MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal)

Transcription

1 MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal) Financial Statements and Management Report for the financial year ended 31 December 2012, together with the Auditors Report Translation of a report originally issued in Spanish based on our work performed in accordance with the audit regulations in force in Spain and of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 1 and 23). In the event of a discrepancy, the Spanish-language version prevails.

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3 Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 1 and 23). In the event of a discrepancy, the Spanish-language version prevails. MEFF SOCIEDAD RECTORA DE PRODUCTOS FINANCIEROS DERIVADOS, S.A. (SOCIEDAD UNIPERSONAL BALANCE SHEET AT 31 DECEMBER 2012 AND 2011 () ASSETS Notes (*) LIABILITIES Notes (*) NON-CURRENT ASSETS: SHAREHOLDERS' EQUITY: Intangible assets EQUITY: Other intangible assets 12 - Capital Tangible assets Paid-up capital Technical installations and other tangible fixed assets (Uncalled capital) - - Long-term investments in Group and associated companies Share premium - - Long-term financial investments Reserves Deferred tax assets (Treasury shares and equity instruments) - - Earnings from previous years - - Other member contributions Earnings for the year (Interim dividend) 12 (9.708) (6.879) Other equity instruments - - UNREALISED GAINS (LOSSES) RESERVE: - - Financial assets available for sale - - Hedging transactions - - Exchange conversion differences - - Other unrealised gains (losses) - - SUBSIDIES, DONATIONS AND LEGACIES RECEIVED - - CURRENT ASSETS: Trade and other receivables NON-CURRENT LIABILITIES: Clients - sales and supply of services (members and member entities) Long-term provisions Clients, Group and associated companies 17 and Other accounts receivable 15 and CURRENT LIABILITIES: Short-term investments in Group and associated companies Short-term financial liabilities to third parties Group current financial assets Margins and deposits received from the market Non-Group current financial assets As central counterparty for financial instruments Materialisation of margins and deposits received from the market Credit balances for settlement As central counterparty for financial instruments Short-term debts with group and associated companies Debit balances for settlement Trade and other accounts payables Short-term accruals Accounts payable 16 and Cash and cash equivalents Sundry accounts payable 14 and TOTAL ASSETS 1-b) and TOTAL EQUITY AND LIABILITIES (*) Figures presented solely and exclusively for comparative purposes. The accompanying notes 1 to 22 of the Financial Statements form an integral part of the balance sheet at 31 December 2012.

4 Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 1 and 23). In the event of a discrepancy, the Spanish-language version prevails. MEFF SOCIEDAD RECTORA DE PRODUCTOS DERIVADOS, S.A. (SOCIEDAD UNIPERSONAL) PROFIT AND LOSS ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011 () Notes (*) Revenues Personnel costs: 15 (7.965) (7.254) Wages, salaries and similar (6.542) (5.954) Social welfare contributions (1.041) (933) Provisions and other personnel costs (382) (367) Other operating costs: (3.355) (1.754) External services 16 (3.323) (1.737) Taxes (32) (12) Losses, impairment and changes to provisions for business operations 16 - (5) Depreciation of fixed assets: (228) (8) Amortisation of intangible assets 5 (44) - Tangible assets depreciation 6 (184) (8) Depreciation and profit (loss) on fixed asset disposals - - OPERATING PROFIT (LOSS) Financial income: Interests in equity instruments In group and associated companies Tradable securities and other financial instruments In third parties 7 and Financial expenses: (4.768) (12.284) Provisions updates 13 (8) (8) Margins and deposits received from the market 10 (4.760) (12.276) Exchange conversion differences - - Impairment and profit (loss) on financial asset disposals - - FINANCIAL PROFIT (LOSS) PROFIT BEFORE TAX Tax on earnings 14 (4.096) (3.024) EARNINGS FROM CONTINUING OPERATIONS Earnings from discontinued operations net of tax - - PROFIT (LOSS) FOR THE FINANCIAL YEAR (*) Figures presented solely and exclusively for comparative purposes. The accompanying notes 1 to 22 of the Financial Statements form an integral part of the profit and loss account for the year ended 31 December 2012.

5 Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 1 and 23). In the event of a discrepancy, the Spanish-language version prevails. MEFF SOCIEDAD RECTORA DE PRODUCTOS FINANCIEROS DERIVADOS, S.A. (SOCIEDAD UNIPERSONAL) STATEMENT OF CHANGES TO SHAREHOLDERS' EQUITY FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2012 AND 2011 A) STATEMENTS OF RECOGNISED INCOME AND EXPENSE () Notes (*) EARNINGS FROM THE PROFIT AND LOSS ACCOUNT From measurement of financial instruments Financial assets available for sale - - Other income/expense - - For cash flow hedging - - Subsidies, donations and legacies received - - For actuarial gains and losses and other adjustments 13 (82) (2) Remaining income and expenses allocated directly to shareholders' equity - - Tax effect - - TOTAL INCOME AND EXPENSES ALLOCATED DIRECTLY TO SHAREHOLDERS' EQUITY (82) (2) From measurement of financial instruments - - Financial assets available for sale - - Other income/expenses - - For cash flow hedging - - Subsidies, donations and legacies received - - Remaining income and expenses allocated directly to shareholders' equity - - Tax effect - - TOTAL TRANSFERS TO THE PROFIT AND LOSS ACCOUNT - - TOTAL RECOGNISED INCOME AND EXPENSES (*) Figures presented solely and exclusively for comparative purposes. The accompanying notes 1 to 22 of the Annual Report form an integral part of the statement of recognised income and expense for the financial year ended 31 December 2012.

6 Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 1 and 23). In the event of a discrepancy, the Spanish-language version prevails. MEFF SOCIEDAD RECTORA DE PRODUCTOS FINANCIEROS DERIVADOS, S.A. (SOCIEDAD UNIPERSONAL) STATEMENTS OF CHANGES TO SHAREHOLDERS' EQUITY FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2012 AND 2011 B) STATEMENT OF CHANGES TO TOTAL SHAREHOLDERS' EQUITY () Shareholders' equity Share premium, Reserves and Other Grants Profit/loss Other Other Unrealised donations and Share from prior Members' Interim Treasury shares and Profit/loss equity gains(losses) legacies Shareholders' Capital premium Reserves years contributions dividend equity investments for the year instruments reserve received Equity BALANCE AT YEAR-END 2010 (*) (9.793) Adjustments for changes to accounting criteria Adjustments for errors ADJUSTED BALANCE AT START OF YEAR 2011 (*) (9.793) Total recognised income and expense - - (2) Transactions with shareholders - Capital increases / (-) Capital decreases Conversion of financial liabilities to shareholders' equity Distribution of dividends (850) - (6.879) (7.729) Treasury share transactions (net) Equity increase /(decrease) by business combinations Other operations with shareholders Other changes to shareholders' equity (10.643) FINAL BALANCE AT YEAR-END 2011 (*) (6.879) Adjustments for changes to accounting criteria Adjustments for errors ADJUSTED BALANCE AT START OF YEAR (6.879) Total recognised Income and Expenses - - (82) Transactions with shareholders - Capital increases / (-) Capital decreases Conversion of financial liabilities to shareholders' equity Distribution of dividends (1.022) - (9.708) (10.730) Treasury share transactions (net) Equity increase /(decrease) from business combinations Other operations with shareholders Merger (Note 1b) Partial spin-off (Note 1b) Other changes to shareholders' equity (7.901) FINAL BALANCE AT YEAR-END (9.708) b) and 12 (*) Figures presented solely and exclusively for comparative purposes. The accompanying notes 1 to 22 of the Financial Statements form an integral part of the consolidated statement of changes in equity for the year ended 31 December 2012.

7 Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 1 and 23). In the event of a discrepancy, the Spanish-language version prevails. MEFF SOCIEDAD RECTORA DE PRODUCTOS FINANCIEROS DERIVADOS, S.A. (SOCIEDAD UNIPERSONAL) STATEMENT OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011 (NOTES 1 TO 4) () Financial YeaFinancial Year Notes (*) CASH FLOWS FROM OPERATING ACTIVITIES: Income for the year before tax Adjustments to profit (loss) (1.031) (738) Depreciation of fixed assets 5 and Other adjustments to profit (loss) (net) 7, 10, 12 and 13 (1.259) (746) Changes to working capital 13, 14, 15, 16 and 17 (380) (1.186) Other cash flows from operating activities (2.407) (1.935) Interest payments 7 and 10 (4.768) (12.284) Dividends received Interest collections 7 and Collections (payments) for corporate income tax 14 (4.096) (3.024) CASH FLOW FROM INVESTMENT ACTIVITIES: (328) Payments on investments (19.988) (328) Group, multi-group and associated companies 9 - (324) Intangible assets, tangible assets and investment properties 5 and 6 (235) (2) Other financial assets 10 (19.753) (2) Proceeds from disposals Group, multi-group and associated companies - - Intangible assets, tangible assets and investment properties - - Other financial assets - - Other assets - - Business Unit 1-b CASH FLOW FROM FINANCING ACTIVITIES: (10.771) (7.729) Proceeds from and payments for equity instruments Issuance of equity instruments - - Amortisation of equity instruments - - Acquisition of treasury equity instruments - - Disposal of treasury equity instruments - - Subsidies, donations and legacies received - - Proceeds from and payments for financial liabilities Issue - - Return and amortisation - - Dividends paid and payments on other equity instruments 1-b) and 12 (10.771) (7.729) EFFECT OF EXCHANGE RATE VARIATIONS - - NET INCREASE/(DECREASE) IN CASH OR CASH EQUIVALENTS (991) Cash and cash equivalents at start of year Cash and cash equivalents at end of year (*) Figures presented solely and exclusively for comparative purposes. The accompanying notes 1 to 22 of the Financial Statements form an integral part of the cash flow statement for the year ended 31 December 2012.

8 Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 1 adn 23). In the event of a discrepancy, the Spanish-language version prevails. MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal) Notes to the financial statements for the year ended 31 December Brief history of the Company, the merger by absorption of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. Sociedad Unipersonal (the absorbed company) by the Company (the absorbing company) and the partial spin-off of MEFF Tecnología y Servicios, S.A. Sociedad Unipersonal (the spun-off company) to the Company: a) Historical outline of the Company MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal), henceforth the Company, was incorporated on 7 December 1988 as OM Ibérica, S.A, coming into operation on 8 November Its corporate purpose is to govern and administer the Market in Options and Financial Futures Derivatives of Equity Instruments, assuming responsibility for the internal organisation and operations of the market, for which it will possesses the resources required. This single corporate objective is understood to include all the activities required to fulfil the corporate purpose in compliance with the law, especially in respect of regulations governing the markets at any particular time. In March 1991, the Company changed its name to Mercado de Opciones Financieras Español, S.A. (MOFEX - Spanish Financial Options Exchange). On 18 December 1991, the Company had a further name change, to MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Variable, S.A. (Sociedad Unipersonal), (MEFF RENTA VARIABLE - The Governing Company for Equities Financial Derivatives, a Single Shareholder Company). On 18 December 1991, the company Mercado de Futuros Financieros, S.A. (MEFFSA) also changed its name to its current name of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) (MEFF Renta Fija - MEFF The Governing Company for Fixed Income Financial Derivatives - a Single Shareholder Company). These name changes occurred under an agreement between the said two companies whereby they became the governing bodies of the official financial derivative exchanges, and took place under the provisions of Royal Decree 1814/1991, of 20 December, which regulates the official futures and options exchanges (subsequently modified by Royal Decree 1282/2010, of 16 October which regulates the official secondary exchanges for futures, options and other derivative financial instruments). The fundamental activity of the Company is the management of the Market in Equity Derivatives and the administration of the clearing house and settlement of operations in that market. However, as a result of the publication of Royal Decree 1282/2010, of 16 October regulating the official secondary exchanges for futures, options and other financial derivative instruments, in financial year 2010, the Company amended its Articles of Association to reflect the change of its corporate name to the current name and increased the scope of its corporate purpose to include the performance of the activities provided for in Article 59 of the Spanish Securities Exchanges Act and Article 44 (iii) relating to its activity as a central counterparty contained in the said Royal Decree. The Company's corporate purpose therefore includes all activities that enable it to fulfil these obligations and are in compliance with the law, and especially with the regulations that govern the markets at all times. As a result, the regulations of the official secondary market in futures and options was changed when it came into force on 24 January 2011.

9 Finally, on 22 October 2012 a change to the Company's Articles of Association was authorised to include its new activities as a central fixed income securities clearing house, transferred from the defunct MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) to the Company as a result of its merger with the Company during the year (section b of this Note). In accordance with Royal Decree 1282/2010, the governing companies of futures and options exchanges must comply with the following fundamental requirements: - Be incorporated as a sociedad anónima (limited company). - May not be members of the exchange, but must organise and manage the exchange. - The governing body's equity must not be lower than eighteen million euros and must exceed than the sum of the guarantees provided by the governing body. - The volume of borrowings, excluding the margins received from the exchange members, must not exceed shareholders' equity at any time. - Exchange members and participants will be required to maintain certain margins, based on their open positions. The Company's activity is, therefore, subordinated to the interests of the Bolsas y Mercados Españoles Group, whose controlling Company is Bolsas y Mercados Españoles, with registered office at Plaza de la Lealtad, 1, Madrid, with the latter being responsible for preparing the consolidated financial statements. This group combines all the Spanish companies that administer the systems for recording, clearing and settlement of securities and secondary markets. The consolidated financial statements of the Bolsas y Mercados Españoles Group for financial year 2011 were approved by the Company's Directors at the meeting of the Board of Directors held on 29 February 2012 and these have been filed with the Madrid Companies Registry. The Company's registered office is at Plaza de la Lealtad, 1, Madrid, but its operational centre is at Calle Tramontana, 2 in Las Rozas, Madrid (Note 4.3). b) Merger by absorption of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. Sociedad Unipersonal (the absorbed company) by the Company (the absorbing company) and partial spin-off of MEFF Tecnología y Servicios, S.A. Sociedad Unipersonal (the spun-off company) to the Company: On 28 June 2012, the Board of Directors of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) and the company agreed the merger and takeover by the company of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal), with the latter being wound up through dissolution without liquidation and the transfer en bloc of its assets and liabilities to MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal), with the later acquiring the rights and obligations of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) through universal succession. On 28 and 29 June 2012, the Board of Directors of the company and of MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal), respectively, agreed the partial spin-off of MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) to the company, which involved transferring the business unit comprising the technical and human resources of MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) supporting the derivatives market to the company, with the latter acquiring the assets, liabilities, rights and obligations of the aforementioned business unit through universal succession. 2

10 Finally, the merger and spin-off deeds were executed on 28 November 2012, and filed with the Companies Registries of Barcelona and Madrid on 14 and 28 December 2012, respectively. The following aspects of the merger should be taken into account: - Pursuant to the provisions of Articles 49 and 73 of Act 3/2009, dated 3 April, concerning structural modifications to mercantile companies: it was not necessary to include in the common merger and spin-off plans the particulars listed under sections 2, 6, 9 and 10 of Article 31 of the aforementioned Act; it was not necessary to issue reports by the Administrators or an independent expert; there was no need to increase the Company's share capital; and there was no need to obtain the approval of the sole shareholder of the three companies involved. - Pursuant to the provisions of article 49 of Act 3/2009, of 3 April concerning structural modifications to mercantile companies, the partial spin-off was performed without increasing the share capital of the Company (the beneficiary), and therefore the common partial spin-off Plan did not include any reference to a distribution of shares in the beneficiary company to the single shareholder of MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) as required by article 74.2 of that Act. - The tax arrangements for the merger and partial spin-off is one of neutrality resulting from the tax arrangement provided for in Chapter VIII of Title VII and the Second Additional Provision of Royal Legislative Decree 4/2004, dated 5 March, approving the consolidated text of the Corporate Income Tax Act (Note 14). - That pursuant to article 44 ter of Act 24/1988, of 28 July, on the Securities Market, as established in Act 31/2011, of 4 October, the Company requested authorisation to perform the role of Central Counterparty Entity in relation to transactions involving fixed income instruments. Authorisation for this was granted by the Ministry of the Economy and Competitiveness by order ECC/2405/2012 on 22 October. In accordance with the provisions of section 2 of registration and measurement rule 21, Operations between group companies, of the Spanish Charter of Accounts approved by Royal Decree 1514/2007 of 16 November, as amended by Royal Decree 1159/2010 of 17 September, both the Joint Merger Project and the Joint Partial Spin-Off Project established 1 January 2010 as the date from which the transactions performed by the company absorbed and the operations of the business unit spun off from MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) would be considered to have been transferred for the Company's accounting purposes. Pursuant to the provisions of registration and measurement rule 21 of the Spanish Charter of Accounts approved by Royal Decree 1514/2007, dated 16 November (amended by Royal Decree 1159/2010, dated 17 September), the balance sheets of the merger and the partial spin-off are considered to be those of the Company, the absorbed company and the partially spun-off company as of 31 December In the merger and partial spin-off operations described above, the assets acquired from MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) and MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) were valued by the Company, being Grupo Bolsas y Mercados Españoles companies, at their value following completion of these operations in the consolidated financial statements of Grupo Bolsas y Mercados Españoles (which do not differ from those in the Company's individual accounts), in accordance with the Spanish Charter of Accounts (as modified by Royal Decree 1159/2010, of 17 September). This generated a merger reserve of million euros (Note 12). For information, the balance sheet of the absorbed company, MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) at 31 December 2011 and the assets and liabilities of MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) spun-off are shown below. The 3

11 balance sheet of the Company is shown for comparative purposes, together with the balance sheet at 31 December 2011: MEFF, Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) Miles de Euros ACTIVO PASIVO Y PATRIMONIO NETO ACTIVO NO CORRIENTE: PATRIMONIO NETO: Inmovilizado material- 36 FONDOS PROPIOS: Instalaciones técnicas y otro inmovilizado material (Nota 6) 36 Capital Inversiones financieras a largo plazo (Nota 8) 32 Capital escriturado (Nota 12) Activos por impuesto diferido (Nota 14) 47 (Capital no exigido) Prima de emisión - Reservas (Nota 12) (Acciones y participaciones en patrimonio propias) - Resultados de ejercicios anteriores - Otras aportaciones de socios (Nota 12) 63 Resultado del ejercicio 547 (Dividendo a cuenta) (506) Otros instrumentos de patrimonio - AJUSTES POR CAMBIOS DE VALOR: - SUBVENCIONES, DONACIONES Y LEGADOS RECIBIDOS - ACTIVO CORRIENTE: Deudores comerciales y otras cuentas a cobrar- 101 PASIVO CORRIENTE: Clientes, empresas del grupo y asociadas 33 Pasivos financieros a corto plazo ajenos Otros deudores 68 Fianzas y depósitos recibidos del mercado Inversiones financieras a corto plazo ajenas Instrumentos financieros en contrapartida central Materialización de fianzas y depósitos recibidos del mercado (Nota 10) Deudas con empresas del grupo y asociadas a corto plazo 45 Instrumentos financieros en contrapartida central Acreedores comerciales y otras cuentas a pagar- 541 Periodificaciones a corto plazo 5 Acreedores 481 Efectivo y otros activos líquidos equivalentes (Nota 7) Acreedores varios 60 TOTAL ACTIVO TOTAL PASIVO Y PATRIMONIO NETO

12 MEFF, Tecnología y Servicios, S.A. (Sociedad Unipersonal) ELEMENTOS DEL ACTIVO Y DEL PASIVO QUE FORMAN PARTE DEL PATRIMONIO ESCINDIDO Miles de Euros ACTIVO PASIVO Y PATRIMONIO NETO ACTIVO NO CORRIENTE: PATRIMONIO NETO: 824 Inmovilizado intangible- 42 FONDOS PROPIOS: 824 Otro inmovilizado intangible (Nota 5) 42 Capital- Inmovilizado material- 362 Capital escriturado - Instalaciones técnicas y otro inmovilizado material (Nota 6) 362 (Capital no exigido) - Activos por impuesto diferido (Nota 14) 4 Prima de emisión Reservas (Nota 12) 824 (Acciones y participaciones en patrimonio propias) - Resultado del ejercicio - (Dividendo a cuenta) - Otros instrumentos de patrimonio - AJUSTES POR CAMBIOS DE VALOR: - SUBVENCIONES, DONACIONES Y LEGADOS RECIBIDOS PASIVO NO CORRIENTE: - Provisiones a largo plazo (Nota 13) - ACTIVO CORRIENTE: 682 Deudores comerciales y otras cuentas a cobrar- 296 PASIVO CORRIENTE: 266 Clientes, empresas del grupo y asociadas 283 Deudas con empresas del grupo y asociadas a corto plazo 67 Otros deudores 13 Acreedores comerciales y otras cuentas a pagar- 199 Periodificaciones a corto plazo 3 Acreedores 186 Efectivo y otros activos líquidos equivalentes 383 Acreedores varios 13 TOTAL ACTIVO TOTAL PASIVO Y PATRIMONIO NETO The merger and partial spin-off described above were conducted to reorganise the Bolsas y Mercados Españoles Group companies involved in activities in the derivatives markets, providing the technical services on which this market is based, to increase the Group's efficiency and reorganise the activities of the companies involved. In this regard, work is currently underway on the possible split of the Company into two different companies: a central counterparty entity and a governing body for the derivatives market. This possibility was still being analysed at the date of these financial statements and no formal decision has been taken on this matter. 2. Bases on which the financial statements are presented 2.1 Regulatory framework for financial information applicable to the Company These financial statements have been prepared by the Directors in accordance with the regulatory framework for financial information applicable to the Company as set out in: a. The Spanish Commercial Code and other commercial legislation. b. The Spanish Chart of Accounts approved by Royal Decree 1514/2007 and its sector-specific modifications and especially in respect of Circular 9/2008, of 10 December, issued by the Comisión Nacional del Mercado de Valores (CNMV, the Spanish National Securities Exchanges Commission), as modified by Circular 6/2011, of 12 December issued by the same body (Note 2.2). 5

13 c. The mandatory standards approved by the Spanish Accounting and Auditing Institute based on the Spanish Chart of Accounts and supplementary standards thereto and those approved by the CNMV applicable to the Company. d. All other applicable Spanish accounting standards. 2.2 True and fair view The Company's financial statements have been obtained from the Company's accounting records and are presented in accordance with the regulatory framework applicable to the financial information and, in particular, the accounting principles and criteria contained therein, such that they show a true and fair view of the company's equity, financial situation, earnings and cash flows in the financial year. These financial statements, which have been approved by the Company's Board of Directors, will be submitted for approval of the Single Shareholder. It is expected that they will be approved without modification. The financial statements for financial year 2011 were approved by the Single Shareholder on 19 April The accompanying balance sheets, profit and loss accounts, statements of changes to shareholders' equity and cash flow statements are presented in compliance with the formats established in Standard 36 of Circular 9/2008, of 10 December, issued by the Comisión Nacional del Mercado de Valores, after inclusion of the changes incorporated by Circular 6/2011, of 12 December. 2.3 Non-mandatory accounting principles applied No non-mandatory accounting principles have been applied. The Board of Directors has prepared these financial statements taking into account all mandatory accounting standards and principles that have a significant effect on the said financial statements. All mandatory accounting principles have been applied. 2.4 Critical aspects concerning the valuation and estimation of uncertain items The results and determination of net worth are sensitive to accounting principles and policies, and the valuation and estimation criteria applied by the Company's Directors when preparing the financial statements. The main accounting principles and policies and valuation criteria are set out in Note 4. When preparing the accompanying financial statements, the Company's Board of Directors has used estimates in valuing some of the assets, liabilities, income, expenses and commitments recorded in the accounts. Basically, these estimates concern: - Assessment of possible losses owing to the impairment of some assets (Notes 4.1, 4.2 and 4.4). - The assumptions used for the actuarial calculation of liabilities relating to pensions and other commitments to personnel (Note 13). - The useful life of tangible and intangible assets (Notes 4.1 and 4.2). - The fair value of certain financial instruments (Note 10). - Remuneration to personnel based on equity instruments (Note 4.13). 6

14 Although these estimates have been made on the basis of the best information available at the close of the 2012 financial year, future events may require the estimates to be either increased or reduced for subsequent financial years. If this should be the case, this will be done on a prospective basis. 2.5 Changes to accounting criteria In the financial year 2012, there were no significant changes to accounting criteria compared to the criteria applied in financial year Consolidation of items Some items in the balance sheet, the profit and loss account and the statement of changes to shareholders' equity and the cash flow statement have been presented in a consolidated format to facilitate their understanding, although where significant, the unconsolidated information has been shown in the notes. 2.7 Correction of errors When the attached financial statements were prepared, no significant errors were revealed that would require a restatement of figures contained in the 2011 financial statements. 2.8 Comparison of information The 2011 information contained in this report is presented for comparison with 2012 information. 3. Application of earnings The proposed distribution of 2012 and 2011 earnings is as follows: (*) Dividends: Interim 9,708 6,879 Final 1,009 1,022 10,717 7,901 (*) On 19 April 2012, the Single Shareholder approved the proposed distribution of earnings for financial year 2011 without modification. At its meetings on 20 June 2012 and 18 December 2012, the Company's Board of Directors approved the distribution of these dividends on earnings for financial year 2012, amounting to million euros and million euros respectively. These were paid out before the close of the financial year and are shown under the "Interim dividend" heading in Net shareholders' equity on the balance sheet at 31 December Furthermore, as a result of the merger described in Note 1b, this heading also includes million euros relating to the 2012 interim dividend agreed by the Board of Directors of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal), the company absorbed by the Company during the year (Note 1b), at its meeting on 18 December Finally, as a result of the partial spin-off of MEFF 7

15 Tecnología y Servicios, S.A. (Sociedad Unipersonal), the Interim dividend heading under Net shareholders' equity on the balance sheet includes 599 thousand euros corresponding to the interim dividend for 2012 attributable to the Company that the Board of Directors of that company approved on 28 December 2012 (Note 1b). The provisional financial statements formulated in accordance with legal requirements reveal sufficient liquidity for distribution of the dividends of the Company, MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal), the company absorbed by the Company during the year (Note 1b) and MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal), the company partially spun-off to the Company during the year (Note 1b), as follows MEFF Sociedad Rectora de Productos MEFF Sociedad Rectora de Productos Derivados S.A.U Financieros Derivados de Renta Fija, S.A.U. MEFF Tecnología y Servicios, S.A.U. (*) Earnings from the financial year available at the dividend date 2,908 7,335 1,774 1,304 Interim dividend paid out during the financial year - (2,908) - - Amount available to distribute 2,908 4,427 1,774 1,304 Available liquidity 21,331 23,031 28,994 2,027 Interim dividend amount (2,908) (4,427) (1,774) (1,304) Remainder 18,423 18,604 27, (*) Both the proposed interim dividend and the provisional liquidity statement prepared by the Board of Directors of MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) include all results and available liquidity of this company prior to the partial spin-off of the business unit supporting the derivatives market, as at that date the aforementioned operation had not been registered with the Companies Registry. 4. Bookkeeping and valuation standards The main bookkeeping and valuation standards used by the Company in the preparation of its financial statements for the 2012 financial year were as follows (Note 2.1): 4.1 Intangible assets As a general rule, intangible assets are initially valued at their acquisition price or production cost. They are subsequently valued at this cost less the corresponding amount of accumulated amortisation and depreciation, and where relevant less any impairment loss incurred. These assets are depreciated and amortised over their useful lives. Other intangible assets Under this heading, the Company records the cost incurred in the acquisition and development of computer programs. Costs for maintenance of computer software are recorded in the profit and loss account in the 8

16 financial year in which they occur. Computer software is amortised on a straight-line basis over a period of three years (Note 5). Charges to the profit and loss account for the depreciation and amortisation of intangible assets are recorded under the heading "Fixed asset amortisation and depreciation Amortisation of intangible fixed assets". If applicable, the Company recognises any loss that may have occurred to the book value of these assets by virtue of their impairment in the accounts; a contra entry is made under "Impairment losses and losses/gains on fixed asset disposals" in the profit and loss account. The criteria used in the recognition of impairment losses on these assets or, if applicable, recovery of impairment losses recorded in previous financial years, are similar to the criteria used for tangible assets (Note 4.2). 4.2 Tangible assets Tangible assets are initially valued at their acquisition price or production cost. Subsequently, this value is reduced by the corresponding amount of accumulated depreciation, and where relevant, any impairment loss that may have occurred. The Company depreciates its tangible assets using the straight-line method, based on the estimated useful life of the respective assets, in line with the following table: Estimated Years of Useful Life Furniture and other equipment 10 Information processing equipment 4 Other fixed assets 10 Charges to the profit and loss account for the depreciation of tangible assets are recorded under "Fixed asset depreciation Depreciation of tangible fixed assets". Expenses relating to the preservation and maintenance of the various elements included in the category tangible fixed assets are posted to the profit and loss account in the financial year in which they are incurred. However, amounts that have been invested in improvements to increase the capacity, efficiency or prolong the useful life of such assets are recorded as a capital cost of those same items. At the close of each financial year, if there are any indications that the book value of the assets included under this heading exceeds its corresponding recoverable amount, the Company proceeds to record in its accounts the impairment to the value of the assets, using the "Impairment losses and losses/gains on the disposal of fixed assets" heading as the contra account. The recoverable amount is considered to be the greater of the fair value less the cost of sale or the value in use. When an impairment loss is subsequently reversed, the book value of the asset is increased by the revised estimate of its recoverable value, but in such a way that the increased book value will not exceed the book value that would have been determined if no impairment loss had been recognised in previous financial 9

17 years. Such reversal of an impairment loss is recognised as income, by crediting an account under the "Impairment losses and losses/gains on fixed assets disposal" heading in the profit and loss account. 4.3 Operating leases In operating lease transactions, ownership of the leased asset, and substantially all risks and benefits associated with the asset remain with the lessor. The Company only acts as the lessee of the building which is used as the Company's operating centre and which is owned by Bolsas y Mercados Españoles Servicios Corporativos, S.A. Expenses originating from the operating lease agreement are debited on a straight-line basis under the "Other operating costs External services" heading of the profit and loss account for the financial year in which they accrue (Notes 8 and 16). Any receipts or payments in connection with an operating lease agreement are treated as an advance receipt or payment and allocated to profit and loss during the lease period, as and when the benefits of the leased asset are paid or received. 4.4 Financial instruments Financial assets i. Classification The financial assets owned by the Company are classified as follows: 1. Loans and receivables: financial assets originating from the provision of services for the company's commercial transactions or which do not have a commercial source and are not equity instruments or derivatives and whose receivable amounts are fixed or can be determined and which are not traded on an active market. This category specifically includes long-term margin deposits, which are recorded in the "Long-term financial investments" heading on the balance sheet (Note 8); reverse repos in which the Company invests surplus cash and which are recorded in the "Cash and cash equivalents" heading (Note 7); balances included in the "Trade and other accounts receivable", Short-term financial investments with group and associated companies and "Group current financial assets" headings; reverse repos, deposits received, and when applicable, other liquid assets equivalent to cash, in which the Company invests the funds it holds temporarily as a result of the regulatory margin deposits which the Company's members are required to constitute to guarantee their market positions (see section of this Note), are recorded in the "Non-Group current financial assets - Materialisation of margins and deposits received from the market" heading (Note 10); and debit balances for settlement, which are recorded in the "Non-Group current financial assets - Debit balances for settlement" heading and which include balances pending settlement on the following day for daily margin variations on futures and daily options transactions, which are presented at a position level per settlement member (see sections and of this Note). 2. Financial assets held for trading: these include all purchases of derivative instruments (options) and, following the merger by absorption of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) by the Company during the year (Note 1b), the fixed income instruments (MEFFRepo transactions) in which the Company acts as the central counterparty, and which are recorded under the heading Non-Group current financial assets - As central counterparty for financial instruments (Note 10). Positions in these financial assets match the corresponding positions in financial liabilities (transactions for the sale of derivatives and fixed income instruments), see sections and of this Note. 10

18 3 Held-to-maturity investments: these include debt securities that are traded in an active market, have a specified maturity date, and generate fixed or determinable payments on fixed or determinable dates, which the Group intends and is able to hold to maturity. 4. Investments in the equity of group, multi-group and associated companies: group companies are considered to be those companies linked to the Company through a control relationship; and associated companies are those companies over which the Company exercises significant influence (Note 9). In addition, the multi-group category includes those companies over which control is exercised together with one or more partners, under the terms of an agreement. In the accompanying balance sheets, financial assets and liabilities are classified by maturity; those maturing in 12 months or less are classified as current and those maturing in over 12 months as non-current. ii. Valuation and accounting for income from financial assets Initial valuation Financial assets are initially recorded in the accounts at the fair value of the consideration that has been transferred, plus any transaction costs that can be directly attributed to them. In the case of investments in the equity of the Group companies that grant control over the subsidiary company, the fees paid to legal counsel or other professional advisers in connection with acquisition of the investment are directly recognized in the profit and loss account. Subsequent valuation Loans and receivables and held-to maturity investments are measured at their amortised cost. Accrued interest is accounted for in the profit and loss account applying the effective interest rate method. However, those items which it is expected will be collected within one year are valued at their par value, provided that the impact of not updating their cash flows would not be significant. Investments in the equity of group, multi-group and associated companies are valued at cost, less the accumulated amount of any valuation corrections for impairment. Such corrections are calculated as the difference between the item's book value and the recoverable amount, the latter being considered to be the greater of the fair value less cost of sale and the current value of the investment's future cash flows calculated either by estimating the expected cash to be received from dividend distributions made by the firm in which the interest is held, and the disposal or removal from the accounts of the investment in that firm, or by estimating the expected cash to be received from dividends distributed by the firm in which the interest is held, which may arise from ordinary activities or by disposing of it or removing it from the accounts. Unless better proof of the recoverable amount exists, the shareholders' equity of the company in which the interest is held is taken into account, with correction for any existing unrealised gains at the valuation date (including any goodwill that exists). Financial assets held for trading are valued in accordance with the method stated in section As a minimum, at the close of the financial year the Company performs an impairment test for any financial assets that are not recorded at fair value. A financial asset is considered to be impaired if objective evidence exists that its recoverable value is less than its book value. 11

19 Specifically, with regard to valuation corrections for trade and other accounts receivable, the process of evaluating possible impairment losses of these assets is carried out individually for all financial assets valued at their amortised cost. When an impairment entry is made, it is recorded in the "Impairment losses and profits/loss on financial asset disposals" heading of the profit and loss account. If the impairment is in connection with trade and other accounts receivable, the entry is recorded in the "Other operating costs Losses, impairment and changes to provisions for business operations" heading in the profit and loss account (Note 16). If the impairment is subsequently reversed, the book value of the asset is increased, but in such a way that the increased book value will not exceed the book value that would have been determined if the asset had not been the subject of impairment losses in previous years, by crediting the profit and loss account headings for "Other operating costs Losses, impairment and changes to provisions for business operations" for Trade and other accounts receivable and "Impairment losses and losses/gains from the disposal of financial instruments" for other financial assets. iii. Removal of financial assets from the balance sheet The Company removes financial assets from the balance sheet when they mature or the rights over the cash flows from the corresponding asset have been sold or the risks and benefits associated with their ownership have been substantially transferred (as in firm sales of assets) Financial liabilities Financial liabilities classified for valuation purposes as Financial liabilities held for trading" are transactions for the sale of derivative instruments (options) and, following the merger by absorption of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) by the Company during the year (Note 1b), the fixed income instruments (MEFFRepo transactions) in which the Company acts as the central counterparty. These are recorded in "Short-term financial liabilities with third parties As central counterparty for financial instruments (Note 10), the positions in which match the financial asset positions (sections and of this Note). Therefore the criteria applied to these assets are also used in valuing these liabilities (see previous section). The remaining financial liabilities that the Company holds are included in the category of "Debit balances and accounts payable", which have originated from the purchase of goods and services for the business's commercial transactions, or those which do not have a commercial source but cannot be considered to be derivative financial instruments. Specifically, this category contains the balances included in the headings: "Trade and other accounts payable", "Short-term debts with group and associated companies"; margins and deposits received from the market are recorded in the heading "Short-term financial liabilities with third parties Margins and deposits received from the market" (see section of this Note and Note 10) and credit balances for settlement, which are recorded in the heading "Short-term financial liabilities with third parties - Credit balances for settlement" and which include balances pending settlement (carried out on the following day) for the change in margins on futures and options traded that day, which are presented as a position for each settlement member (see sections and of this Note). Debit balances and accounts payable are initially valued at the fair value of the consideration received, adjusted for any costs that can be directly attributed to the transaction. These liabilities are subsequently valued at their amortised cost. However, those items which it is expected will be collected within one year are valued at their par value, provided that there would be no significant impact of not updating their cash flows. The Company removes the financial liability when the obligations which generated them have ceased. 12

20 4.4.3 Equity instruments An equity instrument represents the residual interest in the equity of the Company, once all liabilities have been deducted. Equity instruments issued by the Company are recorded under net shareholders' equity, for the amount received net of issuance expenses. Own equity instruments purchased by the Company during the financial year are recorded, if this is the case, at the value of the consideration given in exchange, directly as a reduced value to Net Shareholders' equity under the "Treasury shares and equity investments" heading. Gains and losses arising from the purchase, sale, issuance or amortisation of treasury instruments are recognised directly in Net Shareholders' equity, with no gains or losses being recorded in the profit and loss account under any circumstances. In 2012 and 2011, the Company did not carry out any operations with its own equity instruments and did not have any own equity instruments at 31 December 2012 and Daily balances pending settlement for options transactions and changes to futures margin deposits Balances pending settlement on the following day for each member as a result of daily options transactions and daily margin variations on futures are recorded by the Company at a position level per settlement member and for the same amount in current assets and current liabilities on the balance sheet. They are recorded in the "Short-term financial investments with third parties - Debit balances for settlement" and "Short-term financial liabilities with third parties - Credit balances for settlement" headings respectively (see sections and of this Note and Note 10) Clearing of derivatives transactions: the Company acts as the central counterparty The positions for each holder and/or member resulting from the Company's activity as the central counterparty in purchase and sale transactions for derivatives and Public Debt simultaneously generate a financial asset and a financial liability of the same amount, which for the purposes of valuation are classified as "held for trading" (see sections and of this Note). Therefore, in compliance with companies' legislation, the Company recognises the financial asset and the corresponding financial liability at fair value, both initially and subsequently. The changes that occur in the fair value of the derivatives for which the Company acts as the central counterparty, when fully transferred to the members, are recorded with a contra posting to the corresponding financial asset or financial liability and therefore result in a net nil balance in the profit and loss account (Note 10). 4.5 Foreign currency transactions The Company uses the euro as its operational currency. Consequently, transactions in currencies other than the euro are considered to be foreign currency transactions and are recorded using the exchange rates current at the dates of the transactions. At the close of the financial year, monetary assets and liabilities in foreign currencies are converted using the exchange rate at the balance sheet date. The resulting profit or loss is attributed directly to the profit and loss account for the year in which it arose under the "Exchange conversion differences" heading. 13

21 During the course of 2012 and 2011 and at 31 December 2012 and 2011, the Company had no significant foreign currency balances or transactions. 4.6 Tax on earnings The tax income or expense on earnings includes both the part relating to the current tax income or expense and the part relating to deferred tax. Current tax is the amount that the Company pays in settlement of the tax liability on earnings in the financial year. Allowances and other tax benefits relating to the tax due, excluding deductions and payments on account and tax losses from previous years that can be used for offsetting and actually applied in this year, have the effect of reducing the current tax amount. The income or expense for deferred tax corresponds to the recognition and cancellation of deferred tax assets and liabilities. These include timing differences that are identified as those amounts payable or recoverable arising from differences between the book amounts of assets and liabilities and their tax value, as well as negative tax bases pending offset and credits for tax allowances that have not been applied. These amounts are recorded in the accounts by applying the tax rate at which they are expected to be recovered or settled to the timing difference or credit. Deferred tax liabilities are recognised as being taxable timing differences except for those arising from the initial recognition of goodwill or other assets and liabilities in an operation that does not affect tax earnings or accounting earnings and is not a business combination. The Company only recognises deferred tax assets to the extent that the Company considers it likely that there will be future taxable earnings against which they can be effectively applied. Deferred tax assets and liabilities, arising from transactions that directly debit and credit shareholders' equity accounts, are also recorded in the accounts with a contra posting to shareholders' equity. At the close of each financial year, any deferred tax assets recorded are reviewed and appropriate corrections made if there are any doubts about their future recoverability. Likewise, at the close of each financial year, deferred tax assets that have not been recorded in the balance sheet are assessed with a view to recognising them to the extent that there is some likelihood that they can be recovered against future taxable earnings. On 23 December 2002, Bolsas y Mercados Españoles requested the right to pay its Corporate Income Tax under the Consolidated Tax Regime, which Bolsas y Mercados Españoles has operated since 1 January 2003, as the holding company of the Group which includes this and other Companies. The policy used by this taxable group as regards the distribution of the resulting consolidated Income Tax consists of entering the consolidated amount payable, as well as the corresponding payments on account, as a proportion of the profits of each company within the taxable group. The consolidated amount payable by the Company, which constitutes a debt with Bolsas y Mercados Españoles, is listed under the "Short-term debts Short-term debts with group and associated companies" entry on the balance sheet (Notes 14 and 18). 4.7 Income and expenses Income and expenses are allocated on an accrual basis, i.e. at the time of the actual flow of goods and services that they represent, independently of the time when the monetary or financial flow arising from them occurs. The said income is valued at fair value of the consideration received, after deducting any discount and tax. 14

22 Income for the provision of services is posted to the profit and loss account for the financial year in which it falls due in accordance with the fees established by the Company. In particular: - "Member fees" income includes: New member income, which includes fees paid to become a settlement member of MEFF, without granting the member the right to receive other services free of charge, and which are fully recognised and become due in the profit and loss account in the financial year in which the member joins, provided that there is no uncertainty about collection, as well as the member fee accrued by the Company, which is recognised in the profit and loss account and is accrued on a monthly basis (Note 17). Revenue for access fees, covering connection fees associated with management of the communications network for standard installations, and revenue from rental of IT equipment (MEFF terminals) from MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) to other entities, are settled at the start of each quarter, being posted to the profit and loss account through accrual of the revenue over the period (Note 17). This activity was partially spun off to the Company with accounting effects on 1 January 2012 (Note 1b). - "Income from trade contracts Derivatives", covers fees for trading in equity futures and options and on the IBEX 35 index which are accrued and recorded in the profit and loss account at the time at which the trade takes place. The "Income from trade contracts - Derivatives" account also includes income from transfer transactions and the constitution and release of pledges on securities (Note 17). "Income from settlement Derivatives" includes fees for settlement of equity futures and options and on the IBEX 35 index which are earned and recorded in the profit and loss account at the time at which the settlement takes place (Note 17). - Revenue from clearing and acting as the central counterparty includes revenue accrued from the commission previously charged by MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal), a company absorbed by the Company during the year (Note 1b), for settlement and clearing activities relating to fixed income security transactions in the central counterparty. These revenues are accrued and recorded in the profit and loss account at the time at which settlement takes place. - "Information and others" income covers income related to communication of transactions to the Comisión Nacional del Mercado de Valores (Spanish National Securities Exchanges Commission). These fees, variable based on the number of transactions related to those communications, are recognised in the profit and loss account and are accrued monthly (Note 17). - Income from "Consultancy and technology" is accrued and booked to the profit and loss account as and when services are supplied (Note 17). Interest received from financial assets is recognised by applying the effective interest rate method and dividends are recognised when the shareholder's right to receive them is declared. In all cases, interest and dividends from financial assets that accrue after acquisition of the asset is recognised as income in the profit and loss account. 4.8 Provisions and contingencies When preparing the financial statements, the Company's Directors differentiate between: 15

23 a. Provisions: credit balances to cover actual liabilities arising from past events, which will probably be cancelled and will result in an outgoing payment, but which remain undetermined as regards the amount and/or time of cancellation. b. Contingent liabilities: possible liabilities arising as a result of past events; whether the liability exists in the future is dependent on the occurrence of one or more future events that are outside the Company's control. c. Contingent assets: potential assets arising from past events, whose existence will be confirmed by the occurrence or non-occurrence of one or more future events not wholly within the control of the Company. Contingent assets are not recognised in either the balance sheet or the profit and loss account, but their existence is disclosed in the accompanying notes wherever it is deemed probable that they will give rise to an inflow of resources causing economic benefits. The financial statements include all provisions where it is estimated that the probability of being required to meet the obligation is greater than the reverse situation. Contingent liabilities are not recognised in the financial statements, but are mentioned in notes to the annual report insofar as they are not considered to be remote possibilities. Provisions are valued at the current value of the best possible estimate of the amount required to cancel them or transfer the liability, taking into account any available information about the event and its consequences. Adjustments arising from the revision of the said provisions are recorded as a financial expense as and when accrued. Compensation to be received from a third party at the time that the obligation is settled, provided that there is no doubt that the reimbursement will be received, is recorded as an asset, except if there is a legal relationship under which part of the risk has been externalised, and by virtue of which the Company is not required to meet the obligation; in this situation, the compensation amount will be taken into account in estimating the amount of any corresponding provision. At 31 December 2012 and 2011, there were no provisions or contingent liabilities other than those described in section Severance pay In accordance with prevailing legislation, the Company is obliged to pay compensation to those employees who are dismissed under certain conditions. Therefore, severance pay compensation amounts that can be reasonably quantified are recorded as an expense in the financial year in which the severance decision is made in the "Personnel costs - Wages, salaries and similar" heading in the profit and loss account (Note 15). At 31 December 2012, the company had no plan to reduce personnel which would make it necessary to set aside a provision under this heading Environmental elements in shareholders' equity Environmental assets are considered to be those assets used in a sustainable way in the Company's business activity, and the main objective of which is to minimise the environmental impact and improve environmental protection, including the reduction or elimination of future pollution. Given the business activity of the Company, it does not have responsibilities, expenses, assets, provisions or contingencies of an environmental nature that could be significant with respect to the Company's net worth, 16

24 financial situation or results. For this reason, this report does not contain a specific breakdown with regard to environmental information Pension commitments i. Post-employment commitments The Company's post-employment commitments with its employees are considered to be "defined contribution commitments", whereby contributions of a specific nature are paid (and recorded in the "Personnel costs" heading in the profit and loss account) to a separate entity, with no legal, effective obligation to make additional contributions if the separate entity is unable to pay the compensation to the employees in relation to services provided in this financial year and in previous years. Any post-employment commitments, which do not meet the previous conditions are considered to be "defined benefit commitments". Defined contribution plans The Company has taken out an insurance policy with Aegón España S.A. de Seguros y Reaseguros, in order to create an additional means of providing pensions to its senior executives. Defined benefit plans The Company records the actual value of any post-employment defined benefit commitments under the "Long-term provisions" heading on the liabilities side of the balance sheet, net of the fair value of assets in the plan and the cost of past service which is recorded on a deferred basis as explained below. When the application described in the previous paragraph results in an asset, this is recorded, up to the actual value of the economic benefit that the company may receive in the form of direct reimbursement or in the form of reduced future contributions, plus, if applicable, the part that is pending allocation to earnings of past services under the "Long-term financial investments" heading. If any adjustments are to be made to the valuation of a post-employment benefits related asset, these are directly allocated to shareholders' equity and recognised as reserves. The "plan assets" are those assets that will be used to directly settle these liabilities. They have the following characteristics: - They are not owned by the Company. They are owned by a legally-separate third party with no linked relationship with the Bolsas y Mercados Españoles Group. - They are only available to pay for or to finance post-employment benefits and cannot be returned to the Company, unless the assets remaining in the plan are sufficient to meet all related obligations of the plan or the entity in respect of benefits to current or former employees or as a refund of benefits that the Company has already paid to employees. The "cost of past services" arising from changes made to existing post-employment benefits or the introduction of new benefits is recognised in the profit and loss account, on a straight line basis, over the period starting from the time at which the new commitments arise until the date at which the employee receives the irrevocable right to receive the new benefits. Post-employment benefits are recognised in the profit and loss account as follows: 17

25 - Current period's services cost (understood to be the increase in the actual value of the liabilities arising in respect of employee service in this financial year) including the accrued cost of unrecognised past service is recorded in the "Personnel costs - Provisions and other personnel costs" heading. - The interest cost (understood to be the incremental rise occurring in this financial year of the actual value of the liabilities as a result of the passage of time) is recorded under the "Financial expenses Provisions updates" heading in the profit and loss account. - The expected return on the assets assigned to cover the commitments and gains and losses in its value, less any cost arising from its administration and the tax to which it is subject is recorded in the "Financial expenses Provisions updates" heading of the profit and loss account. Actuarial gains and losses are allocated directly to shareholders' equity and are recognised as reserves. The Company's post-employment defined benefit commitments relate to: - Commitments for pension payments under the Company's obligation to provide an award for any employee who ceases employment with the Company on reaching the age of 65 and makes a request to take retirement and - Health benefit commitments, understood as the obligation, restricted to a specific number of Company employees, to take out health insurance to complement social security medical coverage. The policy paid for by the Company benefits its current employees and their beneficiaries, defined as those entitled to health care under the state social security scheme under the same social security number as the employee, as regulated by prevailing social security legislation, and those retiring after this agreement comes into effect and their beneficiaries (as defined above, plus those becoming widows/widowers and orphans after the agreement comes into effect that are also stipulated beneficiaries of the policy holder). The Company has outsourced its commitments for pension payments by means of an insurance policy with Aegón España, S.A. de Seguros y Reaseguros. ii. Other long-term benefits To comply with the terms of the non-statutory collective agreement, the Company is required to make a payment to award employees for their good conduct and exceptional qualities, as reflected in their loyal years of continuous service when they achieve 25, 35 and 45 years of effective service (Note 13). "Other long-term benefits" are dealt with as described previously for post-employment defined benefit plans, except that the whole cost of the past service is recognised immediately and that actuarial losses and gains are recorded under the "Personnel costs - Wages, salaries and similar" heading in the profit and loss account. The Company has estimated the actual value of the cost for acquired commitments in respect of long service awards at 31 December 2012, using an actuarial study which considers the salary growth rate to be 3.30%, and the retirement age to be 65; PER P tables and discount rates of 2.74% have been applied (4.73% at 31 December 2011), see Note

26 4.12 Transactions with related companies The Company performs all transactions with related companies at market value. In addition, transfer prices are sufficiently evidenced such that the Company's Directors do not consider that any significant risks exist in this matter that might give rise to consideration liabilities in the future (Note 18) Share-based remuneration schemes and other medium-term remuneration schemes Plan On 28 April 2011 the General Meeting of Shareholders of BME approved the establishment of a Medium- Term Compensation Plan (hereafter, the "Plan") consisting of a Share-based Compensation Plan over a number of years and a Special Medium-Term Variable Compensation Plan, under which Plan beneficiaries, provided that they achieve the objectives laid down in the Plan, may be eligible to receive a specified quantity of BME shares and a cash payment, respectively (hereafter, the "Incentives"). i. Multi-year Variable Remuneration Programme in Shares This compensation consists of a promise to provide ordinary shares in BME to current executive directors, executive management, and middle-management executives designated as Plan beneficiaries. The Plan is based on each beneficiary being assigned a number of units in 2011, 2012 and 2013, to serve as the basis for calculation of the BME shares to be provided, as applicable, provided that the objectives set in the Plan are achieved. This plan requires implementation of successive 3-year cycles for the delivery of shares to the beneficiaries, such that one cycle commences and, from 2013 onwards, another one ends each year. The number of BME shares to be provided to each beneficiary, subject to the stated conditions, including the beneficiary's continuance with the Group, shall be the result of multiplying the number of assigned units by a coefficient of between 0 and 1.5. This coefficient will be established based on the Total Shareholder Return ( TSR ) and the Efficiency Ratio ( ER ) from 1 January 2011 to 31 December 2013, 1 January 2012 to 31 December 2014, and 1 January 2013 to 31 December 2015, compared to the growth in these indicators for five other reference companies over these same periods, based on the following scale, with a separate weighting of 50% for each of the indicators: BME's position in the ranking Coefficient 1st 1.5 2nd 1.0 3rd 0.8 4th 0.6 5th 0 6th 0 The maximum number of BME shares included in the Plan is 428,801. By virtue of the powers delegated to him by the Appointments and Remuneration Committee of Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas Financieros, S.A. (Single Shareholder of the Company - Note 1) at its meeting on 30 June 2011, in 2011 and 2012 the Chairman of BME assigned 98,918 and 104,185 theoretical units for the first two 3-year periods of the plan, respectively, with the corresponding maximum 19

27 number of deliverable shares for beneficiaries being 148,377 and 156,278. The assignable units for the remaining third three-year period of the Plan will be assigned in From the total units assigned at the BME Group level, the number of units for conversion to shares attributable to Company employees in connection with the first and second 3-year periods of the Plan amount to 11,794 and 12,421 respectively, equating to a maximum of 17,691 and 18,632 deliverable shares, respectively. Since the compensation consists of share-based payments, paid out using equity instruments, and it is not possible to accurately estimate the fair value of the services received by the Plan beneficiaries, this value has been determined indirectly by reference to the fair value of the equity instruments granted (BME shares). In this respect, with the exception of any including market-dependent conditions, the transfer conditions included within the Plan's terms do not take the granted equity instruments into account when estimating fair value. Transfer conditions other than market conditions are taken into account to adjust the number of shares included to measure the cost of the employee's (i.e. the beneficiary's) service, which will finally be used as the amount recognised in the profit and loss account and reflects the number of shares transferred. With regard to market-dependent transfer conditions, the cost of services received is recognised independently of whether or not the market-dependent transfer conditions are met, although non-market dependent conditions must be met. Share price volatility was estimated using the historic volatility of BME shares over 750 sessions prior to 30 December In particular, at least at the end of every accounting period, the number of BME shares to be delivered to each beneficiary associated with the Efficiency Ratio ( ER ) is recalculated, as this indicator is not subject to market conditions. In view of the nature of the incentive plan, it was deemed appropriate to value it based on a model that generates a large number of scenarios (10,000) using the Monte Carlo methodology. The share price scenarios were generated on the basis of the volatility and daily correlations observed in time series data for the BME share price and the share prices of the reference companies over the three years prior to the valuation date, using the following variables: First threeyear period Second three-year period Price of the underlying asset (euros) Risk-free interest rate 2.032% 0.402% Volatility of underlying shares 26.39% 26.63% Expected duration of the Plan 3 years 3 years Pursuant to the above, incentives under the Multi-Year Share-based Variable Compensation Plan for services provided by Company employees who are plan beneficiaries are booked as an expense with a contra entry to Shareholders' Equity (under the heading "Other member contributions") calculated on the basis of the fair value of the equity instruments awarded (Bolsas y Mercados Españoles shares) referenced to the date when the grant of shares was approved. The supplied services are charged to profit and loss for the specific period in which the employees supplied their services to the Company (Note 15). ii. Special Medium-Term Variable Compensation Plan This compensation plan offers the possibility of obtaining compensation in cash, provided that specific objectives have been achieved over a 2-year period. 20

28 The actual incentive amount to be provided to each beneficiary, if the conditions established in the Plan are met, will be, firstly, the result of multiplying a coefficient of between 0 and 1.5 associated with the growth in Earnings Per Share ("EPS") compared to the change in this indicator for the other 5 reference companies over the same periods, in a similar fashion to the Multiple Year Share-based Variable Compensation Plan described above, and secondly using a coefficient of between 0 and 1 linked to the Coverage Ratio ("CR"), with a coefficient of 1 being assigned if this ratio is greater than 102%. Each indicator has an individual weighting of 50%. The provision for this compensation until the end of the Plan is re-estimated at the close of each financial year, based on the above indicators; this provision is booked under the "Payroll costs - Wages, salaries and similar items" account as all Plan beneficiaries are Company employees, with a contra entry in "Long-term provisions" on the liabilities side of the balance sheet. This compensation matured on 31 December 2012 (Note 13) Cash flow statements The following expressions are used with the meanings given in the cash flow statements: - Cash flows are the inflows and outflows of cash and cash equivalents. - Operating activities are the activities that constitute the Company's main source of ordinary income, along with other activities that cannot be classified as investment or financing activities. - Investment activities are the long-term acquisition and disposal of assets, along with other investments that are not classified as cash or cash equivalents. - Financing activities are activities that result in changes to the size and composition of equity capital and loans taken out by the entity. In preparing the cash flow statements, the following are all presented net: cash flows from operating activities in respect of financial assets and liabilities generated by regulatory deposits constituted by the Company's members to guarantee their market positions (Notes and 4.4.2); balances pending settlement on the following day for each member resulting from their daily option transactions and daily futures margins (Note 4.4.4); and financial assets and liabilities generated by derivatives in which the Company acts as the central counterparty (Note 4.4.5). In addition, for the purposes of preparing cash flow statements, "cash and cash equivalents" are considered to be any short-term, highly liquid investments with low risk of value fluctuation, that do not constitute materialisation of margins and deposits received from the market, and which also do not include financial instruments in which the Company acts as the central counterparty or debtors (creditors) for the settlement of daily trades in options and futures Statements of changes to shareholders' equity The statements of changes to shareholders' equity presented in these financial statements show all changes to shareholders' equity in the corresponding financial year. This information is further broken down into two reports: the statement of recognised income and expenses; and the statement of total changes to shareholders' equity. The following sections explain the main characteristics of the information presented in the two parts of the statement: 21

29 Statement of recognised income and expense This part of the changes to shareholders' equity statement presents the income and expense generated by the Company as a result of its activity during the financial year, distinguishing between those recorded as income or losses in the profit and loss account for the financial year and other income and expense that is recognised directly in shareholders' equity in compliance with current regulations. Therefore, where applicable, this statement presents: a. The result of the profit and loss account. b. Those income and expense items required by valuation standards to be directly allocated to the Company s shareholders' equity. c. Any transfers, if applicable, made to the profit and loss account in compliance with the provisions of the valuation standards adopted. d. Any tax effect corresponding to items b) and c) above. e. The total of recognised income and expense, calculated as the sum of the letters above. Statement of total changes to shareholders' equity This part of the changes to shareholders' equity statement presents all movements in shareholders' equity, including any resulting from changes to accounting criteria or from error corrections. This statement, therefore, provides a reconciliation between the book value at the start and at the end of the financial year for all items of shareholders' equity. The changes that have occurred are grouped by type into the following items: a. Restatements for changes in accounting policies and corrections of errors: this includes any changes in equity as a result of the retroactive restatement of financial statement balances on account of changes in accounting policies or for the correction of errors. b. Total recognised Income and Expenses: this comprises an aggregate of all the aforementioned items recognised in the statement of recognised income and expense. c. Transactions with shareholders: changes in equity due to dividend payments, capital increases (decreases), share-based payments, etc. d. Other changes to shareholders' equity: other items recognised in equity, such as retained earnings, transfers between equity headings and any other increase or decrease in equity Current and non-current items Current assets are considered to be those assets linked to the normal operating cycle, which is usually considered to be one year. Current assets also include other assets which it is expected will mature, be disposed of or terminate in the short term, from the close date of the financial year, also including cash and cash equivalents. Assets that do not meet these specifications are classified as non-current. 22

30 Similarly, current liabilities are those liabilities linked to the normal operating cycle and, in general, all obligations due to mature or terminate in the short term. If this is not the case, they are classified as noncurrent. 5. Intangible assets Changes in this balance sheet heading for financial years 2012 and 2011 are as follows: Computer software Other intangible assets Industrial property Total Cost: Balances at 1 January Balances at 31 December Additions from merger and partial spin-off (Note 1b) 3,274-3,274 Additions Balances at 31 December , ,195 Accumulated amortisation: Balances at 1 January 2011 (878) (29) (907) Balances at 31 December 2011 (878) (29) (907) Additions from merger and partial spin-off (Note 1b) (3,232) - (3,232) Allocations (44) - (44) Balances at 31 December 2012 (4,154) (29) (4,183) Net intangible assets: Net balance at 31 December Net balance at 31 December At 31 December 2012, the volume of fully amortised intangible assets amounted to million euros (907 thousand euros at 31 December 2011). In financial years 2012 and 2011, no impairment losses were identified affecting these balance sheet items. 23

31 6. Tangible assets Changes in this balance sheet heading for financial years 2012 and 2011 are as follows: Installations and furniture Information processing equipment Other fixed assets Total Cost: Balances at 1 January ,803-1,960 Additions Retirements (2) (1) - (3) Balances at 31 December ,802-1,959 Additions from merger and partial spin-off (Note 1b) 2,207 2, ,630 Additions Balances at 31 December ,438 4, ,810 Accumulated depreciation: Balances at 1 January 2011 (116) (1,803) - (1,919) Allocations (8) - - (8) Retirements Balances at 31 December 2011 (122) (1,802) - (1,924) Additions from merger and partial spin-off (Note 1b) (2,171) (2,055) (6) (4,232) Allocations (24) (160) - (184) Balances at 31 December 2012 (2,317) (4,017) (6) (6,340) Net tangible assets: Net balance at 31 December Net balance at 31 December At 31 December 2012, there were fully depreciated tangible assets amounting to million euros (1.886 million euros at 31 December 2011). During financial years 2012 and 2011, no impairment losses were identified affecting these balance sheet items. The Company holds insurance policies to cover any possible risks to which its tangible assets are exposed. 24

32 7. Cash and cash-equivalent assets The "Cash and cash-equivalent assets" heading includes bank demand deposit accounts (recorded under the "Cash" account), and financial instruments that can be converted into cash with maturity of three months or less at the time of their purchase, provided that these instruments do not bear a significant risk of change to their value and that their use falls within the company's usual cash management policy. The latter are recorded in "Other cash-equivalent liquid assets" Category: Cash Current accounts Other cash-equivalent liquid assets: Reverse repos 28,663 15,537 Treasury bills - 4,967 28,663 20,504 Less- Impairment losses - - Net balance 28,933 20,583 The book value of these assets is similar to their fair value. The maturities and average returns on assets included in the balance of "Cash and cash-equivalent assets" on the balance sheet, except for cash items, at 31 December 2012 and 2011, the counterparties for which are Banco Español de Crédito, S.A, Bankinter, S.A, Banco Bilbao Vizcaya Argentaria and the Treasury, are shown below: Up to 1 Month Between 1 and 3 Months Total Average interest rate 31 December 2012: Reverse repos 28,663-28, % 28,663-28, December 2011: Reverse repos 15,537-15, % Treasury bills - 4,967 4, % 15,537 4,967 20,504 25

33 Changes in reverse repos and treasury bills in financial years 2012 and 2011 were as follows: Assets purchased under resale T- agreements bills Total Balances at 1 January ,380-21,380 Purchases 3,811,355 4,967 3,816,322 Sales (3,817,198) - (3,817,198) Balances at 31 December ,537 4,967 20,504 Additions from merger and partial spin-off (Note 1b) 19,755 7,948 27,703 Purchases 8,360,419-8,360,419 Sales (8,367,048) (12,915) (8,379,963) Balances at 31 December ,663-28,663 No impairment losses were recognised on these financial assets in either 2012 or Income generated in financial year 2012 for cash and other cash-equivalent liquid assets, amounting to 121 thousand euros (245 thousand euros in 2011), is included in "Financial income - Tradable securities and other financial instruments - Third parties" in the profit and loss account. 8. Long-term financial investments The balance for accounts in the "Long-term financial investments" heading at the close of 2012 and 2011 was as follows: Classes Other financial assets Category Loans and receivables The "Loans and receivables" heading mainly includes the cash amount paid by the Company in respect of leasing guarantees (Notes 4.3, 16 and 18). This includes 32 thousand euros in leasing guarantees paid by MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal), which was absorbed by the Company in the year (Note 1b). 26

34 9. Long-term investments in Group and associated companies Details of this balance sheet item at the close of financial years 2012 and 2011 were as follows: Equity instruments 5,824 5,824 5,824 5,824 The most significant information regarding Group, multi-group and associated companies, none of which are listed companies, at the close of financial years 2012 and 2011 was as follows: 2012 Cost (Note 18) Impairment (2) Data relating to long-term investments in Group and associated companies Percentage Issue holding, premium Prior year and income/ Result Interim dividend Rest of shareholders' Address direct Capital Reserves losses Operating Net equity Bolsas y Mercados Españoles Servicios Corporativos, S.A. (1) 5,500 - Madrid 11.00% 25,000 25,042 (663) Bolsas y Mercados Españoles Market Data, S.A. (1) Madrid 7.97% 4, (13,591) 23,261 16, ,824 - (1) Data obtained from the individual financial statements for the financial year ending on 31 December 2012, audited by Deloitte. (2) At 31 December 2012, the Company's Directors had not identified a need to record an impairment correction in respect of these equity holdings Cost (Note 18) Impairment (2) Data relating to long-term investments in Group and associated companies Percentage Issue holding, premium Prior year and income/ Result Interim dividend Rest of shareholders' Address direct Capital Reserves losses Operating Net equity Bolsas y Mercados Españoles Servicios Corporativos, S.A. (1) 5,500 - Madrid 11.00% 25,000 25,014 (1,068) Bolsas y Mercados Españoles Market Data, S.A. (1) Madrid 7.97% 4,061 (45) (2,597) (10,690) 22,071 15, ,824 - (1) Data obtained from the financial statements for the financial year ending on 31 December 2011, audited by Deloitte. (2) At 31 December 2011, the Company's Directors had not identified a need to record an impairment correction in respect of these equity holdings. 27

35 In 2011 and 2012, the Company received dividends amounting to thousand euros and 852 thousand euros from Bolsas y Mercados Españoles, Market Data, S.A; these dividends are included under the heading "Financial income Equity interests In group and associated companies" in the profit and loss account. There were no changes in this balance sheet item in Some information on the investee companies Bolsas y Mercados Españoles, Servicios Corporativos, S.A. and Bolsas y Mercados Españoles Market Data, S.A. is provided below. Bolsas y Mercados Españoles Servicios Corporativos, S.A. On 20 October 2005, the defunct company Sistema Electrónico de Negociación de Activos Financieros, S.A. (SENAF), Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. Sociedad Unipersonal, AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal), Sociedad de Bolsas, S.A, Sociedad Rectora de la Bolsa de Valores de Madrid, S.A. (Sociedad Unipersonal) and this Company, all belonging to the Bolsas y Mercados Españoles Group, incorporated (due to their simultaneous incorporation) a limited liability trading company with the name Bolsas y Mercados Españoles Servicios Corporativos, S.A. The shareholders' equity of this company was set at 25 million euros, represented by 25 million shares with a par value of ten euros each, plus additional paid-in capital of 25 million euros. The Company subscribed to 275,000 shares, at a total par value of 2.75 million euros, plus a share premium of 2.75 million euros (10 euros per share), which represented an 11% shareholding in Bolsas y Mercados Españoles Servicios Corporativos, S.A. Its corporate purpose, which reflects the activities the Company has carried out, is: - The acquisition, holding, administration, management and use of immovable property, and the facilities, furniture and services of any kind in respect of such, and all of their facilities, both principal and ancillary. - Contracting with third parties, or coordinating for such contracting, on its own behalf or for third parties, or direct supply in favour of third parties of administrative, accounting, cleaning and maintenance, group catering, general computer purchase and supply, network connection and electronic information transmission services and any other services or devices for the development of third parties' business activities. Bolsas y Mercados Españoles Market Data, S.A. Bolsas y Mercados Españoles Market Data, S.A. (Sociedad Unipersonal) was incorporated in Madrid on 23 May 2008 for an indefinite period by its single shareholder, Bolsas y Mercados Españoles, with share capital of 61,000 euros (consisting of 1,220 shares with a par value of fifty euros each). On 22 December 2010, Bolsas y Mercados Españoles, as the company's Single Shareholder decided to increase the company's share capital by 2 million euros (consisting of 40,000 new shares, each with a par value of 50 euros, fully subscribed and paid up by Bolsas y Mercados Españoles). The public deeds for the capital increase were granted on 28 December 2010 and recorded with the Companies Registry on 3 January On 28 July 2011, Bolsas y Mercados Españoles Market Data, S.A. carried out a capital increase for 2 million euros (consisting of 40,000 new shares with each share having a par value of 50 euros). This capital increase was subscribed to by various Group companies, including the Company, which subscribed 323,650 euros, consisting of 6,473 shares with a par value of 50 euros each. As of 31 December 2012 and 2011, the Company 28

36 held a 7.97% stake in Bolsas y Mercados Españoles Market Data, S.A. The public deeds for this capital increase were filed with the Madrid Companies Registry on 16 August As of 31 December 2012 and 2011, following the capital increase carried out by Bolsas y Mercados Españoles, Market Data, S.A. in 2011, shareholders in this company and their percentage stakes were as follows: Company Percentage holding Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas Financieros, S.A Sociedad Rectora de la Bolsa de Valores de Madrid, S.A. (Sociedad Unipersonal) Sociedad Rectora de la Bolsa de Valores de Barcelona, S.A. (Sociedad Unipersonal) Sociedad Rectora de la Bolsa de Valores de Valencia, S.A. (Sociedad Unipersonal) Sociedad Rectora de la Bolsa de Valores de Bilbao, S.A. (Sociedad Unipersonal) MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal) 7.97 AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal) 0.14 With effect from 1 January 2011 the company took responsibility for information distribution activity, in accordance with the provisions of the Bolsas y Mercados Españoles Group's Information Distribution Protocol. The corporate purpose of the company is: a. To receive, process, develop, manage, communicate, market and distribute financial, economic, stock market, monetary and business information of any type, via computer media or by any other medium. b. To create, develop and market programs, computer hardware, systems and other elements intended for use in capturing, processing, handling, distributing and using financial, economic, stock market, monetary and business information of any type. c. To receive, process, develop, handle, communicate and distribute information about transactions relating to financial instruments and to communicate this information to all kinds of institutions and private or public authorities in Spain and internationally. d. To perform consultancy and advisory activities related to procedures, and the development and management of the previously mentioned activities. Such activities may be performed directly by the company itself or by taking an interest in the activities of other companies with similar objectives, and for which purpose it may promote incorporation of such companies or take equity interests in them. The Company will carry on the activities comprising its corporate purpose without prejudice to the application of the supervisory and legal regimes, administrative control and inspections to which information on these activities may be subject. 29

37 10. Short-term financial investment with group companies third parties and short-term liabilities to third parties a) Short-term financial investments with group companies and third parties i. Breakdown This breakdown for this balance sheet heading by classification, source, currency and type is as follows: Group (*) Third party Group Third party Classification for valuation: Financial assets held for trading - 33,016, ,602 Loans and receivables - 2,703,802-1,581,778 Investments held to maturity 19, ,753 35,720,403-2,014,380 Source and classification for presentation: Short term financial investments with Group companies 19, Short-term financial investments with third parties Materialisation of margins and deposits received from the market (Note 4.4.1) - 2,696,138-1,546,748 As central counterparty for financial instruments - 33,016, ,602 Debit balances for settlement - 7,664-35,030 19,753 35,720,403-2,014,380 Currency: Euro 19,753 35,720,403-2,014,380 Other currencies ,753 35,720,403-2,014,380 Nature: Derivatives As central counterparty for options - 299, ,602 Fixed income securities in central counterparty clearing house - 32,717, (MEFFRepo) (**) Other financial assets Reverse repos - 2,470,140-1,546,748 Bank deposits - 225, Treasury bills 19, Debit balances for settlement of daily options and futures transactions - 7,664-35,030 19,753 35,720,403-2,014,380 Less- Impairment losses Total financial assets 19,753 35,720,403-2,014,380 (*) Investments originating in the defunct MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal), absorbed by the Company during the year (Note 1b). (**) In 2011, central counterparty activity for fixed income securities was carried out by MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija S.A. (Sociedad Unipersonal), absorbed by the Company during the year (Note 1b). 30

38 Group current financial assets The maturity and average returns on assets included under the heading Group current financial assets on the balance sheet at 31 December 2012, the contra entry for which is the Treasury, are shown below: Up to 1 Month 6 to 12 Months Total Average interest rate 31 December 2012: Treasury bills - 19,753 19, % - 19,753 19,753 Movements in "Group current financial assets" in financial years 2012 and 2011 were as follows: T- bills Balance at 1 January Balance at 31 December Purchases 19,753 Balance at 31 December ,753 Income generated in financial year 2012 by Treasury Bills, amounting to 383 thousand euros (zero in 2011), is included in "Financial income - Tradable securities and other financial instruments - Third parties" in the profit and loss account. As central counterparty for financial instruments Below we show a breakdown at month end for the option positions in which the Company acted as the central counterparty in 2012 and 2011, together with the fixed income security positions (MEFFRepo operations) originating in MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal), absorbed by the Company during the year (Note 1b), for which the Company acted as the central counterparty in 2012 (the positions in these financial assets match the corresponding financial liability positions (section b) of this Note): 31

39 Fixed income securities in central counterparty clearing house (MEFFRepo) As central counterparty for options Total As central counterparty for options January 26,546, ,930 26,963, ,623 February 28,991, ,522 29,433, ,694 March 33,182, ,275 33,706, ,265 April 23,719, ,846 24,397, ,669 May 25,902, ,002 26,697, ,747 June 32,965, ,491 33,491, ,535 July 25,071, ,824 25,621, ,119 August 21,236, ,073 21,690, ,823 September 31,860, ,896 32,329, ,124 October 32,955, ,201 33,400, ,918 November 32,687, ,317 33,122, ,623 December 32,717, ,560 33,016, ,602 With regard to futures held for trading, as the Company acts simultaneously as the purchaser and the seller, these are presented in the balance sheet at their net amounts (Note 4.4.5), and the debit and credit balances that correspond to the daily margins pending settlement are only recorded in the balance sheet in the "Shortterm financial investments with third parties - Debit balances for settlement" and "Short-term financial liabilities with third parties - Credit balances for settlement" headings as at 31 December 2012 and These balances and the total amount of futures margins that were settled in the 2011 and 2012 financial years are described in the "Debit balances for settlement" section below. Debit balances for settlement The balance of this account consists of the debit balances for settlement (settled on the next day with each settlement member) of daily option transactions, for an amount of 260 thousand euros and 881 thousand euros at 31 December 2012 and 2011, respectively, and for settlement of daily futures margins, for an amount of million euros and million euros at 31 December 2012 and 2011, respectively. 7,442,072 and 11,159,495 of futures traded and futures margin calls payable at 31 December 2012 and 2011 were settled in 2012 and 2011, respectively. The settled amount of daily margins in assets (debit balance) matches the aggregated total of the daily margins in liabilities (credit balance) since these are not recorded with a contra entry in the profit and loss account (Note 4.4.4). Materialisation of margins and deposits received from the market The maturities and average profitability of assets included in the balance for the "Materialisation of margins and deposits received from the market" heading of the balance sheet at 31 December 2012 and 2011 are shown below: 32

40 Up to 1 Month 1 to 3 Months 3 to 12 Months Total Average interest rate 31 December 2012: Reverse repos 2,470, ,470, % Current accounts with the Bank of Spain 225, , % 2,696, ,696, December 2011: Reverse repos 1,546, ,546, % 1,546, ,546,748 Movement of reverse repos and deposits with the Bank of Spain in financial years 2012 and 2011 were as follows: Assets purchased under resale agreements Balance at 1 January ,565,857 Purchases 388,212,948 Sales (388,232,057) Balance at 31 December ,546,748 Additions from merger (Note 1b) 1,926,505 Purchases 332,798,686 Sales (333,801,799) Balance at 31 December ,470,140 33

41 b) Short-term financial liabilities with third parties This breakdown for this balance sheet heading by classification, source, currency and type is as follows: Classification for valuation: Financial liabilities held for trading 33,016, ,602 Debits and accounts payable 2,703,802 1,581,778 35,720,403 2,014,380 Source and classification for presentation: Short-term financial liabilities with third parties Margins and deposits received from the Market (Note 4.4.2) 2,696,138 1,546,748 As central counterparty for financial instruments 33,016, ,602 Credit balances for settlement 7,664 35,030 35,720,403 2,014,380 Currency: Euro 35,720,403 2,014,380 Other currencies ,720,403 2,014,380 Nature: Derivatives As central counterparty for options 299, ,602 Fixed income securities in central counterparty clearing house 32,717,041 - (MEFFRepo) Other financial liabilities Guarantees and deposits from MEFF 2,696,138 1,546,748 Payables for settlement of daily options and futures transactions 7,664 35,030 35,720,403 2,014,380 Total financial liabilities 35,720,403 2,014,380 The Directors consider that the book amount of the balances included in the "Short-term financial liabilities with third parties" heading on the balance sheet approximates their fair value. The remaining term of "Short-term financial liabilities with third parties", except for fixed income securities as the central counterparty, is adjusted daily based on the market positions of their holders. As a result of the temporary investment of the above-mentioned balances on customer accounts the Company has obtained financial income and consequently financial expenses amounting to million euros ( million euros in 2011) which are included, depending on their sign, in the balance of "Financial income - Tradable securities and other financial instruments - Third parties" and "Financial expenses Margins and deposits received from the market" in the accompanying profit and loss accounts. 34

42 11. Information about the nature and level of risk with regard to financial instruments i. Information about the nature and level of risk with regard to financial instruments The Company's risk management function is centralised in its Financial Management and the Clearing Department, which have established the necessary mechanisms to hedge exposure to interest rate fluctuations and to credit and liquidity risks. The main types of financial risks that the Company is exposed to are described below: a. Credit risk: The main financial assets of the Company are reverse repos, deposits with credit entities (or the central bank) and Treasury bills, cash balances and Trade and other accounts receivable, which represent the company's maximum credit risk exposure in respect of financial assets. Credit risk on reverse repos, deposits with credit entities and cash funds is minimal, given that the counterparties are banking institutions which have been sufficiently rated by international credit rating agencies. The company also operates as the central counterparty for the derivatives market and therefore incurs counterparty risk that it hedges using a guarantee system required of all market participants. This is based on a sophisticated system of measurement and control of open positions that enables it to request additional guarantees depending on the day-to-day activity of members in real time, under the terms set out in Royal Decree 1282/2010 of 16 October. b. Liquidity risk In order to ensure liquidity and the capability to meet all the payment commitments arising from its activity, the Company has the cash balance as shown in the balance sheet (Note 7). c. Market risk (includes interest rates, exchange rates and other price risks) As stated earlier, given that the portfolio of financial assets is mainly made up of reverse repos (with government stock as the underlying asset), exposure to interest risk is minimal, given that maturities are in the very short-term. This enables the company to adapt quickly to changes in interest rates. On the other hand, the lack of third-party funding or financial liabilities that would impose a financial burden means that the company is not exposed to interest rate increases that could erode its margins or require a policy for specific hedging of this risk. ii. Quantitative information a. Credit risk: The Company does not have a significant concentration of credit risk, since its exposure is spread over a large number of customers. 35

43 Percentage of clients within the total of trade and other accounts receivable subject to impairment adjustments (*) (Note 16) 12.86% 20.66% b. Interest rate risk: (*) Except "Clients, Group and associated companies and the Personnel" account. Note 7 provides details of the book value of financial assets, grouped by maturity from earliest to most remote, and the actual interest rates for those assets for which the actual rate can be determined. c. Exchange rate risk: The Company has no significant amount of exchange rate risk since, at 31 December 2012 and 2011, there were no significant debit or credit balances relating to transactions in currencies other than the euro. 12. Shareholders' Equity The breakdown and movements in financial years 2012 and 2011 in the accounts making up the "Shareholders' equity" heading in the balance sheet are as follows: Capital Statutory and legal reserves Other Reserves Other member contributions Profit (loss) in the financial year Interim Dividend (*) Total Final dividend Balances at 1 January ,030 3,606 2, ,643 (9,793) 24,879 - Distribution of 2010 earnings (10,643) 9,793 (850) 850 Earnings for ,901-7,901 - Interim dividend (6,879) (6,879) - Actuarial gains and losses (Note 13) - - (2) (2) - Member contributions (Note 15) Balances at 31 December ,030 3,606 2, ,901 (6,879) 25,143 - Distribution of 2011 earnings (7,901) 6,879 (1,022) 1,022 Earnings for ,717-10,717 - Interim dividend (9,708) (9,708) - Actuarial gains and losses (Note 13) - - (82) (82) - Member contributions (Note 15) Merger (Note 1b) , ,325 - Partial spin-off (Note 1b) Balances at 31 December ,030 3,606 30, ,717 (9,708) 53,372 - (*) See Note 3. 36

44 Paid-up capital At 31 December 2012 and 2011, the Company's share capital amounted to million euros, represented by 3 million ordinary shares with a par value of 6.01 euros each, being fully subscribed and paid up. All shares representing the company's equity capital have the same rights and are not listed on a stock exchange. The Single Shareholder of the Company at 31 December 2012 and 2011 was Bolsas y Mercados Españoles Sociedad Holding de Mercados y Sistemas Financieros, S.A. The Company is, therefore, subject to the Single Shareholder regime, having declared this status to the Companies Registry. In addition to other obligations under this regime, the Company is required to provide a breakdown of any contracts made with its Single Shareholder in its annual report. The Company has not currently entered into any contracts with its Single Shareholder. In addition, in accordance with Article 17 of Royal Decree 1282/2010 of 16 October governing the official futures and options markets, which applies to the Company, it is stated that "The equity capital of the Governing Body Companies must be sufficient to ensure that they achieve their corporate purpose. Their own resources must at no time fall below 18,000,000 euros or, if relevant, below the sum of guarantees contributed by the governing body company (no contributed guarantees at 31 December 2012 and 2011) - Note 1. At 31 December 2012 and 2011 the Company was in compliance with both these requirements. Legal reserve In accordance with the Spanish Corporate Enterprises Act, an amount equal to 10% of earnings in the financial year must be set aside for the legal reserves, until it reaches a figure of at least 20% of shareholders' equity. The legal reserve can be used to increase capital provided that the remaining reserve balance does not fall below 10% of the increased share capital amount. Otherwise, until the legal reserve exceeds 20% of share capital, it can only be used to offset losses, provided that sufficient other reserves are not available for this purpose. At financial year-end 2012 and 2011, this reserve had been fully constituted. Other reserves and other member contributions Other reserves and other member contributions can be used freely. As of 31 December 2012, the Company's voluntary reserves include a reserve originating from the merger and partial spin-off in favour of the Company amounting to million euros (Note 1b). 37

45 13. Long-term provisions This heading on the balance sheet at the close of financial years 2012 and 2011 as well as the principal movements that took place during these financial years is as follows: Long term-obligations to personnel Retirement Pensions Pension commitments (Note 4.11) Awards for good conduct, loyalty and long service Provision of healthcare Other medium-term compensation plans (Note 4.13) Total Balances at 1 January Net allocation charged to profit and loss (Note 14) Net allocation credited to net shareholders equity (Note 12) Funds used (28) (28) Balances at 31 December Net allocation charged to profit and loss (Note 14) Net allocation charged to net shareholders equity (Note 12) Funds used (35) - - (35) Balances at 31 December Long-term liabilities for compensation to personnel The Company measures the present value of pension obligations using the following criteria: - Calculation method: "Projected credit unit", this considers each year of service as the generator of an additional unit of a right to remuneration, with each unit being valued separately. - Actuarial assumptions used: unbiased and mutually compatible. In general, the most important actuarial assumptions used in the calculations are as follows: Retirement Pensions Health care Discount rate 2.74% 4.73% - - Mortality tables PER2000-P PER2000-P PER2000-P PER2000-P Retirement age Projected return on assets 2.74% 4.73% 2.74% 4.73% Growth in payments 1.5% 1.5% 3.5% 3.5% 38

46 - Discount rate: The Company determined the discount rate by reference to market yields at the end of the reporting period on high quality corporate bonds and debentures of a currency and term consistent with those of its post-employment benefit obligations. Specifically, the Company used the market yields of the Markit iboxx Corporates AA +10 index. The figures recognised in the profit and loss account for liabilities in respect of long-term defined benefit compensation to personnel arising from Retirement Pensions are given below: Long-term liabilities for compensation to personnel for Retirement Pensions Cost of services in the current period Interest costs Projected return from insurance policies (15) (11) Cost of past services The change in the current value of long-term commitments for defined benefit compensation to personnel was as follows: Long-term liabilities for compensation to personnel for Retirement Pensions Current value of liabilities at start of the financial year Additions from merger and partial spin-off (Note 1b) 53 - Cost of services in the current period Service cost, prior years - (2) Interest costs Actuarial (Gains)/losses 170 (7) Current value of liabilities at end of financial year The change in the current value of insurance policies linked to long-term liabilities for defined benefit compensation to personnel was as follows: Long-term liabilities for compensation to personnel for Retirement Pensions Fair value of insurance policies linked to pensions at the start of the year Additions from merger and partial spin-off (Note 1b) 53 - Projected return from insurance policies Actuarial gains/(losses) 90 (8) Premiums paid Fair value of insurance policies linked to pensions at the end of the year

47 The long-term liabilities for defined benefit compensation at 31 December 2012 and 2011 are shown below: Other provisions Current value of the liabilities Less- Fair value of assets in the plan (440) (247) Unrecognised past service (59) (62) Balance on the balance sheet In 2012, provisions of 210,000 euros (210,000 euros in 2011) were charged to the " Personnel costs - Wages, salaries and similar items" heading in the profit and loss account in respect of the accrued cost of the Special Medium-Term Variable Compensation Plan under the Group's Medium-Term Compensation Plan (Notes 4.13 and 4.15). This medium-term Extraordinary Variable Remuneration System ended on 31 December 2012, and it is envisaged that the beneficiaries thereof will receive the corresponding remuneration in the first six months of The Public Administration and Tax Position a) Consolidated Tax Group Bolsas y Mercados Españoles pays Corporate Income Tax under the Consolidated Declaration Regime. In accordance with current regulations, the Consolidated Tax Group consists of Bolsas y Mercados Españoles as the controlling company, which controls all the companies in the consolidation scope, with the exception of Sociedad Rectora de la Bolsa de Valores de Bilbao, S.A., Sociedad Unipersonal and Infobolsa, S.A. and its dependent companies REGIS-TR, S.A. and Link Up Capital Markets, S.A. In relation to the business unit supporting the derivatives market, partially spun off in favour of the Company, MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) remained the tax payer responsible to the Public Administration for the main taxes to which it was liable at 31 December As a result, and due to the partial spin-off described in Note 1b, the Company has recognised a credit balance with this company for the amounts attributable to the spun-off business unit relating to corporate income tax (Note 18). b) Balances with the Public Administration Debit and credit balances with the Public Administration at 31 December 2012 and 2011 are as follows: 40

48 Non-current assets: Deferred tax assets Current liabilities: Trade and other accounts payable - Sundry accounts payable The Treasury for VAT payable Social Security organisations, creditors The Treasury, payable for Withholdings c) Reconciliation of accounting profit and loss and the taxable base The reconciliation between accounting profit and loss and the taxable basis for Corporate Income Tax is as follows: Accounting earnings before tax 14,813 10,925 Retroactive accounting for partial spin-off (Note 1b) (939) - Permanent differences: Other non-tax-deductible expenses 1 3 Timing differences: Originating in the year Long-term liabilities for compensation to personnel (Notes 13 and 15) Other Taxable Base 14,469 11,346 d) Reconciliation of accounting earnings and income tax expense The reconciliation between profit and loss and the taxable expense for Income Tax in financial years 2012 and 2011 is as follows: 41

49 Taxable Base 14,469 11,346 Taxed at 30% 4,341 3,404 Impact of timing differences (178) (125) Deductions: Dividends (358) (255) Retroactive accounting for partial spin-off (Note 1b) Positive adjustments to income tax in the year (*) 9 - Total tax expense recognised in the profit and loss account 4,096 3,024 (*) The adjustments to earnings for 2012 relate to the early retirement of assets recognised by the Company originating from refunds received from pension payments. The amount payable by the Company, amounting to million euros (3.149 million euros at 31 December 2011), net of payments on account of million euros made by the Company during the 2012 financial year (2.488 million euros in 2011) are recorded in the "Short-term debts with group and associated companies" heading (Note 18). e) Breakdown of the corporate income tax expense The corporate income tax expense is broken down as follows: Current tax: For continuing operations 4,265 3,149 For discontinued operations - - 4,265 3,149 Deferred tax: For continuing operations (169) (125) For discontinued operations - - (169) (125) Total tax expense 4,096 3,024 f) Registered deferred tax assets Details regarding the balance on this account at the close of 2012 and 2011 are as follows: 42

50 Timing differences: Long-term liabilities for compensation to personnel Other Total deferred tax assets Changes in the balance of this account at the close of 2012 and 2011 are as follows: Balance at the start of the financial year Additions from merger and partial spin-off (Note 1b) 51 - Allocations (net) charged to profit and loss Long-term liabilities for compensation to personnel Other Balance at the end of the financial year The previously mentioned deferred tax assets have been recorded in the balance sheet as the Company's Board of Directors considers that, based on its best estimate of the Company's future earnings, including some specific tax planning actions, it is probable that these assets will be recovered. At 31 December 2012 and 2011 there were no negative tax bases or deferred tax assets that had not been recorded in the accounts. Pursuant to current corporate income tax regulations, it should be noted that: - Balances corresponding to the assets transferred in the merger and partial spin-off described in Note 1b susceptible to amortisation (not the total of these) were as follows, based on the years in which they were acquired: Total Intangible assets Computer software Tangible assets Installations and furniture Information processing equipment Total ,053 Accumulated amortisation of intangible assets (83) Accumulated depreciation of tangible assets (530) Total accumulated amortisation and depreciation (613) Total, net

51 - The balance sheets closed by the transferring entities (the company absorbed and the company partially spun off) that served as the basis for the merger and partial spin-off are shown in Note 1b. - No assets have been incorporated into the books of the Company (the absorbing company and the beneficiary of the partial spin-off) that are susceptible to amortisation and depreciation at a value differing from that recorded in the books of the transferring company. No tax benefits have been enjoyed by the transmitting entity for which the recipient (the Company) must comply with specific requirements. g) Financial year accounts pending verification and inspection As established by current legislation, tax liability cannot be considered as definitively settled until the returns filed have been inspected by the tax authorities or the four-year time limit has elapsed. At 31 December 2012, the Company has all the principal taxes applicable to it open for inspection by the tax authorities since 1 January Owing to the various possible interpretations of the tax regulations applicable to the Company's operations, the results of the above mentioned inspections carried out by the tax authorities could give rise to contingent tax liabilities that cannot be quantified in an objective manner. Nevertheless, in the opinion of the Company Directors, the possibility that such contingent liabilities could arise after inspection has been carried out is remote, and in any case, the resulting tax liability would not significantly impact the Company's financial statements. 15. Personnel costs The breakdown of the balance of this entry in the accompanying profit and loss account is as follows: Wages, salaries and similar 6,542 5,954 Social welfare contributions 1, Provisions and other personnel costs ,965 7,254 In 2012, the "Wages, salaries and similar items" account includes 210 thousand euros and 175 thousand euros (210 thousand euros and 94 thousand euros in 2011) in respect of the provision made for the "Special Medium- Term Variable Compensation Plan" and the part of the estimated fair value of the equity instruments granted to company employees in respect of the "Multiple Year Share-based Variable Compensation Plan" respectively (Notes 4.13, 12 and 14), which are charged to earnings for the specific period in which the beneficiaries supply their services to the Company (i.e. from 1 January 2011 to 31 December 2012 for the first period and from 1 January 2011 to 31 December 2013 for the second period), with a contra entry in the "Long-term provisions" and "Other member contributions" headings respectively. Likewise, the balance of the "Wages, salaries and similar items" account in the 2011 profit and loss account includes severance payment amounts of 51,000 euros (zero in 2012). 44

52 Pending amounts payable for remuneration at 31 December 2012 amounted to 794 thousand euros (447 thousand euros at 31 December 2011), recorded in the "Trade and other accounts payable Sundry accounts payable " heading on the liability side of the balance sheet. In addition, at 31 December 2012, loans and advances had been granted to some Company personnel for an amount of 55 thousand euros (47 thousand euros at 31 December 2011) and these are entered in the "Trade and other accounts receivable Other accounts receivable" heading on the balance sheet at that date. The average number of persons employed in 2012 and 2011 (with category breakdowns), is as follows: Employees Middle Management Specialist technicians Auxiliary personnel In addition, the gender distribution of personnel at 31 December 2012 and 2011 was as follows: Employees Male Female Male Female Middle Management Specialist technicians Auxiliary personnel The addition of 6 employees from 1 January assigned to the business unit supporting the derivatives market partially spun off by MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) during the year (Note 1b) has been considered in determining the average number of people employed during 2012 and at 31 December 2012, as shown in detail above. These employees were formally transferred to the Company, the beneficiary of the partial spin-off, on 1 January

53 16. Other operating costs External services The breakdown of the balance of this item at 31 December 2012 and 2011 is as follows: 2012 Total Leasing of offices and facilities (Notes 8 and 4.3) Hardware and software Communications network Travel, marketing and promotion Independent professional services (Note 18) Information services (Note 18) Power and utilities Security, cleaning and maintenance (Note 18) Other expenses (Notes 18 and 20) ,323 1,737 The balance of the "Leases for offices and facilities" account corresponds to the expense for the lease on the Company's current operations centre, owned by BME Servicios Corporativos, S.A. (Bolsas y Mercados Group - Notes 1, 8 and 18). The increase in Hardware and Software is mainly due to maintenance costs of the information-processing equipment partially spun off by MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) during the year (Note 1b). The Communications network item mainly includes the costs of the data lines needed to provide derivativesmarket access services in the business unit supporting the derivatives market spun off in the year to the benefit of the Company by MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal), Note 1b. Other expenses mainly consists of 116 thousand euros in bank fees (50 thousand euros in 2011), per diems for members of the Company's Board of Directors amounting to 216 thousand euros (including per diems for members of the Board of Directors of the now defunct MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal), absorbed by the Company in 2012, Note 1b), 98 thousand euros in 2011 (Note 20) and upkeep and maintenance expenses and other items amounting to 102 thousand euros (zero in 2011), which are charged in their entirety to Group companies (Note 17). Unpaid amounts at 31 December 2012 and 2011 for all these items are recorded in the "Trade and other accounts payable - Accounts payable" account on the liability side of the balance sheet. Losses, impairment and changes to provisions for business operations The balance under this heading includes valuation corrections in respect of trade and other accounts receivable made in 2012 and 2011 resulting from assessment of potential impairment losses on these assets. 46

54 The amount of trade and other accounts receivable (except Clients, Group and associated companies and "Other accounts receivable") accrued at 31 December 2012, amounted to 31,000 euros (26,000 euros at 31 December 2011). Of these amounts, there are accrued balances subject to an impairment correction of 26,000 euros (25,000 euros in 2011), and for which provisions have been made at a rate of 77.42% (88% at 31 December 2011), Note 11. The following table shows changes in the provisions balance for impairment losses on assets included in the trade and other accounts receivables balance on the asset side of the balance sheet for financial years 2012 and 2011: Balance at the start of the financial year Additions from merger and partial spin-off (Note 1b) 2 - Allowances charged to this year's earnings 5 9 Recovery of allowances credited to earnings (5) (4) Balance at the end of the financial year In financial years 2012 and 2011, the fees paid for account auditing services and other services provided by the Company's auditor (Deloitte, S.L.), or by a company linked to the auditor by a relationship of control, common ownership or management, were as shown below: Services provided by the auditor and by related companies Audit services Total audit and related services Total Professional Services The auditor supplied other services apart from audit services in financial year 2011, but the value of these was not significant. Information on deferred payments granted to trade suppliers The following table gives the information required by Act 15/2010, of 15 July, which amends Act 3/2004, of 29 December, establishing measures against late payments in commercial transactions: 47

55 Payments Made and Outstanding Payments Amount Amount (Thousand (Thousand euros) % (*) euros) % (*) Within the maximum legal time period 3, % 2, % Outstanding Total payments in the year 100% 100% 2, % Weighted average exceeded payment term Deferrals at year-end exceeding the maximum legal time period (*) % of total. Information about leases The following table provides a breakdown of the future minimum payments the Company will incur from operating lease contracts for its premises: (*) Up to 1 year 235 From 1 to 5 years - More than 5 years - (*) Amounts not updated in line with RPI. These payments related to the building used as the Company's operations centre, which is subject to an operating lease. This lease contract matured in the 2012 financial year and is automatically extended, as required, for subsequent annual periods. In addition, it should be noted that these contracts do not contain contingent fees, restrictions or purchase options, but do contain annual review clauses for the contract validity periods, using the Retail Price Index ("RPI") as the reference. 48

56 17. Revenues The balance for this section of the accompanying 2012 and 2011 profit and loss account is broken down under the following headings: Member fees (*) New member fees Market access fees 2,778 - Transaction income - Derivatives 8,212 8,864 Settlement income Derivatives 8,022 8,653 Clearing and central counterparty 4,456 - Information - Other Consulting and technology ,672 18,852 (*) The increase in the balance on this account is due to the transfer of the derivative market access fee resulting from the partial spin-off of the business unit supporting the derivatives market from MEFF Tecnología y Servicios to the Company (Note 1b). The amounts pending collection at 31 December 2012 and 2011 corresponding to the "Revenues" heading are recorded in the "Trade and other accounts receivable" heading on the asset side of the balance sheet at 31 December 2012 and 2011, in the "Clients for sales and supply of services (members and member entities)", Clients, Group and associated companies and "Other accounts receivable". 49

57 18. Balances with related parties As at 31 December 2012 and 2011, the Company maintained the following balances with companies in the Bolsas y Mercados Españoles Group (Note 1): Assets: Long-term investments in Group and associated companies (Note 9) 5,824 5,824 Long-term financial investments (Note 8) Trade and other receivables Clients, Group and associated companies (**) Short-term investments with group and associated companies (*) ,443 6,222 Liabilities: Short-term debts with group and associated companies (Note 14) Trade and other payables Sundry accounts payable (Note 16) Expenses: Other operating costs External services (Note 16) Taxes Wages and salaries Social welfare charges (Note 20) Provisions and other personnel costs (Note 15) - 4 1,055 1,022 Income: Revenues Consulting and technology (Note 17) (*) Corresponding to the balance of the current account with Group companies. (**) The balance on this account consists mainly of amounts pending collection from MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) originating from the assignment of cash resulting from the partial spin-off and the resulting transfer of the activity of the business unit supporting the derivatives market (Note 1b). This includes a net amount of 282 thousand euros payable by the business unit partially spun off to the Company (Note 14). This amount was collected in full after the end of the year. 50

58 19. Other additional financial information Margin deposits received from the market: Received as pledges and securities as collateral Received as surety 997, , , ,218 Total (*) 1,122, ,064 (*) These are off-balance sheet items and are not recorded in shareholders' equity. 20. Payments and other benefits to Members of the Board of Directors and Senior Management Remunerations paid during this financial year to members of the Board of Directors and the Company's Senior Management (including within this category some of the Entity's middle management, consisting of 2 people at 31 December 2012 and 2011), are classified as follows: 2012 Salaries Expenses ( 1) Other headings Pension Plans Medium-term Remuneration Plan (2) Payment in Equity Instruments (maximum number of shares) Maximum amount in cash (3) First threeyear period Second three-year period Board of Directors Senior management ,533 6,881 (1) This amount is recorded within the balance of the "Other operating costs External services Other expenses" account in the 2012 financial year's profit and loss account (Note 16). (2) This is the maximum amount that may be paid to beneficiaries at the end of each Plan (Note 4.13), if all the objectives set are met. These will be settled after 31 December 2013 and 2014, for the first and second three-year periods of payment in equity instruments, and during 2013 for amounts in cash. (3) At 31 December, the projected payment for this amounted to 128 thousand euros, which will be settled, as appropriate, following the year end. 51

59 2011 Salaries Expenses ( 1) Other headings Pension Plans Medium-term Remuneration Plan (2) Payment in Equity Instruments (maximum number of shares) Second Maximum First threeyear period three-year cash amount period Board of Directors Senior management ,533 6,881 (1) This amount is recorded within the balance of the "Other operating costs External services Other expenses" account in the profit and loss account for financial year 2011 (Note 16). (2) This is the maximum amount that can be paid to the beneficiaries at the end of each plan (Note 4.13), if all objectives defined in the Plan are achieved Furthermore, at 31 December 2012 and 2011, the Company had not granted any advances or loans or entered into any pension or life insurance commitments, nor had it assumed any liabilities for guarantees with former or current members of the Board of Directors of the Company or with Senior Management, other than those already stated. In accordance with the provisions of Additional Provision Twenty-Six of the Organic Act 3/2007 of 22 March, on sexual equality, the Board of Directors has seven members, all of whom are male. Information required under Article of the Corporate Enterprises Act In accordance with the provisions of Article of the Spanish Corporate Enterprises Act, which aims to improve disclosure by limited companies, the Company directors listed below expressly declare by signing these financial statements that they hold the positions stated in the companies listed and that they do not have any holdings in the share capital of any company performing the same, similar or complementary business to that of the Company's corporate purpose, nor do they carry out such activities on their own behalf or for third parties: 52

60 Name Company Position AIAF Mercado de Renta Fija, S.A.U. Chairman Francisco Oña Navarro Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A.U. Director Bolsas y Mercados Españoles Market Data, S.A. Director José María Antúnez Xaus Sociedad Rectora de la Bolsa de Valores de Barcelona, S.A.U. Managing Director Manuel Ardanza Fresno Sociedad Rectora de la Bolsa de Valores de Bilbao, S.A.U. Vice-secretary (not a Director) Manuel Escámez Sánchez Sociedad Rectora de la Bolsa de Valores de Valencia, S.A.U. Vice-Chairman and Managing Director Fernando Centelles Martín AIAF Mercado de Renta Fija, S.A.U. Director MexDer Mercado Mexicano de Derivados S.A. de C.V. Director Francisco Nicolás Tahoces Bolsas y Mercados Españoles Market Data, S.A. Director With regard to persons related to the Directors as set out in article 231 of the Corporate Enterprises Act, the Director Manuel Ardanza Fresno has declared that a person related to him to the second degree is the chairman of Fineco, S.V. S.A. The other Directors have declared that they have no relatives who perform functions or roles in, or have holdings in the capital of, companies with the same, similar or complementary activity to that of the Company. 21. Financial structure As stated in Note 1, the Company is owned by the Bolsas y Mercados Españoles Group. The following list shows the companies that are directly held by Bolsas y Mercados Españoles, which is the Group's holding company, and the main companies in which the Group has indirect interests, other than the Company itself and its affiliated companies (Note 9). 53

61 Data at 31 December 2012 () % % Issue Other holding, holding, premium Interim Result Shareholders Name Address direct indirect Capital and Reserves dividend Operating Net Equity Sociedad Rectora de la Bolsa de Valores de Madrid, S.A. (Sociedad Unipersonal) (1) Madrid % - 21,348 22,477 (37,842) 53,507 40, Sociedad Rectora de la Bolsa de Valores de Barcelona, S.A. (Sociedad Unipersonal) (1) Barcelona % - 8,564 9,146 (11,936) 14,651 12, Sociedad Rectora de la Bolsa de Valores de Bilbao, S.A. (Sociedad Unipersonal) (1) Bilbao % - 2,957 3,316 (6,699) 5,596 6, Sociedad Rectora de la Bolsa de Valores de Valencia, S.A. (Sociedad Unipersonal) (1) Valencia % - 4,111 5,014 (8,701) 9,491 9, Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Sociedad Unipersonal) (1) Madrid % - 114,380 41,825 (37,886) 63,882 43, Bolsas y Mercados Españoles Innova, S.A. (Sociedad Unipersonal) (1) Madrid % - 3, Instituto Bolsas y Mercados Españoles, S.L. (Sociedad Unipersonal) (1) Madrid % Bolsas y Mercados Españoles Market Data, S.A. (Sociedad Unipersonal) (1) (2) Madrid 51.00% 49.00% 4, (13,591) 23,261 16, AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal) (1) Madrid % - 3,005 8,863 (6,840) 10,631 7, MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) (1) Barcelona % (705) 1, MEFF Euroservices, S.A. S.V. (Sociedad Unipersonal) (1) Barcelona % - 4,508 1, Infobolsa, S.A. (3) Madrid 50.00% , BME Gestión de Estudios y Proyectos, S.A. (Sociedad Unipersonal) (1) Madrid % Regis-TR, S.A. (1) Luxemburg % 3,600 (802) - (634) (635) - Link Up Capital Markets, S.A. (1) Madrid % 60 6,198 - (2,525) (2,534) - Companies in which interests are held via the Sociedad Rectoras de las Bolsas de Valores Españolas (the Governing Companies of the Spanish Securities Exchanges): Bolsas y Mercados Españoles Sistemas de Negociación, S.A. (1) Madrid % (691) 1, Sociedad de Bolsas, S.A. (1) Madrid % 8,414 9,956 (2,269) 3,460 2, (1) Data taken from the individual financial statements for the year ended 31 December 2012, which are audited, with the exception of those of Instituto Bolsas y Mercados Españoles, S.L. (Sociedad Unipersonal) and BME Gestión de Estudios y Proyectos, S.A. (Sociedad Unipersonal). (2) Indirect shareholding via the Governing Companies of the Spanish Securities Exchanges, AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal) and MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal). (3) Data obtained from the financial statements of Infobolsa, S.A. and its dependent companies at 31 December 2012, whose individual financial statements are audited (limited inspection in the case of Difubolsa Serviços de Difusão e Informação de Bolsa, S.A. and Infobolsa Deutschland, GmbH and Openfinance, S.L.). 54

62 Data at 31 December 2012 () % % Issue Other holding, holding, premium Interim Result Shareholders' Name Address direct indirect Capital and Reserves dividend Operating Net Equity Sociedad Rectora de la Bolsa de Valores de Madrid, S.A. (Sociedad Unipersonal) (1) Madrid % - 21,348 23,134 (47,776) 67,518 50, Sociedad Rectora de la Bolsa de Valores de Barcelona, S.A. (Sociedad Unipersonal) (1) Barcelona % - 8,564 9,290 (17,386) 22,452 18, Sociedad Rectora de la Bolsa de Valores de Bilbao, S.A. (Sociedad Unipersonal) (1) Bilbao % - 2,957 3,328 (8,551) 7,966 9, Sociedad Rectora de la Bolsa de Valores de Valencia, S.A. (Sociedad Unipersonal) (1) Valencia % - 4,111 5,014 (10,543) 12,094 11, Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Sociedad Unipersonal) (1) Madrid % - 114,380 39,125 (38,684) 64,000 45, Bolsas y Mercados Españoles Innova, S.A. (Sociedad Unipersonal) (1) Madrid % - 3,884 2, Instituto Bolsas y Mercados Españoles, S.L. (Sociedad Unipersonal) (1) Madrid % Bolsas y Mercados Españoles Market Data, S.A. (Sociedad Unipersonal) (1) (2) Madrid 51.00% 49.00% 4,061 (2,642) (10,690) 22,071 15,471 5 AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal) (1) Madrid % - 3,005 8,875 (6,612) 10,576 7, MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) (1) Barcelona % - 9,015 18,247 (506) MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) (1) Barcelona % ,286 (1,264) 2,181 1,570 - MEFF Euroservices, S.A. S.V. (Sociedad Unipersonal) (1) Barcelona % - 4,508 1,021 (337) Infobolsa, S.A. (3) Madrid 50.00% ,836-1,091 1,157 - Regis-TR, S.A. (1) Luxemburg % 3,600 (13) - (788) (789) - Link Up Capital Markets, S.L. (1) Madrid % 60 8,553 - (2,401) (2,355) - Companies in which interests are held via the Sociedad Rectoras de las Bolsas de Valores Españolas (Governing Companies of the Spanish Securities Exchanges): Bolsas y Mercados Españoles Sistemas de Negociación, S.A. (1) Madrid % (765) 1, Sociedad de Bolsas, S.A. (1) Madrid % 8,414 10,158 (2,877) 4,444 3, (1) Data taken from the individual financial statements for the year ended 31 December 2011, which are audited, with the exception of those of Instituto Bolsas y Mercados Españoles, S.L. (Sociedad Unipersonal). (2) Indirect shareholding via the Governing Companies of the Spanish Securities Exchanges, AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal) and MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal). (3) Data obtained from the financial statements of Infobolsa, S.A. and its dependent companies at 31 December 2011, which are audited (limited inspection in the case of Difubolsa Serviços de Difusão e Informação de Bolsa, S.A. and Infobolsa Deutschland, GmbH and Openfinance, S.L.). 55

63 Sociedad Rectora de la Bolsa de Valores de Madrid, S.A. (Sociedad Unipersonal) This company was incorporated in Madrid on 7 June 1989, under the simultaneous incorporation procedure with the name of Sociedad Promotora de la Sociedad Rectora de la Bolsa de Valores de Madrid, S.A, and on 27 July 1989 then became the Sociedad Rectora de la Bolsa de Valores de Madrid, S.A. In 2009, the company purchased 15,025 shares in the company Bolsas y Mercados Españoles Sistemas de Negociación, S.A. (previously Mercado Alternativo Bursátil, S.A. Sociedad Unipersonal), equivalent to a 25% shareholding, from Bolsas y Mercados Españoles, for a sum of 118,600 euros. As a result of this purchase, at 31 December 2012 and 2011 the company had a 25% permanent shareholding in Bolsas y Mercados Españoles Sistemas de Negociación, S.A. (previously Mercado Alternativo Bursátil, S.A. Sociedad Unipersonal). Likewise, at 31 December 2012 and 2011, the company had permanent shareholdings in Sociedad de Bolsas, S.A; Visual Trader Systems, S.L. and Bolsas y Mercados Españoles Servicios Corporativos, S.A, with shareholdings in each company of 25%, 90% and 48%, respectively. In 2011, in accordance with the provisions of the Information Dissemination Protocol of the Bolsas y Mercados Españoles Group, the company took part in the capital increase at Bolsas y Mercados Españoles Market Data, S.A, subscribing 8,408 new shares, each with a par value of 50 euros, equivalent to a 10.35% shareholding. This capital was registered in the Madrid Companies Registry on 16 August In this connection, and in accordance with the aforementioned protocol, on 1 January 2011 the company transferred its information business unit to Bolsas y Mercados Españoles Market Data, S.A. Sociedad Rectora de la Bolsa de Valores de Barcelona, S.A. (Sociedad Unipersonal) The company, Sociedad Promotora de la Bolsa de Valores de Barcelona, S.A. was incorporated on 8 June 1989, subsequently becoming Sociedad Rectora de la Bolsa de Valores de Barcelona, S.A. (Governing Body of the Barcelona Stock Exchange) on 26 July In 2009, the company purchased 15,027 shares in the company Bolsas y Mercados Españoles Sistemas de Negociación, S.A. (previously Mercado Alternativo Bursátil, S.A. Sociedad Unipersonal), equivalent to a 25% shareholding, from Bolsas y Mercados Españoles, for 118,600 euros. As a result of this purchase, at 31 December 2012 and 2011 the company had a 25% permanent shareholding in Bolsas y Mercados Españoles Sistemas de Negociación, S.A. (previously Mercado Alternativo Bursátil, S.A. Sociedad Unipersonal). At 31 December 2012 and 2011, the company also held permanent shareholdings in Centro de Cálculo de Bolsa, S.A. and Sociedad de Bolsas, S.A, with the respective percentages being 100% and 25%. In 2011, in accordance with the provisions of the Information Dissemination Protocol of the Bolsas y Mercados Españoles Group, the company took part in the capital increase at Bolsas y Mercados Españoles Market Data, S.A, subscribing 8,268 new shares, each with a par value of 50 euros, equivalent to a 10.18% shareholding, which it still held at 31 December This capital increase was registered with the Madrid Companies Registry on 16 August

64 Sociedad Rectora de la Bolsa de Valores de Bilbao, S.A. (Sociedad Unipersonal) This company was incorporated on 26 July 1989 as a "Sociedad Anónima" (limited company) for an indefinite period. In 2009, the company purchased 15,025 shares in the company Bolsas y Mercados Españoles Sistemas de Negociación, S.A. (previously Mercado Alternativo Bursátil, S.A. Sociedad Unipersonal), equivalent to a 25% shareholding, from Bolsas y Mercados Españoles, for 118,600 euros. As a result of this purchase, at 31 December 2012 and 2011 the company had a 25% permanent shareholding in Bolsas y Mercados Españoles Sistemas de Negociación, S.A. (previously Mercado Alternativo Bursátil, S.A. Sociedad Unipersonal). At 31 December 2012 and 2011, the company also held a permanent 25% shareholding in Sociedad de Bolsas, S.A. In 2011, in accordance with the provisions of the Information Dissemination Protocol of the Bolsas y Mercados Españoles Group, the company took part in the capital increase at Bolsas y Mercados Españoles Market Data, S.A, subscribing 8,268 new shares, each with a par value of 50 euros, equivalent to a 10.18% shareholding, which it still held at 31 December This capital increase was registered with the Madrid Companies Registry on 16 August Sociedad Rectora de la Bolsa de Valores de Valencia, S.A. (Sociedad Unipersonal) This company was incorporated on 25 July 1989 as a "Sociedad Anónima" (limited company) for an indefinite period. In 2009, the company purchased 15,025 shares in the company Bolsas y Mercados Españoles Sistemas de Negociación, S.A. (previously Mercado Alternativo Bursátil, S.A. Sociedad Unipersonal), equivalent to a 25% shareholding, from Bolsas y Mercados Españoles, for 118,600 euros. As a result of this purchase, at 31 December 2012 and 2011 the company had a 25% permanent shareholding in Bolsas y Mercados Españoles Sistemas de Negociación, S.A. (previously Mercado Alternativo Bursátil, S.A. Sociedad Unipersonal). At 31 December 2012 and 2011, the company also had permanent shareholdings in Visual Trader Systems, S.L. and Sociedad de Bolsas, S.A, with the respective percentages being 10% and 25%. In 2011, in accordance with the provisions of the Information Dissemination Protocol of the Bolsas y Mercados Españoles Group, the company took part in the capital increase at Bolsas y Mercados Españoles Market Data, S.A, subscribing 8,268 new shares, each with a par value of 50 euros, equivalent to a 10.18% shareholding, which it still held at 31 December This capital increase was registered with the Madrid Companies Registry on 16 August The most important information concerning the main companies in which the four Stock Exchange Governing Body companies have shareholdings is given below: Sociedad de Bolsas, S.A. Sociedad de Bolsas, S.A. was incorporated in Madrid on 16 March 1989, under the simultaneous incorporation procedure with the name Mercado Continuo, S.A. Its start-up capital of 8,414,000 euros was subscribed to and fully paid up by the four Sociedades Rectoras de las Bolsas de Valores Españolas (Spanish Securities Exchanges Governing Bodies). On 1 February 1990, its share capital was redistributed through the purchase and sale of shares between the four Governing Companies of the Spanish Securities Exchanges, in accordance with the Securities Exchanges Act 57

65 24/1988, of 28 July, which stated that the Company's share capital must be owned by the four Governing Bodies in equal parts. On 26 February 1990, Mercado Continuo, S.A. changed its name to Sociedad de Bolsas, S.A. and made some changes to its Articles of Association to adapt to the requirements contained in Article 50 of Act 24/1988 and Articles 18 to 22 of Royal Decree 726/1989, of 23 June, concerning Governing Bodies and Members of the Securities Exchanges, Security Exchange Companies and Collective Guarantee Companies. The company s activity basically involves operating the programs enabling the trading of securities listed on the electronic stock market of the four official Spanish stock exchanges, and supervising the members of the market in relation to these securities. At the end of 1991, as an additional service provided to market members, the company acquired the MEFF-30 and FIEX-35 indexes and merged them into a single index, the IBEX 35, which acts as an underlying for options and futures contracts on stock exchange indexes. The company owns the IBEX indices and is responsible for managing, supervising and marketing them, and publishing them on a daily basis. The company transferred its information business to Bolsas y Mercados Españoles Market Data, S.A. on 1 January 2011, in accordance with the Information Dissemination Protocol of the Bolsas y Mercados Españoles Group. Bolsas y Mercados Españoles Sistemas de Negociación, S.A. Bolsas y Mercados Españoles Sistemas de Negociación, S.A. was incorporated in Madrid for an indefinite time period on 21 February 2006 as Mercado Alternativo Bursátil, S.A. under the simultaneous incorporation procedure, by Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas Financieros, S.A. Its corporate purpose is to organise, manage and oversee the multilateral trading systems, the Mercado Alternativo Bursátil (Alternative Investment Securities Market: hereinafter, MAB for its Spanish initials) and Mercado de Valores Latinoamericanos (hereinafter, Latibex), and to take responsibility for their organisation and internal functioning, for which it shall be endowed with the necessary resources. The company is therefore legally considered the governing entity of the MAB and Latibex. The MAB was established following approval by the Council of Ministers on 30 December 2005 based on a proposal from the Comisión Nacional del Mercado de Valores (CNMV, the Spanish National Securities Exchanges Commission). It is an Organised Trading System with a national scope, subject to supervision by the CNMV of its organisation and operations. Its basic function is to provide an organised system of trading, clearing, settlement and recording of transactions for: a. Shares and other instruments of Collective Investment Institutions b. Shares and instruments issued by or relating to small-cap entities c. Other securities and instruments which, because of their special characteristics, require specific regulations In addition, in 2008, the company introduced two new trading segments in which securities can be listed. These are Empresas en expansión (Growth Companies) and Sociedades de Inversión Libre (Free Investment Companies: hereafter, "SIL"). For the purposes of complying with the requirements set out in Article 119 of the Spanish Securities Exchanges Act 24/1988, of 28 July, as amended by Act 47/2007, of 19 December, the company requested authorisation from the 58

66 CNMV to convert the MAB into a Multi-lateral Trading System, and this authorisation was received during the 2010 financial year. In 2009, Bolsas y Mercados Españoles sold its entire shareholding in the company, equivalent to a 100% stake, to the Madrid, Barcelona, Bilbao and Valencia stock exchange governing bodies. Consequently, at 31 December 2012, the company's shareholders are the four stock market governing bodies, each holding a 25% stake. On 6 May 2010, the company publicly changed its name to its current name. Bolsas y Mercados Españoles Market Data, S.A. Bolsas y Mercados Españoles Market Data, S.A. (Sociedad Unipersonal) was incorporated in Madrid on 23 May 2008 for an indefinite period by its single shareholder, Bolsas y Mercados Españoles, with share capital of 61,000 euros (consisting of 1,220 shares with a par value of fifty euros each). On 22 December 2010, as the sole shareholder, the Company decided to increase its share capital by 2 million euros (in the form of 40,000 new shares, each with a par value of 50, fully subscribed and paid up by the Company). The public deeds for the capital increase were granted on 28 December 2010 and recorded with the Companies Registry on 3 January On 28 July 2011, the Company decided to increase its share capital by 2 million euros (in the form of 40,000 new shares, each with a par value of 50). The capital increase was subscribed and paid up in full by the Madrid, Barcelona, Bilbao and Valencia stock exchange governing bodies, AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal), MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal) and the Company, and was registered in the Madrid Companies Registry on 16 August At 31 December 2012 the company's shareholders and their ownership interests are as follows: Company Ownership interest Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas Financieros, S.A. 51% Sociedad Rectora de la Bolsa de Valores de Madrid, S.A. (Sociedad Unipersonal) 10.35% Sociedad Rectora de la Bolsa de Valores de Barcelona, S.A. (Sociedad Unipersonal) 10.18% Sociedad Rectora de la Bolsa de Valores de Valencia, S.A. (Sociedad Unipersonal) 10.18% Sociedad Rectora de la Bolsa de Valores de Bilbao, S.A. (Sociedad Unipersonal) 10.18% MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal) 7.97% AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal) 0.14% The Company took on the information business on 1 January 2011, in accordance with the Information Dissemination Protocol of Grupo Bolsas y Mercados Españoles. The corporate purpose of the Company is: a. To receive, process, develop, manage, communicate, market and distribute financial, economic, stock market, monetary and business information of any type, via computer media or by any other medium. 59

67 b. To create, develop and market programs, computer hardware, systems and other elements intended for use in capturing, processing, handling, distributing and using financial, economic, stock market, monetary and business information of any type. c. To receive, process, develop, handle, communicate and distribute information on transactions involving financial instruments and to communicate this information to all kinds of institutions and private or public authorities in Spain and internationally. d. To perform consultancy and advisory activities related to procedures, and the development and management of the aforementioned activities. Such activities may be performed directly by the company itself or by taking an interest in the activities of other companies with similar objectives, to which end it may promote the incorporation of such companies or take equity interests in them. The Company will carry on the activities comprising its corporate purpose without prejudice to the application of the supervisory and legal regimes, administrative control and any inspections to which the information on these activities may be subject. MEFF Euroservices, S.A. Sociedad de Valores (Sociedad Unipersonal) This company was incorporated as a "Sociedad Anónima" (limited company) on 4 August The Company's corporate purpose is to carry out the activities stated in Article 63 of the Spanish Securities Act 24/1988, of 28 July, on the financial instruments listed in Article 2 of the same Act, under the regulations set forth in Royal Decree 217/2008, of 15 February 2008, on the legal regime for investment services companies and other institutions that offer investment services or under any other future regulations that may be developed or which replace the existing regulations. MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) MEFF Tecnología y Servicios, S.A, previously Mercado Español de Futuros Financieros Services, S.A, was incorporated as a "Sociedad Anónima" (limited company) on 4 July On 11 May 2006, MEFF Tecnología y Servicios signed a contract with Red Eléctrica de España, S.A. (the Spanish Electricity Grid), under which MEFF Tecnología y Servicios was appointed as the authorised third party to manage collections and payment, including sending out invoices and receiving and managing security guarantees, and acting as the central counterparty between entities that supply and purchase electricity, i.e. the Market Operators. In this respect, Red Eléctrica de España, S.A. is the Operator of the Spanish Electricity System which, by virtue of Act 54/1997, as modified by RD Act 5/2005 and other statutes, is responsible for the functions of settling and communicating payments and receipts, as well as for receiving and managing security guarantees for operations carried out by Market Operators in relation to system adjustment services and power supply guarantee. On 28 and 29 June 2012, the Board of Directors of MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal) and the Company, respectively, agreed the partial spin-off of the company to MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal). This involved transferring the business unit comprising the company's technical and human resources supporting the derivatives market to MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal), with the latter acquiring through universal succession all the assets, liabilities, rights and obligations of the aforementioned business unit. The public deeds of the partial spin-off were executed on 28 November 2012, and recorded in the Companies Registries of Barcelona and Madrid on 14 and 28 December 2012, respectively. 60

68 Furthermore, during the year MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) was taken over by MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal) (see previous section in this Note). As with the partial spin-off described above, this was intended to reorganise the Group companies conducting activities in the derivatives markets and providing derivative market technical services, to boost the Group's efficiency and reorganise the activities of the companies involved. AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal) The corporate purpose of AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal) after the merger with Sistema Electrónico de Negociación de Activos Financieros, S.A, as described below, is to govern, administer and direct the fixed income securities market AIAF MERCADO DE RENTA FIJA (hereafter referred to as the AIAF Market) and to govern, administer and direct the multilateral trading system Sistema Electrónico de Negociación de Activos Financieros (SENAF.SMN) and the activities which are developed in it. AIAF Mercado de Renta Fija is an official, organised and decentralised secondary exchange for fixed income securities. It was authorised by an Order of the Spanish Economy and Revenue Ministry of 1 August 1991 and officially recognised in compliance with the Sixth Transitional Provisions of Act 37/1998 of 16 November on Reform of the Spanish Securities Exchange Act 24/1988, of 28 July. On 22 April 2009, the Boards of Directors of AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal) and Sistema Electrónico de Negociación de Activos Financieros, S.A. (absorbed company), at meetings held that day, approved the Merger by Absorption Proposal of Sistema Electrónico de Negociación de Activos Financieros, S.A. to be absorbed by AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal), with removal of the company by dissolution but without its liquidation. The Single Shareholder of AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal) and the Extraordinary Meeting of Shareholders of Sistema Electrónico de Negociación de Activos Financieros, S.A, at meetings held on 25 May 2009, approved the merger of both entities by means of the absorption of Sistema Electrónico de Negociación de Activos Financieros, S.A. by AIAF Mercado de Renta Fija, S.A. (Sociedad Unipersonal). This involved removal via dissolution but without liquidation of the former company and the consequent block transfer of its equity capital to the universal successor, the absorbing company, which via universal succession acquired the rights and obligations of the absorbed company. The public deeds of merger were granted on 17 July 2009 and recorded in the Companies Registry on 22 July In 2011, in accordance with the provisions of the Information Dissemination Protocol of the Bolsas y Mercados Españoles Group, the company took part in the capital increase at Bolsas y Mercados Españoles Market Data, S.A, subscribing 113 new shares, each with a par value of 50 euros, equivalent to a 0.14% shareholding, which it still held at 31 December This capital increase was registered in the Madrid Companies Registry on 16 August In this connection, and in accordance with the aforementioned protocol, on 1 January 2011 the company transferred its information business unit to Bolsas y Mercados Españoles Market Data, S.A. Bolsas y Mercados Españoles Innova, S.A. (Sociedad Unipersonal) Bolsas y Mercados Españoles Innova, S.A. Sociedad Unipersonal (formerly, FC&M, Sociedad Rectora del Mercado de Futuros y Opciones sobre Cítricos, S. A.) was set up on 5 February 1993 under the name Sociedad Promotora del Mercado de Futuros de Cítricos en Valencia, S.A. In 1995, the company became the governing entity of the citrus futures and options market. On 30 October, 2003 the company relinquished its license to act as the governing company of an official secondary market and changed its corporate purpose. 61

69 On 27 April 2011, Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas Financieros, S.A. agreed to take over the company and Bolsas y Mercados Españoles Innova, S.A. (Sociedad Unipersonal) and to change the company's corporate purpose in order to bring it into line with the activities conducted by the absorbed company, and to change the company's registered name to the current name -Bolsas y Mercados Españoles Innova, S.A. (Sociedad Unipersonal)- amending its Articles of Association accordingly. The public merger deeds were filed with the Madrid Companies Registry on 1 July After the merger, the current corporate purpose of Bolsas y Mercados Españoles Innova, S.A. (Sociedad Unipersonal) is to: provide consultancy, training, advisory and technical support services in relation to business organisation and structuring projects, regulatory and corporate regimes, financial management and operating procedures, and also to design, create, develop, operate, provide support for and market, in any form, procedures, programs, systems, services or computer, electronic or communication networks of all kinds that contribute to, simplify, speed up, and, in general, improve, the development of financial activities or activities relating to securities markets. Such activities may be carried out directly or by taking an interest in the activities of other companies with similar corporate purposes, to which end it may promote their incorporation or take equity interests. Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Sociedad Unipersonal) Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Sociedad de Sistemas) was incorporated on 7 June 2000 under the name Promotora para la Sociedad de Gestión de los Sistemas Españoles de Liquidación, S.A. This company's initial corporate purpose resulted from Act 44/2002 of 22 November, on Reform Measures for the Financial System (Spanish Finance Act), which established the legal changes required to integrate existing recording, clearing and settlement systems and to design a legal regime to enable the creation of the Sociedad de Sistemas (Systems Company) by merging SCLV and CADE. In application of the aforementioned provisions of the Financial Systems Act, the Extraordinary General Meeting held on 22 January 2003 adopted, inter alia, the following resolutions: to change the company's name to "Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A." and to amend the corporate purpose and the articles of association and to increase the company's share capital by means of noncash contributions, namely: (i) 100% of the share capital of the SCLV, contributed by Bolsas y Mercados Españoles; and (ii) the necessary resources to carry out the relevant public debt book-entry market functions consisting, among others, of goodwill in respect of public debt clearing, settlement and registration activity transferred from CADE to Sociedad de Sistemas, contributed by the Bank of Spain. Finally, with economic effect from 1 January 2003, a merger took place whereby SCLV was absorbed by the Sociedad de Sistemas, under the terms laid down in the Spanish Finance Act. Following the change in the corporate purpose of Sociedad de Sistemas and the amendment of its articles of association in accordance with the Spanish Finance Act, the company is now tasked with the following functions: a. To keep accounting records, under the terms of current legislation, relating to: (i) Securities, represented by means of book entries listed for trading on the Securities Exchanges or the Spanish Book-Entry Government Debt Stock Market; (ii) Securities represented by book entries or securities listed for trading on other secondary markets, trading systems or other types of trading environment, when requested to do so by their governing bodies; 62

70 (iii) Securities for which a listing request has been made or is to be made for any of the exchanges mentioned above; (iv) Securities represented by book entries or securities not currently listed for trading on official secondary markets, when this is authorised by current regulations; (v) Other assets or financial instruments, which are the subject of transactions recorded, cleared and settled by the Sociedad de Sistemas. b. To manage the clearing and settlement of securities and other assets or financial instruments and cash arising from ordinary or extraordinary transactions carried out in the Spanish Stock Exchanges and the Spanish Book-Entry Government Debt Stock Exchange, and transactions carried out on other secondary markets, trading systems or other types of trading environment, when designated for this purpose. c. To provide technical and operational services directly related to the recording, clearing and settlement of securities and any other requested services whereby the company will collaborate or co-ordinate its actions with other securities recording, clearing and settlement systems or environments and in which it may participate. d. To develop the activity of recording, clearing and settling of transactions for securities and other assets or financial instruments handled by institutions in which the Sociedad de Sistemas has a majority interest, or with which it signs an agreement in which it reserves to itself supervisory rights. e. To have direct or indirect shareholdings in entities dedicated to the clearing and settlement business, or those which manage or keep accounting records for securities. f. To supply central counterparty services, either directly or through subsidiary companies, when this is approved in accordance with Article 44 ter of the Spanish Securities Exchanges Act 24/1988 of 28 July, and any other applicable regulations. g. To research, promote and participate in any change and transformation processes that occur both nationally and internationally with regard to record-keeping, clearing and settlement. h. Any others as required by the Government and as notified by the Comisión Nacional del Mercado de Valores (Spanish Securities Exchanges Commission), or the Bank of Spain, as applicable. In order to achieve its purposes and objectives as effectively as possible, the Sociedad de Sistemas will perform all functions assigned to it by the regulations contained in its legal regime and such other functions, falling within the legal scope of its remit, as contribute to improving the operation of the Securities Exchanges. At 31 December 2012 and 2011, the company held a 21% long-term shareholding in Bolsas y Mercados Españoles Servicios Corporativos, S.A. and a long-term shareholding in Link Up Capital Markets, S.A. (incorporated in 2008) of 23.47%. At 31 December 2012 and 2011 the company also held a permanent 50% shareholding in Regis-TR, S.A. The most important information about Link Up Capital Markets, S.A. and Regis-TR, S.A. is provided below. Link Up Capital Markets, S.A. Link Up Capital Markets, S.L. (Sociedad Unipersonal) was incorporated in March 2008 for an indefinite period by Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Sociedad 63

71 Unipersonal), an entity wholly owned initially by Bolsas y Mercados Españoles, with share capital of 3,000 euros (consisting of 376 shares, each having a par value of 8 euros). The company's corporate purpose is to design, establish, create, operate and market, by any method, products, services, systems, procedures or computer networks of any kind for the purpose of channelling orders, information and any type of message sent or received by institutions dedicated to the centralised custody or accounting recordkeeping of securities and financial instruments, and supplying related services to such institutions. A number of capital increases and sales of shares were conducted from 2008 through 2011, with the shareholders of Link up Capital Markets, S.A. and their ownership interests at 31 December 2012 being as follows: Company name Number of shares Ownership interest Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A.U % Clearstream Banking AG % Bolsa de Valores de Grecia Sociedad Anónima de Participaciones, Liquidación, Ajustes y Asiento (HELEX) % Verdipapirsentralen A/S % Oesterreichische Kontrollbank Aktiengesellschaft % SIX SIS AG % Verdipapircentralen ASA % MISR For Central Clearing Depository and Registry-MCDR % Strate Limited % Cyprus Stock Exchange % % On 28 June 2011, in addition to other matters, the Combined Ordinary and Extraordinary Meeting of Shareholders of the company resolved: (i) to convert the company from its previous form as a Sociedad Mercantil de Responsabilidad Limitada, to a Sociedad Anónima, (ii) to increase the company's share capital by raising the par value of the 703 existing shares from 8 euros to 86 euros each, charged to the share premium account, maintaining the percentage stakes of the company's shareholders unchanged (iii) to remove the distinction between Class A and Class B shares and combine all shares of the company into a single series, giving all shareholders the same rights and obligations, and (iv) as a consequence of the above, to amend the company's Articles of Association. The deeds of transformation for the company were executed on 19 December Regis-TR, S.A. On 9 December 2010, Regis-TR, S.A. was incorporated in Luxembourg for an indefinite period by Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Sociedad Unipersonal) and Clearstream Banking, S.A, with share capital totalling 3.6 million (in the form of 36,000 shares, each with a par value of 100, fully subscribed and paid up, in equal amounts, by the two companies), Its corporate purpose is: a. To act as a trade repository under the provisions of applicable Luxembourg legislation. b. To provide administrative, registry and financial information services for any OTC derivative contracts and transactions entered into by financial and non-financial counterparties, as well as reporting information received on these OTC derivative contracts and transactions, inter alia, to the market, regulatory authorities and OTC derivative market participants. 64

72 c. The company may provide collateral valuation and management services in connection with OTC derivative contracts and transactions. The company may also delegate its services to a third party entity and carry out any kind of commercial activity on intellectual property rights relating to the company's purpose as described in the previous paragraph. d. The company may carry out any financial, commercial and/or industrial operations it considers useful to achieve and develop its corporate purpose. Instituto Bolsas y Mercados Españoles, S.L. (Sociedad Unipersonal) This company was incorporated in Madrid, for an indefinite time period, on 28 July Its corporate purpose is to organise and give courses, seminars, conferences, post-graduate programmes, advanced professional training and, more generally, any training activity related to the financial sector and the securities markets as well as preparing, producing and publishing related academic material. Infobolsa, S.A. Incorporated in Madrid in May 1990, under the name Sociedad de Difusión de Información de la Bolsa de Valores de Madrid, S.A. Its corporate purpose is to receive, process, market and distribute financial, economic, stock market, monetary and business information of all types, providing that it is related to stock markets. In 2008, Sociedad Rectora de la Bolsa de Valores de Madrid, S.A. (Sociedad Unipersonal) sold its entire 50% shareholding in Infobolsa, S.A. to Bolsas y Mercados Españoles. At 31 December 2012 and 2011, the share capital of Infobolsa, S.A. consisted of 55,000 shares (all with identical voting and financial rights) with a par value of 6.01 euros each and fully subscribed and paid up. The shareholders of Infobolsa, S.A. are Bolsas y Mercados Españoles and Deutsche Börse, A.G, holding 50% each. Deutsche Börse, A.G. became a shareholder in Infobolsa, S.A. by purchasing shares in the company from Sociedad Rectora de la Bolsa de Valores de Madrid, S.A. (Sociedad Unipersonal), during On 26 January 2011, Infobolsa, S.A. signed an agreement to acquire 62% of the share capital of Openfinance, S.L, for million. Furthermore, in an additional agreement, Infobolsa, S.A. and all minority shareholders of Open Finance, S.L. signed long-term sale agreements for the remaining 38% of the share capital of Open Finance, S.L. (cross options). Despite this and pursuant to the performance of the latter and the conditions established in the private sale agreements, the company's directors do not expect these cross options to be exercised. Furthermore, at 31 December 2012 and 2011 Infobolsa, S.A. retained its holdings in the share capital of Difubolsa Serviços de Difusão e Informação de Bolsa, S.A. and Infobolsa Deutschland, GmbH, at 99.99% and 100%, respectively. BME Gestión de Estudios y Proyectos, S.A. (Sociedad Unipersonal) This company was incorporated in Madrid, for an indefinite period of time, on 21 November 2012 by Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas Financieros, S.A. with share capital of 60 thousand (consisting of 60,000 shares with a par value of 1 each, all fully subscribed and paid up). Its corporate purpose is to analyse and prepare projects related to developing and managing markets for financial products. 65

73 22. Subsequent events At the date when these financial statements were prepared, there were no subsequent events worthy of mention that have not already been detailed in this report. 66

74 MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal) Management Report for the year ended 31 December 2012 Changes to the Company's business and position The trading volume at the end of 2012 was 67,176,527 contracts, down 0.6% on the previous financial year, broken down as shown in the following table: Jan-Dec 2012 (256 days) Jan-Dec 2011 (256 days) Change Open Position Equity Options 34,507,360 29,410, % 8,261,020 IBEX-35 Options 4,206,058 2,198, % 569,200 Equity Futures 21,245,876 27,578, % 1,306,987 IBEX-35 Futures 4,745,067 5,281, % 49,791 IBEX-35 Mini Futures 2,424,766 3,099, % 5,280 IBEX-35 Futures Dividends 2,162 3, % 2, y bond 45, ,176,527 67,572, % 10,195,290 The open position at 31 December 2012 consisted of 10.2 million contracts, 9.7% down on year-end The volume of energy contracts in 2012 stood at 8,548,817 MWh, as shown below: Jan-Dec 2012 (256 days) 24 March Dec 2011 Open Position Annual Energy Swap 3,617,880 2,336,304 43,800 Quarterly Energy Swap 2,007, ,440 1,090,957 Monthly Energy Swap 2,003, , ,589 Weekly Energy Swap 342, ,475 2,856 Daily Energy Swap 578, ,700 8,400 8,548,817 3,756,413 1,709,602 The effective amount registered for the Company's activity as a central counterparty for fixed income securities was 1,358,632 euros, relating to 14,694 simultaneous bilateral public debt purchase and sale transactions among SENAF members. There were significant increases in both the amount of cash involved (98%) and the number of transactions (72%).

75 Economic situation for the financial year Income, broken down by activity, is shown in the table below: Member fees New member fees Market access fees 2,778 - Transaction income - Derivatives 8,212 8,864 Settlement income Derivatives 8,022 8,653 Clearing and central counterparty 4,456 - Information - Other Consulting and technology ,672 18,852 In its role as the clearing house, the Company guarantees the completion of all contracts entered in the system. For each clearing member, the Company makes a daily calculation, based on the member's open positions, of the margin they must deposit to comply with their obligations. At 31 December 2012 these amounted in cash to 2,696,138 euros. These margins are held in government debt repos and money market repos. The company s own cash is invested in government debt repos and Treasury bills, with a balance at 31 December 2012 of million euros. Important events for the Company after the end of the financial year There are no events after year-end which have had a significant effect on the accounts. Principal risks of the business The degree of exposure which the Company has to its main risks is described below: Exposure to credit risk The main financial assets of the Company are reverse repos and Treasury bills, cash balances and Trade and other accounts receivable, which represent the company's maximum credit risk exposure in respect of financial assets. Credit risk on reverse repos and cash funds is minimal, given that the counterparties are banking institutions which have been sufficiently rated by international credit rating agencies. As regards the credit risk associated with the effective collection of fees that the Company has set in consideration for its services, it should be noted that practically all of its clients, in terms of invoicing volume, are financial institutions subject to supervision by the relevant authorities. Furthermore, as most of the aforementioned services are settled in the standard settlement period for the corresponding transactions in each market, there are practically no balances awaiting payment by clients for normal operations. In any event, the credit risks attributed to trade accounts receivable are reflected in the net balance for provisions for insolvency, 2

76 as estimated by the Company Management based on experience in previous financial years and on its assessment of the current economic climate. The company also operates as the central counterparty for the derivatives market and therefore incurs counterparty risk that it covers using a guarantee system required of all market participants. This is based on a sophisticated system of measurement and control of open positions that enables it to request additional guarantees depending on the day-to-day activity of members in real time, under the terms set out in Royal Decree 1814/1991 of 20 December. Exposure to interest risk As stated above, given that the portfolio of financial assets is mainly made up of reverse repos (with government stock as the underlying asset), exposure to interest risk is minimal, given that maturities are in the very shortterm. This enables the company to adapt quickly to changes in interest rates. On the other hand, the lack of thirdparty funding or financial liabilities that would impose a financial burden means that the company is not exposed to interest rate increases that could erode its margins or require a policy for specific hedging of this risk. The Company does not hold financial instruments in foreign currencies. Exposure to other market risks The risks and uncertainties the Company is subject to in the performance of its objectives mainly arise from business volume fluctuations in the markets from which it makes the majority of its income. Experience shows that financial markets are subject to cycles of varying duration and intensity, which have a significant influence on ongoing business. Additionally, as the company operates in a highly regulated sector, any changes that occur in the regulatory framework could affect the company's ability to improve its results. Risk concentration The Company has no significant concentration of credit risk. The Company's likely future development In 2013, the Company expects to maintain its income levels for its Financial Derivatives business, whilst increasing business in its new energy segment significantly. Activities in the field of Research and Development In 2012, the Company had no expenses for Research and Development. Treasury share operations The Company does not hold any treasury shares and did not carry out any treasury share transactions in All of the Company's share capital is owned by Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas Financieros, S.A. (BME). 3

77 The Company's use of financial instruments The policy pursued by the Company to invest excess cash in 2012 consisted of materialising such surplus cash through acquisition of reverse repos with short-term maturities and treasury bills. 4