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

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1 74 7. Further notes Name Location 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 Bank Leu AG Bank Sal. Oppenheim jr. & Cie. (Schweiz) Bank Sarasin & Cie AG Bank Vontobel AG Banque Bonhôte & Cie SA Banque Cantonale de Genève Banque Cantonale Vaudoise Banque de Dépôts et de Gestion Banque du Bois AG Banque Privée Edmond de Rothschild SA Basler Kantonalbank BNP Paribas (Suisse) SA BSI SA BZ Bank Aktiengesellschaft Cornèr Banca SA Coutts Bank von Ernst AG Credit Suisse Deutsche Bank (Schweiz) AG Dreyfus Söhne & Cie AG, Banquiers Location Lugano Küsnacht Basel Neuchâtel Geneva Lausanne Lausanne Geneva Basel Basel Lugano Wilen Lugano Basel EFG Bank E. Gutzwiller & Cie, Banquiers Basel Fortis Bank Global Clearing Frankfurt N.V., Frankfurt Branch Goldman Sachs Bank AG Hottinger & Cie, Banquiers HSBC Private Bank (Suisse) SA Geneva La Roche & Co., Banquiers Basel LGT Bank in Liechtenstein AG Vaduz Lombard Odier Darier Hentsch & Cie Geneva Maerki Baumann & Co. Private Banking AG Merrill Lynch Capital Markets AG Mirabaud & Cie, Banquiers Geneva Pictet & Cie, Banquiers Geneva Privatbank IHAG Zürich AG Rahn & Bodmer, Banquiers Rüd, Blass & Cie AG SG Private Banking (Suisse) SA Geneva Société Générale, Paris, Branch Timber Hill (Europe) AG Zug UBS AG Union Bancaire Privée Geneva Zürcher Kantonalbank

2 75 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 of the SWX Swiss Exchange (shown with an asterisk after their name in the following list): Andreas Amschwand David J. Blumer Christoph Bigger (*) Raymond Breu Werner Bürki (*) Jean-Luc De Buman Jacques de Saussure Bernard Droux Hans Fischer Christian Gell Peter Gomez G. Andreas Guth Andreas Häberli Heinrich Henckel (*) Reto Himmel Lee Hodgkinson (*) Daniel Keist (*) Chris Landis (*) Eduardo Leemann Peter R. Rahn Jürg Spillmann (*) Associated companies Name Other related parties Location Eurex Ltd Eurex Frankfurt AG Frankfurt Eurex Clearing AG Frankfurt Eurex Bonds GmbH Frankfurt Eurex Repo GmbH Frankfurt U.S. Exchange Holding Inc. Chicago STOXX Ltd Stock Exchange Intelligence Ltd Basel Name SWX Group Wohlfahrtsfonds 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 76 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 (38 189) (52 715) 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 and the Chairman of the Board of Directors also receive a variable salary component, to which there is no legal claim. The following table gives an overview of compensation for the SWX Swiss Exchange key management: Short-term benefits Post-employment benefits Benefits upon termination of employment Total compensation for key management Short-term benefits include 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 Notes to the consolidated income statement Revenue Revenue parties with joint control Revenue associated companies Revenue third parties Total revenue Personnel expense Compensation (67 563) (78 360) Social security payments (12 355) (10 804) Other personnel costs (546) (4 861) Total personnel expense (80 464) (94 025) Personnel expenditure in 2005 included non-recurring outlays of CHF 7.5 million in connection with the cost-cutting programme introduced to ensure the lasting profitability of the core business of the SWX Swiss Exchange. The Board of Trustees of the SWX Group Wohlfahrtsfonds decided to contribute CHF 3.5 million to the social plan drawn up by the SWX Swiss Exchange. This amount was credited to other personnel costs in the reporting period. In 2006, an average of 454 people were on the permanent staff (496 in the previous year). There were 424 full-time positions occupied at 31 December 2006, compared with 465 a year earlier.

5 Staff pension fund Calculation parameters Discount rate 3.0 % 3.0 % Interest rate for projected pension 3.0 % 3.0 % Long-term return 4.0 % 4.0 % Salary trend 1.5 % 1.5 % Pensions trend 0 % 0 % Retirement age Men Women Termination probability pursuant to LLP 2000 Men Women Men Women / 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-capitalisable part of surplus Amount recognised on balance sheet Net assets at market value include reserves of CHF 3.7 million for the employer s contributions. The amount of CHF 14.5 million recognised on the balance sheet comprises assets of CHF 16.8 million and liabilities of CHF 2.3 million, shown under Capitalised pension fund benefits and Pension fund liabilities respectively.

6 79 Breakdown of pension fund costs Current expenditure on service years Interest on present value of obligations Expected net return on investment (5 698) (4 680) Change in non-capitalisable part (549) (546) Employee contributions (2 871) (3 037) Pension fund costs included in Personnel expense Actual revenue from budgeted assets Expected net return on investment Actuarial gains or losses Actual revenue Movements in amount shown on balance sheet 1 January (14 926) (12 426) Pension fund costs for the period Employer s contributions (7 147) (7 537) Transfer amount December (14 520) (14 927) Capital taxes Capital taxes current year (730) (635) Total capital taxes (730) (635) Other operating expenses Other operating expenses relating to associated companies (38 189) (52 715) Other operating expenses relating to third parties (87 786) ( ) Total other operating expenses ( ) ( )

7 80 The decline of CHF 14.5 million in other operating expenses relating to associated companies was due to a reduction of CHF 16 million in expenditure associated with the US business of Eurex and a refund of value-added tax amounting to CHF 2.3 million, together with an effective increase of CHF 3.8 million in costs. Other operating expenses relating to third parties included a one-off payment of CHF 5 million to the Swiss Finance Institute in The remaining CHF 13 million of the total reduction in this item last year was the result of savings made in connection with the cost-cutting programme Income from associated companies Dividend income from STOXX Ltd Income from equity stake in STOXX Ltd Income from equity stake in Eurex Ltd (2 339) Total income from associated companies Net financial income Securities earnings (80) Foreign currency earnings (22) 517 Loan to Eurex US revaluation 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 Total net financial income Due to the future prospects of Eurex US companies, the loan granted to Eurex US was fully written off on the basis of an impairment review in After the sale of the US business, a partial repayment of CHF 2.3 million was made, which is carried in the income statement as a revaluation.

8 Net interest income Interest income from parties with joint control Interest income from third parties Total interest income Interest expense for parties with joint control (4) 0 Interest expense for third parties (465) (70) Total interest expense (469) (70) TOTAL NET INTEREST INCOME Income taxes Deferred income taxes (1 191) (1 185) Total deferred income taxes (1 191) (1 185) Income taxes previous years Income taxes current year (46 631) (25 344) Total income taxes (40 505) (25 105) TOTAL TAX EXPENSE (41 696) (26 290) Analysis of tax burden Profit before tax Weighted overall tax rate 22 % 22 % Expected tax expense Tax reductions arising from loss carry-forwards (4) 0 Difference from local tax rates (74) Effective tax expense for current year Effective tax expense as % of profit before tax 23 % 22 % 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 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 Total time deposits (less than 90 days) TOTAL CASH AND CASH EQUIVALENTS Securities Money market funds Bonds Equities Real estate Alternative investments Total securities (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). Equities: This item comprises equity interests in companies which are held with strategic considerations in mind. Real estate: This category comprises shares in a euro-denominated real estate fund. The fund aims at broad strategic exposure to first-class, safe and profitable properties located within the euro zone. Using a systematic approach, the fund targets a performance superior to the benchmark. Alternative investments: This category covers investments in non-traditional instruments which have little correlation with the financial markets. Investments in hedge funds are made only in funds of funds. In order to be protected from manager-specific and investmentspecific (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

10 83 may not exceed 40 %. The decision to invest in a hedge fund or to change the existing exposure rests with the Group Executive Committee. Investments in securities without a market value are carried on the balance sheet at net asset value. Net asset value is based on the market values of the fund s investments. The unrealised gain or loss resulting from this valuation is booked to the income statement. The net asset value is notified by the fund manager. Because of the uncertainty concerning the valuation of such investments and the fact that not all markets are liquid, the net asset value calculated at the time of valuation may diverge substantially from realisable values 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 shortterm loans to associated companies. The loan was repaid in February 2006.

11 Prepaid expenses and accrued income Exchange fees and other revenue Accrued interest on securities Contribution of SWX Group Wohlfahrtsfonds to SWX Swiss Exchange social plan (see note 7.2.2) 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 Pension fund liabilities General bad debt charge (139) (139) (164) Valuation of STOXX Ltd using equity method (2 543) (2 543) (1 226) Capitalisation of pension fund (4 203) (4 203) (4 724) Total deferred income taxes 573 (6 885) (6 312) (5 121) No noteworthy additional tax liabilities are expected as a result of dividend payments by Group companies and associated companies. Changes in deferred taxes during 2006 and 2005 are as follows: At 1.1 (5 121) (3 936) Formation (liquidation) of timing differences (1 191) (1 185) At (6 312) (5 121)

12 Tangible fixed assets in CHF 1000 Hardware Leasehold improvements Other Acquisition costs at Additions Acquisition costs at Cumulative depreciation at 1.1 ( ) (17 481) (19 458) ( ) ( ) Additions (6 366) (1 444) (261) (8 071) (14 541) Cumulative depreciation at ( ) (18 925) (19 719) ( ) ( ) NET BOOK VALUE AT NET BOOK VALUE AT Fire insurance values Hardware Other tangible fixed assets

13 Intangible assets in CHF 1000 Goodwill Standard software Externally developed software Internally developed software Acquisition costs at Additions Disposals Acquisition costs at Cumulative amortisation at 1.1 (38 367) (15 694) (45 743) (17 591) ( ) (97 290) Additions (1 184) (6 568) (8 386) (7 793) (23 931) (20 105) Special amortisation Cumulative amortisation (39 551) (22 262) (54 129) (25 384) ( ) ( ) NET BOOK VALUE AT NET BOOK VALUE AT Software licences have been capitalised 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 capitalised since the 2001 financial year. In connection with the creation of SWX Quotematch Ltd (see note 6.4.2), the SWX Swiss Exchange sold its shareholding in Bremer Wertpapierbörse AG, Bremen, to Deutsche Börse AG at 1 January 2007 pursuant to the purchase and transfer agreement of 5 December Due to the agreed purchase price of CHF 2.8 million, the shareholding was written off at its selling price Associated companies Eurex Ltd, STOXX Ltd, Total associated companies In 2006, Eurex Ltd was provided with fresh capital amounting to altogether CHF 6.9 million.

14 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 2006 financial year is CHF 9.1 million Tax liabilities Tax liabilities previous years Tax liabilities current year Total tax liabilities

15 Long-term provisions in CHF 1000 Repair work on buildings Other Book value at Additions Release 0 (4 841) (4 841) 0 Foreign currency earnings (2) 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.

16 Other information Segment data in CHF 1000 Cash trading Eurex derivatives trading Data sales Admission Corporate services Total Group 2006 Total Group 2005 Revenue Operating expenses ( ) (48 550) (15 638) (5 679) (17 358) ( ) ( ) Income from associated companies 0 (2 339) Financial income (1 200) (2) EBITDA (8 483) Depreciation and amortisation of tangible and intangible assets (18 975) (8 877) (1 321) (47) (2 782) (32 002) (34 646) EBIT (11 265) Interest income Income taxes (41 696) (41 696) (26 290) Profit (loss) for the year (45 570) Intangible assets Tangible fixed assets Holdings in associated companies Other assets Total assets Liabilities (39 430) (1 698) (2 401) (133) (69 249) ( ) (98 945) Investments in tangible and intangible assets Total expenses with no impact on cash flow (42 403) (16 261) (3 258) (4 760) (35 354) (22 166)

17 Partial disposal of operations With effect from 1 January 2007, the SWX Group and Deutsche Börse AG brought their trading operations in structured products under the roof of a holding company incorporated in Luxembourg. The SWX Group holds % of the voting rights in this joint venture. The company holds all the shares of a new exchange governed by Swiss law, to which the SWX Swiss Exchange has spun off its warrants and structured products business. At the same time, it owns all the share capital of a joint-stock company in Germany which is the operator of the warrants and certificate trading business at the Frankfurt Stock Exchange Major contracts The following long-term contracts were in effect at 31 December 2006: Voting pool agreement between Deutsche Börse AG and the SWX Swiss Exchange concerning their joint shareholding in Eurex Ltd,, and its subsidiaries (expiry 2014) Cooperation agreement between the SWX Group and Deutsche Börse AG concerning the parties stake in the holding company being set up in Luxembourg (expiry 2018) see also note above Rental contracts entered into by the SWX Group: Canton of, Selnau stock exchange building (expiry 2012) Canary Wharf Management Ltd., Canary Wharf, London (expiry 2011) Société Privée de Gérance, Geneva (expiry 2012) Telekurs Services AG, (expiry 2007) Wincasa, (expiry 2009) 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 15 % of the financial resources it needs to fulfil its obligations as a clearing house. The commitment for events prior to 1 January 2005 is 20 %. The commitment is limited to a maximum amount of EUR 105 million. 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 Post balance sheet events On 2 March 2007, 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 2006.

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

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