annual report 2007 · 33 board of directors´ statement of policy on corporate governance ......

1

ANNUAL REPORT 2007

2

4 Oslo Børs VPS 5 Key Figures 7 Managing Change – To benefit our customers

8 The activities of Oslo Børs VPS 9 The Securities Market – How it operates 10 Group strategy 15 Business Areas 24 Financial Ratios 29 Shareholder information 32 Registered in VPS ASA 31 December 33 Board of directors´ statement of policy on corporate governance 42 Board of Directors of Oslo Børs VPS Holding ASA 43 Election Committee and Control Committees 44 Executive management of Oslo Børs VPS 44 Boards of directors of Oslo Børs, VPS and VPS Clearing 45 Organisational structure of Oslo Børs VPS

46 Annual Report 47 Annual Report 2007 56 Annual Accounts 2007 95 Auditor´s Report 96 Annual Report of the Control Committees

99 Articles of Assosiation of Oslo Børs VPS Holding ASA

CONTENTS

3

Oslo Børs VPS Holding ASA owns 100% of the share capital of Oslo Børs ASA, VPS ASA, VPS Clearing ASA and Oslo Market Data and Solutions

(comprises Oslo Børs Informasjon AS and Manamind AS).

The Oslo Børs VPS group operates and develops attractive marketplac-es for trading in financial instruments, together with settlement and securities registration services, in order to give customers access to

an efficient and effective capital market.

The company’s shares are traded on the Norwegian OTC list. The market capitalisation of Oslo Børs VPS Holding at the close of 2007 was

NOK 6,150 million.

4

Oslo Børs VPS will contribute to value creation in Norway by simplifying and developing the country s infrastructure

We intend to

…. develop the entire value chain of the Norwegian securities market through increased collaboration and efficient use of resources

…. improve long-term value creation, allocate greater capacity to product development and improve our implementation skills and capacity – to the benefit of our customers, owners and employees

…. offer products and services in line with the highest international quality standards at competitive prices

…. strengthen our competitiveness by operating as a unified business with a greater and stronger presence

…. offer better opportunities for employees and be a competitive employer

5

kEy figuRES

Financial key figures Pro forma*(NOK 1,000) 2004 2005 2006 2007 2007Operating revenues 268 680 361 386 494 631 665 821 1 162 729 Operating profit 100 659 187 377 293 143 390 067 614 216 Profit for the year 75 744 144 097 220 204 304 618 460 205

Earnings per share (NOK) 3,03 5,76 8,81 11,40 10,70Change in cash per share (NOK) 0,68 3,00 1,64 21,94 Ordinary dividend per share (NOK) 2,80 5,20 6,00 7,00Extraordinary dividend per share (NOK) 1,20 0,00 0,00 0,00

Return on equity 36,9 % 57,6 % 67,2 % 44,3 %Return on total capital 36,2 % 52,6 % 58,7 % 41,7 %Net operating margin 37,5 % 51,8 % 59,3 % 58,6 % 52,8 %No. of employees at 31.12 110 117 122 282

Definitions:Earnings per share Profit for the year/average number of sharesChange in cash per share Change in cash and cash equivalents/average number of sharesReturn on equity Profit for the year/average book value of equity over the yearReturn on total capital Pre-tax profit/average book value of assets over the yearNet operating margin Operating profit/operating revenues * Pro forma financial information is intended to show the group’s overall earnings and the major features of the accounts as if the merger had taken place at the start of the accounting period. Pro forma figures are based on the profit and loss accounts of the individual units for the period in question. The figures include depreciation of excess value identified by the excess value analysis carried out in connection with the merger.

2005 2006

Quarterly figures (NOK 1,000) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Operating revenues 79 022 86 610 91 219 104 536 117 161 134 404 110 427 132 639

Operating expensesSalary and other personnel expenses 21 988 22 074 18 035 29 293 25 929 22 407 32 576 21 620Other operating expenses 14 552 16 534 14 823 20 086 18 672 21 614 20 058 21 683Operating expenses before depreciation 36 540 38 608 32 858 49 379 44 601 44 021 52 634 43 303Depreciation 5 470 5 457 5 446 250 4 295 4 084 4 165 4 386Total operating expenses 42 010 44 065 38 304 49 629 48 896 48 105 56 799 47 689

Operating profit 37 012 42 545 52 915 54 907 68 265 86 299 53 628 84 950Net financial items 9 033 -802 511 1 039 1 380 6 844 1 523 2 128

Ordinary pre-tax profit 46 045 41 743 53 426 55 946 69 645 93 143 55 151 87 078Tax 11 150 10 946 14 586 16 378 19 501 24 615 15 442 25 257Earnings for the period 34 895 30 797 38 840 39 568 50 144 68 528 39 709 61 823Earnings per share (NOK) 1,40 1,23 1,55 1,58 2,01 2,74 1,59 2,47

2007 2007 PROFORMAQuarterly figures (NOK 1,000) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Operating revenues 147 232 147 301 143 563 227 725 282 882 281 620 276 413 321 815

Operating expensesSalary and other personnel expenses 29 995 26 634 25 633 56 208 67 664 54 676 63 272 70 950Other operating expenses 24 625 27 401 25 665 38 116 53 525 52 233 41 807 61 745Operating expenses before depreciation 54 620 54 035 51 298 94 324 121 189 106 909 105 079 132 695Depreciation 4 394 4 135 3 848 9 100 21 182 20 906 20 652 19 981Total operating expenses 59 014 58 170 55 146 103 424 142 371 127 815 125 731 152 676

Operating profit 88 218 89 131 88 417 124 301 140 511 153 805 150 682 169 139Net financial items 2 700 14 910 3 981 5 342 4 201 5 656 7 400 7 829

Ordinary pre-tax profit 90 918 104 041 92 398 129 643 144 712 159 461 158 082 176 968Tax 25 457 25 862 25 872 35 192 40 824 44 831 44 633 48 731Earnings for the period 65 461 78 179 66 526 94 451 103 888 114 630 113 449 128 237Earnings per share (NOK) 2,62 3,13 2,66 2,97 2,42 2,67 2,64 2,98

6

kEy figuRES

Operational key figures 2002 2003 2004 2005 2006 2007

Oslo Børs – Equities

No. of companies listed at 31.12 204 178 188 219 229 241

No. of companies listed on Oslo Axess 28

Market cap. of issuers at 31.12 (NOK bn) 503 690 932 1 402 1 916 2 180

New issues for cash (NOK bn) 6 7 9 28 56 54

Turnover by value (NOK bn) 444 552 907 1 513 2 585 3 230

Percentage change from prior year -21,6 % 24,3 % 64,3 % 66,8 % 70,9 % 25,0 %

Average daily turnover (NOK bn) 1,85 2,21 3,58 5,98 10,30 12,92

No. of transactions (1,000) 2 048 2 348 3 406 5 480 8 846 12 156

Average number of transactions per day 8 192 9 392 13 462 21 659 35 244 48 624

Percentage increase in number of transactions -19,0 % 14,6 % 43,3 % 60,9 % 62,7 % 38,0 %

OSEBX 115,21 170,79 236,70 332,51 440,36 490,83

Percentage change in benchmark index – OSEBX -31,1 % 48,4 % 38,4 % 40,5 % 32,4 % 11,5 %

Oslo Børs – Bonds

No. of bonds listed on Oslo Børs 838 826 861 837 744 612

No. of bonds on ABM (Alternative Bond Market) 30 182 350

Turnover by value – ex repo (NOK bn) 737 949 746 648 714 681

Repo turnover by value (NOK bn) 1 728 2 649 2 896 4 087 4 252 6 560

Market cap. at 31.12 (NOK bn) 493 529 546 547 609 632

Oslo Børs – Derivatives

No. of contracts traded (1,000) 3 176 3 824 5 352 6 200 13 157 13 968

Turnover by value – options (NOK bn) 2 2 2 3 5 3

Turnover by value – index futures (NOK bn) 38 38 48 53 100 193

Turnover by value – forwards (NOK bn) 2 4 10 16 22 14

VPS – Issuer products

No. of shares and public companies registered 1 408 1 181 1 142 1 181 1 283 1 443

No. of bond issues registered 1 451 1 601 1 793 1 883 2 038 2 062

VPS – Investor products

No. of VPS accounts (Securities accounts) 1 250 309 1 230 283 1 241 811 1 287 167 1 430 107 1 547 457

Market capitalisation (NOK bn) 1 262 1 554 1 896 2 520 3 265 3 673

No. of Internet users* 446 617 549 449*Figures for number of Internet users first collected from 2006

VPS – Fund products

No. of mutual funds registered 579 601 597 651 843 924

No. of holdings in mutual funds 812 301 799 778 811 140 893 258 1 105 002 1 264 193

No. of transactions in mutual funds 2 079 064 1 715 986 2 341 052 3 266 305 4 251 620 5 971 949

Market capitalisation (NOK bn) 50 72 101 180 267 305

VPS – Settlement products

No. of trades processed by VPS 7 032 400 7 723 660 10 390 846 15 783 438 24 018 987 31 806 333

VPS Clearing

No. of clearing members at 31.12. 27

No. of active derivatives accounts at 31.12. 2 800

No. of cleared TM derivative contracts (1,000) 17 413

No. of cleared loan contracts (1,000) 1 649 478

7

MANAgiNg ChANgE – TO BENEfiT OuR CuSTOMERS

2007 was another eventful year in the Norwegian securities market, with a record level of activity, extensive changes to legislation and regulations, increasing competition, and the merger of Oslo Børs Holding and VPS Holding, as some of the main features. We are all living in a world of continuous change, and we aim to respond positively and develop our business so that we continue to be an attractive supplier of infrastructure and services for the securities market.

In order to maintain the competitiveness of the Norwegian securities market in a world of intense competition with large international exchanges, it is crucial that the quality of the securities infrastructure meets the highest international standards. This was one of the most important arguments for the decisions taken by the boards and general meetings of Oslo Børs Holding and VPS Holding in 2007 to merge the two companies. Oslo Børs VPS Holding came into being in Novem-ber 2007, and the process of furthering the organisational structure of the group is now well under way in 2008.

We want to strengthen interaction between the players in the Norwegian securities market by making better use of the overall resources and expertise of the two companies. Bringing together these two operations offers clear advantages. We are committed to more effective product development for the marketplaces, and for clearing and settlement, in order to improve the competitiveness of the Norwegian market.

Over recent years, we have reduced our prices on a number of occasions, due in part to increasing competition. As recently as December 2007 we reduced the prices for a number of VPS services by up to 30% – just a few weeks after the merger came into effect. I believe this is a good example of both the effect of increasing competition and the new group’s commitment and ability to offer competitive prices for its products and services.

We enjoy good collaboration and dialogue with our customers, both in Norway and internationally, on the continuing develop-ment of the Norwegian securities market. Over recent years our combined efforts have made the Norwegian market more professional and more widely recognized, both in terms of size and visibility. I am sure that our merged group will help to further strengthen this collaboration so that we can work together to develop the marketplaces, clearing and settlement to build an even more attractive market for both Norwegian and international customers.

The EU has issued a number of directives in recent years to create greater competition in the securities market, and as an

EEA country Norway has also implemented these changes. Two important new directives were implemented in the Norwegian market in 2007, namely the Markets in Financial Instruments Directive (MiFID) and the Transparency Directive. The Oslo Børs VPS Holding group has also signed the European Code of Con-duct for Clearing and Settlement, which creates transparency and ensures low thresholds to entry for competing suppliers.

The directives have already created greater competition for stock exchange and securities activities, and have brought about significant changes in the operating environment for ex-changes and clearing houses. This has, on the whole, been posi-tive for markets and their customers, but we do see some less favourable side effects. One consequence of the changes has been some early signs of greater fragmentation and reduced transparency in the European securities market. The latter is a cause of particular concern given the extensive resources that have been committed to pursuing the goal of transparent systems. These trends need to be monitored carefully, since there is a risk that they could lead to investors experiencing lower quality standards in the securities markets.

Oslo Børs and VPS have worked with the challenges mentioned above for a number of years, and we are taking the steps needed to respond to the changing environment and maintain our competitiveness by offering flexible and customer- oriented services and solutions.

To our customers, who always step up to new challenges and contribute to the development of products and the market as a whole, to our employees, who make their contribution with their expertise and enthusiasm, and to our shareholders, who helped to make the merger happen, I would like to extend my thanks for the impressive contribution everyone made in 2007.

I look forward to continuing our collaboration, and to working together as we develop the Norwegian securities market for the future.

Bente A. LandsnesGroup Chief Executive Officer

8

ThE ACTiViTiES Of OSLO BØRS VPS

9

ISSUER

INvESTOR INvESTMENT FIRMS OSLO BØRS

vPS vPS CLEARING

INvESTMENT FIRMS INvESTOR

The functions of the securities market The main function of the securities market is to provide a link between issuers seeking to raise long-term capital (the primary market) and owners of capital seeking good investment opportunities (the secondary market). The term ‘securities market’ refers to the market for both primary and secondary trading in securities, and the clearing and settlement of all the transactions.

ThE SECuRiTiES MARkET – hOW iT OPERATES

Access to capital By participating in the securities market, com-

panies gain an exposure to a broad universe

of investors. This creates opportunities for

companies to gain access to financing, which

is very important for the economy and society

as a whole.

important players in the securities market Oslo Børs operates organised marketplaces

for listed securities such as shares, derivatives

and bonds. Providing this kind of well-organi-

sed marketplace is crucial for ensuring that

investors have confidence in the securities

market, and helps to improve the efficiency of

the market by offering cost-effective services

for its customers. The core business of Oslo

Børs is organising and running marketplaces

to facilitate trading in securities. Oslo Børs is

also responsible for extensive surveillance and

supervision of the capital market.

VPS ensures secure settlement of the trades in

securities carried out through investment firms,

and maintains registers of the owner ship of

all securities that are registered with the VPS

account system. VPS provides account and

settlement services, together with related

services, for issuers and investors in the Nor-

wegian securities market through investment

firms, banks and investment managers. These

services help make it easier and more efficient

for issuers to raise capital and manage their

securities registers, and give investors the

reassurance that they will be able to exercise

their rights as owners of securities. Register-

ing the ownership of securities with VPS

provides legal protection and procedures for

the priority of interests, which are impor-

tant practical features for confidence in the

Norwegian market. VPS helps to improve the

efficiency of securities trading through its

systems for clearing payments and securities

settlement.

VPS Clearing acts as a central counterparty for

participants in the derivatives market, and so

allows participants to reduce their exposure to

both market risk and operational risk. As the

central counterparty, VPS Clearing delivers

accounts services, collateral management

services, payment clearing and settlement

services and other related services. Only

investment firms and credit institutions can

participate in derivatives clearing as agents

for clients. These institutions therefore ope-

rate as distributors of VPS Clearing’s products

and services. In addition, major institutional

investors such as insurance companies and

pension funds can participate in derviatives

clearing in their own right, but they do so as

direct clearing members.

Trading on Oslo BørsTrading in securities listed on Oslo Børs takes

place through investment firms that act as

brokers between buyers and sellers of finan-

cial instruments. Investment firms ensure that

the orders they receive are carried out either

by inputting the order to the Oslo Børs electro-

nic trading system on behalf of the investor for

the order to be matched, or by matching the

order directly. Once a trade has been agreed,

confirmations are sent to the buyer and seller

and the trade is recorded with the central

securities depository, VPS, for clearing and

settlement, including registering the securities

on the purchaser’s VPS account. In addition to

its role in using the trading system to carry out

the order, the investment firm ensures that the

shares or bonds are transferred to the new ow-

ner on the VPS central register for the issuer’s

securities, and ensures that the purchaser

pays the seller through the investment firm.

Investment firms also fulfil an important

function by gathering, analysing and presen-

ting information from issuers that provides

the foundation for the market’s pricing of

securities.

10

gROuP STRATEgy 2008 – 2009

Overview of the group The group comprises a holding company and four subsidiaries, of which three companies carry out activities as their main business that are subject to statutory authorisation.

The group’s major business activities are operating the marketplaces of Oslo Børs ASA, the securities registration and settlement activities of VPS ASA, and the clearing house activities of VPS Clearing ASA.

The Market Data and Solutions area is principally involved in the sales and marketing of financial market data and related information services.

Market trendsAs cross-border trading in financial instruments has grown, market participants have come to expect greater standardisa-tion and efficiency from the systems that make up the securi-ties infrastructure. In addition, the EU Commission has focused on the efficiency of European securities markets.

The three companies in the group subject to authorisation have signed the European Code of Conduct for Clearing and Settlement, which represents self-regulation by the securities industry to set standards in the areas of price transparency, access and interoperability and service unbundling. The Code of Conduct is intended to stimulate greater competition in the central securities depository (CSD) and custody segment without resorting to introducing regulatory measures. The EU authorities are carefully monitoring the securities industry’s compliance with the Code of Conduct.

The EU Markets in Financial Instruments Directive (MiFID) came into force for the EU/EEA area in stages on 1 November 2007 and 1 January 2008. One consequence of MiFID has been the emergence of multilateral trading facilities (MTFs). MTFs are an alternative form of trading platform to a tradi-tional stock exchange, and under MiFID this alternative has a somewhat more regulated and formal role in the market. MTFs operate independently of regulated markets, and can offer trading in all financial instruments admitted to listing anywhere in the EU/EU area. A number of MTFs have already

been launched in Europe, principally in London, that offer cost-effective solutions for trading, clearing and settlement.

Through Project Turquoise, seven of the largest Europe invest-ment banks are working to establish a MTF that will challenge the established stock exchanges.

The Nordic Growth Market (NGM) is in the process of establish-ing itself in Norway. NGM will offer trading and settlement for companies on the OTC list as well as Oslo Børs and Oslo Axess.

OMX AB has purchased the clearing and consulting divisions of Nord Pool ASA as well as the Nord Pool derivative products busi-ness, and is in the process of establishing a unit for international energy derivatives based in Oslo. This acquisition is intended to form the basis of a new energy and commodities division of OMX.

Financial markets around the world suffered from turbulent con-ditions in credit markets in 2007 that have continued into 2008, triggered by problems stemming from the sub prime market in the USA. The Norwegian market has not escaped the effects of this international credit turmoil, and the performance of the Oslo Børs marketplace has been characterised by considerable volatil-ity over this period in the same way as other Nordic and interna-tional exchanges. However, Oslo Børs has reaffirmed its position as a strong exchange for the energy sector, and is recognized as an attractive marketplace for international energy companies.

Foreign investors play an ever more important role in the Nor-wegian market. This group now owns over 40% of the value of shares listed on Oslo Børs, and foreign investors accounted on average for 75% of transactions settled through VPS in 2007.

Our view of the futureThe globalisation of securities trading creates pressure to stand-ardise, simplify and improve services in this sector. At the same time, customers are focusing on the costs of carrying out transac-tions on regulated markets. With a continuing increase in the number of foreign investment firms and investors that make use of the group’s services, we see accelerating pressure to improve the efficiency of our activities and reduce prices. Globalisation, the market’s expectations and the requirements imposed by the

Oslo Børs VPS

Oslo Børs VPS VPS Clearing Oslo Market Data and Solutions*

*Conprises Oslo Børs Informasjon AS and Manamind AS

11

EU commission will also encourage harmonisation of market prac-tice and greater standardisation of products and services. This will in turn increase the pressure for consolidation in the industry.

For the Oslo Børs VPS group, it is particularly important that we are well prepared to deal with competition from new marketplaces (MTFs), the effect of the Code of Conduct on clearing houses and CSDs, as well as the consequences of the European Central Bank’s T2S project (Target2Securities).

We expect the level of activity in the Norwegian securities market to maintain a high level, although we do not expect to see the same pace of growth as in the last two years. This view is based on the continuing strength of the Norwegian economy, driven by global economic growth and a relatively high oil price, but taking into account signs that economic growth is levelling off and the continuing impact of turbulence in the credit markets. Norway will continue to be an attractive country for foreign investors. The Norwegian krone offers a stable currency diversification from the US dollar and the euro, Norway is a country of low political risk, and Norwegian companies are currently reporting good earnings. The level of activity in the market will cause a continuing high level of activity within the group, but we have little scope to directly affect market volumes, only the extent of the services we offer.

We also see a trend for traditional equity markets to build links with marketplaces for financial contracts in commodities. Investors are beginning to recognize the interaction of differ-ent asset classes, and are typically investing simultaneously in a company’s shares and in the commodities market in which the company operates. This approach will have an effect on the securities industry in the future.

Our strategy – Our corporate objectives and visionOur corporate vision is to contribute to value creation in Norway by simplifying and developing the country’s financial infrastructure. We will therefore offer attractive marketplaces, clearing, settlement, securities registry and information serv-ices for financial instruments in order to ensure that our cus-tomers have access to an efficient capital market. We intend to be recognised for our reliability and customer focus.

Our corporate objectives are as follows: We will operate an attractive financial infrastructure•We will develop and market value-adding services that •meet the market’s requirements Ensure continuing domestic and global interest in our •marketplaces and services– The preferred marketplace for domestic companies,

12

tion network. We will ensure the strictest confidentiality both internally and externally, and be recognized for the integrity of our conduct. We will treat all our customers equally and fairly, and maintain a high level of integrity in the market.

What we mean by an attractive workplaceThe group intends to be recognized as an attractive workplace so that we can attract the expertise and resources that the group needs. In order to achieve this, we will offer stimulating and challenging careers for our employees, and involve them in the decision-making that affects their working experience.

What we mean by satisfied shareholdersWe intend to give shareholders a satisfactory return on invested capital in relation to the company’s risk profile, and in managing our relationship with the market we will follow all the requirements that would apply if the group was a stock exchange listed company.

Activities in 2008 and 2009Important areas of focus over the next two years will be:

Realising synergies•Evaluate the securities value chain and implement the •conclusions of this evaluationIntensify marketing activities, both in Norway and interna-•tionally Continuous development of existing products and work on •new products in all areas Co-ordinated focus on the retail investor market, including •evaluating new solutions for mutual fund managersNew trading systems•

Risk factors Commercial risks Given the current structure of operating revenue for Oslo Børs VPS, turnover is principally affected by:

Trading volume and the number of transactions •Trading, settlement and clearing fees accounted for approx-imately 49% of total operating revenue in 2007 (proforma figures). These fees are by their nature entirely variable, and the total revenue generated will largely depend on general market conditions.

Sales and distribution of financial market data products •Sales of financial market data products and solutions gen-erated approximately 15% of the group’s total operating revenue in 2007 (proforma). Approximately 64% of this revenue arises from sales of real-time information, and is

investors and investment firms – The leading marketplace for selected sectors– Competitive prices– Broadly based and robust distribution networkWe will be an attractive workplace•We aim to have satisfied shareholders•

These objectives have been defined against the background of what will be most profitable and appropriate for our custom-ers, the group, its employees and shareholders.

What we mean by attractive financial infrastructureThe group will strive to offer attractive, secure, reliable and com-prehensive financial infrastructure for the market. The infrastruc-ture will deliver a high degree of standardisation and automation. The group will focus on making efficient use of technology com-bined with innovation in developing and delivering services and products that meet the market’s changing needs. We intend to be recognized as competitive in terms of both prices and services, and to be accessible at times the market requires.

What we mean by value adding servicesWe intend to maintain and develop our market position for sales of financial information from the Norwegian market.

On the basis of the core businesses of the authorised compa-nies in the group, we will continually improve existing solutions and develop new solutions to meet changing market needs that increase the value of our offer to our customers and so link them closer to us. This will include solutions in areas such as:

Mutual funds•Services for companies’ general meetings•Share-related saving solutions•Investor Services •Distribution of company announcements•Investor portals•New derivatives products•

What we mean by domestic and global interestWe will maintain and develop our market position as an infra-structure operator for regulated markets, clearing and settle-ment activities as well as for the registration of financial instru-ments both in the Norwegian market and on a global basis for selected sectors (energy, shipping and fisheries/aquaculture).

We will offer a competitive, liquid market that is attractive for both Norwegian and global issuers, investors and investment firms. In order to reach across national boundaries we will maintain and develop a broadly based and robust distribu-

13

mainly variable in nature since it depends on the number of terminal subscriptions. Sales of financial market data typi-cally have a lagged positive correlation with general market conditions and activity.

The number of listed securities/companies and their •market value The annual fees paid by issuers accounted for approxi-mately 10% of total operating revenue in 2007 (proforma). Operating revenue will fluctuate in line with the number of listed securities and their overall market value. Listing fees for equity instruments are in the main calculated based on the market value at the start of the year.

The risks associated with the revenue categories described above arise from:

Competition between marketplaces, securities registries •and clearing houses, and changes in the level or structure of their pricing Competition from new players and greater internal trading •Competition from alternative forms of saving •

Consolidation amongst issuers, members and information •distributors Accessibility and reliability of technical systems •Confidence in the process of price formation and in the •Norwegian securities infrastructure Macroeconomic conditions •Changes in the regulatory framework •Exposure to customer-specific factors •

The group operates with a cost base that is very largely fixed. The operation of a securities infrastructure generally requires a high level of investment, and this together with a high propor-tion of fixed costs means that there is little short-term flex-ibility to adapt costs to changes in the actual level of market activity.

Strategic risks Structural changes in the international capital market cause continuous changes in the competitive outlook. Failure to adapt to changes may have adverse consequences for the group’s domestic and international position.

15

BuSiNESS AREAS

Oslo Børs business areaThe Oslo Børs business area comprises the wholly-owned subsidi-ary Oslo Børs ASA, which is authorised to operate stock exchange activities.

The main objective of Oslo Børs is to be the central marketplace for trading in financial instruments in the Norwegian market. The role of Oslo Børs is to make it possible for purchasers and sellers of securities to carry out their transactions in a rapid, efficient and secure manner. Oslo Børs organises trading in equities, primary capital certifi-cates, fixed income products and derivatives products. In the equity and fixed income markets, the Oslo Børs marketplaces also fulfil an important function in the primary market, i.e. for the issue of shares, primary capital certificates and bonds.

Bente A. Landsnes is the Chief Executive Officer of Oslo Børs. The other members of the Oslo Børs executive management team are Anders Brodin (Marketplaces), Atle Degré (Legal Affairs), Sverre Lilleng (Market Surveillance), Harald Næss (IT), Per Eikrem (Cor-porate Communications), Lisbeth Lindberg (Sales and Marketing), Bjørn Øiulfstad (Projects), Geir Heggem (Finance and Administra-tion). Oslo Børs uses the Saxess trading system for equities and bonds, and the Click trading system for derivatives. Both these systems are owned and operated by OMX.

Oslo Børs had 115 employees at the close of 2007, an increase from 111 at the close of 2006 and 105 at the close of 2005.

2007 was another record year for Oslo Børs. Trading in the equity market averaged 48,554 transactions daily, representing average daily value of NOK 12.9 billion. The Oslo Børs Benchmark Index closed 2007 at 490.81 having gained 11% over the course of the year.

The persistently high oil price helped to ensure that investor interest in typical Norwegian sectors such as energy, offshore and shipping remained strong in 2007, leading to very sizeable turnover in shares, particularly in the largest companies in these sectors. This interest also had a positive effect on trading volume in other Norwegian companies’ shares. A sizeable number of companies were admitted to listing, and this helped to increase activity and create greater interest in the Norwegian market.

Information on the strategy and objectives of Oslo Børs can be found in the commentary on the group’s strategy at page 10. The reader is also referred to the Board of Directors’ Report for 2007 on page 47.

Segmental information for the Oslo Børs business area over the last three years is as follows:

NOK 1 000 2007 2006 2005

Operating revenues – external 457 492 359 538 259 950

Operating revenues – internal 79 925 72 555 54 024

Depreciation and write-downs 16 119 16 862 16 532

Other operating costs 189 951 159 765 135 563

Total operating costs 206 070 176 627 152 095

Operating profit 331 347 255 466 161 879

Share of income in joint ventures 813 176

Investments in joint ventures 15 289 15 176

Other assets 1 233 408

569 744 423 579

Liabilities 240 009 212 987 141 583

Investment in the period 9 761 87 188 56

Internal operating revenue principally relates to consideration paid by Oslo Børs Informasjon AS for the use of market data from Oslo Børs. The amounts paid relate to the revenue generated by Oslo Børs Informasjon from sales of financial market data.

A more detailed account of revenue by the areas that make up the Oslo Børs segment is provided below.

Operating costs increased by NOK 29 million between 2006 and 2007.

Salary and staff related expenses increased by NOK 12 million. The increase reflects the normal annual salary increase, an in-crease in the number of full-time equivalent positions since 2006, increased variable salary payments, increased pension costs due to changes in the economic assumptions for pension calculations, and a reduction in costs reimbursed from other NOREX exchanges in respect of IT collaboration.

Other operating costs increased by NOK 18 million. The increase was principally due to increased use of external resources for operations and systems projects, higher variable trading system costs, and a reduction in costs reimbursed from other NOREX exchanges in respect of IT collaboration.

Equity MarketsThe Equity Markets area’s operating revenue accounted for around 76% of total operating revenue for Oslo Børs in 2007.

Total turnover in shares and primary capital certificates for 2007 as a whole reached NOK 3,221 billion, up by 25% from 2006. The year saw 12.1 million transactions carried out, representing an increase of around 37% from 2006.

16

New share issues carried out in 2007 raised NOK 53.7 billion as compared to NOK 56.9 billion in 2006. With 30 companies admitted to listing and 18 companies removed from listing, Oslo Børs saw a net gain of 12 listed companies in 2007. In all, 241 companies were listed on the Oslo Børs marketplace at the close of 2007.

The Oslo Axess marketplace was launched on 2 May 2007. The requirements for admission to listing on this marketplace are suited to companies that do not fully qualify for listing on the stock exchange marketplace. By the close of 2007, 28 companies were listed on Oslo Axess. In total, 269 companies were listed on Oslo Børs and Oslo Axess at the close of 2007.

The number of firms with membership for trading in equities in-creased from 52 to 58 in 2007, of which 35 are remote members. The numbers of firms that have membership of Oslo Axess and of the marketplaces for bonds and derivatives is somewhat smaller.

The volume of share trading on Oslo Børs in 2007 accounted for around 27% of total share trading through the exchanges of the Nordic countries as compared to around 23% in 2006. Only Stockholmsbörsen reported higher turnover than Oslo Børs. Oslo Børs and Oslo Axess admitted 58 companies to listing in 2007, more than any other Nordic exchange. On a European comparison, only the stock markets of London and Warsaw admitted more new companies to listing in 2007.

The revenue generated from fixed fees paid by issuers (annual list-ing fees) is dependent on the number of listed companies and their market capitalisation. Revenue from fixed fees paid by members depends on the number of active member firms. Trading fees reflect the number of transactions carried out and their value. Pro-spectus, admission and registration fees depend on the number of new companies admitted to listing as well as the number and size of share issues and other equity transactions carried out by listed companies.

A change of 10% in the market capitalisation of listed companies at 31 December 2007 would cause a change of approximately 5% in annual revenue from listing fees. The most widely traded equity market security accounted in 2007 for 7% of the total number of trades (6% in 2006 and 2005) and 22% of total trading value (21% in 2006 and 22% in 2005). Revenue generated from, or in relation to, this company in 2007 accounted for 8% of the Equity Markets area’s operating revenue (9% in 2006 and 8% in 2005) and 7% of total operating revenue for Oslo Børs VPS (6% in 2006 and 4% in 2005).

Operating revenue – Equity MarketsNOK million

2007 2006 2005

Fixed fees – issuers 66 56 42

Fixed fees – members 10 9 7

Trading fees 260 201 124

Prospectus and admission fees 71 43 38

Registration fees

Financial market data

Fees for courses/seminars

Other income 1 1 2

Total operating revenues 408 310 213

No. of listed companies at 31.12 269 * 229 219

Benchmark index (OSEBX) at 31.12

490,8 440,4 332,5

Market value of listed companies at 31.12

2 180 1 916 1 402

No. of member firms – equity markets 58 52 41

No. of trades (1,000) 12 156 8 846 5 480

Value of trades (NOK bn) 3 230 2 585 1 513

* of which 28 on Oslo Axess

fixed income MarketsThe Fixed Income Markets area’s operating revenue accounted for around 5% of total operating revenue for Oslo Børs in 2007.The revenue Oslo Børs derives from the fixed income market is principally determined by the number of issues listed. In all, 962 loans were listed at the end of 2007, made up of 350 loans listed on the ABM (Alternative Bond Market) and 612 on the stock exchange market, representing an increase of 36 loans since the start of the year. New debt issued in respect of new and existing loans amounted to NOK 242.3 billion in 2007, which was NOK 19 billion higher than in 2006.

The revenue generated from fixed fees paid by issuers (annual listing fees) is dependent on the number of listed bond issues and their nominal value. Revenue from fixed fees paid by members depends on the number of active member firms. Trading fees reflect the number of transactions carried out and their value. Prospectus fees depend on the number of prospectuses submitted for inspec-tion in accordance with the Securities Trading Act and registration documents submitted for inspection in accordance with the ‘Rules for the admission of fixed income financial instruments to listing on the ABM, including the continuing obligations of issuers’. A repo is a repurchase agreement whereby the parties simultaneously agree the sale and future repurchase of a specified amount of a bond issue. Repo transactions incur trading fees equivalent to 10% of the rate for a normal trade.

The borrower with the greatest volume of loans outstanding at the close of 2007 accounted for 33% of total outstanding bonds and 76% of total outstanding commercial paper. The figures include

17

loans listed on Oslo Børs and on ABM. Revenue from this issuer accounted for 1.4% of the Fixed Income Markets area’s operating revenue from the primary market in 2007.

Operating revenues – fixed income Markets NOK million

2007 2006 2005

Fixed fees – issuers 17 15 18

Fixed fees – members 2 2 2

Trading fees 3 3 3

Prospectus and admission fees 3 3 4



Other income


No. of listed issues at 31.12 (main market)

612 744 837

No. of listed issues at 31.12 (ABM) 350 182 30

Market value of listed issues at 31.12 632 609 521

No. of member firms – fixed income 16 15 14

Value of trades exc. repos (NOK billion) 681 715 648

Value of repo trading (NOK billion) 6 560 4 252 4 087

Figures for market value and turnover include both the main market and ABM bond loans.

Derivatives MarketsThe Derivatives Markets area accounted for just under 4% of total operating revenue for Oslo Børs in 2007.

Trading fees account for around 90% of the area’s revenue. The revenue from trading fees is dependent on the number of contracts traded and the premiums paid. The premium paid on a derivatives contract is determined principally by the price of the underlying instrument, the period to maturity and, in the case of options, the price volatility of the underlying instrument.

Higher activity in the equity market leads to increased activity in the derivatives market. In addition, Oslo Børs has implemented a number of measures over recent years to increase the level of activity in this market. The number of derivatives contracts traded in 2007 was up by around 6% from 2006, while premium turnover increased by approximately 66%. There was a fall in total premium volumes for stock options and stock forwards, but premium volumes for index options and index futures were sharply higher. The split of the OBX index in April 2006 means that the number of contracts in index products traded in 2006 and 2007 are not comparable.

Operating revenues – Derivatives Markets NOK million

2007 2006 2005

Fixed fees – issuers

Fixed fees – members

Trading fees 19 22 16

Prospectus and admission fees



Other income


Equity options, No. of contracts traded (1000)

4 783 5 782 3 325

Equity options, turnover (NOK million) 2 299 4 073 2 071

Index options, No. of contracts traded (1000)

1 798 1 331 516

Index options, turnover (NOK million) 1 228 1 119 735

Equity forwards, No. of contracts traded (1000)

2 631 3 615 1 797

Equity forwards, turnover (NOK million) 13 674 22 193 16 223

Index forwards, No. of contracts traded (1000)

4 756 2 429 563

Index forwards, turnover (NOK million) 192 814 98 908 53 168

Total No. of contracts 13 968 13 157 6 200

Total value of turnover – options 3 527 5 192 2 806

Total value of turnover – forwards 206 488 121 101 69 391

Average premium equity options 4,8 7,0 7,3

Average premium index options 6,8 8,4 14,3

Average premium equity forwards 52,0 61,4 90,3

Average premium index forwards 405,4 407,2 945,1

VPS business areaThe VPS business area comprises the wholly-owned subsidiary VPS ASA, which is a Norwegian public limited company authorised to register rights to financial instruments with the legal effects stipulated by the Securities Register Act.

VPS ASA develops and markets products and services for banks, investment firms, fund management companies and other finan-cial institutions. These in turn deliver the products and services to issuers and investors. The services offered by VPS make it easier and more efficient for issuers to raise capital and manage their se-curities registers, and give investors the reassurance that they will be able to exercise their rights as owners of securities. Registering the ownership of securities with VPS provides legal protection and procedures for the priority of interests, which are important practical features for confidence in the capital markets. VPS helps to improve the efficiency of securities trading through its payment clearing and settlement system.

18

Jan Hellstrøm is the Chief Executive Officer of VPS. The other members of the VPS executive management team are Tom Kolvig (Staff functions), Sveinung Dyrdal (VPS Securities Services), Anne Ekeren Bjone (VPS Clearing and Settlement), Helene Midtskau (Systems Development) and Gunnar Haug (Operations and Infrastructure).

VPS ASA had 130 employees at the close of 2007, an increase from 129 at the close of 2006 and 128 at the close of 2005.

The level of activity in the securities market was very high through-out 2007. VPS handled a total of 31.8 million transactions related to trades in securities, an increase of 31% from 2006. In addition, VPS handled 6 million purchases and sales of mutual fund units, an increase of 39% from 2006. The number of customer relation-ships increased by 11%, mainly due to growth in equities and securities funds.

Segmental information for the VPS business area over the last three years is as follows:

2007 Proforma Actual Actual

NOK million 2007 2006 2005

Operating revenues 53 966 494 136 404 258 337 952

Depreciation and write-downs

4 739 31 020 28 798 24 483

Depreciation of excess value 2 493 27 423

Other operating costs 30 589 190 971 166 676 164 067

Total operating costs 35 328 249 414 195 474 188 550

Operating profit 18 638 244 722 208 784 149 402

Share of income in joint ventures

489 489 59 -1 160

Investments in joint ventures 1 112 1 112

Other assets 2 904 319 2 904 319

Liabilities 519 287 519 287

Investment in the period 3 660 37 900

Actual figures for 2007 are for the period from 27 November 2007. Pro forma figures for 2007 are based on the annual ac-counts of VPS ASA for 2007 adjusted for depreciation of excess value (shown as a separate item). Actual figures for 2006 and 2005 are taken from the annual accounts of VPS ASA for these years.

Operating costs increased by NOK 54 million in 2007 (Pro forma figures for 2007 compared to actual figures for 2006).

NOK 27 million of the difference relates to depreciation of excess value identified in connection with the merger.

Other costs increased by NOK 24 million. The increase is principal-ly due to increased headcount, annual salary increases and greater use of external consultants.

issuer ProductsThe Issuer Products area’s operating revenue accounted for 18.7% of total VPS revenues in 2007.

The Issuer Products area offers products and services that simplify and improve the efficiency of tasks carried out by account operators and issuers, while at the same time ensuring that inves-tors, companies and other users receive accurate information. The services are delivered through a reliable, secure state-of-the-art system, and most services are available over the internet. The Issu-ers area classifies its product range into three categories: corpo-rate administration (VPS Corporate), corporate events (Corporate Actions) and corporate services (VPS Corporate Services).

VPS Corporate is a state-of-the-art internet-based ‘desktop’ that account operators can use to register and monitor the companies they have registered in VPS. VPS Corporate is also used by investment firms to register subscriptions for new issues/distribution sales and for registering bid acceptances. The service includes search functional-ity with access to information on all shares and primary capital cer-tificates registered in VPS. VPS Corporate also gives an overview of all corporate events that have been recorded in VPS for each security (historical data). The revenue generated by VPS Corporate depends on the number of account operators/investment firms with a link to VPS.

Corporate Actions. VPS simplifies the implementation of corpo-rate actions by offering a set of services for carrying out actions such as new issues, dividend payments, purchases etc. The revenue generated by the Corporate Actions package is affected by the number of actions that are processed, i.e. the level of activity in the market, and the complexity of the actions carried out.

VPS Corporate Services has been developed to allow issuers to make more efficient use of the information registered about their own securities. Issuers can access the service through the internet to monitor who is holding their securities, changes in shareholder structure, and to generate reports for their board etc. This can include information on individual shareholders, historical information such as the dates and amounts of dividends, informa-tion in respect of the company’s last public share issue etc. VPS Corporate Services is a subscription-based additional service for companies registered in VPS.

The Issuer Products area saw a high level of activity throughout 2007. By the close of the year, a total of 1,472 (1,308) limited companies/primary capital certificate issuers and 2,062 (2,038) bond issues were registered in VPS.

19

Issuer Products – Revenue 2007 2006 2005

Total operating revenue (NOK million) 93 82 81

Issuer Products – Key Figures:

No. of AS/ASA companies registered in VPS

1 443 1 283 1 181

No. of primary capital certificate issues registered in VPS

29 25 25

No. of bond issues registered in VPS 2 062 2 038 1 883

No. of short-term bond issues registered in VPS

371 288 363

investor ProductsThe Investor Products area’s operating revenue accounted for 19.5% of total VPS revenues in 2007.

The Investor Products area offers services for investors to make it easier to own and transfer securities, and to keep track of their per-sonal investments. A VPS account can handle all types of registered securities owned by the individual investor, and represents the core element of the product area’s service offer.

Investors can confirm their ownership of securities by registering their holdings in the VPS register. In addition, investors can pledge as collateral their entire VPS account or specific securities held on the account. This is generally recognized as an entirely satisfactory method for pledging collateral.

In order to take advantage of the opportunities of internet-based communications, VPS has also developed an internet service that allows investors to access their VPS accounts over the internet. This service gives investors access to all their securities, even if they are registered through different account operators. VPS also offers a range of additional internet-based services, and launched Online Share Trading in 2007

VPS also launched a product known as VPS Investor Services in 2007. This solution helps account operators to deliver state-of-the-art and efficient customer service, and has been very well re-ceived by customers of VPS. We are already developing additional services for this product in response to customer feedback.

The major part of revenue from the Investor Products area is determined by the number of VPS accounts and the market capitalisation of the securities registered in VPS. Both of these showed increases in 2007, with the number of VPS accounts up by 8% and market capitalisation up by 14%. The number of investors with access to the VPS Internet service increased by 25% in 2007. Growth in revenue in 2007 also reflects sales of the new product VPS Investor Services.

Investor Products – Revenue 2007 2006 2005

Total operating revenue (NOK million) 92.3 69.1 61

Investor Products – Key Figures

No. of accounts 1 547 457 1 430 107 1 287 167

Market capitalisation (NOK million) 3 745 271 3 286 885 2 519 852

No. of unique internet users 549 449 446 617 -*

*Changed calculation basis from 2006

Settlement ProductsThe Settlement Products area’s operating revenue accounted for 47.9% of total VPS revenues in 2007.

Settlement Products provides clearing and settlement services for trading in securities. These services combine low risk with low costs, as well as offering a high level of security for all settlement participants. VPS therefore makes an important contribution to the effective operation of the capital market in Norway through efficient and secure transfers of securities on the one hand and clearing and settlement from buyer to seller on the other hand.

The clearing and settlement system supports ‘straight through processing’ (STP) for the entire value chain. VPS attach great importance to developing the system in response to changing cus-tomer requirements, and VPS closely follow market departments and trends both in Norway and internationally. In addition, we pay particular attention to complying with international recommenda-tions and standards for clearing and settlement. VPS has recently signed up to the international securities industry’s Code of Conduct, which addresses issues such as efficiency, openness and transparent competition for trading and settlement of securities in Europe and freedom of choice for investors involved in cross-border trading and settlement.

Clearing and settlement services are based on generally rec-ognized principles such as delivery against payment (DvP) and multilateral netting between settlement participants, which offers important liquidity benefits for the participants involved. Clearing of payments takes place through the central bank, Norges Bank.

VPS uses linear programming for an optimisation function that ensures maximum utilisation of the securities holdings and cash liquidity available in the settlement process. The degree of opti-malisation can be expressed as a settlement ratio, which measures the number of trades settled on the agreed settlement date. The settlement ratio achieved by VPS has risen significantly from 80% at the end of the 1990s to 98.07% in January 2008.

20

The efficiency of the settlement process is supported by an auto-mated securities borrowing and lending arrangement based on a lending pool. In addition, trades that cannot be settled on the set-tlement day are resubmitted for settlement in five days, and the settlement cycle is run twice a day. Transfers of securities holdings take place in real time, and the system can handle both settlement on the same day that a trade takes place (S = T + 0) and settlement in foreign currency.

Settlement participants communicate with the system using an international open-standard interface (ISO15022). VPS aims to replace status reports provided in list form and updated at specific intervals with real-time information communicated in accordance with this standard. We started implementation of ISO15022 communication in 2002, and usage has grown very strongly. The ratio between the number of online status reports and the number of transactions settled gives an indication of the degree of automation in the settlement system, i.e. the extent of straight-through processing.

At year-end 2007, VPS had 101 settlement participants of which 29 were settlement agents and 72 were brokers. 13 new settle-ment participants joined in 2007. Of the 72 brokers participating in the settlement process, 38 are remote members. Of these, 7 are direct participants while the remaining 31 are represented in the settlement process by an agent.

The Settlement Products area generates the highest operating revenue among the VPS product areas. Revenue is closely linked to the number of trades carried out in the market that in turn gener-ate settlement transactions through VPS. This area’s revenue has accordingly grown very strongly over recent years.

Settlement Products – Revenue 2007 2006 2005

Total operating revenue (NOK million) 236.5 199.0 147.8

Settlement Products – Key Figures:

Settlement ratio 97.46% 97.63% 97.07%

No. of trades settled 31.8 mill 24.0 mill 15.8 mill

No. of reports (ISO 15022) 58.3 mill 43.6 mill 22.7 mill

Reports per transaction 1.83 1.82 1.44

fund ServicesThe Fund Services area’s operating revenue accounted for 13.9% of total VPS revenues in 2007.

Fund Services offers a broad range of services for mutual fund management companies and other distributors of mutual fund products to assist with the management of their funds and the

unit holder registers for individual funds. The VPS account system provides the basis for the Fund Services products, with investors’ holdings of fund units registered on a VPS account in the same way as for other securities.

VPS registration of mutual fund investments offers major benefits for investors, not least because this makes it possible to aggregate different types of securities on the same VPS account, and investors can then use their holdings in mutual funds registered with VPS to pledge as collateral. The number of mutual fund investments regis-tered in VPS increased by 14% in 2007.

It is not compulsory to register holdings of fund units with a central securities depository. Accordingly, the Fund Services area markets its registration services to securities custodians and distributors of both Norwegian and international fund management products in competition with other service providers and the customers’ own systems. At the close of 2007, 67.4% of the market value of Nor-wegian mutual funds was registered in VPS. Taking into account foreign mutual funds and nominee registered funds registered in VPS, the total market value of VPS registered mutual fund hold-ings was NOK 305 billion, an increase of 15% from 2006.

The Fund Services area comprises three main areas, complement-ed by additional services. Fund Basics, Distribution Solutions and Unit Linked Defined Contribution Pension. In all these areas, VPS is responsible for operations, maintenance and ongoing develop-ment of the systems, which allows the customers to focus on their core activities. Fund Services cover all aspects of the value chain, from establishing and registering a mutual fund through to distri-bution and customer service. Similarly, the services for defined contribution pension products cover the entire range from cal-culating pension contributions to making pension payments with tax deduction and producing annual statements. VPS experienced strong growth for all areas of Fund Services in 2007.

The integrated design of the services offered by VPS delivers a unified set of solutions that meet the requirements of mutual fund management companies, distributors of fund products, pension providers, companies and fund investors. These services are tailored for each of the specific user groups using web-based user-friendly solutions with user support from VPS. The overall number of mutual-fund transactions processed through the systems increased by 40% in 2007.

Fund Services include integrated payment functionality that sup-ports purchases and sales of fund units with full DvP (Delivery vs Payment) for investors. In addition, functionality is provided for paying commissions, combining funds and splits of fund units.

21

VPS also provides services for distributing statements to inves-tors in respect of trades, realisation reports and annual state-ments, including information for tax returns. Statements can also be provided in the appropriate format for Swedish and Finnish investors and the taxation requirements that apply. In addition to the main suite of services, customers can also choose from a range of other services offered by VPS.

Fund Services – Revenue 2007 2006 2005

Total operating revenue (NOK million) 68.8 51.5 41.2

Fund Services – Key Figures:

No. of mutual funds registered in VPS 924 843 651

Market value of mutual fund registered in VPS (NOK billion)

305 267 180

No. of investor holdings in mutual funds 1 264 000 1 105 000 893 000

No. of mutual fund transactions 5 972 000 4 252 000 3 261 000

No. of pension accounts in VPS registered schemes (Mandatory Employers’ Pensions)

45 000 33 000 7 600

VPS ClearingVPS Clearing ASA is a Norwegian public limited liability company licensed to operate as a clearing house for derivatives and for borrowing and lending of financial instruments.

VPS Clearing strives to create added value for members through the solutions it provides for the securities market. The business area distributes its products and services through banks and investment firms, but certain types of institutional customers can also apply for direct membership of VPS Clearing.

2007 was a good year for VPS Clearing. The company reported a pre-tax profit for the year of NOK 14.5 million. Operating revenue was NOK 52.3 million, in line with expectations. Costs were kept under control during the year. Depreciation was somewhat higher as a result of increased expenditure on product development and a change in the depreciation period for investment in the clearing system. Net financial income in 2007 was NOK 4.1 million.

At the close of 2007, VPS Clearing had 27 clearing members, of which 5 are solely clearing members while 22 operate as are both trading and clearing representatives. Two new clearing partici-pants became members in 2007, and one clearing membership was cancelled because of default by the member.

The results of stress tests carried out over the period January to December showed that VPSC’s worst-case exposure was between NOK 30 million and NOK 80 million. These figures include actual overnight risk.

VPS Clearing ASA had 10 employees at close of 2007, and the number of full-time equivalent positions in 2007 was 10.

No. of clearing members at 31.12. 27No. of active derivatives accounts at 31.12. 2 800Total No. of cleared TM derivative contracts (1,000) 17 413Total No. of cleared lending contracts (1,000) 1 649 478

Segment information for the VPS Clearing area is as follows:

Pro forma Actual

VPS Clearing – Revenue 2007 2007 2006

Operating revenues – external NOK million 4 562 52 385 17 807

Depreciation and write-downs 307 3 109 376


Total operating costs 3 319 33 571 9 711

Operating profit 1 243 18 814 7 376

Share of income in joint ventures - -

Investment in joint ventures - -

Other assets 2 378 503 2 378 503

Liabilities 2 136 063 2 136 063

Investment in the period 109 3 359

Actual figures for 2007 are for the period from 27 November 2007. Pro forma figures for 2007 and actual figures for 2006 are based on the annual accounts for these years.

Oslo Market Data and Solutions (OMDS)Oslo Market Data and Solutions comprises Oslo Børs Informasjon AS (OBI) and Manamind AS.

Oslo Market Data and Solutions has extensive expertise in captur-ing, processing, distributing and presenting financial market data. Sales of information relating to Norwegian securities forms a cen-tral part of the business area’s activities. A second major aspect is sales of specialised web and internet solutions for trading in securities and real-time presentation of market data. The business unit offers both standard products and customised solutions for issuers, investment firms, leading media players and other parties involved with the financial markets.

Oslo Market Data and Solutions supplies real-time information that is essential for trading on Oslo Børs VPS. In addition, the business area offers technical solutions for processing real-time information.

Sales of real-time information through information distributors such as Reuters and Bloomberg accounted for around 74% of this area’s operating revenue in 2007 (78% in 2006). Revenue is largely determined by the number of terminals in use that have access to market data from Oslo Børs. Customers of information distributors such as Reuters, Bloomberg etc. subscribe to price and market index information from a range of different marketplaces.

22

The number of terminals with access to market information increased by 12% between 2006 and 2007. OMDS offers three types of subscription to real-time information: Professional users with full access to real-time information, private individuals with limited access to real-time information and private individuals with full access to real-time information. Changes were made to the pricing structure [in October 2006]. As a result of these changes, growth in revenue is slower than growth in the number of terminals. These three products accounted for 72%, 17% and 11% respectively of the total number of terminals in use in 2007 (70%, 20% and 10% in 2006 and 72%, 19% and 9% in 2005).

With effect from 2007, professional users with full access to real-time information pay NOK 3,360 per annum for each terminal. Private individuals with limited access to real-time information pay NOK 120 per annum, while private individuals with full access to real-time information pay NOK 1,200 per annum.

Other income from financial market data comes from sales of vari-ous other products such as newspaper lists, index weighting prod-ucts, SMS text services and internet advertising. The two products that make the largest contributions to revenue are fundamental data about issuers and mutual funds information.

The two largest distributors accounted for around 61% of revenue from sales of financial markets data in 2007, while the four largest distributors accounted for 66% of operating revenue.

Market data products offered by the business area include: Market data: Real-time information through the OCDF feed, •information with a 15 minute delay and closing prices.Fundamental data on shares and bonds, annual reports and •interim reports for all companies listed on Oslo Børs, Oslo Axess and ABM.Shareholder lists•Mutual funds data service: A fund prices feed is distributed •globally. In addition, funds report NAV prices to OMDS and this information is distributed to all newspapers and subscribers to fundamental data.Listing/delisting (see www.obi.no).•Index products: Index data for share prices, index weights •for bond indices and VINX (Nordic index weights for Nordic indices).Statistics: Participant Trading Data, Trade Statistics, Broker •Statistics by Issuer, Company Performance Report, User Statistics etc. (se www.obi.no).Corporate Events Diary (se www.obi.no).•Ad hoc assignments of all kinds (se www.obi.no).•

Solutions products offered include:Manamind Investor portal for investment firms and media •companies offers services for securities trading, portfolio reporting, access to investment research and presentation of market data.Manamind IR for listed companies, which provides a complete •and up-to-date overview of the company’s share price and ownership structure through updated data feeds from Oslo Børs and VPS.Manamind Matador, a user-friendly real-time stock exchange •terminal for investment firms and their customers, showing real-time prices, share trading and portfolio reporting. Manamind Picador, an application for access to real-time prices •from mobile telephones.Manamind Arena, a web solution that provides an overview of •the largest shareholders in listed and unlisted companies.

Segment information for the OMDS business area over the last three years is as follows:

Pro forma

MNOK 2007 2006 2005 2007

Operating revenues – external 156 038 140 489 106 832 173 896

Depreciation and write-downs 98 67 91 278

Depreciation of excess value 213 2 342

Other operating costs 116 194 102 715 81 233 127 695

Total operating costs 116 505 102 782 81 324 130 315

Operating profit 39 533 37 707 25 508 43 581

Share of income in joint ventures

Investments in joint ventures

Other assets 223 818 80 653 57 260 223 818

Liabilities 142 722 41 055 29 810 142 722

Investment in the period 16 60 71 2 121

Actual figures for 2007 consolidate Manamind with effect from 27 November 2007. Pro forma figures for 2007 are based on the annual accounts of Oslo Børs Informasjon and Manamind AS for 2007, adjusted for depreciation of excess value (shown as a separate item). Actual figures for 2006 and 2005 are based on the annual accounts of Oslo Børs Informasjon for these years.

The increase in costs between 2006 and 2007 is directly related to the increase in revenues, as well as the consolidation of Manamind.

24

fiNANCiAL RATiOSBased on NFFs Recommendations & Financial Ratios 2007

IFRS IFRS IFRS IFRS Norwegian GAAP

(restated) (as published)

Numbers in NOK 1000 2007 2006 2005 2004 2004 2003

Cash flow statement for analytical purposes

EBITA 390 066 293 144 187 377 100 660 99 216 69 118

- Taxes on EBITA (28%) -109 218 -82 080 -52 466 -28 185 -27 780 -19 353

= NOPLAT 280 848 211 064 134 911 72 475 71 436 49 765

+ Depreciation 21 476 16 929 16 623 21 969 20 897 20 238

- Capex -15 236 -87 072 127 -51 739 -51 739 -1 653

+ Loss on sale of assets 6 -70 -6 613 -243 -243 0

+/- Change in NWC 20 116 -20 661 -10 737 -1 376 -1 376 -7 944

+ Change in provisions 23 623 6 283 6 321 10 492 13 146 1 293

= Free Cash Flow to Firm (FCFF) 330 832 126 473 140 633 51 578 52 120 61 699

+ Net Financials 26 933 11 875 9 781 4 108 4 108 6 477

+ Share of profits from associates after tax -1 302 -176 0

- Taxes on net financials -6 908 -3 253 -2 632 -1 138 -1 138 -1 909

= Free Cash Flow to Equity (FCFE) 349 555 134 919 147 781 54 548 55 090 66 267

- Net acquisitions and divestments 353 789

- Dividends paid and reccived -149 300 -130 000 -100 000 -50 000 -50 000 -90 000

- Share buyback -603 -3

+ Share issues

+/- Difference between paid taxes and caluclated taxes above 33 061 36 030 27 218 12 334 11 929 12 025

+ Other adjustments

= Total Cash Flow = Change in net interest bearing debt 586 503 40 947 74 999 16 882 17 020 -11 708

Earnings before interest, taxes, deprectiation and amortisation (EBITDA) 411 542 310 073 204 000 122 629 120 113 89 356

Earnings before interest, taxes, and amortisation (EBITA) 390 066 293 144 187 377 100 660 99 216 69 118

Earnings before interest and taxes (EBIT) 390 066 293 144 187 377 100 660 99 216 69 118

Profitability and Efficiency Ratios

3.1 Revenue (sales) 665 820 494 631 361 386 268 680 268 680 228 493

3.2 Gross Margin 58,6 % 59,3 % 51,8 % 37,5 % 36,9 % 30,2 %

3.3 EBITDA Margin EBITDA/Revenues 61,8 % 62,7 % 56,4 % 45,6 % 44,7 % 39,1 %

3.4 EBITA Margin 58,6 % 59,3 % 51,8 % 37,5 % 36,9 % 30,2 %

3.5 EBIT Margin EBIT/Revenues 58,6 % 59,3 % 51,8 % 37,5 % 36,9 % 30,2 %

3.6 Pre-Tax Margin Pre-Tax Profit/Revenues 62,6 % 61,7 % 54,6 % 39,0 % 38,5 % 33,1 %

3.7 Net Margin Net Profit/Revenues 45,8 % 44,5 % 39,9 % 28,2 % 27,8 % 23,3 %

25



Numbers in NOK 1000 2007 2006 2005 2004 2004 2003

Cash flow statement for analytical purposes

EBITA 390 066 293 144 187 377 100 660 99 216 69 118

- Taxes on EBITA (28%) -109 218 -82 080 -52 466 -28 185 -27 780 -19 353

= NOPLAT 280 848 211 064 134 911 72 475 71 436 49 765

+ Depreciation 21 476 16 929 16 623 21 969 20 897 20 238

- Capex -15 236 -87 072 127 -51 739 -51 739 -1 653

+ Loss on sale of assets 6 -70 -6 613 -243 -243 0

+/- Change in NWC 20 116 -20 661 -10 737 -1 376 -1 376 -7 944

+ Change in provisions 23 623 6 283 6 321 10 492 13 146 1 293

= Free Cash Flow to Firm (FCFF) 330 832 126 473 140 633 51 578 52 120 61 699

+ Net Financials 26 933 11 875 9 781 4 108 4 108 6 477

+ Share of profits from associates after tax -1 302 -176 0

- Taxes on net financials -6 908 -3 253 -2 632 -1 138 -1 138 -1 909

= Free Cash Flow to Equity (FCFE) 349 555 134 919 147 781 54 548 55 090 66 267

- Net acquisitions and divestments 353 789

- Dividends paid and reccived -149 300 -130 000 -100 000 -50 000 -50 000 -90 000

- Share buyback -603 -3

+ Share issues

+/- Difference between paid taxes and caluclated taxes above 33 061 36 030 27 218 12 334 11 929 12 025

+ Other adjustments

= Total Cash Flow = Change in net interest bearing debt 586 503 40 947 74 999 16 882 17 020 -11 708

Earnings before interest, taxes, deprectiation and amortisation (EBITDA) 411 542 310 073 204 000 122 629 120 113 89 356

Earnings before interest, taxes, and amortisation (EBITA) 390 066 293 144 187 377 100 660 99 216 69 118

Earnings before interest and taxes (EBIT) 390 066 293 144 187 377 100 660 99 216 69 118

Profitability and Efficiency Ratios

3.1 Revenue (sales) 665 820 494 631 361 386 268 680 268 680 228 493

3.2 Gross Margin 58,6 % 59,3 % 51,8 % 37,5 % 36,9 % 30,2 %

3.3 EBITDA Margin EBITDA/Revenues 61,8 % 62,7 % 56,4 % 45,6 % 44,7 % 39,1 %

3.4 EBITA Margin 58,6 % 59,3 % 51,8 % 37,5 % 36,9 % 30,2 %

3.5 EBIT Margin EBIT/Revenues 58,6 % 59,3 % 51,8 % 37,5 % 36,9 % 30,2 %

3.6 Pre-Tax Margin Pre-Tax Profit/Revenues 62,6 % 61,7 % 54,6 % 39,0 % 38,5 % 33,1 %

3.7 Net Margin Net Profit/Revenues 45,8 % 44,5 % 39,9 % 28,2 % 27,8 % 23,3 %



Numbers in NOK 1000 2007 2006 2005 2004 2004 2003

3.8 Adjusted Profit Booked Pre-tax Profit 416 999 305 019 197 158 104 768 103 324 75 595

Effect of transition to defined contribution pension scheme - -4 159

Pension liability incurred at appointment of new President & CEO - 12 300

Capitalisation of internal resources

Rehabilitation of building

Cost of Trading System set to 2003-level (payable costs and deprec.)

Reversal of accruals -2 600

Adjusted Pre-tax profit 416 999 313 160 197 158 104 768 103 324 72 995

Adjusted Profit (28% tax) 300 239 225 475 141 954 75 433 74 393 52 556

3.9 Net Operating Profit Less Adjusted Taxes (NOPLAT) EBITA – Taxes on EBITA 280 848 211 064 134 911 72 475 71 436 49 765

3.10 Cash Earnings (CE) Profit 304 617 220 204 144 097 75 744 74 704 53 316

+Depreciations, Amortisations, Write-downs 21 476 16 929 16 623 21 969 20 897 20 238

- Share in Associates - - - - - -

- Minorities share of depr., amort., WD's - - - - - -

+ Expensed Share-Based Payments - - - - - -

= Cash earnings (CE) 326 093 237 133 160 720 97 713 95 601 73 554

3.11 Cash Flow From Operations (CFFO) Free cashflow to equity + capex 364 791 221 991 147 654 106 287 106 829 67 920

3.12 Free Cash Flow to Equity (FCFE) See "Cash flow statement for research purposes" above 349 555 134 919 147 781 54 548 55 090 66 267

3.13 Free Cash Flow to Firm (FCFF) FCFE – Net financial items after tax 330 832 126 473 140 633 51 578 52 120 61 699

3.14 Number of Full-time Employees Year End 282 122 117 110 110 108

3.15 Average Number of Full-time Employees 137 120 114 109 109 109

3.16 Sales per 'Employee Sales/Number of Employees 2 361 4 054 3 089 2 443 2 443 2 116

3.17 EBITA per Employee EBITA/Number of Employees 1 383 2 403 1 602 915 902 640

3.19 Net Interest Bearing Debt -Interest bearing debt 82 666 - - - - -

- Bonds (face value) - - - - - -

- Interest bearing long term receivables -2 080 -1 215 -1 350 -1 350 -1 350 -1 350

- Bank deposits -813 342 -226 840 -185 893 -110 894 -118 078 -101 058

Net interest bearing debt -732 756 -228 055 -187 243 -112 244 -119 428 -102 408

26



Numbers in NOK 1000 2007 2006 2005 2004 2004 2003

3.20 Net Working Capital (NWC) Receivables 103 973 46 353 39 942 20 759 20 759 21 918

+ Other operating current assets 38 615 28 760 17 768 18 337 18 337 15 297

- Trade creditors -21 676 -3 816 -6 512 -2 226 -2 226 -3 855

- Other Operating Current Liabilities (short term debt less trade creditors, payable taxes and dividend) -99 377 -29 647 -30 208 -26 617 -26 617 -24 483

= Net Working Capital 21 535 41 651 20 990 10 253 10 253 8 877

3.21/3.22 Invested Capital (IC) NWC 21 535 41 651 20 990 10 253 10 253 8 877

+ Non-current Tangible Assets (tangible assets and pension fund assets) 73 845 43 944 43 786 37 877 46 795 51 454

+ Non Current Intangible Assets 2 679 411 15 570 22 511 31 345 31 345 45 571

- Other provisions -161 077 -113 916 -67 696 -38 588 -25 485 -16 504

- Other Operating Non-Current Liabilities - - - - - -

= Invested Capital 2 613 714 -12 752 19 591 40 887 62 908 89 398

3.24/3.25 Return on Invested Capital (ROIC) EBITA/Average Invested Capital 30% 8572% 620% 188% 130% 73%

3.26/3.27 After-Tax Return on Invested Capital NOPLAT/Average Invested Capital 22% 6172% 446% 136% 94% 53%

3.28 Return on Equity (ROE) Profit/Average Equity of the Parent 18% 67% 58% 37% 51% 28%

3.29 Assets/Equity Total assets/Total Equity 1,92 1,62 1,54 1,44 2,36 1,70

3.30 Financial Gearing Net Interest Bearing Debt/Total Equity -0,24 -0,61 -0,66 -0,51 -0,89 -0,64

3.31 Operating Asset Gearing Invested Capital//Total Equity 0,85 -0,03 0,07 0,19 0,47 0,56

3.32 Sales/Assets 0,11 0,82 0,83 0,86 0,85 0,84

3.33/3.34 Sales/Invested Capital Sales/Average Invested Capital 0,51 144,64 11,95 5,03 3,53 2,43

3.35 NWC/Sales Average NWC/Sales 0,05 0,06 0,04 0,04 0,04 0,02

Investment ratios

4.1 Number of shares 43 004 25 000 25 000 25 000 25 000 25 000

4.2 Number of shares diluted 43 004 25 000 25 000 25 000 25 000 25 000

4.3 Average number of shares 26 726 25 000 25 000 15 000 25 000 25 000

4.5 Average number of shares diluted 26 726 25 000 25 000 15 000 25 000 25 000

4.6 Earnings per Share Basic (EPS Basic) Profit/Average number of shares 11,40 8,81 5,76 5,05 14,94 10,66

4.7 Earnings per Share Diluted (EPS Diluted) Profit/Average number of shares diluted 11,40 8,81 5,76 5,05 14,94 10,66

4.8 Adjusted Earnings per Share Basic Adjusted Profit/average number of shares 11,23 9,02 5,68 5,03 14,88 10,51

4.9 Adjusted Earnings per Share Diluted Adjusted Profit/average number of shares diluted 11,23 9,02 5,68 5,03 14,88 10,51

4.10 Cash Earnings per Share (CEPS) Cash Earnings (CE)/Average Number of shares diluted 12,20 9,49 6,43 6,51 19,12 14,71

4.11 Cash Flow per Share (CFPS) CFFO/Average number of shares diluted 13,65 8,88 5,91 7,09 21,37 13,58

4.12 Book value per Share (BVPS) Shareholders Equity/Number of shares 71,76 14,91 11,29 8,73 26,83 31,89

Ordinary dividend 301 028 150 000 130 000 70 000 70 000 50 000

Extraordinary dividend - - - 30 000 30 000

Total dividend 301 028 150 000 130 000 100 000 100 000 50 000

27



Numbers in NOK 1000 2007 2006 2005 2004 2004 2003

4.14 Ordinary dividend per Share (DPS) Ordinary dividend/number of shares 7,0 6,0 5,2 2,8 14,0 10,0

Extraordinary dividend per Share Extraordinary dividend/number of shares - - - 1,2 6,0 -

Total dividend per Share Total dividend/number of shares 7,0 6,0 5,2 4,0 20,0 10,0

4.15 Pay-out ratio based on ordinary dividend Ordinary dividend/Profit 99% 68% 90% 92% 94% 94%

Pay-out ratio based on total dividend Total dividend/Profit

Share Price Last traded price each year 145 120 78 51 51 36

4.16 Market Capitalisation (Market Cap) Share Price*number of shares diluted 6 235 580 3 000 000 1 950 000 1 275 000 1 275 000 910 000

4.17 Enterprise Value (EV) Market Cap 6 235 580 3 000 000 1 950 000 1 275 000 1 275 000 910 000

Net Interest Bearing Debt (see above) -732 756 -228 055 -187 243 -112 244 -119 428 -102 408

Financial Fixed Assets (less pension fund, bonds (face value) and interest bearing receivables) -2 279 -176 519 -85 443 -56 517 -56 517 -10 715

Deferred Tax Asset -76 310 -41 360 -31 936 -29 354 -23 188 -23 543

Enterprise Value 5 424 235 2 554 066 1 645 378 1 076 885 1 075 867 773 334

Multiples

4.19 Price Earnings Basic (P/E Basic) Share price/Earnings per Share Basic 12,72 13,62 13,53 10,10 17,07 17,07

4.20 Price Earnings Diluted (P/E Diluted) Share price/Earnings per Share Diluted 12,72 13,62 13,53 10,10 17,07 17,07

4.21 Adjusted Price Earnings Basic Share price/Adjusted Earnings per Share Basic 12,91 13,31 13,74 10,14 17,14 17,31

4.22 Adjusted Price Earnings Diluted Share price/Adjusted Earnings per Share Diluted 12,91 13,31 13,74 10,14 17,14 17,31

4.23 Earnings yield (E/P) Adjusted Earnings per Share Diluted/Share Price 0,08 0,08 0,07 0,10 0,06 0,06

4.25 Price/Cash Earnings (P/CE) Share Price/Cash Earnings per Share 11,88 12,65 12,13 7,83 13,34 12,37

4.26 Price/Cash Flow (P/CF) Share Price/CFPS 10,62 13,51 13,21 7,20 11,93 13,40

4.27 Price/Book Value (P/BV) Share Price/BVPS 2,02 8,05 6,91 5,84 9,50 5,71

4.29 Dividend Yield DPS/Share Price 0,05 0,05 0,07 0,05 0,05 0,05

4.30 Free Cash Flow Yield FCFE/EV 0,06 0,05 0,09 0,05 0,05 0,09

4.31 Free Cash Flow to Firm Yield FCFF/EV 0,06 0,05 0,09 0,05 0,05 0,08

4.32 Enterprise Value/Sales EV/Sales 8,15 5,16 4,55 4,01 4,00 3,38

4.33 Enterprise Value/EBITDA EV/EBITDA 13,18 8,24 8,07 8,78 8,96 8,65

4.34 Enterprise Value/EBITA EV/EBITA 13,91 8,71 8,78 10,70 10,84 11,19

4.35 Enterprise Value/EBIT EV/EBIT 13,91 8,71 8,78 10,70 10,84 11,19

4.36 Enterprise Value/NOPLAT EV/NOPLAT 19,31 12,10 12,20 14,86 15,06 15,54

29

ShAREhOLDER iNfORMATiON

Restrictions on share ownership, voting, general meetings etc

Børs VPS Holding ASA has only one class of shares, and its shares are freely negotiable, subject to limitations imposed by legislation. Each share carries one vote at general meetings of the company, subject to limitations imposed by legislation. The Stock Exchange Act and the Securities Register Act estab-lish the general principle that no single party may own shares that represent more than 10% of the share capital or voting capital of Oslo Børs VPS Holding. The Ministry of Finance may grant exemptions from this limit, and this may include allowing other stock exchanges or other undertakings to hold up to 25% of the share capital or voting rights in connection with an agreement on strategic co-operation. On 29 June 2007, the Ministry granted an exemption for DnB NOR ASA to hold 19.66% of Oslo Børs Holding ASA and 16.59% of VPS Holding ASA until 31 December 2008. The exemption specifies that DnB NOR ASA may not exercise voting rights for more than 10% of either company’s total share capital or more than 20% of the share capital represented at a general meeting.

The company’s articles of association contain no specific provisions on the notice required to call a general meeting. The provisions of the Public Limited Companies Act therefore apply, and notice must be given no later than two weeks before

the date of the meeting. In practice Oslo Børs VPS Holding aims to send out the notices calling general meetings four weeks before the date of the meeting.

All shareholders are entitled to participate in general me-etings. The articles of association do not require prior notice from shareholders who wish to participate,and shareholders may therefore participate in a general meeting without giving prior notice of their intention. For practical reasons shareholders who do wish to attend a general meeting are asked to give notice of this in advance.

All shareholders of Oslo Børs VPS Holding ASA can partici-pate in a general meeting, either through personal attendance or through a proxy appointed by a written, signed and dated authority, subject to the following:

(a) The shareholder’s shareholding must be registered in the share register maintained by the Norwegian Central Securities Depository (Verdipapirsentralen or ‘VPS’), or(b) If the shareholding is not apparent from the share register, the shareholder must provide evidence of the holding prior to the general meeting. This implies that shareholders holding shares registered through a nominee are permitted to parti-cipate in the general meeting if the shareholder gives notice

30

of the shareholding to the company in advance, and provides evidence of this in the form of confirmation from the nominee registered in the VPS shareholder register.

When appointing a proxy to vote on their behalf, shareholders may specify how the proxy should vote on specific matters.

The members of the company’s Board of Directors and its Chief Executive must be present at a general meeting.

The Board will ensure that an independent person is proposed to chair the general meeting.

Shareholder policyThe basis for the shareholder policy adopted by the Board of Directors is for the extensive range of activities to be managed and conducted in such a way as to focus on creating long-term value for shareholders in Oslo Børs VPS Holding. The Board of Oslo Børs VPS Holding also fully recognises the role that the group’s activities play for Norwegian business and industry. The Board believes that fulfilling this role will represent little restriction to the objective of creating long-term value for sha-reholders in Oslo Børs VPS Holding. In addition, the company will strive to meet the standards of best practice for:

• Theprovisionofinformationtoshareholders• Equaltreatmentofallshareholders• Shareholderinfluence

Oslo Børs VPS Holding will seek to increase its earnings through measures such as marketing its services to issu-ers, member firms and investors as well as through product development and measures to build confidence. As infrastruc-ture operators, both Oslo Børs and VPS are exposed to a high proportion of fixed costs that are not affected by changes in the level of activity in the market. The group therefore pays particular attention to managing its costs. The capital structure and dividend policy of Oslo Børs VPS Holding will be evaluated on the basis of what is considered appropriate and desirable for its shareholders. The Board of Oslo Børs VPS Holding ASA considers it to be in general appropriate that at least half of the group’s annual profit should be distributed as dividend. However decisions on dividend payments must also take into account the need to maintain satisfactory levels of liquidity and solidity, including the effect of planned and possible investment on liquidity and solidity.

Oslo Børs VPS Holding ASA has elected to operate its infor-

mation policy as though the company were listed. All events or decisions that might be expected to have an effect on the price of the company’s shares will be published immediately. The company has also elected to publish quarterly interim reports and will normally publish these reports in the month following the end of each quarter. Presentations of the interim reports are held at the offices of Oslo Børs and are open to all. Members of the Board of Oslo Børs VPS Holding ASA and board members of all its subsidiaries, as well as members of the executive management team and the management teams for all subsidiaries, are classified as primary insiders and are required to give notice of any purchases and sales of shares in Oslo Børs VPS Holding.

Oslo Børs VPS Holding provides investor relations pages at www.osloborsvps.no and the information on these pages is

31

regularly updated. The investor relations pages provide key operational figures which are updated monthly, financial infor-mation, information on primary insiders and other published information, shareholder information etc.

Mandates to the Board of DirectorsThe Board of Oslo Børs VPS Holding has not been granted any mandate to issue shares, convertible loans or any other form of equity instrument. The Board of Oslo Børs VPS Holding holds a mandate to acquire up to 1% of the company’s own shares in connection with a share purchase program for employees. The mandate was granted by the 2007 annual general meeting, and is valid until the 2008 annual general meeting.

The graph of share price movements shown above is not adjus-ted for dividend payments or the reduction in the company’s capital. Historic share prices have been adjusted for the 1:5 share split in May 2007.

The last traded price recorded in 2007 for shares in Oslo Børs VPS Holding was NOK 143 per share. The company’s shares were sold through a distribution sale in May 2001 at a price of NOK 19 per share (price adjusted for 1:5 split). The following table shows all dividend payments and reductions in share capital leading to payments to shareholders since the company was incorporated:

Amount per share Date of

Original After the split

AGM proposal AGM resolution last day of trading inc. right

to dividend

payment

Ordinary dividend for 2001 4.00 0.80 09.04.02 07.05.02 07.05.02 28.05.02

Reduction in share capital 14.00 2.80 09.04.02 07.05.02 28.08.02 12.09.02


Reduction in share capital 12.00 2.40 27.08.03 15.09.03 17.12.03 29.12.03



Extraordinary dividend for 2004 6.00 1.20 17.03.05 09.05.05 09.05.05 24.05.05



Ordinary dividend proposed for 2007 7.00

The Board of Oslo Børs VPS Holding has proposed that the annual general meeting approve an ordinary dividend of NOK 7 per share in respect of the 2007 accounting year.

0

20

40

60

80

100

120

140

160

28.05.2001 31.05.2002 02.06.2003 03.06.2004 01.06.2005 29.05.2006 29.05.2007

Kurs

(28

.05

.20

01

= 1

9)

Oslo Børs VPS Holding

OSEBXPR (norm.)

Source: OBI and NFMF OTC list

Share price history

32

REgiSTERED iN VPS ASA 31 DECEMBER

NO. OF SECURITIES AND NO. OF HOLDERS Registered in VPS at 31.12. MARKET VALUE (NOK million)

2006 2007 2007 2006**

2 038 2 062 BONDS

57 609 38 866 Norwegian individuals holding bonds 19 459 24 586

4 769 4 461 Norwegian enterprises holding bonds 570 181 586 857

698 575 Foreign investors holding bonds 199 603 141 427

63 076 43 902 Total number of bondholders

Total market value, bonds 789 243 752 870

288 371 SHORT-TERM BONDS

4 13 Norwegian individuals holding short-term bonds 23 7

324 315 Norwegian enterprises holding short-term bonds 114 149 87 862

24 26 Foreign investors holding short-term bonds 16 073 11 814

352 354 Total number of short-term bondholders

Total market value, short-term bonds 130 245 99 683

1 283 1 443 LIMITED COMPANIES

372 263 381 916 Norwegian individuals holding shares 86 917 85 236

22 700 25 852 Norwegian enterprises holding shares 1 371 235 1 219 020

21 089 22 911 Foreign investors holding shares 968 379 823 774

416 052 430 679 Total number of shareholders

Total market value, shares 2 426 531 2 128 030

25 29 PRIMARY CAPITAL CERTIFICATES

34 015 34 879 Norwegian individuals holding primary capital certificates 7 618 8 469

1 990 2 444 Norwegian enterprises holding primary capital certificates 11 561 7 201

321 346 Foreign investors holding primary capital certificates 1 674 1 710

36 326 37 669 Total number of primary capital certificate holders

Total market value, primary capital certificates 20 853 17 380

746 780 MUTUAL FUNDS

505 321 560 470 Norwegian individuals holding mutual fund units 59 431 59 048

6 781 8 097 Norwegian enterprises holding mutual fund units 196 876 174 601

22 972 25 515 Foreign investors holding mutual fund units 48 318 33 305

535 074 594 082 Total number of holders in mutual fund units

Total market value, mutual fund units 304 625 266 954

97 144 NOMINEE REGISTERED MUTUAL FUNDS

858 2 478 Total nominee registered mutual funds

Total market value nominee registered funds 94 2

239 475 OTHER EQUITY INSTRUMENTS*

1 862 6 466 Held by Norwegian individuals 335 221

531 1 267 Held by Norwegian enterprises 454 161

417 461 Held by foreign investors 512 142

2 809 8 194 Total other equity instruments 1 301 524

TOTAL HOLDINGS

Market value Norwegian individuals in total 173 877 177 569

Market value Norwegian enterprises in total 2 264 456 2 075 702

Market value foreign investors in total 1 234 559 1 012 172

Market value in total 3 672 892 3 265 443

1 547 457 1 430 107 Number of securities accounts

* Other equity capital instruments include warrants and separable subscription rights. Other derivatives are registered in VPS Clearing ASA .

** Numbers for 2006 are adjusted.

33

BOARD Of DiRECTORS’ STATEMENT Of POLiCy ON CORPORATE gOVERNANCE

introduction

The business activity of Oslo Børs VPS Holding ASA is to hold 100% of the share capital of Oslo Børs ASA, Verdipapirsen-tralen ASA, VPS Clearing ASA, Oslo Børs Informasjon AS and Manamind AS. These companies make up the Oslo Børs VPS group. This statement applies to the Oslo Børs VPS group.

Oslo Børs VPS Holding is committed to all aspects of corpo-rate governance, including ensuring the proper direction and control of its own activities and organisation. Corporate gov-ernance is also important for Oslo Børs VPS as a central player in the infrastructure of the Norwegian securities market. Confi-dence in the infrastructure of the market will be determined in part by the extent to which the participants adhere to good corporate governance practices.

general

The following factors form an important starting point for this statement of policy on corporate governance for Oslo Børs VPS:

Oslo Børs operates the only regulated marketplace in Nor-•way for trading in securities. Verdipapirsentralen operates the only securities register in Norway, together with related settlement and clearing activities. VPS Clearing is the only central counterparty in Norway for the equity derivatives market.

Many parties have an interest in the group’s activities. This •includes its owners, investors, issuers of securities, invest-ment firms, account operators, employees and the official authorities, as well as other participants in the securities chain.

34

It is important that all the operations that make up the group avoid any situation that might lead to any inference that they have abused the group’s particular position in the securities market, either generally or in relation to any other player or players. The Board of Directors of Oslo Børs VPS Holding (the “Board”) takes the view that its main duty is to work to ensure that the company’s shareholders benefit from a sound return on the company’s capital over the long term. However, the Board also takes care to balance this duty with the needs and wishes of other interested parties. The prospects for long-term return on the group’s capital are dependent on maintain-ing confidence in its activities and in the products it offers.

Oslo Børs ASA, VPS ASA and VPS Clearing ASA are authorised pursuant to the Stock Exchange Act, the Securities Register Act and the Securities Trading Act, and are subject to supervi-sion by Kredittilsynet (the Financial Supervisory Authority of Norway).

Oslo Børs carries out supervision of market participants that are also its customers. This arises partly because it operates as a regulated market, and partly as a result of specific duties

delegated by the authorities. Oslo Børs has a duty to report any suspected breaches of rules and regulations by its customers to the authorities, and pursuant to the Stock Exchange Act it can impose violation charges on individual customers for breaches of the Stock Exchange Act or the Stock Exchange Regulations.

The Board of Oslo Børs resolved in 2002 that if the income arising from violation charges exceeds the costs incurred by implementing and monitoring such sanctions, the surplus should be applied to measures designed to strengthen confi-dence in the Oslo market and market integrity. The amounts received in respect of violation charges have as yet not exceeded the costs incurred. The revised Securities Trading Act of 2007 stipulates that violation charges paid by stock exchange listed issuers for breaches of the statutory duty of disclosure, which were previously retained by the exchange, are now payable to the State. Violation charges in respect of other breaches will continue to be paid to Oslo Børs VPS.

1. Corporate governance policiesThe Board of Oslo Børs VPS Holding ASA is of the view that the company’s policies for corporate governance are in accordance with the Norwegian Code of Practice issued on 4 December 2007. Each subsidiary company in the group has clearly defined corporate values and ethical guidelines based on these values. Common corporate values and ethical guidelines will be devel-oped for the entire group. The officers and employees of the companies in the group are subject to a range of rules laid down by legislation and regulation, as well as internal guidelines.

The following sections provide an explanation of how Oslo Børs VPS has addressed the various issues covered by the Norwegian Code of Practice.

2. Business activitiesThe business objective of each company in the group is specified in its articles of association. The articles of association of Oslo Børs VPS Holding ASA restrict the company’s business objective to holding ownership interests in companies that operate stock exchange activities and securities registers, together with other activities normally associated with these activities.

The Board believes that the business objectives laid down in the company’s articles of association provide predictability and direction for the company’s business strategy and the activities that it may acquire or initiate.

The articles of association of Oslo Børs VPS Holding ASA can be found at page 99 of the annual report.

35

Each subsidiary reviews its strategy annually, leading to the production of a strategic plan for future years. The merged group will establish strategic processes that address both the group as a whole as well as the individual subsidiaries. An ac-count of the group’s strategy and focus areas can be found on page 10 of the annual report.

3. and 4. Share capital and dividends, equal treatment of shareholders and transactions with close associatesPage 30 of the annual report provides information on the company’s shareholder policy and dividend policy.

Oslo Børs VPS strives to maintain its equity capital at a level ap-propriate for its strategy and risk profile. At the same time, the company aims to limit the capital the group employs. If the group holds liquidity in excess of the capital considered necessary for its operations, taking into account possible acquisitions, invest-ment plans and the need to maintain satisfactory liquidity and solidity, including the requirements stipulated by the authorities, steps will be taken to distribute the surplus to shareholders.

The Board has not been granted any mandates to carry out transactions that increase the company’s share capital. The 2006 and 2007 annual general meetings granted the Board a mandate to buy back up to 1% of the company’s own shares. In the event that any mandates to increase the company’s share capital are granted in the future, the Board will take a cautious approach to waiving the principle that existing sharehold-ers have a right of preemption to subscribe for new shares. Similarly, the Board is very cautious about buying back shares in any way other than through the market at market price. The Board will only consider exceptions to these principles where they are clearly justified in the interests of the company and its shareholders. The company bought back through the market 3,000 of its own shares in September 2006 and 13,000 shares in December 2007 at market price. 2,995 and 8,922 of these shares respectively were subsequently sold to employees.

The company has not entered into any transactions with shareholders, members of the Board, members of management or close associates of any such parties other than such transac-tions as form a normal part of stock exchange activities. Internal guidelines require that any member of the Board or the execu-tive management, or any other employee, who has a personal interest in any transaction(s) involving any of the companies in the group must disclose his or her interest. In the event that such a transaction proceeds and is not immaterial, the company will seek independent valuation of the values involved.

36

During the course of the negotiations and implementation of the merger between Oslo Børs Holding and VPS Holding, the boards of both companies paid particular attention to the interests of shareholders that were not shareholders in both companies.

5. and 6. freely negotiable shares and general meetings Page 29 of the annual report provides information on owner-ship restrictions, restrictions on voting rights and general meetings.

The Stock Exchange Act and the Securities Register Act impose restrictions on the ownership of shares in Oslo Børs VPS Hold-ing ASA and on voting rights in the company. The Board believes that such restrictions are in principle to be avoided, but takes the view that these restrictions are not unreasonable in view of the particular need to maintain independence and inspire confi-dence in view of the activities carried out by the group.

The Board believes that the company’s policies and practice for holding general meetings are in accordance with the Norwe-gian Code of Practice. It notes in particular that notices calling general meetings are in practice sent out one month prior to the date of the meeting, that the company’s articles of association do not require shareholders to give notice of their intention to attend a general meeting and that the company has made arrangements for shareholders voting by power of attorney to give specific instructions on each resolution to be considered.

7. Election CommitteeAs required by the articles of association of Oslo Børs VPS Hold-ing, an election committee has been appointed to make recom-

mendations to the company in general meeting for the election of members to the boards of Oslo Børs VPS Holding and Oslo Børs ASA, to the control committee for Oslo Børs ASA and to the elec-tion committee. The current mandate for the election commit-tee does not reflect the composition of the group following the merger with VPS Holding. A proposal for changes to the mandate will be put before the 2008 annual general meeting. It will be proposed that the election committee should make proposals for the Board of Oslo Børs VPS Holding ASA and, in accordance with new mandates from the boards in question, should also make proposals for the board of VPS ASA and the control committees of Verdipapirsentralen ASA and VPS Clearing ASA.

The election committee has a minimum of three members. The chairman and other members of the election committee are elected for a three-year term of office by the general meeting. Neither the chief executive officer nor any other employee of the company is permitted to be a member of the election com-mittee. Details of the current election committee can be found on page 43 of the annual report. There are no relationships of dependence, whether financial, family or personal, between any member of the election committee and any member of the company’s Board or management. However, it should be noted that the Chairman of the Board, Leif Teksum, and a member of the election committee, Ottar Ertzeid, are both members of the executive management of the DnB NOR group.

The election committee is required by its mandate to identify candidates that meet the requirements of the appointment in question, cf. the company’s articles of association and the legisla-tion and other requirements imposed by the authorities that ap-ply to the group’s activities at any time. The election committee is required to identify candidates that are suitable for approval taking into account the shareholder composition of the company. The election committee’s mandate requires it to take the follow-ing factors into account when proposing candidates for election to the Board by the general meeting and to report accordingly:

- That the Board should have sufficient expertise and experience to handle both its routine operational responsibilities and the strategic challenges that the company faces. In addition to ensur-ing the availability of suitable expertise, the committee is asked to pay attention to factors such as the balance of age and gender.

- That the candidates are sufficiently independent of the company’s management, and that the Board as a whole is suf-ficiently independent of any single shareholder or particular customer group.

37

- That the candidates have sufficient time in relation to their other appointments and employment to carry out their duties as a member of the Board.

The election committee shall maintain contact with the various groups of shareholders. The committee makes its decisions by majority voting. In the event of a tie, the chairman has an additional casting vote.

The election committee’s recommendations form an appendix to the notice calling the general meeting, and in addition to per-sonal details they must contain information on each candidate’s education, current employment, relevant previous work experi-ence and details of all board and other appointments as well as confirmation that the candidate has confirmed that he or she is willing to accept the appointment if elected.

There is no specific timetable for the election committee’s rec-ommendations. However the committee normally completes its work around one month before the annual general meeting, which is normally held in early May.

The remuneration of the members of the boards and con-trol committees is approved by the general meeting, which considers recommendations from the election committee. The remuneration of the members of the election committee shall be based on an account of the time spent on the work of the committee. The scale of work undertaken by the election committee shall normally be agreed by the chairman of the Board of Directors before the work is undertaken. The rate of remuneration shall be determined by the annual general meet-ing considering a proposal from the Board.

The election committee shall be represented at the annual general meeting in order to provide further information on the committee’s recommendations and to answer any questions.

8. Composition of the Board of Directors and its independenceThe articles of association stipulate that the Board of Oslo Børs VPS Holding ASA shall have at least five and no more than twelve members. Members are appointed for a two-year term of office. The chairman and deputy chairman of the Board are elected by the general meeting.

The Board of Oslo Børs VPS Holding ASA has six members. The boards of Oslo Børs ASA and VPS Clearing ASA are identical to that of Oslo Børs VPS Holding ASA with the addition of em-ployee representatives and of Group CEO Bente A. Landsnes as a member of the board of VPS Clearing ASA. The authorisation

of Verdipapirsentralen ASA stipulates that at least four of the company’s seven board members must be independent of the board members of Oslo Børs VPS Holding ASA and Oslo Børs ASA. This requirement is satisfied since five of the seven board members are independent. Further information on members of the boards can be found on page 42 of the annual report. The Board is of the opinion that, in total, it has sufficient expertise and capacity to carry out its duties in a satisfactory manner.

The Board has not produced a specific operational definition of independence, but has routinely evaluated the independ-ence of its various members. Such evaluations will continue to take place in the future. This draws attention to the issue of independence and helps to maintain an awareness of the issues involved.

It is also important that Oslo Børs VPS Holding has an expe-rienced Board that understands the financial sector and the financial markets. This can lead from time to time to situations in which one or more members of the Board has a particularly close relationship to an issue due for consideration by the Board. Oslo Børs VPS Holding therefore practices a particularly strict interpretation of the legislative provisions on disqualifi-cation. This ensures that no member of the Board can partici-pate in the consideration of any matter where he or she has a financial or other interest, either on his or her own account or through any undertaking with which he or she is associated.

With the exception of the employee representatives, there is no relationship of dependence between any member of the Board and the management of the company, whether finan-cially, personally or in terms of family connections. There is no relationship of dependence between any member of the elec-tion committee and the management of the company, whether financially, personally or in terms of family connections. Moreover, the members of the company’s executive manage-ment are independent of external parties with an interest in the company’s activities. However, it should be noted that the Chairman of the Board, Leif Teksum, and a member of the election committee, Ottar Ertzeid, are both members of the executive management of the DnB NOR group.

Each of the businesses that make up the group has a range of customers. With the sole exception of DnB NOR ASA and its subsidiaries, no customer that represents a significant propor-tion of revenue is represented on the Board. The chairman of the Board is an Executive Vice President of DnB NOR ASA, which is a listed company, and of DnB NOR Bank ASA, which is a member firm, settlement member, securities account operator

38

and clearing member. Certain of the group’s subsidiaries also have customer relationships with DnB NOR.

Benedicte Schilbred Fasmer, who is a member of the Board, is an employee of Sparebanken Vest, which is an issuer of listed primary capital certificates and bond loans. She is also a member of the corporate assembly of StatoilHydro ASA and of the council of representatives of Eksportfinans, both of which issue listed financial instruments. Giselé Marchand, who is a member of the Board, is the Chief Executive Officer of Eksportfinans, which has bond loans listed on Oslo Børs, and is a member of the boards of Norske Skog ASA and Scandi-navian Property Development ASA, both of which are listed companies. Sparebanken Vest, Norske Skog and Scandinavian Property Development are not considered to be main business connections of Oslo Børs VPS. Moreover, the appointments held by these individuals are not considered to compromise their independence. If matters arise that concern the company involved, the Board will pay particular attention to whether these members should be excluded from participation.

Four of the six members of the Board either hold a senior position with a shareholder of Oslo Børs VPS Holding or have a material ownership interest in a shareholder (see table below).

DnB NOR ASA is not permitted to exercise any rights on the shares it holds in excess of 10% other than “to receive divi-dends and to exercise rights of preemption in the event of an increase in share capital”.

With the exception of Leif Teksum, all the members of the Board are deemed to be independent of the company’s largest shareholder.

The Board believes that, on an overall evaluation, the criteria set out in the Code of Practice for the Board’s independence from shareholders, business connections and the executive management are satisfied. Several of the members of the Board of Oslo Børs VPS Holding have ownership interests in or

are employees or elected officers of customers of the group, but none of these customers fall into the category of main business connections.

As part of its normal activities, the Board deals with a number of issues that may have a positive or negative effect on parties that are represented on the Board. Certain members of the Board represent shareholders/customers that may be af-fected in different ways by the strategic decisions taken by the group. This represents a particular challenge for the Board that it has fully recognised and discussed.

9. The work of the BoardThe Board produces an annual plan as part of its planning. The plan includes a schedule for the main tasks carried out by the Board annually and for other routine tasks.

The work of the Board is based on a formal mandate. The mandate sets out guidelines for the Board’s work and proce-dures and for the main responsibilities and duties of the chief executive officer in respect of the Board, as well as defining the authority and the jurisdiction of the Board in accordance with current legislation.

The Board approves job descriptions for the chief executive of-ficer and the senior managers responsible for each subsidiary that specify the duties and tasks of the individual and defines his or her authority and responsibility.

The Board of Oslo Børs VPS Holding has appointed a remu-neration committee. The remuneration committee evaluates and prepares proposals for the Board on the remuneration of the chief executive officer. The members of the remuneration committee are Leif Teksum, Georg Størmer and Benedicte Schilbred Fasmer.

The Board regularly reviews its performance, the expertise it offers in relation to the company’s needs, its working pro-cedures and the work of the chief executive officer and her

Board member Position held Shareholder Shareholder’s relationship to the groupShareholder’s shareholding in

Oslo Børs VPS Holding 31.12.2007

Chairman Leif Teksum Group Executive Vice President

DnB NOR ASA and DnB NOR Bank ASA

Member of the exchange and a settlement member firm, operator of securities accounts and issuer of listed securities

19.1%

Mari Thjømøe Executive Vice President

KLP Investor 10.0%

Svein Støle Chief Executive Officer and majority shareholder

Pareto AS Majority shareholder in Pareto Securities which is a member of the exchange and a settlement member firm

8.2%

Benedicte Schilbred Fasmer

Executive Vice President

Sparebanken Vest Operator of securities accounts and issuer of listed securities

1.3%

39

relationship with the Board. This review is carried out annually in the first quarter, and the results are made available to the election committee in connection with the committee’s consid-erations prior to the annual general meeting.

10. Risk management and internal controlEach company in the group has approved a policy on internal control that specifies methodology, documentation and re-porting requirements for its internal control function, and this applies to both the managing director and the management of the subsidiary in general. A common policy will be established for the group as a whole.

Work on internal control by each subsidiary involves carrying out risk assessments of all significant areas of activity, producing action plans for all the risk factors identified, and producing and updating quality assurance documentation. The documentation produced addresses organisational matters, the division of re-sponsibility, delegated authorities and procedures and reporting routines through the organisational levels up to its board. Internal control reporting also includes issues related to corporate values and ethical guidelines. Each subsidiary has a system for any con-cerns over illegal or unethical conduct to be notified to the board.

The managing director of each subsidiary produces a report for the board of directors of the subsidiary and the group chief executive officer on the status of internal control, based on the arrangements described above, at least once each year. The board of directors of the subsidiary and the group chief executive officer also receive quarterly reports on riskreduc-ing measures and quarterly reports detailing any exceptions. The group chief executive officer reports in turn to the Board of Oslo Børs VPS Holding ASA.

Oslo Børs, VPS and VPS Clearing are subject to statutory regulations on internal control, and each company is required to have an internal audit function. The internal audit function is provided by the employed internal auditor and the accounting practice KPMG.

The internal control arrangements described above also include the internal control of financial reporting.

The internal control procedures include setting policies for financial management, instructions, guidelines and procedures for the various processes involved in financial reporting and detailed descriptions of the procedures for the work involved. This includes stipulating levels of authority for entering into contracts, placing purchasing orders, authorising documents

and authorising payments, as well as reporting arrangements for delegated authority. The internal control environment also includes clearly defined accounting principles, competent staff and prudent separation and allocation of responsibility.

Risk assessments are carried out at least once a year to identify any potential sources of error in financial reporting. Steps are taken to ensure that any unacceptable level of residual risk is re-solved, and the measures implemented are properly followed up.

Control activities include a range of functions such as recon-ciliations, exception analysis and reviews with the relevant managers in order to help ensure that control activities are comprehensive, relevant and carried out with due care.

Use of the intranet, document management systems and financial information systems ensure a good flow of internal information and make essential documents, financial information etc easily available. Both the executive management and the Board receive comprehensive monthly financial reports. External factors are monitored both through publicly available information and by use of databases of specialised and processed information.

The internal control system is kept under continuous review, taking into account changes in requirements or any weakness-es that are identified. Changes in the organisational structure, products, operating parameters etc. may require changes to one or more levels of the internal control procedures. Excep-tions are corrected and reported on a continual basis, and the executive management and the Board receive exception reports of instances that exceed predetermined criteria.

The external audit function is carried out by external personnel who report to the Board and the annual general meeting. Due notice is taken of any areas of potential improvement identi-fied by the audit processes.

11. and 12. Remuneration of members of the Board and senior employeesThe remuneration of members of the Board is decided by the general meeting, which receives recommendations from the election committee in this respect.

All members of the Board, with the exception of the chairman, deputy chairman, and employee representatives, receive the same remuneration. Remuneration of the members of the Board is not linked to the company’s earnings. The remuneration paid to members of the Board is made up of a fixed annual fee plus additional remuneration for meetings additional to those of the

40

corporate bodies of the company/Oslo Børs VPS. In accordance with a resolution passed by the general meeting, such additional remuneration cannot exceed 50% of the annual fee for the mem-ber in question. Meetings of the corporate bodies are deemed to include board meetings, general meetings and meetings with the executive management, as well as meetings of the election committee and control committee. Meetings additional to those of the company’s corporate bodies include meetings of board committees, meetings with the authorities, meetings with other stock exchanges and businesses as well as international repre-sentation on behalf of Oslo Børs. Payments of such additional remuneration are approved by the chairman of the Board upon application by the member in question. Payments of additional remuneration to the chairman of the Board must be approved by the chairman of the election committee. The former chairman of the Board of Oslo Børs VPS Holding, Halvor Stenstadvold, received additional remuneration of NOK 115,000 in 2007.

Members of the Board may receive additional remuneration in accordance with the Board’s mandate if they take on an assign-ment or other duties for the company that do not form a natu-ral part of the responsibilities of a Board member. Any such assignment or duties to be carried out must be approved in advance by the Board and be governed by a written agreement defining the scope of the assignment or duties, their duration and terms of payment. This agreement must be in accordance with normal commercial terms in respect of payment and other matters. No member of the Board carried out any such assign-ment or other duties in 2007.

The Board takes a positive view of ownership of shares in the company by members of the Board, senior management and other employees. Shares in Oslo Børs VPS Holding are listed on the OTC list of the Norwegian Securities Dealers Associa-tion, and are the subject of regular trading. It is therefore possible for both officers and senior employees to purchase shares at will. Share ownership programs were made available to the company’s employees in 2006 and 2007. The Board is considering whether to propose a similar program for 2008 to the annual general meeting to be held in May 2008. The company has not granted any share options.

The boards of directors of Oslo Børs, VPS and VPS Clearing have established guidelines for the remuneration of senior em-ployees. A common set of guidelines will be established for the entire group. The guidelines stipulate that remuneration shall be determined on an individual basis, taking into account ex-pertise and experience. The remuneration of senior employees will follow the same principles as apply for other employees in

respect of the limits set for annual salary increases, the date of such increases and total remuneration comprising fixed and variable salary. The remuneration of the group chief executive officer is determined by a meeting of the Board. The group chief executive officer is responsible for deciding the salary increases awarded to other members of senior management, and reports the decisions made to the remuneration commit-tee and the Board. The guidelines are placed before the annual general meeting for information.

The remuneration of the members of senior management com-prises normal salary together with employment benefits in-cluding company car, telephone and newspapers. The members of senior management are members of the pension scheme and early retirement pension scheme on the same terms as other employees. See also note 14 to the annual accounts for further information on senior management remuneration.

No member of the Board or senior employee is entitled to any form of remuneration linked to shares, share prices or related derivative instruments. The group operates a scheme for variable bonuses for all employees. The scheme is based on profit for the current year, achieving specific targets for the year and a number of other factors. The members of the group management and certain other senior managers are entitled to a separate variable bonus arrangement that provides for bonuses of up to 25% of fixed salary.

The group’s subsidiaries operated similar variable bonus schemes in 2007 prior to the merger of Oslo Børs Holding and VPS Holding. The former owners of Manamind AS who are still employed by the company are entitled to a separate bonus scheme (for the years to and including 2007) based on targets for the company’s earnings. This company also had a bonus scheme for its other employees. A provision of NOK 23.5 million was made in the 2007 accounts for taxes and duties payable in respect of these arrangements. In accordance with the Code of Practice, further information on the fees paid to members of the Board and the remuneration and benefits of the executive management and other senior employees can be found at note 14 to the accounts.

13. information and communicationsPage 30 of the annual report provides information on the company’s shareholder policy, including its policy on dividends and information. Oslo Børs VPS Holding has decided to act in this respect as though the company was listed on the stock exchange. However, the company’s shareholders are not subject to the requirements that apply to shareholders in

41

listed companies in respect of disclosing significant changes in shareholding, the duty to make a mandatory offer etc.

14. TakeoverThe Board will not take any steps to hinder or obstruct an offer for the company’s activities or shares unless there are particu-lar reasons for this. Moreover, in such a situation the Board will not exercise mandates or pass any resolutions that obstruct the takeover bid unless this is approved by the general meeting following the announcement of the bid. If a bid is made for the company’s business activities or shares, the Board will issue a statement evaluating the bid including a recommendation as to whether or not the bid should be accepted by shareholders. Any transaction that is in effect a disposal of the company’s activities will be submitted to the general meeting. Any resolu-tion in respect of merger, dividing activities or disposing of a material part of activities subject to official authorisation must be notified to the Ministry of Finance, and the Ministry is entitled to veto any such resolution or impose conditions on the implementation of any such resolution.

15. AuditorThe auditor produces an annual audit plan that is submitted to the Oslo Børs VPS Holding control committee. The auditor also presents the annual audit plan to the Board.

The auditor submits a Management Letter to the Board fol-lowing the annual audit of the interim and annual accounts. The Management Letter also includes an evaluation of the company’s internal control arrangements. The auditor presents his conclusions to the Board in person.

The Board holds at least one meeting a year with the auditor that is not attended by the chief executive officer or any other member of the company’s management.

In connection with the issue of the auditor’s report, the auditor provides the Board with a declaration of independence and objectivity. The auditor participates in the Board meeting at which the Board approves the annual accounts, and also participates in the annual general meeting. The proposal for approval of the remuneration paid to the auditor provides a breakdown of the total remuneration between the statutory audit tasks and other assignments.

The boards of the subsidiaries have approved guidelines for the use of the auditor as a consultant. A set of common guide-lines will be established for the group as a whole.

42

Svein Støle (born 1963)

georg Størmer (born1939)

Mari Thjømøe (born 1962)

Leif Teksum (born 1952), Chair

Benedicte Schilbred fasmer (born1965)

giséle Marchand (born1958)

ThE BOARD Of DiRECTORS Of OSLO BØRS VPS hOLDiNg ASA

Leif Teksum is Group Executive Vice President, Corporate Banking and Payment Services at DnB NOR Bank ASA. Teksum is a business economics graduate of the Norwegian School of Economics and Business Administration and has experience from the petroleum industry and from various managerial positions in DnB and Bergen Bank. He has been an employee of the DnB NOR group since 1981. Teksum is chair of the board of directors of Bank DnB NORD AS and chair of the corporate assembly of Hurtigruten Group. Previous non-executive ap-pointments include chair of the boards of DnB NOR Finans AS, Nordlandsbanken ASA and Eksportfinans ASA. Teksum was chairman of VPS ASA from 1999 to 2008, and was a member of the control commit-tee for VPS in 1992.

Benedicte Schilbred Fasmer holds the position of Director, Capital Markets Division at Sparebanken Vest. She has a Master of Science degree from the Norwegian School of Economics and Business Ad-ministration. She was previously the Chief Financial Officer and Investor Relations Officer, and more re-cently Head of Corporate Communications and HR, at Rieber & Søn. Her work experience prior to this included Paal Wilson Management AS, chief of staff and later vice president at Citibank International plc, head of the Norwegian branch of Nautopolis.com, and as an investment banker at Pareto Securities ASA in Bergen. Schilbred Fasmer is a member of the Corporate Assembly and Election Committee of StatoilHydro ASA, the Council of Representatives of Exportfinans ASA, and the Election Committee of Lerøy Seafood ASA. Schilbred Fasmer was a mem-ber of the Board of Directors of Oslo Børs Holding ASA from 2005 to 2007.

Gisele Marchand is the President and CEO of Eksportfinans ASA. She previously held various senior management positions in the DNB group, and was responsible as a member of the group executive management for the corporate and retail markets in Norway. She has also previously been Managing Director of the Norwegian Public Service Pension Fund and of Batesgruppen AS. She has experience from a number of board appointments, including Hafslund ASA, EDB ASA, Norske Skogindustrier ASA, Scandinavian Property Development ASA, Innovasjon Norge and GIEK. Marchand joined the Board of Oslo Børs VPS Holding ASA in 2007.

Mari Thjømøe is Executive Vice President and CFO at KLP Forsikring. She holds a master’s degree from the Norwegian School of Management BI (1987) and is a chartered financial analyst from the Norwe-gian School of Economics and Business Administra-tion. Thjømøe headed Investor Relations at Statoil from 2000 to 2005, prior to which she held various positions with Norsk Hydro (1988 to 2000). She is a member of the Board of KLP Skadeforsikring AS, KLP Eiendom AS, Petoro AS and Seilsport Maritimt Forlag AS, and was formerly a board member of the foundation AksjeNorge and Chair of the Norwegian Investor Relations Association. She was on the Board of Oslo Børs Holding ASA from 2006 to 2007

Georg Størmer, an independent consultant, has carried out assignments for, among others, Norges Bank Investment Management. He is a qualified actuary from the University of Oslo and holds an MBA from Harvard University. After completing his education he worked on Wall Street before joining Norsk Hydro from 1968 to 2004, including a period as CFO from 1987 to 1999. Mr Størmer was on the Board of Oslo Børs Holding ASA from 1999 to 2007, latterly as Deputy Chair. .

Svein Støle is Chief Executive and majority owner of Pareto AS. He has been a Board member of both Oslo Børs and VPS since their privatisation in 2001. Other appointments outside the Pareto Group include earlier Board appointments at Fondsforvalt-ning ASA.

Observers in the board

Representatives from the employees

Bjarne Rogdaberg (born 1972), Oslo Børs

Morten Nordby (born 1959), VPS

Vegard Annweiler (born 1970), Oslo Børs

Norunn Dale Seland (born 1946),VPS

43

Erik Must (Chair) to 2008Must is the Chairman of Fondsfinans ASA, Fondsfinans Kapitalforvalt-

ning Holding AS, Arendals Fossekompani ASA, Gyldendal ASA and Erik

Must AS. He is also a member of the board of Norges Handels- og Sjø-

fartstidende AS, Norsk Folkemuseum, Arentz Legat and the Biotechno-

logy Centre of the University of Oslo.

Olaug Svarva (Member) to 2009Svarva is the Managing Director of Folketrygdfondet. Her previous ex-

perience includes Investment Director of SpareBank 1 Livsforsikring,

Managing Director of SpareBank 1 Aktiv Forvaltning and Investment

Director at Folketrygdfondet.

Leiv Askvig (Member) to 2008Askvig is the Managing Director of Sundt AS and holds a number of

board appointments, including Chairman of Imarex NOS ASA. His

previous experience includes Managing Director of Sundal Collier & Co

and a member of the board of VPS.

Ottar Ertzeid (Member) to 2009Ertzeid is a Group Executive Vice President of DnB NOR ASA and DnB

NOR Bank ASA, and is head of DnB NOR Markets. He has also been a

member of the board of Oslo Børs for a number of years.

Election Committee of Oslo Børs VPS holding ASA

Jan Petter Romsaas (Chair), Lawyer, Advokatfirmaet Hjort

Vegard Østlien, Nordea Bank Norge ASA

Eldbjørg Sture, Consultant

Inger-Johanne Lund (Chair), Lawyer, Advokatfirmaet Haavind Vislie DA

Anne Kristin Einarsrud, Head of Operation section in the Technology Department, NRK

Ian W. Kenworthy, Lawyer, Advokatfirmaet Steenstrup Stordrage DA

Knut Nyerrød (Deputy Member), State Authorised Public Accountant, Noraudit DA

Control Committee of Oslo Børs ASA

Control Committee of VPS ASA and VPS Clearing ASA

44

ExECuTiVE MANAgEMENT Of OSLO BØRS VPS

Bente A. Landsnes (50), group CEOBente A. Landsnes took up her position as Group Chief Executive Officer in 2007. She is also the Managing director of Oslo Børs, a position she has held since 1 January 2006. Prior to this, she was Group Executive Vice President, IT and Payment Services at DNB NOR ASA. She also has experience as Vice President of Bankenes Betalingssentral, General Manager and Head of Section at Sparebanken NOR and Group Executive Vice President in the Gjensidige NOR Group. Landsnes has experience as a non-executive director of Oslo Børs, VPS (the Norwegian Central Securities Depository) and NOS (formerly the Norwegian Futures and Options Clearing House). Jan hellstrøm (62), Deputy CEOHellstrøm has management and finance qualifications from the Norwegian School of Management BI. His previous work experi-ence includes employment as an operations consultant, project leader and head of department – systems development at IDA, Integrert Databehandling AS. He joined Verdipapirsentralen when it was first estab-lished in 1984, and became President and CEO in 1992. Following the merger in 2007, Hellstrøm is Deputy Group CEO of Oslo Børs VPS Holding and is also directly responsible for the business area VPS.

P. Anders Brodin (48), Executive Vice PresidentBrodin is an economics graduate of the Uni-versity of Oslo, and has been with Oslo Børs since 1993 when he was appointed Chief

Economist. He has been Deputy Managing Director of Oslo Børs since 2001. He is also a member of the Board of the NOREX alliance.

Tom kolvig (57), Executive Vice PresidentKolvig is a law graduate of the University of Oslo, and also graduated from the Norwegian National Defence College. He previously worked for the Ministry of Justice, as an assistant judge in the Fredrikstad District Court and for the legal department of Norges Bank before joining Verdipapirsentralen as Head of Legal Affairs in 1991. He was the managing director of the law firm Schjødt AS from 1999 – 2000 before returning to VPS in 2000.

geir heggem (39), Senior Vice President & CfOHeggem is a business economics graduate and State Authorised Public Accountant. Prior to joining Oslo Børs he worked for Coopers & Lybrand. Heggem has been CFO of Oslo Børs since May 2002, and was acting CFO in 2001.

Per Eikrem (43), Senior Vice President Corporate CommunicationsEikrem is a business economics graduate of the Norwegian School of Economics and Business Administration, and joined Oslo Børs in 2001. Prior to joining Oslo Børs he was the Information Director of NetCom, and his previous appointments include working as a journalist on Finansavisen and Reuters and as Head of Information for Aker RGI.

Atle Degré (43), Senior Vice President Legal AffairsDegré is a law graduate of the University of Oslo, and has worked in the legal department of Oslo Børs since 1995, and as head of department since 2000. Since 2006 he has also been responsible for the issuer surveillance and prospectuses section. His previous appointments include the Ministry of Finance and a period as an assistant judge. Lisbeth Lindberg (49), Senior Vice President – Sales and MarketingLisbeth Lindberg is a business economics graduate of the Norwegian School of Economics and Business Administration. She joined Oslo Børs on 1 February 2007 as Senior Vice President – Sales and Marke-ting. Lisbeth Lindberg joined Oslo Børs from Statkraft AS, where she was SVP Finance and Investor Relations. Her previous work experience includes SVP Information and IR at Orkla and SVP Group Strategy at DnB NOR ASA.

Sveinung Dyrdal (46), Executive Vice PresidentDyrdal has a bachelor’s degree in marke-ting and strategic management from the Norwegian School of Management BI and has completed a number of courses at the Banking Academy. He has held a number of management positions at Nordea (formerly Kreditkassen), including director and global head of custody services and as assistant director and head of securities services. He joined VPS in 2005 as Head of VPS Securities Services.

Boards of directors of Oslo Børs, VPS and VPS Clearing

Oslo Børs ASAGeorg Størmer (Chair) to 2008, Independent consultantLeif Teksum (Deputy Chair) to 2008, Executive Vice President, DnB NORGisele Marchand to 2009, President and CEO, EksportfinansSvein Støle to 2009, Chief Executive, Pareto ASBenedicte Schilbred Fasmer to 2009, Director, Capital Markets Division, Sparebanken VestMari Thjømøe to 2008, Executive Vice President and CFO, KLP

VPS ASAKim Dobrowen (Chair) to 2009, attorney and partner, ThommesenAnne Johnsrud Hagen (Deputy Chair) to 2008, Vice President, Norsk Hydro ASALeif Teksum to 2008, Executive Vice President, DnB NOR Bente A. Landsnes to 2009, Managing Director, Oslo BørsKnut Erik Robertsen to 2009, Project Manager, SEB Enskilda ASAGunn Oland to 2008, Head of Section, Norwegian Water Resources and Energy Directorate (NVE)Audun Bø to 2008, Managing Director, Orkla Finans AS

VPS Clearing ASALeif Teksum (Chair) to 2008, Executive Vice President, DnB NORSvein Støle (Deputy Chair) to 2009, Chief Executive, Pareto ASGisele Marchand to 2009, President and CEO, EksportfinansMari Thjømøe to 2008, Executive Vice President and CFO, KLPBenedicte Schilbred Fasmer to 2009, Director, Capital Markets Division, Sparebanken VestGeorg Størmer to 2008, Independent consultantBente A. Landsnes to 2009, Managing Director, Oslo Børs

These companies are wholly-owned subsidiaries in the Oslo Børs VPS Holding ASA group.

45

ORgANiSATiONAL STRuCTuRE Of OSLO BØRS VPS

The Oslo Børs VPS group comprises the marketplaces operated by Oslo Børs ASA (Oslo Børs, Oslo Axess and ABM), the securities registry

and securities settlement activities operated by VPS ASA, the clearing house VPS Clearing ASA, and Oslo Market Data and Solutions

(the companies Oslo Børs Informasjon and Manamind)

Oslo Børs business areaThe Oslo Børs business area comprises the wholly-owned subsidiary

Oslo Børs ASA, which is authorised to operate stock exchange activities.

The main objective of Oslo Børs is to be the central marketplace for

trading in financial instruments in the Norwegian market. The role of

Oslo Børs is to make it possible for purchasers and sellers of securities

to carry out their transactions in a rapid, efficient and secure manner.

Oslo Børs organises trading in equities, primary capital certificates,

fixed income products and derivatives products. In the equity and fixed

income markets, the Oslo Børs marketplaces also fulfil an important

function in the primary market, i.e. for the issue of shares, primary

capital certificates and bonds.

VPS business areaThe VPS business area comprises the wholly-owned subsidiary

VPS ASA, which is a Norwegian public limited company authorised

to register rights to financial instruments with the legal effects

stipulated by the Securities Register Act.

VPS ASA develops and markets products and services for banks,

investment firms, fund management companies and other financial

institutions. These in turn deliver the products and services to issuers

and investors. The services offered by VPS make it easier and more

efficient for issuers to raise capital and manage their securities

registers, and give investors the reassurance that they will be able to

exercise their rights as owners of securities. Registering the ownership

of securities with VPS provides legal protection and procedures for

the priority of interests, which are important practical features for

confidence in the capital markets. VPS helps to improve the efficiency of

securities trading through its clearing and settlement system.

VPS Clearing business areaVPS Clearing ASA is a Norwegian public limited liability company licensed

to operate as a clearing house for derivatives and for borrowing and

lending of financial instruments. VPS Clearing strives to create added

value for members through the solutions it provides for the securities

market. The business area distributes its products and services through

banks and investment firms, but certain types of institutional customers

can also apply for direct membership of VPS Clearing.

Oslo Market Data and Solutions business area (OMDS)Oslo Market Data and Solutions comprises Oslo Børs Informasjon AS

(OBI) and Manamind AS. Oslo Market Data and Solutions has extensive

expertise in capturing, processing, distributing and presenting financial

market data. Sales of information relating to Norwegian securities

forms a central part of the business area’s activities. A second major

aspect is sales of specialised web and internet solutions for trading in

securities and real-time presentation of market data. The business unit

offers both standard products and customised solutions for issuers,

investment firms, leading media players and other parties involved

with the financial markets. Oslo Market Data and Solutions supplies

real-time information that is essential for trading on Oslo Børs VPS. In

addition, the business area offers technical solutions for processing

real-time information.

*Comprises Oslo Børs Informasjon AS and Manamind AS

*

46

ANNuAL REPORT AND ACCOuNTSAnnual Report 47

group Annual Accounts– profit and loss account 56– balance sheet 57– cash flow analysis 59– recognised income and expenses 60

Notes to the group accounts– accounting principles 61– note 1 Segment information 65– note 2 Business combinations 66– note 3 Accounts receivable/Losses on receivable 67– note 4 Analysis of profit and loss items 67– note 5 Analysis of balance sheet items 68– note 6 Taxation 69– note 7 Pension costs and pension liabilities 70– note 8a Fixed assets 75– note 8b Intangible assets – developed in-house 75– note 8c Intangible assets – including assets developed in-house 75– note 8d Impairment test for goodwill 76– note 9 Share capital and shareholder information 76– note 10 Earnings per share, diluted earnings per share 77– note 11 Investments in joint ventures, shares etc. 77– note 12 Financial instruments 79– note 13 No. of employees - group 80– note 14 Remuneration of officers, senior management, the auditor etc 81– note 15 Leasing contracts 82– note 16 Uncertainty associated with estimates used 83– note 17 Equity capital 83– note 18 Contingent liabilities 84– note 19 Responsibility 84– note 20 Interes-bearing borrowings 84– note 21 Related parties 84– note 22 Outstanding derivative positions 85

Parent company Annual Accounts– profit and loss account 86– balance sheet 87– cash flow analysis 89

Notes to the Parent company accounts– accounting principles 90– note 1 Shares in subsidiary company 91– note 2 Tax expense/deferred tax assets 91– note 3 Receivables and payables between companies in the same group 92– note 4 Equity 92– note 5 Share capital and shareholder information 93– note 6 Interest-bearing borrowings 94

47

ANNuAL REPORT 2007

Oslo Børs VPS Holding ASA can look back

on 2007 as a very good year with strong

earnings. The stock market saw a further

increase in share prices and a high level

of activity, creating growth in revenue for

all the companies in the group. The group

maintained high standards of quality and

reliability for its services and products.

Oslo Børs VPS Holding ASA reports con-

solidated earnings for 2007 of NOK 305

million (NOK 220 million).

The merger of Oslo Børs Holding ASA

and VPS Holding ASA came into effect

on 26 November 2007. The objective

of the merger is to make more efficient

and better-coordinated use of the overall

resources and expertise of the compa-

nies that make up the group in order to

strengthen the development of the entire

securities chain in the Norwegian market.

The steps to be taken to achieve this will

include more unified and effective develop-

ment work on products and services, to-

gether with efficient delivery of services to

customers of the companies in the group.

The corporate vision of the Oslo Børs

VPS Holding ASA group is to contribute

to value creation in Norway by rationalis-

ing and developing the country’s financial

infrastructure. The group comprises the

marketplaces operated by Oslo Børs ASA,

the securities registry and securities set-

tlement activities operated by VPS ASA,

the clearing house VPS Clearing ASA, and

Oslo Børs Informasjon AS and Manamind

AS. Through these companies, the group

aims to offer attractive marketplaces,

services for clearing, settlement, and

registration of securities, and information

services for financial instruments, in order

to ensure that our customers have access

to an efficient capital market.

Oslo Børs VPS Holding ASA operates from

Tollbugata 2, Oslo.

2007 was another record year for Oslo

Børs VPS Holding. The number of trading

transactions carried out and settled has

never been higher. The Oslo Børs Bench-

mark Index closed the year at 490.81 hav-

ing gained 11% over the course of the year.

The persistently high oil price helped to

maintain strong interest in typical Norwegian

sectors such as energy, offshore and shipping

in 2007, leading to very sizeable turnover in

shares, particularly in the largest companies

in these sectors. This interest also had a

positive effect on trading volume in other

Norwegian companies’ shares. A sizeable

number of companies were admitted to

listing, and this helped to increase activity and

create greater interest in the Norwegian

market. Total turnover in shares and primary

capital certificates for 2007 as a whole

reached NOK 3,221 billion, up by 25% from

2006. The year saw 12.1 million transactions

carried out through the exchange’s trading

system, representing an increase of around

37% from 2006.

VPS processed 31.8 million transactions

relating to securities trading in 2007, an

increase of 31% from 2006. In addition,

VPS handled 6 million transactions for pur-

chases and sales of units in mutual funds,

an increase of 39% from 2006. Customer

numbers increased by 11%.

New share issues carried out in 2007

raised NOK 53.7 billion as compared to

NOK 56.9 billion in 2006. With 30 compa-

nies admitted to listing and 18 companies

removed from listing, Oslo Børs saw a net

gain of 12 listed companies in 2007. In

all, 241 companies were listed on Oslo

Børs at the close of 2007. The authorised

marketplace Oslo Axess was launched on

2 May 2007. This marketplace operates

with listing requirements designed for com-

panies that do not fully qualify for a stock

exchange listing. 28 companies were listed

on Oslo Axess at the close of 2007. In total,

269 companies were listed on Oslo Børs

and Oslo Axess at the close of 2007.

At the close of the year, 2.5 million holdings

of financial instruments were registered in

VPS, held on 1.6 million VPS accounts. The

number of mutual funds registered in VPS

showed a net increase of 81 in 2007, with

924 mutual funds registered at the end of

the year. Over the course of 2007, a further

293 limited companies and primary capital

certificate issuers were registered in VPS,

while 128 registrations were cancelled

due to mergers, acquisitions or closures.

In total, 1,443 limited companies and 29

primary capital certificate issuers were

registered in VPS at the end of the year, a

net increase of 164 from the end of 2006.

The number of stock exchange member

firms increased from 52 to 58 in 2007, of

which 35 are remote members.

The volume of share trading on Oslo Børs

in 2007 accounted for around 27% of

total share trading through the Nordic and

Baltic exchanges (the NOREX alliance) as

compared to around 23% in 2006. Only

Stockholmsbörsen reported higher turno-

ver than Oslo Børs. Oslo Børs and Oslo

Axess admitted 58 companies to listing in

2007, more than any other of the NOREX

exchanges. On a European comparison,

Oslo Børs together with Oslo Axess was in

third place for the total number of compa-

nies admitted to listing in 2007.

At year-end 2007, VPS had 101 settle-

ment participants of which 29 were settle-

ment agents and 72 were brokers. 13 new

settlement participants joined in 2007. Of

the 72 brokers participating in the settle-

ment process, 38 are remote members.

Of these, 7 are direct participants while

the remaining 31 are represented in the

settlement process by an agent.

Oslo Børs Informasjon AS generates rev-

enue from sales of financial market data.

Sales of financial market data are prin-

cipally measured in terms of the number

of end-users with access to market data

48

from Oslo Børs. Customers of information

distributors such as Reuters, Bloomberg,

etc. subscribe for access to price and index

information from a variety of different

marketplaces. The number of terminals

subscribing for access to data from Oslo

Børs increased by some 12% in 2007, to

around 44,500.

Manamind is one of the leading Nordic

suppliers of Internet-based solutions for

the securities market. The company is also

a significant vendor of information on Nor-

wegian securities. The company achieved

an increase of about 34% in both revenue

and earnings in 2007. These increases

were largely the result of long-term con-

tracts for Internet share trading solutions

and stock exchange portals.

Revenue from the fixed income market is

principally determined by the number of

issues listed. In all, 962 loans were listed

at the end of 2007, made up of 350 loans

listed on the ABM (Alternative Bond Mar-

ket) and 612 on the stock exchange market,

representing an increase of 37 loans since

the start of the year. New debt issued in re-

spect of new and existing loans amounted

to NOK 242.3 billion in 2007, which was

NOK 19 billion higher than in 2006.

Higher activity in the equity market leads

to increased activity in the derivatives mar-

ket. In addition, Oslo Børs has implemented

a number of measures over recent years to

increase the level of activity in this market.

The number of derivatives contracts traded

in 2007 was up by around 6% from 2006,

while premium turnover for all products

increased by approximately 66%. Turnover

was lower in stock options and forwards,

but index options and futures saw sizeable

increases in turnover. The split of the OBX

index in April 2006 means that the number

of contracts in index products traded in

2006 and 2007 are not comparable.

VPS Clearing is one of the three companies in

the group subject to statutory authorisation,

and the company is licensed to operate

as a clearing house for derivatives and for

borrowing and lending of financial instru-

ments. The company focused in particular

on product development in 2007, and

launched a number of new products and

improvements to its clearing offer.

VPS Clearing benefited from a good level

of activity in the market in 2007, with

increased volumes for securities lending

and derivatives products. The number of

active derivatives accounts increased from

around 1,600 to 2,800 over the course of

2007. Terra Securities ASA declared itself

insolvent in 2007. VPS Clearing was able to

manage default by this member firm with-

out incurring any direct loss. VPS Clearing

reduced the financial guarantee issued by

Radian Asset Assurance on its behalf from

USD 60 million to USD 50 million in 2007.

ReliabilityThe key systems operated by Oslo Børs

maintained high and stable levels of avail-

ability in 2007. The two trading systems

Saxess and Click maintained 100%

availability, and the real-time data system

OCDF achieved availability of 99.83 %.

Oslo Børs has implemented and operates

internal control procedures in accordance

with the Internal Control regulation issued

by the Financial Supervisory Authority

of Norway (Kredittilsynet). All aspects of

material risk exposure are monitored and

reviewed using risk evaluation procedures

that are standardised across the group,

and risk reducing measures are docu-

mented and monitored as appropriate. No

material risks that might threaten the op-

erations of Oslo Børs have been identified.

Standby and disaster recovery procedures

are in place and are tested routinely.

Oslo Børs maintains ISO 27001 certifica-

tion for information security. Det Norske

Veritas (DNV) routinely reviews Oslo Børs

for compliance with the requirements of

this standard.

The VPS systems also maintained a high

and stable level of production and avail-

ability in 2007. The production system

delivered availability of 99.9%, while the

Internet system achieved 99.4% availabil-

ity. The settlement ratio, i.e. the proportion

of trades that settle on the agreed date,

Oslo Børs Benchmark Index (OSEBX) 2005 - 2007

200

250

300

350

400

450

500

550

Januar 0

5

April 05

juli 05

Oktober 0

5

Januar 0

6

April 06

Juli 0

6

Oktober 0

6

Januar 0

7

April 07

Juli 0

7

Oktober 0

7

Shares – value of trading per month 2005 - 2007 (NOK mill)

–

100

200

300

400

Jan

Feb Mar Apr Mai Jun Jul Aug Sep Okt Nov Des

2005 2006 2007

49

showed a marginal fall in 2007 to 97.5%

from 97.6% in 2006.

VPS has carried out a detailed review of its

material risk exposure and its procedures

for managing these risks. No material risks

that might threaten the operations of VPS

have been identified. Standby and disaster

recovery procedures are in place and are

tested routinely, including the recovery of

all critical systems at a remote standby

operating location.

VPS maintains NS-EN ISO 9001:2000

certification. This standard emphasises

the internal processes necessary to attain

the company’s objectives. DNV carries out

six monthly audits and has not identified

any material weaknesses.

financial resultsHigher market activity in 2007 and the

merger with VPS Holding led to an increase

in operating revenues from NOK 495 mil-

lion in 2006 to NOK 666 million in 2007.

The merger with VPS Holding contributed

an increase in operating revenue of NOK

63 million. (The figures reported below

include VPS Holding from 27 November to

31 December 2007)

Operating revenues

MNOK700

600

500

400

300

200

1002005 2006 2007

361

495

666

Total operating costs amounted to NOK

276 million in 2007 as compared to NOK

201 million in 2006. The merger with VPS

Holding caused an increase in operating

costs of NOK 44 million.

Operating cost

MNOK300

250

200

150

1002005 2006 2007

174

201

276

Personnel-related costs increased by NOK

35 million from NOK 103 million in 2006

to NOK 138 million in 2007. After adjust-

ing for non-recurring items of NOK 5 million

in 2006, the year-on-year increase in costs

was NOK 40 million. The merger with VPS

Holding caused an increase in costs of

NOK 22 million. The increase in personnel-

related costs in 2007 reflects the normal

annual salary increase, an increase in the

number of full-time equivalent positions

since 2006, increased variable salary

payments, increased pension costs due

to changes in the economic assumptions

for pension calculations, and a reduction

in costs reimbursed from other NOREX

exchanges in respect of IT collaboration.

Depreciation was NOK 21 million in 2007,

an increase from NOK 17 million in 2006.

The merger with VPS Holding caused an

increase of NOK 5 million. Certain of the

operational fixed assets used by Oslo Børs

were fully written off in 2007.

Other operating costs increased by NOK

34 million from NOK 82 million in 2006

to NOK 116 million in 2007. The merger

with VPS Holding represented an increase

of NOK 15 million. Other than this, the in-

crease was principally caused by increased

use of external resources for operations

and systems projects, higher variable trad-

ing system costs, and a reduction in costs

reimbursed from other NOREX exchanges

in respect of IT collaboration.

Operating profit was NOK 390 million, up

by NOK 97 million from 2006. The merger

with VPS Holding accounted for NOK 19

million of the increase. Operating margin

fell from 59.3% in 2006 to 58.6% in 2007.

Operating profit

MNOK

450

400

350

300

250

200

150

100

50

02005 2006 2007

187

293

390

Net financial items increased by NOK 15

million to NOK 27 million. The merger with

VPS Holding caused an increase of NOK

2 million. Other than this, the increase

reflects higher dividend receipts from VPS

Holding ASA and higher interest income as

a result of an increase in liquid assets.

Profit for the year was NOK 305 million as

compared to NOK 220 million in 2006.

Profit of the year

MNOK350

300

250

200

150

100

50

02005 2006 2007

144

220

305

The merger of Oslo Børs Holding ASA and

VPS Holding ASA was registered on 26

November 2007.

At the time of the merger, Oslo Børs Hold-

ing changed its name to Oslo Børs VPS

Holding ASA. The merger is recognized for

accounting purposes as a transaction with

Oslo Børs Holding ASA as the acquiring

company. The acquisition date is 27 No-

vember 2007. The implementation of the

merger involved the exchange of 5 million

shares in VPS Holding (with the exception

of 499,000 shares owned by Oslo Børs

50

Holding) for shares in Oslo Børs VPS Hold-

ing ASA. The exchange ratio pursuant to the

Merger Plan was 4 shares in Oslo Børs VPS

Holding for 1 share in VPS Holding. The

merger caused the issue of 18,004,000

new shares in Oslo Børs VPS Holding.

Based on the last reported traded price in

the Oslo Børs Holding share prior to the im-

plementation of the merger (NOK 141), the

purchase price for shares in VPS Holding is

calculated as NOK 2,820 million. In addition,

costs incurred totalled NOK 18 million.

The excess value analysis, which was car-

ried out by independent financial advisers,

identified excess values of NOK 640 million

for IT systems, NOK 87 million for customer

relationships and NOK 10 million for licences.

Goodwill, after deferred tax on excess value

(increase of NOK 177 million) and adjustment

for step acquisition (reduction of NOK 93

million), amounts to NOK 1,931 million. IT

systems and customer relationships will be

written off over 15 years.

The balance sheet item for intangible as-

sets comprises capitalised costs incurred

in developing and implementing IT sys-

tems. The merger with VPS Holding caused

an increase in this item of NOK 639 million.

Financial fixed assets include shares in the

associated companies Fondsmeglernes

Informasjonstjeneste, Finansnett Norge

and NaC, and also a shareholding in Fishex

ASA. Liquid assets of NOK 8 million held on

long term blocked accounts are classified

as financial fixed assets.

The market value of outstanding deriva-

tives positions totalled NOK 2,114 million.

As part of its normal business, the subsidi-

ary VPS Clearing ASA is a formal counter-

party in derivative transactions traded on

Oslo Børs and in derivative transactions or

securities borrowing and lending transac-

tions notified for clearing. Counterparty

risk is measured using models designed

under international standards. Coun-

terparty exposure is covered through

individual collateral provided by each

customer. In accordance with IAS 39 and

IAS 32, the clearing business is required to

recognise in its balance sheet the commit-

ments borne by the company as a central

counterparty in derivative contracts. The

estimated market value of the positions

is recognised as a current liability, with a

matching entry under current receivables.

Claims and liabilities that can be assigned

to outstanding derivative positions are

netted against each other to the extent

that such offsetting is permitted.

Short-term receivables other than deriva-

tives positions totalled NOK 143 million.

The merger with VPS Holding caused an

increase in accounts receivable of NOK 50

million and an increase of NOK 13 million in

other receivables.

Pension liabilities increased by NOK 51

million as a result of the merger with VPS

Holding. In accordance with the alternative

treatment permitted by IFRS, actuarial

losses at the close of 2007 were applied di-

rectly to equity. Reported pension liabilities

therefore represent gross pension liabilities

less the calculated value of pension assets.

Underfunding of group pension arrange-

ments accounts for NOK 70 million, while

NOK 71 million relates to the uninsured

pension scheme for salary in excess of 12

times the National Insurance base amount,

pension liabilities in respect of a former

chief executive officer, the Deputy Group

CEO and former presidents of Oslo Børs,

and early retirement benefits that may be

taken up by other employees of Oslo Børs

and Oslo Børs Informasjon. Further informa-

tion can be found in Note 7 to the accounts.

Current liabilities other than the market value

of outstanding derivative positions totalled

NOK 349 million. The merger with VPS Hold-

ing caused an increase of NOK 154 million.

The equity of Oslo Børs VPS Holding was

NOK 3,086 million at the end of 2007,

representing a consolidated equity ratio of

52%. The holding company, which produces

its accounts in accordance with Norwegian

generally accepted accounting practice,

reported equity of NOK 2,759 million and

an equity capital ratio of 70%. The holding

company’s equity includes distributable

reserves of NOK 108 million. The merger

with VPS Holding caused a net increase in

equity of NOK 2,550 million for the group

and NOK 2,709 million for the holding com-

pany, of which NOK 172 million represents

a gain on the sale of shares in VPS Holding,

which is included in other equity.

The group generated cash flow from op-

erational activities of approximately

NOK 397 million in 2007. Following the

takeover of the liquid assets of VPS

Holding in connection with the merger,

cash flow from investment activities

represented an inflow of NOK 339 million.

Following the payment of a dividend of

NOK 150 million, net cash flow for the

year was an inflow of NOK 587 million.

Liquidity at year-end was NOK 813 million.

In addition, NOK 7 million of liquid assets

are classified as financial fixed assets.

Liquidity is generally at its lowest level in

the months immediately before and after

the year-end due to prepayments at the

beginning of the year.

Exposure to financial risk arises in respect

of liquidity, foreign currency, market and in-

terest rate risk. These areas are monitored

continuously. The Board is of the opinion

that the regular cash flow from operations,

combined with the scale of liquid assets

held, ensures that exposure to liquidity risk

is at a low level. Foreign currency exposure

has been reduced by moving to making

payments in Norwegian kroner when con-

tracts are renewed. Net pension liabilities,

the shareholding in VPS Holding ASA (prior

to the merger), and other financial invest-

51

ments are exposed to market risk in that

their value can be affected by changes in

profits, dividends and interest rates.

The boards of directors of the subsidi-

ary companies Oslo Børs ASA, Oslo Børs

Informasjon AS, Verdipapirsentralen

ASA and Manamind AS have proposed

dividend payments of NOK 745 million,

NOK 30 million, NOK 75 million and NOK

10 million respectively, totalling NOK 860

million. In addition, Oslo Børs ASA will pay

a group contribution of NOK 32. Of the

dividends to be paid by Oslo Børs ASA,

Verdipapirsentralen ASA and Manamind

AS, amounts of NOK 575 million, NOK 58

million and NOK 10 million respectively

will be applied to reduce the cost price of

the shares. The balance of the dividends

represents income for Oslo Børs VPS

Holding of NOK 217 million. Following this,

the unconsolidated accounts of Oslo Børs

VPS Holding ASA show a profit for 2007

of NOK 213 million.

As part of its approval of the Annual

Report and Accounts, the Board of Oslo

Børs VPS Holding ASA intends to propose

to the annual general meeting that an

ordinary dividend of NOK 7.00 per share,

equivalent to NOK 301 million in total,

be approved. IFRS accounting does not

recognise a proposed dividend as a li-

ability until the annual general meeting has

passed a resolution to approve payment of

the dividend. Generally accepted Nor-

wegian accounting practice recognises a

proposed dividend as a liability from the

time it is proposed. The proposed dividend

is therefore included as a liability in the

unconsolidated accounts of Oslo Børs VPS

Holding, but is not included as a liability in

the consolidated accounts.

It is proposed that the profit for the year

of the holding company, Oslo Børs VPS

Holding ASA, of NOK 236,357,619 be

allocated as follows:

Provision for dividend

of NOK 7 per share: NOK 301,028,000

Reduction in

other equity NOK 64,670,381

Total allocations NOK 236,357,619

NOK 301,028,000 is allocated as a

provision for dividend and other equity is

reduced by NOK 64,670,381.

StrategyOslo Børs VPS Holding has started work

on developing a strategy for the merged

group. Over the next two years, the group

will prioritise the following objectives:

We will operate an attractive financial •

infrastructure

We will develop and market value-•

adding services that meet the market’s

requirements

Ensure continuing domestic and global •

interest in our marketplaces and services

The preferred marketplace for •

domestic companies, investors and

investment firms

The leading marketplace for •

selected sectors

Competitive prices•

Broadly based and robust distribu-•

tion network

We will be an attractive workplace•

We aim to have satisfied shareholders•

Important areas of focus over the next two

years will be:

Realising synergies•

Evaluate the securities value chain •

and implement the conclusions of this

evaluation

Intensify marketing activities, both in •

Norway and internationally

Continuous development of existing •

products and work on new products in

all areas

Co-ordinated focus on the retail inves-•

tor market, including evaluating new

solutions for mutual fund managers

Evaluate new trading systems•

Structure

The Board considers the two most signifi-

cant structural changes in the European

market in 2007 to be the acquisition of

OMX by Nasdaq and the London Stock

Exchange’s purchase of Borsa Italiana.

Nasdaq and OMX announced in May 2007

that the two companies are to merge.

Assuming that shareholders in OMX

accept the proposal, the merger will come

into effect in 2008. In October 2007,

the London Stock Exchange merged with

Borsa Italiana.

In May 2007, SWX Group, SIS Group and

Telekurs Group of Switzerland announced

a tripartite merger. The merger took place

in January 2008.


VPS Holding ASA came into effect on 26

November 2007.

Nord Pool ASA announced in December

2007 that it had agreed to sell its clearing

and consultancy division, as well as the

Nord Pool derivative products business,

to OMX.

MarketsIn May 2007, Oslo Børs launched the new

marketplace Oslo Axess. This marketplace

is structured to operate with less oner-

ous requirements for admission to listing

than currently apply to the stock exchange

marketplace of Oslo Børs. Other than this,

the marketplace uses the solutions devel-

oped, for Oslo Børs save for a few minor

exceptions. This means that Oslo Axess

uses the same trading system, applies

the same rules on listing, trading and the

continuing obligations of issuers, and uses

the same systems for announcements by

issuers and for market surveillance. By the

close of 2007, 28 companies were listed

on Oslo Axess. Over the course of 2007,

Oslo Børs actively marketed the Oslo Børs,

Oslo Axess and ABM marketplaces to both

52

Norwegian and international investors,

issuers and investment firms.

Oslo Børs arranged a number of events in

2007, both on its own account and in col-

laboration with other parties, to promote

a better understanding of investment in

shares as a form of savings for private

individuals in Norway. Working in collabora-

tion with AksjeNorge, Oslo Børs carried out

a survey of the level of knowledge about

shares as a form of savings among the Nor-

wegian public. The survey identified a major

need for greater understanding if Norwe-

gian households are to take advantage of

investment in shares as a supplement to

saving through bank deposits and owning

property. In addition, Norwegian house-

holds hold relatively little of their savings

in the form of mutual funds. The results of

the survey will be used to structure future

marketing activities for the retail market.

The Norwegian stock market has succeeded

over recent years in attracting many compa-

nies in the sectors of oil and energy, shipping

and aquaculture. The aquaculture sector has

grown from 4 to 14 companies over the last

two years. In these three sectors, the Oslo

marketplaces offer both Norwegian and

international issuers access to specialist ex-

pertise and industry knowledge, both within

the Oslo Børs organisation and externally

among investors, analysts and investment

firms actively involved in issues and place-

ments. Against this background, Oslo Børs

works actively to attract more international

issuers in these sectors. Over the course of

2007 Oslo Børs, working with other partici-

pants in the securities market, participated

in a number of arrangements particularly

relevant to this target group. By the close of

2007 there were 38 international compa-

nies listed on Oslo Børs and Oslo Axess, of

which 15 were admitted to listing in 2007.

Oslo Børs maintains regular dialogue with

its member firms through consultations and

meetings. In 2007, its officers made at least

one visit to 42 of the 58 member firms. The

number of firms with equities membership

of Oslo Børs increased by 9, and 40 firms

extended their membership to include Oslo

Axess. 2007 saw Paris, Amsterdam and Rey-

kjavik become important locations in terms

of member firms. At the close of the year, 23

member firms were based in Norway while

35 were based outside Norway. The London

market accounted for 14 member firms.

It is essential for market confidence that

the marketplaces operated by Oslo Børs

maintain the highest quality at all times.

Accordingly, extensive resources are de-

voted to work on admitting new companies

to listing and to market surveillance. In

addition, Oslo Børs operates a program of

training courses and conferences through

the Oslo Børs Institute.

Pricing is an important competitive factor,

and the fees charged by the group again

attracted attention in 2007 from the media

and market participants. Research has dem-

onstrated that the fees charged by the group

are in general in line with those charged by

other comparable operators. The group has

reported increases in operating margin over

recent years, but this reflects increased

market activity and trading volumes and not

changes in fees. In areas where its fees have

not been fully competitive, the group has im-

plemented reductions. Oslo Børs reduced its

fees for members and the prices charged for

trading and reporting off-exchange trades

with effect from 1 July 2007. VPS reduced

prices for settlement products by 11% with

effect from 1 April 2007. Its commitment

in this area resulted in a further reduction of

over 10% with effect from 1 January 2008.

It also implemented price reductions for

account services, leading to a reduction in

fees for major investors of up to 30%. These

changes form part of a program of work

to encourage greater activity and better

liquidity in the market, as well as to meet the

challenge of greater competition between

exchanges.

The Saxess system (the trading system for

shares, bonds etc.) was upgraded with new

functionality in October 2007. This has

given Oslo Børs and OMX the opportunity

to harmonise their trading methodol-

ogy and regulations with the significant

changes to securities trading in the EU/EEA

caused by MiFID. At the same time, Oslo

Børs implemented important changes to

trading methodology. These changes were

made principally to ensure that the mar-

ketplace’s microstructure is as competi-

tive and consistent as possible with other

marketplaces and with the trading facilities

that are emerging in the wake of MiFID.

Oslo Børs has decided to extend its opening

hours for equity and derivatives markets by

one hour to 17.30. This change is planned to

take effect from 1 September 2008.

VPS has developed a customer manage-

ment system for account operators known

as VPS Investor Services (VPS IS). This de-

livers additional functionality for account

operators based on modern, user-friendly

technology. VPS IS has already been taken

up by 70% of customers, and the remain-

der are expected to move on to VPS IS

over the course of 2008. VPS will continue

to expand the functionality of VPS IS in

close collaboration with its customers.

The number of investors using VPS Inves-

tor Services increased to 550,000 in

2008. This means that around 60% of VPS

account holders are making increasing use

of self-service functionality.

VPS Clearing strives to create added

value for members through the solutions

it provides for the securities market. The

business area distributes its products and

services through banks and investment

firms, but certain types of institutional

customers can also apply for direct

membership of VPS Clearing.

VPS Clearing launched a range of new TM

53

(Tailor Made) derivative products in 2007,

and improved the procedures for pledging

collateral so that holdings in VPS-registered

mutual funds can now be pledged as collat-

eral in favour of VPS Clearing. The company

has also implemented a settlement solution

for settlement denominated in Euro and

Danish krone, working in close collaboration

with Danske Bank. This solution makes it

possible for VPS Clearing and Oslo Børs to

launch trading and clearing in Euro and Dan-

ish krone for both listed and TM derivatives.

In November 2007, the VPS automated se-

curity program for securities borrowing and

lending (VPO) moved onto the last settlement

cycle, which has made the program more

cost efficient for our members. It has been

decided that the VPS automated security

program will be compulsory for all Oslo Børs

member firms from 1 September 2008.

VPS Clearing had 27 clearing members at

the end of 2007, of which 5 are members

solely for clearing while 22 members operate

as both trading and clearing representatives.

Two new clearing members joined in 2007,

and one clearing membership was cancelled

as a result of default by the member.

VPS also develops and operates core

solutions for Norwegian institutions in the

areas of mutual fund management and

defined contribution pensions to support

the services they offer to Nordic holders

of units in their mutual funds. The mutual

funds area has grown very strongly for

a number of years, creating particular

demand for improvements to distribution

solutions, multicurrency functionality and

adaptation to meet the requirements of

new legislation for mandatory pensions in

Norway (OTP). At the close of 2007, VPS

had a 67% market share by market value

of Norwegian mutual fund management

companies. The number of OTP defined

contribution pension plans registered with

VPS increased by 36% in 2007, represent-

ing around 45,000 employees.

Working in collaboration with customers in

the bond market, VPS made good progress

in 2007 on developing a new solution for

fixed income securities. This product will

give customers new and extended func-

tionality based on modern, user-friendly

technology, and will replace the current

system that has been used in the Norwe-

gian market since 1986.

Companies are showing increasing interest

in employee share ownership programs and

the positive effects of encouraging greater

employee ownership of the company’s

shares. Working in collaboration with custom-

ers, VPS has started development work on

a new product to be known as VPS Share

Savings. This product is due to be launched in

the first half of 2008, and will make it simpler

and easier for employees to commit to regu-

lar payroll savings in their employer’s shares.

VPS carries out regular customer surveys,

and the results in 2007 confirmed a high

level of satisfaction with the products and

services that VPS delivers.

Regulatory frameworkNew legislation and related regulations on

securities trading and regulated markets

came into effect from 1 November 2007.

Certain of the new provisions were delayed

until 1 January 2008. The new legislation

implements EU directives in accordance

with Norway’s duties under the EEA agree-

ment. The directives in question are the

Markets in Financial Instruments Directive

(MiFID), the Transparency Directive and

the Directive on Takeover Bids. Imple-

mentation of these directives also caused

changes to other legislation, particularly in

respect of takeover bids.

MiFID and the Transparency Directive

pave the way for greater competition for

some of the services the group provides,

particularly in respect of reporting trade

transactions and company announcements,

but also for trading in general.

The group’s stock exchange activities

involve duties of market surveillance,

ensuring that issuers comply with the duty

of disclosure and supervising mandatory

and voluntary takeover bids for listed

companies, and these roles will continue

under the new legislation.

A number of initiatives to establish pan-

European MTFs and trade disclosure mecha-

nisms were launched in 2006 and 2007.

This must be seen as confirmation that

competition will increase in the years ahead.

Oslo Børs VPS is well placed to meet this

competition. A very large proportion of

trading in the securities currently listed on

Oslo marketplaces is carried out through

Oslo Børs VPS. Around 98% of all transac-

tions are matched through the Oslo Børs

trading system. In terms of the value of

securities traded, over 75% is carried out

through the trading system. This demon-

strates that the liquidity in these securities

is found in the Oslo Børs marketplaces, and

that the trading system is used for active

trading and not simply as a reporting sys-

tem once trades have been agreed. Trading

through Oslo Børs is subject to continu-

ous real-time surveillance, which helps

to protect investors and the integrity of

the market against the use of information

not publicly available, and against trading

that is otherwise not at a proper market

price. Best execution of orders is normally

secured by trading through the Oslo Børs

marketplaces.

Oslo Børs VPS strives continuously to

maintain the attractiveness and user-

friendliness of the Norwegian securities

infrastructure. Important elements in this

include the trading rules, the functionality

and user interface of the systems, the range

of products offered in addition to carrying

out or reporting trades, opening hours and

product pricing. Oslo Børs VPS is actively

considering a number of specific measures

in these areas. Other factors that are likely

54

to play a role in competition include the

level of service, confidence in the market-

place and the overall efficiency of national

systems for trading and settlement.

Oslo Børs has seen a significant decline in

the number of off-exchange transactions

reported by foreign member firms since

MiFID came into effect on 1 November 2007.

The Transparency Directive and the new

Norwegian Securities Trading Acts stipu-

late that issuers are no longer obliged to

use the stock exchange or regulated mar-

ket on which their financial instruments

are listed when they publish announce-

ments, periodic reports etc. The Directive

stipulates that issuers of stock exchange

listed securities are themselves responsi-

ble for arranging the public disclosure and

distribution of such information. However,

issuers are free to choose whether to carry

out this duty themselves, or to use an infor-

mation distributor to manage the task for

them. In order to ensure that issuers listed

on Oslo Børs continue to have a convenient

and reasonably priced solution available

to discharge their duty of disclosure, on

1 January 2008 Oslo Børs launched a

commercial service for publication and

distribution of information for issuers. The

service is provided by Oslo Børs Informas-

jon AS in collaboration with Cision AB.

In November 2006, Oslo Børs and VPS

signed up to the European Code of

Conduct for Clearing and Settlement. The

Code of Conduct was prepared by the Fed-

eration of European Securities Exchanges

(FESE), the European Central Securities

Depositories Association (ECSDA) and the

European Association of Central Counter-

party Clearing Houses (EACH) in response

to the EU Commission’s focus on effi-

ciency, transparency and competitiveness

in trading and settlement of securities in

the European market. The Code of Conduct

addresses areas such as price transpar-

ency to help customers understand and

compare prices and services, as well as

freedom of choice for investors for cross-

border trading and settlement. Oslo Børs

and VPS comply with the requirements

set out in the Code of Conduct, and will

implement any measures that become

necessary to maintain compliance in the

future. The merger of Oslo Børs Holding

ASA and VPS Holding ASA means that the

provisions of the Code of Conduct now

also apply to the group’s activities in clear-

ing services for derivatives.

SeadrillOn 3 December 2007, the Oslo District

Court issued its judgement on an annul-

ment action brought by Seadrill Limited

against Oslo Børs in connection with the

decision of the Stock Exchange Appeals

Committee in respect of Seadrill’s duty to

make a mandatory offer for Eastern Drilling

ASA. Seadrill’s claim that the Committee’s

decision was invalid did not succeed. Sead-

rill has appealed the court’s judgement.

Seadrill Limited has also issued a writ

claiming damages for losses incurred as

a result of adhering to the ruling by the

Stock Exchange Appeals Committee on

its duty to make a mandatory offer. The

proceedings were issued against Oslo Børs

and the Norwegian State as represented

by the Ministry of Finance. The proceed-

ings allege that the Norwegian State and

Oslo Børs are jointly and severally liable for

damages with an upper limit of NOK 850

million. The court has suspended the new

proceedings until the annulment action on

the validity of the ruling has been decided.

Oslo Børs is of the view that the risk that

the court may require the exchange to pay

damages is low.

Other mattersHalvor Stenstadvold, the Deputy Chair of

the Board of Directors of Oslo Børs VPS

Holding ASA and Chair of the Board of

Directors of Oslo Børs ASA, resigned from

these appointments on 5 December 2007.

A working group appointed by the Ministry

of Finance issued proposals in December

2007 for changes to the current ownership

restrictions in respect of stock exchanges,

securities registers and clearing houses. In

the case of stock exchanges and securities

registers, the working group has proposed

that a general restriction should continue,

but with the current ownership limit

increased from 10% to 20%. It is also pro-

posed that the authorities should be able

to grant exemptions from the ownership

restriction in the case of an owner that op-

erates another regulated market or related

infrastructure, subject to the authorities

being satisfied that the owner is capable

of managing the exchange in a proper man-

ner. The working group proposed that the

current ownership restrictions for clearing

houses should be abolished.

Personnel and organisational issuesThe Oslo Børs VPS Holding ASA group had

282 employees at 31 December 2007,

of which 6 employees were employed on

fixed term contracts.

Female staff accounted for around 40% of

employees at the close of 2007, a modest

increase from 2006. Salary statistics

do not show any differential caused by

gender. Middle management includes

seven female managers. The executive

management team includes one female

employee in addition to the CEO. Three of

the six shareholder-elected members of

the Board of Directors of Oslo Børs VPS

Holding ASA are female.

The average age of the group’s employ-

ees is approximately 41, and since many

employees in this age group typically

have young families this can represent a

challenge for the organisation in terms

of staff availability at certain times. Oslo

Børs VPS Holding provides appropriate

arrangements for parents to be able to

combine a demanding job with their family

responsibilities. Leave of absence and

55

flexible working play important roles in

this respect. In 2007, parental leave of

absence totalled the equivalent of 12 full-

time appointments and was taken by 17

male employees and 19 female employees.

40 new employees were recruited in 2007

on a mix of permanent terms and fixed

term contracts. As in 2006, recruitment

reflected both somewhat higher staff

turnover and an increase in the level

of activity. 24 permanent employees

resigned in 2007. In overall terms, the

group’s employees represent a sound pool

of experience and expertise. Over 60% of

employees have been with the group for

five years or more. At the same time, the

number of employees who have been with

the group for less than two years increased

to 81 for the reasons mentioned above.

Results from employee satisfaction

surveys carried out in 2007 that focused

on internal communications, the working

environment and employee motivation

show stable and good results .

The group takes a pro-active approach to

preventative medical measures, particular-

ly in respect of the problems that may be

caused by working at computer terminals.

Absence due to sickness in 2007 was ap-

proximately 4 %.

The Board would like to thank the employ-

ees for their excellent commitment and

effort over the course of the past year and

their contribution to the strong earnings

achieved in 2007.

Environmental reportThe activities carried out by Oslo Børs VPS

Holding do not have any material adverse

effect on the external environment. The

group’s business activities are not subject

to any environmental licences or restric-

tions.

Research and Development Oslo Børs VPS Holding ASA does not carry

out any research or development activity.

Risk factors and areas of uncertainty

The Board of Directors is of the opinion

that the operations of Oslo Børs VPS

Holding are not threatened by any particu-

larly significant risk factors. The Board

recognizes the importance of continuing

to develop services in close collaboration

with customers in order to ensure that the

risk of losing business volume is minimised.

On a long-term perspective, it is uncertain

how cross-border settlement of securi-

ties transactions will be carried out. The

EU authorities have launched a number of

initiatives to encourage greater competi-

tion, and central banks have taken the

initiative to investigate the establishment

of centralised pan-European settlement

arrangements.

Prospects for 2008 Oslo Børs VPS Holding ASA strives to

operate with a fee structure that is com-

petitive and that promotes active use of

the services the group offers. Competition

is expected to increase in the future. Oslo

Børs VPS Holding ASA will again in 2008

consider changes in certain fees/prices to

the benefit of its customers.

Oslo Børs VPS Holding ASA has the solid-

ity and liquidity needed to take an aggres-

sive approach to carrying out the projects

it plans and meeting the challenges it faces

in 2008. The group’s operating costs in

2008 are expected to be over NOK 550

million.

The Board confirms that the company

meets the requirements for the accounts

to be prepared on a going concern basis.

The Board anticipates continued high

activity levels. However, experience shows

that the level of activity in the securities

market is cyclical. There must therefore be

some uncertainty over the future level of

transaction volumes.

The Annual Accounts have been prepared

on the going concern assumption, and

the Board confirms that this assumption

is appropriate. No events have occurred

between the date of the accounts and the

signing of this report of material signifi-

cance for the accounts reported for 2007.

Oslo, 23 April 2008

Leif Teksum Georg Størmer Svein Støle Mari Thjømøe Chair Board member Board member Board member

Benedicte Schilbred Fasmer Giséle Marchand Bente A. Landsnes Board member Board member Group CEO

56

gROuP PROfiT AND LOSS ACCOuNT

FIGURES IN NOK 1,000 Note 2007 2006 2005

OPERATING REVENUES

Operating revenues 1 665 820 494 631 361 386

TOTAL OPERATING REVENUES 665 820 494 631 361 386

OPERATING COSTS

Salaries and related costs 4,7,14 138 470 102 531 91 391

Depreciation 8 21 476 16 929 16 623

Other operating costs 4 115 808 82 027 65 995

TOTAL OPERATING COSTS 275 754 201 487 174 009

OPERATING PROFIT 390 066 293 144 187 377

Income from investments in joint ventures 11 1 302 176

Financial income 27 655 12 135 12 224

Financial expenses -2 024 -436 -2 443

NET FINANCIAL ITEMS 4 26 933 11 875 9 781

ORDINARY PRE-TAX PROFIT 416 999 305 019 197 158

Income tax expense 6 -112 382 -84 815 -53 061

PROFIT FOR THE YEAR 304 617 220 204 144 097

Earnings per share 10 11,40 8,81 5,76

Diluted earnings per share 10 11,40 8,81 5,76

57

gROuP BALANCE ShEET AT 31 DECEMBER

FIGURES IN NOK 1,000 Note 2007 2006

FIXED ASSETS

Intangible assets

IT systems 8 651 262 15 570

Customer relationships 8 86 982

Licences 8 10 000

Goodwill 8 1 931 167

Total intangible assets 2 679 411 15 570

Tangible assets

Property 8 25 874 28 267

Fittings, IT equipment, vehicles etc. 8 47 971 15 677

Total tangible assets 73 845 43 944

Financial fixed assets

Investment in joint venture 11 16 513 15 176

Investment in shares 5,11 2 279 176 519

Deferred tax assets 6 76 310 41 360

Bank deposits 7 531 7 531

Other long-term receivables 5 2 080 1 215

Total financial fixed assets 104 713 241 802

Total fixed assets 2 857 969 301 316

CURRENT ASSETS

Receivables

Accounts receivable 3 103 973 46 353

Market value of outstanding derivatives positions 22 2 114 331

Other receivables 5 38 615 28 760

Total receivables 2 256 919 75 113


Total current assets 3 070 261 301 953

TOTAL ASSETS 5 928 230 603 269

58

FIGURES IN NOK 1,000 2007 2006

EQUITY

Paid-in equity

Share capital 9,17 86 008 50 000

Own shares 9,17 -8

Share premium reserve 17 2 564 219 63 405

Total paid-in equity 2 650 219 113 405

Other equity

Reserve for unrealised gains 17 65 218

Other equity 17 435 872 194 202

Total other equity 435 872 259 420

Total equity 3 086 091 372 825

LIABILITIES

Long-term liabilities

Pension liabilities 7 161 077 113 916

Interest-bearing long-term liabilities 20 41 333

Deferred tax 6 176 679

Total long-term liabilities 379 089 113 916

Current liabilities

Interest-bearing current liabilities 20 41 333

Trade creditors 5 21 676 3 816

Tax payable 6 186 334 83 065

Payroll tax and other deductions 22 512 7 567

Market value of outstanding derivatives positions 22 2 114 331

Other current liabilities 5 76 865 22 080

Total current liabilities 2 463 050 116 528

Total liabilities 2 842 139 230 444

TOTAL LIABILITIES AND EQUITY 5 928 230 603 269

gROuP BALANCE ShEET AT 31 DECEMBER

Oslo, 23 April 2008


Benedicte Schilbred Fasmer Giséle Marchand Bente A. Landsnes Board member Board member Group CEO

59

Group

FIGURES IN NOK 1,000 Note 2007 2006 2005

Cash flow from operational activities

Ordinary pre-tax profit 416 999 305 019 197 158

Tax paid in the period 6 -83 065 -49 303 -27 880

Gain/loss on sale of fixed assets 8 6 -70 -6 613

Depreciation of fixed operating assets 8 21 476 16 929 16 623

Income from investments in joint ventures 11 -26 933 -11 875 -9 781

Change in accounts receivable -12 177 -6 411 -19 183

Change in trade creditors 9 254 -2 696 4 286

Change in pension liabilities 7 10 774 6 367 6 466

Change in other accruals 35 285 -11 641 4 015

Net cash flow from operational activities 371 619 246 320 165 091

Cash flow from investment activities

Investment in/sale of shares etc. 11 -1 189 -76 996 13 441

Liquid assets acquired by merger 367 462

Costs of merger -13 673

Interest income 27 655 12 135 12 224

Receipts from sale of fixed assets 700

Payments for purchase of fixed assets 8 14 560 1 081

Net cash flow from investment activities -14 061 -10 636 -14 395

Cash flow from financing activities 366 908 -74 937 12 351

Received from capital reduction

Payment on capital reduction

Interest expense

Dividend received -2 024 -436 -2 443

Dividend paid 10 -150 000 -130 000 -100 000

Net cash flow from financing activities -152 024 -130 436 -102 443

Net change in cash and liquid assets 586 503 40 947 74 999

Cash and liquid assets at start of the period 226 840 185 893 110 894

Cash and liquid assets at end of the period 813 342 226 840 185 893

The cash flow analysis has been prepared in accordance with the indirect method. Cash and liquid assets comprise cash and bank deposits. Cash and liquid assets include blocked deposits amounting to NOK 11,481k (NOK 5,791k in 2006 and NOK 5,638k in 2005). A guarantee of NOK 7,531k in respect of future pension payments is classified as a fixed asset and is not included in the holdings shown above.

gROuP CASh fLOW ANALySiS

60

FIGURES IN NOK 1,000 Reserve for Other Total

2005 unrealised gains equity

Increase in value of financial instruments at 1 January 2005 16 210 16 210

Increase in value of financial instruments in 2005 19 928 19 928

Actuarial gains/losses -16 303 -16 303

Net gain/loss charged directly to equity 36 138 -16 303 19 835

Profit for the period 144 097 144 097

Profit for the year 36 138 127 794 163 932

2006 Reserve for Other Total

unrealised gains equity

Increase in value of financial instruments in 2006 29 079 29 079

Actuarial gains/losses -28 694 -28 694

Net gain/loss charged directly to equity 29 079 -28 694 385


Profit for the year 29 079 191 510 220 589

2007 Reserve for Other Total

unrealised gains equity

Realisation of increase in the value of shares in VPS Holding ASA through the merger -65 218 171 836 106 618

Actuarial gains/losses not charged to profit and loss (post-tax) -93 218 -93 218

Actuarial gains/losses 9 036 9 036

Net gain/loss charged directly to equityn -65 218 87 654 22 436


Profit for the year -65 218 392 271 327 053

Accumulated actuarial gains/losses not charged to profit and loss (post-tax) -35 961 -35 961

RECOgNiSED iNCOME AND ExPENCES

61

NOTES TO ThE gROuP ANNuAL ACCOuNTS 2007

ACCOuNTiNg PRiNCiPLESThe consolidated accounts of Oslo Børs VPS Holding for 2007 were approved by the Board of Directors on 23 April 2008.

Oslo Børs VPS Holding ASA is a public limited liability company registered in Norway. The company’s registered office is Tollbugata 2, 0152 Oslo, Norway.

The group’s business activities are the operation of marketplaces for trading in securities and other stock exchange listed financial instruments, settlement of trading in financial instruments, clear-ing of derivatives and sales of financial market data and related systems. The group prepares its accounts in Norwe-gian kroner (NOK), which is the functional currency for all companies in the group.

The accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS) as approved by the EU.

The consolidated accounts are based on the principles of historic cost accounting, save for investments available for sale, which are valued at fair value with effect from 1 January 2005. The difference between fair value and historic cost at 1 January 2005 was NOK 16,210k. There was no difference between fair value and historic cost at 31 December 2007.

Comparable figuresFor comparison with previous years, com-parable figures are provided for balance sheet items for the last two years, while for profit and loss items comparable fig-ures are provided for the last three years.

Consolidation principlesThe group comprises Oslo Børs VPS Holding ASA and the subsidiary compa-nies Oslo Børs ASA, Verdipapirsentralen ASA, VPS Clearing ASA, Oslo Børs Infor-masjon AS and Manamind AS. Oslo Børs

VPS Holding ASA holds 100% of the share capital of these companies. Oslo Børs VPS Holding ASA, Oslo Børs ASA and Oslo Børs Informasjon ASA operate from offices at Tollbugata 2, 0152 Oslo, Norway. Verdipapirsentralen ASA, VPS Clearing ASA and Manamind AS operate from offices at Biskop Gunnerus gate 14A, 0185 Oslo, Norway.

The consolidated accounts show the financial condition of the group when the companies making up the group are consolidated as a single commercial entity. The subsidiaries are consolidated in accordance with the purchase value method. This means that the historical purchase price of shares in the sub-sidiary is replaced by the actual value of assets and liabilities in the subsidiary at the time of purchase. Companies that are purchased or sold during the course of the year are included in the consoli-dated accounts from the time that the group takes over control and until such time as the group ceases to exercise control. Verdipapirsentralen ASA, VPS Clearing ASA and Manamind AS are included in the consolidated accounts with effect from 27 November 2007. All internal transactions, including internal services and unrealised gains and losses as well as receivables and liabilities be-tween the parent company and subsidi-aries, are eliminated on consolidation.

Investments in joint ventures are ac-counted for in accordance with IAS 31. A joint venture is a business over which the group has shared control through a contractual agreement between the par-ties. Such an investment is recognized in accordance with the equity method. Other investments are accounted for in accordance with IAS 39.

The difference between the acquisi-tion cost and fair value of net identifi-able assets at the time of acquisition

is classified as goodwill. In the case of investments in joint ventures, goodwill is included in the balance sheet value of the investment. Goodwill is recognised in the balance sheet at acquisition cost, less any accumulated write-downs. Goodwill is not depreciated, but is tested at least annually for impairment. Assets and liabilities acquired as a result of a business combination are capitalised at fair value in the opening consolidated balance sheet. Minority interests are calculated on the basis of the minor-ity interests’ share of such assets and liabilities. The allocation of costs in con-nection with a business combination may be subsequently revised if there is new information on fair value at the date of takeover of control. Such changes can be made up to the presentation of the next annual accounts or within 12 months.

Goodwill is tested annually for impair-ment. In connection with this, goodwill is allocated to cash generating units or groups of cash generating units that are expected to benefit from the synergy effects of the business combination. If the fair value of equity acquired through a business combination exceeds its acquisition cost, the excess value is recognized to profit immediately at the time of acquisition.

Cash and cash equivalentsCash includes cash held in the tills and bank deposits. Bank deposits with a fixed term of one year or longer are clas-sified as fixed assets. Cash equivalents are short-term liquid investments with a maximum term of three months that can readily converted to a certain cash amount. The group did not hold any cash equivalents in 2005, 2006 or 2007.

Accounts receivableAccounts receivable are recorded at their nominal value less provisions for expected losses.

62

financial derivatives that are not hedging instrumentsFinancial derivatives that are not ac-counted for as hedging instruments are valued at fair value. Changes in fair value are recognised to profit and loss as they occur. The group did not hold any such instruments at the close of 2007.

As part of its normal business, the subsidiary VPS Clearing ASA is a formal counterparty in derivative transactions traded on Oslo Børs and in derivative transactions or securities borrowing and lending transactions notified for clear-ing. Counterparty risk is measured using models designed under international standards. Counterparty exposure is covered through individual collateral pro-vided by each customer. In accordance with IAS 39 and IAS 32, the clearing busi-ness is required to recognise in its bal-ance sheet the commitments borne by the company as a central counterparty in derivative contracts. The estimated mar-ket value of the positions is recognised as a current liability, with a matching entry under current receivables. Claims and liabilities that can be assigned to outstanding derivative positions are net-ted against each other to the extent that such offsetting is permitted.

Tangible operational fixed assets and intangible assetsTangible operational fixed assets are valued at acquisition cost less accumu-lated depreciation and any write-downs. Expenses incurred after an operational fixed asset comes into use, such as rou-tine maintenance, are charged to profit and loss, while other expenses that are expected to produce future economic benefits are capitalised.

Intangible assets are recognised in the balance sheet if it is likely that the ex-pected future commercial benefits aris-ing from the asset will be received by the

company, and the acquisition cost of the asset can be reliably measured. Acquisi-tion cost includes the cost of internal and/or external development resources, as well as the purchase of off-the-shelf software. Costs are capitalised from the time of the decision to implement the project. Costs of preparatory work for a project, marketing and training are not capitalised. Intangible assets with limited commercial life are valued at acquisition cost less accumulated depreciation and write-downs. Depreciation starts when the project is complete, or when a clearly defined subsystem goes into production. Tangible operational fixed assets and intangible assets are subject to linear depreciation using the following periods for expected commercial life:

IT systems (IT systems etc.): 3-8 yearsCustomer relationships: 15 yearsLicences: 15 yearsReal estate: 8-50 yearsVehicles, fixtures and fittings etc: 3-10 years

The depreciation period for real estate reflects different depreciation periods for the different technical installa-tions and building elements included in this balance sheet item. Depreciation method and the periods used are evalu-ated annually. This also applies to the re-maining value. In the event of a change in the estimated remaining commercial life of an asset, the book value at the start of the accounting period is depreciated over the new remaining commercial life.

Operational assets that are leased on terms that transfer the major part of financial rights and liabilities to the group are treated as tangible operational assets at the current value of the minimum rental payments, or at fair value if this is lower. The lease payment liability is included as a long-term liability. For other leasing agree-

ments, lease rental payments are treated as operating costs and are allocated systematically over the same period.

financial instrumentsIn accordance with IAS 39 ’Financial Instruments: Recognition and Measure-ment’ financial instruments that fall within the scope of IAS 39 are classified into the following categories: at fair value through profit or loss (held for trading purposes), hold to maturity, loans and receivables, available for sale and other commitments.

In 2005, 2006 and 2007 the group held instruments in the categories loans and receivables and available for sale. Loans and receivables are valued at amortised cost. Financial instruments classified as available for sale are valued at fair value as observed in the marketplace on the balance sheet date without deducting disposal-related costs.

Gains or losses that arise from changes in the fair value of financial investments classified as available for sale are recognised directly to equity until such time as the investment is disposed of. Upon disposal, the accumulated gain or loss on the financial instrument that has previously been applied directly to equity is reversed, and the gain or loss is recognised to profit and loss.

Financial derivatives that are not hedg-ing instruments are valued at fair value. Changes in value are recognised to profit and loss as they occur.

ProvisionsA provision is recognised in the accounts when the group has a liability (contrac-tual or self-imposed) as a result of previ-ous events and it is likely (more likely than not) that a financial settlement will arise as a result of the liability and the amount of the liability can be measured

63

reliably. If the effect is significant, the provision is calculated by discounting ex-pected future cash flows using a pre-tax discount rate which reflects the market valuation of the time value of money and, where appropriate, specific risks associ-ated with the liability in question.

Equity capitalFinancial instruments are classified as liabilities or equity capital on the basis of the underlying financial reality. Distribu-tions made to holders of financial instru-ments that are classified as equity capital are charged directly to equity capital.

If the company buys back own shares, the purchase price including directly attributable costs is charged directly to equity capital. Holdings of own shares are reported as a reduction in equity capital. Losses or gains on transac-tions in own shares are not recognised to profit and loss. Transaction costs directly attributable to equity transac-tions are charged directly to equity after making a deduction for tax. The reserve for unrealised gains includes the total net change in fair value of financial instruments classified as available for sale, until an investment is disposed of or is deemed to be of no value.

RevenuesFees charged for services provided on a daily basis represent the group’s princi-pal source of revenue.

Annual fixed fees are invoiced in advance at the start of year, and are recognised to income over the course of the year (deferred income recognition). Other trading fees are mainly invoiced in ar-rears, and are recognised to income in the month to which they apply (income recognition in advance). Certain types of revenue, for example the monthly termi-nal fees charged for access to financial market data from Oslo Børs, are invoiced

in arrears on the basis of the reported number of users and are recognized to income in the month to which the fees apply (income recognition in advance). If information on the number of users is not received prior to the end of an invoic-ing period, the income recognised is based on a best estimate of the number of users. Where invoices are issued at a later date as a result of errors in the information provided for monthly invoic-ing, payments received recognised as revenue in the period they are received.

Monetary items denominated in foreign currencyTransactions denominated in foreign currency are translated to NOK at the exchange rate on the transaction date. Monetary items denominated in foreign currency are translated at the exchange rate on the balance sheet date. Non-monetary items measured at historic prices denominated in foreign currency are translated to Norwegian kroner by using exchange rate on the transaction date. Non-monetary items valued at fair value denominated in foreign currency are translated at the exchange rate on the balance sheet date. Currency valua-tion differences are recognised as they occur in the accounting period.

Employee benefitsThe group’s pension arrangements comprise a defined benefit scheme and a defined contribution scheme. The net pension liability for the defined benefit scheme is calculated on the basis of the current value on the balance sheet date of the future pension benefits to which employees are entitled, less the fair value of pension fund assets. The calculations are based on the linear model for the ac-crual of pension benefits. Actuarial gains and losses are applied directly to equity. In accordance with the alternative treat-ment permitted by IFRS, actuarial losses (NOK -22,642k at the close of 2005,

NOK -39,853k at the close of 2006 and NOK 12,550k at the close of 2007), were applied directly to equity. For the defined contribution scheme, payments into the scheme are recognized as a cost as they are incurred. The group has no further obligations in respect of the defined contribution scheme.

income taxationTax expense is made up of tax payable and changes in deferred tax. Deferred tax/deferred tax assets in the balance sheet are calculated on all differences between accounting and taxation values of assets and liabilities with the excep-tion of timing differences that relate to investments in subsidiaries, associated companies and joint ventures where the group controls when the timing difference will be reversed and this is not expected to take place in the foreseeable future.

Deferred tax assets are capitalised in the balance sheet to the extent that it is likely that the group will have suf-ficient taxable surpluses in subsequent periods to make use of the tax asset. The company capitalises deferred tax assets that have not previously been capitalised to the extent that it has become likely that the company can make use of the deferred tax asset. Similarly, the com-pany will reduce a capitalised deferred tax asset to the extent that the company can no longer assume that it is likely to make use of the deferred tax asset. Deferred tax assets are measured on the basis of the future tax rate payable by the companies in the group in which the differences have arisen. Deferred tax and deferred tax assets are recognised at nominal value, and are classified in the balance sheet as financial fixed assets and long-term liabilities respectively.

Tax payable and deferred tax are charged directly to equity if the tax items relate to an equity capital transaction.

64

Borrowing costsBorrowing costs are recognized to profit and loss when they are incurred.

Write-down of financial assets Financial assets valued at amortised cost are written down to fair value if there is objective evidence that it is likely that the instrument’s cash flow has been impaired by one or more events that occurred after the initial recognition of the asset. The amount of the write-down is charged to profit and loss. If, in a subsequent period, the reason for the impairment ceases, and this change can objectively be related to an event occurring after the impairment was originally recognised, the previously recognised write-down is reversed.

The amount of the reversal must not cause the book value of the financial asset to exceed the amortised cost that would have applied if the original write-down had not been taken into account at the time of the reversal. Reversals of earlier write-downs are reported as part of net financial items.

Segmental analysis Following the merger of Oslo Børs Hold-ing ASA and VPS Holding ASA, the group has four segments: Oslo Børs, VPS, VPS Clearing and Market Data and Solutions. The last-mentioned segment comprises Oslo Børs Informasjon AS and Manamind AS. Segment information has been pre-pared in accordance with IFRS 8.

Contingent liabilities and assets Contingent liabilities are not recognised in the annual accounts. Information is provided on any material contingent liabilities, excluding contingent liabili-ties where the likelihood of the liability materialising is low. Contingent assets are not recognised in the annual accounts, but information is provided if there is a reasonable degree of likelihood that the group will receive such a benefit.

Events after the date of the balance sheetThe annual accounts include information on any new information that has arisen since the date of the balance sheet in respect of the company’s financial condi-tion. Events after the date of the balance sheet that do not affect the company’s financial condition on the balance sheet date, but that would affect the company’s future financial condition, are disclosed to the extent they are material.

use of estimates in preparing the annual accountsManagement has used estimates and made assumptions that have affected assets, liabilities, income, costs and infor-mation on potential liabilities. This is par-ticularly the case for estimates made in connection with acquisitions, estimates in respect of depreciation of tangible fixed assets and intangible assets, estimates of the value of goodwill, establishing fair value of financial instruments available for sale and the calculation of pension liabilities. Future events may cause changes in estimates. Estimates and underlying assumptions are kept under continuous review. Changes in accounting estimates are recognised in the accounts in the period the change occurs. If the changes also affect future periods, the effect is allocated over the current and future periods.

New accounting standardsThe following standards and interpreta-tions had been issued but had not come into effect at the time the annual ac-counts were approved:

IFRIC 12 ”Service Concession Ar-•rangements”IFRIC 13 ”Customer Loyalty Pro-•grammes”IFRIC 14 IAS 19 – ”The limit on a De-•fined Benefit Asset, Minimum Funding Requirements and their Interaction”

The group intends to apply the above-mention interpretations in its consoli-dated accounts for 2008. The imple-mentation of these interpretations is not expected to have a material effect on the group’s accounts.

The group has implemented the following revised standards and interpretations for the 2007 accounting year. Compara-ble figures have been restated, and the implementation has no effect on reported equity as at 1 January 2007.

IFRS 7 Financial Instruments: Disclo-•suresIFRS 8 Operating Segments•IAS 1 Information on Asset Management•

Non-mandatory IFRS standardsThe group has elected not to implement the following new standards and revisions to existing standards that have been issued by the IASB. The group will imple-ment these standards when they become mandatory unless it decides on earlier implementation in the meantime:

Revised IFRS 3 Business Combinations •(Mandatory for business combinations where the acquisition date is on or after the start of the first accounting period that begins on or after 1 July 2009. Earlier implementation will be permitted, but not until the standard has been approved by the EU).

Revised IAS 1 Presentation of Finan-•cial Statements (Mandatory for annual accounts for periods commencing on 1 January 2009 or later. Earlier imple-mentation will be permitted, but not until the standard has been approved by the EU).

The group has not currently concluded its evaluation of the potential effect of these new/revised standards, nor has it decided whether to elect for earlier implementation.

65

All figurees are in NOK 1 000 if not specified

Note 1 Segment informationFollowing the merger of Oslo Børs Holding and VPS Holding, the merged business of Oslo Børs VPS Holding has four segments: Oslo Børs, VPS, VPS Clearing, and Market Data and Solutions. The Market Data and Solutions segment comprises the companies Oslo Børs Informasjon AS and Manamind AS..

The business activity of Oslo Børs is to operate marketplaces for trading in securities and other listed financial instruments. The business activity of VPS is the regis-tration of rights over financial instruments and settlement of trading in financial instruments. VPS Clearing carries out clearing for trading in derivatives contracts. Market Data and Solutions sells financial market data and related systems.

The identification of segments is based on the group´s organisational structure and management reporting. Theese segments are based on the units that require authorisation for their activities, namely Oslo Børs ASA, VPS ASA and VPS Clearing ASA. Other segments are based on the similarity of the services offered.

Segment information is based on the unconsolidated accounts of Oslo Børs ASA, VPS ASA, VPS Clearing ASA, Oslo Børs Informasjon AS and Manamind ASA, and on the current agreements between the companies on charges for products and services.

Internal transactions are priced on an arm’s length basis. VPS, VPS Clearing and Manamind are included in the consolidated accounts with effect from 27 November 2007.

Oslo Børs VPS Holding only operates in Norway. The group has customers in a number of geographic areas, but it does not consider that the geographic location of customers gives rise to any material differences in risk and return.

2007 Oslo Børs VPS VPS Clearing Market Data Other/ Total

and solutions netting

Operating revenue – external 457 492 53 450 4 562 150 316 665 820

Operating revenue – internal 79 925 516 5 722 -86 163 0

Depreciation/write-downs 16 119 4 739 307 311 21 476

Other operating costs 189 951 30 589 3 012 116 194 -85 468 254 278

Total operating costs 206 070 35 328 3 319 116 505 -85 468 275 754

Operating profit 331 347 18 638 1 243 39 533 -695 390 066

Income from joint venture 813 489 1 302

Investment in joint venture 15 289 1 112 112 16 513

Other assets 1 233 408 2 904 319 2 378 503 223 818 -828 331 5 911 717

Liabilities 230 816 340 587 2 136 063 102 722 31 951 2 842 139

Investment in the period 10 325 3 660 109 0 14 094



Operating revenue – external 359 538 135 093 494 631

Operating revenue – internal 72 555 5 396 -77 951 0

Depreciation/write-downs 16 862 67 16 929

Other operating costs 159 765 102 715 -77 921 184 559

Total operating costs 176 627 102 782 -77 921 201 488

Operating profit 255 466 37 707 -30 293 143

Income from joint venture 176 176

Investment in joint venture 15 176 15 176

Other assets 569 744 80 653 -62 327 588 070

Liabilities 212 987 41 055 -23 621 230 421

Investment in the period 87 188 60 0 87 248



Operating revenue – external 259 950 101 436 361 386

Operating revenue – internal 54 024 5 396 -59 420 0

Depreciation/write-downs 16 532 91 16 623

Other operating costs 135 563 81 233 -59 411 157 385

Total operating costs 152 095 81 324 -59 411 174 008

Operating profit 161 879 25 508 -9 187 378

Assets 423 579 57 260 -44 883 435 956

Liabilities 141 583 29 810 -17 674 153 719

Investment in the period 56 71 0 127

66

Note 2 Business combinations

The merger of Oslo Børs Holding ASA and VPS Holding ASA was registered and came into force on 26 November 2007. Oslo Børs Holding simultaneously changed its name to Oslo Børs VPS Holding ASA. The merger is recognized for accounting purposes on a transaction basis, with Oslo Børs Holding ASA as the acquiring company. The acquisition date was 27 November 2007. The implementation of the merger involved the exchange of the entire share capital of 5 million shares in VPS Holding (with the exception of 499,000 shares owned by Oslo Børs Holding) for shares in Oslo Børs VPS Holding ASA. The exchange ratio was agreed in the Merger Plan as 4 shares in Oslo Børs VPS Holding for 1 share in VPS Holding. The merger caused the issue of 18,004,000 new shares in Oslo Børs VPS Holding. The costs involved in the issue, NOK 1.7 million (after tax), were applied directly to equity.Based on the last traded price for the Oslo Børs Holding share prior to the implementation of the merger (NOK 141), the fair value of VPS Holding is calculated to be NOK 2,820 million. The purchase price, including purchase cost of NOK 18 million, was NOK 2,838 million.The net cash movement involved in the transaction was NOK 354 million, comprising the takeover of liquid assets of NOK 367 million and transaction costs of NOK 14 million.VPS Holding owns 100% of the share capital of Verdipapirsentralen ASA, VPS Clearing ASA and Manamind AS. The respective activities of these companies are: the registration of rights in the financial instruments and settlement of trading in financial instruments; clearing of derivatives trading; and sales of financial market data and related systems.An excess value analysis of VPS Holding produced the following results::

Balance at Allocation of Fair value Step Fair value

time of excess values after allocating acquisition after effect of

acquisition excess values step acquisition

IT systems 103 989 536 011 640 000 640 000

Customer relationships 87 468 87 468 87 468

Licences 10 000 10 000 10 000

Goodwill 147 361 1 877 024 2 024 385 -93 218 1 931 167

Deferred tax asset 39 583 39 583 39 583

Other fixed assets 34 763 34 763 34 763

Cash 367 463 367 463 367 463

Other current assets 2 022 836 2 022 836 2 022 836

Total assets 2 715 995 2 510 503 5 226 498 -93 218 5 133 280

Equity 505 117 2 333 129 2 838 246 -93 218 2 745 028

Long-term liabilities and commitments 131 602 131 602 131 602

Referred tax 177 374 177 374 177 374

Current liabilities 2 079 276 2 079 276 2 079 276

Total liabilities and equity 2 715 995 2 510 503 5 226 498 -93 218 5 133 280

The excess value analysis, which was carried out by independent financial advisers, identified excess values of NOK 640 million for IT systems, NOK 87 million for customer relationships and NOK 10 million for licences. Goodwill, after deferred tax on excess value (increase of NOK 177 million) and adjustment for step acquisition (reduction of NOK 93 million), amounts to NOK 1,931 million. IT systems and customer relationships will be written off over 15 years. Goodwill arising from the acquisi-tion relates to factors such as the workforce, expected future earnings and expected synergy benefitsGoodwill som oppstod ved oppkjøpet relaterer seg blant annet til arbeidsstyrke, forventet fremtidig inntjening og forventede synergieffekter.

VPS, VPS Clearing and Manamind are consolidated with effect from 27 November 2007. Operating revenues and earnings generated by these companies for the subsequent period to 31 December 2007 amount to NOK 51 million and NOK 16 million respectively.

The following table shows pro forma figures for the group with the VPS Holding group included for the whole year. The pro forma figures are intended to illustrate the group’s combined earnings and the most important features of the accounts as if the acquisition had taken place at the start of the accounting period. The pro forma figures have been produced by aggregating the profit and loss items for the previously independent groups for the period in question, after adjusting for internal transactions and depreciation of excess value.

Oslo Børs VPS VPS Holding Netting Proforma Proforma

Holding 2007 1.1 – 26.11.07 depreciation of profit and

excess value loss 2007

Operating revenues 665 821 497 333 -424 1 162 729

Salaries and related costs 138 470 102 386 240 856

Other operating costs 115 807 109 552 -424 224 937

Depreciation 21 476 32 964 28 279 82 720

Total operating costs 275 753 211 938 -424 28 279 548 513

Operating profit 390 068 285 395 0 -28 279 614 216

Net financial items 26 933 9 074 -11 000 25 007

Ordinary pre-tax profit 417 001 294 469 -11 000 -28 279 639 223

Tax 112 382 74 554 -7 918 179 018

Profit for the period 304 619 219 915 -11 000 -20 361 460 206

67

Note 3 Accounts receivable/Losses on receivables

Accounts receivable are recorded at their nominal value less provisions for expected losses..

The provision for losses has developed as follows

Individual General Total

provision provision

01-jan-06 0 250 250

Provided for during the year 4 0 4

Applied -4 0 -4

31 December 2006 0 250 250

Provided for during the year 1940 0 1940

Provision applied in the year -1940 0 -1940

Provision written-back 0 0

31 December 2007 0 250 250

Ageing of customer receivables before provisions for expected losses is as follows:

2006

Total Not yet due < 30 days 30-60 days 60-90 days 90-120 days >120 days

46 603 27 485 12 392 4 804 269 53 1 600

2007

Total Not yet due < 30 days 30-60 days 60-90 days 90-120 days >120 days

104 223 83 469 14 740 3 281 1 066 42 1 625

Note 4 Analysis of profit and loss items

Salaries and related costs 2007 2006 2005

Salaries 97 072 68 794 62 665

Pension cost 19 642 17 720 13 751

Employer’s social security contributions 19 120 14 811 13 479

Other benefits 3 154 1 206 1 496

Capitalised internal resources -518 0 0

Total salaries and related costs 138 470 102 531 91 391

Other operating costs 2007 2006 2005

Use of external contractors 27 693 17 072 9 071

IT equipment/maintenance 50 561 35 523 31 075

Marketing and communications 3 724 3 669 2 765

Training and personnel benefits 7 925 7 710 6 705

Office expenses 10 815 9 729 9 151

Travel and entertainment 4 351 3 215 2 899

Other costs 10 740 5 109 4 329


Financial items 2007 2006 2005

Income from investment in joint venture 1 302 176 0

Gain on sale of shares in the Copenhagen Stock Exchange 0 0 6 229

Dividend from VPS Holding ASA (prior to merger) 10 978 5 232 2 649

Interest income 16 453 6 636 3 166

Interest expense -1 282

Other financial income 223 267 180

Other financial expense including currency losses -743 -436 -2 443

Net financial items 26 933 11 875 9 781

68

Note 5 Analysis of balance sheet items

2007 2006

Investments in shares

Shares in Nordic Exchanges A/S 206 374

Shares in VPS Holding ASA 0 174 650

Shares in FishEx ASA 2 073 1 495

Investments in shares 2 279 176 519

Other long-term receivables

Loan to joint venture 1 000

Other long-term receivables 1 080 1 215

Other long-term receivables 2 080 1 215

Other current receivables

Loans to employees 2 418 56

Prepayments 25 186 13 078

Accrued income 10 143 15 346

Other receivables 868 280

Other current receivables 38 615 28 760

Other current liabilities

Salaries due, holiday pay etc. 45 769 14 396

Accrued costs 20 239 7 684

Prepaid income 10 857 0

Other current liabilities 76 865 22 080

The terms of trade creditors and other current liabilities are as follows::

- Trade creditors are not normally interest-bearing, and normally fall due for payment within 30 days from receipt of the invoice.

- Salaries due, holiday pay etc are not interest-bearing and normally fall due for payment within six months.

- Accrued costs/prepaid income are normally not interest-bearing. Accrued costs normally fall due for payment within 30 days from receipt of the invoice. Prepaid income normally becomes earned income within 12 months of the balance sheet date

69

Note 6 Taxation

Tax charge: 2007 2006 2005

Tax payable at 28% 111 944 83 065 49 303

Change in deferred tax assets 399 1 750 3 758

Over (under) tax charge in previous year’s accounts 39 – –

Tax charge for the year 112 382 84 815 53 061

The change in the deferred tax asset in 2007, 2006 and 2005 was respectively NOK 3,514k, NOK 11,158k and NOK 6,340k higher or lower than the change in the balance sheet item due to actuarial gain/losses that were recognised directly to equity at the close of 2007, 2006 and 2005.

Reconciliation of tax charge:

Total tax charge for the year -26,95% -27,81% -26,91%

Nominal tax rate 28,00% 28,00% 28,00%

Difference caused by non-tax-deductible costs etc. -1,13% -0,14% -1,00%

Change in temporary differences not giving rise to deferred tax asset 0,04% -0,06% -0,09%

Over/under recognition of tax in previous year’s accounts 0,01% 0,00% -0,27%

The following table provides an analysis of deferred tax assets and the asset or liability with which they are associated.

Effect on profit and loss Effect on equity31-12-07 31-12-06 2007 2006 2007 2006

Goodwill 31 300 12 301 -7 764 -3 075

Tangible fixed assets 1 004 -1 739 1 985 -480

Pension liability 29 911 13 192 3 122 1 783

Pension liability apply

directly to equity 13 985 17 499 -3 514 11 159

Other 111 107 1 538 23

Total deferred tax asset 76 310 41 360 -1 119 -1 750 -3 514 11 159

Tangible assets 25

IT systems 149 499 584

Customer relationships 24 355 136

Licences 2 800 0

Deferred tax liabilities 176 679 0 720

Deferred tax liabilities in respect of excess values arising from the business combination with VPS Holding are not netted in the balance sheet against deferred tax assets associated with other assets. The merger with VPS Holding gave rise to deferred tax liabilities on excess values of NOK 177,374k and an increase in deferred tax asset of NOK 39,583k. The differences in balance sheet items are matched by effects on profit and loss and equity of the same amount.

The following tax positions were applied directly against equity in 2007:

Gross Tax effectActuarial gain/losses not applied to profit and loss 12 550 3 514

Share issue costs 2 421 678

Investments in the joint ventures do not give rise to any temporary differences.

Changes in deferred tax asset and deferred tax liability are shown below:

Deferred tax asset

Deferred tax asset at 1.1.07 41 360

Addition due to merger 39 583

Actuarial gain/losses applied directly to equity -3 514

Changes recognised to profit and loss -1 119

Deferred tax asset at 31.12.07 76 310

Deferred tax liability

Deferred tax liability at 1.1.07 0

Addition due to merger - excess values 177 374

Addition due to merger - other 25

Changes recognised to profit and loss -720

Deferred tax liability at 31.12.07 176 679

70

Note 7 Pension costs and pension liabilitiesInsured schemes The group has arranged both defined benefit and defined contribution collective pension schemes through Storebrand Livsforsikring. The defined benefit scheme is closed to new members, and all new employees are automatically members of the defined contribution scheme. With effect from 2007, the defined contribution pension scheme for employees with salary over 12 times the National Insurance base amount (G) has been replaced by a pension scheme paid from operations. The closure of the collective schemes is deemed to be a change in financing and not a change in pension plan. The net reduction in pension liabilities has been applied directly to equity.

Assuming that the employees who are members of a defined benefit plan enjoy a continual increase in salary from year to year, the premiums paid in respect of a defined benefit plan increase sharply as employees approach pension age. For accounting purposes it is considered prudent to recognise the accrued entitlement to pension rights on a straight-line basis over the period that rights are earned. Pension liabilities are therefore calculated as the net discounted present value of future benefits assumed to have accrued by the balance sheet date, based on the assumption that employees earn their entitlement to future pension on a straight line basis over their period of employment. Pension fund assets are recognised at fair value and are netted against pension liabilities in the balance sheet.

The liability of Oslo Børs in respect of the defined contribution pension scheme is limited to the payment of contributions and paying the as-sociated costs. The scheme involves a contribution equivalent to 5% of salary between 1G and 6G and 8% of salary between 6G and 12G. Risk insurance is equivalent to that offered by the closed defined benefit scheme, except that the closed defined be-nefit scheme also provides for a surviving partner’s pension. At the close of 2007, the group’s defined contribution pension scheme had 130 members.

The collective pension schemes offered by Oslo Børs satisfy the requirements of the Mandatory Occupational Pensions Act.

Uninsured schemes In 2007, Oslo Børs and VPS established a pension scheme paid from operations for employees with salary over 12 times the National Insurance base amount (G). The scheme offers a pension equivalent to 63% of final salary for employees of Oslo Børs and 70% of final salary for employees of VPS. Further details of the pension costs and liabilities involved are provided below. The expected cost for 2008 including employers’ social security contribu-tions is NOK 3,084k.

Oslo Børs established a voluntary early retirement scheme in 1997, offering retirement at 64 years for all employees. The scheme offers a pension equiva-lent to 60% of gross salary. This scheme was closed to new members in 2003. For certain managers,

based on seniority and the management position in question, the scheme offers retirement at age 60. Further details of the pension liabilities involved are provided below. The expected cost for 2008 including employers’ social security contributions is NOK 2,039k.

An agreement to make future pension payments was entered into in connection with the depar-ture of former President and CEO Kjell Frønsdal. The uninsured liability in this respect, which was recognised and expensed in 1999, is estimated at net discounted current value and capitalised in an amount of NOK 5,104k. The cost recognised to profit and loss in 2007 is NOK 246k. Actuarial losses of NOK 18k that arose in connection with changes to the assumption used for calculating the pension liability in respect of this agreement have been charged directly to equity. The expected cost for 2008 including employers’ social security contributions is NOK 235k.

Former President and CEO Sven Arild Andersen retired at the expiry of his employment contract on 31 December 2005. He is entitled from the date of retirement until he reaches 65 years of age (in 2009) to 67% of his salary at retirement. Upon reaching 65 years of age, he is entitled to a lifetime pension of 60% of his salary at retirement (NOK 2,800k), reduced by an amount corresponding to the benefits received from the National Insurance Fund and the benefits received from previous employers. Under the terms of his employment con-tract, his pension entitlement also includes the right to a widow’s pension of 60% of retirement salary. The capitalised liability at 31 December 2007 is NOK 25,940k and the cost recognised in the profit and loss account for 2007 was NOK 981k. Actuarial losses of NOK 2,670k that arose in connection with changes to the assumption used for calculating the pension liability in respect of this agreement have been charged directly to equity. The expected cost for 2008 including employers’ social security contributions is NOK 893k

Bente A. Landsnes took up her appointment as President and CEO of Oslo Børs on 2 January 2006. Her employment contract gives her the right to a lifetime pension of 70% of salary at retirement age (62 years of age) or on any earlier retirement due to disability, reduced by an amount corresponding to the benefits received from the National Insurance Fund and the benefits received from previous employers. Under the terms of her employment contract, her pension entitlement also includes the right to a widower’s pension of 55% of retirement salary. The President & CEO is contractually entitled to a full pension contribution period at Oslo Børs and full pension from Oslo Børs at retirement age (62 years). She is therefore deemed to have 16 out of 30 years of contribution upon joining Oslo Børs. A lia-bility of NOK 23,917k was recognized in the balance sheet at 31 December 2007. The cost recognised in the accounts for 2007 was NOK 1,881k. Actuarial losses of NOK 889k that arose in connection with changes to the assumption used for calculating this

pension liability have been charged directly to equity. The expected cost for 2008 is NOK 2,096k including employer’s social security contributions.

The agreed retirement age for Jan S. Hellstrøm, Deputy Group CEO and CEO of VPS, is 63 years of age. His contract of employment may be extended beyond this age if both parties so wish. The expec-ted pension age applied is 63. Under the terms of his employment contract, he is entitled to a pension of 70% of salary, reduced in respect of benefits received from the National Insurance Fund, with a spouse’s pension at 60% of salary. A liability of NOK 6,300k was recognized in the balance sheet at 31 December 2007. The cost recognised in the accounts for 2007 was NOK 50k. The expected cost for 2008 is NOK 575k including employer’s social security contributions.

Pension cost and pension liabilities The net pension cost for the period is included in salaries and other personnel expenses, and for defi-ned benefit schemes consists of the net discounted present value of pension rights accrued for the year, the interest accrued on pension liability, the expec-ted return on pension fund assets, the expensed effect of any change in the pension scheme or the estimates used, the expensed difference between actual and expected yield and the accrued liability for employer’s social security contributions. The expected cost for 2008 is NOK 15,759k including employer’s social security contributions. Pension cost for defined contribution plans comprises the cost of contributions for the period and related costs. Contributions made for 2007 total NOK 2,329k excluding employer’s social security contri-butions. The expected contribution cost for 2008 is NOK 3,611k excluding employer’s social security contributions.

Employer’s social security contributions in respect of payments to the collective pension scheme are capitalised to the extent that the payments increase pension assets. The provision made for uninsured pension liabilities includes employer’s social security contributions. Pension liabilities, both insured and uninsured, reduced by NOK 12,550k in 2007, equity capital was increased by NOK 9,036k, while deferred tax assets reduced by NOK 3,514k. In 2006, pension liabilities increased by NOK 39,853k and equity capital was reduced by NOK 28,694k, while deferred tax assets increased by NOK 11,159k.

Composition of pension assets: Sub portfolio ProportionShares 27%Money market 5%Bonds 27%Bonds held to maturity 25%Real estate 12%Other 3%

The book investment return as reported in Storebrand’s Q3 2007 interim report was 6.1% (8.3% annualised).

The following assumptions are applied in calculating pension liability

Group

2007 2006 2005

Expected return on pension funds 5,75% 5,40% 5,00%

Discount rate 4,60% 4,40% 4,50%

Expected rate of increase in salaries 4,50% 4,50% 3,30%

Expected rate of increase in the National Insurance base amount (G) 4,25% 4,25% 3,30%

Expected rate of increase in pension benefits – G increases 4,25% 4,25% 2,50%

Expected rate of increase in pensions – minimum increase 2,00%

Average rate for employer’s social security contributions 14,10% 14,10% 14,10%

Mortality table used K2005 K1963 K1963

71

The discount rate is determined on the basis of observed yields on Norwegian government bonds plus a margin for the longer maturity. The average maturity of pen-sion liabilities is calculated to be 30 years. The margin added is calculated by reference to the yield differential between long and medium-term US Treasury yields denominated in USD. The expected rates of increase in salaries, pensions and benefits and the National Insurance base amount (G) are based on historic observations for the company, assuming expected long-term inflation of 2.5%.

Actuarial assumptions are based on risk tables. The mortality table, K2005, is based on best estimates for the Norwegian population. The risk table in force at 31 De-cember 2007 shows expected average life expectancy of 80 years for men and 84 years for women. A summary of the tables used is shown below. The table shows life expectancy and the likelihood of disability and death respectively over the next 12 months for different age groups.

Life expectancy

At age Men Women

20 79 84

40 80 84

60 82 85

80 87 89

Mortality rates

At age Men Women

20

40 0,09% 0,11%

60 0,57% 0,47%

80 6,20% 4,54%

Likelihood of disability

At age Men Women

20 0,13% 0,16%

40 0,21% 0,35%

60 1,48% 1,94%

80 NA NA

Summary of pension liabilities:

2007 Insured scheme Uninsured scheme Uninsured Group CEO Former Total

for salaries under for salaries over early retirement and Deputy Oslo Børs

12 G 12 G scheme Group CEO CEOs

Liability at 1.1 46 054 0 16 818 21 147 29 897 113 916

Charged to profit and loss in 2007 10 147 2 590 2 029 1 931 1 227 17 924

Contributions 2007 -5 363 0 -5 363

Payments -594 -2 768 -3 362

Change in financing -9 508 9 508 0

Transferred by the merger 41 312 2 815 6 250 50 378

Applied directly to equity -12 807 -2 959 -226 889 2 688 -12 414

Liability at 31.12 69 836 11 955 18 027 30 217 31 044 161 077

72

Insured defined benefit scheme for salary up to 12 G

2007 2006 2005

No. of members at 31.12 159 63 114

Pension costs and pension liabilities of the group are as follows:

2007 2006 2005

Pension costs:

Present value of pension rights accrued for the year 7 860 8 394 6 715

Interest on pension liabilities 3 155 2 099 2 370

Expected return on pension fund assets -2 123 -1 929 -2 249

Effect of changes to the pension scheme 0 -4 159 -1 003

Net pension costs before employer’s social security contributions 8 893 4 405 5 833

Accrued employer’s social security contributions

1 254 621 822

Net pension costs including employer’s social security contributions 10 147 5 026 6 655

2007 2006

Financial condition of the pension scheme:

Calculated gross pension liability at 1.1 -82 183 -67 388

Contributions and drawings -108 635 0

Change to financing of top hat scheme 19 204 0

Introduction of defined contribution pension scheme 19 828

Cost of pension rights accrued for the year -7 860 -8 394

Interest cost -3 155 -2 099

Actuarial gains and losses 14 383 -24 592

Pensions paid/paid-up policies 477 460


Pension fund assets at 1.1 41 820 39 125

Acquisitions and disposals 72 427 0

Change to financing of top hat scheme -10 870 0

Introduction of defined contribution pension scheme -4 136

Expected return on pension fund assets 2 123 1 937

Premium payments 4 700 9 820

Actuarial gains and losses -3 158 -4 466

Pensions paid/paid-up policies -477 -460

Pension fund assets at 31.12 106 565 41 820

Net pension assets before employer’s social security contributions -61 204 -40 365

Accrued employer’s social security contributions -8 630 -5 691

Pension liabilities -69 834 -46 056

Changes in the insured scheme liabilities: 2007 2006

Net capitalised liability at 1.1 -46 056 -32 249

Pension cost charged to profit and loss -10 147 -5 026

Premium payments 5 363 11 206

Change to financing of top hat scheme 9 508

Liabilities taken over as part of merger -41 312

Actuarial gain/losses applied directly to equity 12 807 -19 987


73

Uninsured defined benefit scheme for salary over 12 G

2007 2006 2005

No. of members at 31.12 30 0 0

Pension costs and pension liabilities of the group are as follows:

2007 2006 2005

Net pension costs:

Present value of pension rights accrued for the year 1 574

Interest on pension liabilities 696

Net pension costs before employer’s social security contributions 2 270 0 0

Accrued employer’s social security contributions 320

Net pension costs including employer’s social security contributions 2 590 0 0

2007 2006


Calculated gross pension liability at 1.1 0 0

Contributions and drawings -2 467

Change to financing of top hat scheme -15 740

Cost of pension rights accrued for the year -1 574

Interest cost -696

Actuarial gains and losses 9 999

Pensions paid/paid-up policies 0

Calculated gross pension liability at 31.12 -10 478 0

Accrued employer’s social security contributions -1 477

Net pension liabilities -11 955 0

Change in the insured scheme liabilities: 2007 2006

Net capitalised liability at 1.1 0 0

Change to financing of top hat scheme -9 508

Pension cost charged to profit and loss -2 590

Liabilities taken over as part of merger -2 815

Actuarial gain/losses applied directly to equity 2 959

Net capitalised liability at 31.12 -11 955 0

74

Uninsured early retirement scheme for Oslo Børs and Oslo Børs Informasjon

In addition to the assumptions set out above, the following assumptions are applied for calculations in respect of the uninsured scheme:

2007 2006 2005

No. of employees eligible for the scheme at 31.12 53 60

Expected drawings under the scheme – employees under 40 years 25% 25% 25%

Expected drawings under the scheme – employees 40-50 years 50% 50% 50%

Expected drawings under the scheme – employees over 50 years 100% 100% 100%

Pension costs and pension liabilities are as follows

2007 2006 2005

Net pension costs:

Present value of pension rights accrued for the year 1141 816 615

Interest on pension liabilities 637 444 405

Net pension costs before employer’s social security contributions 1 778 1 260 1 020

Accrued employer’s social security contributions 251 178 144

Net pension costs including employer’s social security contributions 2 029 1 438 1 164

2007 2006



Cost of pension rights accrued for the year -1 141 -816

Interest cost -636 -444

Actuarial gains and losses 197 -3 964

Pensions paid/paid-up policies 521 715


Accrued employer’s social security contributions -2 228 -2 078

Net pension liability -18 027 -16 818

Change in the uninsured scheme liabilities: 2007 2006


Pension cost charged to profit and loss -2 029 -1 438

Payments 594 817

Actuarial gain/losses applied directly to equity 226 -4 523


75

Note 8a) Fixed assets

Property Fixtures, IT equipment, Operating assets Total 2007 Total 2006

vehicles etc. not depreciated

Acquisition cost 1.1. 42 585 63 799 317 106 701 97 105

Additions during the year 135 9 189 0 9 324 10 633

Additions through the merger 33 028 33 028 0

Disposals during the year 0 119 0 119 1037


Acc. ordinary depreciation 1.1. 14 320 48 439 62 759 53 319

Ordinary depreciation for the year 2 528 9 879 12 407 9 987

Acc. Ordinary depreciation for assets sold 0 74 74 547

Acc. ordinary depreciation 31.12. 16 847 58 244 0 75 091 62 759

Book value 31.12. 25 874 47 654 317 73 845 43 944

Expected economic life (years) 8-50 3-10 N/A

Depreciation plan Linear Linear N/A

The group had no commitments to purchase fixed assets at 31 December 2007.

Note 8b) Intangible assets – developed in-house

Intangible assets Total 2007 Total 2006

developed in-house

Acquisition cost 1.1. 66 486 66 486 66 486

Additions during the year – developed in-house 4 277 4 277 0

Disposals during the year 0 0 0

Acquisition cost 31.12. 70 763 70 763 66 486

Acc. ordinary depreciation 1.1. 50 917 50 917 43 975

Ordinary depreciation for the year 6 497 6 497 6 942

Acc. Ordinary depreciation for assets sold 0 0 0

Acc. ordinary depreciation 31.12. 57 414 57 414 50 916

Book value 31.12. 13 349 13 349 15 570

Expected economic life (years) 3-8,5

Depreciation plan Linear

Note 8c) Intangible assets – including assets developed in-house

It-systemems Customer relationships Goodwill Licencesr Total 2007 Total 2006


Additions during the year – developed in-house 4 277 0 0 0 4 277 0

Additions through the merger 640 000 87 468 1 931 167 10 000 2 668 635 0

Disposals during the year 0 0 0 0 0 0

Acquisition cost 31.12. 710 763 87 468 1 913 167 10 000 2 739 398 66 486


Ordinary depreciation for the year 8 583 486 0 0 9 069 6 942

Acc. Ordinary depreciation for assets sold 0 0 0 0 0 0


Book value 31.12. 651 262 86 982 1 931 167 10 000 2 679 411 15 570

Expected economic life (years) 3-15 15 I/A I/A

Depreciation plan Lineær Lineær I/A I/A

Licenses comprise the authorisations held by Verdipapirsentralen ASA and VPS Clearing ASA to carry on business as a securities register and a clearing house respectively. The licences have no definite time limit, and are therefore not depreciated

76

Note 8d) Impairment test for goodwill

Capitalised goodwill in the consolidated accounts totalled NOK 1,931 million at 30 December 2007. Goodwill arose as a result of the merger with VPS Holding (see Note 2). The subsidiary companies Verdipapirsentralen ASA, VPS Clearing ASA and Manamind AS are deemed to be the cash generating units in the group, and goodwill is allocated to these units in the amounts of NOK 1,818 million, NOK 81 million and NOK 33 million respectively.

Goodwill is tested for impairment at year-end. The recoverable value is determined on the basis of an evaluation of the unit’s total value. Total value is calculated on the basis of the discounted present value of expected future cash flows after tax, applying the appropriate post-tax discount rate that takes into account the useful life and risk.

The forecasts of future cash flows are based on the budgets for 2008 approved by the Board of Directors, followed by moderate growth in revenues and net cash flow for the following four years. This reflects in part expected growth in the market for existing products and in part the development of new products. No further growth in net cash flow is assumed after the five-year period.

An interest rate of 10.2% is applied to discount the cash flows. This is based on the risk-free return at the close of 2007 of 4.7%, and an equity risk premium of 6.1%. The required return on equity is determined post-tax. Applying this together with an equity ratio of 90% and assuming the cost of capital at 4.7% gives a weighted average cost of capital of 10.2%.

If the actual outturn differs significantly from these assumptions, this may make it necessary to write down goodwill. If actual growth in revenue falls more than 50% below the growth assumption, this could create a write-down situation for the business areas if other assumptions remain constant.

Note 9 Share capital and shareholder information

Oslo Børs VPS Holdings share capital 31.12.2007 consists of:

No. of shares No. of own shares

Value Net share capital and own shares

No. of shares 1.1.2007: 5 000 000 5 NOK 10 49 999 950

Share split 1:5 20 000 000 20 NOK 2

Issue of new shares 18 004 000 NOK 2 36 008 000

Purchase of own shares 4 178 NOK 2 -8 356

No. of shares 31.12.2007 43 004 000 4 203 NOK 2 85 999 594

All shares have the same rights in respect of voting in dividends. Shares were split 1:5 in May 2007. The merger with VPS caused the issue of 18,004,000 shares on 26 December 2007

The 20 largest shareholders at 31 December 2007 were:

Nationality No. of shares Percentage

DNB NOR BANK ASA 8 233 697 19,1 %

KLP FORSIKRING 4 300 200 10,0 %

NORSK HYDROS PENSJONSKASSE 3 662 231 8,5 %

PARETO AS 3 021 250 7,0 %

OMX AB SWEDEN 2 500 000 5,8 %

LANDSBANKI ISLANDS HF 2 500 000 5,8 %

ORKLA ASA 2 235 700 5,2 %

ARENDALS FOSSEKOMPANI ASA 1 996 000 4,6 %

NORDEA BANK PLC FINLAND NIFC FINLAND 1 094 561 2,5 %

SUNDT AS 1 090 000 2,5 %

STATE STREET BANK AND TRUST CO. U.S.A. 1 047 995 2,4 %

STOREBRAND ASA 983 200 2,3 %

BANK OF NEW YORK BELGIUM 911 000 2,1 %

FOKUS BANK DENMARK 750 000 1,7 %

MUST INVEST AS 708 520 1,6 %

JPMORGAN CHASE BANK GREAT BRITAIN 622 000 1,4 %

HAVFONN AS 608 000 1,4 %

SPAREBANKEN VEST 550 505 1,3 %

UBS SECURITIES LLC U.S.A. 527 764 1,2 %

PARETO SECURITIES ASA 500 140 1,2 %

Total 37 842 763 88,0 %

77

Shares held by Board Members, senior employees and their close associates:

Name Office held Shares owned Shares held by associates

Georg Størmer Board member 30 000

Svein Støle Board member – 3 521 390

Bente A. Landsnes Group CEO 3 001

Jan S. Hellstrøm Deputy CEO 5 651

P. Anders Brodin Senior Vice President 7 955

Tom Kolvig Senior Vice President 9 651

Sveinung Dyrdal Senior Vice President 4 000

Lisbeth Lindberg Senior Vice President 2 000

Per Eikrem Senior Vice President 2 380

Atle Degré Senior Vice President 4 726

Geir Heggem Senior Vice President 1 431

Oslo Børs VPS Holding Own Shares 4 203

Chair of the Board Leif Teksum is an Group Executive Vice President of DnB NOR Bank ASA. DnB NOR Bank ASA owns 8,233,697 shares in Oslo Børs VPS Holding.

Pareto Securities AS and Pareto AS, which hold 500,140 shares and 3,021,250 shares respectively, are close associates of Svein Støle.

Board Member Mari Thjømøe is an Executive Vice President of KLP Forsikring. KLP Forsikring owns 4,300,200 shares in Oslo Børs VPS Holding.

Note 10 Earnings per share, diluted earnings per share

Earnings per share is calculated as follows

2007 2006 2005

Profit after tax 304 617 220 204 144 097

Number of shares 26 726 25 000 25 000

Earnings per share 11,40 8,81 5,76

Diluted earnings per share 11,40 8,81 5,76

Dividend: 2007 2006 2005

Dividend proposed 301 028

Dividend distributed 150 000 130 000

Number of shares 43 004 25 000 25 000

Proposed dividend per share 7,0

Distributed dividend per share 6,0 5,2

Shares were split 1:5 in May 2007. The merger with VPS caused the issue of 18,004,000 shares on 26 December 2007. The newly-issued shares are included for 35 of 365 days

Dividends shown as paid in 2005 and 2004 was distributed in 2006 and 2005 respectively. Distribution of dividend to the parent company’s shareholders does not affect the company’s tax payable or deferred tax.

Note 11 Investments in joint ventures, shares etc.

Company Shareholding Book value

FishEX ASA 8,90% 2 073

Nordic Exchanges A/S 23,0 % 206

Shares in Nordic Exchanges A/S are valued at the share of book equity. The company recorded a pre-tax loss of DKK 180k for 2007, with equity at 31 December 2007 of DKK 1,324k.

Oslo Børs purchased 50% of the share capital of Fondsmeglernes Informasjonstjeneste AS on 15 August 2006. Based on the shareholder agreement between the Norwegian Securities Dealers Association and Oslo Børs, the company is judged to be a joint venture. The ownership interest in this company is recognised in the consolidated accounts on the equity method. The proportion of profit recognised, less dividend, is transferred to the reserve for valuation differences. Further information on the company, the book value of the ownership interest and the calculation of the share of profit is as follows:

78

Company Date of acquisition Registered office Ownership interest Proportion of voting shares held

Fondsmeglernes Informasjonstjeneste AS 2006 Oslo 50% 50%

Over-value analysis (50% share):

Book value for Oslo Børs ASA at time of acquisition 1 437

Excess value of systems 720

Excess value of customer relationships 297

Goodwill 12 546

Acquisition cost 15 000

The purchase agreement includes a commitment to pay further consideration linked to any income from registration of bond loans in 2007. Any additional considera-tion is limited to a maximum of NOK 5,000k.

The company did not generate any revenue from registration of bond loans in 2007

Calculation of balance sheet value at 31.12.07

Balance sheet value at 31.12.06 15 176

Share of profit for the year 1 190

Depreciation of excess value -377

Dividend received -700


Share of balance sheet and profit and loss items 31.12.07/2007:

Current assets 2 606

Long-term assets 5

Current liabilities 78

Long-term liabilities 0

Revenue 2 754

Costs 823


FinansNettNorge AS 2007 Oslo 50% 50%

Over-value analysis (50% share):

Book value for Oslo Børs VPS Holding ASA at time of acquisition 623

Acquisition cost 623

Calculation of balance sheet value at 31.12.07

Acquisition cost 623

Share of profit for the year 489


Share of balance sheet and profit and loss items 31.12.07/2007:

Current assets 1 696

Long-term assets 495

Current liabilities 105

Long-term liabilities 1 000

Revenue 1 281

Costs 1 345


NaC AS 2007 Sandnes 50% 50%

The company was incorporated in 2007 and has share capital of NOK 200k. The company did not carry out any activities in 2007.

79

Note 12 Financial instruments

2006 On demand < 3 months 3-12 months 1-5 years >5 years Total

Accounts payable 3 816 3 816

Tax payable 24 659 58 406 83 065

Payroll tax and social security contributions payable 7 567 7 567

Other current liabilities 15 682 6 398 22 080

Total – 51 724 64 804 – – 116 528

2007 On demand < 3 months 3-12 months 1-5 years >5 years Total

Liabilities to credit institutions 41 333 41 333 82 666

Accounts payable 21 676 21 676

Tax payable 69 497 116 837 186 334

Payroll tax and social security contributions payable 22 512

Market value of derivative

positions outstanding 1 964 827 149 342 161 2 114 330

Other current liabilities 50 589 19 635 70 224

Total – 2 129 101 327 147 41 494 – 2 475 230

The group is exposed to credit risk, interest rate risk, liquidity risk, currency risk and market risk.

Credit riskThe group’s two largest single customers each ac-counted for approximately 9% of total revenues in 2007 and around 9% of accounts receivable and other receivables in the balance sheet as at 31 December 2007. Losses on receivables have historically been at a low level. The group has guidelines in place to avoid making sales to customers who have had significant problems in making payments in the past.

VPS Clearing acts as the central counterparty to all parties, becoming the buyer for all sellers and the seller for all buyers. In respect of financial instruments that use the central counterparty model for clearing, VPS Clearing accordingly takes over the counterparty risk between its members. It is therefore exposed to the risk that a counterparty defaults in its obligations to the other party in a financial transaction. The maximum risk exposure in respect of counterparty risk is reported as the capitalised value of outstanding derivative positions.

Other receivables totalling NOK 1,080k are classified as fixed assets and are secured by charges over real estate.

The maximum credit risk is equivalent to the book value of receivables, which totalled NOK 2,257 million at 31 December 2007.

Interest rate riskThe group has interest-bearing liabilities in the form of one loan from a Norwegian commercial bank. Bank deposits are on floating rate terms.

A change of 1 percentage point in the level of interest rates would have affected earnings and equity by approximately NOK 5 billion. This calculation is carried out as if the merger between Oslo Børs Holding ASA and VPS Holding ASA had taken effect from 1 January 2007.

Liquidity risk – GeneralThe group’s strategy is to maintain cash sufficient for at least 3 months’ operating costs at any time. The group does not have any committed drawing facilities. Sur-plus liquidity is held in bank accounts. The table below shows the group’s financial liabilities and their maturity structure. With the exception of the market value of

derivative positions, the liabilities reported represent unconditional claims on the group.

Liquidity risk – ClearingThe market value of derivative positions represents the fair value of derivative positions for which VPS Clearing is the central counterparty. The group is exposed to the risk that a counterparty does not have sufficient liquid-ity to settle its liabilities. This risk is reduced in that set-tlement takes place through a settlement system that fully complies with international recommendations.

The company (group) manages its capital structure and makes necessary changes to its structure on the basis of regular reviews of the economic conditions in which its businesses operate, and future prospects in both the short term and medium term.

The Securities Trading Act stipulates that the company must have primary capital of at least NOK 50 million. Of this amount, at least half should be held as deposits or unconditional drawing rights with credit institutions.

Surplus liquidity is managed in order to maintain the lowest possible risk exposure. VPS Clearing ASA has a policy of investing its primary capital as bank deposits in banks with at least an ‘A’ rating. These assets are clas-sified as liquid assets in the balance sheet.

Currency riskThe group is exposed to currency risk since certain costs are payable in foreign currencies. It is group policy that the consideration for significant purchases must be denominated and paid in Norwegian kroner. Accordingly, exposure to currency risk and the conse-quences for earnings and equity of changes in exchange rates are not material. The group was not party to any forward foreign exchange contracts at the close of 2006 or 2007.

Market riskWith the exception of its clearing activities, the group’s assets and liabilities have little exposure to market risk. The value of shareholdings and investments in joint ventures are exposed to market risk.

Market risk – Clearing activitiesThe group is exposed to the risk that the value of a portfolio may change as the result of movements in the financial markets. This may, for example, relate

to changes in share prices, interest rates or exchange rates. VPS Clearing takes steps to reduce this risk by requiring collateral. Collateral requirements take into account both market risk and the number of days that VPS Clearing considers would be needed to close a defaulted position.

Determining fair valueFair value of financial assets classified as ‘available for sale’ is determined by specific evaluation. The group held 9.9% of the share capital of VPS Holding ASA on 1 January 2007. These shares were realised by the merger. The excess value was applied directly to equity.

The fair value of derivative positions is determined on the basis of market value of the derivative contract in question on the balance sheet date.

Fair value recognition is not applied to cash, accounts receivable, other current receivables and interest-bearing borrowings. The book value of cash and bank deposits is virtually equivalent to fair value given that these instruments have short maturities. Similarly, the book value of accounts receivable and accounts payable is virtually the same as fair value since these transactions are entered into on ‘normal’ terms.

Financial strategyOslo Børs VPS Holding will strive to maintain a level of equity appropriate to its strategy and risk profile. In parallel with this, the group will seek to limit the level of capital it needs. If the group has liquidity in excess of the level needed taking into account the amount of capital it needs for its current operations, acquisitions, or invest-ments, or the requirements for satisfactory liquidity and solidity, including the level of capital needed to satisfy the requirements imposed by the authorities, it will seek to distribute the surplus to its shareholders.

Norwegian legislation imposes a minimum requirement of NOK 50 million for the primary capital of a clearing business. There is no similar requirement for the mini-mum capital required for stock exchange and securities register operations.

The group’s equity at the close at 2007 totalled NOK 3,086 million. Interest-bearing borrowings amounted to NOK 83 million.

80

2007 2006 2005

Book value Fair value Book value Fair value Book value Fair value

Financial assets

Bank deposits 813 342 813 342 226 840 226 840 185 893 185 893

Accounts receivable 103 973 103 973 46 353 46 353 39 942 39 942

Derivative positions outstanding 2 114 331 2 114 331

Other receivables – short-term 38 615 38 615 28 760 28 760 17 768 17 768

Bank deposits – fixed term 7 531 7 531 7 531 7 531 7 327 7 327

Other receivables – long-term 2 080 2 080 1 215 1 215 1 350 1 350

Available for sale investments 2 279 2 279 176 519 176 519 85 443 85 443

Financial liabilities

Accounts payable 21 676 21 676 3 816 3 816 6 512 6 512

Payroll tax, social security contributions and tax payable

208 846 208 846 90 632 90 632 58 420 58 420

Other short-term liabilities 76 865 76 865 22 080 22 080 21 091 21 091

Note 13 No. of employees – group

2007 2006 2005

Number of employees at 31.12. 282 122 117

81

Note 14 Remuneration of officers, senior management, the auditor etc.

NOK 1,000 Salary Fees Variable Bene- Pension Pension Pension Remu- Pension

salary fits cost liability contri- neration liability

bution 2006 2006

Chair of the Board (from 26 Nov. 2007) Leif Teksum 150 150Member of the Board Georg Størmer 187 167Member of the Board Svein Støle 129 228Member of the Board Benedicte S. Fasmer 137 128Member of the Board Mari Thjømøe 129 86Member of the Board Giséle Marchand - 0

Chair of the Board (to 26 Nov. 2007) Halvor Stenstadvold 360 209Member of the Board (to 26 Nov. 2007) Ottar Ertzeid 129 128Member of the Board (to 26Nov. 2007) Maria Borch Helsengreen 129 86Member of the Board (to 26 Nov. 2007) Leiv Aksvig 100 100Member of the Board (to 26 Nov. 2007) Ida Espolin Johnson 100 100Member of the Board (to 26 Nov. 2007) Anne Johnsrud Hagen 100 100Member of the Board (to 26Nov. 2007) Elin Sjødin Drange 100 100Member of the Board (to 26 Nov. 2007) Ylwa karlsgren 167 67

Employee representative Vegard Annweiler 23 Employee representative Stine Fjell 68 Employee representative Bjarne Rogdaberg 45 Employee representative Claes Unger 100 100Employee representative Morten Nordby 100 100

Chair of the Election Committee Erik Must 20 30Member of the Election Committee Olaug Svarva 11 0Member of the Election Committee Ottar Ertzeid 14 14Member of the Election Committee Leiv Askvig 0

Chair of the Oslo Børs Election Committee Harald Norvik 12 0Chair of the Oslo Børs Election Committee Borger A. Lenth 20Member of the Oslo Børs Election Committee Johan Solbu Braaten 6 6Member of the Oslo Børs Election Committee Mai Lill Ibsen 7 11Member of the VPS Election Committee Inge Hansen 28 14 Chair of the Oslo Børs Control Committee Inger-Johanne Lund 111 110Member of the Oslo Børs Control Committee Anne Kristin Einarsrud 78 77Member of the Oslo Børs Control Committee Ian Kenworthy 78 77Member of the Oslo Børs Control Committee Knut Nyerød 78 77

Chair of the VPS Control Committee Jan Petter Romsaas 100 92Member of the VPS Control Committee Anton Jørgensen 13Member of the VPS Control Committee Vegard Østlien 65 58Member of the VPS Control Committee Eldbjørg Sture 65 43Deputy member of the VPS Control Committee

Kjell Sverre Hatlen 65 58

Group CEO Bente Landsnes 2 754 - 535 177 2 609 25 507 0 2818 21691Deputy Group CEO Jan S. Hellstrøm 1 646 700 169 605 13 169 0 2015 12261Executive Vice President Per Anders Brodin 1 963 - 305 157 1 325 9 629 0 2300 9174Executive Vice President Sveinung Dyrdal 1 307 390 195 322 565 0 1509 543Executive Vice President Tom Kolvig 1 317 325 171 444 2 586 0 1660 2182Senior Vice President Legal Affairs Atle Degré 1 255 85 244 164 444 2 527 0 1575 3163Senior Vice President Corporate Communications

Per Eikrem 843 - 112 112 464 1 836 0 1454 1861

Senior Vice President Sales and Marketing

Lisbeth Lindberg 1 138 - 172 132 225 225 43 0 0

Senior Vice President & CFO Geir Heggem 1 107 - 315 159 414 2 191 0 1316 2239

82

Note 15 Leasing contracts

Annual lease rental of operational assets not capitalised on the balance sheet

Operational asset Remaining lease period Annual lease payment

Rental of premises 5,5 år 12 500

Production and operations equipment 0,7 til 4 år 1277

In October 2005 Oslo Børs entered into an agreement with OM Technology to extend the contract for rental of the trading system. The rental period was extended to the close of 2010. The annual payment is made up of a fixed amount plus variable payment for the level of trading activity above a defined level. In addition, in mid-2006 Oslo Børs paid the remaining part of a connection charge. The amount was SEK 10 million, and has been allocated over the period from mid-2006 to mid-2007.VPS Clearing has entered into an agreement with OMX Technology for operating services for the clearing system. The rental period runs to 2015. VPS Clearing pays a fixed annual fee.

The minimum future lease rental payments are as follows (NOK 1,000):

Up to 1 year 32 493

1 to 5 years 101 539

Over 5 years 21 970

Minimum future lease rental payments 156 002

The above remuneration amounts are entered as expenses in the accounts for 2007 of the companies that make up the group, regardless of the period of ownership by the group. Salaries include a provision for the holiday allowance to be disbursed in 2008 relative to the holiday allowance disbursed in 2007. Bonuses consist of a variable salary portion for 2007, which was provided for in the annual accounts for 2007 for disbursement in January 2008. Benefits in kind comprise established benefits such as a company car, free telephone etc. The amounts are exclusive of employer’s social security contributions. Pension costs and pension commitments are calculated based on the assumptions specified in Note 7. Pension cost and pension liability include both the insured and uninsured schemes.

The employment contract of Group CEO Bente A. Landsnes provides for an annual salary of NOK 2,600k plus a company car or company car benefit as well as free telephone and newspapers. Her salary was increased to NOK 3,000k from 1 January 2008. She is entitled to a lifetime pension from 62 years of age, or on any earlier retirement due to disability, of 70% of salary at retirement, reduced by an amount corresponding to the benefits received from the National Insurance Fund and the benefits received from previous employers. Under the terms of her employment contract, her pension entitlement also includes the right to a widower’s pension of 55% of retirement salary. The Group CEO is contractually entitled to a full pension contribution period at Oslo Børs and full pension from Oslo Børs at retirement age. She is therefore deemed to have 16 out of 30 ye-ars of contribution upon joining Oslo Børs. In the event

that employment is terminated by either party, she is entitled, subject to certain conditions, to full salary and other benefits for 24 months. Such payments will be reduced by 50% of any amounts received from other employment during this period.

Jan S. Hellstrøm, Deputy Group CEO and CEO of VPS, is entitled to six months’ notice of termination of employment and six months’ salary after termination of employment. In special cases salary can be paid for a further 12 months. His agreed retirement age is 63. His contract of employment may be extended beyond this age if both parties so wish. He is contractually entitled to a pension of 70% of salary, reduced in respect of national insurance benefits, including a spouse’s pension of 42% of salary.

The employment contract of Executive Vice President Per Anders Brodin, provides for early pension from 60 years of age at 60% of final salary.

Other than the benefits described above and the general scheme for early retirement described in Note 7, there are no other agreements for payment upon termination or change to employment or board ap-pointments. The former owners of Manamind AS who are still employed by the company were entitled to a bonus scheme for the years to and including 2007. Oslo Børs operated an individual bonus agreement for one employee in 2007. Other than these arrange-ments, no company in the group has entered into any personal contracts with any member of its board of directors, managing director or any other employees on bonuses, profit sharing, share options or similar. However, all companies in the group operate an incen-

tive scheme for all employees except the Group CEO. The Board of Oslo Børs considers whether to award a bonus to the Group CEO annually. A share purchase program for employees was carried out in 2007. Shares were sold at fair value, but with a discount of 20% on purchases up to NOK 7,500.

Loans to employees totalled NOK 136k at year-end. Interest is charged on these loans at normal rates of interest. There were no loans to members of the board or the Group CEO.

AuditorA fee of NOK 443k paid to Ernst & Young for ordinary audit services was expensed in 2007. Fees expensed in 2007 for other services provided by Ernst & Young totalled NOK 175k, made up of NOK 33k in respect of taxes and duties, NOK 73k for reporting services and NOK 69k for other non-audit services. In connection with the merger with VPS Holding ASA NOK 269 has been booked as a part of the merger costs.

In addition, fees of NOK 319k were paid to BDO Noraudit in 2007 in respect of ordinary audit services. Fees expensed in 2007 for other non-audit services totalled NOK 67k.

The accounting firm KPMG was selected as the independent internal auditor of Oslo Børs in 2003. A provision totalling NOK 250k was made in the 2007 accounts in respect of KPMG’s services.

All figures are inclusive of the non-recoverable element of value added tax..

83

Note 16 Uncertainty associated with estimates used

The most significant accounting estimates used by the company relate to the following items:– Fair value of assets and liabilities acquired by acquisition, including depreciation and impairment of goodwill and other intangible assets– Net pension liabilities (book value at 31.12.07 of NOK 161,077k)

Capitalised intangible assets, including goodwill, arose almost entirely from the merger with VPS Holding. When the merger took place, the acquisition cost of the businesses acquired was allocated to the assets acquired and liabilities taken over on the basis of estimated fair value. Independent valuation experts were hired to assist in determining fair value of assets acquired and liabilities taken over. The valuation exercise required management to make significant judgements in selecting the method used, making estimates and deciding on assumptions. The material categories of intangible assets capitalised to the balance sheet were customer relati-onships, software and licences. The assumptions used in valuing intangible assets included, inter alia, the estimated useful life of customer relationships based on the rate of customer turnover, and the remaining period of licences and the replacement cost, adjusted for the technology aspects of software and for technological and market developments in general. The assumptions used for valuing tangible assets included, inter alia, the replacement cost of tangible assets. Management’s estima-tes of fair value are based on assumptions that are believed to be reasonable, but these assumptions of necessity involve uncertainty, and it is according the case that the actual values in the future may differ from the estimated values.

The company’s capitalised goodwill and the value of licences are tested annually for impairment, and also for any need to reverse any earlier write-downs in respect of the value of licences. The company’s business activities are affected by economic conditions, and this causes fluctuations in revenue and earnings, which in turn cause fluctuations in the value of its businesses. The annual evaluation is based on assumptions that are believed to reasonable, but these assumptions of necessity involve uncertainty, and it is according the case that the actual values in the future may differ from the estimated values.

The valuation of net pension liabilities is based on a number of commercial and actuarial assumptions, including the discount rate used, future salary growth, life expectancy of employees and the future return on pension fund assets. Changes to these assumptions can have a significant effect on net liability and cost. The company has followed the guidance on pension assumptions issued by the Norwegian Accounting Standards Board.

Note 17 Equity capital

Share Reserve for

Share premium valuation Other Total

capital reserve differences equity

Equity capital at 31 December 2004 50 000 63 405 – 104 900 218 305

Increase in value of financial assets at 1 January 2005 16 210 16 210

Actuarial gains/losses not charged to profit and loss (after tax) -16 303 -16 303

Increase in value of financial assets in 2005 19 928 19 928

Profit for the year 144 097 144 097

Dividend -100 000 -100 000

Equity capital at 31 December 2005 50 000 63 405 36 138 132 694 282 237

Actuarial gains/losses not charged to profit and loss (after tax) -28 694 -28 694

Purchases of own shares -1 710 -1 710

Sales of own shares 1 707 1 707

Increase in value of financial assets in 2006 29 079 29 079

Profit for the year 220 204 220 204

Dividend -130 000 -130 000


Merger – shares issued 36 008 2 502 557 2 538 565

Share issue costs -1 743 -1 743

Effect of step acquisition -93 218 -93 218

Buy-back of own shares -8 -603 -611

Dividend for 2006 -150 000 -150 000

Realisation of value of shares in VPS

-65 218 171 836 106 618

Actuarial gain/losses applied directly to equity 9 036 9 036

Consolidated earnings as at December 304 617 304 617


Share premium on the issue of new shares is transferred to the share premium reserve. Use of the share premium reserve is limited pursuant to section 3-2 of the Public Limited Liability Companies Act

84

Note 18 Contingent liabilities

Oslo Børs was served in March 2007 with a writ for an annulment action by Seadrill Limited. The proceedings were issued against Oslo Børs ASA. The proceedings relate to the ruling by the Stock Exchange Appeals Committee in respect of Seadrill’s duty to make a mandatory offer for Eastern Drilling ASA.

On 3 December 2007, the Oslo District Court issued its judgement on the annulment action brought by Seadrill Limited against Oslo Børs in connection with the deci-sion of the Stock Exchange Appeals Committee in respect of Seadrill’s duty to make a mandatory offer for Eastern Drilling ASA. Seadrill’s claim that the Committee’s decision was invalid did not succeed. Seadrill has appealed the court’s judgement.

In June 2007, Seadrill Limited issued a new writ claiming damages for losses incurred as a result of adhering to the ruling by the Stock Exchange Appeals Committee on its duty to make a mandatory offer. The proceedings were issued against Oslo Børs ASA and the Norwegian State as represented by the Ministry of Finance. The proceedings allege that the Norwegian State and Oslo Børs are jointly and severally liable for damages with an upper limit of NOK 850 million. The court has suspen-ded the new proceedings until the annulment action on the validity of the ruling has been decided. Oslo Børs is of the view that the risk that the court may require the exchange to pay damages is low. No provision has been made in the accounts for any claim.

Note 19 Responsibility

Under the Securities Register Act of 5 July 2002, the subsidiary company VPS ASA is liable for losses resulting from errors that occur in connection with registration activities. The statutory liability only applies to direct losses and is limited to NOK 500 million per claim. For losses that are due to circumstances unrelated to regis-tration activities, VPS is subject to normal liability that is not limited. The Act assumes that losses will be covered through insurance or other guarantees. VPS Holding ASA has taken out errors and omissions insurance limited to NOK 1 billion per year, with a deductible of NOK 2 million per claim.

Compensation of NOK 7,875 was paid in 2007. No other claims were made against the company in 2007.

Note 20 Interest-bearing borrowings

The group has one term loan from a Norwegian commercial bank, repayable in three instalments. The final instalment payment is due in May 2009.

Effective interest rate Maturity 2007 2006

Term loan 3 month NIBOR + margin May 2009 82 666 0

Note 21 Related parties

The group accounts comprise the annual accounts of Oslo Børs VPS Holding ASA and the annual accounts of the following subsidiary companies:

Consolidated

Country of incorporation Ownership from and including

2007 2006

Oslo Børs AS 100% 100% Mai 2001

Verdipapirsentralen ASA 100% 0% November 2007

VPS Clearing ASA 100% 0% November 2007

Oslo Børs Informasjon AS 100% 100% Mai 2001

Manamind AS 100% 0% November 2007

The following table shows the totals for transactions with related parties:

Sales of Purchases of Receivables Liabilities

services services

Joint ventures

- Fondsmeglernes Informasjonstjeneste – – – –

- Finans Nett Norge – 523 1 000 –

- Nac – – – –

The group owns 50% of the shares in each of the joint ventures.

Transactions with related parties are carried out on normal commercial terms. Purchases of services relate to the whole of 2007.

The loan of NOK 1,000k to FinansNettNorge is repayable in five equal annual instalments from 2008 to 2012. The interest rate on the loan is 5% pa.

85

Note 22 Outstanding derivative positions

As part of its normal business, the subsidiary VPS Clearing ASA is a formal counterparty in derivative transactions traded on Oslo Børs and in derivative transactions or securities borrowing and lending transactions notified for clearing. Since VPS Clearing is acting as a formal counterparty, the positions are not regarded as own-acco-unt trading, but are a documentation of counterparty risk. Counterparty risk is measured using models designed under international standards. Counterparty exposure is covered through individual collateral provided by each customer in the form of financial instruments, bank guarantees and cash. In accordance with IAS 39 and IAS 32, the clearing business is required to recognise in its balance sheet the commitments borne by the company as a central counterparty in derivative contracts. The estimated market value of the positions of NOK 2,114 billion is recognised as a current liability, with a matching entry under current receivables. Claims and liabilities that can be assigned to outstanding derivative positions are netted against each other to the extent that such offsetting is permitted. Set-off is applied for positions relevant to recognition that are related to the same clearing representative, are in the same derivative series and with the same maturity date.

Gross outstanding derivative positions 5 745 billion

Set-offs 3 601 billion

Net outstanding derivative positions 2 144 billion

86

OSLO BØRS VPS HOLDING ASA

NOK 1,000 Note 2007 2006 2005

OPERATING REVENUES

Operating revenues

TOTAL OPERATING REVENUES 0 0

OPERATING COSTS

Salaries and related costs

Depreciation

Other operating costs 695 30 10

TOTAL OPERATING COSTS 695 30 10

OPERATING PROFIT -695 -30 -10

Income from investment in subsidiaries 249 786 150 000 132 000

Financial income 48 28 20

Financial expenses -5 236 -77 -63

NET FINANCIAL ITEMS 244 598 149 951 131 957

ORDINARY PRE-TAX PROFIT 243 903 149 921 131 947

Tax expense 2 7 546 -22 -15

PROFIT FOR THE YEAR 4 236 358 149 943 131 962

Earnings per share 6 8,84 6,00 5,28

Diluted earnings per share 6 8,84 6,00 5,28

ALLOCATIONS

Dividend 301 028 150 000 130 000

Transfer from/to other equity -64 670 -57 1 962

TOTAL ALLOCATIONS 236 358 149 943 131 962

PARENT COMPANy PROfiT AND LOSS ACCOuNT

87

NOK 1,000 Note 2007 2006

FIXED ASSETS

Intangible assets

Intangible assets

Deferred tax asset 2 37

Total intangible assets 0 37

Tangible assets

Property

Fittings, IT equipment, vehicles etc.

Total tangible assets 0 0

Financial fixed assets

Investment in subsidiaries 1 3 019 021 113 405

Investment in shares etc. 112

Other receivables

Total financial fixed assets 2 915 433 113 405

Total fixed assets 2 915 433 113 442

CURRENT ASSETS

Receivables

Accounts receivable

Dividends receivable 3 893 044 150 000

Other intragroup receivables 3 2 116 2 092

Other receivables 13 0

Total receivables 998 873 152 092


Total current assets 999 994 153 129

TOTAL ASSETS 3 915 427 266 571

PARENT COMPANy BALANCE ShEET AT 31 DECEMBER

88

PARENT COMPANy BALANCE ShEET AT 31 DECEMBER

NOK 1,000 Note 2007 2006

EQUITY

Paid-in equity

Share capital 86 000 50 000

Share premium reserve 2 564 219 63 405

Total paid-in equity 4 2 650 219 113 405

Other equity

Reserve for valuation differences

Other equity 108 541 1 979

Total other equity 4 108 541 1 979

Total equity 2 758 760 115 384

LIABILITIES


Interest-bearing long-term liabilities 6 41 333

Intragroup liabilities 35 294

Total long-term liabilities 76 627 0

Current liabilities

Interest-bearing current liabilities 6 41 332

Trade creditors

Tax payable 2

Payroll tax and other deductions -108

Provision for dividend 3 301 028 150 000

Intragroup balances 3 736 454 1 187

Other current liabilities 1 334

Total current liabilities 1 080 040 151 187

Total liabilities 1 156 667 151 187

TOTAL LIABILITIES AND EQUITY 3 915 427 266 571

Oslo, 23 April 2008


Benedicte Schilbred Fasmer Giséle Marchand Bente A. Landsnes Board member Board member President and CEO

89

PARENT COMPANy CASh fLOW ANALySiS

OSLO BØRS VPS HOLDING ASA

FIGURES IN NOK 1,000 2007 2006 2005

Cash flow from operational activities

Ordinary pre-tax profit 243 903 215 842 140 494

Income from subsidiaries -249 786 -150 000 -132 000

Tax paid in the period 0 0 0

Gain/loss on sale of fixed assets 0 0 0

Depreciation of fixed operating assets 0 0 0

Dividend received 150 000 132 000 100 000

Change in accounts receivable 0 0 0

Change in trade creditors 0 0 0

Change in other accruals 19 638 -1 952 26

Net cash flow from operational activities 163 755 129 969 99 973

Cash flow from investment activities

Increase in long-term receivables 0 0 0

Liquid assets acquired by merger 172 0 0

Costs of merger -13 843 0 0

Receipts from capital reductions and bonds redeemed 0 0 0

Net cash flow from investment activities -13 671 0 0

Cash flow from financing activities

Received from capital reduction 0 0 0

Payment on capital reduction 0 0 0

Dividend paid -150 000 -130 000 -100 000

Net cash flow from financing activities -150 000 -130 000 -100 000

Net change in cash and liquid assets 84 -31 -27

Cash and liquid assets at start of the period 1 037 1 068 1 095

Cash and liquid assets at end of the period 1 121 1 037 1 068

The cash flow analysis has been prepared in accordance with the indirect method. Cash and liquid assets comprise cash and bank deposits.

90

NOTES TO ThE PARENT COMPANy ACCOuNTS

Principles applied for the parent company accountsOslo Børs Holding ASA was incorporated

in April 2001. At the end of May 2001 the

entire assets, undertaking and liabilities of

the self-owning institution Oslo Børs were

transferred to Oslo Børs ASA with shares in

Oslo Børs ASA as consideration. The shares in

Oslo Børs ASA were transferred to Oslo Børs

Holding ASA with shares in Oslo Børs Holding

ASA as consideration. The shares in Oslo Børs

Holding ASA were sold through a Public Share

Offer in May 2001.


VPS Holding ASA was registered on 26

November 2007. Oslo Børs Holding simul-

taneously changed its name to Oslo Børs

VPS Holding ASA. The merger is recognized

for accounting purposes on a transaction

basis, with Oslo Børs Holding ASA as the

acquiring company. The acquisition date was

27 November 2007. The implementation

of the merger involved the exchange of the

entire share capital of 5 million shares in

VPS Holding (with the exception of 499,000

shares owned by Oslo Børs Holding) for

shares in Oslo Børs VPS Holding ASA. The

exchange ratio was agreed in the Merger Plan

as 4 shares in Oslo Børs VPS Holding for 1

share in VPS Holding. The merger caused the

issue of 18,004,000 new shares in Oslo Børs

VPS Holding.

Based on the last traded price for the Oslo

Børs Holding share prior to the implementa-

tion of the merger (NOK 141), the fair value

of VPS Holding is calculated to be NOK 2,820

million. In addition, purchase costs totalled

NOK 18 million.

With effect from the 2007 financial year,

investments in subsidiaries are recogniseed

in the parent company’s accounts in accor-

dance with the cost method. Under the cost

method, dividends and group contribution

received from subsidiaries are recognized as

income to the extent that they result from

profits earned during the parent company’s

period of ownership. Historical figures have

been restated on a comparable basis. The

effect on equity at 31 December 2006 of this

change in accounting principle is NOK 42.2

million (reduction in the fund for valuation

differences).

Accounting principlesThe accounts have been prepared in accor-

dance with Norwegian legislation and gene-

rally accepted accounting practice in Norway.

The accounting principles set out below have

been applied in a uniform and consistent man-

ner in the accounts presented.

Classification of revenue and expenditure in the profit and loss statementRevenues and costs that are related to

normal operations are classified as operating

revenues and operating costs and are

included in the calculation of operating profit.

Financial items are taken into account fol-

lowing the calculation of operating profit but

before arriving at ordinary pre-tax profit. The

allocation of the profit for the year is shown

in the annual accounts.

Classification of assets and liabilities in the balance sheetAssets which are to be held or used over the

long term are classified as fixed assets in the

balance sheet. Other assets are classified as

current assets. Receivables due for payment

within one year are also classified as current

assets. Liabilities that fall due for repayment

in their entirety within one year are classified

as current liabilities. Where any part of

provisions for liabilities falls due for payment

within the current year, this is not reclassified

as a current liability.

Revenues and costsRevenuesRevenue is recognised to income in the period

the revenue is earned

CostsCosts are recognised to profit and loss in

the same period as the income to which they

relate. Costs that cannot be directly related

to income items are recognised to profit and

loss as they are incurred.

Valuation of assets and liabilities in the balance sheetCurrent assets are valued at the lower of

acquisition price and true value, and current

liabilities are valued at the higher of their

value when created and actual value.

Fixed assets are initially valued at acquisition

cost. If there are indications that a fixed asset

may have fallen in value, investigations are

carried out to see whether there is any need

to write down the book value to actual value

(the higher of net sales value and value in use).

Where necessary, book value is written down

to actual value.

Tax liability arises in respect of the accounting

profit, and is made up of tax payable and

changes in deferred tax. Deferred tax and

deferred tax assets in the balance sheet are

calculated at the nominal rate of tax on the

basis of temporary differences between ac-

counting and taxation values. Differences that

relate to fixed assets and that will be reversed

at a distant future date are not included in the

calculation of deferred tax assets. Net defer-

red tax assets are capitalised on the balance

sheet to the extent that it is likely that they

will be capable of use in the future.

In the case of uncertainty over specific assets

and liabilities, estimated values are used.

Changes in amounts estimated in previous

periods are recognised to profit and loss in

the period in which the changes are made.

91

Note 1 Shares in subsidiary companiesShares in subsidiary companies are recognized in accordance with the cost method.

Shares in the subsidiary Oslo Børs ASA were recognized in accordance with the equity method up to and including the 2006 financial year. The reserve for valuation dif-ferences was reversed in 2007.

Shares in Oslo Børs Informasjon AS were transferred to the parent company from Oslo Børs ASA in 2007. The purchase price of the shares was NOK 400,000k. The acqui-sition was treated in accordance with the continuity principle for accounting purposes and with accounting effect from 1 January 2007. The book value of the shares in the balance sheet of Oslo Børs ASA was NOK 9,598k. In accordance with the continuity principle, the difference between the sales price and the book value, NOK 390,402k , was credited to the value of the shares in Oslo Børs ASA.

Shares in Verdipapirsentralen ASA, VPS Clearing ASA and Manamind AS were acquired in connection with the merger with VPS Holding ASA. The book value of the shares in each company was determined on the basis of an excess value analysis carried out in connection with the merger.

In November 2007, the company acquired approximately 10% of the shares in VPS Holding ASA from Oslo Børs ASA. The acquisition was treated in accordance with the continuity principle for accounting purposes and with accounting effect from 1 January 2007. The purchase price of the shares was NOK 294,410k. The book value of the shares in the balance sheet of Oslo Børs ASA was NOK 109,600k. In accordance with the continuity principle, the difference between the sales price and the book value, NOK 184,810k was credited to the value of the shares in Oslo Børs ASA.

Of the dividends proposed by Oslo Børs ASA, Verdipapirsentralen ASA and Manamind AS of NOK 745,212k, NOK 75,000k and NOK 10,000k respectively, amounts of NOK 575,212k, NOK 58,046k and NOK 10,000k have been applied as a reduction in the book value of the shares in the respective subsidiaries.

Date Registered Ownership/ Book Equity at

Company acquired office voting interest value 31.12 2007

Oslo Børs ASA 2001 Oslo 100% 113 405 230 644

Oslo Børs Informasjon AS 2007 Oslo 100% 9 598 13 251

Verdipapirsentralen ASA 2007 Oslo 100% 2 580 711 253 794

VPS Clearing ASA 2007 Oslo 100% 245 145 289 112

Manamind AS 2007 Oslo 100% 70 161 7 623

Total 3 019 021

Note 2 Tax expense/deferred tax assetsOslo Børs VPS Holding ASA 2007 2006 2005

Pre-tax profit 243 903 149 921 131 947

Dividends from subsidiaries (permanent difference) -216 954 -150 000 -132 000

Tax base for the year 26 949 -79 -53

Tax payable at 28% 0 0 0

Change in deferred tax assets 7 546 -22 -15

Tax credit on dividend received 0 0 0

Tax charge for the year 7 546 -22 -15

Difference Difference

31-12-06 31-12-07

Negative temporary differences:

Losses carried forward 132 132

Loss by VPS Holding in 2007 prior to the merger 14 685

Purchase and share issue costs in respect of the merger 12 132

Tax base for Oslo Børs VPS Holding in 2007 -26 949

Total temporary differences 132 0

Deferred tax/Deferred tax asset, 28% 37 0

Oslo Børs Holding ASA had tax losses carried forward of NOK 132k at the close of 2006. VPS Holding reported a loss for the year prior to the merger coming into force of NOK 14,685k. For taxation purposes, Oslo Børs Holding and VPS Holding are a single tax entity for the whole of 2007. Costs incurred in connection with the acquisition and share issue as part of the merger totalling NOK 12,132k are not recognized to profit and loss but are tax-deductible. Following the receipt of a group contribution of NOK 32,832k from the subsidiary Oslo Børs AS, the tax base for the year is 0.

Changes in deferred tax asset are shown below:

Deferred tax asset at 1.1.07 37

Deferred tax asset due to loss by VPS holding prior to merger 4 112

Deferred tax asset due to purchase costs and share issue costs in connection with the merger 3 397

Changes in deferred tax recognised to profit and loss in 2007 -7 546

Deferred tax asset at 31.12.07 -

92

Note 3 Receivables and payables between companies in the same group

2007 2006

Current receivables:

Oslo Børs ASA - dividend and group contribution due 778 044 150 000

Oslo Børs Informasjon AS - dividend due 30 000

Verdipapirsentralen ASA - dividend due 75 000

Manamind AS - dividend due 10 000

Oslo Børs ASA - intragroup balances 2 092 2 092

Oslo Børs Informasjon AS - intragroup balances 12

Verdipapirsentralen ASA - intragroup balances 1

VPS Clearing ASA - intragroup balances 4

Manamind AS - intragroup balances 7

Total 998 860 152 092


Verdipapirsentralen ASA 35 294

Current liabilities:

Oslo Børs ASA - intragroup balances 714 794 1 187

Verdipapirsentralen ASA - intragroup balances 21 660

Total 736 454 1 187

No guarantees have been issued and no assets or other security has been pledged in support of either the parent company or any subsidiary

Note 4 Equity Share premium Reserve for valu- Other

Share capital reserve ation differences equity Total

Equity at 31 December 2005 50 000 63 405 6 897 2 039 122 341

Holding of own shares -3 -3

Change in accounting principle - cost method for shares in subsidiaries -6 897 -6 897

Profit -57 -57

Dividend received from Oslo Børs ASA 150 000 150 000

Movements in equity 0

Dividend proposed -150 000 -150 000

Equity at 31 December 2006 50 000 63 405 – 1 979 115 384

Reversal of equity method – 0

Merger - issue of shares 36 008 2 500 813 2 536 821

Gain realised on shares in VPS Holding 171 836 171 836

Holding of own shares -8 -603 -611

Profit 236 358 236 358

Dividend proposed -301 028 -301 028

Equity at 31 December 2007 86 000 2 564 219 – 108 541 2 758 760

93

Note 5 Share capital and shareholder information

The company’s share capital at 31 December 2007 was as follows:

No. of shares

Par value

Total

Shares 43 004 000 NOK 2 NOK 86 008 000

Total 43 004 000 NOK 2 NOK 86 008 000

Shares held by Board Members, senior employees and their close associates::

Shares held

Name Office Shares owned by associates

Georg Størmer Board member 30 000

Svein Støle Board member – 3 521 390

Bente A. Landsnes Group CEO 3 001

Jan S. Hellstrøm Deputy CEO 5 651

P. Anders Brodin Senior Vice President 7 955

Tom Kolvig Senior Vice President 9 651

Sveinung Dyrdal Senior Vice President 4 000

Lisbeth Lindberg Senior Vice President 2 000

Per Eikrem Senior Vice President 2 380

Atle Degré Senior Vice President 4 726

Geir Heggem Senior Vice President 1 431

Oslo Børs VPS Holding Own Shares 4 203

Chair of the Board Leif Teksum is Group Executive Vice President of DnB NOR Bank ASA. DnB NOR Bank ASA owns 8,233,697 shares in Oslo Børs VPS Holding.

Pareto Securities AS and Pareto AS, which hold 500,140 shares and 3,021,250 shares respectively, are close associates of Svein Støle.

Board Member Mari Thjømøe is an Executive Vice President of KLP Forsikring. KLP Forsikring owns 4,300,200 shares in Oslo Børs VPS Holding.

The 20 largest shareholders at 31 December 2007 were:

Ownership

Nationality No. of shares Percentage

DNB NOR BANK ASA 8 233 697 19,1 %

KLP FORSIKRING 4 300 200 10,0 %

NORSK HYDROS PENSJONSKASSE 3 662 231 8,5 %

PARETO AS 3 021 250 7,0 %

OMX AB SWEDEN 2 500 000 5,8 %

LANDSBANKI ISLANDS HF 2 500 000 5,8 %

ORKLA ASA 2 235 700 5,2 %

ARENDALS FOSSEKOMPANI ASA 1 996 000 4,6 %

NORDEA BANK PLC FINLAND NIFC FINLAND 1 094 561 2,5 %

SUNDT AS 1 090 000 2,5 %

STATE STREET BANK AND TRUST CO. U.S.A. 1 047 995 2,4 %

STOREBRAND ASA 983 200 2,3 %

BANK OF NEW YORK BELGIUM 911 000 2,1 %

FOKUS BANK DENMARK 750 000 1,7 %

MUST INVEST AS 708 520 1,6 %

JPMORGAN CHASE BANK GREAT BRITAIN 622 000 1,4 %

HAVFONN AS 608 000 1,4 %

SPAREBANKEN VEST 550 505 1,3 %

UBS SECURITIES LLC U.S.A. 527 764 1,2 %

PARETO SECURITIES ASA 500 140 1,2 %

Sum 37 842 763 88,0 %

94

Earnings per share is calculated as follows:

2007 2006 2005

Profit after tax 236 358 149 943 131 962

Average number of shares (1,000) 26 726 25 000 25 000

Earnings per share (NOK) 8,84 6,00 5,28

Diluted earnings per share (NOK) 8,84 6,00 5,28

Shares were split 1:5 in May 2007. The merger with VPS caused the issue of 18,004,000 shares on 26 November 2007

Note 6 Interest-bearing borrowings

The group has one term loan from a Norwegian commercial bank, repayable in three instalments. The final instalment payment is due in May 2009.

Effective interest rate Maturity 2007 2006

Term loan 3 month NIBOR + margin May 2009 82 666 0

95

auditor´s report

96

To the Annual general Meeting and the financial Supervisory Authority of Norway:

The members of the Control Committee in 2007 were:

– Inger-Johanne Lund, Lawyer, (Chair)– Ian W. Kenworthy, Lawyer– Anne Kristin Einarsrud, Head of Section– Knut Nyerrød, State Authorised Public Accountant (Attend-

ing deputy member)

The work of the Control Committee:The Control Committee has carried out its duties in accordance with:– § 3-3 of the Stock Exchange Act, 2001 – Regulations dated 2 April 2001 on Control Committees

for stock exchanges issued by the Financial Supervisory Authority of Norway

– Mandate for the Control Committee issued by the company in General Meeting on 25 April 2001

The Committee met six times in 2007, with four meetings after submitting its annual report for 2006, and has met twice in 2008. The Committee has reviewed the board papers circulat-ed for each meeting of the Oslo Børs Board and the minutes of such meetings. The Committee has also reviewed the business areas and technical areas of material relevance to the Commit-tee’s mandate through conversations with and presen-tations by key personnel and written reports.

The Committee has supervised Oslo Børs to ensure that it complies with the relevant laws and regulat-ions, the terms of its licence, its Articles of Association and other resolutions of its corporate bodies. This has included an evaluation of security issues relating to the activities of Oslo Børs. The Committee has paid particular attention to the following:

1 Ensuring that the operation and control of the Oslo Børs trading system and supplementary essential IT systems is prudent and appropriate in relation to the demands of the market and the activities of Oslo Børs in general. The Committee has reviewed documentation, internal controls, operating routines and security arrangements for the trad-ing system and related IT systems.

2. Ensuring that Oslo Børs adheres to the Information and Communication Technology (ICT) Regulation issued by the Financial Supervisory Authority of Norway,

3. Ensuring that Oslo Børs carries out market surveillance, as defined by the Ministry of Finance’s Regulation of 30 March 2001 on market surveillance (now Chapter 4 of the Stock Exchange Regulations), in such a way as to ensure that the integrity and independence of the market surveillance func-tion is in accordance with the requirements of this regula-tion and that the market surveillance function is provided with the necessary resources.

The Control Committee is not aware of any matters that are in contravention of any law or regu-lation, or of the Articles of Associ-ation of Oslo Børs, or of any reso-lution passed by the General Meeting or any other rule or regulation to which Oslo Børs is required to adhere.

The Control Committee has received all such documentation and assistance as it has requested from the management of Oslo Børs.

The Committee has reviewed the Annual Report and Accounts for 2007 and the auditor’s report. The Committee recommends that the Annual Report and Accounts including the proposed profit and loss account and balance sheet be adopted as the Annual Report and Accounts for 2007. The Committee considers the Board’s ap-praisal of the financial condition of Oslo Børs to be satisfactory.

OSLO BØRS ASA CONTROL COMMiTTEE – ANNuAL REPORT fOR 2007

Oslo, 13 March 2008

Inger-Johanne Lund Ian W. Kenworthy

Anne Kristin Einarsrud Knut Nyerrød

97

CONTROL COMMiTTEE Of VERDiPAPiRSENTRALEN ASAREPORT fOR 2007

To:The Annual General Meeting of Verdipapirsentralen ASAThe Annual General Meeting of Verdipapirsentralen Holding ASA The Financial Supervisory Authority of Norway

The Control Committee comprised the following members in 2007:

Members:Jan P. Romsaas, Attorney-at-Law, ChairmanVegard Østlien, Chief Internal AuditorEldbjørg Sture, Consultant

Attending alternate member:Kjell S. Hatlen, Assistant Director

Meetings:The Control Committee met 6 times in 2007.The alternate was called to all these meetings.

Work during the year:The Control Committee carried out its tasks in compliance with the Securities Register Act, with the Instructions for the Control Committee adopted by the General Meeting of Verdi-papirsentralen ASA on 21 November 2002 and approved by the Financial Supervisory Authority of Norway on 18 Decem-ber 2002, with the Articles of Association of Verdipapirsentra-len ASA and the Committee’s adopted plan of operation.

The Control Committee oversees that Verdipapirsentralen ASA complies with laws, regulations and the terms and conditions of its licence, the Articles of Association and resolutions adopted by the company’s corporate bodies, as well as assessing security aspects of the company’s operations. Moreover, in accordance with its instructions the Committee oversees that the company has satisfactory guidelines and routines for the development and management of its information technology and infrastruc-ture, that it has satisfactory guidelines for security and that they are adhered to, and that the company has satisfactory guideli-nes for the routine internal audit of its operations.

The Board of Directors’ actions•The Committee oversaw the actions of the Board of Directors in 2007 to ensure that they complied with laws and regulations, the terms and conditions of the company’s licence, the Articles of Association, resolutions adopted by the company’s corporate bodies, and the security policy estab-lished by the Board of Directors.

Regulatory framework•Verdipapirsentralen ASA was granted a licence by the Ministry of Finance on 29 January 2003 to operate as a se-curities depository. The company’s Articles of Association were approved by the Ministry on the same date.

Verdipapirsentralen ASA has, pursuant to the Securities Register Act, established further rules for its activities. The rules have been approved by the Financial Supervisory Authority of Norway.

In the opinion of the Control Committee, Verdipapirsentralen ASA has complied with the rules laid down for its activities.

In 2005 the Control Committee instigated a legal review of the activities of Verdipapirsentralen ASA to ensure that its activities comply with appli-cable regulations. The review is still in process by the Legal Department of Verdipapirsen-tralen ASA, and interim reports have been submitted to the Control Committee.

Security•The Control Committee supports the conclusions of the internal audit unit in its annual report for 2007 to the Board of Directors of Verdipapirsentralen ASA.

The Control Committee has reviewed the reports submit-ted by the Board of Directors and the statutory auditor.

The Committee is not aware of any other matters that should be brought to the attention of the Annual General Meeting and the Financial Supervisory Authority.

Oslo, 13 March 2008

Jan P. Romsaas Chairman

Vegard Østlien Eldbjørg Sture

98

CONTROL COMMiTTEE Of VPS CLEARiNg ASAREPORT fOR 2007

To:The Annual General Meeting of VPS Clearing ASAThe Annual General Meeting of Oslo Børs Holding ASA The Financial Supervisory Authority of Norway

The Control Committee comprised the following members in 2007:

Members:Jan P. Romsaas, Attorney-at-Law, ChairmanVegard Østlien, Chief Internal AuditorEldbjørg Sture, Consultant

Attending alternate member:Kjell S. Hatlen, Assistant Director

Meetings:The Control Committee met 6 times in 2007.The alternate was called to all these meetings.

Work during the year:The Control Committee carried out its tasks in compliance with Chapter 6 of the Securities Trading Act, with the Instructions for the Control Committee adopted by the General Meeting of VPS Clearing ASA on 1 September 2006 as subsequently amended by the General Meeting on 21 March 2007 and approved by the Financial Supervisory Authority of Norway on 11 October 2007, and with the Articles of Association of VPS Clearing ASA.

The Control Committee oversees that VPS Clearing ASA com-plies with laws, regulations and the terms and conditions of its licence, the Articles of Association and resolutions adopted by the company’s corporate bodies.

In addition, the Control Committee oversees that the company has satisfactory guidelines and routines for the development and management of its information technology and infrastruc-ture, that it has satisfactory guidelines for security and that they are adhered to, and that the company has satisfactory guidelines for the routine internal audit of its operations.

The Board of Directors’ actions•The Committee oversaw the actions of the Board of Directors in 2007 to ensure that they complied with laws and regulations, the terms and conditions of the company’s licence, the Articles of Association, resolutions adopted by the company’s corporate bodies, and the risk policy estab-lished by the Board of Directors.

Regulatory framework•VPS Clearing ASA was granted a licence by the Ministry of Finance on 29 August 2006 to operate as a clearing house. The company’s Articles of Association were approved by the Ministry on the same date.

In the opinion of the Control Committee, VPS Clearing ASA has complied with the rules laid down for its activities.

The Control Committee supports the conclusions of the internal audit unit in its annual report for 2007 to the Board of Directors of VPS Clearing ASA.

The Control Committee has reviewed the reports submit-ted by the Board of Directors and the statutory auditor.

The Committee is not aware of any other matters that should be brought to the attention of the Annual General Meeting and the Financial Supervisory Authority.

Oslo, 13 March 2008

Jan P. Romsaas Chairman

Vegard Østlien Eldbjørg Sture

99

approved on 11 June 2007 §1 The name of the Company is Oslo Børs VPS Holding ASA.

The Company is a public limited company.

§2 The registered office of the Company is in Oslo.

§3 The objective of the Company is to hold ownership inter-ests in companies that operate stock exchange activities and securities registration activities, and other activities normally associated with this.

§4 The Company’s share capital is NOK 86,008,000 made up of 43,004,000 shares each of nominal value NOK 2.

§5 The Company shall have a Board of Directors consisting of a minimum of five members and a maximum of twelve members. The Managing Director is not permitted to be a member of the Board of Directors. The Chair and Deputy Chair of the Board of Directors shall be elected by the General Meeting.

The Company is committed by the signature of the Chair of the Board signing alone or by the joint signatures of any two Members of the Board.

The period of office for Members of the Board is two years.

The General Meeting may elect up to three Deputy Mem-bers to deputise for the Members of the Board elected by shareholders in accordance with a sequence laid down by the General Meeting in connection with their election. The period of office for Deputy Members of the Board is two years.

§6 Elections to be carried out by the General Meeting, includ-ing supplementary elections, shall be prepared by an Elec-tion Committee comprising a minimum of three members elected by the General Meeting. In addition up to three personal Deputies for the members of the Election Com-mittee may be elected. The General Meeting shall approve the instructions for the work of the Election Committee. Neither the Managing Director nor any other employee of the Company may be a member of the Election Commit-

tee. The period of office for members of the Election Committee is three years. The Election Committee shall deliver its proposals to the Chair of the Board of Directors at least two weeks before the General Meeting is to be held.

§7 No one is permitted to own shares that represent a larger proportion of the share capital or voting capital of the Company than is permitted by the legislation and regulations applicable to a stock exchange or a securities register, taking into account the consolidation rules in force at any time. Rights to acquire shares are considered equivalent to shares for this purpose where such rights must be seen to represent a real acquisition of shares. This restriction does not apply to the extent that the Ministry of Finance has granted an exemption from the legal restric-tions on ownership of share capital or voting capital.

§8 An Annual General Meeting shall be held each year before the end of the month of June.

The Annual General Meeting shall consider and pass reso-lutions in respect of the following:

1. Approval of the annual accounts and annual report, including the distribution of any dividend.

2. Any other matters that shall be dealt with by the General Meeting by the operation of law or pursuant to these Articles of Association.

An Extraordinary General Meeting shall be held when requested by the Board of Directors, the Control Commit-tee, the Company’s Auditor or a shareholder representing more than one-twentieth of the share capital.

§9 The Company’s shares are freely negotiable save for such restrictions as may be imposed by legislation from time to time.

§10 Each share in the Company confers one vote at a General Meeting of the Company subject to such restrictions as may be imposed by legislation from time to time.

ARTiCLES Of ASSOCiATiON Of OSLO BØRS VPS hOLDiNg ASA

100

OSLO BØRS VPS HOLDING ASAP.O.Box 460 Sentrum0105 OsloVisiting address: Tollbugata 2, Oslowww.osloborsvps.no

annual report 2007 · 33 board of directors´ statement of policy on corporate governance ......

Documents