirectly, thefinancial and operating policies of the entity so as to obtain benefits from its activities. To determine the existence ofcontrol, potential voting rights that are currently exercisable or convertible are taken into consideration. The financial
statements of subsidiaries are incorporated in the consolidated financial statements from the date on which control is
obtained until the date on which control ceases.
Associates having a financial activity in which the Bank has a significant but not controlling influence on the financial
and operating policies are accounted for using the equity method. Significant influence is presumed when Dukascopy
Bank SA directly or indirectly holds over 20% of the equity voting rights in these companies. The consolidated financial
statements include the Group’s share in the net assets and the profit or loss of associates. Goodwill identified on
associates is included in the carrying amount of the investment and is tested yearly for impairment as a share of theinvestment.
Participations below 20%, dormant companies, affiliates which are not active in the financial sector and temporary
participations are excluded from the consolidation scope and are carried at cost less necessary impairments reflecting
the permanent decrease in value of such participations.
3.4. Elimination of intercompany transactions
When preparing the consolidated financial statements, significant balances, transactions and unrealised gains andlosses between Group companies are eliminated. Unrealised gains and losses on transactions with associates andjointly controlled companies are eliminated to the extent of the Group’s interest in these entities.

DUKASCOPY BANK SA ANNUAL REPORT 201335

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
3. Accounting principles of the consolidated financial statements (continued)
3.5. True and fair view principle
The consolidated financial statements of the Group reflect the true and fair view of the assets, the liabilities, thefinancial situation and financial results of the Group.
3.6. Closing date of the consolidated financial statements
The closing date of the consolidated financial statements is the 31 December.
3.7. Recording of transactions
For all Group entities, all transactions are recorded in accordance with the trade date principle with the exception ofcurrency / precious metals swaps and spot foreign exchange / precious metals transactions which are carried in the offbalance sheet until their value date.
3.8. Conversion of foreign currencies
The consolidated financial statements are presented in Swiss francs (CHF). Foreign currency transactions are translated
into the functional currency of each entity of the Group using the exchange rate prevailing on the transaction date.
Assets and liabilities of the Bank carried in foreign currencies are converted at the exchange rates of the consolidated
financial statements’ closing date. Conversion gains and losses are entered in the Bank’s statement of income as"Trading income".
At 31 December, the exchange rates used to convert the main foreign currencies were as follows:
2013

36

2012

CHF

CHF

USD

1.00

0.893100.91520EUR

1.00

1.227451.20765

GBP

1.00

1.47855

1.48745CAD

1.00

0.84060

0.92230JPY

1.00

0.008480.01055

AUD

1.00

0.79580

0.95160

NZD

1.00

0.734450.75855

LVL

1.00

1.74520

1.71821NOK

1.00

0.147100.16440SEK

1.00

0.138720.14071SGD

1.00

0.706840.74965

DUKASCOPY BANK SA ANNUAL REPORT 2013

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
3. Accounting principles of the consolidated financial statements (continued)
The conversion into CHF of the financial statements of foreign Group entities for the needs of the consolidation are
made at the exchange rates listed above for all consolidated balance sheet, off-balance sheet and statement of income
captions, except equity which is converted at historical rates. Conversion differences arising from the conversion of thefinancial statements of foreign Group entities are included in the “Profit reserves” of the consolidated balance sheet.
3.9. Amounts due from and Amounts due to banks
They are accounted for in the consolidated balance sheet at their face value. When deemed necessary, individual value
adjustments are recorded as "Valuation adjustments and provisions".
3.10. Loans and advances to customers
The Bank is not active in credit activities. However, loans and advances on salaries may be granted to employees of the
Bank and amounts receivable from clients may appear in the normal course of the Bank's core activities. Loans andadvances to customers are carried at their nominal value. Impaired loans are loans for which it is doubtful that debtors
will be able to meet their commitments. Impaired loans and any collateral obtained are valued at their liquidation
value, and any adjustments in value are made in light of the debtors' creditworthiness. If the repayment of a loan
depends exclusively on the sale of the collateral, a value adjustment is made for the entire unsecured portion of theloan.
3.11. Financial investments
This caption only comprises Swiss government bonds acquired with the intention to hold them until maturity. Held-tomaturity interest-bearing securities are carried at cost, with premiums or discounts (yield components) amortised over
the term of the instrument using the accrual method. Gains and losses arising from their sale or early redemption arerecorded proportionally up to the initial maturity date of the bonds.
3.12. Tangible fixed assets
They are carried on the consolidated balance sheet at the acquisition cost less any depreciation and accumulated
impairment losses required. Depreciation is accounted for on the basis of the estimated period of use of the fixed
assets. The appropriateness of the book-value is reviewed each year (impairment test). If this review brings to light adecrease in value or a change in the period of use, the Group entities record impairment losses by debiting the caption"Depreciation on fixed assets" or adjust the depreciation expense over the revised period of use.

DUKASCOPY BANK SA ANNUAL REPORT 2013

37

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
3. Accounting principles of the consolidated financial statements (continued)
In the Group, fixed assets are depreciated over the following estimated periods of use:
- Fixtures and fittings- Furniture- IT hardware- Vehicles

4 years, on a straight-line basis
4 years, on a straight-line basis
3 years, on a degressive* basis
5 years, on a degressive* basis

3.13. Intangible assets
They consist in softwares acquired either by purchase or by contribution by the shareholders. Contribution values werebased on independent valuations. Softwares are carried at acquisition cost or at contribution value less any
depreciation and accumulated impairment losses required. Depreciation is accounted for on the basis of the estimatedperiod of use of the intangible assets. The appropriateness of the book-value is reviewed each year (impairment test).
If this review brings to light a decrease in value or a change in the period of use, the Group entities account for
impairment losses by debiting the caption "Depreciation on fixed assets" or adjust the depreciation expense over therevised period of use. In the Group, intangible assets are depreciated on a degressive* basis over 5 years.
The goodwill (positive consolidation difference), if any, is presented in the consolidated balance sheet and depreciatedover the estimated period of use. There was no such goodwill at the closing date of the consolidated financial
statements.
3.14. Value adjustments and provisions
The Group entities record value adjustments and provisions based on their assessment of the risks of loss and probableliabilities, based on past events, of which the amount and due date are uncertain but assessable. Value adjustments andprovisions which are no longer necessary are released and entered in the statement of income or allocated to coverother risks. This caption also includes provisions for deferred tax.

* Annual depreciation amounts to 40% of the accounting value at the beginning of the year. Acquisition cost of fixed
assets acquired during the year are depreciated at the same rate on a prorata basis.

38

DUKASCOPY BANK SA ANNUAL REPORT 2013

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
3. Accounting principles of the consolidated financial statements (continued)
3.15. Employee benefit obligations
The treatment of pension commitments is based on the Swiss GAAP FER 16 standard. Employee benefit obligations
mean all commitments resulting from the pension funds to which Group entities' employees are insured for retirement,
death or disablement.
There is an economic benefit if, due to contribution reserves, the Group entities have the ability to reduce their future
employer's contributions. A contrario, there is a liability if, owing to a shortfall in the pension funds, the Group entities
want or have to participate in the financing of the pension funds.
Each time the annual accounts are closed, the Group entities determine whether there is an economic benefit orcommitment on the basis of the annual accounts of the pension funds prepared in accordance with the Swiss GAAP FER
26 rules. An economic commitment is recorded as "Valuation adjustments and provisions" whereas an economic
benefit is accounted for under "Other assets".
3.16. Reserves for general banking risks
The Bank may constitute such reserves in order to cover risks relating to the banking activity which are not covered by
specific provisions. This caption also consists in hidden reserves in individual financial statements of Group entities
which must be reclassified in application of the true and fair view principle. The reserves for general banking risks form
an integral part of the equity.
3.17. Share capital
The share capital is made of Dukascopy Bank SA’s share capital.
3.18. Profit reserves
The profit reserves consist in equity accumulated by the Group. They include the differences resulting from theelimination of the participations, the retained profits and losses and the differences arising from the conversion of thefinancial statements of foreign Group entities.
3.19. Taxes
The Group entities record liabilities for income and capital taxes on an accrual basis. This caption also includes deferred
tax expenses resulting from value adjustments in accordance with the true and fair view principle which are recognisedin the statement of income. Deferred tax assets on tax losses carried forward are not capitalised; they are set out undernote 4.P.
3.20. Trading operations
Trading operations are made up of spot foreign exchange and precious metals transactions which are marked-tomarket. Realised and unrealised results from trading operations are recorded in the consolidated “Trading income".
3.21. Use of swaps
Group entities use currency swaps to rollover spot foreign exchange / precious metals transactions to the next spot
settlement date until positions are closed. Replacement values of these instruments are recorded in "Other assets" and"Other liabilities".

DUKASCOPY BANK SA ANNUAL REPORT 2013

39

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the consolidated balance sheet
A. Collateral for loans and off-balance-sheet commitments
Secured by
mortgages
CHF
-

Other
collateral
CHF
16,436-

Unsecured

Total

CHF
78,45978,459104,262

CHF
78,45978,459120,698

82,49982,49943,884804,000
804,000
808,000

82,499804,000
886,499
851,884

Breakdown of impaired loans

Gross debt
amountCHF

Estimatedliquidation
proceeds ofcollateral*
CHF

Net debt
amountCHF

Total at 31 December 2013
Total at 31 December 2012

10,81889,475-

10,81889,475

Loans
Amounts due from customers
Total at 31 December 2013
Total at 31 December 2012
Off-balance sheet commitments
Contingent commitments
Irrevocable commitments
Total at 31 December 2013
Total at 31 December 2012

Individual value
adjustments
CHF
10,81889,475* Credit or liquidation value per customer: the lower value is applied

B. Financial investments
Debt securitiesof which bonds held until maturity
Total
including securities eligible for repo transactionsin accordance with liquidity regulations

Book value

Fair value

2013
CHF
15,961,977
15,961,977

2012
CHF
-

2013
CHF
16,312,080
16,312,080

2012
CHF
-

15,961,977-

16,312,080

-

2013
CHF
200,000
200,000

2012
CHF
100,000
100,000

C. Non-consolidated participations
Non-consolidated participations
Without listed value
Total non-consolidated participations

40

DUKASCOPY BANK SA ANNUAL REPORT 2013

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the consolidated balance sheet (continued)

Non-consolidated participations 2012
SWFX-Swiss FX Marketplace SA

100,000
100,000

Head
officeShare capital
CHF

Net book
value
CHF

Ownership andvoting rights

Geneva100,000

100,000

100%

Share capital
CHF

dormant
marketing

GenevaGenevaActivitydormant

D. Fixed assets

Participations

Ownership andvoting rights

HeadofficeNon-consolidated participations 2013
SWFX-Swiss FX Marketplace SA
Dukascopy Community SA

Net book
value
CHF
100,000
100,000

Activity

100%
100%

2012
Cost value
CHF

2013

Accumulated Book value at Additions Disposals Depreciation Book value atdepreciation end of year
end of year
CHF
CHF
CHF
CHF
CHF
CHF

Majority participation 100,000
100,000
Total participations(5,122,976)
7,111,881
Tangible fixed assets
Intangible assets
22,703,271 (21,152,300)(softwares)
29,815,152 (26,275,276)
Total fixed assets

100,000
100,000
1,988,905

100,000
100,000
668,797-(967,301)

200,000
200,000
1,690,401

1,550,971

12,726-(1,466,664)

97,0333,539,876

681,523-(2,433,965)

1,787,433

2013
CHF

2012
CHF

4,202,446

4,304,877

Fire insurance value of tangible fixed assets

Future leasing installments arising from operating leases

2014
CHF

2015
CHF

2016
CHF

2017
CHF

1,425,851

1,051,654

346,187

223,493

E. Other assets and liabilities
Other assets
Positive replacement values
OthersTotal other assets

2013
CHF
1,281,688
26,856
1,308,544

2012
CHF
962,249
6,649
968,898

Other
Other liabilities
liabilities
Negative replacement values
Wire transfers
Indirect taxes to be paid
OthersTotal other liabilities

2013
CHF
1,226,749
246,437
144,983
25,304
1,643,473

2012
CHF
438,232
592,654
99,5999,057
1,139,542

DUKASCOPY BANK SA ANNUAL REPORT 201341

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the consolidated balance sheet (continued)
F. Assets pledged as collateral or assigned to guarantee own commitments, as well as assets under reservationof ownership2013

Swiss government bonds
Deposits made with banks
to cover guarantees
Total

Book valueof pledged assets
and assets assigned
as collateral
CHF
15,961,977

2012

CHF
4,164,142

Book valueof pledged assets
and assets assigned
as collateral
CHF-

244,530

244,530

287,057

287,057

16,206,507

4,408,672

287,057

287,057

Effective
obligations

Effective
obligations
CHF-

G. Indications relating to pension funds
A collective pension fund plan exists for the employees based in Switzerland (Caisse Inter-Entreprises-CIEPP).
This fund is a defined contributions scheme. As the Bank has not contributed to any employer's contribution reserve,
there is no identifiable economic benefit to be capitalised in the balance sheet (2012: nil).
Based on the last audited financial statements of the Caisse Inter-Entreprises-CIEPP as at 31 December 2012, thecoverage ratio is 107.5% (31 December 2011: 100.1%).
The employees based in Russia are affilated to a defined contributions scheme pension fund of the Russian state.
This fund does not allow any employer's contribution reserve.
There is no pension funds for the consolidated entity of the Group.
Pension expenses included in "Personnel expenses" at 31 December were as follows:

Contributions paid by the Bank in Switzerland
Contributions paid by the Bank in Russia
Total

42

2013
CHF
450,967984
451,951

DUKASCOPY BANK SA ANNUAL REPORT 2013

2012
CHF
503,613503,613

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the consolidated balance sheet (continued)
H. Value adjustments, provisions and reserves for general banking risks
Recoveries,
past due interest,
New provisions
Balance at
Releases
Balance at
Utilisation in
31 December conformity with currency translation charged to income to income 31 December
differences2012
designated purpose
2013
CHF
CHF
CHF
CHF
CHF
CHF

Provisions for deferred taxes
115,250
Value adjustments and
88,945provisions for default risks(collection and country risks)
Value adjustments andprovisions for other business 816,160
risks
Total value adjustments
1,020,35
and provisions
Reserves for general banking
345,750
risks

-

-

-

-

115,250(18,715)501-(59,913)

10,818(375,000)-

46,907-

488,067(393,715

501

46,907(59,913)614,135

-

-

-

-

345,750

Value adjustments and provisions for other business risks include provisions for legal fees and litigations arising out of
the normal conduct of Dukascopy Bank SA's activities. Provisions are valued according to the best estimate principle.

DUKASCOPY BANK SA ANNUAL REPORT 2013

43

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the consolidated balance sheet (continued)
I. Justification of equity
Shareholders' equity as at 1 January
Share capital
Profit reserves
Reserves for general banking risks
Total shareholders' equity at 1 January
Profit for the year
Total shareholders' equity at 31 December
Represented by:
Share capital
Profit reserves
Reserves for general banking risks

2013
CHF
22,000,000
4,091,990
345,750
26,437,740
2,729,026
29,166,766

2012
CHF
22,000,000
2,738,779
345,750
25,084,529
1,320,738
26,405,267

22,000,000
6,821,016
345,750

22,000,000
4,059,517
345,750

2013
CHF (’000)

2012
CHF (’000)

28,446(100)
28,34624,972(100)
24,872

J. Presentation of the capital adequacy

Tier 1 capital./. Participations
Total eligible capital

Usedapproach*
Swiss standardised
Swiss standardised
standardised
standardised
standardised
basic indicator

2013

2012

Required capital
CHF ('000)
1,395
894
8,017
7,502
515
4,427
14,733
13,613Required capital
CHF ('000)
876
1,770
5,626
5,142
484
4,288
12,56012,312Credit risks
Risks without counterparty
Market risksof which on currenciesof which on precious metals
Operational risks
Total required capital
Surplus of eligible capital* In 2013 the Bank uses the transitionary rules allowed by the capital adequacy ordinance.

Ratio between eligible capital and required capital as per Swiss Law
Solvency ratios (Tier 1 and CET 1*)

192.4%
15.4%* before coverage of large exposures excess, 10.5% minimum are required

44

DUKASCOPY BANK SA ANNUAL REPORT 2013

198.0%
15.8%

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the consolidated balance sheet (continued)
K. Maturity structure
Over
No
Within 3 to 12
Withinmonths1 to 5 years 5 years maturity
CHF
CHF
CHF
CHF
15,961,977

At sight

Cancellable

CHF
82,630,033
47,860,548
11,830-

CHF
244,530
66,629-Within3 months
CHF-

130,502,411

311,159--

15,961,977--

146,775,547

129,221,022

322,725

-

-

-

-

-

129,543,747

13,875,581
102,337,076

-

-

-

-

-

-

13,875,581
102,337,076

Total third-party liabilities at
31 December 2013

116,212,657

-

-

-

-

-

-

116,212,657

Total third-party liabilities at
31 December 2012

102,962,915

-

-

-

-

-

-

102,962,915

AssetsLiquid assets
Amounts due from banks
Amounts due from customers
Financial investments
Total current assets at
31 December 2013
Total current assets at
31 December 2012
Third-party liabilities
Amounts due to banks
Other amounts due to customers

Total
CHF
82,630,033
48,105,078
78,45915,961,977

L. Amounts due to / from affiliated entities and loans to governing bodies
At 31 December 2013 and 2012, there were no loans granted to governing bodies and no amounts due to / fromaffiliated entities.
Transactions with related parties
Dukascopy Bank SA engages into transactions with related parties in the normal course of its business. Thesetransactions mainly include marketing services and software development support.
Transactions with related parties are conducted at arm's length and were recorded as follows:
2013
CHF

2012
CHF

84

–

Other operating expenses

699,647

688,361

Introducing Agent commissions paid

3,880

995

Amounts due to related companies at 31 December

DUKASCOPY BANK SA ANNUAL REPORT 201345

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the consolidated balance sheet (continued)
M. Analysis of domestic and foreign assets and liabilities
2013
in CHF ('000)
AssetsLiquid assets
Amounts due from banks
Amounts due from customers
Financial investments
Participations
Tangible fixed assets
Intangible assets
Accrued income and prepaid expenses
Other assets
Total assets

2012

Switzerland

Foreign

Total

Switzerland

Foreign

Total

82,01623,03072
15,962
200
860
82
612
501
123,335

614
25,074
6
831
15
45
808
27,393

82,63048,10478
15,962
200
1,691
97
657
1,309
150,728

88,40622,344
103
100
1,989
1,551
327
363
115,183

4,381
14,291
18
606
19,29692,787
36,635
121
100
1,989
1,551
327
969
134,479

6,102
3,091
1,012
607
346
22,0004,092
2,729
39,97913,876
13,87696,235 102,337
3,091
631
1,643
7
614
346
22,0004,092
2,729
110,749 150,728

5,263
2,951
929
1,020
346
22,0002,739
1,321
36,5695,363
92,336211
97,9105,363
97,599
2,951
1,140
1,020
346
22,0002,739
1,321
134,479

Liabilities
Amounts due to banks
Other amounts due to customers
Accrued expenses and deferred income
Other liabilities
Value adjustments and provisions
Reserves for general banking risks
Share capital
Profit reserves
Profit for the year
Total liabilities

N. Analysis of total assets by country / group of countries
2013

2012

Absolute
CHF ('000)
123,335

Share
%
82

Absolute
CHF ('000)
115,183

Share
%
86

Europe excluding Switzerland

19,036

13

13,596

10

United States and Canada

8,201

5

5,672

4

Others

156

-

28

-

150,728100

134,479

100

Assets
Switzerland

Total assets

46

DUKASCOPY BANK SA ANNUAL REPORT 2013

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
4. Information concerning the consolidated balance sheet (continued)
O. Analysis of the balance sheet per currency
CHF
in CHF ('000)
Assets82,016
Liquid assets
3,405
Amounts due from banks
8
Amounts due from customers
15,962Financial investments
200
Participations
1,690
Tangible fixed assets
97
Intangible assets
509
Accrued income and prepaid expenses
1,282
Other assets
105,169
Total assets
Claims arising from spot exchange
207,969and swap transactions
313,138
Total at 31 December 2013
Liabilities
6
Amounts due to banks
8,176
Other amounts due to customers
Accrued expenses and deferred income 2,362
1,393
Other liabilities
607
Value adjustments and provisions
346
Reserves for general banking risks
22,000Share capital
4,092
Profit reserves
2,729
Profit for the year
41,711
Total liabilities
265,963
Delivery obligations arising from spot
exchange and swap transactions
307,674
Total at 31 December 2013
5,464
Net position by currency

EUR

USD

GBP

JPY

Others

Total

614
6,235
26
30
6,905

29,601
2
68
5
29,676

6,116
21
6,137

483
483

2,265
42
29
22
2,358

82,63048,10578
15,962
200
1,690
97
657
1,309
150,728

432,378 1,095,137 240,928 196,885

383,880

2,557,177

439,283 1,124,813 247,065 197,368

386,238 2,707,905

4,569
1,389
126
7,667
26,885318
5,789
57,366
372
20
263
56
6
167
7
31,882 65,470
1,707
5,941
364,603 1,110,886 219,771 205,705

119
3,803
74
21
4,017
390,249

13,876102,337
3,091
1,643
614
346
22,0004,092
2,729
150,728
2,557,177

396,485 1,176,356 225,712 207,412 394,266 2,707,905
42,798 (51,543) 21,353 (10,044) (8,028)-

P. Deferred tax assets

Amount of non-capitalised deferred tax asset

2013
CHF
168,664

2012
CHF
186,610

This amount relates to losses carried forward by Dukascopy Europe IBS AS.

DUKASCOPY BANK SA ANNUAL REPORT 2013

47

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
5. Information concerning the consolidated off-balance sheet transactions
A. Open financial derivatives

OTC transactions
Currencies:- forward contracts*- swaps
Total currencies
Precious metals:- forward contracts*- swaps
Total precious metals
Total at 31 December 2013 before impact
of netting contracts
Total at 31 December 2012 before impact
of netting contracts

Trading instruments
Positive
replacement values
CHF

Negative
replacement values
CHF

Contract
volumes
CHF

665,5632,269,683
2,935,246

537,994
2,395,275
2,933,269

384,113,933
2,117,708,908
2,501,822,841

6,645
185,127
191,772
3,127,018

1,030
137,705
138,735
3,072,004

2,049,850
53,359,137
55,408,987
2,557,231,828

4,941,544

4,417,527

2,590,404,750* Represent the spot foreign exchange / precious metals transactions which are accounted for according to the value
date principle.

Total at 31 December 2013 after impact of netting contracts
Total at 31 December 2012 after impact of netting contracts

Positive
replacement values
CHF
1,281,688
962,249

Negative
replacement values
CHF
1,226,749
438,232

6. Information concerning the consolidated statement of income
A. Trading income

2013

2012

Trading income
Currency and precious metals trading income
Total trading income

CHF

CHF

30,962,064
30,962,064

27,220,125
27,220,125

B. Personnel expenses

2013

2012

Personnel expenses
Salaries
Benefits
Other personnel expenses
Total personnel expenses

CHF

CHF

11,407,153
2,914,151
93,727
14,415,031

11,440,096
2,652,459
65,161
14,157,716

48

DUKASCOPY BANK SA ANNUAL REPORT 2013

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
6. Information concerning the consolidated statement of income (continued)
C. Other operating expenses
2013

2012

Other operating expenses

CHF

CHF

Marketing and communication

3,206,567

2,748,392

Premises

2,321,330

2,285,417

Legal, audit and consulting

1,117,079

815,021

Post, telecommunications and data

770,192

830,937

Travels

985,476

910,696

Office supply

237,560

197,734

IT related expenses

1,702,718

938,558

Others

197,178

152,080

10,538,100

8,878,835

Total other operating expenses

D. Extraordinary income and expenses
2013

2012

Extraordinary income

CHF

CHF

Dissolution of provisions on doubtful debtors

59,913--

21,73959,913

21,739

Disposal of amortised fixed assets
Total extraordinary income
There was no extraordinary expense in 2013 and 2012.

DUKASCOPY BANK SA ANNUAL REPORT 2013

49

CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at 31 December 2013
6. Information concerning the consolidated statement of income (continued)
E. Analysis of domestic and foreign income and expenses

Net interest income

2013
Domestic
CHF

Foreign
CHF

9,122

-

Net income from commissions and services

175,577(4,597)

Trading income

29,933,335

1,028,729

Personnel expenses(8,552,352)(5,862,679)

Other operating expenses(5,223,816)(5,314,284)

Gross profit

16,341,866(10,152,831)
2012

Domestic
CHF

Foreign
CHF

Net interest income

26,308–Net income from commissions and services

176,337(1,304)

Trading income

26,994,446

225,679

Personnel expenses(9,268,973)(4,888,743)

Other operating expenses(5,631,819)(3,247,016)

Gross profit

12,296,299(7,911,384)

50

DUKASCOPY BANK SA ANNUAL REPORT 2013

REPORT OF THE STATUTORY AUDITOR

Report of the Statutory Auditor on the Consolidated Financial Statements
to the General Meeting ofDukascopy Bank SA, Geneva
As statutory auditor, we have audited the accompanying consolidated financial statements of Dukascopy Bank SA,
which comprise the balance sheet, income statement and notes for the year ended 31 December 2013.
Board of Directors’ Responsibility
The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with the provisions governing the preparation of financial statements for Banks and therequirements of Swiss law. This responsibility includes designing, implementing and maintaining an internal control
system relevant to the preparation and fair presentation of consolidated financial statements that are free frommaterial misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting andapplying appropriate accounting policies and making accounting estimates that are reasonable in thecircumstances.
Auditor ‘s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We
conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that weplan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are freefrom material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theentity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies
used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of theconsolidated financial statements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements for the year ended 31 December 2013 give a true and fair viewof the financial position, the results of operations and the cash flows in accordance with the provisions governing
the preparation of financial statements for banks and comply with Swiss law.

DUKASCOPY BANK SA ANNUAL REPORT 2013

51

REPORT OF THE STATUTORY AUDITOR

Dukascopy Bank SA, Geneva
Report of the Statutory Auditor on theConsolidated Financial Statements 2013
to the General Meeting

Report on Other Legal Requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) andindependence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our
independence.
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal
control system exists, which has been designed for the preparation of consolidated financial statements according
to the instructions of the Board of Directors.
We recommend that the consolidated financial statements submitted to you be approved.

KPMG SA

Philippe Ruedin

Nicolas Moser

Licensed Audit Expert

Licensed Audit Expert

Auditor in Charge

Geneva, 30 April 2014

Enclosure:- Consolidated financial statements (balance sheet, income statement and notes)

52

DUKASCOPY BANK SA ANNUAL REPORT 2013

ADDRESSES - CONTACTS
Head Office

GenevaInternational Center of Cointrin (ICC), Route de Pré-Bois 20,
CH-1215 Geneva 15, Switzerland
Tel: +41 22 799 48 88
Fax: +41 22 799 48 80
info@dukascopy.com

Representative Offices

Hong Kong
701, 7/F, Tower 2, Silvercord, 30 Canton Road, Tsim Sha Tsui,
Kowloon, Hong Kong
Phone: +852 2162 7354
Fax: +852 2162 7600
hongkong@dukascopy.com
Kiev
04119, Degtiarivska str. 27-T, 4nd floor, Kyiv, Ukraine
Tel.: +380 4449 52092
Fax: +41 22 799 48 80
info@dukascopy.com
www.dukascopy.com
Moscow
109012, 2 M. Cherkasky per., Moscow, Russian Federation
Tel.: +7 (495) 642 8121
Fax: +41 22 799 48 80
moscow@dukascopy.com
www.dukascopy.com
Riga
LV-1011, Lacplesa iela 20a-1, Riga, Latvia
Tel.: +371 67 218 724
Fax: +371 67 218 725
info@dukascopy.com
www.dukascopy.com

Consolidated SubsidiaryDukascopy Europe IBS AS,
Lacplesa iela 20a-1, Riga, LV-1011, Latvia
Tel.: +371 67 399 000
Fax: +371 67 399 000
info@dukascopy.eu
www.dukascopy.eu