7. Further notes. Parent company Swiss Stock Exchange (SWX Swiss Exchange Association), Selnaustrasse 30, 8021 Zurich, Switzerland

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1 78 Annual financial statements Note 2 The staff pension fund of the SWX Group is a defined benefit plan under IAS 19. Owing to the revaluation of pension assets and liabilities by external actuaries, a gain of CHF 3.6 million was recognized in the income statement at 31 December Note 3 In compliance with IAS 36, goodwill is no longer written off according to plan. The goodwill amortization of CHF 0.3 million required by Swiss GAAP ARR was therefore cancelled and booked to the income statement for 2004, taking into account deferred taxes. Note 4 As a result of the adjustments mentioned above, profit for 2004 rose by CHF 2.9 million, taking into account deferred income taxes. 7. Further notes 7.1 Related parties Based on IAS 24, the following persons and entities qualify as related parties within the context of the SWX Group s normal business operations: Parent company Swiss Stock Exchange (SWX Swiss Exchange Association), Selnaustrasse 30, 8021, Switzerland The Swiss Stock Exchange is always referred to as the SWX Swiss Exchange Association in the annual financial statements. Parties with joint control Members of the Swiss Stock Exchange (the SWX Swiss Exchange Association): Name ABN Amro Bank Banca del Gottardo Bank am Bellevue Bank CIAL (Schweiz) Bank Hofmann AG Bank Julius Bär & Co. AG Location Lugano Küsnacht Basel Name Location Bank Leu AG Bank Sal. Oppenheim Jr. & Cie. (Schweiz) Bank Sarasin & Cie. Bank Vontobel AG Banque Bonhôte & Cie. SA Neuchâtel Banque Cantonale de Genève Banque Cantonale Vaudoise Lausanne Banque de Dépôts et de Gestion Lausanne Banque Piguet & Cie. SA Banque Privée Edmond de Rothschild S.A. Basler Kantonalbank Basel BNP Paribas Private Bank (Switzerland) SA BSI SA Lugano BZ Bank Aktiengesellschaft Wilen Cornèr Banca S.A. Lugano Coutts Bank von Ernst AG Credit Agricole Indosuez Lausanne Credit Lyonnais (Suisse) SA Credit Suisse Credit Suisse First Boston Deutsche Bank (Schweiz) AG Dreyfus Söhne & Cie. AG, Banquiers Basel EFG Private Bank SA E. Gutzwiller & Cie., Banquiers Basel Ehinger & Armand von Ernst AG Fortis Bank (Nederland) N.V. Frankfurt Branch Frankfurt Goldmann, Sachs & Co. Bank Hottinger & Cie., Banquiers HSBC Private Bank (Suisse) SA ING Bank (Switzerland) Ltd La Roche & Cie., Banquiers Basel LGT Bank in Liechtenstein AG Vaduz Liechtensteinische Landesbank AG Vaduz Lombard Odier Darier Hentsch & Cie. Maerki Baumann & Co. AG Merrill Lynch Capital Markets AG Mirabaud & Cie., Banquiers Pictet & Cie., Banquiers Privatbank IHAG AG Rahn & Bodmer, Banquiers Rüd, Blass & Cie. AG, Bankgeschäft

2 Annual financial statements 79 Name SG Private Banking (Suisse) SA Société de Bourse Lémanique Société Générale, Paris Swissnetbank.com AG Timber Hill (Europe) AG UBS AG Union Bancaire Privée Zürcher Kantonalbank Key management Key management in the reporting year comprised the Board of Directors of the Swiss Stock Exchange (the SWX Swiss Exchange Association), which is identical to that of the SWX Group, as well as the members of the Management Committee of the SWX Swiss Exchange (shown with an asterisk after their name in the following list): Andreas Amschwand Walter Berchtold David J. Blumer Dr. Raymond Breu Werner Bürki (*) Jean-Luc De Buman Jacques de Saussure Bernard Droux Hans Fischer Dr. Reto Francioni G. Andreas Guth Andreas Häberli Dr. Heinrich Henckel (*) Reto Himmel Lee Hodgkinson (*) Daniel Keist (*) Peter Keller (*) Chris Landis (*) Eduardo Leemann Yves Maas Bruno Meier Peter R. Rahn Jürg Spillmann (*) Stephan Zimmermann Location Lausanne Zug Associated companies Name Other related parties Location Eurex Ltd Eurex Frankfurt Frankfurt Eurex Clearing AG Frankfurt Eurex Bonds GmbH Frankfurt Eurex Repo GmbH Frankfurt U.S. Holding Inc. Chicago U.S. Futures Exchange L.L.C. Chicago STOXX Ltd Stock Exchange Intelligence Ltd Basel Name SWX Group Welfare Fund Location The information required by IAS on related parties is disclosed directly in the relevant positions. Where this is not possible, this information is given below. In principle, services are billed on an arm s length basis. The most important terms and conditions governing the exchange of services between the SWX Group and related parties are as follows: SWX Swiss Exchange Association The SWX Swiss Exchange is the collecting agency for fines imposed by the Disciplinary Commission. Proceeds from the fines are credited to the Solidarity Fund of the SWX Swiss Exchange Association. In addition, other payments are transacted through the current account maintained by the two entities. Parties with joint control Revenue and expenses relating to parties with joint control reflect transactions conducted on prevailing market terms. Amounts outstanding at year-end are not hedged and are settled in cash. There are no guarantees provided in respect of parties with joint control. No provisions were issued at the end of the year for doubtful receivables from parties with joint control. Outstanding debts are monitored on a continuous basis and reviewed for long-term impairment no later than at year-end.

3 80 Annual financial statements Associated companies The most important business relationships with associated companies are set out in the table below. All transactions were conducted at prevailing market prices. Office and administrative services provided by SWX Swiss Exchange to Eurex Ltd Office and administrative services provided by Eurex Ltd to SWX Swiss Exchange Eurex derivatives trading Office and administrative services provided by SWX Swiss Exchange to STOXX Ltd Key management Members of the SWX Swiss Exchange Board of Directors are paid a fixed annual remuneration. Members of the management also receive a variable, profit-related salary component, to which there is no legal claim. The following table gives an overview of compensation for the SWX Swiss Exchange key management: Compensation Post-employment benefits Total Compensation includes pro rata expenses incurred in the reporting period. The amount actually paid may differ from the amount shown above. Key management personnel were not granted any further advantages or benefits in the reporting periods.

4 Annual financial statements Notes to the consolidated income statement Revenue Revenue parties with joint control Revenue associated companies Revenue third parties Total revenue Personnel expense Compensation Social security payments Other personnel costs Total personnel expense The Board of Directors decided to introduce a cost-cutting programme to ensure the lasting profitability of the core business of the SWX Swiss Exchange. Non-recurring personnel expenditure of CHF 4.8 million was set aside at 31 December 2005 to finance the social plan approved by the management. In 2005, an average of 469 people were on the permanent staff (467 in the previous year). There were 465 full-time positions occupied at 31 December 2005, compared with 467 a year earlier.

5 82 Annual financial statements Staff pension fund Calculation parameters Discount rate 3.0 % 3.5 % Interest rate for projected pension 3.0 % 3.5 % Long-term return 4.0 % 4.0 % Salary trend 1.5 % 1.5 % Pensions trend 0 % 0 % Retirement age Men Women Termination probabilities Pursuant to BVG 2000 Composition of pension plan surplus or deficit recorded on the balance sheet: Net assets at market value Present value of obligations Surplus or deficit Non-capitalizable part of surplus Amount recognized on balance sheet Net assets at market value include reserves of CHF million for the employer s contributions. The amount of CHF million recognized on the balance sheet comprises assets of CHF million and liabilities of CHF million, shown under Capitalized pension fund assets and Pension fund liabilities, respectively. Breakdown of pension fund costs Current expenditure on service years Interest on present value of obligations Expected net return on investment (4 680) (3 946) Change in non-capitalizable part (546) Employee contributions (3 037) (2 913) Pension fund costs included in Personnel expense

6 Annual financial statements 83 Actual revenue from budgeted assets Expected net return on investment Actuarial gains or losses (638) Actual revenue Movements in amount shown on balance sheet 1 January (12 426) (8 801) Pension fund costs for the period Employer s contributions (7 537) (11 675) 31 December (14 927) (12 426) Capital taxes Capital taxes current year (635) (1 009) Total capital taxes (635) (1 009) Other operating expenses Other operating expenses relating to associated companies (52 715) (55 290) Other operating expenses relating to third parties ( ) ( ) Total other operating expenses ( ) ( )

7 84 Annual financial statements Income from associated companies Dividend income from STOXX Ltd Income from equity stake in STOXX Ltd (109) Impact of new arrangement for dividend-right certificates of Eurex Ltd 0 (3 544) Income from equity stake in Eurex Ltd (186) Impairment, Eurex Ltd 0 (7 130) Total income from associated companies (6 969) Net financial income Securities earnings (1 284) Foreign currency earnings 517 (1 276) Refund of foreign value-added tax Settlement of projects by Deutsche Börse AG Compensation payment by Deutsche Börse AG for voting pool agreement Other financial income (628) Total net financial income (3 188) Net interest income Interest income from SWX Swiss Exchange Association Interest income from associated companies 0 31 Interest income from parties with joint control Interest income from third parties Total interest income Interest expense for third parties (70) (155) Total interest expense (70) (155) TOTAL NET INTEREST INCOME

8 Annual financial statements Income taxes Deferred income taxes (1 185) (34) Total deferred income taxes (1 185) (34) Income taxes previous years 239 (1 449) Income taxes current year (25 344) (14 406) Total income taxes (25 105) (15 855) TOTAL TAX EXPENSE (26 290) (15 889) Analysis of tax burden Profit before tax Weighted overall tax rate 22 % 22 % Expected tax expense New inclusion of deferred tax assets Tax reductions arising from loss carry-forwards 0 (1 437) Difference from local tax rates (74) 0 Effective tax expense Effective tax expense as % of profit before tax 23 % 20 % The weighted overall tax rate is calculated from the profit tax rates applicable to individual Group companies in the various tax territories, taking into account their respective tax situation.

9 86 Annual financial statements 7.3 Notes to the consolidated balance sheet Cash and cash equivalents Bank current accounts parties with joint control Cash, post office and bank current accounts third parties Total cash, post office and bank current accounts Time deposits parties with joint control Time deposits third parties Total time deposits (less than 90 days) TOTAL CASH AND CASH EQUIVALENTS Securities Money market funds Bonds Hedge funds Other securities Total securities with fair value Money market funds: These funds invest mainly in CHF-denominated money market instruments issued by prime borrowers. The average residual term to maturity of the fund portfolio is not more than one year. Bonds: Assets are invested in bonds denominated in CHF, EUR and GBP. The benchmark indices are SBI-CHF Domestic, maturity range 1 to 7 years, and SBI-CHF Foreign, maturity range 1 to 7 years. The weighting is 50 % for each category. Euro Corporate Bonds and / or Absolute Return Bonds (ARB) may be used up to a maximum of 10 % of the portfolio value to enhance the return. Minimum ratings for borrower quality are A (Standard & Poor s) or A2 (Moody s). Hedge funds: Investments in hedge funds are made only in funds of funds. In order to be protected from manager-specific and investment-specific (strategy) risks, the portfolio must be diversified into individual funds as well as strategies. The amount invested in an individual fund may not exceed 15 % of the fund of funds, while the amount invested in an individual strategy may not exceed 40 %. The decision to invest in a hedge fund or to change the existing exposure rests with the Executive Committee. The investment in hedge funds is carried on the balance sheet at net asset value, as no market value is available. Net asset value is based on the market values of hedge fund investments. The unrealized gain or loss resulting from this valuation is booked to the income statement. The net asset value is notified by the fund administrator. Because of the uncertainty concerning the valuation of such investments and the fact that not all markets are liquid, net asset value calculated at the time of valuation may diverge substantially from realizable values.

10 Annual financial statements 87 Other securities: These securities comprise shares in companies which are held with strategic considerations in mind. Securities held to final maturity: In 2004, the SWX Swiss Exchange granted U.S. Futures Exchange L.L.C, a company of the Eurex Group, a subordinated loan of CHF 2.7 million. This loan was fully written off on the basis of an impairment review Short-term receivables Trade receivables from third parties from associated companies from SWX Swiss Exchange Association from other related parties Total trade receivables Other receivables from third parties Total other receivables TOTAL SHORT-TERM RECEIVABLES Short-term loans Interest-bearing short-term loans to SWX Swiss Exchange Association Total interest-bearing short-term loans Interest-free short-term loans to associated companies Total interest-free short-term loans TOTAL SHORT-TERM LOANS The SWX Swiss Exchange granted Eurex Frankfurt an interest-free loan of CHF 3.2 million, carried under interest-free short-term loans to associated companies. The loan was repaid in February 2006.

11 88 Annual financial statements Prepaid expenses and accrued income Exchange fees and other revenue Accrued interest on securities Other Total prepaid expenses and accrued income Deferred income taxes Deferred taxes arising from differences in assets between the IFRS consolidated balance sheet and the tax accounts are as follows: in CHF 1000 Deferred tax assets Deferred tax liabilities Valuation difference internally developed software Capitalization of pension fund General bad debt charge (164) (164) (396) Goodwill STOXX Ltd 0 0 (240) Valuation of STOXX Ltd using equity method (1 226) (1 226) (483) Pension fund liabilities (4 724) (4 724) (4 528) Total deferred income taxes 993 (6 114) (5 121) (3 936) No noteworthy additional tax liabilities are expected as a result of dividend payments by Group companies and associated companies. Changes in deferred taxes during 2005 and 2004 are as follows: At 1.1. (3 936) (3 902) Formation (liquidation) of timing differences (1 185) (685) Changes in tax rates At (5 121) (3 936) A tax rate of 25 % was applied for the calculation of deferred income taxes. This is the locally applicable tax rate of the SWX Swiss Exchange. Temporary valuation differences only concern SWX Group companies.

12 Annual financial statements Tangible fixed assets in CHF 1000 Hardware Leasehold improvements Other Acquisition costs at Additions Acquisition costs at Cumulative depreciation at 1.1. ( ) (14 532) (18 684) ( ) ( ) Additions (10 819) (2 949) (774) (14 541) (17 127) Cumulative depreciation at ( ) (17 481) (19 458) ( ) ( ) NET BOOK VALUE AT NET BOOK VALUE AT Fire insurance values Hardware Other tangible fixed assets

13 90 Annual financial statements Intangible assets in CHF 1000 Goodwill Standard software Externally developed software Internally developed software Acquisition costs at Additions Disposals (0) (0) (0) (0) (0) (447) Acquisition costs at Cumulative amortization at 1.1. (38 367) (12 339) (35 708) (10 876) (97 290) (83 506) Additions (0) (3 355) (10 035) (6 715) (20 105) (12 720) Special amortization (0) (0) (0) (0) (0) (1 064) Cumulative amortization at (38 367) (15 694) (45 743) (17 591) ( ) (97 290) NET BOOK VALUE AT NET BOOK VALUE AT Software licences have been capitalized since Externally developed software consists of extended functionalities designed by third parties for the Eurex system. The figure for internally developed software refers to development costs for extending the SWX platform, which have been capitalized since the 2001 financial year Associated companies Eurex Ltd, STOXX Ltd, Total associated companies See note for more information on developments at subsidiaries.

14 Annual financial statements Short-term payables Trade payables to third parties to associated companies Total trade payables Other short-term payables to third parties to related parties Total other short-term payables TOTAL SHORT-TERM PAYABLES Accrued expenses and deferred income Employee benefits Swiss Federal Banking Commission (SFBC) Other accruals and deferrals Total accrued expenses and deferred income Pursuant to the ordinance of 2 December 1996 (as amended on 21 October 2003) concerning fees of the Swiss Federal Banking Commission, part of the Commission s costs are covered by a turnover fee levied by the SWX Swiss Exchange on securities trading. The estimated amount payable to the Commission for the 2005 financial year is CHF 9.0 million Tax liabilities Tax liabilities previous years Tax liabilities current year Total tax liabilities

15 92 Annual financial statements Long-term provisions in CHF 1000 Repair work on buildings Other Book value at Additions Reclassification (1 007) Foreign currency earnings (2) 0 (2) 0 BOOK VALUE AT Repair work on buildings: Under the existing rental contracts for the premises at Selnaustrasse 30 in and Canary Wharf in London, alterations made to these buildings by the tenant must be removed and the buildings restored to their original state at the tenant s expense upon termination of the rental agreement. Appropriate provisions are therefore issued for this purpose over the remaining term of the contracts, based on estimates prepared by external architects. Other provisions: total provisions of CHF 5 million were set aside to cover any legal obligations which may arise from service agreements, and in connection with the social plan approved by the Board of Directors and notified to employees in 2005.

16 Annual financial statements Other information Segment data in CHF 1000 Cash trading Eurex derivatives trading Data sales Admission Corporate Services Total Group 2005 Total Group 2004 Revenue Operating expenses ( ) (62 017) (10 480) (5 466) (48 685) ( ) ( ) Income from associated companies (6 969) Financial income (3 188) EBITDA (35 138) Depreciation and amortization of tangible and intangible assets (17 533) (10 448) (1 641) (85) (4 940) (34 646) (30 911) EBIT (40 078) Interest income Income taxes (1 641) (743) 0 (25 452) (26 290) (15 889) Profit (loss) for the year (61 374) Intangible assets Tangible fixed assets Holdings in associated companies Other assets Total assets Liabilities (31 182) (8 881) (1 183) (134) (57 565) (98 945) (78 972) Investments Total expenses with no impact on cash flow (13 623) (18 691) (3 284) (6 114) (22 166) (17 547)

17 94 Annual financial statements Major contracts The following long-term contracts were in effect at 31 December 2005: Cooperation agreement with Deutsche Börse concerning Eurex Ltd (expiry 2014) Rental contracts entered into by the SWX Group: Canton of, Selnau stock exchange building (expiry 2012) Canary Wharf Management Ltd, Canary Wharf, London (expiry 2006) Société Privée de Gérance, (expiry 2012) Telekurs Services AG, (expiry 2007) Payments due under these rental contracts are as follows: Within one year In two to five years In more than five years Total future rental payments Contingent liabilities The SWX Swiss Exchange has committed itself in a comfort letter to providing Eurex Clearing AG, Frankfurt, with 20 % of the financial resources it needs to fulfil its obligations as a clearing house. The terms of this undertaking were revised with effect from 1 January The commitment is now 15 % and is limited to a maximum amount of EUR 105 million. This new arrangement replaces the comfort letter of 8 November The commitment for events prior to 1 January 2005 is 20 % Post-balance-sheet events On 3 March 2006, the Board of Directors recommended approval of the consolidated annual financial statements of the SWX Group. No events occurred after the balance sheet date which would have a material impact on the consolidated financial statements for the year ended 31 December In compliance with regulatory requirements of the Financial Services Authority (FSA), the SWX Swiss Exchange has committed itself to providing virt-x Ltd with sufficient financial resources at any time.